Every month we highlight a whitespace or opportunity that we see in India with tremendous market potential but little startup activity or innovation. We break-down this whitespace by describing the problem, what it will take to solve it, and what the market potential might look like.

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The Problem: Food-spoilage is a major problem across South Asia and Sub-Saharan Africa and contributes to a large extent to food scarcity. 50% of fruits and vegetables, 20% of cereals and 25% of meat in these regions rot before consumption. These losses occur at 3 main points in the movement of produce from farm-gate to markets – (i) at the farm-gate while waiting for transportation to markets or warehouses, (ii) in transit to markets and warehouses, and (iii) in the market-place. At median FAOSTAT prices, value of annual losses exceeds US$ 42 billion in India alone.

Most of the current efforts towards avoiding this waste are focused on building cold-chains and agri-warehouses, and rightly so – in the absence of this infrastructure and given the tropical climates in India and other developing countries of the South – food spoilage is a certainty. Market trends show cause for optimism – E&Y estimates that the agri warehousing market has been growing at a CAGR of 10-12% over the past few years. However, this infrastructure is not a holistic solution to deal with the challenge of food spoilage because without data on the shelf life of produce, food spoilage will continue to occur. Warehousing and cold storage cannot indefinitely extend the life of organic products, and hence real-time data on the shelf life of produce is critical.

The Solution Space: A solution to address the problem of food spoilage in agri-warehouses will find market acceptance and scale faster if it has the following characteristics:

• Affordable for warehouse owners that operate only 1-2 facilities so will not experience economies of scale; product should pay back for itself in 1-2 years
• Solution that can estimate shelf life range without requiring lab-based testing of food samples or unpacking food samples (e.g. rice arrives at warehouses in sewn-up bags made of jute fiber, the solution should work without requiring that the sealed jute bag be opened up)
• Hand-held and semi-automated so unskilled personnel can use to estimate shelf life of produce as it comes into the warehouse and determine when it needs to be shipped out
• Connected to a cloud-based centralized data platform where warehouse owners and other ecosystem players such as bulk buyers can monitor and act upon real-time data
• Not reliant on continued access to power or telecom connectivity given that most warehouses are in rural and peri-urban areas with poor infrastructure
• Versatile enough to be used for a variety of agricultural produce ranging from cereals to vegetables and fruits to livelihood products – essential because this will also open up international markets in South Asia and Sub-Saharan Africa

The Market Potential: At a monetization assumption of 2% of losses; annual market opportunity could be US$ 800 million in India alone.