Greengrocer revolution

With a hoot, the green-and-white three-wheeled electric carts arrive on the streets of Bengaluru each morning. Equipped with tablets, Bluetooth printers and GPS, these battery-operated carts go from street to street selling fruits and vegetables sourced fresh from farms around the IT capital. Packed at the FreshWorld warehouse, each item has a price tag, buyers are given receipts and the warehouse inventory is automatically updated after every transaction.

In Mumbai and its suburbs, fresh produce from Nasik, Pune and Sholapur reaches households by nine every morning. Harvested the previous evening, the produce is loaded on trucks before midnight and arrives by 3am at the warehouse of Go4fresh in Navi Mumbai. The staff work till 7.30am to clean, grade and pack the fruits and vegetables, which customers have ordered online a day before.

And in Vadodara, Ketan Parmar is helping farmers’ cooperatives sell their vegetables and milk to households in the city.

As more than 90 per cent of the country’s ₹4.5-lakh-crore fruit-and-vegetable market is unorganised, a new movement is underway to take fresh produce directly to consumers, minus the intermediaries.

With rising incomes, consumers are willing to spend an extra buck to buy food products that promote health and wellness. A report by consultancy firm Technopak, however, observes that independent retail is not adequately geared for food and grocery selling in urban India. “Corporatised retail needs to find innovative ways of tapping into this surfeit of opportunities on the platforms of nutrition, portability, and convenience,” says the report.

Straight-to-plate pioneers

It is this frontier that several new players are trying to conquer. While all of them aim to take fruits and vegetables straight to plate, they are also attempting to carve out niche strengths. After all, they have to differentiate themselves from roadside vendors.

FreshWorld has its eco-friendly, high-tech carts; Parmar’s Krishi Naturals is taking the organic route to Gujarati households; and Go4fresh is positioning itself as a one-stop-shop for farmers to sell their day’s harvest, irrespective of differences in quality.

Parmar and his team explain to farmers the benefits of organic cultivation and train them to use natural inputs such as jaggery, pulse flour, and cow dung and urine.

Other retail segments have seen major transformations, but fruits and vegetables continue to be sold through the age-old method of street vending, says FreshWorld founder Rajiv Rao. His company wants to bridge the gap by “marrying the art of street vending to the science of modern retail.” His company is using technology to position products differently, as well as to promote professionalism and punctuality in services.

Maruti Chapke, CEO and founder of Go4fresh, has used his years of experience at Reliance Fresh and Future group’s Big Bazaar to fine-tune the farm-to-fork model. In organised retail, stores struggle to find and retain trained manpower. “Home delivery solves that issue,” he says.

Parmar discovered firsthand the advantages of dealing directly with consumers during a pilot project he conducted in the Saurashtra region for his social entrepreneurship studies at the Tata Institute of Social Sciences. “I learnt that selling to businesses (B2B) is not a good idea as they are not willing to pay a premium for freshness or quality.” After completing his course, he launched Krishi Naturals in 2012 to directly offer consumers organic vegetables under the Hariyali Topli brand.

Avoiding fresh mistakes

Aside from focusing on the front-end to improve customer experience, each of these companies is innovating the back-end of operations. Typically, a farmer’s produce arrives at a collection centre before moving to a warehouse, followed by wholesale and retail sellers, and finally to consumers. The farm-to-home players load the produce directly from farms to trucks, ferrying it to the warehouse for direct dispatch to consumers.

As supply chain is the key to profitability, no stone is left unturned to master what the retail biggies have failed to learn in the fresh produce business.

“You can win only through supply chain efficiencies and not opportunistic buying from farmers,” says Chapke. His strategy is to buy all the produce from a farmer. “If I buy only the best quality fruits and vegetables, the farmer won’t be able to find buyers for the rest of his produce. So we buy everything and sell according to the quality to various categories of consumers,” he says.

Chapke’s primary target is individual consumers, who are sold the best grade fruits and vegetables, followed by Horeca (hotels, restaurants and canteens) and the institutional buyers manufacturing juices, pickles and jams and similar products. “This way, we ensure that farmers are offered the most convenient and fair means of selling their produce. And it helps us get best rates as we are buying in bulk.”

His company, Go4fresh, calls its nearly 60 associate farmers one day in advance with its requirements based on the orders received on its website. Krishi Naturals follows a similar strategy, but on a weekly basis. “We know our consumers, their preferences and order a week in advance,” says Parmar.

The key ingredient for these start-ups is undoubtedly near-accurate forecasting. “Since we know the orders, we plan our purchase accordingly and inform the farmers beforehand,” says Chapke.

Chopping losses

According to the Central Institute of Post-Harvest Engineering and Technology (CIPHET), Ludhiana, fruits and vegetables worth ₹13,300 crore go waste annually owing to the absence of cold-storage facilities and inefficient handling. These start-ups are plugging the loopholes. “As we telephone farmers directly, the inventory is very small. Any leftovers can be sold to other customers. So wastage is marginal,” says Chapke.

This, in turn, helps cut losses. Krishi Naturals is operationally profitable, while FreshWorld is confident of turning profitable by March 2016 and Go4fresh by June this year. Importantly, this profitability is neither at the cost of farmers’ livelihoods nor does it make the products unaffordable for consumers.

Prices are 10-25 per cent higher than those of roadside shops or carts. But consumers are not complaining. “I am assured of the quality and don’t have to spend hours cleaning my leafy green vegetables. All the products are clean and sorted. And I know my spinach has not been grown around Mumbai’s railway tracks but in farms,” says Hemangi K Sharma, a regular buyer at Go4fresh.

For Nitya Patel, Krishi Naturals is synonymous with reliable quality. “I don’t have to worry about picking the best for my family. Their produce is organic and certified. Above all, it is fresh; not re-hydrated with water repeatedly,” she says.

Branded veggies

To find more buyers, Krishi Naturals representatives make presentations at housing societies. “If you have a family doctor, why not a family farmer — this is the point we make. If we are brand-conscious about clothing and footwear, we should be brand-conscious about food also,” Parmar reasons. The approach seems to be working, as demand has grown and Parmar is now trying to rope in more farmers.

Chapke’s Go4fresh is tapping Mumbai’s big housing societies by creating micro-entrepreneurs — residents who sell its fruits and vegetables within the society. Each day, the micro-entrepreneurs receive and sell produce worth ₹10,000; any leftover produce is sold to institutional buyers. They each earn about ₹800 a day.

FreshWorld recently opened a convenience store as well. “Through this format, we will be close to consumers. We don’t have to be in a mall… the neighbourhood store concept will work well for us,” says Rao.

He wants to increase the number of carts from 22 to 60 by the year-end and expand to other cities. Similarly, Go4fresh plans to enter Delhi within a year. Parmar is eyeing Surat as the next destination, followed by Mumbai.

As the demand for fresh produce meets supply from a growing community of internet-savvy farmers who are reaping the best rates for their harvest, there is a greengrocery revolution in the making.

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