Snapshots of Food Business News
Study Points to the Rise of Global Nutraceutical Market
Nutraceuticals are now seen as foods or fortified food products that supplement the diet and assist in treating or preventing diseases and providing other medical benefits. In India increase in population, urbanisation, change in lifestyles, awareness about health and fitness has therefore made these foods popular. Presently India accounts for around 1.5 per cent of the global market but the Indian market could see a steep rise from the present $2.8 billion to $6.1 billion by 2020 with a CARG of 17 per cent.
According to a joint study by Assocham and RNCOS it is estimated that the global nutraceuticals market may cross $262.9 billion by 2020. It is growing at a CAGR of about 8 per cent. The US has the largest market followed by Asia-Pacific with Japan being a major consumer followed by China. In third position is the European Union where the major markets are in Germany, France, the UK and Italy. If India is to take advantage of this trend then regulatory guidelines need to be formulated urgently as these products are presently considered non-standardised under Section 22 of Food Safety & Standards Act, 2006 and require product approval from FSSAI.
Burrito Boys to Spread Across India
Burrito Boys, the Mexican food brand was launched by husband and wife duo Griffith David and Elizabeth Bowden-David, the former an Indian native and the latter a native of the US. For the past six years the duo are Bangalore residents and that is the reason why Burrito Boys runs three outlets in Bangalore. It now intends to open 45 more outlets to spread its operations to Hyderabad, Pune and other Indian cities. The brand is planning to expand as company-owned outlets as well as franchise mode. A franchisee can either open a food court or a standalone outlet as per the available area.
The husband and wife team spent a lot of time in the American southwest and absorbed Mexican culture. So they offer authentic Mexican fare like Burritos, Tacos, Guacamole, Salsa, Guacamole etc. which has been inspired by Mexican-brand called Chipotle. The couple also runs Habanero in India. This brand provides a combination of Texan and Mexican cuisines.
Burger King launches home delivery services in India
Burger King debuted in India only nine months ago but it is all set to launch the home delivery service in Delhi, NCR and Mumbai. This is the first time they have begun a home delivery service so close to the country launch. Burger King has 25 stores in India and had also initiated e-ordering through eBay. However, now they have partnered with three tech firms LimeTray, FastOx and Grab for the home delivery services.
In India out of the $48 billion organised food market, the delivery services are pegged at $10 billion. The average food ticket size is Rs.400 for orders from mobile Apps. Burger King would like to take advantage of evolving consumer habits of Indians and the increase of mobile consumer shopping and so have decided to launch their home delivery service in India. Burger King has a presence in 100 countries but home delivery services only in the USA, Spain, Korea, China and now India.
Tex-Mex restaurant Habanero to open 25 outlets
Habanero presently runs four company owned outlets in Bangalore and Chennai and a franchise in Hyderabad. The restaurant offers a combination of Texan and Mexican cuisine. The authentic Tex-Mex restaurant offers classic Mexican foods, Tex-Mex creations and Texas-influenced American items. The brand is looking to open another 20 to 25 outlets in Mumbai, Pune and Delhi in the next four years. These restaurants will be either company owned or franchise based. Founder and CEO, Griffith David is a native Indian but he knows all about Mexican food and so he has created a fun atmosphere in his restaurants and a menu which contains authentic nachos, burritos, quesadillas, and burgers, as well as grilled chicken breasts, fish and tenderloin and classic drinks like margaritas and sangria. For the sweet toothed there is Mexican tres leches cake and the American-style cheesecake with caramel topping.
Andhra Pradesh to get an Ultra Mega Food Park
Kurnool District is to get an Ultra Mega Food Park so as to give the Andhra Pradesh Agro-processing industry a boost. The foundation for the ‘Jain Irrigation Food Park’ was laid by Chief Minister N Chandrababu Naidu. The 758 acre Mega Park will have Agri, biotech and R&D centres besides processing facilities for fruit, vegetables and spices. The Chief Minister also laid the foundations stone for Gujarat Ambuja Exports maize processing facility. This will come up in 200 acres with an investment of Rs.240crore in Orvakallu in the same district.
The Ultra Mega Food Park will have technology innovations like product and crop demonstration centre, water-harvesting demonstration unit and renewable energy hubs and also micro-irrigation systems, PVC and PE pipes and tissue culture. Since lifestyles and food habits are undergoing a change R&D will be able to study the trends, understand consumption patterns so that future needs can be anticipated. Also agricultural practices to study yield will be carried out.
Palanpur in Gujarat to get Rs.600 Crore Amul Cheese plant
Gujarat Co-operative Milk Marketing Federation that owns Amul, plan to triple their cheese output by setting up a Rs.600crore greenfield cheese plant in Palanpur, Gujarat. At the start the plant is likely to produce mozzarella and processed cheddar cheese. Amul’s butter holds 90 per cent share in the market and its fresh milk has a share that is around 4o-45 per cent. Other value added products like curd, ice-cream and milk-based beverages have seen tremendous growth in the past few years. In the same way Amul would like to increase its cheese market to over 65 per cent that it presently commands through sale to hotels, restaurants and café’s that are dependent on Indian brands of cheese. The brand will continue to focus on the domestic market for dairy products as that is growing steadily in double digits.
Jubilant FoodWorks show jump sales for last two quarters
It looks like same store sales are again looking up as Jubilant FoodWorks has posted a growth of 4.6 per cent in the June quarter. Jubilant is the country’s largest quick service chain that operates Domino’s Pizza and Dunkin’ Donuts outlets. Jubilant FoodWorks also have shown year-on-year increase in its net profit for the quarter at Rs.29.5crore while its sales rose 20% at Rs.570.7crore. The company was satisfied with its performance though the stock market rate for the company fell by 2.78 per cent as the performance was below market expectations. The introduction of the pizza with an Indian concept in new cities has been responsible for the profits. Jubilant has also outperformed other Quick Service Restaurant chains like Yum! Restaurants that operate Pizza Hut and Westlife Development that have the franchise for McDonald’s.
Domino’s runs 911 restaurants in 280 cities but its home delivery model has caught the imagination of the consumers with their promise of delivery within 30 minutes. Their profits have increased because consumer trends now indicate preference for home delivery rather than eating out and pizzas come to the mind first. Taking their cue from Domino’s and online food operators like FoodPanda, TastyKhana and TinyOwl; McDonalds and KFC are also now focusing on home delivery. Yum! Restaurants and Westlife Development have also stepped up their value meals and have launched discounts to counter curbs on discretionary spending by consumers. Haldiram’s growth in sales might have reduced to single digit but they are not despairing as consumer trends point to the fact that Indian’s still love their Indian menu and would rather go for Chole Bhature than burgers or pizza even though Indian food costs much more than the value meals at QRSs.
Coffee Day Enterprises to raise Rs.1,150 crore IPO
Market regulator SEBI has given the green signal to Coffee Day Enterprises to raise Rs.1, 150crore through Initial Public Offering (IPO). Coffee Day Enterprises runs the country’s biggest coffee chain Cafe Coffee Day. The company had filed its draft red herring prospectus (DRHP) with SEBI though its banker Kotak Mahindra Capital Company Limited on June 26 this year. SEBI has just recently issued its final observations and Coffee Day Enterprises will go forward with the IPO so that they can expand and pay off their debts.
KKR, Stanchart PE and New Silk Route are slated to invest in Coffee Day Enterprises. The shares will be listed on BSE and the NSE. Coffee Day Enterprises is the parent company of the Coffee Day Group and operates coffee business through a subsidiary, Coffee Day Global Limited which has shown an operating profit of Rs.189crore in 2013-14 fiscal. Once the capital is raised the company will pay off its debt of Rs.632crore. The rest of the money will be used to open new stores, set up coffee bean roasting plants and for making vending machines. The company plans to open 215 outlets and set up 105 kiosks. They have also reserved Rs.15crore worth of shares for their staff.