Cultiveat: Going From B2B to Retail
Until mid-March, agritech start-up Cultiveat Sdn Bhd was comfortably on track to achieving its goals for the year. It had a good number of F&B subscribers, planned to build more farms and was gearing up to retail its produce by June.
Then the Movement Control Order (MCO), involving measures that were put in place to curtail the spread of Covid-19, threw a spanner in the works. In the days that followed, it had nearly eight tonnes of vegetables made redundant as subscribers scaled back their operations because restaurants and cafés were allowed to operate only if they offered delivery or takeaway options.
To save the fresh produce from perishing, Cultiveat CEO John-Hans Oei decided to bring forward the company’s plans for selling directly to end-consumers and accelerated the setting-up of its e-commerce site.
We are working hard to build awareness and customer acquisition in a short time. Digital marketing also involves multiple platforms, which behave differently, so we are learning on the go,’ says Kon.
‘We are supplying 85% less to F&B establishments during this period,’ says Charmaine Kon, head of marketing at Cultiveat.
Following the temporary store closures and social distancing measures, e-commerce is now a bigger part of many shoppers’ retail habits.
‘We were planning to sell the vegetables directly to consumers by May or June. So, we had not developed packaging and delivery systems. We also had not grown enough varieties to start operating B2C (business-to-consumer).
‘But since we were already planning to sell the vegetables directly to consumers, we decided to accelerate our plans, following the reduced demand from our F&B partners, resulting in excess supply,’ says Kon.
The vegetables, which are cultivated using technology-assisted precision farming techniques, are grown without the use of pesticides and in a weather-regulated indoor farm in Kapar. The Cultiveat farms also rely on fewer resources and less manpower.
The vegetables, consisting of various types of leafy greens, are sold online via www.cultiveat.co. Delivery is currently limited to certain locations in the Klang Valley and free until April 14, when the MCO is expected to end.
As Cultiveat has just rolled out the initiative, consumers have only two packages to choose from – Lettuce Mix and Summer Crisps. The lettuce mix consists of a random bunch of six types of lettuce heads such as butterhead, romaine, mini cos, frisee, oakleaf, summer crisp, coral and Batavia.
Kon says once Cultiveat gains more traction and stability, it will increase the number and types of crops sold online.
But this is not without challenges. Kon says the management team is handling the packing and delivery of vegetables to the distribution hub at the moment, as there are no workers on the farm because of the MCO.
‘Our packing room is under maintenance and we cannot get a repairman to come. So, we have moved to a secondary room, which lacks facilities and involves more manual work,’ she adds.
On top of handling the packing and delivery, Kon says the management team also deals with customer service and administration work, as the company has no employee in these roles.
Launching a B2C operation on such short notice also means less time to make announcements and do the necessary marketing.
‘We are working hard to build awareness and customer acquisition in a short time. Digital marketing also involves multiple platforms, which behave differently, so we are learning on the go,’ says Kon.
Cultiveat postponed plans to export its produce because of the MCO.
‘Having said that, we are confident of being able to run and expand because food security matters more now than ever,’ she says.
Fresh produce ready for end consumers.
