Until we all hit a certain age, we tend not to question where our food comes from, and whether the food we are consuming is healthy and organic or just conventionally grown chemical food that is brought by a trustworthy vendor to market. However, with time, people start realising the value of consuming chemical-free fruits and vegetables, thereby generating a niche market in the world.
The Sri Lankan Government recently took measures to ban the use of fertilisers in agricultural production, with an aim to improve the quality of food produced in the country. Until then, only a handful of companies were catering to this niche market in the country, one of which is Saaraketha Organics, founded in 2010.
The Develop It Yourself (DIY) column this week spoke to Saaraketha Organics Co-Founder and CEO Charitha Abeyratne, who took up the challenge of being an entrepreneur by establishing a 100% organic produce company in Sri Lanka.
Enlightening us about her journey as an entrepreneur in Sri Lanka, Abeyratne said that right now she is a happier person by doing the job she loves, rather than working a normal job for somebody else under the typical 9-5 working hours.
“We have created a brand and it gives me satisfaction knowing that it is impacting a lot of other people around us, which is why I’m glad that I and my husband (Co-Founder and Managing Director Prasanna Hettiarachchi) never gave up despite the ups and downs we faced throughout the journey,” Abeyratne expressed.
How did Saaraketha Organics begin?
After gaining inspiration from how the apparel industry in Sri Lanka operated, Co-Founders Abeyratne and Hettiarachchi decided to bring a transformation into the Sri Lankan agricultural sector that could benefit all stakeholders involved, and also have an impact on changing people’s lives.
Speaking to us, Abeyratne said that the proposed plan of the company was executed at the right time, as they were able to find an investor who joined hands to establish the company in 2010. According to her, the initial investment was Rs. 25 million, which expanded further in the years ahead.
As businesses do have ups and downs, Saaraketha Organics also faced an obstacle during its early stages, where the intended plan of having their own farm did not work out, as they did not have the skills of farmers; which resulted in them changing their business model.
“We were very good at building a brand and taking the story out to the market. So we changed our business model – we left the farmers to do the farming and in the meantime, we got the standard certifications and everything sorted out, which actually worked out much better for us,” she said.
As of today, the company gets almost 90% of its supply from over 2,500 rural smallholder farmers who are educated with regard to the subject, and provided the required equipment and tools, along with financial support to retain the farmers in the business.
When inquired as to what the challenges were in establishing a company in the niche market (at that time), Abeyratne stated that the business model used by Saaraketha Organics was a different approach, meaning, the company first targeted the export market, and then the local market.
She explained that the demand from the international market during the company’s inception was much greater than in Sri Lanka. “We focused on the UAE market in the Middle East and the Maldives. Later, to cater to the local market, we pioneered an e-commerce website for fruits and vegetables in Sri Lanka.”
What is the current status?
Today, Saaraketha Organics offers over 200 varieties of organically produced products to multiple destinations around the world. With reference to the product portfolio, the products include fruits, vegetables, spices, heirloom rice, grains, cocoa, cashew, greens, herbs, coconut, dehydrated fruits, and allied products.
Commenting with regard to this subject, Abeyratne highlighted that despite having various product categories to choose from, the company has never been or will be motivated by profit, as creating an impact on everyone’s lives is considered essential within the organisation.
In a measure to prevent a waste footprint, as organic food spoils fast, the company came up with the Modified Atmospheric Packaging (MAP) system, that is designed to use a special packaging material to maintain an optimal respiration rate to preserve the colour, taste, and nutrient content of fresh produce products.
Further, to gain customer loyalty and maintain transparency in the industry, Saaraketha Organics was the very first company to introduce the option of “tracing” from where the organic commodities are produced. Accordingly, all products certified under USDA and EU Organic standards are traceable with farm-to-table transparency, allowing the customer to know the origin and the complete triple bottom line footprint of the product.
When inquired about the pricing model used by Saaraketha Organics, Abeyratne mentioned that it uses a premium price model, “due to the certification cost, expenses of farmers, chilled transportation mode of products, etc. The prices are high. However, we are trying our best to bring down prices as the demand is rising for organic products”.
According to her, Saaraketha Organics supplies to local supermarkets and other e-commerce businesses. Aside from this, it has more than 10,000 customers in the current client database with a total of around eight to 10 large scale foreign buyers.
Switching the topic from products to employees, Abeyratne said that since starting the company with a five-member team, the company now has 50 employees, 50 delivery drivers, and over 2,500 rural smallholder farmers working to drive change in society.
“The corporate culture is very simple and results-driven, with employees who are accountable for the tasks they are doing. Thankfully, we have found the right set of people who are friendly and committed to their job,” she said.
Challenges faced and expansion strategy
Saaraketha Organics’ export industry is currently facing challenges due to the prevailing Covid-19 pandemic. Abeyratne noted that the air freight prices of exporting products have significantly risen by 300%, which has resulted in sales dropping.
“Prior to Covid-19, to export it was only $ 0.99 per kilo, but now it’s $ 3.10 meaning we are paying over 300% more than what we used to. Fortunately, we have loyal customers to buy from us, but we as a country are not competitive at all because the air freight cost is more expensive than the product itself,” she said.
Regardless of exports being affected, when Sri Lanka entered the first lockdown last year, Saaraketha was one of the very first to respond to the overnight national need for delivered food, as it had years of experience with home delivery, supporting a loyal base of urban consumers with a bi-weekly service prior to the pandemic.
With reference to Saaraketha’s official documentation, the pandemic is set to leave a long term impact on consumer behaviour; the remote and contactless consumption model, though forced upon us, will be the new norm globally for evolved consumers, where the traditional retail model is disrupted for good.
Expressing another challenge, Abeyratne said that all-island delivery is not possible due to the logistics issue faced by the country. According to her, Sri Lanka does not have a logistics company that would be able to deliver fresh products across the country.
“We are currently working to facilitate and expand into other areas other than Colombo, because there’s high demand from Jaffna and Kurunegala Districts. We are unable to produce there right now, but are hoping to in the near future,” Abeyratne mentioned.
Continuing further into the expansion plan of Saaraketha Organics, she stated that the company is working on tapping into potential markets such as East Asian markets, with countries such as Singapore and Hong Kong, as they do not produce anything locally.
Giving the concluding remark, she added that in five years, the company aims to be a globally recognised 100% organic brand with the Sri Lankan identity intact along with it. “In this evolved era, companies like Saaraketha Lifestyle shine the light on why being sustainable, ethical, and socially responsible is the only way forward.”