Agritech startup Dehaat launches agrifood consumer brand Honest Farms

Dehaat, an agritech startup known for its business-to-business (B2B) supply chain and market linkage services, has launched its own consumer brand named Honest Farms.

The development is part of a growing trend where agriculture technology startups, traditionally reliant on venture capital, seek to diversify their revenue streams amid challenges in scaling margins and the need to reduce operational costs. The shift is also in response to a growing consumer preference for branded alternatives over unbranded staples.

What does Honest Farms offer?

Founded in Patna, Dehaat has launched Honest Farms on modern trade, quick commerce, and e-commerce platforms. The brand features over 200 stock-keeping units (SKUs) across pulses, rice, and spices categories.

Despite its recent introduction, about six months ago, Honest Farms has seen a monthly revenue growth of 15-20%, reaching Rs 3 crore. 

Strategic investment in sustainable farming

Dehaat's initiative to create Honest Farms involved an investment of Rs 20 crore, starting from mid-2022. The brand collaborates with approximately 5,000 out of Dehaat's 2 million farmer network, ensuring the production of pesticide-free crops.

The model not only provides farmers with a significant margin of 30-50% on sales but also allows Dehaat to maintain a healthy margin at the enterprise level. The emphasis on sustainable and safe-to-consume products aligns with increasing market demand for such staples.

The larger market dynamics

The move towards private consumer brands is viewed by industry experts and founders as a strategic one that leverages existing market linkages while improving margin potential. Prithwi Singh, co-founder of SuperZop, highlighted the largely unorganized nature of India's $350 billion staples market, which has just 10% branded goods penetration. 

What does DeHaat do?

DeHaat, founded in 2012 and based in Patna and Gurugram, offers comprehensive agricultural services to farmers, including high-quality agri inputs, customized farm advisory, access to financial services, and market linkages for selling produce. 

The startup claims to serve over 2 million farmers across 11 states in India.

How well DeHaat is performing financially?

Despite reporting a 253% year-on-year rise in its FY22 loss, DeHaat’s gross revenue grew significantly in FY23. The startup, which has expanded its footprint across multiple states and serves many farmers, sees this partnership operational from the upcoming grape harvesting season. 

The startup expects to strengthen the fruit value chain from India, offering better market access and price discovery to Indian farmers.