Bigbasket, one of India’s biggest online grocery stores has decided to increase its direct sourcing of fruits and vegetables from farmers. Currently, the company is sourcing around 60 per cent of fruits and vegetables from farmers and now it has decided to increase the slab to 80 per cent. The move came just after the company launched its new initiative called ‘Farmer Connect’ in January which aims to omit the middle man from the chain so that both the buyer and the seller will have a healthy profitable margin to share.
Commenting on the company’s recent move, Hari Menon, CEO & Co-Founder, Bigbasket said that the company has established 15 collection centres in the first six months and are working with 1,100 farmers. By March 2017, organisation will be working with more than 3,000 farmers. From the present 3,000 acres, the company would be working with farmers who cumulatively cultivate around 10,000 acres by March 2017, and add another 5 centres by then. Direct sourcing has increased margins by 6-7 per cent and farmer incomes by 10-15 per cent.
As per the company’s report, fruits and vegetables account for 20 per cent of the company’s total revenue and the ratio is increasing very rapidly. Since the company is spreading its wings to explore new places around the country, it is laying heavy emphasis on direct sourcing and plans to increase its slab from 60 per cent to 80 per cent by the end of the current fiscal year.
A number of sellers and users of fruits & vegetables - Metro Cash & Carry, Reliance Fresh, Walmart, Mother Dairy, More, Pepsico and Heritage - have direct arrangements with farmers.