Why worry about Organised Retail (or FDI in retail). It can bring organisation and promote economic co-operation and development but will require a shift in current day mindsets.

1. Capt. Pawanexh Kohli

2. India is 5th largest retail market worldwide.
60% of retail comprises food; fresh & processed 4%
6%
1,968,000 Consumer Food outlets expected by 2015
600
500
Retail U$ Billion
400
61%
300
543 9%
200
353
100
Retail Segments
205
Split India
0
2002-03 2009-10 2014P
Food Fashion
2,000 160 Leisure / entertainment Fashion accessories
Food Service Outlets (‘000)
1,800 140 Consumer durables Health, beauty, Pharma
1,600
120 Furniture Telecom
1,400
1,200 100
Books and music
1,000 80
800 60
600
40
400
200 20 Retail Market is growing irrespective. It is clear
0 0 indication that India is ever growing.
2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E
Organised retail structures demand patterns.
Standalone (LHS ) Leisure (RHS ) Retail (RHS )
Note : Total Food Service Outlets is a sum of Standalone , Leisure and Retail outlets
Source : Euromonitor , IBEF , ORKASH and CrossTree Analysis

3. Collaborate with Source Retail Chain
Stakeholders
or Producer. • Farmer
• Processor
• PHM
• Cold Storage
• Aggregator
Collaborate with
produce aggregator. Producers Inventory
Capacity utilise Post
Harvest infrastructure.
Market Transport
Prepare to Access the
consumption market. • Outlets
• Vendor
• Distribution
Hubs
Extensions • Reefers
Attract or reach the
consumers door step. Organisation means: collaboration, resource
building, good practices and promotes
Appease the Indian transparency in value chains.
Consumer demand. “Partnerships Perforce”

4. GDP USD 1.93 trill in 2011 from 1.25 Domestic spend (₹)
31-Jan-2012
50,164
trill in 2006 (+54% in 5 years) 39,267
Per Capita domestic disposable 29,667 36,760
spend doubled 2005 to 2011. 23,712
28,232
Spending growth: $991 billion in 22,181
2010 to $3.6 trillion by 2020 (5.8% of 17,682
global consumption, doubling from
current 2.7%) [Boston Consulting & CII – Feb2012]
FY05 FY07 FY09 FY11
Per Capita Disposable Income Per Capita Disposable Spending
“Growth…
Increase in Unstoppable”
consumer
class pop.
India Spends on
Quality &
Hygiene
Purchasing 61% Food and Grocery
power, Rise in
consciousness Increased income
Others
Demand for
(Cold Chain)
Quality Foods Clothing and Fashion
Electronics
Easy Changed Beauty and Wellness
consumer consumer
credit mindset
Furniture and Fixtures
Source: MoSPI- Govt of India.

5. Fact! Green Revolution 160 Production of Horticulture Produce
140 Million 146.6 149.6
Proving ground that 120
Metric Tons
128.4 129.1
134.1
2.7 times
farmers’ efforts and 100
2.5 times
government support 80 88.6
101.2
have translated into 60 65.6 68.5 71.5 74.9 77.5
robust response in 40
58.5
50.9
production. 20 28.6
43.0
Yet, food items lead 0
inflation… indicating Fruits Vegetables Plantation Crops Others
that supply systems are
inefficient in meeting Within Horticulture, perishable commodities
trends higher to meet demand & drives
demand side. growing demand for perishable handling.

6. 138 million operational holdings, mostly marginal and
small. Around 20 million engaged in horticulture.
High Fragmentation, but some areas are showing signs
of consolidation of the operational farm holdings.
Transition from peasant mode of production to
production for markets.
HVA is growing faster than conventional agriculture.
Agriculture contributing about 14 % to the GDP of the
country, currently valued at approx Rs 13000 billion.
Contribution of Horticulture to GDP of agriculture is
estimated to be around 30% and growing.
Perishables market and logistics needs to keep pace!
Logistics artistes need to convey this Supply to meet Demand.

7. Supermarkets Requirements:
Supplier requirements :
• Seamless value chains
Any Cold Supply Chain Solutions
• Quality assurance
• Outsource process driven activities
Partner will require the following • Low cost services
• Lower inventories
attributes and services: • Traceability
• Quality, Brands focus
 Commercial Network. • Product Integrity
• Risk Management and food safety
• Continuity of demand
and traceability.  Inventory Management. • Expanding markets
• Increased shelf life.
 MultiModal Connectivity. • Cold Chain Integrity
• Just in time distribution
 Aggregation, Storage. • Quick time to market
• Traceability
 Pick and Pack.
 Build up, Cross Dock.
Storage requirements :
 Documentation.
• Lower costs
Shipping/Airlines requirements :  Fumigation, Quarantine. • Extract efficiencies from value chain
• Cargo capacity utilisation • Quick turnaround
• Flexibility  Traceability, Process.
• Increased flexibility
• Specialisation – cargo freighters  Quality Assurance.
• Multi Modal Connectivity
• Specialist Forwarding agents  Farm to Door care. • Continuity of supply and market
• Simplified Handling demand
 Chain Integrity.
• Information Flow • Traceability
• Security  Cost efficient.
• Consolidation of handling
• Centrally located hub function
These sets of resource attributes – to service specific demand types – need developing.

8. Post Harvest or Source Management.
Refrigerated Transport Connectivity. “These Enablers are
not the business –
they are but the tools
Cold Storages & Distribution Hubs. for efficient trade.”
Packaging & Unitisation.
Cold Chain is already successful in Ice
creams, Processed Dairy, Frozen
Handling & Traceability. foods, meats. It has not been able to prove
itself in the fresh farm food segment.
Because unlike others, the market for fresh
Hygiene & HAACP. food was not structured
FARMER to MARKET – Linked, Accessible, Distant.

9. By consolidating demand, simplifying supply.
By extending market footprint for farmers.
By infusing ownership in the total value chain.
By creating brands versus commodity selling.
By diverting would be loss into processing.
By laying onus on better handling practices.
By adding to existing private participation.
By perforce infusing capital into rural India.
By linking producer owners with consumer.

10. Four Pronged Strategy Recommended to Govt.
Economic Market Institutional Financing &
Agents Linkage Change Incentives
• Farmer co- • Direct Link: • Better synergy • Catalyse &
operatives , between various strengthen PPP &
• to private co-operative
wholesale schemes.
• Producer investments.
organisations, markets • Strengthen cold • Concessional line of
• cooperative Supply chain finance through
• Private enterprise, wholesale through NCCD. NABARD.
• Private investors markets • Schemes on tap and
• Model APMC. better synergy
• Transparency in between Depts and
commerce. & model • Link through WDRA Ministry
to benefit through • Develop cold chain
• Promote FDI in NWR (perishables). for non-horticulture
retail. products.
Investors, Processors, Producers, Service Providers, Retailers
Dr. Saumitra Chaudhari Committee Report

11. Central Excise Duty Exempt
• 100% exemption for specified equipments for storages or transport, self
loading/unloading trailers/semi-trailers.
Customs Duty Exempt
• Full exemption from basic customs duty for manufacture of refrigerated
vans/trucks; bio-polymer/bio-plastics; and
• Concessional duty of 5% for initial setting up or substantial expansion of a cold
storage, cold room, processing, etc.
Service Tax Exempt
• Exemption for ‘Erection, Commissioning or Installation’ of Mechanized
Handling Systems; Cold Storage equipment; transport; and
• Technical Testing; Analysis & Technical Inspection & Certification Services.
Foreign Direct Investment
• Cash & Carry: 100% FDI in wholesale trade / Multi-Brand Retail: 51% FDI.
• Cold Chain & FPI: 100% FDI through automatic route.

12. VG
Agri/Foods identified as National Vegetable 100% FDI in food
NCCD takes shape PPP – IAD scheme Funding, Infrastructure
priority sector Initiative sector
status
Urban
Encourages Promoting
Encourages proximity Grants & Liberalising
holistic integrated
Investments Vegetable Subsidies FDI Inflow
development PPP
Production
Government as
‘Catalyst’
 Increased focus on creating enabling infrastructure by govt. Cash & Carry: 100% FDI in
wholesale trade / Multi-Brand Retail: 51% FDI with state level permission.
 Cold Chain & FPI: 100% FDI through automatic route.
 NCCD to play pivotal role to correlate industry with policies.

13. Industry, PSUs, Government, Investors, Entrepreneurs, Farming
Associations & Knowledge Houses - All Working Together.
Training, HRD and
R&D Committee.
2
Committee for Application
of non-conventional Energy
Technical Specification, Sources in Cold Chain
3
Infrastructure.
Standards, Test
Laboratory & Product 1
Certification Committee.
Executive
Committee
Networking with
6 Committee for Supply
NHB, FHEL and
other NLAs of NHM 4 Chain & Logistics.
NCCD Members, other
5 cold chain sectors

14. Author is founding Chief Advisor to incubate the
National Centre for Cold-chain Development and
is the founder advisor of think tank CrossTree