Safal, fruits and vegetables, subsidiary of Mother Dairy is eyeing total sales of R700 crore for financial year ending March 31, 2018, which will be a jump of 10% over last year's.
Safal, fruits and vegetables, subsidiary of Mother Dairy is eyeing total sales of R700 crore for financial year ending March 31, 2018, which will be a jump of 10% over last year’s. Pradipta Kumar Sahoo, busines head — Safal, Mother Dairy Fruits and Vegetable pegged Mother Dairy’s total turnover of more than Rs 8,000 crore in FY18 with 80% coming from its dairy business selling milk, ice creams, paneer and other dairy products. Sahoo, in conversation with FE’s Hita Gupta talks about the potential of Mother Dairy’s F&V business and how it seeks to strengthen its portfolio in the value added convenient category with food ingredients such as frozen peas, sweet corn and Jackfruit. Safal has its retail outlets in three cities — Delhi-NCR, Bengaluru and Bhubaneswar.
What distribution channel does Safal leverage for the fruit and vegetable business?
We have a strong FMCG (fast moving consumer goods) channel present across the country for our value added convenient products. We are supplying to all big modern retail clients such as Reliance, More, Spencer’s, Metro Cash and Carry, and in the e-commerce space we have an exclusive tie-up with BigBasket. The commission from these players is about 25% on the MRP of the items sold. Besides tie-ups with modern retail we also have our own Safal stores which are by and large franchise stores. In Delhi-NCR we have 400 stores which are primarily franchise, and in Bengaluru we have 20 stores which are company-owned and company-operated. In Bhubaneswar we have just started a pilot with petrol pumps where we get space to sell our products. To our franchise stores, we are also giving them all the infrastructure in terms of the fittings, fixtures, assets and the franchise only buys the merchandise from us and delivers it. Through general trade, we are present across 10,000 outlets in the country.
What is Safal’s share against Mother Dairy’s total business?
The dairy business is to the tune of 70-80% of the total Mother Dairy’s business and non-dairy is the remaining 20%. In non-dairy, the two main businesses are edible oil- Dhara and fruits and vegetables. Total sales of Dhara’s edible oil is in the range of R1,250-1,300 crore and fruits and vegetables business is between R600-700 crore. There is an equal split between the fresh fruits and vegetable business and value added convenient products. Mother Dairy is a R8,000 crore business. The frozen category has two components — Snacks and Ingredients. In the frozen ingredients space we are the market leader with frozen peas, corn, mix vegetables and Jackfruit. In ready-to-eat snacks we offer — Hara Bhara Kabab, Aloo Tikki and French Fries and plan to add more categories. It contributes about R80 crore to the total business. We expect to grow 15% in each category against industry average of 10%.
How large is Safal’s network with the local farmers?
Our key objective is to help the farmers first. We try to buy as much as possible from the farmers without disturbing our economics. We have a network of about 10,000 farmers with us from areas such as Jharkhand, Haryana, Western Uttar Pradesh, Punjab, Himachal, Karnataka, Maharashtra, Gujarat and Andhra Pradesh. We handle about 300 tonnes of fruits and vegetables produce every day. Safal has three processing plants in Delhi, Bengaluru and Ranchi each with processing capacity of over 20,000 tonnes. Our most recent 27-acre plant in Ranchi was inaugurated in March which has state-of-the-art facilities which will be used for processing peas, tomatos and jackfruit. We have invested about Rs 80 crore in it.