Zomato blitzes into functional foods: A plan to shift to D2C?

Zomato an Indian food tech unicorn has now stepped into the dietary supplements. They have added their own product segment for functional foods (health & dietary supplements). The founder, Deepinder Goyal announced the company’s initiative into functional foods which will soon be available on the Zomato app.

Zomato’s business model was initially limited to the provision of food order, food delivery services, provision of information, user ratings and reviews, and menus of partner restaurants. Now, this is totally a new step by the food tech giant post their IPO launch. Further, people are now wondering if this is a step towards shifting to a direct-to-consumer model.

Founder’s words

Deepinder Goyal, the founder of Zomato had responded to a few comments on Twitter stating that this functional food or dietary supplements will soon be available on their app. Additionally, it will be delivered within 15 minutes on the back of its 1.5 lakh delivery partners in its fleet.

More insights by Zomato

These dietary supplements will be launched in the milk-based whey proteins range. In addition to this, the company also stated that the company will keep a strong check on the whole supply chain, from product manufacturing to final delivery to ensure that only authentic products are delivered to you. 

The products (Zomato nutraceuticals) pass through rigorous quality checks at each stage, so that our customers receive only authentic products. Further, all products have a double seal to ensure there is no tampering with the product.

Not just that, Zomato also disclosed that initially, they will start these services in Delhi NCR, Mumbai, Pune, Bangalore, and Hyderabad.

Zomato will have rich information on ingredients, research, dietary, and lifestyle advice, available on the app.

What might Zomato be thinking

Zomato may be targeting a large market since the COVID-19 pandemic has prompted the rest of the world. As well as individuals in India, to place a greater focus on preventative healthcare. With more hectic lives, work schedules, greater patient knowledge, body image concerns, and pill weariness, the need for nutraceuticals in India has increased.

According to a study by ASSOCHAM, the Indian nutraceuticals industry could touch US$ 8.5 billion by 2022. 

In 2015, India accounted for around 2% of the worldwide market. According to a study on the ‘Indian Nutraceuticals, Herbals, and Functional Foods Industry’ conducted jointly by ASSOCHAM and RNCOS. This share is expected to increase to around 3% by 2022 due to the country’s large population base, expanding urban belt, and increased awareness.

The functional foods and beverages industry in India has grown, aided by growing penetration among the country’s health-conscious citizens.  

Rising awareness of wellness and health, as well as rising food spending, have increased the number of consumers adopting functional foods and beverages. This is driving the expansion of the functional foods and beverages market. This is further expected to reach US$ 8.5 billion by 2022.