How Demand Intelligence Tools can propel the growth of Indian Food Retail Segment

By Mr. Avinash Kasinathan 

India’s $800 billion food industry has long been hindered by formidable challenges. A fragmented supply chain, involving 14 million farmers and disaggregation to more than 12 million retailers, has led to a misalignment between supply and demand. This has led to  staggering food waste up to 30%, price volatility, and insufficient remuneration for farmers. As one of the largest producers of food, responsible for feeding close to 1.5 billion people, India’s food supply chain needs to do better. However, a groundbreaking solution is on the horizon – the adoption of demand intelligence tools. By leveraging advanced technology, these tools enable a shift from a supply-led approach to a demand-driven ecosystem, promising transformative growth for all stakeholders in the industry from farmers to distributors to retailers.

The Path to Technological Evolution:

Unlocking the potential of a demand-driven food supply chain requires comprehensive digitisation across all stakeholders in the end-to-end ecosystem. From producers and processors to warehousing, logistics, retailers, and consumers, a seamless flow of digital information is crucial. This digital revolution optimises the management of information, materials, and money (finances), streamlining operations at every stage. A robust planning core, supported by cutting-edge demand forecasting techniques, translates consumer insights into supply and processing plans, ensuring reliability in quality and fill rates. Moreover, understanding consumer preferences facilitates the identification of sustainable supply chains, fostering an efficient and eco-conscious ecosystem.

Long-Term Efficiency through Demand Forecasting:

While short-term demand forecasts provide immediate benefits, long-term forecasting holds the key to true supply chain efficiency and farmer income improvement. Traditional approaches often fall short, neglecting the fact that crops require weeks to months to grow before demand forecasts are made. To bridge this gap, the CENSA, with its advanced technology, delivers precise long-term demand forecasts. By mapping farms; based on soil conditions, water availability, and resource capacity, CENSA provides detailed cultivation plans aligned with future demand at the time of harvest. This revolutionary approach ensures a consistent supply of produce, optimising agricultural practices and empowering farmers.

Unveiling the Nuances of Consumer Behavior

In the intricate realm of food retail, subtle nuances in daily purchasing decisions of agri and food produce have far-reaching implications throughout the supply chain. These nuanced behaviors differ significantly across various product categories and can be influenced by festivals, weather events, and cultural occasions. By capturing over 25 parameters across 105 Stock Keeping Units (SKUs), the CENSA demand forecasting solution delivers unparalleled accuracy up to 85%-90% in multiple crops and hence significantly reduce dump to less than 1% for WayCool (as compared to industry average of 7%-10% and traditional supply chain average of 15%-30%). The system accounts for seasonality, weekend spikes, festive celebrations, and even local events or cricket matches, enabling retailers and supply chain players to anticipate consumer demand with remarkable precision. This newfound accuracy minimises wastage, optimises inventory management, and ensures a resilient supply chain.

Empowering Retailers with Hyper-Local Insights:
Demand intelligence tools offer a game-changing advantage to retailers by providing hyper-local insights. Retailers gain an in-depth understanding of the demand potential for specific products in different regions, empowering them to tailor their offerings accordingly. For instance, CENSA Insights offers invaluable information about the preferences where the rice variant which is suggested to a store in a Telugu-populated colony in Bangalore will be very different from the Sona Masuri rice which is consumed more in other parts of Bangalore. This further guides retailers in stocking the ideal rice variant for their customer base as most kirana stores look at their shops as real estate space and expect to get the best ROIC and not just best margins. Furthermore, demand forecasting algorithms reveal synergies between products, enabling retailers and brands to create compelling combos and schemes, enhancing customer satisfaction and maximising sales.

Building a Sustainable Future:
The integration of demand intelligence tools in the Indian food retail segment extends beyond immediate benefits. Through years of meticulous planning and predictive forecasting, these tools foster a deeper understanding of consumer taste and nutritional preferences. This knowledge not only aids in developing alternative products but also paves the way for sustainable supply chains that align with consumer preferences while reducing environmental impact.

As global food security emerges as a pressing concern, the focus on yield improvements and supply chain efficiency must expand to encompass alternative growing methods and reduced food miles. CENSA’s visionary solutions position the industry on a path towards a more sustainable and resilient future.

(The author is Mr. Avinash Kasinathan – CEO – CensaNext Systems, and the views expressed in this article are his own)