Snapshots of Food Industry News
Future Consumer Enterprises to raise Rs.368 crore from promoters and PE
Integrated Food and FMCG company, Future Consumer Enterprise Limited (FCEL) the Future Group’s food firm will raise Rs.368 crore from promoters and from PE fund Black River Food 2 Pte Ltd. the money will finance the company’s expansion plans and other business initiatives and improvement of costs and maturity profile of existing debt. The company intends to issue compulsorily convertible debentures (CCDs) of face value Rs.100, 000 per CCD to Black River Food 2 Pte Ltd, which is a wholly owned subsidiary of the Food Fund. Future Group will also raise USD10 million through an issue of warrants to its promoters. The debentures and the warrants can be converted to equity shares of FCEL within a period of 18 months from the date of allotment of CCDs and warrants at a conversion price of Rs.22.73 per share.
At the recently held Board meeting the Future Group also approved the master franchisee arrangement with Future Retail Ltd. Their convenience stores comprising of ‘KB’s Fair Price’, ‘KB’s Conveniently Yours’, ‘Big Apple’ and ‘Aadhaar’ will now be operated by FRL. This will entail entering into a separate long-term supply agreement between FCEL and FRL for supply of branded products to Future Retail Ltd. FCEL will continue to pursue its strategic mission of ‘farm to fork.’ The company’s operations range from sourcing of basic food like rice, wheat, spices and pulses; grading, processing, packaging and turning these into brands. It has also successfully branded dairy and bakery, juices, frozen foods, snacks, ready to eat meals, dips and sauces.
Nestle India eyes double digit growth for Maggi noodles
Nestle India hopes that its aggressive sales strategy will see an increase in the consumption of its instant noodles. The company has an eye on double digit growth after its flagship Maggi brand was banned and re-launched in November. The Maggi noodles issue had impacted the results of the last two quarters of 2015. Nestle India has seen a loss of Rs.450 crore which saw the destruction of 30,000 tonnes of the instant noodles since in June. Now the company is focusing on digital media and also pushing other foods like milk products and chocolates to ensure growth.
After the re-launch Maggi is once again available in 700 towns and is sold by 3 lakh small and large shopkeepers. The company is now making great efforts and is investing in Maggi to ensure that the country’s favourite noodles are safe to consume. The company is not only building a strong digital presence to strengthen the Maggi brand but is actively engaging with consumers via social networking sites Facebook and Twitter. In order to leverage all sales channels Nestle has tied up with e-commerce player Snapdeal, to push online pre-orders. The tie-up saw an uptake of 60,000 units in the first five minutes of sale. Overall, Nestle India saw a sale 3.3 crore units of Maggi in the first 10 days of its re-launch. A new initiative ‘We Miss You Too’ Maggi campaign has also been set up which is a 24×7 toll-free service to address consumer concerns.
Online grocer Town Essentials raises Rs.6.7crores from HNIs
Bangalore-based online grocer, Town Essentials, has raised Rs.6.7 crore of funding from a group of High Net Worth Individuals (HNIs). Lead investor is Infosys’ first non-founder employee Sharad Hegde and others are Workday executive Girish Reddy, Siddharth Patil, head of data science at the TellApart division at Twitter and existing investor Shrikant Patil. Founded in 2003, Town Essentials gets about 200 orders a day in Bangalore.
Since the company faces competition from BigBasket and ZopNow among others the fund will be used for marketing to increase their base to about 10,000 customers and they will also launch a mobile app. The vegetarian local e-grocer specialises in fresh fruits, vegetables, regional ingredients and artisanal products. The company aims to help discover and share the best of what India’s farms and kitchens produce. The firm has also recently launched a new platform, called Morning Drop, which focuses on subscription-based product delivery of everyday grocery items like milk, egg etc.
Danone and joint venture partner Rahul Narang Group could split
Just as it parted ways with Britannia Industries Ltd, the French food and beverage maker, Danone, could part ways with current joint venture (JV) partner, the Rahul Narang Group. Danone wants full control of beverage brands Qua and B’lue that is manufactured and distributed by the two joint ventures. A legal battle seems imminent as Rahul Narang has filed a petition in the company law board against Danone Narang Beverages under Sections 397 and 398 of the Companies Act. The Rahul Narang Group has alleged mismanagement of funds, misconduct shown towards company members and oppression by the firm in which Danone has a majority stake. Qua and B’lue together had sales of Rs.100 crore in the last calendar year. Danone wants to go it alone in the beverage market and so there is a mismatch of expectations by the venture partners.
Danone Narang Beverages manufactures and markets beverages in India such as B’lue and Qua. Danone has a minority stake in other venture, Narang Danone Access, which distributes these beverages and other international brands such as Twinings Tea, Monster energy drink and Perrier sparkling water in India. It seems that Danone and the Narang Group have been unsuccessful in valuing the brands for a complete buyout by the French company. Danone Food also runs dairy operations in India and is still relatively small, selling products in Mumbai, Delhi, Bangalore, Pune and Hyderabad. It also runs an equal joint venture with Japanese probiotic products company Yakult—Yakult Danone India Pvt Ltd, based in New Delhi.
Pawan Kumar Agarwal to be new FSSAI CEO
The Union government in its order dated December 22, has appointed Pawan Kumar Agarwal as the chief executive officer (CEO) of Food Safety and Standards Authority of India (FSSAI). Ashish Bahuguna, Chairman FSSAI, was holding additional charge of the CEO ever since Y S Malik was suddenly shifted to NITI Aayog in September. Malik was seen as the man behind the ban on global giant Nestlé’s Maggi noodles.
The Appointments Committee of Cabinet (ACC), headed by Prime Minister Narendra Modi, has approved the appointment of Pawan Kumar Agarwal, a 1985 batch IAS officer of West Bengal cadre. He was joint secretary in ministry of skill development and entrepreneurship.
Bhaskar Bhat will be Chairman of Rallis India
Rallis India, Tata group’s agro-chemical firm has appointed Bhaskar Bhat as Chairman of the company as the present Chairman, R Gopalakrishnan, is to retire as a non-executive, non-independent Director and Chairman of the company with effect from December 25, 2015. Rallis India manufactures crop protection chemicals and has factories in four locations. The company produces more than 10,000 tonnes of technical grade pesticide and about 30,000 tonnes/litres of formulations per annum.
Jetha Bharwad becomes Amul’s first vice-chairman
Senior BJP MLA and Chairman of Panchmahal Dairy, Jetha Bharwad has been unanimously elected as the first vice chairman of prestigious Gujarat Cooperative Milk Marketing Federation (GCMMF) that sells its dairy products under brand name ‘Amul’. Since its inception in 1973, this is for the first time that GCMMF has the post of vice-chairman which was created recently by making amendments to their by-laws. Currently Jethabhai Patel, the Chairman of the Sabarkantha District Cooperative Milk Producers Union (Sabar Dairy) is the Chairman of GCMMF. Bharwad is MLA from Sehra constituency of Panchmahal district. The election was conducted in the presence of all the chairmen of all the 17 member unions, who represented their district milk unions in the state.