How a Family Vision Birthed the Rise of Fresh2day
In 2021, as the Covid pandemic began to retreat, Karthik Annamalai returned to Chennai, inspired by his studies in Finance and Entrepreneurship in the US and UK. A pivotal conversation with his father, Annamalai T—a respected figure in Tamil Nadu’s food and grocery retail sector—sparked a shared vision for a modern supermarket chain focused on fresh produce and exceptional customer experience.
Annamalai T, COO and Director of Kovai Pazhamudir Nilayam (KPN), had been integral to its growth from a single pushcart to over 80 stores across Tamil Nadu. Meanwhile, Karthik’s interest in retail deepened during his time abroad, where he became captivated by the vibrant store environments. Upon his return, he identified a gap in the local market, realizing that Chennai’s grocery stores lacked the quality and service found in international supermarkets.
This synergy led to a joint decision to launch a new retail venture, emphasizing fresh fruits, vegetables, and essential food products. Karthik’s brother, Thiagaraja Annamalai, had already begun his own journey in the sector, establishing a B2B business supplying produce to local stores, inspired by innovative companies like Ninjacart and WayCool.
With a rich family legacy in business and a commitment to quality and innovation, the Annamalai family is poised to transform Chennai’s grocery landscape, creating a groundbreaking retail experience rooted in their passion for fresh produce.
Within a year, Fresh2day expanded to three locations, and the venture gained further momentum with the addition of Karthik’s brother, Thiagaraja. Fast forward three years, and Fresh2day now operates 24 stores across Chennai, encompassing around 50,000 sq. ft. of retail space.
Fresh2day aspires to set the standard as a leading omnichannel food retailer in India, delivering the freshest produce tailored to evolving consumer needs. “We advocate for healthy lifestyles and authentic local flavors while empowering our dedicated employees with cutting-edge technology to enhance their skills,” he adds.
Expanding Accessibility and Quality in Chennai’s Grocery Landscape
Three years after launching its first store, Fresh2day is making significant strides in Chennai’s retail sector, operating 24 locations—17 company-owned and 7 franchised. The brand is strategically focused on expansion, with plans to convert more stores into franchise-invested, company-operated locations. On a typical day, Fresh2day welcomes around 500-600 shoppers, primarily from the Sec A, B, and B+ demographics, who seek quality and convenience for their daily food needs. Each store is staffed by a dedicated team of 18 to 20 employees, fostering a welcoming environment. The workforce reflects diversity, with a gender ratio of 40% female to 60% male, promoting inclusivity within the team.
With an average store size of 2,200 square feet, Fresh2day effectively creates a comfortable shopping experience. This blend of company-operated and franchise stores, combined with a clear vision for future growth, positions Fresh2day as a dynamic player in Chennai’s retail landscape. Location is key to their strategy; Thiagaraja, one of the Directors, emphasizes a focus not only on premium areas but also on above-middle-class neighborhoods. While current stores are located in some of Chennai’s most sought-after locales, there’s a clear intention to expand into B+ areas.
Karthik, the other Director, adds depth to this strategy by acknowledging the need for a nuanced pricing approach as the brand grows. “We can’t enter different communities with the same pricing strategy,” he notes, understanding that perceptions of affordability vary widely. This thoughtful approach reflects Fresh2day’s commitment to inclusivity, aiming to provide high-quality products to a broader demographic beyond the affluent. By balancing location and pricing strategy, Fresh2day is poised to create a shopping experience that resonates with a diverse range of customers.
Where Freshness Meets Daily Needs
Karthik highlights the thoughtful selection of the name Fresh2day, capturing the essence of their business: “Over 80% of our products are fresh and designed for everyday consumption. We specialize in fresh fruits and vegetables, creating a unique shopping experience with an inviting store ambience. This commitment to quality and exceptional service sets Fresh2day apart from competitors in Chennai.”
CEO K. Devendra Kumar notes that 65% of total sales come from fresh produce, while 35% to 40% is derived from regular grocery items, including staples like pulses, oils, and dairy. With a background in both international and Indian retail, having worked with SPAR and other multinationals, he explains that “Fresh2day” perfectly encapsulates the brand’s mission to meet daily food needs.
“Our stores, averaging 2,500 square feet, function as convenience supermarkets, offering a strong variety of food products while keeping non-food items to a minimum. This category distribution reflects our dedication to high-quality offerings while ensuring convenience for our customers.”
Ensuring Quality Through Direct Sourcing
In a market where most retail produce is often a day or two old, Fresh2day identified an opportunity for innovation. Thiagaraja explains, “With 95% of stores offering older produce, we focused on sourcing directly from farmers, ensuring freshness while building strong relationships with those who grow our food.”
To facilitate this, Fresh2day established a collection center in Palakod, situated on the border of Tamil Nadu and Karnataka, enabling them to receive high-quality produce directly from farms. They also source fruits and vegetables from the Bangalore market to enhance their logistics. Fresh produce leaves the collection center between 6:00 and 7:00 p.m., arriving at their warehouse by 2:00 a.m. and dispatched to all 24 stores by 4:00 to 5:00 a.m. daily.
Acknowledging the unpredictability of agriculture, Thiagaraja states, “Farmers may not always meet our requests due to yield fluctuations and weather conditions.” For any shortfalls, Fresh2day turns to local markets to ensure a continuous supply of quality produce. Currently, about 20% to 30% of their fruits and vegetables come directly from farmers, with a long-term goal of increasing that to 80% to 90%. To support their farmers, they offer daily payments, nurturing mutually beneficial relationships.
With a contact list of over 1,000 farmers, Fresh2day relies on approximately 50 to 60 farmers daily, supplemented by another 10 to 20 vendors for shortfalls. Thiagaraja also emphasizes the importance of consistency with farmers: “Establishing clear expectations allows them to plan their yields effectively.” This framework optimizes production capabilities while ensuring Fresh2day maintains the quality and availability of its offerings. “It took time to establish this scale of operations,” he reflects. “Now, with 24 stores, we transport around 25-30 tonnes of fruits and vegetables daily—almost double on weekends.”
Commitment to Quality and Care
At Fresh2day, the commitment to quality and expertise sets them apart in the fresh produce market. Recognizing that each customer has unique preferences, staff members are trained to navigate these diverse tastes with empathy and knowledge. CEO Devendra emphasizes that quality is a core competitive advantage, starting from the farm gate. The Fresh2day quality team is involved in procurement, ensuring each item meets stringent standards.
Every shipment undergoes a rigorous quality check at the distribution center, where size, color, and shape are evaluated. This multi-stage quality assurance process ensures that only the best products reach the shelves.
Training is essential at Fresh2day. Customer Relationship Executives (CREs) not only excel in customer service but also inspect incoming products, empowering them to make informed recommendations. Visual merchandising training helps staff display items attractively while managing inventory effectively to minimize waste.
Devendra asserts that the quest for quality is an ongoing journey, driving Fresh2day to continually refine processes and elevate standards. As customers enter Fresh2day, they encounter an inviting atmosphere filled with vibrant produce and a team that genuinely understands their needs. This dedication transforms grocery shopping into a journey of discovery, making Fresh2day a beloved destination for fresh produce enthusiasts in Chennai.
Unique Offerings and Dedication to Wholesome, Fresh Choices
During summer, Fresh2day sees a spike in fruit sales, while the off-season brings a more balanced distribution, with 60% of sales coming from vegetables and 40% from fruits. Surprisingly, pomegranates are the fastest-selling fruit, outpacing apples, while potatoes, onions, and tomatoes lead in vegetable sales.
To differentiate itself, Fresh2day introduces exotic fruits by leveraging vendor connections to stock these unique items in all stores. Their commitment to freshness extends beyond produce; they are the first supermarket to offer raw, unprocessed cow milk, delivered daily and sold fresh under their brand.
Health is a priority, too. Fresh2day partners with manufacturers to provide preservative-free snacks, focusing on quality over shelf life. Karthik emphasizes the importance of their raw cow milk and fresh curds, assuring customers of their health benefits. Quality assurance is another critical feature at Fresh2day. Regular lab tests on products ensure that customers can shop with confidence, knowing they will find pure curd and preservative-free snacks.
Since its launch, Fresh2day has grown significantly, expanding its offerings to over 30 unique stock-keeping units (SKUs). This growth underscores their commitment to health and quality, establishing Fresh2day as a leader in a market often filled with standard offerings.
Nurturing Expertise
Handling fresh produce at Fresh2day is a skill refined through experience and training. Karthik emphasizes the crucial role of skilled staff who are adept at maintaining the brand’s commitment to quality and freshness. These employees possess a discerning eye, knowing how to identify a ripe mango or the perfect avocado. “Experience matters,” Karthik states, highlighting the importance of staff training in recognizing quality.
Fresh2day implements comprehensive training programs for new hires, pairing them with seasoned employees to pass on essential knowledge about handling fruits and vegetables. Training is ongoing, with weekly sessions that introduce new techniques and keep skills sharp. The company also offers a career progression framework, allowing staff to advance from Customer Relationship Executives (CREs) to managerial roles, fostering growth and learning.
Mentorship plays a vital role, with experienced team members guiding newcomers and promoting a culture of continuous improvement. Karthik notes, “If someone excels, we promote them to a supervisor role and identify mentors,” motivating employees and nurturing talent.
This collaborative environment empowers staff to make decisions, whether it’s rejecting subpar produce or optimizing displays for freshness. “We’re building a culture where quality reigns supreme,” Karthik asserts. Through these initiatives, Fresh2day enhances the customer experience while cultivating a dedicated workforce passionate about fresh produce, ensuring that every visit meets the highest standards of quality.
From Farm to Community
To promote its stores and products, Fresh2day has primarily focused on below-the-line (BTL) marketing strategies around its store locations, effectively engaging with the local community. However, as the brand gears up for the next phase of growth—recruiting a new team and agency—it plans to shift its focus towards a more comprehensive storytelling approach.
The narrative centers on key themes: farm-gate procurement, farm to plate, freshness, quality, value, customer service, and innovative solutions. “Our goal is to share the Fresh2day story more widely,” the team explains. They aim to roll out a robust marketing campaign starting in October, leveraging strong social media activation across platforms.
In addition, Fresh2day is exploring print media and public relations as part of its strategy to communicate its brand story. “We’ve already begun sharing our story on a smaller scale, but soon it will be front and center in both social and print media,” Thiagaraja promises. This multi- faceted approach is set to elevate Fresh2day’s presence in the market and deepen its connection with customers.
From One to Twenty-Four Stores
The journey of Fresh2day from a single store to 24 locations in just three years showcases a blend of vision, hard work, and family synergy. Karthik credits much of this success to his father’s foresight: “More stores mean more volume, and more volume translates to greater benefits for both us and our customers.” This philosophy laid the groundwork for an ambitious plan to open one store each month, aiming for ten to twelve new stores annually to rapidly expand Fresh2day across Chennai.
Thiagaraja highlights their father’s extensive 20 to 25 years in retail, which cultivated a robust network. “After launching our first store and showcasing our unique model, the response was overwhelming,” he recalls. “Once we nailed down the model, it became a snowball effect,” Thiagaraja explains. This validation made it easier to attract partners and resources for expansion, creating a replicable model that resonated with customers and franchises alike.
Karthik emphasizes the collective effort behind this growth: “We were supported by many people within the company, all dedicated to building a strong foundation for Fresh2day.” Each new store symbolizes a piece of a larger vision centered on quality, freshness, and customer satisfaction.
Ultimately, their growth story reflects a family’s vision realized through hard work, strategic planning, and a commitment to excellence. As they continue to expand, Karthik and Thiagaraja remain focused on their father’s principles, ensuring every new store upholds the Fresh2day promise.
A Blend of Innovation and Experience
At Fresh2day, innovation thrives alongside the freshness of its produce. Karthik attributes much of the brand’s success to a blend of experience and fresh ideas. He explains, “While my father laid the groundwork with his supermarket expertise, I focused on introducing innovative services and enhancing the store’s ambience.”
Karthik’s journey into retail innovation was sparked by a visit to Trader Joe’s in the U.S., where he admired their effective branding—95% of their products are under their own label. This observation made him realize that Fresh2day currently only brands about 10% of its products, presenting a significant opportunity for future expansion.
He envisions transforming the in-store experience with innovative marketing strategies, such as digitized displays that provide real-time information and promotions to customers. Karthik contrasts the scale and customer experience of supermarkets abroad with those in India, noting that U.S. supermarkets typically exceed 10,000 square feet and offer a vast selection of goods. This drives his ambition to elevate Fresh2day by blending best practices from around the world with local sensibilities.
CEO Devendra complements this vision with his extensive experience in managing large-scale fruit and vegetable operations, creating a synergy between generational wisdom and modern ideas.
Karthik acknowledges the challenges of transitioning from a family-run business to a corporate-style structure. “We’ve implemented numerous standard operating procedures (SOPs) to cultivate a corporate culture focused on employee well-being, efficiency, and accountability,” he explains. This shift is essential for minimizing waste and maximizing productivity.
Embracing Technology for a Fresh Future
At Fresh2day, growth is not just about opening more stores; it also involves leveraging technology to enhance customer experience and operational efficiency. Thiagaraja highlights their shift from basic software to a more robust ERP solution, emphasizing that “data is the new oil.” This evolution enables Fresh2day to track customer behaviors and preferences, allowing for tailored offerings based on local demographics.
Devendra underscores the importance of technology as an enabling function, focusing on functional efficiencies through automation. A key initiative is the RFM (Recency, Frequency, Monetary) analysis, which helps them communicate effectively with customers by understanding their shopping patterns.
As the retail landscape evolves, Fresh2day is investing in artificial intelligence for improved demand forecasting, crucial for minimizing waste and ensuring the right products are available at the right times. They are actively collaborating with tech vendors to integrate AI into their systems.
Omnichannel Approach to Customer Engagement
Devendra highlights Fresh2day’s vision of becoming an omnichannel partner, stating, “Our mission is to reach customers whenever and wherever they need us.” To support this, Fresh2day has launched an e-commerce platform that allows customers to order via an app or by calling a store, promising delivery within an hour.
Currently, e-commerce accounts for about 2-3% of their business, but Fresh2day aims to scale this significantly by capitalizing on gaps in the quality of fresh produce delivered by competitors. They plan to set themselves apart by ensuring that their e-commerce offerings meet the high standards of freshness.
Looking ahead, Fresh2day is focused on upgrading its e-commerce platform, enhancing user experience (UI/UX) to create a seamless online shopping experience. By prioritizing technology and data-driven strategies, Fresh2day is enhancing its operations while maintaining its commitment to quality and freshness, blending tradition with innovation.
Navigating Competitiveness
As Fresh2day continues its remarkable journey from a single store to a thriving chain of 24 supermarkets, Karthik reflects on the challenges and strategies that have shaped their approach to pricing and competitiveness. “When we first started, pricing was a simple affair,” Karthik explains. “Each store operated independently, but that led to inconsistent pricing based on local perceptions of value. Now, we’re looking to enter new markets with a more strategic approach. We can’t treat every community the same; some see our prices as premium, while others view them as beyond their budget.”
The solution? Centralized procurement. By consolidating their purchasing power across 24 stores, Fresh2day can negotiate better deals, making them more competitive not just in food, but also in fast-moving consumer goods (FMCG). “With greater volume comes lower costs,” Karthik continues. “As we aim for 40 stores, that advantage will only multiply. Our goal is to cater to a broader audience, while maintaining the high standards of quality and freshness that define us.”
Quality as a Competitive Edge
At the core of Fresh2day’s strategy is an unwavering commitment to quality. Karthik emphasizes that their competitive advantage lies not just in pricing but in freshness, exceptional service, and innovative food solutions. Customers expect a clean environment and the highest caliber products, which drives the brand to prioritize customer satisfaction.
Their values—customer centricity, integrity, innovation, and teamwork—guide their operations. Accountability is key, with a focus on empowering employees to grow, which in turn supports the business. Sustainability is also integral, with a commitment to environmentally friendly practices in sourcing and packaging.
As Fresh2day prepares for further expansion, Karthik remains optimistic, stating that their focus on innovation and customer satisfaction will continue to propel them forward. With plans to refine their pricing strategies and broaden their reach, Fresh2day is poised to become a beloved staple in communities, ensuring that freshness and value are always accessible.
Approach to Franchise Partnerships
Fresh2day distinguishes itself through its commitment to quality and innovative franchising approach. Thiagaraja explains how the company evolved its franchise model from a straightforward franchise-invested, franchisee-operated system to a Franchise Invested, Company Operated (FICO) model. This functioning model attracts potential investors with Fresh2day’s established reputation for quality, resulting in daily foot traffic of 500 to 600 customers. Investors can expect attractive returns, averaging around 20% with a payback period of four to five years, and exceptional success can yield returns close to 30% per annum.
Interestingly, Fresh2day has relied on positive word-of-mouth from existing franchisees rather than heavy marketing to fuel growth. As the company continues to expand, the FICO model will remain central to its strategy, safeguarding brand integrity and fostering a mutually beneficial environment for franchisees and the wider Fresh2day community.
Paving the Path to a Flourishing Future
As Fresh2day embarks on ambitious growth plans, Devendra and Thiagaraja outline their strategic vision. With a current run rate of Rs. 100 crore, they aim to reach Rs. 250 crore in two and a half years, and Rs. 500 crore within five years—an ambitious fivefold increase.
“We are poised for double-digit growth,” Devendra states, noting that most stores are thriving despite challenges. They plan to expand from 24 to 60 locations in Tamil Nadu as they transition from a family-run to a professionally managed operation.
To support this growth, they’ve recruited a skilled team from various sectors and are leveraging technology to streamline operations and enhance customer engagement. Fresh2day is exploring strategic partnerships to enhance supply chain and technology efficiencies, marking a shift from their bootstrap origins. With a solid foundation and a clear roadmap, Fresh2day is set to transform the retail landscape in southern India, ready to create a legacy for future generations.
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