Sourcing of Fruit & Vegetables – Let’s put first things first


Decades back, when I was taking strategic sourcing decisions for large corporate, I was often told by top managers that what’s the big deal about purchasing fruit and vegetables, even kids can do it. Housewives do it day in day out. I used to get offended by such caustic, casual and derogatory remarks, but I always kept my cool but did contemplate on the subject later on.

Is f+v procurement job so easy and inconsequential? Time passed by, I got a lot wiser and experienced to understand and tackle the complexities encountered during wholesale procurement of fruit and vegetables. Believe me – Sourcing job is indeed far more tough and trickier than buying anything else. Yes, mark my word, ANYTHING! Why? I’ll elaborate on some other day.

The World has moved far since I donned my first sourcing hat. But the f+v trade, particularly in India and other developing economies, except for some bright spots here and there, has hardly changed. Hearing a live verification conversation between one of our bright Customer Service Executive and a prospective registered supplier of Mangoes from Telangana for our online portal, was all it took me pen down these musings on the subject. There was a DIY manual bursting out of my head on the whole subject but let’s put out the first things first.

Sourcing fruit and vegetables in wholesale for your business is always a challenge and an opportunity. It’s a challenge, of course, because a steady and reliable source of products that conforms to quantity, quality, packing, delivery and price demanded by your buyers is what makes your business tick and sing along. It is your opportunity as well, because you’ll like to find yourself surrounded every day with produce that you and your buyers care about and can sell proudly and profitably.

There is no doubt that sourcing require a great deal of time and effort, but finding the right products to build your business can bring you great satisfaction and reward. Nothing builds your own business quite like the efforts you’ll put into place for the purpose of stocking your and your buyers’ shelves. Whether you find the products you need to sell or resell in your neighborhood market or discover them on the other side of the globe, the stuff you choose will become central to your life. You’ll ultimately immerse yourself in those products and gain expertise in their various aspects, right from production to marketing.

During my times, sourcing f+vs, particularly from remote locations was extremely difficult. My favorite advice to young recruits initiated into the wonderful world of sourcing of f+vs was – Local market (Mandi) is the fountainhead of all information to get you on board of sourcing train. So visit markets during the trading time. However, what I found that even with all the information available on sourcing locations, seasonality and even supplier’s names on rare occasions, getting the products to our warehouse and retail outlets was still difficult. If I’m to point out a single reason for this difficulty, it was the lack of trust between the new prospective suppliers and the companies we represented.

Today, thanks to the Internet in general and more specifically to websites like, your sourcing opportunities have never been more abundant or varied. Once sourcing from far away production clusters was viewed as the province of only biggest and most experienced enterprises like NDDB, Mother Dairy, ITC, Reliance Retail or Aditya Birla Retail etc, now your supplies from remove suppliers is possible, no matter how small business or inexperienced you may feel. Now anyone with a bare Internet connectivity can search the remote suppliers in production belts, get in touch with them and request for quotes and subsequently arrange supplies.

Is it that easy as it sounds? A big NO. But the fact that it is possible and so many businessmen (read suppliers and buyers) have already done it over internet successfully should give anyone enough confidence to go forward.

Internet is so full of promise, so inviting, that by just reading above lines and googling Vegfru, one may be tempted to jump in. We understand and appreciate that. Who will not like to add a dash of growth and profitability in his or her business? But just as a child has to first learn ABC before starting to read a book, you will have to take some small yet very important steps to establish yourself before you embark upon your sourcing journey.

Please appreciate, you are no Tata, Birla, Ambani and Late Dr. Kurian or the organisations they represent or represented. You and are a small or medium business. Any supplier you approach has a right to ask you to prove that you are a legitimate business and valid prospective customer. After all, you are strangers to each other. Don’t be surprised that while you are doing a background check on your potential suppliers, your buyers are also doing the same checking on you. In nutshell, you must be prepared to present yourself as a bonafide business.

Traditional markets, instead of relying on trust building behaviors relied on instruments like advances or part payments which in f+v trade remained counterproductive because of the nature of products and trade. Simply put – it was and still is both expensive and time consuming. By the time cash advances are exchanged between parties, the nature of the product and the market behavior (prices specifically) changes because products have very short life cycles and markets have liquidity constraints because of the perishable nature of products. So what were the consequences – Limited number of buyers and suppliers who had gained initial trust with advances or were related to reach other, remained wedded to each other for generations. New relationships were very rare. Stagnation is the only word I can think of to describe this situation. THIS IS THE NAKED FACT.

What simple steps and behaviors demonstrate and build trust.

The first thing first here is to do some paperwork to ensure that your business is properly registered and authorized to do business within your jurisdiction. Suitable incorporation of your business be as partnership firm, a limited company, LLP or whatever may suits your needs, getting PAN, TIN, Aadhar, Service Tax no, your own website, even your credit rating scores etc are simple and cheap tools that would let you cross the first bridge.

We are going a step further. For a simple fee we are helping small businesses get a third party verification so that they can provide our trust seal to their prospective business partners. It is simply like providing your credit score when you shopping for a loan.

Watch out this space for more on sourcing f+vs.

A TV channel solely devoted to the cause of Fruits & Vegetables would be a Worldwide hit, Right?

Hand holding TV remote control with a television in the background. Close up.

It all began when selective TV shows for cooking on some channels started gaining popularity. Later on, dedicated TV channels for cooking turned out to be massive hits. A lot of related channels on Youtube have attained lakhs of subscribers and millions of video views. Ever wondered how would it be like to have a channel solely devoted to the cause of fruits and vegetables?

Let’s have a look at some of the interesting facts about fruits and vegetables, that majority of us might not be aware of:

1. Fruits and vegetables are equally nutritious in every state, may it be fresh, frozen or in juice form.

2. Apples which are rich in carbohydrate, vitamin, and mineral content, can re-energize you more than a coffee.

3. In most of the cases, the skin of the fruit or the vegetable is the most nutritious part. A lot of people usually peel this off and do not consume them.

4. Most of the commercial fruits that we get in the market are actually clones achieved by several genetic mutations.

5. You can avoid crying while cutting an onion if you hold a piece of bread in your mouth.

Although this list might be endless, it can be a good introspection for us to check out our limited knowledge about the most important ingredients of our diet. Our ignorance is due to lack of easily available and informative content related to fruits and vegetables.

A TV channel in this regards can act as a platform to increase awareness and knowledge about the various fruits and vegetables. It can also be coupled with tips to promote a healthy lifestyle by recommending  best possible intake proportions and routines. Also, the medium of television is still the dominant player having the largest massive outreach.

For adults who seek information, the content can be plainly simple like this There can be shows specifically targeted for Kids who are generally most repulsive towards fruits and vegetables, they can be shown something like this or It can really be a fun way to make them understand the benefits of fruits and vegetables, encourage them to increase the intake and ultimately make them healthier.

Coming to the business viability and commercial prospects from a TV channel perspective, it may sound a bit dicey to hear it for the first time. But, a recently launched TV channel named ‘Epic’ which focuses majorly on mythology and the historical stories/places has started gaining huge traction and top advertisers as well. Their Youtube channel Epified has very rapidly attained a huge number of subscribers and views.

A TV channel focussed on fruits and vegetables would provide advertisers a highly specific and targeted market for their business. It can be used to market and promote healthy products related to fruits and vegetables. The conversion rate for the marketers would be significantly higher as compared to the generic TV channels, ultimately giving them a better “Return on Investment”.

Also, thinking from the morality angle, such TV channel would gradually increase the consumption of fruits and vegetables enabling a healthier population for any country. There would be a decrease in the proportion of lifestyle-related diseases.  It would also give a boost to the agricultural sector, which still employs a larger section of our country and has a substantial share in the economy.

Any takers to start such a channel? shall be bringing to you every fortnight similar interesting and topical content from the wonderful World of fruit and vegetables. Please send a one line email request for the topic of your own interest at

If you require custom insights, reports or research articles on any matter related to fruit and vegetable industry in India or don’t want to get this once in fortnight email anymore, please feel free to send a mail at or tweet us @vegfru or call Pooja at +91-85272-67888

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Please call Anil @ +91-98118-14559 or drop him a line at

Do the Wholesale fruit and vegetable markets in India need more technology?

Motivated by this question, a few of us technology people at a software company set out to investigate the Wholesale fruit and vegetable market experience from both a supplier and buyer perspective. Being Delhi based, our nearest stop was Azadpur, Asia’s largest wholesale fresh produce market in North Delhi.

Our first impression on entering the market was that compared to a modern supermarket, walking through Azadpur felt like an experience from a 19th century.  Were we dreaming? We were told that every day thousands of trucks bring fresh produce to it from all over the country. Azadpur felt out of date with the rest of the city but we were told that it is the most important link in Delhi’s food chain, and its mammoth operations are round the clock. Transactions worth hundreds of crores take place here every day. The methods by which the mandi works may be mysterious to the first-time visitor but seems to work.

Farmers bring their produce to commission agents, who auction it by calling out prices quoted by potential buyers around them. The produce is rarely sorted and graded. These auctions happen only for few hours (e.g. 6am-11am). The suppliers are bound to sell the vegetables by the end of the auctions, as there is no appropriate cold storage available for highly perishable produce and waiting for another day will incur extra time and cost besides the produce will rot.

The commission agent checks with the supplier before handing over the produce to the highest bidder.  If the deal goes through, the farmer pays commission of the final rate to the commission agent. Commission agents (middlemen) try to get the ‘best price’. They don’t bid loudly. Instead, they communicate with buyers in code, by touching hands under a handkerchief. This way, the price changes with every buyer. It’s an old-fashioned way, and illegal too, but that’s how most deals are struck at the mandi.

Thousands of local vendors gather at the mandi to buy produce from the middlemen at the crack of dawn to be able to sell in their areas early in the morning, Azadpur never sleeps or slows down. It is kept alive and active by the thousands palledars, who work round the clock. They live in godowns or in a shanty villages within the market complex. Handling and sorting the produce is labour-intense work. We were shocked when we saw few ladies pounding wet garlic with their naked feet in a lane with open drains. More shock was in store when told that this peeled garlic was meant for big hotels of Delhi.

At the end of early dawn visit, instead of getting a quick answer to our original question we ended with tons of more questions. Do our famers deserve such markets in the age of internet? Were they and consolidators who buy their produce at source are getting a fair price? Do fruit and vegetables that provide heathy nutrition to all of us deserves to be traded in a place that is full of filth and stinks badly, thereby is completely unhygienic? Do the suppliers and buyers have to always burn mid night oil just to market the harvest of their hard labour or make their living? What is the social cost for their families? Can the traders who makes crores from this trade ever bring their families to such a dirty workplace? The list of questions that popped in our head was endless.

In nutshell, how valuable these markets are really in the serving the farmers, consumers and thousands of people associated with this trade?

Sure, we found an answer. In the age of Flipkart and Amazon, wholesales fruit and vegetable markets in India do need more technology. Thus was conceived, a b2b portal we are building for fruit and vegetable trade, specific to needs of developing economies like India.

But one big question emerged without which being answered it would be impossible to attempt building an business to business portal for Indian fruit and vegetable industry.
The big question was; Despite all THE INEFFICIENCIES WHY AZADPUR WORKS?

After some ‘blue-sky thinking’ and few brain storming sessions, besides obvious TINA factor (There is no alternative), we could filter out five broad aspects viz: Discovery, domain knowledge, liquidity, finance (read credit) and network effect that was all that make Azadpur work.  Surprisingly these factors also contribute to major ills at Azadpur. I can elaborate on pluses and minuses of these factors till cows come home but the truth was; “Everything was not rotten in the state of Denmark”.

We reasoned that if we can marry our technology strengths with our domain knowledge of F & V Trade to  build a tool that not only matches Azadpur’s enablers but also provide thousands of proven  benefits from technology integration than perhaps we can do our little bit in making a positive contribution to the industry.

Thus was born.


Two days back I participated in a big debate on impact of recently announced FDI in retail on cold chain infrastructure in India. A specialty magazine for the distribution and logistics scene in India had organized this debate at one of the chambers of commerce in India. Three gentlemen including a self-proclaimed cold chain specialist, an omnipresent agribusiness consultant, a retired CMD of a nationalized bank, apart from yours truly, debated on the subject which was moderated by the editor of the said magazine. Cameramen captured the hot and cold moments of the proceedings for posterity.

Like always since 1987, the year I entered the organized fruit and vegetable industry, the discussion on the subject invariably turns to proverbial 30-50% wastage of fruit and vegetables in India because of absence and / or suboptimal presence of cold chain industry in India. This wastage story is so sticky that it has now become ingrained in minds of every one who has anything to do with food and agriculture in India. No points for guessing – FDI in retail was the only panacea for this ill called f+v wastage as per our self-styled cold chain specialist and the agribusiness consultant. But this is not what I want to discuss here. Though I have always contested the 30-50% figures as physical wastage for the simple reason that everything (all qualities and grades) sells and have a market in India. Overall value loss – yes, agreed or product specific wastages – like onion stored in a traditional way –yes, agreed.

Yes, it was the onions with documented 30% plus wastage during storage that started a chain of thoughts while I started driving back to my office. What follows are my instincts derived through my sectoral experience of fresh produce wholesale and retail in India.

Let’s come back to the title of this post. ‘Wastage is good”… Just visualize and try to create a scenario on what would happen if one fine day in Year 1 the wastage in onions during storage in Maharashtra / Gujarat etc somehow (let’s say because of technology intervention) gets down to zero to from 30%. What could logically happen?

  • 30% additional onion would be available in the onion trade pool.
  • Additional 30%, a huge quantity indeed, could theoretically crash the wholesale prices.
  • The dipped prices could perhaps be lesser then the production cost of onion resulting in huge trading loss to farmers. More suicides perhaps! (I recalled what a Malegaon farmer told me when I did a onion research for NCAER / IDFC last year. His exact words were – No one in Cities has ever died of eating costly onions but low onion wholesale prices have definitely taken lives in Maharashtra).
  • Reduced storage capacity and unemployment in people associated with onion storage.
  • Extended storage could reduction of interstate movement of onion as geographical arbitrage would be missing which will also reduce the onion areas in States like Rajasthan from where onion starts arriving when onion in stores ends in Maharashtra.
  • Excessive onion dehydration because of excessive availability and resultant bubble as equilibrium of flakes market will be broken.

Till I reached my office I continued to weave plethora of scenarios around excess onion supply. You can perhaps add more. Eventually I could only reach to one conclusion that “Wastage is good” in case on onions in India. May be it is not the lack of capital, knowledge and resources that has prevented Indians into investing in Onion storage mechanisms that reduce wastage but have a potential to disturb the market mechanisms.

How I wish some econometric algorithm could churn up the most likely scenario in a situation of excessive onion in the market. Are you listening NCAER?

In a way the issue of more onion supply in not much different from excessive money supply. Excess money (current chairman of Federal reserve in USA would calls it quantitative easing – printing more money in bank’s printing presses at the most base level) can solve most of the issues at individual level but on a higher level, say a nation, more money can create as many complications not only for the nation but also global sometimes. There are many instances in history where too much money led to serious and damaging consequences, such a hyperinflation and assets bubble. The bubble in the property market in USA in 2008 that caused a butterfly effect across the World, was one such consequence of excessive money supply leading to lower interests in USA. Excessive onions are no different from more money supply.

I once again repeat – above said is based on my instincts. I have seen potato and onion rates crashing at the macro and micro level because of excessive supply in the wholesale markets. Many a times instincts derived through experience are more accurate than research. I remember reading somewhere that test methodologies called agile and rapid, has lot to do with decisions based on instincts made on the fly. These are very effective methodologies. I just see a huge pool of information on food wastage which we need to mine to create more thoughts for food, particularly food for the farmers and by the farmers.

What FPOs and farmers’ Coops can learn from Mandies? – 7 important learnings from a brief case study on Onion Trade in Maharashtra.


1.  Non availability of economic loads at farm location. – Availability of onion is widely scattered in Maharashtra. Land holding of onion growers is very less. Most of the farmers own less than 1.5 acre land and due to unfavorable weather conditions even one vehicle of 15 MT is not available with a single farmer field at a given time. Non-availability of full truck load of fresh onions at a farm has led to concentration of onion trading at market yards. Ready availability of desirable onion lots at a market yard in case of a shortfall to make a truck load, is another big plus point. Secondly, procurement cost of small lots in a scattered environment works out to be very steep. So market yards and traders help in pooling of produce and provide infrastructure for standardized sorting / grading at one central location.

2.  Marketing produce as per grade necessity of a particular market. Each market has its own grade requirement for Mahrashtra onions. While eastern / Bangladesh / Bhutan / Nepal markets prefer small sized onions, North and West Indian markets prefer bigger sized onions. Traders buy small lots from the market yards and pool the produce for sorting / grading at their pack houses and sends different grades to different markets all over India depending upon the grade requirements and price at a particular market. Onion trading involves huge risk and in depth knowledge of distant markets. Lack of trading expertise, market knowledge and risk bearing capacity has prevented most of growers or their organizations to make a significant dent in onion trading in Maharashtra. So, most of the trading is in private hands.

3.  Local mandies act as a reference market to small growers. Since Maharashtra onions have an almost year round pan Indian and export clientele, no market including Bangalore, is big enough to act as a price leader. Farmers generally take reference of the local mandies rates, while traders compare rates of all mandies, including major distant and export market and then decide where to send their produce of a particular grade. Significantly, most of the growers Coops handling onions are located in Market yards where their members bring produce for auction under supervision of local APMC’s. These Coops at best act as a commission agent operating from market yards. In case they have tie ups with retail organizations like

Safal, Nature’s Basket, Bigbasket etc, they buy produce from market yards from arrivals of their own members or from arrivals at other commission agents. However, their in ability to market rejections / commercial grades through organizations like us (because of reason # 2) or at distant markets has resulted in their losses and eventual discontinuation of supplies. Due to this reason, retailers end up with relying on its onion supplies from Maharashtra traders since so many years.

4.  Non sustainability of exclusive onion Coops / Associations / Producer Companies. Because of various agro-climatic reasons, onion belt in Mahrashtra is actually a scattered chunk of large number of smaller sub belts, crisscrossing a distance of almost 1000 Kms plus. It starts with Karnataka border on one side and continues till MP / Gujarat border on the other end. It almost covers all western Maharashtra and Marathwada region. For a particular distant market, for example Bangalore, most of these sub belts are active for a short period as far as fresh onion flows are concerned. Active period in some cases is only a fortnight or a month. Because of this reason, exclusive onion coops / associations have not been successful as short period of business can’t sustain their year long expenses. Many coops were organized for the purpose of purchasing / selling onions but over a period these coops have taken other businesses (credit and inputs) and onion trade because of above said reasons have been relegated to the back ground leaving field open only to private traders. In my view, multi F+V items would have succeeded as unlike onions, revenue could be expected to flow round the year. (I am anticipating sustainability problem for the Associations that few retailers or processors has formed or may form in future over the years. Selling other F & V items like tomatoes, grapes, fresh vegetables etc. through Bombay / Delhi platform shall definitely help.

5.  Concentration of large storage capacities with traders. For historical and market reasons, large storage capacities for onions has remained with private traders. State Govt. and Central agencies have promoted small sized storage structures at farms which are not conducive to standardized sorting / grading at central locations by trained labor. Usually growers do sorting / grading on their own, using family and farm hands and are prone not only to errors but smaller throughput. Our recent experience of supervising sorting / grading at many locations simultaneously has not gone well from logistics point of view. Traders can buy the whole stored lots and provide sorted / graded produce to us as per our requirement at their risk and cost. We are trying to pass this role to Coops in addition to facilitating storage capacity build up at Central locations. Finance for establishing such facilities, working capital and risk bearing capacity of Coops / FPOs will have to be taken care off. (A separate post in this regard is being put up in coming weeks). Till then we may have to rely on traders or live with short supplies and / or poor quality produce.

6Non availability of sorting / grading facilities with Co-Ops / FPOs at farm locations. Generally traders purchase un-graded produce from Mandies, then they do sorting and grading. Efforts are being made to establish sorting grading centers with some identified Coops in local market yards but it will take some time. So to ensure quality and standard packing, material has to be arranged from the traders.

7Non availability of sale proceed in time – Can’t help but include this reason though it is very much under both organizations’ control. Major reason for antagonizing farmers or their organizations in not supplying their onion to retail organizations / processors is that they are not being conveyed sale proceeds sometimes even after 10-15 days. At Mandies they get the sale proceed (even lot wise) on the same day. In such a situation even traders will not be willing to give their produce for sale if we do not convey their sale proceed immediately on reaching of their vehicles at retailers’ end.

Looking at the situation I think it is pertinent that there are organizations who should provide advisory and service to farmers organizations in countries like India with small holdings to help them bridge these few bridgeable gaps.