Oil & Food Journal by Advance Info Media & Events

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The Indian

Potato industry King of vegetables in king sized demand

Pulses The Food of the Present and Future

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British farmers told to grow

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Intensification and growth of

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From the Desk of Editor

Dear Readers

he food services sector in India is expected to witness a 50 per cent increase in investments in 2012 to about US$ 750 million, as food suppliers and retail companies plan to scale up business and stay competitive by tapping the large potential of the domestic market. Of the total investments of US$ 750 million in 2012, about US$ 165 million has gone into purely front-end retail, such as fast moving consumer goods (FMCG), food and beverage firms. But today I would like to bring your focus on a sector that is the most fast growing one -The bakery and cereal industry. The Indian bakery and cereal sector today hold a top position in the food industry. You would like to know how did this happen,the answer is simply the fact that …as India undergoes rapid development and population dynamics start to take effect….the Consumers' uptake of products and the influence of consumer trends are fundamental causes of change in markets - making knowing what these trends are and the extent of their influence crucial. Talking exclusively of cereal market, this is estimated at nearly Rs 500 crore with Kellogg's dominating it at the top end of the market. So as they say eat breakfast like a king, and on this line FMCG companies are making king-size plans to enter the breakfast category, diversifying from their core offerings. Recently biscuit maker Britannia entered this category with its range of ready-to-cook breakfasts and porridge under the Britannia Healthy Start brand. Marico has already extended the equity of its flagship Saffola brand to the breakfast cereal category, while sauce and malted drinks marketer Heinz has stretched its Complan brand with a range of muesli. All these years the traditional breakfast eating category has been largely unorganised. While MNCs such as Kellogg's have tried to make inroads with cornflakes, it is the traditional ethnic breakfast market which is poised to grow faster. Breakfast in India is still treated as the traditional nashta and marketers are trying to dabble in varied breakfast offerings to suit the Indian palate. Indian consumers were desirous of a breakfast solution that combined convenience, health and taste so the industry is cashing on cereal and breakfast starter with added health value with no transfats, no cholesterol and no preservatives. In fact, a 'healthy' breakfast is the new emerging category within the foods category. Last year there were new entrants such as Marico and Heinz which decided to enter the category with Saffola and Complan. While on the bakery front, this industry is on growth paths. The sector has indicated promising growth prospects and has been making rapid progress. The Indian bakery market which is currently valued at Rs 3,295 crore is growing annually at a steady rate of eight per cent.The sector which is highly unorganised has undergone a virtual metamorphosis since 2004, due to increasing consumer gravitation towards convenience products and healthy food items. Bread, biscuits and cookies account for 82 per cent of the bakery items while cakes, pastries and buns account for the rest. With globalisation and India being viewed as a potential growth market, there has been a profusion of bakery chains springing up across the country. These include Au Bon Pain, the US-based bakery café chain, Monginis, Donut Baker, Cookie Man, Croissant, Café Coffee Day, Ovenpick, Bread Talk, SAJ Industries' Bisk Farm, Hot Bread, Birdy's, Donut Master and Kookie Jar. The concept of bakery retail chains is a fashion. Aping the Western markets, India too has taken a strategic leap in the modern bakery space. The key growth driver of such retail bakery chains is the propensity to spend, young population willing to experiment on new products, overall change in consumption patterns, preferred locations for hangouts for all age groups.The food habits have witnessed a huge change in recent times and the Urban India is inquisitive, experimental and is willing to try new things. The main factors driving bakery industry are diverse. This is because the structure of the bakery industry comprises three segments namely need-based, basic hotel requirements and connoisseur requisites. The need-based category caters to products like bread and biscuits. Under hotels, it varies from breads to pastries, cakes, pizza and puffs. The connoisseur category focusses on international standard and will cover products like specialised pastries and cakes, including “pannanie tartsto” in addition to a number of fascinating breads with garlic content among others available in hard and soft textures The biscuits industry is estimated at around Rs 10,000 crore and is growing in double digits. At the same time, the rate of growth of the industry is also a function of what extent of the equally large unorganised sector is graduating towards quality and recognised offers. This means that there is space for everyone to grow and that the industry does not mandate each player to have a mutually exclusive set of products. Market valuation shows Bread & Rolls account for one-third of the Bakery & Cereals market in India, over twice the size of the second-largest product category, Cookies (sweet Biscuits). Private label penetration is extremely high in Morning Goods, accounting for approximately two-thirds of the market by volume. Bakery & Cereals tend to record a very high private label penetration rate given the undeveloped and fragmented state of the Indian retail market, as private labels are typically most successful in mature and concentrated retail environments. Significant “attitude-behaviour” gaps exist between the share of consumers citing that a trend affects their consumption and the actual share of the market value these trends influence. This is because consumers don't always act on these trends - the result is that overall trend influence is limited, but has the potential to grow.

Oil & Food Journal Aug 2012

-Editor

Oil & Food Journal Aug 2012

Contents Contents 18

News

12 Will ensure minimum damage to grain stocks Food ministry 12 India planning to export 2 million tonnes of wheat 14 GM labeling norm will hurt packaged edible oil 14 India defers discussion on raising import taxes on edible oils: KV Thomas 15 Kraft 'finds' secret to low-calorie chocolate 15 Hong Kong-based snack brand EDO enters Indian market 15 Non-carbonated drink industry may touch Rs 54,000 cr by 2015: Study

British farmers told to grow

curry ingredients 24 for sustainability

16 The right strategy for

wheat exports

17 The newest trends in

sports nutrition

21 Pawar Calls for

Priority Sector Status to

invites companies for setting up food processing units

Food Processing Projects

Pulses

Natural and organic trends in flavor formulation

The Food of the Present and Future 28

Intensification and growth

44 of

India's Food

Retail Sector

The Indian

Potato industry King of vegetables in king sized demand 10

Oil & Food Journal Aug 2012

Sri Lanka's

Sugar Industry

food industry thanks Ind & Commerce for strong support

of Retail Revolution

At the doorstep

Oil & Food Journal Aug 2012

News

Will ensure minimum damage to India planning to

grain stocks Food ministry

he food ministry assured the nation all efforts were being made to ensure foodgrains were not damaged because of improper storage. This, despite the fact that due to poor storage facilities, 6.61 million tonnes remain vulnerable to the vagaries of the impending southwest monsoon. “I can assure all the best efforts are being made to ensure no grain is damaged in the monsoon,” Food Minister K V Thomas told reporters. He added of the total foodgrain stock in central pool, estimated at about 82 million tones, about 87 per cent was in safe storage facilities. The rest faced high risks, since it was stored in katcha facilities. “We have prepared a comprehensive plan to ensure all the grain stored in katcha storage facilities is shifted from there at the earliest so that minimum grain is damaged,” Thomas said, adding 1.7 million tonnes would be shifted in June, and 1.6 million tonnes in July. In shifting the grain, those stored in lowlying areas would be given priority, followed by those stored in rice and sugar mills. Stocks in the godowns of Food Corporation of India (FCI) and state governments would come next. “By the end of July, almost half the highrisk stocks would be shifted before the monsoon hits the northern parts of the country in full steam, as most of these stocks are in the northern states of Punjab and Haryana,” Thomas said. He added the remaining stocks would be shifted in phases, since these were not as 12

Oil & Food Journal Aug 2012

vulnerable as the rest. He said along with augmenting storage space through the Private Entrepreneurship Guarantee Scheme, under which the Centre plans to add 15 million tonnes of additional storage space (space for four million tonnes has already been constructed), it had also planned an initiative with the rural development ministry. Under this, construction of grain storage facilities in villages and talukas would be carried out under the Mahatma Gandhi National Rural Employment Guarantee Scheme. “We have, in principle, agreed to implement this programme. The finer details would be worked out soon,” he said. Lamenting the fact that FCI had emerged the sole buyer of foodgrains in India in the last few years (which led to storage woes), the minister said a policy needed to be formulated to correct this. “I have written to the prime minister to formulate a policy, as in the last few years, FCI purchased 80-90 per cent of the grains coming to mandis. A few years earlier, it was 25-30 per cent,” he said. He added the recent decision of an empowered group of ministers to allocate an additional five million tonnes of grain for distribution through ration shops and three million tonnes for sale in the open market would also help create additional storage space. “We are working to make the scheme for open market sale more liberal, so that the entire allocated quantity is purchased by bulk consumers,” he said, adding he had written to all chief ministers to take their Public Distribution System allocation for six months at one go. He said he was willing to work with them to resolve financial concerns.

export 2 million tonnes of wheat

ndia is planning to export two million tonnes of wheat from government stock involving a subsidy of Rs 1,000 crore and a decision in this regard is expected soon. The proposal is to be taken up by the Cabinet Committee on Economic Affairs (CCEA) shortly as part of government's moves to offload food grains in view of storage crunch in the country, sources told. At present, the government has food grains stock of 82 million tonnes as of June one against the storage capacity of only 63 million tonnes. Sources said the export of two million tonnes of wheat would entail a subsidy of around Rs 1000 crore as the cost of the food grain in international market is lesser than in India.

In an effort to test the interest of global buyers in Indian wheat stock, state-owned trading firm STC, under the Commerce Ministry, had recently floated a tender and about six-seven bids have been received. The export proposal is based on the recommendation made by the Prime Minister's Economic Advisory Council (PMEAC) Chairman Dr C Rangarajan. The government is in the process of shedding some excess food grains rather than allow these to decay for lack of proper storage. The Empowered Group of Ministers, headed by Finance Minister Mr Pranab Mukherjee, recently decided to offload an additional eight million tonnes of rice and wheat to BPL families and bulk users at subsidised rates, costing Rs 10,000 crore to the exchequer.

AGRO

Food Processing Directory

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Oil & Food Journal Aug 2012

News

GM labeling norm will hurt packaged

discussion on raising import taxes on edible oils: KV Thomas

edible oil

he Union Consumer Affairs Ministry notification on mandatory labeling of packaged food products containing geneticallymodified foods or food ingredients may primarily be targeting imported foods that are flooding the domestic market. But it will willy-nilly have an impact on the domestic market for vegetable oil and vanaspati (hydrogenated oil). India annually produces approximately 11-12 lakh tones of cottonseed oil, a significant part of which in recent years is extracted from genetically-modified cottonseed. To be sure, in the process of oil extraction the problematic protein remains in the cake/meal and not in oil. Even small traces of protein that may be found in the unrefined oil will be removed after refining. In case of cottonseed oil, it is mandatory that the oil sold to consumers is in the refined form. Apart from going for direct human consumption as liquid oil, cottonseed oil is used as a raw material for vanaspati. It is incorporated as an ingredient in the making of vanaspati that usually is a mixture of many oils and hydrogenated. So, will packaged cottonseed sold for human consumption be labeled as GM food? Also, will vanaspati incorporating genetically-modified cottonseed oil be subject to labeling? The industry will have to ponder over this issue. Additionally, India imports about 10-15 lakh tonnes of soya bean oil from abroad (Argentina, mainly) that is extracted from genetically modified soya bean. Will these oils, too, if sold for direct human consumption as liquid oil or incorporated as ingredient in vanaspati, be subject to labeling? India produces about 15-17 lakh tonnes

India defers

Oil & Food Journal Aug 2012

of soya bean oil from indigenously grown soya bean which obviously is non-GM. Both indigenous and imported soya oils usually get blended in the marketplace which makes it nearly impossible to distinguish one from the other. Unfortunately, identity preservation and traceability are virtually unknown concepts in our country. A large part of vegetable oils is sold in loose and not packaged form. Implementation of the mandatory labeling rule is sure to affect companies that sell packaged cottonseed oil and soya bean oil while allowing others to escape the law. For the authorities seeking to enforce the labeling rule, it is going to be wellnigh impossible to detect whether cottonseed oil or soya bean oil is of GM origin. There is suspicion, the law enforcers may not have appropriate testing tools or equipment. Such a state of affairs is fraught with risks for the industry. The sooner it seeks clarity from the government the better. Because the oil, especially after refining, does not contain any protein, it may be desirable to exempt such goods from the mandatory labeling law. In any case, for over eight years now, Indians have been consuming cottonseed oil of GM-origin, either directly or in the form of vanaspati, without any complaint. It is strange the policymakers are now keen to give consumers a chance to make an informed choice. There is also danger that consumer perception may be swayed against GM foods. What prevents the government from strengthening its border controls so as to ensure that unauthorised and unlabelled GM foods do not enter the country?

ndia's cabinet deferred a discussion on raising import taxes of edible oils at its meeting on Thursday, Food Minister K.V. Thomas said, confirming what two government sources had earlier told. â&#x20AC;&#x153;It has been deferred," Thomas told journalists after the cabinet meeting, w h i c h h e a t t e n d e d . The issue was listed on the agenda, but couldn't be discussed because of time constraints, one of the government sources said, adding the issue is likely to come up for discussion in the next cabinet meeting. Edible oil refineries in India, the world's top vegetable oil importer, have been complaining about cheaper imports after Indonesia cut its export tax on refined varieties and raised the duty on crude palm oil. India has kept the base import price, used to calculate import tax irrespective of the purchase price, unchanged since 2006 when the government was battling high food prices.

News Kraft 'finds' secret to low-calorie chocolate

raft Foods, which owns chocolate maker Cadbury, has filed a patent for the manufacture of low-calorie chocolate. This new method is said to preserve quality and texture while extending shelf life. Previous attempts to develop a low-calorie chocolate had resulted in a product that lacked both richness and the appropriate mouthfeel â&#x20AC;&#x201C; texture, melting behaviour, firmness and

snapping characteristics. According to the patent application. â&#x20AC;&#x153;These shortcomings are particularly evident for the prior art chocolate-type products, which lack a texture similar to the texture of regular chocolates and a cocoa flavour similar to the flavour of regular chocolates.â&#x20AC;? Structured liquid At the heart of the application is the use

of a 'structured liquid' which allows increased moisture in the product, permitting a reduction in sugar and fat, so reducing calories. The structured liquid is said to contain thermodynamically stable water, surfactant, co-surfactant and a nonaqueous component.In chocolate manufacture the addition of up to 5% water to a chocolate mass reduces the processing window to less than one minute and necessitates the subsequent removal of the moisture. The filing notes that a level of 5-to-10% water leads to almost instantaneous firming-up of a chocolate matrix and water levels beyond 10% lead to the development of viscoelastic properties which prevent processing of the resulting mass. These difficulties are, according to the application, not encountered when using the structured liquid, because the water is not 'free' but 'entrapped' in a thermodynamically and kinetically stable state. This leads to beneficial properties such as little, or no, agglomeration when incorporating the structured liquid into chocolate-type products, which are the result of its special wetting behaviour.

Hong Kong-based snack brand EDO enters Indian market

ong Kong-based KIU Fung Hong, manufacturers of snack food and confectioneries, under brand 'EDO', on Monday forayed into the Indian market through its distribution partner Four Leaf Technologies. The company has inked an agreement with FMCG trading company - Four Leaf Technologies for distributing its products in the country. Stating that the company was scouting for a "suitable" partner for the distribution of its 300 varieties of products, EDO Trading Company, Marketing Manager, Victor Gung said,

Oil & Food Journal Aug 2012

"We were waiting for so many years (to tie up with a company)... We are happy to find the right company.. (Four Leaf)". "Indian middle class segment is getting bigger and bigger and they are waiting for a quality product. EDO Pack is the one," he said. The company has launched 50 products out of its 300 products that are currently available in various markets. Four Leaf Technologies Founder-Director Vinodh Suchitha Dinakar said they are expecting to garner revenues of Rs 100 crore in the first year of operations. The city-headquartered company also distributes various products, including

Non-carbonated drink industry may touch Rs 54,000 cr by 2015: Study

rowing at a CAGR of about 35 per cent annually, the Indian noncarbonated drinks market is likely to touch the Rs 54,000-crore mark by 2015, industry body Assocham said. Currently, this market is around Rs 22,000 crore, including fruit drinks, nectars and juices. Factors seen responsible for this growth are greater disposable incomes, particularly in urban areas, and a preference for traditional and healthier beverages even if they are relatively more expensive. Also raising awareness levels with regard to obesity and other weight-related health issues, especially amongst teenagers and young adults, has helped push sales of noncarbonates, said an industry-specific analysis of The Associated Chambers of Commerce and Industry of India. The findings indicated a strong shift in consumer beverage demand towards noncarbonated alternatives, creating new opportunities for drinks manufactures in the country. The Indian juice market is dominated by Dabur's Real fruit juices, while PepsiCo's Tropicana has a 45 per cent market share. Real is the market leader in the packaged fruit juices category with over 50 per cent market share, ASSOCHAM SecretaryGeneral, Mr D. S. Rawat, said. The non-carbonated markets are growing at a double-digit growth rate while the Indian carbonated drinks market has declined by 15-20 per cent in the last three years. There has been a strong shift in the consumer beverage demand towards non-carbonated alternatives, creating new opportunities for drinks manufacturers in the country. The recent ASSOCHAM survey was based on responses from 2,500 representatives. About 80 per cent of the respondents preferred non-carbonated drinks in Delhi, Mumbai, Kolkata, Chennai, Bangalore, Ahmedabad and Hyderabad. The juice category is the fastest growing segment at present, at 30-35 per cent per annum growth. The fruit drinks category has also been witnessing growth of around 10-15 per cent annually. Metropolitan cities are the largest consumers of non- carbonated drinks and are going to be the biggest consumers, the survey maintained.

News

The right strategy for

he Government is in a bind over subsidising export of Indian grain from the Central pool. The issues that come into play are: Extreme volatility in global wheat prices, progressive rupee depreciation, lower Indian quotes relative to other origins, weather-related issues, WTO subsidy-compatibility concerns and overflowing stocks.

wheat exports

the world market is now up at $280 (after 45 days), can create a controversy for the government. Likewise, not taking a decision on the tender would convey a lack of faith in the formal bidding process.

As of July 1, 50 million tonnes (mt) of wheat is languishing in public godowns, against buffer/reserve norms of 20 mt. The enormity of the task of evacuating Government-held stocks via export has, therefore, multiplied.

Frankly, the Government cannot take any non-contentious decision on subtle and multiple variable parameters on which the daily prices of a commodity are discovered. Unless the export deal is settled immediately after tender opening, as Egypt and Bangladesh do for wheat import, decisions are likely to be frustrated by unpredictable price gyrations.

WORLD MARKETS

GOVT's DILEMMA

There is no denying that in June, world prices rose due to extreme dry weather in Russia and the US, and projections of lower global output. Black Sea countries (India's most potent competitors) have hiked quotes from $ 250 to $280 free on board (fob), while Indian contracts by private trade are being concluded at $250-$255 fob.

At the same time, the very idea of pursuing tendering route via three PSUs for exporting 4-5 mt of grains and then bids to be considered for acceptance or rejection by a high level committee is self-defeating.

As of June 30, Chicago Board of Trade (CBOT) quotes have also escalated to $ 273/mt, from $243 at the time of STC's tender opening on May 24. Will international prices remain well supported in the coming months, too? No one can really tell. But harvest pressure in above-mentioned regions in July-August, weakening of the rouble, and India entering the world market with subsidised grain, are bearish signals for the coming months. Will the Government now consider confirming the transaction to the highest bidder of STC tender at $228 fob/mt – inclusive of fobbing expenses of $40/mt and service charges of 2.5 per cent plus duty entitlement pass book scheme benefits of one per cent? An international trader will have to add additional 5 per cent on $228 as risk premium and profit — totalling $ 240 — for selling to a third party. Confirming the business at $228 that was based upon quotes of May 24, 2012, while

Oil & Food Journal Aug 2012

PSUs lack functional autonomy and operational flexibility for undertaking negotiated business, i.e. without calling for tenders. Even the global tender of STC attracted two or three valid bids. This limited participation is an apparent rejection of the procedural format contemplated by authorities. The other predicament is that wheat from the open market is currently exportable at $ 255/mt fob basis, assuming Rs 55 to the dollar and a reasonable trader's margin. At Rs 57-to-the-dollar, the same is reduced to $246 fob/mt. But FCI's wheat at economic cost is $320/mt or Rs 18,220/mt ex-depot, or around $350/mt fob. Compulsions of managing meagre marketable surplus can limit sourcing by private trade. At the same time, FCI values, beyond market rates, will not result in substantial reduction of its stocks, which is the primary objective of subsidisation. ALTERNATIVES AT HAND The Government under OMSS (Open

Market Sales Scheme) has already declared price of Rs. 11700/mt for flour millers/actual users/States — where, too, there is only marginal lifting. This OMSS price is discounted/subsidised by Rs 6,520/mt from economic cost of Rs 18,220/mt and is closer to the open market price. The Prime Minister's Economic Advisory Council (PMEAC) has recommended a discount of Rs 8000/mt for 2 mt of grains (Rs 1,600 crore) from central pool and Rs 150 crore inland transport subsidy for one mt to private trade. In the current situation, the Government may be well advised to opt for the following course of action: Fix export target of five mt by March 2013 — pushing monthly exports to 0.6 mt as against current rate of 0.1 mt. Decide subsidy from the central pool, by consenting to offer OMSS price to trade/exporters on “port delivered basis”. Offering the OMSS rate for export will be WTO compatible too, since the wheat is being exported at the same rate as that being offered to domestic mills. Subsidy may be dynamically calibrated by linking it to movement in CBOT prices at quarterly intervals. Dispose of old stocks of 3-4 years vintage (as feed wheat) that are rotting and burdening warehouses with carrying costs of Rs 5000/mt per annum at a discount of Rs 1100/mt over the price of normal wheat. Abolish tender systems, because once subsidised price is fixed, based on a transparent CBOT-linked formula, it will enable both public and private sector exporters to participate with gusto. Railways may be advised to move at least 15 rakes per day to port towns so as to plan haulage of approximately one mt per month. Efforts to export wheat should neither be slow-paddled nor reversed, as overflowing stocks do not justify that course of action. (The author is a grain trade analyst.)

News

The newest trends in

sports nutrition W

ith the London Olympics fast approaching, Leatherhead has recently hosted several conferences looking at sports nutrition. At one, I was alarmed to hear that athletes could be at risk of disqualification because of their use of popular dietary supplements. At another, I was amazed at the massive growth in the global sports drinks market. So here's a quick tour of the newest science and market trends in sports nutrition. Sports nutrition products fall into three main categories â&#x20AC;&#x201C; drinks, foods and supplements. According to Leatherhead's recent global market report on sports performance and energy products, the global market is worth over $42billion. The top three players are US (42%), Europe (15%) and Japan (12%). Between 2006 and 2010, global sales of sports drinks increased by 38% reaching 20 billion litres. Sports foods â&#x20AC;&#x201C; typically snack and energy bars â&#x20AC;&#x201C; are also popular, but sales of sports supplements outside of the US remain limited due to suspicions about functional ingredients. Most consumers prefer straightforward vitamin and mineral supplements. The three main benefits of sports nutrition products are energy, hydration and muscle recovery. Sports drinks mainly address the first two needs. The major players are PepsiCo, Coca Cola and GSK, and typical brands include Powerade, Gatorade and Lucozade. Caloriefree electrolyte tablets, containing minerals like sodium and potassium, are also available

Oil & Food Journal Aug 2012

to dissolve in water. During prolonged exercise sessions an intake of 60g of carbohydrate per hour is recommended (about 240 kcal). During hard exercise, muscles experience minor protein damage which causes postexercise soreness. By consuming protein after exercise, this damage can be rectified. Protein-containing sports drinks can help but, in my opinion, a glass of milk can fulfil the same objective. Another trend impacting the market is the blurring of boundaries between sports and energy drinks. Energy drink brands such as Red Bull (which contains caffeine, taurine, glucuronolactone, B vitamins, sucrose, glucose and water) have been re-positioning their products claiming they help to improve physical and mental alertness. Sports supplements were once the preserve of body-builders intent on increasing muscular bulk, but they are increasingly appealing to a much broader market. They have three main functions: increasing muscle size, strength and tone; providing energy; and aiding weight loss. To increase muscle size and tone, consumption of protein and essential amino acids are recommended. Research has indicated that milk whey and casein are better than vegetable proteins. Recommended daily intakes vary from 1.2g to 1.6g per kg body weight, depending on exercise regimes. For energy provision, a carbohydrate source is needed. However some supplements

contain creatine and caffeine to enhance energy provision prior to, or during, exercise. Creatine is thought to help by increasing phosphocreatine stores and by buffering lactic acid, a by-product of anaerobic exercise that leads to muscle pain and fatigue. Caffeine and guarana reduce feelings of fatigue and effort via direct stimulation of the sympathetic nervous system, which increases adrenaline release. For weight loss (in conjunction with a calorie-controlled diet and regular exercise), supplements such as conjugated linoleic acid (CLA), carnitine, chromium and fucoxanthin are claimed to increase fat burning. However more research is required in this area as evidence from human studies is inconclusive. Athletes however need to be careful. At a recent Institute of Food Science and Technology conference, Dr Roger Clemens, president of US Institute of Food Technologists and a former elite athlete, warned that athletes consuming US-legal supplements could be at risk of disqualification under latest International Olympic Committee rules. Even ergogenic aids, like caffeine, can push legal boundaries. Although Olympic athletes are scarce, amateurs are increasingly engaging in sport, nutrition and exercise in a more professional way. This is why the market for sports nutrition products is burgeoning and why Leatherhead scientists are busy helping food companies to develop opportunities in the sports nutrition market.

Farm Locally

British farmers told to grow

curry ingredients for sustainability

Oil & Food Journal Aug 2012

arming chickpeas and spices would open up new markets and reduce dependence on imports, a new report says Growing ingredients for Indian curries such as chickpeas for pakoras as well as a range of exotic herbs and spices would open up new markets for British farmers and reduce dependence on imports, according to government report into how the agricultural sector can operate more sustainably in future. Growing more curry ingredients domestically could also potentially reduce carbon dioxide emissions from food imports. By examining the problems facing the UK's food production and countryside through key sectors and foods including curries, breads and dairy products, the Department for Environment, Food and Rural Affairs (Defra) is hoping to improve food systems at a time when they are coming under increasing threat. The Green Food Project report says that major changes must be made to agriculture, food processing and retailing, if price rises are to be kept in check and the natural environment preserved. Jim Paice, farming minister, said: "With our increasingly hungry world every country must play its part to produce more food and improve the environment. Britain already punches above its weight, but we're a small island with limited

Oil & Food Journal Aug 2012

Farm Locally space, so we've got to show leadership and play to our strengths more efficiently." Food is one of the most important sectors of the UK economy, as one of the biggest exporting and manufacturing sectors and a major employer – about one in seven UK jobs depends on the food industry,

according to the United Nations Food and Agriculture Organisation will mean that 60% more food will be needed globally by 2050;’ according to government estimates. As a result of the report, a steering group of government officials, farming representatives and food companies – including retailers, caterers and manufacturers – will be joined by environmentalists and scientists to find ways in which the UK's food sector can use less energy, less water and other natural resources, reduce its environmental impact and become more efficient. The study and steering group looked at the UK's food industry through the prism of a few key foods and regions. They examined wheat and bread, the dairy sector, and looked at curry as a popular dish whose complex ingredients cover several important food groups and issues from food imports to waste management. Some of the changes the group predicted would be needed are likely to be wideranging in scope, such as ways of encouraging consumers to waste less of the edible food they buy – currently, as much as a third is thrown away uneaten. But other changes will be at a more detailed level – for instance, more efficient toasters could make a big impact on the energy use associated with bread. The group also looked in detail at three regions: Norfolk, the Lake District and the catchment area of the Tamar river in the south-west. However, although the steering group and the progress made as a result of its efforts will be evaluated regularly on improvements to efficiency, water and energy use, increasing crop yields, using more innovative technology and creating jobs, no targets will be set for such improvements. Paice said: "We're not talking about

Oil & Food Journal Aug 2012

setting Soviet-style targets but an overall approach in which the whole food chain pulls together. Whether it means embracing new farming technology or people wasting less, we've got to become more sustainable." But he admitted major changes were urgently needed: "There are already many examples of cutting-edge innovations in all sectors, but these are the exception rather than the rule. We are talking about the need for a culture change across the entire food chain and this is the first step in a long-term plan to make that happen." The report found an "unprecedented confluence of pressures", including the world's rapidly growing population – which according to the United Nations Food and Agriculture Organisation will mean that 60% more food will be needed globally by 2050; pressures on key resources such as water, energy and land; and the increasing severity of a variety of environmental problems including soil degradation, climate change and threats to biodiversity. "Producing more food through a business as usual approach is not an option," the report found. "We need to do so in a way that does not degrade the environment and as a result compromise the world's capacity to produce food in the future." As well as Defra officials, the members of the steering group include the National Farmers Union, Country Land and Business Association, the National Federation of Young Farmers Clubs, Royal Society for the Protection of Birds, WWF-UK, the British Retail Consortium and the Food and Drink Federation.

Tom MacMillan, director of innovation at the Soil Association, warned that the government must be held to account on the success or otherwise of the initiative. "The big risk is that this report goes the same way as previous reports and recommendations for greening the food system. They failed because government didn't take the lead that industry and the public need it to, particularly on the tough but crucial issue of sustainable consumption," he said. "This report is weak when it comes to the key challenge of making it easy to eat a diet that doesn't seriously damage our own health and that of the planet." Mark Driscoll of WWF-UK said: "Success will be measured by actions that lead to clear and measurable outcomes and actions – for example, reversing the declines in biodiversity in the UK, through monitoring of such things as the farmland bird and butterfly indices. Also, improvements in water quality in our rivers, significant reductions in greenhouse gas emissions from food production, and a healthy and vibrant farming community where producers are rewarded for environmental stewardship." But in contrast to the government's determination not to set targets for improvements, Driscoll said they were needed. "The next steps of this project are crucial if we are to move from some great words to action. We therefore need to look at key milestones and targets for the project under each of the recommendations – you can't measure success or project progress unless this happens."

News Pawar Calls for Priority Sector Status to Food Processing Projects

awar, in addition to existing instruments of duty exemption etc, strongly advocated for giving the status of priority sector lending for the projects involved in processing of perishable products. He was speaking after inaugurating the Srini Mega Food Park at Chittoor in Andhra Pradesh. “The Ministry expects that this year another three projects will be completed in the country. This has further enthused me to upscale this scheme in this five year plan so that more and more farmers and entrepreneurs from rural India gets associated in the food processing sector, creating wealth for themselves and for the country. Let me also inform the budding entrepreneurs gathered here that the Government has decided to further incentivize the food processing sector through various windows,” the Minister said. Elaborating on the importance of food processing sector and the initiatives being taken by the government for its growth, the Minister said: “Some studies have revealed that we might be losing around 40 to 50 thousand crores of rupees for the lack of post-harvest facilities. With

Oil & Food Journal Aug 2012

adequate processing facilities, much of this waste can be reduced with increasing remunerative price to the producer as well as ensuring greater supply to the consumer at appropriate price. “A strong and dynamic food processing sector plays a signiﬁcant role in diversiﬁcation of agricultural activities, improving value-addition opportunities and creating surplus for export of agro-food products. To achieve the objectives of maximizing value addition, minimizing wastage and for generation of employment opportunities the Government has taken a number of initiatives. “Keeping this in mind, my Ministry has launched a National Mission of Food Processing and the initial feedback from various state governments is extremely encouraging. This mission is launched with a philosophy of decentralization, greater participation of the state governments, convergence of various programmes in this sector and implementing the schemes in the mission mode instead of routine vertical programmes. This scheme has adopted all the flexibility of Rashtriya Krishi Vikas Yojana, which has been vehicle of agriculture growth during the 11th plan and has been one of the model schemes with maximum participation of state governments and flexibility with no tailor-made schemes imposed by the central government on the states. I am also happy to announce that we have already started the admission process for the National Institute of Food Technology and Entrepreneurship Management, located in Haryana, very close to Delhi. This NIFTEM with IICPT in Tanjore are expected to fulfill the requirement of industry for the skilled manpower in this sector.”

UP invites companies for setting up food processing units

s leading producers of potatoes in the country, the state government assured industrialists that it would assist entrepreneurs in setting up food processing units in the state. At a Potato Conclave organised here, agriculture production commissioner Alok Ranjan interacted with senior representatives of companies like PepsiCo India, Merino Enterprises, ITC's techno and agri-

based division, Radico Khaitan, Potato King and invited them to set up food processing units in the state. Ranjan also assured them that with the government working to put together a new food processing policy for UP, efforts were being made to iron out all concerns faced by industrialists and entrepreneurs in the past. Following digital presentations by several companies, Radico Khaitan director KP Singh also made a proposal to set up a vodka-manufacturing unit in the state, for which Ranjan said Singh would be given all assistance.

Oil & Food Journal Aug 2012

Pulses Processing

Pulses The Food of the Present and Future

ulses are a vital part of everyday nutrition as they are a rich source of protein. They are the most important source of proteins for vegetarians worldwide and are also used to enhance the flavour, pungency and colour of food. A variety of terms such as legumes, grams, lentils and dal (or dhal) are used when referring to pulses but there are specific definitions for these terms based on which Pulses are classified. The importance of Pulses Apart from being a source of protein, pulses also contain essential amino acids and minerals. In addition, the carbohydrates from pulses are mostly starch and fiber which means they have lower glycemic index than cereals. Pulses not only deliver better health and nutrition to humans, but also to the soil. Pulses contain essential minerals that fix nitrogen from atmosphere to soil, thereby improving the quality of soil. Because of this nutritional and environmental sustainability, food manufacturers and processors have identified pulses as an important ingredient for innovation. Trends in Pulses Processing Industry The production and consumption of pulses is concentrated in Asian countries. India, Myanmar and China

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Pulses Processing together produce about 39% of world pulses. They are also major consumers of world pulses. In fact, India still has to import pulses to meet its consumption needs. India has been producing 14.52 million tons in an area of 24.88 million hectares and their growing demand for pulses can be met only through upgradation of processing technology. China produces about 5 million tons in an area of 3 million hectares and export about 800000 tons of pulses every year. The age old processing method resulted in an estimated loss of 15 per cent. Also, customer expectations & demand for the premium quality dal in the domestic and export market is increasing rapidly. These trends have resulted in consolidation of milling capacities and dal millers are now more willing to invest in latest technology to ensure the quality and also to increase the production efficiency. The Future of Pulses Analysis of patterns of food consumption around the world and numerous studies have shown that the demand for protein rich items increases along with a rise of income in the general population. The growing affluence brings about an understanding and desire for more specific dietary requirements. There is enough evidence to show correlation between growing affluence and spending on protein sources. It is obvious that here is a huge opportunity for pulses processors to take advantage of a vibrant global market. Pulses - which are rich in protein are consumed by both vegetarians and meat eaters and have the versatility to form part of a meal or make a meal in itself. This gives rise to endless possibilities for tapping the potential of pulses consumption. of the various pulses types consumed all over the world, perhaps the most versatile ones are a. Chick peas b. Moong Bean or Green Gram c. Yellow pea (dry garden pea) The figure shows their various

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consumption routes. Bühler's capabilities in pulse processing Bühler engages with processors in countries around the globe and tracks the market trends that will affect their business and the industry as a whole. Using these inputs, Bühler works continuously to ensure that it meet the needs and expectations of pulse processors all over the world. Bühler provides equipment for precleaning, cleaning, grading, hulling, splitting, grinding and optical sorting for all pulses, covering beans, lentils, grams or peas. Bühler equipment can process pulses of all sizes and origins and in different forms such as splits, whole and with or without skin. In addition to main equipment Bühler also provides a complete range of supporting equipment such as conveyors, filters, cyclones, magnets, etc. Bühler also builds complete processing plants for pulses, with capacities ranging from 25 - 250 tons per day for a variety of products including Red Lentils, Yellow Peas, Pigeon Peas, Black Gram, Green Gram

and Chick peas. Buhler plants adds value to the pulses industry by delivering better product yield and finish and dust free plant environment with reduced labour requirement and power consumption. Bühler's experience and expertise in providing complete mechanical engineering solutions, automation & control systems and project management make Bühler a unique supplier for the pulse processing industry. Bühler - continuous focus on solutions As is obvious, the global scope of pulse production; trends in pulses consumption and the potential for use of pulses for food manufactures all point to the tremendous opportunities that have opened up to the pulses industry. With unrivalled experience, technical expertise and continuous focus on providing suitable solution, Bühler is uniquely positioned to help its customers capitalize on those opportunities. For further enquiries please write to: surojit.basu@buhlergroup.com

Oil & Food Journal Aug 2012

King of vegetable

NTRODUCTION: Potato is a major food crop, grown in more than 100 countries inthe world. According to FAO (2008), Potato is consumed by more thanone billion people in the world. It is a high quality vegetable cum foodcrop and used in preparing more than 100 types of recipes. The protein content of Potato has a high biological value than cereals and consideredto be better than milk. Hence, Potato is supplementing meat and milkproducts by lowering energy intake and also by reducing food cost. Potato (Solanum tuberosum L.) popularly known as 'The king of vegetables', has emerged as fourth most important food crop in Indiaafter rice, wheat and maize. Indian vegetable basket is incompletewithout Potato. Potato is a nutritionally superior vegetable due to itsedible energy and edible protein. It has become an integral part of breakfast, lunch and dinner among the larger population. Being a shortduration crop, it produces more quantity of dry matter, edible energy andedible protein in lesser duration of time compared to cereals like rice andwheat. Hence, Potato is considered to be an important crop to achievenutritional security of the nation. South America is known to be native of Potato. In 1537, theSpaniards first came into contact with Potato in one of the villages ofAndes. In Europe, Potato was introduced in Spain, Portugal, Italy, France, Belgium and Germany between 1580 A.D and 1585 A.D. In India itwas introduced by the Portuguese sailors during early 17th century andits cultivation was spread to North India during the British period. Potato is grown in more than 100 countries in the world. Chinaranks first, followed by Russia and India. China, India, USA, Ukraine, Germany and Poland put together constitute more than 62 per cent oftotal global production.

The Indian

Potato industry King of vegetables in king sized demand 28

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King of vegetable POTATO PRODUCTION IN INDIA In India, Potato is cultivated in almost all states under diverseagro-climate conditions. About 85 per cent of Potatoes are cultivated inIndo-Gangetic plains of North India. The states of Uttar Pradesh, westBengal, Punjab, Bihar and Gujarat accounted for more than 80 per centshare in total production. The state wise production of Potato isPotato processingPotato processing is very old and has been practiced in thehighland of Peru-Bolivia for 2000 years by the Inca Indians who created chuno and papa seca, the naturally freeze dried and dried forms ofPotato. In India, Potato processing on commercial scale was first startedby Col. Rennick in 1911, who established a factory at Narkanda in Himachal Pradesh to produce Potato meal. The demand for processed Potato is likely to increase in India dueto increased urbanization, preference for fast foods, rising per capitaincome and because of increased demand for convenience food. The mostpopular processed products are chips and French fries. Processing ismainly confined to developed countries and it is only in its infancy inmost of the developing countries with the exception of China (12%),Korea (6%) and Mexico (8%). In India, processing of Potatoes constitutesless than 0.5 per cent of the annual production. Potato can also be processed into a variety of products rangingfrom Potato powder, Potato starch, and frozen Potato flakes, Potatopreserved in vinegar granules, baby food and alcohol. Expansion ofprocessing industry is also desirable to avoid gluts and the consequentdifficulty of storing large quantities of Potatoes during periods ofextremely high temperatures. With the growing realization that processedPotatoes fetch considerable higher returns than fresh Potatoes,processing activity is likely to look up sharply in the coming years. Thereis considerable scope for expansion of this processing industry in India. Fresh Potato consumption, once the mainstay of world Potatoutilization is decreasing in many countries, especially 29

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in developedregions. Currently, more Potatoes are being processed to meet the risingdemand from the fast food, snack and convenience food industries. Themajor drivers behind this development include growing

In India, Potato processing industry mainly comprises foursegments: Potato chips, French fries, Potato flakes/powder and otherprocessed products such as dehydrated chips, Alu Bhujia, Samosa, and Tikkis. urbanpopulation, rising incomes, the diversification of diets. Potatoes are commonly regarded as a bulky, perishable, and a hightransport cost commodity with limited export potential, confined mostlyto crossborder transactions. These constraints have not hampered theinternational Potato trade, which has doubled in volume and risenalmost fourfold in value since the mid-1980s. This growth is due tounprecedented international demand for processed products, particularlyfrozen Potato products. To date, developing countries have not beenbeneficiaries of this trade expansion. As a group, they have emerged asleading net importers of the commodity. S TAT U S O F P O TATO PROCESSING INDUSTRY IN THE INDIA Company Market Share: In India, Potato processing industry mainly comprises foursegments: Potato chips, French fries, Potato flakes/powder and otherprocessed products such as dehydrated chips, Alu Bhujia, Samosa, and Tikkis. However, Potato chips still continue to be the most common andpopular processed product and presently constitute 85% of snackbusiness worth Rs 25 billion and account over 60% of the total Potatoprocessing capacity of the industry. PepsiCo India ltd with 45% marketshare is the snack food leader followed by 27% share by Haldiram

and11% by Indian Tobacco Company (ITC). Multinationalslike M/s PepsiCo India Holdings Pvt. Ltd. and M/s McCain Food Ltd aresteadily consolidating their market shares with diverse processed, frozen,canned and value-added Potato products and simultaneously otherforeign multinationals are directly or indirectly tying up with their Indiancounterparts on different collaborative ventures to supplement anddiversify this emerging sector. The utilization of raw material by thePotato processing industries in the state during 2007 was about 4.40lakh tonnes which are hardly 2% of the total Potato production. During2008, about 10 lakh tonnes of Potatoes were processed both by theorganized and unorganized sectors and out of which the food arm ofPepsiCo India Holdings Pvt. the increase in the area under the potatocultivation in Hassan district alone utilized around 1.5 lakh tonnes ofPotato for different products. About 28 industries manufacturing Potatochips, flakes and French fries have been installed in the organized sectorin state from just 4 or 5 companies in 2003). Till 2002, all the majorPotato processing industries were located in and around particularly atChennai, Delhi, Kolkata and Bangalore. This is possible mainly due toincreased demand of processed Potato products in the country and thesuitability and availability of indigenously developed Potato processing varieties, like 'Kufri Chipsona-1', 'Kufri Chipsona- 2' and 'KufriChipsona-3'. Presently, these varieties are the choice of processing sectorfor the production of quality Potato chips and French fries. PRESENT DEVELOPMENT India is the 3rd largest potato producer in the world, after China at #1 and Russia at #2 and before the United States at #4. Potato production increased more than 850% since 1960, due to both increased production area and yield. The per Capita Potato consumption in India has risen from 12 kg/capita/year in the early nineties to over 16 kg/capita now, with a slight decline in recent years. However, the potato processing

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king of vegetable industry is expanding fast: The sector developing most rapidly is the snack foods sector, including potato chips. Market leader is Frito-lay with a 45 % market share. Haldiram's has a 27% market share. The market is far from stable: recently ITC, an IT/cigarette company making huge inroad in the CPG market, has managed to get a market share of 11% with its potato chip "Bingo" in just 6 month. Also a dairy manufacturer (Amul) just announced to move into the snack market. Key weapon in this war for the Indian snack market are the Indian flavours. Here are a few more of the many companies operating in the Indian chips and snacks market. Read more on the recent developments on the Indian chips and snack market... The development of the snack market has also created a growing demand for dehydrated potato products, used as raw material for snacks. With regards to frozen potato products, India has long been handicapped by the lack of infrastructure for the frozen food distribution chain. Nevertheless, world's largest French fry manufacturer McCain Foods is active in India since 1995. With the recent completion of the new McCain factory in Gujarat, the production of French Fries in India has been brought to a new level. And for those that want their French fries even more Indian than that: just last month Mandeep Singh, a Punjab farmer turned French fry manufacturer, planned to start the production of frozen fries with his company Satnam Agro Products in Jalandhar. Intriguing aspect of the potato supply chain in India is the strong vertical integration: ITC bought earlier this year the Australian company Technico, which developed technology for rapid multiplication and variety improvement. Also the company Merino Industries (dehydrated potato products among many other products) has its own tissue culture laboratories for multiplication and potato variety development. Although CPRI certainly has done a good job in developing suitable varieties for processing for the Indian cultivation conditions, the degree of involvement of processing companies in the 32

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multiplication and further development offers a lot of promise for the future potato processing potential in India. POTATO DEMANDIN 2012 India's potato demand is expected to grow by about 15% for the current year, while the supplies are expected to surpass demand estimates with an annual growth of about 20% over past year, hinting at lower prices of the agrocommodity in the long-run. India holds nearly 8% of the total global potato production, which is pegged at about 320 million tonnes for this year. This year there has been a significant increase in production in most of the major potato producing countries like China, India, United States, and Europeetc. Potato is the third most important staple crop in the world and is also largely consumed in India. Uttar Pradesh holds about 40% share in the country's total potato production followed by West Bengal 35%, Gujarat 6% and Punjab around 5% of the total potato output in the country. However, potato cultivation has remained a concern as the production had gone down by almost 40% in West Bengal during 2009, due to damage by late blight disease of potato. Production hovered around 5.4 million tonnes in 2009 against 9.0 million tonnes in the previous year, over an area of nearly 320,532 hectares. Potato production is expected almost double around 9.5 million tonnes in West Bengal in the current time. The production estimates of potato for Uttar Pradesh are also expected up by 9-10% as compared to previous year, to around

12 million tonnes. The production is also expected more from Punjab, Haryana, Rajasthan, Madhya Pradesh and Andhra Pradesh. The area is expected to be reduced in Gujarat and Maharashtra due to less rain. Overall the area and production in current year is expected to be more as compared to last year. According to a research report by Karvy Comtrade Ltd, potato prices had maintained its northward journey during 2009 due to lower production. But looking at the current estimation of production and demand, prices are expected to remain in the range of Rs.400-600 per quintal. As of now, the spot rate is hovering around Rs.500 per quintal at Agra market. The demand is likely to remain strong while supply will pressurize the rise in prices. India exports a very marginal part of its potato output constituting about 0.5% to 1% for the world's total potato exports. As per the Directorate of Economics and Statistics, India exports potato, to the tune of around 1,84,961 tonnes valued at Rs.11,503.59 lakh to countries like Sri Lanka, Nepal, Mauritius, Singapore, UAE and Japan. In the short term, the prices are expected to reel around Rs.400-450 per quintal, while considering the seasonal demand amid limited supplies in the medium term, may fuel prices to go up to Rs.550650 per quintal. Whereas in the longer term of about six to nine months, potato futures are likely to trade lower as more and more stock will start coming out from the cold storages. Moreover, the higher production will also pressurize the prices. Potato starts getting rotten, so that has to be sold at the prevailing rates in the market.

Oil & Food Journal Aug 2012

Food Flavors

Natural and organic trends in flavor formulation

Oil & Food Journal Aug 2012

he landscape of the American food market is painted with connotations of natural, organic and wholesome. Words including natural, all natural, organic, honest, homegrown, fresh picked and old fashioned are only a few that have found powerful places on store shelves. These words weave a story to consumers, easily lulling them into a connection with flora and fauna, front porches and fireflies that exist beyond the climate control of most food markets. With this reality in place, it should come as no surprise that â&#x20AC;&#x153;naturalâ&#x20AC;? remains a leading claim on new product labels. Indeed, the claim was included on 23 percent of food and beverage launches, according to a finding in the 2009 Mintel Global New Products Database. Taking in the scenery of packaging today, this trend does not seem to have slowed down and may have helped to revisit product development paths well trodden and forge those less traveled.

Food Flavors In 2009, the popularity of the natural tagline, along with Michael Pollan's demonization of high fructose corn syrup in his bestseller, In Defense of Food, may have helped consumers rediscover that sugar is a natural sweetener. Store shelves experienced a throwback to the days when America's favorite soda brands sweetened their prized products without the use of HFCS. For all the sports fans out there, the soda that Mean Joe Greene famously gulped years ago was most likely sweetened with sugar. The U.S. consumer's diet continues to demand a return to a simpler time when the â&#x20AC;&#x153;tangible material formerly known as foodâ&#x20AC;? as described in Pollan's book must at minimum come from nature. The corn industry acted to remind consumers that HFCS has natural origins and launched a campaign to rename it "corn sugar." Winning approval for use in food products between the years 2008 (U.S.) and 2011(EU), stevia was introduced to consumers' vocabularies and taste experiences. It has been described as the only chemicalfree, zero-calorie, zero-carb, zeroglycemic index, 100-percent-natural sweetener commercially available. Here are four trends driving food flavors, including the race for alternative sweeteners, the rise of organic, helping natural food stay fresh longer and ingredient transparency. 4 trends shaping food flavors 1. Sweeteners come courting These events, accompanied with First Lady Michelle Obama's "Let's Move" campaign to fight childhood obesity in the United States, set the latest environment for product developers to create a great-tasting, zero-calorie beverage. It seems that product developers endlessly endeavor to attain this goal. Past attempts were formulated with synthetic sweeteners including aspartame, saccharin, sucralose and acesulfame K. Stevia offered a natural alternative. Beverage product developers were encouraged to embrace the gamechanging natural sweetener. Stevia 37

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offered significant sweetness along with some inherent taste issues including a delayed onset of sweet perception, bitterness, lack of syrupy mouthfeel and a lingering somewhat licorice aftertaste. Only by correcting these issues would the new player in the game be able to graduate from a promising prospect to star sweetener. According to studies by various sources, taste remains the top infl

cha n g e d . N a t u r a l l y, other zerocalo rie uen

cer for Americans when purchasing food and beverages. Wit h this in mind, all corners of the food industry reportedly rallied around the goal of assuaging the less-desired sensations that accompanied sweetening with stevia. Suppliers of ingredients studied effects of adding texturizers to enhance viscosity, pairing complementary sweeteners such as erythritol and monk fruit to mimic sugar. Meanwhile, natural product managers offered sources of taste modification, and flavorists across businesses were seemingly recruited to create a panacea to moderate stevia's less-palatable attributes. With all of these resources at the disposal of product developers, it appeared to be a matter of time before the world tasted the first zero-calorie, naturally sweetened beverage. In 2009, Zevia became the first beverage in the U.S. sweetened entirely with stevia. It sent a signal that the rules of the zero calorie beverage game had

and lowercalorie versions of existing brands followed and there are sure to be more on the way. Sachets of trademarked versions of stevia also found space on market shelves. Tr u v i a a n d P u r e Vi a b e c k o n e d consumers with images of leaves, plants, berries and hints that nature had provided a zero-calorie sweetener. The prominent packaging color of choice, green, also had the ability to powerfully communicate connectivity with nature. 2. The rise of organic As naturally as we return to long summer days outdoors, sitting on front porches and chasing fireflies, Americans are also experiencing a resurgence of organic home gardening. Our First Lady may have also had a hand in fueling this trend. Michelle Obama revived the idea of planting a White House garden. Previous to her residence, a Victory Garden was last planted when Eleanor Roosevelt lived at the White House. The purposes for each garden were critical to conveying important messages for campaigns of each First Lady. Mrs. Roosevelt's to encourage healthy eating

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Food Flavors in a time of scarcity and Mrs. Obama's to inspire cost-effective, healthy, organic eating in a time of plenty. The appetite for organic is one that has grown at a rapid pace over the past 20 years. Whole Foods Market dominates the natural foods segment, offering natural and organic choices at their stores. In addition to FDA and NOP regulations that define ingredients allowed in natural or organic food items, Whole Foods Market demands that suppliers adhere to their own list of unacceptable ingredients for food. In some cases, food scientists and flavorists who reasonably believed items developed within government standards could also be sold at Whole Foods Market had some reformulating and additional paperwork to do. One can easily predict a continued need to meet custom food requirements for specialty retail grocery stores built on niche markets. 3. Pressure, not heat, for longer shelf life While the positioning of zero-calorie sweetness from nature continues, a report from NASA recently claimed that it had developed a formulation and processing methodology that allowed a four-year shelf life on bread pudding. While this development seems to contrast consumer penchant for fresh, natural products, it highlights advancements utilizing natural processes that may help food stay fresh longer. If one recalls that orange-flavored Tang was developed by General Foods and popularized with the help of NASA, imagining that lengthening shelf lives for most food items might not be surprising to encounter in the future. It may become a new natural. Innovations in natural processing that exist in supermarkets today include the method of High Pressure Pasteurization (HPP). In the days when Mean Joe Greene played for the Steelers, the commercially common manner of sterilization of food was to heat it to 40

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250 F for 3 0 53 minute s. As most people know, heating changes the taste of food items. HPP relies instead on subjecting food to 87,000 lbs. of pressure per square inch to effectively kill bacteria. The taste of the food item is allowed to be free from effects of heat or preservatives. For flavorists, who often struggle to create flavor profiles that survive heat treatment or play well with preservatives, the future may hold exercises in longer shelf stability and increasing demands to deliver tastes that mimic nature. 4. Information, transparency is power Advances and innovations in the food we eat are often accompanied with curiosity of how the item traveled from existing in nature to being packaged on shelves. Information technology assists with satisfying inquisitiveness about sources and preparation of natural foods consumed. One only needs to consult the latest app,

Fac ebook page or brand-supported website to understand the origins of food items in question. As information becomes more accessible, consumers may hold increased involvement in knowing what we eat, why we eat it and why we love it. Natural origins and processes may ease acceptance and development of affection. Food Scientists, flavorists, brand managers, retail grocers, food entrepreneurs and social media experts will productively interact in order to innovate and deliver naturally satisfactory sensorial experiences that inspire nutrition, devotion and love. Cathianne Leonardi is senior flavorist at Allen Flavors, Inc.

News

J-K postal dept to deliver dry fruits, saffron online

eople worldwide will now find it easy to get Kashmiri saffron and dry fruits delivered at their doorsteps through online booking through an initiative of the Jammu and Kashmir Postal department here. "Under the scheme 'Gift Post' people around the world can book their order for Kashmiri saffrons, almonds and dry fruits, through an online service and the delivery will be done through the postal services department," Chief Post Master General of Jammu and Kashmir circle John Samuel told reporters today. "If a person in London wants to have Kashmiri saffron, he can access our website, book the order and we will order it from the Srinagar GPO," he said. Another scheme 'Expressions' launched for the residents of Srinagar will enable them to deliver a bouquet, chocolates or a cake to their dear ones within the city, after booking from the post departments. "A person can book bouquets or

Oil & Food Journal Aug 2012

anything else and we will arrange the delivery on a specific date and time,"

Samuel said the postal services department offers a choice of three types

Samuel said. He said the service is specially meant for birthday and anniversary events, but can also be used for religious or community events.

of bouquets costing between Rs 500 to Rs 700 and three varieties of cakes in this scheme. PTI AZH MIJ RCL

Oil & Food Journal Aug 2012

News

Tripura border fencing hits thriving

pineapple T

he erection of barbed wire fencing in Tripura along the 865-km-long border with Bangladesh has enhanced security, but has led to the decline of age-old pineapple cultivation in the state. The fencing has robbed the state's thriving pineapple cultivation of its predominant market - Bangladesh. Tripura is one of the leading pineapplegrowing states in the Northeast with the total production estimated at around 117531 mt during 2010-11. A pineapple trader said, "When the border was open, we used to sell pineapples in Bangladesh which gave us good returns. But after the fencing came up, unofficial t r a d e w a s s t o p p e d . " This fact was corroborated by the superintendent of the horticulture department in Sonamura sub-division, where the fruit is grown in plenty, Bimal Das. In desperation, many pineapple growers have switched to rubber cultivation, which, they claimed, is paying them good dividends. Wakhiram Tripura, a pineapple cultivator at Jumerdepha village in Sipahijala district, now grows rubber in his pineapple orchard and says it fetches more money than pineapples did. The picturesque village on the hillocks, surrounded by forests, was once famous for the production of the world famous 'Queen' variety of pineapple, and is now slowly turning into a rubber growing region. Wakhiram produces rubber in one hectare of land which brings him about Rs 30,000 per month, which is three times the money earned through selling pineapples. "It is difficult for me to run my family with the money earned from pineapple sale,

Oil & Food Journal Aug 2012

trade

whereas rubber gives us the wherewithal for a decent living," Wakhiram said. Hundreds of pineapple growers have followed the example of Wakhiram, threatening their age-old occupation. Concerned over the development, the Tripura government has stepped in and is taking various initiatives to reverse the trend, aware of the tremendous potential of a robust pineapple-based economy in Tripura. The initiatives include infrastructure development like creation of Tripura Food Park, introduction of investment-friendly schemes, investment in land customs stations, laboratory for testing food products, cold storage chains and training programmes for staggered pineapple cultivation to make it available round the year. â&#x20AC;&#x153;It is much needed for creating an environment conducive enough for a steady growth of the food processing sector which includes pineapple," the chairman of Tr i p u r a I n d u s t r i a l D e v e l o p m e n t C o r p o r a t i o n , P a b i t r a K a r, s a i d . Government officials admitted that no proper fruit processing unit was working in the state. "Though the North Eastern Regional Agricultural Marketing Corporation Limited was incorporated in 1982 with the North Eastern Council as the promoter, they are not effective enough to support pineapple growers," he said. In order to give a fillip to the food processing industry, the central government has put stress on creating mega food parks, retail outlets, cold storage chains across the country, a CII executive here said. Those along with the efforts by the governments of India and Bangladesh to open several border markets or 'hat' have put a smile back on pineapple cultivators' faces as they would be able to sell their produce to an established consumer base. However, not to discourage rubber cultivation, the Tripura government is at the same time aiming at increasing the area coverage of rubber cultivation from the present 55,000 hectares to one lakh hectares.

Retail Way

Intensification and growth of

India's Food F

Retail Sector

ood shopping has become a very pleasurable experience. From simple trading activity, food retailing is now heading to the status of an industry. Imagine yourself walking through the air conditioned lanes smelling fresh food and groceries, enjoying light music, experiencing five star ambiences and above all buying food products (vegetables, spices and beverages) without bargaining with the vendors..

Oil & Food Journal Aug 2012

Retail Way The food industry is on a roller coaster ride as Indians continue to have a feast. Fuelled by– large disposable incomes – the food sector is witnessing a remarkable change in consumption patterns, especially in terms of food. Food retailing has come of age -- from a period when food items were sold in small road side grocer shops & mandis, haats and bazzars by vendors to a stage when food products (processed and groceries) are retailed through supermarket stores where consumers can inspect, select and pick up the products they like in a comfortable ambience and still pay a fair price for the product and the merchandise and sometimes even pay less than the price they would have paid at the nearest food stores. Shopping for groceries is no longer a strenuous and uncomfortable affair. Food retail has surpassed the dominating apparel and accessories sector. There is an old industry saying that “ customer is king” Food retailers today will update that saying to “customers is the dictator” because of fierce competition, new technology and business practices the market power of customer is strong and growing stronger. LOTS AND LOTS OF SMALL STORES The food retail industry in India has traditionally been highly fragmented and is often described as being “ u n o rg a n i z e d ” o r p a r t o f t h e “unorganized” sector. There are an estimated 12-15 million outlets, including push carts, wet market and kirana stores, selling food and related items. The retail food sector is dominated by small (50-200 square foot) kirana stores which are well-distributed throughout urban and rural areas. These outlets provide employment for millions of Indian workers whose interests are represented by several trade groups. Much of the opposition to FDI in multibrand retail has been rooted in a concern that kirana store owners and workers would be displaced by larger retail formats. However, others have noted that kirana stores have advantages such as convenient locations, lower real estate costs, and services such as free 45

Oil & Food Journal Aug 2012

delivery and store credit that should help them to compete with larger retail chains. Exporters who are interested in the Indian market should not discount the traditional kirana stores as an outlet for their products. Larger Indian cities (there are 53 cities with at least a million residents) have at least a few stores that carry imported food products and the number of traditional stores that carry these products is growing as awareness and the supply of imported products increases. Some importers are distributing their products in as many as 10,000 stores, the majority of which are kirana stores. THE FOOD RETAIL TALE Traditionally, Indians were used to buying their sugar, wheat, pulses, rice etc. from their neighborhood baniya. The majority of food and food products were and still are retailed through neighborhood kirana (baniya) stores. A typical kirana store has a retail area of 200 sq ft and sells 500 to 800 stock keeping units (SKUs). The kirana stores focus on dry food products because the infrastructure for cold storage is lacking. The majority of fresh produce is sold from the carts of traveling vendors. Such produce is deemed to be of low product quality, variety and hygiene. This concept is still popular in B-class and II Tier cities of India and giving

employment to thousands of its inhabitants. Initially the food retail format was seen in A-class cities like Mumbai, Delhi, Chennai which had co-operative stores like "Apna Bazaar" in Mumbai and "Kendriya Bhandar" in Delhi. Both were very successful and are operating many outlets in all strategic localities in the city. Escorts group in the late eighties diversified into non-auto sectors by getting into agri business or food business. It came out with first "Nanz" store at South Extension in Delhi in 1990. The first visible sign of the change in food retailing was seen in mideighties. Around that time a few new food stores were set up in all metro cities in India. Calcutta was the only exception where it started a little later. At that time couple of leading food stores started operating such as "Morning Stores" and "Modern Stores" in Delhi, "Nilgiri" in Bangalore, and “Food Land" in Mumbai "Spencers Food Stores" in Chennai. Spencers were the first to tie up with a Singapore based large retail chain -"Dairyland" and had set up the food stores in Chennai. This was a technology tie up. Until the late 1990s, food retailing has been concentrated in the south of the country. Southern India has been witnessing revolutionized activity in food retailing. It has thoroughly experienced the food retailing in various

Retail Way formats such as the supermarkets, hypermarkets and neighbourhood stores. These include Food World, Subhiksha, Nilgiris, Margin Free, and Big Bazaar. The reason being that most entrepreneurs who started organised retail came from southern India and the cost of real estate in the southern region was less than other regions (particularly north and west). Since then, however, organised food retailing has emerged across the country, inspired by the presence of high potential markets in the north, west and east as well as the success of some non-food retailers and food services companies in these regions. THE RECENT EMERGENCE OF MODERN RETAIL Prior to the mid-1990s, there were an estimated 200 modern grocery stores operating in India. These were typically chains in south Indian cities (mainly Bengaluru) that were not much larger than kirana stores. These stores were distinguished by their emphasis on a more modern self-service shopping environment that offered a range of

Oil & Food Journal Aug 2012

products. A few cities also had cooperative stores that were owned by consumer societies. However, the Indian market was dominated by kirana stores and government-run food distribution outlets supplying essential commodities. The emergence of larger chains and stores began around 2005 and the sector has since grown to nearly 3,000 modern retail outlets across India. While many retailers are expanding and opening new stores, profitability continues to be an issue for many as factors such as high real estate costs, high capital borrowing costs, shrinkage, high debt levels, training of qualified staff and a costly supply chain add significantly to operating costs. A discussion of factors affecting the development of the sector follows. The Availability of Processed Foods: Indians have traditionally preferred fresh ingredients procured at frequent intervals from neighborhood stores and street vendors. In general, the supply of processed or packaged foods was limited and quality was lacking. However, as multinational and Indian

corporations have invested in the sector over the past 10-15 years, the availability and quality of processed foods has increased, providing a greater variety of products to sell in retail outlets. Nevertheless, modern retailers indicate that there is still plenty of opportunity to increase the breadth and quality of processed foods. Supply Chain: India's supply chain is multi-layered and expensive and has often lacked an emphasis on product safety and quality. Modernizing and streamlining the supply chain are two of the biggest challenges facing the retail industry. Modern logistics firms are emerging to meet the needs of the retail system, but there is still considerable work to be done, especially from a policy perspective where varying state and city taxes, marketing regulations and policies that limit farm size all hinder growth in the sector. Retailers still cite the timing and volume of product deliveries as major challenges in keeping shelves stocked. Shrinkage: Stores continue to face

Retail Way Demographic Trends: Indians have traditionally lived in large extended families where women were charged with preparing cooked meals from fresh i n g r e d i e n t s . H o w e v e r, r i s i n g urbanization (380 million Indians now live in cities), more working women, and an increase in the number of nuclear families are all trends that point to a greater emphasis on food convenience and healthy foods. Appliances: As India's economy has expanded in recent years, the quality and availability of appliances has improved significantly. More Indians are likely to have refrigerato r s , enabling them to safely store l a r g e r quantities of food items at home. Foreign D i r e c t Investment: C u r r e n t l y, foreign investors are limited to â&#x20AC;&#x153;cash and carryâ&#x20AC;? or a wholesale store format that limits sales to other businesses and approved non-retail buyers. Surprisingly, kirana stores are major customers of cash and carry stores. The long delay in allowing foreign capital and expertise in the retail sector has likely slowed development of the sector. Nevertheless, foreign firms are actively engaged in developing the back-end of their cash and carry operations, working with farmers to establish supply relationships, and streamlining the supply chain. Economic Growth and Incomes: India's economy has been growing at 7-9 percent annually for several years. Given current growth projections, the Indian economy is expected to double in size over the next 10 years. While incomes continue to be relatively low in 47

Oil & Food Journal Aug 2012

India, continued economic growth is expected to lead to shifts in food consumption patterns as lower-income consumer increase their food intake and higher income consumers seek to diversify their diets. Export Emphasis: For many years, Indian food processors have focused a significant part of their marketing efforts on export markets and India continues to be a net exporter of agricultural products. Over the past 20 years, the arrival of foreign multinationals in the f o o d proc

ess i n g a n d restaura nt sectors has helped to alert Indian firms to the importance of the domestic market and the benefits of focusing their marketing and distribution efforts on the Indian consumer. Opposition: Given the number of jobs that India's current retail system provides, some have opposed the

development of a more modern and efficient retail system over concerns that it would displace large numbers of workers. While some groups have opposed the approval of FDI in multibrand retail, modern Indian modern food retailers have rarely been mentioned in the public and media debates about the effects of a more modern retail sector on employment. Farm groups have generally voiced support for the development of the sector. Modern food retail accounts for just two percent of retail food sales and, while the sector appears to be growing rapidly, it seems unlikely that the sector will expand or transform the retail sector as rapidly as it has in some other countries. Over the next 10 years, the potential market for modern food retail could be 200 million consumers. Whether the modern retail sector will expand to reach that many consumers' remains to be seen, but it appears likely that traditional retailers will continue to play a significant role in the food retail sector for years to come. THE FDI IN RETAIL In November of 2011, the Government of India approved 100 percent foreign direct investment in multi-brand retail, only to put the decision on hold a few days later. Much of the subsequent discussion focused on the effects the decision to delay implementation would have on foreign investors, farmers and the traditional retail sector. Largely absent from the discussion were the Indian firms that are investing and expanding the modern retail sector. There are now an estimated 3,000 modern retail outlets in India, up from 200 in 1995. While these firms face challenges rangingfrom a complex and costly supply chain to high real estate costs, many have expanded their operations. This report discusses some of the issues the industry faces and establishes a baseline of the number of modern retail stores in India for the

Retail Way challenges arising from costs associated with unsold products, products that are damaged by rough handling and products that are lost to theft along the supply chain. Real Estate Costs: Stores face high real estate costs throughout India, but especially in larger cities. Real estate can account for over 10 percent of retailer costs. The cost of establishing parking adds significantly to the cost of expansion. Space for parking simply does not exist in some Indian cities and some retailers are pursuing s m a l l e r neighborh ood store formats that do not include parking. W h e r e possible, stores are often located in or next to shopping malls where parking is available. Stores are also working to renegotiate leases, move from prime locations, and expand in smaller cities where real estate costs are lower. Borrowing Costs: Many chains are highly leveraged and borrowing costs in India are as high as 15 percent. Borrowing is further complicated because the industry is relatively new and banks do not have an established risk profile on which to base lending rates which limits access to credit. Car Ownership: While car ownership is on the rise, just four percent of Indians own cars 48

Oil & Food Journal Aug 2012

which could hinder development of a retail model based on large less frequent purchases and driving to an area outside of a consumer's own neighborhood. Import Restrictions: India opened its market to imported food products just over ten years ago. Tariffs on food are high and a number of import requirements effectively prohibit imports of certain food pro

ducts from some countries, including the United States. Better access to imported food products would likely provide retailers with an improved supply and variety of retail products to augment the availability of locally produced products. Nevertheless, imported foods can be found to some degree in nearly every modern retail format as imports of consumer-ready foods increase. Kno w How: U n t i l r e c e n t l y, m a n y Indians firms lacked the expertise to launch a modern food retail chain. As multinationals and Indian firms have invested in the food processing sector and consumer and business exposure to foreign retail has increased, industry understanding of how to adapt modern food systems to the Indian environment has improved. Some chains have had to slow their expansion plans to better focus on developing the â&#x20AC;&#x153;backendâ&#x20AC;? of their operations, but all major retailers now seem to recognize the importance of developing supply chains, inventory management and quality control systems. While labor costs are relatively low, stores will also have to continually emphasize the training of their staffs at all levels to ensure that standards are met in a sector where staff turnover is reportedly very high.

Retail Way purpose of gauging future growth in the industry. FOREIGN DIRECT INVESTMENT IN MULTI-BRAND RETAIL ON HOLD the Government of India's December 7, 2011 decision to put its approval of Foreign Direct Investment (FDI) in multi-brand retail on hold attracted considerable media attention. The decision would have allowed foreign retailers to invest in the retail sector subject to certain provision. The decision was expected to lead to the entrance of multinational retailers that sell food and non-food items into the retail sector. Some of these firms are already operating in India under a “cash and carry” or wholesale format that can only be patronized by other businesses and qualified members. If multi-brand FDI in the retail sector is eventually implemented, it will likely lead to an infusion of foreign capital and expertise that is expected to accelerate the development of the retail sector. However, development of the sector is already underway as India's homegrown multi-brand retailers expand their operations in a variety of retail formats such as hypermarkets, supermarkets and gourmet stores. This sector is expected to expand with or without the approval of FDI in multi-brand retail. While many reports have estimated the dollar value of retail food sales in the ”modern” retail sector, this report attempts to establish a baseline of the number of “organized” or modern retail outlets in India as a means of gauging future growth. In the future, FAS India plans to conduct annual surveys of the number of outlets in an effort to estimate the pace at which the industry is growing. SINGLE BRAND RETAIL In January 2012, The Government of India approved 100 percent (FDI) in single brand retail. The notification states that for proposals involving FDI beyond 51 per cent, firms will have to source at least 30 per cent of their products from small and cottage industries in India that have a maximum investment in plant and machinery of $1 49

Oil & Food Journal Aug 2012

million. The riders proposed in the notification state that stores should carry a single brand and be sold under the same brand internationally. Single brand retailing would cover products that are branded during manufacturing and the foreign investor should be the owner of the brand. FDI in timeline: The evolution of the FDI policies over the past 20 years. · July 1991 FDI up to 51 percent allowed in certain sectors. · January 1997 FDI up to 100 percent allowed in “cash and carry” format with automatic government approval. · February 10, 2006 FDI up to 51 percent allowed in single brand retail with government approval. · November 24, 2011 FDI up to 100 percent in multi-brand retail approved · December 7, 2011 FDI up to 100 percent in multi-brand retail put on hold. January 10, 2012 FDI up to 100 percent allowed in single brand retail Lots and Lots of Small Stores

CURRENT SIZE OF MODERN FOOD RETAIL Estimates of the dollar value of India's retail sector vary significantly. A survey of 10 private estimates indicates that the total (food and non-food) retail sector was valued at somewhere between $320 billion and $550 billion in 2011. Differences may be due to variations in methodology, but an Olympic average of the ten estimates places the size of the retail sector at $450 million in 2011. Retail food sales are estimated at $270 billion which equates to 60 percent of total retail sales and a $225 per capita annual expenditure on food. The figure reflects the relatively high percentage of disposable income spent on food as well as the estimated 800 million Indians who live in rural areas where on-farm consumption and non-retail sales account for a significant percentage of food use. Estimates indicate that modern grocery retailers managed to carve out an estimated one percent share of food retail sales in 2005 and that share has increased to two percent in 2011 or $5.4 billion.

Sector TotalRetail(FoodandNon-Food) OrganizedRetail(FoodandNonfood) FoodRetail (Modernand Traditional)

EstimatedSizein2011 USD450billion USD27billion(6%of total retailsales)

ModernFoodRetail

USD5.4billion(2%oftotalfoodretailsales)

USD270billion(60%oftotalretail sales)

Thefoodretailmarketincludestheretailsalesofallfoodproducts, bothpackagedandunpackaged, aswellasbeverages(includingretailsalesof allalcoholicandnon-alcoholicbeverages). SourceAnalysisofSectorReports

MODERNRETAILSEGMENTATION StoreFormat GroceryStore Supermarket ConvenienceStores Hypermarket GourmetStore Total Source–Post Analysis

StoreSize(sqft.) 500-3,000 10,000-30,000 1,000-1,500 60,000-120,000 500-5,000 2,971

Numberof outlets 1,947 408 324 265 27

Retail Way ESTIMATED NUMBER OF MODERN RETAIL STORES COMPANY

STORE

CHAIN FORMAT

Aditya Birla Retail Aditya Birla Retail Arambagh Hatcheries Ltd Bharti Retail Easyday Bharti Retail Easyday Bharti Retail Easyday Dairy Farm International Dairy Farm International Dairy Farm International

More More Megastore Anambahâ&#x20AC;&#x2122;s Foodmart

Grocery Store Hypermarket Grocery Store

NUMBER OF OUTLETS 575 12 31

Stores Market Hyper Foodworld Gourmet Foodworld Super Store Foodworld Supermarket Big Apple Retail Big Bazaar KB's Fairprice Food Bazaar Food Right Food Hall Nature's Basket Heritage Fresh Total HyperCITY Needs Supermarket SPAR M.K. Retail MyDollarStore Namdhari's Fresh Nilgiris 1905 N Stores Grocery Nuts N Spices Ratnadeep

Grocery Store Supermarket Hypermarket Gourmet Store Hypermarket Supermarket

150 10 1 1 2 70

Grocery Store Hypermarket Supermarket Grocery Store Hypermarket Gourmet Store Gourmet Store Grocery Store Hypermarket Hypermarket Supermarket Hypermarket Supermarket India Grocery Store Grocery Store Supermarket Store Grocery Store Supermarket

65 161 135 135 1 1 18 72 5 12 17 10 7 40 20 90 3 16 3

Reliance Fresh Reliance Mart Reliance Super Spencer's Hyper Spencer's Le Marche Star Bazaar

Grocery Store Hypermarket Supermarket Hypermarket Grocery Store Gourmet Store Hypermarket

592 18 17 30 220 7 13

Express Retail Services Pantaloon Retail Pantaloon Retail Pantaloon Retail Pantaloon Retail Pantaloons Retail Godrej Industries The Heritage Group Jubilant Group K. Raheja Corp. Group Le Millennia Supermart Max Hypermarkets India M.K. Retail Company MyDollarStore Namdhari's Fresh Nilgiri Dairy Farm N Stores Food Retail Nuts N Spices Ratnadeep Super Market Supermarket Reliance Retail Limited Reliance Retail Limited Reliance Retail Limited RPG Retail RPG Retail Sugar and Spice India Tata Group (Trent)

50 Oil & Food Journal

Aug 2012

Retail Way MODERN CONVENIENCE STORES COMPANY

STORE

Bharat Petroleum Godfrey Philips India Total

In & Out Twenty Four Seven

NUMBER OF OUTLETS 320 4 324

CASH AND CARRY STORES COMPANY Bharti Wal-Mart Private Ltd. Carrefour Group Future Group Metro AG

STORE Best Price Modern Wholesale Carrefour Wholesale Cash & Carry Aadhar Wholesale Metro

Aditya Birla Retail: Aditya Birla Retail Limited is the retail arm of the Aditya Birla Group, a large corporation with interests in many sectors of the economy. The company established its food and grocery operations in 2007 with the acquisition of a supermarket chain based in southern India. Subsequently, Aditya Birla Retail Ltd. expanded its presence across the country under the â&#x20AC;&#x153;Moreâ&#x20AC;? brand with Thomas Verghese, CEO supermarket and hypermarket formats. The chain operates 575 More supermarkets around India and 12 More megastores in Mysore, Vadodara, Aurangabad, Indore, Bengaluru, Mumbai, Hyderabad, New Delhi and Nashik. Arambagh Hatcheries Limited: Arambagh Hatcheries Limited started as a poultry processor in the 1970s and began its food retail operations in 2000 with Arambagh's Foodmart. The company operates small grocery stores with a typical area of 600-1,000 sq. ft. The chain has 31 stores, 24 in Kolkata and seven in other cities in West Bengal. Bharti Enterprises: Bharti Retail is a

Oil & Food Journal Aug 2012

wholly owned subsidiary of Bharti Enterprises. The Company operates 150 Easyday neighborhood stores, 10 compact hypermarket stores called Easyday Market and one hypermarket. Stores are located in Punjab, Karnataka, Haryana, Rajasthan, Uttar Pradesh, Uttarakhand, Madhya Pradesh, Delhi and Jammu & Kashmir. Bharti Wal-Mart is a joint venture between Bharti Enterprises and Wal-Mart for wholesale cash & carry and back-end supply chain management operations in India to serve small retailers, manufacturers, institutions and farmers. The Company operates 12 cash and carry stores under the Best Price Modern Wholesale brand. Carrefour Group: Carrefour opened its first wholesale cash and carry store in December 2010 in New Delhi. It currently operates two stores in India. Dairy Farm International http://www.foodworld.in/ Foodworld is a part of the Dairy Farm International (DFI) Group. Previously known as Spencer's Daily, it began in May 1996 as a division of Spencer & Co, a part of the RPG Group. In August 1999 it became a separate company and currently operates 73 stores in Bengaluru,

NUMBER OF OUTLETS 12 2 1 9 Hyderabad, Coimbatore and Chennai. Express Retail Services Pvt. Ltd.Big Apple retail is a New Delhi based grocery store format retail chain. The chain is a unit of Express Retail Services Pvt. Ltd. currently operating 65 stores across the capital. Future Group: Pantaloon Retail (India) Limited, is a large Indian retailer, which is part of the Future Group, and operates multiple food and non-food retail formats. In 2010, the company separated its discount store business, which includes the Big Bazaar hypermarket and the Food Bazaar supermarket businesses, into Future Value Retail Ltd., a wholly owned subsidiary. Future Value Retail operates various food store formats including KB's Fair Price (low frills neighborhood convenience stores), Food Bazaar (supermarket), Big Bazaar (Hypermarket) and specialty stores (Food Hall and Food Right). Future Group, through its subsidiary Aadhaar Retailing Limited, launched its cash and carry business in India through Aadhaar Wholesale in Gujarat in 2011 and currently has one store.

Retail Way Godrej Group: Nature's Basket is a specialty food store, owned by a division of Godrej Industries. The chain has asupermarket store format operating small stores in premium residential neighborhood. Nature's Basket currently has 18 outlets across Mumbai, Delhi, Pune, Gurgaon, Hyderabad and Bengaluru. The Heritage Group: Heritage Retail is a chain of retail stores promoted by Heritage Foods - the leading dairy brand in South India. The Group operates 72 grocery store format chain in Andhra Pradesh, Karnataka and Tamil Nadu. In & Out Convenience Store: Bharat Petroleum operates 6,000 gas stations across India and launched its convenience store retailing initiative in 2001 under the In & Out brand. Currently, there are 320 In & Out stores attached to gas stations. Jubilant Group: Jubilant Retail is a Bengaluru-based retail chain that o p er at es f iv e h y p e r mar k e ts i n Bengaluru under the Total brand. K. Raheja Corp. Group: Hypercity Retail is a subsidiary of the K. Raheja Corp and operates 12 hypermarkets in Amritsar, Bengaluru, Bhopal, Pune, Ahmedabad, Ludhiana, Jaipur, Mumbai and Hyderabad. The first Hypercity store opened in May 2006. Le Millennia (Needs) Supermarket: Needs Supermarket was established in the Delhi metro area in 2000 and operates 17 stores in and around Delhi. Max Hypermarkets India : SPAR Hypermarkets are operated under a license agreement between the Dubaibased Landmark Group's Max Hypermarkets India Pvt. Ltd. and SPAR International. SPAR currently has 10 stores in Bengaluru, Mangalore, Hyderabad, Coimbatore, Delhi, Pune and Gurgaon. Metro AG :METRO Cash & Carry started operations in India in 2003 and operates nine stores in Bengaluru,

Oil & Food Journal Aug 2012

Hyderabad, Kolkata, Mumbai, Ludhiana and Delhi.

retailer in India and operates over six hundred food stores in three formats.

M.K. Retail:Retail Company was established in 1927 and operates seven supermarkets in Bengaluru.

RPG Retail: Established in 1996, Spencer's has become a popular destination for shoppers in India with 30 hypermarkets and 220 supermarkets in 35 cities.

MyDollarStore:DollarStore India operates as a master franchise in India for MyDollarStore Inc of USA. The store follows the retail model of fixed price selling. MyDollarStore made its foray into India in 2004 and is currently operating 40 stores across India. Namdhari's Fresh: Namdhari's Fresh (a unit of Namdhari's Seeds) is a grocery store chain, started in 2000 in Bengaluru and now has 20 stores. The chain focuses on being a premium green grocer. The company offers high quality fruits and vegetables for retail purchase along with other food products. Nilgiris Dairy Farm: Nilgiris is one of the oldest supermarket chains in India with origins dating back to 1905. Nilgiris has grown from being a dairy farm specializing in butter to a leading supermarket chain with 90 stores spread across India's southern states. Nuts N Spices: The Chennai-based supermarket chain Nuts N Spices is a specialty food retailer, which came into operation in 1999 and currently operates 16 stores around southern India. N Stores Food Retail Pvt. Ltd: N Stores is a regional supermarket chain. There are currently three stores operating in Bengaluru. The stores are supported by a large packing and baking facility within the region. Ratnadeep Super Market Pvt. Ltd.: Ratnadeep Super Market (P) Ltd. is a supermarket chain located in Andhra Pradesh that began in 1987. The chain currently operates three stores in Hyderabad. Reliance Retail limited: Reliance Retail, Ltd. is a subsidiary Reliance Industries. Founded in 2006 and based in Mumbai, it is the second largest

Shri Kannan Departmental Stores: Shri Kannan Departmental Store (P) Ltd is a Coimbatore retail chain. It started its operations in 1985 in Erode has established a very strong regional presence with 25 stores within the state of Tamil Nadu. Sugar and Spice India Pvt. Ltd (Le Marche) MarchĂŠ Retail Pvt. Ltd has been in the food business for the past 20 years. From a small beginning specializing in bakery, delicatessen and chocolates, the company has grown to a retail store chain for gourmet foods in India. There are seven outlets in the Delhi metro area. Tata Group (Trent) Tata Enterprises: Trent Hypermarket Ltd is a retail operations company that operates the hypermarket format â&#x20AC;&#x201C; Star Bazaar. Currently there are 13 hypermarkets operating across seven cities in India. Twenty Four Seven Retail store: Launched in June 2005, Twenty Four Seven stores are round-the-clock convenience stores. Currently the chain has four outlets in New Delhi. Twenty Four Seven has launched its first cobranded convenience store in collaboration with Indian Oil CONCLUSION: The past 4-5 years have seen increasing activity in food retailing. Various business houses have already planned for few investments in the coming 2-3 years. Though the retailers will have to face increasingly demanding customers and intensely competitive rivals, more investments will keep flowing in and the share of organized food sector will grow rapidly.Organized food retailing in India is surely poised for a take-off and will provide many opportunities both to existing players as well as new entrants.

News India to

play key role in improving

banana I

n what may peel away obstacles to growing a pest-resistant banana variety, scientists have completed the first ever genetic map of the ubiquitous fruit, which should provide them useful leads on the long sought after variety. Even though they are not part of the sequencing team, Indian scientists will chip in with their work in fulfilling the globally cherished scientific dream of developing a pest-resistant banana. As an international team of researchers published the banana genetic sequence in Nature on Wednesday, it created a buzz among a motley group of South Indian researchers, including a few from Bangalore, who are part of an international project to develop a better banana variety based on the new genetic information. “The genetic information can be used in understanding the fruit's evolution, pests and disease tolerance and crop improvement programme. It helps develop better quality fruits,” K V Ravishankar, a senior biotechnologist at the Indian Institute of Horticulture Research (IIHR), Bangalore told Deccan Herald. Ravishankar and his colleagues from IIHR, National Research Centre on Banana in Thiruchirapalli and University of Kerala are part of Global Musa (banana) Genome Consortium, whose mandate is to improve banana quality using the latest scientific tools. “The sequencing has been done within the framework of the global consortium and is a huge step towards understanding the genetics and improving banana varieties,” said Angélique D'Hont, team leader at CIRAD – a France-based

Oil & Food Journal Aug 2012

variety

international centre for agriculture research and cooperation. Being one of the world's most important staple crops, banana ranks fourth after rice, wheat and maize, on the basis of its production value. It is important for food and economic security of more than 400 million people in southern countries. But the fruit is under constant pressure from a range of diseases, the most well-known of which are black Sigatoka disease and Fusarium wilt. Both, a section of plant scientists argue, can wipe out the fruit from the earth. Such threats necessitate research in developing pest-resistant varieties of banana. The newly available genome sequence provides access to each and every one of the plant's genes – more than 36,000 of them – and to t h e i r p o s i t i o n o n i t s 11 chromosomes, making it easier for researchers to identify genes responsible for disease resistance and fruit quality. It would be a vital tool for improving banana varieties using genetic resources available worldwide, said D'Hont. The sequencing – outcome of a ten-year research project by two French institutes, CIRAD and CEAGenoscope – provides a crucial stepping stone for future genome studies, and may represent an important step.

Event Report

Sri Lanka's food industry thanks Ind & Commerce for strong support

asil Rajapaksa (Economic Development Minister- right) and Rishad Bathiudeen, Minister of Industry and Commerce ( L ) inaugurate the 11th 'Profood Propack International Exhibition 2012' on 06 July at BMICH, Colombo. As Sri Lanka's processed food exports rose by 41% topping $ 95 Mn in2011, the food industry lavished praise on the Industry and Commerce Ministry for its continued support to sustain growth in this crucial sector.” Both food and packaging sectors in Sri Lanka have seen rapid modernization and expansion in recent times. As a result of development vision of His Excellency Mahinda Rajapaksa, the President, many concessions have been offered to these sectors and thus, exports from the Processed Food industry last year stood at 94.84 million US dollars which was a considerable increase of 41 percent in 2011 compared to2010” announced Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka. Minister Bathiudeen was addressing the inauguration event of the' Profood Propack International Exhibition 2012' on 06 July at the BMICH, Colombo. The 11th in the series of exhibitions, Pro Foods/Pro Pack & Agbiz 2012” the most comprehensive agriculture based processed food /packaging exhibition is back with a new look with a complete one stop shop solution, this years' theme being “From the Farm to the Kitchen”. Economic Development Minister Basil Rajapaksa was the Guest of Honor of the occasion. 'Ministry continuously supported us during the last years' says the Industry 54

Oil & Food Journal Aug 2012

Event Report 'Will continue our support and infuse R&D too' says Rishad 217 firms & multinationals from SriLanka, Argentina, India, Turkey, Thailand, and Pakistan at the event 'Lanka food exports surge by 41% in 2011 to $ 95 Mn' says Rishad The organizers for the 2012 show have outlined numerous concurrent events to promote and market Pro Foods/Pro Pack & Agbiz, making it a mustfor all organizations involved in processed food, packaging &agriculture. The exhibition, facilitated by the Ministry of Industry and Commerce, had only 46 companies taking part when it began in 2001, and today has 217 firms participating from Sri Lanka, India, Italy, and Pakistan-as well as an SME pavilion for the growing importance of SMEs and a special pavilion by food and packaging industry of Kerala, India. Among the 217 participating firms and organizations are the High Commission of Canada, Adamjee, Alli, CIC, Ceylon Biscuits, CMC Engineering Exports GmbH, EDNA Confectionaries, Elephant House, JAGRO Ltd, Maliban Biscuits, MAS Tropical Foods, Italy's PIGO SRL, Brown & Co PLC, APIMachinery, Harischandra Mills, Good Value Eswaran Ltd, Currymate, Nelna, MicroCars, MA's Tropical Food, MAI S.A (from Argentina), Mahima Foliage, A. Baur Co, Hindustan Hing Supplying, Tinpak Pvt Ltd, Unilever Lipton Ceylon Ltd, Patkol (from Thailand), Vezirkopru Orman (from Turkey), Institute of Agro Technology of University of Colombo, Gatronova Novatex (Pakistan) and Yamato Scale India Ltd. Minister Rishad Bathiudeen, addressing the event, said: “I am pleased to inform you that Sri Lanka processed food and confectionery industry is reaching the up market segment in exports. To gain a high price at the export market and also to get a premium price from the health conscious customer, attractive and informative packaging is paramount. To this end, the food sector joining with the packaging sector is a welcome sign. In view of this, I am glad to announce that we have decided to continue government's support to Profoods/Propack exhibition by 55

Oil & Food Journal Aug 2012

assisting this series in future too. Food processing and Packaging sectors are considered as priority areas in today's context. In 2011, food and grocery sales dominated global retail sales sector and the food sector was the key driver in global retail sales which stood at14,335 billion US dollars. More importantly, 2011 growth was also led by Asia and Pacific regions. Both food and packaging sectors in Sri Lanka have seen rapid modernization and expansion in recent times. As a result of development vision of His Excellency Mahinda Rajapaksa, the President, many concessions have been offered to these sectors and thus, exports from the Processed Food industry last year stood at 94.84 million US dollars which was a considerable increase of 41 percent in 2011 compared to 2010. In 2010, it grew by 31 percent. Sri Lanka's growing food and beverage industry sector has now more than 4,400establishments with close to 132,000 people engaged in it. We believe that this sector to be fast growing in our exports which shows high potential for further expansion. My Ministry is keen on giving maximum support to develop this industry. We are working closely with the private sector through the advisory committees to identify development needs and implement appropriate programmes. We believe more attention needed on research and development, certification and testing, staff training while certain changes also, needed in the area of fiscal policies. We also believe biotechnology and eco-farming can assist us to expand our processed food sector to the next level. Realizing the growing importance of SMEs in the value chain, this time also my Ministry is hosting a special pavilion to accommodate micro, small and medium industries so that our SME integration continues well. As a result of the awareness programmes we conducted in outside regions, we notice strong demand from SME's for this pavilion. In addition special concessions have also been provided to the universities in order to encourage their participation.” Praising Economic Development Minister Basil Rajapaksa's commitment

and efforts to develop Sri Lanka exports, Minister Bathiudeen said: “I commend Minister Basil Rajapaksa for his committed efforts to develop our exports which he fulfils even at a personal level. His attention is an example for us to follow. For example, yesterday evening Minister Basil personally telephoned me to alert me of a problem being faced by a Sri Lankan Durian fruit exporter to Korea. I thereafter immediately summoned my officials and directed them for immediate action and inquiry as to what went wrong. We are now working on this issue.” Mario De Alwis, Chairman of the Processed Food Development Initiative, the top independent food Industry facilitator, praised the Ministry of Industry and Commerce for its continued efforts to sustain the sector. “Michael Porter, the competitiveness guru once said that sustainable competitive advantage is not only in making the most from a country's environment. Firms must work together and collaborate to create a competitive base to launch their products to the global economy. Though this statement was made during the height of globalization, in today's global downturn, this collaboration should not only extend among industry players but all key player in the supply chain-that is the state, industry and the political community. Thanks to the efforts of the Ministry of Industry & Commerce over the last 11 years, we managed to bring the farmers, industry and political community together here. Collaboration has become even more important in the current economic climate” De Alwis explained. Many international exhibitor participants were upbeat on the continued rise of the Profood exhibition series. “I have heard of this exhibition and was planning for some time to come here and I am here at last” said Asif Manzur Malik, Deputy Manager of Gatron Industries and Novatex Industries of Karachi, Pakistan. “The moment I walked in to the premises to set up my stall, I knew this is a promising effort. I believe that the next three days in Colombo would be successful for us” he added.

Sugar

Sugar Industry At the doorstep

of Retail Revolution

ifferentiation is key to success in large commodity markets which are largely governed by price competitiveness! The Pioneering & visionary efforts in sugar branding were taken by Mawana Sugar Delhi leading corporate from Sugar Industry way back during 1993. Initially to meet the regulations this sugar producers even went to the extent to pack 100 nos. of 1kg pouches in gunny bags & take out from the factory. Subsequently government thru its notifications during July 1997 allowed sugar factories to pack sugar in 1 to 10kg pouches. Over the years total 20 sugar brands entered Domestic market & could establish themselves successfully. The present retail boom will further boost demand for branded sugar to cater

Oil & Food Journal Aug 2012

changed consumer requirements of value added sugar products. This will lead to setting up of ultra-modern sugar packaging facilities by manufacturers themselves to meet requirements of supermarkets directly. Present excess Sugar production has forced sugar factories to think differently & cope up fast changing consumer psychology. The introduction of flavored sugar & development of value added sugar variants is indication of fast changing Industry. Consistent quality & Grain size etc of product is basic requirement for branded sugar & lot of work has been done in the Industry in this direction. Brand Managers & Marketing set ups are developed by leading corporate Sugar players which otherwise would be unheard in sugar Industry.

Sugar Contract Packing set ups needed by Retailers nearby most of cities will be big opportunity particularly for cooperative sugar sector which will in turn create local employment for rural India. The co-packing set ups can be used even to explore possibility for export of value added sugar in retail packs. Sugar factories located near metros will be most benefited in the era of Retail revolution in the offing. The retail sugar packaging set up by manufacturers will drastically reduce the distance between farms to fork which is main mantra of retailers. The main criteria for setting up such facilities are · Round the year operation of such facility instead of seasonal process of Sugar manufacturing. · Consistent quality of sugar preferably refined as per international norms. · Special efforts for Hygienic packaging

of sugar by avoiding entry of dust or foreign particles by use of dust collection as well as metal detection system in the packaging facility. This will help in meeting stringent quality expectations by alert customers of Branded products. · Automated packing set up to avoid any manual handling of sugar by adding even the post packaging systems. · Huge requirement of retail sugar packs if clubbed with quality product then sky is the limit for its market. · ISO & HACCP certification by such facilities will help in promotion of the branded products internationally.. · Value added sugar will help in catering to High end pharma, soft drink & Hospitality Industry · Developing of marketing network adopting new age techniques for

branded sugar marketing in Domestic as well as International markets. The VFFS machines suitable for various pack format options are available for catering to different emerging segments of sugar referred above. The VFFS machines cater to Sugar Industry requirement to pack 500g to 10kg packs using common machine for all the denominations which is major chunk of requirement for Retail sector. Nichrome India Ltd. has introduced Smart pack format on their VFFS machines which is launch of new pack format for the Industry. This format offers Prominent Aesthetics for display on shelf & minimal consumption of packing material as well. In case of Hospitality Industry Stickpack machines offer Single Serve sachets to cater both Airline & Hotel Industry. The Lengthy user friendly sticks in center seal sachets for Airlines & Typical three side seal sachets for Hotel Industry requirements can be taken care off by using machine offering flexible pack formats. Further to above Kisan Veer Co-op sugar factory from Maharashtra has succeeded in introducing pharma sugar which is indication of change in mind set even by co-operatives to come out of crisis situation. Natural Sugar is setting up refinery to introduce sugar to retail sector. We are aware of transformation in the Dairy sector by co-operatives & Private sector players brought in the life of farmers. Can Sugar factories & Dairies join hands for retail marketing of Sugar & bring such transformation/value addition to certain extent for Sugar Sector? Definitely the industry will ride the retail boom!!! R.J.Rayanade General Manager Nichrome India Limited Saffire Park Galleria Second Floor 4, Pune Mumbai Road Shivajinagar Pune 411005 Phone # +91 20 6011001 Extn 204 Cell +91 93702 60064 Website www.nichrome.com Email rayanade@nichrome.com

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