Closing Case

Reliance Fresh

Reliance Retail is consumer lacing business of Reliance Industries Ltd. Started in 2006, it
serves over 2.5 million customers every week and sources from thousands of farmers and ven.
dors. Its loyalty programme, Reliance One, has more than 6.75 minion customers. It has
nationwide network of retail outlets backed by state-of-the-art technology and supply chain
infrastructure.
Reliance Retail has a multi-format strategy and operates through convenience stores, super.
markets, hypermarkets, wholesale cash-and-carry stores and specialty stores. It is the country's
largest retailer with revenue of 220,000 crore and has a CAGR of 29 per cent in 2011-16. In
2015-16, Reliance Retail added 624 new stores, taking the total number of stores to 3,245
stores, spread over 12.8 million sq. ft.
It was not easy for the company. When it was launched, some political outfits protested
and indulged in vandalism at their stores in Uttar Pradesh, West Bengal and Odisha, saying
that it was anti-farmer and anti-small shops. However, the company retails farm produce in
the other states.
Reliance Fresh buys vegetables and fruits from local farmers through collection centres.
This reduces procurement wastage. From the collection point, the goods are transported to
processing point or the retail outlets. The difference between the traditional channel and
Reliance farm-to-fork is illustrated in Figures 8.12 and 8.13. It is easy to see that the company
has to make huge investments in collection and processing centres, logistics and establishing
stores. The end result is that the consumer gets the farm produce fresh; it is transported from
the farm to store within 24 hours. By reducing the number of intermediaries, the company
delivers fresh produce at cheaper rates to the consumer.
The farmer supplies the produce to Reliance's collection centres, where it is weighed and
checked for visual quality. Sometimes the processing is done at the collection centre itself or
it is sent to the processing centre. The products are sorted and crated for transportation, all
the while stored in cool temperature to reduce spoilage. Payments to the farmers are arranged.
The crated goods are transported to Reliance Fresh stores where they are displayed and stored.
The whole cycle takes about 24 hours: farmers start coming in by 11AM at the collection cen-
tres. After sorting and cleaning, trucks begin loading for different stores by 4PM. After process-
ing and crating, the trucks reach the stores early morning, by 6AM, where they are unloaded
and displayed. The store opens at 7AM.
By procuring directly, Reliance Fresh is able to save on middleman commissions, costs of
loading and unloading, employ economical transportation and reduce wastage. Perishable
products are transported from collection centres while non-perishable products, which ha
longer shelf life, are procured directly from manufacturers.
Value is added at several activities in the chain:

 Infrastructure: Centralized centres and large stores, administrative tasks.

 Farmers: Quick and fair payments, ready market for produce, no exploitation.
 HRM: Fair remuneration, training, incentives.

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