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    HomeBusinessChennai start-up WayCool to set up India’s first ventilated cold storage for...

    Chennai start-up WayCool to set up India’s first ventilated cold storage for onion

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    WayCool, one of the country’s leading agri-commerce firms, plans to set up India’s first ventilated cold storage for onions by building a pilot plant.

    Onion is not stored in cold storage but in warehouses that have ventilation. If it is stored in cold storage and taken out, the bulb rots very fast. The reasons are that water condenses from it fast and the vegetable itself transpires due to which it begins to rot.

    “Technology is now available to keep it dry. We will bring and build a pilot plant with a (ventilated) cold storage,” said Karthik Jayaraman, Co-founder and Managing Director, WayCool Foods and Products Pvt Ltd. 

    Tie-up with Dutch firm

    The ventilated cold storage for onions will be part of WayCool’s efforts to build capability in supply chains. “We want to bring in such technology for our supply chains,” he told BusinessLine.

    The Chennai-based firm, launched seven years ago, has tied up with Mooij Agro of the Netherlands to convert cold storage to ventilated cold storage to preserve crops such as potatoes.

    “This reduces the sprouting of potatoes and improves the shelf life of the produce besides preserving its overall quality,” Jayaraman said. 

    Improving shelf life

    As part of its efforts to reduce volatility in the supply chain, WayCool is looking at different options and technologies. One such is its launch of potato flakes for the convenience of chefs. 

    “Potato flakes have a 2-year shelf life compared to a few months for the potato. It is good for producers as the product is preserved and its retains its value. This will also tackle the issue of surplus,” Jayaraman said.

    WayCool is looking to bring such innovation in the supply chain which will offer sustainable benefits to farmers, besides stability and thus reduce price volatility. 

    Tech subsidiary

    Recently, the firm firm took over Pune-based SV Agri Pvt Ltd which has interesting capabilities. “It has teamed up with Agrico of the Netherlands and developed seven varieties of potatoes. It is developing another eight more for India that are resilient ones with low diabetes effects or sugar,” the WayCool co-founder said. 

    The Pune firm also produces “seed potato tubers through aeroponics” which brings another capability of growing the spud throughout the year, Jayaraman said.

    On the other hand, WayCool had developed technologies for its own use and there is now demand for its agri stack to be used among farmers in Africa and Europe.

    “We are open to selling our technology. We are now forming a technology subsidiary that will offer these technologies as SaaS (software as a solution),” he said. 

    Using AI, ML

    The start-up, which is mainly marketing agricultural produce and milk in South India and Maharashtra besides the United Arab Emirates, is putting to good use the expertise it has developed in artificial intelligence (AI) and machine learning (ML).

    Its farmers’ advisory platform, Outgrow, uses AI for early disease prediction and detection.

    “We use weather data for predicting early diseases in pomegranates, potatoes and grapes. The prediction helps farmers to take action early. We have 85 per cent accuracy in predicting pomegranate blight and a couple of diseases in grapes,” Jayaraman said. 

    The other way of tackling disease using AI is by taking images or pictures of plants for disease detection.

    “The image data can help identify 71 diseases in 20 crops with nearly 85 per cent accuracy. We have begun using AI in more areas,” he said. 

    Layers of forecasting

    On utilising ML, the WayCool co-founder said it had to be done in multiple layers for forecasting.

    “We now have six years of data. The quality of forecasting has begun to improve. The past consumers’ data is taken but the forecasting is not just confined to that,” he said. 

    The ML takes into account layers such as elasticity, festival and extreme weather for forecasting. For example, when lemon prices skyrocketed to ₹200 a kg. “We knew people can manage with small quantity,” Jayaraman said. 

    In fact, WayCool has identified 23 types of buying data and is gathering more “to learn better and get better at forecasting”, the WayCool official said.

    Recommendations to retailers

    The firm is also using a set of gig workers to benchmark prices in wet and dry markets to come out with 2,400 data points. “For the short-term, we calculate the price to be given to farmers. In the long-term, we will use them to predict prices,” he said. 

    There is also another area in which WayCool is using ML. One is giving recommendations to retailers if they see interesting customer patterns.

    “There are certain assumptions on buying pattern. For example, people think that Ponni rice sells everywhere in Chennai if it comes from Nellore in Andhra Pradesh or Manachanallur in Tamil Nadu,” he said.

    But WayCool found an interesting pattern in areas such as Ramapuram and Manapakkam in Chennai, where people bought HMT or Miryalguda rice since residents were from that region. Similarly, its data showed that Jayanagar 9th block in Bengaluru had more Tamilians or more people buying Ponni rice in Halasuru in the Garden city.

    Algo for potato blight

    The start-up gets data from two or three sources including its own retailers and Google to provide recommendations to retailers so that they offer the right choice to customers. “This will ensure customers pay the right price and stick to the retailer. We are seeing more traction for valuable intelligence,” the firm’s co-founder said.

    Agriculture can be agile and precise to technology and of late, it has begun to mature. Towards this, Jayaraman pointed out that Wageningen University in the Netherlands has developed an algorithm for blight detection in potatoes. 

    WayCool, which terms itself as basically a directly supply chain company working with a large base of farmers and near-farmers such as farmer producer organisations, did an interesting study of its clients.

    The firm’s staff did a survey of them in the reverse—starting from the wholesaler and ending with the farmers—which revealed that there are 11-12 intermediaries in the supply of dry groceries.

    Intermediaries’ role

    “Though there is one layer of speculators in dry grocery staples, the rest play various important roles in the supply chain. Someone picks up the produce from farmers, then there is the mandi, someone stores it, someone dehusks, there are preliminary processors, warehouse owners and millers,” Jayaraman said. 

    Each intermediary charges commissions ranging from 3 to 10 per cent with the highest going to those who handle fresh produce. “There are costs and losses due to these intermediaries,” he said.

    Costs are in the form of repetitive handling and using different modes of transport besides packaging in gunny bags, boxes and crates. Losses are in improper handling of the supply chain.

    “For example, spinach loses 23 per cent moisture within six hours. So for one tonne, I get only 750 kg,” Jayaraman said, adding that the problem lies in business in food is being led by supply rather than by demand. This is the reason for volatility even for  a small fluctuation in the supply chain. 

    All on a single platform

    WayCool deals with fresh food, milk and staples and process them if required. It has a network of 52 distribution centres, 20-odd collection centres and 22 processing partners in dairying and repacking to supply to at least 55,000 retailers every month. It has 1,00,000 retailers in its database, while nearly 1,60,000 growers are part of its network with 8,000-10,000 of them supply on a daily basis depending on the season. 

    The firm carries out transactions with all of them on a single integrated stack with an app for the retailer. “We have a backend laid out in the same platform that already predicts demand to be placed by a retailer at 7 pm that evening. We place corresponding orders at collection centres which pick them up from the farmers,” he said. 

    Farmers may not be able to meet the entire demand but WayCool’s real-time tracking of goods in transit helps to find out the gap between demand and supply. This helps the firm to place orders with mandi traders and fill the gap. “We are essentially a supply chain using technology to improve efficiency and responsiveness,” he said.

    More value per acre

    In addition, the firm helps retailers to avail of credit based on their transaction history from non-banking financial companies at a reasonable rate of interest. 

    On the other hand, Outgrow provides a large-scale advisory service by helping farmers in soil testing and providing information on micro and macro weather. Micro weather is a paid service, Jayaraman said.  

    Outgrow also provides farmers with information on mandi prices so that they can make a rational decision in deciding on their buyers. “We don’t want only to be transactional partners of farmers but want to engage with them and help in their journey for more value and fewer inputs per acre,” he said. 

    WayCool was launched by a group of people who wanted to put their skills to better use in July 2015. The team decided to look at the food supply chain as it was disparate and fragmented. 

    “Our farmers are small and cannot fill a vehicle entirely. Also, they produce variable grades, while consumers are used to buying small quantity with the retailer placing order once in 2-3 days,” he said. 

    Areas of operations

    WayCool mainly operates in South India and Maharashtra as roads are better in these regionsthat can help reach customers on time. Digitisation, access to smart phones and money are other business enablers, he said, adding that it would enter Goa shortly. It also operates on its own in the UAE. 

    The firm buys products from across the country with most of the purchases coming from Maharashtra, Tamil Nadu, Karnataka and Andhra Pradesh. It imports apples for nine months in a year from 22 countries and has partnerships with 110 orchards abroad.

    While WayCool depends on app for sales in cities, it has a physical sales force with a target to meet 35 customers a day, particularly in the dry grocery sector where traders are still conservative, he said. 

    Dwelling on the firm’s experience during the Covid pandemic when there was ample supply, Jayaraman said it helped in better market linkages through technology. 

    WayCool had raised funds through debt and equity. The firm recently raised $150 million. The firm is getting a lot of guidance from various quarters, while knowledge is being made available through institutions such as ICAR-IHR, NIFTEM and Tamil Nadu Agricultural University.

    Published on June 09, 2022

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