ITC in expansion of Chaupal Fresh

Monday, November 19, 2007

ITC is targeting a pan-India presence for its Choupal Fresh stores. Riding on
the success of stores in Hyderabad, Pune and Chandigarh, the company
is mapping out plans to open these in over 50 new locations. It will set up at
least 10 stores in each location over the next two years.

The proposed expansion will also focus on strengthening its farm linkages in
different states, besides setting up front end stores. The company is likely to
spend over Rs 200 crore by March 2008 to open these new stores. It is also in
talks with a host of retail chains for supplying fresh produce, again buoyed by
the experiment with Q Mart and Food Bazar.

“We are not only talking to more chains for such an arrangement but are also
planning to ramp up this model with existing partners in other locations across
the country,” a senior ITC official told ET. ITC’s existing partners are retail chains
like Food Bazaar to whom it supplies fresh produce.

This would mean bringing more than 2,500 acres under its farm linkages
programme. This model entails partnership with farmers along with a
commitment to source their produce. The company advises farmers on the
crops to be grown and the cropping patterns. It also helps in sourcing high
quality seeds to ensure that the end product matches ITC sourcing standards.

Apart from the ten stores planned for each city, ITC is also looking at creating
a couple of cash and carry outlets in all the locations. The company’s cash and
carry outlets — providing grade-A and grade-B vegetables and fruits in
Hyderabad - is reckoned to have been a success with push-cart vendors
and commercial establishments like hotels and restaurants, said company

“Choupal fresh stores work on the model of selling the same day’s produce
that we source from local farmers,” S Sivakumar chief executive Agri
Business ITC told ET.

In Andhra alone the company plans to scale up its farm linkages to over
,200 acres by the end of this fiscal. It plans to add 13 more stores to its
existing seven in the city of Hyderabad. “We may add another five clusters
soon and are already in talks with farmers for greater engagement,” he said.
ITC is also working with farmers on the cultivation of exotic varieties like
broccoli, yellow and red capsicum, Chinese cabbage, lettuce and so on.
For this, farmers are trying out both polyhouse and open-air cultivation,
which are inspected regularly by ITC agri field experts.