US-India JV eyes blueberry boom
September 25, 2019

India’s INI Farms and US-based berry grower-marketer Munger Farms join forces to develop the blueberry category in India

US-India JV eyes blueberry boom

INI Farms and Munger Farms opened a new chapter in their respective development earlier this month with the announcement of  joint venture focused on building India’s burgeoning blueberry category through US imports as well as the development of domestic production.

Blueberries are a nascent category in India, but one displaying enormous growth potential, according to the partners. Consumption is increasing rapidly off a very small base, fuelled by awareness of blueberries’ health benefits as well as a growing propensity to global trends among India’s middle class.

One of the key hurdles to expanding blueberry consumption in India is the high cost and limited availability of fruit. Supply has been largely dependent on air-flown imports, and the lack of cold chain in India makes it difficult to deliver a consistent product to consumers.

INI Farms and Munger Farms are seeking to combine their respective strengths to tackle these challenges.

US-based Munger Farms, which describes itself as the world’s largest family-owned berry grower, farms over 3,000 acres (1,214ha) of blueberries across California, Oregon and Washington. It is one of four grower-owners of the Naturipe brand, together with Hortifrut, Naturipe Berry Growers (which primarily produces strawberries and raspberries in California and Mexico) and MBG marketing, a blueberry cooperative based in Michigan.

Munger Farms plans to bring world-class varieties, advanced production technologies and technical expertise to India in order to help develop local production and grow consumption.

“The Munger family actually originates from India,” president and CEO, Bob Hawk told Fruitnet. “The owners, David Munger and his brother Kable, are second-generation, so this is a great opportunity for us to come back home, if you will.”

INI Farms, which celebrated its tenth anniversary in August, has expanded rapidly with venture capital backing, establishing a leading position in production, packing and marketing of core categories, notably pomegranates, bananas and coconuts. The company now plans to utilise its network of direct relationships with farmers and its supply chain capabilities to grow, distribute and market blueberries together with Munger Farms.

Two-way trade

While noting that the big opportunity centres on developing domestic production in India, Hawk was swift to point out that this is a long-term project, adding that the companies will work on a number of other opportunities.

“With our partnership, we are able to look at the Indian market from many perspectives. One of them is learning what can be done to grow blueberries in India, and that’s a big project with a lot of work to do. There’s a saying that you’ll crawl before you walk, before you run. So we’re just getting ready to crawl.

“But while we get ready, we can also develop a trading operation with INI Farms, one that goes both ways.”

Importing fresh blueberries from Munger Farms’ US operations into India, as well from its counter-seasonal supply partners within the Naturipe group, will be an immediate focus. Munger Farms also supplies a range of value-added blueberry products, as well as nuts such as pistachios, almonds and hazelnuts.

“Our whole product range is made up of healthy products, and this is a great partnership to come into India and start to bring these products into the marketplace. The blueberry products can be anything from fresh blueberries to frozen berries, to dried berries, juices and jams.”

Munger’s strength as a marketing company within North America will also be utilised to help distribute Indian pomegranates, arils and juice from INI Farms in the US market, he added.

Building from the ground up

INI Farms’ chairman and managing director Pankaj Khandelwal said the partnership represents “a fantastic opportunity” to grow the blueberry category in India.

“Blueberries are available in India, but not at a level where they could be. And with partners like this, we obviously have the best quality and varieties in the world, so we will have the right product.”

Khandelwal recognises that significant investment will be required to develop the category, however. “We do believe blueberries will fit the palate of the Indian consumers. At the same time education is very important. It’s very much part of the marketing plan; to educate the consumer. This is why the relationship is so important.”

Whether it is imported or domestically grown product, the lack of cold chain in India also poses a significant challenge for blueberries, but Hawk said INI’s infrastructure and strategic approach is one of its key attractions as a partner.

“INI has a vertically integrated system, which is hard to find in India, particularly with regards to cold chain. They manage all points from the farm to the consumer internally, not externally.”

One of the immediate priorities for INI Farms is to build the supply chain to handle blueberries from point of receival or production to the consumer, said CEO Purnima Khandelwal. “We’ve been doing this with pomegranate arils for the domestic market, so we know how it works, but we’ll need to develop it further.”   

Sumit Saran of agribusiness consultancy SS Associates introduced the two companies around two years ago, and he feels such partnerships will be the only way to succeed in today’s market.

“On the import side, there has been some trading of blueberries in India, but in my experience the world of trading is over. Now it’s time for relationships, for people to work together, and stand by each other in good times and bad,” he said.

High price points on imported blueberries, coupled with lack of consistency, currently constrain consumption, but Saran is hopeful the development of domestic production will fuel dramatic growth.

“If you were able to grow blueberries on the ground, even with the same production costs, you’re taking off the duty and the freight, which are substantial.”

But first, a significant amount of research and trial production will be required to determine the viable locations to grow blueberries.

“We’ve already made multiple visits to India, and we’ve seen multiple locations,” said Hawk. “We’ve been looking at soils, climate data, the timing of rainfall and so on. It’s a complex process. From our experience, we will select various varieties to bring in that we think we will work.”

Longer term, he said the ideal situation would be to have multiple growing locations close to India’s major cities. “That way, your fruit is fresher, your logistics costs are much lower, and you can really service the consumer.”

In addition to capitalising on the ‘local for local’ opportunity, Hawk said the partners plan to develop blueberry exports once they have become successful at growing in India. “There are many markets that would be receptive to the cost structures because of the logistics, especially the Middle East and South-East Asia,” he noted.