Decentralised agri-processing platform S4S Technologies, one of the first agtech start-ups to become a unicorn, plans to expand its operations to Rajasthan, Madhya Pradesh, and Uttar Pradesh this year, the company’s co-founder and CEO Vaibhav Tidke has said.
“These are the three States we are mapping. We are looking at Tamil Nadu and Kerala, but that is still at the mapping stage,” Tidke told businessline in an online interaction.
Women earnings
Currently, S4S, which means science for society that was launched in 2014, operates in Maharashtra, Odisha, and Andhra Pradesh. One of the unique features of the company is that it helps women entrepreneurs get the raw materials for processing them and helps them market the products.
“We are currently working in 300 villages with nearly 2,000 women entrepreneurs. They typically earn between ₹60,000 and ₹1 lakh a year after meeting all the expenses,” he said.
Basically, S4S is India’s first full-stack food processing platform with a unique supply chain. It provides preservative-free, shelf-stable, fully traceable, and ready-to-use vegetables to replace fresh supplies in industrial applications.
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Increasing shelf-life
“Our supply chain consists of farm-level procurement centres where farmers come and sell their produce. Once we procure, we do farm-gate processing using our patented solar food processing machine, and we convert the agri produce into a long shelf life product,” Tidke said.
For example, onions are converted into dried onions and tomatoes into sun-dried ones. “As the produce is processed at the farm gate, it becomes stable, and there is no pressure to ship the product immediately,” said the co-founder and CEO of S4S, which was launched as a food company.
The product is then collected and brought to its factory, where it is checked for quality, made fit to suit customers needs and sold as a food ingredient to large global companies, exporters, hotels and restaurants.
S4S processes these products at two factories owned by it in Aurangabad, Maharashtra. “What we do at the factory, for example, is to convert sun-dried tomatoes into powder for seasoning, puree, sauce, or paste,” Tidke said.
Product range
Currently, the company handles fruits and vegetables such as onions, tomatoes, ginger, garlic, carrots, cabbage, French beans, and parsley in dehydrated formats. It converts corn to grits and oil while also handling unpolished pulses. S4S procures milk and makes milk powder and khoya from it.
The units dehydrating or sun drying the produce are owned by women, who are financed by the State Bank of India once they decide to work with the agri processing platform.
“We provide them (women entrepreneurs) with four things: raw material, training to process agri produce, market linkage, and access to technology and finance,” Tidke said.
Why women?
On the company choosing to work with women entrepreneurs, the S4S co-founder and CEO said that when the firm sold 500 of its machines soon after it was invented, it found out working at the ground level that food processing at a small level and scale is done by women.
“We started thinking, if the user is a woman but the decision-maker is a man, how can a system that is basically focused around the user be created? That’s how we started figuring out how we can support women for technology access, making technology the right fit for them, and getting finance for them,” he said.
Tidke said farmers sell their produce to his company as they get price discovery at the village level, they save on commissions to be paid at agri-terminal markets, and they save on post-harvest losses.
Rise in income
“Typically, farmers’ income increases by 15-20 per cent in view of these three things,” said the co-founder and CEO of the company, which works with 60,000 farmers across the three States it is present.
One of the challenges S4S faced was to earn the farmers’ trust, which took 3-6 months to accomplish . Also, the company works with non-government organisations and local governments as partners for introduction with farmers, he said.
On the procurement front, the company faces the challenge of decentralisation. Due to this, it has to ensure constant quality. For this, the firm does two things.
“Number one is statistical analysis. We also work with the Marico Innovation Foundation to see that we create the right quality structures, what we call quality by design,” he said.
Future plans
S4S, which has equity investors as well as those who finance working capital, plans in a very detailed way and looks at its three-year forecast. It then works backward on its finances and decides on the equity and loan it should avail of.
The company, which launched full-fledged operations in 2019 and topped the ₹100 crore mark recently, plans to increase the women entrepreneurs working with it to 10,000 from the current 2,000. Currently, it has 2,500 customers, including Indian Railways and Sodexo.
It aims to grow three times from its current level over the next 18 months and is looking at digitalisation to scale rapidly.
“Digitalisation is on the cards in a big way. We are looking at innovating food products, improving margins, and creating more food categories,” Tidke said.
Covid experience
On the company’s experience during Covid, he said people realised that food in general, food processing, and agriculture “are here to stay”. Second, “we also see it is possible to create a supply chain in agri-markets powered by digital technologies”. Payment and procurement through the digital route have dramatically changed the situation, he said.
Tidke said India processes a meagre 2 per cent of its food. Abroad it is 70 per cent. “It is a good opportunity for investors, startups and farmers to enter and create a value chain for the entire ecosystem,” the S4S co-founder and CEO said.
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