Though Mandi Express was launched on August 14th 2014, things really got going in January of 2016. The startup was targeting only restaurants and expanded their service to B2C households by November. Mandi Express has a team that comprises of 30 young and energetic people from diverse backgrounds and skills. These include data scientists, operations managers and supply chain and logistics experts, young growth hackers and creative designers. Definitely not your typical organic business.
CEO, Jehanzeb Chaudhri is a Computer Scientist and studied Data Science and Wireless Sensor Networks and has a farming background. Danyaal Balkhi is the COO and used to work for Jovago as Head of Operations where he scaled the business up from one city to more than 288. These guys started up in a small room in a house, then graduated into a shop and basement and outgrew it.
And the Story Begins
The story of Mandi Express begins in Hawaii. Founder, Jehanzeb Chaudhri had recently graduated and was working in Chicago when he decided to take some time off to join WWOOF Hawaii. “I was placed on an organic farm in the middle of a rain forest on the Island of Maui. I learned to farm and the importance of pure, organic food.” Being on a purely macrobiotic diet, he was able to boost his immune system, heal his chronic sinusitis and allergy issues and increase his energy levels. “A year and a half later when I returned to Pakistan, I struggled with the diet due to the lack of fresh produce procurement systems. It was just ridiculous that I couldn’t find quality, healthy produce nor could I trace the origin of what I was buying, considering Pakistan is a largely agri-based economy.” That’s when he decided to start growing his own food in his backyard. A year later, he scaled up.
“Through research and experience, I found that I could sell my organic produce at the Sabzi Mandi for the same rate that a conventional farmer gets.” Local farmer earnings are meagre to say the least. In fact, for every Rs.100 a consumer spends on fresh produce, the farmer gets Rs.10-20. The remaining amounts are distributed among the various middlemen. “This is what drove the need to start Mandi Express. From solving my initial problem, I now needed to create a marketplace so we could all sell our produce.”
Meeting the [Healthy] Demand
The demand for healthy clean raw food will continue to grow as more people become aware of what they eat. Before modern agriculture, chemical fertilizers and pesticides, we never really cared about how our food was grown, its origin, what pesticides or chemicals were used on it or if the seeds had the genetic material of a sea urchin! Yes, seriously! “Today,” explains Jehanzeb, “we are seeing the effect of these chemicals in the form of diseases ranging from immune system disorders, hormonal imbalances, allergy and inflammation-related symptoms. It’s not just about the demand for healthy, clean raw food; it’s about the awareness and being able to provide options as to where quality products can be purchased from. From a purely business standpoint, this means going through the process in stages where we first establish ourselves as a fresh produce supplier, and then formalize the largely unstructured market of fresh produce.”
Mandi Express sells organically raised chicken and have seen a phenomenal response for it. “Our standard whole chicken cost between PKR 250-350; the organically raised chicken ranges between PKR 650-800. Despite this, we see more orders for our healthier product on the B2C side.” The reason for this? People are becoming aware of the practices used in the poultry industry and effects on their health. There’s some more background to bring things into context.
In a natural ecosystem, it takes a baby chick 90 days to become an adult. In commercial poultry farms, a baby chick grows into an adult within 45 days. Their growth is accelerated using steroids and antibiotics feed. “The steroids accelerate the growth of the chicken much like steroids used by body builders, and the antibiotics suppress any illnesses that they may acquire. For the poultry farmer this ensures a lower mortality rate and a faster 30-45 day grow cycle means more money.” In turn, consumers have an increased susceptibility to antibiotic resistant bacterial diseases, hormonal imbalances which can result in polycystic ovaries among many other diseases. “We believe this is just a start. The high prices consumers are willing to pay for healthier food options is a good indicator for the industry to start making a move towards health oriented farming.”
Mandi Express positions itself not just a healthy food company but as a fresh produce procurement solution. “We believe the customer should have the choice to buy quality produce or cheap produce that is carefully sourced and is completely traceable. We are working towards that goal,” says Jehanzeb.
The Supply Chain and the Customer Lifecycle
Mandi Express is like a ‘sabzi walla on call’ for its customers. When a restaurant first signs up, they get to sample the kind of produce being supplied. Each restaurant has specific requirements, which are recorded. “For example,” explains Jehanzeb, “one of our customers has a very special baked potato that has to be a precise weight and length so it can fit the packaging. Similarly, we receive requirements that range from golf ball-sized green onions to 3-inch long green peppers. For many of our B2B customers this is what sets them apart and we are happy to oblige.”
Mandi Express then sets up the ordering system. Who will place the order, who will provide feedback and who will pay. Each night, Mandi Express receives orders via the phone, SMS, email or online. “We want to make the ordering process as simple as possible. The orders are dispatched the next day and then we offer on-call services to quickly drop off anything that may have been missed or was previously unavailable.”
A new feature called ‘Inventory Analytics’ allows customers to see their monthly consumption of produce in relation to price so they can better manage their inventory. “We offer a complete inventory management solution linked to the restaurants POS system allowing us to automatically replenish stocks without waiting for an order.” Trends, historical data, big data, predictive analysis and the works all yield a better customer experience.
Customers receive a daily invoice on email and SMS along with a comprehensive invoice at the end of their billing cycle to make their accounting easier for them. After all, isn’t it all about transparency and accountability? “One of the biggest problems for restaurant procurement managers and accountants is dealing with multiple vendors and having to go through ‘kacchi‘ receipts. Procurement managers have a very tough job ensuring that all the fresh produce ranging from vegetables, fruits, poultry, beef, mutton and seafood, is procured at the right price and right quality every morning . This means having to deal with multiple vendors for vegetables, for fruits and so forth. For them to deal with just one vendor who provides them a comprehensive invoice and analytics solution, is a big win!”
Mandi Express has a fully automated and tech-enabled supply chain from the point when a customer places an order, until the item is paid for and received. The system automatically aggregates orders, sends out messages to vendors and tallies the accounts. And the nature of the business requires them to hold very little inventory and follow a JIT methodology.
Customers place orders throughout the day which are aggregated at night into one big order. This order is procured overnight from the various mandis and delivered in the morning. It might seem like a big inconvenience requiring customers to place orders a day in advance, however it makes you appreciate the benefit of the system. “You buy at least 4-day old vegetables from the typical sabzi wala. They won’t sell you the fresh stuff without first getting rid of the old stuff that is will rot; so you almost never get fresh produce. With us, the produce is fresh and good quality.” Makes sense. The sabzi wala is looking to minimize cost and buy the cheapest produce possible to make the most money. There is also a 20-40% wastage, so this ‘behavior’ is slightly understandable. That’s the nature of retail. “For us, we buy as much as the customer needs, minimizing our wastage.”
Counting the Chickens…
It’s no surprise that Mandi Express is experiencing organic growth. They continue to ride the trend and expand their services to add grocery items such as wheat, rice and pulses. They have already expanded from just B2B and onto B2C. According to the CEO, Mandi Express isn’t the typical online grocery store; it adds value. “In the next two years, we will have automated all our systems and moved vertically and horizontally to include produce straight from the farm as well as intercity expansion.” And we will continue to follow their tracks.
For more details, visit MandiExpress.pk