Snapshots of Food Industry News
India’s food industry to be worth Rs.4 lakh crore by 2018
India’s food industry is likely to grow at 11 per cent and will reach Rs.4 lakh crore or US$65.40 billion by 2018. The IIM-Calcutta and Academic Foundation have jointly said that at present the food industry is worth US$39.71 billion.
India’s consumption of food and grocery is rather substantial at 31 per cent as compared to China’s 25 per cent, Brazil’s 17 per cent and a mere 9 per cent that US consumers spend. Food is also the largest segment of India’s retail sector. India’s retail market is likely to continue to rise and is likely to reach 24 per cent by 2023 from the current 8 per cent.
Patanajali launches ‘Atta Noodles’ and plans to foray into wellness sectors
Baba Ramdev’s FMCG venture, Patanajali Ayurved, has launched their ‘Atta Noodles’ and aim to take the market from Nestlé’s Maggi. Maggi has returned to the shelves after the five month ban on sales was lifted. Patanajali has priced its noodles at Rs.15 for a 70 gram pack which is cheaper than any other ‘atta noodle’ brand. Patanajali Ayurved has one plant for ‘Patanjali Atta Noodles’ in Haridwar but it plans to set up six more manufacturing plants in NCR, Madhya Pradesh, Karnataka and Andhra Pradesh. This will step up manufacturing capability so that they can cater to more states. By December their noodles will be available in one million stores.
Patanajali Ayurved is also planning to enter other sectors like childcare, cosmetics products and health supplement by the end of this year. The baby care products are likely to be named ‘Shishu Care’ while the beauty care products will be sold under the ‘Saundrya’ brand and health supplement powder under ‘Power Vita’ brand. The company expects to have a turnover of Rs.5,000 crore this year which will be more than double the turnover of Rs.2, 007 crore in 2014-15.
Veeba Foods Services to begin direct sale to consumers
Veeba Foods Services supply sauces, dressings and other ingredients to restaurants. Its customers include Domino’s Pizza, KFC, Pizza Hut, Burger King, Taco Bell and Starbucks. However, now the company is planning to sell their products directly to customers at outlets like ‘More’ and Future Group’s ‘FoodHall’.
Veeba Foods was founded in 2013 and has emerged after the family enterprise ‘Fun Foods’ was sold to German group Oetker.
The products have already entered the consumer retail market across the country. In order to diversify Veeba has raised Rs.38 crore from DSG Consumer Partners and Saama Capital. This diversification is expected to bring the company a turnover of Rs.400 crore by 2019. In order to have a fast growth Veeba Foods is likely to increase their distribution network from 400 to 1000 by the end of 2016. They will also make the products available in the Northeast where they have no presence at the moment.
AB InBev prepares to bid for SABMiller with USD107 billion
Anheuser-Busch InBev that makes Budweiser beer has finalised the terms of a USD107 billion takeover of SABMiller. The takeover will combine two of the biggest brewers and create a company that will make one third of the beer consumed worldwide. The two companies own hundreds of brands including Budweiser, Corona, Grolsch and Stella Artois. The acquisition will make AB InBev world’s first truly global brewer.
AB InBev and SABMiller have already twice extended the deadline for a formal takeover. As part of the deal, SABMiller will sell its stake in Molson Coors. AB InBev is seeking to bolster growth by acquiring SABMiller’s brands in Africa and Asia as changing tastes and craft beers cut sales in developed markets. This bit of news has put to rest concerns about AB InBev’s intention to grip the US market. The joint portfolio of global and local brands would provide more choices for beer drinkers around the world.
Nestlé’s Maggi trials are still not over
FSSAI India’s Food Authority has appealed to the Apex Court against a regional court order overturning a nationwide ban on Maggi instant noodles. Nestle India has just resumed sales of its popular Maggi noodles after they got the green signal from testing laboratories, as mandated by the Bombay High Court in August this year. Though Nestle India can continue to sell its noodles for now, if the appeal is admitted, it would make things a bit sticky for Maggi again.
They have only just begun to re-emerge on the shelves after the ban imposed by FSSAI for unsafe levels of lead. The FSSAI has appealed against the Bombay High Court verdict given in favour of Nestle. FSSAI in its petition in the Honourable Supreme Court has raised point on the Bombay High Court’s decision to allow Nestle to itself do the testing of fresh Maggi samples in the laboratories. Nestle India says that they have been served a notice and since they are confident about the safety of their instant noodles they will be able to defend themselves strongly.