Begun as an online store in July last year, the Altitude store, has a team of nine people in nine months! Ayesha Grewal, founder, tells us about her plans of making India healthy; not only by targeting organic food but by creating a robust rural economy.
Q. How did you start the Altitude store?
A. While working for an NGO in 2001, my job involved going to rural areas. When I started understanding rural economy, I realized that farmers in rural India, didn’t have access to markets. I noticed that certified organic producers and most farmers following organic methods of farming were getting a pittance for their products. This was because, they sold their harvest through conventional channels – to middlemen (wholesalers).
Coincidentally, people in the urban metros were demanding organic products and were willing to pay a premium price. I decided to bridge the distance between low income – marginal farmers and high end markets (city consumers) in India. That was the thought behind Altitude store.
Q. How does your business function?
A. Altitude store sources and markets organic and natural products from 18 states in India. We stock 500 different organic or natural products. Some are sold under the Altitude brand, while others under the names of its producers. Our business model revolves around injecting health into the rural economy. This is done in stages.
For instance, retailers buy wheat from large companies at a premium. These companies purchase wheat from base level farmers or wholesalers at a low cost. Suppose I want to eliminate the middleman and buy wheat directly from the farmer, I get wheat at a less price. But as a retailer, I don’t have space to store it! So, I create a group of 15 farmers and help them finance the storage of wheat at their place itself. They are the owners of the storage unit and over time, as we buy wheat from them, the loan gets repaid. Hypothetically, if we were paying Rs 10 for buying the wheat upfront, we will now pay Rs 11 for the same.
We can take this model to the next level. We can ask farmers to pack the wheat for us and we pay them higher price – Rs 12 for it.
In the next stage, we finance a flour mill for them and ask them to make the wheat into flour. Now, we pay Rs 16 for the packaged flour!
So if we were paying X to the intermediary for wheat, we are now paying the same price for packaged flour, directly to the farmer. We save on the middleman cost and also sell at a premium in the metros. The farmer gets a higher price, and we are making the rural economy healthy!
This is our business model and we are doing our best to put this into practice. We have the help of various NGOs and organizations to get closer to rural India.
Q. What difficulties did you face while setting up the Altitude store?
A. We had to build the trust. A buyer cannot tell the difference between organic and artificially fertilized produce. So we started marking our products as organic or natural on the package. Any produce that has been certified by APEDA (Agricultural and Processed Food Products Export Development Authority) we label as Organic. APEDA issues an organic certificate only if the international organic specifications are met. We also stock produce that are not certified as organic by APEDA, but are grown in the same conditions as organic. They are labeled natural. I think this transparency worked.
Q. How big was your team when you began? How big is it now?
A. We began in July 2009 with four people, today there are 9 of us. We began as an online store. We have recently opened a brick-and-mortar store in Delhi.
Q. What were the challenges you faced along the way?
A. The problem with organic products is the shelf life. As there are no chemicals or preservatives, they tend to deteriorate faster. We realized this after a while and we worked around this problem by keeping smaller stock and smaller inventory.
The other problem we’ve faced is HR. Very few people are interested in connecting or working with the rural sector. So we are finding it difficult to find people.
Q. What support are you looking for as an entrepreneur at the BoP?
A. Access to capital – We need to increase cash flows for buying the produce upfront or even to finance storage facilities for the farmers.
If you want to help the Altitude Store reach new heights, sample a taste of the real organic stuff from their online store at www.thealtitudestore.com or join the team!