Organic munchies: Why D2C brand Farmley has turned to farms for healthy snacking
Delhi-based D2C startup Farmley focuses on providing unadulterated dry fruits and nuts sourced by establishing deep back-end linkages with farmers.
Post-pandemic, more consumers are paying attention to healthy eating and supermarket shelves now have an even wider array of options for nutritious snacks. However, healthy snacks are often more expensive, which causes consumers to buy other ready-to-eat snacks loaded with high levels of energy, sodium, sugar, and saturated fat.
To address this problem, IIT alums Akash Sharma and Abhishek Agarwal established in 2017. The Delhi-based direct-to-consumer (D2C) brand specialises in unadulterated dry fruits and nuts in line with the trend towards natural, organic, and low-calorie snacking.
According to Akash Sharma, Co-founder and CEO of Farmley, two meals are a thing of the past and consumers now eat around 7-8 meals a day.
“This is evident in regions such as Singapore where the average person consumes around eight meals a day, with a majority of these meals being snacks. This shift in consumer behaviour is driving the demand for more wholesome and healthier snacking options,” he tells YourStory.
The startup sources its products directly from farms and over the past five years, it has invested in building deep back-end linkages with the various farms.
The turning point
Farmley's initial focus was on business-to-business (B2B) wholesale, supplying to traditional wholesalers based in mandis and private retailers, who would package the products under their labels.
Three years later, it pivoted to a D2C model to reach the end customers directly.
“We realised that we needed to spread awareness about the category, innovate with the ingredients and curate novel products. We decided that we have to build a brand of our own to drive greater impact in consumers' lives,” says Sharma.
Currently, the company primarily focuses on dry fruits and nuts, offering 80 products such as trail mixes, maida-free pasta, and roasted munchies. Also, it doesn’t use palm oil to make its products.
The price range of its products goes from Rs 30 to Rs 999.
Farmley sells on various online commerce channels including , , , , Instamart, and . While it doesn’t have any exclusive brand outlets, it sells offline through the SIS (shop-in-shop) model and has partnered with 10 retail outlets.
“The initial focus was on achieving high volumes and ensuring product quality. We established manufacturing and processing units as well as supply chain procurement networks directly with farmers, and importers for imported products. The focus then shifted to understanding the qualities, processing requirements, potential adulterations, and the value that could be added across the entire supply chain,” he adds.
Empowering farmers
Sharma comes from the small town of Bharatpur in Rajasthan and his family is deeply rooted in farming.
“We used to have large farms where we extracted mustard oil seeds. That was the first time I realised that even a small amount of value addition to agricultural products can be really useful,” he notes.
Farmley sources its products directly from farmers, eliminating middlemen and performing stringent quality checks in its ISO- and FSSAI-certified manufacturing centres. It has established deep back-end linkages with 5,000+ farmers and producers.
The startup has expanded its presence beyond India to countries including the US, the Middle East, and Australia.
The 260-member startup operates five farm gate processing centres, with women comprising over 60% of its workforce at the centres. Farmley has four fully equipped processing units where the majority of the products are grown.
“One of our processing units is located in Purnia, Bihar, where we directly procure makhana from over 3,500 farmers, “ he adds. Other units are in Udupi, Karnataka for processing cashews from various microprocessors and farms, Sangli in Maharashtra which processes green raisins from over 1,500 farmers, and one in Indore for processing imported products as well as central packaging and value-added products.
The founder believes that this setup allows them to obtain raw materials directly from the source and maintain a close relationship with the farmers.
“All processing and packaging are done in these units, and dispatches are made from there,” explains Sharma. “We can maintain complete control over the quality of our products, which is a key differentiating factor for us.”
Tapping India’s healthy snacking market
The Indian snacks market is highly competitive, with major players such as Haldiram’s, Jumbotail, Licious, and Awesome Dairy. The market is expected to reach a value of Rs 70,731 crore by 2028, exhibiting a compound annual growth rate (CAGR) of 10.4% during 2023-2028, as per IMARC.
“The Indian snacking market is growing rapidly, and the demand for wholesome snacks is increasing among millennials,” adds Sharma.
However, the market for dried fruits and nuts is highly competitive, with many players offering a wide range of products, including mixed fruit and apricots.
While Farmley differentiates itself with its farmer network and in-house innovation unit, it has also faced hiccups. Some challenges include establishing distribution networks and increasing retailer footprints, which Sharma says require a lot of investment, time, and energy.
“Another challenge is being agile about which products are popular with consumers, as even after extensive research, some products may not be picked up by consumers. Insurgent brands must rely on increasing distribution, placement, and packaging to shape the product experience to answer the ‘why me?’ question,” the co-founder adds.
Future plans
The startup raised $6.7 million in a funding round spearheaded by BC Jindal Group last December. Existing investors including , , and Alkemi Partners also participated in the fundraising.
Farmley’s revenue reached approximately Rs 150 crore in FY23, with an ARR (annual recurring revenue) of Rs 300 crore and is fast expanding its offline presence across modern trade and general trade as well.
The company is looking to expand its offline presence across both modern and general trade. It is particularly targeting the Indian population living abroad. As of now, the company is present in markets such as Australia, New Zealand, and the UAE.
“Establishing trust with consumers is critical for companies looking to capitalise on the increased demand for nutritious snacks. We aim to do that as we expand to other markets,” adds Sharma.
In line with its expansion plans, it is setting up another processing centre in Gurugram.
Edited by Kanishk Singh