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RRL brings shrink-wrapped farm produce to Indian shelves

RRL brings shrink-wrapped farm produce to Indian shelves
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First Published: Wed, Dec 17 2008. 07 50 PM IST
Updated: Wed, Dec 17 2008. 07 50 PM IST
Mumbai: Reliance Retail Ltd, the retail arm of Reliance Industries Ltd, plans to sell shrink-wrapped fruits and vegetables to increase their shelf life and reduce spoilage by handling.
The retailer has already started selling shrink-wrapped farm produce at some of its Reliance Fresh shops in Pune and Mumbai and set up facilities to do the wrapping at its five collection centres in the region, said a person close to the development.
Shrink wrap is a plastic film that shrinks tightly over whatever it is covering when heat is applied to it. “Plans are to roll out the project across our network once we understand how fresh produce and the consumers react to shrink wrapping,” this person said on condition of anonymity.
“We are in the pilot stage of offering shrink-wrapped fresh produce in some of our select stores,” a company spokesperson told Mint by email, without elaborating on the details of the project.
India’s organized retail companies are currently reworking their business models on slowing growth as consumers cut down on spending in the wake of an economic slump.
Reliance Retail is also restructuring—pruning number of stores, reducing store sizes and slowing expansion—in a bid to reduce losses.
The latest move of selling shrink-wrapped produce is expected to give the company significant savings once it adopts it across its entire chain of shops that sell fruits and vegetables.
“We lose a lot of fruits and vegetables within the store because of excessive handling by consumers. In addition, keeping the fresh produce exposed to the elements results in loss of moisture and faster spoilage, which results in losses,” said another company executive, who declined to be named because he is not authorized to speak with the media.
Indian consumers typically buy fresh produce from unorganized vendors only after inspecting it closely to rule out bruising and damage. Although they have shown a preference to buy fruits and vegetables in convenience stores, traditional buying habits persist.
“Consumers still examine a head of cabbage or caulifower, remove a couple of layers of the outside leaves and then proceed to bag it for billing,” the executive said.
As much as 30% of fruits and vegetables are spoiled in the country— 40 million tonnes valued currently at $13 billion—due to inadequate infrastructure as cold stoages near farms, and poor handling, according to data available at the website of the International Society for Horticultural Science.
Organized retailers source produce from across the country, and sometimes overseas, and by the time it reaches their stores, the products are already at the end of their marketable life. Shrink-wrapping would clearly extend the shelf life.
To be sure, not everybody agrees such wrapping is a complete solution.
Said Ashok Bhasin, managing director of Wadhawan Food Retail Pvt. Ltd, which owns a chain of 225 stores under its Spinach, Sabka Bazaar and Smart brands, said: “We do lose fresh produce in stores and along the way to the store due to improper handling,” adding that “fresh produce is a critical component in acquiring and retaining consumers in convenience store formats, and giving them high-quality produce is a key to ensuring that this category grows.”
However, he said shrink wrapping can only be done in a limited manner because it deprives consumers of the experience of touching and feeling the produce, which is an important part of buying.
“The right solution to addressing the quality and wastage problem is the correct mix of processes, systems, and supply-chain training,” Bhasin said.
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First Published: Wed, Dec 17 2008. 07 50 PM IST