Pravin Ramnath Sandhan, Owner of Monsoon Foods
Gabriel Jonas Bérard, CEO of BK SAS
Today we talk with our partner in India, Pravin Sandhan, owner of Monsoon Foods. This season, Monsoon supplied over 1000 tons of fresh table grapes to Russia with Bksas with positive results. During this interview, we will discuss this experience.
About Monsoon Foods
Gabriel: Dear Pravin, please tell us about Monsoon’s business?
Pravin: Monsoon Foods is an export company from India. It is a family business. We are based in Nashik. Our main export product is fresh table grapes, mainly Thompson seedless. Our main market is Europe: Germany, UK, Belgium and Switzerland. We also export to China and, of course, to Russia. We’ve been slowly developing for the last 15 years.
Gabriel: Did you start right away with direct supplies to retailers, or did you start with wholesalers at first?
Pravin: We started by working with importers-wholesalers in the beginning. At first with Germany, and then with the UK. The key success factor in our business is consistency in quality. Today we are able to meet all the compliance requirements of Western European retailers with food safety or with ethical standards.
Gabriel: That is a great achievement. What is your work strategy and your approach of business nowadays, Pravin?
Pravin: We are not too aggressive as a company. We want to provide quality fruit. We want to create a position for us, and understand the market.
Gabriel: What do you mean, “create a position”? You mean to have a stable portfolio of customers?
Pravin: Having a stable portfolio of customers, as well as having a better experience with all of them. How the work is there, how we can serve them better. Ultimately, the aim should be that the consumer should get the better quality, good fruit.
Gabriel: As for the customers, are you targeting only the retailers, or do you consider supplying wholesalers as well?
Pravin: At this moment, we have a very standard product, Thompson seedless, and we need to sell this product to retailers. For the last eight years, we’ve had very good partners among retailers there in Europe. We do not plan to work with wholesalers or traders again.
Gabriel: Because of the lack of transparency or delays in payment?
Pravin: In terms of cash flow, working with traders can sometimes be good. The main reason not to work with traders is the lack of transparency: you never know the complete information, and later on you find out about price discounts, payments delays, open claims, etc. Another reason is the difficulty to plan in advance. We work with retailers directly in order to get a better visibility over the end consumer demand. There should be a clear consumer demand, and space on store shelves for this fruit that we are packing. This is our way of working. We don’t want to send the fruit first and then find the customers only later on.
Gabriel: You do not push the sales of your product.
Pravin: We do not have that kind of work style right now.
About Russia
Gabriel: Please, tell us about the Russian market. When did you start exporting to Russia and for what reason? What is the place of the Russian market in your mix?
Pravin: Russia represents between 12% and 15% of our total exports. The main reason to export to Russia is the long duration of the Russian season, it is longer than the European season. You have a bigger window in Russia, from January (even from December sometimes) until June. This is the main reason why we develop the Russian market.
Gabriel: For Russian importers of table grapes, India is the second biggest origin after Turkey. Turkish table grapes export season starts in July and up December. India starts late December and lasts until end of May.
Pravin: I think there have been many changes in the Russian market. For the last 10 years, Russian market has been evolving — many food importers have closed down. Many companies went out. Now the retailers came in, and they are still learning how to procure, how to do these things and organize it. In the last two or three years, it has become a little better.
Gabriel: Today the major shaping force in the Russian fresh fruit market are the retailers, who have developed the necessary infrastructure to import fruit directly, namely Magnit, Dixy, Lenta, and X5. They have been investing into warehouses near the ports, regional distribution centers, and fleet of trucks. This integration of logistic infrastructure is specific to Russian retailers. We do not see that much in Europe. At least, not to that extent.
Pravin: Exactly. Once they organize themselves, they will get a better cost structure and will become more efficient. Hopefully good fruit comes in, consumers will eat good quality fruit, and come back again. That will help to increase the demand from where we stand right now.
About BK SAS
Gabriel: Let us now move on to the last part, which is about the cooperation between Monsoon and our agency in Russia, BK SAS. How did you know about BK SAS and why have you chosen us? Why did you decide to give it a try with us?
Pravin: You had an Indian trainee some time ago, he called me, and then we met you at the Fruit Attraction 2019 fair in Madrid. That was the first time.
Gabriel: In Madrid, that’s right.
Pravin: In Madrid we met for the first time. We had a casual meeting and I liked the approach of how you kept your business. I have seen your customers, you showed me. It seems to be a very fair model for me, I have a lot of advantages from working with you since we’re going to have supermarket contract and payments directly with us. Everything that you discussed with me was very transparent. Definitely you’re going to look after me. And our fruit, if it has certain quality issues when upon arrival, we need somebody to be there to see if the quality report is right, if it is correct. A part of the work is being done by you, which is good for me. I think this is the right way to work for a fruit business in any market.
Gabriel: In the Indian market, or in the Russian market?
Pravin: In general. Even for the European market, we work with a partner in this way. It is very important to handle some issues locally, to be local there and focus on that particular business.
Gabriel: It is true that you must have reliable contacts with Russia, and even more when you deal with Russian retailers. You must be able to control the quality upon arrival, and to manage the rejections if necessary. That is what we do, what we specialize in. We manage contracts, sales, delivery, claims, accounts on behalf of several exporters on a daily basis.
Pravin: You have a complete focus from our side there, so it does not happen that I have to rush or go to Russia on the next plane. You are there.
About rejections by retailers
Gabriel: But there is one major drawback in working with supermarkets: when you have a quality issue upon arrival, the supermarkets cannot always manage it and sometimes reject the lot.
Pravin: Yes.
Gabriel: With their rejections, Russian retailers oblige their international suppliers to get involved into operations in Russia. If you want to work with Russian retailers directly, you must have an after-sales service in Russia, you must be able to retrieve the pallets and resell them.
Pravin: That is still largely the sad part of this business, having fruit getting rejected upon arrival.
Gabriel: Managing rejections is actually the most difficult part in operations. When rejections represent less than 10% of deliveries, it is manageable. But when quality issues grow out of control, it creates a permanent flow of rejected goods, that is hard to manage, even in a minimalist style. Selling directly to retailers is good only for the exporters who reached a high level of quality.
Pravin: Yes. I think that phytosanitary control can also be an issue. For all these things, we really need to have people there upon arrival. Each market has its own ecosystem and its own ways of tradition to work, its own issues to handle. In a market like Russia, it is very important to have somebody there to look after you.
Gabriel: If I were an exporter, I would not totally close the door to wholesalers, but I would try to have two or three wholesalers with whom I have a business, whom I can use as a backup in case my agent is not able to handle it.
Pravin: We are not in a much of a rush or hurry. Maybe we will learn and we can change our strategy. I think it is very important that we found you and we started working with you. I am certain we will be able to make a certain place in the market. Hopefully, we should be able to do a much better work in the future.
Gabriel: I hope so, too. I wish it so. We are committed to you for the Indian grape and the business together. Thank you for this interview, Pravin.