Mihir Mohanta, General Manager (Supply Chain) Mother Dairy, 0
For years, the Indian fruit & vegetable supply system was stagnant. Covid-19 brought in some drastic changes. Issues like border restrictions, restricted trading within mandi, non-availability of transport, increased freight cost, distress sale and delayed payments got amplified during this crisis. While the governments were taking decisions to prevent COVID, they were equally vigilant on distress of the farming sector. There were a slew of quick decisions on the part of the government which brought in path breaking changes. The consumers’ preferences were also changing dramatically and the new trends emerged.
1-Demand for Immunity Boosting Items-The demand for items like Amla, Lemon, Ginger, Garlic, Turmeric, Giloy, Jammun has grown multifold. Amla pulp demand has gone up by 10X. Haldi milk & Haldi ice creams are the new range of product on the immunity platform. As per Nielsen’s survey, the trend of staying at home and eating home-cooked meals (Ghar ka khana) would continue. So also the demand for immunity boosting fruits and vegetables would continue to remain high. Many meat substitutes or the vegan- meat (Jackfruits & Soya) are replacing the non-veg component of popular burgers and pizzas. FSSAI (Food Safety Authority of India) too has recommended 6 foods (Amla, Orange, Papaya, Capsicum, Guava and Lemon) rich in Vitamin-C to boost immunity during this pandemic.
2-Demand for Organics on Rise- Organics had a dormant demand for years, but today these are also getting traction. As per retailers voice the incremental customers’ addition, during the pandemic is 50 percent more. Consumers are looking for long-term immunity solutions. Many cancer patients have permanently shifted to organic foods. Organic vegetable wash- Neem wash (ITC), Veggie Clean (Merico), Saafoo (Cevinkare) were launched during the pandemic to improve Fruits and Vegetables hygiene.
3-Consumers’ Concern on Food Safety & Traceability- For the urban consumers the food safety was hitting hard on their mind. Not only they started to look out for safe Fruits & Vegetable but also they looked out for a reliable channel. Hence, there was the shift from local pushcart vendors to organized MRF’s (Modern Retail Format) or online shopping. The consumers, who were largely price sensitive, also became conscious of quality & safety of the farm produce. Food safety, traceability and low MRL’s (Maximum Residue Limit) are some the emerging priorities.
"One Nation One Market It intends to integrate the physical & virtual markets across India"
4-Convenience & Home Delivery are Expanding- With the pandemic on, the urban consumer buying habits started to change. They preferred to order fruits & vegetables online than to move to crowded marketplace in fear of Covid. Reliability and trust of a channel is adequately being weighed while making a choice of purchase. Last mile delivery therefore is getting formalized faster with Home delivery; App based self-servicing Kiosks, Mobile shopping vans and the farmers’ Supermarket. Sensing the potential strength of the future online markets, many large players looked at these as investment opportunities, thus Reliance launched its Jio-online platform and joined hands with it were Face book & Google.
5-Agri-startups are Doing Well During the Pandemic- India has over 1,000+ startups in the Agritech domain. Agritech startups, which for years had co-existed with the traditional ecosystem, suddenly discovered that they were essential. Ultimately, the pandemic helped catalyze a shift across the agricultural economy, away from traditional, informal, and analog markets towards a more innovative, formal, and digital one. A report published by Accel and Omnivore indicates that most Agri-startups have grown- 0.5X to 3X plus during the pandemic. The startups got prominence on App based distribution and delivery, E-commerce platforms for Agri-inputs & outputs, Farm management (crop management, micro-climate & traceability) and Labor replacement through automation & mechanization.
6-Government Lead Agriculture Reforms- The Government brought in a slew of decisions which were unheard of in Agriculture sector. DBT (Direct Bank Transfer) was at its best in its effectiveness. The next best decision was to declare ‘One Nation, One Market’. It intends to integrate the physical & virtual markets across India. It removed the APMC tax outside of Mandi premises, and allowed transactions from any location. Similarly, EC (Essential Commodity) Act amendments & Contract farming acts were supportive of a open & the transparent market system. As the e-commerce demand were growing fast, government rapidly added up APMC markets to e-NAM network which crossed 1000+. The PM’s call for ‘self-sufficiency (aatmanirbhar)’ and ‘Vocal for Local’ are building up positive sentiments for farmers.
7-Kisan Rail expected to revolutionize agri-commodity movements-
Kisan rail is a positive development. It saves transit time by 40-60 percent, improved arrival quality & freshness by 15 percent & freight cost less the half. Kisan rails have the potential to become the single largest carrier of F&V. It can integrate the production & the consumption centers and support in achieving 'One Nation, One Market' goal. In India, the logistics cost as a percent of GDP stands at 14 percent. This cost is high compared to US – 9.5 percent, Germany – eight percent & Japan – 11 percent. Similarly, it can help to optimize the current modal mix (road – 60 percent, rail – 31 percent, water – nine percent) to global benchmarks (road – 25-30 percent, rail – 50-55 percent, water – 20-25 percent). Kisan rail could be a game changer in transformation of India’s Fruits and Vegetable supply system.
2020 as a year was not so good for the citizens in general and the economy, yet it has been an eventful year for the farmers and agriculture.