Snapshots of Food Industry News
Coke launches Aquarius – non-carbonated drink
Coca Cola India has expanded their portfolio of non-carbonated drinks with the launch of their lemon flavoured beverage Aquarius. The active hydration beverage is one of the top brands globally. Aquarius is a low calorie beverage that contains sodium, calcium and potassium and will be available in 400ml packs at a price of Rs.30. The hydration market is just beginning to build up in India and is likely to grow rapidly.
Coca Cola has been launching new drinks periodically like dairy drink Vio, Fuze ice teas and Coke Zero. Coca Cola also sells brands like Maaza, Minute Maid juice drinks, Schweppes sodas, Kinley packaged water and Georgia tea and coffee besides their carbonated beverages. Aquarius will be used to shape the active hydration category in India and will be aimed at young urban consumers with active lifestyles.
Amazon introduces the Wickedly Prime food label
The US-based e-commerce giant, Amazon has introduced a private food label, Wickedly Prime. Wickedly Prime is exclusively for Amazon Prime members and so targets the “foodie” crowd with offerings that are similar to those available at Trader Joe’s. Wickedly Prime offerings include snacks like popcorn, tortilla chips, and soft shell almonds. Amazon has other private labels like Happy Belly that sells nuts and tea, Mama Bear which sells baby products, Presto! that sells detergents and Buttoned Down that sells formal dress shirts for men.
Badal inaugurates Verka Bhatinda Dairy’s modern ice-cream unit
Harsimrat Kaur Badal, minister for food processing, recently inaugurated the modern dairy and ice cream unit at the Verka Bhatinda Dairy. Badal congratulated the dairy on becoming operational within the time frame as the foundation stone was laid only in April. The one lakh capacity of Verka Bhatinda Dairy has been increased to two lakh litres per day to cater to consumer demands. Out of the allocated Rs.32 crores a sum of Rs.22 crores has been spent on a fully automated unit and the rest on building village level infrastructure for procuring milk from local farmers. This will ensure the quality of milk in the entire supply chain.
This would also enable the Punjab State Cooperative Milk Producers’ Federation (Milkfed) pay the farmers more. Verka is the flagship brand of Milkfed. Milkfed is an organisation that has a three-tier system which comprises milk producers’ cooperative societies at the village level, milk unions at the district level and the Federation as an apex body at the state level. Verka has put up auto-milk collection centres where milk testing is done on the spot and this ensures high-quality products.
Global demand for food processing and packaging machinery increases
The international demand for food processing and packaging machinery rose by 6 percent to reach a value of 38 billion euros in 2015. The demand for machinery and equipment for the production, filling and packaging of beverages remains high as the global consumption of beverages is on the rise. It is estimated that almost one-third of the world trade of this machinery was sold to the beverage and liquid food industry New machinery will be showcased at the leading trade show ‘Drinktec’ to be held in Munich between September 11 and 15, 2017. Drinktec is the world’s largest platform with the highest density of experts and so all involved in the beverage or liquid food business make sure to be there.
In alignment with the global development there is likely to be an increase in the number of visitors from China, Brazil, Mexico, India, Indonesia, Thailand, Vietnam and Iran at the tradeshow. Germany remains the foremost supplier country of food processing and packaging machinery with an average export of 87 percent. After Europe the most important sale region of food processing and packaging machinery is Asia followed by North and South America. In 2015 India too has demonstrated a higher demand for equipment for manufacturing and packaging of food and beverages along with other Brazil, Iran, South Africa, Nigeria and Thailand. Asia is the largest market for soft drinks, and a further increase of 29 per cent is expected. By 2020, the global sales volume is estimated to reach 790 billion litres. The rise in consumption will propel investments in the expansion or modernisation of production capacity. Since local suppliers will not be able to meet the demand for equipment and machinery it will be procured from international markets.
Arambagh Foodmart to take store count to 75 by 2020
Arambagh Foodmart Pvt Ltd, a retail chain has a unique format as it is positioned between the neighbourhood kirana store and the supermarket. The USP of the stores is their concept of ‘value for time’ along with ‘value for money’. Besides competitive pricing and attractive promotions what has spelt success for the Arambagh is their location at crowded places. This is why the retail chain has been able to spread their footprint across Bengal and other eastern cities in a fairly quick time. Arambagh Foodmart Pvt. Ltd began by selling processed and ready-to-eat chicken items but has now evolved and become one of the top three Food & Grocery retail chains in the eastern part of India. The product basket comprises of quality food and groceries – packaged and loose, fish, meat and poultry, toiletries, soft drinks, ice-cream and ready-to-eat snacks. Good quality staples are their mainstay of which rice is the most sold category.
It was the elderly customers that first benefitted from Arambagh’s free home delivery of groceries and so became loyal customers. Over the years working couples and single men who prefer home deliveries have begun to place telephonic orders. The customers mostly belong to the middle to upper-middle class but affluent families prefer that prefer gourmet products are not part of their customers. The stores are standalone and close to residents and apartment buildings dominated by Bengali population. They are highly appreciated for additional services like arranging the groceries inside kitchens or delivery of shopping done in other stores. The biggest challenge the retail chain is facing is from e-commerce but their knowledge of customer preferences and buying patterns gives them an edge.
Nilgai Foods to raise USD 10 million for expansion in India
Nilgai Foods, an FMCG start-up in the Delhi- NCR region, is looking to raise USD 10 million to propel expansion plans. The start-up would like to tap into institutional segment to drive sales. Presently the company’s revenue from institutional sales is around 10 percent and they would like to increase that to 60 percent. It is for this reason that Nilgai Foods is also concentrating on developing ultra-large institutional plants. Around 30 percent of the raised investment would go into distribution expansion and the rest would be utilised for marketing.
Nilgai would also like to see their two brands Pico and Cocofly launch across the country as they are concentrated mainly in Delhi-NCR. Cocofly which also sells on Vistara Airlines has got a good response. The company is also in discussion to with other airlines and the Indian railways to supply their products. However, without adequate funds they will not be able to have a multi-city pan-India launch. Presently the company has sales of around Rs.8 crores and it hopes to raise that to about 30 crores from institutional sales by next year. However, with a pan India presence of Pico and Cocofly they will be able to have a turnaround of about Rs.300 crore in the next four years.
Massive Restaurants eyeing turnover of INR 200 crores
Massive Restaurants, which is backed by Everstone Capital, is planning a turnover of Rs.200 crores by the end of 2017. It plans to raise USD 15-20 million so some of its brands can have a bigger global presence. Their restaurant inventory is likely to triple with expansion in the domestic as well as international arena especially in the Middle East and Europe. They plan to open 34 new outlets next year of which 10 will be franchise-operated.
Massive Restaurants will launch Masala Library in the Middle East in a 7-star property in the coming year with branches in London and New York. It’s Dubai based and much talked about and popular Farzi Café will be launched in Asia, Europe and the US. They have plans to launch two restaurants every month, next year. Massive Restaurants say that all their outlets are profitable and the average store EBITDA margins are in excess of 25 percent while Farzi Café alone generates sales of Rs.2 crores a month.
Amazon introduces 2-hour grocery delivery app, AmazonNow
In order to expand its reach Amazon India has launched their AmazonNow app in Delhi and Mumbai. This will allow their customers to shop for everyday essentials from their 5000 products. The app will enable products to be delivered within two hours or at a pre-scheduled time and on a basket purchase of Rs.350 or more delivery will be free. Last year the app had been launched as Kirana Now but was renamed Amazon Now as it was not just major brands that joined the platform but also local kirana stores. The aim of the company is to delight their customers with the best selection of products and pricing. Their FMCG segment boasts of 19 lakh products and 9000 sellers. AmazonNow app is available from Google Play Store.
Hatsun Agro opens 1,000th outlet in Chennai
Hatsun Agro Products Ltd, the makers of dairy products, has inaugurated their 1000 Daily Hatsun outlet in Chennai. They had set up their first outlet in 2014 to sell the now popular milk brand Arokya, curd, paneer, ghee, butter, skimmed milk and dairy whitener. The company is planning to treble the number of their outlets to 3000 in 2017. Hatsun Agro says that retail expansion is the best way to meet consumer demands and also to reach out to new consumers even in small cities. Their pan- India expansion in the coming year will see them reach out to consumers in Tier II and Tier III cities. Besides expanding to new geographies the company’s Research and Development primarily focuses on innovation of new products.
Patanjali plans to go global in the next 5 to 10 years
Guru Ramdev has announced that in the next five to ten years Patanjali will be a global brand and the entire world will become familiar with Patanjali products. Guru Ramdev also stated that he was neither comparing Patanjali products with those of others and nor did the company wish to bring down the business of others. He clarified that he has no intention to introduce wine or beer even though social media has been carrying this report.
Presently Patanjali Ayurveda has m-cap of Rs.1 lakh crores and in the future this would be more than 5 lakh crores. However, the yoga Guru stated that the profit from the company does not go to any individual but is used in the interest of the nation. In the next five years the Patanjali will generate employment for about 5 lakh young people and will benefit more than 5 crore farmers. The company also intends to bring benefits for women and entrepreneurs by expanding into textile sector.
Coca- Cola reshuffles senior management
Beverage major Coca- Cola has reshuffled the senior management in its India operations. Vice-President Human Resources, Sameer Wadhawan will now have charge of the newly created department of Franchise Capability and Business Transformation. Wadhawan will work closely with Coca-Cola’s 15 franchise bottling partners in India and South West Asia so the company can be future ready by building capability and transforming business. Wadhawan will take over responsibility from January 2017.
Manu Narang Wadhwa who was with American Express has now joined Coca Cola as Vice- President Human Resources to take over from Wadhawan.