Research Report by VIJAY KUMAR FDDI,NOIDA,INDIA

MEASURING IMPACT OF ORGANISED RETAIL ON FOOD PROCESSING INDUSTRY

A Research Report is submitted to the faculty of MARKETING RESEARCH, Centre for retail Management, FDDI In Partial fulfillment Requirement of PGDRM course (2007-09)

SUBMITTED BY:

SUBMITTED TO:

(51)Vijay Kumar

Mr Shashank Mehra F.M.R. CRM, FDDI

FDDI(NOIDA) (center for retail management) (ministry of commerce, GOVT. OF INDIA) 1

THE LETTER OF AUTHORIZATION

As per the integral part of the Marketing Research subject, we have undertaken Projects to conduct a research on measuring the impact of organize retail on food processing industry. This research covers major section of our learning process and covers all the data and information collected which is authentic & going to be used exclusively for academic purpose only. Therefore our respectful faculty of Marketing Research “Mr. Shashank Mehra” has authorized this project and hence all the steps undertaken by us were as per his specific guidelines and directions.

Authorized By: Mr. Shashank Mehra (Faculty of Marketing Research)

2

LETTER/MEMO OF TRANSMITTAL May 01, 2008 Mr. Shashank Mehra, Faculty Centre For Retail Management, FDDI, Noida. Respected Sir, As, per the area and objective of our research and authority received from you we have now completed the investigation on various factors effecting food production and distribution. The result of our research is contained in this Report entitled “Impact Of organized retail on food processing industry”. This report is based on the data collected through questionnaires both from retailers & farmers. The methodology adopted is described in the report and the relevant research practices were used in the conduct of the study. We believe that the result to be valid and reliable within the constraints as defined in the report. We also believe that as per guidelines and specifications received, you will find the report interesting as well as an addition to the on going research on the concerned field which will bring new opportunities for future research. Your’s Sincerely, Vijay kumar

PGDRM, Centre for Retail Management,

3

TABLE OF CONTENTS OF RESEARCH REPORT Section Title

Page No.

1. Executive Summery

7

• Major findings • Conclusions • Recommendation 2. Introduction

• Some Facts • Background

9 10 11

3. Objective of the study

12

4. Research Design

16

5. Methodology

17-19

• • • • • • •

Population definition The sample plan The sample size Development of the survey questionnaire Collecting the data The response rate Statistical technique used

17 17 18 18 18 19 19

4

6. Analysis of result •

A profile of the total sample

20-42 20

a) Retailers b) Farmers • •

Analysis of retailer response Analysis of farmer response

21-31 32-42

7. Limitations of the study

43

8. Conclusion and recommendations

44

Conclusions Strategic recommendations

44 45

• •

9. End matter (appendixes)

46-73

•

Questionnaire a) Retailers b) Farmers

46-51 46-48 49-51

•

Frequency tables a) Retailers b) Farmer

52-73 52-62 63-73

10. Bibliography & references

74

5

EXECUTIVE SUMMARY MAJOR FINDINGS: As per the area of research undertaken by us i.e..,” IMPACT OF ORGANISED RETAIL ON FOOD PROCESSING INDUSTRY” the major findings are also divided into two parts• In term of retailer. • In term of farmer RetailerMajor findings that came into being after conducting a research on retailer are:Most of the organized retailers are of the thought that direct tie-up between farmers and retailers will ultimately going to help them both in a big way. • Above all it will also help in controlling black marketing and inflation. • In terms of strategy for selling most of the retailers feels it is better to go with a push oriented strategy. •

FarmersMajor findings derived through farmers are:Majority of the farmers feels that current supply chain needs to be vastly improved and transportation is the one factor that needs maximum attention. • Farmers want minimum number of intermediaries in terms of supply chain. And they think technology can be very helpful in increasing Agro output. • As like the retailers, farmers also feels that direct dealing with Big retailers could be helpful in reducing price and wastages. •

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CONCLUSIONS: As per the research undertaken & the result derived with in the available constraints it can be concluded that:• Organized retail is acting as a catalyst for food processing industry right from farmers to processor to retailers. • Tie-ups between farmers and retailers are really going to help them both term of efficiency and productivity. • Supply chain needs to be vastly improved in terms of storage, transportation and value addition.

RECOMMENDATION: • Govt should play a pro active role in building the supply chain infrastructures like cold storages and warehouses besides that they should made the policies friendly to both farmers and retailers. • Organized retailers should help farmers and processors or provide them with the technical know-how of the food processing industry because it is ultimately going to pay them back in term of getting good and fast food.

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INTRODUCTION India is world’s second largest food producers and can double the food’s production in next 10 years. In India growing retail appetite, the food sector stands out to be the most promising one. Retail segment has opened up opportunities for processed food products in the country. Indian food industry is full of small players at each level of food chain. Large supply integrator, chain retailers and cooperatives that have actively driven the development of food chains in developed economies are missing in India. But now because of Indian economy is growing at a stupendous pace. Rising income leading to higher household spending on a variety of goods and services consumers are spending as never before especially on food. Urbanization and nuclear families too forces consumer to seek convenience food like ready to cook or ready to eat food. As demand for quality food expands, large corporate have began to make investments in retail chains and food processing like Nestle India Ltd., ITC Agro etc. The entry of so many professionally managed business houses will raise the standard of customer service, improve category management and make sourcing more efficient. Food supplies to retail chains are required to be processed and package as also delivered at a reasonable cost investment in food processing happens once retail chains expands investment will also flow into warehousing to reduce wastages of perishable goods it also helps in developing existing food products and design processes to attain the best quality and safety. Indian economy is growing at a rapid rate of 9% with that income level of common man is also rising. Rising income level means more spending power and lifestyle and convenience shopping. This concept is fueling the organized retail industry, which has a direct connection of dependence on food processing industry. Food processors give retailers and wholesalers the food and the beverages product they want, where they want and when they want with the packaging they prefer. Food processing industry has to nurture further by developing a demand oriented approach that is implementing just-in-time approach to achieved higher customer satisfaction and reduce wastages and excess inventories which in turn reduces cost for both commodities in warehouse space, ultimately increasing productivity.

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INDIA’S FOOD PRODUCTION: SOME FACTS India with arable land of 184 million hectares. India produces annually 90 million tones of milk (highest in the world) India produces 150 million tones of fruits & vegetables (second largest) India has 485 million livestock population (largest) India produces 204 million tones food grain (third largest) India produces 6.3 million tones fish (3rd largest), India has 489 million Poultry and produces 45,200 million eggs. India had the “Green” Revolution, the “White” Revolution, and the “Blue” Revolution, And now the focus is on the “Pink Revolution”. The Green Revolution had led to self-sufficiency in food grains, the White Revolution Saw India occupy the Number One Position in milk production in the world, and the Blue Revolution brought about increase in fish production.

Processed fruits & vegetable: India is the world’s second largest producer of fruits and vegetables. The huge production base needs to be supported by strong food processing industry. Currently in India the processing level is estimated to be around 2.20 %.The major items of the Indian fruits and vegetable processing industry are pulps Particularly of tomatoes & mangoes, ready to serve juices, canned fruits, jam, Pickles, squashes, etc.Frozen fruits, dehydrated & freeze dried vegetables, canned mushrooms etc. are also becoming popular among Indian consumers. The fruit and vegetable processing industry in India is highly decentralized with large number of units is in the cottage/home scale

9

And small scale sector. According to Ministry of Food Processing the installed capacity of fruits and Vegetables processing industry has increased from 11.08 lakh tons in January 1993 to 21.18 lakh tons in January 2006. The utilization of fruits and vegetables for Processing is estimated to be around 2.20 percent of the total production.

RATIONALE

India can become the food supplier of the world. It has the cultivable land, all the seasons for production of all varieties of fruits and vegetables, an agribusiness system that works although it needs to be vastly improved. The single most important problem facing the Indian agricultural industry is the highly inefficient supply chain. Because of lack of cold chain infrastructure and also a food processing industry about 20% of all foods produced in India (Rs.500b) are wasted. By building an efficient and effective supply chain using state of the art techniques it is possible to serve the population with value added food while simultaneously ensuring remunerative prices to the farmers. The surplus of cereals, fruits, vegetables, milk, fish, meat and poultry can be processed as value added food products and marketed aggressively both locally and internationally. Investment in cold chain infrastructure, applied research in post harvest technologies, installation of food processing plants in various sectors and development of food retailing sector are mandatory for achieving gains in this sector. Indian food processing industry logging an impressive growth rate of 18% up from 8% in 2004. Food processing industry employs around 15 million people with a turn over of 70 billion dollar per year by 2010 industry is expected to be worth 150 billion dollars. India has a potential to be the food basket of the world it has large raw material base and varied agro climatic conditions. Rising incomes, changing food habits leading to tremendous scope in terms of variety of product that can be put on self. So, retail will provide the strong local production and consumption base.moreover, pre and post harvest technology can help reduce wastages and save cost.

10

FDI in retail could fuel Food processing industry. it will provide for much needed technical know how to farmers which the established retailers across the world will bring along with them when they open shops in the country.foriegn retail giants are willing to buy 30 billion dollars worth of processed food from the country. According to study country could attract 1.5 to 2 lakh crore in 10 years time if it opens door to FDI in retail.

OBJECTIVES

 Determining the various issues that are influencing food production and distribution.  Measuring current supply chain and impact of organized retail on food processing industry.  Identify the key factors that farmers and food processors should reap through organized retailers.  Measuring the role of govt. in enhancing investment in food processing sector.

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PROBLEMS IN INDIAN FOOD PROCESSING SECTOR: 1

Indian production and consumption centers are widely dispersed. As a result actual cost of transportation becomes much higher due to long supply chain with inadequate cold storage facilities for perishable products.

2

India’s supply chain for perishable is characterized by extensive wastages and poor handling. The wastages occurs because of multiple point of manual handling, inadequate packaging and temperature control and lack of cold storage network both in term of storage, processing and transportation.

3 Production of raw material being relatively unorganized, seasonal and spatially disbursed. 4 . 5

6 7

The supply chain is long because of number of intermediaries due to which farmer will not be able to get due for their produce Value additions in terms of sorting, grading, storage and bulk handling facilities are very less due to lack of capital and experience in food retailing. The reason for such a distress selling are(1)lack of direct linkages with market(2)lack of processing facilities. Ineffective marketing channels.

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WHY INVEST IN INDIAN FOOD PROCESSING SECTOR? • Due to its diverse agro-climatic conditions, it has a wide-ranging and large Raw material base suitable for food processing industries. Presently a very Small percentages of these are processed into value added products. • It is one of the biggest emerging markets, with over 900 million populations And a 250 million strong middle class. • Rapid urbanization, increased literacy and rising per capita income, have all Caused rapid growth and changes in demand patterns, leading to tremendous new opportunities for exploiting the large latent market. An average Indian Spends about 50% of household expenditure on food items. • Demand for processed/convenience food is constantly on the rise. • India's comparatively cheaper workforce can be effectively utilized to setup Large low cost production bases for domestic and export markets. • Liberalized overall policy regime, with specific incentives for high priority food Processing sector. No industry license is required for food processing industries. • Very good investment opportunities exist in many areas of food processing Industries, the important ones being: fruit & vegetable processing, meat, fish & poultry processing, packaged, convenience food and drinks. • Exclusive Agri Export Zones set up for end to end development for export of Specific products from geographically contiguous areas • Setting up of food parks to enable food and beverage units to use capital Intensive facilities, such as cold storage, warehouse, quality control labs, Effluent treatment plant etc

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• Agro based 100% Export Oriented Units allowed sales up to 50% in Domestic market • Presence of virtually all major multi-national companies like Coca-Cola, Pepsi,Britannia, DANONE, Nestle, Cadbury, Lever's Kellogg’s, Heinz, International Best Foods Walls, Perfetti, Van Melle, etc In a developing country like India a large chunk of consumer expenditure is on basic necessities, especially food related items. A recent study by KSA Technopak India Pvt. Ltd. has revealed that food and beverages still gets the major chunk of the total consumer spending in India followed by clothing and footwear.

Sector wise Indian Consumer Expenditure: S.No.

Sector Share of Consumer spending in India:

1 2 3 4 5 6 7

Food and beverages Cloth & footwear Entertainment Consumer durables and furniture Health care Housing Others

52 11 3 7 2 9 16

percent percent percent percent percent percent percent

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FOREIGN DIRECT INVESTMENT IN FOOD PROCESSING SECTOR The Indian food processing market is one of the largest in terms of production, consumption, and export and import prospects. Since, India is one of the major food producers worldwide, with new reforms ruling the roost, it encourages commercialization. The country's food processing market is opening up to a wide range of investors across the globe. In fact, in the last decade, India moved from an era of scarcity to surplus, in the area of food production. Consequently, analysts are of the opinion that the Food Processing Industry in India is on an assured track of growth and profitability over the next five years. It is also estimated that foodprocessing market in India will attract a phenomenal investment, in the form of capital, human, technological, and financial, of over US$32.1 million by 2010.

15

RESEARCH DESIGN The research design followed during the course of research work wasExploratory research: •

To study and gain the knowledge about the current supply chain in the food processing industry and the shortcomings which it is facing.

•

We have done pilot study on retailers and their processors. Our focus group includes Farmers, Retailers and Processors.

• To study problem faced by the retailers and the farmers during supply chain we have conducted the focus group interview.

Descriptive Research: After going through the EXPLORATORY REASEARCH, the research process was advanced with the help of DESCRIPTIVE RESEARCH, which was followed in the following manner:• Designing and developing if questionnaires for both the retailers and farmers. • Collection of data and information with the help of these questionnaires. • Cross sectional study been done to explore the impact of organized retail on food Processing industry. • Evaluation and analysis of data as per the objectives of the research.

16

•

Final conclusion & recommendation as per the analysis

METHODOLOGY POPULATION DEFINITION The population or the parameter considered for the research purpose covers:• Farmers both big and small dealing in different types of crops. • Retailers especially grocery stores which can be called as organized retailers. • Some of the experts of the specialized areas have also been interviewed to know the expert opinion.

SAMPLE PLAN The selection of the samples is done through following sampling technique:

SAMPLE PLAN

PROBABILITY SAMPLING

NON-PROBABILITY SAMPLING

17

SIMPLE RANDOMSAMPLING

SAMPLE SIZE:

JUDGMENT SAMPLING

Retailers- 15 Farmers- 20 SAMPLE LOCATION: •

Selected retail grocery stores in Delhi & NCR region.

•

Farmers interviewed are from Surajpur, Noida & Kasna.

DEVELOPMENT OF SURVEY QUESTINNAIRE: The development of survey questionnaire took place in two phases:Initial phase – At this phase the questionnaire were designed using various tools and techniques as per the research objectives and gone through the pilot testing. Final phase – At this phase the final questionnaire were designed after making necessary corrections in previous questionnaire introduced through pilot testing.

COLLECTING THE DATA: Collection of data from retailers and farmers was done with the help of QUESTIONNAIRE. RESPONSE RATE: As per the number of retailers and farmers contacted the response rates were:18

Retailers: No of retailers contacted 18

Response 15

No Response 03

RESPONSE RATE: 83.33%

Farmers: No of farmers contacted 24

Response 18

No Response 06

RESPONSE RATE: 75%

STATISTICAL TECHNIQUES USED: Statistical tools used are: • Mean • Mode • Standard Deviation

19

ANALYSIS OF RESULT

Profiles of samples Retailers -: The retailers selected by us as a sample were among the major retailers of India, dealing either in apparel or in grocery. These retailers belong to major business units of India, which are -: • Future group • Reliance group • Subhiksha • Birla’s group etc

Farmers -: The farmers selected by us as a sample from from different locations of DELHI &NCR. They were operating on both low and high level of production.

20

ANALYSIS OF RETAILERS RESPONSE

List of Retailer

7%

6%

7%

6%

7%

6%

7%

6%

7%

6%

7%

7% 7%

• • • • • •

7%

7%

BIG BAZAR RELIANCE FRESH SPENCER'S MORE BIG APPLE SUBHIKSHA VISHAL SABKA BAZAR SALSAR RETAIL 6 TEN MOTHER DAIRY SAFAL DOLLAR STORE GUPTA STORE MITTAL STORE

Response received from 15 retailers Sample collected from NCR Non-probability judgement sampling is considered No response by three retailers (Kendriya Bhandar,KB’S,DMS) Response rate is 83.33% Full contribution and equal participation by each retailer@9%

21

1. From where are you procuring your inventories ?

7%

13%

farmers vendors 27% 46%

agents warehouse noresponse

7%

•

• • • • •

To determine the procurement source for retailer highest response rate is warehouse second highest is vendors overall results reflect 50% of the retailer are procuring from warehouses Nominal scaling technique is used Mode is used as a statistical tool(4)

22

Do you think Tie-ups between farmers and retailers will help in controlling black marketing and inflation?

2.

0% 20%

stronglyagree somewhatagree somewhatdisagree stronglydisagree noresponse

80%

• • • • •

To know the retailers opinion about tie-ups between them & farmers Single item balanced scaling technique is used Most of the retailers are agreed with the advantages of tie-ups Response rate is 100% Mode is used as a statistical tool(1)

23

3.

Do you think by helping the farmers, Retailers are ultimately helping themselves?

0% 27% somewhatagree stronglyagree somewhatdisagree stronglydisagree noresponse 73%

• To determine how much are retailers ready to help farmers in term of production and distribution. • Most of the retailers are agreed with the statement asked to them to give their opinion • Response rate is 100% • Single item balanced scaling technique is used • Mode is used as a statistical tool

24

4. Don’t you think decentralized buying is better than the centralized buying?

0% 20% 27%

stronglyagree somewhatagree somewhatdisagree stronglydisagree noresponse 26% 27%

• • • • •

To take the retailer’s opinion about centralized or decentralized buying Single item balanced scaling technique is used Approx equal number of retailer is in favors of cent. & decent. Buying. 100% response rate Mode=2

25

5.

Do you think In-house processing facility will improve product line and productivity for retailers?

13% 0% 0% 33% stronglyagree somewhatagree somewhatdisagree stronglydisagree noresponse

54%

•

• • • •

To know the retailers opinion about In-house processing facility Single item balanced scaling technique is used Majority of the feels it could improve product line & productivity Response rate is 100% Mode = 2

26

6.

Which market do you think is having maximum opportunities?

13%

0%

rural urban semiurban

87%

• To determine which market they would see has maximum opportunities • 87% of the retailers feels urban middle class market has the maximum opportunities to explore • Comparative scaling(constant sum) technique is used • High response in favor of urban market 87% • Mode = 2

27

Where do you think the maximum investment needs to be done?

7.

0%

7%

0%

40%

storage transportation processing coldstorage noresponse

53%

• To know which factor of supply chain they think needs maximum investment • Nominal scaling technique is used • Highest response rate for the transportation (53%) • Second highest is for cold storage (40%) • Outcome is that the transportation needs more attention than other factors • Mode = 2

28

8. Do you think growing need of quality food will ultimately push food processing sector?

0%

40%

60%

stronglyagree somewhatagree somewhatdisagree stronglydisagree noresponse

• To take the retailer’s opinion about relationship between quality food and food processing sector • Single item balanced scaling technique is used • Majority of the retailer(60%) feels demand of quality food is certainly going to push food processing sector • 100% response rate is received • Mode = 1

29

Which strategy do you think is best for retailers?

9.

14 12

no of reatilers

10 8 Series1 6 4 2 0 pushoriented

pulloriented

• To know which strategy they are going with i.e. demand oriented or marketing oriented • Comparative scaling(constant sum) technique is used • Most of the retailers are going up with push oriented strategy i.e. pushing the customer to buy the product • Mode = 1

30

10. Do you think packaged food industry has huge scope of improvement both in

term of product and market?

0%

stronglyagree somewhatagree

47% 53%

somewhatdisagree stronglydisagree noresponse

• To determine what the retailers think about food processing industry and its market • Single item balanced scaling technique is used • 100% response rate • Almost all of the retailers feels food processing industry needs lots of improvement • Mode = 1

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ANALYSIS OF FARMERS RESPONSE

6%

6%

6%

6%

6%

6%

6%

6%

6%

6%

6%

6%

6%

6% 6%

6%

6%

6%

far1 far2 far3 far4 far5 far6 far7 far8 far9 far10 far11 far12 far13 far14 far15 far16 far17 far18

• • • • •

Response received from 18 farmers Sample collected form NCR Non probability judgement sampling is used No response from 6 farmers Response rate is 75% • Full contribution and equal participation by each farmer@6%

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1. Which according to you is the most critical factor affecting post harvesting process?

11%

0% 22%

cold storage warehouse transportation valuaddition no respose 45%

• • • • • •

22%

To determine the most important factor after harvesting or production Response rate is 100% Majority of the farmers takes transportation as the critical factor High response is 45%(transportation) & lowest is value 11%(addition) Nominal scaling technique is used Mode = 3

33

2. Do you think current supply chain needs to be vastly improved?

0%

33% storngly agree somewhat agree somewhat disagree stornglydisagree no response 67%

• • • •

To take the farmers opinion on current supply chain 100% response rate is achieved Single item balanced scaling technique is used Majority of the farmers are in the favor of improvement of current supply chain • Mode = 1

34

3. Do you think direct dealing between farmers and retailers will reduce price and wastages?

0% 0% 17%

55% 28%

• • • • • •

strongly agree somewhat agree somewhat disagree strongly disagree no reponse

To know what the farmers think about their dealing with retailers 100% Response rate Single item balanced scaling technique is used Around 50% are in the strong favor of direct dealing with retailers 11% of the farmer feels otherwise Mode = 1

35

4. Do you satisfy with the efforts being made by Govt in improving food production and distribution?

6%

17%

0% 49%

don't like somewhat like very much like excellent no response

28%

• • • • • •

To know whether they like the efforts being made from the side of the Govt Single item balanced scaling technique is used Half of the respondent do not satisfy the efforts by govt 17% said govt is doing excellent 6% have no response Mode = 1

36

5. Do you think technology can be helpful in increasing agro output?

0%

28%

strongly agree somewhat agree somewhat disagree strongly disagree no reponse

72%

•

• • • •

To know the farmer’s opinion about use of the technology in agriculture Single item balanced scaling technique is used Response rate is 100% Most of the farmers are of the view that technology is certainly a helpful factor in agro processing sector Mode = 1

37

6. Do you have sustainable or continuous demand for your product?

12

10

10

no of retalers

8

Series1

6

4

Series2 4

4

2

0 yes

no

somewhat

• To know the demand pattern for the product of farmers • Nominal scaling technique is used • 61% of the farmers said they have continuous demand for their product • 22% have no response • Mode = 2

38

7. Do you think their should be a integrated cold storage and processing facility for farmers and retailers

0% 0%

6%

17% strongly agree somewhat agree somewhat disagree strongly disagree no reponse 77%

• to know the farmers opinion about integrated cold storage and processing facility • 100% response rate • Most of the farmers were in favor of integrated food processing facilities • Single item balanced scaling technique is used • Mode = 1

39

8. Do you think less number of intermediaries will help both farmers and retailers?

0% 17%

strongly agree somewhat agree somewhat disagree strongly disagree no reponse

83%

• To know the farmers opinion about intermediaries In supply chain • Response rate is 100% • Single item balanced scaling technique is used • 83% of the farmers feels more intermediaries • will reduce price for both them and retailers • mode = 1

40

9. Which strategy do you prefer while production?

14

12

12

NO OF RETAILERS

10

8 6

6

Series1

4

2

0 PUSH(produce & sell()

• • • • •

PULL(food on demand)

To know whether farmers are going with pull or push oriented strategy Comparative scaling(constant sum) technique is used 100% response rate Most of the farmers(66%) were going with push oriented strategy Mode = 2

41

10.Do you think big retailers will provide farmers technical know-how of production and distribution?

5% 0%

18%

strongly agree somewhat agree somewhat agree somewhat disagree 59%

strongly disagree

18%

• • • • •

To take their view on help that retailers can provide them 100% response rate is achieved Single item balanced scaling technique is used Around 60% of the farmers were strongly agreed to the statement Mode = 1

42

LIMITATION OF THE STUDY As per the area of research undertaken the collection of the date and the information is done with in the prescribed set of rules and direction & as per the objectives of the research project, but still there are some aspects which were not possible to be considered or followed in order to make this research flawless, and therefore these aspects had turned into limitations of the study which are as follows• Limited time period to cover the entire concept and take feedback from larger sample in order to get more accurate result. • Non-cooperation of the retailers & farmers in sharing information about their procurement, processing and production process. • The data collected is not representing all the farmers operating outside the NCR Region. • The research paper and the case study analyzed were not having sufficient information about actual impact of organized retail on food industry although it is improving supply chain.

43

CONCLUSIONS AND RECOMMENDATION

CONCLUSIONS

The overall conclusions derived after conducting the research on “MEASURING IMPACT OF ORGANISED RETAIL ON FOOD PROCESSING INDUSTRY” are•

Both Retailers and Farmers feels they are supplement to each other and can achieve lots of good things if they tie-up hands with each other.

•

Both Retailers and Farmers said that current supply chain of food product needs to be vastly improved especially in terms of transportation & warehousing.

•

Organized Retail can definitely boost the food processing industry but it would require lots of efforts from the side of Govt also.

•

Both Retailers and Farmers are going with push oriented strategy i.e. pushing the product into the market

•

Both Retailer and Farmers wants direct dealing with each other with less no of intermediaries to reduce price and wastages.

44

RECOMMENDATIONS

As per the major findings & conclusions derived through this research recommendation regarding strategies, planning & major aspects of supply chain can be draws as-:

•

Retailers should extend their helping hand first to the Farmer because they are the ones who provide the market to the Farmer and can guide the farmers to produce right product at the right time.

•

Retailers should go for contract farming technique to provide Farmers with continuous demand for their product and to avoid wastages & reduce price for both retailer and consumer.

• Govt should comes out with the helping hands for both farmers and retailers as organized retail is still at the adolescent stage and it has lots of potential to improve. •

In term of strategy Retailers and Farmers should go for demand oriented strategy to have maximum consumption of their produce.

45

Footwear Design & Development Institute IMPACT OF ORGANIZED RETAIL ON FOOD PROCESSING INDUSTRY QUESTIONNAIRE NAME:

AGE:

CONTACT NO:

SEX:

LOCATION:

1. Which according to you is the most critical factor affecting post harvesting process? Cold storage

Ware house

Transportation

Value addition

2. Current supply chain needs to be vastly improved. Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

3. Direct dealing between farmers and retailers will reduce price and wastages. Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

46

4. Do you like the efforts being made by govt.in improving food production and distribution? Don’t like Somewhat like Very much like excellent

5. Do you think technology can be helpful in increasing agro output? Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

6. Do you having a sustainable or continuous demand for your product? Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

7. They should be a integrated cold storages and processing facility for farmers and processors. Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

8. Less no. of intermediaries will help both farmers and retailers.

47

Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

9. Which strategy do you prefer while production? a) Food on demand (pull) b) Produce & sell (push)

10. Big retailers will provide farmers technical know-how of production and distribution. Strongly Somewhat Somewhat Strongly agree agree disagree disagree

48

Footwear Design & Development Institute IMPACT OF ORGANIZED RETAIL ON FOOD PROCESSING INDUSTRY QUESTIONNAIRE

NAME:

AGE:

CONTACT NO:

SEX:

LOCATION:

11. From where are you procuring your inventories? Farmers

Vendors

Agents

Ware houses

12. Tie-ups between farmers and retailers will help in controlling black marketing and inflation. Strongly Somewhat Somewhat Strongly agree agree disagree disagree

13. By helping the farmers, retailers are ultimately helping themselves. Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

49

14. Decentralized buying is better than centralized buying. Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

15. In house processing facility will improve product line and productivity for retailers. Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

16. Which market do you think is having maximum opportunities? a) Rural b) Urban c) Semi urban 17. The factors where the maximum investment need to be done are : Storage Transportation Processing Cold storage

18. Growing need of quality food will ultimately push food processing sector. Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

19. Which strategy do you think is best for retailers? a) Push oriented b) Pull oriented

50

20. Packaged food industry has a huge scope of improvement both in term of product and market. Strongly agree

Somewhat agree

Somewhat disagree

Strongly disagree

51

FREQUENCIES OF RETAILER’S QUESTIONNAIRE

Valid

Missing Total

BIG BAZAR SUBHIKSHA SALASAR REL FRESH 6TEN MORE SPENCER'S SABKA BAZAR BIG APPLE MOTHER DAIRY SAFAL VISHAL DOLLAR STORE GUPTA MITTAL Total System

Frequenc y 1 1 1 1 1 1 1 1 1

Percent 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6

Valid Percent 6.7 6.7 6.7 6.7 6.7 6.7 6.7 6.7 6.7

Cumulative Percent 6.7 13.3 20.0 26.7 33.3 40.0 46.7 53.3 60.0

1

5.6

6.7

66.7

1 1

5.6 5.6

6.7 6.7

73.3 80.0

1

5.6

6.7

86.7

1 1 15 3 18

5.6 5.6 83.3 16.7 100.0

6.7 6.7 100.0

93.3 100.0

Retailers

ETAILERS

52

N

Valid Missing

15 0 1.2000 .10690 1.00 .41404

Mean Std. Error of Mean Mode Std. Deviation

1. Do you think Tie-ups between farmers and retailers will help in controlling black marketing and inflation?

Frequencies

Valid

Frequenc y Strongly agree 12 somewhat agree 3 Total 15

Percent 80.0 20.0 100.0

Valid Percent 80.0 20.0 100.0

Cumulative Percent 80.0 100.0

53

Statistics

2. From where are you procuring your inventories?

Statistics

N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

15 0 2.5333 .36341 4.00 1.40746

54

Frequencies

Valid

missing farmers vendors agents 4.00 Total

Frequenc y 1 3 4 1 6 15

Percent 6.7 20.0 26.7 6.7 40.0 100.0

Valid Percent 6.7 20.0 26.7 6.7 40.0 100.0

Cumulative Percent 6.7 26.7 53.3 60.0 100.0

3. Do you think by helping the farmers retailers are ultimately helping themselves?

Statistics

Mean Std. Error of Mean Mode Std. Deviation

Valid

15

Missing

0 1.2667 .11819 1.00 .45774

55

Frequencies

Valid

Frequenc y strongly agree 11 somewhat agree 4 Total 15

Percent 73.3 26.7 100.0

Valid Percent 73.3 26.7 100.0

Cumulative Percent 73.3 100.0

4. Do you think decentralized buying is better than centralized buying?

Statistics

N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

15 0 2.6000 .28950 2.00(a) 1.12122

56

Frequency

Valid

Frequenc y strongly agree 3 somewhat agree 4 somewhat disagree 4 strongly disagree 4 Total 15

Percent 20.0 26.7 26.7 26.7 100.0

Valid Percent 20.0 26.7 26.7 26.7 100.0

Cumulative Percent 20.0 46.7 73.3 100.0

5. Do you think in-house processing facility will improve product line and productivity for retailers?

Statistics

N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

15 0 1.4000 .19024 2.00 .73679

57

Frequency

Valid

Frequenc y Missing 2 strongly agree 5 somewhat agree 8 Total 15

Percent 13.3 33.3 53.3 100.0

Valid Percent 13.3 33.3 53.3 100.0

Cumulative Percent 13.3 46.7 100.0

6. Which market do you think is having maximum opportunities?

Statistics

N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

15 0 2.1333 .09085 2.00 .35187

58

Frequency

Valid

Urban semi urban Total

Frequenc y 13 2 15

Percent 86.7 13.3 100.0

Valid Percent 86.7 13.3 100.0

Cumulative Percent 86.7 100.0

7. In which sector do you think maximum investment needs to be done?

Statistics Valid Missing

N Mean Std. Error of Mean Mode Std. Deviation

15 0 1.7333 .20625 2.00 .79881

Frequency

59

Valid

Frequenc y storage 6 transportation 8 cold storage 1 Total 15

Percent 40.0 53.3 6.7 100.0

Valid Percent 40.0 53.3 6.7 100.0

Cumulative Percent 40.0 93.3 100.0

8. Do you think growing needs of quality food will ultimately push food processing sector?

Statistics

N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

15 0 1.4000 .13093 1.00 .50709

60

Frequency

Valid

Frequenc y strongly agree 9 somewhat agree 6 Total 15

Percent 60.0 40.0 100.0

Valid Percent 60.0 40.0 100.0

Cumulative Percent 60.0 100.0

9. Which strategy do you think is best for retailers?

Statistics

N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

15 0 1.1333 .09085 1.00 .35187

61

Frequency

Valid

push pull Total

Frequenc y 13 2 15

Percent 86.7 13.3 100.0

Valid Percent 86.7 13.3 100.0

Cumulative Percent 86.7 100.0

10. Don’t you think packaged food industry has a huge scope of improvement both in term of product and market?

Statistics N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

15 0 1.4667 .13333 1.00 .51640

62

Frequency

Valid

Frequenc y strongly agree 8 somewhat agree 7 Total 15

Valid

Valid Percent 53.3 46.7 100.0

Percent 53.3 46.7 100.0

Cumulative Percent 53.3 100.0

farmer1 farmer2

Frequency 1 1

Percent 5.6 5.6

Valid Percent 5.6 5.6

Cumulative Percent 5.6 11.1

farmer3

1

5.6

5.6

16.7

farmer4

1

5.6

5.6

22.2

farmer5

1

5.6

5.6

27.8

farmer6

1

5.6

5.6

33.3

farmer7

1

5.6

5.6

38.9

farmer8

1

5.6

5.6

44.4

farmer9

1

5.6

5.6

50.0

farmer10

1

5.6

5.6

55.6

farmer11

1

5.6

5.6

61.1

farmer12

1

5.6

5.6

66.7

farmer13

1

5.6

5.6

72.2

farmer14

1

5.6

5.6

77.8

farmer15

1

5.6

5.6

83.3

farmer16

1

5.6

5.6

88.9

farmer17

1

5.6

5.6

94.4

farmer18

1

5.6

5.6

100.0

Total

18

100.0

100.0

FREQUENCIES OF FARMERS QUESTIONNAIRE Frequency of Farmers

63

1. Which according to you is the most critical factor affecting post harvesting process?

Statistics

N Mean Std. Error of Mean

Valid Missing

18 0 2.4444 .23182

64

Mode Std. Deviation

3.00 .98352

Frequency

Valid

Frequenc y cold storage 4 warehouse 4 transportation 8 value 2 addition Total 18

Percent 22.2 22.2 44.4

Valid Percent 22.2 22.2 44.4

Cumulative Percent 22.2 44.4 88.9

11.1

11.1

100.0

100.0

100.0

2 Do you think current supply chain needs to be vastly improved?

Statistics current supply chain needs to be vastly improved Valid 18 N Missing 0 Mean

1.3333

Std. Error of Mean

.11433

Mode

1.00

Std. Deviation

.48507

65

Frequency

Valid

strongly agree somewhat agree

Frequency 12 6

Percent 66.7 33.3

Valid Percent 66.7 33.3

Total

18

100.0

100.0

Cumulative Percent 66.7 100.0

3 Don’t you think direct dealing between farmers and retailers will reduce price and wastages?

Statistics N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

18 0 1.6111 .18327 1.00 .77754

66

Frequency

Valid

Frequenc y strongly agree 10 somewhat agree 5 somewhat disagree 3 Total 18

Percent 55.6 27.8 16.7 100.0

Valid Percent 55.6 27.8 16.7 100.0

Cumulative Percent 55.6 83.3 100.0

4 Do you like the efforts being made by govt in improving food production and distribution?

Statistics

N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

18 0 1.7222 .27778 1.00 1.17851

67

Frequency

Valid

missing don't like somewhat like excellent Total

Frequenc y 1 9 5 3 18

Percent 5.6 50.0 27.8 16.7 100.0

Valid Percent 5.6 50.0 27.8 16.7 100.0

Cumulative Percent 5.6 55.6 83.3 100.0

5. Do you think technology can be helpful in increasing agro output?

Statistics

N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

18 0 1.2778 .10863 1.00 .46089

68

Frequency

Valid

Frequenc y strongly agree 13 somewhat agree 5 Total 18

Percent 72.2 27.8 100.0

Valid Percent 72.2 27.8 100.0

Cumulative Percent 72.2 100.0

6 Do you have a sustainable or continuous demand for your product?

Statistics

N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

18 0 2.1111 .21219 2.00 .90025

69

Frequency

Valid

missing yes NO Somewhat 4.00 Total

Frequenc y 1 2 10 4 1 18

Percent 5.6 11.1 55.6 22.2 5.6 100.0

Valid Percent 5.6 11.1 55.6 22.2 5.6 100.0

Cumulative Percent 5.6 16.7 72.2 94.4 100.0

7. Don’t you think there should be integrated cold storage and processing facility for farmers and retailers? Statistics

N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

18 0 1.1111 .11111 1.00 .47140

70

Frequency

Valid

Missing strongly agree Somewhat agree Total

Frequenc y 1 14

Percent 5.6 77.8

Valid Percent 5.6 77.8

Cumulative Percent 5.6 83.3

3

16.7

16.7

100.0

18

100.0

100.0

8. Do you think less number of intermediaries will help both farmers and retailers?

Statistics

N Mean Std. Error of Mean

Valid Missing

18 0 1.1667 .09039

71

Mode Std. Deviation

1.00 .38348

Frequency

Valid

Frequenc y strongly agree 15 somewhat agree 3 Total 18

Percent 83.3 16.7 100.0

Valid Percent 83.3 16.7 100.0

Cumulative Percent 83.3 100.0

9. Which strategy do you prefer while production?

Statistics N Mean Std. Error of Mean Mode Std. Deviation

Valid Missing

18 0 1.6111 .14323 2.00 .60768

72

Frequency

Valid

Frequenc y 1

Missing PULL(food on 5 demand) PUSH(produce & sell) 12 Total 18

Percent 5.6

Valid Percent 5.6

Cumulative Percent 5.6

27.8

27.8

33.3

66.7 100.0

66.7 100.0

100.0

10. Don’t you think big retailers will provide technical know-how of production and distribution to farmers?

Statistics N Mean Std. Error of Mean Mode

Valid Missing

18 0 1.3889 .18327 1.00

73

Std. Deviation

.77754

Frequency

Valid

strongly agree somewhat agree strongly disagree Total

Frequenc y 13 4

Percent 72.2 22.2

Valid Percent 72.2 22.2

Cumulative Percent 72.2 94.4

1

5.6

5.6

100.0

18

100.0

100.0

BIBLIOGRAPHY & REFERENCES

• Report of the APO multi country study mission on rural based food processing industry held In Tokyo, Japan • Asian Productivity Organization 2004 • Web site of Ministry OF Food Processing Govt of India. 74

• News paper- Economic Times, HT • Magazines- Retail images. • Book – Marketing research by Naresh Malhotra, Levy’s-Weitz. •

Research papers on “Challenges of Retail” & Food Retailing

75