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Oil & Food Journal Dec 2012

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Dear Readers

From the Desk of Editor

o open the gates of development and enhance the Indian food processing industry The Cabinet Committee on Economic Affairs sanctioned the centrally sponsored scheme titled "National Mission on Food Processing (NMFP)", and this has been done in co-operation with the state governments in 2012-13. The NMFP schemehas a basic mission to help the states/union territories in maintaining requisite synergy between agriculture plans of states and development of food processing sector, which in turn would help increase farm productivity thereby boosting farmers' incomes. By bridging infrastructural and institutional gaps, this would also ensure an efficient supply chain. Thus 2012 can be denoted as a landmark year that brought the introduction of a mega scheme in the food processing sector which intends to provide much needed thrust to this sector in a big way. And also a National Food Processing Development Council (NFPDC) has been set up under the chairmanship of the minister of agriculture and food processing industry with representatives of state governments, industry associations and related government departments. this will provide guidance to all schemes of Ministry of Food Processing Industries (MOFPI) including the NMFP. The basic objective of NMFP is decentralization of implementation of ministry's schemes, which will lead to substantial participation of state governments/union territories. Beneficiaries of MOFPI schemes will also find it easier to deal with state governments. This would be a paradigm shift in the ministry's approach and is driven by the need to make food processing truly a national initiative. During 2012-13, schemes such as technology up-gradation, modernization of food processing industries, cold chain, and value addition and preservation infrastructure for non-horticultural products, among others, being implemented by the government directly will not be implemented through state governments under this scheme. The mega scheme caters to different aspects of this industry such as establishing of mega food parks, integrated cold chains and preservation and modernization of abattoir. Launching of National Mission on Food Processing (NMFP) is likely to have greater involvement of the State Governments and all stakeholders. NMFP focuses on food processing for enhancing farm productivity and farmer’s revenue. It facilitates in addressing both institutional and infrastructural gaps along the value chains. It also has provision for promoting skill development, training and entrepreneurship in post-harvest management. In the 11th Five year Plan a total allocation of Rs. 600 crores was provided for technology upgradation and modernization of food processing industries. The Ministry utilized almost the entire fund and has assisted over 3229 Food Processing Units so far. During the current financial year, an amount of Rs. 99.32 crorehas been released till 31.10.2012. Now for the year 2012-13, Rs. 250 crores has been allocated for NMFP for 2012-13, out of which an amount of Rs.179.39 crores has been released as 1st instalment of grant to the States/Uts. The funding pattern for NFMP is 75:25 by Govt. of India and States respectively, except for North Eastern States. For North Eastern States the ratio is 90:10 respectively. The UTs administered by Govt. of India are funded on 100% grant basis. Seventy Nine Cold Chain projects were approved to be taken up during the 11th plan, out of which 73 projects have been sanctioned by the Ministry in different parts of the country. 8 projects have already started commercial production.. Remaining projects are in various stages of implementation. During 11th Plan an amount of Rs.157.08 crores was released for the scheme and during the year 2012-13 (up to 30.11.2012) an amount of Rs.44.74 crores has been released. Government has recently approved to upscale the 11th Plan scheme to complete 8 approved on-going projects and to take up setting up of 25 new abattoirs and modernization of 25 existing abattoirs involving an estimated expenditure of Rs.330.84 crores. During the 11th Plan, an amount of Rs. 40.93 crores has been released. During the current financial year (upto 30.11.2012) an amount of Rs. 8.04 croreshas been released. The scheme for Human Resource Development envisages financial assistance by way of grant to Food Processing Training Centres (FPTCs), creation of infrastructure for running Degree/Diploma courses in Food Processing in Universities and Entrepreneurship Development Programmes (EDPs). During the 11th Plan an amount of Rs.23.92 crores was sanctioned for 34 infrastructure facilities, Rs.17 crores for 159 FPTCs and Rs.3.83 croresfor 994 EDPs. Under the scheme of strengthening of Institutions the Government in 2006 approved setting up of NIFTEM at an estimated cost of Rs. 244.60 crore including foreign exchange component of US $ 8.1 million. The National Institute of Food Technology, Entrepreneurship and Management (NIFTEM) has been granted the Status of “Deemed to be University” under de-novo category by Ministry of Human Resource Development on 08.05.2012 and the academic session comments from 16.08.2012 for B. Tech (Food Technology and Management) and M. Tech courses.

-Editor

Oil & Food Journal Dec 2012

Contents Contents Starbucks in India! BY: Basma Husain

Companies Gear Up As

24 38

Health Canada Approves Stevia

As Additive For

11 Time for PPP model in food processing: Pranab News 11 Tea Board steps to promote 'Indian Tea' 12 Food processing sector fastest growing sub-sector last fiscal 12 Food processing ministry has approved 62 cold chain facility projects 14 How a transformed Mother Dairy is spreading its wings from Delhi to Dublin 15 38 cases of 'misguiding ads' on food items: Tewari 15 No tea trade without conforming to FSSAI parameters: Tea Board 15 Health foods Complan, Horlicks, Saffola's wrong claims exposed 16 Rabobank Report "Raj-accino" The Rise Of Coffee Culture In India 17 Baby food and child nutrition market in India 18 Vadilal enters flavoured milk market, looks at 5-7% share in three years 18 Indian ice cream market to grow of 17% during 2012-2017 29 India and international year of cooperatives 37 SC seeks records of food safety panel on soft drinks 45 Cadbury invents chocolate that 'doesn't melt' 49 Synthetic meat to be a new concept

Food And Beverage Use

Our focus is to provide better products & services and expanding into more markets By Arif Fazlani

The Implementation of

FDI In Retail 32

A Debate of Blame,

India's Retail Sector Ripe for the Picking by Freny Manecksha

Power And Triumph

Why lighting is important in machine vision applications Vacuum frying

reduces oil uptake & improves the quality parameters of carrot crisps 10

Oil & Food Journal Dec 2012

News Food processing sector fastest growing sub-sector last fiscal

like warehouses, storage facilities, testing labs and fruit-ripening chambers, Rakesh Kacker, Secretary, Ministry of Food Processing Industries, said. After inaugurating Mega Food Parks Summit here, organised by the Ministry and Assocham, Kacker said the food processing industry has consistently registered growth rate faster than that registered by agricultural sector. "Thus the industry was consistently adding value to the agriculture sector," he said. On National Mission on Food Processing, Kacker said the mission was launched with the specific purpose of enhancing involvement of states in efforts to further the growth of the food processing industry. As a part of its promotional efforts to push further the food processing sector in potential states across India, Kacker said the Ministry of Food Processing Industries has already finalised four

schemes on technology upgradation and cold chains for non-horticultural crops, among others. Emphasising the need to maintain appropriate quality standards in the food industry, Kacker said a newly created body, Food Safety and Standards Authority, is playing the regulatory role in this regard. "However, MoFPI was keen to start a process of self-regulation by industry. Towards this end, MoFPI was in touch with apex industry organisations and trying to develop a system of selfcertification by food processing units. Quality Council of India has been tasked with drawing up a roadmap for this purpose," he said. Initially, this will run parallel to statutory certification required to be obtained by units but eventually there could be blending of statutory and voluntary certification, Kacker said.

Food processing ministry has approved 62 cold chain facility projects

ood processing sector has emerged as the fastest growing sub-sector of the manufacturing sector during last financial year, a top official said. Food processing units, being set up in Mega Food Parks, would be provided with entire basic infrastructural facilities like warehouses, storage facilities, testing labs and fruit-ripening chambers, Rakesh Kacker, Secretary, Ministry of Food Processing Industries, said. 12

Oil & Food Journal Dec 2012

After inaugurating Mega Food Parks Summit here, organised by the Ministry and Assocham, Kacker said the food processing industry has consistently registered growth rate faster than that registered by agricultural sector. "Thus the industry was consistently adding value to the agriculture sector," he said. On National Mission on Food Processing, Kacker said the mission was launched with the specific purpose of enhancing involvement of states in efforts to further the growth of the food processing industry. As a part of its promotional efforts to push further the food processing sector in potential states across India, Kacker said the Ministry of Food Processing Industries has already finalised four schemes on technology upgradation and cold chains for non-horticultural crops,

among others. Emphasising the need to maintain appropriate quality standards in the food industry, Kacker said a newly created body, Food Safety and Standards Authority, is playing the regulatory role in this regard. "However, MoFPI was keen to start a process of self-regulation by industry. Towards this end, MoFPI was in touch with apex industry organisations and trying to develop a system of selfcertification by food processing units. Quality Council of India has been tasked with drawing up a roadmap for this purpose," he said. Initially, this will run parallel to statutory certification required to be obtained by units but eventually there could be blending of statutory and voluntary certification, Kacker said.

Oil & Food Journal Dec 2012

News

How a transformed Mother Dairy is spreading its wings from Delhi to Dublin

ast month, a rep from the Irish Dairy Board dropped by at Mother Dairy's Patparganj plant in East Delhi to shoot the breeze with Managing Director Siva Nagarajan. They met in the plush confines of the company's Innovation Centre conference room and as the conversation progressed, Nagarajan --or Naga as he's fondly called -- served up a pinkish cup of rice kheer to the Irishman. He devoured it in no time and asked for a second helping. Naga obliged and then asked why he asked for another cup. It transpired that he had at the back of his mind rice pudding in Germany from a firm called Mulder. He wanted to do a mental comparison of the two products. Naga made sure the meeting ended on a sweet note as the Irishman asked for tech transfer for kheer and a bevy of other products that Mother Dairy m a n u f a c t u r e s . 14

Oil & Food Journal Dec 2012

Mother Dairy has been re-calibrating its Delhi-centric approach over the years, expanding to other parts of the country, and even overseas. The top management today comprises hires from multinational companies who bring in much needed agility and leanness to an organisation that counts a million people in its supply chain dispensing 30 lakh litres of milk a day. From selling commoditised milk to exporting mangoes to Japanese customers or banana purees for sorbets in the European market to identifying gherkins as an export item off Bangalore or even offering golgappa-flavoured kulfis at Rs 5 a pop to the domestic consumer, Mother Dairy straddles an enviable range. In its march to capture new markets and emerge as a leader across categories, the Rs 5,279 crore company is hiring global consultants to tweak its systems, keeping a mindful eye on fair price to the farmer and value to the consumer, the twin peaks that are embedded in the DNA of the company. The corporate makeover There's clearly a change in thinking from a cooperative setup back in 1974 when Mother Dairy was created as part of the 'Operation Flood' programme of the National Dairy Development Board

(NDDB). In 2000, Mother Dairy Fruit & Vegetable Private Limited (MDFVPL) was incorporated as a wholly-owned subsidiary of NDDB to take over the assets, functions and personnel of Mother Dairy Delhi and Fruit & Ve g e t a b l e P r o j e c t . But it was in FY2007-08, on the recommendation of a study by Accenture, a corporate structure actually started taking root. That year, Dhara Vegetable Oil & Food Company Limited, another wholly-owned subsidiary of NDDB, was amalgamated into the fold of MDFVPL. Soon after, taking cues from the study, three strategic business units (SBUs) dairy, horticulture and oils - were created and functional structures were designed. Gradually, a fourth SBU, dairy products, was incorporated. "The accountability matrix was also fixed at that point of time, implying each functional head was accountable for everything in their respective domains," says Saugata Mitra, Chief People Officer, MDFVPL, who served Japanese consumer electronics majors Sony and Sharp before taking up a position with Mother Dairy. All through the transition and beyond, the six-member board led by Chairperson Amrita Patel, has been more than supportive, says Naga. "This board has a sense of appreciation of what the consumer wants and what the farmer has to go through. It understands fairness and doesn't do anything with a short term point of view," says Naga, who has wide-ranging experience in theFMCG space and worked with Philips before signing on at Mother Dairy. He demonstrates with an example.

News 38 cases of 'misguiding ads' on food items: Tewari he Food Safety and Standards Authority of India (FSSAI) has issued notices in 38 cases of dubious claims or misguiding advertisements on food items and prosecution has been launched in 19 cases, the Rajya Sabha was informed.

and Labelling) Regulations, 2011, Tewari said.

Health foods Complan, Horlicks, Saffola's wrong claims exposed

Another matter that was filed pertained to the Horlicks advertisement over the claim that the children consuming the product were "taller, stronger and sharper".

In a written reply, Information and Broadcasting Minister Manish Tewari also said that apart from these 38 cases, other instances that came before the ministry were placed before an InterMinisterial Committee.

Another case was related to the Kellogs advertisement which claimed that "research shows that people who eat low fat breakfast like Kellogg's Special K, tend to be slimmer than those who don't".

According to details given by the minister, complaints had been filed against advertisements of leading brands including one of Complan, which claimed that one can grow two times by using the product. The cases have been filed for violation under the Food Safety and Standards Act 2006 and Food Safety and Standards (Packing

According to Tewari, cases had also been filed against advertisements promoting many other brands.

In response to another question, Tewari said that the Press Council had registered 532 complaints on charges of baseless and provocative news reports published in print media since April 1.

No tea trade without conforming to FSSAI parameters: Tea Board

n a bid to ensure quality and protect the image of India tea globally, the Tea Board of India said no tea can be exported from or imported into the country from February if it does not conform to the Food Safety and

Standards Authority of India's (FSSAI) parameters. "Effective Feb 1, 2013, no teas can either be exported from or imported into India, without conforming to FSSAI parameters and teas would be subjected to random testing," a Tea Board of India 15

Oil & Food Journal Dec 2012

release said here. FSSAI was established under the Food Safety and Standards Act, 2006 as a statutory body for laying down sciencebased standards for articles of food and regulating manufacturing, processing, distribution, sale and import of food so as to ensure safe and wholesome food for human consumption. Against the backdrop of various quality issues that have cropped up in recent years, the tea board has already taken firm steps to protect and enhance the image of Indian tea globally and to ensure that only tea worthy of the tagline 'Indian tea' is exported. The board has recently established Tea Councils for both north and south India to put in place an online mandatory mechanism to track all exports and imports of tea and ensure that quality norms are enforced.

ealth food products and cooking oil to biscuits are facing prosecution for wrong claims.

Think twice before you use a cooking oil that is good for heart and corn flakes that make you lose weight or a drink that makes your kids grow tall and have the memory of an elephant. Food Safety and Standards Authority of India (FSSAI) under the Union health ministry probed the claims of leading food and cooking oil manufacturers. Based on the report, 19 brands now face prosecution proceedings. It was found that the health value of a product in advertising and on the label were different. Food Safety and Standards Act (FSSA) says any nutrition value claims by visual or written as well as orally have to be backed by scientific data. The FSSAI verified the labels on various food products, their advertisement in the media as well complaints from consumers. Based on this the companies were asked to come up with proofs to justify their claims. FSSAI's three-member committee went through the replies and gave the report and ways to stop these companies from indulging in such acts. It asked the regional officers empowered to start prosecution. These products targeted the kids and promised height increase, more stamina and increase in memory power. For the adults, the promise of lowering cholesterol, improving cardiac health and solving obesity related issue were the common claims.Complan, a health drink brand, could not produce any data to show that those drank this grow twice faster. Horlicks with claim to make children â&#x20AC;&#x153;taller, stronger and sharperâ&#x20AC;? too had no evidence. Ironically both these products marketed in the West makes no such claim. Only in India, kids are used on the cover of the food product Complan and Horlicks. Complan Memory which has images of kids with books has been booked for wrongly giving the impression that this drink gives students more memory power. Kellogg's Special K cornflakes is marketed as the ideal breakfast for those wanting to lose weight since it is a low-fat food. There is no scientific study to back this claim. Saffola oil is good for cardiac care and Britannia Vita Marie biscuits reduce cholesterol were the claims. None of them are found to have any such health benefits.

Rabobank report

The Rise Of Coffee Culture In India

abobank has published a new research report on the rise of the coffee culture inIndia, due to the efforts of a few specialist coffee chains and instant coffee players. In a new report titled "Raj-accino," Rabobank's Food & Agribusiness Research and Advisory group says that coffee drinking has spread across the country and consumption has doubled. Specialist coffee shop chains, which have established themselves as a 'hangout' for urban youth, are projected to reach 4,000 in numbers by 2015 (21% CAGR). This growth is a result of favorable demographics, rising income levels, rise of mid-sized cities and high population density. High real estate costs, manpower attrition and difficulties in managing the supply chain will continue to be the key challenges. Although specialist coffee chains' contribution to India's total coffee consumption by volume may not be significant, these coffee shops have added more visibility to the coffee culture. The first specialist coffee shop by Cafe Coffee Day opened up in 1996, and the company has since grown to a market leading position, with 1,350 coffee shops spread across India. At present, there are around 2,100 specialist coffee shops in India, and given that there are multiple international coffee shop chains trying to expand their base in this important market, consumers are likely to have even more options within the next three years. 16

Oil & Food Journal Dec 2012

For a burgeoning segment of the Indian population, coffee chains are also offering a new snacking/leisure experience. These coffee chains offer an experience similar to that in developed markets. The opportunities for coffee chain growth arise from the favorable demographics – low per capita consumption and increasing income levels, the rise of mid-sized cities, and a high population density with its associated potential for expansion of the coffee shop network. "The impressive growth expected of specialist coffee chains in India offers numerous opportunities for both local and international players, provided that they can overcome inherent obstacles," says Nitin Kalani, Rabobank beverage analyst and author of the report. Sourcing coffee beans is not the key barrier for specialist coffee chains, with coffee beans accounting for an insignificant proportion of the total cost of a cup of coffee. For example, the cost of coffee beans in a cappuccino is about 8 percent of the sale price. To be successful, operational efficiency (e.g., managing rent and labor costs) is more important than focusing solely on raw material costs. Real estate overheads are a major concern, with coffee chains facing strong competition for acquiring prime premises. Furthermore, coffee shops must be big enough to accommodate a large number of people, with around 95

percent of consumers in India preferring to drink on-site rather than to take away (compared to around 60 per cent in the U.S.). Competition for industry manpower is likely to continue to be a challenge due to high rates of staff attrition. On top of this, the sourcing of other beverages, food and merchandising – all an essential part of the coffee shop experience – continues to be a problem as players struggle to establish quality, reliable supplier relationships. India remains a tea drinking country, with sales of the traditional beverage still outperforming that of coffee. With growth in coffee consumption outpacing that of tea however, coffee culture is expected to continue to flourish for the foreseeable future. The Rabobank report on the growing Indian coffee culture is available to media upon request. Rabobank Group is a global financial services leader providing wholesale and retail banking, asset management, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries. In North America, Rabobank is a premier bank to the food, beverage and agribusiness industry. Rabobank's Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture. www.Rabobank.com

News

Baby food and child nutrition market in India The Baby Food and Child Nutrition Market in India is growing rapidly owing to the increased awareness among parents regarding proper nutritional well being of their child. In the recent years, the country has also witnessed growth in the number of young working mothers who suffers from shortage of time and has to depend on processed child nutrition products. In addition to this, some major corporate activities such as joint ventures, mergers and acquisitions by some of the top multinationals has also taken place in this sector, which indicates prominent signs of prosperity of the baby food and child nutrition market in the coming years. The report begins with the introduction section which offers a brief description about child nutrition, its various aspects and its role in the proper development of a child. After this, the various factors determining the nutritional requirements of a child are mentioned along with the breakup percentage of energy spent by a child on different activities. It is then followed by the classification of the child nutrition products based on different compositions. It then moves into the market overview section, which provides an overview of the global baby food and child nutrition market with details about its current market scenario and growth. Apart from this, the section also highlights about the major global players of this market in the infant formula category along with their respective market shares. The next section provides an insight about the 17

Oil & Food Journal Dec 2012

Indian baby food and child nutrition market, highlighting the market size and its growth in the upcoming years. It also provides information about the major players in the Indian market with their respective market shares. In addition to this, survey results about consumer preference for child nutrition products and major brands in different baby foods categories are also provided. The next section elaborates on the value chain analysis of the sector. A separate section on import and export of baby food and child nutrition products is also provided, highlighting the growth in import and export values over the years. Then, details regarding major importing and exporting nations are also p r o v i d e d . An analysis of the drivers explains the factors for growth of the industry that include increase in disposable income, increase in number of new born babies, increasing working women population and increased reach and availability due to growing retail and pharma outlets The key challenges include regulatory challenges, rise in ingredient price, high pricing and cultural aspects. The next section speaks about the Government regulations for baby food and child nutrition products which include the Infant Milk Substitutes (IMS), Feeding bottles and Infant foods Amended Act 2003 and the various regulations by the Food Safety and Standards Authority of India (FSSAI). In the next section, different initiatives

taken by the Government of India to facilitate growth of this sector is mentioned which include modification in Packaged Commodities Rules 2011, Milk and Milk Product Order (MMPO ) and other initiatives taken in terms of custom duty relaxation in different industries that are related to this sector e i t h e r d i r e c t l y o r i n d i r e c t l y. The major trends identified in the sector include innovation in product variants, inclination towards health and wellness foods, collaborations and acquisitions and innovative brand building activities. The competition section offers a competitive landscape of the players by providing their financials and key financial ratios. It also provides elaborate information regarding the organizations. Key financial parameters constitute the financial performances of the players which are followed by business highlights. Porters Five Forces Analysis has been incorporated for a brief but effective understanding of the m a r k e t s c e n a r i o . The report concludes with a section on strategic recommendations which comprises an analysis of the growth strategies for the baby food and child nutrition market in India.

News

Vadilal enters flavoured milk market, looks at 5-7% share in three years

ce-cream and frozen processed foods major Vadilal Industries Limited has entered the Indian flavoured milk market with its new Power Sip under the Vadilal Quick Treat umbrella brand. This new initiative is part of Vadilal's long term strategy to offer a wider range of frozen food products to consumers and its first major product launch in the beverages market, a press release from the company said. According to it, the potential for growth in the Indian flavoured milk is very good with an estimated annual growth rate of 15-20 per cent. "Vadilal will utilise its strong ice cream retail distribution network to make this new product a popular brand across India over the next few years," it said. The release said Power Sip will come in a 180 ml bottle priced at Rs 18 with three flavours - rose, elaichi and kesar. More flavours like chocolate, badam and coffee will follow in a few months. No preservative are used in Power Sip and it has a long shelf life of six months, it said. "Flavoured milk is largely an impulse category product and Vadilal will focus

on making Power Sip available at tourist places, railway stations, bus stands, airports, schools & college canteens, etc. This brand targets people on the move who seek quick, healthy and hygienic way to refresh and re-energise. In today's changing and busy lifestyle, market for beverages in India is growing fast. Flavoured milk has become an experience which is relished by one and all. It has a huge potential to become a regular drink among various age groups," the release said. Mr. Devanshu Gandhi, Managing Director of Vadilal Industries Ltd said, “Power Sip is being launched in Ahmedabad first and over the next six months it will be sold across Gujarat. Thereafter, we will introduce this new product in Maharashtra, Madhya Pradesh and Rajasthan. Rest of India will follow in the second and third years. Our target is to capture 5-7% market share over the next three years and make Power Sip a Rs 30 crore plus brand. This is our first major launch in the non-ice cream dairy sector and we plan to introduce more products in this space in future.”

Mr. Rajesh Gandhi, Managing Director of Vadilal Industries Ltd added, “After establishing the company as the second largest ice cream player and a leading player in the frozen processed foods market, we are now strategically looking at those segments which offer us value chain benefits and strong growth. The flavoured milk segment fits in well with our wide distribution network and a strong projected growth rate of 20% per annum in future. With an extensive distribution network of over 50,000 retailers, 250 stockkeeping units (SKUs), 550 distributors and 32 CNFs across India, we are well placed to make Power Sip a successful national brand.” The release said Vadilal has strong backward linkages with the farmer community for milk procurement for ice creams at its plant near Ahmedabad. From a small outlet in Ahmedabad over 80 years back, Vadilal Industries Ltd has today emerged as India's second largest ice cream player. The company is also one of the largest frozen processed food players in India with significant exports of frozen vegetables and ready to eat snacks, curries and breads.

Indian ice cream market to grow of 17% during 2012-2017

ncreasing affluence, a large young population, product innovation, growing institutional sales, etc. are expected to be the catalysts in driving the Indian Ice Cream market in the coming years. Research firm IMARC Group expects this market to grow at a CAGR of 17% during 2012 - 2017, according to its latest report titled “Indian Dairy Market Report & Forecast: 20122017”. The report which has done a comprehensive analysis of the Indian dairy market expects the share of the organized sector to increase significantly in the coming years. According to an analyst at IMARC Group, “Although, the unorganized sector currently accounts for a larger share of the Indian ice cream market; it is shrinking considerably in the urban areas. In the rural areas, however, kulfis/ice creams made by

Oil & Food Journal Dec 2012

small/cottage industry are popular. In small towns and villages, there are thousands of small players who produce ice creams/kulfis and cater to the local demand. The market for the organized sector is restricted to the large cities in the country. In the coming years, however, the penetration of organized players such as Amul and Kwality Walls are expected to increase in the rural and semi u r b a n a r e a s a s w e l l ” . According to the report, a notable shift in the consumption pattern of ice creams in India has been from impulse purchase by youngsters as fun food to its regular use as a dessert. Driven by this rising trend, the report found that the share of take-home sector over the last five years has increased significantly and currently accounts for more than 60% of the total ice cream market in India. This

study, an updated and far more extensive and analytical version of our popular 2011 study, provides and draws upon a comprehensive analysis of every major dairy segment in India. The study, which has been undertaken using both desk research and two waves of qualitative primary research, has analyzed three aspects of the Indian dairy market. The first section quantifies the Indian dairy market into fourteen major segments and investigates the current and future opportunities in each of these segments. The second section provides an in-depth understanding of dairy consumption patterns among Indian consumers and the potential of value added dairy products. The third section investigates into the usage of natural colouration in dairy products and evaluates their current and future potential.

Oil & Food Journal Dec 2012

Starbucks

Starbucks in India! BY: Basma Husain

Oil & Food Journal Dec 2012

he unquenchably ambitious coffee chain opens its first store in the world's second-most-populous nation. It faces some cultural challenges but at the same time it senses absolute acceptability from the new generation. This much-hyped Caffeine rush in India is unbelievably true! The success story is brewing perfectly as India's coffee shop industry witnesses an incredible growth rate of 25 per cent per annum in last few years!

Starbucks Remember the 'Nukkad ka chai wala', who's used to be the real place to hang out for college guys and elderly alike? It was the place for all gossips and sharing; a little rain made the corner all too romantic. And the best was its budget appeal – 2 cups of tea and even pakora to go along with – all this for less than 20 bucks. And suddenly the scene changes to Starbucks culture! The 21st century Indian prefers to sit in a lavish coffee shop and enjoys observing the hottest and coolest crowd of their city in that mesmerizing ambiance. The menu serves a range of coffees from mochas to lattes, iced coffees to espressos and many more which not many can pronounce. Every beverage is highly priced, but no one seems to mind. And why would they? It's not just the coffee that they are enjoying; it's the coveted moments of socialization complemented with a lot of status appeal. It all started with Bangalore-based Cafe Coffee Day, the coffee invasion continued with a few more chains like Barista Lavazza and Costa Coffee joining in, the local cafes also became hotter than ever. The aromatic journey has just entered an intense phase as Starbucks, an American chain, opened its first outlet in Mumbai. With Mumbaikars lining outside the maiden joint, one can safely assume it's more than just Coffee that attracts people to a Café! Starbucks opened its first outlet in India, a cavernous, two-story building in a swank Mumbai neighborhood. It is perhaps the most elegant, beautiful, dynamic store opened in the history. Perhaps part of that confidence comes from the growing appetite for coffee in India. The store is part of the chain's broader push to expand its presence in emerging markets -- seen as the most promising areas for growth, given Starbucks' super-saturation in the States and Europe's entrenched cafe culture. But breaking into new countries requires a little more finesse than simply showing up. Starbucks had been trying to crack the code in India for a while and decided early on they needed to enter India with a

Oil & Food Journal Dec 2012

local partner, as they did in China. And they actually saw the need being fulfilled the day they met Tata. The company, at present is not willing to comment on expansion targets, Starbucks' presence in other markets definitely implies that they are here to achieve an interesting scale. There are more than 700 outlets in mainland China and 1,000 in Japan. While those numbers are dwarfed by the over 10,000 outlets in the United States, Asia has emerged as a key driver of growth. Asia and the entire Pacific Rim present one of the most significant growth opportunities within Starbucks Coffee Company and India is at the core, along with China. The partnership with Tata has brought Starbucks access to some prime real estate for its outlets. The Elphinstone Building, for example, is owned by Tata Sons, the holding company that controls the Tata Group. The Taj Mahal hotel, site of the second shop, is also a Tata property. It has also enabled Starbucks to enter a market with a locally grown and roasted espresso for the first time. The "Indian Espresso Roast" is sourced through an agreement with Tata Coffee, a sister company to Tata Global Beverages. Starbucks definitely did have big plans for India.Starbucks Tata Group, had announced ambitious plans to open 50 stores in the country by the end of the year and speculated that they could one day have as many as 3,000 outlets here. However, those goals have been scaled back, with current ones calling for two more Mumbai stores before the end of this year and one in New Delhi, the capital, by early 2013. The company is apparently just being careful. India already has coffee chains, which reportedly sell beverages for less than Starbucks. Plus Starbucks' profit margins in India are smaller: It's selling its products at a significant discount so prices are more in line with Indian standards. Starbucks does not shave prices at its franchises in China, which is expected to become the company's second-largest market in a matter of years. So does India's Starbucks differ from the

company's other stores? For one thing, the coffee is made "from beans grown and roasted in the country," giving local customers a "distinct Indian blend, according to the marketing guys of starbucks. The company will have products U.S. consumers know, as well as some for the Indian market. Starbucks says: The extensive product portfolio includes Starbucks signature espresso-based beverages, as well as Starbucks VIA Ready Brew and Starbucks Reserves. The store will also offer Tata Tazo and Himalayan mineral water, and its broad food offering boasts a wide selection of 42 items; Western favorites and a menu that is tailored to Indian tastes, featuring items like Chicken Tikka Panini, Elaichi Mawa Croissant, and Tamarind Peanut Chicken Calzone, Tandoori Paneer Roll, and the signature Star Club. "The trademark Chai Tea Latte is in the menu although . . . to Indian ears, this (translates as) 'tea tea latte. Unlike Europe, where Starbucks has foundered on entrenched cafe cultures, India is full of young people looking for an unintimidating place to hang out, away from the prying eyes and cramped quarters of home. Retail consultancy Technopak Advisors predicted that in India's $230 million cafe market will swell to $410 million by 2017, with the number of cafes rising from 1,950 to 2,900 in the next five years. Nation rightly labeled as tea-addict is suddenly going crazy over Coffee! Simply because the world's favorite drink, Coffee, is fast emerging as the best drink to sip together! Definitely, it is the experience! India's coffee culture is now synonymous with socialization. Tea is something we drink at home, but coffee, mocha or latte, has now become a status symbol. That very much explains the recent trend of mushrooming cafes in almost all cities of India. Coffee becomes the beverage meant to be sipped while meeting, discussing, dating and, yes, while chilling out! And what other place then the daddy of coffee shops – the starbucks.

Oil & Food Journal Dec 2012

Health Canada Approves

Companies Gear Up As

Health Canada Approves Stevia

As Additive For

Food And Beverage Use

n November 30th Health Canada approved the use of stevia as an additive in food and beverage products, which means new markets are opening for growers, producers and manufacturers of stevia. It also means that Canadians, especially the 9 million diabetics or pre-diabetics, can now enjoy the benefits of stevia with its zero calorie and zero glycemic index. Prior to November 30th stevia was only available in Canada in natural health products. Health Canada received three separate food additive submissions for approval for the use of steviol glycosides 24

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as a tabletop sweetener and a sweetener in a variety of unstandardized foods. With Health Canada's approval stevia continues its growth to be the worldwide natural zero calorie alternative to sugar, high fructose cornsyrup and artificial sweeteners, such as aspartame and Splenda. According to Elaine Watson at Food Navigator within the next few months new markets will open for stevia, such as India, Thailand and South Africa as they are expecting regulatory approval. With the large populations of the new markets slated to open, and the growing consumer demand for healthy

alternatives to sugar - this will be a huge win for stevia producers. At this time stevia's largest market is the U.S, though sales in Europe, Mexico, China and Brazil are expanding. And now with Canada's approval, companies should soon be clamoring to get its stevia-based products on grocers' shelves as quickly in 2013 as possible. So how can an investor profit from stevia's popularity and growth? The major bottlers such as Coca-Cola (KO) or PepsiCo (PEP) are already using stevia as a sugar substitute in a number of their products, and it appears they will

Health Canada Approves continue to add more to their low calorie or zero calorie pipelines. However, since the two bottlers control such a high market share already, it probably won't affect the stock price as it would smaller companies. Following are some companies that could see their stocks move upward. The list includes growers and producers focusing on developing a sweeter stevia product, or food manufacturers and bottlers adding stevia to more of their product lines. Monster Beverage Corporation (MNST) is hardly considered a small company, but it is in a great position to benefit from the Canadian approval with its line of stevia-sweetened Blue Sky Sodas and Hansen's low calorie juices, which are already on the market. Monster is the leading distributor of energy drinks with its line of Monster Energy, Java Monster, X-Presso Monster, as well as soda and juices through its Hansen's, Blue Sky sodas, and Hubert's Lemonades. Monster carries a diet energy line, Monster Zero Ultra, Monster Low carb, and Monster Absolutely Zero, all sweetened with the artificial sweetener Acesulfame - K. With the changing consumer demand for a healthier alternative to sugar, Monster may want to look in its rear view mirror at Starbucks'(SBUX) energy drink, Refreshers, which is a natural product and uses stevia as its sweetener. It may start catching up, as it becomes a more desirable choice for the new generation of consumers. With countries approving stevia's use, it also gives Monster a golden opportunity to enhance its product line and attract new customers with a healthy alternative. Stevia is not new to Monster; it is already used it in many of its products. Time will tell if Monster will set itself apart from the rest of the field and develop more products, especially its diet Monster energy drinks, sweetened with stevia. Monster Beverage is an $8.84 billion market cap company. Even though the stock has been hammered over the past six months, down over 30%, partly due to the tragedy of the 14-year old girl who died after consuming two Monster Energy beverages, it still has a rather high P/E ratio of 28.4 compared to the 25

Oil & Food Journal Dec 2012

industry sector average of 15.1. Monster Beverage announced its net income rose 5% in the third quarter, to $86.1 million, or $0.47 per share, from $82.4 million, or $0.44 cents per share. Revenue, which rose almost 30% in the last three quarters, increased to $541.9 million from $474.7 million. Some analysts are beginning to think that the worst may be over for Monster, and on Dec. 6th Consumer Edge Research upgraded Monster from a neutral to an outperform. It will be interesting to see if other analysts follow suit, as the overall rating still remains neutral. Earlier this year there was some talk about a takeover target by Coca-Cola, which helped the stock price to raise over $83.00 per share. However, Coca-Cola quickly squashed the rumors, perhaps due to Monster's high multiple. Now with the stock price down to $51.54 per share, its multiple lower, and its price-to-book valueat 9.94 being well below the industry average of 25.1, it may be time for Coca-Cola to re-examine its interest in the company. If so, I'd look for the stock to rise again. Sunwin Stevia International (SUWN.OB), based in Qufu, China, a vertically-integrated manufacturer of stevia products and traditional Chinese medicines, announced the installation of new high-tech production lines to expand its stevia production capacity to 1,300 metric tons, including 500 metric tons of high-grade stevioside

Rebaudioside A (Reb A), and 500 metric tons of steviosin, a stevioside extract used by the pharmaceutical industry. Sunwin began its expansion project in April anticipating an improvement in demand for stevia as a healthy low calorie sweetener and is now poised to capitalize on the industry's upward trend. With Canada's approval of stevia, it becomes apparent that the company was correct as stevia continues to grow in worldwide acceptance. Sunwin's new stevioside extraction line uses a state-ofthe-art crystallization process that substantially reduces the production time while increasing product yield leading to a substantial reduction in overall processing costs as utilization rates increase. Sunwin has begun trial production of its new lines and anticipates its added production capabilities to be fully operational in the first quarter of 2013. In August Sunwin entered into a worldwide stevia distribution agreement with WILD Flavors, giving WILD a non-exclusive worldwide right as a distributor to market and resell all Sunwin stevia products. Sunwin is also developing 6 new formulations in conjunction with WILD with the goal of penetrating the $10.3 billion Chinese bakery market by marketing to manufacturers to develop private label products - a move that the company sees will bolster its domestic production base in China.

Oil & Food Journal Dec 2012

27 Oil & Food Journal Dec 2012

Health Canada Approves Sunwin, with a market cap of $45.1 million, has had an impressive 3-month run, up 30% to $0.27 per share, but still off its 52-week high of $0.35 per share. In the past week of trading, its volume has risen to an average of 41,000 shares traded daily. I like the aggressiveness of Sunwin, and its timing appears to be spot on, especially with Canada's announcement last week. Given the continued expansion of stevia globally, Sunwin may well be one of those small companies that may benefit shareholders with impressive stock gains if its success continues. Stevia First Corp. (STVF.OB), an earlystage agribusiness based in Yuba City, CA, may be poised to benefit heavily from growth of worldwide stevia use even though it has not sold any product as of yet. Stevia First's goal is to develop high-quality stevia at a highly competitive price. It is developing its stevia product using two completely separate methods designed for two completely different customer bases. The first is an industrial-size organic stevia farm in the U.S. This can be very lucrative considering that in 2010 organic food and beverage sales were at $26.7 billion, and in 2011 these sales grew to $29.9 billion. And as of now there is only one organic stevia farm for the industry, and that's in China. Stevia First's other method of producing highgrade steviol glycosides is through a yeast fermentation-based process it licensed from Canada's Vineland Research and Innovation Centre. Even though stevia can be up to 300 times sweeter than sugar, there is actually very little of the sweet components in the stevia plant. The necessary extraction and purification of the stevia account for about 70% of the production costs. The controlled fermentation process makes it possible to convert low-cost plant materials into sweet steviol glycosides, and the process could bypass or significantly diminish the need for stevia leaf production altogether. This process has great potential for the company because, once operational, the fermentation process can ensure a consistent supply of stevia that is not dependent on weather or soil conditions. 28

Oil & Food Journal Dec 2012

It can also produce a consistent tasting stevia from batch to batch, plus the process may have the ability to develop new characteristics in the strains of the Reb A that would be sweeter while weeding out the less desirable characteristics, such as bitterness or the lingering aftertaste. This fermentation method, once operational on an industrial scale, should afford Stevia First to bring its stevia to market at a much lower price than farm-grown stevia. That alone should interest manufacturers and producers that could then manufacture their own stevia-based products at a lower cost. The question is, with stevia being a hot commodity, why isn't Stevia First

rushing its production to get a crop in the ground and take advantage of the growing interest in stevia? The answer can be found in an earlier interview with Stevia First's CEO Robert Brooke: "Our goals are not geared towards short-term crop production, but towards building a sustainable stevia industry in the U.S. We are working to create the plant and practices desirable for farm-based stevia production, and also speed the emergence of fermentation-based production methods, since we see large markets for products derived from each." Mr. Brooke went on to explain: "So rather than focusing on small-scale commercial stevia leaf production to make a few bucks in the short-term, our efforts are directed towards building sustainable competitive advantages that will enable us to compete favorably in the long-term with overseas stevia growers and producers."

Stevia First has a market cap of $21.27 million, and its shares trade just below $0.40. The stock has been stagnant lately due to the lack of news coming from the company. However, Mr. Brooke did present an overview of Stevia First's growth strategy at the 5th annual LD MICRO conference on December 5th in Los Angeles. So hopefully there will be some news soon about how the company is advancing. What I find interesting about Stevia First is not that it plans on being a vertically integrated stevia company, but the two methods it plans on developing the actual stevia. The reason I look favorably on its methods of developing stevia is because, even if the company ends up not being a verticallyintegrated company and just focuses on producing stevia and selling its product to companies like PureCircle, Cargill or Kraft (KRFT), that alone should could make Stevia First a successful company. However, if its fermentation process becomes successful, I think stevia First could be primed for a buyout by one of the larger manufacturers. For those two reasons alone, I see that stevia First has a lot of potential for growth with the expanding stevia market, and this stock is worth a look at. With Canada's approval for the use of stevia in food and beverage products, and the outlook of other countries soon approving the use of stevia, there are a number of companies that should benefit from the growth in stevia, including the latter three discussed above. I think Monster will continue to grow and could be a candidate for a takeover bid in the future. I also think it is the least risky of the companies mentioned. However, I think Stevia First has the potential to be biggest mover percentage-wise if, or when, it gets its production off the ground. But, caution is advised: Microcap stocks can be volatile - they offer huge upside potential and corresponding downside risks. These three companies offer good currentlevel entries for various levels of risk. Interested investors are advised to perform additional research to ascertain which, if any, of these fit their investment criteria.

News

India and international year of cooperatives

he United Nations has declared this year as the International Year of Cooperatives. FAO chose for the World Food Day on October 16, the theme “Agricultural Cooperatives — Key to Feeding the World”. According to FAO, cooperatives across all sections provide over 100 million jobs around the world, 20 per cent more than multinational enterprises. In 2005, the Indian Dairy Cooperatives, with 12.3 million members, accounted for 22 per cent of the milk produced in the country. Sixty per cent of members are landless or have very small plots of land. Women make up 25 per cent of the membership.Cooperative credit societies are performing a valuable role since they extend credit to farmers at a low interest rate.They occupy 7.4 per cent of the financial space in the economy according to B Y e r r a m R a j u . Raju also points out in a recent article (Inclusion, July-Sept 2012) that there is an unfortunate fall in the share of cooperatives in the rural credit market from around 62 per cent in 1992-93 to about 34 per cent in 20022003. The Constitution (97th Amendment) Act 2011 enacted by Parliament is designed to aid the promotion, ownership, control and management of cooperatives by members and seeks to reduce state control in partnership. It is to be hoped that all state governments will formulate new Cooperative Acts in line with the 97th Amendment before too long. Yerram Raju also points out that while there are as many as 97,410 cooperative banks, of which more than 98 per cent are rural cooperatives, barely 50 per cent of them are active in the rural credit system. The National Commission on Farmers called for the revitalisation of the cooperative credit system and suggested that the rate of interest should be 4 per cent for loans extended to f a r m e r s . Some state governments like Madhya Pradesh are giving loans at interest rates even lower than 4 per cent. The rejuvenation of the cooperative credit system is essential for achieving the goal of “financial inclusion”. In addition to the financial sector, there is need for cooperatives both at the production and post-harvest phases of

Oil & Food Journal Dec 2012

f a r m i n g . Thanks to the late V Kurien, and the late Tribhuvandas Pa tel, the cooperative sector assumed a dominant role in our dairy industry, particularly in Gujarat. The Gujarat Cooperative Milk Marketing Federation is one of the largest organisations of its kind, handling nearly Rs12,000 crore worth of dairy produce. 'Amul' has become a household name. Kurien rightly diagnosed that a major ailment of the cooperative sector is the absence of professional management. He had difficulty in finding competent managers for the new dairies set up under the Operation Flood programme. This led to the organisation of the Institute of Rural Management at Anand. He also set up a Vidya Dairy in the Anand Agricultural University. This is a unique training school imparting practical experience from milking to marketing. In our country, with a very large number of small and marginal farmers and with the growing feminisation of agriculture, the cooperative pathway is the most beneficial one for enhancing rural livelihood and nutrition security. The achievements of the dairy sector provide many lessons to policy makers such as the following: First, there is need for an end-toend approach for ensuring the success of the dairy or other farm enterprises. Convergence in the provision of services relating to breeding, nutrition, healthcare and processing and marketing is an essential requirement for success. Second, a quality literacy movement should be launched to spread knowledge of Codex alimentarius standards of food safety as well as animal hygiene and sanitation. Third, cooperatives should be professionally managed and authority and accountability should go together at all levels. Fourth, human resource development is important both at the farmer and professional levels. Farmer level capacity building can be done in Krish Vigyan Kendras, Vidya Dairies, as well as in the farms of outstanding dairy entrepreneurs (farmer to farmer learning). Fifth, public policies in the fields of import and export of animal feed (concentrates), input and output pricing and investment and infrastructure development should ensure the

sustainability and survival of small-scale dairy farming. Finally, the fact that women play a pivotal role in dairy farming should be kept in view, while developing support systems. Gender specific needs, such as creches for infants and medical help for adults should be met. Among outstanding examples of the success of cooperatives, mention may be made of the Indian Farmers Fertiliser Cooperative (IFFCO), which is a unique venture with 39,824 cooperative societies as members. The Krishak Bharati Cooperatives (KRIBHCO) has become the world's premiere fertiliser producing cooperative. NCF has suggested that even where cooperative societies do not function well, cooperation can be promoted among farming families in a village based on shared goals and enlightened self-interest. The self help group model which is now helping women to get the power of scale in small scale enterprises could also be adopted in farming. Farmers can form eco-societies, which will ensure that environmentally benign technologies like integrated pest management, integrated nutrient supply and scientific water management are adopted. Contract farming is another pathway for providing the advantages of group cooperation in production and marketing. Section 25 companies can also be promoted where farmers are engaged in enterprises such as hybrid seed production and the manufacture of the biological software essential for sustainable agriculture. We have nearly 25 per cent of the world's farmer population and poverty and malnutrition are widely prevalent among marginal, small farm and landless labour families. Farm size is diminishing and prime farmland is being sold for nonfarm purposes. A socially viable method of getting small scale producers together, either in the form of cooperatives or selfhelp groups is urgently needed to maintain young farmers' interest in farming. If farm economics or ecology go wrong, nothing else will go right in agriculture. (M S Swaminathan is an agricultural scientist who led India's green revolution )

Oil & Food Journal Dec 2012

FDI In Retail

The Implementation of

FDI In Retail A Debate of Blame,

Power And Triumph The future is rarely a linear extrapolation of the past. Circumstances change and new challenges arise. Hence it is important to identify challenges of the future and start working now to meet them.

olitics and publicity run on the same track. BJP's top notch leader Sushma Swaraj in the utmost foray to impede the implementation of FDI in retail used her position to play blame game and tarnish certain Multinational companies that actually benefited the Indian immensely. The issue of multinationals acting against the interests of the Indian farmers has been debated over the time in the wake of the government's proposal to introduce 51% foreign direct investment in multi-brand retail sector. BJP has been opposing the move to introduce FDI in multi-brand retail since the government had introduced the thought of FDI in retail. Whatsoever wasn't it the NDA who has cultivated the

Oil & Food Journal Dec 2012

FDI In Retail idea of FDI in this regime. Sushma Swaraj known for her orating ability was put in the front by the opposition to foil of this investment. Ms Swaraj, blamed and cited that PepsiCo as an example of how multinational companies short-change Indian farmers on one pretext or the other. She pointed out that PepsiCo sourced most of the potatoes needed for manufacturing chips from abroad, saying Indian potatoes were not large enough for the size of chips it produces. In fact, the argument over potatoes resulted in some hilarity in the House when Congress MP D S Hooda claimed that farmers in his native Haryana were ready to provide 24-inch-long potatoes for PepsiCo's chip-manufacturing plants. Taking a swipe at the young parliamentarian, Swaraj had remarked: So excited is he at eliciting support for the Congress's FDI proposal, he is ready to grow a two-foot potato! I hope he can tell the difference between a potato and a bottle gourd. Multinational food majors McDonald's, PepsiCo and KFC got a taste of real Indian politics when Parliament started a debate on allowing FDI in multi-brand retail where the ruling front and opposition traded charges that left the US firms upset and dumbfounded. The FDI debate left a sour taste for McDonald's, Pepsi, KFC and many multinational companies. McDonald's refuted Sushma Swaraj's allegation that the fast-food giant does not source even basic commodities such as potatoes from within India, while PepsiCo issued a clarification that it is the largest procurer of potato in the country. KFC, which is on an expansion spree in India, did not comment, but it must have been shocked to hear communications and IT Minister Kapil Sibal say, "Many said KFC will drive the dhabas out of the market. Dhabas have driven out KFC. Sushma Swaraj had alleged McDonald's about their fries, saying that they never buy potatoes from local Indian farmers, saying the potatoes are too small here. But in a rare instance of 33

Oil & Food Journal Dec 2012

a multinational refuting a politician, McDonald's India (North and East) in a press statement said: "We confidently and proudly state that ingredients used in our products are sourced locally that includes the French fries. McDonald's India, said it was honoring a prior investment commitment with the government that it would source its entire raw materials from the country. And import only on rare occasions when local supplies ran out. Swaraj's subsequent attack, while opposing the government decision to allow foreign supermarket chains to open stores in India, was on PepsiCo, commenting that, "Pepsi promised to buy potatoes and tomatoes from farmers (in Punjab), but backed out later." In its defense, PepsiCo India, the largest snacks player in the country, said that it sources all its potato requirement from within the country and works with over 24,000 farmers across nine states including West Bengal, Punjab, Gujarat, U P, Maharashtra, Karnataka and Bihar. According to PepsiCo, they are the largest procurer of potato in India and procured 240,000 MT of potato from Indian farmers in 2012, which is more than double of had been procured five years ago. This giant company has set up a state-of-the-art potato seed facility in Punjab and all the seed is provided to farmers across the country is grown by Punjab and Haryana farmers.

PepsiCo works with farmers throughout the crop cycle â&#x20AC;&#x201D; providing quality seeds, technical expertise, facilitating loans from banks, harvesting expertise etc.â&#x20AC;? PepsiCo has been operating in India since 1989, has significantly expanded its footprint in India and currently has 38 beverage bottling plants and three food plants. With several food and beverage brands in the country, PepsiCo is estimated to have about eight Rs1, 000 crore brands. Amid the controversy over the way multinational food and beverage companies have been importing critical raw materials instead of procuring them locally, PepsiCo, the soft drinks and snacks giant, said it would double the procurement of potatoes from Indian farmers from the current 2.4 lakh tonnes over the next five years. This company has been working with about 24,000 farmers and last year we procured about 2.4 lakh tonnes of potatoes through contract farming. PepsiCo will continue this program and now trying to expand the programme in order to double the procurement over the next five year. This company has contract farming arrangements in about seven states and is now said to be focusing on expanding its procurement process in the Indian agriculture sector. Before commenting on basis of certain irrational facts, this opposition leader of Lok Sabha should have made an

Oil & Food Journal Dec 2012

FDI In Retail effort to find and understand what PepsiCo has done in helping farmers improve yield and income: The company' has created a costeffective, localized agri-supply chain for its business by building a stature as a development partner by helping farmers grow more and earn more. It introduced new high-yielding varieties of potato and today PepsiCo India has introduced world-class, top-quality, high-yielding potato varieties. Highyielding potato seeds have allowed farmers to produce world-class potatoes and obtain higher returns. Also by introducing sustainable farming methods and practicing contact farming this company has provided world-class agricultural practices available to farmers and helping them raise farm productivity. In fact its biggest highlight is that this company believes in working closely with farmers and state governments to improve agri-sustainability and crop diversification and also facilitating financial and insurance services in order to de-risk farming. PepsiCo pioneered contact farming in order to improve the performance of a tomato processing plant in Punjab; it imported and tested high-yielding varieties that thrived best in India. Consequently, yield improved by over

300% and the length of the tomato season more than doubled, resulting in a substantial increase of farmer incomes. Today, the success of contact farming has spread and PepsiCo engages with over 22,000 farmers across the country to grow a variety of crops. Through this partnership, PepsiCo has transformed the lives of thousands of farmers by helping them refine their farming techniques and raise farm productivity. KFC is now a prominent presence in Indian cities and towns. The red and white signboard has become evidently even more visible. Yum! Brands, the parent company that owns the KFC brand, has set in motion an expansion plan to open 500 stores by 2015. It isn't being over-ambitious. About 1,800 people visit each of the 190 existing restaurants every day. In December alone, there will be 40 new KFCs popping up all over the country. Despite the fact that there are less than 200 outlets now, India is expected to be such an important market that Yum! Brands India reports directly to the headquarters in Louisville, Kentucky. So Kapil Sibal's statement seemed quite contrary to the statistical figures. Though KFC declined comment on Sibal's statement in the parliament, the truth is that the chain has been

expanding furiously and has already become Yum! Brands largest-selling fast food chain, overtaking Pizza Hut. Also, Yum! expects KFC to account for 60% of the $1 billion sales that the company is expected to generate by then. Ultimately the research done by opposition to stop FDI in the retail sector, was not apt. Ms Swaraj did try to blemish these companies and their effort t to directly benefit the farmers. Today we need capital and funds as well as world class agri â&#x20AC;&#x201C;businesses to compete. No doubt, the entry of FDI in this sector can definitely bountifully position the agri industry in the top notch level. FDI would also be benefiting the Indian farmer immensely without the intervention of the middlemen. Alas the FDI has been passed in the parliament, what else is left to say! Except, it is an important thing. It will boost the government's confidence to implement key economic reforms and would definitely help the government in passing the other important and pending reform measures very quickly Indian industry has welcomed the approval accorded by Lok Sabha to FDI in multi-brand retail, saying it will send a strong signal to foreign investors and enable the government to take up further economic reforms. FICCI â&#x20AC;&#x201C; The association of associations has hailed this development and fully supports the government. The country needs to move forward and it's high time to send a strong signal to foreign investors. FDI will introduce new technology and investment in marketing agricultural produce. India must take full advantage of modern technology and operational and management experience of big supply chains in the food retail business to make this happen. The future is rarely a linear extrapolation of the past. Circumstances change and new challenges arise. It is, therefore, important to identify challenges of the future and start working now to meet them.

Oil & Food Journal Dec 2012

News

SC seeks records of food safety panel on soft drinks

he Supreme Court sought records of a Food Safety and Standards Authority of India's (FSSAI) committee which said carbonated beverages do not pose health

hazard and there were no benzene residues in the soft drinks. Justice K.S. Radhakrishnan and Justice Dipak Misra called for the records of the FSSAI's technical committee after counsel Prashant Bhushan said the authority's Sep 12 order was given by its committee on advertisement and labelling, not by the scientific panel on food additives. As Bhushan focused on the health hazards of carbonated beverages, Justice Radhakrishnan observed that the "best course is to educate people not to consume beverages." 37

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"All cricketers are promoting soft drinks on television," he said. Assailing the order which was submitted to the court, Bhushan said the order, issued Sep 12 by FSSAI assistant d i r e c t o r Kamal Kumar, was like affixing the authority's stamp on a report by soft d r i n k manufacturers . Bhushan, appearing for petitioner Centre for Public Interest Litigation, told the court that the order said benzene residue in carbonated beverages was formed only under certain conditions when agents like benzoates and ascorbic acid were present together with heat, ultraviolet light and metallic ion mixture. "However, in the absence of benzoic acid and ascorbic acid together, benezene residues are not generated (in carbonated beverages)," the order said. It said that according to studies by Indian Council for Medical Research, the consumption pattern of the beverages was only 500 ml per day in a "worst case scenario which do not appear to pose any

health hazard." The order said Indian Beverage Association had confirmed to the FSSAI that in India, benzoic and ascorbic acids were not present together in the beverages. Seeking the minutes of the technical committee which had a hearing for eight days, Bhushan asked if the FSSAI had itself done any test to determine the presence of benzoic acid in carbonated beverages. Bhushan told the court that the FSSAI was not accepting the findings of its own lab in Ghaziabad. Senior counsel K.K. Venugopal, who appeared for one of the respondents, told the court that all the prayers made by the petitioner NGO have been satisfied after the union government enacted a law comprehensively addressing the issues raised in the petition. He told the court that it was nearly eight years since the court was seized of the matter. Additional Solicitor General P.P. Malhotra, who appeared for the government, said the technical committee was authorised to look into the additives. He said Bhushan had appeared before the committee on five occasions but had never raised this objection. However, Justice Radhakrishnan said the issue raised by Bhushan was serious and called for the records of the meetings of the committee.

Exclusive Interview

opariwala Exports has been associated with the food industry for more than 40 years. The firm has a prominent range of unmanufactured and manufactured Tobacco, Oil seeds, spices and fresh cut flowers. The company has 6 world class processing and packing facilities spread over an area of half million sq. ft. The company ensures that all shipments are carefully packed in tamper-proof containers and shipped to various destinations. The agro produce itself is subjected to a series of rigorous quality tests before being sent out and constant innovations in production technology are adopted enabling them to cater to the demands from customers in more than 60 c o u n t r i e s s u c c e s s f u l l y. In the tobacco space, Sopariwala Exports accounts for an average of 85% of the exports of sun-cured tobacco. Additionally the company is one of the leading manufacturers and exporters of Sesame Seeds (Hulled & Natural) & Spices from India. With several decades of expertise, they have managed to build a global network with committed assurance to deliver the finest value product to customers. To certify the credential stature Sopariwala Exports Pvt Ltd has already been honoured with several Certificates of Excellence & Awards from State and Central Government of India. Arif Fazlani, Vice Chairman & Managing Director, Fazlani Group, briefed our Editor Firoz H Naqvi about his company in the below interview.

Our focus is to provide better products & services

and expanding into more markets

Oil & Food Journal Dec 2012

Exclusive Interview Sopariwala Exports has been in the business from couple of decades now, how has been you journey so far? I always believe in coming together is the beginning – staying together is progress working together is success. It has been a satisfying journey with excellent growth, spiced with challenges to overcome. Business must diversify as times and markets demand and we are now into Natural and Hulled Sesame Seeds, Oil seeds, Spices, Pulses, Floriculture, Seeshah (water-pipe), Ready-to-Eat consumer packed food products for the hardpressed-for-time new generation of the cities and towns. Commitment to excellence in all spheres has lead to gratifying growth in the last three decades, and we crave for more. Growth demands more growth, and that must always be so; and we assure ourselves that we shall never be satiated. You have shifted you business from a core Tobacco Company to an agro produce processor cum exporter and then in floriculture, can you please brief us about your each business in brief? Consumer is the sovereign and his demand always changes with change in time. Today's consumers demands products in different tastes and flavors, apart from looks. So in tobacco itself we have launched molasses in different flavours which are witnessing 100% growth in past five years and different items like chewing tobacco of different tastes and types, and for herbals molasses, flavoured hand rolled tobacco which is called beedies for special markets, smokeless tobacco, Sheeshahs and water pipes. From tobacco, we ventured to agricultural products like natural sesame seeds and hulled sesame seeds, spices, pulses, etc. This is a market where the product must be of hygiene and meeting

health standards of different countries, where one has always to be extra careful, and where competition is tough. Our exports have almost quadrupled in past five years & we are proud to be the only approved vendor in India for the largest bakery in United Kingdom. Floriculture had been entirely new field & we have been directly supplying our products to world largest retailers which by itself are no small achievement as these retailers have very high standards and not every company is able to meet them. Not only that the products must be excellent quality, one has always to be on his toes for timely delivery due to the perishable nature of these products. We also ventured out to others countries and we have our associates at Malaysia, Singapore and UAE and they are doing admirably at those places. Recently you have been awarded Silver Trophy for Agricultural & Plantation Products by Federation of Indian Export Organizations (FIEO), how do you feel after this? And how you company will prepare for next level of awards? The work is a reward in itself for us yet we are very excited & happy on receiving the support and recognition from FIEO; and we are now focussing to go higher and higher! With many developed nations experiencing a difficult period, and several developing countries slowing down, I am aware that our journey will not be so easy. But there is demand for quality products with fast deliveries. We look to increase our share of exports in the growing markets of Latin America as well as to Australia and some other fareast markets. Our focus would be towards providing better products, reaching and expanding more markets along with better services & we will hopefully reach our goal. What are you future plans for further expansion and investment especially in India? Indian middle income class, who are busy, running and hard-pressed for time is large and expanding. They need hygienic food, which can be prepared in least possible time. We see large scope for ready to eat foods in India. We are already

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in metros with our products and plan to market pan India in the next one or two quarters. Our products have received good response in UK and New Zealand markets wherein these products were launched six months ago and we look to e x p l o r e m o r e & more markets in days to come! At the same time, we plan to double our capacity in our existing line of business such as flavoured molasses and chewing tobacco as well as in manufacturing of Hulled Sesame Seeds wherein we are seeing tremendous potential and witnessing stupendous growth! What are your focus regions for the export of sesame seeds in the global market? And how much is your total export of this sesame & spices? Our major focus is Europe, Americas and Russia. We are also developing our reach in Australia and Japan. There is substantial demand for peeled sesame seeds which keep its original colour even in higher temperature baking – we are in trial stages and hopefully should be able to commercially export this product by early next year which should help us to increase our share of exports further. Since ours is a family managed organization, I cannot provide an exact number; however our exports is in excess of USD 100 million. How much is your total processing capacity of agro products and locations you have these units? We have two units – one at Navi Mumbai and the other at Gandhidham/Kandla in Gujarat. These are state of the art plants made by Buhler – Germany and equipped with latest Bio-chromatic Sortex Z Series. The capacity at Navi Mumbai is 10 Mts per hour and at Gandhidham is 5 MTs per hour for sesame seeds and spices.

Retail

India's Retail Sector Ripe for the Picking by Freny Manecksha

anji, a slender man with a neat moustache, stands behind the counter of his kirana, a neighborhood store grandly named Ayappa Supermarket. It used to serve almost three-fourths of the lower middle class residents of the housing colony in Thane, one of Mumbai's fastest growing suburbs. As he has for 16 years, Nanji

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doles out sweets to small children returning from school and sells small tubs of homemade yoghurt to local home makers; he scoops rice, lentils, sugar, and cereals from open sacks that customers can inspect; reaches for suspended packets of branded and unbranded biscuits and snacks; and dispenses small sachets of toiletries and

detergents. F o r c e n t u r i e s , I n d i a ' s l a rg e l y unorganized and highly fragmented retail trade has consisted almost entirely of small, low-cost operations where people like Nanji fill local needs and support their families. These small store owners - together with a flourishing informal hawker sector that set up temporary stalls in alleys and street corners - have developed strong relationships with consumers to whom they can extend credit, or sell just half a loaf of bread, part of a biscuit packet, or a solitary cigarette. Then a decade ago, Indian retail corporations like D'Mart, Reliance and Big Bazar introduced hypermarkets and supermarkets that offered home furnishings, lifestyle, apparel, footwear; and most importantly groceries and food that form 70 percent of total retail sales. This evolution was almost inevitable given India's fast-growing economy. A T Kearney, a U.S. management consultancy firm, recently projected that India was destined to become a high-potential market, with accelerated retail market growth of 15 to 20 per cent

Retail expected over the next five years. But while domestic conglomerates have seized the opportunity to move into India's burgeoning cities, longstanding regulations limiting foreign direct investment have kept their international counterparts out of the estimated $500 billion market in Indian retail sales. Two months ago, after years of intense lobbying, the Indian government finally caved and agreed to allow foreign direct investment in organized retail. The news has been welcomed by international supermarket chains waiting to enter India's largely untapped market like Carrefour (France) and Tesco (Britain) as well as the Swedish home goods giant Ikea. A few international conglomerates have been preparing for this day: Wal-Mart has already taken advantage of the fact that India had no restrictions on wholesale operations by investing $100 million in an Indian partner, Bharti Retail, which has 17 cash-and-carry stores. And the U.S.-based coffee shop chain Starbucks, in a joint venture with the Tata group, opened three cafes in Mumbai this October. Neighborhood Business Collapses When the domestic hypermarkets opened outlets near him, Nanji's business collapsed by 50 percent. Now with the advent of foreign direct investment he fears that his shop's days are numbered, as well as for the thousands of small retailers around India based in the "nukkad-bania" (neighborhood trade). A few hundred meters away, Lal Mohan Yadav's position is even more precarious. The roadside fruit vendor ingeniously displays his fruits on simple plastic trays and wooden planks and his pyramids of dark red pomegranates are offset by yellow bunches of bananas. With practiced skill, Yadav plucks a tender, green coconut from the heap at his feet, hacks off the top with a quick machete stroke and offers it with a straw to a customer who refreshes herself with safe and healthy coconut water. Yadav, who has worked as a hawker here for 20 years, earns around $6 a day. Reliance's new hypermarket has has a 41

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major impact on his business, but the 46 year old vendor believes that loyal clients like Saraswati Pachane will stick with him. “I know him, and can haggle,” says Pachane, a domestic worker who earns around $250 a month. “He allows me to taste a grape or two to see if it is sweet.” Yadav's biggest complaint is not the new hypermarkets but that he is vulnerable to severe harassment and demands for "hafta" (bribes) by both police and the civic authorities because of an absence of clear-cut policies to regulate his trade. “We are seen as illegal. Police harassment in particular is growing more intense. When they raid us, we have to pay fines which amount to almost four days' earnings.” Fighting the Changes Nanji and Yadav reflect twin concerns of an informal sector that has suddenly become the focus of intense debate leading up to the Indian government decision this past September to allow 51 per cent foreign direct investment (FDI) in retail operations that sell more than one brand of products. (A clause does allow state governments to reject the majority-foreign funded multi-brand stores.) Opposition parties and even political allies of the ruling coalition have charged that the change sounds a death knell for thousands of small, familyowned shops. The outcry pressured the prime minister to respond. “In a growing economy

there is enough space for big and small to grow,” said the normally reticent Manmohan Singh said in a speech in September. “The fear that small retailers will be wiped out is completely baseless,” Singh added, predicting that the growth of organized retailers would benefit farmers and “create millions of good quality new jobs." The U.S.-based giant Wal-Mart has been singled out for criticism for unfair practices in India. In 2006 when WalMart entered India, it was limited to wholesale operations (through cashand-carry outlets) with Bharti Enterprises as a 50-50 venture partner. Indeed within days of the government's announcement to allow foreign direct investment, Raj Jain, managing director and CEO of Bharti-Wal-Mart, said that the company would be setting up its first multi-brand consumer retail store within 18 months. He tried to counter fears that kiranas would be impacted. Complaints that Wal-Mart had effectively circumvented the laws by making interest free loans to Bharti that they could convert into an ownership stake were quick in coming from a Communist Party of India (Marxist) member of parliament. On October 17, the Prime Minister's office announced a probe into the nature and manner of investments in the deal between WalMart and Bharti Enterprises. “We are in complete compliance with India's FDI laws,” the Indian unit of Wal-Mart protested to the New York Times. “All procedures and processes

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Retail have been duly followed and details filed with relevant Indian government authorities including the Reserve Bank of India (the country's central bank)." The charge that Wal-Mart is using unfair practices comes in the wake of a US investigation into allegations that the company's Mexican subsidiary bribed Mexican officials to gain market advantage. Predatory Pricing The experiences of small retailers and mom-and-pop stores around the world have demonstrated that is hard to survive in the shadow of retail giants that can afford price flexing (selling below cost), and other manipulations, as well as the simple advantage of economy of scale. For example, a UK government commission inquiry listed 27 practices by supermarkets that were deemed against public interest. This has been the complaint against one of India's largest business houses, Reliance Industries which had a somewhat rocky debut. In 2007, angry vegetable vendors in the state of Jharkhand shut down early Reliance grocery stores with violent protests and vandalizing. Taken by surprise by the backlash, Reliance now advocates “inclusive growth and prosperity for farmers, vendor partners, small shopkeepers and consumers,” and has promised infrastructure to support 'farm-to-fork' operations. Small traders say that this is doublespeak for the fact that the company's deep pockets will allow it to weather the setbacks and undercut local operations, noting that Reliance Retail has suffered losses, according to its annual report. “We are very small people who deal with distributors whilst they partner directly with manufacturers for huge discounts and offers,” says Nanji. “How can we match up? We would be keen to participate in schemes with companies, but no one bothers about small fry.” His fear was born out by a 2008 case study jointly conducted by the International Food Policy Research Institute and Michigan State University. 43

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Indian Retail Chains One of the earliest forays into multi-format retail by an Indian company was by Mumbai-based Pantaloon Retail in 1997. Its subsidiary, FutureValue is the country's largest listed retailer by market capitalization and revenue as of 2010. It operates in 93 cities and 60 rural locations, and employs 35,000 people. Future Value retail subsidiaries include Big Bazaar (set up in 2001) and Food Bazaar (2002), which sell provisions, household products, and groceries, as well as Home Solutions Retail, a furniture and electronics chain. Interestingly Food Bazaar, which has 200 stores, markets itself as combining a typical Indian bazaar with an international market by offering convenience of prepackaged commodities along with “Indian values of seetouch-feel” -- displaying staples in huge bins much just like in the kiranas. Another notable business house with an arm in the retail business is the Aditya Birla group. It ventured into food and groceries in 2007, and has expanded with hypermarkets and supermarkets under the name More stores. It has a total of 483 stores and around 9,000 personnel.

It found that prices of basic food items such as pulses, rice, flour, vegetables, and fruits were 30 percent cheaper in organized retail stores than kiranas. This kind of aggressive pricing strategy is an attempt to carve out a special niche in the market, says Chetan Choitani in his “Entry of Corporate Retail: Impacts on Hawkers and Small Retailers--A Case Study from Mumbai” for Global South India, a policy research organization. He notes that India's leading organized retailer, Future Value, branded itself with the slogan: “Isse sasta aur kahan” (Where can you get goods cheaper?) A 2007 report by the Indian Council for Research on International Economic Relations (ICRIER) found that it was the magnitude of discounts and schemes that posed a grave threat to neighborhood stores. Critics have decried these strategies as predatory. But in addition to their ability to price aggressively and weather temporary losses, the new retail formats have also been aided by changes in lifestyle and consumption habits. India's new generation of workers, employed in call centers and corporate offices, are becoming attracted to shopping in glitzy, air-conditioned malls that sell Western products that they see in Hollywood films and international magazines. There has been a spurt in sales of Western breakfast foods, branded snacks, tissues, packaged juices as well as milk and milk products even though fresh and low cost traditional alternatives are available. (It goes without saying that accompanying this shift is an epidemic of high blood pressure, diabetes and other diseases associated with Western diet and lifestyle.) Transformative Changes Ahead Competition with the modern retail chains has caused a 1.7 percent annual decline in the sales and profits of unorganized retailers as well as the closure of many businesses within a year. The ICRIER report argued that this rate of decline is likely to be short-lived. But organizations that work with small

Retail traders and street hawkers dispute the assumption that the impact is temporary. In 2009, Youth for Unity and Voluntary Action (YUVA), which works with urban communities to promote the rights of the urban poor, presented its findings before a parliamentary committee. YUVA claimed that new retail formats were displacing labor, and that global retail chains with deep pockets can sustain losses for many years until they bankrupt immediate competitors. The parliamentary report on Foreign and Domestic Investment in Retail Sector called for stringent legislation against predatory pricing. YUVA, which along with Tata institute of Social Sciences did the first survey of Mumbai's hawkers in 1996, says there is a definite economic conflict of interests between the corporate retail sector and the informal sector that make up 1.8 percent of India's urban workforce. Notably, the ICRIER report looks into financial, but not social aspects of the shift in retailing. On the other hand, the 2002 report of Second National Commission on Labour, which looked at umbrella legislation for workers in the unorganized sector, has warned of social unrest and law-and-order problems if this vulnerable sector is not protected. Significantly, many of Mumbai's hawkers and vendors are textile workers who lost jobs after the 1983 closure of the city's mills. A Need for Hawker's Rights Hawkers unions have urged the government to acknowledge their right to livelihood through speedy legislation that recognizes street vending. They have also demanded a rethink in urban planning so that development plans include space for mobile vendors and the neighborhood markets. India has a historical tradition of accommodating street hawkers who congregate in spaces where mass movements of people take place. In Mumbai these markets include a flower market under the flyover at Dadar as well as Mirchi Galli (spice market) with flavors from all over India. But in recent years, population growth and the demands of real estate have 44

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created heated competition for public spaces and land. Policies are now heavily weighted in favor of the corporate sector, says Haidar Imam, general secretary of the All India Trade Union Congress' hawkers' union. In 1998 the hawkers' unions presented M u m b a i ' s c i v i c b o d y, t h e Brihanmumbai Municipal Corporation (BMC), with a detailed proposal for developing local markets in specially reserved plots. The plan, which aimed at providing employment to thousands of people, was scuttled by the BMC officials to whom it was presented, says Imam. “We elaborated on how to acquire the land, procedures to be followed by hawkers and the charges that could be levied on hawkers depending on the type of goods sold. We even got professional expertise in designing the stalls and display of goods, but the report was never put up for consideration, and the plots we earmarked were given over to private developers.” Corporate clout is manifested in direct and invisible ways, says Raju Bhise general secretary of YUVA. Despite a 1985 court order directing civic authorities to set up hawkers zones in Mumbai, “citizen” groups have sprung up to demand evictions of the hawkers, food carts, and stalls from public spaces. In fact, Citispace, an organization backed by a powerful industrial house and various business associations, has

coordinated the fight among residents and business associations to ban hawkers zones. Another eviction tactic is beautification drives, under which the phrase “hawking menace” is freely bandied about. Bhise argues that hawkers and kiranas provide an indispensable support system by serving marginalized construction workers, laborers, and others. “Even attendants in malls are dependent on street food. In the interests of social justice, we must empower the informal sector,” he says. YUVA's Meckanzy Dabre, who works with hawkers, says that if this unorganized sector is to compete with new retailers on an equal footing, the government must speedily pass the the Street Vendors Bill that is pending in Parliament. He advocates microplanning initiatives under a National Street Vendors Policy that can facilitate hawkers thereby making cities more inclusive. “I am an honest person who is on the street because of the compulsions of rozi-roti (livelihood and food security),” says Ram Sanheri, a vegetable vendor with a mild physical disability. “Yet the police beat me up, and civic authorities threaten to confiscate our goods. Why can't the government frame policies and give us space to carry out our trade? Is this a nation only for the rich and powerful?”

News

Cadbury invents chocolate that 'doesn't melt'

adbury is producing chocolate that does not melt and can survive hot temperatures. The confectionery company's scientists have invented a new Dairy Milk chocolate bar that can withstand up to 104 degrees Fahrenheit (40 degrees Celsius) for three hours. The team of scientists figured out a way to break down sugar particles into smaller pieces, which in turn reduces the amount of fat covering them. This makes the Dairy Milk able to withstand significantly warmer conditions. However, this chocolate will only be available in tropical countries such as India and Brazil. Cadbury said: "Production of temperature-tolerant chocolate would allow production of chocolatecontaining product more suitable for hot climates, particularly in less economically developed countries where the supply chain is ill-equipped to handle temperature fluctuations." Nestlé Strengthens Global Expertise in Confectionery The company's investment in its PTC in the city of York will enable it to accelerate confectionery product development for the UK and the rest of its worldwide business. At the PTC, teams of technologists, scientists, engineers, food chemists, confectioners, nutritionists and other experts work on developing innovative ideas for confectionery, from new manufacturing, raw material processing and packaging methods, to the reformulation of existing products. Nestlé has expanded the miniature

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factory, or pilot plant, at the heart of the PTC, where new technologies are developed and tested before being used in its factories around the world. “All Nestlé PTCs around the world provide a 'critical mass' of expertise in particular product categories.” Stefan Palzer, Director of PTC York. The company has also enlarged the PTC's sensory testing facility, where panels of experienced confectionery tasters evaluate prototypes and finished products on a variety of factors including smell, bitterness or sweetness, and taste preference. The investment is one of a number Nestlé has made in its global research and development capabilities recently. Earlier this month the company opened its first R&D centre in India and the Nestlé Institute of Health Sciences in Switzerland, while in October it announced it would increase the number of R&D units it has in China from two to four. “All Nestlé PTCs around the world provide a 'critical mass' of expertise in particular product categories,” said Stefan Palzer, Director of PTC York, at the opening ceremony. “Here in York, our specialist teams develop breakthrough technologies for chocolate, wafer and fruit-based confectionery, and chocolate ingredients and coatings for ice cream products. “The expansion will enable us to intensify product and packaging prototyping using sustainable and high quality raw materials, innovative manufacturing processes and reliable and efficient equipment. “It means we will be able to develop ideas more rapidly from the initial concept to the finished product you see for a sale on a shelf.” Mr Palzer was joined at the event by David Heath MP, Minister of State for Agriculture and Food; Fiona Kendrick, Chairman and Chief Executive Officer

of Nestlé UK and Ireland, and Ciaran Sullivan, Managing Director of Nestlé Confectionery in the UK and Ireland. Nestlé's PTC in York employs about 185 people of more than 30 nationalities, including a number of placement students and apprentices. Their work is essential for the continuous improvement of the quality, texture, nutritional profile, sustainability and affordability of Nestlé confectionery products. Many employees who are recruited and trained in York will be assigned to other Nestlé operations or research and development centres in the future. The PTC in York currently offers 13 industrial Collaborative Awards in Science and Engineering (CASE) studentships with universities in the UK. These training grants, funded by the Biotechnology and Biological Sciences Research Council, provide students with research training experience through collaborations between academic institutions and partner organisations. The PTC also has a variety of research and development partnerships with other local and international universities, institutes and suppliers. It has recently been granted funding of almost GBP 1 million from the UK Technology Strategy Board for two projects to stimulate business-led i n n o v a t i o n i n t h e c o u n t r y. Nestlé's PTC in York is located on the same site as its confectionery factory that produces popular brands including Kit Kat, Aero, and Milky Bar. The extension work on the PTC was completed according to the principles of 'lean construction', a global standard for designing and constructing more efficient and environmentally sustainable buildings and systems. The PTC is designed to minimise waste of materials such as water, carbon dioxide, and energy while maximising output.

Application

Why lighting is important in machine vision applications

mages are created by a machine vision system by analyzing the reflected light from an object and not by analyzing the object itself. Hence it is necessary to understand how light will reflect from a production part that one is inspecting. For this, the material that the object is made from, its size, shape and finish need to be understood. The object's color is also important; even if the inspection system is monochromatic (a red part will reflect differently from a pink part). All of these characteristics affect how light is reflected, and may pose challenges in creating a good image. “The most sophisticated automated inspection system in the world cannot work without the proper lighting.” – quote from machinevisiononline.org Good image is the result of proper focus and illumination. Images with poor 46

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contrast and uneven illumination require more effort for the imaging computer, as it increasesprocessing time and number of incorrect image analyses. Generally, high contrast images are the easiest to process. A good image processing system is capable of recognizing the plus signs in both images. However repeatability of recognizing top image will be lower due to low contrast of this image as against the one below. If illumination is properly controlled, images should be handled by the machine vision system easily and with a high degree of reliability/repeatability. Bright images are created when light reflects off of an object and is reflected towards the camera. If the object absorbs the light, then the object is seen as dark. A machine vision system focuses on the differences between these areas to make

conclusions about edges, textures or markings that are critical parameters in the inspection operation. Types of lighting: Wavelength of light used is also an important variable in inspection process. Illumination by light of a particular color, the contrasting colors are easier to separate as they will appear dark in the image. This can be used to enhance the date codes on jar lids, for example. Infrared light can be used to highlight bruises on produce and ultra violet light will cause ink or glue to fluoresce (note that filters should be used on the camera if infrared or ultraviolet light are being used so that the fluorescence of the object can be viewed but not the light itself). Collimated light, where the light rays are aligned to be parallel, is good for

Application Consider the image below (Figure 1).

source that highlights the features or defects can be focused and cancel out the unwanted elements of the image. Lighting techniques Correct lighting technique can help in dealing with special issues of a particular application. There are five basic techniques for lighting parts to be inspected: Back lighting, direct lighting, structured lighting, and on- or off-axis diffuse lighting. Back lighting: It creates a silhouette to show shape of a part and allow for its measurement, but totally obscures all surface detail. Maximum contrast is produced that is most part black on white. Dimensional measurements can be done with this technique and is useless for surface inspection. Difficulty in fixturing is the challenge in this. Any mechanical fixture that must hold the part being inspected could obstruct the backlight.

producing sharp images (Figure 2). Diffused light, which can be produced by taking collimated light and shining it through frosted glass, gives a softer, more even illumination, which avoids causing glare or shadows at the cost of reducing the light's intensity. When inspecting parts, speed of motion of photographed part and exposure time of camera needs to be considered. These factors also affect the choice of light source. For inspection, definition of goals and focus is more important. Once the goals are understood, choosing the light

Direct front lighting: The light is illuminated from a slightly off-center angle. It is easy to set up and can create excellent contrast. But it can also create shadows, and may produce glare depending on the inspected part surface. Creating shadows may be desirable, to enhance contrast where low-contrast images are a problem. And, direct lighting may be used to freeze motion with strobes. If shadows are to be minimized, more than one direct light can be used. Some systems use a ring light, which totally surrounds the part being viewed. Structured lighting: It makes use of a

known light pattern (normally a plane of light creating a line) used to obtain dimensional information. Typically highly- collimated light sources are used, such as lasers or fiber optic line lights. This is an inexpensive way to measure depth and height of continuous surfaces and is used when either, light source or surface are moving. It can also show surface details on low-contrast parts. Light should not be absorbed by the as reflection is required for the lighting's effect on the part to be measured. Diffuse on-axis lighting: DOAL, allows light to be shone directly at a part in line with the camera, without it getting in the way of the camera. This is accomplished using a 50% silvered mirror to reflect light directly at the part. The image is seen through the mirror by the camera and it is captured. These applications include detecting flaws on shiny, flat surfaces or inspecting insides of small cavities. Since it loses intensity through the silvered mirror, additional lighting source maybe used to improve illumination or the consistency of light on the subject. Cloudy day lighting or dome light illumination: In this, the light is not reflected directly onto the part, but first onto a diffuse surface and then “bounced” onto the part. The diffused off-axis technique negates shadows as if one was looking at something on a cloudy day. It avoids creating hot spots or glare, which can cause problems in parts inspection applications. When a dome light is used, there can be a dead spot in the center of the image. Therefore, when a reflector is used, it may be advantageous to add a DOAL source to fill in the dead spot. For applications that are spaceconstrained, flat dome lights are available to place between the camera and the part and which produce similar results to curved ones. Always-on or strobed Lighting in machine vision applications is either always-on or strobed. By strobing, a light one can get increased intensity and the light source may last longer. More useful is the ability to stop motion. But, strobes need to be controlled. Timing must be precisely

40 47

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Application coordinated with image acquisition, or the images will vary in intensity. There is also the human factor to consider when using strobe lighting. Flashing lights can cause seizures or headaches when viewed by some people. In designing machine vision systems, one should consider the effect of ambient light in the area where the machine is to be installed. The illuminated light should be bright to overwhelm any ambient light that shines on it so that the intended effect of the inspection system's special illumination is accomplished. Ambient light can cause additional glare on parts. It can also change depending on where the operator may be standing, the time of day, the weather, and season of the year. All these issues need to be considered when selecting the inspection system's light source and designing the machine's physical layout. Lighting sources Halogen light is good for applications where very bright lighting is required, but is limited as they cannot be strobed. They tend to become hot and lose intensity over time. If this type has to be used for an inspection application, it should be run at 80% of its maximum power to extend its life, keeping the voltage constant to avoid color changes and using fiber optics to enable mounting the lamp remotely if the application is sensitive to the halogen heat produced. Incandescent lights can be used as they are inexpensive and readily available, but can't be strobed. They also generate heat and lose intensity slightly over time. Fluorescent lighting sources are relatively inexpensive and are available in different shapes and sizes, provide diffuse light and minimize glare. These also cannot be strobed and degrade over time and cannot be dimmed. These also flicker due to the frequency of the AC power source, which can affect the image quality of vision inspection applications. Using high frequency ballasts can help reduce the amount of flicker, but can't eliminate it entirely. Lasers are highly collimated light sources, which have high intensity, allowing them to be mounted at a distance from the object being inspected. A special type of laser, diode laser, can be strobed. They are often used to make distance measurements, sometimes in

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three dimensions, but high accuracy might not be achieved. They are traditionally very expensive and require special safety precautions as they present potential safety hazards. Fiber optics may provide a safer option to provide collimated light if one's application requires it. Many older strobing systems employ Xenon lights. Xenon is ideal for strobing as it is capable of giving very high intensity over a short period of time, thus creating the impression of stopped motion. But the intensity of Xenon strobes decreases over time and they are rarely used today. A better alternative is to use light emitting diodes (LEDs). These are the most common ones for machine vision applications today. They last a very long time, in excess of 10,000 hours, and can be strobed or left on continuously without heat issues. LEDs are also very safe to use, they are efficient, and can be sourced in virtually any color. Integrated lighting Machine vision users can acquire a system that includes integrated lighting. This simplifies the setup used to highlight particular parts or features without having to acquire, install and power additional lighting. Some vision systems have integrated software to control the intensity and strobing of the light without additional equipment. Since there is no need for external

lighting and power vision, systems with integrated lighting are easier to install and use in hard-to-reach spaces on the production line, and are cost effective. Summary There are many lighting options available and different ways to construct and orient the vision system. Choosing the right lighting can make a significant difference in the productivity of one's machine. When planning a new automated inspection system, the part, surface finish and color, that needs to be inspected has to be understood, as also the production environment. Then, review the pros and cons of various light sources. After selecting the right lighting, one has to position the light source for maximum effectiveness. This combination of lighting source and placement with respect to the part and the camera can negate or accentuate features as appropriate to ensure that good, consistent images are produced to meet the inspection requirements of the application. While early LEDs had limited intensity, modern LEDs can be very bright (consider how many new cars are using them for exterior lighting). The following chart compares the different light source alternatives as to their suitability for different applications.

News

Synthetic meat to be a new concept

ab-grown meat appearing on the supermarket shelves sounds like a science fiction? A city NGO Sukrut Nirman Charitable Trust (SNCT), fighting to curb cow slaughter in the region, is in touch with Dutch researchers who are working on developing synthetic or test-tube meat, taking a small amount of cells from a living animal and growing it into lumps of muscle tissue in the lab which can be eaten as meat for human consumption. Scientists believe synthetic meat, besides avoiding killing of animals, could help reduce the environmental impact of meat production. The technology to develop artificial meat has been around since the turn of the century. National Aeronautics and Space Administration ( NASA) once looked into developing for their astronauts - but making an edible and commercially viable product has remained out of reach. The issue was discussed at the 58th International Congress of Meat Science and Technology (ICOMIST) at 49

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Montreal in August. One of the topics among a host of others included in vitro meat, also known as synthetic or cultured meat, by Dr Mark Post from University of Maastricht, Netherlands. Dr N N Zade, head of department of veterinary public health, Nagpur Veterinary College, also attended the meet. Cultured meat is an animal flesh product that has never been part of a complete living animal. It may be one of the several new technologies needed to maintain food supplies. Zade says such meat is produced in vitro, in a culture cell, rather than from an animal. It is produced by taking number of cells from a farm animal and proliferating them in a nutrient-rich medium. Dr Post claimed cells are capable of multiplying so many times in culture that in theory, a single cell could be used to produce enough meat to feed global population for a year. After the cells are multiplied, they are attached to a spongelike scaffold and soaked with nutrients.

The resulting cells can be harvested, seasoned, cooked, and consumed as a boneless, processed meat such as hamburger or chicken nuggets. Dr Post says cultured meat has its own advantages concern with animal welfare and public health. It has the potential to be healthier, safer, less polluting, and more humane than conventional meat. Founder of Sukrut Kanakrai Savadia believes that cultured meat production can be more efficient than conventional meat in its use of energy, land and water. "More importantly, while making cultured meat it not necessary to kill an animal. Only a muscle biopsy from a live animal is to be collected and culture the isolated cells. In India, cultured meat will be like a boon," Savadia feels. Savadia adds it will also produce less waste and may prove vital, especially in countries like India, which is losing valuable livestock due to meat production to satisfy export demand. Savadia plans to meet Dutch scientists along with some local experts on the issue soon. As per the United Nations Food and Agriculture Organization (FAO), 6.2mmt (million metrictonnes) of meat is produced in India annually. The per capita animal protein consumption in India is 10.4 gram per day compared to world consumption of 25 gram per day. The FAO estimated that 18% of global greenhouse emissions are accounted for by the livestock sector, and demand for meat is expected to double. To prevent further loss of animals, cultured meat was the better solution. Dr Post hopes to satisfy at least part of the country's demand by making the stuff in factories.

Vacuum Frying

Vacuum frying reduces oil uptake & improves the quality parameters of carrot crisps

rying is a complex unit operation that is widely used in the food industry. During the process, food is immersed in an oil bath at a temperature above the boiling point of water. This results in counter ﬂow of water vapour (bubbles) and oil at the surface of the product (Bouchon, Aguilera, & Pyle, 2003). Oil uptake is one of the most important quality parameters of fried food, but this is 50

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incompatible with recent consumer trends towards healthier food and low fat products (Bouchon & Pyle, 2004). The consumption of oil and saturated fat in particular is related to signiﬁcant health problems, including coronary heart d i s e a s e , c a n c e r, d i a b e t e s , a n d hypertension (Saguy & Dana, 2003). Other undesirable effects derived from the high temperatures involved in the frying process and exposure to oxygen

are the degradation of important nutritional compounds and the generation of toxic molecules in the foodstuff or the frying oil itself (Fillion & Henry, 1998). This information has raised a red ﬂag regarding human consumption of fried food. As a result, healthy, low fat snack products have acquired a new level of importance in the snack industry (Moreira, Castell-Perez, & Barrufet, 1999). However, even

Vacuum Frying health-conscious consumers are unwilling to sacrifice organoleptic properties, and intense full-flavour snacks continue to play an important role in the salty snack market (Mariscal & Bouchon, 2008). Several processes have been developed in order to allow companies to manufacture reduced-fat products that possess the desired quality attributes of deep fat fried food whilst preserving their nutritional properties. These include alternative technologies such as extrusion, drying, and baking, which may be applied to raw food or formulated products. Unfortunately, none of them has been as successful as expected because they are still unable to impart the desired quality attributes of deep fat fried food, such as flavour, texture, appearance, and mouthfeel. Vacuum frying is a promising technology that may be an option for the production of novel snacks such as fruit and vegetable crisps that present the desired quality attributes and respond to new health trends. This deep frying process is carried out in a closed system under pressures well below atmospheric levels, which makes it possible to substantially reduce the boiling point of water and thus the frying temperature (Garayo & Moreira, 2002). In fact, most of the benefits of this technology are the result of the low temperatures employed and minimal exposure to oxygen. Said benefits include: (i) the reduction of adverse effects on oil quality (Shyu, Hau, & Hwang, 1998), (ii) preservation of natural colour and flavours (Shyu & Hwang, 2001), (iii) decreased acrylamide content (Granda, Moreira, & Tichy, 2004), and (iv) preservation of nutritional compounds (Da Silva & Moreira, 2008). The oil uptake mechanism of vacuum frying is still not fully understood. During a normal operation, the product is placed inside the frying basket once the oil reaches the target temperature. The lid is then closed and the chamber is depressurised. Subsequently, the basket is immersed in the oil bath, where it remains for the required amount of time. It is then lifted out and the vessel is pressurised using a pressure release 51

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valve. This results in a sudden increase in the surrounding pressure, which may force the vapour inside of the pores to condense, which means that oil absorption may precede cooling (Garayo & Moreira, 2002). However, as these authors explain, the low pressure may allow air to diffuse faster into the porous structure, obstructing oil passage and leading to lower oil absorption than is observed in atmospheric frying. This hypothesis has been supported by the results of experiments that suggest that vacuum fried potato crisps absorb less than half the oil of crisps fried under atmospheric conditions. In order to compare vacuum and atmospheric frying, Mariscal and Bouchon (2008) deﬁned the term 'equivalent thermal driving force', which is the difference between the oil temperature and the boiling point of water at the working pressure. The authors used several equivalent thermal driving forces (40 C, 50 C and 60 C) when frying apple slices under atmospheric or vacuum conditions (4.4 in. Hg). Their experiments showed that vacuum fried apple slices absorbed slightly less oil, and presented better results for colour preservation than atmospheric fried samples. Scant information is available on this topic because scientists are only just beginning to perform research in this ﬁeld. However, it is clear that vacuum

frying of non-traditional fruits and vegetables has great potential. In this respect, carrots are an interesting raw material to be studied because they are the most important source of dietary carotenoids. In addition to acting as natural pigments, these compounds have been linked to the prevention of certain types of cancer and degenerative and chronic diseases as well as pro-vitamin A activity (Rodríguez-Amaya, 2001). The processing of foods may cause major carotenoid degradation due to the isomerisation of trans-carotenoids, which represent almost 100% of total carotenoid content in raw carrots (Kopas-Lane & Warthesen, 1995), and oxidation, with a subsequent loss of biological activity and colour deterioration (Rodríguez-Amaya, 2001). Trans–cis isomerisation affects pro-vitamin An activity, bioavailability, and the antioxidant capacity of carotenoids. Also, there is some evidence that all-trans-isomers are absorbed preferentially by humans as compared to cis isomers in the case of bcarotene. However, it should be noted that isomerisation is only one of the factors that may determine their bioavailability; carotenoid bioavailability may be enhanced by the food matrix, the interaction between carotenoids, the presence of dietary fat, and processing conditions, particularly mechanical disruption and heat treatment (Schieber & Carle, 2005).

Vacuum Frying The objective of this study is to compare oil content, moisture loss, trans a-and bcarotene retention, and colour development in atmospheric and vacuum deep fat fried carrot crisps made using equivalent thermal driving forces in order to identify the technology's potential for producing novel snacks that present the desired quality attributes whilst reﬂecting new health trends. Materials and methods 1.1. Sample preparation Carrots (Daucus carota cv. Abaco) were purchased from a local supermarket and stored at 7 C and 85–95% relative humidity. The carrots were washed and cut into 2 mm-thick slices using a Mandolin Slicer (Danesco International Inc., USA) from which 3.8 cm discs were extracted. 1.2. Frying equipment Both atmospheric and vacuum frying were carried out using an electrically heated, 10-l stainless steel (316L) vessel covered with a stainless steel (316L) lid, which was thermostatically controlled to maintain the set frying temperature (±2 C) using a temperature control system (Micro-controller X, model PXR4, Fuji Electric Instruments, Japan). The fryer basket rod was connected to a rotary system, which was used to stir the oil (40 rpm) before frying in order to minimise temperature gradients. In vacuum frying experiments, the frying vessel was connected to a twostage high vacuum pump (model DVR140, Dosivac, Argentina) with the capacity to generate a vacuum up to 1.92 in.

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Hg (which corresponds to a water boiling point of approximately 38 C). In order to prevent water vapour from the product from mixing with the oil of the vacuum pump and damaging it, a condenser was installed between the devices. (It consisted of a 4-m stainless steel pipe that was immersed in an ice–water mixture at 0 C.) In atmospheric frying experiments, the vessel lid was vented by opening a 2 in. metal piece. That piece was tightly affixed to the lid during the vacuum frying experiments. 1.3. Frying conditions In both sets of experiments, the fryer vessel was filled with 3 l of high-oleic acid sunflower oil (Camilo Ferrón Chile S.A, Chile), which was preheated to 160 C for 1 h prior to frying and discarded after 3 h of frying. Equivalent thermal driving forces were used in both processes. The thermal driving force was defined by Mariscal and Bouchon (2008) as the difference between the oil temperature and the boiling point of water at the working pressure (that is, 100 C under atmospheric conditions and 38 C for vacuum frying). We used two driving forces (60 C and 80 C), which resulted in frying temperatures of 160 C and 180 C for atmospheric frying and 98 C and 118 C for vacuum frying. 1.3.1. Vacuum frying experiments Once the oil reached frying temperature, ten carrot slices (20 g) were placed in the frying basket in order to minimise the drop in temperature. The slices were

then covered with a grid to prevent them from ﬂoating. The vessel lid was fastened and the vessel depressurised. When the pressure inside the vessel reached 1.92 in. Hg, the basket was immersed in the frying oil for increasing frying times until it reached the bubbleend point. The time required to reach said point varied depending on the frying temperature. After each frying time, the basket was lifted out and left to stand for 3 min and the vessel was pressurised. The samples were then removed from the fryer and allowed to cool to room temperature. 1.3.2. Atmospheric frying experiments Once the oil reached the frying temperature, ten carrot slices were placed in the frying basket and covered with a grid. The basket was immersed in the frying oil for increasing frying times until it reached the bubble-end point. The time required to reach said point varied depending on the frying temperature. The basket was lifted out and left to stand for 3 min. The samples were then removed from the fryer and allowed to cool to room temperature. 1.4. Experimental considerations In order to determine the total amount of oil absorbed by the samples, no de-oiling system was used in any experiment. Reported results correspond to the arithmetic mean of three batches ± standard deviation. All batches were handled independently and fresh oil was used for each batch. All determinations and measurements were carried out in

Vacuum Frying triplicate on each batch unless otherwise speciﬁed. 2. Analytical methods 2.1. Oil content Total oil content of ground carrot crisps was determined gravimetrically by Soxhlet extraction with petroleum ether (AOAC, 1995). 2.2. Solids content Each extracted oil-free sample was placed in a Petri dish, dried in a forced air oven at 105 C to constant weight, and cooled in a desiccator (AOAC, 1995). Solid content of raw carrot slices was determined using the same procedure. 3.3. Moisture loss Moisture loss was expressed on a dry basis and calculated using the difference between the original moisture content and the moisture content at time t.

values using Adobe Photoshop 6.0 software (Adobe Systems Inc., USA), which were normalised to L*, a*, b* as explained in Mariscal and Bouchon (2008).

2.4. Colour analysis using a computer vision system A colour digital camera model PowerShot A70 (Canon, USA) connected to a computer via USB interface IFC-300PCU (Canon, USA) was mounted on a stand inside a large opaque box with black interior surfaces. The iris was operated using the manual mode, with lens aperture at f = 8 and speed 1/3(1/6) (no flash, no zoom) in order to achieve high uniformity and repeatability. The samples were illuminated using four CIE source D65 lamps (60 cm length and 18 W; Model TLD/965, Phillips, Singapore) at 45 angle in order to maximise diffuse reflection, which is responsible for colour. The angle between the camera lens axis and the sample was set at around 90in an effort to reduce gloss. The camera was grey balanced before each imaging session with a Kodak grey card with 18% reflectance (L* = 50). Afterwards, calibration samples were placed in the camera's view using a white card. A 1600 1200 pixel image was acquired and stored in high resolution and superfine quality JEPG (Joint Photographic Experts Group) format in RGB colour coordinates. The RGB colour images were converted to CIELAB or Lab

2.5. a and b carotene determination 2.5.1. Carotenoid extraction from raw carrot slices and carrot crisps Carotenoid content was determined using the methodology described by Robert, Carlsson, Romero, and Masson (2003). Carotenoids were extracted from raw carrot slices by homogenizing about 1 g of sample with Celite and cold acetone with a mortar and pestle. The slurry was vacuum filtered and the solid residue was re-extracted with cold acetone. Four extractions were made until no orange colour remained in the solid residue. The combined acetone extracts were transferred into petroleum ether. The organic phase was washed with distilled water to remove residual acetone and filtered through anhydrous sodium sulphate. Then, the solvent of an aliquot of 200 ll was evaporated to dryness under a nitrogen stream. Extracts were dissolved in 1000 ll of acetone prior to analysis by HPLC. Carotenoids from fried carrot crisps were extracted from about 1 g of ground sample with petroleum ether for 4 h and then vacuum filtered. The extract was made up to 100 ml with petroleum ether and an aliquot of 5 ml was saponified overnight with an equal volume of 10% potassium hydroxide in methanol solution at room temperature. The

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mixture was poured through a separatory funnel and the carotenoid solution was washed five times with water to remove the alkali. It then was filtered through anhydrous sodium sulphate. The same process was followed for the fresh sample extracts for HPLC analysis. 2.5.2. Preparation of standard solutions Both all-trans-a- and all-trans-bcarotene standards were obtained from carrots (Daucus carota cv. Abaco). Concentrations of standards in petroleum ether were determined by spectrophotometry using their respective A 1% 1cm (RodríguezAmaya, 2001). Calibration curves were obtained for each carotenoid, diluting standard solutions and measuring associated peaks with HPLC. 2.5.3. Chromatographic procedure Carotenoid analysis was carried out by HPLC using a Waters symmetry column (C18, 5 lm particle size, 4.6 mm i.d 25 cm; Waters, USA). An isocratic mobile phase of methanol:acetonitrile:ethyl acetate (20:65:15 by vol) was used at a rate of 1 ml/ min. The HPLC system consisted of a Merck-Hitachi L-6200 pump and a Waters 996 Photodiode Array detector, which were hooked up to a computer with Millennium 32 software. Carotenoids were detected at 450 nm and identified by comparing peak retention times with standards. Cisb-carotene appeared as a peak following

Vacuum Frying its trans-isomer. 2.5.4. a and b carotene retention The absolute retention factor of each carotenoid was expressed according to Fillion and Henry (1998) on a dryweight fat free basis as follows:

2.6. Water activity (aw) determination The aw of vacuum and atmospheric fried carrot crisps was measured using a Lufft aw-wert-Messer (Durotherm, Germany) at 20 C. 2.7. Texture The texture of the fried carrot crisps was analysed using the procedure described by Da Silva and Moreira (2008), which consists of a three-point bending test. The sample was supported using two parallel edges in order to apply the load centrally. The system was mounted in a TA.XT2 Texture Analyser (Texture Technologies Corp., USA) using a support span of 16 mm. A 2.5 mm-thick steel blade with flat edge was used to fracture the sample at a constant rate of speed of 10 mm s1 The force (N) at the fracture point. (highest value in the plot) was used as the resistance to breakage. 2.8. Statistical analysis Statistical analysis was executed using Statgraphics 5.0 software (Manugistic Inc., USA). One-way variance analysis was carried out in order to confirm that there were no significant differences amongst fried sample measurements under specific conditions. Disparities between samples fried under different conditions were determined through confidence interval analysis using the Bonferroni test. All significant differences were determined with a confidence level of 95%. Linear correlation of colour parameters and carotenoid content was also examined by carrying out a linear regression between a specific colour parameter and carotenoid content (total carotenoids, trans a-carotene, or trans bcarotene 54 Oil & Food Journal Dec 2012

content). Then, the coefﬁcient of determination (r 2 ) for the linear regression model was calculated. 3. Results and discussion 3.1. Moisture loss Fig. 1 shows moisture loss for each

frying time during vacuum and atmospheric frying of carrot slices using thermal driving forces of 60 C and 80 C. The loss of moisture during vacuum and atmospheric frying presented a classical drying profile. There was an initial rapid decrease in water content, which was mainly due to the loss of surface and unbound inner water, followed by a gradually decreasing gradient due to crust formation. All samples were dried to the same final moisture content (bubble-end point, 2% w.b.) The frying temperature and technology (pressure) significantly affected the rate of moisture loss and the time required to achieve the desired level of dehydration (see Fig. 1). Samples fried under atmospheric conditions using a thermal driving force of 80 C achieved bubble-end point after 2 min, whilst samples fried under

vacuum conditions needed 3 min. Something similar was observed when the samples were fried using a thermal driving force of 60 C. Samples fried under atmospheric and vacuum conditions needed 3 and 5 min, respectively, to achieve bubble-end point. The differences are thought to be mainly associated with micro-structural changes. Though the same thermal driving force is used in both processes, samples fried under vacuum conditions are exposed to lower temperatures. As a result, micro-structural changes/damage are impaired. (This is one of the main advantages of vacuum technology.) Also, during the initial depressurisation step of vacuum frying, micro-structural surface changes may occur, which may prevent water from escaping. Furthermore, even though dehydration is mainly limited by heat transfer, diffusion may play a role. Diffusion slows down at lower temperatures, a factor that may preclude moisture loss. Similar results were found by Mariscal and Bouchon (2008) when frying apple slices. 3.2. Oil absorption Fig. 2 shows the evolution of the oil uptake of carrot crisps for increasing atmospheric and vacuum frying times using thermal driving forces of 60 C and 80 C. The general pattern of oil uptake

Vacuum Frying

shows an initial rapid increase followed by a gradually decreasing gradient, with a considerable amount absorbed during the initial period. There were great differences between samples fried under atmospheric and vacuum conditions and between those fried using different thermal driving forces. Oil absorption has long been claimed to be a surface-related phenomenon resulting from the competition between drainage and suction into the porous crust once the food is removed from the oil bath and begins to cool (Bouchon et al., 2003; 55

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Gamble, Rice, & Selman, 1987; Moreira, Sun, & Chen, 1997). Consequently, oil absorption is heavily linked to moisture loss since it determines the extent of crust formation and therefore the volume that is available for oil inﬁltration. Fig. 3 shows oil uptake versus moisture loss during vacuum and atmospheric frying of carrot slices. The strong relationship between them suggests that the water vapour replacement mechanism, which is said to occur during atmospheric frying, would also take place during vacuum

frying, as determined by Mariscal and Bouchon (2008). Statistical analysis showed that both the frying method and the thermal driving force had a significant effect (p < 0.05) on oil uptake (g oil/g dry solids) for the same dehydration level. In fact, vacuum fried carrot slices absorbed 47% and 50.5% (d.b.) less oil than atmospheric fried ones at bubbled-end point when using thermal driving forces of 60 C and 80 C, respectively. When comparing vacuum fried carrot crisps, those fried using a thermal driving force of 60 C absorbed a significantly lower amount of oil compared to those fried using a thermal driving force of 80 C. These results concur with those obtained by Garayo and Moreira (2002), who determined that the oil content of vacuum fried potato crisps (37% d.b.) was significantly lower than that of potato crisps fried under atmospheric conditions (66% d.b.) The authors explained that during a normalvacuum frying operation, the product is removed from the oil bath and the vessel is vented before cooling takes place. This results in a sudden increase in the surrounding pressure at a constant temperature, which may force the vapour inside of the pore to condense, decreasing Ppore and therefore initiating oil absorption before cooling begins (that is, Psurroundings Ppore > 0). They further explain that, because of the low pressure, air may diffuse faster into the porous space, obstructing oil passage and therefore leading to a reduction in oil uptake in vacuum fried snacks as compared to atmospheric fried ones. Mariscal and Bouchon (2008) also observed lower oil uptake in vacuum fried apple crisps than in atmospheric fried ones. They attributed this to the lower vapourpressure of water during vacuum frying and to the higher temperatures reached during atmospheric frying, which induce added structural changes liketissue/constituents degradation. However, the decrease was less pronounced in apples than in carrot slices. This is probably due to the high porosity of apples. 3.3. Carotenoid content

Vacuum Frying

The most abundant carotenoid found in fresh and fried carrot samples was trans b-carotene, which represents about 60% of total carotenoid content. The secondmost abundant was trans a-carotene, which accounts for nearly 40%. These results are in agreement with the literature that has reported that trans bcarotene content ranges from 60% to 80%, whereas trans a-carotene content ranges from 10% to 40% (Chen, Peng, & Chen, 1995). Table 1 shows absolute retention of trans a- and trans b-carotene after vacuum and atmospheric frying of carrot slices using thermal driving forces of 60 C and 80 C. A thermal driving force of 60 C during vacuum frying results in minor degradation of both trans a- and trans bcarotene (only 10.5% and 13.6% degradation, respectively). When the thermal driving force was increased (DT

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= 80 C), absolute retention was about 60%, which is still much higher than the absolute retention found in atmospheric fried crisps. Thermal processing may result in losses of all-trans-carotenes and the formation of cis isomers. In fact, a reduction in the percentage of all-trans-b-carotene with the concomitant increase of 13-cis and 9-cis isomers has been observed during processing (Chandler & Schwartz, 1988). Losses of all-trans-a- and alltrans-b-carotene were greater during atmospheric frying, probably as a result of their isomerisation at elevated temperatures. In fact, formation of 13cis-b-carotene was observed in carrot crisps fried at 160 C and 180 C, representing 12.5 ﾂｱ 1.1% and 28.6 ﾂｱ 1.4% of total carotenes, respectively. Chandler and Schwartz (1988) noted that cis isomers could account for as

much as 29% of total b-carotene content in processed sweet potatoes. Trans窶田is isomerisation affectspro-vitamin A activity and the antioxidant capacity of carotenoids. In addition, b-carotene all-trans-isomer is absorbed preferentially by humans compared to cis isomer (Schieber & Carle, 2005). Our results suggest that trans b-carotene degradation is faster than trans acarotene degradation in all frying conditions. The degradation rate of carotenoids depends on their structure. Key aspects are the number of double bonds and the maximum overlap of carbon窶田arbon double bond molecular orbitals, which give the highest susceptibility (Miller, Sampson, Candeias, Bramley, & Rice-Evans, 1996). Both trans a- and trans b-carotene have 11 double bonds. Their structural

Vacuum Frying

difference lies in the cyclisation of their ends: trans b-carotene has one b-ring on each side of the molecule whereas trans a-carotene has one b-ring and a e-ring. Steric hindrance reduces the orbital overlap between the chain double bonds and the b-ring double bonds in the molecules of trans a- and trans bcarotene. This leaves trans b-carotene with 9 fully overlapping double bonds plus 2 b-ring double bonds with reduced overlap, and trans a-carotene with 9 fully overlapping double bonds plus only one b-ring conjugated double bond, as the double bond of the e-ring is not part of the conjugated double bond system (Anguelova & Warthesen, 2000). Thus, trans b-carotene has a higher susceptibility to oxidation and isomerisation because it has 11 conjugated double bounds, whereas

trans a-carotene only has 10. 3.4. Colour development Carrots' colour is largely related to the presence of carotenes. As reported by Sulaeman et al. (2001), the orange colour of carrots and carrot crisps can be described by lightness (L*), redness (a*), yellowness (b*), and Hue parameters. Table 2 shows changes in L*, a* and b* values of carrot crisps for increasing frying times during atmospheric and vacuum frying. Hue values are not included since we did not find a significant relationship between this parameter and processing conditions. L* is a critical parameter in the frying industry as it is usually the first quality attribute evaluated by consumers when determining product acceptance. Low L* values indicate a dark colour and are

mainly associated with non-enzymatic browning reactions. As shown in Table 2, L* value decreased significantly during atmospheric frying for both thermal driving forces. For instance, L* value diminished from L *0 = 65.2 to L* = 34.2 at bubble-end point (much darker) when frying at 180 C. On the other hand L* remained nearly constant during vacuum frying, only decreasing to L* = 58.4 and L* = 55.9 when using thermal driving forces of 60 C and 80 C, respectively. The degradation of trans a- and trans bcarotene had a big impact on a* and b* values, as shown in Table 2. Crisps fried under vacuum conditions using a thermal driving force of 60 C maintained their orange-yellow chromaticity, showing a slight decrease in their colour coordinates, which varied from a *0 = 49.9 to a* = 45.4 and from b *0 = 65.4 to b* = 65.1. Carrot slices fried under atmospheric conditions showed a significant decrease in their colour coordinates, reaching final values of a* = 15.3 and b* = 25.3, when frying at 180 C. Our results correspond to those of Shyu, Hau, and Hwang (2005), who reported that the values of a* and b*decrease significantly as the frying temperature increases above 100 C because of carotenoids' instability. In fact, we found good linear correlations between a* and trans b-carotene content (r2= 0.95), b* and trans a-carotene content (r2= 0.78) and hue and total carotenoids content (r2= 0.91) when comparing values of fried crisps at bubble-end point.4.5. Wa t e r a c t i v i t y ( a w ) As shown in Table 1, samples reached a

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Vacuum Frying water activity (aw) average value of approximately 0.44. This value matches the results obtained by Katz and Labuza (1981), who found that potato crisps' sensory acceptability decreases markedly above a critical value of 0.47. Furthermore, no signiﬁcant differences were found amongst the samples. Water activity affects the stability of dehydrated foods because it determines both chemical reaction rates and m i c r o b i a l a c t i v i t y . The limiting value of aw for the growth

changes in their microstructure, which in turn determine their ﬁnal physical and sensory properties. The most important textural attribute of crisps and chips is crispness, which denotes freshness and high quality. A crisp should be ﬁrm and snap easily when bent, emitting a crunchy sound (Krokida, Oreopoulou, Maroulis, & Marinos-Kouris, 2001). During frying, vegetable tissues show an initial softening that is followed by hardening due to the progressive development of a dehydrated crust. In

of any microorganism is around 0.6. Below this value, food spoilage is mainly due to enzymatic and chemical reactions, such as oxidation (Adams & Moss, 1995). The rate of oxidation may rise as water content increases since water can enhance reactant mobility and bring catalysts into solution. In relation to carotenoid stability. Lavelli, Zanoni, and Zaniboni (2007) showed that both trans a- and b-carotene from dehydrated carrots present their maximum stability at aw values between 0.34 and 0.54. These results conﬁrm previous ﬁndings by other authors (Baloch, Buckle, & Edwards, 1977).

order to incorporate both phenomena, Pedreschi and Moyano (2005) modelled textural changes (normalized maximum force) during frying by means of two terms (see Eq. (2)). The ﬁrst describes the softening of the tissue for short frying times (fast phase) and the second describes a hardening dependent component (slow phase), which is a function of the square of the frying time and gains relevance at longer frying times. MF¼ eks

3.6. Texture Frying of raw vegetables induces major 58 Oil & Food Journal

Dec 2012

where MF* = normalised maximum force; ks = kinetic constant for softening of carrot tissue during frying (s1); kh = kinetic constant for the crust hardening process during frying (s2) and t = frying time (min).

The final maximum force (MF) of fried carrot crisps was not affected by the frying technology and the thermal driving force used. All samples reached final values of between 5.01 and 5.68 N. Nevertheless, the frying technology significantly affected the rate of softening and hardening. For instance, when using a thermal driving force of 60 C, ks values were 1.8582 and 3.5218 s1and kh values were 0.0441 and 0.1322 s2when frying under vacuum and atmospheric conditions, respectively. Also, higher frying temperatures resulted in faster softening of the tissue and subsequent hardening (see Table 1 and Fig. 4). 4. Conclusions Vacuum-fried carrots may be a promising snack category due to the fact that carrots are the most important source of dietary carotenoids, and this technology makes it possible to overcome major carotenoid degradation pathways due to isomerisation and oxidation and thus preserve biological activity. The results showed that vacuum fried crisps (driving force of 60 C) may reduce the oil content of carrot crisps by nearly 50% (d.b.) compared to atmospheric fried crisps produced using the same driving force. Furthermore, they preserve around 90% of trans acarotene and 86% trans b-carotene, which leads to the preservation of the colour of raw carrots. This is reflected by L*, a*, b* colour coordinate analyses, excellent linear correlations between a* and trans bcarotene content (r2= 0.95), b* and trans a-carotene content (r2= 0.78), and hue and total carotenoids content (r2= 0.91) when comparing values of fried crisps at bubble-end point. As a result, vacuum frying may be a useful process in the production of novel snacks that present desired quality attributes and respond to new health trends. V. Dueik & P. Bouchon, Department of Chemical and Bioprocess Engineering, Pontificia Universidad Católica de Chile, P.O. Box 306, Santiago 6904411, Chile P. Robert, Department of Food Science and Chemical Technology, Universidad de Chile, P.O. Box 223, Chile

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