Organic produce from Maati

1. Organic produce from Maati A presentation to: Villgro April 27, 2012 Author: Deepak Gupta

2. The time is ripe.. • Organic market size was about USD 59 billion globally in 2010 and likely to touch USD 100 billion in 2012. The US organic food and beverages industry alone was about USD 27 billion in 2010 and comprised 4% of overall food and beverage sales * • Technopak estimates the Indian organic market to grow ten fold from the INR 6.75 billion in 2010 to INR 70 billion (USD 1.4 billion) in 2015 • India has about 1.5 million hectares under organic cultivation (increased at a pace of about 50-55% p.a) and early learning from the supply chain including retailing are available • About 95 tests are done in India, compared to about 350 in the developed markets, to call a product organic • Exploding domestic demand as well as exports, whichever way you want to look at it • Young population with growing disposable income and refined tastes • With lower costs in India coupled with certifications and effective propaganda, Indian organic products are being accepted in the US and European markets • There's a plethora of stores in India that sell organic produce now - from dry groceries to fresh fruits and vegetables, even milk! *Source: www.organic-world.net, www.ota.com

3. The industry still has gaps to fill.. • In-store staff lack product knowledge (On easyday: staff know where the organic produce is, but that’s about all they know..) • Consumers confused with Organic, natural and exotic imported food products all under one roof (Godrej Nature’s Basket) • NGO’s, farmer associations (like samitis of Uttaranchal’s UOCB) and companies working together at grassroots of the supply chain, however • warehousing and processing costs high and capacity low (Sresta: It took more than a couple of years to find a way to warehouse properly) • companies in retail chain store model trapped in high fixed retailing costs and need to rapidly increase sale volumes to break-even • Significant losses and contamination potential in the entire supply chain since the product is perishable and value addition at nascent stage • Training of farmers and soil conditioning is time intensive and requires a grassroots local procurement network • Trusting organic labelling in wake of lax enforcement of agriculture and food laws accusations, a challenge • No single player in India has more than INR 1 billion revenue and significant contribution is of exports

4. Organic Maati filling the gaps.. The Organic Maati model uses a network of Independent Sales Agents (ISAs) and Independent Purchase Agents (IPAs) who are trained on product knowledge and are integrated using technology to minimize warehousing and retailing costs and at the same time maintain the stringent quality in supply chain required for the exports market and to build trust. Organic Maati IPAs ISAs Exports Technology platform to ensure timely deliveries with negligible inventory IPAs network with farmers, NGOs, other organic producers and certification agencies with an objective to garner volumes of quality and certified produce of identified items and land them at flash market or export container doorstep on a zero inventory concept as far as possible Exports team solicits and delivers against orders for less perishable and processed items, catering to the international markets This set works on the network sales model, building on the trust they have of their family and friends and organizes flash markets in their neighborhood regularly

5. The numbers look very tempting.. • ISAs must tap corporate executives at their doorstep, urban educated housewives, returning NRIs, foreign tourists, institutional sales to build up the revenue • Collaborative sales promotions with other brands, similar or complimentary products also necessary to meet the numbers Rapid scale up of sales is the key (using a modular approach of flash sale), while maintaining high quality and low costs for domestic as well as export sales. Scorecard based product focus.

6. The risks seem to be manageable.. • Organic exports can get banned • Foreign patents of Indian produce • Urban tastes don’t evolve as per expectations • Misrepresentations by IPAs or ISAs • Reputation damage due to defective product • Conflicts with competition Potential risks and their mitigates • Organics not an essential food commodity • More awareness among Indian producers now • Quick adaptation to changing tastes easier in network sales • Integrity and commitment among grass root agents key entry criteria • Stringent certifications and quality control at each step • Expanding market size is the focus, not the market share

7. The story of a returning NRI turning entrepreneur.. • Profile of the promoter, Deepak Gupta, a returning NRI turning entrepreneur • Strong pedigree: DPS (R.K Puram), SRCC (Eco Hons.), XLRI (BMD-1996) • Started career with Nestle India Ltd at Moga (Jun ’96 to Dec ’97) • Failed early attempt at entrepreneurship (management entrance classes, ’98) • Returned to join corporate world with HDFC Bank (’99 to 2004) • Working with ICICI Bank since 2004 • Started at Bangalore (2004-2006) • Based at South Africa (Jo’burg) for a year and Canada (Toronto) for 4 years before returning to India (Delhi) in May 2011 • Started a website called pradaan.org in Dec 2011 to enable volunteering by urban youth

8. Thank You! Author’s contacts: Deepak Gupta mboxdg@gmail.com +91 8527299850 Private and Confidential The confidential information contained in this document is material and may be used only for the specific purpose stated by the author. By accepting this confidential document, the recipient agrees to use any such information only for the intended purpose of the author and not for any other purpose whatsoever.