Pivot and Persist: This Chandigarh-based hospitality startup ventured into fruits and vegetable business to survive the pandemic
Travel enthusiast Chirag Bansal gave up a secured job as a Product Manager to start his own venture in the hospitality industry,. Along with his sister, Nidhi Bansal, Chirag founded the hospitality strtup in 2018. LivingStone Stays collaborates with property owners and gets them into a marketing contract to renovate the spaces, brand them, and exclusively market on holiday booking platforms.
LivingStone’s USP lies in the fact that its properties are situated away from the hustle and bustle of the towns and cities, offering experiential stays in the Himalaya’s abode. Starting their venture at 12,000 feet in Chitkul, Himachal Pradesh, the startup has now expanded across the Himachal region.
Until now, LivingStone Stays had been receiving up to 80 bookings each month, on an average, and generating revenues worth Rs 8-10 lakh. However, ever since the coronavirus pandemic reached India’s shores, the hotel and hospitality industry has had to bear the brunt. “We received zero bookings in March,” Chirag says, when the pandemic started spreading in India.
A report by IBEF states that the tourism and hospitality industry in India was expected to grow to $488 billion by 2029. However, due to the pandemic, the Confederation of Indian Industry estimated that the sector will lose business worth $28 billion.
Being aware of the consequences, LivingStone Stays has pivoted its model to diversify its business into newer segments. The startup has ventured into the fruit and vegetable business, supplying buyers direct-from-farm.
Why the F&V segment?
LivingStone Stays has a very strong presence of experiential stays in Himachal Pradesh, managing 20 properties under its brand. “This gives us a strong network of apple farmers as many of our property partners are apple farmers as well,” 27-year-old Chirag tells.
Having direct access, combined with the government’s recent reform in the agricultural sector — the creation of One Nation One Agriculture Market, motivated the team to move into the fruit and vegetable segment. “Another motivation to enter this segment was the amount of inefficiency that exists in the current supply-chain,” Chirag explains.
How does it work?
Some five-to-six odd property partners of LivingStone Stays are into apple farming. The startup has further partnered with another six apple and pear farms in Himachal Pradesh to source the produce.
“After sourcing the fruits from our partners, we will facilitate the grading and packaging as per the buyer’s requirement at a farm-gate level,” Chirag explains. The packed units will then be shipped directly to the buyers, without the involvement of any middlemen.
This direct-from-farm supply chain channel provides advantages to all the stakeholders in the system. Chirag says that by bypassing middlemen, LivingStone Stays will be supplying fruits and vegetables directly from the farms to the near-end of the value chain.
“In a conventional trade channel, a farmer sells his produce in the local mandi, from where it is transported to the bigger mandis, and then it is further transported to the rest of the country. This long supply chain involves a lot of inefficiencies and spoilage,” he explains.
By shortening the supply chain, LivingStone Stays is addressing one of the major issues in the apple farming sector — timely payments. Apple farmers are usually paid after the produce has been sold. LivingStone Stays ensures that the payments are made in a regular and timely fashion.
Besides this, the majority of the fruits and vegetables are usually packed by the farmers. Thus, traders or suppliers are usually not able to assure quality. LivingStone Stays facilitates grading and packing, assuring that the standards and quality are maintained. This ensures that the fruits and vegetables reaching the end-customer are fresh, as the time and handling are minimised.
Challenges so far
The fruits and vegetable supply segment is a cash-intensive business. “We need to constantly pump in money to facilitate instant payments to the farmers. And it takes time to grow the produce and transport it to the end-buyer,” Chirag reveals.
Besides investing from his own savings, Chirag has been looking to bridge the funding gap through debt funding from a bank under the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) scheme by the Government of India. He says that CGTMSE CEO, Venu Rao, has been helping the startup by facilitating the loan.
Additionally, the fruits and vegetable business involves a lot of uncertainty. Chirag has now planned to dispatch the first consignment of apples. However, the process was delayed due to harvesting issues, and the startup is geared to ship its first consignment by the last week of July.
Initially starting with only apples, LivingStone Stays has now also ventured into supplying pears. Chirag says that the apple harvesting season ends in mid-November, and the startup then plans to expand its offerings to cherries, dry-fruits, cauliflower, and tomatoes, all of which is grown in the Himalayas.
The road ahead
Recently, LivingStone Stays’ properties have started getting a couple of bookings. “People are finding no reason to put up in big cities as they are now able to manage to work remotely, and their children's education has now gone completely online. Inquiries for our experiential stays for longer periods have increased,” Chirag adds.
Chirag says that going ahead, international travel for leisure would be limited, which will further push domestic travel and give rise to demands for unexplored tourist destinations. “We see this as a strong tailwind as one of our core offerings include providing stays in unexplored and offbeat destinations,” he says.
Tourism and apples generate the maximum employment in the Himachal Pradesh, and Livingstone Stays wants to monetise this. “Once some activity starts in the tourism sector, we will bundle fruit-picking experience with our experiential stays. The apple-picking experience is highly popular in developed countries like the US and Europe, but there is little awareness in India. We will offer a complete farm-stay package to our customers with a stay in a wooden-chalet in an apple farm, and offer apple-picking as a leisure activity,” Chirag says.
The startup is targeting to sell apples worth Rs 1 crore. Chirag says that his greatest learning from these testing times has been to keep the business agile and diversified.
YourStory’s Pivot and Persist series spotlights Indian startups that are pivoting to seize new business opportunities, transforming their business models, and offerings to navigate the current COVID-19 crisis.
Edited by Kanishk Singh