BUSSINESS IDEA:

FARMFRESH

Submitted By:
Gaurav Chaturvedi
Mudit Khanpuri
 BUSSINESS IDEA: FARMFRESH

Business Idea:
DATA & INTERNET is the next big thing of the 21st century, and there is no
denying in the fact. The way predatory competition is shaping up in the
internet service providers industry, it is certain that more and more
people would can upgrade their transaction platform from manual to
digital. The surge in the online trading has gone up to such levels that
marketers have identified online selling as the third channel of marketing
after direct selling and indirect selling.
The biggest internet based company of the world Facebook is valued at a
whopping 242 billion USD. This is the power of Internet and online
connectivity. Digitization has disrupted markets for newspapers,
televisions, ticket windows in railways and bus -stations, dining, payment-
virtually everything. In this era, Indian Government is pushing its
campaign of digitizing India and demonetization has given the initiative a
greater stimulus. This digitization surge has given rise to zillions of
opportunities for businessmen to take their business to the third
dimension of marketing- Online Selling or e-selling.
Our business India is to directly connect Farmers and poultry producers
with nearby restaurants and college messes in urban & semi urban areas.
Our approach will be to create a B2B model. Farm fresh will be an app &
Internet based fruit & vegetable market place. Our motive will be to
provide fresh Fruits and Vegetable from the farm to the customers and to
reduce middlemens in the process which will result in higher profit margin
for farmers.

Our app will provide a tool by which farmers will put their produce on the
app for sale, and different restaurants and business owners can buy that
from there according to the requirement. Logistics & quality testing will be
in scope of FARMFRESH and will be added to the final price of the
product. After delivery, online invoice will be generated and we will use
UPI payment interface system. Weekly payment will be done to farmers
and will be transferred directly to their account. Weekly online payments
will be collected from restaurants with option to pay instantly and longer
credit period can be provided to large restaurants. We will tie up with local
cold storages to store fruits and vegetables for just in time delivery to
restaurants. Restaurants can schedule delivery of food and vegetables
from the app or website as per their requirement.

Current Scenario:

Today, India ranks second worldwide in farm output. Agriculture and allied
sectors like forestry and fisheries accounted for 13.7% of the GDP (gross
domestic product) in 2013, about 50% of the workforce. The economic
contribution of agriculture to India's GDP is steadily declining with the
country's broad-based economic growth. Still, agriculture is
demographically the broadest economic sector and plays a significant role
in the overall socio-economic fabric of India.

India exported $39 billion worth of agricultural products in 2013, making it

the seventh largest agricultural exporter worldwide and the sixth largest
net exporter. Most of its agriculture exports serve developing and least
developed nations. Indian agricultural/horticultural and processed foods
are exported to more than 100 countries, primarily in the Middle East,
Southeast Asia, SAARC countries, the EU and the United States. Indias
GDP is growing at very fast pace of 7 to 8% every year.

Despite having a large percentage share of GDP, agriculture market on

India is not modernized. In market farmers sell their crop at cheap prices
to middlemens because they dont have access to the market. Middlemen
make most of the profit and control the market. Also, lots of produce get
destroyed in India because of Supply Chain Issues.

Product Strategy and Market Potential:

Our service will be an app and website based product. We will provide
farmers direct access to the market enabling them to sell their produce at
higher price. We will also provide them technical support and logistics
support. This will lead to higher profits by farmers as they will be able to
directly sell to business customers at market price. Restaurants and mess
owners will also be able to get fresh vegetables directly from farms. In this
way, we will generate value both for farmers as well as restaurant owners.

Size of Indian restaurant market is INR 3,09,110 Crores in India and is

projected to be INR 4,98,130 in 2021. This is a high growth market and is
expanding at a rate of more than 10% per annum
 Restaurant Market size in India (source India food service report
2016)

Out of this market 67% market is Unorganized market which we will target
for our business. As Indian restaurants will move toward efficient
operations, we will provide them efficient supply chain and fresh
vegetables. Total market size of organized restaurant market is INR
2,07,103 Crores.

Market share (source India food service report 2016)

We surveyed the cost structure analysis of Sodexo and Bollywood dhaaba
and we found out that out of total revenue of a restaurant, 25% goes
toward vegetable costs. From that we can found out that total market of
food and vegetables in Indian restaurants is around INR 51, 775 Crores
($7.5 Billion). It is a very lucrative market to enter into as there is no
competitor present and we will get first mover advantage.

Because of Governments Digital India initiative aims to deploy the

National Optical Fibre Network (NOFN) providing broadband connectivity
to cover 250,000 gram panchayats, fierce competition between mobile
Internet users, very low prices for data and smartphones there will be very
high growth of Internet penetration in Rural Market. India will have 730
Million smartphone users by next year with 75% users coming from rural
India

Launch Strategy:
We will launch our product in 3 Phases. 1 st Phase will be test run and
development phase of the product. In this phase, we will test our app and
website. In this phase, we will develop core competencies and enter key
partnerships with Farmers, cold storage warehouses and Restaurants. In
2nd phase we will expand our services to other major markets in India. 3 rd
Phase will be to expand our services to retail and data analytics.

Ist Phase: We will launch our product initially in the New Delhi region
as it has large numbers of restaurants and its nearby Haryana and UP
which are major producer of fruits and vegetables in India. Steps in
launching the first phase will be
1. Raising Funds from banks & investors
2. Set up a office
3. Developing app and web interface and entering partnership with
web hosting service
4. Developing of ERP system and CRM.
5. Partnering with restaurants and agricultural products producers
of Punjab & Haryana. Farms will be in bordering areas of New
Delhi. Also, partnerships will be done with cold storage
warehouses and logistics partners.
6. We will partner with mobile handset manufacturers and Mobile
internet providers to provide cheap smartphone and internet
services to the farmers.
7. Partnering with
8. Starting operations in New Delhi
9. Getting into new partnership and expanding operations
 2ndPhase: In this phase, we will expand our services in top 25 cities in
India one by one based on GDP and number of restaurants. We will use
the key competencies developed during the test phase to expand and
raise capital. We will also provide support to farmers by providing them
recent trends.
3rd Phase: In 3rd Phase we will try to expand into tier 2 cities in India
based on market response.

SWOT ANALYSIS OF FARMFRESH:

INTERNAL FACTORS
STRENGTHS (+) WEAKNESSES (-)
High Margins available Very efficient logistics support
Market potential is Unutilized required
Ist Mover Advantage Cold storage warehouses are not
Acceptance rate will be high as available in most of the cities.
farmers will get high margins and
restaurants will get fresh food
Changing demographics and
eating habits will only cause
restaurants business to grow.
High mobile internet penetration
and cheap internet.

EXTERNAL FACTORS
OPPORTUNITIES (+) THREATS (-)
Agricultural product and will result Current middlemens in supply
in low taxation chain can oppose our service due
Increasing Health Consciousness to fear of losing business and will
among Indian consumers & Faced try to influence farmers for not
Pace lifestyle will result in market partnering with us.
growth Crops are susceptible to various
Aligned with Govt. initiatives diseases and pest attack which
Digital India Initiative will cause can cause problems in supply
more villages to be connected by chain.
internet. Substitute products.
BUSINESS MODEL CANVAS:
FARMFRESH
MICHAEL PORTER FIVE FORCES ANALYSIS:

THREAT OF NEW ENTRANTS (HIGH)

As the entry barrier is very low, so many business firms might mimic and
duplicate the idea. We will try to bring in long term procurement contract
with the farmers and would try to lock in all their produce so that any new
player doesnt have the produce to do enough business. So, the key factor
for us is to consolidate as much business as we can. And thus, we would
not let competitors to flank our market share at all.

THREAT OF SUBSTITUTES (LOW)

As the business model provided by us is unique in its way of operation and
providing benefit to farmers will earn us very good word of mouth
publicity, we anticipate that in near future we will reap all the advantage
of being the first mover.
All the Opportunities, will be taken proactively by our data analysts and
we will always maintain an edge over the other competitors if any.
Our relationship with the customers would be based on mutual long term
agreements of at least 5 years. So, for the first 5 years there would be
very few customers to switch to any substitute. Also, our model would be
very easy to mimic but truly difficult to implement. That is why we
conclude the threat of substitutes to be very low.

BARGAINING POWER OF SUPPLIER(LOW)

The bargaining power of supplier will be low as the present conditions of
the farmers of India is not good and 40 % of the crops produce rot,
because of highly inefficient and sometimes totally absent supply chain.
We provide an everlasting solution to these glaring problems and thus the
farmers would not be able to bargain much from us. The comparative
benefit is very high if we were absent from the scenario. We also would
provide them crucial information as to which crop to produce from our
database. All the forecast would be shared to them free of cost and data is
the most expensive thing present in todays world.
We will also share all the technical expertise through collaboration with
government agencies, and this cost would also be entirely borne by us.
And the fees which we would cost is very less for all this benefit. So, the
bargaining power of farmers would be low.

BARGAINING POWER OF BUYERS(MODERATE)

The buyer would have moderate bargaining power because they know
that our business is fully dependent upon them.
But the platform we provide to them is unique and the experience would
be highly enriching in the way that we bring the transaction cost to a bare
minimum. Also, the best quality products that we would supply will be
unmatched for a given cost and time. The buyer can bargain regarding the
fees, and he has the right to do so.

Rivalry Among Existing Competitors(LOW)

We have First mover advantage in this field and we can capture a major
market share if we work efficiently and as per plan. We will have an
advantage over new entrants as we will get into long term contacts with
restaurants and farm owners.