Looking at the huge surge in as well as consumer preference towards organic products, Bengaluru-based online grocer BigBasket aims to double the contribution of organic fruits and vegetables (F&V), staples sale on its platform by March 2017.
The marketplace which sells Organic F&V under its own range of fresh produce called Fresho and staples under the name Bigbasket Royal, currently generates 5 per cent of F&V, staples sale from the Organic section and has been strengthening its supply chain for a while now to increase this contribution.
“Fruits and vegetables as a category currently account for 18-20 per cent of the overall sales on the platform. Out of this, more than 5 per cent comes through organic products and by March 2017, we are expecting it to reach 10 per cent of total F&V and Staples sale,” National Head – Buying and Merchandising, Bigbasket, Seshu Kumar told Indiaretailing Bureau.
The company has established a dedicated organic supply chain for the procurement of organic products. It directly source the products from the farmers and also help them by providing training regarding the best practices of organic farming and local certification for the produce.
“We had set up seven collection centres for procurement of Organic F&V. We locate farmers in a particular location and set up collection centers near the place where the organic farming is done. We have hired an organic consultant to train the farmers and get them all certified,” said Kumar.
“We also help them getting a Participatory Guarantee System certification, which is meant to certify the organic farmers. Once the consultants train the farmers and get them certified we start buying from them,” he added.
However, currently due to the shortage of supply the organic products are expensive than the regular ones, but Bigbasket want to herald an ‘organic revolution’ by making such produce priced at par with regular ones.
“We don’t follow premium pricing and our objective is to sell organic produce on the regular price. But presently the supply is low and farmers are still making a choice to move organic, where he doesn’t know what are the risks involved. So we offer them a premium of 10-15 per cent and same premium we charge to the customers,” explained Kumar.
BigBasket, which is eyeing revenues of Rs 1,800-2000 crore by March 2017, recently also entered the B2B segment to sell its private-labels to boost its revenues and margins.
Kumar said, the objective is to provide more opportunities from the supply chain perspective.
“We are in the process of setting up a ‘Farm to Fork’ supply chain wherein we procure 50 per cent to 80 per cent of our requirements in F&V directly from the farmers through ‘Farmer Connect’ centres. We are setting up sourcing linkages with rice and dal mills in different parts of the country. We believe that this supply integration enables us to provide a wide range of high quality produce at competitive prices to Hotels, Restaurants and caterers. This has been corroborated by hotels, restaurants and Caterers who are already buying from us without any major push from our side,” explains Kumar.
Currently about 1000 Kirana stores and 15-20 restaurant chains, like Le Meriden in Bangalore, Wow Momos, among others are buying from the company.
Bigbasket has grown from Rs 30 crore since its inception in 2011 to Rs 700 crore in the previous fiscal. “We have doubled our sales every year and this year we expect it to be over 2.5 times,” Kumar concluded.