Namdhari's Group CEO On What It Takes To Build a Seed-to-plate Agri-business In India Gurmukh Roopra believes that the group's expertise in farming, earned over the years, helps it exercise complete control of the entire value chain

Namdhari's Group was started with the vision of bringing global fruits and fresh produce to the Indian market. Today, the group has grown to become a vegetarian seed-to-plate agribusiness with more than five lakh farmers using Namdhari seeds and a retail presence of 80,000 sq. ft in Bengaluru, offering a range of fresh fruits and vegetables, single-origin dairy products, an in-house bakery, imported dry fruits among others.

The group claims to leverage its expertise in farming to exercise complete control of the entire value chain. We spoke with Gurmukh Roopra, CEO, Namdhari's Group to understand more.

"We started more as an agriculture-based organization with our roots pioneering the early stages of changes in the agriculture side, somewhere around the late 70s to the early 80s. And today, we are mostly into hybrid seed development, trying to take many of the high-yielding products to the farmers," he said. The group works with more than half a million farmers across the country and has operations in Southeast Asia as well as the Middle East.

Multiple revenue streams

The company operates two store formats. One is Simpli Namdhari's, which is a large-format experience center that houses residue-free and safe-for-consumption groceries, organic and FMCG items and an in-house live kitchen, Simpli Good Food, where delicacies are served. The next one is Namdhari's Fresh, which is an integrated greengrocer-cum-corner store carrying fresh fruits and vegetables sourced from the company's own farms in addition to a range of daily necessities. The first Namdhari's Fresh store was launched in 2001 and today the Group operates 25 stores, including 9 Simpli Namdhari's and 16 Namdhari's Fresh stores in Bengaluru and plans to expand to other markets.

It also has Namdhari Seeds which breeds, produces, and distributes vegetable seeds, flower seeds, and hybrid crops. Founded in 1985, Namdhari Seeds initially focussed on contract seed production for exports. Later, breeding programs were started to develop suitable hybrids for the Indian market. Today, it claims to have 500 commercialized hybrids across 2,00,000 hectares of open fields, greenhouses, and net houses catered by a network of 1500+ distributors, globally.

Being a vegetarian omnichannel retailer

"The retail part, which is Simpli Namdhari's, gets the highest visibility because it's the one which is most in the consumers' eyes, even though retail is not really a major part of our business. It probably accounts for about 25 per cent of our business topline. But it definitely gives us the best brand visibility and in a way that enables us to showcase a lot of the good work which we have done at the production level," said Roopra.

He also added that the Group's strength lies in its control over the entire backward-integrated value chain, from R&D and production of seeds, crop cultivation, harvesting and packaging, and delivery of these products for sale in the retail outlets, to offering home-developed recipes served at Simpli Good Food. "Today, when you walk into one of our retail stores, you will be able to get a value chain integrated product, whether it's fruits and vegetables, a bakery or a dairy or some of the FMCG range of products. And finally, also an in-house cafe that has curated menus using a lot of the ingredients that we have on offer within our stores," he said.

Brand investments in R&D

Roopra claims that different capabilities have been developed in each one of its businesses over the last 20 to 30 years. "When we talk about the sweet spot, about 8-15 per cent of the seed business topline goes into R&D capabilities, and we have different locations to trial our products. We have about 8-10 stations across the country. We have got 30 to 40 people in the research team, just purely plant breeders and on top of that it's coupled with some biotech support. It's fairly scientifically driven and research-oriented."

In the seeds business, it takes about seven or eight years for the company to introduce a variety into the ecosystem. "So, I think that kind of demonstrates the power and the rigor that is required to come in with a product which is suitable for farmers and for the seed business our primary customer is really the farmer in India," he said. The company supplies seeds within India through 15,000 distribution points and is available in Thailand, Indonesia, Vietnam, Myanmar, and Turkey.

The company claims that the production part of the business works on multiple fronts and each supplier complements the overall ecosystem within the country. "India is a pretty fragmented consumption country. So, we actually grow products ourselves, work with farmers and buy back products from them. So, when we are talking about doing export-grade products, we are working under protected infrastructure ourselves. This would be high-tech greenhouses, precision agriculture, so to speak. It could also include working with farmers, providing them with technological know-how, buying back those products from them and then processing them to certified processing facilities and then making them available as Indian products for international markets," he said. The company also supplies specially grown differentiated products for e-commerce players and supplies the to QSRs as well.

Price-sensitive India market and post-pandemic changes

Talking about India being considered a price-sensitive market, he said, "We have one of the fastest growing middle-class populations, which is an aspirational class. Does that mean that they will come in and buy things that are expensive? No, I think Indian consumers are value-driven."

The pandemic has brought many changes in the way we live, shop, etc. This has impacted the retail space hugely. Namdhari's believes that the only natural way to exist today is to be present everywhere. "Consumers have gotten used to the convenience of e-commerce. But it's also very difficult in our category, especially fruits and vegetables, which is very tangible, perishable, something which is unbranded and commoditized. And that's where the whole fact that we have a pretty strong integrated cold chain system comes in," he said.

This system has so far helped the company stick to its omnichannel strategy. "Our strategy is to have as many touch points and to continue to give that convenience to customers," he said. Namdhari's Group plans to build collection centers, and protected cultivation and distribution centers, and is actively seeking partners to help realize its vision.