Amazon India Begins Pilot Project to Buy Fresh Produce Directly from Farmers

Amazon Retain India is running a pilot project in Pune where the giant US e-commerce company plans to buy fresh produce directly from the farmers for the first time as part of its farm-to-fork initiatives.

Amazon Retail India Pvt Ltd (ARIPL), the wholly-owned food retailing venture of the US giant has been working with dozens of farmers in the region and has created a cold chain hub in the locality to supply fresh production of vegetable and fruits to sell online through its Amazon Fresh and Amazon Pantry, sources said.

As per reports, the Multinational Company plans to expand this program to other parts of India once the project is successful. Currently, it purchases fruits and vegetables from aggregators in various mandis.

“We are engaging with farmers and government bodies to develop a sustainable farm-to-fork model by investing in technology,” said an Amazon spokesperson.

"Grocery is an important priority that we would like to keep improving our service and expanding,” Amazon’s India head Amit Agarwal told to a media interview last week.

Food and grocery is the largest portion of India’s retail market and organized retailers, including e-commerce companies, are trying to tap into the growth.

As per sources, the company organized retailers account for $25 billion of India’s annual $580 billion food and grocery market and the segment is expected to grow to $69 billion by 2024, according to Axis Capital.

“Our ambition is to have the largest wallet share of customers for grocery purchases,” Agarwal said.

Moreover, ARIPL had received government approval to invest $500 million in the food retailing subsidiary that for the first time allows Amazon to stock and sell locally produced food items. Currently, a portion of food products on Amazon’s India marketplace is sold by ARIPL.