Supply chain management of fruits and vegetables in India

Abstract

India produces 146 million tons of vegetables (NHB report, 2011) and the total area under vegetable cultivation is around 8.5 million ha. Potato, tomato, onion, cabbage and brinjal account for around 60% of the total vegetable production in terms of quantity. India’s annual fruit production is 75 million tons (NHB report, 2011) and the total area under fruit cultivation is around 6.3 million ha. The major Indian fruits are mango, banana, citrus fruits, apple, guava, papaya, pineapple and grapes. Fresh fruits and vegetables play a vital role in Indian context and their marketing works as an influencing force in the economy. Though retailing of fresh fruit and vegetables is a low margin business, the market potential is very large in a country like India. This factor has attracted many corporates into this sector. Marketing of agricultural produce is different and more challenging than many industrial products because of the perishability, seasonality and bulkiness. The very nature of small size of land holdings by the farmers, varied climatic conditions, production spread over wide geographical area, mainly in remote villages, diversified consumption patterns/habits of the Indian consumers and poor Supply Chain (SC) infrastructure makes marketing for fruits and vegetables more complicated. At the same time, Indian consumers demand fresh fruits and vegetables. Thus SCM plays a crucial role in marketing fruits and vegetables. Supply Chain efficiency not only helps in increased production and per capita consumption, but also contributes to economic development of the country. As a result, SCM throws both challenges and opportunities in marketing of fruits and vegetables. Efficient SCM in marketing, not only increases the profitability and efficiency of retailers, but also adds value to different stakeholders like cultivators (farmers), consolidators and consumers. This study attempts to identify various issues involved in managing supply chain in fruits and vegetables and identify and analyze different strategies that can be applied to optimize supply chain in fruits and vegetables. This paper aims to analyze the business models of vegetable retailers in organized retailing.