Working on a B2B2C model, Sorted sources fruits and vegetables directly from the farmers and offers them to customers through partnerships with mom-and-pop shops
In his last entrepreneurial stint, Goel, along with Ashish Goel, Anurag Jain and Yatish Talvadia, founded Milkbasket in 2015 to cater to household grocery needs
Before venturing out in other cities, Sorted wants to secure the market leader position in Gurugram
If there is one thing that the Covid-19 pandemic has changed, it is, with all certainty, our outlook towards how to lead a healthy lifestyle. The statement can be seconded by millions of Indians who are now obsessed with having high-quality organic food on their plates – be it fruits or vegetables.
However, amid an increase in demand for fruits and vegetables, especially in the era of quick 10- to 30-minute deliveries, we often have to face disappointments with the quality of produce that reaches our kitchens.
This is because the fruits and vegetables segment is marred by challenges like physical contaminants (pathogens, chemicals and foreign objects) and efficient transportation and storage facilities to keep the produce fresh — the baggage of which is then passed over to the end user.
Anant Goel, the erstwhile CEO of Milkbasket and a veteran with years of experience in the segment, is trying to solve this with his new venture, Sorted, an omnichannel platform for fruits and vegetables.
In his last stint, Goel, along with Ashish Goel, Anurag Jain and Yatish Talvadia, founded Milkbasket in 2015 to serve household grocery needs.
The Blume Venture-backed Milkbasket was acquired by Reliance Retail Ventures in 2021. Amid the acquisition talks, Goel called it quits as the CEO after scaling the venture for nearly half a decade.
Interestingly, Goel has once again placed his bet on the segment, but, this time, he has many tricks up his sleeves.
The ex-CEO of Milkbasket told Inc42 that he has spent 8-9 months preparing a model, which he claims to be ‘best’, to resolve the issues plaguing the segment, so that each Indian family can get fresh and quality produce delivered to their household.
Founded in 2022, along with Nitin Gupta (a former OLA and Flipkart executive) and Sahil Madan (earlier with OYO and P&G), the fruits and vegetables startup has raised over $5 Mn in its ongoing seed round.
Sorting Out The F&V Market
Addressing the elephant in the room, Goel said that today there is a wide gap between what people want on their plates and what they are being served. The challenge has bloated with the entry of online players who today need to understand the nuances, including clear customer preferences and expectations, to drive the fruits and vegetables (F&V) segment effectively.
“There are online players, such as BigBasket and Millbasket, which are selling fruits and vegetables online. And people are unhappy with the quality of the produce that they sell. Also, they hardly cater to family or individual-focussed consumption patterns in the space. This is where we solve the issue of individual choices as this segment is very different from FMCG or other consumer goods sectors,” Goel told Inc42.
At a time when most people prefer to buy fruits and vegetables from street vendors and hawkers, the startup has joined hands with mom-and-pop shops, each catering to 50-100 families in their vicinity.
“We directly procure quality fruits and vegetables from farmers and deliver the produce to our partner stores within a few hours. It has not only helped us cut out the middleman but also strengthened consumer trust. As far as the quality of the produce is concerned, we guarantee the source and quality of the produce,” the former CEO of Milkbasket said.
Traditionally, not a lot of mom-and-pop shops sell fruits or vegetables because of the short shelf life of the produce and the time and energy that goes into its procurement, among other things.
According to Goel, sourcing is a challenge for such shops as they need to go to local wholesale markets, or mandis, every morning.
“We thought, why don’t we solve the problem of source for mom-and-pet shops? We will bring it directly from the farmer supply chain to stores within a few hours of harvest. When customers are buying the products, we guarantee them about the source and reliable quality,” Goel said, adding that Sorted helps them save up to INR 10,000 a month when it comes to sourcing the produce.
Apart from this, Sorted also aims to solve the challenge of convenience and quality for consumers. “We are giving consumers a convenience of choice and good consistent quality produce daily,” said Goel, whose vision is to reduce wastage in the fruits and vegetables industry.
According to the founder, wastage is a big pain point even for online marketplaces and the chances of getting substandard produce via online channels are as high as 15% to 17%. This is because online channels deliver the produce that is stored in warehouses for 15-18 hours.
A Sorted Customer Acquisition Strategy
Having started its journey in Gurugram, Sorted’s growth and expansion strategy is simple – it wants to lead Gurugram with an 8-10% market share.
While Sorted has partnered with 10 to 12 mom-and-pet shops in its pilot mode, it wants to scale up the number going forward as it is building a network of these shops in the first phase.
“The initial addition is high and many mom-and-pop shops want to work with us. We do a background check of these stores before onboarding them,” Goel said.
Sorted has a team of business development executives and a call centre for onboarding such stores. “Some of these stores serve as many as 50 families or 100 to 200 customers. When we partner with these shops, we onboard their customers along with them. Hence, our customer acquisition cost is low and our marketing budget is negligible,” Goel said.
The startup is investing heavily in data science including AI, and ML capabilities to understand differential pricing of fruits and vegetables based on several factors such as localities and ongoing festivals.
Sorted has so far raised over $5 Mn in its ongoing seed round. From a team of 100, Sorted wants to scale up its team size to 500. As it is a high-margin market, Goel is optimistic that the startup would turn out to be profitable soon.
