Snapshots of Food Industry News
Kellogg set to build its R&D centre in India
The world’s biggest Cereal maker Kellogg is getting ready to set up a Rs.150crore research and development centre in India by the end of 2015. The R&D centre would develop products that are India specific and also create products for other emerging markets. Besides the R&D centre, Kellogg is also planning on setting up its third manufacturing plant in India in the next three to four years. Kellogg India could already be contributing 20 per cent to the Asia Pacific revenue for the company.
India is being keenly watched as a market that could see business in the food processing segment triple. According to the department of industrial policy and promotion (DIPP) Foreign Direct Investment in food processing has seen the highest invest as compared to other sectors as FDI crossed Rs.25, 000crore in 2013-14. Economic growth increases the demand for processed foods and India is being viewed as ripe for investment. Cargill has also announced an investment of Rs.600crore in a corn milling plant near Bangalore which is likely to begin operations next month. Indian companies like ITC and Britannia could also jump on to the processed food band wagon with dairy products.
Uttar Pradesh to have Four Amul Dairy Plants
The Gujarat Co-operative Milk Marketing Federation (GCMMF) is all set to make an investment of Rs.600crore to set up four Amul dairy plants in Uttar Pradesh at Lucknow, Kanpur, Varanasi and Saifai. Amul already collects 5 lakh litres of milk from 1 lakh families and generates an income of Rs.700crore per annum for people in rural UP. They plan to procure 45 lakh litres of milk over the next three years and will be able to generate income from milk for 5 lakh rural families. With the dairy plants also coming up in UP Amul will also be able to provide employment for lakhs of unemployed people.
ITC’s Yippee noodles replacing Maggi?
While there is still a question mark on the sale of Maggi noodles, Yippee noodles have stepped into the Maggi shoes. Yippee instant noodles seem to have replaced Maggi and have gained almost 50% of the market share. Maggi controlled about 63% of the instant noodle market till the ban was imposed in June 2015. Nestle India has destroyed more than 35,000 tonnes of Maggi noodles from about 4.5 million retail outlets across the country. Sale of instant noodles for all makes had dropped dramatically after the Maggi ban but Yippee noodles have now captured the instant noodle market.
Yippee noodles had only a little over 10% of the market before the Maggi ban but now it is controlling 50% of the market through clever marketing strategy which included an advertisement that showed the clean and safe ITC factory that manufactures instant noodles. ITC has gained over other companies because it also has one of the most extensive distribution and retail networks. This helped the company to push Yippee noodles even to the most remote areas of India where it enjoyed as a very popular snack. Another company to have gained from Maggi’s loss is Wai Wai noodles from Nepal’s CG Foods though the company says it has to still recover pre-ban ground.
Mumbai gets 23rd outlet Mad Over Donuts
The Singapore based Mad Over Donuts launched its first outlet in India almost eight years back. Recently the company opened its 23rd outlet in Mumbai and the 50th one in the country. The new Mumbai outlet is designed as a café with ample seating space. It is located in Churchgate which is a busy area as it has all types of business. Mad Over Donuts has a presence in Mumbai, Pune, Bangalore, Delhi and NCR and its famous eggless donuts, cupcakes and coffees are most popular.
FSSAI proposes norms for Nutraceuticals and Ayurvedic products
FSSAI is to soon come out with a gazetted regulation that will ban the sale of health supplements as medicine. The apex food regulator has also framed regulation (Proposed Draft) for products that are based on ayurveda, sidhha, unani and other traditional health systems. The new regulations will also outline the permissible limits for ingredients used in these products. The limits will be based on maximum levels per day usage of these Ayurveda, siddha and unani products. These products need to be backed by scientific evidence before they are marketed.
The companies will no longer be able to claim that nutraceutical and health supplements provide cure or that they are for therapeutic use. According to proposed draft FSSAI says that “Every package of food or health supplements shall carry the information on the label… the words FOOD or HEALTH SUPPLEMENT… the term ‘NOT FOR MEDICINAL USE’ shall be prominently written on the label.” India accounts for 1.5 per cent of the global nutraceuticals market so ASSOCHAM has suggested that FSSAI must come up with safety norms for nutraceuticals and dietary supplements so that the market can grow and inferior products can be weeded out of the market.
Although the Apex food regulator had already shared the draft copy earlier but this time the food regulator asked for the suggestions & comments in a Gazette notification, from all stakeholders and will come out with a final notification on the regulations for such food articles.
Coca-Cola to widen its healthy beverages portfolio
With the aim of widening its portfolio of healthier beverages Coca-Cola will be launching Fuze tea. Last year the company introduced no sugar Coca-Cola Zero in the healthy options drinks. The fruit juice-based Fuze tea will compete with Hindustan Unilever’s Lipton ice tea, which is sold with a tie-up with PepsiCo, the Coca – Cola rival company. Launching Fuze tea is also being seen as an attempt by Coca-Cola to reduce the risk of its largely-aerated drinks portfolio and to make its drink business an all season affair rather than just a summery affair. Coca-Cola already sells Georgia-branded tea in India through institutions and restaurants.
Fuze tea will be introduced in 250 ml pet bottles priced at Rs.30 each, a high-margin price point. The first phase of the rollout will be in Bengaluru, Chennai and Hyderabad, followed by Goa and Delhi. Coca – Cola is banking on its popularity in the south where per capita consumption of its beverages is almost double that of the national average of 14 bottles. While the national market for soft drinks is estimated at Rs.25, 000crore in 2015 the ready-to-drink tea remains a niche segment with an estimated Rs.100crore of the market share.
Online food delivery market touches Rs.350crore in 2014
According to a report by IAMAI-IMRB India’s online food delivery market is surging ahead with brisk business being conducted in metros Delhi-NCR, Mumbai and Bangalore. In 2014 this segments had a growth of 40 per cent and touched Rs.350crore. Besides delivery of food the online services includes segments like online entertainment ticketing, online commuting, online food and grocery delivery. Together the online market stood at Rs.2, 025crore in 2014. The food delivery category as an online service constituted 17 per cent of the online services. On the other hand the online grocery segment accounted for six per cent of the total other online services.