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Metro invests in building the supply chain
Posted On: 29-11-2007 09:07:15 AM

A recent report in the Mint highlights Metro’s efforts at building the ‘farm-to-fork’ supply chain in India. Metro is the first western retailer to tackle the fundamental problem of stocking supermarkets and hypermarkets with produce sourced from farmers, shepherds and fishermen using antiquated techniques, and which must traverse the Indian rough roads in outdated trucks.

A typical Indian mandi highlights the country's traditional way of transporting vegetables. Large open trucks are piled high with loose onions, carrots and sacks of green chilies etc, which sit roasting in the mid-day sun until they are unloaded by manual labor. The produce is weighed and then piled high in un-refrigerated warehouses. Large distributors buy from the market and sell to mid-size retailers, who then sell to mom-and-pop shops and cart pushers. Economists estimate that up to 40 per cent of produce in India is spoilt or lost.

Metro has taken steps to address this with the aim of reducing wastage to 7 per cent of the produce. The company has some basic tips for vegetable farmers, such as: do not water spinach the night before it is picked, do not place cucumbers on the ground after you pick them, pack fruits and vegetables in crates instead of sacks, do not store onions in warm warehouses or they will sprout and spoil. Metro has cut out middlemen by sending its own trucks to collect directly from some farmers. These trucks are refrigerated to between 42° and 46° Fahrenheit (5.6° and 7.8° Celsius). In order to ensure that their suppliers did not switch of the refrigeration to save fuel, a common problem among Indian drivers, Metro has introduced cross-check measures such as checking if the ice cream has melted from the center of the package, along the way.

When Metro first opened a shop in Bangalore four years ago, getting fresh fish was a problem. Metro had to teach the fishing crews, that fish could be cooled immediately by gutting and stuffing them with shaved ice. The company now sells up to five tons of seafood (between 80 to 120 types of fish) in the Bangalore region every day. Metro managers have visited shepherds to show them how to vaccinate and treat their herds. The company imported British sheep to breed with their Indian counterparts, which tend to be too skinny for Metro's meat rack.

The promise of big retail, is an efficient supply chain, which would help reduce the level of wastage. If Metro does indeed deliver its goal of 7 per cent wastage, it would revolutionize the Indian farming sector.


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