Snapshots of Food Industry News
Goodricke: Right time to acquire tea gardens
Goodricke Group is planning to spend around Rs.40 crores to acquire tea gardens in Assam. They feel this is the right time for this acquisition as prices of tea have fallen and reflectively the prices of tea estates will also be lower. Presently the prices of Assam tea have fallen from Rs.175 a kg to Rs.145 a kg. Goodricke is based in West Bengal and they wish to acquire tea estates in Assam that can produce a million kilogram of tea so as to expand their production of tea. Goodricke already has two tea estates in Assam, three estates in Darjeeling and 12 in Dooars. The company is also keen on the acquisition because Assam tea is of premium quality and attracts buyers both from India and abroad. Currently Goodricke’s management team is scouting the region and they have the funds as banks are willing to finance them.
Varun Beverages hikes stake in Zambia subsidiary
Varun Beverages Ltd, a PepsiCo bottler, has raised their stake in their Zambia subsidiary to 90 percent from the present 60 percent. Varun Beverages Ltd has been running operations in Zambia since it acquired the subsidiary in 2016. Varun Beverages (Zambia) Ltd was created with the aim of consolidating the company’s presence in fast growing and emerging markets beyond India. The increase in the stake shows the confidence the company has in the future growth prospects of their Zambian subsidiary. In 2016 Varun Beverages recorded sales volumes of 10.7 million cases in Zambia for the company Zambia continues to be a market that has high growth potential. The company has stated that the hike in stake is reasonable as it will have an attractive payback.
ICRA: Indian poultry industry to witness improved profits in FY17
Since the past four years the Indian poultry industry has shown muted profits. However, according to a rating agency ICRA, things are going to look up for the poultry industry in FY2017. Profits will be possible because they will be supported by lower soymeal poultry feed prices and good realisations in broilers and table eggs. The domestic broiler meat production volumes increased from 3.7 million tonnes in CY2015 to 3.9 million tonnes in CY2016. The table egg production is estimated to be 81 billion eggs for CY2016 which indicates a growth of 4 percent.
The average broiler realisations in terms of farm gate are expected to be Rs.70/kg as compared to Rs.67/kg in FY2016 while the production cost will be only Rs.64/kg in 2017. The broiler volume growth has been deliberately kept at manageable levels to avoid supply glut. Control measures like lower chick placements, hatching holidays, early liquidation of parent stock have controlled supply and ensured reasonable broiler realisations.
Coca Cola’s Maaza to become a USD1 billion brand by 2020
Coca Cola acquired Maaza, their mango fruit based drink, in 1993 and are likely to see it grow to a USD 1 billion brand by 2020. Presently Maaza is an over Rs.2,000 crore brand but it has the potential to reach the billion brand status as it is one of India’s most trusted and loved beverage brands. In order to achieve the target Coca Cola will invest in increasing the manufacturing capacity. The bottlers of the company are setting up 5 Greenfield projects over the next two years and 50 per cent of these will have manufacturing lines for Maaza. These lines will keep pace with the increase in demand for Maaza in the next few years and will hopefully see Maaza become a USD 1 billion brand.
Mahindra launches mobile app MyAgriGuru for farmers
Mahindra Agri Solutions Limited (MASL) has launched their mobile app MyAgriGuru for Android mobiles. Developed in Hindi and English the mobile app is a 24×7 advisory platform for farmers. Mahindra’s long term vision is to impact farmers positively and this will fulfil their goal of Delivering Farm Tech Prosperity. The key features of MyAgriGuru include Crop, Agri-Buzz, Market Price, Weather and Charcha from experts. Farmers will be able to find key information to support their farming needs and even collaborate with other farmers and agriculture experts to seek immediate and reliable solutions for farming issues.
MyAgriGuru would enable Mahindra to reach out to a far bigger farming community and impact the lives of 75 million farmers by 2025. Mahindra is partnering with the Indian Meteorological Department (IMD) to source the weather forecast so farming activities can align with climatic conditions. The National Commodity and Derivatives Exchange Ltd (NCDEX) will help them share real-time prices of various commodities from mandis across the country. The digital initiative is in keeping with the larger vision of Digital India. The app could act as a tool to double the farmers’ income by the year 2022.
Future Consumer partners with Hain Celestial to enter health food category
Future Consumer Ltd (FCL) has entered into a joint venture with Tilda Hain India, which is a wholly owned subsidiary of the Hain Celestial Group to sell wellness products. They will look at the three broad categories comprising organic chips, baby food and non-dairy products. Hain Celestial has created a name for itself in the organic and natural segment and Future Consumers is looking forward to providing Indian consumers with standard foods that are healthy as consumers are focusing on healthy living.
The 50-50 partnership will see their first factory set up in Tumkur, Karnataka by the end of this year where they will produce Terra vegetable based chips at a much cheaper rate than the present Rs.400 per pack rate. They will also work towards educating farmers so they can cultivate vegetables to manufacture Terra chips. The JV will enable them to manufacture in India, Hain Celestial’s ‘Earth Best’ which are organic baby supplements. In the non-dairy segment they will focus on products like “Dream.” Hain Celestial on their part will be able to increase the distribution of its products throughout India.
Sri Sri Ayurveda to introduce spices and organic staples
Sri Sri Ayurveda was set up in 2003 as the FMCG arm of spiritual leader Sri Sri Ravi Shankar’s Art of Living Foundation. Presently it focuses on products like breakfast cereals, health drinks, oil, spices, personal care, oral care, cookies and ready-to-cook items. However, the company is now set to introduce spices and organic staples into the Indian market. Also they are likely to introduce a basket of organic staples like organic moong dal, split dal, chana dal, toor dal, etc. the company’s recent health drink brand Ojasvita, which has seven power herbs, has already been getting good consumer feedback. Sri Sri Ayurveda has received immense response from the market for their products. For further expansion they are getting ready to concentrate on all modes of trade like general and modern trade besides e-commerce and franchise. In the global arena the brand already has a presence in Singapore, US, Malaysia, Oman, Canada, South America, Brazil and they will soon launch their products in Russia.