The business model taken up by the company aims to decrease input costs of the farmers and maximise their profit by providing them training in sustainable farming techniques.
The small farmers in Bangladesh can barely sustain them and their families from the income generated from even bountiful harvests and the scenario becomes worse with a drop in market price.
Most of the food retailers here source fresh produce via third party traders due to which the farmers often do not receive the fair market value of their harvest.
Direct Fresh’s inclusive business model involves training of farmers in sustainable agricultural practices and sourcing fresh produce from them for direct sale.
In 2013, Direct Fresh took the initiate to supply fresh produce directly to households and other businesses through Internet sales.
The company aims to provide adulteration-free vegetables and fish to 25,000 consumers in Bangladesh’s capital, Dhaka, by 2019.
Support to farmers is incorporated into the Direct Fresh core business model. This includes training in sustainable farming techniques, such as safe pest-control measures, helping farmers to decrease input costs and maximize profits. It also supplies high-quality seeds and other inputs through trusted partners in order to ensure that harvests remain strong over the long term – without the overuse of chemicals.
In order to ensure quality standards, Direct Fresh provides free soil testing and continuous monitoring. The company then purchases crops directly from farmers at above-market prices. Eliminating middlemen allows Direct Fresh to ensure that the business is profitable while improving farmers’ livelihoods.
One of Direct Fresh’s most successful partnerships during the formative stage of the company’s inclusive business model was with Swiss contact’s Katalyst, a market development project to increase the competitiveness of farmers and small enterprises in Bangladesh. Katalyst supported the company’s pilot model to establish and promote a sustainable supply chain for safe produce in Dhaka. The successful cooperation allowed Direct Fresh to grow and scale its initiative to be able to custom-farm for large businesses including hotels, retails, restaurants.
Direct Fresh sources close to 80 different types of vegetables from 900 farms. With its inclusive value chain firmly established, the company plans to expand both the volume and variety of produce it sources from smallholders, with a goal of taking its model nationwide. It is also facilitating loans for farming families to diversity their incomes through the purchase of dairy cows through a partnership with microfinance institutions.