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INTERVIEW

“90% have no idea about the source of their produce”

Monday, 04 July, 2016, 08 : 00 AM [IST]

back2basics, an organic farm model, has now convinced consumers that the source of vegetables, fruits and greens is vital to promote a healthy lifestyle. The bootstrapped father-daughter duo Madhusudhan S and Bhairavi Madhusudhan are now driving the importance of organically cultivated fruits and vegetables that are safe to consume and easy to access.

Madhusudhan S, chief farmer, back2basics, in an email interaction with F&B News points out that 90% of consumers today have no idea about the source of their produce and reveals what his company is doing in this regard. Excerpts:

When did you start operations and what has been the response so far?
back2basics was started in 2011. We spent considerable time in understanding both the challenges faced by the Indian farmer and the discerning Indian consumer with an appetite for fresh, high-quality fruits and vegetables. By applying several management techniques to improve current agricultural practices, back2basics is a unique blend of ancient wisdom and modern science.

Give us a peek into your experiential farm model.
Our experiential farm is the first of its kind in India. We have set aside this 3.5 acre farm purely for our consumers to visit. We recognise and appreciate our consumers' need to see exactly where their produce is coming from, because ultimately seeing is believing.

Once they are at the farm, they will see high-quality organic production for themselves. They will learn about the inputs we use, our chemical-free production techniques, and can even pick their produce to take home! Consumers will see some varieties of fruits, vegetables and greens, most of which have never been seen in India before!

Our farms spread across close to 200 acre around Bengaluru. We are able to maintain high standards of uniformity, consistency in taste, colour, texture and finish. We grow high-quality organic, zero-pesticide, chemical-free produce. We supply to many reputed grocery chains, retailers, 40 organic stores in Bengaluru and also export to Germany and Singapore. We have realised that over 90% of consumers today have no idea about the source of their produce! This was the genesis for our B2C initiative. What we are trying to do is connect the consumer to the actual producer and depict the source and origins of the fruits and vegetables consumed. Without middlemen, we are able to offer the fresh produce, at efficient cycle times and at a much more reasonable price point too! We also supply to the HoReCa sector.

We produce over 90 varieties of both exotic and local vegetables, fruits and greens, using both modern and ancient natural production techniques. Some of our best-selling produce includes Kabul Pomegranate (Bhagwa variety – our flagship product; 40% of all organic pomegranates sold in Bangalore today come from our farms), Spearmint, Cremini Mushroom, Chinese Cabbage, Leaves - Gotu Kola/Pennywort, four varieties of Lettuce: Greek, Coral Red, Romaine and Iceberg besides Gaja Nimbu.

What was the investment required to get started because you have a farm area of 200 acre across Bengaluru?
Our production models are not based on contract farming. We only cultivate on land that we hold and manage the entire supply chain, from seed to harvest to grading/sorting/packing and last-mile fulfilment. We are self-funded and equipped with adequate infrastructure production and expansion. Most landowners/farmers were willing to give their holdings to us, at very reasonable lease rentals This became an attractive option to scaling up.

How large is your team on your farms?
We have four commercial farms in various parts of rural Bangalore, which together is about 180 acre. We currently employ over 500+ people, both in the farms and in our corporate division.

What do you do with the produce that is unsold?
We have a unique model where we only harvest, based on confirmed orders. This is to minimise wastage and keep our produce as fresh as possible. Once harvested, the produce will be graded as many of the B2B clients want a premium grade. We have liquidation channels in place for each grade of produce. We use the produce that does not meet our quality control standards in our composting and mulch, whereby it is returned to the soil and generates value for us. For the items that are not harvested and remain unsold, we donate them to an NGO in Bengaluru which cares for elders and destitute children. The stalks and stems of our harvested plants are given free to a gou ashram to feed cows and in-return we take the gobar slurry from them.

Provide details about your distribution and collection centres?
In our B2C initiative, we sell our produce on our e-commerce site, where it goes under the brand name of back2basics. Also, we make sure that the morning harvest which commences at 1.30 am reaches our customers by evening to ensure that the produce is garden fresh. The process of post- harvest includes quality control where the produce is graded, cleaned, sorted, it is segregated by order for of our clients in both B2B and B2C. Only biodegradable and eco-friendly materials are used for packaging.

What will be your future efforts?
We are currently only able to fulfil only about 80% of our total demand. In the short-term, we are looking to streamline our operations and logistics for both our B2B and B2C businesses to make our processes more efficient. In the long term, we are certainly planning to acquire more land to meet the growing demand for our produce.

What are the visible trends in organic horticulture?
The organic food market in India is growing at 25-30%, but the awareness about organic farming is still low in India despite huge spending. According to research reports in 2015, the size of the organic food market was around $0.36 billion of which organic pulses and food grains took the lion's share of the market. The size of our category of organic fruits and vegetables is around $80 million. There was also a study released recently which projected that the domestic organic food market would touch the $1.36 billion mark by 2020. More growth is expected in future as the government is increasingly supporting organic farming in the form of subsidies and is also planning to roll out a comprehensive policy in this regard.

What are the problems encountered by startups like yours?
Few of the challenges are that organic farming on an industrial scale is difficult. There are many conflicting ideas on meaning of ‘organic’ farm produce. Most retailers do not bother to educate the layman consumer. Further there are hassles in operational and logistics which in our case has already been put in place to ensure that we are able to meet consumer demand.

How willing are PEs and VCs agreeable to fund organic farming business models?
One of our directors, Bhairavi Madhusudhan, actually worked in private equity in Frankfurt, Germany, prior to joining back2basics. From our experience, investors are essentially willing to fund business models that are sustainable, scalable and have a clear unique selling proposition (USP). We have been approached by a number of leading Indian and multinational investors, but we are currently self-funded. However, we are always open to having meaningful dialogue with like-minded individuals, identifying potential areas for collaboration and forming mutually beneficial relationships.