Fruit and Vegetable Unit was set up in the year 1988 by National Dairy Development

Board , an institute of national importance, a body corporate created by Government

of India , with an objective to provide a direct link between fruit and vegetable
growers and consumers. The unit has drawn on NDDB's three decades of dairy sector
strengths in designing it's state of the art large and ultramodern central distribution
facility to handle fresh and frozen fruit and vegetable.
Presently it is an unit of Mother Dairy Foods Processing Ltd, a wholly owned company
of Mother Dairy Fruit & Vegetable Ltd. In April 2000, Mother Dairy Fruit & Vegetable
Ltd was created as a subsidiary of NDDB. The processed products of the unit are
marketed with the brand name 'SAFAL'
Unit complex is situated on 22 acres of land. It comprises a prefabricated building
consisting of cold store chambers with different sets of temperature and humidity
conditions suitable for storage of various fruit and vegetables. It has controlled
atmosphere chambers and ripening rooms, deep freeze rooms, preparation hall,
processing hall, dispatch hall, reception, dispatch facilities etc. Material handling is
done in specially designed plastic crates with the help of forklifts..
The Unit also initiates and supports production enhancement activities at farm,
improved pre and post harvest practices, efficient logistics from farm to the retail
outlets, scientific quality assurance and education of grower, support staff and
consumer.
Production of quality product begins at the farm level where the grower, in co-
operation with unit officials, work to cultivate and supply quality produce to the Unit.

th the utmost care and dedication, the growers and Unit officials try to apply their
professional knowledge and skills to give consumers the best return for their money.
Standards are defined for each fruit and vegetable so as to link price to quality.
Procurement specialists and trained field staff help the farmers in crop management
and protection. Efforts are made to introduce new seed varieties and scientific
methods of agriculture to increase the yield and improve the quality of produce.

279 specially designed modern retail outlets have been set up in and around Delhi to
market fresh and frozen fruit and vegetables, directly to the consumers. Each shop
caters to large number of customers, with a capacity to sell 1,600 kilos of fruit and
vegetables a day. The shops are equipped with electronic machines that
automatically weigh the produce and print item wise bills. Unit also manufactures
products such as Jam, Squash , Ketchup etc at its Ramgarh unit. Fruit & Vegetable
Unit is IS/ISO-9002:1994 / DIN EN ISO 9002: 1994 & HACCP Certified Organization.

VISION
TO PROVIDE QUALITY PRODUCE, PRODUCTS AND SERVICES TO THE ENTIRE
SATISFACTION OF CUSTOMERS.

TO IMPROVE QUALITY OF LIFE OF FARMERS AND PRODUCERS BY PROVIDING GUIDANCE FOR :

· IMPROVING YIELD AND QUALITY OF PRODUCE,

· IDENTIFYING SUPERIOR VARIETIES,

· ADOPTING BETTER AGRICULTURAL PRACTICES,

· EXPANDING MARKET, AND

· ENSURING REMUNERATIVE PRICE FOR THEIR PRODUCE.

TO PROVIDE OPPORTUNITIES TO EMPLOYEES FOR ADVANCEMENT IN LIFE AND SERVICE CAREER.

TO HELP CREATING BETTER AND MEANINGFUL LIVING FOR ALL IN THE SOCIETY.

TO CONTINUOUSLY PURSUE EXCELLENCE IN ALL AREAS OF WORKING.

ABSTRACT

The project deals with channel creation for sales and distribution ofSafal
products.Safalpresently has 375 F&V booths in Delhi and NCRand with help of
distributors we plan to launch 30 SKU’s inGeneral trade.
The methodology followed for the project is PRIMARY RESEARCH, which is done
by surveying the market and creating a list ofprobable distributorsin different zones.
Study of different channel partners
(i.e.distributor,C&Fagents,superstockiestandretailer)willalsobeundertaken.
It justifies why distributors are beneficial for the company and how we can gain
through model of distribution. It gives an insight about the terms and conditions of the
company as well.
Theprojectaimsto understand the retail business of fresh fruits, vegetables
andsafalproduct through safal outlet.
 EXECUTIVE SUMMARY

India is a market of diversity-diverse with regard to income, price points, culture and
preferences. The Indian lifestyle has a traditional predilection for fresh fruits
andvegetables or those processed at home. With the changing lifestyle and improved
spending habits the processed food consumption in India is gaining momentum.
Country’s GDP has accelerated well past the 7 to 8 percent per annum growth rate.
Mother dairy fruit and vegetable unit was set up in the year 1988 by the National
Dairy Development board as a corporate body whose aim was to provide a direct link
between farmers and consumers. It later on forayed into processed food segment
through the much known Safal peas. Safal products are sold through its 375 retail
outlets in the Delhi-NCR region. With an objective to increase the market share and
boost up sales Safal decided to enter the General trade. To enter into the General trade
a well established distribution network is of paramount importance, so the project
involved creation of a market channel for Safal products. The effectiveness of
distribution coverage is very important. Understanding of the distribution coverage is
important for the manufacturer to plan and implement effective distribution
strategy .The methodology used in the project is primary research which involved
surveying the catchment area to find the list of probable distributors and thereby
meeting and convincing them about our model.Study of channel partners was also
undertaken. The methodology used is questionnaire method with open ended
questions. An overall analysis of the competitors was also taken up. The project gave
a huge area to explore the working of a channel involving the channel partners &
findings of the project are basically divided into the findings of the retailers,
distributors and the competitor’s schemes and margins. The findings are discussed in
detail in the project. The conclusion which can be drawn from the project depicts the
difficulties which a company faces while developing a distribution network and the
type of distributor to search for in case of processed food distribution. The
recommendations given involve various changes in the policies of the company. After
putting lots of efforts the results seems to bein favor but still three months is not
enough to practically understand everything and get the improvements done with the
results. The results will blossom in the future.
 CHAPTERS
A) INTRODUCTION 11
Background 11
About 13
Project Brief 14
B) Objective of the Project 16

C) Scope of the Project 17

D) Research Methodology 18

E) Organizational Overview 20

F) Project in the Company 21

SWOT Analysis of FMCG Sector 23
Subsector Information 24
WHY WE REQUIRE CHANNEL PARTNER? 28
C&F Agent 30
Super Stockiest 31
ROLE OF DISTRIBUTOR 32
WORKING OF DISTRIBUTOR 35
TERMS AND RESPONSIBILITY OF DISTRIBUTOR 36
UNDERCUTTING 38
ARE THE CHANNEL OF DISTRIBUTION WHAT THE TEXTBOOK SAY? 39
PRODUCT PORTFOLIO OF SAFAL 41
SWOT Analysis of SAFAL 45
TERMS AND CONDITIONS FOR SAFAL AGENCY 46

G) FINDINGS 47
Study of Retail Outlets and Retailers 50
Competitors Schemes and Margins 51
Data analysis
a) Data analysis 53
 H) CONCLUSION 58

I) RECOMMENDATION 60

J) Limitation 61

K) Annexure(Questionnaire) 62
REFERENCES 63
 INTRODUCTION
BACKGROUND INFORMATION
Mother dairy fruit and vegetable unit was set up in the year 1988 by the
NationalDairy Developmentboard. It started as a corporate body whose main aim was
toprovide a direct aim between farmers in the village and the consumers. By this
wayboth the farmers and the consumers are benefitted. Safal made a foray into
theprocessed food sector with its frozen peas and captured the market and became
themarket leader. It then entered into the processed food and beverage with a
wideproduct portfolio having 30 SKUs. These products are marketed through 375
Safalbooths in Delhi-NCR region. Safal now wants to increase the sales of
theseproducts and increase the market share. This can be done by entering into
theGeneral trade for which we need the creation of a well defineddistributionchannel.
Entering into the General trade would require efforts as to developing
achannelbyfinding the channelintermediary such as distributors who haveknowledge
of the market and can target the retailers.

The company markets an array of fresh and frozen fruit and vegetable products
under the brand name SAFAL through a chain of 400+ own Fruit and
Vegetable shops and more than 20,000 retail outlets in various parts of the
country. Fresh produce from the producers is handled at the Company’s
modern distribution facility in Delhi with an annual capacity of 200,000 MT.
An IQF facility with capacity of around 75 MT per day is also operational in
Delhi. A state-of-the-art fruit processing plant of fruit handling capacity of 120
MT per day, a 100 percent EOU, setup in 1996 at Mumbai supplies quality
products in the international market. With increasing demand another state-of-
the-art fruit processing plant has been set up at Bangalore with fruit handling
capacity of around 250 MT per day.

Historical Background of Mother Dairy

"MotherDairy" is the single largest brand of milk in India as well as in Asia,

marketing about 2.2 million litres of milk per day. Mother Dairy commands
40% market share in the organized sector in and around Delhi, primarily
because of consistent quality and service – whatever be the crisis - floods,
transportstrike, curfew etc. Mother Dairy, Patparganj, Delhi, is presently
manufacturing & selling around 8.5 lakh litres of tonned milk through bulk
vending shops.

Mother Dairy, Delhi is an IS/ISO - 9001:2000 and Hazard Analysis Critical

Control Points (HACCP) and IS-14001:1996 Envoirnment Management
System (EMS) Certified organisation. Mother Dairy was the first Dairy in the
country to implement ISO-14031 (Envoirnment Performance Evaluation)
project.

Thecomany's Quality Assurance Laboratory is ISO/IEC- 17025:1999 certified

by NABL (National Accreditation Board for Testing and Calibration
Laboratory), Department of Science & Technology, India. This provides
assurance to the consumer in respect of Quality and Safety of products
manufactured and marketed by Mother Dairy.

The National Dairy Development Board (NDDB) commissioned Mother Dairy

in the first phase of Operation Flood in 1974. Considering the success of
Dairy industry NDDB established Fruit & Vegetable Project in Delhi in 1988
with "SAFAL" as its umbrella brand.

With a view to separating the commercial activities from developmental

activities, the NDDB merged Mother Dairy and the Fruit & Vegetable project
into a wholly owned company named Mother Dairy Fruit & Vegetable Ltd
(MDFVL) in April 2000. This becomes the holding company of Mother Dairy
India Ltd (MDIL) – a marketing company and Mother Dairy Foods Processing
Ltd (MDFPL) – a processing company. MDFPL is a multi unit company, with
units at various locations in India. Mother Dairy, Delhi is one of the units of
MDFPL.
VISION STATEMENT-To provide quality produce, products and services for
the entire satisfaction of consumers

Mother Dairy fruit and Vegetable Unit was set up in the year 1988 by NationalDairy
Development Board, which is an institute of national importance, a bodycorporate
created by Government of India. Its objective is to provide a direct linkbetween fruit
and vegetable growers and consumers. The unit has drawn onNDDB’s three decades
of dairy sector strengths in designing its state of the artlarge and ultramodern central
distribution facility to handle fresh and frozen fruitand vegetable.

Unit complex is situated on 22 acres of land. It comprises a prefabricated

buildingconsisting of cold store chambers with different sets of temperature and
humidityconditions suitable for storage of various fruit and vegetables.

The Unit also initiates and supports production enhancement activities at

farm,improved pre and post harvest practices, efficient logistics from farm to the
retailoutlets, scientific quality assurance and education of grower, support staff
andconsumer.

Production of quality product begins at the farm level where the grower, in co-
operation with unit officials, work to cultivate and supply quality produce to theUnit.

The product portfolio of Safal has grown over the years to include a wide rangeof:

• Fresh fruits and vegetables - marketed through 375 F & V Booths in Delhi
&NCR

• Frozen vegetables - Peas, Corn & Mixed Vegetable.

• Processed products like jams, Pickles, ketchups etc.

• Fruits Juices & Nectars: Orange, Mixed Fruit, Apple, Mango, Grape &

• Guava.

Today, Safal is the market leader in the frozen peas category with over 60%
marketshare nationally with a turnover of Rs. 165 crores (including exports)..
About

Indian economic reform process commenced in 1991, it is only in the last five to
seven years that the country’s GDP has accelerated well past the 7 to 8 per cent per
annum growth rate. There is clear evidence of discernible increase in purchasing
power in many parts of the country and rising affluence in many urban pockets.

Globalization, urbanization, relaxation of import policies, rising income, growth of

organized retailing, economic growth, impact of visual media and changing lifestyles
and food habits have opened the doors for the various processed foods and beverages
in the market.

There are a large number of players in the market selling processed foods like Kissan,
Nestle, ITC to name a few.

Safal has also forayed into the processed food market with a product line which
comprises of juices, nectars, RTS, ketchups, jams, pickles, purees and squashes. Safal
has a strong equity in fruits and vegetables space and hopes to leverage that.

India’s FMCG sector is the fourth largest sector in the economy and its principal
constituents are Household Care, Personal Care and Foods and Beverages. The total
FMCG market is in excess of Rs. 85,000 Crores. It is currently growing at double
digit growth rate and is expected to maintain a high growth rate. FMCG Industry is
characterized by a well established distribution network, low penetration levels, low
operating cost, lower per capita consumption and intense competition between the
organized and unorganized segments.

The foods category in FMCG is gaining popularity with a swing of launches by HUL,
ITC, Godrej, and others.

Safal is also trying to tap the opportunities in the FMCG sector and working hard to
make a mark in the FMCG sector.
PROJECT BRIEF

Safal is trying to make its entry into the ever growing FMCG sector in India.

Despite of tough competition in the sector from existing leading players such as
Nestle, Dabur, Parle etc., Safal has a huge potential to make a stand in the market
because of high quality product it offers.

Product distribution is of paramount importance in achieving the desired sales.

Aproper channel creation needs to be done so that the products have a
wideavailability with the consumer. The effectiveness of distribution coverage is
veryimportant.Understandingof
thedistributioncoverageisimportantforthemanufacturer to plan and implement
effective distribution strategy. Our studyshows that there are a number of channel
partners involved such as distributors,Wholesalers, retailers and consumers.

The project deals with a well defined distribution channel for the sales anddistribution
of Safal products which includes processed merchandises such asjuices, jams,
ketchups, RTS, nectars, purees and pickles.

Channels are the means by which one sells products to the customers.
ChannelDevelopment and Optimization helps identify those sales channels and
processesthat yield the highest return for one’s company.

ChannelStrategyincludesrecommendationsforbothidentifyingandmanaging channel
partners. Many companies are not getting the sales growth, market penetration and
customer share they should because of ineffective channel design and deployment.

The distribution channel creation will help Safal to move into the general trade in
Delhi-NCR region thereby increasing the sales and the market share in the processed
food category.

The business is proposed to target 10,000 retail outlets in Delhi-NCR region.

Presently Safal has a turnover of about 32 crores per annum through its 375 outlets in
Delhi-NCR region.

Nature of business
Manufacturers, Suppliers and Exporters of Dairy Products like: Dairy Whitener, Table
Butter, Ghee, Toned homogenized Milk-UHT, Skimmed Milk Powder, Full Cream Milk
Powder and Fruits and Vegetables Products like: Alphonsa Mango pulp, Mango pulp,
Mango Slice in Brine, Banana puree, Organic Banana Puree, papaya pulp, Guava Pulp,
Juices, etc.

Other products and services

Milk and milk products. Cream
Milk, fresh
Milk, full-cream
Milk, pasteurised
Milk, skimmed
Milk, semi-skimmed
Milk, UHT (ultra heat treated, long-life)
Ghee
Ice cream and sorbet
Milk, condensed and dried
Health and diet products
Juices, fruit and vegetable, dietetic
Oils and fats, edible
Vegetable ghee
Juices, fruit and vegetable