Zomato’s latest ambition: Entering ‘farm to fork’ business

Food-tech unicorn Zomato has widened its horizon from being a mere food discovery and ordering platform to becoming a full stack solution for foodies and restaurant partners. The company is eyeing farm to table (aka farm to fork) segment and has already begun ground works to launch it in near future.

“We are already taking baby steps towards being the biggest farm to mouth food company in the world, and there is so much to do for all of us,” mentioned a Zomato blog post written by Deepinder Goyal.

According to Goyal, Zomato would start delivering raw materials such as staples, fresh vegetables, and fruits, amongst others, to restaurant partners. The company would also give certified tag of Zomato to partners who source agricultural produce from the platform.

Since hygiene in food is becoming a priority for consumers, certified dining and delivery restaurants will help users in knowing whether the outlets are using quality ingredients or not along with other crucial details about the restaurant.

While Zomato is certainly eyeing an altogether new business model by entering into a farm to fork segment, the execution will not be easy for the company as it requires a different set-up and skill set. The Gurugram-headquartered company would need to build significant number of collection centres in rural areas and distribution centres in cities to fulfil orders.

Over the decades, traditional merchants in agricultural produce fulfil the raw material requirement for restaurants. The segment is highly unorganised, but because of the entry barriers like long payment cycles and dominance of traditional suppliers, none of the startups has been able to make a sizeable dent into it.

Long payment cycle and fixed pricing (from restaurant front) have been major hurdles for startups eyeing to become suppliers for restaurants. However, to some extent, Zomato doesn’t face such challenges as it already has an established sales channel for restaurants through online ordering, table reservation, and subscription-based membership Zomato Gold.

Since Zomato collects payments on behalf of restaurants, it can solve the challenge of a long payment cycle to a large extent.  Currently, startups such as Crofarm and NinjaCart have been catering to some restaurants. But, their primary focus is on retailers (like Big Bazaar, More, HyperCity etc.)

With a new business line - farm to table, Zomato is entering a segment which is yet to be evangelised by any other large to the mid-scale company. While the segment would throw new challenges to a decade old platform, it would be exciting to see how Zomato’s ambitious plan pan out in future.