SUMMARY
Amazon is currently working on developing a sustainable farm-to-fork model in India
It procures fresh stocks of fruits and vegetables from aggregators across various mandis
Amazon plans to capture half of the grocery and household market in India by 2023
In order to get fresh produce to its consumers, the ecommerce giant Amazon Retail India (ARIPL), on Wednesday (December 18), announced that it is running a farm-to-fork pilot project in Pune, where it will be directly working with farmers to source fresh produce.
According to an ET report, two sources familiar with the development said that the ARIPL, a wholly-owned food retailing entity of Amazon, is working with dozens of farmers in the state. The company has set up several cold chain storage hubs in the regions to supply fresh produce through its online channels like Amazon Fresh and Amazon Pantry.
If this works, Amazon plans to expand this programme across the country, aggressively.
Moreover, Amazon said that it is leveraging technology to develop a sustainable farm-to-fork model, where it engages with farmers and government bodies, like the Maharashtra State Agricultural Marketing Board (IAMB) and Indian Council of Agriculture Research (ICAR) among others, to procure fresh stocks of fruits and vegetables from aggregators across various mandis.
In April 2019, the parent company Amazon had invested INR 240 Cr ($35 Mn) in ARIPL to increase the sale of groceries, household and other food products in India. Focusing on the food and grocery business, Amazon had planned to use $500 Mn out of $5 Bn commitment towards the country. Amit Agarwal, Amazon India head, earlier had also said that the company expects grocery and household business to occupy half of the Indian market by 2023.
Amazon is not the only player in the farm-to-fork or farm-to-table business in India as there are other startups like Zomato, BigBasket, Milkbasket, Freshtohome and Licious, where the startups have already built direct-to-consumer channel for delivering food and grocery products to restaurants, hotels and consumers.
A ‘Farm-to-Fork’ Race: Amazon Competes With Zomato, BigBasket And Others
In March 2019, Zomato’s HyperPure relocated from a 6K sq ft warehouse in Bengaluru to a 30K sq ft cold storage setup to service over 2.5K restaurants every day with fresh produce directly procured from farmers. In fact, within three months of the launch of HyperPure, the service grew immensely with about 350 restaurants purchasing from HyperPure and 1K restaurants using its platform, seamlessly. The increase in demand prompted the company to scale up its operations.
HyperPure by Zomato works directly with farmers, mills and producers and source each of the ingredients to ensure freshness and quality of the produce. Similarly, BigBasket, Licious and Milkbasket have all forrayed in this space and are expanding its services and products across India.
BigBasket cofounder Hari Menon had earlier said that grocery is a business of scale, and the success lies in their farm-to-fork supply chain of fresh fruits, vegetables, meats and inventory-led wholesale approach, which help them with high order fill rates.
Licious is another startup that works directly with the farmers. It’s farm-to-fork business model, covers end-to-end supply chain operations, right from procurement to processing, cold storage and cold chain control and last-mile delivery. In the last four years, the company has evolved into providing fresh meats to its consumers across India. Recently, the company raised $30 Mn in Series E from Singapore-based Vertex Growth.
