Fresh Dispatch #1 — Solving the missing middle of sustainable food
You are a conscious consumer. You bought a bag of brown rice that was sustainably produced. It was delivered to you through a delivery service that offers carbon neutral deliveries. You saw that the packaging was also made using plastic free material. Another great decision made for the planet.
But here’s a little back story: The farmer that grew the paddy probably stored it in a ‘bandh’ (a temporary storage facility) in his village for a while until it was the right time to take it to market. He then rented a petrol run tractor to take it to the nearest mandi which could be as far as 70 kms. Chances are he did not get a good price that day, so he ended up traveling again the next day with the produce to a nearby trader 20–30 kms away and sold it to him. The trader now stored it in a godown with other farmers’ produce and then sent it to the company’s warehouse on a 30 MT petrol run truck. It stayed in the climate-controlled warehouse for a few weeks before it was sent to a rice mill on a truck, where it was processed and packaged using electricity and more fuel. The packet then traveled a long distance to reach the delivery platform’s dark store.
According to a study by FAO, 31% of the global human-caused GHG emissions originate from food systems. Of this, more than one-third emissions are from supply-chain processes that include transportation, storage and handling. While Indian farms are being transformed to adopt techno-optimistic practices using IoT devices, satellite imagery, digital advisory, automated data collection, and carbon credits; simply tweaking and optimizing current processes can have outsized impact on the way our production and consumption of food impacts the planet.
FarMart is a foodtech company backed by climate investor Avaana Capital, and other prominent VCs including General Catalyst, Omidyar Network India, Matrix Partners, that is trying to address these post harvest supply chain inefficiencies. We leverage communities, skills, and tools that already exist in the food value chains to aggregate and sell produce from the farmgate to global businesses.
In a recent independent study conducted by Climes, it was found that FarMart’s operational GHG emissions are 34% less compared to conventional food logistics. In 2022, we avoided 1500 MT CO2 eq emissions through our operations. This was achieved by simply increasing efficiency and optimizing traditional processes in two areas: (1) transport and (2) storage of agricultural produce.
Reducing wasteful travel through easy discovery
As per the Climes study, every ton of food transported via FarMart travels 22% less between the farm and buyer location compared to conventional agri-logistics.
FarMart has a widespread network of suppliers and buyers all over the country. Our tech leverages this network to help any supplier who has a certain quantity of produce in finding a buyer that matches the specifications and is optimally located.
What this means for the supplier is that he/she now has a guaranteed buyer without even stepping out of their house. They no longer need to go to the mandi or to different traders to finalize a trade. The produce can go directly from the farmgate to the buyer location.
This also allows the buyer to gain access to a large network of suppliers in close proximity that he/she wasn’t even aware of, hence reducing dependency on handful suppliers, and save both time and costs associated with transportation.
Minimizing storage through instant fulfilment
With FarMart, an aggregator can submit a bid to sell on our application within 5 seconds of visibility of produce. He/she gets a verification call within 3 hours after which a ground executive reaches him/her to conduct a quality check within 24 hours. In the next 2–3 days, the produce reaches the buyer destination, all payments are made, and the loop is closed. Our rejection rates are as low as 0.6% and order fulfillment remains above 97%.
All of this drastically minimizes the need for any storage for the produce. In a typical supply chain, the produce would be on average stored in 3 different locations — at the source, at the aggregation point, and then at the destination — simply because of a gap in the supply and demand.
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Overall, 7.4 kg CO2 eq. is saved per ton of food sold via FarMart. Putting it another way, sustainability is integrated into our business model, and it scales as the business scales.
We’re cognizant that our Co2 reduction numbers themselves are only a drop in the ocean of action that is needed, but we believe that our ‘unscaled’ model (reference from ‘Unscaled’ by Hemant Taneja of General Catalyst) of leveraging existing scale instead of building it and using tech and AI to automate tasks, holds the key to address a majority of the challenges. Further, while the first mile and last mile of the supply chain are already evolving, we’re standing at the cusp of enabling the middle mile — the 30 MT trucks traveling interstate for weeks at a stretch — to also witness the revolution.
