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Marco makes packing more productive and profitable

Among the hardware and software products Marco was promoting at the show were its Field Side Packing solution, which allows producer who don’t have dedicated pack houses to nevertheless meet retailers’ demand for accurately declared weights on pre-packed produce.

Fruit and vegetable pack houses with over-packing rates as high as 12% have managed to get them down to less than 1% thanks to  productivity improvement expert Marco Ltd, according to its business development coordinator Becky Hart.

Speaking to ED at London Produce Show, Hart said UK-based Marco’s pack house systems have been installed in 27 countries, including Peru, Chile, Guatemala, the US, Canada, South Africa, India and Kenya.

In the fresh produce sector they are ideal for fruit and vegetables that need to be manually packed for handling or presentation reasons.

“We supply solutions for the packing of table grapes, tomatoes, berries and all soft fruits, loose leaf salads and herbs, and all pre-packed vegetables, from mangetout to sugar snap peas to stir-fry packs and baby vegetables,” she said.

“Our systems provide comprehensive data management and visibility through the packing process. Most people pack on very basic and stand alone table top scales which do not provide any weight capture, operator performance reports or batch records. Yet if one of the biggest problems for packers is high levels of overpack (giveaway), you cannot hope to reduce it unless you are monitoring and controlling weights in each and every punnet or box.

“What our system does is make every operator accountable because you have to log into the weighing station, so immediately in a huge pack house you know exactly what everyone is doing and at what speed they’re doing it, and it also reduces the overpack massively and obviously that means you can create more punnets with the same amount of raw produce. It’s this saving that pays for the system and typically following installation we are providing an extra saleable pack in every 10. We usually see a typical return on investment (for our customers) of six months or less, or one growing season” she said.

Among the hardware and software products Marco was promoting at the show were its Field Side Packing solution, which allows producer who don’t have dedicated pack houses to nevertheless meet retailers’ demand for accurately declared weights on pre-packed produce.

Marco: http://www.marco.co.uk/
The London Produce Show and Conference: http://londonproduceshow.co.uk/

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Secrets to Reynolds’ success supplying the UK foodservice market

" Historically, our business has been quite heavily weighted towards restaurants and restaurant groups, supported by a good amount of hotel custom. We're now placing quite a lot of focus on the education sector."

From its origin about 70 years ago as an east London greengrocer, Reynolds has evolved into a national supplier to the catering industry, with annual turnover of £200 million (€281m).

Dedicated to supplying the UK’s foodservice market, it has a particular focus on restaurants – which account for about 60% of its business – and supplies the likes of Pret a Manger, Pizza Express, Carluccio’s and Bill’s. It also serves pubs, hotels, schools, colleges, universities and healthcare establishments.

At the London Produce Show in June, ED spoke to Reynolds’ head of marketing Andy Weir and senior buyer Matt Jones – both based at Reynolds’ National Distribution Centre in Waltham Cross – and started off by asking them what makes such businesses choose Reynolds.

AW: There are a number of reasons they use us. We have a national presence, which obviously means that wherever they open a new store, we can deliver. We have our national distribution center in Hertfordshire, where all of our fresh produce and dairy comes into, and then we truck that to our five satellites. We have one QC team at the office and that means that wherever they’re based, our customers’ outlets get the same produce into their stores – from the same grower, checked by the same people. That means they get absolute product consistency across their stores. That’s really important for any operator building a brand.

MJ: Another key benefit we offer our customers is fixed pricing for 6 month periods, which, because they know their products’ prices are fixed, guarantees their margins. That’s really important because the prices of fruit and vegetables can be quite volatile. So what we do is we lock our prices down with our suppliers and then we pass that security on to our customers. That’s a key difference between us and most of our competitors.

Who are your main competitors?

MJ: There are a couple of other large national produce suppliers in the UK, but they are owned by larger companies, whereas Reynolds is still very much a family owned and run business. There are a whole host of small suppliers, especially in London, within the markets such as Covent Garden.

Where are you making changes?

AW: Historically, our business has been quite heavily weighted towards restaurants and restaurant groups, supported by a good amount of hotel custom. We’re now placing quite a lot of focus on the education sector.
When you’re focusing on one particular market you tend to get sales peaks and troughs. By targeting other markets, such as the education sector, they tend to mirror the rest of the sector quite well. When the schools are off, the restaurants are quite busy, and vice versa. A more diverse mix of business helps us manage our fixed costs better and our technical expertise is very well suited to the education sector, where food safety is clearly very important.

What about in your supply chain?

AW: When our customers order what we call splits, which is single items – a twin pack of peppers, a cucumber, an iceberg lettuce and a punnet of tomatoes, for example – historically they’d all go in one cardboard box or several, depending on the order size. Over the last years we’ve tried to move customers away from disposable packaging and we now use returnable crates.
The driver takes the crate in, leaves the produce with the customer and then takes back the crates on the next delivery. That works really well because our customers have to pay disposal costs to get rid of waste cardboard. I think where we can get any packaging out of the chain completely it’s got to be great for everybody. It saves us money, it saves our customers money and it’s good for the environment.

What’s your biggest challenge?

AW: It’s managing the demand and supply side because we don’t know from one day to the next exactly how much of a single product our customers are going to order. Obviously we don’t want fresh products sitting in the warehouse as shelf life is limited. Equally, our customers expect us to have the appropriate stock levels to meet their demand.
Trying to predict exactly what a customer is going to order, and having the foresight to order the appropriate quantities in advance, is a very difficult balancing act. The average turnaround time in our warehouse is about a day and a half. The idea is that it comes in and goes out. We spend a lot of time fine-tuning our forecasting model to make sure we get that balancing act absolutely right and work closely with customers to understand what drives their demand, such as weather and menu changes.

What are your biggest volume products?

AW: Believe it or not, our biggest selling line overall is milk – because everybody uses it – but for fresh produce tomatoes would probably be number one. We have a couple of dozen different tomato lines, everything from standard round, single M’s, double M’s, Marzaninos, English heritage tomatoes on the vine, and everywhere in-between.

But we don’t just bring these things in and let them sit in the warehouse and hope they sell. We work with our customers to establish what product works best for them. Do you want provenance? Do you want great flavour? Do you want a product that’s going to last a long time? You tell us what you want and we’ll source the right product for you. That’s how the business has evolved.

MJ: On stock at the moment, I’m probably doing about 22 different SKUs, 22 different products of tomatoes. I would say we do 16,000-18,000 boxes a week on tomato, across all the ranges.

What else is big?

AW: Avocados are another line that’s really important for us and for our customers. Obviously when they get the avocados delivered to their store, they need to know they’re ready to eat and ready to prepare, they’ve got to be at absolute peak ripeness. If they’re too hard and they can’t use them, well they don’t have the storage space to leave them out or leave them in the fridge for a few days. It’s really important that we get that absolutely perfect. So yes, we sell an awful lot of avocados and again, we’ve got quite a few different lines depending on customer requirements.

MJ: We do about 13,000 boxes of avocado a week, which I believe is up there with some of the larger retailers. It’s a product that’s heavily used in our industry, around sandwich manufacture, guacamole, etc.

Where do you source your avocados from?

AW: It very much depends on the time of year. At the moment they will be predominantly Peruvian, supported by some South African fruit. On a product like avocados we tend to let our supplier partners manage that decision-making process for us. That’s what they’re best at and we stick to what we’re best at, which is distributing short shelf-life chilled products to our customers.

Please tell us what you do in grapes.

MJ: In grapes we just run two lines, a red and a white grape year-round. We run through about 8 seasons over the year and it’s controlled by one supply base, which manages the Brix, colour and the size of berry, according to our specifications.

What varieties are they?

MJ: Multiple. It could be Superior to Thompson. It could be anything all the way through. We take the best grapes for the time of the year, for the customer base.

AW: Having said that, there are certain customers, like maybe 5 star hotels in London, that want something different. So we do obtain specialty varieties for them, and obviously they cost a lot more than the standard red or white grape. Again it’s back down to what the customer wants, and we can source pretty much anything they want, as long as it is in season somewhere in the world. With our connections and extensive supply base we’ll find it for you.

How is demand for tropical fruit such as pineapple? What kind of volumes do you do in pineapple?

MJ: I do two types of pineapple. I do an extra sweet size 6, a large pineapple, which I do about 1,200 boxes, and a 10, which is a smaller pineapple, at about 600 boxes. About 1,800-2,000 boxes a week in total.

What are your top sellers in salad?

MJ: Cucumber would probably be the biggest, at about 6,000 boxes a week. Peppers would be next, probably roughly around 3,500 boxes of peppers a week, across the three colors, and a little bit in orange and black.

Foodservice is often where emerging culinary trends are seen first. What are you noticing?

AW: More and more demand for provenance. For the majority of our customers it’s about British produce and it’s well-known that consumers like to know now – particularly post Horsegate – where the food on their plate comes from. Whether it’s Kentish strawberries or asparagus from Hampshire, it all about menu appeal and authenticity.
Our food development team spend a lot of their time advising customers on where their produce comes from, so they can market it to consumers. If you take for example, Bill’s, which is one of the fastest growing restaurant groups in the UK – they’re one of our customers – they do a fantastic job at promoting great British produce. If you look on the menu you’ll see the appropriate product for the time of year. At the moment, there’s kale on there, and there’s strawberries, but they don’t have strawberries on there at Christmas time.
We work closely with our customers to help them map out what’s going to look good, what’s going to be appropriate on the menu in three months, in six months’ time, because these operators need to plan in advance exactly what they’re going to have on their menu and if they put something on their menu for the summer and it’s not available, obviously that’s not great for anybody. So we play a large part in advising them on what’s going to be best at what time of year, what’s going to be in season, what’s going to be British, to make sure that they satisfy their consumers’ appetite for fresh, seasonal produce.

Reynolds: http://www.reynolds-cs.com/
London Produce Show http://londonproduceshow.co.uk/

JB

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Exploring Waitrose’s biggest store – Canary Wharf

About 15% of turnover at Waitrose’s Canary Wharf branch is from sales of fruit, vegetables, salads and flowers.

Waitrose’s three-storey, 73,000 sq ft. Canary Wharf branch is its biggest store and the one with the highest sales.

Officially a ‘Food, Fashion & Home’ store, it also has one of the biggest fruit and vegetable sections of all Waitrose branches. About 15% of the store’s turnover is from sales of fruit, vegetables, salads and flowers.

ED toured this Waitrose flagship store in early June as part of the London Produce Show and spoke to Buying Manager for fruit Jocelyn Clarke and Department Manager Anselm Colom.

Clarke said Waitrose is doing particularly well in produce, highlighting that while the retailer holds about a 5% share of the UK grocery market overall, its market share for fresh produce is higher, typically around 8%. “In terms of location we’ve got the best of all worlds here,” Colom told ED about the Canary Wharf branch, “we’ve got many customers who do a big shop, and hundreds of thousands who do small top-up shops, we’ve got people passing by, local residents, workers, people travelling into London – all sorts of different demographics.

“Our biggest challenge is physically trying to stock all the shelves all the time – it’s absolutely relentless but a nice problem to have.”

A big focus on fresh produce

Fresh produce is one of 13 sections in the store and includes the food-to-go offering. Clarke said there is saying in retail that if you don’t get produce right then customers go no further. At Canary Wharf, the fruit and vegetables section sits at the front of the store and there is a big focus on it, she said.

There are typically two layouts for the fruit and vegetable section – a summer and a winter one. The summer layout started in mid-April with soft fruit moved to the front, apples and citrus cut back a little and moved to the back, and more space for exotic and stone fruit and less for vegetables. “But we wouldn’t dream of moving potatoes, bananas or salads, they stay where they are all the time,” Colom said.

The top sellers: berries and citrus

Clarke said that over the course of a year, the branch’s top sellers are berries but at Christmas, citrus is the clear-cut best seller, as in the UK it is traditional to include some in Christmas stockings. The UK, Spain and South Africa are the main sources of the fruit in the store.

The berries cooler, located on the right at the very front of the store over summer, was rarely without a customer during ED’s visit and is replenished several times during open hours. Clarke said there is still a lot of opportunity to expand sales of berries – particularly blueberries – as the household penetration of this product is still relatively low.

Organic produce has small but loyal customer following

Organic produce accounted for 5-6% of total produce sales in the week ED visited. Colom said it used to generally be a bit higher but some weeks can still get up to about 12%.

Waitrose has a high market share in organic which is going from strength to strength. The new Waitrose Duchy Organic design was seen in store on berries. Clarke said this design would be seen on other fruits in the coming weeks.

Private labels and provenance

While private label – also known as own brand – products account for about 45% of Waitrose products overall, in the case of fresh produce this soars to 90-95%. Some brands are seen in salads, then there is also co-branding of Waitrose and Pink Lady, which sells well. Otherwise it is all about the Waitrose brand

Clarke said that Waitrose branches in country locations do see interest in local produce, as do stores in Scotland, such as for Scottish-grown strawberries.

Grapes must have crunch, texture, flavour

At the time of speaking to ED, Colom said the grapes on the branch’s shelves included the black seedless Sweet Sapphire, seedless white grapes including Sugraone and Prime,  and Early Sweet, and in red seedless, Flame.

“We look for crunch, great texture and really great flavour – a lot of aromas and sweet/acid balance,” Clarke said. “Cotton Candy was a good seller last year and we’re going to do more of it this year. Sable’s done exceptionally well and Italia is very popular.” She said Waitrose mainly sells seedless grapes, typical of the UK market. It doesn’t sell Red Globe and stocks only a couple of seeded varieties over the course of a year.

Fully automatic ordering

Colom said Waitrose uses an elaborate algorithm-based ordering system based at its head office so people in positions such as his no longer do ordering. The system factors in weather data, sales history, demand, space at a branch, and so on and “works out what we can sell for every single product.”

His priority is to ensure the stock thus ordered indeed reaches the store shelves. “It’s critical to do an off-sale check before we start in the morning, so we know what don’t have.” Also, given the short shelf life of fruit and vegetables, date rotation and quality are critical. “We do quality checks all the time.”

Much attention is also paid to ensuring the country of origin is on the ticket for each item, a legal requirement, “that’s absolutely critical,” he said.

Continuous replenishment

Most of the stock comes into the branch at night. Three deliveries of fruit and vegetables take place then, and another mid-afternoon, as well as 3 ambient deliveries, and various other special and additional deliveries.

A maximum of about 7-8 people in total work in Colom’s Fresh produce section at one time and while the shelves are filled through the night, during open hours they spend most of the time replenishing stock.

Colom said he is proud of the quality of the produce on the shelves and, in particular, of the deep knowledge of some of the partners (staff) on the section, such as on the different fruit and vegetable seasons. If you want to know about new Jersey potatoes in late April/early May, British asparagus in May, strawberries in June, certain apples in June and July, and so on – look for the person wearing the ‘fruit, veg & flowers specialist’ apron.

Waitrose: http://www.waitrose.com/
London Produce Show: http://londonproduceshow.co.uk/
Read more about Waitrose in our article: Waitrose banks on omnichannel strategy

JB

 

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IDEP marks 10 years promoting Tucumán exports

IDEP Tucumán, the Institute for the Productive Development of Tucumán in Argentina, has celebrated its first 10 years as an institution that supports exporters.

IDEP Tucumán, the Institute for the Productive Development of Tucumán in Argentina, has celebrated its first decade as an institution that supports exporters.

IDEP is the reference entity on foreign trade. It is run by a diverse board of directors consisting of government officials and entrepreneurs who represent the main production sectors of the province: citrus, sugar, horticulture, metallurgy, tourism and other services.

To celebrate the milestone, IDEP held a cocktail event at the Hilton hotel in Tucumán.

“We welcome this fusion between the public and private sector because it has allowed us to grow as a province, to give visibility to our exporters through participation in fairs and international business circles and help them improve their competitiveness through quality standard certifications,” said Juan Luis Fernandez, IDEP’s executive director.

IDEP: http://idep.gov.ar/

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Sun World launches new consumer website

Sun World said online searches related to grapes occur in the hundreds of thousands every month.

Do you know the best way to freeze grapes for a cool, sweet summer treat? Ever tried pan roasted chicken with green grapes?

California’s Sun World International, LLC has unveiled a new web site that provides just such information and inspiration and covers about anything consumers might want to know about table grapes.

Grape recipes, how-to guides and health Information are among the topics covered on the site, which has been optimised for accurate viewing on any device.


Frozen seedless grapes

Included is the answer to what Google Trends shows is one of the most common queries regarding grapes: how many calories in them? The answer is just 90 in a cup-and-a-half serving, the new Sun World site says.

In a press release, the company said online searches related to grapes occur in the hundreds of thousands every month.     

“Like all of our marketing activities, the new Sun World website was designed based on consumer insights to help us better engage, educate and entertain people,” program marketing manager Natalie Erlendson said.

“The website is part of a larger strategy to build Sun World as the trusted brand for grapes which can increase demand and drive consumption for our customers,” executive vice president Gordon  Robertson said.

Sun World said it is a leading innovator in the research, production, distribution and promotion of fresh  produce.

It maintains vertically integrated table grape operations in the Coachella and San Joaquin Valleys of California, as well as a licensed growing and marketing program with leading  agricultural operations in Australia, New Zealand, North America, Europe, South America, Israel and South Africa.

See the new Sun World site at www.Sun-­World.com.  

 


 

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Poupart Imports brings world best produce to the UK

Topfruit, grapes and summer stonefruit / soft-fruit are the mainstays of Poupart Imports’ success and continue to show annual growth, Green said.

“It’s a very dangerous business to be in and it’s daily, it’s immediate, it’s spot, it’s the open market. We are still traders, unlike the companies that supply the retailers, who are programmed and automated and predictable – we are the unpredictable end of the fresh produce industry.”

That’s Poupart Imports Senior Trader Jerry Green talking to ED about the volatile prices in the world of wholesale supply.

While at the London Produce Show in June, he said this specialist supplier to the non-supermarket sector handles high quality produce and trades across the whole UK fresh produce wholesale market, including pre-packers and processors, even retail category managers in the event they run short.

Topfruit, grapes and summer stonefruit/soft-fruit are the mainstays of Poupart Imports’ success and continue to show annual growth, Green said.

The company is also a specialist in handling consignments destined for retail which have either become ‘compromised’ (under-specification, for example) or which are ‘excess to requirement’ and which need a special type of handling.

Bases in UK & Spain

“We’re very well-placed,” Green said. Poupart Imports – part of the Poupart Ltd Group – has offices in 3 different areas.

Deep sea procurement, off-market sales, accounts and logistics are run out of its head office in Hertfordshire, in England, while most of its European procurement is handled out of its base in Figueres, near Barcelona.

A third office in Surrey, also in England, is a 2-person operation controlling some 35% of the company’s total sales volume.

Why wholesale supply is so unpredictable

Tomatoes are a huge item for the importer, which offers the whole gamut, be they round, plum, cherry, cherry on the vine, cocktail tomatoes, etc. Green said they are a good illustration of the challenges of buying on the spot market as it takes very little to change the supply and demand equation.

“A little blip in the temperatures in the production area and it looks like there’s a spike in demand. There’s not, demand is constant, it’s just the supply is not there, so it contributes to a hugely volatile market.”

Also volatile is the market for iceberg lettuce, where a 5kg box can be £10 one day, £5 the next day, £2 the following day and £8 the day after, Green said.

“We operate within probably the purest form of the oldest economic law, that of supply and demand. Prices move in an instant depending upon the perceived availability or under-supply.”

Salad and vegetables procurement via Spain

Poupart Imports offers a wide, seasonal product range. Green said salad items and vegetables are procured almost exclusively by the firm’s base in Spain. “We handle all sorts of salads, leaves, capsicums, aubergines, courgettes, tomatoes and a range of vegetables – a pretty comprehensive range – but there are various products, like potatoes and onions that we don’t find worth touching as we don’t have the product knowledge, contacts or expertise properly to manage these categories.”

Spain is the main source of Poupart’s salads and vegetables but it also sources from France, Italy, Morocco and Poland.

Avocadoes: mainly sourced from Peru but also South Africa, Spain

Poupart aims to supply avocadoes year-round, mainly drawing its supply from Peru (50%), South Africa (25%) and Spain (25%). Green said Hass is the biggest seller in the UK, and what the retail sector mainly sells, but Poupart Imports doesn’t tend to handle that variety. The open spot market sells mostly greenskins, such as Fuerte, Pinkerton and Zutano.

The company doesn’t tend to import products such as pineapples as a retail programme is required to successfully manage the individual season and to mitigate losses incurred in the spot markets. “This is really outside the remit of Poupart Imports as non-retail is the target market,” Green said.

The company does however import melons – from Europe, Brazil, Costa Rica, Honduras, Panama and Guatemala – for its open market business.

Year-round grape supply and largely seedless

It imports grapes throughout the year, averaging about 60 pallets a week but attuning its volumes to supply and demand. “If there’s an oversupply, we will attempt to dissipate that supply across the market, if there’s an undersupply we do our damnedest to procure whatever we can, safe in the knowledge that it can be traded successfully in such times of high demand.”

The company does import a seeded grape variety in Red Globe but about 85% of its grapes are seedless and mostly white varieties, particularly Thompson, Sugarone and Superior. Red varieties such as Flame and Crimson complete the offer.

“Obviously we start off in Europe, and that lasts us through to about September-October, from there we go to Brazil, Peru, and then South Africa. After Christmas it’s still a bit of South Africa, then we major on Chilean red and green grapes before going heavily into India. At the end of the Indian season, which is about now (early June), you’re looking at bringing in Israeli, and Egyptian before we go back into the European season in about a month’s time.”

“We bring it in in bulk 9kg, in 4.5 kg boxes and in ready-packed 10 x 500g punnets, labelled or unlabelled, and with single or mixed varieties in the punnet –  whatever the customer wants.”

Wide client base

As for its clients, Green said Poupart supplies virtually every Total Produce outlet in the UK wholesale sector and views the group as an integral part of its customer base.

Other clients include Barton & Redman in Manchester’s New Smithfield Market; H G Walker, Premier Fruit and P&I at New Covent Garden Market; JT Produce, Payne Simmons and Mirpa/Cypro Food in London’s Spitalfields Markets; Burbank in Bradford, Crossley and Graham, and Nicol & Dow in Glasgow, just to name a few.

Keeping customers by keeping them happy

“We never become complacent about our customers and fully accept that no customer belongs to us no customer belongs to us, they just happen to be customers who are reasonably loyal to us in the short term. There’s no long term about it unless we continue to perform for them and keep the customers satisfied. We do manage to keep customers loyal to us and in some ways dependent upon us because we’re pretty good at what we do and have become acknowledged market leaders in the sector,” Green said.

“We have a 12 man sales desk if you like, albeit split up between the 3 offices, and we attempt to service the best part of 138-140 customers. Every single day, they will all get at least one phone call a day from us and if they don’t take one particular product they’ll take another. Very rarely do you put the phone down without selling somebody something.”

“We’re there five days a week most of the year and six days a week during the summer months when there’s a lot of stonefruit. We are viewed as being one of the two principal suppliers to the wholesale sector,” he said, “and continue to enjoy this position thanks to the professionalism of the procurement and sales teams, the synergy between the two, the back-up provided by the admin and logistics departments and above all by the comprehensive nature of our daily offer to the market.”

Poupart Imports: http://poupartimports.co.uk/

JB

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Inside India’s biggest e-grocer – BigBasket

Big Basket is currently India’s biggest online grocery player, clocking an average 12,000 orders a day – 70% of which include fruit and vegetables – and sales growing 10-15% month on month.

BigBasket says fruit exporters have a big chance to grow their brands in India, the world’s 6th largest grocery market e-grocery

Currently India’s biggest online grocery player, BigBasket clocks an average 12,000 orders a day – 70% of which include fruit and vegetables – and sales growing 10-15% month on month.

Even so, that’s just a drop in the ocean of potential grocery e-commerce in India. Against a total F&V market of about US$ 53 billion, modern retail sales of fresh fruit and vegetables contribute around US$ 500 million and online sales around US$ 30 million. So said Vipul Mittal, head of fruit and vegetables for Bangalore-based BigBasket.com.

Speaking to ED from India, Mittal also stressed that e-retail success is “not as simple as it looks.”

“A lot of back end work has gone into this company over the last 3-4 years to make it very powerful. It’s about being a comprehensive service and delivery package and not just a web site.”

And Indian consumers look for value irrespective of the channel through which they buy. Hence constant benchmarking against all competitors takes place to compare prices and ensure value, he said.

E-grocery potential in India

With an estimated 1.27 billion people — and likely to overtake China by 2028 as the world’s most populous country — India also has lowest rate of meat consumption, highest rate of vegetarianism, and a growing affluent class keen to try new cuisines.

According to the Indian daily Business Standard, last year Randstad India – which pegged India as the world’s 6th biggest grocery market – estimated just 1% of the groceries Indians buy are online. By 2020, it expected that to grow to 2%, making India’s online grocery market worth around €9 billion.

Indian households tend to buy fruit and vegetables 2-3 times a week, and the same trend is seen on Bigbasket.

Mittal said e-commerce facilitates insight into consumer buying patterns and allows the offering to be tailored accordingly, for instance running a promo on apples to all mango customers in the off-season (July).

Expansion into ready-to-cook food

The online retailer sells other grocery items apart from food, such as personal hygiene products, but until now, sales of fruit and vegetables have hovered around 14-16% of its total value sales, Mittal said.

However, having built a solid customer base, it now plans to increase its assortment further with many other food products including an imported and gourmet range.

According to recent reports, BigBasket is also set to offer more organic fruit and vegetables and plans to start selling gourmet salads and ready-to-cook meals – initially Thai, Mexican and Italian dishes – that include freshly cut vegetables and other ingredients, and recipes. This it has launched under the brand ‘Happy chef’ – a la Blue Apron.

Technology aids forecasting

Getting supply right is the key to BigBasket’s success, Mittal said. ”We have used a lot of technology for forecasting demand and use a dynamic model to plan capacity and the availability of vehicles.”

“Historical data has limited scope to assist demand forecasting in perishables, especially when the growth is so rapid and there are multiple variables.”

Big Basket has developed backward linkages with growers and buys directly from growers wherever possible, giving it better control of quality and enabling delivery of fresher produce by reducing time between harvest and consumption.

Direct sourcing preferred

BigBasket is currently located in six cities – Bangalore, Hyderabad, Mumbai, Pune, Chennai and Delhi – and tries to source what it needs in the vicinity of each.

By the end of this financial year, it will have opened 50 more locations, all in clusters with 5-6 cities around six central locations typically with one central warehouse.

BigBasket has no contracts with growers as yet, but is setting up collection centres to source directly from multiple farmers. It plans to establish linkages to bring safe food to the table with complete traceability, having already set up four such centres in southern India.

“We are currently a very small player with respect to total production in an area. So typically when we go into source areas, there are multiple farmers who can supply us. We create an enabling environment for the farmer to bring his produce to us soon after harvest and provide him the transparency of price and weighment. We have also initiated a pilot to provide extension services to the farmers through our field agronomists.”

BigBasket may also draw on wholesale markets to fill any gaps but prefers not to, Mittal said, because the produce is a step further from harvest, therefore less fresh and more expensive. “Quality and freshness are the driving force rather than price and margin.”

Chance for exporters to build brands

In terms of opportunities to export into India, it is a matter of creating differentiation, which so far has been very limited. BigBasket is looking to stand apart by bringing in different products and varieties, such as seedless watermelon, wider variety of pears and apples, exotic fruit, etc. (Few vegetables are imported by India, mainly due to shelf life reasons.)

Mittal stressed he sees a big – and so far largely untapped – potential for foreign suppliers to harness e-commerce to build their brands.

Most imports into India are channelled through traders and conventional retail channel. Growers/shippers don’t have much opportunity to build their brands because they don’t have much control over distribution channels, as well as other marketing elements. BigBasket, in contrast, can package, display and deliver its imported apples under a brand, for instance.

“It’s a big opportunity to build a brand in India, where ecommerce is still in a very infantile stage but set to expand rapidly,” he said, stressing e-commerce’s power to communicate directly to consumers.

(BigBasket is also said to be looking at launching a data analysis business to offer information on customer trends related to brands.)

Also on imports, Mittal said produce should adhere to global food safety and quality standards but trade with India is “not as tricky” as with the EU and US.

No questions asked returns

BigBasket’s customers mostly order by noon for same day delivery or choose a convenient slot among four options the next day. Insulated boxes are used to maintain the cold chain for temperature sensitive products such as mushrooms.

Its recent acquisition of a a hyperlocal food delivery startup in Bangalore will be act as a springboard to compete with rivals offering hyper-rapid delivery.

Mittal said customers can return produce at the time of delivery if for any reason they don’t like it. The return rate for fresh fruit and vegetables is about 0.5% and the most common reason is a problem with quality caused by transit damage.

Analysis of complaints has led to service improvements, such as in the case of customers finding worms in their cauliflower. Now the company has introduced florets, thus solving the worm problem “and adding value.”

Another big source of complaints was fruit being delivered semi-ripe. Thus, in March, BigBasket set up a ‘freshometer’ – for bananas, mangoes and papayas – on its sales page so consumers know when to eat them. Mittal said this is important because BigBasket tends to ship these fruit to consumers at the semi-ripe stage – to reduce transit damage – so consumers need to know what to expect and when to consumer for best results.

Customers expect Big Basket to be ‘greener’

Mittal said customers’ increasingly expect Big Basket to be environmentally friendly, but e-grocery has its pros and cons in this regard.

On the one hand, all its produce must be pre-packed for home deliveries and till recently only plastic was used. But unlike on retail store shelves, having transparent packaging is not a necessity for home deliveries, so Big Basket is now trying to increase its use of more eco-friendly packaging, such as paper and cardboard boxes. “For example, this season all mangoes were shipped in cardboard boxes,” Mittal said.

BigBasket.com

JB

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Prophet tracing fresh produce around the globe

Prophet is a leading designer and provider of supply-chain software for the food and horticultural sectors, with extensive expertise in fresh and chilled horticultural products, and was an official partner and sponsor at the show.

“Traceability is now expected by retailers, as opposed to something that’s nice to have,” Prophet customer relations director Paul Seekins told ED at the London Produce Show.

Prophet is a leading designer and provider of supply-chain software for the food and horticultural sectors, with extensive expertise in fresh and chilled horticultural products, and was an official partner and sponsor at the show.

Seekins said one of the competitive advantages of Prophet’s software is batch control.

“A batch can be as big or as small as you want it to be – it can be a ship, a truck or even down to a pallet – it gets a unique number no matter where it goes, if split down, packed, wasted or marketed, whatever, the identify of that batch goes with the product.

“It can end up on the shelf as something completely different but we can trace back to that raw product, who supplied it and potentially which field or tunnel it was grown in, depending on the requirements of that particular supply chain.”

Traceability is now much higher on the agenda for retailers and suppliers, Seekins said. In the US, fresh produce food scares – where, for example, people have died from food poisoning linked to eating melons – has highlighted the need for much higher levels of traceability.

“Because not only do you need to know that you have an issue now, you also need to know precisely who else has had that particular batch in order to be proactive and do a proper recall, without scaremongering everybody who might have ever bought something from you.”

“We specialise in fresh produce and therefore we deal with all kinds of it – everything here at the show is a commodity that is being transacted on our system somewhere in the world,” he said.

Prophet: http://www.prophet.co.uk/

London Produce Show: http://londonproduceshow.co.uk/

JB

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How Australia could sell more cucumber, cauliflower and other veg

Cucumber

Emphasise that vegetables like carrots and cucumbers make ideal raw, healthy snacks that can be eaten on the go.

And for other vegetables, highlight the benefits they bring to a meal – like the taste and nutrition of celery, or the variety that pumpkin adds.

These are among tips recently shared by the Australian horticultural body Ausveg, drawing on Nielsen Homescan data.

In a press release this month, Ausveg said Nielsen’s market research identified multi-million dollar opportunities for the Australian vegetable industry via areas with potential for growing vegetable consumption or that could benefit from better product positioning.

For instance, encouraging cucumber-buying households to buy cucumber as frequently as they did a year ago could achieve another (AUD) $4.8 million in sales value, Ausveg spokesperson Kurt Hermann said.

“In some instances, the industry could capitalise on already-increasing sales value – for example, we’ve seen an increase in the value of cauliflower sales on last year, and Nielsen have found an opportunity to gain a further $1.3 million in the senior couples demographic,” he said.

Read the release here.
Cucumber image: by Mgmoscatello (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons
 

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M&S still growing ahead of market in food

In its latest annual report, the UK retail chain said despite the most competitive food market of recent years, it delivered like-for-like growth in every quarter and maintained its margin.

M&S says 2014/15 was an outstanding year for its food business “in a sector that continues to go through profound change.”

In its latest annual report, the UK retail chain said despite the most competitive food market of recent years, it delivered like-for-like growth in every quarter and maintained its margin. “We have a clear and distinct offering and our growth plans look clear and achievable,” it said.

Screenshot 2015-07-13 at 20.30.44.png

M&S has two divisions: Food, which accounts for 57% of its turnover, and General Merchandise, which accounts for the remaining 43%. Overall, it has 33 million customers through its 852 UK stores and e-commerce platform. Worldwide, M&S has 480 wholly-owned, jointly-owned or franchised stores in 59 territories across Europe, Asia and the Middle East. “Our International business now includes a fast-growing standalone Food operation, meaning that more people around the world can enjoy our delicious, innovative food products,” it said.

M&S said innovation remains its core strength as a speciality retailer. “In Food, we showed that we are at the forefront of discovery and creativity,” it said.

Expansion of convenience format: Simply Food

M&S said it opened 67 new stores during the year. Of these, 62 were its Simply Food convenience store format, taking its total to 504. It said franchise partners play a key role in this growth and in March it opened its 200th Simply Food store through a partnership with BP.

“We expect Food space to increase by 4.5% in 2015/16, again driven by growth in Simply Food store numbers,” the chain said in its report.

“The Simply Food format plays into evolving shopping habits. People are shopping more regularly and more locally, meaning that our convenience format is one of our key differentiating factors.”

M&S said it has “a strong pipeline with the fastest Food store opening programme planned in M&S’s history.”

“The UK food market will remain challenging but we are well positioned with a store format that caters for how shopping habits are changing.” 

source: M&S