Reliance Retail Ltd.

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

• Reliance Retail Ltd.

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
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
Transportation in crates
Store display
De-handing
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!