Chennai: Krishna Kumar’s morning routine begins with yoga and meditation at 5.30am, followed by high-protein yogurt with no-sugar granola, Blue Tokai coffee and a light breakfast accompanied by cut fruits or fresh juice. Almost all the food is sourced from FirstClub, a Bengaluru-based premium online grocery startup launched in 2025.
The 52-year-old senior bank executive, who was once fond of sweets and sugary drinks, has over the past decade cut sugar, taken up yoga, and turned vegetarian. Greater awareness and spending power pushed him towards clean-label, low-preservative, organic, and “better” quality food.
What Kumar did not want, however, was for every grocery purchase to become an exercise in checking labels. That is where FirstClub came in. Kumar discovered the platform when it set up a kiosk in his apartment complex. The company says it vets every product and has banned more than 200 ingredients, including artificial colours and sweeteners, benzoates (used as preservatives) and dough conditioners.
“The whole experience from the mix of products to delivery to packaging gives a premium feel. Most importantly, they have maintained standards. I do not have to think too much before placing an order; I know it will be good,” says Kumar. He now shops on FirstClub at least three times a week, spending at least ₹1,000 every week.
Kumar represents a new kind of “premium” grocery consumer—one looking beyond imported or expensive products for cleaner, healthier, fresher and preferably Indian-made food, and willing to pay more when he sees value.
FirstClub is among a new crop of premium grocery retailers betting on this new breed of discerning consumers. Others include offline ones such as Foodstories, Food Square and FreshTerra. All of them were set up between 2023 and 2025.
The glamour of premium grocery retail can, however, obscure a less attractive reality: it is a difficult business to execute, and India is yet to produce a scaled specialist retailer.
Moreover, competition is heating up. In recent months, leading quick-commerce companies Blinkit (Eternal’s), Instamart (Swiggy’s) and Zepto have jumped on the bandwagon and are pursuing the same customers, lured by the prospect of bigger basket values and better margins.
Deja Vu?
The premium grocery category isn’t new. For decades, affluent consumers turned to specialist stores and markets for imported food and cheese. Delhi had Modern Bazaar and INA Market, Mumbai had V.K. Stores, and Chennai had Amma Naana.
Then came organised formats such as Nature’s Basket and Foodhall. But the category struggled to scale. Foodhall shut in 2023, while Nature’s Basket, launched in 2005, has grown to only 35 stores nationally. Its sales fell to ₹272 crore in FY26 from ₹296 crore in FY24. Modern Bazaar has sharply cut down the number of stores—from 27 until about a year ago to 12 now.
“On the surface, it looks very enticing because you see it in aspirational neighbourhoods and clusters. But if you scratch the surface and do the math, the story is much more nuanced,” says Ankur Bisen, senior partner at consulting firm The Knowledge Company. “Premium food retail has always had two problems. One is that the demand is fragmented. The second is execution. Indian retailers have not been very consistent in delivering a superior retail experience when it comes to premium food.”
So, what are the new premium grocers doing differently to succeed where their predecessors struggled? To begin with, they are riding a tailwind in the form of rising consumer incomes and a shift in preferences.
High-income Indians have become discerning about what they eat, with health, freshness and provenance driving purchase decisions. They no longer see a product as having value just because it is expensive or imported.
“Rather than the premiumization or positioning, what I have seen is customers are asking very tough questions: where is my food coming from? Is it good for me? These two questions have created a category,” says Shashi Kumar, co-founder and managing director of dairy company Akshayakalpa Organic, which sees revenues of about ₹70 crore a month.
Addressing those questions, the new crop of grocers offer consumers curated, high-quality Indian products at reasonable prices, through direct sourcing and private labels or house brands. They are also scaling cautiously, focusing on execution rather than adding stores at a rapid pace to spur growth.
India’s gourmet food market is set to grow over 22% in just a year, from $5.4 billion in 2025 to $6.6 billion in 2026, according to market research company IMARC Group. It is projected to be worth $24.5 billion by 2034.
“The supply of high-quality food products and services is just exploding with hundreds of brands being launched, and we think that it is only growing exponentially,” says Mayank Gupta, co-founder of Food Square. Launched in 2023, Food Square operates three stores, has crossed ₹150 crore in revenue and is profitable, he says.
Data from startup tracker Tracxn shows that in 2026 alone, up to August, 253 food and beverage product startups launched in India. And that an average of 493 new companies have been launched annually in this category over the past 10 years.
While changing consumer behaviour and a growing supply of better-quality products have created an opportunity, it all boils down to execution.
“When you are selling premium food, the consumer pays for a certain level of assurance and experience. That requires operational excellence in storage, expiry management, quality assurance and consistency. The customer should get the same high standard every time,” says Bisen of The Knowledge Company.
The new playbook
For FirstClub, this starts with deciding what not to sell. The company has deliberately limited its assortment to about 4,000 grocery SKUs, compared with more than 10,000 at other retailers. (SKUs, or stock keeping units, are unique codes assigned to each piece of inventory.)
Founder and chief executive Ayyappan R. says this also makes demand planning and inventory management easier.
A change from earlier is the insistence by the new crop that higher prices do not necessarily mean premium products. FirstClub, in fact, does not like to call itself a premium retailer. “Premium often implies that something is more expensive, exclusive or aspirational—out of reach, in a way. That isn’t our intent," says Ayyappan.
Price, then, is as important as quality, and to that end, sourcing is key. FirstClub goes upstream to manufacturers and sources directly where possible, aiming to offer better-quality products without making consumers pay 50–60% more.
The company raised $55 million in Series B funding in January and had an annualized gross merchandise value of about $50 million at the time. (GMV, a key metric in online commerce, is the total value of goods transacted through a platform over a specific period, before accounting for returns, cancellations and platform fees.)
FreshTerra, one of the newest entrants, is taking a similar approach. Arvind Mediratta, who previously held senior roles at Metro and Walmart, spent six months setting up the sourcing and supply chain before opening the company’s first 4,000-sq.ft. store this July in Gurugram.
“When I say quality, I’m talking about three things: it has to be fresh, it has to be wholesome, and it has to be at a price that a normal customer can afford. Quality should not come at a big premium,” says Mediratta.
Much of FreshTerra’s range is private labels, and procured as close to the source as possible. Organic produce comes from producer groups around Delhi-National Capital Region, A2 ghee from Gujarat, and Khapli wheat from Maharashtra. A2 Cow Gir Ghee is priced at ₹1,799 a litre, against ₹2,000–3,000 for similar products, while Khapli wheat is sold at ₹165 a kilogram, compared with over ₹200 at competitors.
Despite the relatively reasonable prices, margins remain upwards of 30% because of tight sourcing controls. Private labels already account for over 60% of sales, says Mediratta, who expects the store to break even in October.
The q-commerce question
The combination of customer appetite and better-margin potential has also attracted quick-commerce players looking for differentiation and better economics.
Blinkit has launched Gourmet, while Zepto has introduced Select in certain cities and pincodes. Instamart is offering a bouquet of options, such as its private label artificial preservative- and palm oil-free range, Noice; premium fresh produce, Nectr; and Switch to Better, a collection of over 400 brands offering cleaner and healthier alternatives.
Kushal Bhatnagar, partner at RedSeer Strategy Consultants, says premium products can help q-commerce raise average order values, a key route to sustainable profitability. Akshayakalpa’s Kumar said the company’s customers’ average order value on q-commerce is around ₹1,100, compared with under ₹600 for a regular customer.
So, can premium-only grocery retailers hold their own in the face of growing q-commerce competition?
Take Priti Nanda, 62, who moved with her husband from South Delhi to Gurugram’s tony Camellias apartment complex after retirement. Her staff used to handle most grocery purchases in Delhi. In Gurugram, she began ordering from quick commerce and multiple offline stores, but says that changed when FreshTerra opened nearby.
“I am very happy with the quality of the produce at FreshTerra. Also, the attas get milled right there, as does the cold pressed oil. I don’t buy my fruits, vegetables or meat on Blinkit Gourmet anymore, as I find it expensive. I find FreshTerra is priced fairly.”
While FirstClub has carved out a niche with its non-instant delivery and curation-focused model, offline retailers know that a transactional relationship alone is not enough to make customers brave traffic regularly. Their large-format stores are therefore doubling up as spaces to be experienced.
Ashni and Avni Biyani’s five Foodstories stores, in Mumbai, Delhi, Bengaluru and Hyderabad, host masterclasses, maker meet-ups, tastings and even grocery raves. The café and beverage bar encourages customers to eat, shop and linger.
The Biyani sisters, daughters of Future Group founder Kishore Biyani, had earlier launched luxury gourmet food chain Foodhall in 2011, operating under 10 stores across the country. But by 2023, all stores were shuttered following insolvency proceedings against parent Future Retail initiated by its creditors.
“You need a lot more theatre, the stores need a lot more drama. They need to keep giving the customer a reason to come back,” says Ashni.
But the store still has to work as a shopping destination and is positioned as a place for customers who value and know good food. Discovery, in particular, is difficult to replicate online.
“Discovery of products on a small six-inch phone screen, where you’re using a quick-commerce app, is very difficult, almost impossible,” says Gupta of Food Square, which counts Swiggy as one of its investors.
That discovery matters to brands, too. Millie Mitra, founder of small-batch, plant-based, vegan cheese brand Millie's Kitchen, says nothing matches the visibility offered by stores such as Foodstories and FreshTerra. “They have amazing product support. We have samplings every weekend at Foodstories and we get to showcase our products to customers,” she says.
But q-commerce is competing for those brands too. Platforms have even waived listing fees, which typically is about ₹25,000 per SKU per location, compared with ₹5,000–10,000 for physical shelf space. Millie’s Kitchen, for instance, did not have to shell out a listing fee when it went live on Blinkit Gourmet earlier this year. Q-commerce accounts for around 60% of Millie’s Kitchen’s sales.
Q-commerce, however, cannot simply turn its dark stores into premium supermarkets. Dark store capacity is finite, and mass-market products move faster. “You cannot be extremely premium because then you will be really bad on the throughput of the dark store,” explains RedSeer's Bhatnagar. A dark store typically has room for 35,000–40,000 SKUs across grocery, beauty and personal care, home and electronics accessories, leaving limited space for slower-moving premium products.
There are quality constraints too. Akshayakalpa’s Kumar says q-commerce still has gaps around expired products and cold-chain failures. Yet it remains a major channel for the brand, contributing 40% of sales, the same as its direct channel. Offline contributes the remaining 20%.
Unsurprisingly, all offline gourmet players are offering website, WhatsApp or app-based home delivery options. While the stores primarily handle the deliveries, Foodstories has tested delivery-only centres and FreshTerra is considering dark stores as it expands. Food Square is live on investor Swiggy’s Instamart in some locations in Mumbai.
But none of them, including the online-only FirstClub, is chasing 10-minute delivery. “I don’t think a gourmet customer needs deliveries in 10 minutes. And I don’t think 10 minutes is sustainable,” says Food Square’s Gupta.
Careful expansion
A fundamental challenge remains: scale. The founders of the new crop of retailers have learnt from earlier failures and are wary of expanding before they have figured out what works.
Food Square, for instance, took nearly three years to open its first store outside Mumbai, in Ahmedabad, this July. It spent that time operating its two Mumbai stores and refining the model. It is now planning three more stores this fiscal year.
Foodstories is taking a similar, measured approach. Rather than chasing a national footprint, the Biyani sisters want to build depth in their current locations before expanding to new ones.
The caution is partly because premium grocery is a high-involvement business. FirstClub’s Ayyappan says for each new city, the platform has to identify suppliers, build the supply chain, acquire customers and understand how products behave in different local climates.
The platform operated only in Bengaluru for a year before expanding to Hyderabad earlier this year. It intends to eventually reach 35–40 cities in three to four years.
That makes it fundamentally different from q-commerce. “I can’t launch 200 cities in the next five years even if people give me money. If things need to be done right at each location, it will need time,” says Ayyappan.
And then there is real estate. For a business that depends on footfalls from affluent neighbourhoods, the right location can be difficult to find, and expensive when found.
FreshTerra’s Mediratta sees potential for more than five stores each in Gurugram and Delhi, but has rejected dozens of locations. A good location, on the flip side, could be too expensive. “If the rentals are ₹30 lakh I’ll never make money or I will have to increase my prices to more than what people are willing to pay. That’s a recipe for disaster,” he says. The company will launch its second store, also in Gurugram, this week.
The founders are far more bullish about how large the category can become. “I think the time is now,” says Avni Biyani, adding that the potential is “infinite”. Food Square’s Gupta estimates that a premium grocery retailer can eventually build a ₹1,500-crore business.
Getting there, however, will depend a lot on whether they can deliver the quality and experience their customers expect every single time.