Company Performance and its Expansion Plans

In an exclusive interview with FRA(N)EWS, Sunil Bansal, CEO, Safal, elaborates on the company's...

By Fra(n)ews | January 14, 2011

Sunil Bansal

CEO, Safal

In an exclusive interview with FRA(N)EWS, Sunil Bansal, CEO, Safal, elaborates on the company's performance and its expansion plans.

1.    Where and how did the concept of Safal come into existence?
The Government of India formed a working group to benefit fruit and vegetable producers on one hand and the urban consumers on the other. The group working on ‘Perishable Agricultural Commodities’ suggested in 1981 that this change can be best managed by an organisation that has the experience and capability of handling commodities that are perishable and of daily need. The National Dairy Development Board took this challenge upfront, as they had adequate experience in bringing about such a transformation in another similar sector i.e., milk. The proposed project of NDDB of SAFAL got a final go-ahead from the Ministry of Agriculture in 1986. A humble beginning was made in 1986 to test the feasibility in a rented premise catering to 12 retail outlets. At the same time, an infrastructure, internally known as the Central Distribution Facilities, was created on 22 acres of land located in an industrial area of Mangolpuri in the western part of Delhi. In a record time of 15 months, the entire operations were in full-fledge action on the new premises in 1988. It today caters to over 400 retail outlets in Delhi NCR with sale of 350 + MT of fruits and vegetables every day.

2.    What does your product offers and how is it different from its competitors?
At Safal outlets, you can get comprehensive offering of most needed food items for a family under one roof. They are:
•    Fresh fruits and vegetables
•    Safal’s range of processed foods like jam, ketchup, juices, nectars, drinks, pickles, etc
•    Milk and milk products under Mother Dairy brand
•    Edibles oils under Dhara brand
•    Staples, bakery and snacks items

We, at Safal, work towards providing our consumers fresh fruits and vegetables. We practice and promote use of chemical-free, safely ripened fruits. Fruits and vegetables are sourced predominantly from known procurement sources. They are well below the stipulated limits of harmful insecticide/pesticide/heavy metal residues and are free from colouring chemicals. We ensure safety by following Good Agricultural Practices (GAP) and provide analysis for presence of heavy metal and pesticide residues.

3.    What practices and initiatives have been introduced by your company?
•    Safal has always been working towards sustainability. We have established a strong and robust supply chain, covering 16 states, about 50,000 farmers and over 200 farmer associations.
•    We have advanced crop production techniques (wide bed technology, deep chiseling, etc).
•    Propagation of Integrated Pest Management (IPM), thereby, reducing the use of harmful chemical insecticides and pesticides
•    Promotion of neem-based products, which minimise the chemical load on soil and improves the soil health
•    Standardisation of fruit and vegetables’ quality into different grades, packaging and transportation
•    Safal was the first to introduce use of plastic crates in fruit and vegetable business in India.
•    Safal also introduced electronic weighing machines in fruits and vegetable retailing
•    There is also a wide range of minimally processed fruits and vegetables for customers

4.    How long did it take to break even and how did you sustain yourself till you achieved that?
Fruit and vegetable retailing in an organised way is a very difficult job. Safal is now in this business for over two decades and its entry was way ahead of time. The concept of organised retailing in India at that time was not prevalent. Doing it in fresh fruits and vegetables was even tougher. However, over the years, Safal has learnt the nitty-gritty of the business, both in front-end and back-end, which has now become standard for the industry and resulted into robust Safal model.
Safal is working towards a socio-economic cause. Our mission is to facilitate a direct link between fruit and vegetable growers and consumers. We provide quality produce, products and services aimed at delighting the consumers on one hand and improving the quality of life of farmers and producers by providing expert guidance.

5.    How did you fund your business?
We got the funding as per company’s policy.

6.    At what stage did you find your business ready to take off to the next level?
Over the period, Safal could establish nationwide robust supply chain network, which is the most critical part of this business. To leverage the resources and capability it had developed over the period, Safal wanted to replicate its proven model in other cities and launched another path-breaking pilot project at Bangalore in year 2005, which is called ‘Safal Auction Market.’ Before that, Safal also extended its business line to processed fruit and vegetable pulp and concentrates in year 1994.

7.    What has been your experience with hiring your first employees and building a team?
The project started in 1988 on a pilot basis. The initial team was a good mix of young and experienced engineering and agricultural graduates. As the business concept was novel, the whole team was excited and eager to deliver. Managing and building a team, which is aligned with organisation’s vision and mission, is always an enjoyable experience. Most of the members of initial team are still working with the organisation and feel proud to be a part of this successful business.

8.    What are your expansion plans?
•    We are planning to increase our retail foot print by expanding our network of current 400+ outlets to 500+ outlets in next one year in Delhi and NCR. In Bangalore, we shall double the number of retail outlets during the same period. Currently, processed products are available only through its retail outlets. We are planning to make them available through the general trade also, initially in Delhi NCR and North India and later to other cities of India.

9.    What is the criterion for selecting franchisees?
We are looking for dynamic, enterprising and passionate entrepreneurs to join hands with us. We seek concurring franchise partners and look for the following attributes in them:
•    Business acumen: Entrepreneurial skills with favourable business attitude
•    Passion for retail: Committed towards efficiently delivering day-to-day F&V retail operations
•    Strong credentials: High personal standards, excellence, honesty and integrity
•    Balanced perspective: Inherent motivation to balance immediate profits with sustainability
•    Site selection: Proper location with approx 400 sq. ft space and easy accessibility
•    Experience in F&V retailing: Not mandatory
•    Effective compliance: Compliance with standard policies/operating manuals
•    Investment : Approx Rs 5–6 lakh

10.    What kind of training and support does a franchisee gets after partnering with your company?
As a responsible franchise leader, Safal is dedicated towards creating a successful franchise channel and providing comprehensive support to its partners:
•    Training programmes: Extensive training support pertaining to operational, administration, sales and marketing activities.
•    Standardised operations: Centralised purchase, warehousing and supply of goods, to maximise efficiencies and reduce costs through economies of scale.
•    Accounting/audit/legal: Direct reporting to our administration department responsible for the financial and legal oversight.
•    Marketing support: Assistance in development of advertising materials and strategies, which include marketing plans for local area.
•    Field support: A dedicated member of our support staff will visit you regularly to resolve your issues.

11.    Would you like to give some advice to the young and budding entrepreneurs?
You should be passionate, hard working and put your heart in whatever you want to achieve in your life.

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