Photo - MOPP Foods Private Limited
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MOPP Foods Private Limited

Cloud Kitchens focused on popular Indian Food concepts

India, Haryana
Market: Food industry
Stage of the project: Operating business

Date of last change: 26.12.2020
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Idea

Founded by Gaurav Gupta (IIT Bombay, 2002) and Geetika Anand Gupta (MBA Gold Medallist), MOPP Foods is a Cloud Kitchen start-up operating 6 Online Restaurants and 3 Cloud Kitchens. Their brand portfolio currently includes 2 brands – “Mad Over Parathas & Pakodas” and “Mealy”, while 3 more brands will be added within next 6 months. They plan to scale to 1500 online restaurants operating out of 250 cloud kitchens and crossing Rs. 400 Crore in revenue within next 5 years. They raised seed funding earlier this year led by Rahul Singh (Founder - The Beer Café) along with other serial angel investors

Current Status

MOPP Foods is a Cloud Kitchen start-up currently operating 6 online restaurants with 2 brands - Mad Over Parathas & Pakodas (MOPP) and Mealy. We are currently delivering 6000+ monthly orders across Gurgaon.
MOPP delivers popular Indian street foods Parathas and Pakodas (popular Indian street foods) that are made hygienically and delivered in custom designed packaging along with a hygiene kit containing wet tissue, dry tissue, cutlery and sanitizer to ensure safety and comfort. Biggest USP of MOPP is the reinvention of Pakodas recipe, that makes them less oily, not soggy and keeps them crispy even after 45 mins of delivery. This makes pakodas delivery friendly which is a new category in itself. MOPP is building a new segment with these popular street foods and uplifting them to build a mid-segment premium brand, like the way “Wow! Momo” did with Momos and built a venture which is valued at Rs 860 Crore in its last round of funding led by Tiger Global. We strongly believe that if Momos can be uplifted to build a company of that size then the potential with Parathas & Pakodas is much bigger, as Parathas & Pakodas have a much wider appeal across India compared to Momos. True to its name, brand’s vision statement reads “To Make the World Mad Over Parathas & Pakodas”. Brand was also awarded by Times group as Trendsetting Parathas & Pakodas in street foods category in November 2020.
MOPP launched its second brand “Mealy” last month. It is a “meals only” brand focused around pocket friendly single meals. With its range of comfort food meals made with homely recipes and taste, Mealy is slowly strengthening its position in this segment. We plan to launch 3 more brands over the next 6 months. New brands will be focused around Indian food concepts like Biryani, Tikkas, Rolls and Kulchas. With multi-brand online restaurants and cloud kitchens operating in hub and spoke model, MOPP plans to build India’s biggest online restaurants company focused on Indian food. This segment is growing at a CAGR of 30% and projected to be a US$ 12 Billion market by 2025. Start-ups like Rebel Foods (now Eat Sure) and Box8 have grown on the back of this opportunity. The potential size of this segment has grown multi-fold in post-COVID era, as people are expected to dine-out less and order-in more often than they would have done in pre-COVID times. MOPP Foods plans to capitalise on this expanded market opportunity and build a large-scale venture.

Market

According to IMARC report dated April'20, Food delivery market size in India reached about US$2.9 Billion in 2019. Growing at a CAGR of 27%, it is projected to reach US$12.7 Billion by 2025. While the pandemic has been a challenge for most of the businesses, it has certainly brought changes that will lead to exponential growth of Food Delivery market in next 3-5 years. Hence, it is expected to breach the projections by a large margin.

Parathas & Pakodas are both staples dishes of Indian food and almost everyone eats Parathas & Pakodas in some form across India. Hence, the market opportunity for these products in huge because of the wider appeal of these dishes. Our confidence in the opportunity is boosted by the success of Wow! Momo which has created a business valued at 860 Crore (as per their last round of fundraise) with another street food "Momos". However, Momo's are not even staple diet across the nation. It is only popular in some pockets of the country. This validates, that when a business of such size can be created with Momos then the potential with Parathas and Pakodas should be much larger. We are confident that the market for our products is so big that there is perhaps space for multiple players.
Also, we conducted some R&D where the potential of the product is phenomenal. Online Food industry as a whole is expected to become a $8 billion market by 2022, growing at a CAGR of almost 30%.
Good thing about Parathas and Pakodas is that it is eaten by people of all regions, ethnicity, religion, gender and age. Even a 5 year old happily takes parathas in his school tiffin and a 80 year old happily eats it for breakfast. Parathas are eaten for breakfast, lunch, dinner and as late night meals. Pakodas are eaten as a snack during tea time and also people love with their drinks in the evening. Pakodas are a great party finger food, whether a corporate party or a casual get-to-gather of friends. We get large party orders for Pakodas fr om corporate houses. Veg Pakodas go well with Chai. Also our Pakodas are known as Fusion Pakodas which are like the finger food eaten in bars and lounges. Our Pakodas specially our Non Vegetarian varieties like Chicken and Amritsari fish Pakodas are very popular with liquor and other drinks too. We supply to senior citizen groups too. We have varieties like Chocolate Paratha and Chocolate Pakoda which is very popular among children. Current Customer profile includes based on real data:
=Singles working
=People living in PGs without kitchen facility
=Nuclear families
=Joint families
= Families wh ere both husband and wife are working
=Corporates
=Parties
=Get-to-gather bulk orders
=Everyday Tiffin service as we have more than 100 varieties of parathas
The unique Menu consists of some curries too and meals which fill the gap for all TA.

Our packaging is high in quality, environment friendly, made with biodegradable materials and designed specifically to deliver an experience along with the food. All Parathas are delivered in an eco-friendly box which opens like a flight tray where every food item and condiment sits in a pocket specially designed for it. There are 5 pockets, 1 for curd, 1 for makhni gravy, 1 for a branded butter chiplet,1 for a pickle chiplet and 1 pocket with butter paper for the paratha. We also send a hygiene kit along with the order which has an infographic:
1. Sanitizer (use me before eating)
2. Dry tissue (use me while eating)
3. Cutlery (use me for eating) and
4. Wet tissue (use me after eating)
This delivers a seamless and hassle-free experience to our target customer.
This has also led to a great customer perception and faith in the brand building confidence in the mind of the consumer. We are rated EXCELLENT in hygiene by external auditors too. This has led to serving customers (TA) who look to order hygienic food made with premium ingredients along with an experience in the presentation of food as well.

If we check the pie chart of our sales data, there is no hour which is a lean hour. Means we serve from 8.00 am till 2.00 am at night and sales is very nicely distributed throughout the day.
Breakfast 15 %
Mid-morning 10%
Lunch 20%
Late afternoon 5 %
Evening 5 %
Dinner 25%
Late Night 20%

Hence, there are no geographical boundaries, sex limitation, age band for our Target Audience.

Problem or Opportunity

Customer needs/pain points that are addressed by MOPP:
1) Lack of mid-segment option in Paratha. We have either roadside eateries or expensive fine dining restaurants.
2) No organized player catering to Pakodas.
3) Lack of hygienic & healthy food among street vendors.
4) Lack of menu innovation with Parathas and Pakodas.
5) Pakodas are too oily and loose crispiness when delivered.
6) Lack of high-quality affordable comfort meals.

Market size is huge, Target audience is vast and yummy food delivered to your doorstep keeping in mind the hygiene and quality will be the next fashion/fad for the community. This will no longer be a luxury but a necessity. Example the people who work and have moved from different cities have no place to cook their meals and depend on delivery brands for their daily meals. Busy families depend on delivery of food brands. Also because of the pandemic some people have lost their jobs, some have reduction in their salaries but they want to enjoy partying and dining out. But their buying capacity has reduced. So instead of eating out 4 times in a week they will still go once but rest of the 3 times will order their food at home. This will lead to the increase of the delivery size of the market. Delivery market size in few other countries have already increased post lockdown.
The other brand "Mealy" launched under the same portfolio of MOPP foods private limited is catering to the TA who want reasonable and pocket friendly food delivered regularly. Hence, the portfolio of MOPP foods will be a perfect balance targeting different segments in the delivery market.

Solution (product or service)

MOPP Foods currently operates two brands out of three kitchens located in Gurgaon (Delhi NCR).

First brand MOPP delivers popular Indian street foods Parathas and Pakodas that are made hygienically and delivered in hassle free packaging with a hygiene kit containing wet tissue, dry tissue, cutlery and sanitizer to ensure customer safety and comfort. Pakodas are not oily, not soggy and remain crispy when delivered.

Second brand is "Mealy" which is a “meals only” brand focused around pocket friendly single meals. This brand was launched in Nov'20. With its range of comfort food meals made with homely recipes and taste, Mealy is slowly strengthening its position in this segment.

Few Advantages of MOPP Foods:
>Great Taste
>Standardized Recipe
>Creative and innovative packaging
>Menu innovation
>Not soggy and not oily pakodas which remain crispy on delivery.
>Tech enabled kitchens
>High repeat ratio of customers
>Advantage of being the leader in this market segment (early entrant)
>Created a new segment and capitalized the current market opportunity

Competitors

We have a few direct competitors in Parathas segment as this is a large segment and currently being established the way Pizza was pushed 10 years back in India. Paratha Experiment by Ola Foods, Paratha Express and Oye Kiddan are a few names worth mentioning. Paratha Experiment is a brand by Ola Foods (food arm of Ola Cabs) and it only validates our belief in this segment that the size of the opportunity is big enough to tickle interest of unicorns like Ola Cabs. Paratha Express is another chain of parathas however they seem to have lost the plot due to excessive franchising leading to poor customer experience and inconsistent food. Oye Kiddan sprouted in Mumbai and expanded to Delhi and Bangalore via franchising. However, the brand suffered again due to poor franchisee management and lost the initial traction in these markets. The fact that Oye Kiddan flourished in Mumbai and Bangalore initially, establishes the market potential of Parathas and to that matter Pakodas as well in cosmopolitan metro cities due to large migratory population and local influences.

In Pakodas segment we do not have any direct competition as only a handful brands have tried to introduce limited variety of Pakodas e.g. Chaayos and Chai Point have 2-3 options for pakodas on their menu. The fact that Pakodas with the original batter are not a delivery friendly product, its perception is that it gets soggy and oily which has deterred F&B business from trying this segment. However, with our innovative recipe, WE ensure that Pakodas are delivery friendly and do not become soggy or oily and remain crispy even after an hour of delivery window. In fact, it can reheated in an air fryer even next day and they taste as fresh as from the oven without oil and sogginess. Thus, we are well placed to scale this category much more than expectations. We have the first movers’ advantage in this category.

What differentiates us from these competitors is our multi-brand strategy giving us that extra edge in terms of scale and revenue potential which will allow us to operate additional brands out of same kitchens. While MOPP will remain to be our anchor brand, other brands will add substantial contribution to our revenue topline and also diversify our portfolio.

In terms of indirect competition, all large food delivery chains like Rebel Foods, Box8 and Innerchef etc are our indirect competitors as they are not competing with us on Parathas and Pakodas but they compete with us on food as a category. Success of these food delivery brands confirms the large market opportunity with food delivery business in India. Food delivery is projected to grow at a CAGR of 27% for the next 5 years.

Advantages or differentiators

Few Advantages of MOPP:
>Great Taste
>Standardized Recipe
>Creative and innovative packaging
>Menu innovation
>Not soggy and not oily pakodas which remain crispy on delivery.
>Tech enabled kitchens
>High repeat ratio of customers
>Advantage of being the leader in this market segment (early entrant)
>Created a new segment and capitalized the current market opportunity

While F&B is a low barrier industry, we have protected our key recipes and created blend of spices for use in dishes. Even if another team tries to imitate our products and recipes, the key factor in venture success is the execution. We have proven our execution capability to build a scalable online brand and now looking to replicate the model with other products with multi-brand strategy. By pivoting to a multi-brand strategy, we will be able to maximize resource utilization and a healthy topline.

Finance

We work on a B2C model and currently secure online orders via Zomato and Swiggy platforms. We are currently operating 3 outlets in Gurgaon. 2 of these outlets have a face and are located in busy markets of Sector 31 and DLF Phase 3 and hence they operate for dine-in, take away and deliveries, while the 3rd outlet located in Sector 52 is a cloud kitchen (operating for deliveries only). Our Products are made fresh using premium ingredients and following a standard recipe.
Food is prepared in kitchens and served or packed for takeaway or deliveries. Part of our menu is being centrally prepared in our larger kitchen at Sector 52 and semi-finished items are being sent to other kitchens for final finishing before serving to ensure standardized taste and quality of our food.

Our pricing strategy is to target the mid segment market. For example, our parathas are not priced at roadside prices of Rs 40 or at Fine-Dine restaurant prices of Rs 400 but our parathas range between Rs 99-219. Our Pakoda portions range from Rs 99-329. This is the segment that is the largest in the market size. It is a mass market approach. Thus, we can say we are in the mid field of margins sitting in the sweet spot of Low margin and high volumes but at the same time our strategy is to build a sustainable business without being dependent too much on volume or fallacy of niche market.

Business model

MOPP - Mad Over Parathas & Pakodas with its unique and innovative menu, mid segment pricing, hygienic food and scalable business model is well placed to fill the market gap highlighted in previous section. We plan to build a global brand and take Indian staple dishes Parathas and Pakodas to the tables globally.

MOPP Foods currently operates three kitchens in Gurgaon. Two of them have a small dine-in area to accommodate 6-8 Pax. Third kitchen is a cloud kitchen and operates as a delivery only outlet. Currently MOPP - Mad Over Parathas & Pakodas is operating out these three kitchens as a strong Food Delivery brand (90% of business is generated online via Zomato, Swiggy). Two news brands are also being added to the portfolio now and they will also operate out of the same three kitchens. This is expected to give 2.5X upside to the topline over the next 4-6 months, which currently stands at about 13 Lacs/month. Also, this will help to utilize the resources better with a better ROI.

Our business model is based on hub and spoke model wherein we will have a tech enabled central kitchen that will service between 5 to 15 satellite kitchens (point of sales) depending on the size and location of the central kitchen. Central kitchen will supply semi-finished products to satellite kitchens where the food will be finished and delivered to the customers. Tech enabled central kitchen will ensure that the food is standardized in quality, size and taste so that food from MOPP outlets across India will taste the same leading to a highly scalable model. We will be expanding with a cluster approach wherein a minimum of 4 to 5 outlets will be launched together in a central kitchen like a cluster at the same time. This approach will help us scale faster, minimize wastage and maximize resource utilization.

We have been investing heavily in brand building and will continue to do the same for new brands as well. Intent is to build a multi-brand business with a portfolio of 4-5 strong brands and expand to other parts of Delhi NCR, Bangalore and Mumbai over the next 12-15 months.

MOPP with its highly scalable model and strong delivery brand reputation, is well placed for expansion in post-covid era. I plan to scale MOPP to 250 outlets and with a business valuation of Rs 1000 Crores in next 5 to 7 years.

Ultimately the brand will also launch frozen versions of Parathas and Pakodas in the retail market. Frozen fried food and parathas have a great demand outside India and now India is also consuming frozen food much more than before.

Money will be spent on

50% on Capital Expenditures
25% Marketing and Brand Building
25% Team Expansion

Offer for investor

Currently looking to raise USD 300K at a valuation of USD 2M. Any investment made at this stage may potentially return a 50x over a period of 5-7 years.

Team or Management

Risks

An extended lockdown last over years may may hamper business's scalability potential. However, with vaccine approval now, we are hopeful that we will be out of pandemic effects on this segment with next 3-4 months.

Our only weakness currently is availability of sufficient funds to continue investing in building brands and fuel geographical growth. We are actively engaged with various VCs, Angel Funds and Angel Investors to raise funds, and overcome this weakness against our competitors.

Incubation/Acceleration programs accomplishment

Currently at Stage 3 of selection process for Upaya + MIT D-Lab Scaleups Accelerator for Women Entrepreneurs.

Won the competition and other awards

Recently got awarded by Time Group (Operator of India's largest national daily).

Photos

Photo 1 - Cloud Kitchens focused on popular Indian Food concepts
Photo 2 - Cloud Kitchens focused on popular Indian Food concepts
Photo 3 - Cloud Kitchens focused on popular Indian Food concepts
Photo 4 - Cloud Kitchens focused on popular Indian Food concepts
Photo 5 - Cloud Kitchens focused on popular Indian Food concepts

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Idea
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