EatLocal

Owned by Ashu Sikri (Unlicensed)
Feb 22, 2022
6 min read

Rikin call notes from Aug 2020

Just spoke with EatLocal's (https://eatlocal.world/ ) Vijay..


They share much of the same values for boosting farmer sales and taking a hands-off, tech-first SaaS approach.  I didn't see the product demo but he compared it to being similar to Open Food Network (OFN) and Barn 2 Door.  Their main inspiration was CSAs in the US and wanting to create software for them (i.e., they have global expansion interests).  They've essentially largely focused on the CRM part of the puzzle (though want to get into the supply-side of coordinating between individual farmers with the farmer organization too).  They intentionally don't have a marketplace/discoverability feature cause they want to avoid farmers being pitted against one another (though they anticipate doing some cross-pollination between different farmers' apps).  

It didn't seem like they are supporting farmers/FPOs on developing a new customer acquisition strategy/channel though.  They're instead creating tools for order, payment, and customer management for whatever sales and marketing channel they already have.. That seems similar for OFN and Barn 2 Door too?  That is, they're building software for the CSA, retailer, ecommerce, and farmer market channels that the farmers have already figured working with and that EatLocal effectively attempts to digitize, right?

Its interesting that EatLocal's focus is helping farmers create invite-only apps where the expectation is that farmers will send it out to those consumers who already know them to make a purchase.  That actually makes sense for their current use-case with the ~30 farmers that the NGO, Navadarshanam (http://navadarshanam.org/food-initiative/), which Dr. Nadagaouda (and maybe Ashok?) may know in Hosur.  EatLocal's plan is to scale with similar NGO-supported farmer groups/SHGs, and they've created videos for them to get on-board with their SaaS tools.  Everything from quality control to transport logistics to customer acquisition seems to be on the NGOs; not EatLocal.  As an aside, I stayed at their campus back in 2008; its quite similar (and close in proximity) to the one that we first started with, GREEN Foundation (now part of Vrutti). 

He said Navadarshanam has 190+ SKUs and they use EatLocal to sell to their existing base of 300 customers in Bangalore.  (I've actually been on Navadarshanam's mailing list.)  Apparently, the digitization has helped to improve Navadarshanam ad-hoc's customer coordination (which used to be in Excel sheets) -- which in addition to Covid -- has helped to boost avg order size from 530 to 972 and did Rs. 26 lakhs last FY and already Rs. 16 lakh since April.  The farmers are now selling more value-added products (e.g., gunpowder) where they earn more margin.  He sees their platform as something that could be extended for folks to sell other products like arts and handicraft.  Apparently, there is a bunch that they've learned in how to manage orders where consumers or producers need to make last-minute adjustments (e.g., when a particular type of honey runs out, a consumer wants to add more items just before delivery, etc).  They signed a 10 year agreement with Navadarshanam to get a % of sales that they increase, but it seems EatLocal is struggling to be financially sustainable which is their first priority and then to be able to scale which they also want to do.

Vijay is keen to partner with us in any capacity because of this.  He said they could give us their software and that they'd be fine with us rebranding it.  If we don't want to partner with the EatLocal company, he and his co-founder, Radhika, would also be keen to work with us (maybe as consultants?).  

Bottom-line: EatLocal seems like an OFN equivalent, and similar to the earlier analogy of software groups who create custom software for NGOs to manage their SHG microfinance transactions.  Vijay thinks there's a lot of NGOs/FPOs who could use such a SaaS tool out of the box, but like our video approach in which we help train folks on how to produce & screen videos and also have specific guidance on using pico projectors & featuring local farmers, the way that we're thinking about market access is different.  We're between the Shopify/EatLocal-type of fully customizable storefront in attempting to create a specific type of new customer acquisition channel (i.e., team-buy over WhatsApp among proximate markets) while trying to avoid becoming a traditional BigBasket/Amazon aggregator ourselves.  That in between space seems to be where Farmizen & PDD also live -- perhaps, they're more towards being an aggregator since they also have a marketplace/discoverability function and they handle customer service issues directly themselves (while we're not planning to do much of both at least to begin with)?  Perhaps we can circle back on engaging with EatLocal once we've got our experiment off the ground to see what/if might make sense to do with them?

 

I do wonder what/if role Beckn (https://beckn.org/ ) could play into making that marketplace a level-er playing field and not just one biased to whichever farmer/FPOs pay more to give their ads/listings greater visibility; how do they handle that?

AS Call Notes from July 2020

They currently help farmers collectives (not FPOs but informally organized farmers groups) sell through 4 channels: 

  • CSA/subscription model targeting housing societies: 100-200 subscribers within each society. Mostly perishables w some staples as well.

  • Retailers: this is an offtake channel for less perishables value-add products produced on farm: papad, pickles, chutney. maybe some fruits (all unbranded)

  • Ecommerce: value add farm products. not branded 

  • In person farmers market: Not doing this yet but aspirational

Channel (1) is the main focus, consumers within 150km of the producers are invited to place orders with a local farming collective. Its a CSA type model where some portion of the basket is fixed and a portion is custom (their view is that Indian consumers wont go for pure CSA). Each society is linked with a single farm which builds a tight relationship between the consumer community and producers and ensures the producers are not commoditized. Producer group defines the catalog and delivery dates.     

On the consumer side, there is a buyer coordinator who is a volunteer that receive the farm products (which are delivered by the producer collective) and sets up an easy way for the housing society members to pickup

They launched in August 2019 and I think most of their customer base is Chennai but can confirm tomorrow. The first farmer collective they worked with is based in Hosur. Vijay is based in BLR and Radhika in Chennai. 

So far they have build what a web interface for consumers to connect with local producers and place orders (what we will see tomorrow) and they want to extend into tools that help with supply chain mgmt (make it easy for customers to customize one of the elements in a basket), logistics (better visibility to customers on delivery status), crop planning. 

Since their launch last August, EatLocal has been focused on building up a single producer group of ~30 farmers in Hosur which is servicing a couple hundred customers, primarily in Bangalore.  

Each customer has a login to a website branded for that specific farmer collective (remember, producers invite customers to join) and places orders via a pretty standard e-commerce interface which features products just from the featured farmer group. Orders are finalized by Fri, packed Saturday and deliveries are every Sunday; the FPC has 3 trucks that go into BLR for drop off at various points where a local community coordinator / volunteer receives and organizes so its easy for others to pick up. On Monday, there is a reconciliation/crediting process where refunds and any adjustments are accounted for; either things get spoiled in transit or customers request changes between the order finalization and delivery date. 

Their perspective is that the total grocery basket is ~10k per month per household and ambition is for the producer group to capture ~40-50% share of wallet. The inventory of the particular producer group they showed was really expansive and covered all the staples, processed foods, etc. Average order size is now +900 per order and a big driver for that is the vegetable boxes which start at ~400 rupees. Customers seem to prefer buying branded grocery items so that is relatively smaller for them.  

I found the interface really heavy handed which may be needed given customers can customize individual items of even 200 grams within their veg basket (eg, my family doesn't want garlic so replace w some smaller weight of cilantro). Then, the producers need to deal with this level of detail on the fulfillment side so they have super detailed reports meant to be used in the delivery centers specifying exactly what to pack in every box. Their view is that customers need this level of customization and producers need to support this is their goal is to become the primary source of products for the household. 

 

They didn't share an exact customer or order number but I estimate its about 150 orders per month did mention referrals as the main acquisition channel. 

 

EL has built a number of marketing templates for specific crops detailing what is seasonal, native / indigenous, recipes that use that specific crop.  

 

Have not figured out an economic model yet; evaluating between a 2% transaction fee or a flat 2k per month SaaS model (which I think implies at least 1-2 lakh in monthly sales)