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How Fresh Produce food loss decreaced to 2% from 25%..!

An Interview by Mr. Ramakrishnan, VP – Intello Labs with Mr. Pankaj Khandelwal, Co-founder – INI Farms

Insightful story about the INI Farms and its journey to make it International brand &  reaching overseas markets with technology implementation for operational issues.

Click this Link to LISTEN to PODCAST – 

Ram– thanks for joining us Pankaj.. It’s a pleasure to have you on this interview .. to start with can you please introduce INI farms to the audience. 

Pankaj – INI farms… We are actually a global farm to home agtech branded fruits company .. basically, we operate at a global scale, present in about 35+ countries today but complete disintermediation .. so we are directly with the farmers, managed the entire supply chain, and worked directly with the retailer as well as D2C approach to delivering to the consumers .. very strongly risen by technology .. uhh .. technology is a very strong part and role in helping us to create branded fruits .. so. We are into a branded fruit category as an organisation. 

Ram– Great .. thank you so much .. as you are aware this interview is in the context of interna

tional food loss and food waste day coming up organized by FAO . so I know you are paying some attention to this. You’ve had great success .. so let’s start from the beginning .. When did you start looking critically at food loss and what were your loss levels at that time?

Pankaj – food loss actually was a very important issue for us from the beginning itself. And we started the company 2009 …the entire business model was focused on disintermediation of the supply chain and on the disintermediation side while in general, we think of disintermediation as .. you know removing of intermediaries and reducing cost. For us it was very much focused on two aspects one was improving quality and reducing wastage.. Largely .. as a construct our own business model, it was central to what we wanted to achieve. The key requirement was actually to first build a certain kind of scale across different product categories and therefore.. Uhh from our timing perspective if you asked me .. we focused on food loss coming in about 3 years down the line after the company started because you know without transactions happening it wouldn’t make any sense.. So first building certain transactions was our priority and food loss and wastage were very very critical aspects.. which is when we started to look at it .. I would say something around 2012 or so.

Ram– Right, and what were your losses around that time?

Pankaj–  so dependent on different product categories.. But it reached from 12% to about 25% that also was dependent upon season, it was dependent on bananas, pomegranate had a different kind of process which was followed.. But it did range i would say from about 12% to 25%

Ram– Right, and which is quite the industry average if I were to say.. You know mostly that’s the kind of numbers we have seen with others as well.

Pankaj – yes that’s right, as two things an industry kind of operates closely to 15 to 17%  on an average and there is a variation between seasons and product categories.. Ya but still it’s kind of the standard that we have seen early. 

Ram– right right, and then of course you started your journey in terms of fixing this, bringing this down… So what were some of the initial steps, what did you do? How did you go about monitoring and improving…?

Pankaj– so, I would rather say there are two parts of this journey of reducing the food loss for us. The first part was actually getting the operating level issues resolved.. Why food loss happens.. Right .. it happens at multiple stages at the farm gate, when the transaction is taking place between farmer and INI.

Ram– So great,… And then you started your journey and you took it as a focus area. . You know .. to address .. What were the initial steps? How did you start? How did you monitor or how did you improve? 

Pankaj– sure, so see I would actually divide this entire journey into two major stages, the first stage was to actually understand the reasons and source of wastages and the wastage at an overall level is high but when we look at the entire supply chain the wastage is distributed across multiple locations and steps and transactions so at farm gate and then from farmer to transaction taking place with INI then the fruit moving to plants there is transact loses we have factory loses and outbound losses… So… there is a multi-stage, where we actually have to understand what are the sources of the wastages and then actually how to solve it. So there is a technical aspect of how to solve these problems which is from the packaging to monitoring the packaging, the quality and the type of packaging material. so there are many such things which are more operating and technical in nature where you first have to understand and develop and then standard operating procedures,  after we have identified the source of the problem technically we will resolve it, as the first thing. So this is what I will say is the first stage which was at the smaller scale because we could monitor the transaction, we could track things easily and manually to a large extent,.. So when the organization was at a small scale we could focus much more on identifying the source of the problem and resolving it from a technical way which was more physical in nature. And the second aspect and journey I would say began when the organization scaled up… when the organization scaled up the problem became very different  .. So now you know what is the source of the problem and how to solve it but how do you get it implemented across a large scale organization which is.. If you are aware .. INI today operates in 8 different states, and there are multiple transactions taking place and multiple truck movements which are happening. We have had a large number of Supervisors with different capabilities actually handling the produce. how do you ensure that this happens at scale also, so our journey was very interesting.. In the first phase as a small scale we could actually get it down to i would say about 7-8% in terms of the wastage reduction purely by monitoring manually by training the supervisor. But as it scaled up it again went up right because we couldn’t standardize it we couldn’t be processes streamlined, it’s a very different problem to solve at that scale and that’s when the technology came in.. in a big way, because what we ended up doing was that we must be at every stage of the transaction which started capturing data. We started monitoring what was happening and there were multiple gate points where every personal responsibility was a crucial step and that could be monitored and tracked to an individual level so you could actually identify which supervisor has led to what level of wastage in his set of operation.. On a daily basis at a weekly level at a monthly level at an annual level .. that’s where technology comes in an extremely powerful way because that is black and white at every stage you managed to map an individual performance with data as to what’s happening and that started to give transformation at a scale level and it even took us to a level which is beyond at a micro level what we could manage to pass today to about 2% of overall wastage in our supply chain, right? So those are the two different phases in which we went through about resolving this problem

Ram–  Very interesting. Can you give me an example of an intervention which worked in the manual stage and an intervention which works better in the kind of Technology adoption States?

Pankaj– Yes, For example, if I were to look at Banana, right and a very simple example would be to say that we are operating and packing at the field level itself, right so labour and supervisors fundamentally doing with the mobile pack out actually going and doing the operations there now it’s a skilled operation and you need to technically cut the banana into the right form to be able to pack now depending on that skill users could be very very different because if label and supervisors are not careful about it, you could end up generating in that just one step of packaging something like 5 – 7% of wastage because you’ve actually not done your job properly right, now what happens with that when we started to put technology. So this is very difficult to do at scale. And if you have, you know, 20 different operating activities taking place across three different states we couldn’t really monitor it…  with technology coming into the picture. We could actually exactly say how much of A-grade has been packed, how much B grade has been packed, how much has been the wastage at each farm right. For each supervisor.. now that started to generate data which we could then at the end of the day push it back to the supervisor and they could see that supervisor A is performing at a level which is excellent and another supervisor is performing at a very poor level, right? It builds so much of you know, and everyone knows that it is being monitored and tracked.. impact their performance. It is part of their KRA’s, benchmarks are well defined. When you do all these things put together actually the entire system starts to get into a very positive cycle when every individual starts to look at and say how do I improve and then that fundamentally led to practically zero wastages in that kind of packing operation.

Ram– Excellent. Excellent. I mean it’s a very inspiring Journey as I’ve mentioned before I’m sure there would have been some challenges along the way.. Do tell us about the hiccups and how did you deal with them? 

Pankaj– It’s a long list of answers. you might have to be patient with me on that.. as I mentioned. The first issue was actually how do you solve this problem at scale, which I’ve already dealt in a little bit of detail. So I’ll skip that but the second issue is very agri specific in the sense that most of the people that we work with in rural India. We’re not technology savvy. It was the first time that they were using tools on mobile phones, on laptops and they were themselves required to enter data to understand what was happening. You know..even ..  If you ask me, even the performance management system is something that was absolutely new to most of these people right? It’s very tough. And this is the data technology Works to a large  extent when your data is accurate. If the data is not correct it is garbage in and garbage out of hundred percent. Right? So the people that you are working with one of the first challenges that we had was to actually educate, upgrade and motivate the team to actually understand how valuable this whole set of things is for them.. how it would impact their own performance. Of course, the value is there for the organization and gets their buy-in and motivation to be able to use technology in the first stage. It’s very, very tough to do. At a rural level you have had a lot of problems which are infra driven, asurable, right? So that is one specific problem that I would say, we have to foresee and work on to actually make the technology work. The second important element that I would say that we faced was that initial level, you know, you have to build because we divided the problem into multiple stages in each stage. There were conflicts within different departments between different people as to who has done the right job and who is not done the right job. It’s very important because it’s a supply chain and you know, it’s…. to be able to pinpoint where the problem happened is very very critical. So the second problem I would rather say is building that trust with technology as well as in the quality management system, which helped us to kind of reduce the wastage dramatically.. the entire trust. It takes a much longer period of time to be able to do that. So right these are all And the third thing was that even the existing process has to be reengineered to actually meet the technology process flow, you know data at the end of the day has to be fed into the system and the product flow in the system as well physical It has to happen simultaneously, right? It’s easier said than done and it’s a very very complex ground of work that has to be done to make technology work. So my overall point of view is that all the problems that we face are fundamentally ensuring how you really extract the value out of the solutions that we are implemented to be able to reduce wastage and it does take a lot of time and effort to do. 

Ram– Interesting that you mentioned the time aspect. So from whatever 15 to 25 per cent to two per cent, which is like again, super impressive. How long did this journey take? Especially after you said that you were trying to scale up and that’s when you brought in technology. How much time did it really take to go through this? 

Panjak– Yes. so from scale and the technology part the second phase of introduction which was very important it was almost a 3 years process .. we started in 2015 and in the end of 2018 is when we really started to get the full result of all the implementation and effort that we put in. so it was a three-year process. 

Ram– so, I’m sure that’s something a lot of listeners would find interesting because many of their initiatives there is no silver bulletin there is no shortcut, sometimes people just need to be patient to kind of get the result and the rewards and I’m glad that you shared that nitty-gritty. Thank you. 

Pankaj– I would like to add the Ram that it wasn’t a one-shot thing. . right .. We have divided it as a step by step process. So while it took three years, I would say that we were making ⅓ of the progress every year because they were some low-hanging fruit some easier things some teams adapted to it faster some don’t. So it was because the process which actually we did to get out mechanisms by which every six months there was a success story to share because that’s the only way to keep people motivated and energized about this whole thing. So it was I would rather say that you know every year we reduce the wastage by 5% to be able to reach 2% over the three-year period so that also has to be thought through and planned.  

Ram– awesome, so.. 2% I mean that’s already a great number you’ve achieved. What are your goals Now? Where do you go from here?

Pankaj–  so, I think on the wastage or the lost side we are probably better than most of the old benchmarks that you will come across. I don’t think there is much as far as this is concerned the challenge would always remain with respect to scale .. as this scale up as this adds up more geographies the complexities basically keep on increasing .. so the scale is the one complexity that I see, the second complexity is the product specifications. So as you add more products the solutions are more nuanced to specific products..  The solution that works for pomegranates is very different from bananas. The technology platform is the same, identification and saying, you know that the supervisors are underperforming and this is an excellent performance, that is the technology solution will be the same but the answers from their own right, why this has happened is a very nuanced answer for each product. So as you get into each product  the technical issues have to be resolved for that. So yes, I mean, it’s a continuous process. I really don’t think it ends here because every time you add a product and every time we scale up these kinds of issues will keep on popping up and we need to ensure that we remain at this Benchmark, but we’ll have to keep running very hard to be here. So that is it.

Ram–  sure. Sure. Thank you so much for sharing those details. You know, there are others who do want to try and cut down food losses, some of them are starting from scratch. If you were to give one key message to some of these beginners, what would that one message be?

Pankaj– So well,  actually it’s possible today.. When compared to what it was not possible 10 years ago is one very important thing. It’s possible because of Technology, but my key message would be that technology needs to be part of additionally from the point of view of the science behind the Agriculture and especially behind the food loss reduction. So one would have to build both competencies. The science of reducing food loss comes and aligned with New Technology Solutions, which would help you to reduce the food loss right… So both of them are extremely critical and whoever wants to do it needs to ensure that they are on top of both the elements.

Ram– Thank you so much for your input. This was really helpful. 

Pankaj– It’s been a pleasure Ram. So I hope this helps and happy to share our story. Thank you so much. 

Ram– Great. Thank you so much.