April 13, 2021
Waycool is an agri-accelerator buy produce at farmgate and sells in cities, with the technology involved in between, prefers to call itself a soil-to-sale business.
Established in 2015, Waycool is one of the fastest-growing agriculture and food supply chains in India with revenues of nearly $100 million (₹740 crore). It buys more than 350 tonnes of fresh produce, staples such as cereals and pulses, spices, and milk from close to 50,000 farmers every day and sells to kirana stores, modern trade, hotels, and restaurants in six states, primarily in South India.
According to its CEO and founder, Karthik Jayaraman, the USP of the company is its commitment to creating a positive social impact and help farmers increase their income.
The margins in an agri-food chain can be deceptive. Buying tomatoes at ₹8 a kg and selling for ₹16 may seem to fetch an attractive 50 percent gross margin. But a lot of the costs are constant and hard to compress. The standard trucking cost of ₹3-3.50 from Nashik to Chennai for a kilo of onions cannot be crunched any further.
“If you want to build sustainable margins and be focused on community impact, you have to go beyond. That’s why we bring in partnerships at the seed and soil level,” says Jayaraman. Waycool, for example, ties up with a seed company that has a high-yielding hybrid tomato variety. Its agronomists work with farmers during the crop cycle to help lower costs through simple measures like inter-cropping and judicious use of pesticides.
Other steps include staggering cultivation to obtain a certain yield every day. “The controlled and predictable supply also helps us liquidate the products more easily and at a better price,” Jayaraman explains.
According to a farmer living near Tindivanam in Tamil Nadu, selling to Waycool at the farmgate instead of sending his gourds and chillies to the Koyambedu wholesale market fetches him up to ₹2 more a kilo.
His monthly income from vegetables has gone up to ₹35,000 from ₹25,000 before. “I get paid digitally on my phone as soon as the vegetables reach Waycool’s warehouse. With agents I had to shell out 10 percent in commissions and wait more than a week for payment,” he says.
In the next two years, Waycool plans to expand its reach to 75,000 farmers across the country. To increase rural incomes it is gradually shifting the work of grading, sorting, and even packaging of dry goods to the farmgate and villages from its warehouses. And if all goes to plan, it wants to help rural entrepreneurs get into food processing for its in-house brands. “Transferring value-addition processes to the villages would be a bigger economic force multiplier than keeping them reliant only on-farm production” says Jayaraman.