India stands poised to become a leading world economy, unleashing potential across industries of finance, technology, infrastructure, healthcare and capital goods to name a few.
It’s a promising tide for innovators and visionaries to harness for economic development that is not only likely to create an impact for the people impacted by the innovations made, but also one that is likely to uplift our standard of living as a society.
However, amidst all this positive movement, if history is paid heed to, it has shown that industrial and agricultural developments must complement and mutually support one another. The agricultural revolution of England, US and Japan preceded and aided the industrial revolution that followed. Hence, working to place greater emphasis on developing the output and productivity of the agricultural sector will accelerate India’s projected growth, contributing significantly to the overall economic development of the country.
In search of perfect fields & yields
After having worked on several social entrepreneurship projects all over the world, interacting with small farmers in India while on a microfinance project made me realize the universality and repetitive nature of the problems farmers face. Considering the scale of the farming industry in India, I was compelled by the need to address the economic hardships faced by the over 200 million small farmers who face challenges such as little market power and are subject like their counterparts world over to unpredictable external forces of weather and pests
Leading from the heart
The decision to help these farmers was the seed behind Krishi Star and the intent was to end poverty for small farmers in rural India. Working on our food processing model seemed like the perfect solution to get these farmers more ownership in the supply chain. In India, the food processing industry has emerged as a high-growth and high-profit sector poised for tremendous growth considering the Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales.
When we started Krishi Star in 2013, the industry’s high potential with 20% year-on-year growth and a projected growth of 30 million crores by 2021 promised commercial viability and scope for growth.
India is the second largest producer of tomatoes following China, contributing 11% share to the global production. Tomatoes are an important crop for India but less than 1% of India’s tomato production is processed, which is way below the average of 26% for the world’s top 10 tomato producing countries according to IBEF (India Brand Equity Foundation).
These were the considerations that convinced us that our intervention could benefit these small scale tomato farmers.
Good intent interrupted
Now the tomato-based processed food consumption in India is growing at an annual rate of over 30% creating massive demand for existing processors, ushering in the entry of new market players. Back when Krishi Star started in 2013, there were not so many canned tomato product manufacturers in the domestic market. Producing a quality version of the canned tomato product with consistency between separate units was proving to be a challenge.
With no preceding product quality knowledge in the market to rely on and grappling alongside with the ubiquitous startup ailments of fund procurement, talent management and limited working capital, we also had to ensure that any strategies to pivot or iterate the processes should not shift focus from farmer welfare, which was foundational to our project.
Finding a champion in the mentor ecosystem
Seeking intervention from the mentor ecosystem of Marico Innovation Foundation (MIF) at this stage helped us in many ways. Our initial engagement with MIF was for a 6 month duration to address the challenges of supply chain, product standardization and quality control and Mr. Shailesh Ghodekar who heads Corporate Quality Assurance at Marico Limited mentored us meticulously.
He studied our operations right from crop sourcing up to delivery of the can to the customer;decoding the product to standardize every parameter.
As our engagement deepened, we extended MIFs intervention by an additional 6 months by the end which, Shailesh had helped us streamline processes, adopt best practices and instill more professionalism in the workings of Krishi Star.
Going that extra mile to share their expertise and experience, MIF helped us put together a quality control manual, which we refer to like a bible, setting parameters and processes in place covering
- Consistency of product
- Rejection policy
- Quality Control
- Production Planning
- Damaged Goods
This has increased capability and efficiency in current operations and scaling up with newer units is also easy.
Infact, in 2016-17 the cost of quality which covered damaged and rejected products or rusted cans, was about a lakh which came down to 15,000/- with MIFs intervention
Creating sustainable impact
Giving a percentage of the ownership of these processing units to these small farmers allows them to join the ecosystem, promising to deliver a big impact in terms of economic empowerment alongside hedging the agricultural risks these farmers faced by creating a demand that was affected by seasonality. Our work also enables:
- Building market linkages
- Increasing the utilization within these factories making them more profitable
- Delivering the desired social impact of uplifting the farmers and creating long term benefits
- Generating employment
The Indian food processing industry accounts for 32 per cent of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth according to IBEF.
Staying in step with this growth potential, Krishi Star has established its farmer owned processing units in the markets of Mumbai, Pune, Goa, Gujarat and Delhi and we are soon to start operations in Andhra Pradesh. This will open the markets of Bangalore, Chennai and Hyderabad to us as well.Krishi Star is working with 2,500 farmer members.
Our experience taught us how indispensable finding the right mentor or business guru can be to an entrepreneur on the journey to achieving a sustainable desired scale of impact through their innovation. Our collaborative association with MIF gave us access to experience and expertise built over several decades of thriving in a dynamic market like India -- oiling the wheels that set were in motion with the single minded purpose of lifting many small farmers out of poverty.
Bryan Lee is the CEO and Director at Krishi Star and a MIF Scale-up cohort member. The Marico Innovation Foundation is a mentor to Krishi Star.