Quick commerce companies Blinkit and Zepto are reshaping India’s horticulture supply chain by partnering directly with Farmer Producer Organisations (FPOs), eliminating layers of middlemen and increasing farmer incomes, according to a report by AGRI_TIO.
The FPO Model and Farmer Benefits
The Sambhal Swarnim Potato FPO in Moradabad district, Uttar Pradesh, launched in December 2022 under the Centre’s 10,000 FPO scheme, saw its turnover rise to ₹15 crore in 2024-25 from ₹12 crore previously, AGRI_TIO reported. Over a thousand farmer-members receive ₹2-2.50/kg more than local mandi rates for their potatoes.
On July 7, 2026, FPO Managing Director Deepak Kumar delivered 15 tonnes of potato at ₹15/kg to Kiranakart Wholesale (a Zepto group company) and 13 tonnes to Zomato Hyperpure (B2B arm of Blinkit) at warehouses in Sonipat, Haryana. On the same day, prevailing mandi rates were ₹9-12/kg in nearby markets and only ₹7-8/kg in Aligarh and ₹6-7/kg in Sambhal, AGRI_TIO noted.
Farmer Nasir Noor Ahmed of Sambhal received ₹11/kg from the FPO with payment in maximum five days, versus ₹8.50/kg from the local mandi. Mahesh from Aligarh echoed similar higher realisations.
| Detail | FPO/Platform Price | Local Mandi Price |
|---|---|---|
| Potato delivery to Zepto/Blinkit (July 7) | ₹15/kg | ₹9-12/kg (nearby) |
| Farmer’s net (Sambhal) | ₹11/kg | ₹8.50/kg (local) |
| Mandi reference (Aligarh, Sambhal) | – | ₹7-8/kg, ₹6-7/kg |
Operational Mechanics and Cost Structure
Kumar leases a 10,000 sq ft warehouse in Greater Noida at ₹2.16 lakh/month to cater to NCR demand. Transportation from Sambhal to Sonipat via Greater Noida (with grading and sorting) costs ₹2.50-3/kg, as per AGRI_TIO.
A sourcing executive of one platform explained the model is currently run on a “no profit no loss” basis. “Eliminating all middlemen by procuring through an FPO and supplying directly to consumers helps us to sell even at lower than market rates at times,” the executive said. The key mechanism to avoid loss is a ‘return to vendor’ (RTV) clause and buying only grade ‘A’ fruits and vegetables.
Platform Strategy: RTV and Quality Control
Each quick commerce platform works with 5-8 FPOs per vegetable, and all FPOs agree to repurchase any rejected quantity. This ensures only top-quality produce is sold, the executive added, according to AGRI_TIO.
Zepto’s Draft Red Herring Prospectus (UDRHP) for its planned IPO reveals a vertically integrated F&V platform with a Farmer Partner Network, collection centres across major growing hubs, and capabilities in sourcing, packaging, cold storage, and transportation logistics, AGRI_TIO reported.
A source close to Zepto said: “By sourcing closer to FPOs, farmer partners and collection centres, the model reduces intermediary layers, handling delays and wastage. That is what creates room for better producer realisation while keeping the channel efficient for Zepto.” The intent is to remove “avoidable leakage” from the chain rather than pay more in isolation.
Implications for B2B Supply Chains
For B2B marketplace operators and cross-border e-commerce logistics managers, the model offers a template for disintermediation in fresh produce. Kiranakart Wholesale and Zomato Hyperpure serve as B2B wholesale arms that aggregate and distribute, capturing value formerly lost to middlemen. Sellers can study how these platforms integrate FPO networks and RTV clauses to manage risk while offering farmers better margins. The approach also highlights the importance of direct procurement partnerships and quality control mechanisms in reducing supply chain costs.
Sources:
