Branding and Direct Sale of Mangoes in Bangalore city

Kolar Gold Mangoes (K.G.M.)

Department of Agricultural Marketing

Cooperation and Business Management

Department of Agricultural Marketing

Cooperation and Business Management

University of Agricultural Sciences, Bangalore-65

RASTRIYA KRISHI VIKASA YOJANARASTRIYA KRISHI VIKASA YOJANA

Branding and Direct Sale of Mangoes

in Bangalore City

Activity under:

Market-Led Extension Cell

Project Team:

Research Fellow - RKVY Project

Mr. Raghavendra.V.G

Mr. P.V. Rame GowdaAssociate Professor

Mr. T.N. Venkata Reddy,Professor KSAMB Chair

Dr. P.K. MandannaProfessor and University Head, PI RKVY

L-R

Contact Persons:

Mr. T.N. Venkata ReddyPH: 9448798402

Email: [email protected]: 9448544889

Email: [email protected]

Mr. P.V. Rame Gowda

BRANDING AND DIRECT SALE OF MANGOES IN BANGALORE CITY

Introduction

Agricultural sector in India contributes about 21 per cent to India's GDP. Horticultural

crops constitute a significant component (accounting for 28 per cent of the GDP contributed by

agriculture) of agricultural production of the country, particularly fruits. Horticultural crops cover

approximately 8.5 per cent of the total cropped area (20 M.ha) with an annual production of 184.9 mt

and a productivity of 9.24 tonnes per hectare during the year 2005-06. Among the horticultural crops

in India, mango occupies an important place in terms of both production and productivity. Among

fruits, Mango (108 lakh tonnes) stands next to banana in terms of production. India is the largest

producer of mango in the world with an annual average production of 100 lakh tonnes with an area of

16 lakh hectares. Mango cultivation in the country accounts for 42 per cent of total area under fruits.

Karnataka produces nearly 13 lakh tonnes of mango fruits annually. The major varieties of mango

grown In Karnataka are Alphanso, Badami, Totapuri, Malgoa, Rasapuri, Sindhura, Neelam and Mallika

and the peak harvesting season is from March to July.

Table: 1 Area, production and productivity of mango in Karnataka (2003- 08)

Year Area

(in Hectare) Production (in Tonne)

Productivity (Tonne/Hectare)

2003-04 116261 1111206 9.56

2004-05 120833 1189222 9.84

2005-06 121456 1292707 10.64

2006-07 129092 1368765 11.00

2007-08 134567 1223258 9.09

Source: Department of Horticulture

Table: 2 Selected District-wise Area, Production and Productivity of

Mango in Karnataka (2004-2005)

337.7

(Area in ' 00 Hectare, Production in ' 00 Tonne, Yield in Kg./ha.) District Area Production Yield

203.0 110.3 29.5

29.0 25.6

23.4 21.3

KolarBangalore RuralTumkurMysoreDharwadMandyaChikkamagalurHassanDavanagere 19.0

1842 3425 1582

16490 2614 2889 4497 3958

622.0 695.2 174.5 487.1 75.9 73.9

105.2 84.4

168.5 8893

Source: India stat

The mango growing districts of Karnataka are Kolar, Bangalore, Tumkur, Davanagere, Dharwad,

Hassan, Mandya and Mysore. The area under mango cultivation (33,770 Ha) is largest in Kolar district

with a production of 62,200 tonnes, Bangalore district stands second in area and but first in

production, with 20300 ha and 69520 tonnes respectively, Tumkur ranks third in mango area and

production with 11030 ha and 17450 tonnes respectively. Mysore district stands first in the state in

productivity of mango with 16.5 tonnes per ha. In Kolar district, mango production is concentrated in

Srinivasapur taluk both in area and production as presented in table:3.

Table: 3 Area, production and productivity of mango in Kolar Disstrict (2008- 09)

Area (in Hectare)

Production (in Tonne)

Productivity (Tonne/Hectare)

Kolar District 39090 149095 3.81

Srinivasapur 20275 81100 4.00

Mulbagalu 10750 39775 3.70

Chintamani 5451 54510 10.00

Source: Department of Horticulture

Existing Marketing Channel for Mango

Price Spread

Mango is traded in fresh form for a very short period,

as its shelf life is very short. Depending on the variety

harvested in different states from March to July, mango is

traded between April to August. Mango is brought to

Mandies either by farmers themselves or by contractors. Pre-

harvest Contractors play a major role in mango trade. They

purchase the orchard during flowering season by paying

some nominal amount to the farmers. Thereafter, they will

take the responsibility of watch and ward, harvesting,

transporting and marketing. These pre-harvest contractors have well established contacts with traders

(locally or other states) to whom they sell the produce after reaching the market. Commission agents

play an important role, followed by traders, shopkeepers, hawkers in reaching the final consumers.

------Pre-harvest-Contractor------Trader/CA-------Wholesaler------- Retailer --- Consumer

2. Farm------- Trader/Commission Agents-------Wholesaler-------Retailer---Consumer

3. Farm------- Traders -------- Retailer------consumer

4. Farm-------Retailer------consumer

5. Farm ------ Processor

6. Farm ------ Trader------- processor

Farmers are ignorant of consumer's choice and quality of the fruits. Unscientific harvesting and

handling of mango results in huge wastage during post harvest stages. Consumers' price in the market

is influenced by the proportion of fruits wasted in the channel. A large proportion of the consumer's

rupee is taken away by the intermediaries; leaving a small chunk to the farmers.

Thus, the present system of marketing is far from

satisfaction. There are, however, some sound reasons as to

why the grower cannot easily overcome these difficulties,

unscientific production practices, poor post harvest

handling, distance from the market and lack of quick means

of transportation, immediate need for money, lack of

coordination between growers and agents in the wholesale

markets, lack of awareness about markets and marketing

Major marketing channels observed in mango trade are

1. Farm-

procedures, all these problems compel the growers to sell their produce to pre-harvest contractors to

avoid the risk in watch and ward, harvesting, transportation and marketing. Under the circumstances

the market intermediaries tend to grab more margins leaving a pittance to the farmer.

With this background a new model of marketing, branding and direct sale of mangoes was

taken up on a pilot basis in Bangalore city by farmers during the 2009 season under the initiative of

Market-Led Extension Cell of RKVY project in the Department of Agricultural Marketing, Cooperation

and Business Management, University of Agricultural Sciences, Bangalore. To popularize the concept of

branding and direct sales, a group of farmers from Srinivasapur taluk, Kolar district were selected and a

self help group of mango growers was formed. A training was organized for mango growers under

Rastriya Krishi Vikasa Yojana (GOI) Project in February 2009 on production and marketing practices of

mango. Scientists from University of Agricultural Sciences, Bangalore had trained the farmers in

scientific production practices, harvesting and post harvest handling of mangoes.

Evolving of brand name and organizing

direct sales

Selection of sale points

At present, there is a gap in the market for quality

and convenient packaging of mangoes. By promoting

branding and organizing direct sales, the branding concept

can be popularized among the farming community and

consumers can patronize the brand. With this background a

Brand Name, 'Kolar Gold Mangoes' indicating the identity of

the place (Kolar) for Gold and Mangoes, a logo (KGM) was evolved for direct sale of mangoes. To give

wider publicity about direct sales of KGM brand of mangoes outdoor advertisement was done and a

brochure was prepared to appeal to the consumer to patronize KGM brand and encourage the

farming community. A group of six enthusiastic farmers trained under the training programme were

selected for direct sales of mangoes in Bangalore city. To organize direct sales different locations in

Bangalore city are selected looking into consumers' profile and density of population. To inculcate the

habit of branding and direct sales and also to encourage farmers, 9600 corrugated boxes of 3kg

capacity, with branding details were supplied, free of cost.

The sale points were selected targeting different

classes of consumers in different places. The consumers

targeted for direct sales at GKVK and KSAMB are office

goers. At Lalbagh daily early morning sales were started

targeting morning walkers. Near JP Garden in

Yashavanthpur, evening walkers were targeted, as they

comprise cross section of the society. The price sensitivity of

consumers is closely linked to their incomes. There are

certain posh areas in the city. Bangalore cantonment east is

one such area. The spot at a petrol bunk run by Venkatadri

enterprises located in Banaswadi main road was chosen for

direct sales. The HP dealer is known to the University

scientists and hence direct sales was arranged and the farmer

was advised to charge 15 percent higher price to encash high

income group consumers in the area.

MethodologyTo analyze the economic benefit of branding and direct sales of mangoes to farmers, primary

data was generated by recording on daily basis. Relevant secondary data on prices and arrivals of

mango in wholesale markets were also collected from APMC Srinivasapur and Bangalore, retail prices of

the mango in the Bangalore city were ascertained from fruit vendors and modern retail outlets across

the city. Measures of central tendency were applied to analyze the data.

Table: 4 Details of farmers selected, place of sales and number of

branded boxes sold

The retail prices of mangoes in Bangalore city has

been presented in Table: 5, from the table it is observed that

the retail prices of different varieties of mango in Jayanagar

and Koramanagala are slightly higher than Yelahanka and

Mathikere. It was found that the price sensitivity of

consumers is closely linked to income levels. Since Jayanagar

and Koramanagala are inhabited by higher income groups,

the retail prices over there are found to be slightly higher

compared to other places in the city.

Table 6: Variety-wise retail prices of mango in different modern retail

outlets in Bangalore city

Sl.No Varieties Reliance More Nilgiris Smart

1 Alphanso 80 78 75 75

2 Mallika 45 45 48 45

3 Benisha 35 35 35 35

4 Malagoba 50 45 46 45

5 Neelam 36 30 35 35

The retail prices of mango in the modern retail formats are presented in Table: 6. It could be

observed from the table that there was no much variation in the prices among different modern retail

formats. When we compare these prices with the prices of the branding and direct sale prices, the retail

outlet prices are high as they incur more cost on grading, sorting, transport, storage and also the

administrative costs.

(Price in rupees)

Sl.No Varieties Jayanagar Yalahanka Matthikere Koramangala

1 Alphanso

65 60 65 65

2 Mallika 45 42 45 45

3 Benisha 35 30 30 35

4 Malagoba 45 40 40 45

5 Neelam 35 30 30 30

Table 5: Variety-wise retail price of mango by push cart fruit vendors at

different places in the city

Table 7: Variety-wise average wholesale market prices of mango in Byatarayanapura

APMC market yard during 2009 season

Sl.No

Varieties

Price of mango per tonne

1

Rasapuri 8000

2

Alphanso 18000

3

Totapuri 4600

4

Local 3500

5

Neelam 5700

6

Benisha 7500

7

Mallika 14000

Sl.No

Name of the farmer

Village name

Place of direct sale

boxes supplied

Number of

1

Raja Reddy Diguvapalli J.P graden, BEL circle 1800

2

Devraja Reddy Pathapalli H.P.Petrol bunk Banasavadi

1800

3

Lakshmana Reddy

Kiruvara

Lalbagh east gate, KSAMB

1800

4

V.N.Narayana Swami

Venkatapura

GKVK, Corporation office circle

1800

5

B.N.Chandra Reddy

Bandapalli

Lalbagh, NES Yalahanka

1200

6 V.R. Anand Varthanahalli Lalbagh west gate 1200

From the data collected from the APMC's it is found that the

average price Alphanso ( Rs 18000 per tonne ) tops with market

price followed by Mallika variety was Rs. 14000 and Rasapuri,

Benisha, Neelam, Totapuri and local varieties with market

prices of Rs. 8000, Rs.7500, Rs.5700, Rs.4600 and Rs 3500

respectively. As price of the commodity is directly influenced by

demand, from the data it is observed that wholesale market

prices of Alphanso and Mallika varieties are very higher since

the demand for these two varieties is higher.

Table: 8 Variety-wise direct sale price of Kolar Gold Mangoes in Bangalore city.

1 Alphanso 45 50

2 Mallika 30 35 3 Benisha 25 30 4 Malagoba 30 35 5 Neelam 20 22

* Direct sale price of different varieties of mango at GKVK, JP Garden, Lalbagh east gate & west

gate, KSAMB, Corporation sale points in the City

** Direct sale price of different varieties of mango at H P Petrol bunk Banasavadi

Variety wise direct Sale prices of mango are presented in the table 8. It was found that the prices of

mangoes sold at HP Petrol bunk Banasavadi is 10 to 15 per cent higher than the other places in the

city. In spite of higher prices, there was greater demand for the fruits. Consumers turned out to be

regular customers to patronize the direct sales. Around 20 per cent of the customers of the petrol

bunk are also buyers of Kolar Gold mangoes.

Table: 9 Cost incurred for marketing of mango in wholesale market

Cost incurred for marketing of mango in wholesale market is presented in the table 9, it is found

that the cost incurred in selling at whole sale market of mango includes Rs. 750 per tonne for harvesting

and grading of mangoes, bulk transportation from gardens to the markets by using tractors costs Rs.

350 per tonne and commission collected by the commission agents from the farmers for selling of the

produce was 10 per cent of the total value of the produce, irrespective of variety these costs are similar

for marketing of mango in the nearby wholesale markets. The percentage of wastage varied from

variety to variety amounting to about 5 per cent.

Cost incurred for direct sales of one tonne of mango in Bangalore city

To analyze the economic benefits of direct sales of mangoes through branding the data on cost

incurred was collected and analyzed. The details are

presented in the table: 10. Labour charges for

harvesting and grading of fruits account for Rs 750 per

tonne, transportation of fruits from the garden to the

ripening/packing house in the city costs Rs 800 per

tonne, cost incurred for ripening and packing is Rs 250,

rent paid for packing house worked out to Rs. 350 per

tonne, cost of labeled corrugated boxes for selling one

tonne of mangoes is Rs. 3600, transportation charges

for taking fruits from packing house to sales points is

Rs. 350, living expenses and labour charge for sales

personnel comes to Rs. 600 and wastage accounted

for 10 per cent of produce during grading, ripening

and transportation. This wastage will be offset by the

saving in commission charges to have been paid if sold

in APMC's through commission agents.

Table: 10 Cost incurred for direct sale of mangoes in Bangalore city

Sl.No Varieties Price Rs per Kg of Mangoes *

Price Rs per Kg of Mangoes **

Sl.No Particulars Cost incurred Rs per tonne

1.

Harvesting and Grading

750.00

2.

Transpiration to near by wholesale market

350.00

3. Other miscellaneous expenses 300.00

4.

Commission collected by commission agents 10 % of the value

5. Wastage of fruits in marketing 5 % of the value

Sl.No Particulars per tonne

Cost incurred in Rs

1 Harvesting and Grading 750.00 2 Transportation to pack house 800.00

3 Ripening and packing 250.00

4 Rent of pack house 350.00

5 Cost of corrugated boxes 3600

6 Transportation to sales points 350.00

7 Labour charges and living expenses 600.00 10 8 Wastage of fruits % of the total value

Suggestions to boost direct sale of mango in future

1. Farmers' identity cards should be provided to guanine farmers, that will create trustworthiness

among consumers about farmers involved in direct sales.

2. Issuing permission to sell, without harassment at different places across the city.

3. Training should be provided for farmers to improve their marketing communication skills that will in

turn improve direct sales.

4. Common packing house facilities need to be provided.

5. Transportation at competitive price should be provided.

6. Formation of growers association will help farmers in collective transportation To compare the economic benefit realized by direct sales of mangoes in Bangalore city the

comparative prices of mango at different markets is presented in the table 11. With marketing of fruits

at nearby APMC wholesale market, an example of Mallika variety is taken. Wholesale market price of

one tonne of Mallika variety of mango is Rs. 14,000, cost incurred for harvesting transportation,

wastage, commission paid to commission agent and other expenses accounts to Rs. 3,500 per tonne

and the net returns realized per tonne is Rs. 10,500. For direct sale of the same variety of mango the cost

incurred included Rs 750 per tonne labour charges spent for harvesting and grading, transportation

from garden to the ripening/ pack house in the city costs Rs 800 per tonne, cost incurred for ripening

and packing was Rs 250, rent paid for packing house worked out to be Rs 350 per tonne, Cost of labeled

corrugated boxes for selling one tonne of mangoes was observed to be Rs 3600, transportation charges

for taking fruits from packing house to sales points was Rs 350, living expenses and labor charge comes

to Rs 600 and Percentage of wastage accounted for 10 per cent of produce during grading, ripening

and transportation ( it will offset by the saving in the commission charges to have been paid if sold in

APMC's through commission agents) and this amounts to Rs 6700. The price at which the fruit was sold

by branding and direct sale was Rs 30 per Kg of Mallika variety of mango, i.e., Rs 30,000 per tonne. Net

returns realized by the direct sale of one tonne of Mallika variety of mangoes was Rs 23,300. The

additional income realized by direct sale of one tonne Mallika variety of mango was Rs 11,800 which

works out to be 120 per cent higher income than that realized by the farmers by selling in wholesale

markets. By direct sales of branded mangoes, consumers were also benefited in respect of good quality,

naturally ripened fruits at a price 20 per cent less than the open market retail price.

Conclusion Due to this intervention of branding, packing and direct sales of selected verities of mango has

resulted in 120 per cent extra net income to the farmers compared to income realized by selling the

same varieties in APMC market yard Srinivasapura. This model will be scaled up in the coming season

by addressing to the minor lacunas and adding new dimensions.

Table: 11 Comparison of mango prices realized by farmers in various channels

Varieties

Wholesale market price (at APMC) Rs per Kg

Open market Retail

prices per kg (Rs)

Prices of KGM Mango

(Rs per Kg) Malagoba 13 40-45 30-35 Alphanso 18 60-80 45-50

Neelam 6 30-35 20-25

Benisha 7.5 30-35 25-30 Mallika 14 35-45 30-35

Problems faced by farmers in direct sale of mangoes

Farmers who participated in direct sales complained about harassment by local businessmen

and street vendors, farmers have faced communication problems at sales points, most of the farmers

opined that cost of transportation from packing house to sales points was very high since they were

using locally available hired vehicles.

Economic benefit of branding and direct sales of mango in Bangalore

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