SECTOR SPECIFIC SUPPLY

CHAIN

Trina Bhagat (09020242004)

Aikta Dube (09020242008)

Meghraj Gawande (09020242009)

Kamlesh Kunhara (09020242016)

Saurabh Walke (09020242034)

Sagar Shinde (09020242038)

Vipra Khandelwal (09020242046)

Jyoti Jadhav (09020242051)

1
 The Food and Beverage Industry

• Large number of products like: alcohol, beverages, bread & biscuits etc are
included under the category of Food & Beverages

• This industry consists of high level of market segment, huge variety of

products, huge number of companies and many other characteristics

• It represents a diverse set of products and processes: fresh, frozen, chilled,

and long shelf-life food and beverage products

• They are manufactured, distributed, imported, and marketed to consumers,

retailers, catering services, and other manufacturers

• The manufacture & export of food & beverage has been constantly
increasing since past few years

2
 Indian Scenario

• The food processing industry is one of the largest industries.

• It is ranked fifth in terms of production, consumption, export and

expected growth.

• The industry size has been estimated at US$ 70 billion by the

Ministry of Food Processing, Government of India.

• 6.3 per cent to India‟s GDP in 2003 and had a share of 6 percent in
total industrial production.

• The industry employs 1.6 million workers directly.

3
 Growth

• Indian food, beverages and tobacco market will grow at a

CAGR of around 7.5% during 2009-2013 to around US$ 330
Billion by 2013.

• All the segments registered uptrend in terms of consumption

and sales between 2005 and 2009, but the alcoholic segment
outperformed other segments.

4
India's competitive Advantage in
Food Processing Sector

5
 Role of F&B sector

• Expands economic opportunity.

• Operates at multi level of the society

• International Firms can build opportunity around F & B

value chains.

• Provide income to workers.

• Transform life of billions of workers

6
Some Observations On The Current
Supply Chain Scenario

• Low level of processing –

– 2% in the case of fruits and vegetables
– 14%in milk
– 4% in fisheries
– 1% in meat and poultry products
• India‟s share in world‟s processed food production-
1%
• Value addition 20%

7 Source: MOFPI, Govt. of India

 Contd…

• India‟s share in global agricultural export is 1.6% of $520 billion

• Exports have stagnated during the last five years

• Unorganized marketing and distribution of food items

– 72% of food consumption in the world is through organised set up
whereas it is 1% in India
– Fragmented retailing results in high cost due to inefficiency ,wastage

• Estimated wastage fruits & vegetables in India-35%

• The Unorganized, small players account for more than 70 per cent of
the industry output in volume terms and 50 per cent in value terms.
8 Source: MOFPI, Govt. of India
 Supply Chain in Food & Beverage
>> Weak Link
• Production sector unorganised.

• Bulk of production in small & marginal holdings.

• Producers getting only 30 % of produce value.

• Trade intermediaries getting rest 70 % without any value addition.

• Supply line unreliable.

• Lack of infrastructure at the production sites.

• Producers not linked to the processors.

9
 Contd…

• No linkage between production of agricultural produce and its

demand in the market

• Poor on-farm practices in harvest and post-harvest handling

• Poor infrastructure in terms of transportation, storage and

market

• Difficulty in collection from numerous small farms

10
 Contd…

• Negligent attitude towards post-harvest losses

• Lack of quality consciousness

• Absence of food processing units

• Faulty power supply

• Unavailability of modern cold storage

11
 Meeting demand for sustainable
products
• Promote sustainable agricultural practices by providing
agricultural education

• Back ward and Forward linkages.

• Establishment of marketing network.

• Establishment of cold chain, low cost pre-cooling facilities

near farms, cold stores and grading, sorting, packing facilities
to reduce wastage, improve quality and shelf life of products

12 Source: MOFPI, Govt. of India

 Contd…

• Design innovative system of manual distribution

centers

• Building distribution networks and micro enterprises

• Financing mainly through loans.

13 Source: MOFPI, Govt. of India

 Fruits & Vegetables Processing
Processing Pattern - Global
Country % Processed*

Malaysia 83
South Africa 80
Philippines 78
Thailand 72
Brazil 70
USA 65
India 2-3

* percentage processed out of total production of fruits & vegetables

14 Source: MOFPI, Govt. of India 14

Segmentation of different sectors in
food processing industry

15
7/11/2013 16
Dairy Sector

17
• most of the processing is done by the unorganized sector.
• the share of organized sector is less than 15 per cent.
18
Fruit & Vegetable Sector

19
• Fruit and vegetable processing in India is almost equally divided between
the organized and unorganized sectors.
• organized sector : products like juices and pulp concentrate
• The unorganized : processed items like pickles, sauces and squashes
20
Meat and Poultry Sector

21
• India is the third largest fish producer in the world
• The fisheries sector contributes US$ 4.4 billion to the national income,
which is about 1.4 per cent of the total GDP

22
 Beverages Sector
• Aerated soft drinks
• Alcoholic drinks
• Packaged drinking water

23
 PEST Analysis
• Legislation
• Market regulations • National and global interest
• Trade agreements rate and fiscal policy
• Tax • suppliers and creditors
• Type of government behaviour.
regime e.g. communist, • Response of the competitors
democratic, dictatorship to the changes in the global
scenario.
Political Economical

Technological Social
• Telephone, internet, IT • Social forces
software, Bluetooth, photo • Cultural impact
copier etc • Demography.

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 PEST ANALYSIS OF INDIAN
FOOD & BEVERAGE INDUSTRY
POLITICAL ECONOMICAL
 Vision 2015 of Govt of India is to raise  Size of food market in India - Rs.
agro/food processing from 6% to 20%, value
addition from 20% to 35% and the global 8,60,000 Crores
trade from 1.5% to 3 % .  Primarily processed food market – Rs.
 Twenty mega parks in various cities to attract
2,80,000 crore
Foreign Direct Investment (FDI) in the food-  Value added processed food market –
processing sector
Rs. 1,80,000 crore
 Concessional rate of 5% custom duty on tea  Investment during the 10th plan is
and coffee plantation machinery. estimated at Rs. 62,105 Crores
 Industry growth rate during the last five
 Tax exemption in sales and excise duty for
small scale industries. years is estimated at 7.14% against GDP
of 6.2%
 Transportation and infrastructure  Investment required during next ten
development in rural areas helps in
distribution network. years – Rs. 1,10,000 crore

25
 Contribution of Food and Beverage Industry
GDP rate

9.7
9 8.9
8.4
7.9

6.9

5.4

4.5
3.9

2000 2001 2002 2003 2004 2005 2006 2007 2008

26 Source: MOFPI, Govt. of India

 India's FMCG Market Size (In USD Billion)
40

35

30

25

20

15

10

0
2003 2006 2007 2015

27 Source: Naukri Hub, IBEF, Chennai Online

 Contd..
SOCIAL TECHNOLOGICAL
 People are switching to  Technology has been simplified
healthier foods and beverages and available in the industry.

 The need for convenient  Foreign players are helping in

packaging increasing high technological development.

 Introduction of cans and plastic

 Healthier beverages are bottles have increased the sales as
preferred over alcoholic these are easier to carry and you
beverages can bin them once they are used.
 Market for ready-to-eat food is
increasing in National &
International market.  Introduction of new machineries
all the time

28
 Future Opportunities

• According to the Confederation of Indian Industry (CII) the food- sector

has the potential of attracting US$ 33 billion of investment in 10 years and
generate employment of 9 million person-days.

• Exploitation of the huge untapped.

• Opportunities presented by contract farming, captive supplies of raw

materials, disintermediation and direct access to farmers, availability of
new and improved seeds and farm technology.

29 Source: MOFPI, Govt. of India

30
 Located around the idyllic hill-town of Panchgani in Western India.
 With an annual processing capacity of around 30 thousand MT,
 Mapro is a market leader in Western India.
 The company has grown organically over the last five decades with sustained
profitability.
 Known for its quality and innovation, Mapro has been built on its founder‟s
philosophy of developing products that are wholesome, nutritious, value-for-
money, and imaginative.
31
 50 Fruitful Years

• Founded in 1959.

• Founder: Kishore Vora a pharmacist by profession.

• Today, his „hobby‟ has borne fruit in the shape of Mapro, one of the
most modern, hygienic, quality-focussed fruit product
manufacturing units in India.

• His vision has been taken forward, thereby transforming the region
around Mahabaleshwar and Panchgani, the erstwhile sleepy hill
stations of Maharashtra, into a flourishing fruit processing zone.

32
 VISION\MISSION

• Mapro will develop, produce, package & sell food products,

with high regards for safety, nutrition & taste, which we can
confidently give to our customers by implementing and
continually improving Quality Management system & food
safety management system to meet & exceed customers
expectations.

33
 About Mapro
• Mapro is the first company to introduce pectin jellies and fruit sweets in India.

• There are 500 local employees. There are 100 contract labourers employed as
well.

• Mapro has been growing consistently at the rate of 25-30 per cent in the past
few years.

• The company earns a profit of about 40-50% profit in an average.

• The Company has expanded capacity to produce 30000 MT of processed

frozen foods.

• Estimated Annual Sales (USD): US$5 Million - US$10 Million.

34
 Beyond business
• Flat organization structure.

• Common canteen for one and all.

• Employees are recognized and felicitated.

• Socio-economic upliftment.

• The development of the village of Gureghar, comprising around 70 families,

between 1971 and 1985

• 100% employment

• 100% literacy

• 0% dropout rate
35
 Product Portfolio
• Taste

• Quality

• Natural Goodness

• Nutritive Value

36
37
 Jam
• Mango Jam

• Mix Fruit Jam

• Orange Marmalade

• Pineapple Jam

• Strawberry Jam

• Whole Strawberry

38
 Falero
• The „Falero‟ pulpy
fruit chews, which
are better known
as „pates de Fruit‟
in the rest of the
world – are
excellent
exemplars of
Mapro‟s very own
Innovation Labs.

39
 Location

• Shendurjane

• Indora

40
 Quality

• With its state-of-the-art production facilities, Mapro is committed to

developing, producing, packaging, storing and selling food products, with
high regard for safety, nutrition and taste, by continually improving quality
and food safety management systems to meet and exceed customers‟
expectations

• The company has obtained ISO 9001:2000 certification and HACCP

Certification from BVQi.

• ISO 22000 Certification is currently under implementation and the

implementation of B. R. C. Standards is being planned in the near future.

41
42
 Quality maintenance

• In all stages i,.e.

• Developing

• Producing

• Packaging

• Storing

• Selling food products

43
 Bureau Of Indian Standards

• BIS has adopted this International Standard as IS/ISO 22000:200-

‟FOOD SAFETY MANAGEMENT SYSTEMS
CERTIFICATION SCHEME’.

• Highlights:
 Emphasis on preventions of food safety hazards of all types.
 Ensures compliance with legislative and regulatory
requirements.
 Provides for management of potential emergency situations &
accidents that can impact food safety.

44
 Codex Alimentarius Commission

• The Codex Alimentarius (also known as the CODEX) is a collection of

internationally adopted food standards presented in a uniform manner and
aimed at protecting consumers' health and ensuring fair practices in the
food trade.

• The Codex Alimentarius includes standards for all the principle foods,
whether processed or raw, for distribution to the consume

• Codex standards usually relate to product characteristics and may deal with
all government-regulated characteristics appropriate to the commodity, or
only one characteristic.

• Maximum residue limits (MRLs) for residues of pesticides or veterinary

drugs in foods are examples of standards dealing with only one
characteristic.

45
 Agricultural Produce (Grading and
Marketing) Act, 1937 (Agmark)

• Under this Act Grade standards are prescribed for

agricultural and allied commodities.

• These are known as Agmark' standards.

• Grading under the provisions of this Act is voluntary.

46
 HAZARD ANALYSIS CRITICAL
CONTROL POINT (HACCP)
• Hazard Analysis and Critical Control Point (HACCP) is a
process control system designed to identify and prevent
microbial and other hazards in food production

• It includes steps designed to prevent problems before they

occur and to correct deviations as soon as they are detected.

• Reduces direct costs by substantially reducing the need to

destroy finished product for food safety reasons.

• Enhanced marketability of products, especially in light of

increasing concerns for food safety by domestic and
international customers and consumers,
47
 ISO-9000

• Implementation of the ISO standards enables export

enterprises in developing countries to offer products or
services that meet well-defined needs, satisfy consumer
expectations, comply with applicable standards and
specifications, as well as conform to requirements in regard
to health & safety, protection of the environment and
conservation of energy and materials: all these at lower
costs and higher levels of efficiency.

• ISO 9000 series of standards are generic standards and are

applicable equally both to manufacturing as well as to
service industries.

48
 Mapro Food Park

• In Panchgani: to cater to growing demand

• The food park is capable of processing over 30 tonnes jams

and pack over 30,000 jam bottles of 200gm, 500gm and 1kg
per day.

• Currently, their aim is to process strawberry, papaya, orange,

sweet lime, kiwi, mango, pineapple and raspberry. (Source:
Mr. Anis Siddiqui, manager – factory, Mapro Foods

49
 Contd…
• To achieve food safety and quality assurance at all
level, Mapro has created three departments

a) microbiological analysis,

b) R&D analysis

c) physical & chemical analysis.

50
 Visit Details

Date: 6 January 2010.

Time: 12:30 pm to 4 pm
Place: Shendurjane, Tal: Wai, Dist: Satara
Person contacted: Mr. Mustaq Shaikh
(Head, Supply Chain Dept , Mapro Foods Pvt .Ltd)

51
52
 Organization Structure
Director
( Mr
Mayur
Vohra)

SCM Head
Marketing Financial Manufacturing
HR Head (Mushtaq
Head Head Head
Shaikh)

Head Sales

Area Sales
Manager

Sales
People

53
 Supply Chain

Planning

Procurement

Manufacturing Logistics

Packaging &
Warehouse

Distribution
54
55
 Forecasting

New Products

56
 Forecasting
• Production plan is prepared for a quarter

• Sales team gives sales plan from previous sales data.

• Plan of 3 months is divided into weeks.

• Maintains daily data for proper evaluation.

57
 Procurement
Basic Raw Material

Sugar Fruits

58
 Sugar Contract

Suppliers(Agents)

Tender-
Quotation

Sorting of
Supplier

Final Contract
59
 Fruit

Directly from Market Directly from Farmers

Directly from Societies No Contract farming

60
 Example of Strawberry
Procurement
• Every year 1000-2000 tons
is required.
• Price at which procured is
around Rs.30 to Rs.50 per
Kg.
• Market is Panchgani.
• Stock for 9-10 months is
kept in cold storage.

61
 Other fruits
• Nagpur (Maharashtra)

• Muzzaffarpur (Bihar)

• Ratnagiri (Maharashtra)

62
 Raw Material
Category Items
Fresh Mango Raspberry Strawberr Papaya Grape Pineapple
Fruit/ Litchi Kokum y Apricot Lime Orange
Partially Peach Juice
Processed
Commodi Sugar Glucose
ty
Food Pectin Citric Preservati Starch Sodium
Additives Acid ves Citrate

Packing Glass PET PVC Labels Bags Cartons

Materials Bottles Bottles Packs Caps
Spices Cardamo Cashew Fennel Khus White Maggateri
m Nut Seeds Pepper Seeds

Others
63
Honey Dry Kesar Spices Fruit Bags
Fruits Drops Flavours
 Preservation Process
• Deep Frozen Technique

• Aseptic Technique

• Sodium Meta Sulphide

64
 Manufacturing
• Manufacturing plant at Shendurjane, Wai

• It consists of various divisions for various products.

• They have their own Boiler unit which works on electricity

and Baggase.

• For proper quality, trained work force is present.

• Separate Quality lab is present inside unit.

65
66
67
 Steps in Manufacturing
Inspection

Cleaning &
Crushing

Pasteurizing

Process

Filling jar,
Labelling

Storage
68
 Packaging
Items Variants
Glass 200gm 250gm 300gm 400gm 500 gm 1000gm
Bottles
PET 200ml 350ml 500ml 700ml 1000 ml 6kg Jar
Bottles
Outer 2 PLY 3 PLY 5 PLY
Cartons
Inner 50gm 100gm 200gm 500gm
Cartons
(PVC)
Caps 28mm 53mm 63mm 73mm Crown Screw on
Cork Cork
Others Wrapping Shrink Plastic Labels Gum/ Cans
Paper Rolls Bags Cpesello
T
69
 Warehousing

Single warehouse capacity is 50,000 sq feet

No. of warehouse:2
70 1 under construction.
 Cold storages

71
 Distribution

Distributor Superstockis Company

• Retailer
t
• Distributor
• Modern
• Customer Retailers
• Retailer
• Customer • Customer

72
 Logistics

• Inbound Logistics:

1) Sugar @ Middle man‟s expenses.

2) Fruits @ Company‟s expenses.

3) Packaging Material @ Company‟s expenses.

73
 Contd..

• Outbound Logistics:

– From warehouse to distributor or Superstockist @

company‟s expensenses.

– Company owned vehicles for outbound logistics.

74
75
 Assessment
• Periodical review of Suppliers performance.

• Distributors and Retailers performance appraisal

through sales team.

• Customer satisfaction surveys and Customer helpline.

76
 Use of IT
• Use of Tally for evaluation of various operations.

• Internal communication within workforce by e-mails.

• Bar coding.

77
 Tools for better Operations
• Integration of outbound & reverse logistics.

• Waste Management.

• Electricity generation from Baggase.

• Recycling of water for orchards.

78
 MAJOR FINDINGS

• No Contract Farming.

• Should use ERP now.

79
 Conversion Ratio
• Strawberry- 70%

• Mango- 50%

• Guava- 70%

• Orange- 40%

• Custard Apple- 20-25%

• Kiwi- 60-75%

• All product costing is online

80
 Manufacturing cycle

• Strawberry pulp is a semi finished product

• So strawberry products are completed in 24 hrs

• For ripe products 24 hrs cycle

81
 Distribution Cost
• 8% to distributor

• 15% to super stockist

• Retail margins 15-25%

• Advertisements- 1-2%

• Schemes vary from season to season

82
 Role of SCM for new products

• Sales forecast- Last year sales + growth in each

product

83
 Future opportunities
• Falero- production- presently- 8 tonnes

• Targeting for 20 tonnes

• Next year Mapro is supposed to become a 100 Cr

company

• To achieve this target the contributions would be as

follows:

• Falero - 70%

84
 Mapro garden

85
 Contd…

• With growing demand for fruit-based products – Mapro Foods

has decided to augment their fruit processing capacity at
Mapro Food Park, Panchgani.

• The food park has a capacity to process over 60,000 litres of

SCS (squash crush and sharbat) range and process over 2 lakh
litres ready-to-serve beverages everyday.

86
 Contd..

• “The food park is capable of processing over 30

tonnes jams and pack over 30,000 jam bottles of
200gm, 500gm and 1kg per day. Currently, they aim
to process papaya, orange, sweet lime, kiwi, mango,
pineapple and raspberry,”

87
 Visit to Mapro garden

• 10-12 lakhs footfall in Mapro garden

• Peak season 10,000-12,000 footfall everyday

88
 Marketing

• Press Release.

• Mapro Garden.

• 1% to 2 % of total revenue is spent on promotion.

• Promotion concentrated in Western Maharashtra only.

• Various Schemes for Distributors.

89
 Future

• The company is going to open its manufacturing units in Delhi

and Pathankot lately.

• It is also concentrating in expanding its market to the other

cities like Kanpur, Lucknow and in Punjab.

• It is setting up a Frozen and Fresh Food Distribution Chain in

Indian Metros to service the fast growing modern Organised
Retail Supermarkets being set up in India

90
 In year 2011

• Projected to be 100 crore company.

• Out of this

 10% Syrups

 20% Crushes

 7 % Jam

 63% Falero & others

91
 Contd…

• Falero- production- presently- 8 tonnes

• Targeting for 20 tonnes

• Falero - 70%

• New product launched on 7th Jan 2011 is F20 (Ready

to drink)

92
 Contd…

• Crushes- 15-20%

• Syrups- 10%

• Jams- 5-7%

• Excise on syrups- 4%

93
SWOT Analysis

94
 STRENGTH
• Increase in Customers loyalty.

• Increase in Profits.

• Image created in particular region will be carried

forward at national level.

95
 WEAKNESS
• No visibility in new market.

• Have to design new Marketing, supply chain design

in new areas.

• Problem in Investments.

• Financial problem.

96
 OPPURTUNITIES
• To explore new market.

• To target new customers.

• To create new products.

• Expansion of Brand image.

• Enter in export business.

97
 THREATS
• Well established national brands are bigger competitors.

• Regional brands are other competitors.

• If failed as national brand then loss of huge investment.

• If failed, it will create negative effect on regional

customers and this will hamper the regional profits also.

98
 Acknowledgement

Mr Mayur Vohra Mr Mustaq Shaikh

Mr. Satish Rajdeep

99