Download - Reliance Retail Ltd
Access Livelihoods India Conference
Reliance Retail Ltd.
"Agriculture based Livelihoods: Opportunities and Potential"
Access Livelihoods India Conference
17th -18th Nov, 2010
Hotel InterContinental Eros, New Delhi
Access Livelihoods India Conference
Reliance Retail created a farm to fork supply chain for fresh fruits & vegetables.
Developed base with growers
Retail operations spread across country
Handling of all fruits & vegetables
Different supply chain models as per product need
Reliance agri supply chain Reliance agri supply chain
2
Access Livelihoods India Conference
Established robust end to end supply chain for banana
Inclusive business model – Co-opting the entire agri value chain Also caters to external customers
Developing upon the strength of existing channel partners
Reduce post harvest losses ,improve quality , better market access
Profitable business proposition - scalable and sustainable model
Win-Win situation - enhanced value to growers, customers and the company
Reliance banana supply chain Reliance banana supply chain
3
Access Livelihoods India Conference
Traditional Supply ChainTraditional Supply Chain
• Harvested in looms
• Transported loose
• Maturity stage based on distance travelled
GrowersVillage level Consolidators
Retailers/ Consumers
Wholesalers in terminal markets
Semi Wholesalers / Ripeners
• Finances growers
• Arranges loading and transportation
• Charges commission and cost incurred to growers
• Auctions in mandi• Finances
consolidators • Extends credit to
buyers• Charges
commission and recovers advances & cost
• Uses unscientific practices for ripening
• Extends credit to retailers.• Also owns push carts • Gets known people from villages
to operate them• Gives a price band to sell • Operator makes up for any loss• They get fixed amount per day
paid as lump sum amount when leaving for home-town
• Poor quality.• Low shelf life• Often sold at
mark-down price
4
Access Livelihoods India Conference
Traditional Supply ChainTraditional Supply Chain
Village auction Loader standing on loom Conventional ripening
Loading of loom Loose transportation Poor quality for customers
5
Access Livelihoods India Conference
Drawbacks – Traditional Supply ChainDrawbacks – Traditional Supply Chain
Many intermediaries - adding costs but little value addition
No ownership of produce quality - No effort channelized towards reducing losses
Once harvested, farmer is at the mercy of traders
More than 30% of produce in the value chain becomes unsalable
Waste handled in city – unhygienic environment and additional cost
Financial value loss passed onto grower , quality value loss passed onto consumer
Poor shelf life
6
Access Livelihoods India Conference
Reliance Value ChainReliance Value Chain
GrowersCompany appointed vendors
Company owned ripening facilities
Distributors/ Retailers
Consumers
• Buying directly from field
• Fixed farm gate price
• Payment linked to quality
• Secured payment
• Trained on post harvest handling
• Simple infrastructure/ gadgets to follow practices.
• Fixed logistics cost per Kg• Payment on quality &
quantity received at company
• Weekly indent
• Scientific ripening under controlled condition
• Quality check of green fruit
• Control of dump, shrink and transit loss of each consignment.
• Dispatch quality check
• Purchases at fixed price from company
• Price as per quality• Daily supply as per
requirement ensures fresh stock available for customers.
• Training on fruit display & handling
• Retailing losses reduced with fruit at right stage of ripeness
• Mark-downs minimized due to better shelf life
• Consistent quality with
better shelf life• Appreciation of
quality offered - willingness
to pay premium
7
Access Livelihoods India Conference
Reliance Value ChainReliance Value Chain
Display at pushcart
Store display
Labled banana
Ripening chamber
Transportation in crates
Raw banana
De-handing
Washing
8
Access Livelihoods India Conference
Reliance Value Chain – salient featuresReliance Value Chain – salient features
Paradigm shift from trading driven operation to a value addition based supply chain
Draws on strength of existing players but transforms role towards improving quality
Purchase price fixed before harvesting – de-risking farmer from market uncertainty
Secured payment to farmer as per commitment
Right maturity stage harvesting – improves quality of fruit and productivity
Price benchmarked with quality – motivates farmer to adopt practices for improving quality
Tie ups for better planting materials to improve yield
Developing existing channel partners for marketing produce
9
Access Livelihoods India Conference
Major impact areas Major impact areas
Improvement in farmers income
Farmer access to new markets
Reduction in losses
Creation of rural employment
Improved quality to consumer
Environment friendly
Benefits of the model enticed unorganized sector to adopt best practices
Inclusive Innovative Agri model suited to the local context
10
Access Livelihoods India Conference
Key milestones Key milestones
Sourcing from 40 banana growing clusters across the country
Linkages with more than 2000 growers
Developed 150 plus vendors for procurement
Marketing in 16 major cities to internal as well as external customers.
100 plus distributors & organized retailers
11
Access Livelihoods India Conference12
Thank You!