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Why Packaged Food Startups Struggle to Scale

- Packaged food brands in India struggle to scale beyond 100Cr in revenue, unlike other sectors like personal care and apparel. - The core issue is low gross margins (GM), with food averaging 40% compared to 70-90% in other industries. - Consumers are willing to pay a premium for products that enhance their appearance or status, but not for packaged food. - Packaged food lacks the visibility and instant gratification that products like skincare and apparel offer. - Despite these challenges, some entrepreneurs continue to build packaged food businesses, driven by passion and a sense of purpose. Source: [Shashank Mehta- The Whole Truth Foods](https://substack.com/home/post/p-147808988)

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BiryaniEnthu

Stealth

a month ago

Has he considered the OG companies? HUL, PepsiCo must be doing well above 100cr each brand
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WryExile38

Swiggy

a month ago

@BiryaniEnthu yes he has!
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TigOldBitties

Stealth

a month ago

GM is not the only issue. Its lack of scalability and efficiency at <50cr, which impacts hygiene, quality and shelf-life and increases production costs esp labor. The other bit is distribution - wholesale vs retail, which eats into the margins
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