Agri Business

Budget offers big opportunity for aquaculture: FreshToHome

Vinson Kurian Thiruvananthapuram | Updated on February 26, 2020 Published on February 26, 2020

FreshToHome’s COO Mathew Joseph (left) and CEO Shan Kadavil

States with adequate land resources will particularly make gains, says online fresh fish vendor

The fisheries sector considers Budget 2020-21, with its target of increasing fish production from the present 140 lakh tonnes to 200 lakh tonnes by 2022, a significant one. If anything, it reflects a disquiet about the dwindling yields and the need for tapping alternative sources, aquaculture in particular, says Mathew Joseph, Chief Operating Officer of FreshToHome, the country’s largest online fresh fish vendor, and a leading exporter.

Aquaculture, need of the hour

The need for a thorough relook at aquaculture has never been more felt than now, said Joseph, who has spent more than 30 years reading the seawind and pulse of the fisherfolk. The size of the domestic fish market is a staggering $50 billion (either matching or exceeding the Hollywood movie industry) and the demand is so high that the depleting catch has failed it badly, he added.

This is a golden opportunity for States such as Odisha, Andhra Pradesh and Tamil Nadu, with adequate land resources, to promote aquaculture, Joseph told BusinessLine. “The litmus test lies in implementation on ground of a purposeful aquaculture policy, national or sub-national. The prospects are bright in States where aquaculture is already being carried out over large tracts,” he added. Kerala, with limited availability of land, may have priced itself out of the game.

Coronavirus impact on exports

Speaking about the coronavirus impact on his export business, Joseph said FreshToHome did not take a direct hit. But a few varieties in the export basket suffered, especially live crab. Most exports from here as well as Chennai are directed to Singapore, to be re-exported to China, the largest consumer. For instance, live crab prices had come down from ₹1,200 per kg to ₹700 within the first week of the virus outbreak. Another was vannamei shrimp, a good portion of which also goes to China. The third one was ribbon fish, 100 per cent of which goes to that country.

Volumes may not have suffered as much as the foreign exchange foregone. The idea is to fight this trend by going in for value-added items, explained Shan Kadavil, Chief Executive Officer, FreshToHome, and a serial entrepreneur. Joseph agreed, pointing to the case of baasa fish fillets. All of the baasa catch is sourced from Vietnam, which bleaches the fish white before sending it out. The mindless use of chemicals is something that FreshToHome is fighting tooth and nail (and therefore the high acceptance in the domestic market), Kadavil said.

Baasa farms in Kerala, Karnataka

According to Joseph, last year, India imported 504 containers of baasa fillets from Vietnam. This requires contracting at least 1,500 containers of whole baasa fish since the average yield is only 25-30 per cent. This means that 1,500 tonnes of chemically-treated baasa whole fish was imported.

FreshToHome has already begun baasa farming in Kerala and Karnataka. “In Kerala, we joined with baaza farmers, forming a cooperative society, and set up a 40-acre farm at Ambalappuzha in Alappuzha district three months ago,” said Joseph. The crop will be ready in six months. The baasa fish seeds were sourced from Andhra Pradesh. “In order to make up for the loss in export gains, we will cut the whole fish into just meat, fillet (strip), or marinated products...to basically raise the percentage of those products in our export basket,” said Kadavil.

Tech changes business model

Fish accounts for 70 per cent of FreshToHome’s business. According to the company, it was the first start-up to bring fresh fish online. It was also the first company in the world to bring raw fish online and has since turned number one in the UAE.

“FreshToHome is what it is today only because of the introduction of technology into a traditional business model, courtesy my CEO Shan,” said Joseph. In fact, the pioneering technology sources meat and fish directly from livestock farmers and fishermen to supply them at mass market prices by essentially cutting out middlemen.

Onboarding of fishermen has also greatly helped the cause of building a cold chain, its most essential link, and cut down the time taken to push the day’s catch to the whole of South India from three days to just 24 hours, Kadavil said.

His team created an Android app, which features pictures with which the fisherman and livestock farmers can bid the price at which they intend to sell their stock. Then the system generates a purchase order, as if on a virtual trading commodities exchange. After this, FreshToHome sends its trucks across to lift the fish and meat at source, which falls within a radius of 100 km.

Published on February 26, 2020
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