Proventus Agrocom Ltd. - Overview
Proventus, a leading commodities firm, specialises in providing a diverse range of dry fruits, nuts, and seeds under its brand ‘ProV’. Positioned at the forefront of health-conscious offerings within this segment, Proventus is strategically expanding its product portfolio across various commodity baskets. The company’s integrated business model, known as “farm to homes,” underscores its commitment to quality and sustainability throughout the supply chain, from sourcing to distribution. In the Indian market, Proventus identifies significant opportunities, particularly in Tier 2 cities where there is a growing preference for branded products in the dry fruits, nuts, and seeds category. ProV, known for its reliability and innovation, aims to meet the evolving needs of health-conscious consumers with premium offerings. With a robust pan-India distribution network, Proventus aims to solidify its position as the preferred choice for discerning consumers seeking high-quality commodities.
Products and Services:
Proventus offers a comprehensive range of premium dry fruits, nuts, seeds, and other related products, catering to diverse consumer preferences and market demands:
- Almonds: Proventus specialises in sourcing and processing almonds, offering a variety of forms including whole natural, roasted salted, blanched, sliced/diced, and almond powder. With a state-of-the-art processing plant capable of handling 50 MT of Inshell Almonds daily, Proventus ensures high-quality products sourced directly from farms in California, USA, and Australia.
- Pistachios: Leveraging a strong network of suppliers, Proventus imports and processes both Californian and Irani origin pistachios. They offer in-shell pistachios, flavoured variants, and kernels tailored to meet the diverse needs of the Indian market, from bakeries to retail consumers.
- Cashews: With a focus on the cashew-rich regions of South India, Proventus sources and processes raw and processed cashews. They maintain a robust supply network, ensuring a monthly capacity of over 50 MT of cashew kernels across various quality grades, serving both wholesale and retail markets.
- Walnuts: Proventus imports walnuts from California, USA, and Chile, ensuring a consistent year-round supply. They have in-house capabilities for hand cracking and sorting in-shell walnuts, maintaining high standards of quality and freshness.
- Raisins: Proventus offers a diverse portfolio of raisins, including Indian and Afghani varieties. They hand-select and use automated sorting methods to ensure premium quality, supplying over 50 MT of raisins monthly to meet market demands.
- Other Dry Fruits, Nuts, Seeds & Berries: Proventus continually expands its portfolio to include high-fat nuts like macadamia and hazelnuts, sweet and sour berries such as cranberries and blueberries, superfoods like quinoa and chia seeds, as well as a variety of dried fruits.
- Spices: Headquartered in the spice capital, Proventus sources aromatic, hot, and mild spices directly from the choicest suppliers.Their expanding spice portfolio under the ProV brand caters to discerning consumers looking for quality and authenticity.
- Pulses: Recognizing India’s prominence in pulse production and consumption, Proventus offers a wide range including gram, tur/ahar, urad, and moong. They engage in both domestic distribution and import, partnering with processors to enhance value-added offerings.
- Oilseeds & Other Commodities: With over 30 years of experience in the Indian commodity markets, Proventus trades in oilseeds like castor seed, mustard, and soybean, along with cereals, spices, and the guar complex.
Key Operations and Capabilities:
Proventus Agrocom Ltd employs a comprehensive approach to processing and packaging dry fruits and nuts, adding significant value across its operations.
Primary Processing: The primary processing facilities convert raw produce into finished products ready for secondary processing or packing. With a capacity of handling 12,600 metric tons per annum, Proventus primarily focuses on converting inshell almonds to almond kernels.
Secondary Processing: To meet growing consumer demand, Proventus roasts and flavors dry fruits and nuts, with a capacity of 720 metric tons per annum. They are also exploring products like nut milks, flours, butters, and granola bars, employing fumigation processes to enhance shelf life.
Packing and White Label Services: Proventus offers extensive packing services, with a daily capacity of 100,000 packages. As a co-packer for large institutions, they provide a one-stop-shop for wholesale products, secondary processed goods, and packaging solutions, covering the entire journey from farm to shelf.
ProV (Private Label): Proventus’s in-house brand, ProV, captures market share in the dry fruits, nuts, seeds, and berries categories, achieving over 1.5 lakh metric tons of monthly sales across six brand categories and 12 commodities, with over 100 SKUs. They also offer customized white-labeled packaging for specific customers.
Sourcing: Proventus sources produce globally and locally, establishing long-term purchase contracts to ensure a consistent supply of dry fruits, nuts, and pulses. They utilize a robust network across Indian mandis, farmers, traders, and derivatives markets.
Distribution: General Trade: 45+ distributors, 7500+ touchpoints, 20+ states. Modern Trade: PAN India presence, 3500+ stores, 20+ airports. E-Commerce: 8+ leading platforms.
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Brands:
ProV has six segments:
- ProV Select: Economical daily consumption.
- ProV Premium: Flagship high quality.
- ProV Regal: Luxury jumbo-sized produce.
- ProV Flavours: Flavored products.
- ProV Fusion: Exquisite trail mixes.
- ProV Minis: Pick-and-go needs.Â
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These segments range from lower to higher gross margins, catering to a variety of market needs.
Management Meeting Notes
Proventus AgroCom
Management Meeting Notes Company
Background: Proventus AgroCom is primarily engaged in the trading of dry fruits. Over the years, there has been a notable shift from the unorganised sector to the organised sector in this market.
Shift from Unorganized to Organized Sector:
This shift is largely due to the streamlining of the tax regime. Previously, the Value Added Tax (VAT) ranged from 5% to 22%. The introduction of the Goods and Services Tax (GST), which is standardised, has encouraged this transition. Before GST, there was little branding, which favoured unorganised players.
Post-GST, the market has become more streamlined, making it more beneficial to operate within the organised sector. The organised sector is projected to grow at a rate of 25%, compared to the overall market growth of 10-12%. This disparity is due to four main reasons:
1. Consumers are increasingly preferring to purchase packed dry fruits.
2. The quality of products in the organized sector is better.
3. In India, dry fruits are commonly used as nuts, while in other countries, they are also used as ingredients in the recipes.
4. Rising per Capita Income.
Market Size and Growth Opportunities:
The overall market size for dry fruits is estimated to be around 60,000 crores, presenting a significant opportunity for Proventus AgroCom. The company has set a target to achieve 1,000 crores in sales and revenue by FY28. FY28
Targets: Proventus AgroCom has set ambitious internal and revenue targets for FY28. One of the key targets is achieving 1,000 crores in sales and revenue by this fiscal year. For the current year, a specific Diwali target has been set at 2 lakh pouches.
Product Margins: The company offers several products with varying profit margins. Notably, cranberries and almonds have higher margins. The margin for cranberries is approximately 30%, while the margin for almonds is around 15%.
Procurement and Quality Control: Most of Proventus AgroCom’s procurement occurs during the harvest season, which lasts for two to three months. During this period, the company acquires large quantities of dry fruits that are of the best quality. After procurement, the company focuses on packing and ensuring strict quality control.
Promotion and Marketing: Following the quality control processes, Proventus AgroCom engages in promotion and marketing efforts to boost product visibility and sales.
Distribution Network: Proventus AgroCom focuses on a robust distribution network comprising three major channels:
1. General Market: This includes traditional retail outlets, local grocery stores, superstores, and distributors. The company is focusing on states like Kerala, Tamil Nadu, Andhra Pradesh, and Telangana.
2. E-commerce: Online platforms where the company sells directly to consumers.
3. Modern Retail: Large retail chains such as Reliance. The cost per sale is lowest in the modern retail channel.
Product Return Rate: Proventus AgroCom maintains a zero product return rate. They achieve this by strategically shifting their products from modern retail to e-commerce to the general market as needed to ensure that no products are returned.
Revenue Guidance: The company has provided the following revenue targets:
FY24-25: 450 crores
FY25-26: 600 crores
FY26-27: 800 crores
FY27-28: 1,000 crores
Promoter Background: The promoter of Proventus AgroCom has a diverse and interesting background. He then became a finance controller and worked at Edelweiss until 2005, holding roles in financial control and treasury. From 2008 to 2015, he was involved in the commodity business before founding Proventus AgroCom.
