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

Venkyvenky@matchboxsolutions.in 98847 61354

Vallisrivalli@matchboxsolutions.in

11 loganathan colony Mylapore, Chennai 600004Ph : 044-43577236

www.efarm.inLinkedin : AgriIndiaTwitter :venky_efarm