ABSTRACT

The first wealth is health, is a statement which describes the importance of health.
Now-a-days people are lagging in good health because of not eating healthy food
products. The healthy consciousness made the public to move for organic products,
which will be cultivated without the use of harmful fertilizers and pesticides. Organic
food consumption has become the need of the hour to strengthen the life span of the
people.

Key words: Organic food, green products, environment friendly products, organic
farming, etc
 ABOUT THE COMPANY
_1 line_. It is a chain of retail stores focused in gourmet food. It is headquartered
in Mumbai and has multiple stores in various cities like Mumbai, Bangaluru, Pune
and Kolkata, with a diverse product portfolio.

Nature’s Basket is India’s pioneering food destination present through physical retail
stores, online portal and a mobile application. Our footprint currently extends to over
36 neighbourhood convenience stores in Mumbai, Pune and Bangalore with a diverse
product portfolio ranging from fresh fruits and vegetables, fish and meat, artisanal
breads, FMCG and staples.
Our aim is to redefine India’s freshest and finest food experience for our customers.
Be it the freshest fruits & vegetables, the finest meats, wide array of cheese,
irresistible bakery products and more, for us, our customers’ needs come first and to
serve them better and offer the best in terms of quality, benefits, flavour and taste we
have grown and nurtured our own brands over the years. Healthy Alternatives,
L’Exclusif and Nature’s are our range of own brands, each providing a distinct
offering to cater to the discerning palate of the Indian consumer.
Nature’s Basket which was earlier a part of Godrej Group has been acquired by RP
Sanjiv Goenka Group’s retail flagship Spencer’s Retail in May 2019.

OUR VISION

To be India’s dominant and pioneering omni-channel, gourmet retailer.

 Redefining India’s freshest and finest food experience by 2020
 To expand our footprint across metro & tier-I cities with our stores and to all
India with our E/M-commerce service
 To provide a brighter customer experience with an assortment of finest local
and international foods and highest level of service
 To continue to set benchmarks in gourmet food retailing

PURPOSE

To spread the joy of food

QUALITY STANDARDS

Nature's Basket Quality Policy

Quality is a word synonymous with Godrej and we at Godrej Nature's Basket take
pride in our stringent quality standards. We go to great lengths and take the utmost
care and precaution to ensure that each day our customers get nothing but the very
best across all our products, services & interactions. Here are a few quality standards
that we practice at Godrej Nature's Basket.

Only A+ Quality Levels

When you walk into a Godrej Nature's Basket store you can be sure that you will get
the best quality level of fresh produce and bakery products in the city. Our teams take
great pains to locate and source only the finest available produce in every fruit and
vegetable. Our bakery products too are developed especially as per our stringiest
standards.

Everyday Freshness
All fresh produce and bakery products retailed at our stores are procured on a daily
basis. These are delivered every morning to the stores. Stale and old produce of the
previous days is discarded or sent back to be resold through other channels. This
ensures that Natures Basket consumers always get to choose from a wide variety of
the freshest produce & bakery products.

Appropriate Care In Storage

We store our products as per recommended conditions and ideal temperatures. We do
not switch off our Freezers, Chillers or other refrigeration equipment at night. This is
to ensure that temperature sensitive products are stored at correct temperatures all
through. We switch on exhaust fans at night to adequate ensure air circulation for
ambient products. Even though our store running costs are higher, we believe that this
is a small price to pay to ensure 100% fit for consumption products at all times.

Only High Quality Vendors

We only deal with suppliers and vendors who trade ethically. We do not deal with the
grey market or with vendors who have a reputation to deal in products by abusing and
altering sell by dates. In the unlikely event that any of our suppliers is caught
tampering with sell by dates, we penalize them appropriately and their supply
contracts to our stores are terminated.

Exhaustive Stock Checks

We thoroughly check all our branded products for expiry dates each month and
segregate those products that are close to expiry. These products are either sent back
to vendors or discarded completely. Products that are sent back to vendors are usually
re-sold through other channels by independent retail stores.

Expert Care (Management)

All our store representatives compulsorily wear hand gloves and hairnet while
handling food. The store and all fixtures are sanitized at regular intervals. Food
storage and display areas are cleaned with food grade cleaners as per prefixed
schedules.

Return Policy
In the unlikely event that the products purchased from us are expired or spoilt when
purchased, we would be happy to replace or exchange the foods so purchased or
refund the money to the customer.
CONCLUSION

Health plays a vital role in all our lives without which no action can be performed.
Especially, young generation people have addicted to junk food than the healthy one,
and falls ill often as there is no stamina to challenge the health issues. This is the
situation where organic food products which are grown with harmony in nature and
with no dangerous pesticides, came into real picture. This study has concluded that
the consumption of organic food products will lead us to have a healthy life and also
to prevent environment pollution.
PROJECT REPLENISHMENT

Satisfied and delighted customers are key to any business success. Supply chain plays
a key role in assisting store teams to fulfill customer needs and delight them. Rightly
functioning supply chain with strong customer centricity brings competitive
differentiation to fresh and ambient food retail business.

Nature’s Basket has become well-known for offering international product ranges, but
there were opportunities for improvement on customer experience from the standpoint
of consistency in availability. This at times led to customer dissonance and some
frustration among store teams. When we deep dived, we observed this happened due
to manual processes which were inconsistent, time consuming from indenting and
replenishment and had weaker controls. It as well led to higher wastages, adversely
impacting operational efficiency and profitability.

Over the last 20 months, our supply chain team led the defining & implementation of
various process frameworks, replenishment models for fresh and ambient categories
in partnership with category and operations colleagues and developing sustainable
supplier relationships. This achieved shared business success on three clear focus
areas:

 Strong customer centricity by achieving consistently high availability

 Service organization mindset to support stores, ensuring support from vendors
 Enhance efficiency in supply chain through better optimizations and process
standardizations.

Significant improvement was attained in stock availability of fresh and ambient

categories which positively impacted customer NPS score on availability to 65 from
25. HF (High frequency) customers as well improved to 55% from earlier 44%.

The goal of Godrej Natures’ Basket supply chain team is to ensure products are
available at the convenience of the shopper in the most efficient manner. This want is
accentuated due to large number of SKUs, seasonal / market variations, constant
changing customer needs, ever evolving supplier base and long lead times. The
processes are designed and driven with paramount focus on the need of internal and
external customer.

THIS JOURNEY TO SUCCESS WAS NOT EASY

Well, the major pain point of the stores was inconsistent availability of products,
leading to customer dissonance. Supply chain function addressed it by creating a
roadmap with time-bound milestones in alignment with other business functions
factoring business priorities.

The team started approaching the delivery on this metric in a phased manner - one
category after another. It all started with fresh categories and progressed into ambient
categories over a period of 4-5 months. The results were inspiring and strong
reflection of aligned efforts:

 Built replenishment model for fresh categories to help stores order accurately
and ensure consistent abundance of produce on shelves.
 Fresh category fill rates improved to 90% from earlier levels of 65- 70% and
YoY sales growth in these categories were in the range of 30%+ (Bakery–
39%, F&V-46%, Meats–17%)
 Achieved substantial improvement in stock availability for ambient products.
Stock availability (> 3days) has reached 88 % from earlier 55%.
 DC to store fill rates (Service rate) improved to 88 % from earlier 65- 70%
levels
 Worked with tech/IT team to drive process through system and add scalability.

Built strong partnership with the category, operations and IT team to institutionalize

processes, which addressed current gaps and set the foundation for future scale.
Master data management processes to improve master data quality with defined SOP
on article-vendor listing and necessary guidelines.
Assortment Rationalization: Basis customer and internal feedback to have
consistent availability of merchandise basis the available shelf spaces and GMROF,
store level finite SKU count was defined. Ambient assortment being optimized from
9000 SKUs to current 3500 SKUs. This led to better stock management and consistent
availability. Simultaneously, assortment lock concept (Item budget) has been
introduced at category level to have effective control over inventory and consistent
shelf space optimization.

Cross-functional New Store Opening: Plans for the same were prepared with
function wise ownership, timelines, mapping overlaps and inter-dependencies. It
helped in pre-visibility of activities across function and timely stock connectivity at
the store. Successfully opened all new stores. We have opened in all 15 new sites over
last year.

The task force: The newly formed team at Nature’s Basket formulated and worked
towards the supply chain strategy supported by required organogram with a 3-year
road map with milestones to proactively contribute towards transformation journey of
refresh 2020 Vision. There have been two focus aspects:

Sustainability: The supply chain team brought critical systemic changes in SAP in

close collaboration with the IT team to make the replenishment processes sustainable
viz., article-vendor master updation in SAP, setting up automated PO expiry control
basis supplier lead times to push vendors for on-time delivery, scanning based goods
receiving in DC to check EAN mismatches at source, DC-store replenishment in SAP
to have system visibility of stock replenishment and picking efficiency at DC. The
team is working to build further system controls and integrate the process into SAP to
manage future scale with profitability.

Scalability: The team worked to envision a future-ready supply chain by bringing

about structural changes in the supply chain to efficiently manage the scale of
increasing the footprint of stores through key centralization project, delivered through
smart warehousing. This entailed moving more merchandise through the warehouse,
achieving the benefit of consolidation, economies of scale at the back-end, and
providing better operational efficiency to store operations with optimized inventory
and additional margin or the business leading to COGS improvement.

THE TRANSFORMATION JOURNEY

The transformation journey was challenging as it entailed a shift of value proposition

change from a being a destination to a neighbourhood store and from premium food to
daily delight store. To translate that strategy across the entire organization and getting
it executed required a lot of change management. We have been able to percolate that
change right from top to down as well built right capabilities in terms of people &
processes in the organization. Supply chain function was actually originated from that
strategy. It was originated as one of the strategic pillars in this transformative journey.
Our transformation journey to redefine India’s freshest and finest food experience
rests on four key pillars:

 Excel in Sourcing & serving the freshest and the finest.

 Stores come first, always & every time
 Relentless in achieving profitable growth
 Creating a lasting experience for all customers, employees, suppliers and
communities

We began our journey at Nature’s Basket in January 2017 with myself being a single
individual to an entire function starting from defining strategy, road map with
milestones, organizational structure, integration of existing talent, hiring specialized
talent, developing supplier relationships and setting up processes. We were clear that
we wanted to build a company, which was extremely strong with processes. This is a
very execution focused business, and to have high class execution, a company needs
to be built on processes and drive those processes through the right set of people and
technology.
We did overall assortment rationalization because in an average 5k-6k SFT
neighbourhood store, you will not be able to keep more than 5000 SKUs factoring
supplier fill rates but our assortment used to be in the range of 12,000. There were two
drawbacks to manage such a huge SKU. First of all, we were not able to deliver a
consistent experience to our customers because one day we would have one product
and another day a new product came on the shelf. In such cases, consistent SKU
availability goes for a toss and the second is your inventory holding. Earlier our
damage & expiry used to be in the range of 6-8%, which has now come down to
2.5%. This is even when our fresh contribution to overall business is more than 50%.

Huge credit goes to our category and sourcing colleagues in improving the sourcing
for Nature’s Basket. Our sourcing teams did great work in identifying the right origin,
right partners and consolidators who perfectly understand our requirements and
quality parameters. We are trying to go deeper into the back-end and upstream to
avoid undue consolidators in between. For F&V, around 35%-40% of sourcing
happens from farmers based in Manchar and Nashik farms. We have tied up with
farmers so that the benefits percolate right to the bottom of the pyramid. Two months
back, the company hosted farmers’ conference at a place where they grow. It helps us
empower them, educate them of our requirements and in turn our customers get what
they want and farmers get much more deserving prices for their goods.

Network clustering within each region: Once the cluster is finalized with a set of
stores, the SKU count per cluster is finalized – only that much count is allowed into
the store because it has to offer effective revenue to the company against the space
utilized. When we keep these counts constant and follow one-in one-out it helps us
maintain perfect balance between key sellers, new product introductions and
continually improving customer experience. That was a big process change that we
had to bring in along with maintaining consistent availability. We also brought in a lot
of change in terms of SAP and Master Data Management system because the idea is
to not just list the product but to ensure that once you’ve listed that product, it is
consistently available in the market. We have to be very accurate in demand-supply
planning to ensure that ordering accuracy is better. We are also working on
continually improving engagement with our suppliers so that our fill rates are better.
We have started tracking the top suppliers and are continuously discussing with them
to enhance on time deliveries. With the rationalized assortment, right ordering, and
better supplier engagement, our fill rates have enhanced significantly. Earlier our fill
rates used to be 45—48%, now it has gone up to 75%+. By ordering efficiently, the
availability of the stock on the shelf has improved hugely. When we started, we had
54—58% availability of stocks, today we have been able to take that figure to 88%.
At any store, the stock has to be in a minimum quantity, which is sufficient for three
days of sale. That’s a significant business shift.

Adoption of centralization strategy and augmenting it by a SMART

warehouse: We are in growth phase, adding 2-3 stores every month. Nature’s basket
is already a network of approx. 40 stores with further inorganic addition of 15 stores
in the Goa market through a JV. Currently we are focused on organic growth in 3
geographies – Mumbai, Pune and Bangalore.

Momentum as we scale up: Once, as a management team, we aligned on clustered

centralization as strategy to grow, we were clearly committed to invest in our backend
capabilities of warehousing and distribution to not only manage current volumes
better but more importantly to offer a back-end which pro-actively support the future
scale in an efficient manner. For my suppliers to reach out to each store and for us to
manage ordering of each store, requires a lot of efforts. I believe it’s not a scalable
model. We are trying to build increased centralization or indirect flow share up to
70% levels. This will be highly beneficial to stores and enable them in efficient front
end operations. Stock levels at stores will reduce due to reduced lead times, no MOQ
condition and aggregation of inventory at higher node. Store staff and their time used
in goods receiving will reduce significantly because now stores don’t have to manage
40-45 deliveries from suppliers a day. With higher centralization share stores will
have under 10 deliveries a day including a consolidated delivery.

A SMART WAREHOUSE IN BHIWANDI

We achieved an inflexion point in our transformation journey with the setting up of a

Smart Warehouse which not only de-bottlenecked our backend but also significantly
enhanced our warehousing and fulfillment capabilities. It’s equipped with state-of-
the-art infrastructure- flexible and scalable as well deep integration of technological
capabilities in each step of warehouse operations, including an integrated and
customized WMS capability with differentiation offered on two aspects (a.)
automated batch management based on FIFO (first in first out) and (b.) Paperless
operations. We had set an ambition to build a scalable supply chain by establishing a
smart warehouse- it entailed moving to a new premise – complaint and scalable for
space, layout, quality and infra standpoint as well involved on-boarding of a
professional 3PL with the right logistics and tech capabilities and having focus on
productivity and a service mindset.

Around Dec 2017, we had set an ambition to achieve the milestone and transition
journey from blueprint to results was achieved in record time of 7 months.

We created an exhaustive project plan covering all possible aspects across functions
and stakeholders with tentative timelines and kept a hawk eye focus across key
milestones and their delivery. This was a great case of end-to-end planning, with deep
focus, anticipation and execution abilities and accommodating any deviations well in
time to avoid any impact on final timeline. The entire journey had three key
milestones:

a. RFQ, evaluation, CSQ and LOI and site finalization

b. Defining IT landscape (WMS customization, WMS- SAP interface detailing

followed by WMS-SAP integration) – this was key as the entire benefit on
technological investment were to come from the quality of data handshake and data
movement being close to real time.

c. Greenfield set-up (site getting ready, Capex procurement & installation and finally
statutory compliances.

All of this required huge efforts and consistent attention from the team directly
working on the project, cross functional collaboration and coordination with external
parties. The overall experience was a demanding but quite a rewarding experience
when we were able to see the benefit it started delivering in terms of consistent
service levels to stores - 96.5%, On-time GRN – 94.2% GRN completed same day
and returns reduced to 0.9% from earlier 4.1%. The real time visibility and prompt
action helped us improve the quality and productivity of entire operations with
damage & expiry at WH coming under 0.6 % from 4% easier.

DEMAND & SUPPLY MANAGEMENT

For demand management, we consider quite a few historical parameters and certain
immediate future factors. We do demand planning basis past 90 days data of sale. We
also factor previous year sales during the forecasted period and then we do weightage
analysis and create a baseline with exponential smoothing. Once we have a baseline
ready, we work based on our annual operating plan and check on variances and do
consensus planning with stakeholders and finally arrive at demand plan. We intend to
start an automated way of sharing a 13-week rolling plan with our key suppliers so
that they are also aware in terms of what they need to keep. That’s the way complete
demand planning works.

In terms of supply planning, since we have two modes – direct store delivery (DSD)
and indirect flow share (DC). We have different replenishment logic for both. For
DSD, we can’t keep inventory holding more than 7-15 days depending on SKU
characteristics as stores don’t have much space. But at DC, we keep an inventory of
25-30 days depending on the SKU if it’s a flow through or put-away. We are
investing heavily into implementing new age technology solutions such as SAP
driven auto replenishment. Going ahead, the entire supply-demand planning will be
managed by SAP. We expect this to be the next game changer for this year.

OMNI OPPORTUNITY

Omni-channel adds a variety to a company’s offline or physical retail stores. At

physical stores, we just need to ensure that the products are available on the shelf but
the moment you go online, you are actually offering an assortment, which is much
wider than what you can keep on the shelf as the store space is always going to be
limited and the product portfolio will keep on growing from time to time. The
challenge is to manage assortment along with the customer service level that you have
promised. Currently around 15% of Nature’s Basket business gets generated from its
online channel, which is a good contribution. We have identified certain specific
catchments or specific stores to ensure home delivery of online orders. Going
forward, we have a plan in place to develop certain dark stores and if the volumes
increase further, we might open a consolidation center as well. We have around 5
delivery slots throughout the day to service our customers. The key lies in executing
better fulfillment, last mile delivery seamlessly in terms of route planning, real-time
visibility and customer experience. __IMP_

REDUCING REVERSE LOGISTICS INSTANCE

We have invested in online processes and in back-end technology to ensure that the
product reaches the customer in optimum condition of quality and temperature. When
we started, we took a few months to set up the right processes. You need to appreciate
the fact that we are not retailing a smartphone with consistent features rather we are
serving the demand which is perishable in nature and same SKU has different sizes
and complexities are high. Parameters such as right product sourcing, post-harvest
handling, storage and handling, managing supplier relationship, sorting and grading
before dispatch to stores, maintaining quality norms at each step of supply chain and
finally how the order is getting picked and dispatched from the store till it reaches the
customer, if you are able to maintain quality guidelines across then you are able to
deliver that quality to customers. It calls for a lot of investment in terms of processes,
and as you scale up, you have to ensure that processes start to get integrated with
technology but very critical is getting the right set of people. In a nutshell, if
processes, technology and right people are balanced well, then automatically you are
able to deliver a consistent experience to your customers and that’s what precisely we
have done in the Nature’s Basket journey.

Reverse logistics remains a big part of online business and specially in the fresh
supply chain because the moment you have multiple handlings, perishability of the
product goes significantly higher and if the product is being handed beyond three or
four times, the product usage gets limited. So, we try to ensure minimum touches. We
have returns of roughly 6% in online and home delivery and we are aiming to bring it
down to 2.5 – 3%. The challenges are definitely there because the higher the number
of returns, the higher is probability of damage and expiry.
3PLS – A CRITICAL LINK

The moment you have any considerable warehousing and distribution operations for a
retail business then the right 3PL plays a critical and differentiating role. Smart
warehouse that Nature’s Basket has set up in Mumbai is run by a professional and
tech oriented 3PL. The most important parameters on which it evaluates 3PLs
include:

 3PLs must possess a growth as well as service mindset and serve the company
that has invested in their logistics capabilities by keeping the service levels
top-notch.
 They need to have strong processes in place with technology at their core.
 The team must take customer feedback very seriously and continually strive to
innovate further.
 They need to be thoroughly professional in their approach.

We have two warehouses – Mumbai & Bangalore. Both are operated by different
3PLs. Mumbai is a bigger operation with different requirements vis-à-vis Bangalore.
3PL engagements are long-term starting with 3-year contracts. We are quite optimistic
from the way entire 3PL industry is shaping up given the shift in the nature of
fulfillment and distribution driven by customer expectations & order characteristics
and wave of new technology innovation like collaborative robotics, augmented
reality, autonomous vehicles, sensor technology and IoT.

‘GNB REFRESH 2020’

Godrej Nature’s Basket has embarked on a journey of strategic transformation titled

‘GNB Refresh 2020’. The business strategy outlines a clear roadmap for the business
to become India’s freshest and finest premium neighbourhood store and achieve its
target of 3x growth by FY20. GNB’s transformation journey entails consolidation and
sustainable profitable growth that will materialize over the next 3 to 5 years. The aim
is to have a robust and thoughtful omnichannel expansion in the medium term.
We aim to provide a brighter customer experience with an assortment of finest local
and international foods and highest level of service; and to continue to set benchmarks
in gourmet food retailing.