Sangram Sawant’s septuagenarian mother runs the family’s kitchen like a tight ship. She is very choosy about the produce she uses to cook, especially the fish. It is only after prodding, sniffing and examining it thoroughly that she deems is good enough to be eaten by her family.
Watching her buy fish from local Koli fisherwomen and the wet fish market turned out to be Sawant’s eureka moment. He realised that the domestic per capita fish consumption, which was just 6.6kg in 2016, has been steadily rising and there was a huge opportunity to provide consumers with fresh seafood from reliable sources.
“There was this big vacuum as nobody had attempted to organize the fresh fish business. There was a massive influx of the unorganized sector, and I felt that sooner or later the market would catch up. A brand was needed that could encompass values like freshness, convenience and quality,” Sawant noted.
It also helped that while pursuing his MBA at Suffolk University in the US, he had worked with a sea-food company called Great Northern Products, and therefore had hands-on knowledge about the industry.
When he returned to India in 2004, he traversed the country to various landing shores and understand the dynamics of the seafood business. A year later, he launched Pescafresh, as a home delivery service. In the initial days, it was just him, a production manager and a delivery boy – today, the company has around 100 employees on its payrolls! This stands testimony to the potential of his idea.
BIG FISH IN A SMALL POND
The initial resistance to the business came from the consumer’s side, who were used to buying from the wet fish markets, Koli fisherwomen and immigrant workers who sold door-to-door. Winning their trust was an uphill task, given a complex product category like fresh seafood.
Sawant decided to initially focus on the top end of the consumer pyramid, who wanted quality and fresh produce and did not mind paying a premium for it. “In the first few months, when we were operating at a smaller scale, we knew we could only do that many deliveries. So, we went to consumers who can appreciate good quality. Now, since we are an aspiring country, we are tapping the middle part of the pyramid, which is also massive,” Sawant explained.
Realising that there was a need to educate these buyers, it held cooking demonstrations and sampling sessions at upmarket clubs like Bombay Gymkhana and CCI. “At these sessions, I would speak to people to tell how Pescafresh was different. I spoke about our supply chain, explained about fresh fish, the different cuts and ways to cook it, as well as made them aware of how fresh fish could be mixed with chemicals or could be sitting on a slab for a week and the buyer would not know,” Sawant recalled.
BUILDING BRIDGES THAT LAST
Pescafresh was off to a slow start but slowly started building a regular clientele. “We have a customer retention rate of over 95%, which we want to take to 100%,” Sawant claimed.
It tries to ensure that it offers optimum price by undertaking a cost bench marking exercise. Its associates visits local markets, seafood retailers and other outlets to see the price they are selling at. Accordingly, it adjusts the price for its products that can offer best value to the consumer.
Since the company emphasises on selling fresh fish, it had to ensure that its supply chain was well integrated to minimise transport time. Talking about the technical nuances of shipping fish, Sawant explained, “The optimal thing for fresh fish is right amount of ice and proper handling during transit. Firstly, the ice to fish ratio should be 1:1 and the temperature should be at 2° to 3° C in thermocol boxes. We use the Indian Railways extensively since it reaches even the remotest cities quickly and is cost efficient.”
Once, the fish reaches Pescafresh’s distribution centre, it is tested on two levels. The first is organoleptic, which is testing by touch, smell and feel, which is done by trained supervisors, and the second is random bacteriological and microbiological testing at either government approved or private laboratories.
The company has also implemented traceability standards. If a buyer is unhappy with any purchase, it can be traced right back to the source. This includes where it was caught, who was the supplier, what time it reached the distribution centre, who was the supervisor during its packaging, what was temperature validation on it, who processed, picked and delivered it. “This helps to get to the root cause of any issue and resolve it,” Sawant elucidated.
Pescafresh currently works with around 25 landing shores across India, including Maharashtra, Gujarat, Kerala and Karnataka. It focuses on the bigger ones as it prefers to build a supply-chain that is proportionate to its front-end sales. “It is pointless to have a larger supply-chain because I am committing to the supplier that I will buy fish from them for 240 days, if it’s falls within our pricing and quality norms,” Sawant stated.
All these suppliers are coded into the technology mainframe, so that their produce can be tracked. Its next phase of technology enhancement is putting its entire quality processes and traceability on the cloud to make it easy to access.
A couple of years ago, the company had introduced its ecommerce portal, but Sawant scrapped it as he was unhappy with it. Based on the insights gathered over the years, it has added technology layers in the backend and is relaunching the portal.
Next up, is the launch of an app. However, Sawant wants to tread this space with caution. “An app can itself be a product, rather than my fish. So, once our consumers start moving online, we will capture and incorporate those insights before launching the app,” he added.
EXPERIMENTING WITH OMNICHANNEL
Starting as home delivery business, over time Sawant was intrigued with all the noise about modern trade in India. “I once walked into a Aditya Birla Retail’s More store, and just didn’t like the fish out there. I reached out to the brand and suggested that we can do much better out there. So we worked with them, soon I was handling the fresh seafood for its Vashi, Nasik, Bangalore, Hyderabad and Delhi stores,” Sawant recalled. Similarly, he started working with Godrej Natures Basket and some other specialist retailers. Soon, the business from these retail business was contributing almost 60% to overall revenues, given their scale of reach.
However, Sawant said “Because my brand was everywhere, I was very dependent on how these retailers handled that category, which started affecting our brand.” This is why he decided to stop working with retailers and go direct to customers. However, he added that over the past couple of years, modern trade has evolved and if retailers can tick some critical check boxes, then he would be happy to engage with them again.
Currently, Pescafresh is available on ecommerce marketplaces like Amazon, BigBasket and Grofers, which has opened another customer acquisition channel for the brand. At the same time, it retains control of product aspects like packaging and delivery. “We do the whole shore to door fulfilment. The moment I allow someone else to manage the last-mile fulfilment, it adversely affects my brand. If we’re able to handle the whole show to door thing, we don’t mind working with different retailers,” he clarified.
WHAT CAME NEXT – THE FISH OF CHICKEN?
More than seafood specialists, Pescafresh has emerged as a direct to home consumer specialist providing fresh produce. Sawant said that many consumers asked why the company did not start selling chicken as well. “I am unhappy with quality of the poultry. So when we start, it will have to be very different in terms of freshness and quality. We will ensure it will not use antibiotics or growth hormones on the animals, the processing facilities are state-of-art, humane butchering systems are followed, etc,” he said.
With this clarity of thought, Pescafresh has decided on the chicken suppliers and finalised the brand name for this product vertical. Sawant hopes to launch it by April.
For this product line too, the quality litmus test will still be his mother – if it passes her approval, he will know he has another winner on his hands.