Snapshots of Food Industry News
Tremendous growth in the Indian online delivery industry in 2016
According to a research firm RedSeer, India’s online food delivery market grew by more than 150 percent in 2016. The growth has been achieved despite low investor sentiment and scaling down of operations by players and some even shutting down their operations. The online platform has helped restaurants extend their reach and improve their resource utilisation. Instead of ordering from individual restaurants, customers have also begun to opt for the multiple choices offered by online platforms.
In fact the study says that online food delivery share of partner restaurants has reached 30- 35 percent. The report also says that more than 80 percent of online food orders come from the top 5 cities. Therefore, those active on the online platform are concentrating on improving their operational efficiencies as well as profitability in these cities. One of options they have adopted is limiting their expansion into newer markets so that they can make their online businesses sustainable.
Rasna to expand portfolio into kids snack segment
Rasna has expressed that they would like to capitalise on the opportunity that the evening snack space for kids is offering. The fruit juice concentrate maker is, therefore, planning new products in the back-from-school segment for kids. In fact their ads and products will reflect the evening space. Since most players have the same idea of entering the snack segment, Rasna has stated that their focus will be on the sweet snack category.
Rasna would like to also expand its overall product portfolio which should begin in fiscal 2018-19. The company plans to expand into rural areas with their semi-premium products. They have 9 plants across the country and these make 4 million glasses each year. Rasna is the market leader in the powdered drink space and have 85 percent of the Rs.1000 crore market in this segment. Rasna plans to change the packaging of their drink brand Ju-C and will also introduce three new drinks. Rasna will be adding a Greenfield plant and increasing their capacity by 10 to 15 percent. Another plant will also manufacture their breakfast snack Vitos.
HyperTrack raises funds from multiple food tech start-ups
HyperTrack, founded in 2015, enables businesses to track their executives and products through its software. The company has created software which offers tracking services to B2B as well as C2C businesses. Food delivery start-ups and on-demand logistics services are using HyperTrack to track various aspects of their business such as manpower, sales team and logistics among others. HyperTrack is operational in over 30 countries and over 100 clients use the firm’s services. Another 800 clients have signed up on the company’s platform. HyperTrack charges a fee of 4 cents for every order tracked by them.
HyperTrack has now raised USD1.5 million from Chamath Palihapitiya’s Social Capital, Vy Capital and from angel investors like Deepinder Goyal of Zomato and Hari Bhartia of Jubilant Foods and some others and closed the funding in three stages. HyperTrack will invest the capital to strengthen its product and hire another ten people in key roles. They also plan to open an office in San Francisco with about five people. They are hiring software engineers, data scientists and in developer relations roles as they solve deep technology problems. Their focus is to continue building a superior product, engage deeper with customers and build the world’s best team for location-based services.
Pizza Hut aims to open 700 outlets in the next five years
Yum! Restaurant owned pizza-chain Pizza Hut operates 360 outlets in India and plans to double its store count to 700 in the next five years. The pizza chain runs a franchise model in the country, where investments come from franchise partners. With the popularity of western fast food on the rise in India the fast food chain considers India to be one of its most important markets. A recent study undertaken by Pizza Hut showed that pizza has become the biggest food category in the country and is accepted in all consumer categories.
Pizza Hut opened outlets on an aggressive note in 2014 but now they wish to consolidate and stabilise their business. Pizza Hut is also focused on growing its online sales which they started through a website app. Now, over 60 per cent of home deliveries happen through online as compared to call-centres earlier. Home delivery is another area that has seen a spurt and about 35 percent of sales come from that.
Mother Dairy looking beyond Delhi NCR for growth opportunities
Mother Dairy, a brand under the National Dairy Development Board (NDDB) sells, milk and other edible products. It has sales of around Rs.7,200 crores but is now sensing growth opportunities in eastern and western India. It is for this reason that the NDDB has drawn up a strategy called ‘purab-paschim’ which will fulfil its goal for growth by expanding into these new geographies. Mother Dairy has bought an old plant in Nagpur which it will revamp at the cost of around Rs.10 to 15 crores. It will also spend around Rs.30 crores to set up milk procurement facilities in this area. Mother Dairy is talking to the Maharashtra government about the possibility of setting up a new milk plant at Bhiwandi for which it is willing to spend Rs.150 crores.
In East India, Mother Dairy is looking to tap into the Rs.1100 crores frozen fruit and vegetable market. It is looking to set up a plant for cut fruits and vegetables in Jharkhand for which it will spend Rs.80 crores. It could also enter the juice market using cold press technology. Mother Dairy has also begun to think of innovations in fruit pulps, pastes and concentrates. The ‘Safal’ stores will also undergo a facelift and NDDB will spend Rs.10-15 lakh on each store so they can be facilitated with modern retail practices. ‘Safal’ operates around 300 stores in Delhi NCR and these are the biggest earners of revenue.
Manpasand Beverages to invest in Sri City
Manpasand Beverages is one among the 13 companies that have signed several memoranda of understandings (MOUs) with the integrated business city, Sri City, in Andhra Pradesh. Out of a total investment of Rs.600 crores, promised by the companies, Manpasand alone will invest around Rs.150 crores. All the companies are from different sectors but will together generate employment for around 2000 people. Besides Manpasand Beverages other companies in the food sector to have signed the MoU are Sri Lakshmi Agro, Shrisym Technologies and Premium Ingredients, which is a company from Spain. Sri City has become the most preferred investment destination and the MoUs signed are in line with the ‘Make in AP’ policy. The state government says that besides creation of employment, Sri City investment will also help in the rapid economic growth in the state.
Ruchi Soya to help curb malnutrition with increase in edible oil fortification
Ruchi Soya Industries Limited, India’s leading Agri and FMCG Company has been playing a role in curbing malnutrition since 2014. The company has been fortifying its leading edible oils brands (Mahakosh, Sunrich and Nutrela) with Vitamin A and D which has impacted 12 million consumers every month. Now the company has announced that it will expand its edible oil fortification initiative and is likely to include ‘Ruchi Gold’, one of the largest-selling refined palm oil brands across the country. This proposed expansion is likely to bring fortification benefits to 20 million households per month including low income consumers. For its fortification initiative, Ruchi Soya has been collaborating with leading global organisations like the Centre for Community Economics and Development Consultants Society (CECOEDECON) and the Global Alliance for Improved Nutrition (GAIN).
Fortification means deliberately increasing the content of essential micronutrients in food to improve its quality. Micronutrient malnutrition is on the increase as the intake of micronutrients in daily diet is less than 50 per cent of the recommended dietary allowance (RDA). About 57 per cent of pre-schoolers and their mothers have sub-clinical Vitamin A deficiency. Fifty per cent of the 6000 deaths in children below five years of age, in India are due to malnutrition. To curb the increasing malnutrition the FSSAI has also recently released the draft standards for fortification of edible oil along with other items.
Bikano plans for Rs.1,000 crore turnover by FY 2019
Bikano, part of Bikanerwala Group, has planned to expand its fast food and snacks portfolio and to open more outlets across the country, to reach its target of Rs.1, 000 crore turnover by fiscal 2019. The company also entered the ready-to-eat segment last month. Last fiscal they reported a turnover of Rs.550 crores and are looking to close the current financial year with sales of Rs.650-675 crores. Presently Bikano has three manufacturing plants in Greater Noida in Uttar Pradesh, Rai in Haryana and one in Delhi.
In order to expand their manufacturing facilities, the company is setting up two new plants, a second one in Greater Noida and the other one in Hyderabad with an investment of Rs.150 crore. While the Greater Noida plant is expected to be operational by end of this calendar year and the Hyderabad one by end of 2018. Bikano has a network of 55 stores across the country and is looking to add another 25 in the next three to four years. Since the company has no presence in South and East India they will look to enter these markets also.