Venkata Subramanian , Founder & COO

Srivalli Krishnan , Co-Founder & CEO

eFarmEnabling FArmers to Reach Markets

Presented To:

ITC Water and Agriculture WorkshopAuroville Cetre For Scientific Research , Dec 23 2010

An Agri Supply Chain Platform Linking farmers and consumers

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 Taxation

8 years experience in Sales,Marketing, & Operations. Hasrun two start-ups and organisedfund raising for NGOs as part ofCSR programs.

Responsible for businessdevelopment, finance

Currently Better known as ….

Hi-Tech Sabjeewallahs ;-)

THE PROBLEM STATEMENT

Only a crystal clear question yields a transparent answer

– Zen saying

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•No accurate DATA

1

2

3

4

5

6

Retailers to Dining Table

7

Loss in transit 40%

Price hike

End 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 agricareer

Need role models and pioneers to build the road to recovery

Pain areas | The Farmer’s ‘REAL’ crisis

Pain Areas | Customer Spectrum Huge domestic demand, Escalating prices & Unmet needs

Low Income Group

• > 40% in volume

• Buy from neighborhood markets (evening)

• Pay more for less quality

Middle Income Group

• ~ 20% in volume

• Buy from street vendors

• Price + Quality conscious

High Income Group

• ~5% in volume

• Buy from retail chains

• Quality & variety conscious

Hotels & caterers

• ~25% of volume

• Buy from wholesale mandi

Food & Drink processors

• ~5% of volume

• Product specific buyer

• Large volume + fixed price range

Export

• ~1% of volume

• Best quality / specific products only

Organised retailers are crowded in this spaceCompetition 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/sales

Agriculture – Farmer handles both roles

Brands have value !! Indian products

though have wider varity and better

taste have not established a stable

brand

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

THE SOLUTION

"We can't solve problems by using the same kind of thinking we used when we created them."

Albert Einstein

Key Innovations

1) 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 haul

Transportation

Urban area

Distribution centre

Small retailersLocal vendors

Food Processing

units

Exports

Bulk buyers

(Hotels / Caterers /

Retailers)

Compost/Manure

from waste

eFarm Common Services

Planning &

CoordinationResearch

Call centre /

CommunicationTechnology

Training &

Support

Local

Distribution

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 retailers

Provide common support services like marketing , training , technology and agri business consulting

‘Organize’ the ‘un-organized’ rural to urban supply chain

Manage the network to ensure sustainability across the chain

Farmers

Cooperatives

Collection centers

Village ICT kiosks

Phone booths

Mobile operators

Storage

Warehouses

Value added resellers

Sorting , Grading , Processing, Packing

Small Independent transporters

Intra-city small tempos

Kiranas

Self Help

Groups

Hawkers

Bulk buyers

Exporters

Logistics Fleet

operators

Solution | The Big Picture – Connecting The Dots

Key Products / Services : eFarm’s Focus Areas

Vegetables

Fruits

Exotics / Organic Produce

Processed Items (peeled , cut vegetables)

Compost

Non perishable Commodities (future)

Marketing

Distribution

Technology

Training

Support services

Ground Operations Model

Inspired 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 !!!

•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

Forward Logistics

(Fresh produce)

Small & mid sized farmers

Rural

Collection

Centres

Urban

Distribution

Centers

Retailers /

Mom & Pop stores

Bulk buyers

Exporters

Hub and Spoke Model For

Scalability and Organic Growth

•Collection centres spread across a 10 hr(max)

driving radius

•Distribution centres across key metro region

•Long haul trucks(4 tonne) connect collection

centres & distribution centres

•Local distribution use mixed transport mediums for

last mile connections

Cooperatives

Food Processors

Catering/Hotels

SHGs

Producer

Corporations

Reverse Logistics

( Manure , Farmer supplies)

Logistics Operations |Hub and Spoke with localised,inter connected nodes

The rural market linkage

OPERATIONS OVERVIEW

eFarm | Operations Summary

1 Collect Customer Requirements

2 Gather farmer’s produce details

3 Map demand & supply

Plan logistics , schedules

4 Aggregate produce at collection centres (rural)

Grading / sorting / value addition

5 De-aggregate from distribution centres ( city)

Pricing & Delivery , Payments

Step 1 : Mutual visits by eFarm team & NGO/Farmers organisation to baseline roles & responsibilities

NGO and eFarm team officials meet to plan trial operations

eFarm & NGO staff jointly meet farmers to explain model , benefits & operations

Step 2 : Collect produce samples, conduct trial marketing

eFarm visits farms to collect info on produce varieties, quality and output

Coconut samples , grades, quality of kernebeing tested

Oyster mushroom farm

Step 3 : Farmers data collected, analysed , prepare sourcing plan

Farmers database with details of produce variety, sowing/harvesting period, expected output and days of plucking.

This gives current + future supply side scenario by farmer/location/produce

Aids in planned cultivation, matching current+futuredemand , and advanced marketing plans

Cost of production , Pricing details using standard templates

• Most farmers don’t keep financial records

• Hence their Profit or loss is notional based on market conditions and historic trends

• Efarm has come up with a standard cost of production model for most vegetables & fruits . This data is very crucial to ensure sustainability and fair price determination

Step 4 : Initiate mobile collection process to jumpstart operations

Routes to farms and schedule planned along with farmers to avoid clashes with schedules and current deliveries to t.nagar markets.

Picture inset : scenic ecr route

Mobile collection truck with crates, gunny bags , standard weghingbalances, bill book . An eFarm Purchase manager accompanies the truck to facilitate pickups

As nationalised banks have good rural reach , and have core banking facilities, payments can be done in checks or e-transfers now.

Collection trials

Vehicle goes to individual farm locations

Farmers bring the produce and it is checked and weighed at site location itself

Training farmers on how to arrive at prices based on market data

Payments

Farmers being paid on the spot based on output

All grades being picked and price arrived based on quality

Women farmers paid more to encourage self help groups.

Step 5 : Setup Permanent Rural Collection Centres

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

Established permanent Collection points close to villages

Standardised Quality checks , Grading & Weighing process established

Mobile collection trucks for remote areas

Step 6 :Capture lessons learnt , discuss with NGO partners , roll out full fledged collection centre

TECHNOLOGY FOR AGRIMARKETING

Technology | Farmer side

Farmer’s produce database

•Produce name, variety

•Grade

•Typical yield at harvest

•Harvest cycles /frequency

•Cost of production

•Location / closest pickup point

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

Technology | Backoffice

IT Infrastructure

Supply Chain Planning & Management

Logistics Scheduling & Tracking

Billing & Invoicing

Key Benefits To Farmers and Consumers | Market trends & inputs , Decision support

Koyambedu nadu tomato

(data courtesy : TNAU-INDG market information portal)

For Farmers :What to grow ?How much to grow ?When to harvest ?Where to sell ? At what price ?

Koyambedu : Sambar onion

For Consumers

What produce is in-season/ off-season ?High/Low price variations ?Sourcing options and alternatives ?

Small scale Food processing unitsadding value , creating jobs

• Background

• Raw vegetables perish faster

• Processed items (cut / peeled/ pastes / powders) have longer shelf life

• Better price owing to value addition

Scope Small scale food processing units at

urban areas (Veg. Pickles, powders, pastes )

Allied to collection centers to take away excess/unsold items

Utilise existing marketing channels

Approx. Cost / Time

Initial setup cost (equipments, training, raw material) : 5 lakhs

Initial setup time : 1.5 month

Working capital : 2 lakhs

Break even : 5 months

•Cutties•Banyan

Reference projects

Jobs creation for people with growth disorders , dyslexia & autism

Food processing units operated by Banyan & RASA

Mental health outpatients operate peeled items unit

Call centre operated by visually challenged

Cutties and Banyan Units

.. Running their own stalls in major events ..

AGRI MARKETING & AGRI BUSINESS TRAINING

eFarm’s Agri Business Training througheducational institutions, e-cells, NGOs• In house training : 1 day workshops, Internships (6 to 8

weeks) at efarm office – hands on work

• On campus training : at NGO office, institutions, e-cells

• Over 2000+ people trained over 2 years

• Guest lectures , seminars – mentor in NEN

CURRENT STATUS

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself.

Therefore, all progress depends on the unreasonable person

George Bernard Shaw

Key Clients |From star hotels to street hawkers

‘Hotbreads’ Mahadevan’s Chain of Fine dining restaurants in Chennai (OCPL)

Foodcourt at ExpressAvenue Mall(asias’s largest)

Upcoming Kiosk Chain

Indian ArmySouth Zone HQ Canteen (Outlet)

Sangeetha SVRLeading s.indianrest chain

.. And several local vegetable vendors as well…

Key Partners |The Whole is more than sum total of parts

Technology

Farmer network

NGO – Outsourced LabourFood processing

Market Linkage Programs

Thank You

Venkyvenky@matchboxsolutions.in 98847 61354

Vallisrivalli@matchboxsolutions.in

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

www.efarm.inLinkedin : AgriIndiaTwitter :venky_efarm