By Rajesh Naidu
India with a population of 1.08 billion (growing at about 1.7 % per annum) provides a large and growing market for food products. Food products are the single largest component of private consumption expenditure, accounting for as much as 49% of the total spending. Furthermore, the upward mobility of income classes and increasing need for convenience and hygiene is driving demand for (a) perishables and non food staples and (b) processed foods.. Also, with the globalization of trade and availability of high speed logistics, food retailers in developed countries are sourcing a year-round supply of fruits and vegetables from developing countries. Thus, both for local consumption as well for export there is a year round opportunity for fruits and vegetables, meat and poultry products and ready to eat processed foods. Food market in India is valued at Rs 2500 billion and fruit and vegetable forms 25% of it.The Indian middle class spends about Rs 400 billion annually on food and groceries. Owing to this high demand and attractiveness many retail giants have forayed into the fruit and vegetable retailing. Organized retailing in Fresh Fruits and Vegetables is gaining a lot of momentum in India with huge investment by leading Indian corporations in this area. Modern formats of supermarkets such as Reliance Fresh, Choupal Fresh, Farm Fresh, Filed fresh and Namdhari Fresh etc. promoted by different companies are emerging very rapidly in small and large towns around the country. Two of the major players in the supermarket sector in the country are Reliance Industries and Bharti- Walmart tie up. Other key players include ITC, Food World (JV of RPG Group of India and Dairy Farm International based in Hong Kong), Spencer, Godrej, Pantaloon (Big Baazar and Food Baazar), Subhiksha and Aditya Birla Group. 2.
Reliance fresh is a convenience store format belongs to Reliance Industries. About 453 Reliance Fresh stores are in operation across India (www.reliancefresh.info). The typical store space varies from 2000 to 3000 square feet across various Tire-II and Tier-III cities along with metros. It was started with an objective of selling only fruits and vegetables but because of the pressure on margins in the commodity reliance had to diversify its Product portfolio like frozen foods, bakery items and dry fruits and canned vegetables etc. Reliance is in continuous operations and expansion mode since January 2007 with ever increasing number of stores. Few of the distribution and techno initiatives undertaken by the company are rebuilding the supply chain value proposition for perishable produce. It has built an effective distribution system across the country that are the most complex by virtue of Inter-State product movement being full of administrative and regulatory restrictions. On the flip side it couldn’t sustain severe expansion without proper planning that has resulted in cutting down of its retail space. One such initiative was emergence of ranger farm outlets where they started carrying out B2B trade of selling fruits and vegetables to institutional buyers, wholesalers and other standalone retail outlets. Also reliance has 36 different types of businesses under Retail wing. Relogistics private limited, Reliance Agri produce distribution Pvt. Ltd, Reliance Mart, Reliance Fresh, Ranger farms are a few divisions working under retail wing of Reliance Industries. The present study focuses on only Reliance fresh and for our project we have confined our study to understanding the operations of an organised retail player. And in the process we have done a comparative study of organised retail of fruits and vegetables with unorganised sale of fruits and vegetables by street vendors. 3.
Rationale of the project
The purpose of the assignment is to understand the concepts of agribusiness relate them with a real time study and share the study with the rest of the batch....
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