 Hello, everybody. Good evening and welcome to the private property farming podcast. My name is Mbali Mwaka once again, your host right here on the farming podcast. Today we have a lady on entrepreneur, an agripreneur, as I said, CEO of the crop box. She's not a stranger to the show. Her name is Pumzile Chifunise and she's back to talk to us about agricultural value chains. She's definitely diversified her business since it was established in 2019 and I'm looking forward to just understanding how her growth has been over the past years and maybe just let's unpack what agri value chains means and how we can take advantage of opportunities that exist within the agri value chains. If you have any questions for us tonight, please feel free to comment, ask the questions and I hope we can answer them in tonight's podcast. Let's welcome Pumzile once again. How are you doing Pumzile? I'm happy to have you on the show. Hi. Good to see you. Thank you so much for having me once again. Likewise, likewise. So maybe let's just quickly start with a quick summary of what the crop box is because you are the founder and CEO for those maybe that haven't gone back to check the previous recording, but just maybe for the first minute or so tell us about the crop box and what you do. Yeah, so the crop box is B2B B2C food service organization that started in 2019 from a registration perspective but I spent quite a few months in the beginning of 2020 trying to establish what we would do and so we started officially in 2020. And we work with local farmers, manufacturers and wholesalers to supply three types of clientele, number one, wholesale and commercial clients if they think of hotels, if they think of organizations who have a hospitality division, we supply kitchens if you can call it that. And the second customer clientele base that we have is NGOs who work with NGOs that are responsible for feeding schemes in underprivileged communities, and thirdly household customers and that's essentially the crop box started from. We first started by establishing delivery service from the farm to your household, specifically in Hau Ding, Johannesburg in Victoria, and we have a strong base of households that we distributed crop boxes to. So crop boxes, how it started was boxes of about 15 fresh produce from the farm. And the idea was to shorten the supply chain between the farmer and the consumer, whereby produce is taken directly from the farm and same day harvest into your household. So the idea was to of course eliminate the impact of carbon in the environment but also just to educate our consumers on farm to fork and the benefits of that from a traditional perspective. So we have grown and diversified from that base into supplying wholesale and commercial capacity and that's essentially what the crop box is. So crop box as a small enterprises now started from farmers growing to wholesale. So you're definitely climbing the ladder around the agri value chain. You know, they say that small businesses have seen many opportunities across the agricultural value chain. Can you give us an insight of these opportunities and the value that agricultural value chains brings to small businesses. Yeah, I mean, first and foremost, if you think of the magnitude of agriculture as a sector, I mean, it contributes some 3% GDP of South Africa and every processing as a whole alone is one of the third biggest subsets of manufacturing into the country to GDP. And so, thousands and thousands, hundreds of thousands actually is of jobs are created by every processing. And that's just the tip of the iceberg, you know, at surface level but as you mentioned, and you know, I apologize split into the three sectors, primary, secondary and tertiary. And by the primary level, over and above farming, there's so many things that enable primary farmers to be able to do what they do on a daily basis. So if you think of the inputs that are required to produce seedlings fertilizers etc etc and machinery and that are required for for plantation and irrigation and technology and as well think of all of the digital tools that have been developed and to benefit farming and drones and sorry, it just looked my mind. And if you think of drones and traceability platforms and that we have globally. So farming has moved way beyond just planting seed on the ground but not if we do that there's so many and added services that are added to disposal as a farmer that you are able to tap into so as to not only blow you produce in a timely manner but sustainably as well which is the the last word that every sector is tapping into so farming is no different. And so within all of those activities, and these possibilities for SMEs to tap into seeing quite a lot of e-commerce platforms for example digital platforms that are getting a lot of traction and funding from this perspective and that just goes to show that how much traction some of these very added services are contributing to primary farming. And then into secondary farming processing, chopping and machinery and all of those elements that are required to process raw materials into, you know, be it a salad, you know, baby food or whatever the case may be any form of product and the very added service that comes into secondary agriculture is where there's also a lot of opportunities for entrepreneurs to be able to tap into just from their kitchen, you know, taking a character and chopping it up that is a very added service that someone is always really too procured from. And then you would have a tertiary agriculture or tertiary industry that also enables agriculture to function from farm to fork. And then that is everything from distribution, cold storage, nevermind even what happens at an office level, you know, people like myself who work in servicing agriculture. And literally we're in between buyers and farmers and making sure that products and produce and lands on retail shelves and so all of those components make up tertiary industry of agriculture. And then we think about we haven't even started to explore the topic of exporting and all the way from getting your produce out of the ground all the way to a consumers table. There's so many components that make up the value chain and as an entrepreneur, and there's lots of opportunities in that scope for you to explore. So you've seen with COVID-19 and the impact that it had on the sector just like any other sector. It was a catalyst for innovation. And so as an entrepreneur, your responsibility is to go on the ground and to go and affect finding missions and to understand opportunities, the backlogs that what the process is for you to see how you can add value itself by identifying the innovative in a solution that you can bring into the sector. And so if you're speaking about a value chain, you're speaking about what happens in between when you as a farmer finish your entire cycle harvesting and you send it out to the market. So many activities that happen in between your produce being consumed by a consumer and that forms part of some of the opportunities that exist. Yeah. Well, I love how you really unpacked the value chain from primary to tertiary level. I think it gives so much into perspective of the role players that exist within the industry. So much, so much more like you said, the opportunities that exist. But tell me, Pomzila, with you having established crop box in 2019, but formally trading in 2020, what are some of the pressures that come with building a business to service various levels within the value chain that we get an angry. So maybe you can bring your own personal history with growing the crop box brand. So my question to you is, what are some of the challenges of the demands or the pressures rather that come with servicing the value chain at every level. Yeah, so the center is is fickle. And, you know, you can imagine, even from a farming primary production, the space of timings, everything. Right. And so, and I suppose that's where the crop box started to carve its own niche within the market of the supply chain, taking produce that has been freshly harvested directly into to the consumers house, or in the case of our commercial clients from the farmer to to the kitchen. And one of the things that they identified with we can differentiate ourselves because as I mentioned timing is everything and so when we got into the industry, we had to take a step back into identify areas in which we can connect what's currently connected and at the time that we started the crop box. And first things first, was that consumers are often, even though everything that we do as entrepreneurs as service providers, you know, et cetera, et cetera, and is directed to the consumer and the consumer especially in the food production and consumers of space. The consumers often lived far behind in terms of the supply chain. And you find that from farm to farm and retail shop floor there's so many steps that have taken place. And that is the consumer at the end of the entire process is left with having to consume a product that has spent time on the intransit and you know temperatures especially now in South Africa. And if you're talking about heat in the summer seasons, and Spanish with waltz between the market and the shelf store, you know, there's so many things that can happen and that can hinder the consumer from accessing the best version of produce. And so in our investigative process that is to identify where in the market we get fit in. One of the things that we identified when we can differentiate ourselves was to shorten the supply chain and shorten the time in which the consumer gets their finished product at the end of the entire cycle between the farm and the refrigerator. And so I suppose that is a principle that we have used throughout the entire process as we're trying to do our business to say within the entire industry. And one of some of the opportunities we can identify for ourselves to to to be value to what people are struggling with or that sometimes I don't even know that they're struggling with them and at the time the solution was found to fork, shortening the supply chain fresh as possible. And then what they've done that and did too was the idea of whole, wholesale and commercial foods. And a lot of the times buyers in retail or in hospitality industries and sectors don't have the time to go from one shop to another to try and get the cheapest but yet the best quantity of fresh produce. And what we wanted to do was to assist them from a pricing perspective, and we are competing with other wholesalers to bring them the freshest fresh produce but also, and what we're bringing on the table was the component of the fresh farm fresh type of farm to fork component in the harvest. And that's what a lot of the clientele that we have now were drawn to the fact that we go physically to the farm to get fresh produce and supply them in whatever form that they're looking for. And a lot of the times that we found was the whole produce sector was a commodity that a lot of kitchens were looking into getting directly from the farm on and so we can provide that link. And the fresher that the produce is the more they will be able to do a lot with it. And that also fit into NGOs. It takes a lot of coordination and manpower to put together food parcels, which were very big in COVID-19 as well. We also saw quite a surge in our business. And, you know, people were brilliant willing to to feed the underprivileged. And that's where we came in to say over and above us coordinating and packaging do it in a sustainable manner and underprivileged communities should be no different. We wanted to hear about sustainability and plastic free and fresh, high quality nutritionist foods. We wanted to provide and to ensure that I don't wish communities have the same access to that as much as high ever since we're accessing. So our service to NGOs through literally crop boxes that were prepared by a lot of cases and employed young people themselves in those local communities and is the service and many offering that they put on the table to NGOs say we want to give you fresh quality and well packaged food parcels for you and communities. And that also then fit into commercial clients where we're providing that similar service just without the packaging and into crop boxes where we source produce whether it's fresh or frozen and also what we saw was tapping into food products that are outside of fresh produce. You know, we then was exposed to fresh or rather frozen vegetables and food, which was what our commercial and wholesale clients were looking for, as well as other grocery items, which is a space that we're also playing in right now. We've got eggs, weights and dry grocery ingredients and staples like your rice, your pup, all the way to canned foods. We're in that space where we are now playing to the tune of our kitchen and commercial and hospitality clients who do need the whole basket not just fresh produce. And all of that came out of just spending time in the industry and understanding how we can expand our offering over and above fresh produce. And so those are some of the opportunities that we saw that are in the industry that entrepreneurs like myself can tap into and all of that comes into just understanding the value chain and spending time with clients on the ground to see what opportunities exist for us. You spoke about access to markets, Pomsile and some of the hurdles that a new entrant would face or encounter when trying to penetrate the various value chains in the agri-sector. Tell us about how these businesses can be supported so that they can flourish at the end of the day. Yeah, and to your point, first things first, what every entrepreneur will tell you is the need for market access. That's how we get our food into the door. But that's also how we keep ourselves sustainable, right? And a lot of the times, as I mentioned before, it's not uncommon to have once-off tenders and once-off opportunities. And so it becomes very difficult for you to keep your business afloat from one month to another if you are just servicing one client as on the one-to-one basis. And so it's a very, very important for buyers to look out of their radar, what they are currently being serviced by and who they are currently being serviced by. And look at other ways in which they get created to unbundle rather than supply chains by having the procurement process to fit other small players, whether it's been through subcontracting or unbundling, as I mentioned, the procurement opportunity where you separate the components. It's called pays-to-one contract going to one person. You break it up that you've got different opportunities that different entrepreneurs can possibly see if they can be able to service. And another thing that we as entrepreneurs trying to access and to go into the value chain need is logistics. Logistics is hugely expensive for small players who don't have the fleet of logistics that they can tap into when it comes to servicing clients. Everything from four by four right up to a four, five, 10 tonne truck. And in most cases because you're in food, that truck has to be refrigerated, right? And so as a small player, some of the challenges and some of the needs that I have is for logistics for support. I mean, I still use my sedan. And if I hire out a truck, I follow the truck in my sedan and you can imagine my days of using that sedan, driving out to the farms, and I've had heaps and heaps of invoices from my dealership of me, my car having mechanical problems because of driving in the incorrect terrain. And so logistics for me is a great need that I have in my business to keep it not only afloat but for me to be able to service by clients in an adequate manner using adequate resources such as refrigerated mobile vehicles. And what happens from time to time, ever entrepreneurs that are in by shoes will experience as a would be called storage, or even overnight storage is the case of dry goods. And so the relationship that we have with our wholesalers becomes very important because you can negotiate overnight storage and as you wait for their shipments to be complete from a supply perspective to be able to distribute and do order to your client the next day. And so if I had storage facilities, which I'm hoping I'll be able to get in the long term, that would definitely add value and more value to my business where I can supply and service my clients overnight without any hassles and without also spending obvious amount of money for storage facilities, for example, and as well as logistics and fleet rentals, and as I mentioned, not to say that we don't appreciate because my business is outsourcing and I do quite a lot of outsourcing and logistics, for example, so we appreciate all of the logistics partners that we have had to lean on in the past and going forward. And but as we build and strengthen ourselves in the market. And it's important for us to, to, to order every chain by having resources that are in house so as to eliminate our costs of policing and rentals and so logistics and housing storage, cold storage, even just simple and storage is as one of the things that we look forward to to providing a important in our business internally, so as to begin to provide quality service to clients. Yeah, thank you so much for your time this evening. I think we were able to get somewhat of a masterclass around agricultural value chains because you're impacted so nicely for us, gave us so many examples that we can relate to and understand and also bring it down to business because again, not everybody wants to be a farmer, but there are many people who want to interact and trade within the agri-value chain and also support farmers, support buyers, support sellers, and also, you know, find their way around what niche they want to focus on, especially within the value chain. So wishing Cropbox all the success. I hope you come back onto the show just to tell us a little bit more about the, how you've diversified your offering within Cropbox, but we'll keep that as a secret for now to make sure that people watch and tune in for when you come back onto the show. But thank you so much for your time and for your insights today. Thank you for having me. Thank you. That was Pumzi Lechifouni. She's the CEO and founder of the Cropbox and today we're speaking about agricultural value chains and I think the words that were going around today were small businesses, prices to markets, buyers, sellers, value chain, primary tertiary, primary secondary and tertiary levels within the agri-sector price negotiations, business, markets, you know, wholesale. These are some of the words that were flowing through our conversation today just to give you an insight about what really is the agri-value chain and what sort of activities happen within this space. So if you thought farming was just about putting a seed on the ground, then I think you're in for something because there is a whole lot more that happens within the sector. So I really hope you enjoyed this conversation as much as I did and I will catch you next time on another episode of the Private Property Farming Podcast. Take care.