wingreens farms: Wingreens Farms posts 50% jump in FY23 revenue at Rs 307 crore, loss doubles

The Gurugram-based company reported a 50% rise in operating revenue for FY23 at Rs 307 crore, compared to Rs 205 crore in the previous year, showed regulatory filings sourced from Tofler.

Total expenses ballooned 73% to Rs 491 crore in FY23. This was primarily due to a surge in the cost of goods sold, and higher advertising and promotional expenses.

In the year ended March 2023, Wingreens Farms’ marketing costs stood at Rs 114 crore or over a fifth of its total spends, compared to Rs 63 crore in FY22.

Founded in 2011, the Peak XV Partners-backed company has shifted from a direct-to-consumer (D2C) strategy to focus more on offline channels to boost unit economics.

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 its brands.

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“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 trade 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 at a valuation of around $205 million.

According to filings with the Registrar of Companies (RoC), Wingreens Farms has so far received Rs 62 crore as a part of this round including from existing investors such as Peak XV, Investcorp, Omidyar Networks, and Grand Anicut Fund of Anicut Capital.

Cofounders Arjun Srivastava and Anju Srivastava have also participated in the round.

In addition to the Wingreens brand, the company also owns 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.

Meanwhile, the company’s auditor Price Waterhouse has flagged certain accounting practices in its FY23 results 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 this financial year, the company has decided to consolidate all its acquisitions, and would target profitability on earnings before interest, taxes, depreciation and amortisation (Ebitda) level.

The Gurugram-based company reported a 50% rise in operating revenue for FY23 at Rs 307 crore, compared to Rs 205 crore in the previous year, showed regulatory filings sourced from Tofler.

Total expenses ballooned 73% to Rs 491 crore in FY23. This was primarily due to a surge in the cost of goods sold, and higher advertising and promotional expenses.

In the year ended March 2023, Wingreens Farms’ marketing costs stood at Rs 114 crore or over a fifth of its total spends, compared to Rs 63 crore in FY22.

Founded in 2011, the Peak XV Partners-backed company has shifted from a direct-to-consumer (D2C) strategy to focus more on offline channels to boost unit economics.

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 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 trade 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 at a valuation of around $205 million.

According to filings with the Registrar of Companies (RoC), Wingreens Farms has so far received Rs 62 crore as a part of this round including from existing investors such as Peak XV, Investcorp, Omidyar Networks, and Grand Anicut Fund of Anicut Capital.

Cofounders Arjun Srivastava and Anju Srivastava have also participated in the round.

In addition to the Wingreens brand, the company also owns 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.

Meanwhile, the company’s auditor Price Waterhouse has flagged certain accounting practices in its FY23 results 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 this financial year, the company has decided to consolidate all its acquisitions, and would target profitability on earnings before interest, taxes, depreciation and amortisation (Ebitda) level.