For desktop farmers, Shan Kadavil was already a hero. In his role as country manager and chief executive officer of video game developer Zynga’s India operations, Kadavil was one of the architects behind the wildly popular online social game FarmVille.
Today, Kadavil’s farmyard operations have shifted from land to sea—Kadavil, as co-founder of FreshtoHome, works with thousands of fishermen and other livestock farmers to bring fresh, chemical-free fish and meat to consumers.
FreshtoHome is an online marketplace for fresh fish and livestock produce that sources products directly from farmers and supplies them to customers at (or sometimes below) the wet market rates (wet markets are markets that sell fresh meat, fish and produce). By going straight to the source and eliminating middlemen, Freshtohome benefits farmers. It also allows the product to be sold at mass prices, thus benefiting consumers too.
The company was co-founded two years ago, in August 2015, by Kadavil and Matthew Joseph. “I’m a Malyalee and I like to eat fish thrice a day,” said Kadavil, with a chuckle. Never happy with the quality of produce and hygiene at Bengaluru’s fish markets, Kadavil became a customer of SeatoHome, India’s first e-commerce venture in fish and meat, which was started by Joseph in 2012. Joseph had been in the fish export business for 25 years, and had gradually seen an increasing rise in domestic consumption. By ensuring great quality, Joseph had built up a huge consumer base, but the venture was not financially viable.
This is where Kadavil saw an opportunity. “The size of the fish market in India is $50 billion, in production and sale, according to statistics released by the Indian Fisheries Department in 2014,” said Kadavil. “Ninety per cent of it is domestic consumption while ten per cent comes from exports, figures that were inverse just a decade ago.”
Weeding out the middlemen
The obvious problems with the traditional set-up included the large number of middlemen involved.
“There are around 1,500-3,000 harbours just in south India, so it is very fragmented,” said Kadavil. “Once the fish leaves the fisherman, it goes through at least four middlemen—at the coast, at the point of transportation, at the wholesaler, who then sells it to the local retailer—before it is bought by the consumer. That’s how the supply chain works.”
This also affects hygiene. The supply chain of fish is such that without a proper cold chain, bacterial contamination typically starts within 30 minutes. Traditionally, the supply chain follows a four-day cycle, wherein all parties don’t necessarily conform to scientific food safety norms. Plastic crates are used and ammonia, which is toxic for humans, is added to the ice to preserve the fish. Tests have also revealed that other preservatives like sodium benzoate and formalin which are used to keep the fish from deteriorating, are potentially carcinogenic for humans.
Joseph’s years of experience of dealing with the fisherman directly, conforming to the strict export quality guidelines of fish, together with Kadavil’s technical acumen, gave them the confidence that SeatoHome could be revived into a financially successful model.
“In 2014, I convinced Matthew to restart the whole venture,” said Kadavil. “We replicated the entire process by going directly to the source.” The name was changed to FreshtoHome, so as to incorporate poultry and livestock produce as well.
“I spent a lot of time on the research and technology, it took us about a year to set up the supply chain,” said Kadavil. Along with Joseph, Kadavil brought some former colleagues from Zynga on board. Once BM Tambakad, Suresh Parameshwaran, Jayesh Jose, Nilkamal Malakar, and Prashun Purkayastha had joined the team, FreshtoHome was launched in August 2015.
“Our products are 100% free of chemicals and antibiotics,” said Kadavil.
Plenty of bait
Currently, FreshtoHome sources from around 800-1,000 fishermen, covering around 125 ports. The main areas of sourcing are the smaller ports in the Kerala belt and also includes freshwater areas in and around Bangalore. While it is a largely unorganised and fragmented market and most fishermen are illiterate—they are very tech-savvy, said Kadavil. As a result, his tech team created an app for the fishermen which allows them to trade directly with the company.
Using pictures that they can scroll through, the app allows the fishermen to bid with the company, functioning like an electronic commodities exchange. Once the bid goes through, the system generates a purchase order. “Once the purchase order comes through, we control the supply chain,” said Kadavil. In order to ensure that the consumers receive the best quality fish, FreshtoHome sources from the small fishermen with fresh catch, not large trawlers.
Once the purchase order has been placed, the company’s trucks (one for every 100 km) collect the fish from the fishermen. Specially insulated boxes and RO-treated ice are used to transport the fish to the FreshtoHome factory in Hennur, Bengaluru, which has the capacity to store 40 tonnes of produce. “We don’t freeze the fish as that alters the taste,” said Kadavil. Once the fish is on the truck, it is checked for quality before it is made available online for purchase. On reaching Hennur, the fish is processed, packaged, and then sent out for delivery. The entire cycle takes between 24-36 hours.
“We do lab-testing for chlorine, antibiotics, hormones… there are multiple levels of quality checks,” said Kadavil. Customers can choose between three delivery slots: morning, noon, and evening, while some areas like Indiranagar in Bangalore can avail of express delivery within two hours. Within Bangalore, the produce is delivered to the customer by bike, in ice boxes, all the while maintaining the optimum temperature of 0-4 degrees celsius.
Big fish in a big pond
In the two years since its inception, Freshtohome has begun supplying to Bangalore, Delhi, Chennai, Cochin, Thiruvananthapuram, Mysore, Palakkad, and the Kolar Gold Fields in Karnataka. FreshtoHome has 399 items in its portfolio and the antibiotic-free chicken is its single highest-selling product. The popular varieties of fish vary with season, but, according to Kadavil, the smaller fish like seer, mackerel, sardines, and prawns are popular in the south, while freshwater fish is more popular in Delhi. Freshtohome sells close to 6 tonnes of produce in a single day and currently has around 1.4 lakh customers with 60% month-on-month retention.
FreshtoHome was initially self-funded, but soon attracted seed investment from the likes of Mark Pincus of Zynga, Walter Kortschak of Kortschak Investments, SignalFire, Abdul Azeez Al-Ghurair of Mashreq Bank Al Ghurair Masafi, Pete Briger of the Fortress Investment Group, David Krane from Google Ventures, and Rajan Anandan from Google.