With more than a billion people to feed, India ranks second in the production of fruits and vegetables in the world. Despite this, the value of fruit and vegetable imports in the country amounted to over Rs 19,700 crore in fiscal year 2022, as per Statista report. India imports most of its fresh fruit from Thailand, Vietnam and Chile and is the largest importer of fresh fruit in the world. To dig further into this space, nuFFooDS Spectrum recently interacted with Tarun Arora, Director, Single Family Office, IG International. With more than 50 varieties, this Mumbai-based company boasts an extensively multifarious stack of offerings from 22 countries for its Indian customers. In addition, IG International possesses 16 cold storage, accommodating about 40,000 pallets, making it the country’s largest cold chain logistics space.
What are the regulatory challenges involved in fresh fruit imports in India?
India’s imports of fruits are growing in double-digits, but there was a point in time when we were facing challenges in terms of imports in India. The fumigation process was posing a big hurdle for us in importing various fresh fruits. Hence, the discontinuation of the fumigation process, helped us to import cherries from the US-based Stemilt Growers within four weeks.
With the withdrawal of trade privileges by the US, the imports of fresh fruits in India increased and it hit back with 25 per cent retaliatory tariffs in 2019. The year 2021-22 has seen imports between 450,000 tonnes and 5000,000 tonnes with apples contributing a major share.
Fresh fruit imports did not face any problems with regard to sanitary and phyto-sanitary measures undertaken by the government. There are regulatory challenges but officials are cooperating with importers. They are actually helping solve the problem, understanding the logistics hurdles.
Which new varieties of fruits will be imported into India in 2023 and beyond? Are those varieties better in terms of quality and cost for the Indian market?
We are planning to import cherries, melons, and pineapples into the country. We are in discussion and expect to conclude it in the upcoming quarters. We have identified the potential areas in Karnataka, Kashmir, Arunachal Pradesh, and Kerala for melons, cherries and pineapples respectively. If things go well as planned, it will result in a combination of company-owned land as well as collaboration with farmers.
What was the revenue of IG International in FY 2021-22 and what’s your expectation for FY 2022-23?
The revenue from operations for the financial year 2021-22 equals Rs 1,335.78 crore (as compared to Rs 852.19 crore for the financial year 2020-21). The expected growth rate for 2022-23 would be in the range of 8-10 per cent compared to the preceding year.
Could you comment on a few of your new joint ventures and partnerships?
Our new joint ventures and partnerships in CEA- Controlled Environment Agriculture, Plant Bioscience, Logistics, among others, are all forward-looking in giving us better control over our upstream and downstream supply chain and also in making India a premium fruit-producing nation.
IG International has entered into a joint venture with Hortifrut, Chile to produce the finest berries for the domestic market as well as export; a joint venture with Engin Tarim, Turkey for apple production; partnered with Palogix International, USA for reusable transit bins; with Aatreyas in protected cultivation systems such as net houses, greenhouses and tunnel systems; Esquire Corrugation for fresh produce packaging; Deccan Exotics for avocado plant nursery; and Rajat Biotech for tissue culture rootstock and sapling for imported premium fruits.
How are you leveraging technology to adapt to the new challenges in this sector?
The pandemic was the turning point for IG in embracing technology with an urgency never seen before. In fact, at that point, it was technology that kept us afloat, and today, technology is keeping us ahead of others. We are deploying technology in production, procurement, shipment, and supply chain, and finally in selling our product. In the production line, we use plant genetics in rootstock and sapling selection, we use CEA in our growing practices in orchards and farms. In the procurement line, we use data science in forecasting and market studies, we use GPS and other related technologies in the supply chain and finally, we use our App – MYIG in selling our products online. We are becoming a technology-driven venture, all-in-all.
What steps have you taken to be ‘ahead of the game’?
The imported fruit market in India is all set to grow and IG International has realigned its vision to be future-ready – by making its fruit basket as varied and easily available throughout India, throughout the year, adopting the highest sustainable practice that involves everything from growing and procurement of fruits to the plate of its millions of customers. To achieve this, IG has set its goal to gain the highest control over the value chain of the company through investment in vertical integration moving upstream and downstream.
How are you overcoming the roadblocks in the management of cold chain logistics?
In India, the growth of cold chain logistics is in a developmental stage and the loss of food resulting from the lack of it is estimated to be $8-15 billion per annum. Cold chain management is quite a costly affair and has a direct impact on the profitability of the business.
It comes with a higher operating cost, as fuel costs constitute around 45 per cent of the operating expenses of cold storage in India, which is way above that in the West, as fuel costs constitute a mere 10 per cent for them.
To run a successful cold logistics, one needs to rely on integrated technologies such as Artificial Intelligence, Machine Learning, and the Internet of Things for optimum efficiency. We are at an initial adoption and developmental stage.
Breakdowns in equipment caused by power failure are a challenge as well, and unless attended to immediately, may result in the loss of the entire shipment. Therefore, cold chain logistics comes with a very big risk factor.
At IG, we are installing power-efficient modern cooling systems in our cold storage. Our reefer vehicles are equipped with GPS, enabling us to monitor breakdowns in real time. As the cold chain logistics in India is developing, there is a huge opportunity, making it one of the most promising industries. And, although the proposition is costly, looking into the future of this industry, IG is making a massive investment in setting up cold warehousing throughout the country.
The company is betting high on Sustainability. What are the company’s goals in this regard?
IG International understands that only sustainable fruit-growing practices can be our most practical defence against the threat of climate change. We have made an elaborate ESG (environmental, social, and corporate governance) assessment and are working in that direction. We are reducing the fruit mile (food mile) by growing those fruits in India that we usually import. We are using CEA in our farms, conserving water, land, and other natural resources, while on the other hand, increasing output. We are using reusable and renewable packaging for our products. We have set our goal in EV (electric vehicle) transportation to reduce emissions from our vehicles. We are currently using solar power to run our cold storage with a goal in the near future of a total transition to renewable and green and clean power sources. And we are educating our people to embrace the change.
Please list the countries from which fruits are being imported into India. How is it helping the Indian market?
IG imports fresh fruits from more than 22 countries throughout the world including the USA, Argentina, Peru, Chile, Mexico, South Africa, Italy, Belgium, France, Czech Republic, Russia, Spain, Australia, Turkey, Egypt, Iran, China, Vietnam, Cambodia, New Zealand, and other countries.
Exotic fruits from these countries are offering diverse choices to Indian customers, apart from providing health and wellness. The inclusion of these fruits is redefining fine dining experiences as well.
These products are creating a new segment, known as Imported Fruits, and are expanding the fruit market in India. Although higher in price than the Indian counterpart, imported fruits are becoming phenomenally popular as the market size has grown from zero in 2000 to 721,493 tonnes by 2021. The upward trend continues to rise.
What are your views on the fruit export capabilities of India?
India is progressing well in creating a global footprint. With our diverse climate spread across our country, it provides excellent conditions to produce diverse fruits. As corporates are gradually entering this trade, fruit growers are recalibrating their farms according to the international market demand. With CEA and other technological interventions, Indian growers are upgrading their produce to address the export-specific challenges that had been barring our participation in the export market.