Snapshots of Food Industry News
Andrew Yule to Setup Two Bought Leaf Tea Factories in Northeast
Kolkata based and diversified state-run company Andrew Yule will set up two bought leaf tea factories in the Northeast at a cost of Rs.24 crores. Bought leaf factories buy green tea leaves from small tea growers, process them and sell the tea. The two plants will be established in Upper Assam and Dooars in North Bengal and the investment will be spread over two years. The company has taken this move so as to cushion its business against the capacity of constraints that is possible in the tea gardens in the northeast.
Andrew Yule has also clocked sales of Rs.449.35 crores from operations and other income in FY17 as compared to Rs.389.98 crores in the previous year. The company also received Rs.18.3 crore from the sale of land for a national highway project which has been included in the profit of Rs.27.39 crores for FY17. However, the present stalemate in the Darjeeling Hills has affected the sale of Andrew Yule’s speciality teas like white Oolong and hand-rolled teas of which about 2000 kg is lying in its Mim tea estate since the lockdown on June 9. These speciality teas fetch Rs.5000-15,000 per kg.
Five Leading Food Firms and Restaurants Keen to Partner with McDonald’s
Hardcastle, Jubilant FoodWorks, Speciality Restaurants, Moon Beverages and Lite Bite have all shown interest in partnering with McDonald’s as franchise partners. According to speculations in the market Hardcastle Restaurants which runs McDonald’s stores in the west and south, is a keen contender for the McDonald’s market in the north and east India. Speciality Restaurants have, however; openly expressed their interest in partnering with McDonald’s and so has Moon Beverages which is Coca-Cola’s largest franchise bottler. On the other hand, Lite Bite said it would consider the proposal if it is approached. However, McDonald has stated that presently it has nothing to say right now as the process details are confidential.
Meanwhile, the legal battle with former partner Connaught Plaza Restaurants (CPRL) continues. The CPRL board is likely to take legal action against what it terms ‘illegal termination’ of licence. However, it is yet to be seen if McDonald will appoint a new franchise partner before the case with CPRL comes up for hearing before the National Company Law Appellate Tribunal. The joint venture began to show cracks in 2013 when Vikram Bakshi who leads CPRL was ousted as MD. He was reinstated by the National Company Law Tribunal last month and that is when McDonald’s approached the Appellate Tribunal.
Nissin and Bagrry’s Sign Distribution Pact
Indo Nissin Foods that make Top Ramen instant noodles and Bagrry’s that makes breakfast cereals have had a distribution pact. Nissin will distribute Bagrry’s cereals which will widen Nissin’s distribution portfolio. Bagrry’s, on the other hand, will have access to more consumers. The partnership with Nissin is for specific products like single server packs of Bagrry’s and cornflakes. This is a first of its kind partnership and both companies will work towards building it up. Presently Bagrry’s have a portfolio which reaches 50,000 outlets and Nissin, on the other hand, has a reach in 400,000 outlets in 600 cities.
Bagrry’s feels that distribution of a single category product is always difficult, and so it has partnered with Nissin to step up its presence in other markets. Competition is also building up in the breakfast cereal market with the entry of newcomer’s like Britannia, PepsiCo and Marico and the leading presence of Kellogg. The partnership with Nissin is a big opportunity as market estimates say that the category has a reach of 2.5 lakh outlets. It will give impetus to Bagrry’s efforts to penetrate the tier II and tier III cities, especially as entry-level consumers here prefer smaller packs.
Mandala Capital Acquires 15% Keventer Agro Shares
Mandala Capital, the Singapore based private equity firm has picked up 15 % stake for about Rs.170 crores in Keventer Agro which is based in Kolkata. This is being seen as one of the biggest private equity investments in the dairy sector in East India. The entire investment will be utilised in the future growth of Keventer’s pouched milk business which sells under the brand name Metro Dairy. The company has plans to invest Rs.400 crores in its dairy business in the next two years which will be funded by a mix of debt and equity of Rs.250 crores and Rs.180 crores respectively.
Metro Dairy Ltd is a wholly owned subsidiary of Keventer Agro and is the second largest dairy player in Bengal. The company also has a presence in processed and fresh fruit and vegetables. The present funding is likely to be used for enhancing the capacities of its existing units and setting up new ones besides launching new brands and variants to suit the tastes of millennial and to enter new geographies. All these moves will propel the company into the number one position as a dairy player in eastern India, pushing their dairy business to clock a turnover of Rs.1000 crores in the next three to five years.
MANMUL to Setup Automated Mega Dairy in Gejjalagere
Mandya Milk Union Limited (MANMUL) is planning to set up an automated mega dairy at Gejjalagere, near Maddur, at an investment of Rs.227.47 crore. Chief Minister of Karnataka, Siddaramaiah laid the foundation stone of the dairy. The proposed project will be energy-efficient and will require a limited workforce and will also reduce the role of middlemen. It will enable MANMUL to get sophisticated chilling plants and other advanced infrastructure for preserving, processing and packaging. It will have a processing capacity of 12 lakh litres of milk per day. MANMUL has received a grant of Rs.100 crore from the National Dairy Development Board (NDDB) for the project and the rest will be made available from MUNMUL’s infrastructure fund. They also have the option to apply for a bank loan.
The new dairy which is expected to complete in 15 to 20 months will increase the milk procurement and production capacity in Mandya district of Karnataka and improve farm incomes. It has been observed that this district has been increasing production by 10 percent annually. The present milk processing capacity is 4.5 lakh litres a day. The dairy converts four and five lakh litres of milk into milk powder and other milk products. The key objective is to enhance milk processing capacity and improve the financial stability of farmers. MANMUL has 1,174 milk producers’ cooperative societies across the district that collect milk and about 96,900 milk producers are registered as members of these societies.
Indian Ice Cream Sector Grows by Rs.3000 crore in One Year
The Indian ice cream industry is one of the fastest-growing segments in the dairy or food processing sector. From Rs.9, 000 crores in 2016, the ice cream category has jumped to Rs.12, 000 crores in 2017. This was stated in the seventh essay of the Indian Ice Cream Congress and Expo (IICE), which recently concluded at Mumbai.
The two-day event was organised by IICMA and Aim Events, with Bluestar India being the main sponsor. It was inaugurated by Maharashtra’s industries minister Subhash Desai and attended by national and international ice cream players. IICE 2017 included a series of informative and technical seminars and panel discussions covering a range of topics including ice cream industry as cold chain, ice cream ingredients, automation, food safety and packaging.
The ice-cream sector is heading for more growth with improvement in the cold chain infrastructure in the country along with increasing disposable incomes and the changing lifestyles. The ice-cream growth story has been particularly improved because of the role of ice-cream parlours and their rapid expansion that brought wider reach. One of the interesting seminar topics, therefore, revolved around parlours as the real growth engines for ice cream brands. Other topics included ingredient trends to make ice-cream better as also processing your dreams, called ice-creams. V K Pancham, deputy director, Food Safety and Standards Authority of India (FSSAI), Mumbai, was the chief guest at the one-day international seminar. Stakeholders pointed out that there should be systems in place for the food safety officers (FSOs) to collect samples from the ice cream shops. The stakeholders wanted a letter to be sent from the higher authorities that permit FSOs to collect such samples. Stakeholders wanted to know how it is possible that a trainee FSO decides the fate of a big ice cream brand.
Chef Gautam Chaudhary Acquires Health Food Start-up – World in a Box
Chef Gautam Chaudhary has acquired Gurugram based health food startup- World in a Box. Though the details are not known there is speculation that it was a cash and equity deal. World in a Box is doing well in Gurugram and has even bagged the prestigious best online food delivery award. The online platform is a pioneer of “make your own meal’ where consumers can customise their meal. Chef Gautam is not only Michelin recommended but has over 20 years of culinary as well as management experience and so will add value to the brand.
Nitish Jha founder of World in a Box will now move up to a larger role at the Demiurgic group so as to manage operations and marketing. By the end, September Demiurgic Hospitality is likely to come up with their second brand “Deseez’, a boutique North Indian delivery kitchen. The group has a lot of other interesting plans and are likely to come up with multiple food brands under the parent umbrella.