1% of india = a business opportunity — india day 4

January 8

In stark contrast to Sula Vineyard’s slight pessimism about the 1% market for wine in India, FreshTrop Fruit in Nashik has a different perspective: 1%, or even 0.5% of the population in India is a business opportunity. Even a small percentage of one billion is still a lot of people!

Similar to the wine grapes, the cold snap in Western India has also put a halt to the processing and distribution of table grapes. For their grape operation, Freshtrop’s post=harvest management goal includes ensuring that grapes are fresh and crisp for retail markets abroad. Because the condition of grapes dramatically decreases post-harvest and a cold chain is significantly lacking in India, Good Ag Practices (GAP) must be kept to address food safety.

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According to Mayank Tandon, the Senior Vice President of sales and marketing at FreshTrop, food safety and the health benefits of his product are at the upmost concern. In order to promote sustainable agriculture, Tandon believes that agrochemicals, used in the most optimal way, are an intricate part of the system. “Even if yoga, exercise, and healthy living lead to a healthy life, medication from the doctor may still be necessary sometimes,” Tandon explains, paralleling the importance of educating farmers about safe use of agrochemicals.

I have spent much time studying the sincere lack of transparency in America’s food system, and was quite taken aback by the extreme measures FreshTrop takes to provide information to their consumers. Grapes are harvested during the mornings of the hot season, brought to FreshTrop directly from the producer, and stacked in different sections throughout the processing plant. Complete traceability is maintained throughout the supply chain.

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100% traceability — back to the individual farmer’s plot, and the dates of harvest and applications of agricultural inputs — is maintained with a barcode on the package. An online traceability system is also accessible by customers. In case of a threat to food safety, information regarding origin of food must be available to consumers within 72 hours in India; Tandon and his company are proactive, with such information available to customers before they even purchase the product.

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Much innovation and entrepreneurship has gone into this quality grape product; a high demand is available in Europe’s markets, with consumers willing to pay a higher price for a better product. For instance, the packaging consists of a moisture-resistant cardboard box with the strength to handle a couple hundred pounds of pressure; a plastic liner containing a sodium solution, that in reacting with water releases sulfur dioxide to help regulate fruit temperature; and plastic that consists of “virgin” plastic in contact with food, with the intermediary and outer layer made of recycled plastic to reduce waste.

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In 2010, FreshTrop Fruit was embroiled in an economically disastrous regulatory issue while trading with Europe. An unapproved, persistent agrochemical was detected in a shipment to the E.U., but was rejected. Producers in India had started to use this chemical as a growth retardant for weeds. The accepted level for the chemical in Europe was 0.05; the European Food commission, however, immediately published a paper saying the safe limit was 1.6, and it was therefore not a food safety issue, rather regulatory.

The UK took the approach that all produce that had landed on their shores was okay, but none would be accepted from thereafter. Most importers returned the product at a price that did not even cover transportation, nonetheless cost of production.

As an eye opener for India’s exporters, people from Bangladesh and Delhi showed up at FreshTrop with bags of money in search of produce. Who knew India had an even higher market for this expensive, but quality product? The domestic market got a taste of FreshTrop’s grapes, and has not looked back since. The bottleneck in Tandon’s company is increasing difficulty of finding workers and physical grapes — not a consumer demand.

In FreshTrop Fruits’ business, “Quality outweighs cost. This is my face,” Tandon says. Even at a high cost, the value added to table grapes through FreshTrop’s distribution scheme makes it a profitable and sustainable system across the supply chain.

Another facet of FreshTrop’s company is providing juice concentrate for domestic markets. It is not economical or sustainable for the company to transport reconstituted juice, as water adds weight. Again, the biggest bottlenecks in the fruit processing facility include: raw material; landholding has decreased due to Land Ceiling Acts in India, which has driven farmers into subsistence farming rather than producing for sale. India is a highly consuming nation, and therefore a vast majority of their products are sold domestically.

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Tandon continually returned to discussing the fragmentation and disparity in India’s agriculture industry, and how it paralleled to land ownership. On one end of the spectrum, farmers are barely surviving on subsistence farming; on the other, money and technology is being put into land. As technology increases and the potential for higher production grows, farmer income grows, and the whole supply chain strengthens. Farmers purchase a better house, better education for their children, a nicer car, more land, businesses get more produce, and farmers make more money to put back into their businesses. “We [FreshTop] can provide guidance and info to farmers. We take care of marketing, and the farmer can take care of production.”

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