Mumbai Grahak Panchayat’s Innovative Distribution Model Presented by: Shirish Deshpande

Role Model for Sustainable Consumption Norwegian Environment Ministry highlighted MGP’s Distribution System as a Role Model for promoting Sustainable Consumption, at the conference organized by Commission on Sustainable Development at New York in April 1999.

Norwegian Environment Ministry highlighted MGP’s Distribution System as a Role Model for promoting Sustainable Consumption, at the conference organized by Commission on Sustainable Development at New York in April 1999.

Artificial shortages & scarcities Sky-rocketting prices Cheating in weights & measures Adulteration Unfriendly Buying Environment

Artificial shortages & scarcities

Sky-rocketting prices

Cheating in weights & measures

Adulteration

Consumer-friendly Distribution Model Of Buying Groups

Consumer-friendly Distribution Model

Of

Buying Groups

Philosophy Growth In Production Equity In Distribution Restrain On Consumption

Growth In Production

Equity In Distribution

Restrain On Consumption

How the Model operates

11 Families Buying Group Group Leader MGP Distribution Model

Indent Indent Consolidation Total Order Bargaining & Negotiation MGP HQ Producers Wholesalers Market Price Plus 7 to 7.5 % FINAL PRICE Final Price Final Price Total Indents PAYMENT WAREHOUSE Unpacking Repacking DELIVERY PAYMENT MGP Distribution Model Purchase Committee

Profile of the MODEL 90 products available every month. Delivery to 21,632 families through 1574 Buying Groups . Product range covers grains, cereals, edible oils, dry fruits, soaps and detergents, cosmetics, hosiery, stationery etc. Annual turnover: INR 250 million (US $ 6.09 million )

90 products available every month.

Delivery to 21,632 families through 1574 Buying Groups .

Product range covers grains, cereals, edible oils, dry fruits, soaps and detergents, cosmetics, hosiery, stationery etc.

Annual turnover: INR 250 million (US $ 6.09 million )

Economics of the MODEL System operates on ‘No Profit – No Loss’ basis. End price includes Procurement Cost, Transportation Costs and Administrative Expenses. Savings of 15-20 % in monthly grocery budget of the household.

System operates on ‘No Profit – No Loss’ basis.

End price includes Procurement Cost, Transportation Costs and Administrative Expenses.

Savings of 15-20 % in monthly grocery budget of the household.

Annual Sales Turnover

More & More Families Joining Buying Groups

Benefits to Members Products cheaper in price, better in quality and accurate in weights & measures Saving 15-20% in monthly Grocery Bills Delivery at Buying Groups’ Doorstep Saving of Members’ time & money on transportation Focus on Health & Nutrition

Products cheaper in price, better in quality and accurate in weights & measures

Saving 15-20% in monthly Grocery Bills

Delivery at Buying Groups’ Doorstep

Saving of Members’ time & money on transportation

Focus on Health & Nutrition

How the MODEL promotes Sustainable Consumption Discourages impulsive buying. Helps restrain unnecessary or extravagant consumption. Substantial savings in fuel consumption. Reduces transportation for delivery Saves 52,544 kms. transportation per month in Mumbai

Discourages impulsive buying.

Helps restrain unnecessary or extravagant consumption.

Substantial savings in fuel consumption.

Reduces transportation for delivery

Saves 52,544 kms. transportation per month in Mumbai

How the MODEL promotes Sustainable Consumption (contd) Reduction in Greenhouse Gases Employs re-usable cloth bags for wheat, rice and sugar thereby cutting plastic usage. Effectively dispenses use of 75,000 plastic bags per month thus eliminates use of 2100 kgs. of plastic per month or 25,200 kgs. of plastic per year. Discourages wasteful, fancy packing

Reduction in Greenhouse Gases

Employs re-usable cloth bags for wheat, rice and sugar thereby cutting plastic usage.

Effectively dispenses use of 75,000 plastic bags per month thus eliminates use of 2100 kgs. of plastic per month or 25,200 kgs. of plastic per year.

Discourages wasteful, fancy packing

Environmental benefit Delivery to 1178 Buying Groups in Mumbai involves 4300 km running of delivery vehicles per month. In absence of such a Model , these consumers going to local markets would collectively incur 56,544 km of transportation per month. The Model thus effectively saves 52,244 kms . of transportation per month.

Delivery to 1178 Buying Groups in Mumbai involves 4300 km running of delivery vehicles per month.

In absence of such a Model , these consumers going to local markets would collectively incur 56,544 km of transportation per month.

The Model thus effectively saves 52,244 kms . of transportation per month.

Indent Indent Consolidation Total Order Bargaining & Negotiation MGP HQ Producers Wholesalers Market Price Plus 7 to 7.5 % FINAL PRICE Final Price Final Price Total Indents PAYMENT WAREHOUSE Unpacking Repacking DELIVERY PAYMENT Environment Friendly MGP Distribution Model Lesser Pollution Fuel & Resource Optimization Time Saver

Sustainable Consumer Movement Promotes Sustainable Consumer Organization Sustainable Consumer Movement.

Promotes Sustainable Consumer Organization

Sustainable Consumer Movement.

KEY ELEMENTS OF MODEL Operates largely on voluntary efforts Based on Members’ faith & trust Driven by Collective Leadership Guided by Social Philosophy Promotes Sustainable Consumption Establishes Consumer Sovereignty Operates on ‘No Profit-No Loss’ basis

Operates largely on voluntary efforts

Based on Members’ faith & trust

Driven by Collective Leadership

Guided by Social Philosophy

Promotes Sustainable Consumption

Establishes Consumer Sovereignty

Operates on ‘No Profit-No Loss’ basis

KEY ELEMENTS OF MODEL (contd) 15 to 20 % Savings in grocery bills Service-oriented and not commercially-oriented No stocks, No Inventories Discourages MNC Products Special emphasis on Health & Nutrition Predominant women participation & empowerment High satisfaction level

15 to 20 % Savings in grocery bills

Service-oriented and not commercially-oriented

No stocks, No Inventories

Discourages MNC Products

Special emphasis on Health & Nutrition

Predominant women participation & empowerment

High satisfaction level

What is needed to start Buying Groups Service-oriented approach Availability of dedicated voluntary activists coming from local areas Involvement of house-wives with their natural sense of care and concern Inspiring and trustworthy Leadership Small team of ladies, good at tasting and selecting household products Sense of social responsibility Sensitivity for environment

Service-oriented approach

Availability of dedicated voluntary activists coming from local areas

Involvement of house-wives with their natural sense of care and concern

Inspiring and trustworthy Leadership

Small team of ladies, good at tasting and selecting household products

Sense of social responsibility

Sensitivity for environment

The GLOBAL WARMING may be “ THE INCONVENIENT TRUTH ” But THE CONVENIENT WAY OUT is MGP’S UNIQUE DISTRIBUTION MODEL

If you wish to replicate this model in your country Contact: Shirish Deshpande, Mumbai Grahak Panchayat [email_address] or mgpanchayat@hotmail.com T H A N K Y O U

Contact:

Shirish Deshpande,

Mumbai Grahak Panchayat

[email_address]

or

mgpanchayat@hotmail.com