Decoding Shorts - 9
Are you interested in knowing how Private labels are created by start-ups? Does the upcoming but niche segment of agri supply chain excites you? If yes, then let’s walk through the journey of two young co-founders trying to disrupt this complex space.
In 2017, Abhishek Agarwal and Akash Sharma, the IIT Roorkee and IIT Delhi grads respectively, began working together to change the landscape of niche agri commodities. There were huge white spaces between growing demands and inadequate supplies, which they construed it to be a distribution problem and wanted to create an aggregation platform. That’s how Farmley was formed, to create a strong Agri supply chain for value addition.
Further, they zeroed down on makhana as the first category and decided to put down their foot for better exploration. The seven-day trip in remote areas of Bihar and Bengal gave them a reality check, seeing how processors, traders and brokers handled the supply chain. A change in ideation occurred, and they decided to transform the landscape of these commodities and convert them into actual food products - from solving a supply chain problem to a full-fledged food company.
The demand was to improve sourcing from farmers and bring in new research and technology to create better and nutritious processed foods. Along with this, integrating scalable automation was of prime importance. Since 95% of products in markets are highly adulterated, the quality of products, traceability, processing, etc., becomes crucial before launching a brand. They also identified that the dry fruits and nuts category is up for disruption and addressed these hard backend problems.
The core team shifted to the base locations where these products are grown and solve problems in each of them. The contract manufacturing centres to onboard service partners who could run the warehousing, labour, and manufacturing operations worked wonders for them. At the same time, they built a world-class facility in the areas close to the growth locations of these commodities.
In the last 12 months, Farmley inaugurated 5 factories, with the country's largest almond and makhana plant. A centralized unit is created to bring more innovations in categories, including makhana, almonds, cashew, foxnuts, and raisins, utilizing different quality grades.
With $ 2 Mn in funding from VCs like Omnivore and the Angels like Harshil Mathur and Shashank Kumar, Farmley has garnered handsome traction, clocking INR 300+ Cr as annually recurring revenues. Their recently launched “retail outlets” are expected to further deepen their addressable market. With stiff competition from traditional players like Haldirams and other start ups trying to solve for the agri supply chain, it would be interesting to track how this start up navigates different challenges in days to come.
Author: Ashwin Ambala