Will Licious’ Foray Into Plant-Based Meat With D2C Brand UnCrave Pass Market Litmus Test?

One of the myths about India is that it is a vegetarian nation — but in fact, only 23% of women and 15% of men never consume chicken, fish, or meat. So it’s no wonder that the meat industry was one of the hottest sectors for tech startups to tap into.

Licious did just that for the past seven years, and now it’s stepping into new territory with the launch of UnCrave, a D2C offshoot into plant-based meat. While UnCrave is starting out with just two SKUs at launch, the ‘left turn’ into this category is certainly noteworthy for a company that has made its name and money on the back of changing how meat is bought in India.

Developed from plant-based proteins, the new offering currently consists of vegetarian ‘chick~n’ and ‘mutt~n’ seekh kebabs. In the initial phase, the products are being launched in metro cities and can be ordered through the Licious app, web, offline stores and other channels where Licious products are currently available such as quick commerce and delivery apps.

Leveraging the scale and network that Licious has built over the years, UnCrave “aligns with the company’s strategy of portfolio diversification” according to the company’s statement. But there are plenty of unknowns right now despite how bullish UnCrave and Licious are currently.

Licious Goes Green With UnCrave

Simeran Bhasin, the business head for alternative protein at Licious, believes that the Indian market offers a tall growth ceiling for meat alternatives — not just for the minority vegetarian population but also the non-vegetarian population that are forced into temporary abstinence from meat during festivals and other ritualistic affairs.

That’s also why UnCrave is not positioning itself as a healthier alternative to meat — but simply as a meat-like product that’s completely vegetarian. The word ‘health’ is in fact not mentioned in UnCrave’s launch press release at all. The two-year-long R&D process has been about taste, texture and product shelf-life, Bhasin told Inc42, such that the product does not feel like a meat alternative.

“If you look at the meat alternative brands today, you either have frozen products or ambient temperature products, but India prefers fresh meat and we are trying to create a product that fits this preference,” – Simeran Bhasin, head of alternative proteins at Licious

The shelf life is also similar to meat given that UnCrave’s can last for up to two weeks in the refrigerator. UnCrave products are meant to be refrigerated at home like regular meat and don’t need to be frozen.

The focus on taste and texture means that UnCrave products contain butter and ghee and are therefore not vegan. But the company is not ruling out an entry into vegan foods territory depending on how closely vegan ingredients can replicate the same taste.

Startups such as GoodDot, Imagine Meats, Proeon, Blue Tribe and others are tapping the niche addressable base for plant-based meat substitutes in India, while also keeping an eye on lab-grown meat (such as Beyond Meat, Impossible Foods), which is yet to hit the Indian market in a big way.

Bhasin believes that at the moment the Indian market is not ready to pay a premium for lab-grown meat, and UnCrave has no plans to enter this space for now.

Founded in 2015 by Abhay Hanjura and Vivek Gupta, Bengaluru-based Licious turned unicorn last year and has raised more than $480 Mn since inception. Licious’ farm-to-fork model relies entirely on vertical integration across the supply chain — from sourcing meat to cold chain control, processing, quality control, storage and delivery.

Licious & Uncrave: The Veg/Non-Veg Paradox

The strategy of focussing not on the healthiness aspect is interesting and noteworthy, but may have been forced due to UnCrave’s origins within Licious.

Most meat alternative brands in India focus on how ‘veg meat’ products are healthier than actual meat, but UnCrave is targeting the meat-eating consumer who wants to abstain from meat occasionally but still has a craving for it.

Essentially, it is a vegetarian product meant for meat eaters. This paradox manifests itself in UnCrave’s plan to rely on the Licious channels for distribution and sales. When it comes to user perception, the Licious app is still largely associated with meat — a plant-based meat product being sold through a meat-first app seems ironic.

The other paradox is related to the D2C model, which UnCrave has touted heavily. UnCrave is a separate brand and as such it will have its own social media presence as well, Bhasin clarified. That means it will leverage digital marketing and social media analytics to bring users to the Licious storefront.

While UnCrave can leverage Licious’ infrastructure around the meat supply chain that we have highlighted above, the UnCrave brand has to be strong enough by itself for D2C to work.

Like other plant-based protein companies, the new brand also has to emphasise its plant-based identity heavily. It also has to market to the primary consumers of plant-based meat (vegetarians) and then convince them to download an app that’s primarily meant for meat delivery.

Will a vegetarian customer ever download the Licious app in the first place?

We can imagine a situation where a user comes across an Instagram post for UnCrave, but abandons the journey mid-way since they have to use the Licious platform. The trust in knowing that a product is truly vegetarian is a huge dependency for meat alternatives. Having meat and meat alternatives on the same aisle erodes this trust to a large extent.

‘Clash’ Of Sister Brands 

Bhasin says that from a positioning perspective, UnCrave has very consciously chosen the endorsed brand strategy with the Licious association. But she also admitted: “I do anticipate it will be a little more challenging to talk to those who are not familiar with Licious at all. It won’t be as cost-effective simply because we don’t have our own channel.”

And that’s where some of the expectations around the ease of pitching plant-based meat to meat eaters and leveraging Licious’ scale to lower customer acquisition costs may come undone.

Last year, cofounder Gupta claimed that Licious has touched an annual revenue rate of INR 1,000 Cr, year-on-year growth of 500%, with over 2 Mn customers.

In FY21, Licious saw revenue from operations grow by more than 3X to INR 420 Cr from INR 131.8 Cr in FY20. However, the company’s losses widened too from INR 146 Cr to INR 370 Cr.

While Licious is in the red, the diversification of the portfolio will contribute to some gains in terms of the contribution margin given that UnCrave will utilise some of Licious’ existing resources and infrastructure.

Licious may have the scale to actually make UnCrave the top plant-based meat brand in India within a year as it has set out to do. But the launch has thrown up some interesting questions around the product strategy and the paradoxical relationship between UnCrave and its parent Licious.

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