Food wastage is a major challenge faced by Indonesia’s B2B food supply chain. This is so much the case that the amount of food lost and wasted in the country per year between 2000 and 2019 could have fed up to 47% of the population.
Further, studies have found that food wastage contributes to more than 7% of greenhouse gas emissions every year in the country. According to Indonesia’s National Development Planning Agency (2021), the economic hit of this annual waste is somewhere between US$14.3 billion and US$37.1 billion per year.
To help address this gap, Indonesia’s premier B2B food supply chain startup EdenFarm is enabling small share farmers (often micro-entrepreneurs in the agriculture industry) and buyers alike to operate at almost zero food waste.
The startup runs a unique marketplace that helps Indonesian farmers sell directly to restaurants, shops, and grocery outlets of all shapes and sizes in the archipelago.
On a recent episode of Indonesia Digital Deconstructed by AC Ventures, EdenFarm founder David Gunawan discussed with the investment firm’s founder and managing partner Adrian Li how the startup is helping stakeholders across the country achieve near zero food waste, thereby reducing the sector’s carbon footprint at large.
Understanding the pain points of farmers
Before launching EdenFarm, David and his co-founders were actually farmers themselves, and this is why they understand the pain points of farmers so intimately.
“For me and my co-founders, being in the farming industry, which is arguably one of the most traditional sectors in Indonesia, expedited our product-market fit research process. Back then, we did everything – from producing to processing, as well as selling, invoicing, mingling with other farmers, and speaking with industry stakeholders. This gave us a lot of clarity on understanding the minute details, like what kind of person would be the best to sell products to a certain demographic and so on,” shared David.
In fact, it was during their farming days that David and his co-founders realized there was a huge gap in the B2B food supply chain. This is how EdenFarm’s unique business model was born.
One of the most fundamental challenges that David and his team faced early on was that not every farmer in Indonesia has primary education. Some could not read, while others could not do basic math.
As such, it would have been extraordinarily difficult to teach them to scale a company or do business more efficiently.
“Whatever they produce, they are able to sell 30% to 50% of it to the middlemen and the rest of it goes to waste. This can be due to multiple reasons – either the quality of their yield is not up to par or maybe they are simply unable to find any buyers for whatever they are planting,” explained David.
EdenFarm brings real solutions
EdenFarm has been building an integrated food distribution network since 2017 and succeeded in simplifying the supply chain to increase margins by reducing prices and cutting out intermediaries. It then used tech to provide accurate demand forecasts for farmers and also helped them achieve production predictability. This demand forecast, combined with a highly diversified buyer-side, is what helps EdenFarm’s ecosystem operate on near zero waste.
David shared, “We create consistent demand for farmers and micro-entrepreneurs in the farming industry, provided that they agree to follow our precise forecasts and instructions. They happily oblige because, with EdenFarm, they don’t have to go through the hassle of finding buyers. Another major upside is that we are able to avoid food wastage and reduce negative environmental impacts.”
With this model, David hopes to make food accessible to more people. He added, “If this model is adopted on a global level, we might be able to help address the issue of world hunger.”
Enjoy the full episode on Spotify, Apple, and Google.
See also: The voluntary carbon market is a lynchpin for tech in Indonesia
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