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Reliance Retail Ltd.

Reliance Retail Ltd. "Agriculture based Livelihoods: Opportunities and Potential" Access Livelihoods India Conference 17 th -18 th Nov, 2010 Hotel InterContinental Eros, New Delhi. Reliance agri supply chain.

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Reliance Retail Ltd.

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  1. Reliance Retail Ltd. "Agriculture based Livelihoods: Opportunities and Potential" Access Livelihoods India Conference 17th -18th Nov, 2010 Hotel InterContinental Eros, New Delhi

  2. Reliance agri supply chain • 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

  3. Reliance banana supply chain • 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

  4. Growers Wholesalers in terminal markets Semi Wholesalers / Ripeners Retailers/ Consumers Village level Consolidators Traditional Supply Chain • Harvested in looms • Transported loose • Maturity stage based on distance travelled • 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

  5. Traditional Supply Chain Village auction Conventional ripening Loader standing on loom Poor quality for customers Loading of loom Loose transportation

  6. Drawbacks – 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

  7. Reliance Value Chain Growers Company 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

  8. Reliance Value Chain Raw banana Transportation in crates De-handing Store display Ripening chamber Display at pushcart Washing Labled banana

  9. Reliance 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

  10. 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

  11. 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

  12. Thank You!

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