Startup Saturday: Where passion delivers zero residue veggies
While most start ups in Pune are generally focused on technology and apps, it is quite a surprise to see one that sprouts its entrepreneurial wings on the back of agriculture. Nilesh Palresha grew up hearing his father lament about the quality of fruits and vegetables that were available. “My dad always used to say how they grew up eating better quality food than we did. Also whenever I went abroad I would see such fresh fruits and vegetables and often notice that these came from India, particularly in the Gulf region.”
The major shift
So though Nilesh did his Mechanical engineering and a course in family business from SP Jain management Institute and spent a year working at Tata Motors, he knew his heart lay in the land that would grow good fruits and vegetables. He quit his job and undertook to change the landscape of a stone quarry that the family owned. “ We were into real estate business and had 100 acres of land but it was a stone quarry. I decided that I would do farming on that land and grow vegetables that would be of the best quality,” he says.
The decision to convert a stone quarry into a farmland was not driven only by passion. Says Nilesh, “I noticed that people were getting more and more health conscious. Gyms, spas and health centres were mushrooming. The number of dietician clinics was also increasing. So I thought why not provide them with healthy vegetables?”
Converting the quarry into a farm meant pouring 10,000 trucks of soil. It involved creating water ponds that could hold up to nine crore litres of water, setting up a 5,000 sq ft of pack house where vegetables are cleaned, sorted and packed, hiring consultants who would guide them on the nature of zero residue farming. “We spent Rs 7.5 crore of our own money on technology, irrigation and such like before we even began growing vegetables.”
Nilesh was very sure about growing fruits and vegetables that were world-class. “In Europe, you have zero residue farming which means that there is no chemical residue on your vegetables. Every farm has a Global GAP (good agricultural practices) certificate which means that you follow certain practices that are audited. For example, one can trace back a tomato back to the exact farm and the labourer who worked on it. It’s that specific.”
How is this different from organic farming? Says Nilesh,“Well, we too use organic bio fertilizers and pesticides, but how do you know that an ‘organic brinjal’ is truly organic? Who certifies it? It’s mostly self certified. But at Earth Foods, we do not state that. I have a global body that ensures whatever produced here is zero residue and it involves a lot more than just using organic fertilizers and pesticides.”
Part of the Global GAP certification has 230 audit points that involve among others housing for labour, how dust bins are cleaned and plastic disposed. “Our GAP certification is still going on.” For the first one and a half year, we spent time on R&D to ensure that our produce was chemical free and more importantly consistent. We developed patterns for sensitive crops like tomato; we grow them in three farms so if disease hits one farm, I can still have tomatoes to supply to the market.”
Strategy at work
Initially Nilesh started supplying his vegetables to C and D grade retailers, typically the vendors at different localities. “Once I knew that the vegetables were well accepted and I was sure of my supply chain, we approached stores like Star Bazaar and Dorabjees in Sept 2017. We grows 45 different types of vegetables, both Indian and exotic and at the store, the packaging will tell you the best before date. I have an ERP in place which tells me which plot on my farm produced the ladies’ finger lying in the packet at Star Bazaar, who was the person who handled it and what materials were used. As of now, we employ 80 people at the farm and 15 people at the manager level. The packing is done in the pack house and transported to retailers in our air conditioned vans,” he says.
The demand for fresh fruits and vegetables started growing, actually more than the supply. “I needed to expand for which I needed more land. I needed to scout for funds. I was sure that I would not approach venture capital or fund houses for money. Money infusion had to come with a deep commitment to the business. I wanted money from a person who was as passionate about farming as I was.”
Tall order for a start up. But Nilesh was lucky. His close friend whose family was also in the real estate business like Nilesh’s and had some experience with farming was interested. Says Nilesh, “Siddharth Khinvsara is an old friend and his father used to do farming years ago. When I told him about my requirement, he immediately agreed. He infused Rs 6.5 crore in Earth Foods and also became a co-founder.”
Siddharth’s family has been into the real estate for the last three generations. He set up Rairah Corporation that did realty projects. Says he, “I come from a family that has extensive experience in farming and real estate. My father used to grow tons of rice in Pimpri Chinchwad municipal corporation(PCMC) area. He opted out of the business due to personal reasons. When Nilesh asked me to join him, I was thrilled. I look after operations, we now have three farmlands and harvesting happens every alternate day. I also look into selling.”
On the cards
As of now, Earth Foods produces 10 tons of vegetables every month. They harvest every alternate day. But with the new 50 acre farm they recently bought with new capital infusion at Belwandi, they expect to harvest daily in about six months time.
Says Siddharth,”In six months time, we will produce about 40 tons a month.” The duo plan to grow by supplying to Mumbai in the next two years. Understanding the challenges a bigger market poses, Nilesh says, “ We will most certainly need more land but we aim to get into contract farming then. Of course we will train our partners in the zero residue farming methods but that is on the cards.”
This is one business where demand is not a problem. Revenues presently are Rs 10 lakh per month and with the Belwandi farm set to begin production it is expected to go up to ₹20 Lakhs per month. Says Siddharth, “our challenge is to ensure we maintain our standards. For our exotic vegetables we plan to get into hydroponic farming where the temperatures can be controlled, a necessity for such vegetables.”