Rural Agri Input - paradigm shift in customer behaviors

1. 1
Rural Agri Input Marketing – A paradigm shift in “customer behaviours”
Hitesh Patel

2. 2
Rural Agri Input Market – As Is

3. 3
Agriculture Value Chain
Value
Chain
Segment
Segment
that
support
broader
Agritech
ecosystem
• Financial services
• Loans/Credit facilities for
input procurement
• Insurance/reinsurance of crop
• Information platforms
• Online platform for
agronomic pricing
• Market info
Supply chain tech and output linkage
Quality management and traceability
Farm mechanization and automation
Farm infrastructure
Precision agriculture and farm management
Farming as A Service
Market linkage-Farm inputs
Fintech

4. Agriculturally Demographic India
4
•What is the extent of variation?
•The last Agriculture Census for 2015-16 placed the
total “operational holdings” in India at 146.45 million.
•India’s “serious” farmer population adds up to 36.1 million
•Consumer behavior in the rural market is even more
perplexing because of a singular lack of consistency in
groups which are homogeneous in parameters of
demographics-
1. Age
2. Occupation
3. Education
4. Income
Most marketers realize that India is on the cusp of
momentous change
• Women constitute 42% of agriculture labor force in
India, but own less than 2% of farmland.

5. Agrochemical distribution and Institutions Involved
Agrochemical distribution, Key Cluster Areas
Key states in North
India include Punjab,
Haryana, Uttar Pradesh
and Delhi (UT)
Value: INR 24,000 Crs
INR 30,000 Crs (Including CN)
Key states in the
West include
Maharashtra,
Gujarat, Rajasthan
and Goa (UT)
Key states in South
include Tamil Nadu,
Karnataka, Andhra
Pradesh and Kerala
32%
30%
28%
10%
West and Central
South
North
East
Value : INR 24,000 Crores
Key states in East
India include West
Bengal, Bihar,
Odisha. But the sales
are low in East India
Agrochemicals Market in India - Market Share by Region ( FY’21)
Types of
Entities
South West North East N East
State
Departments
1.0 0.1 2.8 0.1 0.0
Cooperatives 1.4 9.2 2.7 1.1 0.2
Private
Distributors
17.2 57.5 2.3 1.5 4.1
Private Deals 20.6 30.2 66.6 20.2 0.3
Total 40.2 97.0 74.4 23.0 4.6
Note: Units are in 1000
North, West and Southern regions accounted for 90% of distribution points.
Source: Ministry of Agriculture Frost & Sullivan

6. Agrochemical Consumption Pattern in India VS Global
6
5.0%
95.0%
India
ROW
Agro
chemicals –
Global vs
India
• The global agrochemicals market was valued at USD 60 billion in FY’20, with India contributing
around 5% of the overall value
• At present India is the fourth largest player in the agrochemicals market after USA, Japan and
China with insecticides accounting for the highest share of the market
• India is expected to be one of the fastest growing markets for agrochemicals in the coming
years, as domestic production as well as exports increases rapidly
Agrochemical Consumption Pattern in India VS Global

7. 7
Per-Capita Consumption much below Global averages
• India is the leading producer (in terms of cropped area) for rice, wheat and cotton, however the area treated under
agrochemicals remains very low as compared to global averages (~35-40% of area is treated with agro chemicals).
• India’s share in global agricultural output is 12%, but India’s share in global pesticides use is just around 1%.
• While, domestic consumption of agro chemicals is substantially below the global standards at ~0.58kg.ha.
• The Top-5 states (AP, Punjab, MH, Karnataka and Gujarat) consumes >60% of the total agrochemicals in India.
• While, Paddy and cotton are major agrochemicals consuming crops (consumes >60% of the total agrochemical
consumption).
Country Value of Agri
Output (USD
bn)
Pesticides Use
(tonne)
No. of AI’s
registered
China 968 17,63,000 681
India 401 50,410 279
EU 239 3,68,588 489
USA 193 4,07,779 323
Brazil 94 3,77,176 477
Japan 57 51,006 583
Australia 36 50,922 561
World 3,342 41,16,832 NA
Country-Wise-Value of Agri-Output, Pesticides usage and AI registration

8. 8
Agriculture Value Chain
Value
Chain
Segment
Segment
that
support
broader
Agritech
ecosystem
• Financial services
• Loans/Credit facilities for
input procurement
• Insurance/reinsurance of crop
• Information platforms
• Online platform for
agronomic pricing
• Market info
Supply chain tech and output linkage
Quality management and traceability
Farm mechanization and automation
Farm infrastructure
Precision agriculture and farm management
Farming as A Service
Market linkage-Farm inputs
Fintech

9. 9
Agri Input – Key Challenges
• Labor shortage
• Lack of Information
• Low demand
• Lack of Finance
• Infrastructure

10. 10
Agri Input – Conventional Marketing
Crop
Product
FM /
FD
Social
Media
Telema
rketing

11. 11
Agri Input – Marketing new trends
Crop
Solution
FM / FD
Trade
FM / FD
Social
Media
Faas
Agro
Advisor
y
E-comm
Platfor
m
Market
Linkages

12. Present Market Dynamics
12
1) Earlier influence of
Retailer was high on Farmer
decision making which has
now shifted to
experts/Online
influencers/Progressive
fellow farmers
2) Many Brands using
social/digital media in a big
way which helps in brand
awareness and later on in
actual conversion
3) If you have an integrated
marketing plan then
product launch to scale up
cycle has been reduced
4) Getting Customer
feedback has become
easy
5) No of players and no of
substitutes is increasing so
cut throat competition in
many cases
6) Content plays a big role
in brand building if you
have the proper structure
and backend
7) Creating a brand and
having a brand equity is
challenging day by day or
rather you need more
investment for the same
8) Sustaining the brand
has also become challenge
9) Earlier customer used to
be price sensitive (Quality
was compromised with
price). Now farmer is ready
to pay anything for assured
quality product (Buying
capacity of farmer has
increased)
10) Fertilizer segment
bargain for price has
increased tremendously
since bulk fertilizers doesn't
exhibit much product
differentiation hence farmers
tends to buy economical
product.
11) Soaring glory of all
fertilizer brands tamed by
some level. Where as
demand for customized
solution even in fertilizers
has increased
tremendously among veg
growers.
12) PLC of fertilizer is
among the longest and
even brands which were
created in late 80s are
amongst the most popular.
13) More cash business
post covid
14) Attraction towards Cash
discount rather than turn
over discounts
15) Secured business
approach rather than free flow

13. 13
Future Outlook
• FAAS Boom imminent
• Rise of data led models and farm analytics
• Block chain models in Indian Farms
• Spray using drones
• Rise in urban farming
• Nutritional Farming

14. Three challenges that rural marketers must overcome
01
02
03
01
Reaching the mass population
The first of this is the challenges of reach-markets in the
rural India that are small & scattered making them
inaccessible & unreliable or both
02
Brand Recall- a continuos process
The next challenge is to ensure that the consumers are
aware of your brand and want it.
03
Rural Market is influence
The third challenge is easy Influence by companies in
rural markets

15. Paradigm shift from Economically Driven to One-Health
Driven Food Systems
15
One Health driven
food systems based
on regulation,
programs & projects
From reactive to
proactive polices
Poor environmental health
Mining of natural
resources
Variable soil
management
Improved environment health
Economically
driven food
systems based on
market prices
Management of natural
resources
Soil management
Cheap Calories
Poor
micronutrient
access
Processed foods
Poor public health
Sensibly priced
Calories
Adequate
micronutrient
access
Raw ingredients
Improved public health

16. Soil v/s Human Zinc Deficiency

17. Soil v/s Human Zinc Deficiency

18. India to double specialty chemicals market share in 5 years
• The Indian specialty chemicals industry will outpace its Chinese counterpart and double its share of the global market to
~6% by 2026 from 3-4% in fiscal 2021. This will ride on a strong revenue growth of 18-20% this fiscal and 14-15% in the
next, compared with single-digit growth in the previous two fiscals.
• India is the 4th largest producer of agrochemical in world
18
https://www.crisil.com/en/home/newsroom/press-releases/2022/03/india-to-double-specialty-chemicals-market-share-in-5-years.html

19. Initiatives by Industry for Enhancing Farmers life
19
• Enabling smallholder farmers to grow their farms into commercially
viable and sustainable farming businesses.
• Approaches focus on the following main areas:
a. Education
b. Customized Agronomic Solutions
c. Insurance and Finance
d. Market Access and Fair Prices
e. Partnerships
• Catering more than 10,000 smallholder farmers.
• Increase the productivity and profitability of smallholder farmers by providing
training, access to resources and markets, and partnering with public, private
and local organizations.

20. 20
Agri Input – Digital Revolution

21. Country-wise Agritech Maturity Matrix
21

22. Factors Driving the Growth of Agritech
Inadequate And Unstructured Data
Lack of Access To High Quality Inputs
Inefficient Supply Chain
Lack of Employment Rationalisation
High Cost of Equipment
Lack of Finance
Pain Points Of Indian Agriculture Sector Fueling The Rise Of Agritech
Despite its significance to the Indian economy, agriculture often played second fiddle to many
of India’s emerging industries, particularly in manufacturing and the IT services sector. This in
turn led to agriculture taking a backseat and falling behind the times. There were other factors
too, which have necessitated today’s agritech push.

23. Farm Inputs
23
100 107-110 115-120 120-125
7-10% Margin 7-10% Margin
7-10% Margin
4-5% Margin
4-5% Margin
Typical Agritech Model For Farm Inputs
100 107-110 112-115
Traditional Model For Farm Inputs
Dealer
Distributor Sub-Dealer Farmer
Agritech Player Sub-Dealer Farmer

24. Agritech in India: Key Highlights
24
$170 Bn
$24 Bn
$204 Mn
Note: Turnover includes the value of inputs, gross income from agri loans and insurance, and value of produce
Source: Inc42 Plus, EY
Total market
opportunity in terms
of turnover
Addressable market
opportunity when
adjusted for net
revenue to normalize
across segments
Current market size of
agritech is -1% of
overall agritech
market potential
Sub-Sector Startups
Market
Linkage
Farm inputs
Precision
Agriculture
FAAS
Financial
Services

25. 25

26. 26

27. Impact of digitization
ROCE
EBIT
Cost of
Capital
Contribution
Margin
Fixed Costs
Sales
Variable
costs
Capital
Cost Rate
Operating
Assets
Fixed
Assets
Current
Assets
Manpower
Maintenance
Packaging
Sales
Volume
Sales Price
Quality
Delivery
Procurement
Energy
Waste
Management
Sales Cost
Investment
Planning
Inventory
Receivables
• 360 degree customer view
• Improved sales
• Lesser Revenue losses
• Traceability
• Better QA and sampling
• Efficient and timely delivery
• Lesser operational delays
• Optimized procurement
• Efficiency and cost management
• Low wastage and spillages
• Reduced sales cost
• Better resource planning
• Better OEE
• Predictive and preventive
maintenance
• Packaging yield tracking
• Better visibility
• Better planning
• Reduced cost
• Visibility leading to low stock out
• Visibility leading to lower DSO
Targeted solutions
eWallet and
Payment gateways
WMS
Planning tool BI tool
Field app for sales
Planning tool
Planning tool SCADA IoT
Planning tool RPA
Field App for
sales
DMS/ CRM
tool
Digital
marketing
QR code
scanning IoT
BI / MIS
tool
BI / MIS
tool
BI / MIS
tool
BI tool
Digital Transformation – Agricultural company Ecosystem

28. 28
What Industry is doing on Social Media
a. General Post b. Customer Partnering c. Corporate Branding d. Product Information e. Product Launch
10%
20%
35%
35%
UPL
2%
8%
10%
90%
Syngenta
5%
5%
10%
20%
60%
Adama
10%
15%
15%
50%
Dhanuka
6%
10%
14%
70%
Crystal
Product Information Customer Partnering Corporate Branding Leadership Thought
General Post

29. 29
Vertical Farming – New Hope
Production
%
Water
%
Cost
%

30. 30
Problem(s) in Agricultural Spraying

31. 31
Drone – Revolution in Big Data

32. 32
Precision Farming

33. 33
Precision Farming

34. Initiatives by Industry for Enhancing Farmers life
34
• Enabling smallholder farmers to grow their farms into commercially
viable and sustainable farming businesses.
• Approaches focus on the following main areas:
a. Education
b. Customized Agronomic Solutions
c. Insurance and Finance
d. Market Access and Fair Prices
e. Partnerships
• Catering more than 10,000 smallholder farmers.
• Increase the productivity and profitability of smallholder farmers by providing
training, access to resources and markets, and partnering with public, private
and local organizations.

35. 35
Corporate farming & FaaS

36. Paradigm shift that Industry Needs
On the other hand, Indian wheat is considered as feed grade in the
global market. Shouldn’t Indian farmers look at growing premium wheat
varieties that can be used for making pizza and pasta?
Currently, Indian agriculture methods are towards meeting domestic needs
as part of achieving self-sufficiency in production.
Focus must shift to meeting consumer and export demands.
Marketing side of agriculture must be given more attention
For example, there is an increasing demand for healthy foods such as rice
or wheat rich in amylose content. These varieties are diabetic-friendly
and in great demand.

37. FAAS- Farming as a Service
Boom imminent
Rise of data led models
and farm analytics
Block chain models in
Indian Farms
Spray using drones
Rise in urban farming
Trend 2022 &
Beyond-
Advancement
in Agriculture
Agriculture Way forward
GHG emission’s
reduction
Adoption to
climate change
Food Security
Carbon-Neutral
Agricultural
Commodities

38. 38
Q&A

39. 39
Thank You