Gurugram-based meat delivery specialist Zappfresh is making its most ambitious strategic move yet, venturing into the highly competitive frozen foods segment just weeks after its public market debut. The company, which recently went public through an SME IPO, now aims to diversify beyond fresh meat into vegetarian frozen products, despite facing significantly better-funded competitors.
The Frozen Ambition
Deepanshu Manchanda, co-founder and CEO of Zappfresh, revealed in an exclusive interview that the company is aggressively pursuing frozen foods as its next growth frontier. "Our next area of interest is exploring complementary categories that naturally pair well with our existing products. We'll be pouring into frozen foods, including vegetarian," Manchanda stated, though he declined to specify exact investment figures for this expansion.
The timing of this strategic shift comes barely a month after Zappfresh's IPO experience, where its ₹60 crore offering was undersubscribed at just 52%, forcing a revision of the price band from ₹96-101 to ₹95-100. This contrasts sharply with the company's operational performance, which showed 43% year-on-year revenue growth in the first half of FY26, reaching ₹95.85 crore from approximately ₹66.92 crore in H1FY25.
Cold-Chain Challenges and Investments
To support its frozen foods push, Zappfresh is making substantial investments in cold-chain infrastructure. The company is implementing IQF (individually quick freezing) technology, which freezes each food piece separately at extremely low temperatures to preserve texture and quality after thawing. Additionally, the firm is adding advanced automation across its plants and storage facilities to maintain strict temperature control.
"We are currently developing more capacity...we keep investing time and again so that we don't hit the ceiling on capacity," Manchanda emphasized, highlighting the company's focus on preventing "temperature abuse" - any fluctuation outside safe temperature ranges during processing, transport, or storage that can compromise food safety and quality.
However, this infrastructure doesn't come cheap. According to Akshat Gupta, practice leader for Food and Agriculture at Praxis Global Alliance, an IQF line can cost between ₹50 lakh to ₹4-10 crore depending on scale, with cold rooms and deep-freeze distribution adding significant upfront and recurring power and maintenance costs.
Competitive Landscape and Market Dynamics
Zappfresh enters the frozen foods arena against formidable competition. The company has raised just $16 million in funding compared to Licious's $490 million and FreshToHome's $286 million war chests. Even quick-commerce players are entering the space, with Zepto launching its private label Relish in October 2023.
The frozen foods market in India is growing at 13-14% CAGR, within a frozen meat and ready-to-cook market estimated at roughly ₹10,000 crore. This growth has attracted major players like ITC, which recently acquired Meatigo and Prasuma in a deal worth approximately ₹187 crore, valuing Prasuma at just under ₹300 crore.
Meanwhile, Zappfresh's larger competitors are pursuing different strategies. Licious is pushing deeper into offline retail, planning to open 25 stores by year-end, recognizing that physical stores still account for the bulk of India's meat sales.
The strategic challenge for Zappfresh is clear: frozen capacity requires long payback periods and depends on steady volume ramp-up. Whether a newly listed SME player with limited funding can achieve the volumes necessary for frozen foods to become profitable remains the critical question looming over its ambitious next chapter.
