Forward integration in wholesale business: CEO
Hyderabad, Nov. 10 The robust back-end work with over one lakh farmers is paying off for ITC’s Agri Business Division. It is not just helping in the expansion of Choupal Saagar and Fresh outlets but also in boosting branded horticulture produce.
Significantly, the spurt in organised retailing activity has opened up a new opportunity in the form of store-in-stores.
“We manage food and vegetable section at some of Food Bazaars and True Mart stores. In a way, this is forward integration of wholesale business,” Mr S. Sivakumar, Chief Executive of ITC’s International Business Division, told Business Line.
The company manages vegetable component at 15 such outlets at major malls in Hyderabad, Pune and Chandigarh where it runs Choupal Fresh.
Over a period of time the number would increase, synchronised with Choupal retail expansion in the existing and new cities.
“Half of the 50 Choupal Fresh stores it planned in the next few months would be store-in-stores,” he said.
ITC would increase Choupal Saagars to 100 from the present 20 in the next two years. Farmers could sell their produce and buy a variety of things from these marts. The company has decided to open smaller Choupal Saagars, depending on the needs and catchments of certain geographies. Overall, ITC plans to open 700 such malls across the country in the next 7-10 years.
With regard to Choupal Fresh, the vegetable and food retail format, the company would have 50 outlets by mid-2008 as against the present nine in three cities. After it crossed the 50 mark, it would add 3-4 more cities, he said.
As in the case of Choupal Saagars, the company has begun experimenting with smaller versions of Fresh outlets to cater to the specific needs of specific localities.