Thu. May 28th, 2020

Farm-to-table 101 in Indonesia with Sayurbox’s CEO and co-founder Amanda Susanti9 min read

Sayurbox’s Amanda Susanti joins us for a call to talk about farm-to-table in Indonesia — the underlying problems of the sector, emerging solutions they have been running in the last four years, and what the future holds for fresh produce in the country

About our guest

Amanda Susanti is co-founder and CEO of Sayurbox, an ecommerce platform for farm-to-table fresh produce in Indonesia. We’ve been privileged to partner with Amanda since a while back, and we’ve been impressed by the company’s efforts to tackle inefficiencies in Indonesia’s food supply chain, and they’ve done a good job to improve the country’s agricultural sector. So the company has also garnered acclaim from government institutions in Indonesia as well as startup programs like Grab Ventures Velocity and Seedstars. Prior to co-founding Sayurbox, Amanda built a deep understanding and expertise in farm operations running her family farm, Amantani Farms. She was a recipient of Forbes 30 under 30 2019 list and is also a fellow of the Alibaba e-Founders program.

Timestamps

00:35 Introduction of Amanda

01:41 How Amanda transitioned from running a farm to running an agritech startup

03:45 Indonesia vs China/India

05:26 Approach to hiring in agritech

06:49 Driving farm-to-table adoption among farmers

08:11 Adapting to consumer behavior

09:22 How COVID19 has affected their business

10:22 Maintaining quality control

11:25 Sayurbox in the next five year

12:40 How avocados became one of their best-selling items

Yinglan: I would love to get a quick sound bite of yourself on why you started Sayurbox, and what has the experience been like moving from a traditional agriculture business to leading a tech company like Sayurbox? 

Amanda: I was born and [spent] most of my life here in Indonesia. Sayurbox came to play after I initially started a farm; I was planting a lot of vegetables to supply to high-end restaurants. Before I was actually working in distribution, and the reason I started to go into agriculture was because of my uncle, who was a university professor of agriculture. At the end of the day, people need to eat, and Indonesia still relies heavily on imports. 

This is something I wanted to change going into the agriculture sector, so I started the farm and lived there for about a year, so that’s how I got to know how inefficient the distribution of fresh supply chain is. So farms are super fragmented here in Indonesia. Farmers don’t know where to sell their produce; they don’t have the logistics access, and they end up not being able to sell 30% of their harvest. 

So there’s no priced demand transparency, and a lot of middlemen in the supply chain. So there’s a lot of food waste, and this is something I feel very strongly about. So that’s when I met my co-founder Rama, and he was at that time involved in Gojek, so he suggested let’s do Sayurbox, which ultimately aims to aggregate demand and distribute fresh produce directly from farms to end consumers. 

Yinglan: Agritech is actually an interesting space, especially in Indonesia. It has been making the headlines, one citing it to be at an “inflection point.” What are your thoughts on the market in Southeast Asia currently? How has the agritech model evolved versus the ones that you are seeing in China and India?  

Amanda: In agriculture, Indonesia is still miles behind China especially but also India. But the market is huge and it’s still technologically untapped, so there’s potential for disruption. Now people are relatively flexible [working] in the space, but when we started it was still relatively new. To an extent it is still relatively new now, but it has gained a lot of interest. I don’t think we can compare it completely to India and China. 

The farm landscape infrastructure and logistics is so different here in Indonesia and you do need the local knowledge and understanding. So I think we can learn from India and China, but it’s hard to replicate exactly what’s being done [there], but there are companies similar to ourselves that are doing very well, so it’s promising. 

If we compare it to China and India, the farms are much more smaller, and they’re more fragmented, usually a small group of farmers growing a small crops and they really don’t have any access to the logistics and infrastructure so I would say the supply chain from the farms to the end consumer is longer than they would be in India and China. 

Yinglan: One of key components to building a company like this is that you need to have industry experience and the right connections in the team. I think your background is very unique. How has it helped you with the business and how did it affect your approach to hiring?  

Amanda: Because it is a new space, I think the experience in agriculture is a lot of help but it is difficult to find people with deep understanding of the space and also the hunger, speed, and ambition to make things happen. A lot of the players in this industry are traditional players, so with regards to hiring, we do hire very slowly to find people who can adapt to a fast-paced culture, but have experience and connections in the farm side. Luckily because I have been doing it for the past five years I did make [those] connections over time. So I think it’s important to have an understanding of the culture, of how farmers think, in order to be able to retain these farmers. 

Yinglan: Tell us a little bit about the model in depth. You are essentially building a farm-to-table marketplace, and you need to have both the buy-in of farmers and consumers. Maybe talk a bit about how you started, how did you drive supply and demand on the platform, what were the obstacles you faced, and where is it now? 

Amanda: We took it one step at a time. On one side, we built a presence in the farm areas, we built sourcing hubs in the farm areas. It’s only the uncertainty of the demand, but also the supply, so there’s a lot of things that need to be taken into consideration, with supply and demand planning. But essentially the model works around the concept that farmers want everyone to take their harvest whether it’s good grades or bad grades. So it helps that we’re doing a multi-channel demand approach so we’re not only selling to B2C, but we’re also selling to B2C. 

So we’re able to get easier forecasting from the B2B but in case there’s external factors that influences the supply side we’re also able to flush, say if there’s an overharvest, able to flush it out to our B2C customers because the demand from that side is easier to influence from the pricing. This way it lets us get all the harvest from farmers, lets us also get better pricing, less waste in our supply chains. Currently we’ve managed to get wastage in our supply chain under 5% compared to the traditional supply chain which is upwards of 50%.  

Yinglan: Tell me more about the consumers. What did you learn about the consumers and consumer behavior? 

Amanda: So from the B2C side, consumers want visibility on items that they’re getting. They also want it to be very easy and very efficient, which through our aggregation, logistics, and distribution we are able to deliver faster and have the variety that farmers want, and we do overnight delivery so customers can order before bedtime and then receive their orders in the morning. We also have three delivery time slots so that they can collect the orders at night or in the afternoon as well. We also do QC so they know exactly what they’re getting. Now with the coronavirus issue as well, customers are also looking for more transparency, they want to know where their food is coming from. We’re able to show that, they know exactly which farms the produce is coming from, they know that it is checked and it is clean and it’s safe. So I think the market is also heading towards this direction. 

Yinglan: Since you’ve mentioned Covid19 how has that affected your business? 

Amanda: The market generally wants to know where the produce is coming from, that the produce is safe. I think people are looking to live healthier lifestyles. So we’ve actually been able to grow a bit from here, so customers are getting used to ordering online, they don’t want to go to the wet markets, where it’s not convenient. So we’re preparing for this, there’s a huge increase in the demand for herbs. So we’re working with farmers to go ahead and secure supplies for these items. 

Yinglan: I think one of the things we really like about Sayurbox, is that the quality control is of a very high standard [even as] the number of farmers you have is growing. Can you talk a little bit about how you do quality control and keeping the produce fresh? 

Amanda: We do harvest and delivery within 24 hours, so we don’t keep stock for vegetables anyway, we do one day turnover, and for fruits we do two days, maximum three days inventory turnover. Throughout the supply chain we have QC checks and QC stocks so we have it in our sourcing hubs, so the good grade products it’s very transparent that these are the best grades, and the lower grade it’s also transparent that these are lower grade. So the aim is to give to consumers what they’re paying for and give transparency over that. 

Yinglan: One thing we’d love to understand is fast forward a few years, what can customers look forward to with the farm-to-table experience going forward, where do you see Sayurbox [going]?  

Amanda: So hopefully we’ll be in multiple cities all over Indonesia in five years. Because we’ll be able to do hyperlocal farm deliveries according to each city so it’ll be faster fulfillment times, and built-in products will also have more precise grade types, fresher produce, and again transparency of where the food is coming from, food safety, able to buy lower grade items should that be what the customers want, so more affordable fresh produce for the different markets, less price fluctuation, easier ordering experience and a lot more. 

Yinglan: I wanted you to also share an interesting anecdote you told me when we first met. You found that one of the best-selling produce is avocados. It was interesting because it’s actually hard to procure some of these fresh avocados in Indonesia. Tell me a little bit about that story and how you used it as a growth hack to grow faster. 

Amanda: Avocados we do source from Indonesia, and because we do have different types of avocados, we’re able to source such a large amount, we are able to sell these avocados cheaper than the wholesale market so people do come to us for avocados, we do have the best avocados from Flores and also really good avocados from other areas in Indonesia.

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