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Sai Aditya foods and retail private limited


A Project submitted in partial fulfillment for the award of the degree of


(Batch: 2011-13) - MBA 3rd TRIMESTER

Under the guidance of: Submitted by Dr. A. Sreeram B. Avinash Professor, 2225111106 Gitam University, 1st Year MBA, Hyderabad Business School

Hyderabad Business school GITAM University


Rudraram, Patancheru (M), Medak Dist. - 502 329, A.P. INDIA


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I hereby declare that this Project Report titled A effective study on Inbound and Outbound

logistics of Fresh Choice in Visakhapatnam submitted by me to the Hyderabad Business

School, GITAM University. Hyderabad is a bonafide work undertaken by me and it is not

submitted to any other University or Institution for the award of any degree diploma /certificate

or published any time before.

Name and Address of the Student Signature of the Student

Bandaru Avinash

1st Year MBA




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This is to certify that the Project Report title A effective study on Inbound and Outbound logistics of Fresh Choice in Visakhapatnam submitted in partial fulfillment for the award of MBA Programme of Hyderabad Business School, GITAM. University, Hyderabad, was carried out by Bandaru Avinash under my guidance. This has not been submitted to any other University or Institution for the award of any degree/diploma/certificate.

Name and address of the Guide Signature of the Guide Dr. A. Sreeram


Hyderabad Business School,

GITAM University,



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Any job in this world however trivial or tough cannot be accomplished without the assistance of others. There is always a sense of gratitude that one likes it express towards the persons who helped to change an effort in a success, the opportunity to express my gratitude to people who have helped me to accomplish this task.

I deem it a proud privilege to extend my greatest sense of gratitude to my trainer

MR B. SUDHAKAR RAJU (GENERAL MANAGER FOR RETAIL & MARKETING, SAI ADITYA FOODS AND RETAIL PRIVATE LIMITED) for the keen interest, inspiring guidance, continuous encouragement, valuable suggestions and constructive criticism throughout the pursuance of this report, and also extended my greatest sense of gratitude to MR. A.V.N RAJ PRODUCTION MANAGER.

I take this opportunity to thank MR. N.ANIL KUMAR (SENIOR EXECUTIVE HR), MR. V.GUPTA (SENIOR EXECUTIVE MARKETING) for their valuable support in helping me to gain this opportunity of being associated with an organization of such esteem.

I am thankful to director sir PROF.S.S.PRASADA RAO for granting me the permission to undertake the study. I also thank Associate DR.S.SUMANBABU for making this internship happen and also making us and part of SAI ADITYA FOODS AND RETAIL PRIVATE LIMITED. I would like to convey thanks to my project guide DR.U.DEVIPRASAD, DR.SREERAM for ready assistance, keen interest and Valuable suggestions. I also thank PROF.Y.MANOHAR for taking a lecture how to behave in an organization and perform the internship.

Last but not least it would be unfair if I don‟t extend my gratitude to all my faculties, to my parents and all my friends for their active cooperation which was of great help during the course of my training project.


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Food industry supply chain and logistics are one of the important fields of modern life. In a globalized world where parts and pieces are being sourced from different locations to be summoned into one in the next location, the well thought and implemented supply chain system is the key for success. Taking above mentioned into account, the supply chain and logistics system in food industry is even more critical due to the factors as safety, seasonality, and product life of food.

The research is on the basis of A STUDY ON “INBOUND AND OUTBOUNG LOGISTICS” AT SAI ADITYA FOODS AND RETAIL PRIVATE LIMITED. The overall aim of the project is the analytical review of the Logistics system management adopted by Sai Aditya Foods and Retail private limited. Analysis will be carried out based on several key points helping to understand the “nature of business”, established infrastructure to be able to respond to the customer demands, challenges faced and solutions to mitigate those, overall supply chain system has been built on.

The study was based on the descriptive research design. The sampling design being used here is stratified random sampling. A survey was done on the Institutional sales (Retailers) like More,

Spencer (Hyper), kashyap, and Vijetha. And National sales like Railways & Shipyard. A

survey was also done on Fresh Choice Line Members with a sample size of 9 out of 11 line members in Fresh Choice. Thus this report seeks to utilize primary research, through structured questionnaires and secondary method involves data collection and information given by the organization. Collected date is represented in bar chats and interpreted.

Suggestion made by the Retailers, and Line Members of Fresh Choice are implemented whenever they were applicable.


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Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers. Logistics involves the integration of information, transportation, inventory, warehousing, material-handling, and packaging, and occasionally security.

History of Logistics:

Logistics has always been a critical part as one of the 4 P‟s in Marketing:

• Product

• Place

• Price

• Promotion

The “Place” component ensures the product is at the right place, at the right time, in the right quantity and the right quality.

"How the logistics discipline started and where it is headed?”

Military Roots:

Logistics received recognition in military operations during World War II. It gained its momentum as it contributed to the effective distribution of machinery and supplies to troops. A service delivery failure here may mean an increase in unnecessary fatalities. Peter Drucker (a business guru in the 1960‟s) identified logistics as a growing concern within business. This generated more prominence towards the practice of logistics.


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With the advent of globalization, firms began to seek ways of cutting their production costs. Thus, multi-national corporations re-located their factors of production to low-wage countries to gain a competitive advantage.

Increasingly, more and more countries are joining the World Trade Organization (WTO) and opening their country to foreign capital investment (most recently in India and China).

Retail giants like Wal-Mart exploit these new efficiencies and increase their imports from new emerging economies to reduce product prices in their stores. Thus, the new challenge is how to manage the product and information flows around the world. The increased pressure on managing these operations further underscored the importance of logistics as an area for optimization.

Information Technology:

Another contributor that led to an increased presence for logistics was the explosion in information technology and use of computers throughout the 1980‟s and onwards.

The cost of computing has decreased year after year since then and computing power rose exponentially. The use of the Internet and increased bandwidth capacity further enhanced and enabled quick connectivity and collaborative relationships that reduced inventories and created a Just-In-Time operating opportunity for organizations.

These efficiencies reduced errors, increased fill-rates and cut overall operating costs for organizations.

Supply Chain Management:

As the above factors fuelled efficiencies, logistics gained more prominence in organizations. A natural extension was to link the logistical operations from each firm to the entire supply chain.

The new paradigm became known as the „systems approach‟ to supply chain management and introduced the concept of trade-offs. In order to achieve least total supply chain cost, operational integration of the 5 main areas of logistics must be simultaneously optimized:


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• Warehousing • Transportation • Inventory

• Order Processing and • Lot Quantities

Optimizing any one of these areas individually will sub-optimize the system as a whole.

For example, a single warehouse in a network would achieve the lowest warehousing cost. This would create high transportation costs as suppliers ship over greater distances to ship products into the warehouse and conversely, outbound to its market distribution area.

The addition of a second warehouse in the network would reduce transportation costs more than the marginal cost of operating the second warehouse, which would reduce total supply chain costs.

Future Challenges:

As the business landscape constantly changes with mergers & acquisitions and as globalization grows, there are corresponding changes in the supply chain that need to be continuously optimized to ensure least total supply chain costs.

Radio Frequency Identification (RFID) and other technologies will continue to drive down inventories as better information is made available in a timely manner. Since supply chain activities cross over all functional areas in an organization (such as Marketing, Finance and Human Resources), new metrics must be developed to track true supply chain costs and identify the impact on new costs as corporate strategies change.

Organizations that measure and benchmark these costs will have a sustainable competitive advantage going forward.


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The data used for the study had primary and secondary character to it. The primary data was collected through questionnaire method. The secondary data were composed through the reference of books, websites, and interviews with various executives in different organizations of the sample. The procured data was analyzed by a simple percentage method and the results are supported with graphs and charts.



Supply Chain Management encompasses, planning, design, control and implementation of all business processes related to procurement, manufacturing, distribution and sales order fulfillment functions of a business.

All these activities involve multiple networks of vendors and service providers which are integrated and co-coordinated by the Supply chain Experts of the organization to move raw materials and finished goods from and to all distant locations across the globe.

„Logistics‟ is the backbone on which Supply Chains are driven. Logistics refers to management

of flow of goods and supplies involving information, data and documentation between two entities or points. Logistics play important role in post procurement function of delivery of raw material from the supplier to the point of production and Finished Goods Supply chain management from the point of dispatch from factory to the point of delivery to the customer.

Global markets are expanding beyond borders and re-defining the way demand and supplies are managed. Global companies are driven by markets across continents. In order to keep the cost of manufacturing down, they are forced to keep looking to set up production centers where cost of


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raw materials and labor is cheap, Sourcing of raw materials and vendors to supply the right quality, quantity and at right price calls for dynamic procurement strategy spanning across countries.

With the above scenario you find companies procuring materials globally from various vendors to supply raw materials to their factories situated in different continents. The finished goods out of these different factory locations then pass through different chains of distribution network involving warehouses, exports to different countries or local markets, distributors, retailers and finally to the end customer.

Logistics therefore is an integral component of Supply chain Management.

Origin of Logistics as a recognized discipline is generally attributed to military and defense organizations. Defense departments make use of detailed and extensive planning to gather supplies and move men and materials to various locations and bases. The success of any military exercise depends upon the ability of the establishment to be able to gather information, analyze, assimilate and take appropriate logistical measures to continuously support their units.

Similarly in any business organization, the successful operations depend upon visibility and control over the logistics process managed through and with excellent logistics service provider backbone and network

Finished Goods supply chains are very dynamic and are the backbone of a good sales organization. A number of departments are responsible to work in coordination and seamlessly

to ensure Finished Goods reach the markets and the customers. Logistics and supply chain departments have to work in tandem with or aim to be ahead of Marketing and Sales and ensure that when a product is announced for sale by marketing, the products are made available at all nook and corner of the city, state and country. A situation where the customer goes to a sales counter to place an order and the product is not available cannot and should never happen as a rule.


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It can be defined as the process (completion of a series of activities) of obtaining goods and services for the firm consistent of user requirements. It links members in the supply chain and assures the quality of suppliers in that chain. The quality of the materials and services that are input affects finished product quality and hence customer satisfaction and revenue.


The traffic function manages the inbound transportation of materials


The receiving process involves the actual physical receipt of the purchased material from the carrier. The receiving clerk, who must ensure that the goods a firm receives were those ordered and shipped, compares the materials indicated on the buyer‟s purchase order and the vendor‟s packing slip with the material the buyer has actually received. If discrepancies exist, the receiving department notifies the purchasing department, the material‟s users, and the accounts payable department.

Logistics service providers:

Procurement Logistics, Manufacturing Logistics and Finished Goods Logistics functions are managed by different independent departments in a company. Though the functions of the departments involve common activities like transportation etc., however the processes and nature of logistics functions are specific to each function besides the requirements and sensitivities of delivery times, schedules etc.

With the emerging trends and availability of third party logistics providers has pushed the companies to adapt the practice of outsourcing all supply chain components and logistics functions termed as non-core functions to their part logistics providers.

Inbound logistics:

Inbound side of logistics includes procurement or purchasing and the related materials management activities. It is important to note that the inbound and outbound logistics systems


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share common activities or process, since both involve decisions related to transportation, warehousing, materials handling, inventory management and control, and packaging, as well as some other activities.

Logistics Management Function:

Logistics is the process of movement of goods across the supply chain of the company. This p r o c e s s c o n s i s t s o f v a r i o u s f u n c t i o n s , w h i c h h a v e t o b e p r o p e r l y m a n a g e d t o b r i n g effectiveness efficiency in the supply chain of organization. The major logistical function are-


Warehousing refers to the storing and assorting products in order to create time utility. The basic purpose of the warehousing activity is to arrange placement of goods, provide storage facility to store them, consolidate them with other similar products, divide them into smaller quantities and build up assortment of products. Generally, larger the number of warehouses a firm has the lesser would be the time taken in serving customers at different locations, but greater would be the cost of wareho using. Thus, the firm has to strike a balance between the cost of warehousing and the level of customer service.

Major decision in warehousing is as follow:

 Location of warehousing facility  Number of warehousing

 Size of warehouse  Design of the building  Ownership of the warehouse

Warehouse efficiency factors

Managing Warehouse Operations is akin to playing symphony with people, systems and processes. As long as these elements are balanced and in harmony the operations go on smoothly and efficiently.


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People are very important assets of warehouse operations. Human resources can be the strongest and the weakest link to warehouse performance.

Even in a highly automated and system controlled design, warehouse operations are heavily dependent upon people to run and manage operations.

Typically in warehouse operations, besides management structure, the operations resource categories are MHE Operators, Operations staff who manage shipments, put away, material picking tasks and other operations including labeling, packing, kitting, inventory counting, documentation and systems operators. These resources are mainly categorized into team leaders and operators.

Normally in warehouse operations, the manpower resources structure is employed in a mix of, on the company role jobs, on contract and temporary or daily wages and outsourced contract labor. The categorization is based on the nature and skill set requirement of each job coupled with criticality of the position and the local supply and availability of resources.

Workforce - Quality, Job Structure:

Workforce strength is often an issue which affects the operational efficiency. It has been noticed several times that few local managements try to cut corners by under staffing at various levels and extending the working hours or job responsibilities and trying to save costs. There can be several instances of shortage of manpower from the strength that has been planned and budgeted for.

Any warehouse operations needs to have an optimum workforce budgeted based on clear cut tasks and volumes of transactions. As all operations are time bound activities having inter-related tasks and dependencies, estimation of work and work division clarity is essential to avoid over staffing or under staffing. Over staffing can result in slackness in individual performance levels besides increasing the costs.


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Warehouses source temporary labor and resources from local nearby areas to manage this sudden surge in demands. Any change in internal process or business process or improvement in systems and processes can lead to redundancies. Many times, they are having to face over staffing problems and need to look at ways to reduce numbers or re deploy resources into other activities. Therefore warehouse operations are never in a stable state or status quo for a long time. Managing people dynamics holds key to managing operations effectively.

Right skill sets

In warehousing operations, process and system compliance demands keen focus and discipline at all levels. The skill sets and attitude requirements are different for different jobs. The skill set requirement is more linked to attitude and functional capability of the persons and less dependent upon knowledge or educational qualification.

Any person who works on Forklift would need to have a good sense of control, direction and patience. At operating level, people are required to understand what is expected of them, be able to follow the process and comply with the process and instructions. The operations require manual dexterity and ability to be on feet for long durations besides being able to bend down and reach up constantly to pick up items. Ability to lift small weights and walking distances in the warehouse is Must Have strengths. These practical points have to be kept in mind and evaluated while hiring people.

Attitude and Outlook

It has been seen in warehouse operations that the workforce attitude towards the company, job and customer plays an important role in the operations. Studies done in various cases have shown a direct link between people‟s attitude and commitment to day to day operations. Wrong shipments, short shipments and defective deliveries coupled with warehouse equipment damage, misuse and accidents are few of the results of the problems that show up and need correction of attitudes at individual levels. Inventory management functions are highly vulnerable to individual performance and attention to detail.


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A good warehousing operations management team who is sensitive to the above factors and is equipped to manage a team and the dynamics would be successful in ensuring efficient operations.


Effective supply chain management requires careful coordination of the inbound system of Logistics, which is frequently referred to as materials management, and the outbound system, which is usually called physical distribution. The integration of the inbound and outbound system is extremely important to the efficient and effective management of the logistics supply chain. Information flow is often the key ingredient to the coordination of inbound and outbound. Since the information regarding product demand flows down the supply chain, the possibility exists that decisions related to the flow of materials will not be coordinated with the customer, especially with respect to inventory accumulation and/or lack of appropriate flow quickly in both directions for effective coordination.

Materials management can be described as the planning and control of the flow of materials that are a part of the inbound logistics system. Materials management usually includes the following Activities: procurement, warehousing, production planning, inbound transportation, receiving, materials quality control, inventory management and control.


Manufacturing of consumer products has evolved with changes in technology. The focus has been to increase through put rate, quality and flexibility of production. With advances in automation and lean manufacturing techniques production of consumer goods has undergone a sea transformation from being batch processes to continuous processes; it has become less labour intensive and more flexible to changing product mix. Fresh Choice has been adopted an advanced technology in Manufacturing a products with good workforce and keeping quality as major aspect and producing a product to the market.


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Manufacturing planning of products in Fresh Choice

Raw Materials Mixing

Volumetric Divider


Bread Moulder Proofing chamber Oven Baking

Cooling the Trays for 3-4 hrs





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Although companies cannot afford to neglect their inbound logistics systems, many companies focus more upon outbound systems because of the costs involved and because managing the outbound system well make it easier to achieve and sustain market share.

The current emphasis upon reducing cycle times and developing pull inventory systems and flexible manufacturing makes it even more critical that the inbound and outbound systems be coordinated. It is almost impossible in today‟s environment to manage inbound and outbound systems in the same company as separate processes.

Inbound and outbound systems share some common activities, such as transportation, inventory, warehousing, and materials handling. However, like inbound systems, outbound systems have some activities that are unique or deserve special emphasis, such as customer service and channels of distribution.

Reverse logistics and SCM:

Supply Chain Management is concerned not only with the flow of raw materials and finished goods, but scope extends beyond this to include reverse flow of unsold finished goods, parts and packaging materials from the point of consumption at customer‟s end back to the organization or to rework / refurbishing vendors.

In Fresh Choice concept of reverse logistics is applicable to Institutional sales like More, Kashyap, Spencer‟s, Vijetha, were the damaged products are been taken back to production unit.


Transportation seeks to move goods from points of production and sale to points of consumption in the quantities required at times needed and at a reasonable cost. The transportation system adds time and place utilities to the goods handled and thus, increase their economic value. To achieve these goals, transportation facilities must be adequate, regular, dependable and equitable in terms of costs and benefits of the facilities and service provided.


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The Production, Logistics and Marketing functions:


Sampling is the selection of some part of an aggregate or totality on the basis of which a judgment about the aggregate or totality is made. Area sampling method was used in this project. Under this sampling method, we first divide the total area into a number of smaller non-overlapping areas. Then all units in these small areas are included in the sample. This sampling is especially helpful where we don‟t have the list of the population concerned. It also makes field interviewing more efficient since interviewer can do many interviews at each location.


For a research study to be perfect the sample size selected should be optimal i.e. it should neither be excessively large nor too small. Here the sample size was 10 in line members survey, and 4 in Institutional sales like More, Spencer‟s, Vijetha, Kashyap.


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In the project, data was collected in two ways by using primary and secondary methods. The primary data was collected through questionnaire method. The secondary data were composed through the reference of books, websites, and interviews with various executives in different organizations of the sample. The procured data was analyzed by a simple percentage method and the results are supported with graphs and charts.


 Percentage analysis


One of the simplest methods of analysis is the percentage method. It is one of the traditional statistical tools. Through the use of percentage, the data are reduced in the standard form with the base equal to 100, which facilitates comparison


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Logistics of Fresh choice

 Logistics planning for Fresh Choice is very much similar to Dairy products logistics process.

 Fresh Choice takes special care in delivering the goods which have low-shelf life to end point (consumer or Dealer) and ensure that timely delay in delivering is avoided.

 “An early bird catches the worm” with this great philosophy Fresh Choice is trying to capture the market.

 “Earliest is the best” Timing is the major aspect in the Fresh Choice logistics.

 Fresh Choice has implemented a new Production Plan recently so that the product reaches the market earlier and attract the consumer, with this plan entire logistics process of fresh choice is well organized and showing a good result.

Special order delivery

Warehouse Rural marketing Line Distributors Institutional sales Own Outlets Production unit-1


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Limitations of Study:

 A few organizations did not publish the exact values for each question especially in sales turnover and other similar figures.

 Certain monetary values were not being filled by organizations.

 Due to organizations security reasons documents like Bills, Warehouse Bills, etc. couldn‟t be gained.

 Most the questionnaire answers were filled over internet email facility therefore contact was through phone and emails.


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Bakery industry in India is the largest of the food industries with an annual turnover of about Rs. 3000 crores. India is the second largest producer of biscuits after USA. The biscuit industry in India comprises of organized and unorganized sectors. Bread and Biscuits form the major baked foods accounting for over 80% of total bakery products produced in the country. The quantities of bread and biscuits produced are more or less the same. However, value of biscuits is more than bread. The industry has traditionally been and largely continues to be in the unorganized sector contributing over 70% of the total production. Bakery products once considered as sick man‟s diet have now become essential food items of the vast majority of population. Though bakery industry in India has been in existence since long, real fillip came only in the later part of 20th century. The contributing factors were urbanization, resulting in increased demand for ready to eat products at reasonable costs etc.

The sector which is difficult to define has indicated promising growth prospects and has been making rapid progress. The bakery industry has achieved third position in generating revenue among the processed food sector. The first and second segments are the wheat flour processing and fruits and vegetables processing, stated experts from the food industry.

The sector which is riding a positive growth journey is known to generate over 50 per cent profits on certain products and net profits to the tune of 30-50 per cent annually, informed experts who have been closely following the industry but did not wish to be identified.

According to the University of Agricultural Sciences (UAS), Bangalore, bakery is a promising sector for growth going by the interest evinced for products like cakes, biscuits, buns, rusks among others for all age-groups.

UAS estimates that the bakery industry in India generates Rs 10,000 crore and has a significant presence of small unorganized players in the business.


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The bakery units are unevenly spread among States. These are mainly concentrated in the States of Maharashtra, West Bengal, Andhra Pradesh, Karnataka and Uttar Pradesh. Industrially advanced States like Maharashtra and West Bengal have very large number of bakery units. The per capita consumption is very high in industrialized States like Maharashtra and West Bengal. The Biscuits are becoming quite popular in rural areas as well. Nearly 55% of the biscuits are consumed by rural sector. The higher consumption of biscuits in rural area could be attributed to its position as a snack, longer shelf life and better taste which is liked by different cross sections of population. There is no marketing problem as every shop is a market for wafer biscuits.

Bakery products still remain the cheapest of the processed ready to eat products in the country. The production of Bakery products has increased from 5.19 lakh tones in 1975 to 18.95 lakh tones in 1990 recording four-fold increase in 15 years. Among the bakery products, biscuits occupy an important place as they contribute over 33% of total products processed. Over 79% of the biscuits are produced by small scale sector consisting of both factory and non-factory units. The growth rate for bakery products is estimated at an average of 9.8% per annum. The demand for bakery products will continue to increase in future. The estimated growth rate of 9.8% is on the lower side considering the present potentiality of bakery products, particularly in rural areas, where about 70% of the population lives. Encouraging trends in consumption of bakery products by population of lower and middle income groups indicate vast scope for consideration of nutritional enrichment of bakery products.

Bakery industry in India is on a growth curve. The sector which is difficult to define has indicated promising growth prospects and has been making rapid progress. The bakery industry has achieved third position in generating revenue among the processed food sector. The first and second segments are the wheat flour processing and fruits and vegetables processing, stated experts from the food industry.

The sector which is riding a positive growth journey is known to generate over 50 per cent profits on certain products and net profits to the tune of 30-50 per cent annually, informed experts who have been closely following the industry but did not wish to be


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identified. According to the University of Agricultural Sciences (UAS), Bangalore, bakery is a promising sector for growth going by the interest evinced for products like cakes, biscuits, buns, rusks among others for all age-groups.

UAS estimates that the bakery industry in India generates Rs 10,000 crore and has a significant presence of small unorganized players in the business.

Lucrativ sector:

The bakery industry also is a lucrative sector for entrepreneurship in the food industry. This calls for honing skills in baking science and technology, stated Chetan L Hanchate, food consultant, Centre for Processed Foods.

The Central Food Technological Research Institute (CFTRI), Mysore, sees potential in this growing segment. From small bakeries to airlines and railways, the demand for bakery units and products is growing.

With globalization and India being viewed as a potential growth market, there has been a profusion of bakery chains springing up across the country. These include Au Bon Pain, the US-based bakery café chain, Monogynies, Donut Baker, Cookie Man, Croissant, Café Coffee Day, Oven pick, Bread Talk, SAJ Industries‟ Bisk Farm, Hot Bread, Birdy‟s, Donut Master and Cookie Jar.

The concept of bakery retail chains is a fad. Aping the Western markets, India too has taken a strategic leap in the modern bakery space. The key growth driver of such retail bakery chains is the propensity to spend, young population willing to experiment on new products, overall change in consumption patterns, preferred locations for hangouts for all age groups, according to sources from the Indian Institute of Management (IIM), Bangalore.

Sabina Kannur, business head, Au Bon Pain, India, said that the fast-casual bakery and café chain was a need for experimentation by consumers. “This is because the food habits have witnessed a huge change in recent times. There is a constant interest to opt for e „couscous salad‟ which is Mediterranean, besides orders for croissants and muesli for breakfast. At office locations, Au Bon Pain harvest of rice bowl is immensely popular. Urban India is inquisitive, experimental and is willing to try new things,” he said.


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“For a bakery and café chains there are several challenges to meet when it comes to growth of the business and generating revenue. Some of the issues are procuring highest quality of ingredients, maintaining consistency in standards of food and managing efficient service in terms of hospitality,” pointed out Kannur.


The main factors driving bakery industry are diverse. This is because the structure of the bakery industry comprises three segments namely need-based, basic hotel requirements and connoisseur requisites. The need-based category caters to products like bread and biscuits. Under hotels, it varies from breads to pastries, cakes, pizza and puffs. The connoisseur category focuses on international standard and will cover products like specialized pastries and cakes, including “pannanie tartsto” in addition to a number of fascinating breads with garlic content among others available in hard and soft textures, according to Sanjay Mehra, Director, Paramount Impex, a manufacturer of bakery equipment.

Changes in lifestyles and rising travel opportunities are now forcing coffee bars to add on bakery products like cakes, sandwiches, pastries, puffs, pizzas, and croissants. “Indian consumer is extremely experimental in attitude and therefore there is ample scope for Café Coffee Day to innovate in its offering in food,” stated Venu Madhav, chief operating officer, Café Coffee Day.

In order to have an edge in the market, home delivery and take-away packs are allowing customers the option of just order and carry, stated an official from Marry Brown, an initiative of the MG Muthu Group (MGM), Chennai.

Dr S V Suresh, coordinator, Bakery Training Unit, Directorate of Extension, University of Agricultural Sciences, Hebbel, Bangalore, said there was major inclination for healthy bakery products like iron-, protein- and fiber-rich breads, and rusks others.

“We have already commenced research on these fronts and developed 100 per cent ragi cakes, with no Maida. Efforts are also on to use millet powder in many of the bakery products. The biscuits made of maize flour are a big hit at our bakery counter for the public,” Dr Suresha added.


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Biscuit industry

With biscuit consumption becoming an anytime and anywhere convenient option, the presence of branded biscuits is a common sight on the bakery shelves. From Britannia, Parle to ITC and Priya Gold all vie for a share of the consumer basket along with the traditional bakery biscuit varieties.

The biscuits industry is estimated at around Rs 10,000 crore and is growing in double digits. At the same time, the rate of growth of the industry is also a function of what extent of the equally large unorganized sector is graduating towards quality and recognized offers. This means that there is space for everyone to grow and that the industry does not mandate each player to have a mutually exclusive set of products. However, Sunfeast entered the market with several innovative products; take for instance, Orange Marie, differentiated creams such as butterscotch, flavor inclusions within biscuits and flaxseed biscuits, according to an ITC spokesperson.

“Sunfeast‟s market share is a third of what Britannia and Parle Products have. (Industry estimates peg Sunfeast's market share at 11%). They are looking at profitable growth by following a higher margin, value-added strategy. We have been focusing on the mid-market and premium segment and less on glucose biscuits. We launched Marie Oats, Special Cookies, Premium Creams, Choco Fills and relaunched Marie and Dark Fantasy,” added the ITC source.

According to ITC, the Bingo! Range of potato chips is also a part of the bakery offering and the product saw sales growing by 48 per cent during the December 2010 quarter. In the biscuits category, sales of Sunfeast grew by 28 per cent during the quarter driven by product mix improvement led by significant growth in the sales of value-added variants of cookies and creams. “Snacks and biscuits are major driver of the foods business growth,” pointed out the company.

Experts from UAS, who are tracking the bakery industry closely, stated that estimating the market size of the sector is difficult primarily because it is largely unorganized and highly fragmented with a handful of branded bakeries in the country. In Bangalore city alone there are over 10,000 bakeries.


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Growth factors

The major factors for growth of bakery segment, according to Dr Suresha, are brand loyalty, volumes and strong distribution networks.

According to estimates sourced from the Internet, “The bakery industry in India is valued at Rs 69 billion. Out of this bread and biscuits hold about 82% of the share. Bread, biscuits, pastries, cakes, buns and rusk are some of the bakery products fast catching up with the popularity trend in India. The bread market has a business volume of 1.5 million tones‟. The bread industry has a production of approximately 27 lakh tones‟.

But with growing food inflation, prices of raw materials like sugar, vegetable oil, milk, and wheat flour are spiraling. Hence, efforts are on to substitute fats with peanut butter. The UAS product development research Centre is now using 50 per cent peanut butter and remaining fat for many products.

“In the wake of the presence of modern global bakeries, the local outlets are facing a challenge of presentation of the products. There is need for better packaging and presentation for the products without ignoring quality of the contents and baking processes,” concluded Dr Suresha.


Yamazaki baking – Japan

Mexico‟s group bimbo – Latin America Kraft foods – belongs to Nabisco biscuit





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M/s. SAI ADITYA HOTELS AND SUPERMARKETS PVT LTD. was formed with the objective of establishing Supermarkets, Cake shops and Hotels throughout the state of Andhra Pradesh. Mr. K.V.Vishnu Raju the Chief Promoter and Director of this company is a young, energetic and dynamic Engineering Graduate hailing from the state of A.P. He had worked for short period is U.S.A. in a multinational company. During his stay in U.S.A. and during his tour of other developed countries, he was very much attracted by the supermarkets, cake shops, and hotels existing in those countries. He observed them with keen interest and decided to start similar ones in Andhra Pradesh. He possesses 15 years of business and management experience.

The idea to start a new format of bakery retail and introduce customers to a quality range of products was born in 1992. Vishnu Raju, the founder of this institution, is a passionate foodie. Educated in the US and well-traveled across the globe Raju was always fond of creating a manufacturing base for retail products. Opportunity was realized when he met with Nilgiris founder Muthusamy Mudaliar's son, Chenniappan at Coimbatore. At that time Nilgiris was rapidly expanding its Super market chain in Tamilnadu. Chenniappan saw the passion for business in Vishnu Raju and immediately encouraged him to take charge of opening Supermarket formats for entire Andhra Pradesh region under the franchisee model. This was a great opportunity for Raju to invest into as he was already the Managing Director of Raasi Cements, and was keen on diversifying into retail. Raju spotted the 'City of Destiny' as an ideal place to launch the Super market format, as it was the most cosmopolitan town in AP and together with the Port, Steel plant and Naval base offered a perfect city for middle class working population to settle down and build a lifestyle.

Nilgiris set foot in the state of Andhra Pradesh through Sai Aditya Foods and Retail Pvt Limited. The Supermarket franchise was opened in October 1994. Nilgiris had a small bakery attached to their retail stores, and the genesis for "Fresh Choice" was thus born. In March 23rd 2005 Sai Aditya Foods and Retail P Limited, launched a new retail format under the brand name of Fresh Choice, and a range of bakery products like Puffs and Rolls, Breads and Buns, Cakes and Pastries, and Cookies and Biscuits came into reality. The retail formats had sit in dining and take away outlets. The first 3 outlets were inaugurated across the popular residential areas in Vizag.


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Fresh Choice blossomed into a chain of many outlets across the city residential areas and also built a large distribution network to cover the outskirts of the city. ""


Sri. K.V.Vishnu Raju, Managing Director of the company, is an Engineering graduate. He worked in U.S.A. for a short period. He hails from the family of Sri B.V.Raju garu who is the pioneer in Cement Industry in Andhra Pradesh and founder of Raasi Cements. Sri K.V.Vishnu Raju is the Chairman and Managing Director of Anjani Cements and Chairman of Sri Vishnu Educational Society, Bhimavaram, He got rich business experience and exposure.


It is an existing private limited company closely held by the family of Sri K.V.Vishnu Raju.


The existing supermarket-cum-cake shop is located at Siripuram opposite Waltair Club. The bakery‟s manufacturing unit is located at Vijayanagaram(Modavalasa).

The company has a chain of Bakery retail stores across Visakhapatnam and is on its way to expanding its presence in all the major towns of Andhra Pradesh.

The Fresh Choice brand is well known and most sort after for its bakery product range which includes breads, puffs, pastries etc.

The company has state of the art production facilities at Visakhapatnam and Kakinada through which the entire product range is sold at company owned stores and distributed through retailers and institutions.

Fresh Choice products are also available at major retailers like Reliance Fresh, More, Spencer‟s, and PSU Companies, Corporative stores of VSP at Visakhapatnam. The company also supplies to institutions like HSBC, Airtel, Idea, Indian Railways, Shipping and Star hotels etc. Fresh Choice offers an excellent product range focusing on quality, hygiene and appealing to customers of all age groups.


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 To be the largest and finest retailer of baked and processed foods in Andhra Pradesh.

 Their long term goal is to open retail shops to the general public with a view to expanding their product, employment development across the east coast of AP. In the short term they planned to expand the consumer base all over Andhra Pradesh and to be the largest and finest retailer of baked and processed foods in Andhra Pradesh.

 Ultimate in keeping the choice fresh.

Management :

This venture is the brainchild of Mr. K.V. Vishnu Raju.

He spearheaded activities of other group companies as its Chairman and as Director of several other companies.

Anjani Portland Cement Limited Vennar Ceramics Limited Hitech Print Systems Limited Sai Aditya Foods & Retailing Dr B.V.Raju Foundation Sri Vishnu Educational Society

His vision of retail sector for rapid growth and development started in Oct 1994 with the opening of a Supermarket & Cake Shop with 30 employees at Visakhapatnam.

Under the leadership of Mr. K.Narasimha Raju and his ability to pass down acquired competencies to succeeding cohorts by training Bakers/ Cake decorators along with Internal team managers and other bakery & supermarket staff enabled strong business outgrowth with the view of opening bakery shops throughout Visakhapatnam. Combining the high demand for quality Breads, cakes and pastries.

Sophisticated methods of Bread and pastry making in traditional method made Fresh Choice to grown from a single outlet into Bakery retail chain with 300 plus employees.


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 To produce and retail large volumes of quality and fresh baked and processed foods, with a strong backup of state of the art production facilities. A highly motivated and committed workforce catering to urban, semi urban and rural markets and upholding the interests of all the stakeholders involved.

 The commitment to excel in the craft and artistry of baking enabled to deliver high quality products that look appealing outlook and delicious for the customers, delight the customer and make celebrations a moment to cherish. They also have committed themselves to tantalized the pallet of bakery connoisseurs. Their products exceed local stores and franchise competitors. Their products possess more variants than the competitors. They create the elegance in traditional method of bread making, making and cake decorating with culinary techniques to achieve the height of quality and excellence in the cake and pastry sector. Their products range from high end artistry to modern and local customs.

The slogan they adopt is

 If you dare to dream we will create it.

 The choice that keeps your option fresh.


 Conducted blood camp programmes.

 Conducted swine flu programmes.

 Conducted events like TAARE ZAMEEN PAR on global warming for children.

Brief profile:

Fresh Choice is a Super Market and Bakery chain in Visakhapatnam which owns one supermarket and 16 Bakery outlets. It also supplies Bread and other Bakery products to over 350 outlets in and around Vizag through its own distribution network.


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The Bakery business had a very humble beginning 12 years ago with only a small production facility. For catering to the needs of the supermarket and the In-house cake shop. With the growing potential and customer demand the Bakery was shifted out of the supermarket and the capacity increased. Bread and other products started being distributed in the local market.

The positive outcome of the bakery operations, the foreseeable potential in the Bakery retail format, the opportunity for growth and the experience gained over the last 12 years of operations have prompted the expansion of the Bakery business. In 2004 an exclusive cake shop was started near the production facility. Subsequently two more cake shops were also started in the city.

With this experience, favorable market conditions and the opportunity for growth, it was decided to expand the model to cover the entire city. It was decided to target the more affluent costal districts (Visakhapatnam, East and West Godavari, Krishna) of Andhra Pradesh in the first phase. The Second Phase would cover the corridor between Vijayawada and Hyderabad.

With own Production, Sales and Logistics they have complete control over their products right from production to sale. This will enable them to provide customers with the best products in the best possible environment ensuring complete customer satisfaction.

In order to increase the production new facilities located at modavalasa (vijayanagaram district) and Kakinada came into production to meet the market demand yet to spread the product to other districts as well.

The present turnover is about 14 crores they target for this financial year is about 20 crores .

Management Strategies:

To Maintain a focus on Quality product with bottom-line growth through optimal performance. They also focus on technology and innovation to make sure employees have extensive training to perform proper technique and equipment operations.

Meeting Customer Needs:

Fresh choice ensures that staff and quality preparation, food service, storage and holding equipment with a view of producing a quality products for the customers liking in terms of taste, freshness and hygienity. Consumers will come back for time and again.


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Market Share Distribution:

Word of mouth advertising via quality output has proved their strongest selling point, Occasional social events Like Awareness Programs, Sports, School Competitions, donations and product gifts to active community figures. They take the product to the consumers and let them sample the product to help create brand awareness.

Their 15 years‟ experience and Ability to Penetrate Market in baked goods preparation and quick delivery along with a fine reputation for high quality products will answer the demand for a fast, fresh, tasty menu of quality bread, cakes and pastry products. Their ability to deliver quality & quantity to meet special and unique requests enable them to penetrate new market segments while holding niche positions. Within a short time they have gained from a small 10% market share to 70%.

Products and Services:

Showcase of elegantly decorated special occasion cakes are priced for all segments of customers, The products also range in variants and are rightly priced for all segments of people. Affordable pricing is ensured to cater these products to the middle income group people. Customers service like door delivery, make to order and feedback are given top priority at fresh choice.


The choice of bread includes Sandwich, Milk, Wheat, Masala, French…..etc., and

wide variety of buns, cream bun being the most popular.


Fresh Choice is synonymous for its spread of puffs with delicious fillings of both veg

and non-veg variants.

Pastries and Cakes:

Their Fresh Cream pastries and Butter Cream cakes are a special

attraction for all occasions.

Cookies and Biscuits:

Almond cookies are an In-house specialty; other choices include

Butter, Cashew, Honey nuts, Chocolate… etc. Cakes Pizzas and Sandwiches are also included.


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The sale of products will be through the company‟s own outlets and also through institutional sales. All outlets will have a standard design and look. The outlets will be divided into 3 formats namely L1, L2 and L3.

L1 are outlets typically situated in high traffic areas and with an area of 150-300 sq ft. They will

have no seating arrangements and will be take away counters. They are branded as Fresh Choice


L2 is outlets with an area of 300 -500 sq. ft. These are also air-conditioned and will have 2-3

tables with seating or a couple of High tables. They are branded as Fresh Choice Regular.

L3 are the flagship stores. They are largest of the three formats and will occupy anything

between 750-1500 sq. ft. They are well decorated, air conditioned and have a seating capacity of more than 35. They are branded as Fresh Choice Super.


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Chairman and Managing Director - Mr. K.V.Vishnu Raju

Vice Chaiman - Mr.R. Ravichandran

Business Director - Mr.K. Narasimha Raju


General Manager (Retail and Marketing) - Mr.B.Sudhakar Raju

Deputy General Manager (production) - Mr.B.B.V Krishnan Raju

Production manager - Mr.A.V.N RAJ

Brand Manager - Mr.Varun

Financial manager - Mr.Dhanraj

Senior executive H.R - Mr. N.Anil Kumar

Senior executive marketing - Mr.V.Gupta


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Organization Structure

Director D.G.M Production Incharge Cashier Helper Supervisor outlet Administration Manager Production supervisor Assistant Marketing Manager Line Distribution Distribution Market Executive Institutional Sales Kitchen supervisor Banking supervisor Dispatching Supervisor Stores supervisor Supervisor IT Manager Finance Manager Super market supervisor Sr.EXE HR Cashier Accountant Assistant Stores Supervisor Purchasing Supervisor Floor supervisor GM (Retail & MRKT) 90 Packing


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SWOT analysis of fresh choice:


 Fresh choice is one of the trusted brands in Visakhapatnam

 Provides good quality of bakery products.

 Excellent supply of products whenever required

 Widely accepted by all generations.


 Quantity of biscuits is less compare to its competitors, as they concentrate more on Quality.

 Duplication of fresh choice products available in the market made by local manufacturers.


 With the opening of new outlets in different areas the sale of products will increase.

 Generates employment opportunity.


 Bakeries like Food Ex, Aashray, Bakers zone entering into this segment of market.

 Offering heavy discounting in the market by Competitors products.


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This survey is under on Line Members and Institutions sales (retailers)

The Fresh Choice has 11 line members, >5 institutions sales (retailers) like More, Spencer‟s (Hyper), kashyap, Vijatha, and National sales like Railways and Shipyard and also Fresh Choice own outlets, Fresh Choice also has own outlets. With these factors, sales of the Fresh Choice are being promoted in and around Visakhapatnam dist.

The collect data is interpreted and presented in bar chat diagram.

Line member‟s names 1. Lathiff 2. Kishore 3. S.Srinivas rao 4. Bhaskar Panda 5. Venkataswarao 6. Raju 7. Anand 8. Appa rao 9. Radha Krishna 10. Venkatesh


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1. Line member‟s relation with Fresh Choice


Out of 10 line members, 2 member has 6months to 1year relation, and 3 members has 1-2 years relation, and remaining 5 members have >2years of relation with Fresh Choice.

0 2 3 5 0 1 2 3 4 5 6

1-6 Months 6 Months- 1year 1-2 years >2 years

Line member’s relation with Fresh Choice

SI. No Response No. of

Respondents Percentage 1 1-6 Months 0 0 2 6 Months 2 20 3 1-2 Years 3 30 4 > 2 Years 5 50 Total 10 100


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2. What influence you to buy Fresh Choice Products


Out of 10 line members, 5 members are interested to buy Fresh Choice because of Quality and 4 members are interested to buy Fresh Choice because of Price and 1 member are interested to buy Fresh Choice because of Brand image & values.

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

Quality Price Brand Image & value 5



What influence you to buy Fresh Choice Products

SI. No Response No. of



1 Quality 5 50

2 Price 4 40

3 Brand Image & Value 1 10


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3. Regular supply of Fresh Choice products


Out of 10 line members, 9 members get Fresh Choice products daily and 1 member get Fresh Choice products weekly sometimes.

0 1 2 3 4 5 6 7 8 9

Daily Weekly 15 Days Monthly 9


0 0

Regular supply of Fresh Choice products

SI. No Response No. of

Respondents Percentage 1 Daily 9 90 2 Weekly 1 10 3 15 Days 0 4 Monthly 0 Total 10 100


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4. Profit derived from Fresh Choice products to dealers


Out of 10 line members, 6 members are getting profit by selling Fresh Choice is less than or equal to 20% and 4 members are getting profit by selling Fresh Choice products is 21% - 49%.

0 1 2 3 4 5 6 20% or less 21% -49% 50% -74% 75% or more 6 4 0 0

Profit derived from Fresh Choice products to dealers

SI. No Response No. of

Respondents percentage 1 20% or Less 6 60 2 21%-49% 4 40 3 50%-74% 0 0 4 75% or more 0 0 Total 10 100


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5.Payment mode


Out of 10 line members, 9 line members pay cash to Fresh Choice and take product.1 line member take products on credit.

9 1 0 1 2 3 4 5 6 7 8 9 10 Cash Credit Payment mode

SI. No Response No. of



1 CASH 9 90

2 CREDIT 1 10


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6. Receiving company‟s Incentive schemes


Out of 10 line members, only 5 members are receiving incentive schemes from Fresh Choice and 5 members are not receiving any incentive schemes from the Fresh Choice.

0 1 2 3 4 5 Yes No 5 5

Receiving company’s Incentive schemes

SI. No Response No. of



1 YES 5 50

2 NO 5 50


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7. Opinion on schemes


Out of 10 line members, only 2members are saying good, and 5 are satisfactory with the incentive schemes provided by Fresh Choice, and 3 are feeling poor with the schemes provided by the Fresh Choice.

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

Good Satisfied Poor 2



Opinion on schemes

SI. No Response No. of

Respondents percentage 1 Good 2 20 2 Satisfied 5 50 3 Poor 3 30 Total 10 100


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8. Price comparison between Fresh Choice & other brands


Out of 10 line members, 3 members are feeling that price of Fresh Choice is high, and 6

members are feeling that price of Fresh Choice is normal when compared to other brands, and 1 member is feeling that price of the Fresh Choice is low.

3 6 1 0 1 2 3 4 5 6 7

High Normal Low

Price comparison between Fresh Choice & other brands

SI. No Response No. of

Respondents percentage 1 High 3 30 2 Normal 6 60 3 Low 1 10 Total 10 100


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9. Accuracy in charging freight and extra service bills


Out of 10 line members, all the 10 line members are having their own transportation.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Satisfied Dissatisfied Own Transport 0 0


Accuracy in charging freight and extra service bills

SI. No Response No. of

Respondents percentage 1 Satisfied 0 0 2 Dissatisfied 0 0 3 Own Transport 10 100 Total 10 100


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10. Periodic information about Fresh Choice to dealers


Out of 10 line members, 5 members are receiving periodically information about Fresh Choice and 5 members are not receiving periodically information about Fresh Choice. Members receive periodic information about Fresh Choice is through phone.

5 4 5 0 1 2 3 4 5 6 Yes Phone No

Periodic information about Fresh Choice to dealers

SI. No Response No. of

Respondents percentage 1 YES 5 50 2 Phone 4 - 3 NO 5 50 Total 10 100


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11. Fresh Choice conducts dealers meeting


Out of 10 line members, only 4 members say yes that Fresh Choice conduct meeting regularly and 6 members say no that Fresh Choice doesn‟t conduct meeting regularly.

4 6 0 1 2 3 4 5 6 7 Yes No

Fresh Choice conducts dealers meeting

SI. No Response No. of



1 YES 4 40

2 NO 6 60


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12. Opinion on timely distribution system of Fresh Choice


Out of 10 line members, 5 members say that Fresh Choice delivers them on time and 1 member say that Fresh Choice delivers them not on time and 4 members says that fresh choice delivers mixed. 0 1 2 3 4 5

On Time Not on Time Mixed 5



Opinion on timely distribution system of Fresh Choice

SI. No Response No. of

Respondents percentage 1 On Time 5 50 2 Not on Time 1 10 3 Mixed 4 40 Total 10 100


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13. Are there any damages on Fresh Choice products through Logistics?


Out of 10 line members, 7 members say there are no damages, and 3 of them say there are damages regularly. 7 3 0 1 2 3 4 5 6 7 8

No Damages Regular Damages

Are there any damages on Fresh Choice products through Logistics?

SI. No Response No. of



1 No Damages 7 70

2 Regular Damages 3 30