“However, not every issue is relevant to every business, especially in agriculture. We help farmers and co-ops by identifying key priority issues that their stakeholders and customers care about. We then try to see where there is an intersection with internal strategic goals”, Ajay explains. “Once the farmers and co-ops understand the impact of these issues on their business, we quantify their impact. This is the very first step toward helping them lower their negative impact. We then come up with recommendations and strategies that lower their negative impact while improving sales and reducing costs. In doing so we generate business value. That is the core of our company.”
Ajay says that while big companies have already started measuring and managing their impact, most other companies in the world have not done so yet. “We do this for them. As a business, just like you measure and improve your finances, you want to track, measure, and reduce your negative impact. We help companies do this through a variety of strategies – changing business models, using new technology and most importantly, improving your supply chain processes,” says Ajay.
“Latin America is at a crossroads”
“Big food brands are ultimately responsible for the products they sell. This is called producer responsibility. We help such brands define standards and reduce their supply chain impact at the farmer and food processor levels. But as a farmer, your core expertise is to grow food; you shouldn’t need to think of sustainability. This is where we can help. Having worked with brands on setting sustainability standards for farmers in the first place, we are in the best position to help farmers meet the supply chain sustainability policies and get certified.”
Ajay says Green Insights is very interested in stepping into Latin America. “Latin America is a key artery in a heart that is the global fresh produce supply chains of big food brands in US and EU.
With consumer demand increasingly shifting to sustainably grown products in the west, Latin American food businesses are at the crossroads of making an important decision – they could either integrate sustainability and adapt to this new market norm to stay relevant, or continue their old business ways and either lose their “license-to operate” or spend a lot of money to rectify things and, possibly, even ruin the environment. We want to use our experience in establishing sustainable supply chains in the food sector to help Latin American food producers generate maximum value by catering to the shifting market needs.”
Sustainability increases revenues and reduces costs
Ajay says there are two ways for farmers, or any company, to improve their business - 1) Lower costs and 2) Increase revenues. In agriculture, this is even more relevant - sustainability issues directly affect yield. “Climate change is one of the big issues”, he says. “Climate change affects rain patterns and ambient temperatures. This changes the types of crops you can grow and also the annual yields. This uncertainty basically means that there is higher risk – i.e. you will not know how much you are going to sell, and therefore cannot enter into long term contracts at the start of the season. Also, the cost of borrowing capital goes up because any lender is going to look for some level of certainty to lower the risk of default.”
One of Green Insights’ main goals is to reduce this risk by helping people rely less on nature to grow the crops. “This is called regenerative agriculture. You use advanced agricultural technology and best practices like growing in greenhouses, using hydroponics and crop rotation. Hydroponics uses about 1/10th the amount of water used in open fields for the same output levels.That reduces not just water costs but also the risk because you would know for sure what your volumes would be.”
“Big buyers will prefer the sustainable growers”
As a farmer, adopting sustainable agricultural practices has a number of advantages - you will start to satisfy the sustainability criteria in the supplier codes of conduct and policies of the big brands, which means that they get to spend less to measure, audit and train you. So, they are going to prefer buying from you rather than buying from the next farmer who does not do any of these things”, explains Ajay.
In most countries the mindset is that being sustainable means investing money now for a possible future return. According to Ajay, “That is not exactly true. Let’s look at what the business gains by doing this – a) it becomes easier to sell your products to buyers, which improves your market share b) the money you save due to lower energy and water costs makes up for the initial investment fairly quick c) your brand equity, as a co-operative or processor, also grows. You build goodwill in the community you operate in and your productivity improves. Improved brand equity means increased brand value and that is also good for improving sales which, in turn, increases revenue.”
For more information;
Ajay Varadharajan
Tel: +31 6 28285768
Email: ajay@greeninsights.org