It is far better to sell to companies like LivLush than at the mandi (farmer market). Not only are the margins better, but payments are prompt, too,” says Kiran Kumar as he walks through his farm where he grows a variety of vegetables. One can see a swathe covered with a crop of leafy lettuce, with lemongrass plants dotting the boundaries. Kumar’s farms are located in Kattanallur village, not very far from Bengaluru city. He has been regularly selling vegetables to LivLush (formerly Green AgTech), a Bengaluru-based startup, which is working towards professionalising the post-harvest supply chain.
Co-founder Rohan Patnaik feels the current supply chain that starts with the farm up until the end-consumer is extremely unstructured with the farmer’s own interests being compromised. Patnaik explains with the help of an example. “Let us assume that a farmer sells one kind of vegetable for Rs.20 for a kg to the mandi. The middleman would sell it at Rs.70 to the retailer, who then sells it to the end-consumer at Rs.100. The middlemen’s margin comes up to Rs.50 in this case. On the other hand, we would buy the same at Rs.30 from the farmer, which means he makes 50% more, and we sell at a cheaper price to the end-customer,” he says.
The intermediary cornering margins in the farm-to-fork supply chain has been a well-known phenomenon. The need to address this pain point was felt by Patnaik and his two cofounders B Raghunandan and Amol Patil in early 2016.
LivLush wasn’t their first joint enterprise. The trio first started off by founding RedCooker in Bengaluru in December 2014. “The idea was to connect people with home chefs via an e-commerce platform. We also had three kitchens from where we delivered chef-made food,” explains Raghunandan on RedCooker. Soon, they spotted a great pain point. “We found that we couldn’t trust our vegetable vendor — either on the delivery time or the prices, which he changed everyday. Then we started going to the mandi. The idea was to figure out a trusted source with better commitment on prices,” says Raghunandan. This is where they observed the supply chain in action, and the entir