Meghalaya is primarily an agricultural state with more than 80% of its population engaged in farming. The state is home to many varieties of indigenous crops such as Lakadong turmeric, valerian (a perennial flowering plant used to make herbal/medicinal tea) and bhut jolokia (ghost pepper). But due to its remote habitations (and hence, lack of connectivity) and shortage of markets, cultivation here is more about subsistence than commerce.
As the infrastructure in the north-eastern state gradually developed, agri-retail businesses started popping up, tapping into the opportunity of commercialising local crops. But like everywhere else in India, the perennial problem of middlemen hindered local farmers from directly reaching out to consumers for a fair price.
So, Shillong-based direct-to-consumer (D2C) brand Zizira entered this space to ensure that local farmers could sell directly to customers to bypass the unfair trade terms of the intermediaries and get better margins. The startup was conceptualised by Ralph Budelman, a serial entrepreneur, and started operations in 2015.
“Budelman wanted to change the system and promote sustainable business practices. Today, the company continues to have a positive impact on farmers, families and communities by creating better opportunities for them,” said Kimbretta Khongwir, Head of Zizira.
The Indian spice market is an evergreen sector with opportunities galore in local and global markets. According to a report by Avendus Capital, India’s branded spice market is set to reach $6.8 Bn by 2025, capturing around 35% share of the total organised spice market. Besides Zizira, Indore-based Pushp, Sonipat’s Urban Spices and Delhi-based ORCO are some of the major players in the branded spice segment.
Zizira’s Unique Journey And Its Challenges
Budelman moved to Shillong from Chicago in 2004 and started his first entrepreneurial venture Chillibreeze, a PowerPoint formatting platform. In 2015, at the age of 65, he shifted to agri-retail, sensing the potential of Meghalaya’s farm produce and started Zizira. (His late entry into this space reminds one of Colonel Harland Sanders, who started the fast-food icon KFC in his 60s and sold it at the age of 75, helping create a multibillion-dollar global business.)
The D2C brand procures, processes and sells local spices to the rest of India. Zizira has 60 SKUs in place and operates in the premium segment, with prices in the range of INR 250-700.
One of its key products is Lakadong turmeric, named after the tiny village where it mostly grows. It is considered one of the purest turmeric varieties, with a high content of curcumin (more than 7% instead of 2-3% available in regular varieties), valued for its medicinal properties. The company also offers local ginger blends, preservative-free wildflower honey, valerian tea blends and more.
Running a D2C business is difficult enough, even in metros. But running it out of the remote valleys in Meghalaya comes with its own set of challenges that is difficult to resolve at first.
As Zizira was committed to local empowerment, it chose to hire locals based on how close they were to core company values and their ability to learn technical skills. But not hiring experienced professionals with technical knowledge and market understanding from the get-go meant the company had to go through a steep learning curve in its formative years, and it reduced the potential for early growth.
Its decision to eliminate the middlemen from the procurement process also created a challenge as the brand had to approach farmers directly and convince them to partner with the new business. Despite the hiccups, the startup persevered with its vision. It is now working with more than 30 farmers for seamless procurement and fair pricing.
“We started with nothing but a young group of individuals and a vision to bring Meghalaya farmers to the fore. When the current team joined, we had no experience. We did everything on a trial-and-error basis and learnt as quickly as possible,” said Khongwir.
Of Quality Standards And Logistics Roadblocks
As part of Zizira’s vision to make farmers famous, there is a heavy emphasis on quality control. While procuring agri produce, the company ensures zero use of chemical fertilisers during farming.
Next, samples from every batch are sent to labs approved by the Food Safety and Standards Authority of India (FSSAI) to test the quality of the ingredients. Ingredients are taken to the processing stage only after the benchmarking.
Unlike many players, Zizira has in-house processing units. According to Khongwir, this enables complete control over the processing part, helping maintain top quality and reduce overhead costs. The company claims to follow all food safety protocols of FSSAI and the U.S. FDA’s Hazard Analysis Critical Control Point (HACCP) across its processing units.
The D2C spice brand markets its products via Facebook and Instagram ads and focusses on spreading awareness about native spice varieties. The company claims to witness a single-digit month-on-month growth post the second wave of the Covid-19 pandemic in spite of logistics restrictions and its remote location.
But outbound logistics was one area where Zizira struggled. Shipping its products from Shillong to the rest of the country through difficult terrains resulted in delivery delays, breakages and leakages as well as lost shipments.
The spice brand initially partnered with local courier services but faced issues regarding coordination and delivery efficiency. Eventually, in March 2020, it tied up with Shiprocket, a Delhi-based third-party logistics (3PL) service provider.
By leveraging Shiprocket’s courier recommendation, Zizira was able to streamline delivery operations and cut down on delivery time. The company now uses Shiprocket’s warehouses and takes 5-7 days to deliver products pan-India. At present, the brand claims to have an average monthly order volume of 1,500.
The company also focusses on post-purchase experience for better customer retention. Its online loyalty programme offers discounts to repeat customers and buyers can easily track their orders after shipping.
As a D2C brand, Zizira ticks all the right boxes. But unlike a few players, it has not witnessed a meteoric rise. Instead, it has seen slow but steady growth as the company started from scratch and built entrepreneurial efficiency in a region with low infrastructural support. However, it has a lot of plans to scale.
“We are focussing on overall improvement and aiming to partner with more farmers and release more products. We are trying to establish Zizira as a premium spice brand that delivers exclusive products from the region to the doorstep,” concluded Khongwir.