J Padmapriya & Sreekala G HYDERABAD 

AFTER deep-diving into the rural heartland with its retail initiative, ITC has now turned to cities. ITC is planning a mega rollout of Choupal Fresh, its fresh food retail chain, in urban India by leveraging its extensive backward linkages with farmers and supply chain efficiencies.

The company has already cut its milk teeth in the retailing business with its 10 Choupal Saagar outlets catering to rural India.

Talking to ET, chief executive of ITC’s agri business division S Sivakumar said: “Choupal Fresh will operate as a wholesale-cum-retail store. We have started with a 2,500 sq feet store with an attached warehouse and cold store of 7,500 sq feet in Hyderabad. We will be expanding our footprint to cities like Pune, Chandigarh next month and Kolkata soon after.”

Hyderabad is clearly in for some retail action with Reliance’s reported debut plans of a large food and vegetable store in the city.

The Choupal Fresh stores will open as early as 5 am for wholesale business and would, during the day, focus on retail. The warehousing and cold chain infrastructure would support supplies to various points in the cities and also check wastage of the perishables.

ITC’s urban retail chain would focus on stocking fresh horticulture produce like fresh fruits and vegetables. The company has also set up a complete cold chain for ensuring the availability of fresh products in the market, besides direct linkages with the farmers for sourcing farm fresh produce.

“The emphasis will be on improving the quality and productivity of domestic horticulture products through ITC good agricultural practices as opposed to relying on imported products,” Mr Sivakumar said.

The international business wing of the agri business division is already exporting fresh and processed fruits and vegetables for the last few years and is targeting doubling its revenues from this line next year from Rs 50 crore in 2005-06.

The company forayed into retail with its first Choupal Saagar near Sehore in Madhya Pradesh in August 2004. There are nine more such hypermarkets operating in Madhya Pradesh, Maharashtra and Uttar Pradesh while construction at nine more sites is nearing completion. Apart from a wide basket of products, these rural malls also provide farmers services of soil testing, banking, insurance and medical facilities.