Organised retail chains are increasingly focusing on direct procurement of horticulture produce from farmers to cut wastage and cost, amidst fluctuating and often skyrocketing vegetable and fruit prices.

Future Group’s new store format Future Fresh Foods has started procuring 75 per cent of its vegetables and fruits directly from the farmers. “Currently, we are procuring 75 per cent goods directly for our Kolkata and Mumbai stores. We would like to take this to 80 per cent with all the vegetables and most of the fruits bought from the farmers,” said K Radhakrishnan, president, Future Fresh Foods.

As Future Fresh Foods expands, a similar system of procurement will be established in 18 cities by September. The produce will be supplied to all the stores of the company, he said.

Similarly, Aditya Birla Retail has been increasing the proportion of direct procurement every year by five per cent. Currently it accounts to 30 per cent of the total horticulture procurement. “This varies from state to state depending on the availability. But we are trying to increase this as much as possible,” said Thomas Varghese, CEO, Aditya Birla Retail.

“Reduction on procurement cost and wastage will result in savings of 10 to 40 per cent depending upon the product. As far as customers are concerned, this could make the goods at least 10 to 20 per cent more competitive in the market,” said Radhakrishnan.

“Moreover, direct procurement helps the farmers get the right price without wastage and added expenditure of transit to the wholesale market. For the retailer, availability of quality fresh goods is crucial in bringing back the customer to the store,” said Varghese.