It was a healthy concept- selling natural vegetables, with no harmful chemical fertilizers or pesticides. In today’s world, where everyone was looking at living healthy and eating healthy, natural products were exactly what the doctor ordered.
If health was on everyone’s mind, Danish Kakkar and Ashish Sharma, the co-founders of IRIL Farms, decided to create a business out of natural farm products. Now in case you’ve studied the subject you would know that natural vegetables are not easily available. For one thing, the water in several parts of the country, including Delhi, is contaminated, therefore you cannot really grow natural stuff there. Secondly, once you switch from chemical fertilizer-based farming to natural farming, it takes three years to get rid of the effects of the fertilizer that the land has already soaked up. Till then you cannot get genuine natural produce. And finally, there is the impact of neighbourhood farms as well. Remember, if the adjoining farm is using chemical fertilizers, the water from there will seep into your farm as well.
In other words, our young founders needed to identify clusters of farms spread over large areas, where the majority of farmers had been following natural methods for the past few years, which they did find in the serene hills of Himachal, around the town of Solan. So they set up a collection centre in Solan. Farmers growing natural vegetables would land up at this centre, and Iril Farms would buy this produce off them – giving them a hefty 20-30% premium for the natural tag. The produce would then be brought to their main warehouse in Delhi, where it would be sorted, cleaned, and finally packaged under the brand Iril Fresh and then these packs would be taken to retail outlets in Delhi and Gurgaon, where happy customers would buy them.
That was the plan. And everything was going just perfectly, till of course, Covid-19 hit them. The lockdown severely impacted transport from Himachal to Delhi, which means the supply chain from the farms to their warehouse in Delhi snapped and they had no produce to sell.
Now at this stage you might imagine that our friends threw up their hands, liberally cursed their fate, stopped all activity and waited for the virus to disappear. This is what many founders did during this recent lockdown, but then what would they do with their employees? Would they ask them to leave? And would they be able to get them back once the situation stabilized? And if they hung on to the employees, how would they pay their salaries – with no revenues in sight?
Fortunately, these two young men were determined to fight it out. And what they did was quite fascinating. They realized that the lockdown had messed up their supply chain from Himachal to Delhi, but it had also messed up the supply chain for farmers in and around Delhi. Not natural farmers – even the regular kind that used fertilizers and pesticides. These farmers used to sell their produce to their local Mandis, but now even that had become extremely tough. And that’s when Kakkar had a brainwave. Why not pick up vegetables from these farmers and supply them to retail outlets in Delhi and Gurgaon? The farmers would be happy – after all, they were getting someone to buy their produce at source. And the retail outlets were equally happy, because they were getting fresh vegetables every day – and that too, in extremely uncertain times.
Of course, there was one very important issue. They could not use the Iril Fresh brand. After all, this brand was synonymous with natural produce, and what they were selling during the crisis was definitely not natural. So they didn’t use the brand, but the key thing is that they survived the crisis. They were able to pay salaries and lo and behold, they actually grew their revenues during this period.
Was this a permanent shift in strategy? Of course not. Their vision remained exactly what it was before the crisis – that of being a market leader in the space of natural fruit and vegetables. They were simply pivoting their business model temporarily, to survive the crisis, and to get in some cash flows. And since the lockdown is over and the supply chain from Himachal has resumed, they are back in business. Incidentally, they have also tied up with Swiggy now to deliver natural vegetable at your doorstep.
Now that’s a lesson to all of you founders out there. In life and in business, there will always be the unexpected and you have two options to react to the crisis. Either you can sit back and curse your fate, or you can fight, and change your business model, even if it is temporary, to survive the crisis. Which of these do you pick?
The writer is a Professor at MDI, Gurgaon, and a Director with Lead Angels Network)