Fresh business

A greengrocer-turned-entrepreneur runs a chain of convenience stores.

This past year has been a tough one for organised retail in India. But one small player in the south has not only stood up to competition from the more established players, such as Reliance and Spencer’s, but has even managed to grow by an impressive 15-20 per cent. This is Kovai Pazhamudir Nilayam (KPN), a chain of 20 fruit and vegetable outlets across Tamil Nadu and Puducherry.

KPN is a remarkable success story. It was started in 1967 by N Natarajan, a greengrocer from Coimbatore who decided to scale up his business. He started his first shop in a 100 sq ft space in Peelamedu with Rs 2,000 he had saved selling vegetables on the streets. Natarajan sold vegetables by day, and at night he worked in a textile mill.

“It used to be difficult,” he says. The first day, he remembers, his shop sold goods worth Rs 100 — “that’s because I invited lots of guests,” Natarajan says with a smile. The second day, he made just Rs 10.

Today KPN has an average daily turnover of around Rs 30 lakh and targets 10 per cent year-on-year growth for the next three or four years.

“From day one,” says Natarajan, “we were particular about maintaining our quality and pricing, which is not easy.” To that end, KPN has a policy of replacing stocks at its stores twice a day — even if the produce has not been sold. It requires 15 vehicles to bring in and carry out stocks (some just a couple of hours old) from each shop. “We are very particular that it should not go to the secondary market,” says Natarajan.

The chain sources vegetables and fruits from the domestic and international open market and also from around 400 farmers in the area, who are paid daily and in cash. “This has helped us retain our suppliers over the years,” says Senthil Natarajan, 27, Natarajan’s son. “Not one farmer has left us.” Senthil quit his job as a product developer with Microsoft to work with his father.

The younger Natarajan has brought in technology to manage the supply chain and day-to-day activities. He has also come up with a plan to convert vegetable and fruit waste into manure for farmers in Kerala. The outlets in Coimbatore and Tirupur alone produce a tonne of waste every day, says Senthil. The composting takes place at KPN’s own farms and Senthil is thinking of generating energy from the process.

Seasons, a café offering juices, salads, milkshakes and snacks, is Senthil’s other brainchild. “I started it in 2005 in a 1,500 sq ft space for which I pay my father Rs 30,000 as rent,” he says, emphasising his independence from the family business. There are four Seasons outlets now in Coimbatore and Chennai, and Senthil is looking to grow.