AGRICULTURE FOOD MANAGEMENT INSTITUTE, MIT

CAMPUS, MYSORE, KARNATAKA.

COURSE TITLE: PGDM In Agri and Food Business Management

TOPIC: RETAIL VEGETABLE MARKET ANALYSIS
MANNURU HARIHARA NANDAN
Introduction

 India’s diverse climate ensures availability of all varieties of vegetables.

 It ranks second in fruits and vegetables production in the world after China.
 As per Horticulture Data published by TOI, during 2020-21, India will produce 194 million
metric tonnes of vegetables cultivated in 10.7 million hectares.
 The study found that area under total vegetables cultivation is growing at the rate of 4.12%
and production growth rates is 6.48%.
Contd..

 The vast production base offers India tremendous opportunities for export. During 2019-20,
India exported fruits and vegetables worth Rs. 9,182.88 crores/ 1,277.38 USD Millions which
comprised vegetables worth Rs. 4,350.13 crores/ 608.48 USD Millions.
 Onions, Mixed Vegetables, Potatoes, Tomatoes, and Green Chilly contribute largely to the
vegetable export basket.
 The major destinations for Indian vegetables are UAE, Bangladesh, Malaysia, Netherlands,
Sri Lanka, Nepal, UK, Saudi Arabia, Pakistan and Qatar.
TRENDS IN FRUIT AND VEGETABLE
PRODUCTION
250

200
189 194
184 187.36
178
166 169
162
150

100 97.35 97.38 102 103

88.9 88.1 90.2 92.9

50

0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-2020 2020-21

Vegetables Fruits
TYPES OF VEGETABLE MARKETS

 Local markets
 Street hawkers
 Hyper markets
 Wholesale markets
 Online markets
 Retail markets
RETAIL VEGETABLE MARKETS

 The retailers buy vegetables from the wholesalers or the commission agent and sell to the
consumers.
 Higher rates than wholesale markets.
 In direct contact with end customer.
 Retailers are B2C companies- The buy from businesses but sell to customers.
 Margins are high but sales are fewer of each vegetable.
What is Retailing?

 Retail, by definition, is the sale of goods or service from a business to a consumer for their
own use
 Retailer is a person or business that you purchase goods from. Retailers typically don’t
manufacture their own items. They purchase goods from a manufacturer or a wholesaler
and sell these goods to consumers in small quantities.
 Retailing: is the distribution process of a retailer obtaining goods or services and selling them
to customers for use.
Functions of Retailer

 Buying and Assembling

 Connecting link
 Stocking Varieties of Vegetables
 Estimating the demand and arranging the purchase of the product
 Marketing functions
 Acting as consumer‘s agent
Retailing in India

 Retailing sector is of two forms namely

1. Organized Sector
2. Unorganized sector.
 Regarding the employment, the organized sector has employed 50 lakh people, whereas,
the unorganized has employed 3.5 crore people in India.
 It is estimated that the retail contributes 10- 11% to the GDP of India. The value of the
organized retail is Rs. 35,000 crores and of the unorganized is Rs. 9,00,000 crores.
 The Indian retail Industry is expected to grow to US $1.1 trillion in 2020, attaining a
compound annual growth with rate of 16.7%.
 Segment-wise Contribution in Retail Sector

2% 1%
3%
4%

7%
Food & Grocery
Apparel & Footwear
9% Consumer Durables & IT
Jewellery & Accessories
Health & Entertainment
Beauty & Personal care
10%
64% Home décor
Others
Types of Retail Markets:

 Organized Market:
1. Here the retailing is done by Licensed retailers who are registered under tax system
2. Retailers follows the rules set up by the government.
3. The value of Organized retail market is around 35,000 crores
 Unorganized Market:
1. It refers to the traditional ways of low cost retailing, for example, the local kirana shops,
convenience stores, handcarts, and pavement vendors.
2. Traditional retailing is backbone of our country.
Key Players in Organized Retail Market

 Reliance Fresh
 Safal
 Nature’s Basket
 Big Bazaar
Business Models of Vegetable Retailers In
India

 Traditional Retail Model

 Hub and Spoke Model
 Value Chain Model
Traditional Retail Model
About TRM

 It is a complex route model for the logistic flow of vegetables and it consists of maximum
involved players other than farmers and consumers.
 In this model vegetables are not cleaned and not washed. Also there is no particular
warehouse for storage.
 Information technology and advanced management techniques are not used in this
model.
 Example: The families who sells staple products along with vegetables comes under this
model.
Hub and Spoke model
About HSM

 In this model organized retailers are included.

 Fewer players are involved here when compared to TRM.
 Vegetables are cleaned and washed in this model.
 Space available for temperature controlled storage is very less but ware house is used for
it.
 Information technology and advanced management techniques are partially used in this
model.
 Example: Spencer's and More
Value chain model
About VCM

 Connectivity between stores(retail outlets), hub and back office is established.

 In this model preliminary sorting and grading are done before packaging.
 Wrapping machines and film packing machines are used in this model.
 Ware house and temperature controlled storage is fully used.
 Example: Reliance Fresh
Vegetable Retail Scenario

 Traditional Indian retailers account for 12.8 million retail outlets all over India and more
than 40 percent of them sell vegetable and grocery.
 The traditional retailing of vegetables is not very much organized, amounts to 85% of the
total arket , is extremely localised and highly fragmented with large number of
intermediaries(Auctioneers, Wholesale treaders and Commission agents)
 Farmers selling vegetables directyl to the customer amount to very small fraction by
volume. Farmers sell bulk of their produces to agents and auctioneers.
 Wholesale market is a vital link in vegetable supply chain. Both the traditional and
organised retailers are dependent on wholesale market with different propositions.
Challenges in Vegetable Operations in
Retail Sector

CHALLENGES: STRATEGIES:
1. Low Shelf life 1. Local Buyers
2. Quality Uncertainty Vegetable 2. Backward Integration
3. In-store Wastage Operations in 3. Personnel Training
4. Price Fluctuations Organized 4. Bench Marking &
5. Huge Wastage Retail Sector Monitoring
5. Recycling dumps &
Shipment frequencies
TIPS FOR EFFICIENT MARKETING

 Proper storing facilities.

 Holding capacity to wait till best prices are fetched.
 Adequate and cheap transport facilities so that farmer is able to reach market rather than
disposing it off at his village only.
 Clear and timely information about the market prices so that he is not cheated.
 Organized and regulated markets so that he is not ripped off by middlemen. As small as
possible number of intermediaries are suggested.
 SWOT ANALYSIS
• Increased Organized • Political Uncertainity
retail chains • Poor Infrastructure
• Increasing demand • Highly Unorganized
for Exotic vegetables market with 85% share
• Established Market

• Indian companies trying to

grow foreign Vegetables in
• Digital Strategy India
• Consumer Centric • Price Fluctuations
approach • Breakdown in Supply-
Demand
Frozen Vegetables

 Vegetables that have had their temperature reduced and maintained to below their
freezing point for the purpose of storage and transportation
 India Frozen Food Market is expected to continue its growth trajectory in the forecast
period, and its market will be US$ 3.1 Billion by 2026, from US$ 1.1 Billion in 2020.
 Frozen Fruits and Vegetables together constitute around 14% of overall frozen food Market
share.
 Spinach, Broccoli, Cauliflower
CONCLUSION

 Though India is the world’s second largest producer of vegetables, development is needed
in various areas for attaining efficiency in production and marketing of the produce.
 Indian vegetable markets are ruled by middlemen and the producer has very little
advantage.
 The Transition from Unorganized Retail chain to Organized Retail is a good sign towards
development but also safeguarding the interests of traditional retailers is also necessary.
References

 https://www.ibef.org/industry/retail-india.aspx
 https://timesofindia.indiatimes.com/india/horticulture-output-to-hit-all-time-
high/articleshow/81401959.cms
 https://agriexchange.apeda.gov.in/indexp/monthexport.aspx
 https://blog.se.com/sustainability/2020/01/02/scenario-of-the-indian-retail-market/
 https://www.researchgate.net/publication/331148819_REVIEW_ON_FRUITS_AND_VEGETABL
ES_RETAILING_IN_INDIA