Fruits of retail labour

Every morning, Nagesh Mani leaves home at 4.30 am in one of his trucks to buy vegetables at the wholesale APMC market in Navi Mumbai. Accompanied by one of his two brothers, he takes a quick round of the market to gauge the prices and supplies of fruits and vegetables, which could vary every day.

Next, they pick up their requirements, but randomly check the vegetable lots for quality by opening the sacks/boxes of vegetables and fruits or sifting through the vegetable trays.

"This is crucial, as agents and farmers can keep good quality vegetables at the top and inferior ones at the bottom. If we don't get the right quality, the entire lot could go waste," said the 44-year old Nagesh, whose firm AP Mani & Fruits sells fruits and vegetables at retail stores such as D'mart or Trumart in Mumbai, who insist on lower prices and superior quality to lure customers into their stores.

Not long ago, AP Mani & Fruits was just another fruit and vegetable outlet in the Mumbai suburb of Chembur "" Nagesh's father AP Mani Nadar began selling vegetables under a flyover with only Rs 30 as seed capital. Today, the firm is riding the retail boom and sells at or supplies vegetables to many retail stores in Mumbai such as D'mart (six outlets), Akbarally's (three outlets), Trumart (two outlets) and Haiko. It also supplies fruits and vegetables to many restaurants and caterers, and clocks a business of nearly Rs 20 crore a year. After paying stores a commission of 8-10 per cent and meeting expenses, Nagesh and his brothers make a net margin of 5 per cent. Their first break came in 2000, when Nagesh approached the Haiko retail store at the posh Hiranandani Complex in Powai, which was the closest to him. He offered to supply them with vegetables, neatly sorted in small, transparent polythene packets of 250 and 500 grams. He was already selling pre-weighed and pre-packed vegetables at his outlets in Chembur to meet the evening rush-hour demand and had even put a logo on the packets. "It was difficult to convince Haiko initially and our first order was worth only Rs 1,600," said Nagesh.

The next stop was Akbarally's at Chembur, but AP Mani's big break came when D'mart opened its first store next to Haiko in Powai. "Initially, they were not even planning to sell vegetables," recalled Nagesh. Today, D'mart is his largest customer, where he sells fruits and vegetables worth Rs 50,000 to Rs 1 lakh a day in each of their six outlets.

"Many sourcing managers of big retail chains nowadays come and ask us for tips on sourcing and managing the supply chain," said Nagesh, whom this reporter chased for three months before he agreed to meet one evening at his 3x6 sq ft office at Chembur's Jai Kisan Mandai (vegetable market). AP Mani also owns a fleet of trucks to ensure greater control over its supply chain.

Exposure to modern trade also drove AP Mani to open their own 1,000 sq ft retail store in Chembur that sells grocery and items of daily needs, besides fruits and vegetables, and does a business of Rs 1.25 lakh a day. Next, it plans to open 20-25 small retail stores of 300 sq ft each near Mumbai's suburban stations to sell fruits and vegetables, and is looking for partners to reduce risks. This would allow him to capture the 10 per cent-odd margin he gives to retailers today.

If he gets more space at these locations, he could sell other items of daily needs, for which he already has the expertise. Retailers, though happy with him all these years, say that things might get difficult for him going forward. "It might be difficult for him to sustain this model as retailers start sourcing on their own," said Ashok Maheshwari, CEO, Magnet, who was at D'mart and gave AP Mani its first big break. That's probably why Nagesh is thinking of moving up the value chain.