India wastes about 40 per cent of its fruit and vegetable produce, valued at $8 billion annually. A handful of start-ups want to plug this loss with innovative cold-storage solutions.
Each day, farmers deposit about 800 litres of milk at Heritage Dairy’s collection centre in Meerkhanpet village, near Hyderabad. Promethean Power System’s cold storage machine cools the milk in three minutes flat. In case of a power cut, the thermal battery gets into action, working without break to ensure the milk reaches the processing centre fresh and safe.
Miles away in Pune, Marc Cremer and his workers at GreenTokri farms pack fresh lettuce leaves every morning for distribution to customers across the city. Cremer has invested in a cold storage machine, where lettuce from his farm goes directly after harvesting and is instantly cooled to 3°C before being packed into thermocol boxes with Cryo-Gel. So the salads arrive farm-fresh at the retail outlets at 3pm. The cold storage at GreenTokri greatly reduces wastage, an evil that plagues most of India’s farming sector.
The world’s largest producer of milk and second-largest producer of fruits and vegetables annually wastes about 40 per cent of its fruit and vegetable produce, valued at $8 billion, according to the United Nation’s Food and Agriculture Organisation. While conventional cold storage services focus on transporting produce safely to the wholesalers or retailers, a handful of start-ups are keen on stemming the rot at the point of production to cut losses for the farmers.
“The country has a big need for cold storage services, especially at the farm level,” says Sorin Grama, co-founder at Promethean Power Systems. Rajat Sethi, founder of Coolify, another start-up focused on reducing farm wastage, agrees on the need for services at a micro level.
“After the harvest, a farmer has zero negotiating power. If you offer him even two to three days of storage, it becomes vital in negotiating a good deal.”
Moreover, 80 per cent of farm cold storages in India stock only potatoes as they are ideal for inter-seasonal use and are easy to handle as well. Other produce is literally left high and dry. That gave rise to a requirement for standalone cold storage units, at low operating costs, run preferably on solar or other reasonably priced power, and equally capable of handling milk or fruits and vegetables.
Promethean began in 2007 by chilling and preserving milk. Its cold storage units are powered by a thermo battery, which stores grid energy when available and releases it when unavailable.
The company so far has 160 installations in India, mostly in the south. Its major clients include Amul, Mother Dairy and Hatsun Agro. It then ventured to store fruits and vegetables. “Instead of cooling liquid, here we are cooling the air and keeping the temperature at just 4-5 degrees centigrade to reduce spoilage.”
Shagun Kapur Gogia started ColdStar in 2010 to offer an integrated solution to reduce spoilage in the farm-to-fork supply chain. Insulation technology is used to keep the produce fresh.
Coolify’s business model involves building, owning and operating micro units at farm level which farmers can pay to use. “We are looking to set up 3,000 units in three years,” says Sethi. Each unit costs ₹3.5-4 lakh and can be operated remotely by a central team. Sethi, a Harvard alumnus, is initially targeting very specific export-oriented products such as cherry, lychees and wine. Farmers can save on operational costs; the basic charge is 50 paise to stock one kilogram of produce at the site of production. The charges vary based on the nature of produce, location and other factors. The target is to break even in three years.
Grama says that while such clean technology costs 20 per cent more to set up, the operational costs are much lower compared to conventional technologies.
“Most users can recover investments in two to three years. Each battery lasts seven years and can be refurbished quite easily,” Grama adds.
Cremer at GreenTokri agrees it’s a one-time investment that saves on the expensive diesel otherwise needed to run a generator. “Even farm workers can operate the unit easily.
Promethean manufactures for the India market at its Pune plant, using local suppliers. It currently produces 20-40 systems each month and can go up to 50. “We are looking at expanding in South India to be closer to some of our customers,” says Grama. Overseas, the units are in demand in Bangladesh and Sri Lanka.
“Africa is generating a lot of enquiries,” Grama says.
ColdStar is focusing on the domestic market initially and aims to handle thrice as much over the next 18 to 24 months. This will offer a larger supply network for the end producer, Gogia says.
Despite the inherent potential, the cold-storage business in India has not attracted private-sector funds. Coolify has been funded by the US Department of Agriculture so far while Harvard Innovation Lab provided the seed money. Promethean, too, received funding from American investors.
“We got angel investors in 2007-08 before the crash and it was easier to get money for clean technology,” says Grama. Now the company is close to breaking even and seeks funds to expand. Will local investors show interest in funding the likes of Coolify and Promethean? This has potential to rescue lakhs of farmers from the cold clutches of losses and poverty.