Rising Ventures: Suminter Makes “Satva” a Sustainable Business Proposition
Suminter India Organics was founded on the philosophy that fair, transparent business practices and high-quality products would provide part of a blended value business model that would generate benefits for local farmers while penetrating a significant and growing market for organic goods. Suminter is utilizing this model to establish itself as a leader in organic Indian products, supporting 600 farmers in five villages by commercializing their output in a $31 billion annual global organics market.
by Rajya Karipineni – New Ventures India
Satva is the Sanskrit word for Purity. It is also appropriately the brand name under which Suminter India Organics sells a wide variety of organically grown, non-perishable produce. Suminter’s farmers meet the highest international organic standards to bring consumers a healthier product that in turn gives farmers a safer and cleaner environment in which to work.
Three years ago, the Suminter team took the initiative to provide local farmers with the necessary training and certification from Skal International, an internationally recognized organics certifying body. Now, Suminter contracts with over 600 of these farmers, buying back all of their products and providing the necessary farming inputs for organic cultivation. Suminter then provides the forward linkages that farmers require to bring their products to market. Through this process, farmers incur substantially lower costs and also receive a 10 percent premium over market prices. In this way, Suminter India Organics bridges the gap between the company’s suppliers and the global market, commercializing their products through a fair and transparent process. Fairness is, in fact, the foundational philosophy of Suminter, and the company will soon receive Fair Trade certification in addition to its organics certification.
Driven by a commitment to quality and transparency, Suminter India Organics has built lasting relationships with its current customer base in the Netherlands and the United States. To support their activities abroad, the company created a division in the Netherlands that meets growing demand for the distribution of their product. Through this branch, Suminter has captured the entire value chain, from the farm to the market. Their Netherlands division handles warehousing and marketing, which eliminates third party exporters and traders. It is this type of integrated supply chain that differentiates Suminter from its competitors. They have even come up with an internal solution to the biggest problem facing organic farmers: the prevention of pest and bacteria attacks. Suminter has an exclusive joint venture with the Dutch company, Eco2 BV, which has a well-respected technology for chemical-free fumigation.
Currently, Suminter organically farms 5000 acres, which directly affects the well-being of families in five villages. By 2008, they will be maintaining 15,000 acres and producing more value added products under the Suminter brand such as ready-to-eat goods and organic dairy. Company growth has been 100 percent each year and contracts with clients have outlined a committed purchase of the entire stock of some products for the next three years. In a worldwide organic produce market of $31 billion annually, Suminter India Organics has already positioned itself ahead of its competitors and is poised to expand internationally. Suminter plans to penetrate the domestic organic products market as well, a sunrise sector with growth in the triple-digits. Both strategies are crucial for the Suminter team to reach their goal of being a $25 million company within three years. As evidenced by the company’s past successes and innovative business model, Suminter is well on its way to becoming an Indian organic products leader.
To learn more about Suminter India Organics, visit www.suminterindiaorganics.com or the New Ventures site.
The Rising Ventures Series features articles, announcements and profiles of investors and entrepreneurs related to the theme of innovative small and medium businesses (SMEs) in emerging markets that deliver social and/or environmental benefits. These business models have been identified through the New Ventures (www.new-ventures.org) and Development through Enterprise (www.nextbillion.net) projects. To view other Features in the Series, visit http://www.new-ventures.org/risingventures