Company Overview
FreshFoods Retail operates a chain of 25 neighborhood grocery stores across Bengaluru, with a strong focus on fresh produce, dairy, and bakery items. Their "farm-to-store" promise means they carry more perishables than typical grocery chains — a competitive advantage that also creates unique challenges.
The Challenge
Perishables are the heart of FreshFoods' business — but also their biggest headache. The margin for error is measured in hours, not days.
8% Shrinkage on Perishables
Fruits, vegetables, dairy, and bakery items accounted for 8% shrinkage — products thrown away because they passed their sell-by date. At FreshFoods' scale, this meant ₹2Cr+ in annual waste.
The Freshness-Availability Tradeoff
Store managers faced an impossible choice: order more and risk waste, or order conservatively and disappoint customers with empty shelves. Neither option was acceptable.
Daily Demand Volatility
Unlike packaged goods, perishables demand varies wildly. A rain day cuts vegetable sales by 30%. A neighborhood wedding increases fruit purchases. Historical averages were useless for day-to-day ordering.
"Every morning at 6 AM, our store managers were guessing how much lettuce to order. Get it wrong by 20%, and you're either throwing away food or turning away customers. Neither is acceptable."
— Karthik Rao, Operations Head, FreshFoods
The Solution
FreshFoods implemented Decisio with a specialized configuration for perishables management:
1. Short-Horizon Demand Forecasting
Orion built demand models specifically for perishables, forecasting at the day and store level with factors unique to fresh products:
- Weather forecast integration (rain, temperature)
- Local event calendars (festivals, school holidays)
- Day-of-week patterns specific to each neighborhood
- Freshness-adjusted demand (sales taper as products age)
2. Dynamic Markdown Optimization
Astra monitored inventory age and recommended optimal markdown timing and depth to maximize recovery value before expiry:
- Automatic markdown triggers based on shelf life remaining
- Tiered discounting (10% at 2 days, 30% at 1 day, 50% at hours remaining)
- Cross-store rebalancing for items with longer remaining life
3. Supplier Collaboration
Demand forecasts were shared with key suppliers, enabling them to plan harvests and deliveries more accurately, reducing both waste and stockouts.
Implementation Journey
Results After 6 Months
Waste Reduction
- Shrinkage reduced from 8% to 4.4% — a 45% improvement
- ₹1.2Cr annual savings from reduced waste
- Sustainability metrics improved (less food waste)
Availability Improvement
- Product availability improved from 82% to 94%
- Customer complaints about stockouts down 70%
- Basket sizes increased as customers found what they needed
Operational Benefits
- Store managers save 45 minutes daily on ordering decisions
- Markdown decisions automated, staff focuses on customer service
- Supplier relationships improved with better forecasts
"The waste reduction is great for our bottom line, but I'm equally proud of the sustainability angle. We're throwing away 45% less food. That matters to our customers and to us."
— Karthik Rao, Operations Head, FreshFoods
Lessons for Grocery Retailers
- Perishables need special models: Standard forecasting doesn't account for shelf life
- Weather matters more than you think: Rain alone can swing demand 30%
- Markdown timing is critical: Too early leaves money on the table, too late means waste
- Empower store managers: Give them recommendations, not just data