Snapshots of Food Industry News
More Maggi variants on the anvil say Nestle India
In the next three to four months Nestle India will be launching other variants of Maggi noodles. The company said that variants like oats noodles, aata noodles, and cup noodles are on the anvil. After the re-launch of the banned Maggi instant noodles, Nestle is now planning to move ahead with new product launches. After re-launch, the company has sold 50-60 million packs of Maggi noodles so far, against 300-400 million packets it used to sell prior to the ban. The company says that they are taking all precautions before coming back into the market.
However, Nestle India is not fully out of the earlier controversy as recently the Supreme Court has ordered re-testing of Maggi noodles by an accredited laboratory at Mysore and not in Chennai as sought by the National Consumer Disputes Redressal Commission. The Supreme Court has also stayed the proceedings in government’s Rs. 640 crore pending lawsuit against the company. So there is still some time before Nestle will be able to go back to their old footing.
Baskin Robbins seeks expansion through franchise partners
Baskin Robbins entered India in 1993 through a joint venture with Graviss group. Today the global ice-cream brand has penetrated into more than 145 cities in India and has 600 parlors. However, the brand is looking for more franchisees in the metros and tier-I cities as they feel they need to expand through their successful franchising model.
The company offers 100 percent franchise and through this, they have been able to create many entrepreneurs who have a stake in the success of the brand. The company feels that these entrepreneurs have been able to create the presence of Baskin Robbins locally. Baskin Robbins on their part handles development and marketing. Baskin Robbins is best known for the creation of 1200 ice-cream flavors. Also, their ‘31’ logo signifies one flavor for each day of the month.
SEA- International policies could impact the domestic edible oil industry
Through a recent release, the Solvent Extractors’ Association of India (SEA) has raised concerns about how policy changes in Argentina, Indonesia, and Malaysia can leave an impact on India’s domestic oil sector. Newly elected Argentine president’s announcement about eliminating a number of export taxes on soya bean and soya bean oil has seen a fall in prices of these products in the international market. Likewise, the Indonesian government’s decision to increase its biodiesel blending mandated to B-20 in 2016 will create more demand and raise CPO prices internationally. Also Indonesia and Malaysia and jointly set up a Council to maintain high prices for palm products in the international market and reduce competition amongst themselves.
In 2014 -2015 India imported almost 9.5 million tonnes of palm products from Indonesia and Malaysia which constituted two-thirds of the total 14.4 million tonnes of import. This shows how dependent India is on Indonesia and Malaysia for edible oil requirement. These countries have also inverted duty structure for exports with high duty on CPO (raw material) and lesser duty on RBD Palmolein which has already affected the domestic refining sector in India. SEA says that all these changes could have long-term implications for India and so suitable policy changes need to be initiated by the government.
Crisil: By 2018 organized dairy to see massive growth
According to Crisil, India’s organized dairy segment will see a growth that will be higher than the present 22 percent. The rise in disposable income and quality consciousness are two factors that will spurt consumer preference for branded milk and milk products. In the next three years, milk processing capacity is likely to reach about 1,050 lakh liters per day. Along with this, the organized milk sector will spend about Rs.15, 000 crore towards expansion. They will focus on value-added products, invest in brand building and scaling up operations, particularly in processing and milk-collection infrastructure.
Uttar Pradesh, Punjab, and Haryana which are presently the highest milk producers are not well organized but will see improved capacity. Almost a third of the overall CapEx is expected to be undertaken by the largest dairy player Gujarat Co-operative Milk Marketing Federation which owns the Amul brand. On consumer shift to the organized sector, the revenue share could rise to 25 percent by fiscal 2018 from the present 19 percent. Crisil says that the organized segment presently has revenues of Rs, 75,000 crores.
Bisleri set to re-enter soft drinks space in 2016
Bisleri International is likely to re-enter the soft drinks business in 2016 with the aim of having a turnover of over Rs. 2,000 crores by 2020. The bottling water major will see a comeback in the soft drink space after over two decades. In 1993 Bisleri promoter, Ramesh Chauhan had sold Thums Up, Limca, Gold Spot, Maaza, and Citra to Coca-Cola. They are re-entering the soft drink space with a mind to diversify and have allocated a budget of around Rs.100 crore for the new venture. They will come up with new flavors in lemon, spicy, mango and pina colada that are different from those the company previously handled.
Besides packaged drinking water, the company also sells natural mountain water under brand Vedica, Bisleri Soda, and energy drink Urzza. During 2014-15 fiscal, Bisleri had a turnover of about Rs.700 crore and is growing at a range of 20-25 percent. Over 90 percent of their total sales come from packaged water. The company would continue to add 10 to 12 plants for packaged water every year in a combination of company-owned plants, franchise, and contractors. Bisleri has around 80 plants in India and production in Nepal is to begin soon while in Bangladesh it has just started. In 2016 they are likely to have a plant in the UAE too. They are planning to export Vedica to some European markets as they have successfully exported it to Japan and some Middle East countries.
Harsimrat Kaur Badal: Country to set up 42 mega food parks
Speaking at the inauguration of the Centre for learning resources Development at L M Thapar School of Management, at Dera Bassi, Union Food Processing Minister, Harsimrat Kaur Badal said 42 mega food parks worth Rs. 2,000 crore will be set up in India, out of which five have already been established, one of which is at Fazilka in Punjab. In the next two years, Punjab will have two more food parks at Ludhiana and Kapurthala. On demand of Local Legislator N K Sharma, she gave the approval for establishing Mega Food Park at Lalru.
The food parks would have a production and processing plant, cold storage, collection center and transport. It will also facilitate the farmers by providing value for their hard work. She said that one Mega Food Park provides employment to 30 thousand people and more than one lakh people will benefit indirectly. She also said that the Centre has given its approval for making ethanol from maize. This will expand the area under maize crop. Chairman Punjab State Farmers Commission encouraged farmers to grow fruits, flowers, and vegetables to improve the degrading sub-soil and said that collection center should be established in each district of the state for marketing needs.
Godrej Agrovet acquires the majority stake in Creamline Dairy
Godrej Agrovet, India’s largest animal feed manufacturing company, has acquired a majority stake in Hyderabad-based Creamline Dairy for Rs.500 crore. This marks the company’s foray into the Rs.4 lakh crore dairy business. The Godrej Group now has a holding of 51 percent in the dairy firm as they had bought 26 percent of Creamline in 2005. GAVL plans to develop successful brands and add more value-added products to its current portfolio.
Creamline, with a capacity of nearly seven lakh liter of milk processing a day and in March 2015 they had posted revenues of Rs 858 crore. They sell milk and dairy products under the ‘Jersey’ brand in Andhra Pradesh, Tamil Nadu, Karnataka and parts of Maharashtra. The company has 29 milk chilling centers of its own and nine belonging to its associates. A number of companies are entering the hot dairy segment. Multinationals like Unilever and Danone are operating in segments like yogurt, flavored milk, cheese or ice creams. Last year, French dairy major Le Groupe Lactalis had purchased Hyderabad based Tirumala Milk Products, the second-largest dairy company in South India, for Rs.1,750 crore.