minimizatoin of wastage of fruits and vegetables at reliance fresh outlet
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Fruits and vegetables typically constitute an essential part of the daily diet in India and they
are in great demand round the year from most sections of the population. The commercial
value of fruits and vegetables in terms of direct consumption, processing as well as trade has
risen substantially in recent years. Their economic importance has also increased and high
labor intensity in the production of most fruits and vegetables production also makes them
important from the employment angle as well. Increase in area allocation under horticultural
crops has often been suggested as a measure for agricultural diversification, increased
employment and income.
India ranks first in the world with an annual output of 32 MT fruits, about 8% of the world’s
fruit production; also is the second largest producer of vegetables (ranks next to China) and
accounts for about 15% of the world’s production of vegetables. The current production level
is over 71 million MT. But the real challenge starts after the production. More than 72
percent of the vegetable and fruits are wasted in every year in the absence of proper retailing,
storage and other infrastructure facilities. The sector is constrained by widespread
fragmentation in the supply chain, low productivity levels, and huge post harvest losses
arising out of inadequate storage, cold chain and transport infrastructure, logistics and supply
Against a production of 180 million mt a year of fruits, vegetables and perishables, India has
a capacity of storing only 23.6 million mt in 5,386 cold storages across the country, of which,
80 per cent is used only for potatoes, according to the latest DIPP paper on Foreign Direct
Investment (FDI) in retail. According to industry estimates, 25 to 30 per cent of fruits and
vegetables and five to seven per cent of food grains in India get wasted.
Traditional Indian retailers account for 12 million retail outlets all over India and more than
40 percent of them sell vegetable and grocery (IBEF, 2008). Indian food retail consists of
staple commodities comprising grains, pulses, and vegetables. The Indian food retail
business, especially vegetable retailing is witnessing a rapid growth in India's organized retail
sectors. The traditional retailing of vegetables is not very much organized, amounts to 97% of
the total market (Ernst & Young, 2006), is extremely localized and highly fragmented with
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large number of intermediaries. The intermediaries between the customers and farmers are
traditional retailers with different outlet formats-mom and pop shops, non-permanent shops in
the market, pavement vendors, roadside vendors and push cart vegetable sellers, wholesale
traders, commission agents and auctioneers.
The farmers themselves sell their produces directly to the end consumers in local markets,
regulated and unregulated 'farmer markets', or they sell to intermediaries—agents and
organized retailers. The market place is usually in close proximity to the farmland and
customers accessing the market live in and around locale. Farmers selling vegetables directly
to the customer amount to very small fraction by volume. Farmers sell bulk of their produces
to agents and auctioneers. The agents buy small quantities of produces from farmers and
transfer it to wholesalers directly or through another agent. The auctioneers are people who
enter into buying contract with farmers for whole or partial quantity of the produce and sell
the produce to an agent or a wholesaler. Auctioneers also transfer the vegetables to
wholesalers directly or through another agent. Wholesalers of vegetables sell to retailers—
both traditional and organized retailers, and to customers, who buy in large quantity. Cart
vendors, a type of traditional retailers, buy vegetables from wholesalers or organized
retailers, sell to customers in mobile carts and deliver to customers at customer's doorsteps.
Currently, organized retailer Reliance Fresh (Reliance Retail Ltd) follows a Value Chain
business model (VCM). Organized retailers who adopt VCM procure the produces directly
from farmers and sell to customers by avoiding intermediaries. This model is based on its
core growth strategy of backward integration and progressing towards building an entire
value chain starting from the farmers to the end consumers. Very fewer players are involved
in this model compared to the traditional retailing model or organised retailer's hub and spoke
model. Farmers, organized retailers, and customers are the players who form this value chain.
In this practice, farmers, organized retailer's operational units, consolidation centres, hub
(distribution centres) and retail outlets stores, and customers are players. Small farmers,
contract farmers and lease farmers are the primary source of supply of vegetables to the
organised retailers. Contract farmers and lease farmers are farmers who execute a trade
agreement with the organized retailers for sale of vegetables. Figure 3 illustrates the VCM
business model of vegetable retailing. Vegetables move from farm locations to customers in
four phases farmers to consolidation centres, consolidation centres to hub, hub to retail
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outlets (stores) and stores to customers. Independent farmers supply their produces to the
consolidation centres; contract farmers and lease farmer's produces are picked up by
consolidation centres. One consolidation centre supplies vegetables to multiple hubs,
depending upon the product. Hubs get direct delivery from the contract farming locations.
The hub takes care of supply of vegetables to retail outlets. It has supply coverage to all
stores of a specific geographical area. A hub is served by one or more consolidation centres
and a consolidation centre serves one or more hubs. A store is served by only one hub. Store
sells vegetable in retail quantity to the customers and is the last phase of distribution in VCM
business model. The hub disposes off the shelf life-expiring vegetables and do not sell to cart
vendors. Value chain business model differs from hub and spoke business model in
dependency on wholesale market and supply link between hubs. The hub in the VCM
disposed off the shelf life-expired vegetables, but hubs in HSM sell off to the cart vendors.
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Fig 1: value chain of reliance fresh
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2. COMPANY PROFILE
Reliance Fresh is the convenience store format which forms part of the retail business
of Reliance Industries of India which is headed by Mukesh Ambani. Reliance has made an
investment of 250 billion in the last 4 years in their retail division. The company already has
886 Reliance Fresh outlets across the country and 47 in Bangalore. These stores sell fresh
fruits and vegetables, staples, groceries, fresh juice, bars and dairy products.
The company may not stock fruit and vegetables in some states. Though Reliance Fresh is not
exiting the fruit and vegetable business altogether, it has decided not to compete with local
vendors partly due to political reasons, and partly due to its inability to create a robust supply
chain. This is quite different from what the firm had originally planned.
When the first Reliance Fresh store opened in Hyderabad on October 2006, not only did the
company say the store’s main focus would be fresh produce like fruits and vegetables at a
much lower price, but also spoke at length about its “farm-to-fork" theory. The idea the
company spoke about was to source from farmers and sell directly to the consumer, removing
middlemen out of the way.
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Fig 2: organizational structure of Reliance Fresh
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A descriptive research was carried out to fulfill the requirements of this project. In this
chapter, objectives, sampling frame, database and method of analysis employed are presented
under the following headings
The objectives of this project were to:
1. To identify different fruits and vegetables procured in the outlet
2. Identify the reasons for wastage of fruits and vegetables in the retail outlet.
3. To estimate wastage value of F&V in the outlet
4. To suggest remedies for minimization of wastages
3.2. Nature and Source of Data:
The study was based on the secondary data which was collected from the concerned store.
F&V that was sorted out and discarded was recorded as part of a daily routine normally
performed by the store. Percentage of dump quantity is employed for analyzing the data.
Record of dump of fruits and vegetables on daily basis was used as the data. No primary data
gathering have been carried out within the project. The data presented in the report has kindly
been given by representatives from the store
This research has been conducted based on descriptive in nature. The data overstate the
amount of fruits and vegetables actually ingested because they do not take into account all of
the substantial quantities lost due to human use through waste, moisture loss, and spoilage
beyond the farm gate in the marketing system and the home. Moreover, retail outlets of fruits
and vegetables are more dependent on cold storage, logistics and distribution; this of study
includes the same to identify the source wastages.
Analysis of sources of wastage of fruits in retail markets is undertaken to suggest ways
out to minimize this loss and improve the return.
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3.2.1. Nature and size of Sample:
The value of fruits and vegetables sold and dumped extracted from the sales report is
used for the study. The data is collected for each day for 60 days
3.2.2 Period of the study: The study was conducted for the duration of 2 months i.e. from
the periods of July to August 2013.
3.3 Analytical tools and techniques employed:
To fulfill the specific objectives of the study, the nature and extent of availability of
data, the certain analytical tools and techniques have been adopted. Measures of central
tendency and percentages were used to analyze the data and interpret the results properly.
Percentage waste was calculated in relation to sold value in monetary terms.
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4. RESULTS AND DISCUSSION
Keeping the specific objectives of the study in view, the results were presented under the
a. Fruits and vegetables procured in the outlet
b. estimate wastage value of F&V in the outlet
c. reasons for wastage of fruits and vegetables in the retail outlet
d. suggest remedies for minimization of wastages
4.1 Fruits and vegetables procured in the outlet
Table 1: Fruits and Vegetables catalog of Bhuvaneshwarinagar Reliance Fresh Retail outlet
Sl. No Name of Vegetables Name of Fruits
1 Amranthus Red Bunch Banana Robusta
2 Brinjal Purple Papaya
3 Broad Beans Banana Yellaki
4 Cabbage Pomegranate
5 Capsicum Apple royal gola
6 Carrot Regular Melody melon
7 Cauliflower Guava
8 Chilly Green Mango Neelum
9 Cluster beans Sapota Round
10 Coriander Bunch Apple Rose
11 Cucumber Apple Red Delicious
12 Curry Leaf Plum Indian
13 Methi Watermelon
14 Mint Bunch Apple Fuji
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15 Okra Mosambi
16 Onion Muskmelon
17 Potato Pears Indian
18 Radish White Orange Imported
19 Ridge guard Banana Red
20 Spinach Bunch Banana Nendrean
21 Tomato Custard Apple
4.2 estimated wastage value of F&V in the outlet
Dump can be divided into two groups: Recorded in-store dump and unrecorded in-store
dump. Recorded in-store dump was defined as waste occurring after purchase from the
supplier. This waste is sorted out and discarded by stores when there is little or no
possibility of selling the products. This could be due product deterioration for unpackaged
FFV. Unrecorded in-store dump consisted of waste that was discarded but not recorded.
This means that it had the potential to be either pre-store waste or recorded in-store waste
if recorded in any of these categories. Unrecorded in-store waste originated from two
sources: underestimated mass when recording unpackaged waste; and unrecorded of
wasted items. The latter can occur in error or as a deliberate act, e.g. it is not cost-
effective to record small amounts of waste. The general procedure for registration of
dump amounts: all products that are discarded are registered via the item-code and also
the reason behind the discard is registered. The amount is registered in monetary terms.
Only products that are sold by weight are registered by weight, sometimes with estimated
weight and sometimes actual weight. The purpose of this very comprehensive registration
is not primarily to quantify waste for the retail sector, but to get statistics about product
loss that might have a significant influence on the economic result of each retail shop and
company, as this might have a significant negative impact on the economic results for the
shop owner and the retail company. F&V that was sorted out and discarded was recorded
as part of a daily routine normally performed by the stores. The routine starts with an
inventory in the morning where products considered unsellable are sorted out. Products
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are considered unsellable if they have passed their best before or use-by date. Since FFV
are sold without a date label, the sorting of these products is based on visual appearance.
Table 2: Table showing average daily F & V sales
DAY F & V SALES (Rs)
Chart 1: chart showing behavior of F& V sales
F & V SALES
F & V SALES
Linear (F & V SALES)
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Table 3: table showing daily average of dump
Chart 2: chart showing behavior of dump values
DAY DUMP (Rs)
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Chart 3: pie chart showing proportion of dump to F & V sales
4.3 reasons for wastage of fruits and vegetables in the retail outlet
As this study emphasizes dumping at retail level but before that it is necessary to
acquaint with the different parts in value chain where dump occurs. The most important
reasons for dumping in different parts of the value chain are described below:
Damage in the marketing chain:
Fruits and vegetables are very susceptible to mechanical injury. This can occur at any
stage of the marketing chain and can result from poor harvesting practices such as the use of
dirty cutting knives; unsuitable containers used at harvest time or during the marketing
process, e.g. containers that can be easily squashed or have splintered wood, sharp edges or
poor nailing; over packing or under packing of containers; and careless handling of
containers. Resultant damage can include splitting of fruits, internal bruising, superficial
grazing, and crushing of soft produce. Poor handling can thus result in development of entry
points for molds and bacteria, increased water loss, and an increased respiration
rate. Produce can be damaged when exposed to extremes of temperature. Levels of tolerance
F & V sales
F & V sales
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to low temperatures are important when cool storage is envisaged. All produce will freeze at
temperatures between 0 and -2 degrees Celsius. Although a few commodities are tolerant of
slight freezing, bad temperature control in storage can lead to significant losses.
Some fruits and vegetables are also susceptible to contaminants introduced after
harvest by use of contaminated field boxes; dirty water used for washing produce before
packing; decaying, rejected produce lying around packing houses; and unhealthy produce
contaminating healthy produce in the same packages. Losses directly attributed to transport
can be high. Damage occurs as a result of careless handling of packed produce during loading
and unloading; vibration (shaking) of the vehicle, especially on bad roads; and poor stowage,
with packages often squeezed into the vehicle in order to maximize revenue for the
transporters. Overheating leads to decay, and increases the rate of water loss. In transport it
can result from using closed vehicles with no ventilation; stacking patterns that block the
movement of air; and using vehicles that provide no protection from the sun. Breakdowns of
vehicles can be a significant cause of losses, as perishable produce can be left exposed to the
sun for a day or more while repairs are carried out. Loss of product because of changes in
supply chain management, for example, changes to packaging specifications or incorrect
demand forecasting leading to disposal of product either to landfill or anaerobic digestion.
Such losses are estimated to equate to the order of 100,000 to 150,000 tonnes or around 5%
of the total waste arising. Although precise estimates are not available, disposal to anaerobic
digestion is increasing while disposal to landfill is falling.
Dump at Retail and wholesale sector
At the retail marketing stage losses can be significant. Poor-quality markets often provide
little protection for the produce against the elements, leading to rapid produce deterioration.
Sorting of produce to separate the saleable from the unsaleable can result in high percentages
being discarded, and there can be high weight loss from the trimming of leafy vegetables.
Arrival of fresh supplies in a market may lead to some existing, older stock being discarded,
or sold at very low prices.
Following were the major reasons identified for dumping at the retail outlet:
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Lack of knowledge on how different products should be handled especially fruit and
vegetables as they are sensitive to storage etc.
Lack of timely sorting of fruits and vegetables.
No sale for long duration and the stock held up in the store.
Damage caused by customers while picking for the good produce.
Nature of the produce: for example Tomato is more prone to be dumped compared to
Weight reduction due to loss of moisture in fruits and vegetables after certain period of
problems with product quality, quality that does not meet the retailer’s specifications and
additional trimming of edible parts, such as for precut produce (ex. Cauliflower, Cabbage
Bad display- banana in front of chiller will decrease the quality of banana
Watermelon, papaya, muskmelons are dumped due to stacking one over the other, fruits
are spoiled due to weight exerted by each other.
Fruits and vegetables are exposed in large piles (Musambi, Pomegranate) – with the
results that fruits in the middle or the bottom of the pile will easily get damaged and must
be disposed. Also if a fruit becomes rotten in the pile, the surrounding fruits are more
likely to be rejected than if they are displayed one by one.
Improper Indenting: What the customers buy is dependent on the weather, the season, the
offers of the week, and on the general mood of the customers. All this makes it difficult to
indent adequately: Lack of knowledge among the personnel regarding ordering, it takes a
long time to learn how to calculate the right amounts to Indent.
Improper handling while arranging and keeping the stock. Break-down of products due to
wrong mechanic handling also occurs. (Watermelon easily get damaged due to rough
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A part of the wastage was due to occasional reasons such as mistakes and special
occasions. Special occasions, e.g. promotions or holidays, and festivals cause waste since
they can be difficult to predict.
Expectation of customer perfection: Many customers select stores based on the quality of
perishables, and therefore retailers feel compelled to have only produce of perfect shape,
size, and color—leading too much of the culling.
Large Pack sizes: Produce arrives in preset quantities according to case size. This limits
the flexibility for produce buyers to purchase exactly the amount needed. For example, if
a grocer wants 200 gm grape but they come in cases of 500 gm, the store is then stuck
with 300 gm extras.
Unnecessary inventory: excessive storage and delay of products or information resulting
in excessive cost, overstocking and over handling by both staff and customers and
damage to items on the bottom from the accumulated weight.
Products, do not achieve their intended market outlet because, they have to be marked
down for sale or because they do not meet the required specification. Such products are
channeled to dump. This type of loss can represent a significant economic loss to business
even though it reflects an efficient use of the product because it is being channeled into its
next best market rather than being disposed off.
Poor ventilation of produce also leads to the accumulation of carbon dioxide. When the
concentration of carbon dioxide increases it will quickly ruin produce. (For example,
Lack of aeration due to tight packing of vegetables like Brinjal, Okra, Carrot, French
beans, Radish etc.)
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4.4 ways to minimize dumping at Retail outlet:
Marking down the price of F and V in order to dispose of excess stock.
Promotions that have passed (post-holiday discards are most common) so to reduce the
dump, offer discount for out-of-date promotional items or slightly damaged goods.
Avoid exposing Fruits and vegetables in large piles. This was the main cause of dump of
Musambi in the concerned store.
Poor ventilation of produce also leads to the accumulation of carbon dioxide. When the
concentration of carbon dioxide increases it will quickly ruin produce. (Ex. Lack of
aeration due to tight packing of vegetables like Brinjal, Okra, Carrot, French beans,
Radish etc. Avoid tight packing and punching of plastic bags should be done.
The increased pre-store waste could be a consequence of waste reduction measures in
previous steps in the supply chain, meaning that if the producer and supplier allow
through products with questionable quality, the wastage might just move to a later stage
in the supply chain. Shifting the waste from in-store to pre-store is a way to save money
for the store. Allow only good quality produce or produce without any damage to enter
Common and more standard appearance of crates used to deliver fruit and vegetables
would make the personnel’s work easier.
Information to the personnel and set target goals for decreasing the wastage.
Packages – using the right type of packages for specific fruits. For example Watermelon
comes in gunny bags, which is one of the reasons of dump during loading, unloading,
transportation, stocking and arranging. Separate nylon bags should be used for packing of
Indent the right amounts at the right time. What the customers buy dependent on the
weather, the season, the offers of the week, and on the general mood of the customers. All
this makes it difficult to order. Proper training for indenting should be provided to the
One idea is to Store at the right temperatures and right light. Lowering the temperature in
the fridge/freezers does increase the freshness of the products especially green leafy
vegetables. Fruit and vegetables should be stored at optimum temperatures.
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“Separate display” for the different produce. In store, produce of less quantity used to be
kept in a single crate, for ex. Banana stem, Banana flower and Drumstick which is one of
the reasons of early dumping.
Avoid overstocked product displays: retail stores operate under the assumption that
customers buy more from brimming, fully stocked displays, preferring to choose from a
towering pile rather than from a scantly filled bin. (Ex. Apple). Product display redesign
using platforms and other props to make produce bins appear fuller.
In order to reduce the dump, workers should be instructed about product quality
Proper display: Workers should be trained on display considerations. For example
Tomato should not be kept beside Papaya as ethylene production from tomatoes cause
early ripening of Papaya.
Timely segregation of fruits and vegetables like tomato, onion, okra and chilli.
Adapt the FIFO inventory management method.
Nailing done by customers to check tenderness especially in Bottle gourd and
Pomegranate. Company should attempt to restrict damage caused by customers while
picking for the good produce.
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The objective of this research was to assess the monitory value lost due to dumping of fruits
and vegetables at Bhuvaneshwarinagar Reliance Fresh. The store has average daily total sales
of Rs. 206000 and F and V accounts for 31 per cent of total sales.
In the process of research various sources identified for dumping of fruits and vegetables.
Among them most common reasons were poor indenting practices, poor segregation of fruits
and vegetables in order to separate dump from fresh produce, improper stacking of fruits like
watermelon, papaya, banana.
From the above study we come to know that the average daily F and V sales of
Bhvaneshwarinagar Reliance fresh was around Rs. 62442/-. The average dump values to be
Rs. 2754/-. The F and V dump value accounts for 4.54 per cent of average daily sales.
It is observed that at the weekends have relatively high F & V sales and low dump.
In order to reduce dump at the store level the store must follow proper indenting, proper
stacking of F & V.
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R. Arivazhagan, P. Geetha, and Ravilochanan Parthasarathy, Analysis of Sources of
Fruit Wastages in Retail outlets inChennai, Tamilnadu, IndiaInternational Journal of
Trade, Economics and Finance, Vol. 3, No. 3, June 2012
Business Models of Vegetable Retailers In India, Paulrajan Rajkumar and Fatima
Jacob Department of Management Studies, Anna University, Chennai, India
Retrieved from www.greatlakes.edu.in/uploads/pdf/Chapter3.pdf
DIPP report on multibrand retailing. Retrieved from