Vegetables and fruits are highly perishable in nature and largely underserved by technology or new generation supply chain innovation to reduce wastage and time of travel. Because of its liable to rot quality, farmers always end up at the disadvantage side as they have to sell it off within a day or maximum two.
This tilts the balance of the market towards buyers and leads to lower income for farmers. Whereas other non-perishable commodities can be stored longer and have a mature supply chain structure in place.
While procuring fresh vegetables and fruits is a painful affair for retailers restaurants and other businesses, selling fresh produce at the right price is a huge challenge for farmers. Typically, farmers sell their produce to middlemen or mafia in mandis often at dirt-cheap prices.
To solve this problem for buyers and sellers, a couple of startups in India are leveraging technology to create an efficient supply chain. One such startup is Bengaluru-based Ninjacart.
Founded by Ashutosh Vikram, Kartheeswaran K K, Sharath Loganathan and Thirukumaran Nagarajan – Ninjacart is an agri-marketing platform connecting vegetables and fruits farmers directly with businesses.
At one end, Ninjacart helps farmers get better prices, consistent demand, and immediate payment and on another end, it helps modern retailers, restaurants to source fresh fruits and vegetables at competitive prices directly from farmers.
The platform does this effectively at lower cost and larger scale using smart supply chain enabled by strong technology, data science, warehouses and integrated logistics network.
Creating win-win situations for farmers, businesses and the ecosystem
Market Information barriers, distribution inefficiency, and marginal farming lead to the creation of numerous middlemen, who were involved in getting the produce from farm to store. As a result, farmers get only one-third of what the end consumer pays.
Ninjacart solves this problem by enabling farmers with supply chain platform to sell directly to businesses, thereby maximizing farmers’ income. It picks up the produce from farmers’ fields and delivers it to the doorstep of businesses.
Lack of reliable and hygiene options to procure vegetables and fruits and necessity to go market everyday morning put retailers and restaurants in a disadvantaged position. With help of Ninjacart, businesses can get a quality and hygienically handled produce delivered to their doorstep everyday morning fresh from the farm.
Presently, about 30% of vegetables and fruits get wasted and cost of moving the produce from farm to store is high because of inefficient supply chain and broken agri-marketing ecosystem. Meanwhile, Ninjacart claims to reduce the wastage to 4% and move produce to store at lower cost using the state of art supply chain.
Cracking supply chain leveraging ERP and forecasting
For frictionless movement of fruits and vegetables from farm to retail, Ninjacart has developed ‘tomorrow ready ERP’. “It accommodates the flexibility it needs as we scale and delivers a frictionless movement of goods. Mobile ready ERP also ensures we use zero paper in our supply chain,” says Ashutosh Vikram, co-founder Ninjacart.
Forecast more, you have a lot of unsold wastage; predict less, you will see customers walking to the market, due to unavailability. “We have leveraged deep machine learning to perfect our forecasting to 97% and reduce the overall wastage to 4%,” adds Vikram.
Importantly, traditional supply chains have wastage up to 25%.
Multiple market intelligence tools and machine learning algorithms help Ninjacart predicts market prices and assists farmers plan harvest accordingly. The farmers know the price before harvesting and this increases the odds of better returns.
Speed and cost can make or break any supply chain. “Our indigenous route optimization and utilization help us keep our load factor at 92% and put fresher vegetables on the plate. We move the produce from farm to store within 14 hours at a cost almost one-third of the traditional supply chain,” says Vikram.
Why Ninjacart focuses on only fruits & Vegetables?
The vegetables and fruits marketing ecosystem in India has been traditionally broken and favored mandis. “We see a huge opportunity in disrupting this using a technology and empowering farmers by removing information barriers and providing distribution network,” says Vikram.
The potential in fresh produce is huge enough to focus narrowly and crack the space rather than get distracted with other categories at this point in time. Lack of competition and more than 95% un-organised space makes this a huge potential to tap.
Currently, the company processes close to 90 tons of fruits and vegetables on a daily basis, which makes it 2700 tonnes of vegetables and fruits a month.
So far, Ninjacart has raised about $8.5 million investment across two rounds from likes of Accel Partners, Nandan Nilekani’s NRJN Trust, Qualcomm Ventures, M&S Partners and Mistletoe among others.
Market opportunity and road ahead for Ninjacart
The agriculture sector is key to nation’s growth in GDP and it contributes to more than 55% of employment in India. According to the data by Euromonitor, vegetables and fruits marketing is an approx $150 billion market, which is growing at nine percent on a yearly basis.
It’s expected to reach $224 billion by 2020. The market is spread across all cities and towns in India. “The kind of product we deal with, is a basic and for everyday consumption, which makes the opportunity comparable with markets for milk, water, and internet,” quips Vikram.
Ninjacart estimates that fruits and vegetable consumption in Bengaluru on daily basis would be close to 3500 tonnes and it’s just getting started in disrupting this.
The company plans to venture into new cities by early next year. “Our aim is to build a strong network of supply and demand in South India in a 12 to 18 months period,” concludes Vikram.