By Prachi Sinha
Jan 11, 2022
3 min read
Investment

Two macro/ industry trends stand out when we think of fruits and vegetables production in India

One- the increasing focus on protected cultivation

India ranks second in fruits and vegetables production in the world, after China. A very small portion of this is organized. The organization mostly is in fruit production and some low value vegetables like potatoes, tomatoes and onion. While protected cultivation accounts for only 0.2%-0.4% of the total area under cultivation (for horticulture), the yield is 10x-12x higher than regular cultivation There is a strong push on increasing area under protected cultivation, with ~10,000 Ha. added just last year. Further, The government is currently giving subsidies to the extent of 50% of the cost of greenhouse. If farmers are unable to mobilize the rest of the amount, they may be given as high as 75% as subsidy.

Two- High variability in production and quality across seasons

The biggest procurement challenge cited by HoReCa players and other B2B agri-platforms, is the lack of consistency, in both quality and quantity supplied and the increase in prices during off season (4x-5x higher).

Pepper Farms (http://pepperfarms.in/) uses agronomy driven Standard Operating Procedures (SoPs) to benefit from “One” and solve for “Two”. The company is building an asset light, vertically integrated model of greenhouses/ polyhouses, driven by precision agriculture and agronomy support on production and B2B market linkage for mandis, HoReCa and e-commerce players.

The company has built deep inroads into the ecosystem to expand scale and impact. They partner with local bodies like Farmer Producer Organizations (FPOs- for the list of beneficiaries), infrastructure companies and network of agronomists to identify greenhouses. After identifying a farm, their operations are split into farm activation followed by crop management. Farmers and landowners are able to see 15x-25x increase in revenue per acre. With more land and farms added, their operational efficiencies will increase by 4x-5x, adding to very healthy margins.

The traction speaks volumes about the model- in just a little under three quarters, the company has grown >12x with a well thought out playbook to scale another 10x in ARR. They already account for >50% wallet share of some of the largest HoReCa and B2B players in the country.

The founders, Saurabh and Shalini, come with prior experience in both agri and export supply chains. They have also been able to attract PhD level agronomy team with over 50 years of vegetable experience.

We are delighted to welcome them to the Axilor family and be partners in their journey.

Building something exciting in Agri-tech? Lets talk- write to me at prachi@axilor.com

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