Business Case Study: Farmley
Business Case Study - Farmley: An Ultimate Source For Healthy Snacking
Nowadays, we see that people are actually becoming aware of the health risks that they might face from eating junk food. Especially post-pandemic, concepts like healthy snacking have evolved and gained a lot of significance and curiosity among people.
According to recent data, around 40% of Indians are suffering from obesity, and all the credit goes to unhealthy snacking habits. However, the major issue is that when it comes to healthy snacking options, they are super expensive, which means that when people buy other alternatives, they are full of ingredients like sodium, saturated fat, and sugar.
This is exactly where it clicked into Akash Sharma and Abhishek Agarwal’s minds: they are IIT alums, and have established their business in 2017. They have a wide range of options for healthy snacking, including dry fruits and nuts. Their products were first sold through Flipkart, and within a year, they were rated as the best sellers in that particular category.
Target Customers
For any business, it is a key task to identify its target customers. In the case of Farmley, their major focus is on dry fruit consumers aged between 25 and 45. They ensure that they cater to health-conscious individuals who are looking for premium-quality dry fruits at reasonable rates.
Makhana
So, Makhana, being their central source of inspiration, actually deserves all the recognition. It is just grown in Bihar, and that too in a very particular region. There’s a particular community that grows them, which is called the "Mallah” community.
According to their business plan, they do all the work related to makhanas in Bihar, Mangaluru, where they do all kinds of cashews and Sangli for raisins.
Safety and quality checks
Agarwal stated in an interview that they do around 30-35 inwards in a day, and almost 10% of their material goes for sampling and checking. They even perform a chemical check for all the seasonings. Talking about their rejection and acceptance rate here, around 20% of this material gets rejected.
Production and storage
They approximately produce 15 tons a day (2024), which was as low as 5 tons last year. There are certain products, like raisins, that contain high moisture, which is why they require separate storage. Such products are stored separately in cold storage.
Initial funding and supply chain
Initially, the idea was to crack the supply chain and work accordingly. They directly managed networks with farmers and importers. Later on, their focus shifted to adding more value to the supply chain. From organizations like Reliance, they could easily manage their cash flow. They directly source their products from farmers, eliminating the middlemen. They have established deep back-end linkages with 5000+ producers and farmers. They have around 2 crores of packaging material at this point.
Growth of Farmley
In the past 18 months, they have significantly increased their revenue by 10X. Without compromising customer expectations, Farmley has kept building trust as its centre of focus. They have raised their total funding of $14.9 million in four rounds. Its first funding was done in February 2018. Eight investors participated in its recent funding round, which was in April 2023 and was led by Jindal Group. They have 2000+ retail outlets in Delhi, Hyderabad, Chennai and Bangalore.
Manpower
Farmley had around 90 employees as of April 23, 2023, which was nearly 53% more than that of April 22.
Funding raised by the company
They have successfully raised $9 million in funding from a group of investors, including:
Omnivore
Insitor
Alkemi Partners
DSG Consumer Partners