yale case 10-036 november 10, 2010

FieldFresh Foods
Could Baby Corn Create the Platform for a Big Agribusiness?
Mukesh Pandey1
K Sudhir 2
Raman Ahuja3
Deepali Tewari 4

On one of those pleasant cold February mornings, Sanjay Nandrajog, the Chief Executive Officer
of FieldFresh Foods Private Limited, pondered the future. He had just returned to Delhi from the
company’s Agri Centre of Excellence (ACE), an R&D farm where he celebrated the dispatch of
500 metric tons of fresh baby corn to Europe. The top management team at FieldFresh was
justifiably proud of this achievement as it had required tremendous effort to become an important
exporter of Indian produce.

FieldFresh had been incorporated in 2004 with the vision of linking Indian fields to the world.
India certainly had a number of natural advantages in terms of climate, acres in production, and
labor force to become a major power in agriculture. However, a poor infrastructure and an
antiquated regulatory regime had stymied efforts to unleash India’s promise.

During its initial years of operation, FieldFresh had found out how difficult it was to build a
supply chain for produce in India. The company had been through a phase of experimentation
where it tried different sourcing models, logistical options, and crops. After less than stellar
results, the company had decided to concentrate on one crop, baby corn. Over the next few years,
the FieldFresh team adapted logistics to overcome crowded and crumbling roads, irregular power
supply, and bureaucratic procedures. The company worked with thousands of farmers to gain
their trust. By 2010, the FieldFresh team had been able to create an efficient supply chain for baby
corn across Punjab and Maharashtra at all levels—input delivery, credit, irrigation, timely
scientific advice, production as per specifications of European market, careful harvesting,
improved produce handling, clean and fast transportation, proper management of cold chain
storage environment, gaining safety certification, as well as grading, packaging, and labeling to
meet domestic and international standards.

But success brought with it the expectation of growth. Nandrajog had a number of questions to
answer before he could articulate a plan. Should FieldFresh grow opportunistically into different
foreign markets as retailers and wholesalers demanded different products for their respective
markets? Should FieldFresh continue to focus on baby corn, whose supply chain-market linkages
it had perfected, or should the company expand the range of products it would supply? Should
FieldFresh continue to maintain its primary export focus, or shift relative emphasis to the
growing domestic market?
A Second Green Revolution?
FieldFresh’s plunge into agriculture came at a time that many in India were calling for the initiation of a
second green revolution. The first green revolution had begun in the 1960s and allowed India to go from
frequent famines to food self sufficiency. Dramatic increases in wheat and rice production followed the
introduction of HYVS (High Yielding Varieties of Seeds), fertilizers, and pesticides.

However, by the start of the 2000s, it had become clear that were side effects to this transformation.
Prolonged use of chemicals had depleted soil fertility and hurt the environment. Yields were falling and
the once thrifty farmer had become a profligate user of power and water.

Also, it was evident that the benefits of the green revolution had not spread evenly in society. Cultivation
of staples was capital intensive and therefore disproportionately benefitted large farmers. And yet, India
was a land of small farms, of peasants cultivating their ancestral lands mainly by family labor and draft
animals. Most farmers cultivated less than one hectare of land (see Exhibit 1). Slow and inconsistent
growth in agriculture had proved a major obstacle to further GDP growth. Nearly 700 million Indians
depend on agriculture for their livelihood, yet the sector accounts for just 18 percent of the GDP.

Various government agencies and private sector companies had argued that diversification into growing
vegetables and fruits – horticulture – could spark a second green revolution, benefitting both small farms
and the economy itself. Labor-intensive horticulture could drive incomes for small farmers up by as much
as 30 to 40 percent over traditional crops and provide opportunities for the use of surplus family labor.
Horticulture could also help transition agriculture from a supply-driven to a demand-led market-oriented
sector.5

India’s long growing-season, diverse soil and climatic conditions comprising several agri-ecological
regions provide ample opportunity to grow a variety of horticulture crops (see Exhibits 2 and 3). In 2009,
India grew 1,975 million metric tons of fruits and vegetables in an area of 14.08 million hectares (see
Exhibits 4 and 5). Although India was the world’s second largest grower of fruits and vegetables (behind
only China), it was also among the most inefficient (see Exhibits 6 and 7). An estimated 25 to 40 percent
of produce worth $12 billion (Rs 50,400 crore) rotted every year even before it reached consumers.6
Fruits and vegetable processing in India was a mere 1.7% of agricultural production as compared to 60 to
70 percent in USA.7 Exports were small compared to production. For example, India grew 65 percent and
11 percent of world’s mango and banana respectively, ranking first in the cultivation of both crops, yet
India’s exports of the two crops were negligible (see Exhibits 8, 9, 10, 11).

Major constraints on cultivation and marketing of fresh fruits and vegetables in India included the lack of
good quality of seeds, inadequate irrigation, lack of soil testing facilities and extension staff, inefficiency in
pest management, lack of availability of adequate and timely credit, high cost of production, lack of
market information, huge post-harvest losses, lack of roads, inadequate cold storage space, and high
transportation costs.8 Some of these issues were accentuated for small and marginal farmers, as they had
limited investment capabilities and low cushions against loss.

While India suffered from supply chain problems, other countries had discovered that fruits and
vegetables could be a lucrative export (see Exhibits 12, 13, 14 and 15). The USA had long been a major
exporter. In addition, two decades of market growth had provided significant trade opportunities for a
number of developing countries. The largest increase in production for both fruits and vegetables had
been in Asia and South America, especially in China, India, Brazil, and Chile. China accounted for 34
percent of world output and had a huge production base with efficient supply chains and infrastructure
facilities. Countries like Kenya, South Africa, Cô te d’Ivoire, Uganda or Zimbabwe also had gained export
earnings and had in some cases even emerged as market leaders for products like pineapple, French beans,
cut flowers, papayas and mangoes.

2 fieldfresh
Regulatory hurdles to horticulture

Another problem with India’s food distribution system was a legacy of the 1940s and ‘ 50s, when chronic
food shortages led the government to crack down on the hoarding of produce by unscrupulous cartels.
The government introduced Minimum Support Prices (MSP) that assured farmers who grew wheat, rice,
and sugarcane a guaranteed price. The Indian APMC (Agricultural Products Marketing Committee) Act
of 1960 further required all agricultural products to be sold only in government-regulated markets called
mandis (pronounced mundees).

Over the long run, the MSP had acted as a strong disincentive for crop diversification. Many analysts
believed that if pricing of rice and wheat was left to the market forces, land would be released to meet the
growing demand for non-cereal crops.9

For their part, APMC markets have led to layer upon layer of intermediaries in the sale of vegetables and
fruits, which typically provide little service in areas such as price discovery, grading, or inspection. A
typical Indian fresh fruit and vegetables supply chain that goes through government-regulated APMC
contained many steps:

Farmers → Consolidators/Local Traders → Commission Agents → Retailers → Consumers

Under the APMC system, farmers were legally barred from entering into contracts with buyers such as
retailers. Unorganized small farmers with little market power had to sell to local traders (village
merchants, itinerant traders, or pre-harvest contractors). Farmers often had to wait months to be paid
and routinely went into debt to the very traders who bought their produce. (These traders often were the
same people who sold farmers seeds and fertilizers for the next crop.) Local traders then sold to an APMC
wholesale market, where a commission agent deducted his charges and sold the produce to retailers.
Many times, there was more than one commission agent in the chain. These middlemen charged
exorbitant margins in an arbitrary manner for the services they rendered. The commission agents who
distributed the produce had no incentive for quality. Moreover, the wholesale markets were poorly
designed and congested.10 Marketing through traditional means was characterized by poor handling
during loading, unloading and transport.11

In turn, the consumer had no choice but to buy what was available. Customers and food processors found
that horticulture crops varied in terms of quality, quantity, and specifications. Commenting on the long
chain of intermediaries between farmers and consumers, the Prime Minister of India Dr. Manmohan
Singh said, “The Government had on many occasions drawn attention to the wide difference between the
retail and the farm gate prices and there is the evidence that retail prices have shot up more than wholesale
prices. We need therefore greater competition and therefore need to take a firm view on opening up the
retail trade.”

The Ministry of Agriculture in India formulated a model APMC Act in 2003, and advised states to
implement it. Under provisions of the new Act, farmers would no longer be compelled to sell in
government markets and would be able to contract with private players, food chains and retailers.

However given India’s federal structure, each state controlled the marketing of agricultural products
within its border and was governed by its respective state APMC Acts. So while a number of states had
implemented the new law (see Exhibit 16), it was not clear how uniformly or completely the new
structure would be implemented across the country, nor to what extent the act would end the existing
system of middlemen.

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FieldFresh
Bharti Enterprises had partnered with the Rothschild family to incorporate FieldFresh Foods Pvt. Ltd. in
2004. Given the structural obstacles in India’s agricultural sector, corporate India had traditionally not
seen agriculture as a big business opportunity. However, Bharti Enterprises was used to pioneering high
impact projects in underdeveloped sectors of the Indian economy. 

Founded in 1976 by Sunil Bharti Mittal, Bharti Enterprises was becoming one of India’s leading business
groups. The business group had seen its greatest success with Bharti Airtel, a mobile phone company that
launched in 1995. In the space of a decade, Bharti Airtel had become India’s leading telecom company and
one of the top five wireless operators in the world. Besides telecom, Bharti Enterprises promoted
businesses in a variety of areas, including financial services, retail, and real estate. The business group
boasted operations in over 21 countries.

Bharti’s strategy was to create businesses that transformed entire sectors of the Indian economy. From
2005-2010, the group had diversified into a number of emerging business areas such as retail stores in
multiple formats, as well as establishing large-scale cash and carry stores (with Wal-Mart) to serve
institutional customers and other retailers. The group had growing interests in other areas such as
telecom software, real estate, training and capacity building, and distribution of telecom/IT products.

Bharti prided itself on forging strong partnerships with other multinational companies. Over the years,
Bharti had formed alliances with Singtel, IBM, Ericsson, Nokia Siemens, and Alcatel-Lucent in telecom;
Wal-Mart in wholesale retail; and the AXA Group in financial services.

Bharti also had distinguished itself through various philanthropic enterprises. The Bharti Foundation
was set up in 2000 with a vision “to help underprivileged children and youth of our country realize their
potential.” Bharti Foundation founded and funded a number of primary and higher education programs.
Among other programs, the Foundation ran 237 Satya Bharti Primary Schools in Punjab, Rajasthan,
Haryana, Uttar Pradesh, and Tamil Nadu. These schools provided free quality education to over 30,000
students and had become the largest privately funded program in primary education in the country.

FieldFresh’s mission

The chairman of Bharti Enterprises, Sunil Mittal, articulated the rationale for founding FieldFresh: “The
underlying philosophy behind our FieldFresh operations is to link Indian farms to the world by creating
India’s first global outsourcing opportunity in fresh produce.”

FieldFresh research on European and US markets had led to the realization that there was potentially a
huge market for Indian fruits and vegetables. Moreover, India had enormous amounts of cultivable land,
abundance of labor, and plentiful sunshine. What was missing were things like efficient extension
services, cold chain facilities and freight infrastructure. Lady Lynn Forester de Rothschild, a Director of
FieldFresh Foods, summed up the business opportunity in 2004, “If Indian farmers became more efficient,
their farms would be far more profitable. Every 60th person in the world is an Indian farmer, but he
produces 1.8 tons a hectare, while an American farmer produces eight tons. China has 60 percent of
India’s arable land in use, but has 40 percent more agricultural produce.’’

When FieldFresh started operations, the product promise was that its fruits and vegetables would
conform to international quality standards. Developed markets required stringent quality and safety
standards. All horticultural produce, being perishable, needed extreme care at every stage to meet these
quality levels. The company believed that given the right inputs of capital, know-how, and market access,
Indian farmers should be able to meet international standards, though the company acknowledged that
meeting these standards would require a great deal of work. According to R.P.S. Dhaliwal, Head-ACE
Operations in Punjab, “Unless we train the farmers as per international benchmarks, exports become a
question mark. While the farmers grow very good vegetables for domestic consumption, clearly the global

4 fieldfresh
customer’s requirements are of a totally different variety for the same vegetable. A lot of work has to be
done for that.”

In India, low awareness and literacy levels among workmen and farmers made it difficult to ensure correct
hygiene practices. In addition, farmers had to ensure the proper use of chemicals and pesticides in order to
meet standards for the maximum residual limit (MRL) level of chemicals. The quality and process control
department at FieldFresh began building a robust Quality Management System to ensure compliance of
food laws and packaging requirements. These standards included Global GAP, BRC Food Safety
Standards and ISO:22000.

To kick start the process of bringing Indian crops to international standards as well as to build a high
quality farm extension team, FieldFresh, in 2004, began developing a 300-acre R&D farm in Ladhowal,
Ludhiana. The land was leased from the Punjab Government and rechristened the Agri Centre of
Excellence (ACE). Sited near the birthplace of the Mittals, ACE represented a high-profile commitment to
improving Indian agriculture. Besides the FieldFresh team, ACE could call on experts from the well-
respected Punjab Agriculture University (PAU) that adjoined the R&D farm.

Sourcing models

The operations team tried several sourcing models – leasing land and farming it under the company’s
control; contract farming; and even sourcing through intermediaries. (Corporate ownership of
agricultural land was not allowed and, depending on the state, individuals could not own more than 19 to
22 acres of cultivable land.)

In the case of leased farming, land was leased and staff deployed to manage the farms. Teams would show
up at appointed times and leave when the day was done. But the employee model proved incompatible
with the round-the-clock demands of agriculture. “By the time we discovered the difference between an
owner managed farm and company managed farm we were managing over 4000 acres of land!” said R.P.S
Dhaliwal.

Far more successful was the contract farming model. Instead of directly managing the land and taking on
the associated risks, FieldFresh provided local farmers with a written guarantee that the company would
purchase all the produce grown within specified quality and quantity parameters, and assured them of
sustained technical support. Teams of extension workers at FieldFresh met regularly with farmers and
shared the latest soil management techniques, better seeds and implements. After the harvest, FieldFresh
transferred the money directly into the farmer’s bank account within a week of delivery, thus building
further trust and transparency in the relationship. Anubhav Misra, FieldFresh’s head of domestic
purchasing, noted, “By moving in and taking over the supply chain in fresh fruits and vegetables,
FieldFresh is also breaking the stranglehold of middlemen and loan sharks who not only exploited the
farmers, but also routinely marked up prices by as much as 60 percent without actually adding any value.”

Direct contracts with farmers provided FieldFresh with other advantages. Working with intermediaries
whose role was aggregation, the company ran the risk of not knowing whether the produce complied with
safety standards. With contract farming, the company could trace produce to its source – traceability and
batch control being key elements of insuring standards compliance.

With thousands of small farms to oversee, FieldFresh also began experimenting with other methods of
supervising sourcing. In the state of Maharashtra, FieldFresh identified certain leading farmers who were
trained to manage a large part of the value chain. These “agri-entrepreneurs,” as FieldFresh calls them,
recruited and managed other small farmers and provided technical services such as crop demonstration
plots and crop advisory. Depending on the capacity of an agri-entrepreneur, FieldFresh provided soft
funding up to $200,000 to allow the agri-entrepreneur to build technical and physical capacity.

5 fieldfresh
Logistics

Given India’s infrastructure, the logistics of getting produce from the field to international markets
proved daunting. FieldFresh’s first export shipment in 2005 turned out to be a complete disaster. By the
time the air freighted consignment of mushroom and okra reached the Middle East, much of the produce
had rotted.

Over time, FieldFresh learned how to handle the logistical challenges in an extremely unpredictable
operating environment. Most important was the need for the construction of a consistent “cold chain” that
would allow produce to be properly refrigerated through its journey from the fields to the market (see
Exhibit 17). As an example of the temperature shocks that produce might experience, refrigerated trucks
maintained a temperature of 0 to 2 degrees Celsius. When produce reached the airport, the doors of the
truck would be opened, allowing hot air to enter the chamber. In just a couple of hours, this thermal
shock would deteriorate the vegetables. Then, the vegetables would go into a cold storage at the airport’s
perishable product handling center. Prior to the departure of the flight, the vegetables would be taken to
the tarmac, an open area, where they would again suffer thermal shock that could sometimes last for
several hours. On top of this, since passenger bags were priority, there would be no guarantee of
FieldFresh produce being loaded into the underbelly of the aircraft.

Bharti’s expertise in collaborating with the government came in handy. Knowing well that it would be
impossible to do everything on its own, FieldFresh Foods team worked with local authorities to get things
sorted out. The results were encouraging. Agencies like the Airports Authority of India set up modern
perishable centers (temperature controlled storage facilities) in Delhi and Amritsar, for instance. The
National Horticulture Board sanctioned budget expenditures to develop a permanent perishable center at
Amritsar airport in Punjab. Rakesh Bharti Mittal, Vice Chairman Bharti Enterprises & Chairman
FieldFresh Foods, noted, “India presents a great opportunity in horticulture. The opportunity lies in
rapidly enhancing farmer incomes through productivity increases, supply chain infrastructure and
collaboration with state and non-state players.”

Product experimentation

The early years at FieldFresh were full of experimentation, including trials of different products. Early on,
FieldFresh decided to focus on niche international markets in fruits and vegetables rather than grains, oils,
seeds, or other farm commodities. Working with its agricultural experts at ACE, the company tested a
variety of crops.

This experimentation showed that fruits could be problematic. The business exported a wide range of
fruits like Thomson seedless grapes, mangoes, pomegranates, and lychees. However, a number of
problems became apparent with these crops. First, orchard crops allowed for limited company
intervention, as farmers were scattered and the layout of the orchards did not allow producing large
volumes of high quality exportable products. In the case of grapes, the company relied upon existing
vineyards, which were at best erratic in complying with international standards of quality (berry size) and
pesticide residue limits imposed by EU/UK. In addition, there was a vibrant local market for many fruits
that interfered with developing a reliable supply chain for export.

The export market for Indian fruits was still nascent and prices fluctuated unpredictably. Where India
was exporting an accepted product, such as Thomson seedless grapes, the window of opportunity was
very limited – six to eight weeks starting in March. After that, Indian supplies ran the risk of overlapping
with supplies from Chile, the largest grape exporter.

Nonetheless, FieldFresh was determined to succeed. In 2008, the company became the third largest
Indian exporter of fresh grapes to EU/UK. The financial results, however, were not commensurate with
the efforts. That year, the whole industry made a loss, and FieldFresh was no different.

6 fieldfresh
Baby Corn

By 2007, as a result of difficulties with a variety of crops, FieldFresh decided to focus on a single product
and use that product to debug the entire value chain. In parallel to the venture in fruit, the FieldFresh
business team had investigated vegetable cultivation where the cropping cycle from seed to harvest could
be managed; not only from a quality perspective but also from the perspective of enhancing value capture
– both for the farmer and the company. Of the various vegetable crops, the team recommended focusing
on baby corn.

Baby corn was the ear of maize plant (Zea mays L.) harvested young, just after the silks have emerged and
before fertilization had taken place. The de-husked ears were eaten as a vegetable, whose delicate flavor
and crispiness were much in demand abroad. Baby corn is free from pesticide and its nutritional value is
comparable to cauliflower, cabbage, tomato, eggplant and cucumber. Farmers can grow three to four
crops a year. The by-products of baby corn, such as tassel, young husk, silk, and green stalk, can be used
as animal feed. Then, cattle manure can then be used to fertilize crops, enabling organic recycling through
the plant-animal chain.

Brokers and exporters were experienced in the international sourcing of baby corn, as a large percentage
of the baby corn in developed markets was grown abroad. Thailand dominated world baby corn exports.
While statistical information on baby corn production is limited because many producing countries either
neglected to report production or included it in sweet corn production, Thailand was estimated to account
for 80 percent of the world trade volume. During 2002 to 2004, Thailand exported fresh baby corn to
approximately 30 countries and preserved baby corn products to almost 100 countries. Other exporters of
baby corn included China, Kenya, Zimbabwe, and Zambia.

Major baby corn markets were in the UK and EU, the U.S., Malaysia, Taiwan, Japan and Australia, but
there was considerable variety between markets in terms of their preferences and distribution. Baby corn
was usually consumed as fresh; however, frozen and canned baby corn was also sold. The USA usually
imported fresh baby corn; however, baby corn was rarely sold in supermarkets, but was bought by high-
end restaurants. European countries imported fresh baby corn both in loose and pre-packed forms,
though the latter was more prevalent. The U.K. was the largest fresh baby corn market in the Europe,
which was distributed through retailers such as supermarkets. In the Middle East, Saudi Arabia was the
largest importer of canned baby corn. Some Asian countries like Japan and Malaysia also imported a lot of
canned baby corn.

FieldFresh ACE had started conducting crop trials on baby corn in August 2005. These trials took over
two years to complete, but succeeded in identifying the appropriate farming techniques for baby corn
cultivation. In addition to crop trials, the team also worked to outline the quality and certification
requirements of global retailers.

Along with scientists at Punjab Agriculture University, FieldFresh extension personnel invested
significant time in convincing farmers to grow baby corn and help make their operations meet the
international standards of quality. The extension teams sensitized farmers towards optimum use of
resources like water and minimizing the use of chemical fertilizers and pesticides. They also promoted
crop rotation and other progressive agricultural practices like inter-cropping with sugar cane and mint to
not only ensure proper soil and water management but also to enhance the return per acre. In addition,
the extension teams pointed out that since most of the farmers also have a dairy business, the fodder from
baby corn crop could bring a 5 to 10 percent better milk yield – both in terms of volume and fat content.
The total return from baby corn, therefore, reduced overall farming costs and brought Indian farms into
line with benchmark costs from Thailand.

The stringent Quality Management System (QMS) that FieldFresh had devised ensured that the
processes were in total control and could promptly be corrected should exceptions arise. Farmers were
provided with production plans so that they could identify areas and necessary resources for cultivation.

7 fieldfresh
The extension teams provided a schedule of nutrient application, pest prevention, harvesting and
transportation procedures called “Package of Practices” to each farmer to ensure the crop was free from
chemical or biological contamination. By 2010, hundreds of farmers in Punjab and Maharashtra supplying
FieldFresh were Global GAP certified. FieldFresh’s own ACE farm at Ludhiana was certified to Global
GAP, and Tesco’s Nature’s Choice standards. The pack house was BRC certified for Food Safety, and also
ISO: 22000-2005 certified.

Besides working with farmers, the FieldFresh team optimized the logistics framework to allow getting
baby corn from the fields to the markets in two entirely different agri-climatic zones—Punjab and
Maharashtra. Equal amounts of baby corn were produced in each region, however the sourcing model
differed. In Punjab the company had a direct commercial relation with over 200 farmers, whereas in
Maharashtra the company was engaged with over 3,500 farmers through agri-entrepreneurs. Each agri-
entrepreneur managed 400 to 700 farmers.

FieldFresh fresh baby corn in consumer packs hit the UK and EU markets in 2007. Over the next three
years, the company established the “India” brand of baby corn in UK’s leading supermarkets like
Sainsbury’s, ASDA, and Tesco. By 2009, FieldFresh had become the largest Indian exporter of fresh baby
corn, selling 500 metric tons (handling over 6,000 tons of raw materials) and capturing over 10 percent of
the UK retail market (see Exhibit 18 for baby corn cost structure).

The success of FieldFresh baby corn had drawn notice among Indian farmers. Rakesh Bharti Mittal
remarked:

There is a spark in the rural areas. Farmers are already earning more with us. More and more
farmers want to participate in our contract farming program. From our point of view, this could
be the agriculture BPO equivalent in India. We provide a consolidation opportunity. With
divisions in families, a farmer gets to hold only 2 to 3 acres of land and earns only Rs 20,000 to
25,000 per acre. Those who are working with us do not have to go to moneylenders and borrow
money at high costs. Instead, they improve their farm incomes by at least 25 to 30 percent.

Markets
FieldFresh’s success in the baby corn trade had made the company hungry for expansion. In researching
opportunities, the company considered the particularities of the European market as well as the growth
and competitive landscape in the domestic Indian market.

European markets

FieldFresh’s connection with the Rothschild family, largely perceived as a British investment bank, helped
the company open up market access in the UK/EU. FieldFresh allied with exporters that supplied
supermarkets. Supermarkets generally delegated a range of products to an exporter, who then ensured the
supermarket had a year-round supply (an approach termed “category buying”). Category buying was a
relatively new approach to produce distribution and simplified matters for supermarkets. The approach
required that importers develop relationships with suppliers throughout the world to maintain constant
supply. Working with the importers gave FieldFresh a way to get their produce on supermarket shelves.
Sameer Sachdeva, Head of Fresh Exports at FieldFresh puts it succinctly, “In our endeavor to hasten the
learning curve for exports, we aligned ourselves to leading importers of premium and exotic vegetables in
UK. The advantages were manifold: a clear understanding of quality standards, support in developing
right agronomy and crop growing practices, assured market at a pre-agreed price, and above all patience
in developing a new source!” 

The importance of supermarkets in the retail food sector varied across the EU. In general, the United
Kingdom was dominated by supermarkets. French city dwellers preferred to shop for fresh produce at

8 fieldfresh
retail market stalls while supermarkets were beginning to take over the rural food markets. Italy had seen
the growth of multinational supermarket chains, but local supermarkets were still competitive and they
procured fresh produce from traditional wholesale markets.12 There was also a proliferation of street/retail
markets all over the UK and in Europe. Rome, for instance, had over 80 of these markets, Paris 65 and
London about 40. Some of these markets opened only once a week; some only on weekends, but there
were a number of permanent markets.

Unlike supermarkets, which often purchased directly, small retailers and street vendors got their produce
from wholesale markets. There were two main types of wholesale markets in Europe. The first were
assembly wholesale markets located in the production areas to collect produce from producers and gather
them in bulk. The other type was urban terminal wholesale markets, which de-bulked large shipments of
products to sell to other intermediaries for retail or restaurant sales.13 Value-addition by the wholesalers
was basically limited to pre-packing or packing in the customer’s customized containers. The bigger
markets had other traders and even food processors on the premises. Produce was peeled, sliced or
mashed, and packed in bulk or small containers. The markets throughout Europe and the UK were
modern functional buildings specially designed for the purpose of handling fresh produce. Most of the
services of the markets were outsourced, and because of the competition, the logistical support and
services at the markets were generally of a high standard. 14

Very few producers dealt on a one-to-one basis with wholesalers in the market; rather, they sold to
distributors and brokers at predetermined prices or on the futures market. By the time the wholesalers
purchased the product, the price was virtually set and there was little room for negotiation. Because
traders did not sell on a consignment and commission basis, they carried the entire risk. At the assembly
and terminal markets, pricing was determined by auction and tended to be stable and predictable.
Minimum prices were set and guaranteed to the producers. If the produce was not sold, it was simply
discarded.15

Indian consumers

Though FieldFresh had concentrated on exports, the domestic Indian market also presented
opportunities. India had a large and growing population of over a billion people of whom, around 300
million were categorized as middle class consumers who had significant purchasing power. The country
also offered a relatively young market with 54 percent of the population below 25 years of age.

For India’s affluent middle class, the percentage share of food expenditure vis-à-vis other
products/categories was decreasing at the same time that total expenditure on food was increasing. In the
1970s, food expenditures were concentrated around basic food items like grains, vegetable oils and sugar.
In the 2000s, the consumer’s repertoire expanded to include fruits and vegetables, eggs, meat, beverages,
and processed food. The change in food purchasing was credited to rapid urbanization, higher disposable
incomes, increasing number of nuclear families, less time available for cooking, mobility, and exposure to
global markets. Information and communication technologies were creating increased demand for ready-
to-cook and ready-to-eat convenience foods.

India’s long history of vegetarianism was a strong influence on its food consumption pattern. Meals
typically include pulses (legume crops such as daal), wheat-based flatbreads or rice, with vegetable dishes
and accompaniments including curd (yoghurt), chutney and raita; non-vegetarian meat or fish dishes
have Mughal influences. In 2006, an estimated 31 percent of Indians were vegetarian (341 million), with
the lowest proportion in the coastal areas of Kerala (2%), West Bengal (3%), Andhra Pradesh (4%),
Tamil Nadu (8%), and Orissa (8%). The inland states in the north and west have the highest proportion
of vegetarian families: Uttar Pradesh (33%), Madhya Pradesh (35%), Gujarat (45%), Punjab (48%),
Haryana (62%), and Rajasthan (63%).16

The opportunities were immense. The McKinsey Global Institute, a think tank, estimated India’s retail
market would be worth $1.52 trillion by 2025, up from $370 billion in 2005. Though the relative

9 fieldfresh
importance of comestibles was expected to shrink as people earned more disposable income, McKinsey
estimated the food-and-beverage category would still account for 25 percent of all retail spending in 20
years.

New Indian agri-business players

As of 2010, India’s retail sector was dominated by more than 12 million mom-and-pop stores called
kiranas. Kiranas tend to be tiny and often dusty spaces that offered a small and unpredictable selection of
goods. However, larger players were promising to enter the retail and wholesale food trade in India and
shake up the industry considerably. The entire industry was fluid with major business groups placing bets
on different options.

One of the primary reasons that kiranas continued to hang on despite interest by large companies in
opening supermarkets was that Indian consumers valued their relationships with retailers. The owner-
operators of kiranas had one-on-one relationships with their customers, built up over many years. They
understood the needs and preferences of their customers and were often happy to barter with them on
price. The experience with modern retailers was more impersonal. However, observers believed that over
time big scale operators might be able to build brand values that, when effectively communicated to
consumers, could inspire trust and loyalty.

Even kirana owners valued fresh vegetables and fruits. Of wide range of criteria that Indian consumers
considered in choosing a retail store (see Exhibit 19), fresh fruits and vegetables were the most crucial
category in communicating a positive impression and image for the whole store.

Major players were entering the market in a number of different ways. Some were building expanded
wholesale operations and “Cash-n-Carry” businesses that could supply retail establishments such as
kiranas at lower costs. Others were also building flashy retail stores with the hopes of becoming major
retail players. Bharti Enterprises had made investments in both areas. Bharti had agreed to a joint venture
with Wal-Mart to build a series of wholesale stores that would feature Indian produce. Bharti also had
opened a series of 1,300 to 3,000 sq. foot retail establishments dubbed “EasyDay.”

Besides Bharti, corporate houses like Reliance (“Reliance Fresh”), ITC (“Choupal Fresh”), Aditya Birla
Group (“More”), Godrej (“Nature’s Basket”) and Namdhari (“Namdhari’s Fresh”) had entered into
retailing, with a focus on fresh fruits and vegetables. In wholesaling, cooperatives like the National Dairy
Development Board (NDDB’s “SAFAL”), business groups such as Adani (“Fresh”) and foreign entities like
Germany’s Metro Cash and Carry were entering the fray. A number of business models were being tried
in the sector.

Reliance Industries Ltd (RIL) announced that the company was setting aside USD 10 billion to build a
complete farm-to-fork supply chain. Reliance had drawn up plans for a presence in 784 towns and 6,000
mandi (wholesale market) towns with 1,600 rural business hubs to service these. The company had
already rolled out 177 Reliance Fresh stores across major towns in 11 states. According to a company
report, RIL was targeting a turnover of USD 8.5 billion in the next few years.

The Mahindra business group was becoming what was known as “aggregators” of farm produce (this
business model was already in use in Europe–for example, Tesco outsourced 7 percent of its sales to
aggregators). Aggregators leased small sections of a store from retailers. The aggregator then collecteed
produce from different farms and fills up the shelves in their section of the store. The aggregator could
use a mix of warehouses, cold storage facilities, and refrigerated trucks, depending on the kind of product
they were supplying. The aggregator also would bear the losses that occur in transit.

The Godrej group’s “Agrovet,” on the other hand, was using its marketing experience in rural areas by
opening advice centers called “Aadhar.” These centers would enable the farmer to increase his production
and farms in these villages would be directly linked to Godrej’s retail business, Nature’s Basket, in

10 fieldfresh
Mumbai. Godrej, however, was not creating a cold chain, since the company reasoned that the cost could
not be recovered from consumers.

In general, transportation considerations were limiting the creation of extensive supply chains. Most
companies were dealing with farmers on the periphery of cities, but analysts said they would ultimately
have to invest in cold chains and move into the interiors. Whether companies other than those with deep
pockets like Reliance would have the courage to do that was in question. According to the Confederation
of Indian Industry (CII), for India to double its fruit and vegetable production to 300 million tons by
2012, it would require pumping in close to USD 4 billion. But analysts warned that such investment may
not pay dividends since it doubled the cost of transportation.

The influx of new players and capital was intensifying competition. Behind the squeaky clean showrooms
of the new food retail outlets that were dotting the cityscape, dirty wars were being fought. Rivals were
poaching staff and suppliers. Price wars were breaking out. Other skirmishes were being fought over
farmers and their produce. Suddenly, the humble growers of vegetables and fruits were being sought out
and wooed as corporate India’s biggest names tried to secure enough supplies to feed their rapidly
proliferating chains. In this mad scramble, loyalty was at a discount. The experience of NDDB’s Mother
Dairy provided a cautionary tale. Mother Dairy had diversified into fruits and vegetables in the 1980s. In
the 2000s, farmers who have been growing produce for NDDB’s SAFAL warehouse outlets had defected
when retail chains offered hefty premiums. Increasingly, Mother Dairy’s back end, built up painstakingly
over the past two decades, was coming under strain.

Growing FieldFresh
In 2010, the FieldFresh board that had supported the company through its phase of experimentation was
hungry for growth. Sanjay Nandrajog, the Chief Executive Officer, considered his numerous options.

Nandrajog was a graduate of India’s elite Indian Institute of Technology, Delhi and Indian Institute of
Management, Calcutta, with rich experience of over two decades in diverse industries. He worked himself
up to being a successful manager in a leadership role in the mobile division of Bharti Airtel. When
Nandrajog was tapped to be CEO of FieldFresh Foods, he was given the charge to make FieldFresh “the
most trusted and innovative provider of branded fresh fruits and vegetables and processed food products”
and to take it to a turnover of USD 250 million by 2015.

In Nandrajog’s tenure, the company’s resources had changed. In late 2007, the Rothschilds had sold their
stake in FieldFresh Foods to Del Monte Pacific Ltd. The new co-owners were a leading producer and
marketer of premium food and beverage products in the Philippines and boasted the world’s largest fully
integrated pineapple operations. Del Monte was expected to bring to FieldFresh its strength and
experience in the area of processing branded food and beverage products.

Nandrajog was justifiably proud of FieldFresh’s success in the baby corn market. In a short period of
time, the company had developed a supply chain that could produce and supply the highest quality baby
corn needed for the UK market from two progressive agricultural belts in India—Punjab and Maharashtra.
The company felt there was still considerable upside in the baby corn market. In 2010, FieldFresh wanted
to increase its shipments to over 1,000 metric tons of baby corn to Europe. They also wanted to expand
the number of farmer partners to from 3,500 to 5,000.

However, FieldFresh was also facing considerable competition in export markets. Other countries were
keen on keeping and expanding their share of the European market (see Exhibit 20). Meanwhile, other
Indian business groups were developing capabilities to export fresh fruits and vegetables. Namdhari’s
Fresh, ITC, Mahindra, and many other private players were contracting with Global GAP certified Indian

11 fieldfresh
farmers. They also were developing a supply chain with forward and backward linkages operating with
heavy investments in infrastructure and cold chain.

Nandrajog could also consider switching or at least increasing FieldFresh’s focus on the domestic Indian
market. Supply and demand were certainly growing (see Exhibit 21), but so was competition. Bharti
Enterprises itself was making investments in wholesale and retail outlets. New co-owner Del Monte
allowed FieldFresh to adapt to the changing retail environment and move from just fresh produce to food
and beverage processing as well. Given the growing opportunities in the domestic economy, FieldFresh
could consider bringing value-added products to the domestic market, including development of a
comprehensive strategy to serve the market’s business-to-business (B2B) segment.

Nandrajog also considered the possibility of other crops that FieldFresh could sell. India grew over 35
fruits and 70 vegetables with their more than 200 variants. People in different states and regions had
different local preferences in terms of color, shape, and size for the same fruit or vegetable. For example,
people in certain geographical areas preferred long, violet brinjals (eggplants), whereas people in other
areas preferred whitish green, round ones. However, a FieldFresh study revealed that a Indian-grown
basket of the top 25 fresh produce comprising 7 fruits and 18 vegetables contribute almost 80 percent of
the revenue and 90 percent of the volumes of all produce. Out of these, 18 products were available round
the year from some agri-climatic zone. The other seven products were available only for four to ten
months.17

However, consumption only told part of the story, as margins varied. For example, potatoes, tomatoes,
onions and cauliflower had high volumes but low margins, whereas coriander, garlic, ginger, and green
chilies had low volume but high margin (see Exhibit 22 and 23).

Finally, Nandrajog remembered the company’s history. In its short existence, FieldFresh had suffered
many early setbacks, but had built what top management believed to be a long-term sustainable model
based on experimentation. Had the company created a platform that could be scaled to achieve long-term
growth and succeed as a world-class agribusiness?

This case has been developed for pedagogical purposes. The case is not intended to furnish primary data, serve as an endorsement
of the organization in question, or illustrate either effective or ineffective management techniques or strategies.

Copyright 2010 © Yale University. All rights reserved. To order copies of this material or to receive permission to reprint any or
all of this document, please email the Yale SOM Case Study Research Team at case.comment@yale.edu or mail at 135 Prospect
Street, PO Box 208200, New Haven, CT.

Endnotes

1
Fulbright Scholar at Michigan State University. 
2
Professor of Marketing at Yale School of Management.
3
Business Head Fresh Foods at FieldFresh Foods, India.
4
Horticulture Extension Specialist at GBPUAT, Pantnagar, India.
5
Viswanadham, N. “Food and retail chains in India.” ISAS Working Paper No 15, October 6, 2006, Singapore.
6
Dagar, Shalini S. “Agriculture’s Second Wind,” Business Today, May 20, 2007.

12 fieldfresh
7
Blatt, Harvey. America’s Food by Technopak Advisors. (2008).
8
Kumar, Sant, P. K. Joshi and Suresh Pal. Impact of Vegetable Research in India. NCAP Workshop Proceedings
No.13. Published by National Centre for Agricultural Economics and Policy Research, ICAR, India, 2004.
9
Mittal, Surbhi. “Can Horticulture Be a Success Story for India?” Working Paper no 197, ICRIER, 2007.
10
Coulter, Hugh. Wholesale Market Management Manual: Support for Agricultural Producers: Support to the
Vertical Structure of Market. European Union, April 2004.
11
A World Bank study of the supply chains of 13 high-value commodities that covered 1,400 farmers, 200
commission agents and 65 exporters across the country found that high transport costs and multiple players in the
linear supply chain were crippling horticulture.
12
Cadilhon, J., A. P. Fearne, P. Moustier and N. D. Poole. Changes in the organization of food marketing systems
in South East Asia: a preliminary assessment. Imperial College, UK. 2003.
13
Ibid.
14
Louw, André , Mariette Geyser, Hilton Madevu and Leah Ndanga. Global trends in Fresh Produce Markets, Part
of the NAMC Section 7 Section Committee Investigation on Fresh Produce Marketing in South Africa. 2005.
15
Rademeyer J. G. H. Global Trends: Fresh Produce Markets. Impact Marketing Solutions for Fresh Produce
Markets, Munster, South Africa, 2006.
16
Yadav, Y. and S. Kumar. The food habits of a nation. The Hindu, Monday 14 August, 2006.
http.//www.hinduonnet.com/2006/08/14/stories/2006081403771200.htm. 2006.
17
According to the Central Potato Research Institute of India (CPRI), India produces 25 million tons of potatoes.
For those who can link the supply chain from the farm to the shelf, a business worth Rs 25 billion is up for grabs.

13 fieldfresh
Exhibit 1: Distribution of Operational Land Holdings in India (2000–2001)
Percentages in brackets are % of column total

Number of Average size of

Area operated
Category of holding operational holdings operational holding
(‘000 hectares*)
(‘000) (hectares)
Marginal 76,122 30,088
0.40
(less than 1 hectare) (63.0%*) (18.82%)
Small 22,814 32,260
1.41
(1.0 to 2.0 hectares) (18.9%) (20.18%)
Semi-medium 14,087 38,305
2.72
(2.0 to 4.0 hectares) (11.7%) (23.96%)
Medium 6,568 38,125
5.80
(4.0 to 10.0 hectares) (5.4%) (23.84%)
Large 1,230 21,124
17.18
(10.0 hectares and above) (1.02%) (13.21%)
All holdings 120,822 159,903
1.32
(100%) (100%)

Source: Adapted from “Distribution of Operational Holdings—All India, Agricultural Statistics at a Glance 2006, Agricultural
Census Division, Ministry of Agriculture, Government of India.

*One hectare is approximately equal to 2.5 acres.

14 fieldfresh
Exhibit 2: Fresh Fruits in India, Major Producing States & Main Arrival Months
Percentages in brackets denote contribution of the concerned state to total production in India for the fruit
category.

Crop Months of Market Arrival Major Producing States of India

Jammu & Kashmir (67.1)

Apple July to October Himachal Pradesh (25.7)
Uttarakhand (6.7)
Tamilnadu (25.4)
Banana March; Maharashtra (18.9)
June to November Gujarat (13.6),
Andhra Pradesh (10.7)
Andhra Pradesh (34)
January to April; Gujarat (14)
Lemon June to December Orissa (9)
Karnataka (8)
Maharashtra (39),
Orange November to May Madhya Pradesh (31)
Rajasthan (10)

Maharashtra (75.3),
Grapes February to July Karnataka (14.3),
Tamilnadu (4.8)
Uttar Pradesh (27.2),
Andhra Pradesh (19.8),
Mango April to August
Bihar (10.4),
Karnataka (10.1)
Andhra Pradesh (43.6),
Papaya February to June Gujarat (19.9),
Karnataka (11.3)
West Bengal (21.2)
Pineapple August to October; Assam (16.8)
January to February Karnataka (13.9)
Bihar (8.9)
Maharashtra(68.1)
Pomegranate February to August Karnataka (17.1)
Andhra Pradesh (8)

Source: Indian Horticulture Database, Govt. of India, 2009

15 fieldfresh
Exhibit 3: Fresh Vegetables in India, Major Producing States & Main Arrival Months
Percentages in brackets denote contribution of the concerned state to total production in India for the
vegetable category

Crop Months of Market Arrival Major Producing States of India

West Bengal (26.6)

Brinjal (Eggplant) October to August Orissa (18.9)
Bihar (11.4)
Gujarat (10.1)

West Bengal (29.7)

Cabbage October to February Orissa (14.1)
Bihar (9.9)
Assam (8.5)

West Bengal (26.7)

Bihar (16)
Cauliflower November to February Orissa (10.2)
Haryana (7.7)

West Bengal (18.4)

Bihar (16.4)
Okra April to October Orissa (14.1)
Andhra Pradesh (9.7)

Maharashtra(29)
Karnataka (22.4)
Onion October to May
Gujarat (10.4)
Bihar (7)

Uttar Pradesh (50.2)

Peas December to February Madhya Pradesh (8.9)
Jharkhand (8.3)

Karnataka (14.1)
Andhra Pradesh (12.6)
Tomato October to April Orissa (12.2)
Bihar (9.3)
West Bengal (9)
Uttar Pradesh (31.4)
Potato December to April West Bengal (28.8)
Bihar (14.6)
Punjab (5.8)

Source: Indian Horticulture Database, Govt. of India, 2009

16 fieldfresh
Exhibit 4: Production of Fresh Fruits in India

2006-07 2007-08 2008-09

Area Production Area Production Area Production
Fruits
000' HA 000'MT 000' HA 000'MT 000' HA 000'MT
Mango 2,154 13,734 2,201 13,997 2,309 12,750
Apple 252 16,240 264 2,001 274 1,985
Banana 604 20,998 658 23,823 709 26,217
Citrus 798 7,145 867 8,015 923 8,608
Guava 176 1,831 179 1,981 204 2,270
Grapes 65 1,685 68 1,735 80 1,878
Litchi 65 403 69 418 72 423
Papaya 72 2,482 83 2,909 98 3,629
Pineapple 87 1,362 80 1,245 84 1,341
Pomegranate 117 840 124 884 109 807
Sapota 149 1,216 152 1,258 156 1,308
Others 1,016 6,244 1,112 7,321 1,083 7,249
Total 5,554 59,563 5,857 65,587 6,101 68,466
Source: I Indian Horticulture Database, Govt. of India, 2009

Production Share of Fresh Fruits in India

(2008-09)
Pomegranate
1% Sapota
2%
Papaya Pineapple Others
11% Mango
5% 2%
19%
Apple
Grapes Litchi 3%
3% 1%
Guava
3%
Citrus
12% Banana
38%

Source: Indian Horticulture Database, Govt. of India, 2009

17 fieldfresh
Exhibit 5: Production of Fresh Vegetables in India

2006-07 2007-08 2008-09

Area Production Area Production Area Production
Vegetables
000' HA 000'MT 000' HA 000'MT 000' HA 000'MT
Potato 1,743 28,600 1,796 34,658 1,828 34,391
Onion 768 10,847 821 13,900 834 13,565
Tomato 596 10,055 566 10,303 599 11,149
Brinjal (Eggplant) 568 9,453 561 9,678 600 10,378
Cabbage 249 5,584 266 5,910 310 6,870
Cauliflower 302 5,538 312 5,777 349 6,532
Okra 396 4,070 407 4,179 432 4,528
Peas 297 2,402 313 2,491 348 2,916
Tapioca 255 8,232 270 9,056 280 9,623
Sweet Potato 123 1,067 123 1,094 124 1,120
Others 2,282 29,146 2,414 31,402 2,275 28,006
Total 7,581 114,993 7,848 128,449 7,981 129,077
Source: Indian Horticulture Database, Govt. of India, 2009

Production Share of Fresh Vegetables in India

(2008-09)

Others
22% Potato
27%
Sweet Potato
1%
Tapioca
7%
Peas
2% Onion
11%
Okra
3%
Cauliflower Cabbage Tomato
5% Brinjal 9%
5%
8%
Source: Indian Horticulture Database, Govt of India, 2009

18 fieldfresh
Exhibit 6: Comparative Yields of Major Fruits-India versus Other Countries
(In MT/HA)

Commodity Yield-India Potential Yield (Highest in world)

2007-08 2008-09 First Rank Second Rank Third Rank

Italy Chile France
Apple 8.0 7.2
(40.4) (39.1) (37.2)
Indonesia Costa Rica India
Banana (Eggplant) 36.0 37.0
(54.3) (42.5) (37.0)
Grapes 26.0 23.5 India South Africa Argentina
(23.5) (13.8) (13.2)
Mango 6.0 6.0 Brazil Indonesia Pakistan
(16.8) (10.9) (10.6)
Indonesia Guatemala Brazil
Papaya 33.0 37.0 (72.7) (52.7) (51.7)
Indonesia Costa Rica Mexico
Pineapple 15.0 16.0 (61.2) (48.5) (41.9)
USA
*Orange 6.7 6.7 - -
(35.4)
Guatemala
*Guava 11.1 11.1 - -
(26.8)
*Litchi 6.1 5.9 - - -

*Sapota 8.3 8.4 - - -

Spain
*Citrus 3.7 3.3 (51.2) - -
Turkey
*Lime/ Lemon 8.3 8.1 (30.5) - -

*Pomegranate 7.2 7.4 - - -

Source: Indian data taken from Indian Horticulture Database, Govt. of India, 2009; World data taken from FAO, 2006

19 fieldfresh
Exhibit 7: Comparative Yields of Major Vegetables - India versus Other Countries
(in MT/HA)

Commodity 2007-08 2008-09 Potential Yield (Highest in world)

First Rank Second Rank Third Rank

Japan Italy Turkey
Brinjal (eggplant) 17.0 17.3
(34.4) (29.6) (26.2)
Korea Japan Poland
Cabbage 22.0 22.2
(67.3) (44.3) (37.7)
Cauliflower 18.0 18.7 Italy Germany (22.2) Turkey
(22.3) (21.5)
Okra 10.3 10.5 Egypt Saudi Arabia India
(15.7) (11.5) (10.5)
USA Spain Japan
Onion 15.0 16.3 (53.9) (52.1) (47.6)
France USA China
Peas 8.0 8.4 (11.5) (11.0) (10.3)
Netherlands USA
Potato 19.0 18.8 Germany (43.8)
(45.6) (44.2)
USA Spain Brazil
Tomato 18.2 18.6
(77.4) (69.6) (63.3)
Sweet Potato 8.9 9.0 Japan
(275.2)
Tapioca 33.57 34.35 -

Source: Indian data from Indian Horticulture Database, Govt. of India, 2009; World Data taken from FAO, 2006

20 fieldfresh
Exhibit 8: Exports of Fresh Fruits to various countries from India- Ranks and Share (%)

Commodity Country 1 Country 2 Country 3 Country 4 Country 5

Bangladesh Nepal
Apple
83.70 12.43
U Arab Emts Saudi Arabia Bahrain Kuwait
Banana
44.6 19.6 8.0 6.9

Orange Bangladesh Nepal

90.56 6.95
Netherlands UK Bangladesh U Arab Emts
Grapes 37.32 18.21 17.11 11.52
Saudi Arabia U Arab Emts Sudan Oman Nepal
Guava 24.8 18.7 13.4 7.7 6.5
Bangladesh Nepal
Litchi
66.3 33.7
U Arab Emts Bangladesh UK Saudi Arabia
Mango
45.8 23.9 8.2 4.9

Papaya U Arab Emts Saudi Arabia Netherland Bahrain Kuwait

33.4 18.2 13.7 7.9 7.4

Pineapple Nepal Maldives U Arab Emts Saudi Arabia Kazakhstan

32.0 20.2 14.5 12.1 3.3
U Arab Emts Bahrain UK Canada
Sapota 48.5 16.9 15.1 5.4

Source: Indian Horticulture Database, Govt. of India, 2009

21 fieldfresh
Exhibit 9: Exports of Fresh Vegetables to various countries from India- Ranks and Share (%)

Commodity Country 1 Country 2 Country 3 Country 4 Country 5

Canada Netherland
Brinjal (Eggplant)
90.0 5.6
Saudi Arabia Canada Nepal Maldives U Arab Emts
Cauliflower
29.7 26.7 25.7 13.4 2.4

Onion Bangladesh Malaysia U Arab Emts Sri Lanka Pakistan

40.3 17.5 11.8 8.7 8.6
Saudi Arabia U Arab Emts USA
Peas 69.0 13.7 12.1
Pakistan U Arab Emts Bangladesh
Tomato 79.7 11.2 6.6
Pakistan Nepal Sri Lanka U Arab Emts
Potato
50.2 24.6 10.3 3.4
U Arab Emts Maldives
Sweet potato
85.6 12.0

Source: Indian Horticulture Database, Govt. of India, 2009

22 fieldfresh
Exhibit 10: Export of Fresh Fruits from India

Fruits Quantity( '000 Kgs) Value (in Million Rupees)

2007-08 2008-09 2007-08 2008-09

Mango 54,350. 80 83,703.18 127.42 170.71

Apple 32,655.27 44,540.57 33.31 52.17
Banana 16,662.54 30,401.46 33.31 52.17
Orange 29,261.30 25,329.57 27.27 23.20
Grapes 96,723.21 118,132.93 317.07 367.06
Litchi 161.52 1,546.50 0.06 1.56
Papaya 10,879.73 13,833.77 11.23 18.10
Pineapple 4,194.99 3,893.44 3.40 3.68
Sapota 2,150.84 4,112.28 5.04 6.08
Source: Indian Horticulture Database, Govt of India, 2009

Exhibit 11: Export of Fresh Vegetables from India

Vegetables Quantity(000' Kgs) Value (in Million Rupees)

2007-08 2008-09 2007-08 2008-09

Potato 78,450.77 184,960.99 41.43 115.04

Onion 1,008,606.48 1,670,186.29 1,035.78 1,827.52
Tomato 134,845.15 124,617.22 152.91 127.66
Brinjal (Eggplant) 338.10 29.34 1.92 0.12
Cauliflower 70.85 284.60 0.02 0.16
Peas 814.64 2,519.41 2.71 7.95
Sweet Potato 346.81 879.15 0.35 0.81
Source: Indian Horticulture Database, Govt of India 2009

23 fieldfresh
Exhibit 12: Fresh Fruit Exporters by Rank, 2005

India
Commodities Rank 1 Rank 2 Rank 3 Rank 4 Rank 5
Ranks

Apple China Chile France Italy USA 28

Banana Ecuador Costa Rica Philippines Belgium Colombia 44

Lemon Spain Mexico Argentina Turkey S. Africa 17

Other Citrus
China India Israel Thailand Netherlands 2
Fruits/Mosambi
Orange Spain S.Africa USA Egypt Morocco 21

Grapes Chile Italy USA S. Africa Turkey 17

Guava and Mango Mexico India Brazil Pakistan Peru 2

Papaya Mexico Malaysia Brazil Belize USA 9

Pineapple Costa Rica Philippines Belgium Cote d’Ivoire France 29

Source: Working Paper no 197, ICRIER, ‘Can Horticulture be a Success Story for India?’, Surbhi Mittal, 2007

Exhibit 13: Fresh Vegetables Exporters by Rank, 2005

India
Commodities Rank 1 Rank 2 Rank 3 Rank 4 Rank 5
Ranks

Brinjal (Eggplant) Spain Jordan Mexico Netherlands China 24

Cabbage USA China Netherlands Spain Poland 48

Cauliflower Spain France China USA Mexico 42

Onion India Netherlands China USA Egypt 1

Peas Guatemala China Belgium Russia Netherlands 17

Tomato Spain Mexico Netherlands Syrian Arab Jordan 27

Potato Netherlands France Germany Belgium Canada 17

Sweet Potato USA China Israel Indonesia Egypt 35

Lettuce Spain New Zealand Mexico France Netherlands 74

Pumpkins and Gourd Spain New Zealand Mexico France Netherlands 74

Beans France USA Kenya Netherlands Spain 24

Source: Working Paper no 197, ICRIER, ‘Can Horticulture be a Success Story for India?’, Surbhi Mittal, 2007

24 fieldfresh
Exhibit 14: Major Fruit-Producing Countries

Area Production
Country
‘000 HA ‘000 MT
China 11,042.62 107,837.63
India 6,100.90 68,465.53
Brazil 2,455.87 38,988.30
USA 1,160.60 28,202.51
Italy 1,243.23 17,653.46
Mexico 1,201.90 16,122.21
Indonesia 720.26 15,917.95
Spain 1,895.78 15,835.00
Philippines 1,118.53 15,420.66
Iran 1,354.38 13,604.30
Turkey 1,094.36 12,824.81
Uganda 1,822.59 10,038.60
Others 24,247.05 217,285.90
World Total 55,458.05 578,196.86
Source: FAO Website 10.2.2010; India Data from Indian Horticulture Database, Govt. of India, 2009

Major Fruit-Producing Countries - 2009

China
18%
Others
37% India
12%

Brazil
Uganda 7%
USA
2% 5%
Philippines Mexico
Turkey Iran 3% 3% Italy
2% 2% Spain 3%
3%
Indonesia
3%

Source: FAO Website 10.2.2010, expect for India Data (Source Indian Horticulture Database, Govt. of India)

25 fieldfresh
Exhibit 15: Major Vegetable-Producing Countries

Area Production
Country
‘000 HA ‘000 MT
China 24,080.08 457,730.39
India 7,981.00 129,077.00
USA 1,165.23 36,431.63
Turkey 1,103.40 27,135.62
Iran 647.80 16,173.00
Russian Fed. 861.60 14,057.80
Egypt 1,217.50 13,750.51
Italy 523.64 13,686.62
Spain 367.57 12,784.90
Japan 438.85 12,699.50
Others 17,503.81 232,765.90
World 55,890.49 966,292.86
Source: FAO Website 10.2.2010; Indian Horticulture Database, Govt. of India, 2009

Major Vegetable-Producing Countries - 2009

Others
24%

Japan China
1% 47%
Spain Italy
1%
Egypt 1%
2%
Iran
Russian Fed. 2%
2% India
Turkey USA
3% 13%
4%

Source: FAO Website 10.2.2010, expect for India Data (Source Indian Horticulture Database, 2009)

26 fieldfresh
Exhibit 16: Progress of Reforms in Agricultural Produce Marketing Regulation (APMC) Acts
in India

Sl. No. Stage of Reforms Names of States/ Union Territories

States/ UTs where reforms to APMC Act has been
1. done for Direct Marketing; Contract Farming and
Markets in Private/Coop Sectors
State/ UTs where reforms to APMC Act has been
2. done partially
Andhra Pradesh ,Arunachal Pradesh Assam,
Chhattisgarh, Goa, Gujarat, Himachal Pradesh,
Jharkhand, Karnataka, Madhya Pradesh,
Maharashtra, Nagaland, Orissa, Rajasthan, Sikkim
and Tripura
a)Direct Marketing: NCT of Delhi
b) Contract Farming : Haryana, Punjab, and
Chandigarh
c) Private Markets: Punjab and Chandigarh

States/UTs where there is no APMC Act and hence Bihar*, Kerala, Manipur, Andaman & Nicobar
3. Islands, Dadra & Nagar Haveli, Daman & Diu &
not requiring reforms Lakshadweep

States/UTs where APMC Acts Already provides for

4. Tamilnadu
the reforms

Mizoram, Meghalaya, Haryana, J & K, Uttarakhand,

5. States/UTs where administrative action is initiated West Bengal, Pondicherry, NCT of Delhi and Uttar
for the reforms
Pradesh

*APMC Act repealed w.e.f. 1.9.2006

Source: Agri Marketing Summit, Confederation of Indian Industries, 2009

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Exhibit 17: Cold Chain Requirement in India- Select fruits and Vegetables

Fruits and vegetables are natural produce which live and breathe. They vary in their respiration and
maturity behavior and as such require a distinct temperature, humidity and packaging condition to ensure
quality.

Storage Temperature
Product Storage Humidity Approx Shelf Life
(degree Centigrade)

Sweet corn 1 96% 5 days

Baby corn 1 95% 5 days

French Beans 3 95% 5 days

Onion 1 63% 110 days

Mango 12 90% 25 days

Banana 18 95% 7-28 days

Apple 1 95% 90-240 days

Pineapple 12 90% 14-36 days

Source: Quality and Process control department at FieldFresh

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Exhibit 18: Typical Baby Corn Cost Structure

Selling Price* Rs. 200**

Costs

Raw material Rs. 55

Packaging Rs. 20

Labor/factory overheads Rs. 30

Transportation (including air freight) Rs. 85

* Selling Price does not include government subsidies that can add about 5% of FOB value

** The selling price are quoted in Indian rupees. However, final prices are settled in Euros or Sterling. Any exchange rate
fluctuation will impact the rupee realization while the costs will remain constant.

Source: Casewriter’s notes based on company documents

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Exhibit 19: Consumer Criteria for Choosing a Fresh Food Store

Source: The Fresh Imperative: Creating Excellence in Asian Fresh Food Retailing, Coca-Cola Retailing Research Council, Asia &
Accenture report

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Exhibit 20: Potential Competing Countries for Export Markets

Crops/Groups Potential Competitors

Fruits
Apple China, S. Africa
Banana Oman, Singapore, Philippines
Lemon S. Africa, Jordan, Iran
Other Citrus Fruits/ Mosambi Spain, France, S. Africa, Thailand, Netherlands,
Orange Bhutan
Grapes Austria, USA, S. Africa, Syria, Chile
Mango and Guava Mexico, Australia, China, Singapore, UAE
Papaya Malaysia
Pineapple Thailand, S. Africa, Philippines, Malaysia, Kenya

Vegetables
Brinjal (Eggplant) Netherlands, Spain, France, Kenya
Cabbage Spain, Netherlands
Cauliflower Mexico, Australia, China, Singapore, UAE
Onion Thailand, Netherlands, China, Pakistan, Indonesia
Peas Syria, Egypt, Greece, Kenya
Tomato China
Potato Pakistan
Sweet Potato Thailand, Indonesia, Vietnam
Beans Jordan, Kenya, Oman, Zambia, Iran, Egypt
Source: Working Paper no 197, ICRIER, ‘Can Horticulture be a Success Story for India?’ by Surbhi Mittal, 2007.

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Exhibit 21: Production and Supply Forecast- Fruits & Vegetables in India

Post-harvest
Area Yield Production Supply
Year Losses (percent
(Million HA) (Tones/HA) (Million Tones) (Million Tones)
of production)

Vegetables

2010-11 6.49 20.2 131.0 19 106.2

2015-16 6.49 23.5 152.5 19 123.5

Fruits

2010-11 4.43 15.1 66.9 25 50.2

2015-16 4.43 16.9 74.9 25 56.2

Source: Kumar, Praduman and Pramod Kumar (2003) “Demand, Supply and Trade Perspective of Vegetables and Fruits in
India,” Indian Journal of Agricultural Marketing, Vol 17(3): 121-130

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Exhibit 22: Fruit Production and Consumption Patterns in India
A. Production wise contribution to total

Top two fruits = 56.9%

Top three fruits= 9.5%
Top four fruits=74.8%
Top five fruits=77.5%
Top ten fruits= 87.2%

B. Revenue (Quantity X Rs/Kg) contribution to total

Top ten fruits – 83%

Top twenty fruits – 97%

C. Ranking of fruits on the basis of quantity of production

1. Banana 11. Watermelon

2. Mango 12. Muskmelon
3. Citrus 13. Orange
4. Papaya 14. Sweet Orange
5. Guava 15. Lemon
6. Grapes 16. Pear
7. Pineapple 17. Coconut
8. Sapota 18. Kinoo
9. Pomegranate 19. Babughosa (A type of pear)
10. Litchi 20. Groundnut whole

D. Ranking of fruits on the basis of Revenue (Quantity X Rs/Kg) generation

1. Banana 11. Pear

2. Apple 12. Guava
3. Lemon 13. Grapes
4. Mango 14. Coconut
5. Orange 15. Kinoo
6. Papaya 16. Sapota
7. Watermelon 17. Groundnut whole
8. Muskmelon 18. Babughosha (A type of pear)
9. Sweet Orange 19. Awala
10. Pomegranate 20. Peach

E. Ranking of fruits on the basis of Margin (Rs./ Kg)

1. Kiwi 11. Grapes

2. Strawberry 12. Cheekoo
3. Lemon 13. Peach
4. Raspberry 14. Groundnut whole
5. Cherry 15. Litchi
6. Jamun 16. Pomegranate
7. Apricot 17. Orange
8. Apple 18. Belpathar
9. Dates 19. Kinoo
10. Plum 20. Green Badam

Based on Indian Horticulture database 2009 and field study done by FieldFresh team

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Exhibit 23: Vegetables Production and Consumption pattern in India

A. Production wise contribution to total

Top two vegetables- 37.1

Top three vegetables -45.7
Top four vegetables -53.7
Top five vegetables -59.0
Top ten vegetables – 78.3

B. Revenue (Quantity X Rs/Kg) contribution to total

Top ten fruits – 83%

Top twenty fruits – 97%

C. Ranking of vegetables on the basis of quantity of production

1. Potato 11. Cucumber
2. Onion 12. Bottle gourd
3. Tomato 13. Coriander
4. Brinjal 14. Capsicum
5. Tapioca 15. Tori (Smooth gourd)
6. Cabbage 16. Carrot
7. Cauliflower 17. Ginger
8. Okra 18. Palak
9. Peas 19. Garlic
10. Sweet Potato 20. Radish

D. Ranking of vegetables on the basis of Revenue (Quantity X Rs/Kg) generation

1. Potato 11. Carrot

2. Tomato 12. Ginger
3. Onion 13. Brinjal
4. Cauliflower 14. Palak
5. Cucumber 15. Garlic
6. Brinjal 16. Radish
7. Bootle gourd 17. Peas
8. Coriander 18. Smooth gourd
9. Capsicum 19. F. Beans
10. Bhindi 20. Arvi

E. Ranking of vegetables on the basis of Margin (Rs./ Kg)

1. Coriander
2. Garlic 11. Capsicum
3. Babycorn 12. Kari Leaves
4. Mint 13. Lettuce
5. Green gram peeled 14. Baby Pumpkin
6. Broccoli 15. Beetroot
7. Ginger 16. Brinjal
8. Green Chilli 17. Chappan Tinda
9. Sprouted gram 18. Ribbed gourd
10. Sprouted moong 19. Green Onion
20. Parwal (Pointed gourd

Based on Indian Horticulture database 2009 and field study done by FieldFresh team

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