Why I started a food supply chain startup & what I learnt in 2 years journey of Snackexperts?
Alike all the startup founders, I was also cross-examined by many people (Friends, Family, Ex -Colleagues, Customers, Fellow Founders, Funders, Mentors, etc.,) about the inception, of my entrepreneurial journey to snackexperts.com . Dates aren't important anymore when it comes to putting efforts in making our dreams come true. Things fell in place and that's how snackexperts originated.
“You can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever” – Steve Jobs.
Summing up, all the founders of multifarious startups, with their ultimate aim of solving a problem in our society fall into two categories: 1.Startup by Spark 2. Startup by Experience. But, our startup had a perfect blend of both. Arun called me through a spark that this might be an interesting problem to solve and I joined him deliberately by my experience that this problem is worth to be solved and I might be the right person to take up this journey.
Deep involvement with food supply chain starting from school days
My involvement in food and agriculture starts with my love towards farming from childhood. Ability, importance and demand for the food sector to feed billions of people three times a day, always persuade me to be in this space every hour of past, present and future.
Being born and brought up in a farming family cultivating and selling vegetables in the local market from our 5 acres of farmland make me happy. I grew up watching, playing and enjoying activities in the farm, starting from ploughing to harvesting and beyond. Doing activities like the logistics to the local market, calculating the money spent, kilos harvested, kilos sold and money earned molded me of today. It was one of remarkable experience to be a farmer without being aware of the terms like Burn, P&L, Balance sheet, cash flow – but pulling off everything far better than the real world entrepreneur. Risks in farm lands are neither calculated nor predicted.
College days in Agri University
With this passion and love, I joined B.Tech in Horticulture at Tamil Nadu Agricultural University (TNAU) in 2004. This is where the place I got a broad perspective on the scenario of food production through my visits across India during the four years of my college days.
I understood that the percentage of people and area under production involved in primary agriculture is coming down significantly. Other side Indian Economy is growing faster and disposable income of people is increasing significantly, where people started showing interest to pay a premium to branded quality products. I felt combining these two trends is going to create a new wave of opportunities in the field of agriculture where individuals need to produce more in a given unit area, reduce the waste, improve the supply chain that assures the quality and safety to the consumer.
On completing the undergraduate degree program with all these line of thinking, due to the financial burden of my family, I decided to take up a career. I had three choices 1. Agrochemical MNC sales and marketing job with good salary and allowance 2. Banking career as a Rural banking officer 3. Management trainee in a 100% EOU(Export Oriented Unit) which involved in contract farming, processing and export of vegetables to global markets. Without any second thought I decided on to option 3, though the other 2 offers were provided with much better salary and job security. It stand to the reason as the offer aligned to what I wish to do and was sufficient enough to also take care of my basic financial needs. I accepted the offer and started my career in IAP as a Management Trainee to contract farming division.
Finding winning ways in Agri supply chain
In the first year, I was indulged in the activities like travelling to contract farmer fields across south India, to understand the farming practices, sourcing mechanisms and logistics of the factory. This helped me to learn the fundamentals and nuances of contract farming. In the Second year, I got an opportunity to initiate the drip irrigation project to contract farming farmers on which we failed commercially after installing 50 acres of drip irrigation to nearly 75 farmers across Tamil Nadu and Karnataka. Technically we were successful but commercially we failed. This failure helped me to learn the difficulties of dealing with scattered farmers in different locations for multiple growing seasons. I thought we might never take up drip irrigation again, but management decided to take up own drip farming based on our technical expertise. This helped me to learn few things.
1. Shutting down is never a solution in business
2. Analyzing the Failure is the best way to know your strength
3. Building the team to overcome the weakness is a must to do.
We found a way to scale with a new manager who had nearly 30 years of experience in tea plantations (large scale farming) to ensure commercial success large scale farms. I was taking care of the technical management of crop cultivation and he took care of workers, scale and commercials. During the third, fourth and fifth years was we did only scaling. From zero acres to 300 acres of vegetables in 3 years is a massive scale in the industry. I learnt the art of scaling from scratch through him. When competitors, failing continuously, we went on to build the scale with commercial success because of fundamentally strong unit economics and execution focused lean team.
Field to Factory, a step close to business
5 years of experience gradually transformed me into a techno-commercial person from technical person. Then I got an opportunity to look after quality in a factory and readily accepted because I felt that this is a big step towards learning the farm to fork process. We were doing processing to all the leading global players following best in class food safety standards and processes and it is a 100% Export Oriented Unit (100% EOU). Everything in the facility was developed from scratch and built by the in-house team.
Apart from managing Quality and processing aspects, one thing I observed was growth story of an MSME turned to be one of the India’s largest exporters of cucumber to global markets. One big learning here was – how to shift gears from an aggressive result oriented approach to gradual system oriented approach and vice versa as we grow and importance building user-friendly systems which are flexible to changes at the same time strong in compliance monitoring.
Dinner table discussion to startup idea
Mid of May 2014, I visited Chennai for a meeting and in the evening met my TNAU friend and hostel roommate Arun Prakash over dinner and we started discussing so many things. He is one of the big time readers of global trends, cleared civil services main examination thrice and was attempting to clear interview and was working in a well-paid energy consulting job. He was discussing a lot about increasing lifestyle diseases and changing food habits of the Indian population. This 2-3 hour of discussion ignited the spark in both of us. While returning by bus, I was thinking through the discussion we had and the root cause for the same.
Next 4-5 days made me think about the fundamental issue with food manufacturing, distribution, retailing, consumer behaviour, ingredients, health issues, global trends and so many things. Next 2-3 weeks we discussed continuously around this topic. I interacted with many people in food industry about this and what are we doing and really what we should be doing, and in the meantime, Arun did a research about this market, how FMCG brands are marketing these items and different models across the globe. My intention was mainly to have a deep understanding of this issue whereas Arun intention was to understand the global trends around this.
The fundamental problem I understood was “Raw materials to finished product can be done in 30-40 minutes. Consumption from opening the pouch was within 2 hours in 90% of FMCG products. Since we were not able to predict the exact demand, distribution weakness in the systems and manufacturing led operations are the culprits which force the product developers and processors across the globe to adding chemicals to increase the shelf life to withstand all this inefficiencies. Though they are approved based on science but simply not adequate to the task of establishing reliable knowledge — poorly-controlled human experiments, observational studies incapable of establishing cause and effect end up in showing nothing meaningful about what happens in human over 30-40 year period. We started to witness the increasing trend life style diseases like . Diabetes, Obesity, Blood pressure etc., Main culprit to all this issues are wrong food choices that are loaded with chemicals.
Mid of June I visited Chennai, where we met again and discussed the topic. Arun found some interesting trends, startups emerging across the globe but none is hitting the core of the problem with the fundamental solution of simplifying the supply chain and changing the manufacturing led sales process to order led manufacturing process.We both felt this can be worth attempting as a business and worth investing our time and money into this.
End of June 2015, seed for www.snackexperts.com was sown.
Part 2 of my blog will cover how we started our work, early phase trials, quitting the job, funding, acceleration, challenges, failures & tough phases, pivoting business models, customer acquisition, giving exit to angel investors, achieving profitability in 2 years and most importantly building the wonderful team to take our journey forward.