Emerging Entrepreneurs

SunnyBee’s cool way to sell fruits and veggies

Vinay Kamath | Updated on April 30, 2019 Published on October 03, 2016

Sanjay Dasari   -  Bijoy Ghosh

Entrepreneur Sanjay Dasari hopes to build a low-on-wastage logistics and supply chain in the fruits and vegetables business

At 6 ft 3, with a build to match, 22-year-old Sanjay Dasari packs a lot of muscle. These days, Sanjay is packing, well, figuratively, a whole lot of fruits and vegetables for his one-year-old venture, Sunny Bee, a chain of six stores across Chennai that sells fresh produce.

You would wonder what a young man, who qualified from Babson College near Boston with a bachelor’s degree in business administration with a specialisation in entrepreneurship, is doing in a fruit and vegetable store. Isn’t the whole world and their uncle plunging into an ‘app’ world? Talking to Sanjay at his cheerful SunnyBee store in the city’s upmarket Kalakshetra Colony he disabuses you of any such notion that he’s dabbling in a traditional and age-old business for a lark.

SunnyBee, he avers, is only the front end of the business he’s established. “We researched the industry and saw scope for differentiation in the supply chain as it’s a pure price play at the front end. Fruits and vegetables also pass through many aggregators who all perform limited tasks in the supply chain, but add cost. We saw that there was scope for improvement.”

On that premise, Sanjay and a team comprising a former McKinsey executive, co-founded Waycool Foods & Products Pvt Ltd in July last year and set about establishing ties with farmers’ associations while also revving up a fleet of trucks.

While Waycool has six SunnyBee stores, Sanjay says it will be only one outlet for the fruits and vegetables he sources. “As far as our supply chain and trucks are concerned, we will sell through our own branded chain, our competitors’ chains, through wholesale… so long as I can sell more through my supply chain and have control of it,” he explains. The firm has 10 trucks, all Ashok Leyland’s Dosts.

Waycool sells to about 25 e-commerce and supermarket corporate clients and to about five competing chains. The customised trucks go around to large office complexes and gated communities — they visit over 30 such in a week — to sell fresh produce on the spot. The firm has set up three warehouse hubs around the city, with one at Mahindra World City as well where it sells through its trucks as well as a SunnyBee store, its best-performing, in MWC’s main shopping hub. Produce is graded, washed, sorted and packed at these warehouses.

Sanjay hesitates to brand his store organic as that takes on too many connotations. But, he avers, Sunny Bee is identified with direct-from-source products, some of them organically grown as well. “So, perhaps in future, a restaurant can have a placard which says sourced from Sunny Bee and you know that restaurant is using safe-to-eat unadulterated vegetables,” he adds.

Key clients

Waycool supplies direct to CK’s Bakery, Relish Juices, Amadora ice creams, among others. Sanjay expects more restaurants will start sourcing from his outfit soon.

The firm has tied up with 85 different farmer organisations and aggregators all over south India, as well as coastal Andhra and Maharashtra, from whom it directly sources. Upcountry sourcing is also done; like in pineapples from Shillong, Agra for potatoes, red pears from northern India. Sanjay likes to recount the story of transporting litchis during the season from Bihar. Litchis were transported speedily by truck and air and 2.5 tonnes of the fruit hit Chennai in 16 hours and sold at competitive prices.

As Waycool is yet to get an import licence, it sources the exotic produce from the wholesale market in the Chennai hub of Koyambedu. Green apples, peaches and pears, rambutans, dragon fruit and such like are all sourced from importers. “We have to establish scale first then we can go farther back till we get to the source itself,” he says.

Waycool sells 10 tonnes a day, 85 per cent of it through Sunny Bee stores, where at least 2,000 customers troop in every day.

Sanjay believes that there’s massive under-utilisation of the existing cold storage capacity as there is no network between farmer and retailer. “We also started out with high wastage, 30-40 per cent wastage which is the industry norm. We could send a truck to a location, with 300 kg of stock and may be sell 10 kg. Now after demand forecasting and better transporting and handling, we got that down to 7-10 per cent wastage though our internal target is 5 per cent,” he explains.

Looking for funds

Waycool’s investors are nine high net worth individuals who are angel investors in the company. “We finished two rounds of funding from these investors. People who understand that it’s a complex industry and know that we have to go deep and establish IPR in the supply chain are those who have invested,” says Sanjay. Now, Waycool is at a stage where it has been talking to VCs for Series A funding.

Vinod Dasari, Ashok Leyland Managing Director, Sanjay’s father and an investor, says lack of proper logistics causes nearly a third of the produce in India to go to waste. “Clearly there is a business opportunity if someone can solve this problem. This business by Sanjay was especially interesting because it not only was solving a problem but was doing it in such a manner that helps the farmer as well. I expect a minimum of a 10x return in 5 years.”

Ishwar Subramaniam, another investor, said the idea presented was compelling enough for him to invest. “The promoting team were young, hungry and smart. From then on it was theirs to lose,” he says.

It was the same for CK Ranganathan, MD of CavinKare, who’s invested in the second round as well. He liked the team behind the venture and the fact that they were quick to take to ideas and also change course fast. “They will have to continuously keep increasing margins while challenging operational costs,” he says. Ranganathan says he will stay invested in the venture as he’s looking for long-term value creation.

“This industry has not seen a lot of movement as far as VC funding goes, so we need someone who understands the business,” he says.

Sanjay expects the project to break even by mid of next year when the company builds scale from selling 10 tonnes a day to 50 tonnes with the current operating and cost structure.

And if he does that, it will be way too cool.

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Published on October 03, 2016
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