Founded in 2011, the Peak XV Partners-backed company has now switched lanes, moving away from a direct-to-consumer (D2C) strategy to focus more on offline channels, in an attempt to improve unit economics.
Elevate Your Tech Prowess with High-Value Skill Courses
| Offering College | Course | Website |
|---|---|---|
| Indian School of Business | ISB Product Management | Visit |
| IIM Lucknow | IIML Executive Programme in FinTech, Banking & Applied Risk Management | Visit |
| Indian School of Business | ISB Professional Certificate in Product Management | Visit |
In FY23, the company clocked revenue from operations of Rs 307 crore, compared to Rs 205 crore in the year ended March 2022, according to regulatory filings sourced from Tofler.
However, the company’s total expenses grew at a faster clip than its revenue, ballooning to Rs 491 crore in FY23, 73% higher than Rs 284 crore in FY22. The increase in Wingreens’ spending primarily came from a surge in the cost of goods sold, and advertising and promotional expenses.
In the year ended March 2023, Wingreens Farms’ marketing costs came in at Rs 114 crore – just over a fifth of its total spends – up from Rs 63 crore in FY22.
Wingreens Farms’ cofounder and deputy managing director Arjun Srivastava told ET that losses in FY23 grew on account of an “aggressive D2C push” that the company did on all of its brands.
Discover the stories of your interest
“We soon realised that unit economics did not favourably support a D2C strategy and we put D2C on hold and focussed on other channels. As a group, 70% of our revenue comes from offline channels – modern and general trade. We have also made very good progress in quick-commerce channels which are growing at a fast pace,” Srivastava said.The company is currently in the process of raising $10 million (around Rs 82 crore) in a bridge round of funding that values it at around $205 million. According to filings made with the Registrar of Companies (RoC), Wingreens Farms has so far received Rs 62 crore as a part of this round. including from its existing investors such as Peak XV Partners, Investcorp, Omidyar Networks, and Grand Anicut Fund of Anicut Capital.
The company’s cofounders Arjun Srivastava and Anju Srivastava also participated in the round.
In addition to Wingreens, the company also owns the juices brand Raw Pressery, gourmet dips brand Saucery, and packaged snacks brand Postcard. It acquired Raw Pressery in January 2021, and Postcard in April 2022.
As a part of its FY23 financial statements, the company’s auditor Price Waterhouse has flagged certain accounting practices pertaining to the goodwill recognised by the firm on account of Postcard. The auditor noted that it has identified “material weakness…in the operating effectiveness of the company’s internal financial controls over financial reporting as at March 31, 2023”.
Responding to a query on the note, Srivastava said, “Auditors have raised concern over the fall in revenue of our newest addition to the portfolio – Postcard. The Postcard brand and business was purely a D2C business. Post acquisition, we took a call at the group level to put a pause on D2C, because the unit economics were negative. Postcard business was put on a temporary hold”.
“We plan to bring Postcard back in a different avatar with an offline business model. We are clear that there is intrinsic value in the brand and the business and we have plans to relaunch it in the near future,” he added.
Looking ahead, Srivastava said that in the ongoing fiscal, the company has taken a call to consolidate all its acquisitions and target profitability on earnings before interest, taxes, depreciation and amortisation (Ebitda) level.