Snapshots of Food Industry News
Tata group to enter the ready-to-eat food market
The ready-to-eat food market is largely dominated by ITC and MTR but the Tata Group could make an entry into this market soon. Tata Industries formed a new division for this purpose in March. The country’s largest conglomerate could soon be manufacturing and marketing veg, non-veg, carbonated and non-carbonated food products. The company says that project is still at an experimental stage and may or may not evolve into a business. The step to move into the ready-to-eat segment was one of the reasons for the conflict between former Chairman Cyrus Mistry and Ratan Tata. The former felt that a fast scale-up would be cost restrictive especially without market acceptability.
The company feels that presently the ready-to-eat market is too small to be a standalone though the group feels that millennials do look for foods in the ready-to-eat segment. The ready-to-eat landscape in the country is attracting interest because along with the dozen or so existing players other companies are also lining up as the young consumer base looks attractive. Ready-to-eat foods eliminate the need for cold changes besides the convenience to the consumers. All consumers need to do is microwave the food and eat it.
Uno Pizzeria & Grill plans to set up 70 outlets in India
Uno Pizzeria & Grill that offer specialist Chicago-style, deep dish pizza, has tied up with Kolkata-based Dhanukas of the Dhunseri Group to enter the Indian market. The Boston based fast food chain plans to open 70 outlets in the next seven years. According to the franchise agreement Delhi-NCR is likely to be the first to get an outlet by December, followed by Kolkata. Dhanukas will make an investment of Rs.30 crores in the first two years. The target revenue is Rs 6 crore per restaurant per year.
Tastetaria, which is Dhunseri Petrochem’s wholly owned subsidiary, will develop and operate the Uno Pizzeria brand. They will open outlets through the master franchisee affiliate and through the sub-franchisee route and will lease space instead of adding assets. Uno Pizzeria & Grill see the Indian market as having a huge potential and they welcome the move to bring their brand of pizzas to Indian consumers. Indian pizza and pasta lovers however, will have a choice of only 60-70 dishes as against 140 dishes offered in the US restaurants. In India they will also have more options for burgers and appetisers.
Food processing minister makes fresh pitch for relaxing FDI rules
Food processing minister, Harsimrat Kaur Badal has asked for further relaxation in Foreign Direct Investment (FDI) in food retail business as companies have shown low interest. The government had allowed 100% FDI in locally-produced and manufactured food products in a bid to encourage domestic industry and farmers and cutting down on wastage. However, while Wal-Mart merely studied the model companies like Amazon, Metro Cash & Carry, Big Basket have yet to go ahead despite government nod. The rules are a bit stringent as internationally large stores generally retail food as well as non-food items.
Badal states that since food has very low margins and infrastructure needs large investments not having non-food items really doesn’t work out well. She has also suggested the creation of infrastructure at the farm gate level so that a percentage of what the retailer invests at the farm gate is allowed to be used for stocking home related products. Badal feels that a policy relaxation could result in an inflow of $10 billion in the next two years. Another area that the minister talked about was clarity in the tax structure for aerated drinks that have been newly formulated to contain at least 10 percent fruit juice. Under GST juices are expected to attract 12 percent duty and aerated drinks 28 percent but aerated drinks with juices fall in neither category.
Amul to expand its chocolate production capacity five times
Amul the flagship brand of Gujarat Cooperative Milk Marketing Federation (GCMMF) has just announced the official sponsorship of the New Zealand cricket team. Amul feels that they are bigger brand than Hindustan Unilever Ltd. Amul is sold by 18,000 village cooperative societies outside the formal distribution channel in Gujarat. Amul has a sales turnover of over Rs.38, 000 crore, including the GCMMF revenue of Rs.27,000 crore.
Among new initiatives Amul has planned to expand its chocolate production by five times. This will involve a cost of Rs.150 crores. In another initiative GCMMF is also planning on five new integrated plants in Gujarat, Mumbai, Pune and West Bengal with an envisaged expenditure of Rs. 800 crore. Amul also has plans to enter markets in Tamil Nadu and Kerala. All these initiatives have been undertaken with the intention of generating sales of Rs.50, 000 crore by 2021.
After ban on milk and milk products India suspends fruit imports from China
It is for the first time that India has banned the imports of apples, pears and marigold flower seeds from China. Repeated tests found that there were pests in the shipments arriving from China, forcing India to temporarily suspend the imports. Apples and pears account for almost 90% of the fruit and vegetables India imports from that country. India already prohibits the import of milk and milk products like chocolates, candy, confectionery and foods that contain milk or milk solids as ingredients form China.
Indian authorities in their letter cited non-compliance and violation of phytosanitary control systems in China. The presence of quarantine pests is a matter of concern as their presence can cause biosecurity risk to Indian agriculture. China has made a response that the quarantine pests might have entered during packaging and circulation. Now New Delhi has sought additional information like the registration procedure for orchards. The issue is likely to be discussed in July when officials from General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) visit India.