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Britannia’s new fullfledged play for the Dairy segment Dairy to be enhanced due to urbanization Indian dairy players to tap Russian market India’s dairy sector tops milk output in 2015, but lags behind in productivity
CONTENTS
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Budget 2016 Mixed double for the food Industry
Traders body CAIT ay that FDI in food processing will hit farmers,
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FoodPanda and MacDonald join hands for online delivery
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Sugar industry demands ‘Commission for Agriculture Costs and Prices’ Government considers starting small food clusters Vinchur food zone attracts 31 processing units
India becoming home to Asian food brands Government to allocate four food parks with a cumulative investment of Rs 500 crore
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Nod to 100 % FDI in Multi-Brand Retail Shines in Union Budget 2016-17; Poses for firm Jolt 39
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The expanding anti-caking agents market in food processing sector
‘India’s wheat production will be 85 million tonnes less than final estimation:’ NCAER
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FSSAI goes for an image makeover
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An Eye For Details
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''Our technology & quality is at par and better than those accessed in developed countries": R P Banerjee
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Taste the feeling Coca Cola saga amid sin tax
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Prabhat focusses on Cheese, Ghee, Dahi, Lassi & Shrikhand 27
Make In India Initiative Sustainable Growth For
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The Indian Food Processing Industry
Whey Products In Ice Cream And Frozen Dairy Desserts
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A EDITOR Manzar Aftab Naqvi CONSULTING EDITOR Basma Hussain GROUP EDITOR Firoz H. Naqvi firoz@advanceinfomedia.com Graphics Designer Naved H. Kazmi naved@advanceinfomedia.com Circulation Seema hayat Shaikh Seema@advenceiifomedia.com Delhi Sayyed Shahnawaz +91-8375034558 Gujarat Brijesh Mathuria +91-9924546999 Genreal Manager Gyanendra Trivedi Marketing & Circulation Office 121,1st floor, Rassaz Multiplex, Station Road, Mira Road (E), Dist. Thane- 401107 Telefax : +91-22-28555069, Tell.: +91-22-28115068 Mob.: +91-9867992299 E-mail: info@agronfoodprocessing.com sub@advanceinfomedia.com Vol 11 Issue 05 March 2016 Annual Subcription Rs.950/By Normal Post Add Rs. 400/-For Courier Charges Add Rs. 50/- For Outstantion Charge Overseas $80 By Air Mail Email:sub@advanveinfomedia.com Single Copy Cost Rs. 100/Printed, Published & Owned By Manzar Aftab Naqvi RNI No. MAHENG /2005/15987 Postal Regd. No. THW /50/2014-2016 WPP License No. MR /TECH /WPP-308/TW /2016 Regd. Office Adcanveinfomedia & Event 103,AmarJyot Apartments, Pooja Nagar, Mira Road (E) Dist Thane-401107(Mumbai) Printed At Rolleract Press Services A-83,Ground Floor, Naraina Industrial Area Phase-1, New Delhi -110028 The views expressed in this issue are those of the contibutors are not necessarilly those of the magzine. though every care has been taken to ensure the accuaracy and authenticty in infomation, "Oil & Food Journal" is however not responsible fordamages caused by ministerpretation of infomation expressed and implied with in the pages of this issue. All disputes are not to be referred to Mumbai Jurisdiction
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EDITORIAL
country doesn’t deserve anything less than success from us, so let us aim for success – APJ Abdul Kalam The global economy is in trouble. Some analysts even suggest that the recession of 2016 will be worse than 2008. China has been the locomotive of global manufacturing for more than two decades but now its economy hasslowed in the face of declining demand, rising real wage rates and a shaky banking structure. This transition, along with a broad-based contraction in global demand, has knocked the props from under the commodity market. The price of every major commodity, from soya beans to steel to copper and oil, has plunged and many commodity exporting countries are now on the edge of financial insolvency. The five oil producers in the Gulf (Saudi Arabia, Oman, the UAE, Kuwait and Bahrain), for instance, had a combined fiscal surplus of around $600 billion three years ago. Today, they are struggling to manage a deficit of approximately $400bn — a turnaround of nearly $1 trillion. The Russian economy is on the skids. The US stands out for its relatively solid growth rate of around 3 per cent, but even in the US, banks are exposed: Reportedly, they have lent between $500bn to $1tn to shale oil and gas companies. With the price of oil at around $35 a barrel — and still under pressure as Iran looks to add 500 kbd (thousand barrels per day) in by March — most of these companies are staring at bankruptcy. Against this international backdrop, it is no surprise that India has attracted a positive dictumand its macro fundamentals are strong. The balance of payments is healthy; the current account deficit is down to 1 per cent; the fiscal deficit is on track to reach its target of 3.9 per cent of GDP; inflation is in check and, on a trade-weighted basis, the rupee exchange rate is not a cause for worry. But amid all this positivity the growth is not generating enough jobs and the numbers of unemployed and underemployed are increasing; private sector investments have dried up in the face of over-capacity, high debt and slackening demand; the public sector has not taken up the investment slack; the banks are loaded with non-performing assets and there is a gap between the rhetoric of structural reform and the reality on the ground. India, into the 70th year of Independence, still struggles to provide basic necessities to all its citizens. More than 70 per cent of its 120 crore population still lives in villages, many of them unconnected by roads, electricity or communications networks. More than half the working population in rural areas toiled as casual labour and 30 per cent depended on farming. Though these figures have been quite disturbing, but widening fiscal deficit has been keeping government spending on a tight leash. Its expenditure as a percentage of the GDP, a key factor in boosting growth, has fallen from 15.8 per cent in 2009-10 to 13 per cent in 2015-16. Budget numbers show that it will be marginally lower at 12.9 per cent this year. Growth in taxes could have given the government more headroom, but India's tax-GDP ratio is at 16.7 per cent. In comparison, China's is 19.4 per cent and the US' is 25.4 per cent, according to the Heritage Foundation's 2016 Index of Economic Freedom. Brushing off earlier misgivings, the finance minister has committed to fund welfare programmes started by the previous government such as the rural job guarantee scheme, village roads building and cheap crop insurance. The budget measures, Jaitley hoped, would create assets in rural areas and help double farm income in five years. It would take careful planning, technological fixes and capacity building at the grassroots to realise the ambitious target. It would take careful planning, technological fixes and capacity building at the grassroots to realise the ambitious target. ‘’Make in India’’ also has been the centre of gravity for this government where the budget was totally tangle with this initiative as this has been Prime Minister, Narendra Modi’s campaign and India hopes that its economy as well as its GDP will be positively affected. This time I decided to write on economic slowdown because this directly affects our food industry and its important to make the right move to make this sunrise sector a stable one that will generate employment and bring food security to its people. We need to work hard and bring results and of course keep our finger crossed. Till next time!
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BUDGET 2016- 17
Budget 2016 Mixed double for the food Industry
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he marketing blitzkrieg called ‘Make In India Week’ organised in Mumbai in February was hailed as a successful exposition of India’s potential as a manufacturing hub. The event attracted investment proposals worth Rs 15.21 lakh crore. Even if half of these agreements materialize, the agenda of accelerating economic growth and creating millions of jobs would receive a shot in the arm. But the question everyone’s been asking is: What concrete steps will the government take to enable Make in India? How will the intent translate into action? This is the question that Finance Minister (FM) Arun Jaitley tried to answer through the budget he announced on February 29. Solutions included boosting rural purchasing power, improving infrastructure to facilitate
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domestic markets, giving a boost to local manufacturing while discouraging imports, making it easier to do business, and nurturing a trained workforce. The FM’s intent appeared to be Make In India, for India. Agri-focus Budget 2016 focused on improving the quality of life for a majority of the population that lives in villages and small towns, with agriculture as its main occupation. Against the backdrop of slackening global demand, the government aims to create a robust local market for the goods that India produces
and services that it provides. “Since foreign markets are weak, we must rely on domestic demand and Indian markets to ensure that India’s growth doesn’t slow down,” Jaitley said. The government committed Rs 2.21 lakh crore towards improving infrastructure, including the construction of roads,
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BUDGET 2016- 17 electrification were announced and these will help in growing rural income and create demand for various kinds of products and services.
highways and railway lines. It also outlined a plan to partner with states to revive 160 defunct small airports. Around Rs 3,000 crore per annum will be spent over 15-20 years to develop nuclear power within the country, which is energy-starved with demand for power projected to rise exponentially. For the rural and agrarian economy, Jaitley promised better irrigation facilities, new roads, and a unified and technologydriven agriculture market. He reduced indirect taxes on components required to create a better cold storage chain and allowed 100 percent FDI in food processing that seeks to add value to India’s farm produce. Electrification of India’s rural households is also a priority for the government, which aims to achieve 100 percent rural electrification by May 1, 2018. The decision to allow up to 100 percent FDI through FIPB [Foreign Investment Promotion Board] in marketing of food products produced and manufactured in India is progressive and will help in farm diversification, reducing wastage and encourage the industry to produce locally and this far-reaching reform will benefit farmers, give impetus to the food processing industry and create vast employment opportunities. The government will spend Rs 35,984 crore on agriculture and farmers’ welfare, Rs 86,500 crore on irrigation, Rs 2.87 lakh crore as grants to gram panchayats and municipalities, and Rs 38,500 crore on the Mahatma Gandhi National Rural Employment Guarantee Scheme. Some good initiatives around agriculture reforms, social sector spending and rural
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100 per cent FDI for Kerala Kerala is a significant producer of pineapple, banana and jackfruit majority of which are now going unprocessed. The nascent food processing industry in Kerala is happy at the measure of 100% FDI through FIPB route in the marketing of food products manufactured in India, announced in the Union Budget. The state produces 3.25 lakh tonnes of pineapple, which is mostly grown as inter-crop in rubber plantations. At a time when rubber prices have crashed, the fruit provides alternate income to the rubber growers. With 100% FDI, this can be raised to even 50,000 tonnes, which will help in maintaining a remunerative price for the pineapple farmers especially when there is a glut in the market. The case of banana
is no different. The state is famous for its popular banana chips. But it is dominated by non-branded players. The arrival of big players, though , may hit the existing players, will be good for the banana farmers in the long run as they will be able sell all their produce. The state produces around 3 lakh tonnes of banana. Tierra Foods, which has launched branded banana and tapioca chips, is in talks with Lays for supplying banana for marketing of banana chips by the latter. Companies like Lays may require huge quantities, which will help the farm sector in Kerala. Futuristic for dairy Dairy industry has hailed the budget provisions for the animal husbandry sector as futuristic, especially the focus on technology, research on genome of indigenous breeds and e-commerce platform for connecting breeders with farmers. The budget has provided Rs 850 crore in next few years for spending on the 'PashudhanSanjivani', an animal wellness programme and provision of Animal Health Cards ('NakulSwasthyaPatra'); second, an Advanced breeding technology; third, Creation of 'E-PashudhanHaat' . an e
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market portal for connecting breeders and farmers; and fourth, a National Genomic Centre for indigenous breeds. India lacks in animal records, high quality breed and has been neglecting local breeds. The budget provision of Rs 850 crore is in right direction. The improved breeding will deliver increased productivity and hence improve farmer profitability. E-commerce will help improve transparency and eliminate middle men, while genomics for local breeds will ensure sustainable dairy farming with local resources. The budget provisions for animal husbandry sector are futuristic. The National Genomic Centre will help unleash potential we have in our indigenous breeds and take it to the farmers to translate into their dairy operations. The focus on advanced breeding is also good as the sexed semen technology, patented by two global companies, is not locally available in India. The proposed e-commerce platform will help connect those who are looking for good breeds with the breeders. Ease of doing business Jaitley has realised that the role of the private sector in building infrastructure is paramount and has sought to remove regulatory obstacles that have hindered many projects in the past. The government will introduce a bill to streamline institutional arrangements for the resolution of disputes in infrastructurerelated construction contracts, PPP (public-private partnership) and public utility contracts; guidelines for renegotiating PPP concession agreements; and a new credit rating system for infrastructure projects to deal with the standard perception of risk that often leads to mispriced loans. Make In India cannot happen without skilling the country’s workforce.
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Consequently, Jaitley announced the setting up of 1,500 Multi Skill Training Institutes. Entrepreneurship education and training will be provided through 2,200 colleges, 300 schools, 500 industrial training institutes, and 50 vocational training institutes through open online courses. Budget 2016-17 seems promising for India’s youth—whether it is about the quality of education, focus on skill development, improving teaching and research outcomes, emphasis on job creation or creating ease of business to
BUDGET 2016- 17 disappointed with the Union Budget presented as the finance minister has not proposed any new measures to reduce dependence on burgeoning imports of edible oils. The Solvent Extractors Association has said that there is no change in duty for import of vegetable oils and maintained the same at 12.5% on crude oils and 20% on refined oils. For level playing field, the industry had demanded to raise the duty difference between crude and refined oils from 7.5% to 15% to safeguard the interest of farmers and higher capacity utilization of refiners which currently operating at 40 to 50% only. Finance Minister has chosen not to increase import duty on edible oil and decided to maintain the status quo. This will discourage farmers to continue to grow oilseeds and may switch over to other crops and our dependence on imports of Vegetable oil will
promote entrepreneurship.
further increase.
One critical issue around the ease of doing business, some sections feel, hasn’t been fully resolved: Retrospective taxation.While Jaitley promised that the government will not retrospectively create any fresh tax liability, the current retro remains in force.
The aerated drinks company has asked the finance Minister to reverse the sin tax that has been pushed upon them. Finance Minister announced an excise duty hike to 21% on aerated sugary drinks and mineral waters from the existing 18%. This is the second straight year when excise has gone up in the Rs 14,000-crore soft drinks industry. Last budget too, excise on fizzy drinks and water went up to 18% from the earlier 17.5%. Coca-Cola and PepsiCo are grappling with single-digit volume growth, impacted by slowing category sales and consumers switching to healthier drinks and this move comes at that time when the soft drink industry is struggling. The price increase will give negative impact on consumption especially in two- and threetier towns and cities at a time when the firms are pushing volumes and stepping up distribution in smaller markets.
However, he announced the setting up of a high-level panel headed by the revenue secretary to oversee fresh cases where the existing retro amendment was to be applied. Pending disputes could also be settled by a one-time dispute resolution mechanism. It now remains to be seen how the government gives shape to the vision the Budget has articulated for India’s economic growth. The intent is clear. Dissatisfied ones Indian Vegetable oil industry is hugely
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The expanding anti-caking agents market in food processing sector
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GOOD PRACTICE
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nti-caking agents are defined as substances added to finely powdered or crystalline food powders to prevent caking, lumping or aggregation by improving their flow ability. These agents are themselves very fine powders and are listed as nutrients and are considered food ingredients. These are placed in powdered products for the ease of packaging, transport and consumption. They do not have nutritional value. There are a number of anti-caking agents available in the market which includes tricalcium phosphate, powdered cellulose, magnesium stearate, sodium bicarbonate, sodium ferrocyanide, calcium ferrocyanide, magnesium trisilicate, potassium aluminum silicate, stearic acid and polydimethylsiloxane among others.
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GOOD PRACTICE income of the population in Asia Pacific are the parameters that have augmented the demand for anti-agents market in the region in the last few years. However, there are several regulations in the use of anti-agents which are expected to act as a restraining factor for the market. FSSAI Regulations Food Safety and Standards (Food Products Standards and Food Additives) Regulationshas laid down the standards for anti-caking agents. No anti caking agents may be used unless they have been permitted in the regulations.
Sodium aluminosilicate is used as an anticaking agent in table salts. In addition, it is present in dried milk, egg mixes, sugar products, and flours. Sodium ferrocyanide and potassium ferrocyanide are more common anti-caking agents in table salt. Anti-caking agents are classified as natural and man-made. Natural anti-caking agents such as calcium carbonate and magnesium carbonate are very expensive. Some anti-caking agents are soluble in water and some are soluble in alcohols or organic solvents. They function either by absorbing excess moisture, or by coating particles and making them water repellent. For instance, calcium silicate absorbs both oil and water. Some non-food items that contain anti-caking agents are fertilizers, cosmetics, synthetic detergents and road salts among others. The applications of anti-caking agent in fertilizer include nitrogen, potassium, phosphorus, ammonium, and compound based fertilizers. The market for anticaking agents is estimated to grow with the increasing use of anti-caking agents in different industries. Food that contain anti-caking agents include vending machine powders, milk & cream powders, cake mixes, instant soup powders, drinking chocolate, baking powder, table salt, icing sugar and grated cheese among others. Lumps form in these powders when they absorb moisture
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and thus cannot be spread evenly. Without anti-caking agents, vending machine powders such as coffee or chocolate do not flow regularly. The lumpy powder may block the various tubes in the vending machine and the taste of the drinks would not be consistent enough. Powdered milk can clump together during processing, packing and storage. The growing market of anti-caking in food industry Growth of the food and beverage industry owing to the rising population, rising awareness regarding packaged food, and consumer preference towards convenience food and rising disposable income is likely to boost the demand for anti-caking agents market over the forecast period. Growth in the food & beverage industry is expected to drive the market for anti-caking agents globally due to a shift in consumer preference towards convenience food due to busy lifestyle of the people. High demand for anti-caking agents in confectionery, fresh meat, cereals, soups, coffee and dried foods is expected to boost he demand within the forecast period. Growing population, rising awareness of benefits of packaged food, changing lifestyle of people, inclination towards westernized eating habits, growing food & beverage industry, rising consumer preference towards junk food and take away, and high disposable
Table salt, onion powder, garlic powder, fruit powder and soup powder may contain anti caking agents but in quantities not exceeding 2.0 per cent either singly or in combination; • carbonates of calcium and magnesium • phosphates of calcium and magnesium • silicates of calcium, magnesium, aluminum or sodium or silicon dioxide •Myristates, palmitates or stearates of aluminum ammonium, calcium, potassium or sodium. Calcium potassium or sodium ferrocyanide are permitted to be used as crystal modifiers and anti-caking agents in common salt, iodized salt and iron fortified salt in quantity not exceeding 10 mg/kg singly or in combination expressed as ferrocyanide. Anti-foaming agents in edible oils and fats
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The definition of anti-foaming agent is a “substance which retards deteriorative changes and foaming height during heating”. •Di methyl Polysiloxane, food grade, may be used as an anti-foaming agent in edible oils and fats for deep fat frying up to a maximum limit of 10 parts per million. •Mono and diglycerides of fatty acids of edible oil may be used as anti-foaming agent in jam, jellies and marmalade Health hazard Seasonings and condiments comprise the largest share for anti-caking agents, followed by the bakery segment, according to a report released in January 2016 by Markets to Markets. Consumer concerns are not unfounded. Research shows the agents degrade nutrients instead of protecting them, such as with vitamin C, leading to loss of nutritional values at low humidity levels, now day’s consumers in all over the world want food products that address health, wellness, and their active lifestyles. As such, they perceive e-labels on food packages to mean the product is unsafe, unaware of the permitted dosage range of food additives. Regulations to curb the use of food additives can also stymie the growth of anti-caking agents. Labeling laws in certain countries impact the consumption of food anti-caking agents because they create restrictions or prohibitions in trade. In 2014, calcium compounds comprised the largest market share, followed by silicon dioxide and sodium compounds. Growth and innovation The industry’s growth is attributed to
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population expansion, especially in the developing world, and the growth in powdered foods, related to geographical food habits and market maturity. The current and mid-term higher growth areas are South America, Asia, the Middle East, and Africa. The anti-caking agent are now an integrated ingredient of emerging and high growth market segments such as "powered and performance sports drinks, processing aids for more effective production, seasonings, and milk, egg and other products for animal nutrition. The anti-caking agent innovation acts as an
efficient processing aid, for example, in the prevention of sticking in spray drying. Officials see expanded economic opportunities for anticakingagents’calcium carbonate and newly developed functionalized calcium carbonate (FCC) show high functionality but they are not widely used as food anticaking agents.FCCs are a versatile raw ingredient that can be used by a variety of customers in any number of food applications. The nutrient is not only an effective source of calcium but also has functionalities such as extrusion aids, pH buffers, and gelling agents. Calcium carbonate has limitations based on low pH blends. FCCs have the "capability of taking up
GOOD PRACTICE very high amounts of liquids and still remain a powder. Calcium carbonates, combined with high purity (e.g. low aluminum levels), obtained from natural raw materials and only treated physically, are attractive for use in natural products. In the past, mainly precipitated calcium carbonate has been used, which is introducing quite a high carbon footprint. The use of anti-caking agents in foods remains crucial to maintaining the quality of ingredients, which is important to consumers who command better quality ingredients in a variety of foods. The agents play an important role because they enable the "flow and even mixture of hygroscopic materials during the production process, ensuring that the final product is a homogeneous mixture. The future of anticaking agent By 2020, the food anti-caking agents market is expected to be worth $822 million and Europe will continue to lead the food anticaking market; and China and India will continue as the largest markets in Asia-Pacific. Challenges to the expansion of the market come from negative consumer perceptions as to the nutritive value of food anticaking agents, as well as rigorous government regulations. For example, the European Union has banned the use of sodium bicarbonate E550. However, the growth of anti-caking agents is related to consumers’ quest for quality ingredients, which have spurred product innovations and require the agents to prevent caking. Manufacturers of anti-caking agents are marching forward by addressing consumers’ concerns through innovations and expansions and acquisitions to gain market share.
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Plot no 7 Khasra no 13 Mohidinpur Manpur Indal Area Behhind Vaisno Dharam Kanta Meerut Road Ghaziabad-201003, Uttar rdesh, India Mob: 09810803491, 08285012431/32 E-mail: vermafoodsystem@gmail.com, Website www.vermagroup.com
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BLEEDING BEVERAGES
Taste the feeling
India is the sixth largest market for Coca-Cola worldwide; it has jumped from being number 19 in 2006 to the sixth spot in a decade and the company has plans to break into the top five markets for Coke worldwide by 2020, if not sooner.
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S
oft drinks and packaged water prices are set to go up by Rs 1-2 with immediate effect. Why? Because Budget 2016, the Finance Minister has increased the excise duty 21% on aerated sugary drinks and mineral waters from the existing 18%. This is the second straight year when excise has gone up in the Rs 14,000-crore soft drinks industry. Last budget too, excise on fizzy
drinks and water went up to 18% from the earlier 17.5%. Coca-Cola and other soft drinks are grappling with single-digit volume growth, impacted by slowing category sales and consumers switching to healthier drinks and this move comes at that time when the soft drink industry is struggling. The price increase will give
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BLEEDING BEVERAGES
Coca Cola saga amid sin tax
impact on consumption especially in two- and three-tier towns and cities at a time when the firms are pushing volumes and stepping up distribution in smaller markets. The hike could be effective both on prices of glass bottles and entry-level packs of 200 ml and 300 ml and 1.5 and 2 litre bottles. So I decided to do a feature on the oldest
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and biggest cola in the world – Coca Cola -and analyse it journey in India. Coca-Cola Worldwide And In India The Coca-Cola Company (TCCC) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still beverage brands. Globally, TCCC is the No. 1 provider of sparkling beverages, ready-to-drink
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BLEEDING BEVERAGES
Coca Cola is focused development of the communities which include the “Support My School” program, the “Parivartan” retailer training program, women empowerment program as a part of the global 5BY20 campaign etc.
coffees, juices and juice drinks. While it is simply viewed as ‘Coca-Cola’, globally, the Coca-Cola System operates through multiple local channels; the ‘Coca-Cola System’ is not a single entity from a legal or managerial perspective. The Company has the strongest portfolio of brands in the nonalcoholic beverage industry – now featuring 20 brands that generate more than $1 billion USD in annual retail sales. In India Coca-Cola is one of the country’s leading beverage companies, offering a range of high quality, refreshing beverage options to consumers. Over the last 22 years, ever since its re-entry in 1993, the company has gone on to establish an unmatched portfolio of beverages; refreshing consumers with its leading beverage brands like Coca-Cola, CocaCola Zero, Diet Coke, Thums Up, Fanta, Limca, Sprite, Maaza, Minute Maid range of juices, Georgia and Georgia Gold range of hot and cold tea and coffee options, Kinley and Bonaqua packaged drinking water, Kinley Club Soda and BURN energy drink. The Company along with its bottling partners, through a strong network of over 2.6 million retail outlets, touches the lives of millions of consumers. Its brands are some of the most preferred and most sold beverages in the country – Thums Up and Sprite – being the top selling sparkling beverages.
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The Coca-Cola system in India has already invested USD 2 Billion since its re-entry into India. The company will be investing another USD 5 Billion till the year 2020. The Coca-Cola system in India directly employs over 25,000 people including those on contract. The system has created indirect employment for more than 1, 50,000 people in related industries through its vast procurement, supply and distribution system. In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-Cola Company namely Coca-Cola India Pvt Ltd which manufactures and sells concentrate and beverage bases and powdered beverage mixes, a Companyowned bottling entity, namely, Hindustan Coca-Cola Beverages Pvt Ltd; thirteen licensed bottling partners of The CocaCola Company, who are authorized to prepare, package, sell and distribute beverages under certain specified trademarks of The Coca-Cola Company; and an extensive distribution system comprising of our customers, distributors and retailers. Coca-Cola India Private Limited sells concentrate and beverage bases to authorized bottlers who are authorized to use these to produce our portfolio of beverages. These authorized bottlers independently develop local markets and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other businesses.
Changed Strategy Bursting on to screens in a riot of red, 'Taste the Feeling' plays out like a launch campaign, birthed by marketers obsessed with cramming the product into every other shot. Young people guzzle bottles or playfully twirl them, logo outwards, and striking poses seen only in advertising. The films play out to simple, occasionally retro storylines and montages, where the product invariably saves the moment if not the day. Except the hard-nosed, hardworking 'Taste the Feeling' (TTF) is from CocaCola which until very recently was the patron saint of postmodern marketing. Its previous 'Open Happiness' campaign found successful expression in realityTVesque advertising: shareable online films built around brand activations (or actorvations as the more cynical called them). So why has Coca-Cola chosen to reboot its advertising? An obvious answer is may be due to the increase in the excise
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BLEEDING BEVERAGES
citing absence of "long-term economic viability", which may affect at least 300 employees. Manufacturing has been suspended at Kaladera near Jaipur (Rajasthan), Vishakhapatnam (Andhra Pradesh) and Brynihat (Meghalaya). The decision to close down a plant is a business decision taken on the basis of its long-term economic viability and market demands of the products being manufactured at that particular plant. The company is going through a process of consolidation where new state-of-the art facilities are being built and existing production capacities are being optimized. duty to 40 per cent sin tax that is being implemented on carbonated drinks. This definitely has affected the sale of the carbonated drinks. The second reason is the consumer who are more and more going towards the healthy drinks option and thirdly because of change at the top. Which is why the shift from the stratospheric concerns of 'Open Happiness' to pushing more product and emotional marketing goes to the extreme; talking about message without product, and values without benefits. Over the last few years the company had been talking about happiness and sometimes forgetsthat coke tastes very good. Just as important is the One Coke strategy: folding Coke Zero, Coke Life and Diet Coke which have so far been standalone products running their own campaigns, as sub-brands under an overarching CocaCola umbrella. The new campaign slips these variants into its numerous montages and storylines. But What Has Happened Now‌.. Though India is advocating foreign investment for its Make in India initiative, but it is somehow depressing the growth of aerated drink industry with its health prompting crusade. Before the budget was announced Coca Cola had shown its skeptics’ over it. It said that it may
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have to close some bottling plants if the government pushes through a proposal that would subject fizzy drinks to a 40 percent "sin" tax, as part of a broader fiscal overhaul. It was afraid that the increase in tax would lead to a sharp decline in consumer purchase and under such circumstances; the company would have no option but to consider shutting down certain factories. Several countries are debating so-called "sugar taxes" to tackle obesity and encourage healthier lifestyles. While more than a fifth of India's population lives below the official poverty line, the country is home to the third-highest population of obese people after the United States and China. Coca-Cola India, which employs 25,000 staff, said it is on course to invest $5 billion by 2020 as it looks to raise production to target a growing middle class. The company, which re-entered India after economic liberalization in the early 1990s, has at times had a tricky relationship with local authorities. Last year it was forced to halt production at one of its bottling plants in the country's north after it was accused of using excessive groundwater. And with the tax further increased, Coca Cola India's bottling arm Hindustan Coca Cola Beverages has suspended manufacturing at three locations in India
These decisions are taken in keeping with plant capacity utilisation considerations, based on the market demands and projections and the injustice done to the aerated drink category. What Is Sin Tax? What is sin tax? It's a tax governments impose on goods or services considered harmful to society. Of course, this designation is completely arbitrary, determined by those in positions of power. Unfortunately for Coca-Cola might get caught up in this net being cast. Not only in India, also in the USA, there is extra taxes on these goods is prevalent. However, this time the Indian government has increased it to a higher tax rate of 40%, more than double the standard (non"sin") tax rate of 18%. Tax on sugary drinks isn't without precedent. Mexico, one of the most obese countries in the world, passed a soda tax in 2013, levying 1 peso per liter. The direct effect on individual brands is difficult to measure, since each variety has its own cost structure. However, the big picture is clear: A study found that in 2014, average sales declined by 6%. Furthermore, there was a deteriorating trend as time passed. In December 2014, sales declined by 12% (as opposed to the average of 6%) year over year. This paints a very clear picture for the impending effects on Coca-Cola India. The president of Coca-Cola India and
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BLEEDING BEVERAGES Minute Maid Tetra Edge pack has a specific role to play in the Coca-Cola India portfolio as the company wants to tap into the huge opportunity offered in the ₹11-20 price bracket. From a functional point of view, the Tetra Edge pack is a convenient on-the-go offering targeted at urban youth aged between 2029 years. As per estimates, “on-the-go consumption” contributes nearly 3040 per cent to packaged ready-to-drink beverages volume.
South West Asia even admitted that if this proposal goes through, he would "have no option but to consider shutting down certain factories." Reversal Of Excise Hike India's Rs 14,000-crore soft drink industry has requested Finance MinisterArun Jaitley to reverse an excise duty increase on aerated beverages in the Budget. According to the Indian Beverage Association, which represents Coca-Cola and PepsiCo, the viability of the industry could be at grave danger because of such a consistent adversarial tax approach. Coca-Cola and PepsiCo are dealing with single-digit volume growth, impacted by slowing sales and consumers switching to healthier drinks and already the industry growth has slowed down to under 4% in 2015. Grabbing Bigger Market After the tax issue, Coca Cola to further boost ‘on-the-go consumption’ and offer more ‘value-for-money’ options to consumers for its beverages is launching innovations in its packs for juice and sparkling beverages. The company is set to introduce its 200 ml Minute Maid Tetra Edge packs in Tamil Nadu over the weekend, priced at Rs.13. This will be a limited geography
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launch in Tamil Nadu and depending on consumer feedback, it will scale up to other southern States — Karnataka, Andhra Pradesh and Kerala. Minute Maid has a stronger presence in the South, one of the reasons why the launch was in the region first. Unlike other smaller juice packs that come with a straw and tend to get positioned for children, these packs offer a better drinking experience due to the wide mouth and ability to close the pack with a cap, and are apt for pulp-based products.
The company has already launched Maaza Tetrafino pouches that are currently available in Madhya Pradesh, Maharashtra, West Bengal and parts of Uttar Pradesh. The 100-ml pack is priced at Rs. 7 and offers a single serve option, especially aimed at rural regions. For its sparkling beverages, the company has pilot launched a 300-ml PET mini pack, priced ₹20, for Sprite, Thums Up and Coca-Cola in collaboration with its franchise bottling partner in Lucknow. It plans to ramp up distribution in the next few months. In the past, the company was offering 300 ml returnable glass bottles. Foraying Into Dairy Also Coca-Cola is now foraying into the value-added dairy drinks segment in the
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Indian market with brand Vio, which will make its debut across the country very soon. Two flavours will be introduced under Vio and Coca Cola had tied up with Reliance Retail as part of a pilot launch to make the brand available exclusively across the latter's 500 stores. Vio will be available in 'Kesar Treat' and 'Almond Delight' variants, priced at Rs 25 per pack of 200 ml.
Chauhan family of Parle Products who sold this brand along with Thumps Up and Gold Spot to Coca-Cola Company in 1993. Coca Cola will be investing heavily in the coming years to achieve target for Maaza. This investment will be from our Rs 30,000 crore overall investment plan in India and will continue till 2020.
Apart from getting into sparkling drinks with juices, Coca Cola has also ventured into dairy segment to increase its market share and has tied up with Schreiber Dynamix Dairies Pvt Ltd, which will manufacture the product.
Innovations One innovation has been on how Coca Cola makes its products — The Company has reduced water consumption in plants and now consumes 40 per cent less water than it was done five years ago. Innovation has been done on the equipment in the market.
Coca Cola has launched a Splash bar, developed bottling company Hindustan Coca-Cola, which is a simple fountain machine that uses two-litre bottles to dispense drinks. It’s an affordable fountain that we place in small shops and they can sell a small cup of Coke at ₹5. There’s enough profit for a small retailer as he doesn’t have to buy a big fountain, and can dispense through two-litre bottles. It’s designed and made in India, and we hope it will go global, soon.
The company had earlier done a pilot test with Maaza Milky Delight in the dairy segment but with the brand strongly associated with mango drinks, it has decided to discontinue it and launch the Vio brand. In fact Coke wants to play a large role in helping the value added dairy products segment grow in the Indian market because the overall dairy segment in India is largely unorganised but is estimated to be 120-135 billion litres a year.
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Coca-Cola India has partnered with Jain Irrigation to enhance yield there by increasing their income.
The beverage giant has placed over 1,000 solar-powered coolers in many villages. These have gone to women shop-keepers in small villages and the lady retailer’s store has developed a lot. This is because often, she’s the only person in the village who can store products to chill.
This step by the beverage company is will be a part of the doubling investments in India to $5 billion (about Rs 28,000 crore) by 2020 which was announced in June 2012. And has definite plans to set up our own packaging units in future for the dairy products, but we will not get into milk collection.
Maaza' A $1 Billion Brand Coca-Cola India plans to make mango drink Maaza, a $1 billion juice drink brand from its current brand value of Rs.2500 crore in eight years. Its objective is to build Maaza, which has become 40 years old, to be the world’s first 1 billion US dollar juice drink brand (in retail sales) from India. Globally Coca-Cola has three $1 billion juice drink brands including Minute Maid Pulpy and Simply Orange. Maaza was initially introduced by the
BLEEDING BEVERAGES
Coke’s ‘Make In India’ Story
The company is embarking on this Make in India mission of turning Maaza into the world’s first USD 1 billion juice drink brand coming out of India, and visualizes the multiplier effect that it can have on the agri-sector and the food processing industry. To source high qualify mango pulp from farmers in South and Central India,
The Coke you drink in 60 countries has been packaged in PET made in India. Coca Cola’s global R&D and partner, India Glycols, together found a way to produce PET from the waste that comes out of processing sugarcane — from the molasses — and make PET chips, which are then sent to our partners around the world to convert into PET bottles. These bottles are then used to bottle Coke and water. It’s a ‘plant’ bottle. They already export Rs 400 crore worth of PET chips and it’s an inspired, global innovation from India.
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Make In India Initiative
IIM
Sustainable Growth For The Indian Food Processing Industry
T
he Indian food industry is poised for huge growth, increasing its contribution to world food trade every year. In India, the food sector has emerged as a high-growth and high-profit sector due to its immense potential for value addition, particularly within the food processing industry. Accounting for about 32 per cent of the country’s total food market, the food processing industry is one of the largest
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industries in India and is ranked fifth in terms of production, consumption, export and expected growth. The total food production in India is likely to double in the next 10 years with the country’s domestic food market estimated to reach US$ 258 billion. The Government of
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India’s Only Monthly for Agro, Processed Food & Allied Sector
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MII The Food Processing Sector in India being a sunrise sector is poised for exponential growth and has emerged as a high growth sector due to its immense potential for value addition, ability to control inflation and ensure remunerative prices to farmers.
India has been instrumental in the growth and development of the food processing industry. The government through the Ministry of Food Processing Industries (MoFPI) is making all efforts to encourage investments in the business. It has approved proposals for joint ventures (JV), foreign collaborations; industrial licenses and 100 per cent export oriented units. The Indian food processing industry accounts for 32 per cent of the country’s total food market, 14 per cent of manufacturing Gross Domestic Product (GDP), 13 per cent of India’s exports and six per cent of total industrial investment. Indian food service industry is expected to reach US$ 78 billion by 2018.The Indian gourmet food market is currently valued at US$ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20 per cent. It is expected to cross US$ 2.8 billion by 2015. According to the data provided by the Department of Industrial Policies and Promotion (DIPP), the food processing sector in India has received around US$ 6.55 billion worth of Foreign Investments during the period April 2000—September 2015. The Confederation of Indian Industry (CII) estimates that the food processing sectors have the potential to attract as much as US$ 33 billion of investment over the next 10 years and also generate employment of nine million person-days. Investment in food start-ups, which
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mainly include food ordering apps, has increased by 93 per cent to US$ 130.3 million1 comprising 17 deals in 2015 till September 2015 as against only five deals in 2014. The food processing industry is one of the largest processing industry in India and is ranked 5th in terms of production, consumption, export and expected growth. The food processing industry forms an important segment of Indian economy in terms of contribution to GDP, employment and investment, and is a major driver in countries growth in the near future. This industry contributes to GDP in agriculture and manufacturing sector. Food Processing Main Priorities In 2016
To foster the growth of food-processing sector certain initiatives has been taken; like; recently, the Reserve Bank of India has classified loans to food and agro-based processing units and cold chain under agriculture activities for priority sector lending (PSL) subject to an aggregate sanctioned limit of Rs.100 crore per borrower. It will ensure greater flow of credit to entrepreneurs for the setting up of food-processing units and attract investment in the sector. An ‘Investors’ Portal’ has been developed by the food processing Ministry with the intention to disseminate information on the state specific resource potential, policy support, and fiscal incentives offered to investors in the food-processing sector. The investors, both domestic and foreign, can also seek guidance on specific issues by using information disseminated on the portal. Investors can access and avail these services through the Investors’ Portal
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MII for processed food to drive exports; allow deduction of 200% for brand-building expenditure (at par with R&D). • Provide fiscal incentives on primary processing of perishables, e.g. IQF, Cold Chain.
(http://foodprocessingindia.co.in/) or through the Ministry’s website (http:// mofpi.nic.in). Surplus and deficient areas of various agricultural and horticultural produce in the country have been identified. It will help in planning processing clusters by means of setting up suitable facilities in different parts of the country. The map is available on the website of the Ministry. The government had depleted the excise duty on food-processing and packaging machinery has from 10% to 6% in the 2014-15 budget and services of preconditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables have been exempted from service tax in the 2015-16 budget. Another important step taken is to easing the business process, wherethe requirement of supporting documents such as affidavits, agreements, etc., to be submitted with a proposal has been reduced. Some other priorities for 2016 for the food sector is building a sector which provides safe, hygienic and quality food products to the people, makes available nutritious food items to all sections of the society, builds a competitive and highly productive industry, and promotes awareness of hygiene and safety issues relating to food and availability of choice to the consumers is of utmost importance. There is an aim to develop a knowledgebased industry which promotes high value
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addition, and through that, higher incomes and employment in the economy, besides bringing the benefits of technology to the food-processing sector and promoting the modernization of agriculture as an essential component of a strong and expanding economy. Food Processing Sector - Growth Engine For Make In India ‘’Make in India’’ is a major national major initiative taken by Prime Minister Narendra Modi has been designed to facilitate investment, foster innovation, and enhance skill development. It will also protect intellectual property and best in class manufacturing infrastructure. The main objective of Make in India is to promote India as the preferred global manufacturing destination and a strong impact has been created by this initiative. The food-processing sector has been identified as one of the priority sectors under Make in India, with a view to attract investment to this sector. In this regard a strategy had been discussed for various departments, including food-processing industries, to attract investment. For the food-processing sector, the following short-term initiatives (for one year) and medium-term initiatives (for three years) were proposed. Short term Initiative • FSSAI – Abolish system of product-byproduct approval for ingredients already approved. Align standards to Codex. • Promote the “Product of India” brand
• To provide incentives for increased usage of solar and other renewable sources of energy for food parks and cold chains; the issue has been taken up with the Ministry of New and Renewable Energy (MNRE) at the level of Minister. (A concept paper indicating the technologies, cost estimates, etc., integral to the viability of operating cold chain projects on solar and solar hybrid solutions has been prepared by the Solar Energy Corporation of India and is under consideration of this Ministry.) • The Ministry is targeting an additional six mega food parks and 50 cold chain projects under the Make in India program this year. Targets for medium-term achievement for three years under Make in India: • Complete all 42 mega food parks and 138 cold chain projects; support the creation of an additional 7.5 million MT of cold chain capacity. • Push for reform in APMC (e.g. removal of perishables from APMC’s purview); remove stock limits on storage by processors. • Impose lower tax on processed food products under GST. • Set up additional 50 NABL-accredited modern food testing laboratories. • Given the seasonal nature of food processing, align fixed electricity charges, labor laws and income tax provisions accordingly. Apart from these initiatives, the food processing industry need to disseminate information to potential investors to attract investment to the sector through
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MII
a dedicated Investors Portal in which a range of information like resource base, availability of land, state-specific policies, and fiscal incentives are shared with potential investors. Investment under Make in India In April 2015 PepsiCo commissioned manufacturing unit at Sri City. ITC has indicated investment of around Rs. 3789 crore in West Bengal for constructing two integrated food processing unit. Abu Dhabi based Lulu Group plans to invest Rs 2,500 crore for fruit and vegetable processing units and integrated meat processing units. Kellogg India is making large investment in manufacturing and is planning to set up R&D facility in Mumbai. While Rexam has secured land in Sri City to build a beverage can plant within initial investment of Rs. 468 crore. And of course MacDonald India plans to double the number of outlets with Rs 750 crore investments. The company is looking to add another 250 restaurants by 2020. Make In India Has The Potential To Provide Appropriate Skills Make in India along with the foodprocessing industry can create a major employment segments. A well-developed food-processing sector with a higher level of processing helps in the reduction of wastage, improves value addition, promotes crop diversification, ensures better returns for the farmers, promotes employment, and increases export earnings. This sector is also capable of addressing critical issues of food security, food inflation, and providing wholesome, nutritious food to the masses. The food-processing sector has emerged as an important segment of the Indian economy in terms of its contribution to GDP, employment and investment. And seeing this,a skill development program has been initiated through the Sector Skill Council for food processing which has been set up by the FICCI. The Sector Skill Council for food processing – i.e.
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Food Industry Capacity & Skill Initiatives (FICSI) – is working on the identification of job roles and competencies required for each position so as to develop National Occupational Standards (NOS) for different sectors of food processing. It will include the major sectors of the food-processing domain like, fruits and vegetables, food grain milling (including oilseeds), dairy products, meat and poultry, fish and seafood, bread and bakery and beverages. Until now, FICSI has developed 38 draft qualification packs (QPs) for the food-processing industry; 27 national occupational standards (NOSs) relating to bakery, grain milling, etc., have been approved by the National Skill Development Corporation (NSDC). The skill development program has been launched through FICSI in 30 centers across 11 states of the country on September 4, 2015. Food Safety And Make In India The right of the consumer to safe food is paramount and non-negotiable and the Indian food processing industry adheres to it. With the Make in India initiative the Indian companies now have to gear up and be in the same line as the global industry in relation to consumers right and food safety . The Food Safety and Standards Authority
of India (FSSAI) is mandated to lay down science-based standards for articles of foods and to regulate their manufacture, storage, distribution, sale and import to ensure the availability of safe and wholesome food for consumers. FSSAI is also required to coordinate with state governments in matters relating to enforcement. The FSS Act, 2006, also envisages that measures taken by the FSSAI shall be proportionate and no more restrictive to trade than is required to achieve appropriate level of health protection. A major issue being faced by the industry was the insistence of the FSSAI on the requirement of productby-product approval in the case of all non-standardized products, called proprietary food. The Supreme Court, in the judgment delivered on August 19, 2015, has quashed the product approval advisory of the FSSAI. Consequently, upon the Order of the Hon’ble Supreme Court, the FSSAI has discontinued with the process of product approval. In the meantime, the FSSAI has already uploaded, for public comments, around 11,500 draft standards for food additives, which are harmonized with Codex. The FSSAI has also uploaded the draft standards for health supplements, nutraceuticals, food for special dietary uses, food for special medical purposes, functional foods and novel foods. After
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the specified timeline for public comments is over, the FSSAI will take further action to finalize these regulations. After these regulations come into operation, the requirement of product approval would certainly be reduced. The Ministry of Health and Family Welfare has also been requested to expedite the process of framing regulations so as to ensure that the food-processing industry/ consumers do not suffer. The Mega Food Park Scheme Imperative In Make In India Concept To give a major boost to the foodprocessing sector by adding value and reducing food wastage and loss at each stage of the supply chain, with particular focus on perishables, the implementation of the mega food park scheme in the country since 2008. A mega food park, located in an area of at least 50 acres, works on a cluster-based approach based on a hub and spokes model. Infrastructure is created for primary processing and storage near the farm in the form of primary processing centers (PPCs) and collection centers (CCs) located in production areas. Common facilities and enabling infrastructure are located at a central processing center, like modern warehousing, cold storage, IQF, sorting, grading, packaging, pulping, ripening chambers, tetra-packaging units, roads, electricity, water, ETP facilities etc. A total of 42 mega food parks have been sanctioned by the government to be set up in the country. Currently, 23 projects are under implementation. This will create a huge modern infrastructure for the foodprocessing sector and provide impetus to the growth of the sector. These 42 mega food parks, when they become functional, should attract investment of around
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Rs.5,000 crore in modern infrastructure, additional collective investment of around Rs.10,500 crore in 1,250 food-processing units in the parks, and an annual turnover of Rs.21,000 crore. These parks, when fully functional, will create employment for about 2.5 lakh persons and benefit about 12.5 lakh farmers directly and indirectly. The timely completion of these mega food parks will provide a big boost to the growth of the food-processing sector in
the concerned state, help to provide better prices for farmers, reduce wastage of perishables, add value to the agricultural produce, and create huge employment opportunities, especially in rural areas. These will also help in stabilizing prices of food products and containing inflation in the country. FDI In Food Processing Industry India has allowed 100% foreign investment in processed food retailing provided they are manufactured in India that will help retailers such as Marks & Spencer, Tesco, Walmart and IKEA to set up food-only retail outlets. This is a step where the Make in India initiative will play a vital role; creating global investment in India and creating require employment and developing the food processing sector to new heights. Foreign direct investment (FDI) was permissible in the food-processing sector up to 100% under the automatic route
MII except for items reserved for micro and small enterprises (MSEs), subject to applicable laws/regulations, securities and other conditions. For the manufacture of items reserved for micro and small enterprises, FDI was permissible under the automatic route up to 24% of the capital. If foreign investment is more than 24%, an Industrial License under the Industries (Development & Regulation) Act 1951 is required. Badal had written to the Prime Minister's Office pushing for 100% FDI in multi brand retail in the food processing sector saying such move would create of infrastructure, revenue and uplift the farmers. In 2013, India allowed 51% FDI in multi-brand retailing but such ventures come with a host of riders such as 30% mandatory local sourcing, $100 million upfront investment and half of it in backend infrastructure. With the new ruling in the budget, retailers can sell their own food products without any restriction as long as they are produced within the country. What Make In India Can Really Do For The Economy The Make in India initiative has showcased India as a potential manufacturing hub in the eyes of the whole world. According to India Brand Equity Foundation, India’s manufacturing sector could touch $1 trillion by 2025. The sector has the potential to contribute 25-30 percent of the country’s GDP and create up to 90 million domestic jobs in the next 10 years. What’s needed now is to ensure that those who have stepped up to the challenge are not left frustrated by policy paralysis, bureaucratic bottlenecks and impediments to execution that can be the undoing of the best laid plans.
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COVER STORY
Nod to 100 % FDI in Multi-Brand Retail Shines in Union Budget 2016-17; Poses for firm Jolt Vol.11 Issue 05 March 2016
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Archana Aroor, Mumbai n 29 February 2016, in the wee hours, The Finance Minister Arun Jaitley announced a ninepillar-budget consisting nine categories such as Tax, Personal-Finance, Social, Health, Education, Energy, Investments and Infrastructure, Agriculture and
O
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Banking. Much of those points in the announcements came to the industry as a ‘Surprise’ or a ‘Disappointment’ is still a debatable question. However, it is assured that this budget was eagerly awaited. There has been an increasing criticism of the perceived gap and the action taken on the ground, this
COVER STORY
budget was a key to opportunity to restore the lost ground (unlike the earlier political party (Congress) in power) and accelerate the process of converting the ‘Make in India’ dream into a reality. As such, to a few it has come or generated a cheer and optimism, however, there was little scope to others to lean-on.
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The industry welcomes of the new government’s initiative to encourage the farm-agri sector and a huge applaud goes to the move to allow 100 per cent FDI in retailing, albeit most of them wish to see its on-ground realities with the fine print.
COVER STORY
money for their produce. This would bring down the prices at retail level and inflation to repose.
“I did not find any major announcement which can directly relate to Food processing sector apart from 100 per cent FDI in Food retailing,” Sanjeev Gupta, Director, Kanchan Metals Pvt Ltd told Beverages and Food Processing Times Magazine.
Another significant advantage as noted by the experts earlier was that with the aforesaid move, big retail chains would invest in supply chains that will reduce wastage which is currently estimated to be around Rs 92,000 crore in the country. Not only this, small and medium enterprises would have a bigger market along with better technology and global best-practices.
Gupta opined that this initiative would
Moreover, it would create employment
Snajeev Gupta
bring the retailing into an organised way stressing that more products and opportunities would come for processing sector which required special conditions/ environment for retailing. He then said that the initiative may lead to increased sales with more availability to consumers. Also the well-known retail chains will go for own branding thus creating more opportunities for manufacturers/processor for private label. To him, there should be some investments taking place in retailing through global companies. The advantages of allowing 100 per cent FDI in multi-brand retail as analysed by the industry experts in the media were many. The aforesaid initiative would cut intermediaries between farmers and the retailers by helping them to obtain more
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Dinesh Gupta
and induce better competition in the market and thereby benefitting the producers and the consumers. Elaborating on the topic, Jayesh Gosrani, Joint Managing Director, Goma Engineering Pvt Ltd, says, “100 per cent FDI in marketing in Food Retail sector on its face entails that it could encourage foreign companies to source out food and products domestically or locally and then sell it in the domestic and export market.” Gosrani mentioned that this could help the domestic food producers and aid foreign companies to test the market before manufacturing food products themselves. He also foresees that there could a possibility of increase in competition for the domestic food processing companies over a period of time, if those foreign companies decide to begin manufacturing
in India and accordingly the impact would be felt in no time. Interestingly, largely the manufacturing sector has received a boost –with the government’s ‘Make in India’ and ‘Skill India’ Mission with the government promising to set up around 1500 Multi Skill Training Institutes across the country. Also, recently the Finance Minister Jaitley’s proposal for corporate tax reduction to 25 per cent for newly set-up manufacturing units would act as a tremendous boost for the entire manufacturing industry even to those customers who manufacture food and dairy products.
Jayesh Gosrani
Much to say, this is a also a similar viewpoint by the players whose products are involved in the Production, Processing, Storage and Packaging of Food and Beverages, Pharmaceuticals, Plastics and other verticals of the industry ---Bry-Air Asia (India) , where Budget seems to be a good sincere effort by the government to make it more inclusive. Dinesh Gupta, President, Bry-Air (Asia) Pvt Ltd says, “Budget is only an Enabler. It will lot depend on how responsible opposition and media is about country’s growth. Perceptions are more damaging than ground realities.” Needless to say, that all in all this budget connected all the experts to a positive opinion alongside of the government’s announcement of 100 per cent FDI in Multi-brand retail and when probed, the
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responses continued with re-iterating views. “100 Per cent FDI in marketing of food produced in India may be a way to partly open retail for foreign retailers particularly relating to fresh produce. The move will benefit farmers, give a fillip to the food processing industry and create vast employment and this is very progressive as it will help reducing the wastage, helping farm diversification, encouraging industry to produce locally within the country,” says Mrunal Joshi, Executive Director, Nichrome India Pvt Ltd. Joshi then commented that FDI in multi-
COVER STORY
Policy Clarity To make it clearer, this move particularly means that the government has opened the door of food marketing to Multinational Brand Retailers via the Foreign Investment Promotion Board (FIPB). With this, it scoops out the possibilities for setting up of manufacturing outlets in the country by any foreign retailers in the food sector who are vying to win the race. However, the proviso stated that it would have to sell food products manufactured by the Indian producers. In this context, a few of the analysts
Joint Ventures (JV) or whether the industry would grow to its full potential in the future with such investments. Further, to tear down the raised questions of the coherence of the government’s policy, recently, the Food Processing Minister, Harsimrat Kaur Badal stressed that 100 per cent FDI would be permitted only in multi-brand retailing of food products and not in all items. Kaur stressed that while the extant rule on FDI in multi-brand retailing of any product mandated that atleast 30 per cent of the raw materials had to be sourced from the domestic market, in food processing, a foreign retailer would have to procure 100 per cent of raw materials from domestic sources to be eligible to bring in 100 per cent FDI. It seems that everything is fair in the state of political affairs of our country. True that the 100 per cent FDI in Multibrand Retail is a welcome, particularly to the food processing industry, our inquisitiveness arouses when the Food Minister, Harsimarat Kaur Badal had recently informed that she was the one who pitched in for this initiative as reported by few of the media organisations.
Uday Sant
Mrunal Joshi
retail had been a hot-button political issue and had seen ruling government in the past sparring with opposition parties over opening up of the retail sector, a move that is perceived to be a threat to both small traders and domestic retailers.
hunch that global retailers such as Marks and Spencer’s or Tesco, which have food services units could now set up their marketing outlets in the country where they could sell food products manufactured by the Indian companies.
“To be sure, the current FDI policy in retail allows multi-retailers to invest only 51 per cent while opening retail stores and that 100 per cent is allowed in whole cash and carry retail”, adds Joshi asserting that however, the fine print would be needed to be seen on how marketing was fine.
With this perspective, Gosrani mentioned that a few years ago there had been an increasing interest of foreign players such as Le Groupe Lactalis of France taking over Tirumala Milk Products to become Lactalis Tirumala to invest in India to tap its potential and therefore, it would be an early prediction with reference to Government’s boost of FDI in the said sector would definitely encourage Merges or
Furthermore, Uday Sant, the Country Manager from JBT Corporation, one of the leading global solutions provider to highvalue segments of the food processing and air transportation industries opined that multi-brand retailing was a good initiative to move to branded and organised food production.
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“I have requested the Prime Minister that 100 per cent FDI in multi-brand retail of those food products which are produced and processed in India should be allowed. So that big companies can create infrastructure especially for the agriculture sector and would bring latest technology for the farm sector,” says Badal.
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According to the reports, the Minister had written a letter to the PM requesting for a ‘relook’ at the country’s FDI policy in multi-brand retail in food processing. Earlier, India had the permit of 51 per cent FDI in the multi-brand retail and reportedly there were immense apprehensions for the aforesaid move from the industry. So is the new initiative just a reformation of the old one? FDI Inflows: Statistics According to Department of Industrial Policy and Promotion (DIPP), the total FDI inflows soared by 24.5 per cent to US$ 44.9 billion during FY2015, as compared to US$ 36.0 billion in FY 2014. FDI into India through the Foreign Investment Promotion Board (FIPB) route shot up by 26 per cent to US$ 31.9 billion in the year FY2015 as against US$ 25.3 billion in the previous year, indicating that government's effort to improve ease of doing business and relaxation in FDI norms is yielding results. Meanwhile, United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2015 stated that India had acquired ninth-slot in the top 10 countries attracting highest FDI in 2014 as compared to 15th position last year. The report also mentioned that the FDI inflows to India were likely to exhibit an upward trend in 2015 on account of economic recovery. India also jumped 16 notches to 55 among 140 countries in the World Economic Forum’s Global Competitiveness Index that ranks countries on the basis of parameters such as institutions, macroeconomic environment, education, market size and infrastructure among others. As stated by the Indian Brand Equity Foundation, during FY2015, India had received the maximum FDI equity inflows from Mauritius at US$ 9.03
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billion, followed by Singapore (US$ 6.74 billion), Netherlands (US$ 3.43 billion), Japan (US$ 2.08 billion) and the US (US$ 1.82 billion). Healthy inflow of foreign investments into the country helped India’s balance of payments (BoP) situation and stabilised the value of rupee. FDI in India witnessed an increase of 13 per cent and reached US$ 16.63 billion during April-September, 2015 as compared to US$ 14.69 billion in the same period last year. According to media reports, The Cabinet Committee on Economic Affairs (CCEA) has recently raised the threshold for foreign direct investments requiring its
approval to Rs 3,000 crore (US $ 469 million) from the present Rs 1,200 crore (US $ 187 million. The reports stated that this decision was expected to expedite the approval process and result in increased foreign investment inflow. Curio still lures……. Another key focus of the Budget was its initiative to encourage the rural economy as Jaitley once rightly pointed that farmers were the backbone of our country and 60 per cent of the income relied on the agriculture. Whether the aforesaid was expected or unexpected would whip through one word answer. The Budget also carved a niche ambition to double the income of the farmers by 2020 that which raised the eyebrows of the industry questioning after what precedent. “There is a lot of infusion of funds into agriculture and farming. The direct implication is boost to Seed Industry,
COVER STORY Production of Grains and AgroChemicals. Also there will be investments into grain and food processing. Therefore, as packaging solution provider, we look at this as a positive step and expect more capital investments in processing and packaging machineries,” asserts Joshi. In addition to already announced programmes on Soil Health Card that promotes optimal use of fertilizers and the Crop Insurance Scheme that broadbases the insurance benefits to the farmers, the government would now fast-track 23 major irrigation projects by bringing an additional 28.5 hectares land under Irrigation. Creation of a ‘National Agriculture Market’ --a Unified E-platform to be facilitated by states amending their respective APMC acts to let farmers sell their produce anywhere in India has been announced has been commendable, however so far only 12 states were onboard the programme, seems PM would have to push those state law changes. To support farmers after calamities, special focus has been given to ensure timely flow of credit, target is Rs.9 trillion in FY17 and to ensure benefit of Minimum Support Price reaches all parts of the country—remaining states will be encouraged to take up decentralised procurement, effective arrangement of pulse procurement and Government’s plan to set apart Rs.412 crore to encourage organic farming are the other aspects of ‘Farm-Agri oriented Budget 2016-17. Conclusion: The Food industry has experienced and it has grown much, till date. The announcements were many and we still see a huge round –up of an analysis posing its loopholes and the obligations so to conclude a final word on the Budget 2016-17 makes it a ‘hard-won’. It can be mainly viewed as a political one and let’s be careful not to ruffle feathers!
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EXCLUSIVE INTERVIEW
''Our technology & quality is at par and better than those accessed in developed countries": R P Banerjee In 1969, at the IDA conference held at Chandigarh I was introduced to Dr V Kurien by Mr Rayan, Chief of Nestle. Mr Rayan stated that my company had supplied equipment to Nestle which was better than European equipment. I narrated my experience of working at APV, Kolkata where I handled different projects at Nestle, Glaxo and HLL to Dr Kurien. Dr Kurien then invited me to visit Anand to meet Mr V H Shah and expressed that the operation flood for indigenous development of dairy machinery needed similar qualified people. I do not get assistance from multinationals. However, I was appointed as a member of consulting committee by and by.
T
R P Banerjee
ell us about your journey in the dairy industry.
I have been associated with dairy industry for the last 60 years. I was also connected to Operation Flood programme that is responsible for India to become the highest milk producing country. I was also closely associated with Dr. Verghese Kurien, who had developed indigenous dairy equipment in India. During the 80’s, I founded SSP Pvt Ltd along with Mr. Tapas Chatterjee. ‘SSP’ played an important role in the development of dairy industry in India, by indigenously manufacturing highly-energy efficient, cost-effective & customised milk processing projects on turnkey basis.
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Mr. V H Shah is one of the brilliant engineers, I ever met. His dedication, hardwork and meticulous planning was responsible for laying the foundation for the growth of dairy industry in India. I had the opportunity to work with him through 1969 – 1987. I found him as a great administrator and a humble person who was always thinking about indigenous development of dairy equipment. We discussed how Indian industry would be capable to design, fabricate and commission
dairy machinery independently on European technology. The following projects was under his personal attention; Mogar Complex, Sagar Dairy, Dud Sagar Dairy, Banas Dairy, Amul Dairy, Ludhiana Dairy, Bhatinda Dairy, All feeder Balancing Dairies and Mother Dairy. The first 10 TPD milk powder plant, supplied to BANAS DAIRY with a 3 effect evaporator with TVR and Egron type spray dryer – was successful. Similar model was applied to Amul, Indore and Sangam Dairy and all of them were successful. Not only this, Amul’s desire to expand old powder plants with indigenous technology at Amul Dairy was also successful. F-35 powder plant capacity increased from 10 TPD to 20 TPD. F-60 plant capacity in evaporator increased from 45 TPD to 60 TPD matching expansion of F-60 powder plant by providing largest fluid bed dryer of 16.5 sqm area. Today, Prime Minister Modi has announced
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EXCLUSIVE INTERVIEW
evaporator, where all the generated and regenerated vapour can be used in the evaporator, without a condenser & cooling tower. Kindly share your opinion on the growth of the Indian dairy industry for the last 5 years and its growth in the next 5 years. According to the industry statistics, dairy production is growing at the rate of 4.5 per cent annually, however, limited resources and inputs, particularly the feed, have reportedly caused dairy prices to rise in the last few years.
‘Make in India’ programme to manufacture everything in India. Such a concept was planned by Dr Kurien around 46 years ago that was implemented by Amul. Therefore, even Indian technology based plant and machinery are exported to other parts of the world in competition with the multinationals. Could you please inform about your company and the products that are dealt with? SSP is an ISO 9001:2008 certified company & ASME ‘U’ stamp holder. Since 1977, based on the core competency and knowledge on evaporation and Drying Technology, SSP provides customised turnkey projects & solutions to the industries, pertaining to food processing sector, dairy processing sector, fruit & vegetable processing sector, chemical industries and effluent treatment plant for various industries. We have been providing need-based, customised, highly-energy efficient and costeffective turnkey projects , for the last 39 years. We try to meet our customers industrial needs. In this regard, we have supplied more than 350 projects that include more than 600 Evaporators & 400 Dryers all over the globe, with marked footprint over 47 countries with cutting edge technology. In the dairy sector, we supply plant and machinery for milk processing with powder plant, baby food formulation plant, neutraceutical powder plant Evaporated/ sweetened condensed milk plant, malted milk
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plant and whey, casein and Lactose processing plant. We have successfully supplied 86 milk powder plants around the globe. Out of that 40-50% are our repeated clients. The advantages of SSP’s powder plant are innumerable. Highly energy efficient plant, in evaporator, no scale formation in tubes; production of instant quality powder, flexibility in controlling powder quality are some of those to quote a few. In its earnest desire to develop most energyefficient evaporator, SSP has invented
The government of India (GOI) offers subsidies and other assistance through schemes to enhance production and to address the aforesaid issues. In recent years, more private sector dairy processors have entered the market. Some private sector processors provide accessibility to modern extension services to farmers and such help would improve farm management, feeding, fertility (including artificial insemination and genetics), food and safety/ hygiene and veterinary care. According to National Dairy Development Board (NDDB), the Indian dairy industry is all set to experience high growth rates in the next eight years with demand likely to reach 200 million tonnes by 2022 from 132 million
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tonnes in 2013. India has the potential to become one of the leading players in milk and milk product exports. How do you compare your company’s stance with developed countries? SSP has developed many technologies in the field of evaporation, drying, extraction, aroma recovery and agglomeration. Our technologies are at par or some times better than technology available in the developed countries. We provide highly-energy efficient, cost-effective and quality industrial projects to industries around the globe with the development of latest technologies by innovative R&D activities. Our R&D centre is even better than that of reputed European companies. Earlier, we used to import technology, now SSP is looking for equipment manufacturers and fabricators in different countries for collaborations and technology-transfer. What needs to be done to become a surplus milk producing country? Despite being, the world’s largest milk producer, India’s productivity per animal is very low, at 987 kg per lactation, compared to the global average of 2038 kg per lactation. Indian breeds of cows are considered inferior in terms of productivity. Indigenous cattle and buffalo make up 45 per cent of the country’s total milk population, in contrast to the cross-bred cows at 10 per cent. Main factor conditions for dairying entail the quality of animals, human resources and technical skills, land availability, capital, credit, infrastructure and other inputs relevant to the value chain. To become a surplus milk producing country, we have to look into proper cattle and buffalo breeding programmes, extension and
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management on dairy enterprise development, feeding practices. Side by side we have to improve milk transportation facility and cold chain system. What is the best solution to manage supply-chain management of Indian milk processing companies in Rural India? Poor road network and lack of investment in cold chain infrastructure have long challenged the country’s dairy industry, Instead of big
milk chilling centres, it is better to have small bulk milk cooler for collection and storage of milk. But in remote areas, there is an problem of power. Solar-based vapour absorption system can be adopted for refrigeration system for milk cooling. Recently, Lactoperoxidase System (LPS) is being adopting as an alternative method of milk preservation. It is a protein naturally present in milk. One of its unique biological functions is antibacterial/that—would work effectively in the presence of hydrogen peroxide and thiocyanate. The LPS method
EXCLUSIVE INTERVIEW
is fully effective, cheap, safe and applicable at milk collection points and can prolong the shelf-life of unrefrigerated milk up to 3-4 hours more than that of untreated milk. LPS system has great potential as it is recommended by the IDF Code of Practice. Is dairy industry mature enough for ‘Private Equity Funds’ Investments? Private equity funds are meant for only established players in the industry but, valuation is a problematic area. So unless there is severe liquidity crunch dairy industry will not like to go for private equity fund. What is your point of view on the demand of milk products? Do you feel setting-up of dairy with valueadded products, a good idea to venture? Yes, setting up dairy with value added products seems to be a good venture as I also see that demand for dairy products in India has grown significantly, driven by more consumers, higher incomes and greater interest in nutrition. Consumption of processed and packaged dairy products is increasing in urban areas. Several national and international brands have entered the market and expanded consumers’ expectation of quality. What are your future plans? With the increase in milk availability, requirement for dairy equipment and projects are going up drastically. SSP is planning to supply turnkey projects for dairy industries along with its powder plants.
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INTREVIEW
Prabhat focusses on Cheese, Ghee,
Dahi, Lassi & Shrikhand
P
rabhat Dairy Limited, which is an integrated milk and dairy products company in India extends its services to institutionals as well as retail customers. The firm that is into ingredient business such as skimmed milk powder, sweetened condensed milk, dairy whitener, concentrated milk and consumer business such as cow ghee, flavoured milk, curd, lassi and chaas had been in the news for raising Rs 400-500 crore from the market via IOP. It is backed by India Agribusiness Fund (IAF), which is sponsored by Rabobank Group. Vivek Nirmal Joint Managing Director, Prabhat Dairy , in an interview with Dr J.V.Parekh, , shares deeper insights into the Indian dairy industry based on his experience. He says “Dairy industry has a brighter future in the value chain in the near future.” Could you please brief about the company? What are your company products and services? Established in 1998, Prabhat Dairy Ltd is an
integrated milk and dairy products company in India catering to institutional as well as retail customers. We produce fresh, dry, frozen, cultured and fermented dairy products, including pasteurised milk, flavoured milk, sweetened condensed milk, ultra-pasteurised or ultra-high temperature (UHT) milk, yoghurt, dairy whitener, clarified butter (ghee), milk powder, ingredients for baby foods, Cheese, Paneer Lassi and Chaas. Prabhat majorly has two business verticals B2b and B2c. In B2b company's focus is on premium dairy ingredients that are supplied to leading Indian companies and major MNC’s in India. In consumer space, company's focus is on daily nutritional products such as Ghee, Dahi, Lassi, Shrikhand etc. The major strength of Prabhat is its procurement network that has been developed in these years. Today Prabhat connects to more than 85000 farmers on a daily basis. Where does India stand globally relating to the use of modern dairy technology? Dairy is one of the old industries prevailing in India. We are the largest Milk producer in the world and I find we are very well advanced in manufacturing technology as compare to developed countries. However, we are lagging behind in the procurement technology, both at milk production and collection level. In milk production, the core areas to
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be focussed are Fodder, Breeding, Medication and Cattle Management. At the collection level we need to have efficient chilling, transport and milk testing infrastructure. The status of supporting infrastructures and their delivery is still inadequate and concerted efforts are required to bring desired improvement. The strengthening of market linkages, either through expansion of cooperatives or by facilitating contract farming arrangements, would go a long way to ensuring sustainable growth of the Indian dairy sector in the days to come. Though India is the largest producer of milk but the growth in production of milk is still shorter than demand. What needs to be done to optimise the country’s milk productivity? As I said, Milk production is growing at the rate of 4.3per cent, while consumption is growing at 5 per cent leaving a gap between demand and supply. The demand for milk is always going to increase in a vegetarian country like India, where milk is a major source of essential nutrients. However, to fill the gap the major role will be played by production of Cow’s milk as we have already reached optimum milk yield capacity of buffalo milk. In India our cropping pattern is oriented towards grian production, whether cereals, oilseeds or pulses;and only crop residues are fed to the cattle. Hence the nutritional value
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obtained by the cattle is very low this leads to low productivity in animals. However, major steps are taken at grass root level and we will see the change in the coming years. Private Equity Funds have been a talk of the town in recent years in Indian food processing industry. Do you think dairy industry is mature enough for such type of investments? Dairy is particularly a farmers' business; hence there are many regional players as compare to national players. PE comes in the industries which are evolving very fast. Being the world’s second largest populated nation, with nearly half its population below 25 years of age, food processing companies in India have been an obvious choice for private equity (PE) investors. PE investors tend to like food companies as they grow fast and the business tends to be steady once a brand name has been established.
clients and has been instrumental in their growth as well. While we continue to grow with our current clients our focus product will be Cheese and we have setup the 3rd largest cheese plant in the country. At the same time, Prabhat will focus on its consumers business with daily nutritional products such as Ghee, Dahi, lassi, Shrikhand etc. As I mentioned earlier, the demand for the milk and milk products has grown tremendously due to the changing lifestyles of the consumers, growth in the food services industry, increasing urbanisation, rising need for convenience, with better health awareness among the end-users, this industry is getting mature enough to produce quality products. Also, many regional players are emerging actively. Therefore, the industry has a bright future for all in the value-chain.
As far Dairy is concerned, this industry is one of the fastest growing segments in India, many local corporate and MNC’s have already started to make a room for them. Hence, I believe this has helped in gaining confidence of the investors and making dairy industry to look for. Do you think venturing into value-added segments would serve a significant leverage to the dairy business? Yes, in coming days the industry will be driven by value-added products. Growth for value added products is driven by several factors such as changing lifestyle of consumers, growth in the food services industry, increasing urbanisation, rising need for convenience, better health awareness among end-users, etc. Sensing higher demand for processed milk and milk products, several domestic and global players forayed into different value added segments (leading to higher margins) to gain a higher market share. What is your focus area for growth in the future years? How do you see the future of Indian dairy industry in terms of demand for milk and its by-products? Prabhat is known for its procurement and manufacturing excellence. It has partnered with thousands of farmers and its valuable
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INTREVIEW
considered to be the largest crop of India and adds largest to the agricultural GDP of the country. Domestic milk production grew at 4.3per cent CAGR, to nearly 134 billion litres in fiscal 2014, from 113 billion litres in fiscal 2010. The growth in milk production in India outpaced other large milk producing nations such as United States of America and China, which grew at 2-3per cent CAGR in the past five years. Milk production is growing at a rate of 4.3per cent, while consumption is growing at 5per cent leaving a gap between demand and supply. According to recent OECD-FAO Agricultural Outlook, the demand for milk and its products in Asia will reach almost 320 MT by 2021. In volume terms the dairy industry grew 4per cent annually in the five years ended fiscal 2015, while the organised sector twice as fast. With changing consumer preference, the volume of milk processed from organised sector is expected to grow 13per cent annually by fiscal 2018, way ahead of a 5per cent annual growth for the industry at large. Please share your broad experiences with the dairy industry? Being a family driven business, I got an early opportunity to enter into the business. During those times, I have witnessed the milk surplus, drought period, exports, technology upgradation, price variation etc.
Going forward, where do you see the industry in the next five years? India is among the fastest growing dairy markets in the world and has become the largest global producer of milk. The dairy industry in India is shifting from unorganised to organised sector. Farmers find dairy as a very good remunerative option for fulfilling their daily needs. It is a 365-day business and milk is generally
The experience was very warm and I have learnt enormous things from this industry. The chain starts with milk procurement where you get an opportunity to connect with farmers and ends up with consumption of the dairy products by endusers. This gives an opportunity to understand different mindset of people. We have tried to do our very best to contribute to the industry, in these years we had developed ourselves on manufacturing and procurement front by giving training to our team, educating farmers. Overall, my outlook is that the industry warmly welcomes you, and if you have a vision supplemented with hard work, you can reach newer heights.
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ALTERNATE
Whey Products In Ice Cream And Frozen Dairy Desserts
By Dr. Steven Young, Ph.D. Steven Young Worldwide, Houston, Texas, USA
W
hey and whey protein products have been used successfully in ice cream and other frozen dairy desserts for the past six decades. Sweet whey, whey protein concentrates (3489% protein) and whey protein isolates (90% protein) are among the most commonly used whey products. Other whey ingredients such as delactosed and demineralized whey can also be used. Cost efficiency and quality improvement are key drivers in using whey products. The nutritional value of whey products is also an important reason why an increasing number of manufacturers, worldwide, include U.S. whey products in their formulations. Whey powder was the first whey product added to ice cream and its popularity was associated with its cost benefits
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when compared to other sources of milksolids-non-fat (MSNF). Nowadays, the functional properties of the proteins in whey protein concentrates (WPC) and whey protein isolates (WPI) also justify their use in mix formulas. In global markets, the use of whey products in frozen dairy desserts has become increasingly common. This can be attributed to the greater availability of high quality functional whey products and the increased knowledge about the applications and benefits of whey products. This monograph focuses on the functional benefits and considerations associated with adding whey ingredients to ice cream and frozen dairy dessert formulations. It is intended as a tool to jump-start product development. For additional information and quicker reach of your goals, please consult with your
U.S. whey ingredients supplier and/or other publications available from the U.S. Dairy Export Council (www.usdec.org). Market Trends And Expanding Use Of Whey Products In Frozen Dairy Desserts In the U.S., ice cream (including fullfat and fat-modified products) is still the predominant frozen dairy dessert category by total unit volume. Frozen yogurt, sherbet and sorbet show no indication of significant growth as percent of total sales. Novelties continue to grow but only within the ice cream segment, and within that segment most new novelties are based on full-fat (10% milk fat) ice creams. In the U.S., as in other regions of the world, the term “ice cream� includes fat-
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modified and/or sugar-modified (no sugar added) frozen dairy desserts – as long as other compositional standards for “ice cream” are met. The market availability for such “nutrient-modified” products shows the increasing demand for a true ice cream eating “experience” with lower fat and/or lower added sugar. “Ice cream” covers nearly 90% of all frozen dairy desserts in the U.S. Of this, 70% is full-fat product. The remainder is split between fat-modified (”light,” “reduced-fat,” “low-fat” and “fatfree”) and sugar-modified (nosugar added) “ice creams.” Of all new products, nearly two-thirds are full-fat ice creams.
for regulatory standards rather than “total milk solids” or “total milk-solids-nonfat (MSNF).” Such evolving proposals are more scientifically and technically correct and, inherently, allow the use of more whey protein ingredients if all other functionalities and sensory needs are met in the finished frozen dairy dessert. Of course, individual national regulations, or limitations, on the use of whey and whey protein ingredients need to be considered in this potentially changing regulatory environment. The use of judicious
Regulatory Limitations There are no international standards for frozen dairy desserts and, thus, no internationally recognized standards for the use of whey ingredients in frozen dairy desserts. Manufacturers should check local legislation for maximum amounts of specific ingredients allowed in their frozen dairy dessert formulations. However, proposals now being considered in the U.S. may allow use of “total milk protein” (total of all casein and whey proteins) as the basis
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sorbet only) • Whey Protein Concentrate (WPC with protein levels ranging from 34% to 89%) • Whey Protein Isolate (WPI 90% protein) • Other customized products and readyto-use blends. Composition of any given whey ingredient can vary based on the supplier, the type of cheese from which it was created and the purification process. Even so, it is relatively easy to formulate whey products into ice cream and frozen dairy desserts with a few key formulation guidelines. Functional Benefits Of Whey In Ice Cream And Related Products Water Binding Whey proteins bind high amounts of water through physical and chemical means. This tends to increase mix viscosity but also aids in achieving finished goods freeze/thaw stability by limiting water-icewater transition. Limiting transition of water-toice-to-water-to-ice helps maintain small ice crystals which improves resistance to heat shock and helps the finished frozen dairy dessert retain its smooth and creamy eating quality.
This further highlights and emphasizes the constant consumer demand for nutrient-modified products (low/no-fat; low/ no-sugar) that also maintain a classical ice cream eating quality. Novel products might include truly sugar-free (>0.5g totel Sugars per saving)executions and better quality (i.e. better taste, eating quality and texture) executions of fat-free “ice creams,” and/ or products with “low glycemic index.” Whey and whey products can offer significant functionality benefits, costeffective functionality for cost avoidance and cost reduction, quality improvement, superior nutritional value and other nutritional benefits such as reducing the glycemic index.
ALTERNATE
amounts of the appropriately selected whey product(s) typically results in superior finished product quality – flavor, body, texture, and freeze/thaw stability – while improving the nutritional content at reduced ingredient costs. A Range Of Functional Ingredients The U.S. whey products most often used in ice cream and frozen dairy desserts include: • Sweet Whey • Reduced Lactose Whey • Demineralized Whey • Acid Whey (acid flavored sherbet,
Whipping/Foaming The whipability and foaming function of whey proteins adds to desirable performance during freezing and enhances air incorporation. Furthermore, by increasing the viscosity of the unfrozen portion of the mix, whey proteins help stabilize and strengthen air cells. This helps in retaining air and helps prevent the collapse of structure known as “shrinkage.” When small air cells are created and maintained, smooth and creamy ice cream results. Also, resistance to heat shock is enhanced. Emulsification Whey proteins are very efficient emulsifiers of fat and oil. They easily form stable emulsions and can be used to totally or partially replace chemical emulsifiers in frozen dairy desserts. Additionally,
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the “bound” fat in whey products is relatively high in phospholipids (e.g. lecithin) adding to the emulsification capacity of whey ingredients. Milk fat in whey ingredients needs to be taken into account when considering final milk fat targets. Whey products can be a highly economical source of milk fat. Whey can also directly or indirectly influence fat agglomeration during whipping (addition of air) and freezing (creation of ice). Fat agglomeration is critical to superior heat shock resistance and eating quality in terms of body (chew or bite) and texture (smoothness or creaminess). Flavor Whey products have a sweet/dairy flavor (sweet whey) with virtually no perceivable flavor profile of their own (whey protein concentrates and isolates). Using high levels of sweet whey may, in some formulations, result in a strong “whey flavor” in the finished product. However, if properly selected and applied this can be avoided and positive aspects of whey in relationship to flavor can be maximized. Additionally. when organic acids (e.g. citric, malic, lactic) and fruit flavors are used, as in some ice creams, most sherbets and sorbets, many typical “whey” flavors or their effects are eliminated. Formulators can easily balance the use of whey products versus any function of overall flavor optimization. Viscosity Chew and bite (i.e. body) and texture (i.e. smoothness and creaminess) improvements can be achieved through the addition of whey proteins. Whey proteins help increase viscosity of the unfrozen portion of the ice cream and help maintain both small air cells and small ice crystals. Thus, mouth-feel of frozen dairy desserts with whey proteins tends to be smoother, creamier and less icy or “coarse.” Again, resistance to heat shock also results.
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Visual Appeal Depending on the mix type, whey products can add opacity, whiteness and “milkiness” to mixes and finished products. If properly selected, whey products can also help preserve visual appeal by helping maintain structure and/or form in the finished product. Whey products can also indirectly aid in maintaining ice cream structure which helps with visual appeal of flavors with added particulate(s) and/or syrup (ribbons, variegating sauces) inclusions. Bulking Agent In some formulations, whey ingredients can be used as low-cost solids bulking
agents and replacers of removed functionality (e.g. fat replacement in lowfat frozen dairy desserts). Since whey is not a “fat,” fat replacement is best executed in high-fat products and less so in lower-fat products where the need for true fat functionality is greatest. Freezing Point Management Whey protein, lactose and mineral salts in any given whey ingredient can be taken into account to efficiently manage water-to-ice freezing performance and transitioning. This, in turn, affects freezing conditions, mix performance and finished product qualities such as body (chew, bite) and texture (smoothness). Whey proteins play a key role in managing ice crystal growth during heat shock and other distribution abuses. Superior freeze-
ALTERNATE
thaw stability can be achieved through the use of whey proteins. Proper selection and use of any given whey ingredient are critical to success. Impact on Added Flavors High molecular weight proteins such as whey proteins can absorb various chemical components from added flavors such as vanilla extract. The higher the whey protein content, the more impact on added flavorings. This effect can occur with other proteins as well and formulators need to optimize their formulations in terms of protein/flavoring addition. Cost-Effectiveness An important factor in the use of whey products in ice cream and other frozen dairy desserts is the ability to manage or reduce mix ingredient costs. By properly selecting the best whey product, significant savings can be achieved. When a formulation is done correctly, all whey ingredients can offer cost saving opportunities. Additionally, improvement in yields (i.e. ability to achieve higher overruns) can offer significant secondary cost savings. Whey proteins help achieve higher overruns by allowing more air to be incorporated during freezing and whipping of the mix and by helping to maintain small and strong air cells. Nutrition Whey is a great “nutrient buy.” The pricevalue relationship is such that there are few equivalent sources of key nutrients such as high quality protein, calcium and a variety of health-enhancing components such as whey fractions. Indirect impact on the nutrient content of mixes such as in “reduced-” or “low-” fat products also adds value. Manufacturing Of Frozen Dairy Desserts With Whey Ingredients
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Impact of Whey Ingredients on Specific Manufacturing Steps Assembly of Ingredients, Mix Preparation Whey products are added with other liquid and dry ingredients to each individual mix. Whey products must be added to the mix prior to pasteurization to assure the microbiological quality and safety of the finished mix. Whey and whey ingredients are always added during the assembly of mix ingredients. Dry whey should be added under high shear to the totality of liquid ingredients (water, milk, skim milk, cream, liquid sugar, sweeteners) to prevent lumping and pre-gelation. Under these conditions, it is not necessary to preblend whey with other dry ingredients to aid dispersion. Under less than high shear conditions (normally for small batch sizes), amounts of whey and whey products can be added via simple pre-blending with other dry ingredients (such as sugar, corn syrup solids or maltodextrin) to improve dispersion or through a “powder funnel” with recirculation through the funnel pump and batch tank. In either high or low shear preparation, care is necessary to prevent excess foaming (air incorporation) in the mix. Foaming is not just due to addition of protein-containing ingredients (e.g. cream, skim, milk, egg solids, etc.). More protein and less fat in any given mix increases the potential for foaming. Foaming leads to burn-on (in batch and continuous pasteurizers), low yields, increased costs, poor freezer performance and other undesirable effects such as development of oxidized and/or burnt flavors. Foaming is easily controlled through properly engineered mix preparation systems. Pasteurization (Batch or Continuous) Pasteurization can potentially impact whey product functionality in finished mixes. This is dependent on the specific mix, composition, whey ingredient(s) used, and the exact times and temperatures applied during pasteurization. Typical pasteurization conditions for frozen dairy desserts do not impact whey product functionality. However, if heating systems are uncontrolled, burn-on can
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occur which can result in off flavors and varying functionality from added protein ingredients such as whey. In some instances, ultra-high temperatures or ultra-long times can affect whey protein functionality, both positively and negatively. Again, care is necessary when considering these temperature and time options to maximize water-binding or gelling characteristics of any given whey ingredient in any given mix. Homogenization Whey proteins help form a stable emulsion at the fat/water interface of the mix and add stability to the serum (non-fat) phase of the mix. This is particularly helpful in a mix that is to be packaged for freezing at another location at another time. Freezing (Batch or Continuous; -5 to -6ºC) The actual “draw” temperature from the freezer is dependent on the mix composition and functionality and what needs to be done with the finished frozen dairy dessert. Normally, the lowest possible draw temperature is desirable (greatest amount of ice made in the barrel of the ice cream freezer) as long as the finished ice cream can be handled for whatever purpose (packaged, molded, extruded) it is to be used. By managing the freezing point of the mix, inclusion of whey products can impact the "draw" temperature and the “draw” viscosity (weak and “fluid” versus stiff and “dry”). Weak viscosity may be adequate and desirable for molded novelties but unacceptable for extruded novelties or packaged ice cream. Additionally, whey and whey ingredients can help in the freezing of many small ice crystals that impact the eating quality of the finished dairy dessert. Distribution (<-28ºC) Temperatures will fluctuate with specific conditions and hardware used in the distribution chain. Whey and whey products can offer significant benefits and increase stability by managing the transition of ice-to-water-to-ice during freeze/thaw abuse. As ice-to-water-to-ice transition
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occurs due to temperature fluctuation during distribution, whey products help since they add heat shock resistance and maintain the body (bite, chew) and texture (smoothness, creaminess) of the frozen dairy dessert. Formulating With Whey Products Care is necessary to manage protein (amount and functionality), lactose and salts to insure proper freezing performance (i.e. maximize creation of large number of small ice crystals) and eliminate potential for “sandiness” defects. This is true in super-premium ice creams as well as nutrient-modified ice creams. In general, whey products, when applied on a protein-to-protein basis, can replace up to 50% of natural occurring case in most ice cream mixes. This helps retain the unique functional properties of casein that add body (chew), texture (smoothness) and resistance to heat shock. The effects of lactose and salts must also be carefully considered. Typical starting formulas for full-fat, fat-modified (reduced-fat, low-fat and fat-free) and sugar-modified (no-sugar added) ice creams using sweet whey, whey protein concentrates and whey protein isolate are presented. Considerations When Using Whey In Frozen Dairy Desserts Selection of the exact amount and type of whey ingredients to use is based on the following considerations: Final Use of the Mix Retail Packs: Two-, one-, half-liter and other small packs for home consumption, where significant freeze/thaw stability is necessary due to temperature abuse. WPC or WPI can add significant freeze/ thaw stability when distribution abuse is a potential concern. Bulk Packs: Tenliter packs or larger for food service or “dip shops,” where repeated dipping and sampling can physically punish the finished frozen dairy dessert. Again, WPC or WPI can add physical strength to the finished frozen dairy dessert and add both heat shock resistance and resistance to punishment due to physical abuse of the frozen dairy dessert. Directfill Novelties: This is the direct filling of cups, cones, “push-ups,” etc. Because
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the ultimate shape of the product is determined by the package, the frozen dairy dessert must be able to flow evenly into the package before final hardening, thus concern is given to mix composition, viscosity and processing. Sweet whey is a normal ingredient selection for these direct-filled novelty applications. “Draw” temperatures are selected to reflect need of the final frozen dairy dessert to flow into the package without voids. Extruded Novelties: These are novelty items that are extruded through shaped orifices and cut to the proper size and shape. Frozen dairy dessert needs to be flowable, yet stiff enough to extrude and hold a shape. Both WPC and WPI offer significant functionality to bind water, stiffen the frozen dairy dessert and help an extruded piece withstand the physical abuse it must undergo during manufacturing. Molded Novelties: Normally, very fluid (as compared to stiff) frozen mix is deposited into molds, which, in turn, are frozen to create the molded form. Frozen dairy dessert mixes need to be created to withstand air incorporation and freezing, yet allow flow, rapid hardening (to hold inserted stick, if desired), surface thaw to release items from the molds, and secondary treatments (liquid or dry coating applications.) If molds are not filled adequately, voids are created which can cause a variety of undesirable defects. Sweet whey (or demineralized whey) is typically used. Coated Novelties: Whether a frozen item is to be coated or not is critical to mix ingredient selection and mix formulation. Whey can add significant functional characteristics that assist application and retention of coatings onto the finished frozen novelty. Lactose is a desirable ingredient in many compounded novelty coatings as it provides sweetness control and low-cost solids. This includes dry as well as liquid coatings. Amount and Type of Mix Ingredients Available
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Lactose Content: An important factor is the total lactose content of the mix. To minimize lactose crystallization (also known as "sandiness" in frozen dairy desserts), it is advisable to reduce the lactose content of mixes to below 7.5%. Lactose solubility is limited and varies with a number of factors. Although there must be lactose crystallization in virtually all dairy-based frozen dairy desserts, the amount of lactose and the size of the actual lactose crystals are critical to detection of “sandiness.” By managing the lactose content, both the likelihood of lactose crystallization and the size of the lactose crystals can be reduced. This simple recommendation can help prevent
sandy defects. Of course, the lower the lactose content the less likely it is that the lactose can or will contribute to “sandiness.” The contribution of lactose from all dairy ingredients must be known, calculated and controlled. Sweetness: Whey, particularly sweet whey, adds some degree of sweetness to the mix. Depending on mix specifics, it may be possible to reduce sweetness using whey for improved consumer acceptability. However, in most instances sweetness from the lactose (only 20% as sweet as sucrose) in dairy ingredients can be ignored. If sweetness from lactose is to be considered, it must be considered for all mixes that are being compared. Bulking Agents, Stabilizers and Emulsifiers: Whey proteins can interact with
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several large molecular weight bulking agents (starches, starch hydrolysates, hydrocolloids, etc.) to add or detract from the performance of a given mix. Thus, care is necessary when adding WPC or WPI to specialty mixes with relatively large amounts of “bulking agents.” Whereas there is very little interaction between components of whey ingredients and added chemical emulsifiers, there can be significant interaction between components of whey and stabilizer gums (e.g. free calcium from whey and low methoxyl pectin). Such interactions can result in sticky and/or gummy frozen dairy dessert if the mix is “over stabilized.” Processing Conditions: Typically, pasteurization conditions impact very little on whey protein functionality in mixes. However, if aggressive (high temperature, long time) pasteurization is considered, whey protein functionality can be affected, depending on the processing of the specific whey ingredient. Whey products, particularly WPC (with 60 to 85% protein) and WPI may become more hydrated during aging and can significantly effect mix viscosity and mix performance. Freezer “draw” temperatures become critical. Recommended “draw” temperatures are typically those that are as low as possible and still allow the manufacturer to handle the frozen dairy dessert as necessary (e.g. for packaged ice cream, extruded novelties, molded novelties, directfilled novelties, etc). Modern continuous hardening systems maximize the use of whey products by quickly freezing the remaining free water as ice. This allows the use of either the maximum acceptable sweet whey or reduces the amount of WPC or WPI needed for any given purpose If severe thermal abuse during distribution is expected, selecting a proper whey protein product can add significant freeze/thaw stability. Whey products offer significant mix ingredient and yield improvement cost savings. Whey products play a significant role in
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reducing ingredient costs and improving finished product yields (see sample formulations and cost tables). Whey Permeate As An Ingredient In Soft-Serve Ice Cream C.S. Otte,* K. Lim,** K.E. Smith,** V. Jusuf,* L. Jensen,* S.A. Rankin* Department of Food Science* and Center for Dairy Research,** University of Wisconsin-Madison, WI Soft-serve ice cream is smooth, soft and has a similar flavor to hard ice cream, yet contains less milk fat. To reduce the production cost, whey ingredients can be added to replace some of the milk solids. A study was conducted by researchers at the University of WisconsinMadison to determine the influence of whey permeate on the texture and flavor of soft-serve ice cream. In the study, three vanilla soft-serve ice creams were made: 1) Control – with11.3% nonfat dry milk 2) Replacement of 25% milk-solids-nonfat (MSNF) with sweet whey powder 3) Replacement of 25% MSNF with whey permeate* The mixes were pasteurized (84°C for15 seconds), homogenized (2000/500 psi) and aged for 24 hours at 4°C. Prior to freezing,127 ml/L of natural vanilla was added to each mix. Each mix was frozen to identical draw temperatures on a soft-serve ice cream freezer. Colorimetric tests showed that the whey permeate sample was more similar to the control than the sample with sweet whey powder. There were no significant differences in the melting rates, fat destabilization and overrun. The trained sensory panel showed significant differences in the vanilla flavor intensity and salt flavor intensity of all three products. The consumer panel found no significant differences in preference. These results show that sweet whey powder and whey permeate can successfully replace a portion of the MSNF in soft-serve ice cream while maintaining consumer satisfaction. *Whey permeate (also called high lactose
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whey or dairy products solids) generally contains 65% to 85% lactose, 3% to 8% protein, less than 1.5% fat, 8% to 20% ash and less than 5% moisture. Recommendations For The Use Of Whey Products In Frozen Dairy Desserts When considering using a whey ingredient, note the following: • Balance the freezing performance of the mix with that of the whey ingredient of choice.
• Be sure to control total lactose in formulas to >7.5% of total mix to minimize lactose crystallization resulting in “sandy” ice cream. The lower the lactose, the less likely it is that “sandiness” will result. • The functionality (including flavor) of the whey ingredient itself and its impact on added flavors should be assessed for each individual mix. • Regulatory limitations: check local legislation for usage limits of all ingredients. • Consider how the finished food is to be used, distributed and marketed. • Add dry whey to the totality of all liquid ingredients under high shear or as a preblend (small batch sizes) together with high solubility dry ingredients. • Minimize foam through a properly engineered batching system. Other process considerations can be managed
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through proper formulation. • Economics: When properly formulated significant savings can be achieved. • Sweet whey may be the most economic whey ingredient. However, WPCs and WPIs can be more cost-effective ingredient choices to achieve quality, consistency and desired nutritional profile. WPCs and WPIs are multifunctional ingredients which may help reduce or displace less desirable ingredients or additives. When all product and process considerations are taken into account, whey products are viable and valuable ingredients for use in virtually all frozen dairy dessert mixes. Q: What are “typical” recommended use rates for sweet whey, WPCs and WPIs in frozen dairy desserts? A: Actual use rates are very much dependent on all the key considerations affecting frozen dairy dessert composition and the individual functionality of the specific whey ingredient to be used. However, in general, the following initial recommendations can be considered guidelines: Sweet Whey 2.0-3.0% WPC 34 1.5-3.0% WPC 60 to 85 0.5-2.0% WPI 0.5-1.0% If total milk protein (total of casein and whey proteins) is used as a regulatory standard, then it is recommended that at least 50% of the total milk protein be as naturally occurring casein. Thus, the amount of any given whey ingredient can be simply calculated based on this target and the percent protein in the specific whey ingredient. This retains the functionality of casein in the conditioning of the fat globule during aging of ice cream mix in preparation for fat agglomeration during freezing and whipping but allows significant use of whey protein for function, quality and cost savings opportunities. Fat agglomeration is necessary to build air cell strength and subsequent resistance to heat shock. The following tables demonstrate how to
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formulate using this and other guidelines. Q: How can WPC 80-85 and WPI, which carry cost premiums to skim milk solids, be cost-effective? A: Several factors impact the costeffectiveness of high protein WPC and WPI. The key is to know that these highly functional ingredients can be used at significantly lower levels (0.50-2.0%) than standard sweet whey (2.0-3.0%). In addition, these highly functional ingredients can totally or partially replace other more expensive ingredients (hydrocolloid stabilizers and some emulsifiers) from formulas. Finally, because ice cream is sold by weight, as well as volume, increased yields can be achieved by producing quality product at higher overruns. Minor increases (56%) in overrun (producing more finished ice cream from a given volume of mix) can return major reductions (10-12%) in ingredient and process costs when premium whey products are used. Q: Can whey permeate be used in ice cream and other frozen dairy desserts? A: Permeate, which is the by-product of the process to make whey protein concentrates and isolates, is ultra-high in salts and lactose. These latter components negatively affect freezing point of ice cream mix, heat shock resistance and add unusually high percent of lactose (which can increase the sensitivity to “sandiness”) to mixes. Thus, permeate is typically not recommended for ice cream. If considered, care must be taken. Q: Whey “flavor” is typically a defect of ice cream and other frozen dairy desserts. Does using whey add “whey flavor” to frozen dairy desserts? A: “Whey flavor” or other flavor defects – called “cardboard,” “oxidized” or “cheesy” flavors – can be attributed to whey ingredients, particularly sweet wheys. This defect may occur in lowquality or poorly processed ingredients. U.S. whey ingredients typically have a pleasant dairy flavor which is highly compatible with frozen dairy dessert mixes. Q: Can I use whey or whey ingredients in sorbet?
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A: Yes. A judicious amount of a whey ingredient (limit the lactose content at or below 7%) can offer smoother body and texture and still retain a low- or no-fat claim. Since sorbets have little or no added dairy ingredient, added whey’s impact is to improve bulk, whipping performance and stability. Additionally, whey protein gives increased mix viscosity resulting in smoother, more refreshing finished products. In non-fruit flavored sorbets (e.g. chocolate), whey adds low-cost dairy background flavor and appearance (opacity) characteristics. Q What is “gelato”? Can whey ingredients be used successfully? A. There is no uniform definition or standard for “gelato” (Italian for ice cream). However, gelato typically refers to ice cream of high solids (milk fat levels can vary), extremely low overrun, bright, bold colors and strong flavors. Again, rules outlined above for replacement of milk-solids-non-fat with whey protein ingredients hold. Remember, gelato is ice cream. Q: What about whey and whey protein concentrates in variegating syrups and other ice cream inclusions? A: Whey and whey protein concentrates can be used where applicable in flavoring swirls, ribbons, etc. and in particulate inclusions such as baked pieces, candies, etc. that are added post-pasteurization; as long as the inclusion has one of the following characteristics: • Has a pH below 4.7. • Has been baked, roasted, pasteurized or in any other way heat treated. • Has a water activity of>0.85. •Contains high levels of alcohol (such as vanilla extracts and other liquid flavors). • Is a bacterial culture (freeze-dried lactic acid bacterial) that is pathogen-free. • Is subjected to any other process which renders the inclusion pathogen-free. This also holds for functional (e.g. mousse, whipping) bases and compounded flavoring bases that may contain whey products as ingredients to be added at the flavor tank before freezing. Q: What about frozen yogurt? A: Standards for frozen yogurt may, or
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may not, exist in any given market. Whey products can be added to frozen yogurts in much the same manner as for standard ice creams. Rules related to total milk protein, percent of casein and lactose still hold. However, any modification of osmotic pressure on the culture side of mixes can result in poor fermentation, flavor and functionality. Frozen yogurt mix can be processed in several ways: 1. Culture the entire ice cream mix. The original way of making frozen yogurt is not recommended. This approach results in atypical fermentation leading to bitter and tart off flavors. 2. Cold incubation. In some countries the addition of live and active bacterial cultures to pasteurized and refrigerated ice cream mix is allowed. No culturing of the actual mix is made. Cultures can be added at the flavor tank. The amount and type of culture determines function and flavor of resulting frozen yogurt. 3. Partial culturing of dairy ingredients: a. Two-way blend of cultured dairy (milk fat & milk-solids-non-fat) and uncultured non-dairy ingredients (sugar, corn syrup, stabilizer, etc). Whey can be added to partially replace milk solids-non-fat using rules noted previously. b. Two-way blend of cultured mix (a specific percent of the total mix) and remaining percent of uncultured mix. Again, whey can be used following rules for standard ice cream. c. Two-way cultured dairy (milksolidsnon-fat) and uncultured sugar/dairy blend. Whey ingredients can be used as appropriate in either side to partially replace skim milk solids. d. Three-way blend of yogurt (milk fat, milk-solids-non-fat and/or sugar), uncultured dairy and sugars. Use of whey ingredients again is determined by guidelines for standard ice cream.
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NEWS
An Eye For Details
C
heckweighers are silent workers that help factories control product losses, scale processes and accommodate various production needs. Integrated with rejecting systems, Checkweighers can be used to sort differentsized products into several grades based on weight. In food and non-food factories, Checkweighers are widely used to weigh and classify products by weight on a production line with attributes such as proper, over and underweight products. Checkweighers are also used to improve the giveaway of Weighing machines, analyze weight tendency, classify products based on various grades, check the status of real-time production and inspect for missing items. It also functions on a line that has products of various weight, shapes and types. For better production •Improving giveaway Checkweighers can control weighing accuracy and minimize the giveaway of weighing equipment. •Analyzing weight tendency Factories should manage product giveaways closely as even a small amount of giveaway per a package can lead to a major loss. The weight tendency of products of a proper weight is therefore closely analyzed to find out if they tend to be heavy or light.
Operators can see product weight tendency in greater detail from the data generated and change the setting of the weigher, bag maker and other equipment in order to make the average weight of proper- weight products closer to the target weight. •Data management Generally, Checkweighers measure the weight of each product at the end of production line. Such information can be used to analyze and manage the efficiency of production. Weighing results are now managed on personal computers, which enable operators to see the status of production in real time and to make timely decisions to improve machine settings. They can also check what went wrong at a previous production cycle in the event of a complaint. •Inspecting for missing items In a non-food factory, the packaging process usually relies heavily on manual labor, which often results in shipment with missing items and components. Checkweighers can be used to automate missing item inspection, which identify missing items by weighing a product package in the line and detect differences in weight based on a reference weight. • Inspection on a mixed line High-mix, low-volume production is popular among factories. While several Checkweighers are generally required to inspect every production line of different products, using a combination of a Checkweighers and a
barcode reader, operators can inspect a mixed line with different products that are conveyed at random. Conclusion As consumers are more likely to purchase lower-priced products despite the rising prices of packaging materials and raw materials, manufacturers should leverage on the qualities of Checkweighers in order to control losses and analyze their production cycles for better efficiency. This also enables the supply of reliable products while protecting the bottom line.
FSSAI goes for an image makeover Our Bureau, New Delhi
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he Food Safety and Standards Authority of India, has hired an ad agency to go for an image makeover. This will help them to devise multimedia advertising campaigns and will hire consultants to ramp up its social media presence. FSSAI has requested expressions of interest on its website. The budget for the proposed multimedia
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campaign is not known. The authority said payments will be made at rates offered by the Directorate of Advertising and Visual Publicity. The contract is for one year and can be extended to three years. Agencies based in New Delhi with an annual turnover of at least Rs 50 lakh during the past three financial years and experience of working with a
government bodies can apply for the deal by March 3. The regulator's Facebook page was last updated on November 15.
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NEWS
Britanniaâ&#x20AC;&#x2122;s new full-fledged play for the Dairy segment Our Bureau, Mumbai
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s part of its overall strategy to be a total food company Britannia Industries planning for a full-fledged play in the estimated Rs 85,000 crore in Indian dairy market. The company will pursue board approval within a couple of months for its expansion in dairy segment, which could entail a minimum investment of Rs 300 crore in the initial phase. Britannia Industries Managing Director Varun Berry t thinks that to be a total food company and to be a total food company, one can't ignore the large dairy segment. The dairy segment in India is almost Rs 85,000 crore. Britannia already sells dairy products worth Rs 400 crore and for bakery business they buy dairy products worth Rs 300 crore. Overall, the consumption and sales is almost Rs 700 crore, which is a fairly large number. When asked how the company is preparing to enter the segment, Berry
said: "We have reached a very interesting stage where we have got a fairly good grip on what we need to do to make the plunge in dairy. We just want to make sure that we get all the details together before take this proposal to the board, which will be in the next couple of months."
for demerger of the manufacturing and retails sales divisions of its subsidiary Daily Bread Gourmet Foods (India) to be merged into it. The step will help it in optimum utilisation of resources, achieve cost saving and economies of scale, among others.
The company has also roped in dairy expert, Sarad Garodia, who has joined the company as Business Head Dairy Operations. He had earlier worked for 16 years with Schreiber Dynamix, one of the leading dairy products manufacturers in India.
Brittaniaâ&#x20AC;&#x2122;s first step will be establishing the back end, making sure that we have a fully integrated dairy business, right from collection of milk to processing and the first stop up will be to bring part of what sell in-house and then look at how to innovate and enter into new categories.
He is helping us validate all the assumptions... In the next couple of months we should definitely be ready with the plan. I am pretty bullish on it but it has to pass a few tests because it is going to be a fairly large investment," Berry said.
In the phase one Britannia Industries will focus on value added dairy products that it already sells. Cheese will be a big category and besides cheese, the company already sells fresh packed milk, dahi, flavoured yoghurt and accompaniments such as ghee.
The first phase will be about Rs 300 crore. In the next two or three months we will be able to take a decision on it.
Britannia Industries is aiming to be a Rs 20,000 crore company in the next 5-6 years as a total food company. The company had posted consolidated net sales of Rs 7,775.09 crore in the last fiscal.
The companyâ&#x20AC;&#x2122;s board has approved a plan
Dairy to be enhanced due to urbanization Our Bureau, New Delhi
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ational Dairy Research Institute (NDRI), Karnal has initiated a three-day conference on the theme 'Dairying in India by 2030: Make in India and was inaugurated by T Nanda Kumar, chairman of the National Dairy Development Board (NDDB). India's economy was growing at 7-8% and dairy sector was bound to grow and main driving force was urbanization which would catapult the demand of processed milk, said Kumar. He also deliberated that dairy development in the country could help
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ease the malnourished, especially in in rural areas and in a survey done by the NDDB, out of 15 crore rural women, one crore women expressed to take livestock rearing as profession.
Cooperative Milk Marketing Federation (Amul), Anand and Harjinder Singh, professor and director Massey Institute of Food Science and Technology, New Zealand were the guests of honour.
"In the same survey, it was also proved that, the rural families having dairy animal have 3 times better nutrition than non-dairy families," he said.
N R Bhasin, president, Indian Dairy Association, presided over the function.
More than 2,500 delegates from India and about 100 delegates from various countries, including US, Russia, UK, Ireland, Croatia, Australia and New Zealand are attending the conference. R S Sodhi, managing director, Gujarat
Other present on this occasion were NDRI director A K Srivastava, NDRI joint director (research) R K Malik, Prof Paul McSweeney, School of Food and Nutritional Sciences, University of Cork, Ireland and R S Khanna, vice-president, Indian Dairy Association (north zone).
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NEWS
Indian dairy players to tap Russian market Marketing Federation Ltd (GCMMF) [Amul], states, “The demands put before the Indian dairy players by the Russian government are highly impractical, 1,000 cattle cannot satisfy a huge consumer base of Amul. Thus, we have cooperative model. Even if we take it as a mandatory requirement, how can we stand before the competition on foreign soil?”
Our Bureau, Mumbai
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n a bid to import cheese from Indian dairy players, India has inquired Russia to review the stringent conditions-livestock of at least 1,000 cattle heads to be eligible—it has laid down to tap Russian market. In this regard, recently, a senior official from Amul, India’s leading dairy player, accompanied prime minister Narendra Modi on his tour of Russia, seeking a review of the condition that is posing a huge hurdle as most of the dairy businesses in India depend on cooperatives to procure milk. As per the conditions laid down by the Russian government, only two dairy players are likely to qualify while missing out almost all the dairy players from India. R S Sodhi, MD, Gujarat Cooperative Milk
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He adds, “We need to have more milk procurement to satisfy foreign demands. One-thousand cattle can generate a maximum of 40,000 litre of milk, which is very less. We have several products on our portfolio at Amul. How to meet huge demands with such a small quantity of milk? Amul has a cooperative model of operation, which enables us to procure more.” Sodhi states, “We also have asked Indian government to convey this to the Russian government. The demands they are making are impractical.” Nevertheless, the protocol is expected to establish a new market for Indian dairy players. In the past, Amul had appreciated the protocol as it will open new markets for the dairy industry.
Throwing light on the issue, Anup Chatterjee, director, business development, Schreiber Dynamix Dairies, Pune, Maharashtra, comments, “Russia has a huge demand for cheese. Russians have a habit of eating cheese. Russian government has imposed sanctions on imports from the European Union. This is a result of not following the Russian guidelines. This can be a warning that Russian government is strict with its laws.” He confirms, “The representatives from the Russian government have already visited Indian dairies earlier and have selected only two dairy players from India who matched their requirements. Schreiber Brazil is already one of the prime exporter of dairy products and solutions to Russia. We are seeking real business out of this deal.” Officials of Export Inspection Council (EIC) are said to have prepared guidelines for disease-free procurement of milk but these have been delayed due to the pending approval from ministry of industry and trade, India. Meanwhile, various suggestions were put forth during the dialogue with the Russian government's representative. A source close to the ministry, avers, “We suggested that one can put up a check post at the milk procurement centres where a clearance certificate can be issued to ensure that the milk procured is free from contaminants and other illnesses.”
India’s dairy sector tops milk output in 2015, but lags behind in productivity
n 2015 India has recorded milk production 146.31 million tonnes in as compared to 137.7 million tonnes a year before and continues to top the list of the major milkproducing countries in the world followed by the USA, China, Pakistan and Brazil.
compared to 2013-14 (up by nearly 6.3% as compared to global average of 2.2% increase during the year), the milk productivity (production per animal) in the country was far less as compared to those in developed dairy nations.
According to latest milk production data at National Dairy Research Institute (NDRI), Karnal in Haryana India recorded substantial increase in milk production in 2014-15 as
The Food and Agriculture Organisation of the UN stated that India currently accounts for nearly 16% of total world milk production. However, India is not among the highest
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milk surplus countries due to huge domestic demand and less productivity. Tough efforts are being made in the country to further increase milk production and productivity, and a new initiative, National Gokul Mission, has been launched for the preservation of indigenous cow breeds”, with a sum of Rs 550 crore has been released for 29 proposals from 27 states by December, 2015.
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NEWS
‘India’s wheat production will be 85 million tonnes less than final estimation:’ NCAER from October 2015 to March 2016, the total wheat stock in the Central pool might fall to 15 mt by April, which would be 2 mt less than the stocks during the year-ago.
Our Bureau, Mumbai
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ndia’s wheat production will be 85 million tonnes(mt)-1.5 mt less than the final estimate of 2014-15, which is in contrast with the government’s estimate that production in 2015-16 will be 7.3 mt more than last year, says a report by the National Council for Applied Economic Research (NCAER) for the Agriculture Ministry. The NCAER report released in January also reported that India might not export any wheat in 2016-17 marketing year. However, because of lower procurement and strong purchases by private traders
According to the report 2015-16, rabi rice production would be lower than the 201415 production due to poor post-monsoon rains and lower water levels in reservoirs. Rabi rice exports are forecast to decline to 9 mt from 11.8 mt in marketing year 2014-15, it added.
offset the low production, the think tank assumes the import of pulses will rise to 5.5 mt in 2015-16, up from 4.5 mt last year. On vegetables, the NCAER study showed that potato production in 2015-16 would be lower at 44.1 mt, down from 45.9 mt in 2014-15. This could lead to a spike in prices. Onion price is expected to rise to 20.6 mt, up from 18.7 mt a year ago.
The report stated that similar to last year, external factors would remain less conducive to Indian agricultural exports, this year. On pulses, the NCAER report paints a grim picture. It said the total pulses production in 2015-16 (both kharif and rabi) would be 16.6 mt, which would be 0.55 mt less than the final production of 2014-15.
Further, the report stressed that with an opening stock of 9.6 mt and expected domestic production of 27 mt in 201516 sugar season that started in October, any significant uptick in prices is not expected. India’s milk production could rise, but meeting the Centre’s target of 160 mt in 2015-16 could be tough due to over-supply in the market. On global commodity markets, the NCAER report showed food markets would remain wellstocked and less volatile.
This means that according to NCAER, India’s domestic pulses production would fall for the third consecutive year. To
Overall, the report showed the prospects of India’s agriculture sector wouldn’t improve much in 2016 compared to 2015.
Traders body CAIT say that FDI in food processing will hit farmers, employment Our Bureau, New Delhi
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raders body CAIT has said that the Budget proposal to permit 100 per cent FDI in food processing segment would adversely impact farmers and will result into mass unemployment. Allowing foreign investment in any form of retail will have adverse impact on traders, farmers, hawkers, transporters, small industries and will result into mass unemployment. Allowing FDI in food sector is nothing but a step in the direction of opening retail sector to FDI much against the declared commitment of not allowing foreign
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players in the retail sector. CAIT is strongly opposing this move of the government which will enable the global retailers to control, dominate and monopolize the food sector. The trade fears that today it is the food sector and tomorrow entire retail may be opened on one pretext or the other. It is a major shift in policy of the government and that too without taking traders into confidence and the government seems to be much lethargic and having least bothered about trading community of the country which is generally considered as strong vote bank of BJP," CAIT said.
The body urged Prime Minister Narendra Modi to "give us an audience and listen our sufferings" as no priority is given to retail sector, it added. Further it said the government has not taken cognizance of the report of Indian Council of Agricultural Research, which had stated that food wastage in India is merely 0.8 per cent to 10 per cent. Any move to allow multinational companies into Indian retail trade will amount to "betrayal of confidence" of the small businesses in India, it said urging the government to issue a white paper on FDI in retail.
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NEWS
Sugar industry demands ‘Commission for Agriculture Costs and Prices’ Our Bureau, Mumbai
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head of the Union Budget, the sugar industry in a series of meetings with Finance Minister Arun Jaitley and Reserve Bank of India Governor Raghuram Rajan reportedly demanded that long-term financial viability of the sector be ensured and a scheme to restructure outstanding loans be announced. The representatives urged the government to adopt a report of the Commission for Agriculture Costs and Prices (CACP) that recommended that the industry pay a price derived based on a revenue sharing formula and if this was lower than the fair and remunerative price (FRP), the difference be transferred directly to farmers’ bank accounts. A scheme on similar lines was adopted this year, where the Centre transferred Rs 4.50 per quintal directly to farmers. The sector wants this scheme to be made permanent in a more structured manner. Representatives claimed despite improvement in prices and steps taken by the Centre, the sector has not come out of the woods. The sector’s debt burden rose
four times to around Rs 40,300 crore in March 2015, from Rs 11,000 crore in March 2008. “We have requested the finance minister and RBI governor to allow the sector permission to restructure loans under the 5:25 flexible structure, currently available for core industries and infrastructure sectors,” Tarun Sawhney, President, Indian Sugar Mills Association, says. The Centre can fund the shortfall from a stabilisation fund, which can be financed by raising cess on excise duty to Rs 200 a quintal or Rs 2 a kg. At present, the Centre levies a cess of Rs 125 a quintal or Rs 1.25 a kg.
Sawhney reportedly mentioned that any move to raise the cess by Rs 0.75 a kg won’t push up prices as almost 70 per cent of India’s annual consumption comes from the industrial sector. Meanwhile, Verma said that the Centre would earn Rs 4,500 crore a year if the cess is raised to Rs 200 per quintal. Of this, the total outgo on bridging the gap between FRP and revenue-fixed price would be lower.
“This would be levied only if prices are below a certain threshold limit. If prices stay firm, the cess is not levied,” Abinash Verma, ISMA director general, says.
He said a sub-category could be created under the Sugar Development Fund for the price stabilisation fund which this amount could be deposited.
Government considers starting small food clusters Our Bureau, New Delhi
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nion Minister Harsimrat Kaur Badal stated that the government is planning to establish small food clusters to boost processing level of agri products for the benefits of farmers. Each small food cluster would focus on processing of fruits and vegetables grown in its surrounding region. According to Badal there is a view that
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there should be small food clusters focusing on processing one or two agriculture commodities depending upon that specific region. These clusters can have more flexibility so we are considering that. Badal also said that the processing of fruit and vegetables will double with the expected rise in foreign fund inflows after government in this year's budget allowed 100 per cent FDI in marketing of food products manufactured in India.
She also mentioned that this step will lead to creation of 'swadeshi' (local) infrastructure with 'videshi' money (foreign investment). She added this will help farmers get remunerative prices for their produce, and adoption of modern agricultural practices required for producing agricultural produce on a large scale to meet the requirements of organised marketing.
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NEWS
Vinchur food zone attracts 31 processing units
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fter the disappointment of getting only 0.5% of the total MoUs worth Rs 7.94 lakh crore signed for Maharashtra during the Make in India week in Mumbai recently, Nashik finally has some reasons to cheer. The food processing zone adjacent to Godavari Wine Park of the Maharashtra Industrial Development Corporation (MIDC) at Vinchur has attracted 31 small food processing units at an investment of Rs 50.14 crore. These units have already submitted proposals to the MIDC for setting up food processing units. The MIDC has reserved 50 hectares (125 acres) for food processing units at Vinchur. An MIDC official said, "Around 31 small food processing units have applied for allotment of plots in the range of 0.5 acres to two acres. The investment in these 31 units is estimated at Rs 50.14 crore. The move is expected to generate employment for around 1,000 people."
These units will process frozen foods, mango & other fruit pulps, raisin, onion powder, biscuits, cookies, papad pickles, tomato products, bakery & confectionery products and fruit juices among other items. The state government set up the Godavari Wine Park at Vinchur near Nashik in 2001 in a bid to promote wine industry. Of the total 133 hectares (332 acres) land, the wine park had been developed on 83 hectares (208 acres). As only five wineries became operational in the wine park, the industries had demanded the government to allow food processing units on the remaining 50 hectares (125 acres). During an industrial exhibition in April last
year, Nashik-based industrial associations had approached state industries minister Subhash Desai with their demand. Desai too had given positive response to the industrial associations. Accordingly, the MIDC gave approval in September for allowing industries to set up food processing units at Vinchur. Now, the MIDC is in the process of developing infrastructure such as roads, water supply and streetlights among others and is also conducting a survey for the purpose. The infrastructure is expected to be developed within the next six months.
FoodPanda and MacDonald join hands for online delivery and south India. FoodPanda has a network of over 12,000 restaurants across over 200 cities in India.
Our Bureau, New Delhi
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ardcastle Restaurants owns and operates McDonald's chain of restaurants in western and southern regions and FoodPanda has joined hands with Hardcastle Restaurants to deliver food from McDonald's in west
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online.
According to FoodPanda the partnership would lead to the US-based food chain operator McDonald's widening its accessibility across multiple platforms, giving customers more options while ordering
FoodPanda India CEO Saurabh Kochhar said that this opportunity of being exclusive partners with MacDonaldâ&#x20AC;&#x2122;s will allow consumers to enjoy McDonald's menu for the first time through an online food aggregator.
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NEWS
India becoming home to Asian food brands Our Bureau, New Delhi
year in India. While these numbers are small in comparison to some of the big food and fast moving consumer goods (FMCG) brands operational in India, the fact that they have takers here points to their growing acceptability, experts say. Clearly, Asian brands - be it East, West, South or Southeast Asian - are making home in India and the trend is expected to grow.
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otte's chocopies is a Korean company which is estimated to have annual sales of Rs 250-300 crore in India, prompting the company to ramp up production here. Chocopiethose cream-filled, marshmallow-style cookies - are a favourite with most children; they love having chocopies from top brands like Lotte. Orion whenever they can Orion is imported from Korea. Lotte, set up manufacturing in India a few years earlier, after seeing the potential for chocopie in the domestic market. But if you thought these treats came from an Indian manufacturer, think again. It set up its second plant last year in Delhi (the first was opened in Chennai, after acquisition of Parry's from Murugappa Group) and it is planning third facility in the country in the near future, say industry sources. There is Kikkoman, another Japan's largest domestic producer of soy sauce, used in most hotels, bars, restaurants and
fast-food joints in India. Sales of this brand, according to industry sources, are estimated to be nothing less than Rs 100 crore a year. Another product, the Tong Garden which is into nuts and snacks, headquartered in Singapore.Or Lion Dates from Dubai or Mama Noodles and Koka Noodles from Thailand or Mogu Mogu juices, also from Thailand. All these brands are estimated to have sales of close to Rs 100 crore a
Thanks to more international travel, purchasing power and awareness levels of Indians, food and food brands from different regions, including Asia, are travelling rapidly these days. A food product popular in a certain market is no longer restricted by the borders of that area. It is leaping into other territories, contributing to the growth of this category. Asian brands are also making their way into this country due to agreements such as on the South Asian Free Trade Area or the Asean-India Free Trade Area that allow easy entry of these products due to lower tariffs and duties. " People ready to experiment with cuisines. They are willing to try out new products and spend money if quality is good.
Government to allocate four food parks with a cumulative investment of Rs 500 crore the government had allocated 17 mega food parks by allocating 10 such parks to private companies including Adani Group and Ruchi Soya and the remaining seven projects to state government PSUs.
Our Bureau, New Delhi ive new Mega Food Parks have been operationalized in the past 19 months. In March last year,
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According to sources, out of the 17 parks which were allocated last year, two parties had withdrawn while the other two were not materialized due to some other reasons. Under the scheme (2008-09) of mega food parks, the Food Processing Ministry
had sanctioned 42 projects throughout the country. Of these, 25 parks have already been allocated. The scheme envisages one time capital grant of 50 per cent of the project cost (excluding land cost) subject to a maximum of Rs 50 crore in general areas and has a provision of 75 per cent of the project cost (excluding land cost) subject to a ceiling of Rs 50 crore in difficult and hilly areas, including the North-East and Jammu and Kashmir.
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