V thought

V-thought- A Knowledge Initiative by Vertebrand
Topics
Vol5 The Business of Agriculture
Vol4 Education Branding
Vol3 The world of Service Branding
Vol2 B2B Branding
Vol1 Branding Trends

The Business of Agriculture
Volume 5
V A VERTEBRAND KNOWLEDGE INITIATIVE

03Vthought I Volume 5
From the Editor’s desk 04
Emerging trends in Indian Agri Business 06
Branding Agriculture - Creating brands from commodities 09
Around the world - Stories of successful Agri Branding 12
Challenges in Branding Agri Businesses 14
Down to Earth - Young India turns to Agri Business 16
Expert Speak - Interview with Mr. Prabhakar Rao, Chairman, NSL Group 18
C o n t e n t s

The very mention of Agri business
invokes the memory of Farming; hard
work, some poignant memories and
some not so pleasant thoughts as well.
Our thoughts have also been fashioned
with the belief that India is an agrarian
economy and yet at the same time
the current state of affairs bears grim
testimony of the fact that there is an
urgent need for rapid transformation.
Agriculture contributes to about 14.2%
of our GDP and yet provides livelihood
to close to 52% of the Indian working
population. This possibly leads to
agriculture being seen more as a social
phenomenon rather that just an industry
or a business.
Agriculture in India is largely dependant
on 2G’s.The first is God or more
specifically monsoon God. With the
monsoon playing truant this year, the
buzzword is certainly about how India
will cope. The cascading effect on other
sectors cannot be discounted and hence
every business entity in India is worried.
The 2nd G is Government. Agriculture
is perhaps one sector where every
aspect is controlled and influenced by
the Government. There is a social angle
to this sector requiring government
intervention. However, while reforms in
every other sector have taken some shape, agriculture
has been lagging behind. Also the number of ministries
involved in the entire chain, compounded with many
legislations at both central and state level makes it
difficult for changes to be brought about. Industry-friendly
efforts of allowing private players to directly purchase
from farmers is probably a right step in that direction.
Yet, the APMC Act and the EC Act impose significant
barriers and states are yet to make changes to them.
A billion mouths to feed with overflowing warehouses,
sharp rise in food inflation and more than 50% of domestic
spending on food products does not bode well for an
economy wanting to grow and become a super power.
Agri business is an indirect growth driver and if India
needs to propel itself to being an economic super power,
several structural reforms are necessary in this sector.
Government spend towards agriculture is 80% towards
subsidies and 20% towards investment. Unless that
situation changes to more share for investment and less
for subsidy, problems will continue to plague this sector.
However there is a silver lining. While mega changes
have not taken place at expected levels, small innovations
are sweeping the sector. These are driving this sector to
become more efficient, more customer-centric and in all
boosting local economies.
We, at Vertebrand, have partnered many of our clients who
are part of the agri business. Our experience in working
with clients has been across the value chain. We are
actively partnering a ‘ Seed company’ in their marketing
initiatives and in the past have created and managed
successful brands for clients in the agro processing
FROM
THE EDITOR’S
DESK
04 Vthought I Volume 5

business. The Vertebrand team has also been involved in
providing expertise on the retail and logistics aspect of the
agri value chain. Our collective experience of working with
several clients in this sector has been the prime mover
behind this issue of Vthought.
This issue of Vthought traces certain key trends sweeping
this sector. With Indian economy opening up, there have
been marked changes in the consumption pattern,
especially of urban India. This in turn has given rise to the
marked changes in the way agri products are processed
and consumed. This issue traces the emerging trends in
agriculture and the challenges in branding of key sectors.
There are some interesting stories of branding which have
taken place in the agri business sector across the world.
We are specially indebted to Mr. Prabhakar Rao, Chairman
of NSL Group and Managing Director of NUZIVEEDU
Seeds Ltd for his contribution to this issue. He talks about
the future of this sector and how to bring back the past
glory of agriculture.
We do hope you enjoy what you read here. We look forward
to hearing from you. Please write back with your feedback
and comments to ‘aparna@vertebrand.com’.
To read and download the online edition of this Vthought,
visit www.vertebrand.com
Happy reading!
Aparna Lakshmi
Chief Editor

Aquick update on where India stands
in the world agricultural production:
• Ranks number one in the production of
commodities like
- Mangoes, Papayas, Bananas, Spices,
Millets like Bajra, Ragi etc
• Second in the production of
- Silk
• Third in the production of
- Tobacco, Coconut, Tomatoes
• Sixth in the production of
- Coffee
• India houses the world’s largest
livestock population and is number
one in the production of Cow milk and
Buffalo milk.
The Green revolution has been the
starting point for Indian agriculture in
its quest for growth and automation.
However, the biggest game changer for
the sector happened in the 90’s when
cropping patterns which hitherto were
determined by agronomic conditions,
moved to being determined by market
forces. This in turn, marked a shift
from subsistence farming to that of
cash cropping. This has led to several
emerging trends which characterized the
last decade of the 20th century and first
decade of this century.
The movement from being just food
crops to cash crops and then cropping
based out of market and consumer
demand has brought interesting trends
in this sector.
Movement from Agriculture to Agri business
Agriculture for a long time has been associated only with
farming. For a long time, a strange belief has existed,
that farming is not a business and farmers can never be
businessmen. However this mind set is changing. With
the decline in cultivation and trade of traditional food
crops and non food / horticulture gaining prominence,
agriculture is no more about farming only. It has evolved to
Farming, Processing and Preserving before it reaches the
first level of intermediaries. The evolution of organized
retail has not just spruced the supply chain but has made
the entire chain agile and nimble. The increasing affluence
has led to changes in the consumption pattern of people.
This in turn adds enormous pressure on the sector to
value-add their offering and adopt technology just like
any other industry. The trend is encouraging, yet there is
a significant distance to be covered on the processing and
logistics front to truly become an efficient sector.
Corporate involvement through Contract Farming
Indian Inc has been in the forefront in acquiring lands
for farming in African countries. The legal framework in
India does not permit such direct participation. However
corporates have been investing in the sector actively
through contract farming. The changes brought to
the APMC Act by several states have also provided
an impetus for the adoption of contract farming.
One of the pioneers in this area has been PepsiCo when
it initiated contract farming for sourcing tomatoes in
Punjab. Contract farming has enabled farmers to access
better seeds, adopt better farming techniques, improve
yield and also get an assured market and price. In turn
companies have benefited by getting consistent quality
of supplies. Contract farming today has grown leaps and
bounds with many giants turning to contract farming
across different crops ranging from potatoes, basmati
rice, cotton, wheat, soyabean to name a few. The biggest
challenge in Agri business was the access to capital
and the absence of recourse to farmers when there was
EMERGING
TRENDS IN
INDIAN
AGRI BUSINESS

crop failure. Today the model has come of age. Financial
institutions like ICICI have partnered with Unilever and
other contractors in providing access to capital for
contract farmers. Weather based insurance products have
also come into play to prevent loss due to crop failure.
There is a flip side to contract farming as farmers
are dependent on contractors and produce only non
local crops. Hence there is a danger of a lopsided crop
pattern. However given the need for rapid improvement
in productivity, contract farming is indeed a must for
the growth of the sector as well as for the rest of the
economy.
Information technology enabling a smart farmer
Information & communication technology has enabled
the farmers on two fronts - Risk reduction and Price
maximization. Weather updates and forecasts have
enabled farmers to plan their sowing accordingly. The
critical information on the correct market price enables
farmers to get the right price and not be completely
dependent on the intermediaries. Some solution providers
have also been able to provide guidance on future pricing
based on global trends. This has taken the farming
community one step further to critical decision making
on selling and thereby not falling victim to price fall.
The pioneering and most prominent success story of
harnessing information technology to build a farming
community network at a large scale can be attributed to
the ITC e-choupal initiative. Today, this initiative is spread
across 15 states, touching the lives of over 4 million
farmers. Much of the success of e-choupal can be
attributed to the fact that it is not just a pure play IT
solution but was backed by strong physical infrastructure.
It cannot be denied that this initiative opened up the
farming community to adopt information technology for
a mutually benefiting relationship.
Mobile telephony now touches the lives of more than
two thirds of India. With the advent of smart phones, the
next generation of technology adoption has come of age
and is in turn leading to smart farming. An initiative of
Thomson Reuter Group - Reuters Market Light (RML),
was first piloted in Vidharba in 2007, as a professional
content service for farmers. For an annual subscription
fee of ` 800, farmers receive daily weather updates as
well as personalized content. RML equips the farmers
with market intelligence and keeps them updated on
prices of different markets to help them understand
broader current trends and future projections. From a few
thousand subscribers who received the service free of
cost during a test-run in 2007, RML today reaches 250,000
farmers in 13 states, signalling a staggering growth driven
by greater rural consumer interest.
With the growth of value-added services, mobile phone
companies have also dived in to provide value added
services to the farming sector. Bharti Airtel, in June this
year added a new value added service geared toward
rural India. Called “Behtar Zindagi”; the interactive voice
response service was rolled out first in Rajasthan.
At INR 30 per month, the operator’s Behtar Zindagi
service is focused on farming and allied communities.
It allows customers to receive various data on their
mobile phones, including weather updates, market rates,
live stocks, agriculture, fisheries, health, education and
finance. The service is powered by Handygo, an India -
based wireless services provider specializing in mobile
entertainment. Handygo has worked with various private
and government bodies to collate relevant information and
disseminate the data to farmers.
The service is available 24/7, supports several dialects and
is available in Hindi and 17 other regional languages.

Other corporate entities like TCS have
piloted mkrishi - a personalized and
integrated service in the local language
to farmers on their mobile phones.
Farmers in remote areas will be able to
connect to their stakeholders, access
good quality agricultural inputs, find
advice on farming practices, and get
information on market prices, weather,
and other essentials for improving yields.
While providing information on weather
and market prices tops the chart, there
have been other initiatives which are
utilitarian. There has been a glut in
services which allow farmers to use
mobile phones to remotely monitor and
switch on irrigation pumps used for
watering crops in remote locations.
Rise of Organic Farming
The green revolution might have
propelled India to move towards self
sufficiency, but there have been several
unfavorable consequences which are
being experienced now. The emphasis
on increasing productivity has resulted
in deterioration of soil health. The
mounting fertilizer subsidy itself is also a
case in point that all is not well with that
formula for increasing productivity.
Organic farming has been an answer to
getting back to a process of cultivation
of agriculture naturally. It helps in
the reduction of synthetic fertilizers,
avoids building up of those substances
in the soil and in turn creates a
balanced ecological chain that ensures
sustainable, eco friendly and pollution
free environment. Awareness has been increasing
about the ill effects of synthetic fertilizers and the bio
amplification of it, which in turn has translated into
increasing demand for the organic products.
However, there are two essential derailers to the rapid
adoption of organic products. Given that farmers in India
have very small land holdings, their ability to adopt the
usage of bio fertilizers and judicially use it to reap good
results has so far been low. On the consumer front, urban
consumers have high awareness of organic method of
cultivation and do aspire to buy organic products. But are
they willing to pay for that? Sadly, No. The demand side
is still weak. Consumers like to have organic food but are
not willing to pay a premium for it.
It is hoped that in the near future there will be much
more rapid adoption of organic farming. As agri retailing
becomes more entrenched with organized players coming
in, there is ample scope for improvement in the demand
for organic products. This in turn will facilitate technology
transfer and will boost adoption of organic farming at a
much larger scale than what it is now.
The road ahead
As they say ‘We live in interesting times’. Indian agri
business culture has been seeped in the middle ages, with
lack of information and market being a key impediment
to its development. There have been small steps taken to
move to a transparent market mechanism. It is hoped that
this effort will only go up in the days to come. However
with monsoon vagaries continuing to haunt the Indian
farmer, there is a paramount need to manage water.
The next wave of innovation needs to address the issue of
water management. Another area of interest will be that
of adopting bio technology. Barring Bt. Cotton, India has
not moved forward. While there are pros and cons to that
debate, it will be interesting to see some concrete action
on that front.

BRANDING
AGRI BUSINESS
Creating brands
from commodities
Arecent study has revealed that, there is a shift in the
consumption pattern from cereals to value-added
commodities owing to the change in dietary habits, socio
economic and socio demographic factors. As consumers’
income rises, demand becomes more discriminating,
i.e. wider variety and higher quality are sought. It is
believed that the share of value-added products in food
consumption would reach 50% by 2015.
However, the majority of agri products in India are sold
to the market as commodities with very little value
addition. In the current situation, it is no longer sufficient
for agri business to continue focussing on productivity
improvement. It is important that agri businesses adopt
strategic planning models that address the development
of strong brands, a unique selling proposition, the
formation of close relationships throughout the supply
chain and the development of market orientation.
Commodity Vs Brand
Kotler and Keller (2006) define a commodity as a product
that is presumably so basic that it cannot be physically
differentiated in the minds of the consumer. However
Theodore Levitt (1980) in his classic article titled,
‘Marketing Success Through Differentiation - of Anything’,
states “There is no such thing as a commodity. All goods
and services are differentiable.”
At Vertebrand, we believe that ‘A brand is defined as a
bundle of functional benefits and added emotional values
that some people value enough to buy into repeatedly’.
A brand gives an identity to a commodity and desirability
to purchase. Not only does it help in quality assurance,
but also product repurchases have been allied with good
quality branded products thereby increasing loyalty among
the customers. In essence, a brand is the tool to create a
sustainable competitive advantage.
Why branding is important
Proper branding of products ensures that the farmers/
producers receive prices of their products according to
their quality. Branding is an incentive to improve quality.
It also safeguards consumers against adulteration.
Branding narrows the gap between the producer price
and the consumer price. Branding creates a favourable
position in the consumer’s mind and hence the
willingness to pay a premium. Empirical studies indicate
consumer’s willingness to pay at least a 10% premium on
branded agri products over commodities. Branding is a
means to create a loyal consumer following who is ready
to buy your product repeatedly, thereby giving an edge over
competition.
Branding Agri business
A brand is a mix of both functional and emotional
attributes and hence it is necessary to look at the
business not just from a pure product basis. Agri business
is no different from other industries in the efforts required
to build a brand. Brand creation needs to necessarily
go through the ritual of Mapping consumer needs,
Market segmentation, Product differentiation and Brand
communication. However, there is a significant challenge
in this business. The nature and size of farm holdings
which are small and heterogeneous means that scale is
not possible and hence individual farm owners will not
have the wherewithal to create brands. Also product-
led innovation is difficult and again, will not achieve
economies of scale easily. Creating an agri business is
fraught with challenges, but there is a method to the
madness.

Core product packaged well
In many agri products, the opportunity
for real product differentiation is very
low. However, consumers have a very
strong need for safety given the threat
of adulteration and poor consistency in
the quality of produce. Brands typically
start off with offering a packaged product
which safe-guards consumers from
adulteration and also meeting a certain
basic product quality. Typically, staples
like rice and pulses start off with this
route, promising customers a certain
minimum assured quality. However, the
opportunity to charge price premium is
minimal over unbranded commodities.
In most situations, the brand owner
isn’t the agri product producer but an
intermediary.
Augmented product offering
Evolution of food processing technologies
along with Farm to Fork concept has now
given the opportunity to provide added
value to the core product, which can
be used as a significant differentiator.
A brand needs to give assurance of
certain quality and consistent product
innovations which new technologies in
food processing enable. For example,
long grain rice or unpolished dal with
long shelf life are examples of offerings
which have found significant consumer
acceptance.
Value added products for discerning consumer need
Organic farming and Specialty agri produce are some
of the ways to create a differentiated product offering
and in turn create brands which command much higher
premium pricing. Typically, there is a partnership
between the farmer and brand owner to create such
differentiated products which are high up on the value
chain. In such cases, the first mover has the biggest
advantage as they create a need for a certain category
of products in the consumer’s mind. Along with product
innovation, investment on brand building is essential to
sustain the branding effort. Otherwise, the advantage of
a differentiated product is lost with competition crowding
in. For example, special rice for diabetics, fortified milk,
oil etc. fall into this category. Over time, every agri brand
needs to find a real differentiator to stay in this space, or
else the advantage of pricing will be lost.
Retail Brands
Organized retail has been at the fore front in adding
value to agri products. While branding the source (farm)
is not easy, branding at the point of sale has been a
way of creating brands. While store brands in many
manufacturing categories are considered inferior to
producer brands, in agri business ‘store’ brands are seen
as that of superior quality. Almost 60% of organized retail
chain businesses are from food and related items. With
changes in the APMC Act & FDI in retail, the future will
see a more direct relationship between farm and store.
Retail branding is then expected to pick up.
GI as a brand building tool
Geographical Indicator is an indication; it originates from
a definite geographical territory, and it is used to identify
agricultural, natural or manufactured goods. GI is similar

to trademarks except that they point to the place of origin
and not to the owner of the goods. World over, GI has been
effectively used for agri products especially with relevance
to export markets.
GI is applicable for Agricultural/Horticulture products that
have qualities derived from their place of production and
are influenced by specific local factors, such as climate,
type of soil, altitude, etc. Some criteria which are essential
to meet GI registration are
• Produce are distinct eco-types with many appreciable
features.
• Produce have been under cultivation for a long time.
• Produce with strong local reorganization and
commercial impact in the zone of their cultivation.
• No individual or organization has claimed ownership of
these crops.
• The local communities have recognized such crops as
heritage crops.
While much of the evidence surrounding the dollar
benefits derived from GI branding is anecdotal, some
empirical research has shown that geographic origin
plays a key role in consumer decisions, including
willingness to pay a higher price for regionally branded
food products. For example, researchers have found that
geographic location is an important component of wine
pricing as well as food products, such as beef and fresh
produce.
While GI can be an effective tool for differentiation,
an effective marketing program is a must to take the
message across to the consumer. This is challenging,
especially for developing countries which have an inherent
imagery disadvantage. The producer boards which till now
Some of the GI registered
agri products
• Basmati Rice
• Darjeeling Tea
• Assam Tea
• Nilgiri Tea
• Goa Feni
• Malabar Pepper
• Kerala Cardamom
have focused on productivity and product improvement,
need to reorient themselves towards building the brand.
Historically, the focus of agri business has been to remain
profitable by minimizing costs (improving productivity).
Today, an increasing number of agricultural producers
are examining how to increase profit through product
differentiation. GI branding, in conjunction with an
effective marketing program, can help agricultural
producers and processors develop more profitable
operations.

AROUND
THE WORLD-
Successful
Agri business
branding stories
Abrand gives an identity to a
commodity and desirability to
purchase. Not only does it help in quality
assurance, but also repurchases have
often been allied with good quality
branded products, thereby increasing
loyalty among the customers. Majority
of agri products in India are sold to
the market as commodities. However
increasingly it is observed that there
is greater opportunity to make profits
by selling branded produce. Branding
efforts in agri business in India owe their
genesis to Basmati rice and since then
has been extended to Darjeeling tea and
other products.
These efforts though, are minuscule
compared to the opportunity available.
While the domestic market is fraught
with its own unique challenges,
branding is the need of the hour in the
export market. Branding is the way for
developing countries to be a force of
reckoning in the global food economy.
Typically, agri produce branding has
been linked to the geographical regions
where they are grown. Think of cheese
and wine from France which carries
the “appellation d’origine contrôlée
certificate” and the prestige that it
enjoys. However, developing countries
like India are at a disadvantage. Products
from developing countries are always
viewed with suspicion and a higher
discount is expected by consumers in
the developed world. However globally,
there has been success demonstrated by
developing countries in creating strong
agri brands
Brazil- Viva Tango
Brazil has one of the top rated agri branding programs.
Not only has Brazilian coffee been promoted extensively,
but also branding programs have been in existence
- Brazilian fruit, Brazilian chicken and even Brazilian
Lobster tail! Brazil holds seven percent of the world’s
agricultural commodity market and is the world’s third-
biggest exporter of agricultural products. Agriculture
is the most globalized sector of the Brazilian economy,
accounting for 25 percent of GDP and 36 percent of
exports. Brazil is the world’s leading exporter of: red meat
(24 percent of the total), chicken (39 percent of the total),
sugar, alcohol, orange juice, coffee and tobacco.
Part of BRAZILIANS’ success can also be attributed to
their acumen in market selection. Brazil’s focus for export
is not the US or EU where they face trade road blocks, but
the other developing countries. They understood that the
greatest potential for growth in food and agricultural trade
is among developing countries due to the large population
and the rising income growth. Now Russia is the main
buyer of Brazilian pork while Egypt is the main importer of
Brazilian fresh beef and China is the biggest importer of
Brazilian soy beans.
Brazil has followed a strategy of diversification,
globalization and brand differentiation, thereby reinventing
Brazilian agricultural produce. The country today is seen
as a producer of many high-quality products.
Colombia- Rebranding a nation
A well thought-out branding program for agri produce
will do a great deal in even building the country brand.
Perhaps the best example would be Colombia coffee.
Colombia for a long time was synonymous with crime and
narco terrorism until the Colombia coffee program came
along.
Similar to BRAZIL’S branding efforts, Colombia’s coffee
growers’ federation took the initiative and started building
a brand for their product back in 1959. They created the
strategy that built recognition and distinction for 100
percent Colombia coffee. The aim was to emphasize

coffee’s origins, on the same lines as Bordeaux for wine.
It was successful too. Although it only grows about a
quarter of Brazil’s coffee harvest, it is Colombia’s coffee
that has the reputation for quality.
Perhaps that has been the only positive thing about the
country and it has changed the overall impression of the
nation itself!
Experience, across the world, indicates that aggregation
and quality is a precursor to branding agri business.
BRASMAR -
Lobster tail turns gold
The story of Brazilian Lobster tail is a case in
point. Interbras is an export promotions board set
up by the Brazilian government in 1976. One of its
most successful ventures has been to organize the
collective marketing and branding of lobster tails.
Interbras recognized the opportunity to increase
Brazil’s penetration of the large US market for lobster
tails. They set about organizing the fishermen in such
a way, as to ensure reliable supplies and to develop
a strong brand identity. Interbras was initially able to
convince about 50 percent of the fishermen to give
them exclusive rights to export their lobster tails
to the US. In return, Interbras gave them a better
margin than the fishermen had been getting through
the importers. Interbras offered a firm price to both
the fishermen and to the brokers and in each case
that price was guaranteed for a three month period.
Moreover, whenever Interbras exceeded its target
margin, surplus profits were channeled back to the
fishermen.
Subsequently, Brazilian Seafood Marketing Associates
(Brasmar) was formed. Brazilian lobsters were
packed in good quality cartons bearing the ‘Brasmar’
label giving the product a single brand identity. The
product was promoted on its quality attributes and
so, was positioned as a direct competitor to South
African lobsters. A rigorous quality control system
was instituted to ensure that the brand image was
sustained. Suppliers who consistently failed to meet
the quality standards set by Interbras were ultimately
excluded from the scheme.
As for the South African product, restaurateurs are
the principal buyers of Brazilian lobsters. Brasmar
recognized that in addition to reliability of quality, the
restaurants were concerned about portion control
and were therefore interested in buying a product of
uniform size. Interbras developed a grading system
with 14 size categories instead of the 6 category
system used by others. This augmentation of their
product was well-received by buyers who could
then purchase a carton of lobsters, knowing that it
contained lobsters of uniform size.
The success of Brasmar can be measured in a
number of ways. Perhaps the most important of these
is that 85–90 percent of Brazil’s lobster fishermen
now collectively market through Brasmar and the
organization is able to claim that their marketing
system brought US$6 million more into the country
than did the system it largely displaced.
Source: FAO corporate documentation repository
Geographical indicator is a great tool for branding agri
produce. Till recently, about 31 agriculture products
including Darjeeling tea and Alphonso mango have got
GI registration. Currently, the action related to GI appears
concentrated on the registration of GI goods and has not
made any headway in adoption of strategies for branding
and promotion of GI products as well as their marketing
and distribution in both domestic and export markets. It
needs to be noted that GI coupled with effective marketing
can mean greater profits to the local producers.

CHALLENGES IN
BRANDING
AGRI BUSINESSES
Why is it in a country like India
which produces huge quantities
of agricultural products, there exists a
voluminous gap between proportion of
branded and unbranded products? In
a market where commodities like rice,
pulses, fruits and vegetables are bought
by visually and physically assessing the
quality, establishing a brand is a colossal
challenge.
The fact of the matter is that export
opportunities have contributed
significantly to the field of agri-branding.
For example, the overseas market for
basmati rice gave an impetus to the rice
producers and marketers in India to sell
branded basmati rice. On the domestic
front, the basmati and non basmati rice
varieties are made available in various
branded package variants suitable to
consumer preferences. Similar is the
case with pulses which is in nascent
stages.
Although commodities like Basmati Rice
and Darjeeling Tea are well known and
have a huge market overseas, the need
of the hour is to look beyond to branding
of such commodities with significant
export value and look at developing
brands in the domestic front
So what prevents the wide prevalence of
branding? Currently the branding efforts
in India for agri products are driven by
the food processing and organized retail industry only.
While organized retail has been growing, its contribution
is still in single digits. Hence, vast majority of India
continues to buy only unbranded agri produce.
Key Challenges which impede branding
Value-Seeking Indian Consumer
The value conscious Indian consumer is always on the
lookout for the lowest price. The perception that branded
products are costly is deeply rooted in the Indian psyche.
To many consumers, a branded product still means a
product with an attractive label rather than an assurance
of quality.
The great Indian retailer
India has been a land of Shopkeepers. Indian retailers
enjoy high trust quotient by virtue of their superior service
and relationship with their customers. This in turn means
consumers trust the retailer’s choice implicitly and hence
do not feel the need for branded products. However, this
trend has been changing with increasing awareness about
various products. Retail consolidation has also been a
prime mover in the picking up of branding efforts in agri
produce.
Scalability Challenge
A brand needs to stand for something to someone. The
heterogeneity of the Indian population in turn means
extensive localization and hence becomes unviable for
making investment towards building a brand across a
large geography. Only players with deep pockets have the
capabilities to invest and build a brand. Since the very
nature of agri business is oriented towards supplying
to the local community at large, branding efforts are
sporadic.

Market Structure
The system of aggregation for farm produce (Mandi)
by itself is against branding. This method strives to
consolidate without any allusion to the source and hence
wipes out any opportunity for differentiation at the first
point of sale. It does not incentivize farmers to provide a
much superior produce and charge premium accordingly.
This in turn goes against the grain of branding.
Poor Farmer Awareness
The average holding in India is way too small for any
farmer to make efforts towards branding. Although dairy
has seen the co-operative movement being successful
in creating great brands like AMUL, there have been no
concrete efforts in other spheres of agri products. The
farming community in India is still caught up on efforts to
sell and does not have the awareness of the relative merit
of branding.
The Way Ahead
It is only a matter of time before the challenges are
overcome. What are the ways to overcome this branding
conundrum?
Quality First
• ‘Cheap & best’ possibly exists only in the Indian lexicon.
However, increasingly people are realising that both
cannot always exist together. Continuous effort needs
to be put on highlighting the superior quality of branded
produce.
o Visual differentiation is a key method of highlighting
quality. For example, when branded sugar came into
vogue, very clear communication about how the sugar
is whiter and uniform in crystal size was highlighted.
Don’t undermine value - seeking
• Indian consumers cannot be divorced from seeking
value. Use any scope of differentiation to highlight
superior value to customers.
o For example, long or rounded grains can be
highlighted to prove that less quantity is required for
cooking.
Don’t scare consumers
• One of the strategies adopted many times by brands is
to scare consumers about adulteration in unbranded
commodities. That is not a good way to build a good agri
brand. It might give temporary results. However, it does
not add any value to the brand in question.

DOWN TO
EARTH -
Young India
forays into
agri business
Agri business today employs about
52% of the Indian population.
However, there has been large scale rural
to urban migration. People take up agri
business not by volition but more because
it has been their family tradition or
because that is the only profession they
can take up.
Recently, the wind of change has been
blowing in this direction with a chunk
of educated professionals taking up
agri business with gusto. Thanks to
the economic slowdown and fall-out of
countries, educated youth are realizing
the importance and prospects of agri
business and are exploring new avenues
in this field. Agri business is one sector
that will stay for long - till the survival
of mankind. Young entrepreneurs
are realizing this fact. Even when the
economy is shattered, people need food
to eat.
Any business, if it has to attract new
people, needs to provide intellectual
stimulation and financial rewards.
It’s the same in agri business as well.
Floriculture and Horticulture have been
at the forefront of attracting new-age
entrepreneurs.
Down to earth - What do youngsters
bring to the table?
The risk appetite of these new-age
entrepreneurs is definitely more - hence
the ability to experiment with crops which have a high
export potential has been a trend. We have witnessed the
efforts made by a 28 year old entrepreneur Mr. Rahul Gala
who has successfully cultivated the Iraqi Bari Dates in
Gujarat, which have a very lucrative market abroad.
Today’s youth are also willing to adopt technology.
A complete wave of computerization has taken place in
some farms, and technology is used to such an extent that
a click on the computer will irrigate and fertilise the entire
land as per requirements!
Emergence of a new service engagement with the
young entrepreneurs, has given rise to a completely new
service industry of supporting the farming initiative with
Know how. A successful revenue model which works on
providing a one-stop solution on key farming information
has created a new service business stream.
Getting the youth to the earth - the need of the hour
India has 60% of its population below the age of 30.
A robust economic growth is achieved only if this youth
population is gainfully employed and agri business does
provide the impetus. Initiatives have already been rolled
out by various governments. For example in Kashmir,
floriculture by youth is actively promoted as a means to
combat even terrorism. A sustained effort of this nature
needs to be done across the country.
Educating the youth-The agri education system needs a
bigger impetus to reach out to more youth and educate
them on practices leading to better revenue generation.
This is absolutely critical to gainfully engage the youth and
bring them back to working on the ground.

Expanding scope of service sectors - Services like sale of
farm machinery, processing of farm produce, extension
of agricultural knowledge have very good scope in rural
areas and will also help generate income in rural areas
and engage the youth in the entire agri value chain.
Overcoming the social stigma - The perception about
farming is at the nadir compared to any other industry.
This in turn means building up of family pressure to
move out of this business. While there is certain truth in
Bhushan Agro - Young & Educated making
a difference
With a strong intent to change the grim situation
of farmers, Chandra Dubey (IIT-Kgp and IIM-L
), set out on a mission to improve the situation
by using scientific methods of farming on farm
lands leased out from poor farmers in Madhya
Pradesh. Working on 56 acres of farm land in a
village near Sagar, Madhya Pradesh, Bhushan
Agro is focused on contributing towards rural
transformation. The business model is to lease
agricultural land from farmers at ` 8000-10,000
per acre per year and carry out farming using
modern scientific methods, equipment, systematic
crop rotation, and water harvesting techniques. The
revenue from agricultural activities per acre per year
is approximately ` 100,000 – 150,000. Also, because
of the increasing number of farmers under debt and
the consequent suicides, Bhushan Agro is looking to
replace financial institutions and also provide them
with crop insurance on reaching scale.
some of the perceptions, it is still misplaced and a social
rebranding of the sector needs to be taken up to instill
the sense of purpose in being employed in and by this
business.
We are not going to witness a reverse migration from
urban to rural and IT to agri in the near future. But small
steps have been taken and there is a need to overcome
the inhibitors and draw youth back to the ground.

EXPERT SPEAK-
Mr. Prabhakar Rao, Managing
Director, Nuziveedu Seeds Ltd.,
speaks on the challenges
and future of Agribusiness
Mr. M. Prabhakar Rao is the
Visionary Chairman of the NSL
Group and the Managing Director
of Nuziveedu Seeds Limited.
Hailing from an agricultural family,
Mr. M. Prabhakar Rao is a post
graduate in agriculture and has
nurtured Nuziveedu Seeds to
become the country’s largest seed
manufacturer and the dominant
player of Bt. Cotton seeds. Today,
Nuziveedu seeds is recognized as a
leading Bio-Agri company of India.
Apart from seeds, the group has
also diversified into several sectors
like Renewable Power, Textiles,
Integrated Sugar Factories and IT
Infrastructure.
In this exclusive interview, he talks
to Vertebrand about the boon and
bane of the agri sector.
The contribution of agriculture to GDP
has been steadily declining. The general
impression seems to be that the future
growth prospects for this sector are
weak. On the other side there are a
billion mouths to be fed. What is your
opinion on the future growth prospects
of this sector?
The Contribution of Agriculture to GDP
is certainly declining. This is natural
when other areas like manufacturing
& services start to grow and hence
contribute more to the GDP. However,
The role of government in this industry is very important.
Yet the general feeling is that reforms are significantly
pending in the sector. What are the significant reforms
you think need immediate priority and attention?
Iagree that Government intervention and role is very high
in this sector and there is an urgent call for reforms.
On the policy front, we urgently need a well thought-out
policy on genetically modified crops. There needs to be
adequate safe-guards, but in the larger interest of the
people, we need to adopt GM crops soon.
We need significant changes on the policy for subsidies
for agri inputs. It is paramount that the benefit needs
to reach the farmers directly. Currently, this is being
partly implemented and we need a whole-hearted
implementation going forward.
Beyond framing policies, there is a larger government role
in building rural infrastructure. With Indian agriculture
being dependent on monsoon, we need better irrigation
facilities. Point to note is that we already have a low
cropping intensity (i.e. area under cultivation as against
available area). Hence, it is important that priority is given
to improve the availability of water supply.
absolute growth in this sector cannot be compromised.
In a country where about 60% of the population is engaged
in agriculture and related occupation, it is important
that society inequalities do not crop up and growth is
maintained in this sector.
I strongly believe that 4% growth is possible if we ensure
that productivity is enhanced from the current levels
and that is possible by virtue of bringing in technological
innovations, extensive education to the farmers and
developing a strong linkage between farmers and markets
Yes, Agriculture can continue to make a healthy
contribution to GDP and can grow at modest levels,
provided right measures are taken.

Information technology has been a game changer in
many sectors. What do you think will be the role of IT in
transforming agri business?
IT is now an essential part of any business. A key area will
be the availability of real-time information. Information
about market prices and trends to farmers will certainly
enhance their decision making capabilities. At a larger
level, information on global commodity trends and
innovations across the world will positively transform the
industry. There is no doubt that information will play a key
role in connecting the farmers to the world.
Apart from BT cotton there seems to be no further roll
out of GM seeds. Do you see any future for GM seeds
getting into India?
I believe that adopting GM traits in all crops will improve
productivity, reduce losses and also improve the quality
of output, thereby making agriculture profitable.
However this is an area which needs the consensus of all
stakeholders. As told in an earlier question there is a need
for a well thought-out policy.
To start with, we need robust and transparent regulatory
mechanisms to roll out GM crops. This must be followed
by extensive education programs to general public on the
safety of GM foods. There is no doubt that India needs GM
crops.
In your line of business i.e. Seed industry, what do you
see as the significant challenge in the coming years?
Currently, the agri sector is plagued with issues of low
productivity due to poor agronomic practices in the
context of constant arable land and increasing demand for
grain and fibre. Hence, it has become imperative for the
industry and government to enhance yield per unit of land.
To accomplish that, there needs to be significant
investments in R&D and technology. We also have too
many regulatory challenges. A number of legislations
are involved right from Seed Act; PPV & FR Act; EPA;
Essential Commodities Act; State Cotton Control Acts;
Biodiversity Act etc. to name a few. There needs to be
concrete effort by the government to rationalize the
controls. Unless it is done, R&D and its adoption will be
stifled. The uncertainty in GM food crops is a dampener.
Warehousing facilities and Connectivity to Market need to
be significantly improved. Government should champion
PPP model in this area.
Government needs to incentivize R&D to bring out
innovative products.
With rising affluence of consumers, a significant change
in the dietary pattern is experienced. What is your
prediction of the consumption which is expected? In fact,
price rise of dals has been attributed to the increasing
consumption of protein rich food by Indians. Do you see
any such future trends in food consumption in India?
It is true that the rising income of the population has led
to changes in the dietary pattern of people. The increase
in demand for fine rice, vegetable/fruits, eggs and meat
clearly indicates this trend. In fact, fruits & vegetables
have registered significant growth not just in India but
in all developing countries with the demand growth
outpacing the production growth.
Along with the increasing consumption of eggs and
chicken, the demand for maize grain has also increased.
Thereby, an increase in demand for maize hybrid seed
is seen. As a seed manufacturer, we need to take
consonance of such trends.

There is a lot of buzz about Organic
farming. Do you think it will be a
sustainable movement and what will be
its future in India?
I don’t think we are ready for organic
farming on a large scale. Our task is cut
out - We have one of the lowest levels of
agricultural productivity and that should
be improved to match at least the global
average. Once we attain that standard, we
may look at high-value agriculture. For
now, it is not a priority area.
If multi brand retail FDI becomes a
reality, how will the face of Indian agri
business change?
Allowing Foreign Direct Investment
in multi brand retail will benefit the
farmers. In fact, both the farmers and
retailers may benefit by avoiding the
middle men. Let’s wait & watch.
Indian corporate sector has made significant acquisition
of farms in African countries. Do you see this
corporatization of farming ever happening in India?
Many corporates have initiated farming related activities in
Africa. One has to wait for some more time to understand
their success. I have no doubt that Africa is going to be the
food bowl for the world in the future. The basic difference
between Africa and India is the availability of large tracts
of land in Africa, which is not so in India. Within the
natural limits of our agriculture (like dependence on
rain), we can grow only to a limited extent and hence am
doubtful about this.
There seems to be a trend of many youngsters returning
to farming. What will be your advice to the budding
entrepreneurs in the agri business space?
Till recently, the rural young have been shying away
from agriculture. I am not aware if there is a large trend
of youngsters turning back to agriculture rather than
turning their back on agriculture. However If it is true that
youngsters are returning to this sector, it is the best thing
that can happen to Indian Agriculture and I wish them the
very best!

THE EDITORIAL TEAM
Aparna Lakshmi (Chief Editor)
Aparna Lakshmi is the Head of Corporate
Communication and Knowledge Management at
Vertebrand. Her sectoral interests includes foods and
consumer goods.
Syed Haque
Syed Haque is an Associate Vice President at
Vertebrand and leads the Research and Strategy
Development domain. In addition to business
strategy and consumer research, Syed is also a
specialist in supply chain management.
Richa Chhabra
Richa Chhabra is an associate and part of the
business development team at Vertebrand. Her
interests lie in tracking consumer patterns and
behavioral trends.
Karthik Sunkara
Karthik Sunkara is an associate and part of the main
business development team at Vertebrand. His area
of interest is digital marketing.

ABOUT VERTEBRAND
Vertebrand is India’s premier Brand Equity Management partnership. We take
turnkey accountability for managing brand equity of products and services on an
outsourced basis and help entrepreneurs take ideas from mind-to-market.
Occupying the hitherto-vacant space between Management Consultancies on the
one hand and typical Communication and Design firms on the other, Vertebrand
adopts a 360� perspective towards enhancing the business-stakeholder connect,
across all touch-points.
Vertebrand offers a comprehensive array of services spanning the science of
building & managing Brand equity. We have handled dozens of prestigious
assignments across sectors, assisting clients in New Product launches,
Channel Structuring & building, Internal Brand Alignment of employees,
Brand Architecture & Positioning, Corporate Identity Creation as well as Brand
Valuations.
Our expertise spans several industry verticals from Foods to Fertilizers, Consumer
Goods to Chemicals, Automobiles to Apparel, et al.
Our scientific & proprietary consulting tools are deployed by a team of over 35
consultants with deep-domain Sales & Marketing experience across various
industry sectors.
Vertebrand is today’s India’s largest single-window brand-building partnership.
Headquartered in Bangalore, the company has full-service offices across Delhi,
Mumbai, Chennai & Kolkata.
Most recently, Vertebrand was chosen as the global alliance partner and the
exclusive Asia-Pacific licensee of Equancy International (www.equancy.com ),
a premier Digital & Strategic Marketing global consultancy with a network
spanning Paris, New York & Shanghai. Vertebrand & Equancy collaborate actively
in knowledge-sharing & cross-border assignment-handling.
For more details, do visit us at www.vertebrand.com
For business enquiries, contact us at: brand.engineers@vertebrand.com

Vertebrand Management Consulting Pvt Ltd, No. 119, 1st Cross, 2nd Main, HAL 3rd Stage,Indiranagar, Bengaluru - 560 075, India.
T+ 91 80 2521 0277-79 F +91 80 2521 0280 www.vertebrand.com
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