Bengaluru, India Headquarter Captain Fresh Launched in 2020, it is a technology-focused business that provides digital solutions targeting the entire fish and seafood supply chain.
Over the past year, the group has begun building its own portfolio, including shrimp, salmon, crab and lobster, recently acquiring Sencea, Cenecrus, and most recently Coral from private equity firm Abris Capital. Partners.
If you look at the way Captain Fresh has evolved… in the first 24 to 36 months, our energy was spent building technology tools focused on critical stakeholders across the value chain. We have technologies for fishermen, technologies for farmers, processors that turn raw materials into finished products, technologies for distributors. After we built the technology, we tried (to see) if it could be a game that could be played only with the tech, then we sold the technology and got subscribers.
Very quickly, we realized that this market (this) does not lend itself to such a business model, which means that it must be a transaction-driven business model, which is where we begin to focus on being the main player. Not just the technology player, but the main player in the value chain for inventory, quality, delivery service, etc… combining fishermen, farmers to transform into finished products… and then our own distribution in the US, Europe, both food service and retail channels.
On the value chain where we are now involved, we have a whole range of activities that cut across geographies. Our main advantage is obviously the technology, but we are involved in all these activities and we are the principle behind it. The product we sell. With this strategy, we’ve been very inorganically oriented in the brands we buy, especially… in the US and Europe, where we bought Sensei, we bought Coral, we bought Senecrus.
There are parts of the value chain where it’s smarter to buy than build, and we’ve bought companies and brands in those parts of the value chain, and there are parts of the value chain (where) it’s smarter to integrate organically and technologies. It plays a role… mostly on the supply side.
AndThe Senecrus is the first one we bought a little over a year ago. The second was CenSea, which is now almost a year old, and we recently closed Coral, a Polish brand. As we speak, we are looking at two more brands in the US and one more in Europe.
And: As you can imagine we’ve over-indexed on growth because the thesis that we’re carrying is that this is a commodity … and in any commodity business it’s the balance that wins you superpowers and we’re going to continue to scale quickly.
We believe this is exactly day zero. In terms of annualized quarterly revenue improvement, we are around $600-650 million… We will continue to grow 50% to 60% every year, and we hope to reach $1 billion in terms of revenue this financial year, that’s what it is now. Calendar year.
AndIt’s a bit earlier than that, we’re looking for an IPO in 2025, so the process is just about to start. I think the rationale is that mostly one has a big question mark around the business model, profitability, expansion… I believe they have some plausible answers at this point. We are comfortable investigating ourselves in the public market. India is a logical market for us to target in terms of gaining share.
And: Yes, we have been profitable for the last two quarters, so the profitability has been very stable. At this point, we’re closing in on 5M to 6M in expenses every quarter, and we’re seeing leveraged profitability every quarter.
Regarding equity fundraising, yes, we are continuously in discussions on equity fundraising as we are looking at growth opportunities in terms of acquisitions. Which should be a prerequisite for the IPO we are considering.
And: America and Europe are the most important markets and will continue to be in the horizon of the next three to four years. The US is currently around 60% of the market and in that ballpark, it will be around 30-35% in the next four to five years in Europe. Proportionally we are in the Middle East and parts of South-East Asia, but in terms of opportunity, America and Europe clearly dominate.
AndWe are not looking to enter a new market. We are entering existing markets. Going deeper, we’re going to open up a few more channels in existing, existing markets. We are very strong on the US foodservice trend, looking to open up the retail channel.
On the other hand, we are opening more and more varieties in our offering portfolio. We’re strong in shrimp, we’re strong in salmon… we’re doubling species like tuna, white fish over the next 12 odd months…. That’s the line of thinking, on one axis we expand the product portfolio, and on the other axis we go deeper into channels, adjacent channels, existing markets.
AndIn Europe, food service is not the focus at this time.
In Europe, there are 20 large retail logos, which usually cover 80% of the total consumption. Today we can find all seven. The idea is to expand our access to logos. Also, our market presence is mostly in Central/Eastern Europe and Germany, and some parts of Western Europe. So Southern Europe is something we want to gain our exposure to through acquisitions.
And: Actually, it plays in our favor. While the market is huge, if you put things into perspective, seafood is just as big as meat or poultry or pork in terms of global opportunity.
Where we see the opportunity is if you take, for example, poultry, the largest player is a $50 billion giant like Tyson. If you take the biggest player in fish and seafood, it’s a $6 billion or $7 billion game. Overall global market share, while in pork, the top five players account for 20-25% of the market share.
There’s something unique about (the) seafood industry, which means there’s still a degree of fragmentation in this industry, which is an opportunity we see.
AndIt’s the structure of the company, and… some general business model positions. We call ourselves a multi-species, multi-origin, vertically integrated platform in seafood.
This abundance of species (ingredients) in general opens up the seafood basket for us as a… opportunity. If you take the biggest player today, let’s say Mowi, the salmon specialist. While fish and seafood is a $450 billion industry, salmon is a $40 billion, $50 billion industry, which means they address less of the overall opportunity. Similarly, there is shrimp, which is $40-$50bn, tuna $30-40bn. The way we look at this industry, from a consumer perspective from a supply perspective, our address is huge.
The second difference is that we have an equal focus on the Indian Ocean, the Atlantic Ocean. We don’t have that much focus, but we have the ability to expand assets into the Pacific. In a way, we are origin-agnostic, compared to incumbents who take a very asset-heavy approach, but we take a very asset-light approach to supply chaining.
These two things will make a huge difference in terms of looking at the consumer view of the market and the ability to unlock supply from any part of the world, compared to what technology is. -Leadership, rather than strong ownership.
AndWe are looking to acquire additional brands that are uniquely priced for a specific market segment. It can be in retail; It can be food service. In terms of market presence, it could be registered in the US or the South-Eastern US… that’s one way to look at it.
Another way of looking at it is from the point of view of the whole species, in addition to the basket that we have today, a few things that I have pointed out are tuna, white fish.
And third… we’re looking at competencies that will help us push the product in terms of this overall innovation product and mix up the evaluation curve. Brands or teams that have done a better job on those competencies, we want them to come in.
AndIn the next six to nine months.
AndI am the largest shareholder, but not the majority owner. I own around one-fifth of the company, four-fifths with institutional investors, names like Accel, Tiger Global Management. It also (a) has a meaningful 5-6% stake for management in the form of ESOPs (Employee Stock Ownership).
AndOne of our businesses is manufacturing for private label brands such as Geronimo Martins, Lidl, etc.
Private label is reasonably large for us… I would put private label (at $200m), so it’s close to a third of the business. If you look at the growth over the next 12 odd months, private label is expected to grow rapidly given our visibility on some of the larger contracts.
AndIn markets like Europe, it is moving from fishmongers’ counters to retail chains. Especially if you go to southern Europe… in Valencia, Malaga, all these cities you see a lot more changes now to retail channels where the fish is sold through traditional channels and within these channels there is this whole movement of goods. Transition to standard pre-packaged forms.
I think convenience is a big driver for some of these shifts, and while these changes (are happening) there’s scope for private label, there’s scope for a supply chain player like us, to be in the value chain and be able to. Provide the necessary suite of services to support a private label brand.
And: Taking a long-term view, I think seafood is a pretty secular growth sector. In terms of consumer dynamics, there is a clear shift from red meat to seafood. But if you take a short-term view, there are affordability shocks, inflation, supply chain disruptions because these are long supply chains.
If you force me to estimate the outlook in the short term, I would say one to three years, the industry is going to strengthen without much increase because of short term inflation, relative prices etc. But in the long run, this is an industry with many fundamental areas that will definitely support growth.
That’s the opportunity, and the challenge is that as you make this commodity more affordable, you’ll broaden the consumer base… given the cost pressures that are likely to arise in the near term (near term). Being present in the value chain and having regulators to optimize the cost structure, we see this as an opportunity to perhaps deliver better cost performance and help ourselves in terms of market share.
“”We believe this is just Day Zero” – Captain Fresh to be a “principle player” in seafood Originally created and published by Only foodA brand owned by GlobalData.
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