Can Parle’s premium biscuit brands garner more revenue?
Parle Products, the confectionery giant has revealed on May 7, 2015 that it is planning to generate more revenues from its premium brand biscuits in the coming few years, as its revenue from its mass-based products are dwindling. Parle’s representative was optimistic of the growth of the premium biscuit sector, which has seen a growth of 20% year-on-year, while the sales for its mass-products have plateaued. Lately, Parle’s premium biscuits category has faced a lot of steep competition from innovative premium products launched by companies like ITC and Britannia.
Parle has seen the competition happening and has revised its product portfolio and has introduced newer brands, with a clear focus on premium biscuits. With a 35% stake in the Rs. 25,000 crore Indian biscuit market, Parle means business. It has a number of favorite brands, both in the premium and mass categories. Some of the mass brands include Parle G, Parle Marie, Krack Jack and Monaco; while in the premium category there are brands like Milano, Simply Good, Happy Happy and Hide and Seek, among others. The company is laying more emphasis on modern retail trade channels for its premium products, which it considers to be more relevant. The company will be focusing on its existing range of premium products over the next couple of years in order to consolidate its position in market rather than launching new products.
Danish biotech company’s foray into enzymes for F&B sector in India
A USD 2 billion Danish biotech company, Novozymes, is looking to expand its enzyme base in the food & beverage (F&B) industry in India. The company is trying to develop regional solutions for the F&B sector based upon the changing food habits of Indians in recent times. Novozymes has a presence in India for the last three decades, and is committed to the application of industrial biotechnology for developing enzyme systems for solving regional issues in the F&B industry in India. For example, the company has found a way to keep naans and rotis fresh for longer periods of time, using its existing enzyme systems. Besides regional innovations, the company also looks at global innovations. For example, the issue of continuously heating oil during cooking is a global issue, which Novozymes is trying to solve using enzymes.
The company closely works with academic institutes as well as other industry partners. With the changing dietary patterns of Indians, and the preference for processed food and ready-to-eat meals, biotechnology can step-in to develop processes to enhance food quality, shelf life etc., where Novozymes can play a major role. Novozymes spokesman indicated that a major challenge for making new headways was the slow regulatory approval process that delays the whole cycle of innovation, and even if a product is ready, it cannot be marketed leading to huge losses for the companies. Therefore, there was a need to improve, revamp and streamline the regulatory approval process.
Tiger Global makes a non-tech investment in Chaayos tea chain
Tiger Global has made a non-tech investment of USD 5 million on the Gurgaon-based Chaayos, the tea chain. The startup, which has presence only in Delhi NCR, will be able to expand to around 50 outlets in Mumbai and Bengaluru also, with the new investment. The tea chain will also try to mobilize the new funds to expand its delivery service through its mobile app. A Chaayos spokesman indicated that since tea (chai) is consumed almost 10 times more than coffee, Chaayos wants its presence to be felt across the sector, eventually to become the biggest tea company in India. He indicated that the company had made some innovative kettles also. Chaayos will also be focusing on its retail tea blends. It sources tea leaves from various tea estates to create its own tea blends, which it has a seed funding of Rs. 2 crores. It has recently started marketing its own blends of tea packaged products in partnership with Amazon, Grofers, Big Basket and Ola Café.
Chaayos has received financial support from the New York based investment firm Tiger Global, which has also funded Just Dial, Flipkart and Ola Café. Other major players in the tea segment include Tea Box and Chai Point. Tea Box however, doesn’t have any offline presence. Although the Indian tea consumption market is valued at USD 50 billion, it’s the coffee chains that are leading in front with Café Coffee Day and Starbucks, way ahead of the others.
Karnataka Government puts on hold KMF’s proposed hike in milk prices
Nandini Milk and Milk Products, part of Karnataka Cooperative Milk Producers’ Federation (KMF) is looking to hike the price of milk and milk products by Rs. 2 per liter, in spite of the fact that it has already raised the sale price of milk three times over the past 2 years. Nandini Milk holds 65% of the market share on milk and milk products, essentially enjoying monopoly over the market. It wants to raise the price of milk for the benefit of the dairy farmer and to meet its expansion costs. The price hike would affect the prices of at least 60 varieties of milk and milk products. KMF’s managing director indicated that the rise in prices was planned to meet the expansion costs of the federation’s infrastructure of its milk networks, the cost of which was to the tune of Rs. 2,000 crore. He added that the expansion would be completed within the next few years, and this would not affect the brand value, due to the superior quality of its products and loyal consumers.
Nandini milk and curd would be available at the same rate as before as the state government had not approved KMF’s price hike. It is believed that the government will take some time to come to a decision, given the upcoming Gram Panchayat elections and the Municipal elections in Bengaluru. Currently Nandini milk is available Rs. 38/liter and Nandini curd at Rs. 29. Nandini is aiming to increase its milk production from almost 59 lakh liters per day to 70 lakh liters per day by next month. Nandini has entered the Hyderabad market only last week and has faced competition due the entry of Amul in recent times. Nandini’s milk is priced at Rs. 36 per liter, while most other brands like Mother Dairy, Thirumala, Vijaya and others have prices around Rs. 38 per liter. However, with the entry of Amul in Hyderabad last month, these companies have also been forced to slash milk prices in order to stay in the competition.