Ever wondered where are the mushrooms stacked in your nearest Nature's Basket store coming from? Well, we did and to understand the large scale mushroom farming in India, we called on our show, Avdhesh Kumar, Co-Founder of CEO of Jiwa Foods, India's third largest Mushroom Producer with a capacity of 4000 kgs of mushrooms per day! And they're just getting started. We discussed how Avdhesh starting off from tea trading, having tried his hand at healthcare consulting, landed up in mushroom farming business. We, of course made it a point to discuss with him the various opportunities that exist in the world of Hi-Tech Farming and Agri Supply Chain for our bootstrappers!
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Tune in to our conversation with Avdhesh where we also discuss:
What was the market research process before Jiwa Foods decided to venture into mushroom industry? (8:26)
- Jiwa Foods explored dairy, pulping, food processing, canned foods, ready-made snacks, cold-storage etc. Jiwa Foods considered factors like financial barriers to entry, global trends (China is the biggest mushroom producer in the world with certain of its farms producing more than 250,000 kgs of mushrooms everyday!), dependency on weather and of course gut feeling!
What are the common pitfalls to watch out for while getting into high-tech farming? (13:07)
- Hiring project consultants: Avoid 'penny wise and pound foolish' mentality! hire experienced technical consultants to get the most bang for the buck. Prefer production linked incentives for them.
- Government approvals: cumbersome process
- Transport and logistics: Fresh mushrooms don’t travel well, which actually led Jiwa to design special packaging material to maintain freshness of mushrooms for inter-city transport (also, did you know Orissa is the largest mushroom consuming state in India!)
What is Jiwa Foods’ distribution channel and what are distributors’ mark-up like? (21:20)
- B2C was not practicable (at least while starting off), so Jiwa started off with traditional whole distribution channel. Post Covid, Jiwa Foods managed to gain access to modern retail chains (Nature’s Basket, Reliance, FoodHall), simultaneously trying its hand at D2C tying up with start-ups who cater to this niche.
What are the mushroom varieties Jiwa Foods produces? Scope for innovation and exports? (28:30)
- Jiwa focuses on white button mushrooms but Jiwa loves to experiment! Currently, they are experimenting with portobello mushroom. Growing conditions requirements vary across mushroom varieties such as shitake, enoki, oyster – while the market for these varieties is not as big, it can be worth exploring.
- Internationally, demand for fresh mushroom is miniscule and major countries import their mushrooms from Netherlands, China, which have highly sophisticated farms. Competition is tough but not entry is not impossible. Jiwa plans to spearhead export of fresh and canned mushroom soon.
What can be the other avenues in High-tech farming and D2C opportunities? (35:14)
- There is void for Bell-peppers in the Indian markets, leafy greens, hydroponics and LOT of scope for building businesses. People have been inclining towards clean foods, with increased focus on health and nutrition in recent times; they don’t mind paying an extra buck for better quality and taste.
- There are a lot of niche areas in High-Tech farming and varieties of foods one can focus on - businesses need to decide what portion of population they plan to cater to, with their product.
- There is a huge gap in supply chain - monopoly of existing players. 'Farm to fork' model needs to be re-visited to limit the middlemen, to ensure better quality, affordable prices and fair returns to the farmers (Tomato sold by a farmer to a middlemen at Rs. 2-3/kg becomes Rs. 40/kg by the time it reaches our house!!!)
Social impact of mushroom farming (42:16)
- Employment opportunities: Women make up majority of workforce at Jiwa Foods. Temperature controlled High tech farms provide decent working conditions for the workforce.
- Raw material: compost / raw material used for growing mushroom is actually agricultural waste. Mushroom industry is one of the largest buyers for agricultural waste/ chicken manure, which are otherwise burnt by the farmers. Leftover compost is processed and sold as fertilizer for corn and banana industries.
Mushroom farming in India grew 48x between FY14 to FY18 but is still only 2% of global mushroom production. Talking to ventures like Jiwa, we realised that there’s a revolution happening at the niches of farming in the country, providing riches to the people who can correctly exploit these niches. So what now - find a niche and dominate!!!
If you have any interest in setting up a business in the field of Agriculture and you liked this episode, I highly recommend you to read our newsletter on High Tech/ New age farming at https://bit.ly/3aL92fR.
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