Sanjay Dasari (MBA ’22) shares his experience starting WayCool Foods, one of India’s largest and fastest-growing agri-tech social enterprises, reducing food wastage and supporting Indian farmers.
Tell us more about your background and what inspired you to be an entrepreneur.
I was born in Ohio, USA, but I grew up primarily in India, traveling back and forth my whole life. I have been blessed with the opportunity to visit classic European cities and rural Indian villages from a very young age, and I have my parents to thank for that. Because of that exposure, I grew cognizant of the stark contrast between the lives these people were leading, and I decided to do whatever I could through my career to bridge that gap so that everyone in India, regardless of socio-economic background, can have the same exposure and opportunities as those in more developed countries.
Keeping this overall goal in mind, I narrowed it down to four industries that needed to be completely revamped if India wanted a shot at becoming more developed: Agricultural Tech and Food Security, Affordable Healthcare, Democratized Education, and Waste Management. My current company is an extension of the first target: Agricultural Tech and Food Security.
What is the problem that you are trying to solve?
In short, WayCool Foods is trying to reimagine India’s food supply chain to improve farmer livelihood and reduce food wastage. Agriculture is the primary source of income for nearly half the population, yet India has some of the highest rates of farmer suicide and farmer distress. India is also the world’s second-largest producer of fruits and vegetables and has a clear capability to be the world’s food source, but the country suffers from 20-45% food wastage due to poor planning, inefficient operations, and other issues.
One of the key things to understand about the Indian agriculture market is that Western solutions will not be directly transferable to solve this problem. There are extremely high first-mile and last-mile costs due to how fragmented the market is, and how important aggregation and disaggregation are. For example, in the USA you might be able to buy 1,000 tonnes of potatoes from one farmer, but in India, you would have to buy 1 tonne of potatoes from 1,000 farmers.
Average farm holding is around 500 acres per farmer in the USA vs. two acres per farmer in India. At the same time, for the last mile, Western countries have large established stores like Whole Foods and Costco that buy in bulk, while in India, we have thousands of mom-and-pop kirana stores, each of whom require small quantities of nearly 150 varieties of fruits and vegetables, every single day.
To solve this problem, the traditional industry adopted a very fragmented approach that forces food products to pass through anywhere from 7 to 15 different intermediaries before reaching the end consumer, compared to two intermediaries in the WayCool supply chain. Therefore the cost of collecting produce and the cost of segregating produce for each customer’s requirement are both incredibly high, with equally complicated processes. In simpler terms, there are a lot of people doing a lot of work for little to no return, so nobody is happy.
What is your solution?
At WayCool, we take ownership and accountability for the entire end-to-end supply chain, working closely with farmers to decide what to plant, when to plant it, and how to cultivate it. We launched a partner farming program called Outgrow that helps to structure a lot of these initiatives and operates as an independent non profit, with social impact focus areas. On the front end, we sell these fresh food products to retailers, e-commerce players, hotels, restaurants, and catering companies, and we even own and operate our own chain of retail stores. By taking control of the supply chain and using in-house IT systems to map forecasted demand to forecasted supply from farms, we are able to drastically reduce the wastage in the supply chain from 20-45% to 2-3%.
In addition, we invest heavily in automation in our warehouses, since we believe in what we call a Phy-Gital approach, placing equal importance on physical processes and systems as digital ones. With conveyor belts, automatic quality checking systems, and semi-automated packaging systems, we can be far more efficient in a limited space than the traditional supply chain.
We also offer a complete basket of food products to our customers (spread across hotels, restaurants, supermarkets, online retailers, and mom and pop stores). This includes fruits, vegetables, rice, dairy products, wheat, and other value-added products and consumer goods in either our private labels or more well known brands. Overall, our work has delivered a 35% increase in the net income of 35,000 farmers we partner with, and we currently average around USD $50 million per year in topline revenue, and around 10,000 customers serviced every day.
What was the inspiration behind your company/idea?
I love food, and I have always had a passion for social enterprise. Coming out of Babson in 2015, I was working on an idea for a South Korean food truck chain concept to cater to the large population of South Korean nationals living in my city of Chennai, India. Through my research and conversations with people in the industry, the idea quickly changed from a restaurant business to a restaurant supply business.
There were a few main drivers behind this pivot. On the customer side, every restaurant owner I spoke with had complaints about the existing food supply chain. Prices were erratic, availability was suspect, and product quality was questionable. On the back-end, farmers were getting paid in 21-30 days and had little to no visibility into the prices their products commanded or what they sold for, given the extremely high level of fragmentation in the supply chain (can be thought of as a variation of the bullwhip effect from TOM).
Who is the team behind your startup?
My co-founder and I started the company in 2015, one month after I finished my undergraduate degree at Babson College. We were bootstrapped at first with friends and family supporting us, but as we scaled we were able to attract the right kind of investor interest. We actively searched for investors who had a social impact focus and a long investment horizon, so we wouldn’t be under any adverse pressure to compromise on our ideals to deliver a higher valuation. After pitching to nearly 100 investors, we raised our first round of institutional funding in April 2017, and we have raised a total of USD $50 million since then, in a couple more rounds. The team that runs it today is a mixture of ex-entrepreneurs, consultants, corporate professionals, supply chain experts, and more. With over 1,200 employees, the company has grown to a significant scale, but we are proud of the level of employment we are blessed to provide.
How did you get started?
Our original plan was to get started in retail, in true DTC (direct-to-consumer) fashion. However, we saw significant scale benefit opportunities in B2B and pivoted to a hybrid model almost immediately. We still maintain our retail stores under a different brand name (SunnyBee Market) and use them as a testing ground for any new products, IT innovations, or projects that we have in mind.
It is an exciting time for the company. We recently cut over from our legacy Enterprise Planning IT System (one that we built house) to SAP S4 HANA (a global leader in ERP software), which gives us a lot more stability and reliability in data flow; the team is well put together with almost all senior positions filled and a packed emerging leadership cohort; and we also raised a round in March, so we are relatively financially secure for now. In the near future, we will be aggressively looking at expansion through acquisitions of complementary companies, launching more private label goods into our Value Added Products portfolio of brands, and using a SaaS approach to monetizing the incredible IT solutions that we have developed along the way. Check out our Medium page to learn more!
Sanjay Dasari (MBA ’22) is from Chennai, India, and graduated from Babson College of Entrepreneurship in 2015. He has always focused on social enterprises as the way of the future, and his work with WayCool Foods earned him a spot on the Forbes 30 Under 30 list and the Entrepreneur 35 Under 35 list in 2019. Long term, he hopes to launch a social enterprise focused VC fund that invests in four industries within India—Agri Tech, Med Tech, Ed Tech, and Waste Management.