Sustainable Profitability: Case StudyAnswering Anju Srivastava’s concerns─

Group 3Supriya JayadevShaoleeSakshi

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What is the distinctiveness of Wingreen’s model?Wingreens focused on the most neglected area in India (Agriculture). It understood the needs of the marginal farmers arising out of very less assured annual income from the yield with respect to family needs and high risk from dependency on monsoons. They also understood that farmers are not willing to sell their lands despite high valuation due to emotional and cultural connect.Keeping these in mind they developed a strong social & environmental sustainable partnership model with basic ethos as below:

Earning Farmer’s Trust & Loyalty : Gained Farmers’ trust by removing all Fear and Monetary Risks through the Rental & Employment Model:

o They paid lease rentals upfront even before signing agreement as an assured source of annual income.

o Farmer and family members were employed to tilt their own leased land

o Farmer continues to own the land and earn up to 10times more with same land and labor as earlier.

Although the risks transferred to Wingreen, it gained access to costly land without locking high Capital.

Effective/Environment-friendly Technology: Instituted new farming techniques to increase the yield from the land, besides being environment friendly (like growing low water consumption crops, drip irrigation, etc)

Social & Human Touch: Kept a sensitive approach to the whole operative model with the prime aim of bringing social prosperity to the poor farmers and welfare, education and empowerment to their families

Is Wingreens model scalable?One of Anju’s biggest concerns in 2009 was whether Wingreens could transit from a small personalized family owned company to a system and process driven bigger firm. At the first glance it looks like an owner-driven model and hence seems unsustainable but Wingreens is a very robust model because it is driven and owned by all the Stake holders including Farmers, Retail Chain and Consumers:1. Self-driven by farmers and their families: Farmers and their families are not only land owners but also collaborators in the business. The company has earned a huge trust factor through word of mouth publicity and is now the first choice for farmers. Their individual growth is linked to company growth. The Rental &

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Employment model is taking away all the risk from the farmers with assured annual income. However to sustain & grow the income inflow the business will be required to be sustained and grow. Hence Farmers are actively involved in the same. This loyalty and motivation can be replicated among farmers across various geographies by providing similar support systems and processes as the basic concerns, financial problems and value system is identical in most villages across the country. 2. The Retail Chains: The Retail Chains like Reliance, Spencer’s, Bharti-Walmart, etc have found a strong impact on customer footfall caused by the presence of Wingreens products and innovative marketing techniques and hence have helped in expansion of Distribution network, thereby giving assured consumption for produce. Since the middlemen have been eliminated from the entire process, the retail

chains stand to earn more margins and hence they were involved in ensuring sales of the product.. With modern trade on the rise in urban India, newer stores and formats of stores are coming up, some of them dedicated solely to organic and locally grown products (for eg, Godrej Nature’s Basket, FabIndia, etc). Wingreens has a plethora of opportunities in terms of growing partnerships with retail chains.3. The Urban Consumer: The urban consumer is becoming more aware and conscious about sustainability. The demand for organic and locally sourced/produced products has been on the rise since liberalization of the Indian economy and so is the willingness to pay a premium for such products. Urban consumers value quality and reward sustainable brands with high loyalty. The demand for Wingreens products will continue to grow as more and more urban consumers become socially sensitive and aware about its offerings.Considering that all the 3 stakeholders aligned in favour of Wingreens’ growth, there should be no concern of scalability. Since the process is self driven through the farmers, through the collaborators and consumers, Wingreens can replicate its model and standardized processes from 1 village to several states in no time. With farmers’ trust and loyalty, extensive and leading Retail Channel Partners and growing Urban Consumers scaling to become a systems and process driven bigger firms is not going to be an issue.

Will Wingreens be able to engage with farmers at an individual level, even after growing big?Since Wingreen currently operates in selected locations, it is possible for the owners to engage with farmers on an individual basis. But once Wingreens expands its business across several states, it would be highly difficult for Anju and her husband to take time out to interact with each farmer. But does this mean that Wingreens will have to lose the trust farmers place in the business? The answer to this dilemma is a dedicated sales force. A sales force will have to employed and trained to:

Interact with the farmers on a day-to-day basis Provide necessary technical support Empathize with farmers’ situations

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Take authoritative decisions in terms of farmer recruitment, training, assistance, etc

The sales force, preferably hired from among the locals will act as the face of the company and perform all the functions the owner would have for each situation. This would require a lot of power transfer from the senior management to the local level and immense amount of training but will have to be done in order to prevent the loss of the element of personal assistance from the model.

Will a multinational be able to emulate this model?It can be safely assumed that in the competitive packaged food market, full of information and marketing expertise, Multinational companies would find Wingreens’ model very lucrative and would want to replicate the same, especially after witnessing the rapid growth of Wingreens. The Wingreens model has 3 important components. We need to check the replicability of each component to answer this question.

Technology/Farming Practices: The optimizing techniques and practices for high yield are publicly available and can be easily purchased and imitated by any company. Even tie ups with irrigation experts like Jain Irrigation or equivalent is easy for a Big Firm.

Retail Chains and Consumers: Retail chains can be lured in using higher margins and customers can be attracted using branding and sales promotions. All this is easy for any big MNC.

Farmers’ Trust: This is the most important part of the Wingreens model. The level of trust and goodwill that Wingreens has earned is not easy to replicate for any MNC. Wingreens has gained the following advantages in terms of farmer loyalty:

o First Mover Advantage with a noble causeo Trust of the whole family unit o Risk minimizing proposition for the farmero Employing and empowering women o Deep understanding of the Indian agriculture system and its problems

An MNC with deep pockets can replicate the operational model but will find it difficult to replicate the place Wingreens has created in the farmer’s life. Hence, if Wingreens sticks to its core competencies and deepens its roots in the Indian agricultural system, no MNC with deep pockets can pose a threat to it.