Mahindra War Room 2015 Agri-business Caselet

MAHINDRA AUTOMOTIVE & FARM SECTORSAGRI-BUSINESS CASELET - FRUITS BUSINESS: SABORO B2C STRATEGY

Mahindra’s Automotive & Farm Sectors have independent caselets for the Automotive business, Tractor business, Truck business and Agri-business - this caselet pertains to the Agri-business.

BUSINESS BACKGROUND

The Farm Sector is one of Mahindra’s oldest businesses, commenced in 1960s with the manufacture of tractors. Mahindra has attained global scale in the Tractor business, being the world’s #1 seller of tractors by volume, with over 2.1 million tractors sold across 40 countries. Mahindra tractors hold the lion’s share of the market for the last 30 years. In the 1990s, Mahindra added a range of farm mechanization equipment, such as harvesters, transplanters and tillers under the ‘Applitrac’ range. In the late 2000s, Mahindra has reinvented its Farm Sector Vision to beyond just selling of tractors and farm equipment, to “delivering farm-tech prosperity”. The business was accordingly re-imagined in 2010, and organized into 2 distinct groups - the Tractor & Farm Mechanization business and a distinct “Agri-business” comprising Fresh Produce (the erstwhile Shubhlabh business), Crop Care, Seeds, Micro-irrigation, Agronomy Services (the erstwhile Samriddhi business) and other food related businesses. This caselet pertains only to this “Agri-business” with another independent caselet for Tractor & Farm Mechanization business. From an Agri-input driven approach, Mahindra has re-oriented to focus on key input businesses on the farm side - such as seeds, micro-irrigation solutions and crop-care, as well as the new Dairy, Edible Oil and Pulses businesses. Mahindra’s Agri-business strategy is borne out of a deep realization of the importance of “Farm-tech Prosperity” - of assisting farmers by providing them market linkages for their produce, which in turn would help increase their returns. Based on a detailed evaluation of the Agri Value Chain on specific business selection criteria, the Agri-business division has decided to enter key food related businesses like Fresh Fruits, Dairy, Pulses, Edible Oils, Processed Foods and Basmati Rice.

Mahindra Agri-business is one of the fastest growing businesses in the Mahindra Group, with an 8X growth in the last 4 years, with deep connections to the War Room as well - the Dairy business foray was the national winner in 2012, and one of the members of the winning team is actually working with Mahindra GMC in implementing the strategy. The Edible Oil business strategy caselet in 2014 too was one of the most popular caselets across campuses, and the choice of the national winning team too!This year’s challenge pertains to the Fresh Produce business - and the Agri-business team is looking to an encore performance on popularity and win rates for this caselet!

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Mahindra War Room 2015 Agri-business Caselet

LIVE CHALLENGE: FRUITS BUSINESS - SABORO B2C STRATEGY

One of the key segments that the Agri-business is aiming for growth is the fruits segment which is ~ INR. 300,000 Crore industry in India. In November 2013, Mahindra agribusiness launched its brand of fresh fruits in India under the name “Saboro” - that stands for premium quality, healthy, hygienic and delicious fruits. Around the same time, Mahindra entered into a joint-venture with Univeg Private Limited - a 1.8 billion euro Belgian company that is the world’s largest in the fruits business. Mahindra Univeg Pvt Ltd, the JV, will focus on developing world-class fresh fruit supply chain to provide high quality fruits that meet the needs of both domestic and international markets. Additionally, the JV will focus on the modernization of the domestic fruit supply chain, in order to improve yield and reduce wastage - enhancing grower productivity and returns to farmers.

The fruits business today is highly commoditized and unorganized, with low retail penetration. There is a strong demand for fruits and fruit-based products with high quality standards, offering a ripe market for creating a differentiated value proposition - going beyond the normal selling of fruits, to a strong personal engagement platform. With this intent, Mahindra launched the Saboro fruit brand, exuding values of premium quality, good health and hygiene, with a delicious taste. Mahindra’s strategy is to develop Saboro as a premium Consumer brand that is able to stand out in the market.

With this background, create an aggressive business plan for Saboro to be a INR. 1000 Crore Fruits Business Consumer Brand by 2020, with a minimum of 30% return on capital employed. Your strategy should lead to a scalable business model in the B2C space, with focus on fruits and fruits-based product categories such as Fresh Fruits, Processed Fruits, Fruit based Meals etc.

The business plan must be comprehensive, including:• a Supply Chain Strategy to evaluate the entire value chain to identify white

spaces for disruption in delivery and service.• a Channel Strategy to Explore different channels that could be used to market

Mahindra fruit products, such as Retail, Wholesale, E-commerce etc.• an Advertising & Sales Promotion Strategy to identify means to enhance visibility

of the Saboro brand with premium positioning and high top-of-mind recall.• an overall Operations Strategy to Draw out clear plans for setting up operations

which including marketing plans and financials

The Saboro team is looking forward to innovative business models that are unique and are open to all ideas - however wild they may look at the first glance.

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