Indian lifestyle retailer Fabindia looks set to enter the fresh produce sector through an ambitious bid aimed at lowing the cost of organic fruit and vegetables.
The Times of India has reported that Fabindia hopes to develop its own supply chain, allowing the company to deliver fresh produce directly from growers to households via its online store.
By cutting out middle-tier wholesalers and distributors, Fabindia is confident or regulating India’s high organic prices. A report commissioned by the retailer found that price of 1kg of carrots sold from the farm gate for Rs27 (US$0.43) is marked up to Rs80 (US$1.28) by the it reaches INA Market in Delhi.
With consciousness about food safety rising among India’s growing middle-class, Fabindia managing director William Bissell predicted heightened demand for organic produce. "There is no control over water contamination, excessive use of herbicide and the way vegetables are processed,” Bissell told the Times of India. “I have seen bananas being ripened with gas. Organic farming provides an opportunity to reduce food arbitrage by around 30 per cent or more.”
Fabindia has already moved to enter the sector after acquiring a 40 per cent stake in Lucknow-based grower-marketer Organic India in 2013.