Venkata Subramanian , Founder & COOSrivalli Krishnan , Co-Founder & CEO
eFarm Enabling FArmers to Reach MarketsAn Agri Supply Chain Platform Linking farmers and consumers
Presented To:
ENTREPRENEURSHIP DEVELOPMENT IN AGRICULTURE – CHALLENGES AND OPPORTUNITIES30th December, 2010: MSSRF Foundation, Taramani, Chennai
Challenges In Agri Entrepreneurship
Introductions
Venkata Subramanian • Founder & Managing Director, Matchbox Solutions
& eFarm, Chennai
Brief profile :• MS (Computer Science), 2003,University at
Albany, NY ,• B.Arch , IIT Kharagpur ,1995 , India• 12 years of experience in IT industry in both
technology & commercial roles (7+ years in US)
• Head of key outsourcing & consulting accounts in Insurance, Capital Markets & Banking
Introductions
Srivalli • Co-founder, CEO
MBA , B.Com Taxation8 years experience in Sales,
Marketing, & Operations. Has run two start-ups and organised fund raising for NGOs as part of CSR programs.Responsible for business
development, finance
Currently Better known as ….
Hi-Tech Sabjeewallahs ;-)
PROBLEM STATEMENT
Pain areas | The Agri Supply Chain Current State : Too Many Steps , Too Little Value Addition
Wholesalers to Retailers
Terminal markets to neighborhood wholesalers
Regional mandi to Terminal markets near large cities
Harvesting of Vegetables
A local mandi auctioning
Local to Regional mandis for Auction
• Unorganized , unregulated , unprofessional & unprofitable•A Middlemen’ dominated market•Adhoc /Arbitrary Decisions on quality & price
1
2
3
4
5
6
Retailers to Dining Table
7
Loss in transit 40%
Price hikeEnd to
end> 400%
Reality Check•Farmers cannot do “everything”. They need professional help and organizational support
•Farming needs to become self sustaining and HENCE a business activity•High uncertainty and risks = Very low investor interest•Years of neglect & low esteem = educated youth avoid an agri career
Need role models and pioneers to build the road to recovery
Pain areas | The Farmer’s ‘REAL’ crisis
Reality Check• No accurate , dynamic data on supply • No market research on customer demand• No data = Wild guesses ?
Lack of Data| No visibility to supply or demand
Pain Areas | Customer Spectrum Huge domestic demand, Escalating prices & Unmet needs
Organised retailers are crowded in this space
Competition high
Efarm targets entire B2B segment and currently untapped areas
Pain areas | Marketing -The missing link ?
Reality Check
No proper customer demand data
India’s agribiz is ‘supply driven’ rather than ‘market driven’
Other industries have differentiated production from marketing/salesAgriculture – Farmer handles both rolesBrands have value !! Indian
products though have wider varity and better taste have not established a stable brand
PPPerishabilityPerishability
????????
The missing FIFTH ‘P’ of marketing in agri context - PERISHABILITY !!
Pain Areas |So many solutions , but why still a crisis ?
Reality Check
Lots of great ideas and effort
But
Exist in silos
Blind men and the elephant ?
Cold chain Modern
retail & logistics
Micro finance &
Grants
Increase yield
ICT solutions
Export market
R & D
Contract farming
Market Scenario| Burning Crisis or Booming Oppurtunity ?
India’s Total production of fruits & vegetables =
•100 Million Tonnes = Rs 650,000 Crores (value) [ 1 tonne = 1000 kgs]
Wastage in transit/handling/distribution = 40%
Current market segmentation of organised players:•Organised retail/Branded retailers share in F&V : 1.5% •Food processing sector : 1% ( key pain : erratic supply)•Export sector : 1% (key pain : poor grading, quality checks)
Typical DAILY requirement of fruits & vegetables of Tier 1 city/metro :
•4000 tonnes = Rs 6 crores value
Key focus areas for govt. for urgent
improvement
Even a 1% improvement in this segment
would create/generate/save Rs 650 Crores !!
Source : IMAGES F&R Research Study , Govt of India , Dept. of Agriculture, Min. of Food processing
THE SOLUTION
"We can't solve problems by using the same kind of thinking we used when we created them."
Albert Einstein
Key InnovationsInterveInterventionsntions1) Weighing machine = standardise agri business
transactions !Bundles, baskets , bags Kilograms , Counts
2) Simple grading = right quality to right customer!!
Mixed grades S / M / L (Or) excellent / OK /bad
3) Simple technology = widest usage !!!
PCs, Websites Mobile phones , Voice, SMS
Value proposition | Unlock revenue potential across the chain
Farmers
Rural Produce Collection Centres
Quality Inspection/ Grading
Cleaning / Packing
Routing
Long haulTransportation
Urban areaDistribution centre
Small retailersLocal vendors
Food Processing units
Exports
Bulk buyers(Hotels / Caterers /
Retailers)
Compost/Manure from waste
eFarm Common ServicesPlanning &
Coordination Research Call centre / Communication Technology Training &
Support
LocalDistribution
Every stakeholder is alternately a buyer or seller of agro goods, linked together by a common system. Thus : Develop Online supply chain Technology backbone with offline distribution mechanisms Create a network of farmers, intermediaries, logistics providers, distributors and retailersProvide common support services like marketing , training , technology and agri business consulting
‘Organize’ the ‘un-organized’ rural to urban supply chainManage the network to ensure sustainability across the chain
FarmersCooperativesCollection centers
Village ICT kiosksPhone boothsMobile operators
StorageWarehouses
Value added resellersSorting , Grading , Processing, Packing
Small Independent transportersIntra-city small tempos
KiranasSelf Help GroupsHawkers
Bulk buyersExporters
Logistics Fleet operators
Solution | The Big Picture – Connecting The Dots
Ground Operations ModelInspired by the ‘best’ supply chain systemin Indian conditions
•Product Category : Perishable food items•IT Systems usage : NIL•Management team : Illiterate and average age of 55•Age of company : Over 150 years•Customer Segment : From slumdwellers to crorepathis•Operational efficiency : Six sigma !!!
The Mumbai Dubbawallahs !!!The Mumbai Dubbawallahs !!!•Key success factors :
•Highly decentralized operations – agile, flexible , scalable •Use of low cost transport medium – trains•Use of human power for last mile delivery – No Fuel related hikes•Strong customer relationship – personal , localised•Simple coding, routing, labelling system – operates even without electricity !•Delivery excellance – fixed time , professionalism
The rural market linkageOPERATIONS OVERVIEW
eFarm | Operations Summary
Technology | Farmer side
Cost of production / Fair Price analysis tools
Supply side forecasting tools / Sourcing planner
Rural call centres / Mobile sms for data updates
Technology | Customer side
Order capture (Mobile / Customer portal)
Requirements analysis and demand projection
MIS & Dashboard
Delivery Tracking
POS systems for agri
Agri CRM
Collection centres |Localised sourcing points, Planned aggregation
Established Collection points close to villages
Standardised Quality checks , Grading & Weighing process established
Over 2500 farmers enrolled and active
Mobile collection trucks for remote areas
On the spot payment of fair price
Distribution centre |Close to urban customers , Localised distribution
2000 sq ft facility for handling 5 tonnes / day
Verify arrivals, inventory
Loading & packing as per customer specs
Value addition by peeling/cutting
Local distribution to customer site
Composting of waste , conversion to manure
Customer visits , feedback
Key Challenges: The 3 M’s• Biggest challenge is people’s Mindset , Myths
and Misconceptions about this sector – “Agri is a low growth sector”– “agri businesses are very risky”– “Farmer vis-a-vis Entrepreneur”– “Subsidies” v/s “Incentives”– “Production” v/s “Marketing”– “NGOs/NPOs v/s Social Enterprises”– “Increase yield” v/s “Increase efficiency”– “Middlemen” v/s “Value Added Reseller”
The Ideal Agri-preneur
Have the discipline of a soldier ….
.. Ready to jump into fire …
.. But still ‘enjoys’ doing the impossible !
Thank You
[email protected] 98847 61354
11 loganathan colony Mylapore, Chennai 600004Ph : 044-43577236
www.efarm.inLinkedin : AgriIndiaTwitter :venky_efarm
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