Elixiir Foods Founder and CEO Arvind Mediratta on FreshTerra’s focus on fresh, wholesome and affordable food, its private-label strategy & emerging food trends
FreshTerra, owned by Elixiir Foods, is positioning itself around a proposition that the brand describes not as premium food, but as high-quality food at affordable prices. The company is betting on freshness, wholesome ingredients, private labels and a differentiated retail experience, while deliberately staying away from the 10-minute delivery race in quick commerce.
In an interaction with BW Retail World, Arvind Mediratta, Founder and CEO of Elixiir Foods, spoke about FreshTerra’s retail strategy, its growing private-label business, consumer shifts towards healthier food, its store expansion plans and the company’s longer-term ambition of becoming IPO-ready.
What is FreshTerra’s core proposition and what gap are you trying to address in India’s food market?
I would first like to share what FreshTerra stands for. It is not exactly an affordable premium food destination. We believe that three things matter in any country: the air you breathe, the water you drink and the food you eat.
When it comes to air and water, consumers often have to depend on government infrastructure or use solutions such as air purifiers and water filters. But food is an area where we felt we could do something ourselves.
Over the last 15-20 years, the food narrative in India has largely revolved around two things. One was “brands for less”, which encouraged the consumption of cheaper food. The other has increasingly been convenience — getting the same food delivered within 10 or 15 minutes.
We believe it is time to challenge both narratives. Consumers should have access to high-quality food, and 10-minute delivery should not come at the cost of food quality. Our objective is to provide people earning more than Rs 12 lakh a year access to high-quality food at affordable prices. It is high-quality food, not premium-priced food.
What does “high-quality food” mean for FreshTerra?
We define quality through three broad principles. The first is freshness. Fruits and vegetables should be absolutely fresh and, as far as possible, brought directly from farms. The same applies to meat, poultry, seafood and dairy.
We also believe staples should be fresh. For example, we bring wheat from farmers and convert it into atta in the store in front of the customer. We do the same with mustard seeds, converting them into cold-pressed mustard oil.
Our spices are freshly ground. We source raw turmeric and convert it into haldi powder in front of customers. We also make chilli powder and our signature biryani masala from whole spices. If a customer has their own recipe, we can even create a customised masala blend.
The second principle is wholesome food. We focus on the quality of ingredients and avoid ingredients such as palm oil and added sugar in our products. This is reflected in our own range of snacks, including sorghum sticks, baked multi-millet bhujia, broccoli chips, broccoli sticks and oat-based snacks. We also have whole-wheat and jowar-based rusk, jowar puffs and roasted chana.
How do you ensure transparency around product quality and claims?
Transparency is very important to us. Our packaging is transparent, so customers can see the product.
If we claim that something is organic, whether it is fruits and vegetables, rice or lentils, we have traceability and certification to support that claim. We do not want to make false claims.
Every product that goes on our shelves is tested and has to meet our quality standards. We have also rejected products after testing them. Our philosophy is that quality does not mean taking a well-known brand and selling it at a discount. It means testing the product, checking the ingredients and making sure it meets the required quality standards.
Private labels appear to be central to FreshTerra’s strategy. How significant are they?
Private labels account for 62 per cent of our total sales. We have around 2,200 SKUs in the store, of which about 900 are private label. We have private labels across most of the major categories. In atta, around 97 per cent of our sales are private label. In rice, we have about a 90 per cent share, while in snacking our private-label share is around 70-80 per cent.
We also have private labels in tea, rusk, pickles, honey, cooking oil, spices and ghee. In tea, we have co-branding with Lakshmi Tea, while in chocolates we have partnered with a local boutique chocolate brand called Tara.
The idea is to build our own range around categories where we believe we can deliver better quality at attractive prices.
Are there categories where you do not want to develop private labels?
Yes. We have not developed private labels in some frozen and international categories because they require significant investment, particularly in the cold chain.
For example, we keep imported Korean, Japanese and Italian products where consumers have a preference for established brands. You cannot necessarily replace a particular sushi rice brand with a private label and expect the same consumer response.
We also have not developed private labels in frozen salmon, frozen peas and French fries. Similarly, some niche and gourmet categories remain branded. Our approach is to develop private labels where we can create a strong proposition, while offering branded or imported products where consumers specifically value those brands.
What has the response been like since FreshTerra opened its first store?
We opened our first store on July 25 and the response has been overwhelming. People are telling us that they want to come to the store even though we have an app.
We are seeing record sales every day. We are preparing to open our second store and plan to open the third store in Noida in October. We are also looking for additional locations across Delhi-NCR.
We raised around USD 9 million in a pre-seed round about eight to nine months ago. The funds are being used to open stores and build the online offering. Our plan is to have five to six stores by March 2027. We are also considering raising additional capital as interest from investors grows.
Why have you chosen not to list FreshTerra on quick-commerce platforms?
We do not want to list our products on quick-commerce platforms because we believe it makes the economics difficult. These platforms can charge significant listing fees, while brands also have to spend heavily on awareness.
We believe the better model is omnichannel. Customers can visit our stores or order through our own online platform.
We do not promise 10-minute delivery. We deliver in around 30 to 90 minutes, depending on how far the customer is from the store. We believe customers are willing to wait for good-quality food.
The important point is that we deliver from our actual stores, not dark stores. Customers can visit the same store and see the quality of the products being delivered to their homes.
What gives FreshTerra an edge in a market where quick commerce has changed consumer expectations?
What we sell is not available everywhere. The quality of our fruits and vegetables is a major differentiator. The same is true of our meat and chicken, where we believe we offer better quality at lower prices.
Our range of snacks is another differentiator. Products such as broccoli chips and quinoa-based products are not easily available elsewhere, particularly at the price points we offer.
Then there is freshly milled atta. Customers can see the wheat being converted into atta in front of them. The same applies to freshly ground spices and cold-pressed oil.
Our focus is on execution. We have experienced people in buying and sourcing, and that allows us to bring in products from different parts of India and overseas while keeping prices competitive.
How does your pricing strategy work if you are offering higher-quality products?
This is where our buying expertise becomes important. For example, we source turmeric directly from Lakadong in Meghalaya. We source Khapli wheat directly from farmer-producer organisations in Maharashtra, mill it in front of customers and sell the atta at Rs 165 per kg.
We also source A2 cow ghee directly from farmers in Gujarat. Our ghee has become the number one-selling article in the store. Similarly, we source nuts from different locations, including walnuts from Chile, and the prices are comparable with wholesale-market prices such as Khari Baoli.
Our buying team has decades of experience. The person buying staples has spent 25 years in the category, while our fruits and vegetables buyer has around 20-25 years of experience.
Retail is ultimately about buying the right products at the right cost and selling them at the right price. It is not simply about delivering in 10 minutes.
What kind of consumer trends are you seeing in food?
The basics remain the most important part of the business. Atta, rice, dal, spices, fruits, vegetables, meat, poultry, oil and dairy will continue to be the mainstays. I would say the basics will continue to account for around 70-80 per cent of sales. That will not change.
At the same time, consumers are becoming more conscious about what they eat. We are seeing demand for products such as protein ladoos, podi, A2 dairy products, Greek yoghurt, kombucha, alkaline water and nutritional products.
We are also seeing strong demand for seafood, including salmon, even in Delhi. Korean food is another interesting trend, with Korean corn dogs, noodles and fried chicken performing strongly.
Consumers are also exploring different types of rice, including black rice, red rice, kala namak rice and matta rice, while Khapli and multigrain atta are seeing increased demand.
Are consumers actually changing their traditional food choices for healthier alternatives?
Yes. We are seeing a shift within everyday staples towards healthier alternatives. For example, consumers are moving from refined oil towards cold-pressed oil. We are seeing demand for Khapli and multigrain Khapli atta.
In spices, consumers are becoming more interested in specific varieties and want freshly ground products rather than powders where they are concerned about mixing or adulteration.
There is also a shift towards organic dals. The premium between our regular and organic range is around 25-30 per cent, whereas some other players charge substantially more.
So even within basic staples, the mix is shifting towards healthier options.
What are some of the emerging categories that you believe could become mainstream?
A2-based products are seeing strong interest, as are kombucha and prebiotic and postbiotic drinks. Alkaline water is also doing well. There is growing interest in natural sources of protein rather than only protein bars. Paneer, for instance, is doing very well for us because we source a high-quality product from Garhwal.
We are also seeing demand for healthier snacking, millet-based products, sugar-free chocolates and speciality products.
However, I would still emphasise that these are emerging categories. The foundation of the business remains everyday food — the staples that households consume regularly.
What is your vision for FreshTerra over the next five years?
If you want to build a large and profitable business, it should be IPO-ready. More importantly, we want FreshTerra to become the most trusted destination for fresh, wholesome and gourmet food.
When people think of high-quality food, we want them to think of FreshTerra. That is our mission.
We want to build a large business without unnecessarily burning cash. The response from our first store has been much stronger than we expected, and we are now seeing the potential for store-level profitability within the first three to four months, rather than the second year as we had originally anticipated. Our dream is to take the company towards an IPO in five to six years.
