Lecture Notes on Egg Industry and Startup

Overview of the Egg Market

• The Indian egg market is valued at ₹90,000 CR.
• The quality of eggs in retail is poor and lacks standardization.
• The aim is to build a national level brand for eggs and egg-based products.

Motivation for Starting the Business

• Founders noticed the poor quality of eggs in India and the lack of standards.
• Founders: Friends and batchmates from ID Kapur.
• Established their first farm in Bihar Sharif, expanding to Madhya Pradesh, and managing around 80,000 birds.
• Recent expansion to Delhi NCR, Bangalore, Hyderabad, Chennai, and Mumbai.

Business Model of Eggo

• First brand to hold itself accountable to customers.
• Building the category from the ground up with quality standards and FMCG distribution.
• Eggs undergo rigorous checks for quality before reaching the market:
  • Inspected for cracks and deformities.
  • Processed through safety checks, UV sanitized, and properly packaged.

Operations Management

• Decentralized procurement:
  • Eggs for North India sourced from around Delhi.
  • Eggs for South India sourced from Bangalore and Hyderabad.
• Eggs are transported to processing centers within 4-5 hours for efficiency.

Funding and Revenue Model

• Bootstrapped and raised over ₹100 crores from venture capitalists and private equity funds.
• Revenue sources include:
  • Majority from modern trade and quick commerce.
  • 30% from general trade and offline segments.

Production and Product Range

• Production now outsourced to farmers under contract farming.
• Utilizes IoT devices for farm management.
• Product offerings include:
  • White eggs, fortified eggs, brown eggs, and free-range eggs.
  • Value-added products such as egg burgers, omelet kits, and nuggets.

Financial Overview

• Selling price of eggs: ₹10 per egg.
• Procurement linked to market rates, with premiums paid to farmers.
• Breakdown of expenses:
  • 50% to farmers.
  • 5-8% on packaging.
  • 5% on logistics.
  • 10-11% on manpower.
• Customer acquisition cost: ₹40-60 per consumer.

Competitors and Market Strategy

• Competition mainly from unbranded eggs (97-98% of the market).
• Target audience includes mothers and health-conscious consumers.
• Aim to create a branded category recognized by consumers.

Team Structure

• Co-founders have clearly defined roles:
  • One oversees sales and HR.
  • Another focuses on supply chain management.
  • The third handles marketing and technology.

Branding and Positioning

• Bright orange branding symbolizes morning sunlight.
• Products branded as high-quality with an OS nutrition stamp for quality assurance.

Future Plans and Opportunities

• Targeting a revenue growth of 20-25 times in the coming years.
• Exploring value-added consumption in the egg category.
• Opportunities for new entrepreneurs in diversified egg products (liquids, powders, ready-to-eat products).

Conclusion

• The egg market in India presents significant opportunities for innovation.
• Encouragement to learn the product deeply, understand the supply chain, and develop a solid strategy.