India’s food business is estimated at $75 billion, while projections forecast that by 2030 it could become a $125 billion industry. Of India’s 6.3 crore MSMEs, about one per cent are engaged in the organised food business space. The numbers may seem optimistic, but the food sector has been plagued with challenges relating to quality and compliance, and has largely been dominated by foreign players with varying levels of benchmarks and adherence.
Rassense, a Chennai-based food business, has achieved the unthinkable feat of breaking the decades-old stigma in the food space. Food businesses not only navigate intense market competition and varying customer perceptions such as being low-value, but also have to deliver quality standards. “Even organised players deliver poorly on compliance parameters or even laws such as labour codes,” rues Rassense’s Sanjay Kumar, the man behind the venture.
Explaining the complexity of the food business, he says: “It is ironic that in a category as local as food, and in a country as diverse as India, the two largest players are from Europe.” Emerging from the back lanes of Chennai and operating from a swanky headquarters in Bengaluru, Rassense is the first Indian company to have harnessed technology on a massive scale to surpass a crucial R500-crore revenue mark. This story is a riveting one on data, algorithms and the gumption of an architect – a tale rarely seen in India’s food business segment in the last 78 years.
Decoding the first principles
In industrial settings such as factories, getting quality food is challenging. These are locations where there may be no restaurants for miles, or where an enterprise has limited access to quality food. Rassense’s structured canteen food services are a first, where an organised business has pioneered a service in these factory canteens.
The moat in Rassense’s business is its untiring capability to turn data into insights and then make food as palatable, tasty and nutritious as possible for its customers. Sanjay Kumar explains why it is a revolutionary approach. “The three previous technology revolutions did not touch food – PC, Internet and mobile. But AI and data will have a profound impact on food beyond our imagination,” he says.
Kumar explains the fundamentals of the business: “We deal with food: simple, nutritious, and a no-frills business! In an industrial setting, getting the food right is the most gruelling puzzle! And we have been serving 3.5 lakh high-quality meals every single day across 110+ clients, and doing that without letting margins disappear into the ‘black bin’ of food waste.”
Rassense’s model is unique in multiple ways – customer segment, perfection in food processing, and the ability to leverage data. Despite being in an industry where operators often cut corners, Kumar explains: “We are the only nationally scaled Indian food services brand in a fragmented industry comprising contractors serving food in industry and factories. The only reason we have survived in this industry and built revenue of over Rs500 crore, with a national footprint stretching across 10 states, is our professionalism.”
Revealing the secret sauce, he explains that the level of granular data from the 3.5 lakh meals processed daily is a relevant innovation. He illustrates this with examples: “We have changed the diet and menu patterns. The biggest change is visible in the canteen itself, where chalkboards of the day’s menu are replaced with LED display units. These giant screens provide a transparent breakdown of total calorific counts and allergens for every meal, which helps workers across plants and assembly lines make informed consumption choices.”
The push to transform industrial canteens into sophisticated ‘Eat Right’ ecosystems has been architected by integrating technology with sensory experiences. This has enabled productivity and also helped clients such as Daikin achieve necessary FSSAI hygiene and health accreditations. A counter-intuitive aspect of the Rassense growth story is its aggressive pursuit of negative feedback. At large-scale sites like VIT Bhopal, the company does not just ask for opinions; it incentivises them through high-stakes engagement programmes, including raffle quizzes where students can win iPhones, tablets and smartwatches.
By engaging and rewarding critical feedback, Rassense has managed to turn its harshest critics into quality-control consultants, and the company has delivered an industry-leading 97.6 per cent client retention rate.
While data is valuable, in the food business the ability to tackle black bins makes for a viable business model. In the food space, about 4-10 per cent of a restaurant’s inventory goes to waste. Wastage and costs stem not only from inflation or rising input costs but also from the ‘mood swings’ of consumers.
“The only way to tackle these challenges is extreme planning by leveraging data. We have turned to IoT-enabled weighing scales. When an employee at a factory such as Tata Motors or Maruti Suzuki finishes their meal and discards leftovers into a bin, a system helps track food wastage in real time. This system, built using IoT sensors and ML algorithms, has helped our team curate menus based on data rather than guesswork,” says Kumar.
Fine-tuning food
To explain the context, Swarna Lakshmi, Chief Business Officer at Rassense, says: “If Wednesday’s lunch wastage is high, we analyse it with the client to understand if the menu needs a change and accordingly fine-tune food to reduce waste.”
These dashboards, besides helping plan and optimise operations for Rassense, have also been instrumental in guiding enterprises towards their ESG goals and improving transparency in employee spending.
Rassense has leaned into building reliability by investing consistently in technology. The leadership team believes the utilisation of an ERP tool has helped build transparency across stakeholders.
Elaborating on the technological pillars of success, Kumar explains: “AI and the new digital age make technology agnostic to scale when it comes to deployment. We were able to design the perfect recipe to revolutionise how factories in India serve food to those for whom a good meal matters. The ingredients were simple – data + nimbleness + self-belief!”
He further adds about a rare concept in the food industry: “We have been using SAP ERP for 7 years, which is a rarity in itself, considering that in our industry we generally see competitors using manual ledgers or basic software tools. Granular data helps clients and also enables our vendors to keep a continual track of everything from delivery to invoicing and accounts.”
The company’s crown jewel, however, is Raspec, an in-house developed quality-control app. In a country where ingredients are sourced fresh daily, and often within a 50 km radius, standardisation is great to expect but a nightmare to deliver.
“Raspec allows site managers to instantly reject ingredients that do not meet strict specifications, sending real-time alerts to our head office and to the vendor. This ensures that whether it is sambar served in Chennai or dal in Pune, the quality remains consistent, effectively professionalising the entire supply chain,” adds Swarna Lakshmi.
The three previous technology revolutions did not touch food – PC, Internet and mobile. But AI and data will have a profound impact on food beyond our imagination
Kumar also explains the compliance aspects in India’s food services industry. He says, “Local companies had given up on building scale to compete with the MNCs, and while Make in India did strike a chord, the regulatory environment did not help. With no ITC on GST, even though it was a contracted business, the survival of Indian food service companies became tough and drove non-compliance, or we could witness sell-outs to bigger players. It is ironic that in a category as local as food, and in a country as diverse as India, the two largest players in the sector are from Europe.”
Data, technology and speed of execution were differentiators that enabled Rassense to comply. Asked to explain this further, he said enabling the entire production chain to be digital and building models that allow data to be shared with clients created shop-floor transparency.
He emphasises that MNCs sell brands, but Rassense sells benefits – measurable with data – such as customer satisfaction, nutrient intake at factory canteens, proprietary digital platforms to track raw material quality in real time, predictive recipe models, and IoT-enabled waste bins.
Kumar emphasises that within a year, using AI, it will be possible to even build recipes within a day. Offering a sense check, he explains: “Imagine our recipe bank has 4,000 recipes: we have more than 11 recipes for sambar and nine for simple butter paneer. It was therefore impossible to predict which one would work at which site, and hence one had to depend on a few vocal opinion leaders on the shop floor to decide the canteen recipe.”
We were able to design the perfect recipe to revolutionise how factories in India serve food to those for whom a good meal matters. The ingredients were simple – data + nimbleness + self-belief
A typical industrial site has 347 SKUs for producing 30,000 meals a day. No tool had accurate models to correlate and predict the outcomes. “That’s where we saw the opportunity to use AI and build a business that can survive MNC dominance with measurable, real-time deployed solutions.”
Skin in the game: human capital play
If technology is the engine, the ‘People First’ philosophy is the fuel. “This is a non-negotiable for us,” the team asserts, even if it impacts margins in the short term. This commitment to governance was a key factor in securing Rs26.5 crore in funding from Spark Capital, an Alternate Investment Fund (AIF), an industry first that signalled Rassense’s arrival as a credible, bankable player.
Rassense offers its 4,500 on-payroll employees a transparent career trajectory. Site managers have commenced their journeys as utility workers, while senior executives such as the CFO double as part of the HR function. “This is not just corporate benevolence; it is a strategic move to ensure that those running operations have a deep, foundational understanding of the business’s complexities,” says Kumar.
The biggest employee-centric feature has been rewarding employees to ensure everyone from the C-suite to supervisors has skin in the game. “We do not expect our people who communicate with clients to keep changing,” says Kumar, noting that this also helps create stability, trust and wealth generation.
Despite the complexity of operating in a low-margin environment, Rassense is outperforming the market. It has grown from a local LLP into a national powerhouse approaching the R600 crore mark, serving giants such as Tata Steel and Foxconn.
Rassense has already evolved from beyond earlier negative perceptions. It is the only Indian caterer to have continually and simultaneously serviced major global OEMs such as Maruti Suzuki, Tata Motors and Yamaha. In an industry that is 75 per cent fragmented and unorganised, Rassense is a home-grown champion outperforming even international benchmarks.
The vision of the CEO, Sanjay Kumar, is clear: “We are in the business of technology, and food is a medium. Ours is a purposeful model built by turning chaotic industrial canteens into predictable, data-driven enterprises.”
Rassense’s pan-India presence is extensive, and so are its customer satisfaction scores. When asked about an IPO, Kumar appears slightly surprised, having prepared himself for operational queries.
“We will do a great job there (IPO), no doubts. But an IPO looks more promising since it is an opportunity for us to showcase to investors and competitors how to professionalise this industry. Awareness of employee benefits and good food is needed,” says Kumar candidly.