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Reliance Retail Ltd.

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Title: 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!
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