For modern men and women, food is increasingly becoming the ultimate medicine. Eat healthy, stay healthy. You are what you eat. Over the past few years, public awareness of food safety and healthy food has reached a new height. It has created new challenges for business. Similarly, like any other challenge in business, it has created new opportunities as well.
Several estimates said that the global market for organic and healthy food is expected to reach US$321 billion by 2025. The consumer demand for safe and pure healthy food has grown steadily over the last few years.
This reality reflects on a sudden influx in the number of companies that are offering safe and healthy food. Companies are now making active effort to communicate that they maintain safety standard in their manufacturing process. The food safety-related lawsuits have increased. Products like mango juice and drinks suffered in the market due to negative word of mouth. A small but growing social movement around safe food has already begun. It indicates a strong trend. All indications suggest that this trend is just getting started and it is here to stay. A certain segment of the population is already willing to pay extra for safe and healthy food. And this segment (of the population) is growing as the middle class expands in the country.
Shwapno, the leading retail brand in Bangladesh, identifies itself with this changing reality of the food business across the world in general and Bangladesh in particular. Between 2017 and 2018, it made a decisive move to incorporate safe and healthy food and make it a central piece of its long term growth strategy. Shuddho, a new safe food brand, was born.
As a part of its safe food push, it entered into a collaboration with Global Gap. It has started working with 72 farmers. Sabbir Hasan Nasir, Shwapo Executive Director notes in an interview that this (move) is going to change how Shwapno operates as a company. “This is a new and bold step. Through this initiative, we’ve started our mission of transparency from the field to shelf,” he says in an interview with FS. “It means what goes inside the soil and crops before harvesting is also important for consumers to know and retailers to know.” Shwapno says its ambition is to sell only Shuddho produce in Shawpno in the next couple of years.
But it would not be easy. Consumers are (always) price sensitive whereas safe and organic food produces are relatively expensive. Consequently, achieving scale is a challenge. On the other hand, convincing enough farmers to get into producing safe produces would not be easy if there is not a ready market for it. For now, Shawpno pays a higher price to farmers for producing safe produces for Shuddho compared to the existing market rate through a mutually agreed process. But in order to truly scale it, there has to be greater demand as well as sustainable incentives for farmers.
In an interview with FS, Shawpno Executive Director Sabbir Hasan Nasir explains Shwapno’s safe food strategy, how it works with farmers and how it plans to scale the brand in the coming years.
We developed a concept called Shuddho in partnership with Global Gap and became a Global Gap member. Global Gap is the worldwide standard that assures good agricultural practices and is the certifying authority and partner for many retailers across the world like Walmart, Whole Food Markets, Tesco and many more. We are probably the first retailer in Southeast Asia to start such a partnership.
USAID’s AVC project, which is an agricultural value chain program, came forward to help us. We are going to the field where farmers produce our crops and teaching them about pesticides, how to use them, what is allowed and what is not and how we can convert chemical pesticides into natural pesticides.
There is a term called PHI which stands for the pre-harvest interval, the wait time between a pesticide application and when a crop can be harvested. We educate them on how to maintain PHI in crops so that it doesn’t have an unacceptable level of pesticide residue.
This is a new and bold step. Through this initiative, we’ve started our mission of transparency from the field to shelf. It means what goes inside the soil and crops before harvesting is also important for consumers to know and retailers to know.
Almost 72 farmers are now supplying their produce to us through this Global Gap certification process. Shuddho is that brand where we maintain PHI in the crops and don’t allow any harmful pesticides inside the crops, inside the soil. There are guidelines that we are following to ensure safe food. This is a new step in Bangladesh retail industry.
In the initial life cycle, we need more push. We have to make consumers aware and ask them to pay extra. That has to be there because my scale is low. I can’t make sustain if I charge it on myself. It’s not just possible.
I will create more awareness so that it eventually creates a pull and when there is a pull, farmers will be motivated to produce safer produces and pass it through the chain. That’s one. Then more players would be interested and there would be a social movement for that. Then probably scale will increase and the cost will come down.
But this will not happen right away. It will take another three to five years. Nothing happens overnight. But somebody has to take the lead. So we are taking the lead. One of the factors that I identified that can help is export. Since we are heading towards the Global Gap certification. If our farmers can get it they can export. If that happens, their value chain gets totally changed and they get more incentives to produce at a higher cost.
We give them buyback guarantee, that’s one. We give them 10-15% extra compared to the market price. The farmers and our representatives visit the market and conduct a price survey and then they select a price and then we give them 10% extra on that price. We give them buyback guarantee so that they are inspired to do it.
Within the next couple of years, Shwapno should have only Shuddho produces, nothing else in our fresh produce line, in fruits and vegetables. I’m trying to extend it to fish and meat as well. So that’s the plan.
This story heavily borrowed from our interview with Mr. Sabbir Hasan Nasir. You may read the full interview here
