Four friends quit the corporate world to begin their own initiative of direct-to-consumer, farm-fresh produce through agronomy and hydroponic technology.
Back in 2017, four, longtime childhood friends — Avinash BR, Arvind M, Gururaj S Rao, and Santhosh Narasipura — wanted to start a commercial venture together. Having known each other for over three decades, there was a burning desire to transition away from their respective careers in the corporate world and start something on their own.
(Image above: Founders of Clover Venture)
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During one of their regular catch-up sessions at Santhosh’s 100-acre coffee estate near Sakleshpur in Karnataka, they decided to establish a venture surrounding the popular beverage. However, this did not take off for a variety of reasons.
Fast forward three years and they are now running a greenhouse agri-tech startup called Clover Ventures, which works with about 60 small-scale farmers spread across nearly 70+ acres in the vicinity of Bengaluru and Hyderabad. Working in partnership with these farmers, they have started to supply high-quality, consistent and traceable fresh produce for internet kitchens, modern retail franchises, kirana stores and individual consumers in these cities.
Clover’s business model centres around demand-led cultivation, a managed farm network, and full-stack agronomy. The managed farm network of greenhouses are based in peri-urban and rural areas surrounding urban consumption zones, thereby ensuring freshness and reducing spoilage. Clover provides a full-stack agronomy solution to the greenhouse farmers in the network, improving yields and standardising output quality.
“Our business model involves giving free agronomy service, ensuring higher yields and productivity from the farmer and buying all the produce that we’ve asked them to grow. Over the last 24-odd months, we’ve seen farmers increase their yield anywhere from one-and-a-half to four times the yields that they were getting without our intervention. The added benefit is also lesser wastage due to committed market access. We’ve seen farmers’ incomes go up by 30 per cent to 50 per cent by working with us,” says Avinash BR, co-founder of Clover, in an exclusive conversation with The Better India.
The company is in the process of launching its farm to consumer brand of fresh produce and also began its D2C (Direct-to-consumer e-commerce) journey in Bengaluru this year in April. In the coming days they will scale the D2C offering across both Bengaluru and Hyderabad.
When the coffee venture didn’t materialise, Santhosh had another parcel of unutilised land measuring five acres on the outskirts of Bengaluru, where they decided to try something else.
Through their Bengaluru-based agritech startup, which they incorporated in 2018, they wanted to address four key concerns — how do you cultivate at scale in a country where the majority of farmers are small and marginal, the absence of technology, the sheer unpredictability of yield, access to markets and understanding the best time to sell produce.
None of them had any experience or lineage when it came to farming. However, Avinash came upon the idea of venturing into hydroponics, which is soil-less cultivation, during his last job working for a Mumbai-based venture capital fund. “We latched onto this idea because this wasn’t conventional cultivation. There was some technology involved. Since we didn’t have an agronomist, we did things ourselves, committed mistakes and experienced a steep learning curve for a few months. Growing crops like lettuce made sense economically in a hydroponic/greenhouse environment with decent returns. We grew lettuce, mint and English cucumbers and soon made very early inroads into internet kitchens including the likes of Fresh Menu, Chef Kraft, Cure Fit, etc. We started offering our produce to them,” says Avinash.
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After they began their venture in early 2018, two things happened serendipitously. In the summer of 2018, Ooty, the once quaint hill station from where Bengaluru sources many of its fresh vegetables, endured an unusually hot summer. As a result, there was a supply deficit of vegetables in Bengaluru, while Clover continued to supply high-quality, fresh produce. Then in November 2018, Bengaluru witnessed unseasonal heavy showers.
“Once again, supply was disrupted. While we suffered some hiccups, we largely met customer demand without compromising on quality. We had figured out how to grow high quality produce without letting the weather impact us significantly, but were doing it for a limited number of crops like lettuce, mint and English cucumber. Customers began asking us for a wide range of fresh produce of a certain quality that would be available throughout the year,” says Avinash.
That’s when Clover Ventures began speaking to various stakeholders including hotels, restaurants, retailers, food processors and kirana stores. In the following months, they deepened their knowledge of the fresh produce ecosystem and realised that these segments of highly-perishable produce face huge volatility in terms of availability, quality and price throughout the year because they are grown in uncontrollable environments.
Once their voice of customer exercise was done, they came up with a list of products. But by then, Clover Ventures had run out of production capacity at their warehouse. As a bootstrapped startup, they didn’t have the capital to set up more greenhouses.
“In the process of understanding the fresh produce ecosystem, we had spoken to a lot of farmers with greenhouses in the vicinity of Bengaluru, who employ drip irrigation. We explained to them that we don’t have the capacity in our warehouse and asked if they could help us. These farmers were already growing what we wanted, but in many cases they knew nothing about leafy lettuce, basil, arugula, celery or parsley. So, we helped them grow these crops,” says the co-founder.
Clover’s customers in Bengaluru couldn’t spot the difference between the produce that came from their farm and those sourced from these farmers. Clover could enter into a partnership with these farmers if they could control production in terms of overseeing the choice of seeds, cropping density and a nutrition programme to ensure clean produce by minimising chemicals and pesticides.
Onboarding farmers & making greater headway
(Watch Avinash give us an overview of the greenhouse farming ecosystem.)
Take the example of Narayanaswamy, a farmer from Hoskote, Karnataka, who did not have a greenhouse before he encountered Clover nearly two years ago. He was growing tomatoes and potatoes in an open field before encountering the people at Clover.
“When I saw what the people at Clover were doing with greenhouse farmers, I decided to construct one myself. I built the greenhouse with the confidence that working with Clover would help me better use my land and time,” says Narayanaswamy.
In the 20 months since Narayanaswamy built the greenhouse, he has grown five crops including colour capsicum, English cucumber, coriander, green capsicum and haricot beans. On his remaining open field, he has grown five batches of cucchini, cauliflower and broccoli.
“When I was trying to sell tomato and potato in open markets, I faced massive price volatility. All those problems were solved with Clover. Yield and productivity are taken care of and pricing is also structural. The agronomist from Clover visits the farm regularly and advises on crop maintenance. Instead of unscientific advice from the local stores, I now rely on proper guidance from Clover. Not only does this result in optimising my input costs, but the inputs are also more effective on the field as evidenced by the results seen in the field,” he adds.
(Watch Avinash explain how Clover works with their farmers)
“We buy the produce from these farmers and then sell it to the end consumer. Given the data and demand trend analysis in our possession, we can reasonably forecast the demand well. We are able to orchestrate this network of independent farmers to fulfill consumer demand. Hypothetically speaking, say I have a single day demand of 100 kg of capsicum and I have two farmers giving me 50 kgs every day, but one of them is going out of production one month down the line. In this case, we immediately identify another farmer in our network ready to fill that demand. Also, given the traction of in-bound inquiries, we can onboard another farmer to sow capsicum so that future demand is met,” says Avinash.
By the first half of 2019, Clover was present in Bengaluru working with about 40-odd acres of farmland and 50 farmers and started to make headway in Hyderabad. Around 70 to 80 per cent of produce comes from farms we are managing under the supervision of our agronomists, who closely monitor what the farmer is doing.
To facilitate this on-boarding process, in December 2018 the startup had raised USD 1.2 million in their seed round from Mayfield. But as they were growing further, the startup had begun to receive a lot of in-bound inquiries from individual customers in Bengaluru and Hyderabad.
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Direct-to-consumer? But COVID-19 strikes
While the startup had grown massively in the B2B (business-to-business) segment, they knew that in the long run it was the B2C (business-to-consumer) market which would value the difference they were bringing in terms of quality and consistency of fresh produce.
By the time they had raised their Series A round of funding amounting to USD 5.5 million predominantly from Omnivore in February, 2020, they had begun to dip their toes in the B2C segment by first supplying their branded range of packaged produce to kirana stores (one step removed from the end individual consumer) in both cities.
However, when the pandemic struck, like other ventures, Clover, too, suffered. Their HORECA demand practically evaporated overnight. Operationally, there were a lot of hurdles in terms of movement of vehicles, material and labour. However, from modern retail franchises and kirana stores, they started seeing a lot of demand because markets were shut.
“People were going to modern retail stores to buy cleaner produce that did not go through a mandi. We had B2C plans, but the form of demand changed. That’s the transition we made while COVID-19 happened. As we speak today, we are present in over 100 kirana stores across Bengaluru and Hyderabad with our range of packed produce. We are doubling our footprint across kirana stores every two weeks and serving individual households and apartments with fresh range of produce in both cities. Last week, the first set of kirana stores in Hyderabad began selling our packaged produce,” says Avinash.
Clover serves individual customers in Bengaluru and by the end of November, the facility will be available to consumers in Hyderabad as well.
To facilitate this movement to B2C further, the startup is also developing an app for individual customers to place orders, besides setting up a daily subscription system.
While Clover offers farmers access to expertise and markets all through the year, consumers benefit with better quality and traceable produce. In the process both sides benefit unlike a standard feature of Indian agriculture where one benefits at the expense of the other.
(Edited by Yoshita Rao)
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