FirstAgro: Growing Zero-Pesticide Crops
When even WHO doesn’t seek zero chemical traces, FirstAgro’s ultimate health food has people excited. Can it achieve scale with the speed its customers want it to?
Nameet MV mildly frets about the tomatoes lying in the beds on his farm. Mildly, because if these white, purple, chocolate and yellow tomatoes don’t reach the retail shelves or chefs’ kitchens in Bangalore, they would go for sun drying or seed making. The torrential rains, much more than what the region had experienced in previous years, had hit the Heirlooms, the San Marzanos, the Romas and 15 other varieties of tomatoes that Nameet grows on his farms. Many plants still have full bunches; the strawberry-red cherry tomatoes are luscious with just the right mix of sweet and tart.
In contrast, and true to their fiery nature, the pepper plants stand firm in nearby patches. Bishops Crown, the UFO-like green and red peppers, guard the corners. Like a gastro-masochist, Nameet introduces the chillies: “This is Bullet, grown commonly in the UK; this is Badmash—the green-purple chillies pointing up are more pungent than their downward pointing cousins. Don’t these Jasmine bouquets (off-white chillies in green leafy bunches) look classy?”
In dazzling colours and crazy shapes, the chillies look lovely. So does the 45-acre farm in Talkaad, 110 km from Bangalore and a popular scenic weekend getaway for city dwellers. Most of the patches in Nameet’s farm have not been tilled for several years. Nameet, his brother Naveen and cousin KN Prasad, who founded FirstAgro in 2010, look for near-virgin lands even though they are harder to till. But it’s the first step in growing zero-pesticide crops. In India, where crop production suffers from systemic overuse of chemicals, with pesticide levels ranging from 5 to 150 times higher than world standards, setting global benchmarks in pesticide-free horticulture is almost like setting a counterculture.
It hasn’t been easy. “It took us six crop cycles of experimentation, of 90 days each, to get farming methods and input proportions right,” says Prasad, who is chief operating officer. But the founders, who have invested nearly $2 million from friends and family money, are in no hurry. There was no “venture capital[ist] hanging like a sword over our head,” says Prasad. In its third year of operations, FirstAgro is shipping nearly 30 tonnes of vegetables and exotic greens every month to top retailers and fine dining places in Bangalore, including the two hip hotels that opened in the city in the last two months—Ritz Carlton and JW Marriott.
For most retailers the buck stops at regular red tomatoes and green lettuces. Now that they see varieties, there’s no pausing at Double Lola Rosa and Triple Lola Rosa (a type of purple lettuce) or Komatsuna (Japanese mustard spinach) and Mizuna (Japanese mustard). Supply isn’t keeping pace with demand. Retailers say zero-pesticide produce is flying off the shelves.
In the startup world, this is an enviable situation to be in. But when you are FirstAgro and decide to go even beyond the World Health Organization standards of pesticide-free crops, scaling up is the biggest opportunity as well as the toughest challenge.
‘Short-termism’ is not what chief executive Naveen MV lives by. He’s looking at 10-15 years from now when FirstAgro would create a niche category in the country. The startup will close at Rs 6.8 crore in revenue in March 2014 and has ambitious plans to clock $75 million by 2018 through 16 agro clusters across the country. For the sons of the soil, the toil has just begun.
GERMINATION
The idea had its genesis in 2008 in San Francisco when Naveen and his younger brother Nameet got together. Naveen was then handling the Asia Pacific business of Hewlett-Packard; Nameet was a commercial pilot in Vancouver, Canada. Slowdown was squeezing Nameet’s flying time, and he had an entrepreneurial idea they could pursue. Flying over large green houses in Canada, he had fallen in love with horticulture. He often flew red-eye planes which gave him day hours to work with small local farmers. He collected agri knowledge and some farm wisdom too. (In Canada, even the smallest farm exceeds 100 acres.)
Naveen left the IT industry and Nameet gave up flying to start FirstAgro. Cousin KN Prasad, a supply chain professional with experience in various industries, joined them later. The trio brings complementary skills to the farm. In boots and shorts, Nameet looks like the tech-loving farmer he is. He even knows why his three dogs like Japanese cucumber more than the Indian varieties. Prasad, who comes from a farming family, is the manager on the ground. In jeans and flip-flops, he is as relaxed accosting stray visitors to the farm as handling the local power or water supply glitch.
The savviest among them is Naveen. Largely based in Japan, he runs an IT management consultancy there. He is now scouting for local farm opportunities to supply to the local market. “We don’t have export ambitions, but we plan to use FirstAgro expertise to serve some Asian markets, especially in the hospitality sector,” he says. He visits Bangalore and Talkaad every quarter but don’t mistake him for a roving, long-distance chief executive. His Excel sheets reflect precisely how many beds in how many patches grow what crops and when they are due for harvest. “If I make any changes here,” says younger brother Nameet, “he calls to inquire the next day.”
“This is part of the standardisation plan. I bring the IT industry’s systems and processes,” says Naveen. If they proceed as per their plans, they will have a 90-100 acre cluster in 16 locations, all within motorable distance from major cities so that the farm produce reaches the market within five-six hours.
India is the second largest producer of fruits and vegetables in the world, but with farm wastage, urbanisation and increasing disposable incomes, these products seem to be in perpetual short supply.
Increasingly, people don’t blanch at higher prices if the quality is good. In FirstAgro’s case, the maximum retail price is 15-20 percent higher than regular produce. “We’ve developed loyal customers and they stick with this brand… The base is small but it’s growing nearly three-fold,” says Ashutosh Chakradeo, chief merchandising officer of HyperCITY Retail which stocks premium products and is part of the Raheja group. He thinks FirstAgro is filling a big hole in the broad organic products category where retailers don’t know where the produce is coming from.
In retail’s dynamics, traceability is also important for forecasting. If a store sells 100 kg of tomato, then it needs to stock 110 kg. “For regular stocks, I am dependent on the mandi. I might require 100 kg of cauliflower but I might get only 80 kg. With professional brands like FirstAgro, I can forecast my requirement,” says Chakradeo, who also does category awareness for customers.
DIFFERENTIATION
The organic movement of the 20th Century is big business today. The well-being of the soil, the crops and of the people who consume the produce, form the basis of organic agriculture. For some it is a spiritual quest, for others it is a way to be environmentally sensitive. It is catching up in India too, moving from being a fad to a conscious health choice. However, very few growers certify their produce. Retailers say they have to work with organic suppliers to get them certified; some don’t know while others wear the label casually.
Nameet likes to describe them as “students who study for 10th grade but never care to pass the exam”.
“Very few organic growers go to the lab,” he says. In such everything-goes-in-the-name-of-organic environment, FirstAgro has set itself up for stringent public scrutiny. Its products not only comply with the CODEX standards prescribed by the WHO (which food exporters in India have to follow), but go a step further and declare themselves totally pesticide free.
To keep the standards and the farming rigour high, the founders say they would never do three things: Contract farming (which could compromise compliance); digress from zero pesticide (which could dilute the brand); retail directly or sell loose (which could adversely influence their farming practices).
BLOOM
If there is one community that loves this seemingly-crazy idea of zero-pesticide horticulture, it is the chefs. Internationally, farm to fork is a proven model and most chefs worth their ingredient grow some bit of herbs and greens. They like to know where their stuff is coming from.
Anupam Banerjee, chief chef of Ritz Carlton, who has relocated to India after 15 years and is India’s first Michelin Star-rated chef, is delighted. After visiting the farm, he has been working to synchronise his menu with Nameet’s seeds and crop cycle. “If we can sustain two-three dishes in each restaurant [at Ritz], it’d be a good start,” says Banerjee for whom FirstAgro has developed a patch in the hotel on Residency Road, an upscale Bangalore locality.
At JW Marriott, executive chef Surjan Singh Jolly, or Chef Jolly as he is popularly known on various TV shows including MasterChef India, says when he relocated from Renaissance in Mumbai to Bangalore, he missed his agri patch terribly. He isn’t complaining now. “In less than six hours the produce from the farm is in my kitchen. It also helps me plan my menus. If I plan for my next palm hearts [a baby cabbage dish] or if I want my candy beets, I can work with them,” he says.
Not just big hotels, even smaller restaurants are happy. After suffering for years for want of the right heirloom tomatoes for pasta sauce or right daikons or fresh jalapeños, Vibhuti Bane is now experimenting with menus. “Nobody is growing zero pesticide crops. The kind of flavours you get from this farm is really good,” says Bane, corporate chef at three fine dining restaurants including City Bar in chic UB City Mall, whose garnishes come straight from Talkaad.
Internationally, restaurants grow their own “living wall”, which treat customers to do-it-yourself salads or seasoning. Nameet is just getting around to growing these “walls” with micro-greens, herbs and other salad ingredients. Some want it circular, some vertical and some are even going for hydroponic walls (where plants are grown in a nutrient solution) which have inverted tomatoes. All in the name of taste, style, and, of course, differentiation!
Chefs like to think of their dishes as fables. They spin yarns. And when there is a passionate grower like Nameet who likes to tell stories about his seeds and farm practices—how he learnt to kill black moth using basil or how touch-me-nots repel insects—it is a feast for all.
ROUGH WEATHER
In the near term, FirstAgro customers see no challenge, though most retailers would certainly want bigger and more regular stocks. Their stocks disappear in no time, says Hari Menon, co-founder and chief executive of Big Basket, an online grocery store in Bangalore. FirstAgro has just moved from twice-a-week supply to thrice-a-week supply but that is not sufficient. In a consumer’s grocery budget, fruits and vegetables constitute 25 percent of the budget but for modern retail stores these categories make up only 6-8 percent of stocks. “It’s fundamentally a supply chain issue and our aim is to drive it up to 10-15 percent at Big Basket,” says Menon.
Nameet and Prasad are trying hard to increase production. They intend to invest $20 million in the next five years, mostly from debt and internal accruals. Nearly 45 varieties are in production, 40 more are in field trials. But this isn’t run-of-the-mill farming. Apart from the standard crop rotation and resting period, a patch of land requires at least six-eight weeks to prepare. It’s not difficult to understand why troubles of farming have led nearly 2,000 farmers, going by 2011 census, to quit cultivation virtually every day for the last 20 years. The brothers are also aware that as they expand, land acquisition—though they are open to long-term leasing—would be a challenge; as would be water and power availability. Menon suggests they work with local governments to speed up things. But the promoters are wary, lest their business acquire any political tinge. After three years of Talkaad, their next cluster is coming up in Pali in Maharashtra.
It is not just land and staff that require preparedness. Customers and retailers need education as well. Prasad still looks aghast when he describes how a retailer rejected four crates of wild rocket (a kind of lettuce used in gourmet food) because some leaves had holes, which is a hallmark of the rare wild variety, not of pest infestation. Or, how another store rejected ripe green cherry tomatoes saying green meant raw and wasn’t ready to sell.
Naveen believes the new Food and Safety Standards Act which has come into effect will drive awareness. This year the national CODEX contact point has become active in educating growers and retailers about food safety.
Back at the farm, you look at damaged lettuces and strewn tomatoes and wonder if the founders have bitten off more than they can chew. Having nature play a decisive role in your business is a risk factor. “You can’t fart against a thunderstorm. We know what we’ve gotten into…Nothing goes waste here,” says Nameet, with a jovial wave of his hand, pointing to the seeds and compost pit.
(This story appears in the 29 November, 2013 issue of Forbes India. To visit our Archives, click here.)
