Industry
Made in Bihar: How superfood makhana works its magic
Summary
- It comes from the muck but we don’t realise it. Once processed, makhanas make its way to fancy supermarkets. The gluten-free, protein-rich and low-fat snack is great with beer. Well, with any beverage. And the business is now worth millions. Here’s the inside story.
Purnia, Katihar: At 3 am, in a poorly ventilated, dimly lit hut along a deserted road in Harda village in north Bihar’s Purnia district, Bhola Sahni’s family of seven awakens from a short spell of sleep. Within moments, they take their places at the fodi (a cramped workshop where makhana seeds are popped), settling down on stacks of folded jute bags in front of earthen chulhas (stoves) fed by corn cobs. An old television set plays a Hindi comedy in the background—the sound from the TV mixing with the cacophony of the room and providing a dim source of light. The quiet street is now pierced by the synchronized sounds of seeds being roasted and stirred with metal sticks, on flames blazing under four pans, before they are struck hard with a wooden mallet, making them pop.
Sahni’s niece, in her early twenties, handles the seeds in the fourth pan. When they are heated to around 250 degrees celsius, she quickly passes the blazing hot seeds to her brother with her bare hands. He then strikes them with the thaapi, or mallet, transforming them into the white, fluffy, globally trendy superfood we know as makhana, foxnut or gorgon nut. The workers collect the fox nuts in large piles and will sort them later by size, pack them in plastic sacks, and sell them to a local trader.
With most of Harda’s migrant populace having left for home by January, only a hundred families or so were around in March when Mint visited Purnia. At the time, agents were purchasing the makhana at ₹800/kg from the fodi. “More than the price of cashew," says Sahni, 42, adding, “So this has been a good season".
Sahni, his wife, brother, sister-in-law and their children came to Purnia last July, at the start of the foxnut harvesting and popping cycle. The family, from Darbhanga district, nearly 250 km away, will head home soon, as the fodis close. Each family of 6-7 members earns ₹4,500 per quintal of seeds popped. Ravi Kumar, Sahni’s 28-year-old nephew, says that roughly translates to ₹300 per day for each family member, after accounting for the cost of fuel, food and specially-made equipment that the family buys from the local market each season.
The makhana is a product of intense manual labour, demanding precision, endurance, and skill. A hundred thousand mallah families from the Madhubani and Darbhanga districts in Bihar are the only ones engaged in this work, even though the crop is cultivated widely across Asia. Sahni’s family is from the banpar caste of fishermen and boatmen, known as mallah, who migrate to the nine makhana-growing districts each season. The districts, mostly in north Bihar, include Katihar, Purnia, Araria, Sitamarhi and Kishanganj. There, the families pop the gudiya, seeds of the prickly water lily, into makhana, which today has found global appeal as a gluten-free, protein-rich and low-fat snack. Indeed, makhana could emerge as the crown jewel of the $20 billion-plus snacking market (a size estimated by various reports) in India. And Bihar, which accounts for nearly 90% of the world’s makhana production, according to the Agricultural and Processed Food Products Export Development Authority, holds that crown jewel.
Makhana pasta, anyone?
If you sat down to eat a bowl of Makhana Penne Pasta, Farmley’s makhana-based penne pasta, which is made of 50% makhana flour, you’d be hard-pressed to distinguish it from a regular semolina pasta. Akash Sharma, co-founder of Farmley, tells Mint that the makhana pasta and macaroni was born out of an effort by the company’s new-product-development team to address the wastage they dealt with due to all the foxnuts not meeting the size grade for flavoured or unflavoured makhana packs. Or wastage due to their being improperly popped, leaving them with a slightly unsavoury texture, but still perfectly nutritious.
The makhana pasta has now given Farmley access to a pasta category that in itself is valued at a whopping $650 million, according to an estimate by market research agency Expert Market Research. “We have managed to address 35-40% of our wastage this way. We have tested noodles made from makhana flour and see this as an interesting category," says Sharma. Farmley is the only brand currently manufacturing makhana-based pastas. “It’s only a matter of time before others do it too", Sharma tells Mint. Apart from having seven flavours of packaged makhanas that it processes and packs in Purnia, Bihar, the Noida-based startup also makes makhana munchies as a healthier alternative to Pepsico’s Kurkure, and will soon launch popped makhana chips.
Snacking possibilities with makhanas appear to be exploding. Ritesh Kumar, director of fast-moving consumer goods (FMCG) conglomerate Dharampal Satyapal (DS) Group, which offers flavoured makhanas in ₹20 packets that are mainly sold via kirana stores and corner shops, envisions makhana being sold as a breakfast cereal, like muesli. Mr Makhana, the leading packaged makhana manufacturer in India, sells makhana bhel, while Bihar-based Mithila Naturals sells makhana smoothie powder.
The $20-billion snacking category, and the fast-growing $2.5-billion healthy snacks category, which is dominated by products such as protein bars, health drinks, and millet or jowar (alternative cereal-based) snacks, is highly lucrative, thanks to demand from health-conscious millennials growing exponentially. A report by financial advisory firm Avendus puts the size of the ‘health food’ market at a potential $30 billion by 2026, and companies in the snacking space want a slice of the pie.
Apart from DS Group, Better Snack, Tata Consumer’s Sampann, Marico’s Saffola, Rajdhani Besan, and RPG’s Too Yumm brand have ventured into selling packaged makhana.
Industry estimates suggest the flavoured makhana category is growing at 30% year-on-year.
Startups like Mr Makhana, which exclusively deal in foxnuts, are now finding store space in UK-based retail chains Tesco and Sainsbury’s. Makhana accounts for 30% of Farmley’s total sales, out of a bouquet of several dry fruit and seed-based offerings. DS Group’s Snack Factory says its business in the makhana category has doubled every year since 2018. “We started in early 2018 with three flavours in small packs in the National Capital Region. Now, we are available in all the metros and tier-1 and tier-2 cities, with our presence in more than 70,000 outlets, including modern trade, e-commerce and over 100 vending machines," DS Group’s Kumar tells Mint.
Mr Makhana, Snack Factory, Haldiram’s and Farmley are the prominent makhana players in the domestic market.
“Our strength is in the masala supply chain. For other brands, millets might be a strength. There are a lot of brands that are going to come into this, eventually, but it really boils down to the backend capabilities one has in this market," Sharma tells Mint. “It is such an unorganized market that if you don’t have the supply chain under control and an understanding of the product, you are either unable to get consistent quality or you are not able to maintain pricing in terms of raw material."
While there is an ever-growing list of businesses selling packaged makhana, not many are growing or marketing the category aggressively. Many of the large FMCGs alluded to above say makhana is only a ‘test market’ for them. Moreover, despite India’s vast urban population, nearly half of the entire annual production of makhana is exported to countries such as the US, Canada, Australia, the UAE, and the UK.
In the US, just before the pandemic, a brand called Bohana was pitched on Shark Tank, where its Lebanese founder said the brand’s mission was to “bring popped water lily seeds to the world". Needless to say, the small $3.99 pack ( ₹332) was sourced from Indian fodis.
Broken supply chain
The makhana market is projected to touch almost $1 billion in the next two-three years, based on traders’ estimates, which peg the current annual production at 80,000 tons, which is worth around $700 million today, at the current wholesale rate of ₹700/kg. And yet, makhana is not a ‘serious’ category just yet for large FMCGs. This is despite many brands wading into the space and industry estimates pegging the size of the flavoured makhana market at ₹150 crore annually today, and growing by at least a third of that value every year.
Price fluctuations for the makhana pop impact the decisions of corporations. Last crop year, for instance, the price of raw makhana stagnated at around ₹250-300 a kg. This year, prices have shot up to more than ₹700 a kg.
“The backend is not structured in the right way in terms of sourcing makhana. There is a volume constraint. Mass consumption in this category is at the paanwaala level—at the ₹10, ₹20 or ₹30 price points. You can’t sell a ₹100 packet there—for that you have to go to a different model," Kumar tells Mint.
“Now, in modern trade, where you can do that, the volumes are only 5-10% of the total market in terms of consumption in the snacking category, which is not interesting in terms of scale."
“We sell a 14 gm pack for ₹20. When we started Snack Factory makhana in 2018, it was 20 gms, which got reduced to 18 gms, and now is at 14 gms because of the increase in the price of raw makhana. The price has gone up from ₹150-200/kg when we started to ₹800-900 a kg now. So, that’s a big challenge for the industry and for the category—sourcing makhana in future if the consumption keeps increasing," Kumar adds.
“That’s why you see that in the last six or seven years, a lot of brands that had tried makhana as the only product, with the exception of Mr Makhana, have all shut shop. When prices fluctuate rapidly, and people have launched brands with makhana as the sole offering, it is very difficult to sustain in terms of profitability. We relied on our distribution and our bandwidth, and we have been consistently building it despite these challenges from the last six-seven years, without any marketing effort," says Kumar.
But what is the root of the stress in the makhana supply chain?
The prickly water lily, the seeds of which are popped into makhanas, has traditionally been a ‘wild crop’ occurring naturally in marshy ponds with stagnating water 4 feet up to 10 feet deep. But now, nearly 70% of the cultivation of the crop is in the ‘field system’, which requires water only 6-12 inches deep. And, the plant can be intercropped with rabi or kharif crops such as wheat, paddy and maize.
The fields are prepared by enriching the soil with lime between December and January, with seeds sown from January to March. The harvest occurs in three phases between July and October. Despite being a staple in Bihar’s culture, makhana cultivation faced limitations until scientific methods introduced by local agricultural colleges began to transform its production.
“Makhana grew wild for many years... but its scientific cultivation has occurred only in the last decade," explains Paras Nath, principal at Purnia’s Bhola Paswan Shastri Agricultural College. This has led to the area under cultivation doubling from 15,000-20,000 hectares in 2012 to just over 40,000 hectares today. “Unlike a fruit crop or cereal crops like wheat, where recommendations for fertilizers and pesticides, planting and sowing, weed management, irrigation management, and post-harvest management are defined, makhana farmers had been handling the crop traditionally, with trial and error, which is why it wasn’t expanding in a big way," Nath explains.
“The first challenge was that there was no improved mass-cultivable variety of the seeds. So, we did local germplasm collection and found 7-8 promising lines, where the yield potential was higher than the varieties being grown widely. We worked at weed management, fertilizers. And then we did field trials," he tells Mint.
Efforts to expand the area under cultivation have been successful, with the technology and seed variety now going beyond Bihar, even reaching parts of Bengal and eastern Uttar Pradesh. The introduction of high-yield varieties has increased average yields significantly, contributing to the economic viability of makhana farming.
“Prices for the crop would be at ₹81 per kg in the first week of July 2012. Then they would go down to ₹71/kg, then ₹65/kg and drop to ₹20-30/kg in the second and third harvest," recalls Anil Kumar, a professor specializing in makhana at the agricultural college.
“Makhana cultivation was in the hands of very few people. From Madhubani to Kishanganj, there were only a handful of families involved in cultivation. In 2012, we started calling large exporters to the college and got people to intervene. By 2021, the price had risen to ₹240/kg. This year, it was at over ₹800/kg," he says.
Scientists at the Bhola Paswan Shastri college were the key facilitators in filing for a GI (geographical indication) tag for Mithila Makhana, which covers 21 districts in Bihar.
A high-yielding seed variety called Sabour Makhana-1, developed under the aegis of the Bihar Agricultural University in Sabour, has led to 35-40% expansion of the land area under makhana cultivation, according to Nath. However, the makhana supply chain continues to face significant hurdles as its cultivation and stocking practices are still concentrated in the hands of a few traders.
This concentration creates price fluctuations, disadvantaging farmers and small processors, who cannot benefit from peak market prices. The first challenge is that nearly 90% of the crop’s supply comes from Bihar alone. And within the nine large districts in the state where the crop is cultivated, monopolistic forces hoard the popped seed on a large scale, leading to the price being artificially inflated.
“New players entering the makhana business are facing problems because the crop isn't part of the Essential Commodities Act or linked to any commodity index, so there is no provision at present to prevent large-scale hoarding. From July to October, large agents with deep pockets create stocks; the moment the pop and seed in the market is depleted, the stock is released at inflated prices," says Anil Kumar.
“The fodi is not economically sound, nor is the farmer, to break out of this process. The producers and fodis can’t keep stocks of the popped seeds because they aren’t wealthy, and are forced to sell the stock cheap. We are also encouraging farmers producers organizations (FPOs) to link with large companies directly, so the farmer benefits from the growing demand for makhana."
Local traders in Purnia say warehousing or cold-storage facilities can help stabilize makhana pricing.
According to a former mallah community political leader from Darbhanga, families involved in the popping process last season faced steep losses and are still in debt as the price of makhana suddenly dropped. Unable to hold or pay for stock themselves, they were forced to sell to agents at less than half the price they obtained for the seed last season.
“We need warehousing facilities, and we need affordable loans so we don’t fall into penury when a season goes badly. After months of labour and living away from home, the mallah men do not get to reap the benefits of the high retail prices of makhana," he tells Mint.
Going places
While the production of makhana remains concentrated in Bihar, the industry expects to see widespread proliferation of the crop in regions outside the state in the coming years. Companies such as Farmley, DS Group and Mr Makhana have experimented with growing makhana in Azamgarh and Noida in Uttar Pradesh. However, the experiments have remained at a nascent stage because the fluctuation of makhana prices hasn’t given them enough clarity on the economic feasibility of in-house production.
“However, in the next five years, I don’t think makhana will be local to Bihar alone," says Farmley’s Sharma.
“There is potential for expansion of makhana cultivation to 1 lakh hectares of waterlogged land in nine districts in Bihar, from 40,000 hectares now. We hope that with government support, it can go to 60,000-80,000 hectares by 2026-27, as more processing units get established locally," says Nath from the agricultural college in Purnia.
“Many wings of value addition are opening up and the market chain for makhana is getting vibrant. Twenty-one districts in north Bihar have a GI tag for makhana. We are adding one or two more districts every year—Khagariya, Gopalganj, Vaishali, Muzaffarpur and more. Our objective is to drive expansion in the entire GI area. This will lead to utilization of chaur (waste, waterlogged) land," says Nath. “Our makhana development practices, including the tech and seed variety, are also being used in the low-lying lands of Chhattisgarh's Dhamtari district and the low-lying lands of Madhya Pradesh."
The government of Bihar has included makhana in its ODOP (One District, One Product) programme for Darbhanga, Katihar, Supaul and Saharsa, recognizing its potential as an untapped crop.
Instant makhana pop?
Cultivation of makhana, however, is now awaiting another breakthrough. While several companies and institutes, such as CIPHET in Ludhiana, have been working on machines to negate the dependency on manual labour to pop the makhana, harvesting is also an intensely manual process in need of mechanization. It involves diving into the water and getting exposed to the thorny leaves and roots of the prickly water lily plant—an occupation that is the preserve of the mallah community.
There is a need to design a makhana harvesting machine so that it is easy for non-traditional farmers to cultivate it. Half of the cost of makhana cultivation is in harvesting, and mechanization can lower it. Purnia’s agricultural college, under the direction of Bihar Agricultural University Vice Chancellor Dr DR Singh, is working on research and development of the makhana crop, including designing a machine to harvest it. International interest has so far been limited, however. It is a demand and supply game—when scale expands, multinationals will come in and also design and develop machines, say Purnia scientists Nath, Kumar and PK Yadav.
This process has already begun and the industry expects new harvesting machines to come up in the near future. CIPHET Ludhiana’s popping machine, while successful, is, however, not economically viable yet and needs further development. “We want large-scale, portable popping machines. Like a maize-popping machine, which can give you instant makhana pop like a roadside popcorn vendor," says Nath.
“Dhaan and makai (rice and maize) are fast being replaced by makhana cultivation in our village. In one acre of land, we were able to cultivate 20 quintals of rice. At most, we could get ₹2,000 a quintal. For makhana, in one acre, we can cultivate eight quintals, which sells for anywhere from ₹15,000-20,000 per quintal, per season," Uday Singh, a makhana farmer from Lahsa village in Katihar, tells Mint.
“Crops like makhana and mustard don’t require a lot of investment. We also cultivate mustard alongside makhana—and whatever we earn from the mustard crop is enough to cover the cost of cultivation of makhana," he adds. Singh owns five acres of land and has been cultivating the crop for five years now.
For the 60,000-70,000 farmers associated with makhana farming today, makhana cultivation has become lucrative compared to traditional crops. But its remunerative value has scope to be enhanced.
There is still no organized mandi for farmers to sell the makhana in—meaning they have to rely on agents to procure the crop directly. Unlike in Punjab and Haryana, Bihar’s farmers hold much smaller parcels of land. In 2006, Bihar had abolished the Agricultural Produce Market Committee (APMC) Act, which governed the mandi system.
Outside some mallah families that are into makhana popping, working in a fodi isn’t seen as an attractive job. Families working in fodis constantly sweat, get dehydrated, and contract lung diseases. “You can work till your body works. If someone is sick, they have to stop work," Sahni says, “But it allows the whole family to stay together. We are associated with the water—we dive in the water to collect the seeds from the pond, we do the popping; in Darbhanga, we do the fishing. Hum mein paani ki oorja (energy) hai."
Perhaps mechanization will draw non-mallah communities into makhana popping and address the skill shortage.
Sahni’s nephew Ravi isn’t worried about that eventuality and is, in fact, looking forward to the advent of the machines. “If a machine is made, we will operate it. We are not afraid at all of losing work. People will be needed to operate any machines that come, and who better than us to do it? It’s not like each and every process in the fodi can be mechanized. So, far from being fearful, we want the machines to come, so that the fodi becomes a little bit more livable for us," he says.
