Heritage Foods plans to open 75 Fresh@ stores
Business Standard Reporter / Chennai/ Hyderabad August 8, 2008, 3:31 IST
Hyderabad-based Heritage Foods India Private Limited (HFIPL) is planning to set up about 75 Fresh@ stores, its grocery retail chain, in Hyderabad, Chennai and Bangalore. Each outlet will come up at an estimated cost of Rs 50 lakh.
Speaking to Business Standard, Heritage Foods president M Sambasiva Rao said, “Our idea is to have about 50 retail outlets in each of these cities in a year from now.” The company already has 30 Fresh@ stores in Hyderabad and 22 each in Chennai and Bangalore.
The company had raised about Rs 35 crore from private equity last year and intends do the same for further expansion, he said without sharing further details.
The focus will be on reaching out to more customers through home delivery. HFIPL is keeping a tab on the construction activity in these cities to be the early bird for booking space for retail outlets on a long-term lease.
“We will grow on our strengths,” Rao said on the company wanting to go solo without mergers or acquisitions. However, it is entering into strategic agreements with trade partners for supply chain management.
For instance, it is into a bilateral agreement with Metro for supply of commodities. Though the recent price rise had impacted the sale, the demand for packaged and processed food and essential commodities has gone up. The company employs about 3,000-plus workforce.
HFIPL, apart from the retail division, has dairy and agri divisions in its fold. The company is targeting a revenue of about Rs 800 crore this year. Of this, it expects dairy and agri divisions to contribute Rs 600 crore while the remaining would be from the retail segment.
The company last year registered a revenue of about Rs 600 crore with the dairy division contributing Rs 485 crore and the rest coming from the retail sector.
HFIPL has a network of about 200,000 farmers in the state. The company has a capacity to produce 1.5 million litre of milk per day but is currently operating at about half its capacity due to short supply. It has increased the price of milk at the farmer level by Rs 2 a litre due to the shortage.