How Two Brothers Organic Farms Integrated Fmcg Model Is Revolutionising Indian Agriculture

A consumer eats by his eyes first and then by his tongue. Your fruit is ugly in the way it looks. Market is standing at 10 bucks a kg and you have got four rupees a kg. It’s unusual for those who come from farming families and break away to come back to it.

Our parents being farmers put us in a boarding school in Punea with the hope that we never come back to farming and the village life. I think 4 years into a banking job, we realized we were not cut out for this world. What was the reaction from the family? Dad was uh really uncomfortable seeing us both back. Farming has become socially unacceptable. If you’re a farmer’s son or you’re a farmer by profession, no one even wants to marry the daughter to you. There’s almost like a movie script that you come back. But then there’s this very tough part when you realize you have to actually make a living. The practices over the last 50 years, conventional farming practices have ruined soil fertility and that concerned us. So initially when we got back to farming, there was never an idea of forming a brand or marketing or a business around it. It was purely for the love of it. Now, we had no credentials in agriculture. So, we understood farming from the people on the farm who were doing it. How does this dynamic work [music] in running a business? You’re obviously the quiet one. [laughter] I take care of the back end, which is all the manufacturing, uh, accounts, finance, the supply chain, and I take care of the front end, which is more growth focused, marketing, branding, fundraising. Yeah, it’s been easy because, you know, apart from being siblings, we were uh in hostel together. Yeah. from literally from KG till PG. Welcome to this very special episode of the disruptors. Um, a huge aspiration for families when they educate their kids or even for youngsters is what do you want to be when you grow up? Doctor engineer used to be a thing of the past. That’s also still very exciting. I want to be in tech or maybe I want to be an entrepreneur. But it’s quite rare that you hear someone who wants to be a farmer. And that is part of the story that we’re talking about today when we cover the founders of a brand called Two Brothers. Uh these are two brothers who are with us today. Sati and Ajinka. Thank you so much for coming in and joining us on the disruptors as we talk about your story. Uh Satjit, let me start by asking you to explain what your story is, what your company is and what your journey has been. Superb. Thank you Tamana for inviting us over. It’s a pleasure to be you know like you said in some light after the farm. So well we both are farmers sons and we come from the small village called Bhini which is south of Pune 2our drive and our parents being farmers put us in a boarding school in Punea with the hope that we never come back to farming and the village life. Uh and I think you know we did what they wanted us to do did an MBA and then God working with banks. I was working with City Bank and he was working with HSBC. I think four years into a banking job we realized we were not cut out for this world. Uh and so I think you know 12 years back we decided to go back to the farm and the village to live that life to be amongst livestock and growing food. Once out there like they say you know the grass is always greener on the other side. When we landed up there we realized the grass is you know green but it is not sustainably green. The practices over the last 50 years conventional farming practices have ruined soil fertility. They have reduced biodiversity both above and below the soil and they have made food which is bereft of any nutrition and that concerned us because we wanted to pass on our farm to the next generation and given given that choice of doing farming and so you know our journey of discovering sustainable farming practices started 10 years back and then we you know uh switched our farm from a chemical based farm to a so so we’ll go through the journey of the story but I have to start right at the beginning because It’s unusual for those who come from farming families and break away to come back to it. It is and in fact it’s a crisis of sorts because next generation of farming families don’t want to farm. They want to do anything else. That’s the dream. Uh what has been your reason for coming back? I know you’re the younger brother, you’re the elder brother. [laughter] I know he took the plunge first. Uh why did you have to follow? In fact, I took the plunge to the first. Okay. Okay. So I think it’s purely for the interest of farming. As children we had grown up on the farms. We had seen the life on the farms the cows the cattle uh the khif rubby crops and when we started working in Punea, Mumbai, Delhi I think somewhere we always kept uh kept bouncing at us and it was always we feel more comfortable at the farms one life let’s do what you like and uh that that’s how we came to the conclusion of let’s get back to farming and let’s let’s go and explore. So years of boarding school and then you know life in the corporate world did not take out the farmer from you. No in fact I think it instilled that will to get back to farming even stronger. What was the reaction from the family? Because I know this is aspirational as well for a lot of family farming families that our kids should have more opportunities. So what was the reaction when you went and said okay I want to come back and be a farmer. No. So you know our dad was uh really uncomfortable seeing us both back because like I said at age four he put us outside the village and he said never come back go to a larger city a larger country and when we decided to come back you know after ticking off all those boxes he was very uncomfortable and rightly so because over the last 50 years farming has become financially unsustainable. Farming has become socially unacceptable. If you’re a farmer’s son or you’re a farmer by profession, no one even wants to marry the daughter to you. It’s become such a situation uh back. So I think both our mom and dad were not very comfortable. The the idea of progress was you know you move to a better city or you move to a western country that’s progress. Did you did you have that opportunity to work outside India? uh very briefly while working with the banks we did go outside and see the outside uh world so as to say and you know like he said it made our desire to go back to the farm even more stronger. Yeah. Now you come back to the farm it sounds like such a romantic notion on paper. Uh right. uh it’s it’s almost like a movie script that you come back but then there’s this very tough part when you realize you have to actually make a living and then you create a business which is doing now a 300 cr a r so how does that first plunge happen and what was the initial phase like so initially when we got back to farming there was never an idea of forming a brand or marketing or a business around it was purely for the love of it I think back in 2012 is when we quit our jobs went back to the farm farm. What was being farmed out there was sugarcane. We come from the western side of Maharashtra the commercial crop of the sugarcane. We took to it. Now we had no credentials in agriculture. We were not BAC MC agree students. We came from a different educational background. So we went out there, we understood farming from the people on the farm who were doing it and very quickly understood that a couple of uh decades back with very little input we used to get 80 90 tons of sugarcane output and now with so much of input going in in terms of fertilizers the output has dropped to 65 60 tons an acre. So I think that was a starting point. Uh having said that there’s one point about making your own farm or your own land sustainable because luckily you had enough land to come back to and then to build it into a viable business is a different ballgame altogether. Yeah, it’s a very different ballgame because it involves people and capital when you want to scale up. Uh doing our own farm was very exciting. We were experimenting with newer models. uh very personally satisfying. Also when farmers started looking at us and you know they were seeing that we’re needing less and less inputs on the farm and our yield is better in terms of quality not quantity per se and we were needing lesser water and stuff. And so they plugged into our system and we started handholding them also. And then uh we realized we’ll have to put up teams for handholding them from seed stage to harvest stage which we have now. What started off as a small little processing center in our own homes in the village slowly grew into our garage and then to a larger uh mega kitchen and now it spreads over two lakh square ft. So I think the things you know when they start growing you have to manage more people you have to manage more capital that is a different skill set altogether but uh you know fortunately we’ve been managing it till date with the support of our consumers because they love the stuff. Yeah, but talking about the consumers, one of the big challenges that agriculturists and farmers face is when they have to go and sell their produce. And most of the time what we hear and what they say is you don’t even get the cost of what you put into uh cultivation. You’ve had that firsthand experience as well with your first crops. Oh yes. So that’s a very interesting experience we had. We were growing papaya and normally a farmer gets you know 40 tons an acre as yield. We grew it the natural way without fertilizers and we got a yield of 20 tons an acre which is half which is half. But the fruit tasted like jaggery. It was so sweet from inside. Lately if you have had papaya it is tepid. It doesn’t have any taste. Actually any fruit you bite into an apple with your eyes closed a guava a pear you won’t get to know what it is actually you know without seeing it. And uh similar with the papaya tasted different. And we thought when we take it to the market they will give us a you know a a right value for it. and we took it to the Pune uh Mandi and we experienced that process early in the morning at 3:30 a.m. get your fruit it gets auctioned you know in a system where you don’t understand what’s happening and then he came back and told us the market is trending at 10 bucks a kg and you have got four rupees a kg and after asking him why he said uh and I told him you know the fruit tastes way better but he said a consumer eats by his eyes first and then by his tongue your fruit is ugly in the way it looks and organic is ugly because you’re not spraying any kind of pesticides on it to make it shine and look even and right sized it’s various forms and shapes and it has blemishes on And he said then the consumer is by his tongue and your fruit doesn’t appeal to the eye. That’s when we felt like a big setback because we thought that people would appreciate the fact that it is better in nutrition, it is better in taste uh and they would give us a higher value and we realized that we’ll have to put up a system or a platform that is independent and that you know will allow us to get the right value for good food. So cut out the middleman. cut out the middleman and directly talk to a consumer and spread awareness and get the right value for what we’re doing. You know, but you you’re talking about a time and I assume this this started when your journey started about 10 years ago. You’re talking about a time when organic was exciting but not such a buzzword. You now have consumers willing to pay a premium for organic. My question, a lot of the organic food that we all buy at a higher cost. It costs more. Is it truly organic? So like I said, you know, you’ll have to put in systems and processes where you’ll have to show seed to uh harvest traceability. You’ll have to show the certifications that you are uh taking for whatever you’re growing. You’ll have to open up the farms and processing facility for people to come and visit and see it by their own eyes. And then of course by ultimately when they consume it and they feel the difference in taste and what it does in their system, then that’s a final validation. So it takes time. It’s taken it’s taken us 10 years to develop trust among consumers. Uh it’s taken us benchmarking ourselves against the best certifications in the world. So we just got our uh entire farm and our product certified glyphosate free from the detox project uh which is in the US. So I think all these processes combined develop trust with consumers which has been it does for branded stuff out there but there is no central certification which comes and checks whether someone who’s claiming to sell organic food whether it’s actually organic or notist does that exist is my question because you’re talking about okay I will show you my farm. Everyone’s not coming to someone’s farm to see if they’re buying a papaya or a mango or an apple. I think uh that system is not existing today and I think uh some central body will have to play a role where they become uh you know auditors of sort to see whether that produces really organic or chemical free and stuff and I think that will come with time you know let’s understand the difference about why organic and um the traditional way of farming is so out of reach right now and you can talk about this Ajinka through your own experience um why did you have to come and change the way for example that your father was farming and was it very difficult to do how much more did it cost you I think it’s it’s been a systemic change over the past 40 50 years if you look at the 19 up to 1950s 1960s the only way farming was being done was organic it was after the introduction of a lot of the green revolution a lot of chemicals coming in is when the hybrid seeds the modern seeds uh with the emphasis more on production in and then a different way of farming set in from 1960s onwards. uh when we came back to farming like I mentioned we understood that this gives you more production which is what all the universities research seed companies have been doing but then is it sustainable that’s a question and then some down the line we understood that the common denominator in farming is actually the soil while a lot of emphasis in our studies has gone into seeds and crops and production there’s very less attention in the past 40 years has gone into the soil sciences so developing the soil biology, the different kinds of bacteria, protozoa, nematodes, uh earthworms, centipedes, millipedes that get into the soil, how do you increase their population? How do you make the soil more fertile? And then automatically whatever grows on it is bound to be of a good nutrition value, but most of a good medicinal value. So that that uh change of focus is what we got back into the farming. But uh like I mentioned the last 45, how much more does it cost you to grow anything organic compared to a regular way? cost in terms of monies and time. So I think the curve with organic farming is a little longer. You’re using organic manure which is mostly cow dunk, cow urine or other organic alternatives. It takes time for the soil biology to set in. So uh it’ll take you 3 to four years to get back to the normal production that a chemical farm gave you. So you lose that 2 three years of production in in in that sense to to make some sense out of it. And then the good thing is then lesser inputs are required. So if you look at it at a long term it makes more sense but if it’s a very short term 3 years 5 years then probably it wouldn’t make much sense economically. No. So the reason I asked this because that’s a challenge that the sector is facing right. The reason that we need uh the kind of mass production is because if everyone went organic would there be enough food uh to feed the country? I know it’s a philosophical question I’m asking but it’s an important one. I think it’s a fundamentally important one and one that needs to be considered if what you are doing at two brothers becomes mass. I’ll tell you uh this we are often asked that you know can we feed the 8 billion mouths with uh you know this kind of uh production techniques where yields are lower. If you see and if you analyze data 70% of farmers worldwide do not grow real food. They grow commodities that are traded. Um only 30% farmers grow real food which you consume daily. And by real food I mean as fruits, veggies, legume, lentil, pulses, grains and stuff. Now if you make the other 20 30% people farmers grow real food then I think you’ll have enough supply though if yields drop. So instead of growing commodities if majority of farmers are made to grow real food you’ll have enough supply. Uh and if and why don’t they grow real food is the next question because the value that they get for real food is far less than commodities. So if you start paying the farmer more for real food, many more will start growing real food and you’ll have nutrient-rich real food that can feed the billions of mouths. Yeah. But it has to be packaged and presented. For example, your company is doing well. You’ve grown and you have big investors. Nathan Kamat is one of your early investors. You’re exporting and present in 50 countries because you’re packaged and presented as a premium organic product. My question would be if your product is truly better in quality why should everyone not have access to it? So um ideally we are working towards that. So like if you ask us 8 years back we had a couple of 100 customers. Today we are uh being able to serve over 8 lakh consumers across many uh cities and some countries also. So I think with time once you get economies of scale once you set up uh you know proof of concepts that are scalable you’ll be able to service more and more consumers and also us becoming successful to an extent has inspired I think more than a hundred other brands to get into the same business. There’s so much of scope for putting up so many brands in the agri space. Uh very few talented people actually go back to a village and you know find out about what opportunity exists out there what problem can I solve out there. So us being successful uh I think has inspired so many people. Collectively many more farmers are practicing sustainable farming. Many more consumers are getting access to this kind of food. You can’t change a system that’s been there since the last 60 years over the over 10 15 20 years. It’ll take at least 20 25 30 years to uh reach the tipping point after which you know everybody demands and gets access at a lower more affordable price uh to good food. Also another data point I would like to tell you is that in in the US you know 30 40 years back an average household spend 14% of its income on food. Today that is approximately 8 9%. So it’s also a mindset you know you have as a consumer you’re spending less and less on food. You want food to become cheap and cheaper whereas your expense on other stuff has increased gradually over time. Yeah. uh tell me what the uh fundraising journey has been like because this is an unusual idea an unusual business to take to uh VCs or you know investors who are used to looking at maybe are you selling something online do you have a platform are you delivering it in 10 minutes none of the above in your case so um since we wanted this to scale up economically and sustainably the model that we established was also making a lot of sense tense financially. So if you see our growth over the last 5 years, we have been growing at 85 90% yearon year. Uh we have been managed to attract talent from pedigree institutions who finds purpose in the way what we’re trying to solve for also. So this attracted many people uh and you know like Nathan you rightly mentioned who runs a fund called rain matter whose primarily priority is to invest in solutions that solve for climate issues that solve for nutrition issues that solve for health issues. So Nithan Nithan has been one of our investors and uh we were just checking you know at the last count nearly every investor 90 90% of our investors are all consumers. So I think somewhere they want assurance to the food that they’re consuming and uh many of our initial consumers have invested uh across the world in in in a startup. Was it difficult to convince uh some of your investors? There was inbound interest and yet there is a very strong inbound interest. uh I think somewhere even from an investor’s mindset they know the world is changing uh after what happened you know after co people uh focusing on the food uh has become you know more and more evident and I think they’ve seen those trends change where uh you know brands that are helping solve for that will eventually make commercial sense and uh we have had that kind of interest so it’s not been hard we don’t have a banker also in the last two rounds that we raised it was without a banker so you just picked pick up the call and you tell Nathan that come on I have another [clears throat] fund. No, I mean they have they’ve connected they’ve come to the call. I mean we’ve had that interest inbound where they have heard about the brand and the work and they express interest to come and see at the back end and they’ve come and seen everything and then it has materialized into an investment. Yeah, I think a lot of investors especially like rain matter they’re also very social impact oriented. So it’s not just the commercials of course that forms a big uh discussion but that intent with the right money going to the right place uh is is coming up. Um are you a profitable business? Can you be a profitable business farming or can you be a profitable business if you’re if you’re a food company? Because you’re also now from the uh point of view of the consumer you’re a food company, right? you’re you’re selling ghee and you’re selling uh pickles and you’re selling oils and etc. Ata uh you’re a food company so you’re competing with say the large MNC’s of the world who are also food companies. Can you be profitable in this business in the farming community? Yes, you can be profitable and u like I was telling you for the 10 years of existence we have been profitable for six years. It’s now only that we are growing uh and we’re investing in capeex and you know processing facilities and farmer trainings and growth at the front end hiring teams uh is where we have we’re you know uh investing I think with a little more scale we’ll turn profitable I think in the next uh two quarters we’ll be turning profitable as such but if you look at our CM1 CM2 uh they’re double digit so that itself gives you an idea that such businesses can be profitable because you are seeing it from a lens of sustainable farming but for a consumer it is an FMCG product it is a consumer product so on that front uh there’s a lot of demand for such stuff and do you see the competition from the big players because now everyone’s going organic yeah they have the narrative has changed I’ve seen just yesterday I saw front page ad from a very large uh food company saying that our stuff doesn’t contain you know contains lesser sugar and more fiber so the narrative has started changing very large Grocery brands have started speaking the same language that we are speaking. They never prioritized consumer health. They prioritized their margins and scalability and stuff. When we came up to consumers with a different value proposition and that is ringing bell, they’re seeing the you know the ties change and uh I’m glad that I mean they’re trying to make that shift. How does this dynamic work in running a business? You’re obviously the quiet one. [laughter] you’re the one I think when we started off uh we’ve been doing everything possible wherever there is work we’ve been jumping in and doing it but over a period of time as the business has expanded and uh very early on in the journey we decided we will do the entire back and the front end which means the farming the manufacturing uh we have our own dairy own plants own coldressed oil plant a sister concern that does ketchup javan brush laddus so it’s very while it looks like a very FMCG or a D2C brand we are very manufacturing heavy uh so I take care of the back end which is all the manufacturing uh accounts finance the supply chain uh we are now shipping to the US to Dubai we have an entity in both the places so a lot of operations supply chain that gets into this uh the quickcoms our own website Amazon’s uh I take care of all the back end and uh yeah and I take care of the front end which is more growth focused marketing branding fundraising and both of us have a interest in farming because that’s been our passion this business started off uh you know by pursuing a passion and so we try to spend as much as time on the farm with farmers. Yeah. Is it uh easy to work together as your company grows and clearly you want to see more growth. I believe you’ve thought about an IPO at some time as well. Do you see as you scale up uh continuing in the same way of work you bring in professionals how do you go to the next level as a company? Uh I would say it’s it’s been easy because you know apart from being siblings we were uh in hostel together from literally from KG till PG and so uh you know we have stayed in environments where we had to be together so that has helped uh and that has remained uh till date um for the largest part of our life we were left uh you know to be with ourselves and parents are not there in the picture and that dynamic has uh has continued And I think the interests are common. Both of us have a very strong feeling towards uh towards the duty of being you know coming from a farming background. Uh when we were in school and college we saw people from various other backgrounds who were living a very uh high quality of life. And when we look back and we see you know what is it wrong in doing farming? Why isn’t a farmer earning those common interests have kept us uh together? I think yeah you know for those who are watching this and maybe have farm land in their family there there’s agricultural land in the family and wondering what to do whether we should sell it off and maybe one high-rise comes there and then you know make make money and they’re watching this and they’re thinking at the back of their mind is this something that I should do what should you tell them what would be your message to them I think uh this has great scope uh familyrun [snorts] farms even forget a scale business but even small businesses that can keep you and your family sustainable uh there’s a great scope people due to social media they can identify brands they can follow your work uh they can develop a loyalty towards your products and your farm um and I think with increasing uh you know AI and stuff growing in other regions where they are predicting a lot of unemployment because of all this I think farming is one area which will remain viable because it requires people working on the farm manual uh work and stuff and farming is also highly rewarding uh you’re physically working your mind is where you are it’s not in the past and the future and I think being disconnected from such work environments is also causing a lot of stress in people who are just sitting and working throughout the day farming I would I would recommend people who have land like you said near cities to opt for farming you live a better quality of life there are opportunities to create small brands that give you economic uh sustainability and uh I think you’ll grow food for your family also you know the One trend with uh D2C brands and the moment they get popular is that some of the big fish come in and gobble them up and start acquiring them. If you have an offer tomorrow from a large uh company or a large conglomerate which is in the food business, is that something you would look at? I wouldn’t comment on any speculation but [laughter] I mean when you build you build for irrespective of all of this coming in uh you build uh to become a solid entity. uh we have not copied any model any brand. It’s a unique uh solution that we’re giving uh and that we’re putting up and I think it has merit of becoming a strong brand business in itself and we’re building for that. Okay. Wish you uh the very best of luck and one thing I think everyone can agree on is that we need to eat better quality cleaner food which is uh grown with care and grown responsibly and with care and love. Thank you so much to both of you. Thank you. Thank you.