Snapshots of Food Industry News
Organic food brand YumBox launched in Gurgaon
Divyat InfoTech Pvt Ltd has launched YumBox, India’s first organic fast food provider. YumBox is presently available in Gurgaon but in the next six months Noida, South Delhi, Bangalore, and Mumbai will all be able to get a taste of organic burgers, pizzas, wraps, rolls, sandwiches, rice bowls, parathas, pasta smoothies and more. All the food items will be made with 100 percent natural and organic ingredients. The young founders of the company have thoroughly researched the food industry and once they saw the gap they decided to launch YumBox which will provide fast food options for health-conscious people.
YumBox is the first to launch organic foods in the Indian food industry. They will provide organic and natural premium quality foods at an affordable price range of Rs.49 to Rs.289. Every YumBox product will not only be 100 percent organic but will also be freshly made in their in-house bakery with the help of industry experienced chefs from IHM Delhi and Mumbai. Customers can place orders from their website www.yumbox.ooo or call on the toll-free number. Orders will be delivered free of cost within 45 minutes. Every product will be delivered in YumBox branded packaging.
The details of the Government’s proposal for 100 FDI being awaited
The government wishes to boost farmer incomes, give a push to the food processing industry and create employment opportunities. So it has proposed to allow hundred percent Foreign Direct Investment (FDI), in multi-brand food retailing. The new policy could also allow FDI for online food retailers so they can be brought to par with offline stores. The idea is to drive growth through locally grown food and food consumption sourced from Indian farmers and manufactured in India. However, there is no clarity yet on whether grocery can be defined as food in the new policy for online retailers. Food processing and dairy leaders like Rasna and Amul can also expect a large flow of funds with the Government’s decision to allow 100 percent FDI in multi-brand retailing. However, the companies feel that there must be strict provisions in place as they do not want that the move hurts rather than helps farmers.
According to the Department of Industrial Policy and Promotion (DIPP), the new FDI policy could not only benefit Indian retailers but Wal-Mart Stores Inc. and Carrefour SA will also get to open stores as long as they only sell locally produced food. It is important that the Government take all precautions to ensure that under the pretext of FDI, agricultural commodities from abroad do not enter the Indian market. Besides Wal-Mart, Carrefour, Marks & Spencer and Tesco, the industry is hoping to see investment from other firms like New Zealand based Fonterra, US’s Amy’s Kitchen and Germany’s Aldi. Companies like DANONE and Lactalis are already in the Indian dairy sector and if more companies purchase raw material from Indian dairy farmers then the share of the organized dairy sector will increase. However multi-brand retailers will have to wait and see how the policy pans out as the nitty-gritty are still being worked on.
Amul targets rapid growth in the next five years
Makers of Amul brand, Gujarat Co-operative Milk Marketing Federation (GCMMF) has reported sales of 11 percent in the year that ended on 31 March. In 2014-15 the dairy brand had reported turnover of Rs.20, 733 crore and this fiscal that has increased to Rs.23, 005 crores. Based on the estimated growth Amul expects CAGR to grow at 20 percent in the next five years. In view of this anticipated growth, Amul is planning to increase its milk processing capacity from the current 28.1m liters per day to 38m liters per day by 2021. Milk processing plants of GCMMF members are coming up Haryana, Uttar Pradesh, Maharashtra, Madhya Pradesh, West Bengal and Rajasthan.
Amul has not increased prices of its products but the increase in growth has come through higher milk procurement and the addition of new markets. In fact, after considering the group turnover of member unions, Amul has a turnover of more than Rs.33, 000 crores. This figure is derived by adding turnover of member unions like Sumul dairy of Surat which is part of Amul but not a member of GCMMF. The demand for milk and milk products has increased in urban areas and that is the reason for the growth figures. Amul prices are likely to remain unchanged even in the summer months as the cost of fodder, labor and upkeep of milk-producing animals have to be factored in.
Parle Agro to invest further in advertising and distribution
Makers of Frooti, Parle Agro, is all set to spend Rs.150 crore in 2016 on advertising, building sales and distribution networks. They intend to spend around Rs.70crore on increasing brand presence in rural markets and the rest will go towards advertising. The company had completely rebranded its flagship brand Frooti earlier, which accounts for more than half the company sales. Frooti sales are particularly popular in the tetra-packs but the change to PET bottles has also shown accelerated sales.
Parle Agro has a sales force of 4000 which they mean to increase by 20 percent. They also plan to increase their distribution outlets to one million in the coming year by adding another three lakh. The company’s new manufacturing facility at Sitarganj in Uttarakhand will become operational any time this year. In competition with Coca Cola’s Maaza and PepsiCo’s Slice, Parle Agro has also kept its presence alive in the glass bottle category. Since Appy Fizz sales have shown a growth of 20 percent, they are planning to scale up Appy and Appy Fizz this year too.
Everstone aims to treble revenues from acquired Modern Foods
Private equity major, Everstone, has decided to treble revenues from the acquired Hindustan Unilever’s, Modern Foods. Everstone took over Modern Foods in September and is now expecting to increase revenues to Rs.1, 000 crore from the bread and bakery business. To fulfill its ambitious plans Everstone has hired Aseem Soni, a former Cargill Foods executive, as a new chief executive, while Kuldip Kaura has been made Chairman of the Board who was earlier managing director and chief executive of ACC Cement, besides being a director with Everstone Group.
Modern Foods has seen hands change for the third time now. It was set up by the government in October 1965 as Modern Bakeries India, at Kazhikundram, Tamil Nadu. In January 2000 the then central government sold 74 percent of the company to Hindustan Lever and it was the first privatization of a government PSU. The remaining 26 percent was bought over by HLL in November 2002. Modern Foods has 14 bakeries in 13 cities and 40 franchises. It mainly sells bread but also cooking oil, flour, fruit pulp and juices, beverages, concentrates and energy drinks. At one time it used to sell fruit concentrates under the Rasika brand and aerated soft drink Double Seven.
People & Placements
Jubilant Foods makes changes in senior management
Jubilant FoodWorks has made some changes in senior management as it wants both Domino’s Pizza and Dunkin’ Donuts to benefit from diverse leadership style. Dev Amritesh, who was earlier heading Dunkin’ Donuts, will now be president and chief business officer at Domino’s Pizza India. On the other hand, Tarun Bhasin, who was heading Domino’s, will now head Dunkin’ Donuts.