CrossTree Blog

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Market for Fruits in India

Fruits-Banana-Apple-Orange
India is viewed as a steady state consumption market, including for fruit produce…and it has lived up to this perception! Over the last 10 years, imports into India of apples, kiwis, pears, grape have seen phenomenal growth; not merely doubled or quadrupled, but more than 10 fold growth has been witnessed.

On the domestic front, Indian farms repeatedly break production records but one does not see a likewise increase in trade volumes from these domestic source points. What prevents our own produce from spanning the sub-continent and emulate the growth our imports have witnessed?

Is it that our consumers have a penchant for imported fruit, a specific flavor, a specific brand?
I think this argument does not pass muster, because our buying market base spans more than these whims. Besides, one has yet to find a brand that is ‘favored’ in this segment. In fact, it is this brand vacuum where may lay the immense business opportunity.
Is it that our consumers differentiate between tastes and opt for specific quality?
Maybe… possible… but while we may profess to extremely sensitised taste buds and claim gourmet like antecedents, the majority sensibly measures the mile for each buck. Yes, if the quality in terms of freshness is out of synch, there would be few takers.
Is it that our domestic fruit is not available in our markets, in quantity, in a format that is appealing enough, over sustained periods, on demand!?!
Bingo! Or at least that is where I feel lies the problem.
The fact that fresh fruits are imported and profitably distributed in ever growing numbers across India establishes that we have an effective temperature controlled distribution system. The demand, market trends and the scenario is well documented and published in public domain. Re-establishing that is not even a moot point. These growth trends clearly do indicate that whatever we have developed in terms of infrastructure has catered towards this exponential jump in the volume of imported fruits. (Yes, yes there is a lot more that can be done to optimise the  operations and the profits of the importers).

The other fact... that we do not have our own produce being distributed along these same channels, at the same quality and fetching the same price… tells us we do not have the right cold-chain! A dichotomy indeed and in conflict to our development agenda!

Fruit that travels over a few thousand miles from other continents is sold and willingly consumed in India. From the moment they touch our shores, they too traverse our subcontinent, utilising the conduit of our existing logistics. Yet our own produce does leverage this infrastructure to effectively compete with this imported produce, despite the obvious advantage of being home grown.

You see, before undertaking any travel, one needs to prepare for the long haul – as humans we prepare by packing essentials, ablutions, checking tyre pressure, oil check etc. The fruit also needs to be prepared before dispatch to market with the aim to arrive in a saleable state. This is the most important component – just entering willy-nilly into the cold chain is futile!

But our domestic produce is not prepared or conditioned, since what has been developed as temperature controlled logistics did not venture backwards to point of origin, the farm-gate. All we did was promote mid-point transit hubs or long term cold warehousing. Hence our produce is barely packaged, rarely conditioned, infrequently branded but most hastily pushed onto consumers.

The result is poor handling, large wastage, shoddy quality and poor price discovery.

Where lies the hesitancy in doing things right? Our fragmented and traditional production centres cannot take this up on their own, which is why business houses with visionary leadership ought to pay heed and recognise the rapid change & opportunity. Yet, there is a clear inertia, a palpable wait for a notional starter’s gun.

Some say it is a matter of profitability or the lack thereof. This does not cut ice when we see that domestic consumers are paying a higher price for imports that are subject to the same logistical constraints (plus the added cost of international shipment, tariffs and sourcing).  

Productivity as an issue, it may be argued... but surely input costs are much lower here and our buyers span across all quality grades. 

Not big enough of a market yet, some say... but is this not the very market that buys the imports... what belies this hesitancy in broaching cold chain as a business?

Is it lack of strategic leadership? An irreverence towards interacting with and developing the rural landscape? Or is it just that the business world has not matured enough to see beyond the immediate? Maybe the story and the occasion is not fully understood…

There exists demand and there is a gap… there is a market and the opportunity stares out obstinately.