SOCIAL SECTOR INTERNSHIP REPORT

Operationalization of Monthly Provisions Pack and Mapping of

farmer producer organizations

ABY Farmers LLP

Industry Guide: Ms. Suhasini Prakash (Director of Operations)

Submitted in the partial fulfillment of the Bachelor of Management Studies (BMS) of the
School of Management and Entrepreneurship, Shiv Nadar University.

Submitted to: Prof. Sudarshan Naidu

Date of Submission: 13th October 2019

Neha Reddy Kuthuru

1710110232

School of Management and Entrepreneurship

Shiv Nadar University

Page 1 of 20
 TABLE OF CONTENTS

S.No. Topic Page Number

1. Acknowledgements 3

2. Executive Summary 4

3. List of Abbreviations 5

4. Introduction 6

5. Methodology 8

6. Analysis 10

7. Conclusion 14

8. Annexures 16

9. References 17

Page 2 of 20
 ACKNOWLEDGEMENT

I’d like to express my sincere gratitude to ABY Farmers LLP for providing me with an
opportunity to work on kickstarting their latest venture – “The Monthly Provisions Pack.” It
has truly been an enriching learning experience that has helped me grow both personally and
professionally. This internship has presented me with an opportunity to work in a start-up
environment that was characterized by a very vibrant work culture. Unlike huge corporations,
each member is at the forefront of organization, driving and coordinating several activities thus
getting hands on experience.
I would also like to take this opportunity to thank my mentor, Ms. Suhasini Prakash, Director
of Operations, for the professional guidance, encouragement and valuable inputs throughout.
I’m also extremely grateful for having gotten an opportunity to work with Mr. Satya Dev, CEO,
ABY Farmers LLP. I thank him for the absolute freedom that was given to pursue the project
of my interest and consistent support throughout.
I’d also like to thank each and everyone in the organisation who made me feel welcomed and
assisted me during the entire process.
I would not have been able to take up this opportunity without the support and guidance of
Prof. Sudarshan Naidu, Assistant Professor of Marketing, Shiv Nadar University. He has been
of incredible help to find the project of my interest and has constantly assisted me throughout
the entire process.

Also, my sincere appreciation goes to my alma mater, Shiv Nadar University for always
encouraging me to pursue unique development opportunities.

Page 3 of 20
 EXECUTIVE SUMMARY
As a part of the two-month social sector internship, I had the opportunity to work with ABY
Farmers LLP, closely working on the marketing of agricultural produce. The key issues of the
agricultural marketing in India are lack of infrastructure for storage, uncertainty of market price
realisation (lack of market intelligence), lack of institutional finance for value addition at
farmers level. All these contribute to less income to farmers in the whole agriculture value
chain in the country.

There is a need to enable the farmers/farmer owned organisations to get into processing of
agriculture commodities and ensure that they get fair share in the total agriculture value chain
pie in the country. ABY Farmers LLP has been established for achieving this objective.

To help farmers directly and indirectly, the organisation has to constantly make efforts to
develop new product offerings that would increase their sales which would translate as an
increased income for the farmers. To achieve this objective, the idea for Monthly Provisions
Pack was proposed.

During the course of the project, several techniques were undertaken to find the right market
for the newly launched product and formulate strategies to reach out to the market. Mapping
of farmer producer organisations was done to identify farmers/FPO’s for the organisation to
collaborate with. On interacting with a few farmers, I have gotten better insights into the
challenges of organic farming and the FPO landscape in the country.

Buying behaviour and purchase patterns of the consumers were analysed with the help of
personal interviews and the insights that were thus drawn were used to tailor the marketing
strategies to appeal to the target audience the most.

This report also highlights the various other operational modalities and supply chain
management activities that were undertaken during the course of the internship like developing
inventory management and vendor management systems, generating barcodes etc.

Page 4 of 20
 LIST OF ABBREVIATIONS

LLP Limited liability partnership

FOMO Farmer Owned and Managed Organizations

FPO Farmer producer organization

NABARD National Bank for Agriculture and Rural Development

NIRD National Insititute of Rural Development

KPI Key Performance Indicator

NPOP National Program for Organic Production

NOP National Organic Program

FSSAI Food Standards and Safety Authority of India

NPOF National Project on Organic Farming

RKVY Rashtriya Krishi Vikas Yojana

Page 5 of 20
 INTRODUCTION

Introduction to the organization

ABY Farmers LLP, a marketing social enterprise for Farmers and Farmer organisations, was
established in 2017. ABY Farmers is an abbreviation for Agri Business Yuva Farmers that
highlights the organisation’s mission to provide the best market price to the farmers while
providing the best quality commodities to their consumers. They also make efforts to encourage
the youth to take up agriculture as their preferred livelihood option by facilitating them to get
better returns on their produce.

They essentially follow a 2-step business model. Firstly, procurement of commodities is done
from the farmers and farmer organisations at the village level by paying them the prevailing
market price at the village there by eliminating the expenses of farmers related to the marketing
of their produce. The commodities are then processed into value-added products and marketed
under registered brands (Green Royals, Milees, Quick Make). Secondly, at the year-end, ABY
pays 50% of the profit to the Farmers as price difference.

They are currently associated with 15 FPO’s (Farmer Producer Organisations) in Telangana,
Andhra Pradesh, Karnataka and Maharashtra. By 2025 they aim to serve at least 1 lakh active
farmers in the country by partnering with 100 Farmer Owned and Managed Organizations
(FOMOs).

Introduction to the project

ABY Farmers has a diverse product portfolio with around 60-70 products ranging from pulses,
cereals, millets and nuts to cold pressed oils, honey, fruits and vegetables. They have also
obtained the NPOP (National Program for Organic Production) and NOP (National Organic
Program) organic certification giving them access to sell organic products to consumers.

The existing model of the organisation deals with individual product sales. Despite having a
wide variety of products, it becomes extremely difficult to convince the new/potential
consumers to try out products in larger quantities when they have been just introduced to the
brand. To attract new consumers and ensure their long term association, the idea of Monthly
Provisions Pack and the option for a trial pack was introduced.

Page 6 of 20
This pack would be launched in two sizes – Trial Pack and Standard Pack. Both of these pack
would contain 28 items that have been curated taking into consideration the majority
consumption of the households.
The main aim of the trial pack is to appeal and attract the potential customers who have not
made a purchase yet and thus increasing the brand awareness. This would give them an
opportunity to try the products, assess the quality and make future purchase decisions. The
pricing of the trial pack is also strategically done at Rs. 650 which is 28% – 40% lower than
the price of other organic brands in the market.
The standard pack is majorly for the customers who already have a fair idea about the quality
of the products thus willing to purchase larger quantities of the same 28 items. To accommodate
for the requests by consumers, there is also an option for customisation available.
The entire product development plan of action had activities related to inventory forecast,
packaging design, communication material etc.
Objectives of the project
 Devise an exhaustive plan of action and launch strategy for monthly provision pack
 Develop a go-to marketing strategy for the aforementioned pack.
 Integration of the product into the existing systems and developing new systems
wherever applicable.
 Gain insights from the target market and suggest a plan of action for the future
 Identify the deficit commodities and explore options for collaboration with farmer
producer organizations
Scope of the project
The pilot test for the product was launched in Hyderabad since the organization has already
established a niche market for themselves in the city. The project would be expanded to reach
out to consumers in other metro cities like Mumbai, Bengaluru and Delhi depending on the
kind of response received by the consumers in Hyderabad.
This project is primarily set to target the customer category who are looking for healthy food
options but are price conscious as well. The pack is also designed in a way that the customer
has absolute flexibility to design their own packs according to their eating habits and budget.
To attract the new customers and to give an essence of the quality of products, a trial pack
variant has also been designed which costs Rs. 650 for 28 items.
This project was seen as a huge potential for the organization to increase its customer base. It
was primarily targeted towards households. The short-term target was to again 10 customers

Page 7 of 20
each from 50 different apartments, resulting in 500 customers and a turnover of Rs. 1.2 crores.
In the long term they aim to attract 4000 customers, resulting in a turnover of Rs. 8 crores.

METHODOLOGY
 Observation research
This method was primarily undertaken to assess the consumer’s buying behavior and what
essentially drives their purchase decision. The organization had such a set up where the
customer could make a purchase from the location of office itself, therefore I invariably
interacted and observed the actions of customers to understand the attributes/parameters that
play a role in the entire purchase process. 30 customers were closely observed in accordance
with a checklist to analyze their behavior on various dimensions.
Observation research checklist –
o Are they an existing or new customer?
o How have they found out about the brand and its products?
o What demographic (age, gender, income group) do they belong to?
o How aware are the customers and have they made a purchase decision before visiting
the store?
o What is their point of sale involvement in terms of the packaging, price etc.
 Personal interviews
Personal interviews were taken of the existing and potential customers to get deeper insights
into the demographics (age, gender, income group), their perceptions of the products,
willingness to buy etc and to tailor the marketing strategies accordingly to get attract the
majority of target audience. 11 customers were interviewed, out of which 4 were male and 7
were female. All of them belonged to middle class families with age lying in the range of 35-
45. These were the people who carried out majority of the grocery shopping for their
households. All the interviews lasted about 15-20 minutes post their purchase since they were
also in the middle of a purchase. Telephonic interviews with the customers could not be
undertaken due to the absence of relevant customer data.
The discussion happened in a rather unstructured manner, but a set of few questions asked
during the interview were –
1. Why do you choose to consume organic farm produce?
2. How often do you purchase groceries?
3. What is your household’s monthly grocery expenditure?

Page 8 of 20
 4. What is your most preferred channel of purchase for groceries?
5. Are you completely aware of the certifications with respect to the organic products?

 Competitor analysis
This was undertaken to understand the pricing, strengths and weaknesses of the competitors so
that the organisation can tailor their offering to attract the customers. Data about competitors’
offerings was gathered by visiting three (Two Ratnadeep and One D-Mart) grocery stores,
talking to customers (13) and through secondary research online through the company
websites. Price information was collected for the major competitors like 24 letter mantra1,
Organic Tattva2, Terra Greens3 and compared it against the prices of the organisation. This
information was critical to include in the communication material and formulate a unique
selling proposition that’d give them a competitive advantage and would appeal to the
consumers.
 Secondary Research
Several articles, journals and reports (all cited at the end of this report) were studied for
additional information during the course of the project.

1
https://www.24mantra.com/
2
http://www.organictattva.com/
3
http://www.terragreensorganic.com/

Page 9 of 20
 RESULTS/ANALYSIS

1) Product Launch Plan of Action

One of my primary responsibilities during the course of the internship was to develop an
exhaustive plan of action for the product launch across all verticals like product development,
designing support systems and working on the post launch initiatives. I was also responsible to
coordinate and manage all the activities related to this particular product across all the
departments.

The following were the activities undertaken for the product launch-
 Inventory Forecast – A short term inventory forecast was done by using a combination
of quantitative (historical sales) and qualitative (demand based) methods to assess the
inventory/stock requirements for the implementation of this product launch. This was
evaluated against the existing stock to determine the commodities, pouches, labels etc
that have to be procured and in their relevant quantities.
 Identifying procurement sources for deficit items: After a thorough research with
the existing and potential customers, a list of 28 items (attached in Annexure - 4) was
made which represented the commodities/groceries that were used by maximum (85%)
number of households. This list also consisted of new items that weren’t in the
inventory of the organization, thus focusing on the need to find new procurement
sources for the same. Extensive research was done online and through sources like
NIRD to find the details of the farmers/farmer producer organizations that deal with
organic produce. The relevant FPO’s were contacted and connected to the concerned
person in the organization.
 Packaging and Labelling – Packaging of the box is extremely important because it
also serves as a marketing tool which can be used to attract the customers. It was
designed considering all the necessary information about the products that a consumer
would need. Bright colours were used to make to more attractive to the consumers.
Since we want to achieve long term association with the consumers, the first impression
they get from the product should be convincing enough to make repurchase decisions.
All the relevant nutritional information was duly provided with details regarding the
barcodes as well as the FSSAI License number. The packaging of the product was also
designed in such a way that there was extensive focus on the shelf life of the product.

Page 10 of 20
  Developing Inventory and vendor systems: I had undertaken several activities related
to supply chain management during the course of the project. Excel was used to develop
sheets that would constantly keep a track of the stock in, stock out, lead time etc.
Systems were also designed to keep a track of the vendors with the information like
credit balance, commodities purchased etc.
Attached below are the snapshots of the inventory systems that I had made to keep a track on
the inventory that would also assist in the inventory audit.

Figure 1 : Inventory Management & Control

Figure 2 : Vendor Management

 Preparing budgets – For procurement of commodities through various external

sources, comprehensive budgets were prepared which were further sent for approval.
 Barcodes – Information about all the products (like shelf life, HSN Code, Product
Description, MRP) was collected for various weights and the respective barcodes were
generated through GS1 barcode services.

Page 11 of 20
 Communication material – It was critical to understand the target audience (mainly
middle-class consumers who show interest towards organic products but are sensitive
to the high prices) and prepare communication material that’d appeal the most to them.
It entailed information about all the offerings. The information about the organisation’s
mission and partner information was mentioned for the reference of any interested
parties. Attached below is the final pamphlet design.

Contents of the provision box

Packaging of the box

Design of the communication material

Page 12 of 20
 2) SWOT Analysis

Strengths Weaknesses

 Produce with varied quality

 Access to a network of farmers/FPOs
 Low Margin products
 Network with value chain operators i.e.
 Unavailability of funds for working
processing units
capital
 Price advantage over competing brands
 Relatively high storage and
 Authorized certifications
transportation costs
 Network with existing market players
 Poor quality control measures

Opportunities Threats

 Supportive policies by the government  Risks associated with price

 Creating processing clusters by FPC’s fluctuations
 Increase in demand for organic food  Increase in operational costs
products by the consumers  Issues regarding certifications

After conducting the SWOT Analysis, it was quite evident that the strengths of the company
lie in its very exhaustive network of FPOs and other relevant market players. Low prices
characterized by high quality products also act as one of their primary strengths. The various
initiatives by the government to promote the FPO ecosystem in the country is seen as one of
the major areas of opportunities for the company. With the wide section of the consumer market
showing inclination towards healthier food options, the demand for organic food has
subsequently increased thus providing a substantial opportunity for the company. The main
weakness of the organization lies in the fact that there are no sufficient funds to manage the
increasing operational costs. The low margins and varied quality of products due to varied
procurement sources is also one of the weaknesses. Absence of stringent systems for stock
audit and quality control is also seen as a \ huge flaw in the company’s model. The fluctuating
prices and increase in operational costs pose a serious threat to the organization.

Page 13 of 20
 3) Key Insights gathered from the customers

- Seeking organic products but are looking for affordable options

With the rising awareness about the benefits of consuming organic produce, the consumers are
starting to make a shift in their buying behavior and are seeking more natural and organically
produced groceries. But the consumers still continue to remain extremely price sensitive and
are looking for more affordable options to meet their organic grocery needs.
- Minimal accessibility to these organic products
Since the existing players cater to a very niche set of audience, their products are unavailable
to most of the rising target market. Thus, the consumers seeking and looking for organic
products do not end up making a purchase due to unavailability of these products in their
vicinity.
- Lack of trust regarding the certifications
It was also observed that the consumers are often really sceptical about the brands that promise
certification. Thus, it becomes extremely crucial to gain their trust by delivering what the brand
promises especially in terms of the quality of the product.
- Groceries often bought as a basket of goods
After interacting with the customers, it was evident that majority of them preferred to make
their grocery purchase at the beginning of the month and often bought the same items very
month with slight variations. Thus, a possibility of getting their monthly requirements at once
is an idea that seems to be appealing to the target audience.

4) Go-To Market Strategy

A brief Go-To market strategy was prepared on the basis of the information gathered from
the target audience to formulate and define a unique selling proposition that would give the
product a competitive advantage in the market and satisfy the consumer expectations.
Market analysis:
o Consumer needs and expectations: From the insights gathered it was clear that the
target audience group was seeking organic products but at an affordable price range.
They also expect to attain high satisfaction in terms of the quality of the product.
o Analysis of Competition: A detailed competitor analysis was done by identifying the
relevant competitors – both existing and potential ones. The identified ones were either
companies dealing with organic produce on a wide scale in Hyderabad or the ones who

Page 14 of 20
 have a business model similar to the one of ABY Farmers. The primary competitors
shortlisted for the analysis were 24 Letter Mantra, Organic Tattva and Terra Greens
since these are the ones with the largest market share when it came to organic product
sales in Hyderabad. Other secondary or indirect competitors like Ratnadeep and D-Mart
were considered since the majority of the customer base still considered their products
occasionally. I have personally visited various super markets to understand the various
strategies with respect to visual merchandising, pricing etc being implemented by these
companies. The pricing data from the competitors was collected and compared to the
similar commodities of the Organisation. On analysis, it was found that the prices of
the company (ABY Farmers) were 28% - 40% lower than that of the other competing
brands. Apart from the pricing strategies, the value propositions and marketing
strategies of the competitors were also analysed and reported.

STP Analysis:
o Segmentation
By demographic, the majority of the customers are often found to be women who often make
the grocery purchases for their house. Having said that, men are also involved in the buying
process. These segments typically belong to a middle-income group of age in the range of 30
- 45. They are also found to be inclined towards living a better lifestyle, thus opting for organic
and natural produce.
o Target Market
The target market seems to mainly be composed of middle-aged men and women who often
make the grocery purchase for the households. Retail stores (kirana stores) and organic stores
should also be targeted. People who are health conscious and desire affordable organic food
should mainly be targeted.
o Positioning
ABY farmers has positioned itself as an organization that “Always Bring you the Best”. Thus,
it has to strength its positioning by conveying the idea of a healthy lifestyle but at an affordable
price. Value for money, accessibility can be positioned as one of the unique selling
propositions.

Promotion and Distribution:

Word of mouth seemed to be one of the best ways through which consumers get to know about
the new products and offerings in this particular market. Thus, steps have to be taken to
Page 15 of 20
incentivize the exiting customers to promote the brand in their circles. Whatsapp is also being
extensively used to reach out to the target audience which is rather effective because all the
information needed by the customer was made available to them at the touch of a finger. Since
the primary target audience is middle class households, promotion through the use of pamphlets
can be done. To increase the accessibility to the products to the target audience, stalls could be
set up in apartment complexes, gated communities etc.

5) Mapping of Farmer Producer Organisations

6) Marketing metrics and KPIs

After analyzing the various processes of the organization, I assisted in developing certain
marketing metrics and key performance indicators that are relevant to the organization like
customer acquisition cost, customer lifetime value, leads generated etc.
Customer acquisition cost here is defined the cost incurred in convincing the customer to make
a purchase. This would include all the marketing and sales promotion expenditure and would
take into consideration the number of new customers gained.
Customer lifetime value is how valuable the customer is to the company. This takes into
consideration the purchases made by each customer during their association with the company.

CONCLUSION AND THE WAY FORWARD

Through the course of the entire project, I had a holistic exposure to various aspects of business
be it operational modalities like barcodes or marketing activities like STP analysis or designing
communication material. Through all the different activities undertaken I got to learn a new
skill while applying the theoretical knowledge in a practical scenario. By making detailed plans
of action, I also got to understand the various tasks involved in implementation of a product
launch strategy. While researching for various FPOs, I got to understand the entire landscape
of FPOs in the country. It was also a great experience to interact with customers and understand
their perceptions about the products and learn more about the different elements in a retail
business.
After working on various domains of the organisation, I was asked to suggest few strategies
and the following are the ones that could possibly be implemented -

Page 16 of 20
 Identify a diverse set of customer sample (existing and potential) and conduct in-
depth market research
 Map the localities that do not have any listed organic stores and evaluate the
feasibility of setting up a stall there or visit apartments. This way we might appeal to
consumers who are interested but don’t have access to any organic stores in their
vicinity.
 Customers could be made more interested in our products by sharing the health benefits
or the way these products could be used (recipes) etc. This could be done on various
social media platforms like Facebook, Instagram etc.
 The responsiveness of e-mail marketing can be quite low but it would be worth giving
it a try. Attractive mailers with all the relevant content could possibly generate few
leads.
 The popularity of Instagram can be leveraged to reach out to a different set of target
audience that is looking for affordable organic commodities.
 SEO services could be considered to generate more traffic to the website and online
store.
 The concept of referral discounts could be implemented which would persuade the
existing customers to recommend our products to their family and friends.
 Partner with media houses like Your Story, LBB, Better India to convey the business
model and mission to a larger audience, out of which a few might be interested in our
products.
 After sale services like taking constant feedback and consistent communication of
product information have to be implemented so that we don’t lose out on the existing
customers.
 A database of impact investors could be made and a carefully curated e-mails could be
sent. The conversion rate could be very low but it might be worth trying.
 Customer reviews seem to have an impact on purchase decisions of other customers so
a section could be added on the website with customer testimonials and their experience
with ABY.

Page 17 of 20
 ANNEXURE – 1

List of products in the monthly provisions pack

Trial Pack Standard Pack

S.No List of Provisions (gm/ml) Weight (kg/L)
1 Semi Polish Rice 500 5
2 Siri Dhanyalu (5 Millets) Combo Pack (2.5 Kg) 1000 2.5
3 Ragi Flour 200 0.5
4 Jowar Flour 200 0.5
5 Rice Flour 200 0.5
6 Wheat Flour 200 1
7 Wheat Ravva 200 0.5
8 Idly Ravva 200 0.5
9 Redgram Dal 200 0.5
10 Greengram Dal 200 0.25
11 Blackgram Whole (White) 200 0.5

12 Bengalgram Dal 200 0.25

13 Bengalgram Dal (Roasted) 200 0.25

14 Groundnut (Peanuts) 200 0.5

15 Groundnut Oil (Cold Pressed) 200 1
16 Rock Salt 50 0.10
17 Jaggery Block 200 0.5
18 Jaggery Powder 100 0.25
19 Wild Forest Honey 100 0.25
20 Tamarind (Deseeded) 100 0.25
21 Red Chili (Dry) 50 0.20
22 Red Chili Powder 50 0.20
23 Turmeric Powder 50 0.10
24 Cashew Whole 50 0.10

Page 18 of 20
 ANNEXURE – 2
A section of the FPO database

S.No State Name of the FPO

1 Maharashtra Naisargic sheti producer company private ltd
2 Maharashtra Ajinkyatara satvik organic farmer producer co ltd
3 Maharashtra Harit kranti sendriya sheti gat
4 Maharashtra Krushikanya sendriya shetkari bachat gat
5 Maharashtra Shri ganesh sendriy sheti vikas gat
6 Maharashtra Rahimatpur panchakroshi oraganic farmers group
7 Maharashtra Hemantgiri krushi gat
8 Maharashtra Salubris pure organic
9 Maharashtra Cooperative of organic farmers of india (cofi)
10 Maharashtra Rayreshwar organic farming group
11 Maharashtra Sahyadri farmers producer co ltd
12 Maharashtra Dindori pranit farmer producer company
13 Maharashtra Parivartan organic farmers’ producer company limited
14 Maharashtra Lokhit organic farmers producer company limited
15 Maharashtra Farmersfriend organics producer company limited
16 Maharashtra Shasvath organic farmers producer company limited
17 Maharashtra Small farmers organic producer company limited
18 Maharashtra Natural organic farm producer company limited
19 Maharashtra Avani organic producer company limited
20 Maharashtra Mahaorganic farmers producer company limited
21 Maharashtra Natural organic fruits and vegetables producer company limited
22 Maharashtra Bloom field organic producer company limited
23 Maharashtra Spoorthy organic farmers producer company limited
24 Maharashtra Pimpalpaan organic farmers producer company limited
25 Maharashtra Aayur organics producer company limited
26 Telangana Sahaja Aharam Producer Company Ltd
27 Telangana Yenabavi Organic Farmers’ Mutually Aided Cooperative Society Ltd
28 Telangana Bommalaramaram Organic Farmers Mutually Aided Cooperative Society
Ltd
29 Tamil Nadu Pudukkottai Organic Farmers Producer Company Limited

30 Karnataka Avishkar NGO

31 Karnataka Kolar Organic Farmer Producer Company Ltd
32 Uttarakand Jivamrit Organic Farmer Producer Ltd

Page 19 of 20
 REFERENCES

 https://www.24mantra.com/

 http://www.organictattva.com/

 http://www.terragreensorganic.com/

Page 20 of 20