Academic journal article UTMS Journal of Economics

Spice Route: Logistic Journey of Spices in Retail Supply Chain Perspective

Academic journal article UTMS Journal of Economics

Spice Route: Logistic Journey of Spices in Retail Supply Chain Perspective

Article excerpt

Abstract:

The aim of this paper is to report the findings of the study of the routes and the distance traveled by spices from the farming location to the consumer in traditional and organised retailing. This research study is primarily exploratory in nature, and the research instruments include interviews and survey through questionnaires with players in the spice supply chain. The study is to track the spice routes by the retailers for assessing the current state of the supply chain management practices, and evaluate 'food mileage' clocked by them. 'Food miles' is a relatively recent concept in retailing and result of this study reveals that significant increase in food miles in the case of organised retailers. Longer food miles of spices are an indicator of the shifttowards organised retailing. The speed at which spices reach their destination as well as the time taken between any two points was not observed. This is the limitation of this study, and also the scope for further research. The research study is not aimed at finding the factors related to the food mileage.

Keywords: retail, spices route, food mileage, logistics, supply chain.

JEL classification: L81; L83; L91

(ProQuest: ... denotes formula omitted.)

INTRODUCTION

Spices constitute an important group of horticultural crops. The marketing of spices is not a new activity; the spice trade has been in practice for more than thousand years, across continents. However, over a period of time, trade practices have changed. This exploratory study is to understand the logistical operations of spice trading. It is limited to the logistical operations of cooking spices in the city of Chennai. The logistical chain of spice marketing is carried by two distinctly different business operators; organised and traditional retailers. Organised refers to marketing activities undertaker by licensed retailers, that is, those who are registered for sales tax, and income tax, and business is managed by professionals as a firm or limited company or cooperatives. Traditional refers to those who operate in unorganised markets with different outlet formats - mom and pop shop, non permanent shops in the market, and pavement and road side vendors. From the cultivation of the spices to their delivery to the customers, lots of activities are carried out. Spices travel long distances to reach the consumer's kitchen. Every kilometer of the journey is a cost addition to the product price. There is a need to understand and assess the 'Food Mileage' of every spice. This undertaken study reveals the food mileage of selected five spices. Indian traditional grocery retail is not well organised in fact, it is unorganised and fragmented. Corporate business houses are active in the retail business of low volume and high value spice crops; the study indicates that the entry of corporates in grocery retailing is the beginning of advanced retailing practices.

SPICE ROUTE

At various periods in history, spices have been as valuable as gold and silver. In 1498, Soon Vasco da Gama arrived at Calicut after the first direct sea voyage from Europe, a sea route that has linked Venice to South East Asia though Arabia. Establishment of this route predominately used for spice trading is known as the 'Spice Route'. The spice route had ignited the world economy from the end of the "Middle Ages" well into the "Modern Age". The middle age spice route was over seas and intercontinental and the driving force was the search for a way to reach the supply base. The modern spice route is not only global, but also intra-national, in search of customers. The route and the distance traveled is a logistical, distributional factor, which is very critical for any product in retail marketing, especially, the spices used in cooking through retail market. The customer buys spices in small quantities for domestic use, but the transportation cost has a huge impact on their prices. India is consuming almost all its spice production, and the "Spice Route" within the country is as important as the ancient route. …

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