A Case Study: The Outgrower Program of ITC

The rapid development of the organized food retail sector (modern supermarkets, hypermarkets and specialty stores) is a significant indicator of the economic and cultural revolution that India is undergoing. The burgeoning consumer preference for supermarkets has its roots in the rise of the urban middle class. Most major corporate houses, multinational companies and Indian retail companies are actively engaged in the sector and competing for a larger slice of the pie and this growth in organized food retail provides significant opportunities, and challenges, for small-scale Indian farmers who may become preferred suppliers – or be marginalized – by this emerging food value chain.

This case study, part of Action for Enterprise’s “Facilitating the Development of Outgrowing Operations” manual, describes the experiences of one food retailer, ITC, in expanding its outgrowing activities to the fresh vegetable sector. The study describes ITC and its incentives for outgrowing and presents the structure of its outgrowing operation and its successes and challenges. Finally, it describes the role that GMED, a development organization, played in facilitating the expansion of ITC’s outgrowing operations.