This past Friday, we were fortunate to have Pratyush Pandey, Managing Director of Global Easy Water Products (GEWP) join us for breakfast at our offices in New York. Joining Pratyush for breakfast were a number of Acumen Fund Partners and staff. GEWP is a for-profit company that manufactures, distributes and sells drip irrigation systems to smallholder farmers in seven states across India; Pratyush was in town following the final presentation for the Legatum Prize (GEWP was among the five finalists; unfortunately, they did not win the USD $1 million award).
In any case, back to the breakfast. Pratyush’s talk – and the subsequent discussion – left me with three key takeaways and an important reminder:
Takeaway 1: Building a successful business serving the low-income market requires listening to the poor and building a product or service based on the specific needs and constraints of those living at the base of the pyramid.
GEWP – and its parent company, International Development Enterprises - India (IDE-I) – sell four types of irrigation systems. The systems vary in cost and depend on the specific preferences of the farmer. Not only does this enhance affordability, but the modular system design allows the farmer to add acreage incrementally as they generate profits from increased production. For example, a typical GEWP customer starts by irrigating one crop; after a successful season, he’ll add acreage and drip-irrigate another two or three.
Takeaway 2: In order to scale, GEWP must recognize market opportunity while strengthening its in-house capabilities.
While the need for drip irrigation in India is acute, GEWP’s business there is relatively seasonal (in the monsoon season, sales drop significantly). Understanding this aspect of his business and global demand for drip irrigation, Pratyush developed an international distribution strategy that sells drip irrigation in nine countries in Africa and seven additional countries in Asia. GEWP has also ramped up its in-house manufacturing capabilities in order to lower the costs associated with purchasing the irrigation systems externally.
Takeaway 3: Successfully marketing to low-income farmers is about tapping into the current infrastructure of local non-governmental organizations and other embedded actors who have earned the farmers’ trust.
GEWP’s success is largely due to the 20-year track record and network built by IDE-India. These lessons can be applied globally. For instance, Acumen Fund recently invested in a new, for-profit company in Sindh, Pakistan called Micro Drip. Much as GEWP is associated with IDE-I, Micro Drip is tied up with the Thardeep Rural Development Program (TRDP), a 16-year old agricultural services non-profit with a long-established network of smallholder farmers for whom drip irrigation technology can have enormous benefits.
Three key takeaways: listen, understand the market and leverage trusted partners. In addition to these three key lessons – which, if you look at them, seem to be relevant to all sectors, not just drip irrigation – there was an important closing aside.
As the breakfast came to a close, Acumen Fund’s India Business Manager, Biju Mohandas, gave us an important reminder. Biju, on his last day in the New York office prior to returning to India, asked us to remember that while most Americans think a typical Indian is the man working at a call center or at an IT firm, almost 70% of the country’s population are farmers. And at the end of the day, India’s sustained growth is dependent of the success of its farmers – and those farmers’ success might depend on the growth of innovative enterprises like GEWP.
