Snapshots of Food Industry News
Guiltfree Industries to sell Indian and western packaged snacks
The RP- Sanjiv Goenka Group has started a new company called Guiltfree Industries. Guiltfree will sell Indian and western packaged snacks, cereals, juices and beverages that will be launched under the ‘Too Yummy’ brand next month. The group owns Spencer’s Retail chain and already sells gourmet foods at some of their retail stores but the new launch is aimed at making living affordable beyond retail. Guiltfree Industries is planning to launch new products every few months and the products will be sold through retail chains, e-commerce and from neighborhood stores.
Initially Guiltfree will begin with the introduction of khakra, makhana in the snacks section, breakfast cereals like cornflakes and juices and fruit-based beverages. They will be positioned as affordable healthy foods. The foods are likely to be low calorie so consumers can have guilt-free snacking. There is huge scope for penetration in this segment and so the field is wide open to allow new consumer themes to find a place. The new company could tap into the Hindustan Unilever talent pool as it is looking for marketing professionals. Some executives from Spencer’s Retain are also likely to be asked to join the Guiltfree team.
IG International ventures into fruit exports
IG International, the fresh fruit importer, will now be exporting fresh fruits as well as importing them. So far the company has been involved in exports from third parties that wish to export from India but now it is likely to export fresh fruit directly. The first fruit IG will export are grapes which will be known as IG grapes. The grapes will be sourced from the grape growing belt of Nashik, Satana, Malegaon, Baramati, and Sangli. Presently IG exports black, green and red seedless grapes to Russia, Europe, and some South Asian countries.
IG has stated that after the success of the import business they now feel the need to set up their own independent export business. IG international is now aiming to penetrate further and is also experimenting with technology that could increase the shelf life of grapes for longer transit periods. They also feel they have a large experience in handling fresh fruit and would like to diversify into new fresh fruit exports like bananas, pomegranates, as well as vegetables like onions and potatoes to major markets in Europe. IG realizes that there is a need for quality and taste and so they are keen to export high-quality food produce overseas.
Britannia and Chipita of Greece sign a joint venture
FMCG major Britannia Industries has recently entered into joint venture with Greek firm Chipita SA for producing and selling ready-to-eat croissants in India. Britannia will hold 60 percent of the total share capital of the joint venture company while the rest will be held by Chipita. The investment in the joint venture ‘Britchip Foods Ltd is likely to be Rs.100 Crores. The joint venture will develop, produce and sell ready-to-eat croissants and any other product the parties agree to. The parties will also enter into additional agreements such as technology license, brand license, support service and distribution pacts. Both companies will be entitled to appoint the Directors in their agreed equity proportion. The board of Britchip will have a minimum of five and maximum of ten members. Britannia has the right of first refusal in case Chipita intends to sell its stake after the expiry of lock-in period of ten years.
Mother Dairy aims at a 20% growth from its health segment
Mother Dairy’s milk portfolio which accounts for a little over 70 percent of its annual earnings could fall to around 60 percent by 2018-19. However, sales of its value-added dairy products could pick up. With the aim of accelerating the growth in this segment by 20 percent, the Delhi-based Mother Dairy Fruit & Vegetable could enter the health foods segment. Value-added dairy products category like ice-cream, cheese, yogurt, buttermilk and cottage cheese is the fastest growing category for Mother Dairy. In the health segment, low-calorie foods are gaining traction so the company is likely to diversify into low-calorie value-added products.
The company has invested around Rs.15 crore in research and development to come up with new healthy foods and low-calorie product lines. Mother Dairy’s research team has found that women in the 11- 59 years age group are deficient in calcium, iron, and Vitamin-D which could possibly be a new consumer segment. Since the company is targeting an annual turnover of Rs.10,000 crore by the end of the next two financial years, they are likely to boost up their Dailycious liquid milk brand which until recently focused solely on powdered milk. In Bengal, government law does not allow them to sell liquid milk under the Mother Dairy brand and so they use the name Dailycious brand in the state. Since the eastern market is poised to grow by 10-12 percent in the coming 10-15 year they are looking for growth opportunity and brand expansion there.
Hatsun Agro looks for a Greenfield project in Maharashtra
Chennai based dairy firm Hatsun Agro Product Ltd, one of the country’s largest ice cream makers, is planning to expand into Maharashtra. Hatsun started off as an ice cream company in the 1970s and later expanded into milk and other dairy products. It currently retains a majority of its products in Tamil Nadu, Karnataka, Andhra Pradesh and Telangana. It is now looking to see if it could acquire a Greenfield project or farm in Maharashtra. They are also looking at take-over options if someone in the state is willing to accept it. For a takeover, they prefer a small company which they can easily restructure according to their requirements. They can also modify the procurement system, the distribution model, and advertising.
The firm is also looking at retailing its oldest brand, Arun ice creams and also Hatsun curd in Maharashtra. It began procuring milk from Maharashtra last year but sells milk only in a few pockets of the state. Its expansion plans include selling milk under its Arokya brand more widely, starting with southern Maharashtra. Hatsun Agro currently has 1,200 outlets in the areas of its operations and is aiming at adding another 1,800 outlets in a phased manner over the next 15 months.