Specialty retail Mar, 16 2011

Gaining Grounds with Horticulture Franchise

Retailers are always on the look-out, to grab the maximum share of retail pie. Selling fruits and vegetables from the organised stores is one such trend that is increasingly becoming popular among retail companies. To add to this is the expansion of the r

By Abha Garyali
Sub Editor
Gaining Grounds with Horticulture Franchise

Till recent times selling of fruits and vegetables (F&V), also known as horticulture retail used to be the monopoly of local sabzi-walas, who used to sell F&V from a small cart at the prices as per their wishes. However, the emergence of organised players in the sector has completely changed the experience of selling and buying of F&V. The organised retailers are opting for franchise route for quick and easy expansion.  At present India stands at four per cent in organised horticulture trade as compared with 56 per cent globally. This shows that organised F&V trade in India still has a long way to go to reach the global status. Considering the ever increasing prices of fruits and vegetables the Government regulations are also in favour of private participation in F&V Retail. With franchising getting the stature of a globally acclaimed business model with thousand of new and exciting business opportunities, it is no surprise that franchising is the best foot forward even for F&V trade.

Favourable Factors for Horticulture Franchising

With a paradigm shift in the lifestyle, attitudes, preferences and awareness level of modern consumers, F&V Retailing is becoming increasingly organised and gaining popularity as well. Traditionally sold through small road side grocer shops and mandis, food items such as fruits & vegetables are now being sold through various supermarkets, departmental stores and convenience stores. Let us explore the factors favouring the shift:

  • Convenient shopping: Organised retail offers convenient shopping environment with best prices.
  • Regulated prices: Traditional F&V sellers used to charge whatever they wanted but with the emergence of organsied players the prices are more regulated.  
  • Government initiative: To curb increased volatility of prices of fruit and vegetable, the solution lies in lay in modernising agricultural production and marketing the government is in favour of private participation. 
  • One stop shop: The modern franchised superstore or a convenience store does not only sell fresh fruits and vegetables but all other important household items like dairy products, oils, pulses, soaps and many other important products.

Beneficial for Farmers

Today, organised F&V retailing is gaining strong momentum in India, with huge investment by leading Indian corporations. Players are collaborating with farmers to ensure good quality of produce and encouraging contract farming. This is benefitting both the farmers and the franchisors and franchisees. Farmers associated with modern value chains earn higher returns than selling to traditional markets. Moreover the farmer after selling his produce to an established player has no worries of its logistics, selling etc. Hence linking small farmers to end-consumers through modern value chains creates a win-win proposition for all parties concerned.

Players in Grocery Franchising

Organised horticulture is comparatively a new phenomenon in franchise domain. But a few players have already tasted success in this field. Safal, Sai Niranjan Fruits are the few players in the field which are sure to have tremendous scope in future. However, Safal takes credit of initiating the concept of organised fruit and vegetables (F&V) retailing and franchising. Pradipta Kumar Sahoo - Business Head (Horticulture), Safal shares, “Safal is a thriving business proposition that has taken both the Indian retail as well as Indian F&V retailing by storm.”

Franchising: the key to Safal’s Success

Till now Safal has its franchised outlets in Delhi, NCR and Bangaluru which sell fresh fruits and vegetables, milk and milk products under Mother Dairy brand and also processed food products under Safal brand. The brand has 410 franchised outlets in these cities. But looking at the success of the brand Sahoo says, “As our organisation gains impetus and increases its customer base with each passing day, we intend to explore new markets and penetrate new customer base by launching new Safal stores across Delhi NCR, Bangaluru and other cities. This would help us in lifting more produce from our farmer base at a remunerative price and providing the same to our customers at a reasonable price.”

Selection and Training of Franchisees

All aspiring entrepreneurs keen on setting up a business but not having the necessary educational qualifications can gauge the scope in the horticulture segment and can gain success in the field. Aspirants need to have business acumen, passion for retail, balanced perspective, experience in F&V retailing and an investment of approximately Rs Seven to 10 lakh. However running a franchise outlet is not so easy also as there is always the problem of perishable goods. Fruits and vegetables are perishable goods; therefore an effective cold storage is a must for the outlet. Other than this the parent company provides adequate training and support to its franchisees. Extensive training support pertaining to operational, administration, sales and marketing activities is offered.

Indian food and beverages retailing, is slated for robust growth in near future, thus offering enormous scope to aspiring entrepreneurs. With a strong backend facility, lower costs and assured profits, this industry offers an ideal investment choice for entrepreneurship.

Related: Grow like bamboo with a bamboo biz!!

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