Lets be fair to the middlemen and the agents. Had it not been these much maligned folks, every nook and corner of India would have been deprived of their daily dose of Pan (Beetle leaves). Considering very high perishability and low value of this product, thanks to middlemen, this product safely reaches all corners of India and thousands of people in India get their employment and pleasure (daily quota of pan) still keeping the prices low for anyone to afford – that too without refrigerated transport. Can Reliance Fresh duplicate this effort? You bet..

This is not in defense of middlemen or an ode to them. This is reality and I know this better after spending 20 plus years in organized fresh produce retail in India with companies like Mother Dairy, Reliance Retail and Subhiksha with a brief to eliminate or at least reduce middlemen from food supply chain.

It is not incidental that all above said big fruit and vegetable retailers still by between 30-40% of fruit and vegetable supplies from these middlemen in wholesale market. Go and check their yesterday’s purchase records. History of Safal Market at Bangalore would have been different had it built itself on the strengths of existing middlemen.

A little known secret – Most of the times in a year, auction price of Potato from Agra (UP) at Azadpur Wholesale market is cheaper than the price at Agra itself even if the potato is arriving in this market from same belt. Same is true for Onions from Nasik. Well, it is wide inter-middlemen competition that drives down the price where as potato growers exploit the limited and thinnly spread traders at production source.

During my school days in early 70s, I remember asking my English teacher one fine day what does ‘Good bye’ means. I vividly recall even now what Anita madam, my teacher told us.  Good bye means – ‘God be with you’. I hope what she said is true as Good bye is what I want to wish someone who have been so un-reliable despite its name.

God be with you Mr. Un-Reliable because you’ll never be able to gain trust of people you get associated with. So only God shall with you, perhaps to save you.

Good bye once again Mr. Un-Reliable. May I say Good riddance?

Every fresh produce grade sells in India. But not usually separately but as a mixed grade which is a nightmare to marketers. I want to use charity as a tool to achieve product standardization in fruit and vegetables in India. Any ideas on how to go ahead to build up a commercial project around this. Charity in broad sense means here using / selling low grade but perfectly edible cull fresh produce to low income groups / markets and marketing the rest to quality conscious high income buyers.

Objective is to achieve standard quality produce without any taking away any incentive away from suppliers which are small and medium farmers in our case. Premise is simple. All stakeholders need to be incentivized.

Stakeholder No. 1 – (Farmers) – They get full price (product plus sorting /grading charges) for their harvest at the production source. Full price is what they’ll get the wholesale market for their unsorted produce. 

Stakeholder No 2 – (Rich folks / Large Companies) – Charity givers – Providing inferior grade but perfectly edible to poor groups meet their social and community objectives.

Stakeholder No 3 – (Government) – Can provide some tax breaks to rich people / large companies while providing cheap / free nutrition to poor.

Stakeholder No 4 – (Retailers) – They get all standardized / saleable products reducing dump / shrink.

Stakeholder No 5 (Fresh produce Industry) – Standardized produce ensures better price discovery with more transparency and lesser price volatility. In fact industry shall be biggest winner of all.  

As Stakeholder No 6, if I put up my time, money and effort in operationalising the concept, I also must get compensated for the effort.  Therefore, the answer I’m looking for is – How to operationalise whole concept. Thought of using Internet for the purpose, at least to create an interface for all stakeholders except Government) but deciding against it because of almost negligible Internet penetration in rural India. More ideas that don’t add cost to the concept are welcome. 

Well, you can stop the bleeding only when you know where to apply band-aid. With first step taken by capturing data on where all the category is bleeding, balm can be applied to target areas to bring the shrink down.

In corporations quite often it is not possible to even start the healing process without getting a sign off from bottom to the top. Everyone has to know and acknowledge that they own part of the problem. When you start delving deeper, you will find that department lime Commercial and IT which apparently look remotely linked with Freshness issue, contributes a lot towards shrinkage. (Ask me – I’ll tell you how). Only this way it is possible to crack the issue. Next step would be to nominate someone who is now responsible for freshness or dump/shrink- end to end – period. It is also important that this freshness officer reports to the chief executive and is suitably empowered. It is pertinent to note here that this freshness executive is bound to ruffle many feathers. Organisations which thrive on polticking and back-biting shall ensure that this freshness officer is moved out of scene. So it is important to create safeguards in this regard. The scene now set for implementing and executing the crated agenda and thereafter measure and contol the losses. This approach shall sure work than bringing in cold chain and costly technologies. Good luck fresh produce retailers. You still have a long way to go….      

At its core, fresh retailer’s dilemma (read freshness / wastage predicament) is an inventory management issue.

But is it only a supply chain problem? What about impact of merchandising – their planograms, displays, promos and Store operations? What about procurement department which has to lift committed quantities oblivious of front end needs? What about logistics which has to honor vehicle movement restrictions put by city administrators? What about loss prevention (ironically responsible for reducing shrink) who have to seal fresh breathing produce in sealed closed trucks?

To make a dent into what look like a simple inventory management issue, a fresh retailer has to take a multidisciplinary and multi departmental approach to manage complexities that may eventually leads to new business processes, perhaps a new business model or altered organizational structure.

Beginning of course has to made by capturing data to get insights into what causes freshness leading to lesser dumps and vice versa. Though not a resource hungry approach but it is easier said than done. Are metrics available on FRESHNESS? What about its alter ego, dump / shrink? Let’s start with measuring that without each element in the value chain accusing one another as a dump / shrink contributor. To be continued..