Sushodh: A Case Study

Krishi Chanakya’20
Presentation By,
Optimisers
 Case Background

Agri-business Supply Chain & Drivers of Agri-business

Close-loop Business Model

Enablers & Requirements of Agricultural Technology

Technologies to be leveraged to expand Market Share

Benefits of Agricultural Technology

Products Categories for Company X

Contents FMCG Growth drivers

Phase-wise Implementation & Challenges

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 CASE OVERVIEW

Company X Services – Agri-advisory Customers – 1 million+ farmers Mode of delivery – Mobile based virtual

SWOT Analysis Diversification Avenues

STRENGTHS WEAKNESS
› Visibility in deep rural pockets › Customers - Small &
› Rural distribution Marginal farmers Cattle Feed High likelihood of connected
› Core agricultural backend team › Non-smartphone user farmers owning cattle
› Huge farmer base
› 100+ connected FPOs Strengths Weakness Agri-tech Heavy investments in
› Decent technology support team
Integration advanced technologies

OPPORTUNITIES THREATS
› › Established competitors Opportunity to leverage
Internet boom
› › Heavy competition in the brand name and forward link
Telecom disruptions Retail Product
existing market the farmers’ produce
› Portfolio Diversification
› Digitalization
› Internet penetration in rural Opportunities Threats
market

Things to Do

Ideas to improve channel Ideas to increase subscriber base

Roadmap for next 5-10 Years productivity

Ideas to become Market leader in Innovative ways of sales and

Avenues of Product innovation
next 5-10 years marketing e-business e-distribution
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AGRIBUSINESS OVERVIEW

Gross Value Added By Agriculture And Allied Sectors (US$ billion)

285 283.68

280 277.7
275

270 267.9

265

260
FY 18 FY 19 FY 20

Agricultural Exports India Sector-wise Exports India FY20

(US$ billion) (US$ billion)

1.01
0.7
45 0.79
40 38.21 38.54 1.63 5.89

35
30 28.94 3.05
25 3.4
20 2.8

15
10 Marine Products Basmati Rice
Buffalo Meat Spices
5
Non-Basmati Rice Cotton
0 Oil Meals Sugar
FY 18 FY 19 FY 20*
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 AGRIBUSINESS SUPPLY CHAIN
Supply Chain of Agri-business Drivers of Agri-business

Rise of e-Commerce
With the consistent rise of E-
commerce, home delivery
grocery stores have created an
opportunity for agriculture
enthusiasts to start their own
farms with the help of
agriculture experts

Population Growth
The ever-growing
population has increased
the demand for food
produce

Suppliers
Agriculture/ Agro-Trader/ Processing/ Wholesale/
Consumer Shift in Consumer
Farming Distributors Refinement Retail Preference
The growing awareness and
popularity of high-quality
Seeds Red/White meat Red/White meat Dairy Discounters Convenience organic farm produce that
Fertilizer Dairy Oils Meal Supermarkets Shopping sells at high value in the
Crop protection Crops Meal Bakery e-Commerce Specialty market.
Food Ingredients Crops Snacks

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 RECOMMENDED MODEL FOR COMPANY X

Recommended - Close-Loop Business Model Model Description

› The Farmer’s yield is divided into 2 parts:
» Harvest – can be used as a Raw Material for the retail product of Company X
» Waste – can be used as Cattle Feed

› The cattle farm’s yield is divided into 2 parts:

» Milk – which can be sent to processing plants for commercialization
» Waste – the cattle excreta can be sent back to the farmers for improving the yield of the
fields

› The Raw Material received from the farmlands can be used for producing the retail product of
Company X

› The Manufacturing plant’s yield can be divided into 2 parts:

» Finished Goods – which will be sold through various channels like traditional retail,
modern trade or e-commerce
» Wastages – the non-hazardous wastes can be used for composting, which can help in
improving the farmland’s yield

› Similarly, the non-hazardous wastes generated at the retail outlets can be sent to the
composting sites

Features

Minimal Wastage Scalable Sustainable

Future ready Farmer Centric 6

 AGRITECH – ENABLERS & CHALLENGES FOR COMPANY X

Enablers & Conditions Implementational Challenges

Enablers Minimum Conditions Developing a digitalization Calculative investments in

culture across the company. Application of IoT, data-driven
Develop a set of employees 1 2 farming, chatbots, drone

D t of i-te ste
&

ev r ch m
and customers driven towards technology & precision

n r y
Use of gy

el ob
ag cos
accepting & leveraging digital ng olo

op u
s agriculture to increase farm

e
internet o
r n nt

m st
technologies to improve St ech D me output while maintaining cost

e
efficiencies t & st efficiency
Mobile R ve
in
phones &
social media New Age
Agri-tech

Cr du labo
Connectivity Affordability e

in ol r atio
bl

os str ra
Digital skills Availability
ra ory ent

c fo v

s- y tio
n no
Company X should also u
vo lat nm

in
leverage various government Fa egu iro Company X should be keeping
Support for policies such as Start-up Agri- r nv itself abreast with the new
e
agripreneur

n
India to avail benefits from the technological developments
ial culture government 3 4 across all industries

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 TECHNOLOGIES TO BE LEVERAGED – COMPANY X
Segment Description
Data analytics and machine learning Precision agriculture and farm management,
Financial services
Challenges addressed
Improved productivity through insights on weather and soil health ,Data and
insights to guide use of resources, such as water and labor , Risk models to
predict farmers’ credit profiles

Data and platforms for price transparency Market linkage – farm inputs, Supply chain Better returns for farmers through higher transparency and online platforms for
tech and output market linkage price discovery for inputs and outputs

Imaging and AI to monitor crop quality Quality management and traceability Crop quality monitoring and improvement through imaging or AI, Automation in
output grading and yield classification

Platforms for produce traceability Supply chain tech and output market linkage Increased visibility and transparency across supply chain, Better data in
emergency situations

Robotics and drones for cultivation/ harvesting Farm mechanization and automation Help overcome labor shortage , Improve time to market for produce

Benefits of Agricultural Technology

› Optimize application of water, fertilizers, & pesticides across fields through › Enable more reliable monitoring & management of natural resources
targeting only the right areas as per requirements. Benefits include: through robotic technologies. Benefits include:

Higher crop Reduced impact on natural Greater efficiencies and lower prices
productivity ecosystems

Less runoff of chemicals into Increased worker safety Reduced environmental and ecological impact
rivers and groundwater

Safer growing conditions and safer foods

Decreased use of water, fertilizer, & pesticides - keeps food prices down

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 FMCG RETAIL – COMPANY X

Segment-Wise breakup of
Market Size (US$ billion) Sector Composition Value Elements – Company X
Revenue
250 Value Proposition
220 Engaging the stakeholders in value shopping
200
19
150
110
100 50 45 55
50 31 Value Delivery
Value Creation › IoT
0 Compatibility with
2020 2025 › Vending machines
the environmental › E-comm business
Urban Rural restrictions
FMCG is the 4th largest sector in Food and Beverages Models
the Indian economy and is Healthcare
expected to grow 9-10% in 2020 Household and Personal care
Growth Drivers – Company X should leverage Product Categories to be Explored by Company X

1 Wheat, Fruits, vegetables,

Rising Income level Fresh,
Pulses, Processed frozen peas and
Frozen &
Cereals, and foods carrots, and
Dry foods
Desire to experiment with brands 2 Boxed pasta raisins and nuts

GROWTH FACTORS FOR Growth of Modern trade 3

FMCG
Ready-to-eat Prepared Dairy Milk, Yogurt,
Increasing awareness of brands 4
meals meals Products Cheese
products
Availability of Online Model 5 9
 MARKETING STRATEGY FMCG RETAIL – COMPANY X
Rural
Challenges in the Rural Market
› Costly logistics - poor connectivity leading to high distribution costs.
› Financing of business: due to poor collateral capability.
› Green food preference: Packaged or manufactured foods are abhorred and considered
unhealthy.
› Dealer network - Sales network is not professionally managed
› Wholesale and dealer network problems
› Marketing communications - low literacy level, poor media
Urban
› Market data unavailability: Not much research on consumer buying behavior
› Poor infrastructure: markets are not easily reachable.
› Low per capita income puts less disposable income for expenditure.
› Living standard: basic standards of living are basic.
› Aspirational and upgraded expenditure is low.
› Culture: Social, economic and cultural backwardness create impediments to
adoption of products.
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 FMCG RETAIL – IMPLEMENTATION PLAN
3-Phase Implementation Strategy Challenges in the Model Implementation

Phase-1 Phase-2 Phase-3

Item 2
› Realization of a fair price to farmers through direct access to the market

› Financial Analysis › Timely availability & accessibility of credit to the farming community.
› Production
› Market Analysis and
› Listing of Machinery Project design cost › Training of farmers.
› forecasting Funding of project
Factory space requirement
› Methods of Entrance › Easy access to cold storages and granaries.
› Min area requirement Project costing
› Consumer behavior
› Waste management Subsides
measurement › Panchayati Raj institutions to be the nodal points for agricultural inputs.
› Factory specimen Pay back analysis
› Expansion scope

Roadmap Promotion

“India Feeding India”

helping to uplift the Indian Farmers 11
XYZ ABC

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