30th September 2014

Sunhara Fresh
Farmer Centric Vegetable retail Supply Chain
Managing supply chain, Procurement and Distribution

Presented By
1. Chanchal Chakrachattari
2. Kunal Delwadia
3. Shankar Shethe

Indian Institute of Management Kashipur

Post Graduate Program in Management
(PGP 2013-15 Batch)

Introduction
Farmer Centric Vegetable retail Supply Chain
1
Indian agriculture
food system is under
rapid transformation
due to change in
external economic
conditions

Integrating front end

and back end
activities, Retailing is
consolidating while
back end is
fragmenting

Linking the two ends

and ensuring viable
business for both
farmers and
agriculture business
entity

Establishing assured
market place, reduced
risk and ensuring
remunerative prices at
the farm level.

2
Contribution to GDP
1980 2014
Agriculture 35% 13.7%
Service
42% 57%
Agri
Service

Providing critical
services like credit,
insurance, grading and
inspection, technology
extension and market
information

7
Institutional services help
small holders to operate,
raise their productivity,
income, and mitigate risk
involved in participating in
markets

8
Recent growth and
diversification of consumer
demand and expansion of
food processing companies
will boost demand for
market opportunity

9
Achieving these goals likely
require creation of new
institutional and innovations
to develop supply chain and
facilitate linkages between
farmers and retailers

Linkage between farmer and retailer to add value to supply chain

Traditional Supply Chain

Farmer Centric Vegetable retail Supply Chain
Sunhara Fresh: Objective
and comparison
Product

SF

Convenience

People centric

Quality

Professional

Inclusivity

Cost Efficient

Positive
Impact

Low Wastage

Vending
carts

Producer
Unpacked
Vegetables

Tradition
al SC

SM

Local Mandi

No value addition
Channel farming
Risk free income
Multiple handling and wastage

City Mandi

Price and income risk

30% of wastage of vegetable
Leftover unsold vegetables
Economy of scale (Poor)

Agents

Lack of options at farm gate

Rudimentary farming practice
Delayed Price Discovery
Distress selling

Lower quality of vegetable

Hygiene of vegetables is low
Fluctuation in price
High Transaction time

Wholesalers

Retailers

Consumers

Procurement Strategy
Farmer Centric Vegetable retail Supply Chain
Contract Farming
The essence of such an arrangement is the commitment of the producer/
seller to provide an agricultural commodity of a certain type, at a time
and a price, and in the quantity required by a known and committed
buyer.
Seeds/saplings, agricultural practices, and regular inspection of the crop
and advisory services on crop management
Strategic Partnership with local body
Hydroponics technology to use their land efficiently

Benefits

Limited investment
Reduces costs due to partner
cost-sharing
Reduced risks (vs. commercial
production) due to geo dispersal
of out growers

Cons

Greater risk of side-selling

No core production
Reliant on smallholder
production
High transport costs Can be
reduced by Nano warehousing

Increasing Buyers Investment

Increasing Risk in Supply Chain

Rural banks

Sunhara Fresh
Buyer
Input Supplier
Multipartite Model
Sunhara sources from farmers & farmer group
Technical assistance/ input/credit provision &
grower management via 3rd parties
Limited firm/ farmer coordination
Higher level of product specification necessitates
close monitoring on of production

Potential
Incentive: Buyers

.. 1

Procurement Strategy
Farmer Centric Vegetable retail Supply Chain

Lower Investment, operational costs, reduced

staff thorough outsourcing production

.. 3

Reduces transaction costs for (I) coordination

to agreed arrangements for regular and stable
supplies and (II) Procurement owing to scale
economies and higher productivity
Reduces post harvest losses due to more efficient
post-harvest warehousing, transport and logistics

.. 4

Reduces investment risk because of efficient

utilization of all resources and installed capacity

.. 2

.. 5

.. 6

Sustainable supply of required volume and quality

at required delivery schedule, access to large land
and labor, reduced supply risk compared to spot
market procurement
Reduces marketing risk owing to better alignment
of supplies and customer requirement, more
consistent supply through better control over
production and quality, more flexible response to
growing demand of market.

Potential
Incentive:
Farmers

Better and more stable income through higher yields,

reduces losses and possible premiums
Improved access to inputs through buyer credit s or
direct provisions by buyers which reduces the input
cost and increases the volume

1 ..

Improved liquidity through pre financing of inputs or

adequate terms of payment, reduces credit risk in
case bank accepts the forward contract as collateral
Reliable and stable market access, improved access
to non financial services(e.g. technological
extensions and training) and reduce market risk
through market oriented production planning

3 ..

Reduce production risk through access to inputs and

new technologies lower barrier to produce higher risk
crops, improves over all farm performance and skills
Increases diversification in production of crops.

2 ..

4 ..

5 ..

Concept and
Parameters

Well
Drainage

A level of the ground is

slightly raised above its
surrounding areas

Warehouse
infrastructure

Side walls must be

least exposed to sun
light so that there is
least variations in
temperature inside the
warehouse

Warehousing Strategy
Farmer Centric Vegetable retail Supply Chain

Soil bearing

Soil bearing pressure

should be greater than
150 KN/m2

Material for
side walls

Nano plastic sheet can

be used to make roof
and side walls, it is hard
as steel, light weight and
saves vegetables from
external environment

Location

For easy transport,

warehouse should be
located near site/farm

Control

Implement sensors for

temperature control,
moisture control to
provide safe natural
conditions so that
vegetables stay fresh

Electronic data interchange: Sunhara Fresh and farmers can exchange the
information about productivity, stock in the ware house, production schedule
through thumb impression etc.
Grading, quality check and packaging facility at Warehouse

Nano
Warehousing

Mobile application

Tracking of Goods and Supply

Farmer Centric Vegetable retail Supply Chain

Develop a mobile application to leverage the advantages of mobile phones and their growing number in India and direct in favor of
farmers and retailers. It has to be made to empower the female farmers to know the value of their farm produce and to no longer
depend on the middle man who can manipulate the prices.
Mobile application (in local language) will Comparing the price
of commodity in Mandi s and retailer
Provide them information and benefit to connect with retailer
than connecting with Mandi to gain trust among the farmers
Provide information about the volume and money provided to
them for their contribution towards supplying the fruits and
vegetable to retail chain of Sunhara
Provide information for quantity need in future on the mobile
application itself.
Integrated forecasting ( data can be collected from mobile
application) and at Warehouse.
Mistake proofing- design packaging in a way that it does not
get damaged during transport ( e.g. Chinese water melon )
All deliveries are taken from Nano warehouse. Farmers can
supply quantity to these warehouse and retailer can pull it
from there.

Google cloud messaging for android is a service that allows

one to send date from server to users android powered
device. It has been used extensively for the purpose of
automatic synchronizing and messaging the user about
retailers agriculture product requirement and account for every
transaction with retailer.

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Recommended Business Model

Farmer Centric Vegetable retail Supply Chain

Entire supply
chain
Farmer

Farmer

Collection of upgraded produce to

Sunhara Fresh collection center in
the village forward movement one
village one commodity policy

Sunhara Collection center

Transportation of primary produce
to Sunhara fresh Nano Warehouse

Sunhara Fresh Nano Ware House

Retail outlet

Ice carts (Local

)

Availability of options
Advanced methods of farming Practices
Price Discovery through mobile app
Assured market for their produce

Value addition to fresh farm produce

Minimized market risk for farmers and Sunhara Fresh
Reduce of wastage (5-7%)
Two way information flow- Electronic data interchange

Risk free assured income

Advanced design & models of carts
Recollected by Sunhara Fresh In evening
Collaborative, formal and modern method of selling
Reduced working hours

Assurance of quality and quantity

Reasonable price
Fresh, pure and hygienic vegetables
Fixed price
Lower transaction times and cost

Appendix
Farmer Centric Vegetable retail Supply Chain

Thank You