Oil & Food Journal October 2016

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VOl.11 Issue 12 October 2016

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VOl.11 Issue 12 October 2016

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Adani Wilmar to invest Rs 600 cr in Odisha

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Patanjali acquire RH Agro’s rice mill for Rs 70cr

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Post Offices to sell pulses at subsidies rates

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Central cut taxes on import of Wheat and edible oil

India- Russia join hands to reduce food loss

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Missing stock is harming India’s food security

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Maharashtra Pulses bill amended for Centre's approval 9

Probiotics are alive, active and not just in yogurt 21

PEPSI GOING THE HEALTHY WAY 41

Horticulture boon for UP, Maha, Bengal, Bihar & Rest of India

Decoding Patanjali 50

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Sweet Surrender Food and beverage firms exposed to high sugar price risk VOl.11 Issue 12 October 2016

Eggonomics of India Meal Vouchers: A disruptive force waiting to erupt

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EDTIORIAL

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EDITOR Manzar Aftab Naqvi CONSULTING EDITOR Basma Hussain GROUP EDITOR Firoz H. Naqvi firoz@advanceinfomedia.com Graphic 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 12 October 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 Advance Info Media & 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

here were some problems only ice cream could fix and mine was the fixation with it. My three lovely daughters love ice cream and I relish ice cream with them. But of course it doesn’t stop there I am actually totally involved in promoting and enhancing the ice cream industry in India and globally. So being a member of Indian Ice Cream Congress (IICE) as well an integral part of food processing industry; ice cream has become quite synonymous to me.

This September we are bringing, one of the most significant events in the global icecream industry- Indian Ice-cream Congress (IICE). This is the 6th edition of IICE, which is a 2 day event being held from 28th September to the 29th September 2016 at the Expo Centre Noida in Noida, India.

IICE is one of the most important events that epitomize the wholesomeness of the ice cream industry both in India and internationally. This event highlights the accomplishments of the industry, the challenges it faces, the effort taken by ice cream industry and related industries people to develop and nurture it.

Companies providing freezing and handling machines, packaging machines and materials, equipment and component suppliers, cone manufacturers, food ingredients companies, cold chain companies especially cold rooms and deep freezers, consultancy services, traders and stockists, raw material suppliers, milk powder and chocolate suppliers, ice cream bands looking for expansions will participate as exhibitors in the show.

The ice cream industry is a highly seasonal industry and bulk of the retail sales take place in the summer period. In this fragmented industry, there are over 10,000 players.

In the organised segment, Amul is the leading ice cream player and holds close to 32% of the market share followed by Vadilal Industries. Other large players in the sector include Hindustan Unilever, Mother Dairy, Havmor and Nestle. The ice cream market in India is estimated to be over INR 10,000 crores, and is growing at a rate of 15-20% year-on-year. It is projected that by 2019, the market will reach around INR 6,198 crores.

Demand for ice cream across India is growing at 15% to 20% per year however, costs remain a problem because of weak logistics and cool chain facilities within the country Amul is planning to set up an ice cream plant within 18 months in the western city of Pune. The planned facility, which will be Amul's third ice cream plant, will be well located to service southern Indian markets.

GM crops are one of the options available to deal with climate change and population.

They aren't 'the' answer to climate change but they are one of the answers... one of the armaments that we can use ... facing the issues of climate change, population growth, to deal with food security and hunger... we need a worldwide collaboration. It is also important to make sure that food from genetically engineered plants must be as safe as food from conventional plant sources. We have to ensure nutrients are the same. Food crisis is looming over the globe, I believe that for once science should be given the trust to tackle some of the atrocities that the farmers are facing, to tackle malnutrition that the underdeveloped world is facing, to make developing countries free of food timidities, to make certain our future is secure with sufficient food in our platter.

Century-old RoohAfza brand is entering the ready-to-serve beverages segment under the RoohAfza Fusion, which pits it directly against juice drinks such as Dabur's Real and PepsiCo's Tropicana.

Nissin has overtaken Yippee, Patanjali and other noodles and made up to the second slot in the noodle market after Maggi, health foods market crosses Rs10,000 crore in revenue,7Up becomes first fizzy drink in India to use the stevia sweetener, and Nestle is going to accelerate its game in the country as the food company considers doubledigit volume growth "a must win battle.

Well my written communication with my readers ends here but I look forward to meet many of you as delegates and visitors at the IICE‌.Till we meet bye!

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TECHNOLOGIES IN FPI than forecast. Of course, India is a major producer its sugar output has been less than expected, as dry weather affected the crop. Poor forecasting too should be blamed, as actual output was much less than originally anticipated.

As of 30 April, sugar output was down by 11% during this season at 24.6 million tonnes with only 48 mills still crushing cane. In January 2016, the Indian Sugar Manufacturers’ Association revised downwards its earlier forecast of sugar output to 26 million tonnes, from 27 million tonnes. The final number is set to fall short by another 1 million tonnes.

The government has taken some measures already. A production subsidy given to mills has been withdrawn. Stock holding limits have been imposed to improve supplies and limit hoarding.

There is talk of an export duty on sugar, as exports rose sharply in FY16. More measures can follow.

Rising sugar prices have seen the performance of sugar mills improve, clearly visible in their March quarter results.

This is set to continue as sugar prices continue to rule in their favour and their shares have risen in anticipation. In the past six months, Balrampur Chini Mills Ltd.’s share is up by 62% that of Bajaj Hindustan Sugar Ltd is up by 28% and Shree Renuka Sugars Ltd.’s share is up by 39%.

Sweet Surrender

Food and beverage firms

exposed to high sugar price risk

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he times are good for sugar companies. The global sugar demand-supply situation supports firm prices in the foreseeable future, which is good for profits.

The fly in the ointment could be the

Indian government’s eagerness to keep food inflation under check.

Wholesale data for mid-2016 shows a 22% increase in sugar prices over a year ago. Globally, sugar output has been less

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Government measures to control prices are a near-term risk. A good rainfall has ensured that the next season’s sugar output (beginning October) improve. Still, the shortfall in this season is likely to keep the balance in favour of sugar mills.

Right now, global market conditions are favoring sugar prices. The next sugarcane crop may change that, so output in countries such as Brazil and Thailand should be watched. Sugar mills have not had it so good for years now. A more gradual increase in prices would have

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TECHNOLOGIES IN FPI products and soft drinks may go up if the manufacturers decide to pass on the additional burden to consumers.

The production cost of dairy items, mainly condensed milk and ice cream, will also go up, putting pressure on the manufacturers’ profit margins. ‘’The largest sugar consuming sectors are processed food-based products, confectionery and the traditional sweet-making industries, which will bear the brunt’’ inspiration strong.

The twin impact of sustained demand and lower 2015-16 production has pulled Asian sugar inventory to historic lows... sugar prices in the region have increased by 30-50 per cent since 2015,” the report said.

been overlooked.

If beating food inflation down becomes a priority, sugar makes for a soft target. The effects of drought in parts of the country over the past two years are set to impact prices of sugar and confectionary items, with shortfall in sugar production in India causing a demand-supply gap.

Confectionary, food and beverage sectors get hit India, the world’s second-largest producer of sugar, will witness a fall in production by 3.7 million tonnes due to consecutive droughts in 2014-15 and 2015-16 and will become a net sugar importer in 2016-17.

Since mid-April, worldwide prices of raw sugar have risen by 30 per cent as the market started factoring in potentially lower global sugar output in this year.

with the Indian Sugar Mills Association, production in the state has dropped in the past year.

Higher price trend is likely to persist over the next few quarters and will have substantial impact on Asian Food & Beverage (F&B) corporate margins.

While households will have to shell out more to meet their regular demand of sugar, that too in the upcoming festival season, prices of confectionary

A research report has predicted that India would witness major a shortfall in production during this financial year and will have to import sugar, which will push prices upwards. ‘’Domestic sugar prices across Asia also reflect the tighter supply situation’’ In Mumbai, sugar is retailing at Rs. 41 per kg, and the prices have gone up by Re.1 in the past three months, mostly due to inadequate supplies. As per figures

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With subdued production expected during this year and sustained growth in demand, prices would remain high until the fourth quarter of 2016. In India, domestic prices have risen over the past 6 months and if users are slow to react, it could mean ballooning costs and a squeeze on profit margins, it said.

Added burden of festive season Confectionery items are set to become dearer in the run up to the festival season, driven up primarily by higher sugar prices.

The sugar and confectionery segment has

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TECHNOLOGIES IN FPI ax on export Government has imposed 20 per cent customs duty on sugar exports to boost domestic supply and check prices which are ruling high at Rs 40/kg.

To keep the domestic prices of sugar under check, the government has decided to impose export duty of 20 per cent on the export of raw sugar, white or refined sugar.

seen persistent inflation, with prices on an upswing.

Blame it on the drought in sugarcane growing regions where production has seen a massive fall, inflation in this category of the consumer basket has soared to 21.9% in July from a 0.5% in February.

The higher sugar price is spilling over into candies, sauce, jam, jelly and ice cream, making them costlier as well.

"Prices of confectionery items will firm up with the festive demand peaking in September-October and any price correction to happen only after Diwali, which this year is on October 30."

While in the ice cream sector any correction in prices, would be only in February-March. The sugar and confectionery category, with a weight of 1.36% in the consumer price index and 3.49% in the food index, has seen the second highest inflation rate after pulses for the last six months.

While they are facing cost pressure, food companies get extra room to raise their product prices at this time of the year, with festivals providing guaranteed demand.

"Festive season is the time when product prices can go up. Companies can afford to increase prices based on

this assured festive demand ... this is where they can exercise their pricing power’’ Meanwhile, the sugar industry is predicting stable prices, or even a price correction, for the sweetener, as there would be enough supplies in the local market despite an expected fall in 201617 production.

According to the Indian Sugar Mills Association, the average ex-mill sugar price in India is Rs 34.50 a kg, similar to that in 2014-15. Now the prices are going to remain stable as there is enough sugar in the country and market.

Also as soon as the sugar crushing season begins by mid-October, there could be a correction in the price. The sugar industry has predicted output in 2016-17 at about 23.3 million tonnes, compared with 25.1mt the previous year.

According to agriculture ministry data, cane acreage as on August 19 was lower at 45.55 lakh hectares against 49.60 lakh hectares last year.

But the food ministry expects enough sugar supplies in the market. In June, it predicted the closing stock at the end of the sugar marketing year in September at 7-7.5 mt and the estimated production next season at 23-24 mt, which would be more than enough to meet the domestic demand of about 26 mt.

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The duty has been imposed to restrict exports following sharp rise in global prices. India, the world's second largest sugar producer after Brazil, has exported 1.6 million tonnes of sugar so far in the 2015-16 marketing year (OctoberSeptember). Further exports are unlikely to take place with this decision.

With retail sugar prices soaring, the government has taken various steps to contain prices including withdrawal of export-linked production subsidy and imposition of stock limits on traders.

"Global sugar prices are rising and therefore traders may increase the export of sugar to make profit" Global effect Weather conditions in global sugar producing countries have been so unfavorable that an impeding sugar shortage could see the price of sugary drinks and snacks rocket in the second half of 2016.Raw sugar prices have risen 9.6 per cent so far this year and are trading around their highest point for 18 months.

Sugar is also running a deficit that is expected to reach 4.95 metric tonnes in 2016-17.

“Many companies have been holding off, but the extended deficit in supply may force a price increase to be passed along to consumers in the second half of 2016”.

The gap between supply and demand in raw sugar has widened 19 per cent since January.Crops have been hit by El Nino, a warm weather event in the Pacific Ocean that has a knock-on effect on agriculture the globe.

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TECHNOLOGIES IN FPI outstrips demand, for the five years until 2015, which means stocks have built up.

Asia is heading towards its first sugar deficit in over five years, and this is being led by India.

Sugar production in Asia is expected to be significantly lower in the 2016-2017 sugar season, as the 2015 El NiĂąo-induced drought pulled output down to a five-year low. For 2015-16, the forecast is that Asia will witness a deficit of an estimated two million tonnes.

While Europe could see improved production next year, the world is expected to face a sugar deficit of 5.5 million tonnes in the next sugar season.

Drought has hit sugar production in India, Thailand and Brazil for this season and next. Chinese production has already been downgraded by Green Pool Commodities from 9.5 to 9.2 million metric tonnes in 2016.

In China, excess sugar stock is owned by the government and used as a buffer. If the Chinese government sees the price of raw sugar increasing, it may decide to release some of that stock to the market to reduce inflation.

Below average rainfall in India has hit production and limited planting for the upcoming crop. Indian sugar farmers also have some government support, making it very difficult to predict how the market will react.

Sugar ran at a surplus, where supply

Oils and food insight Domestic sugar industry has started showing signs of turnaround with surging prices and depletion in buffer stocks due to a decrease in global as well as domestic production and steady growth in consumption.

For the past two sugar seasons, the industry was witnessing a challenging phase marked by extreme volatility in prices and lopsided margins for sugar mill owner.The domestic market envisages a decrease in production of sugar from about 25.2 MT in season 2015-16 to about 23.3 MT in 2016-17.

This is because lower area under cultivation for sugarcane during season 2016-17 (from approximately 5.3 million hectares in 2015-16 to about 5 million hectares in SS2016-17), lower opening stock of about 7.2 MT in SS16-17 and a steady rise in consumption would further deplete the closing-stock of sugar, it said.

On the other hand, the government has introduced measures such as imposition of stock holding limits at the traders' end, imposition of export duty of 20 per cent and withdrawal of excise duty exemption on ethanol supplied for blending in order to keep sugar availability in domestic market

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intact.

Sugar prices started declining from August 2014 on account of surplus stocks both in domestic and global markets.

Wholesale price of sugar slumped from Rs 33.76/kg in August 2014 to a low of Rs 26.40/kg in August 2015 and remained below Rs 30 per kg for almost half of production period in the season 201516.The country's sugar production is estimated at about 25.20 MT in 2015-16, a 10.95 per cent drop from 28.30 MT in 2014-15. At the same time, sugar export is expected to remain about 2 MT higher than imports in 2015-16.

During the 2014-15 seasons, in order to improve domestic sugar price sentiment and make Indian sugar exports competitive, the government had introduced various measures to boost exports andcurtail imports. In September 2015, government announced Minimum Indicative Export Quotas (MIEQ) for mills and co-operatives for mandatory exports of 4 MT of sugar in 2015-16.

However,as a measure to curb imports, the government enhanced import duty on sugar from 25 to 40 per cent from April 30, 2015.

As a result, the country's export increased 12.40 per cent from 2.58 MT in FY15 to 2.90 MT in FY16, while import during the same period increased marginally by 0.10 MT to 1.10 MT.

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TECHNOLOGIES IN FPI

Probiotics are alive, active and not just in yogurt New advances are getting the good-for-you bacteria in products like coffee, granola bars and dog food

P

robiotics are an important part of the complex world of foods that are good for health. They are foods that contain live bacteria. It is the bacteria and metabolites which they produce that give these probiotics their health-

promoting properties.

Probiotics market size was USD 36.6 billion in terms of ingredient sales in 2015. Function food consumption is seen as a major industry trend benefiting global probiotics market growth. This

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trend is getting popular as consumers are increasingly becoming aware of the link between nutrition, diet and health.

Demographics, changing lifestyle, and increasing consumption of sodium

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FOOD SAFETY engineered to withstand the heat required for preparation like boiling, microwaving or baking and are found in products as diverse as hot tea, breakfast burritos and gluten-free brownies.

This is a huge advance in stability for an ingredient normally sensitive to temperature, light, oxygen and moisture.

And it is this viability under diverse processing conditions and a broader temperature range that manufacturers believe will help probiotics achieve greater market penetration.

BCC Research projects the probiotic market to grow to $50 billion globally and while yogurt still leads the market for probiotic inclusion, new products for the bacteria include fruit and vegetable juices, confectionery, baked goods, wine, beer, infant formula, dark chocolate and pet food.

content in food may fuel increasing gut disorder occurrence. These ingredients, when consumed help in fighting the bad bacteria and gain immunity by improving the gut health.

Animal feed probiotics market size is set to gain highest growth rates at above 7.5% CAGR and be register over USD 4.2 billion by 2023. Livestock production growth owing to increase in meat consumption may positively influence product demand. Growing concerns towards maintaining animal health for meat consumption owing to outbreak of diseases are exerting influence in demand growth.

Coming a long way Probiotics have come a long way in a decade. The first probiotic-laced yogurt was introduced to the U.S. in 2005, and at that time, the good-for-you bacteria couldn't be added to anything else and survive.

Nowadays, probiotics have been

Low awareness level among consumers about efficacy of the products may obstruct market growth. Numerous alternative strains are available having similar properties of improving the immune system and gut health creating misconception about the product.

Streptococcus thermophiles are commonly used as ingredient strain which helps maintaining immunity and digestive track function. R&D and raw material cost broadly determine probiotics market prices.

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Do we need probiotics?

The best known example of a probiotic is yogurt. The bacteria which are found in probiotic products such as yogurt, kefir and fermented vegetables usually aren't found in the human intestine.

Because of this, bacteria eaten in probiotic products don't colonize the intestine,

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FOOD SAFETY powders, and beverages containing Lactobacillus acidophilus and other live bacteria, as well as some fungi can be helpful.

According to one of the brands, a capsule a day can strengthen the immune system, counteract the side-effects of antibiotics and decrease diarrhoea. In addition, these supplements are said to be not only safe but necessary for infants, as well as pregnant and nursing women.

As to the range of cultures in supplements including Lactobacillus acidophilus, Lactobacillus casei, Bifidobacterium bifidum, Bifidobacterium longum, and the yeast Saccharomyces there is little reason to think whether one needs to swallow them or not.

but are flushed and eliminated quickly from the body. The bacteria that live in the intestines make up a very large and diverse population.

The numbers of each kind of bacteria change depending on age, diet, health status, and use of drugs and supplements.

The bacteria thrive because they are able to adhere to the intestinal wall and use the semi-digested food that is passing through the intestines. Also, the bacterial population in the intestines of vegetarians is much different than that of meat-eaters, because some bacteria have specific nutrient requirements.

known as prebiotics. FOS are compounds made up of fructose sugar molecules linked together in long chains. They can be found naturally in such foods as Jerusalem artichoke tubers, onions, leeks, some grains and honey.

People who eat yoghurt have a probiotic in their diet. Others eat foods that contain FOS and thus have a prebiotic in their diet. So it is possible to eat a probiotic that contains a prebiotic.

Probiotic supplements - pills, capsules,

It has been proposed that adding these particular foods or nutrient to the diet could be a way of increasing the numbers of specific bacteria. That is what prebiotics are.

Prebiotics are foods or nutrients that are used by specific bacteria and that can be added to the diet to increase the chances of these particular bacteria growing and thriving in the intestine.

Fructooligosaccharides (FOS) have been

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Caution: Since supplements are unregulated, there is no guarantee that they contain what the labels say or that live bacteria could survive in such forms.

In fact, a recent Belgian study found that many of the powdered or pill-form supplements contain little or no live bacteria, and that none contain enough to have any effect in the intestines.

To spore or not to spore There are two types of probiotic organism: non-spore forming or spore-forming. It is the latter that initially made it possible to expand beyond the dairy case. Sporeforming organisms form a type of shell or coating that causes them to enter a dormant state resilient to heat, moisture

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FOOD SAFETY could disrupt the market. Pediococcus acidilactici 5051, a plant-based, non-spore forming probiotic, is generally recognized as safe as an ingredient, is less sensitive to oxygen exposure than Lactobacillus and Bifidobacterium and more resistant to heat. It can survive across a broad temperature range, remaining stable and viable in temperatures ranging from -20 degrees Celsius up to 185 degrees Celsius for brief periods of time. And it offers acid stability.

Although spore-formers can provide good benefits, some manufacturers might prefer a non-spore forming strain.

They (manufacturers) might be more comfortable with a probiotic that is nonspore forming because it enables them to have greater level of microbial control in their plant.

and oxygen. This protects the organism until it enters the gastrointestinal tract, where ideal conditions exist.Once it reaches the small intestine, the probiotic can provide health and wellness benefits.

However, health and wellness benefits and tolerance parameters are strain specific. Reputable suppliers conduct clinical trials and provide evidence to back up their claims.

Strain survival There is nospecificnumber of probiotics that is most beneficial. Some with similar benefits might be most effective at different amounts. Like one organism produces a certain immune modulation response at 500 million CFU (culture forming units) per day, while another might require 30 billion CFU for the same level of efficacy.

This is where strain survival is critical.

Looking at yogurt and examining survival of probiotic bacteria through digestive acids, “good bifidobacteria survive the stomach’s gastric acidity at a level of a tenth of a percent to a percent. So if you

include 10 billion CFUs in the initial product, a percent or a tenth of a percent makes it into the gut.”

First, formulators need to account for the clinical data.A strain might get good results supplying a certain health or wellness benefit at 10 billion CFU. However, then you also need to ensure the shelf life, so the consumer who buys the product realizes the promised benefits.

A spore-forming organism called BC30 (Bacillus coagulans GBI-30 6086) sees a 24% to 78% survival through gastric acid. There are many manufacturers that believe BC30 can deliver benefits.

This probiotic strain has been used in more than 500 consumer products across a spectrum of categories, including nut butters, frozen desserts, granola, organic juice and an avocado-based smoothie bowl.

There’s a new strain in town A newly identified strain of probiotic that its proponents say is shelf stable

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The spores of any type can be difficult to eradicate. Manufacturers processing multiple products within their facility want to “be able to implement sterilization and cleaning procedures, then formulate again with a fresh batch of product and start clean. Any spore forming strain, under certain conditions, can pop up again.

A&B Ingredients is commercializing this probiotic strain. The company has tested its probiotic in products including yogurt, chocolate, coffee and soy sauce. It is investigating the probiotic's potential for nutrition bars and cereal and other areas in the food industry “that traditionally shy away from having spores in their facilities.

There is strong evidence that P. acidilactici can help immune functions in humans and in animals.

Pet food is a viable product category for probiotic inclusion.Dogs and cats have digestive systems that work much like those of humans, so a lot of probiotic data could work the same way for human and pet food.There are already a several probiotic products on the market for pets.

Wal-Mart has a premium line of dog food that incorporates B30. And another study showed P. acidilactici 5051 could relieve

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VOl.11 Issue 12 October 2016

20 www.agronfoodprocessing.com eczema in dogs.

Why now?

Is the growing demand for probiotics in diet a need or a fad?

Part of it, is consumer awareness of the importance of the microbiome and a healthy gut.That aside, previous generations, didn’t “hand you antibiotics every time you sneezed, Meat products, were not "laced with antibiotics.

Overexposure to antibiotics is “screwing up the gut. Probiotics are more necessary in today’s society.”

Another part of the growth in the probiotics market can be attributed to consumers’ more proactive approach to immune health, thinking has evolved from ‘I have a cold and need something to help me with my symptoms,’ to ‘help me stay healthy, so I don’t catch a cold’.

This approach to boosting the immune system can help reduce antibiotic use, as DuPont discovered in a clinical trial. DuPont offers a range of nonspore forming strains based on Bifidobacterium or Lactobacillus that target various health and immune concerns of people from infants through adults.

For one blend, clinical findings demonstrated an 80% reduction in antibiotic use when tested on children suffering from cold and influenza-like symptoms. It also supported respiratory health, showed a decrease in incidences of respiratory symptoms and reduced the number of sick days.

Indian probiotic market The India Probiotic market is emerging as one of the highest growth potential markets worldwide due to multiple factors such as growing health concerns among consumers especially among the youth, changing food consumption patterns, increasing diabetic population, growing risk of stress/lifestyle related and cardiovascular diseases, and rising disposable income. The availability of probiotic is also increasing gradually due

to expanding distribution channels across the country, which is steadily bridging the demand-supply gap.

According to the shed report “India Probiotic Market Forecast and Opportunities, 2019”, the probiotic market in India is projected to register a CAGR of 19.80% during 2015-19, in revenue terms. North India dominates the India probiotic market, in terms of sales revenue, followed by the Southern and Central regions of the country.

Mother Dairy, Amul, Danone Yakult and Nestle India are among the leading producers of probiotic

FOOD SAFETY animal feed segment.

The India probiotic animal feed market is largely unorganized due to presence of a large number of medium and small players.

Despite being in nascent development stage, the probiotic market in India is projected to register strong growth through 2019 due to growing health concerns, rising incidences of lifestyle related disorders and increasing healthcare cost.

The demand for probiotic drugs and dietary supplements is increasing rapidly, especially due to rising need for women and pediatric nutrition.

With increasing purchasing power of consumers and rising urbanization, the demand for probiotic products in India is expected to grow further in the coming years.

functional foods and beverages in India.

These companies are forecast to register strong CAGR growth, in revenue terms, due to their expanding distribution network and focus on establishing exclusive outlets.

What’s next?

Jumping onto the protein bandwagon, certain probiotic ingredients suppliers offer studies that show strain-specific probiotic effectiveness in supporting the body’s protein utilization. BC30 supports the body’s utilization of protein and also enhances vitamin and mineral absorption. This protein utilization opens up new possibilities in the sports nutrition category.

Probiotic functional foods and beverages is the largest segment in the India probiotic market, in terms of revenue share. The market for probiotic functional foods and beverages is expected to witness significant growth during 2015-19 due to rising popularity for these products among the youth.

Another new category of interest for probiotics could be weight loss products.

The probiotics themselves will not cause the pounds to drop off, but rather support the immune system, which is under the stress during dieting. Probiotics could also help relieve gastrointestinal issues that can crop up.

The probiotic drugs and dietary supplements segment is dominated by Dr. Reddy’s Laboratories, Tablets India and USV India, while Zeus Biotech, Unique Biotech and Polchem Hygiene Laboratories are leaders in the probiotic

And as the pet food market continues to grow, probiotics will likely be used more in pet foods and treats to help man's best friend improve digestion and other health functions.

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Horticulture boon for UP, Maha, Bengal, Bihar & Rest of India

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mall farmers across India reaped a bumper crop of fruits and vegetables in 2015-16 defying a widespread drought. India’s horticulture output crossed a record 283 million tonnes, shows the third advance estimate recently released by the agriculture ministry.

However, the story is not just about a record harvest during a drought

year—primarily due to better access to irrigation—but also a structural change underway in Indian agriculture where farmers are moving toward high-value horticulture crops.

Being short-duration crops, and as they can be grown in very small plots of land— say one-tenth of an acre—farmers now prefer to grow more vegetables. These crops ensure a quicker cash flow, unlike

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say, pulses, which may take more than six months from sowing to marketing.

While 2015-16 marks the fourth straight year of horticulture production outstripping foodgrains output, the other story is that the horticulture boom is spread across the country, and not limited to the erstwhile foodgrains-based green revolution states like Punjab, Haryana and western Uttar Pradesh.

States like Tamil Nadu, Telangana, Maharashtra, Madhya Pradesh, Karnataka, Gujarat, Bihar and Andhra Pradesh are among leading fruit growers in the country. For vegetables, states in the top 10 list include West Bengal, Bihar, Gujarat, Karnataka, Madhya Pradesh and Odisha.

The Real Revolution in Agriculture

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121, 1st Floor, Rassaz Multiplex, Station Road, Mira Road (E), Dist Thane - 401 107, Maharashtra.

Ph. : +91-22-28115068, 28555069, 8689979988 Email : info@agronfoodprocessing.com www.agronfoodprocessing.com

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COVER STORY

23 www.agronfoodprocessing.com production of food grains in the country in 2015-16: 280 plus million tons compared to 250 plus million tons.

The message is very simple: farmers seem to be growing more fruits and vegetables and possibly using better technology that has improved yields.

Of course, the problem of access to markets remains as intractable.

Lack of cold storages and a direct interface with urban consumers means farmers rarely get the returns they should via horticulture.

Two contentious issues always crop whenever there is an attempt to discuss the state of the Indian economy. The first is about the crisis confronting Indian agriculture. The more impassioned liberals point out how thousands upon thousands of farmer suicides reveal the rot within and how the benefits of liberal economic policies have never reached farmers.

Two other "agricultural activities-dairy and poultry farmingtoo have registered phenomenal growth rates in the 21st century. Dairy farming is a testimony to the success of the cooperative movement in India while the growth in poultry is due to the increased appetite of ordinary Indians to eat chicken and eggs.

The more reasoned economists talk of low productivity, lack of market access and low returns hurting Indian farmers. The second contentious point is about the poor getting a raw deal. Much data is bandied about to "prove" how malnutrition is rising amongst the poor. Falling per capita availability of food grains and pulses is shown as decisive proof of this scourge.

There is a bit of truth in all this. But there is also a lot that presents a slightly contrarian view.

For the fourth consecutive year, production of horticulture outstripped

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Without a shadow of doubt, this represents a quiet revolution in Indian agriculture that is not often talked about or debated.

The Indian farmer has been smart enough to both expand and diversify his sources of income. It is the state that has failed the farmer by not providing the right infrastructure and market access.

This phenomenal growth in horticulture, dairy and poultry farming also has deep implications on the diet of the ordinary Indians, and the debate about persistent malnutrition. If you go by per capita consumption of food grains and pulses, it would be easy to reach a conclusion that poor Indians are suffering from more malnutrition than before. But that is simply not true. It is just that rising incomes ha e helped even poor families to change their diets and perhaps imbibe more nutrition than before.

Look at horticulture. Between 1991 and 2014, the population of India grew by more than 30%. Horticulture output in the same period grew by more than 200%.

Surely it would be physically impossible for only rich and middle class Indians to consume so much more of vegetables and fruits? The fact is, poor families have been moving from almost pure food grains diet to a more varied one that includes vegetables and fruits. Not to forget milk, chicken and eggs. Per capita availability

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COVER STORY where are the horticulture hotspots in India? An analysis of state-wise production figures shows that three statesMaharashtra, Andhra Pradesh and Uttar Pradesh-grew nearly a third of all fruits in India. For vegetables, Uttar Pradesh, West Bengal and Bihar contributed nearly 40% to India’s production.

Where is India’s flower basket? Tamil Nadu, Kerala, West Bengal, Madhya Pradesh and the tiny state of Mizoram.

The story in all of this is that Indian agriculture has moved beyond the green revolution states of Punjab, Haryana and western Uttar Pradesh—India’s foodgrain basket. Also, horticulture production is spread out across states, except for, among others, apples in Jammu & Kashmir and grapes and in Maharashtra. This means that small farmers across the country are sharing the gains of horticulture’s success.

Consecutive droughts and freak weather in 2014 and 2015 dented India’s foodgrain production and worsened rural distress.

For farmers, the weather woes came on top of a drop in prices of key crops like rice, wheat, cotton and sugar. But one sector that escaped the weather shocks--if not the price drops--is horticulture.

100% in the last two decades. Per capita consumption of eggs has grown from 5 a year in the early 1950s to about 60 a year now. Something similar has happened with broiler chicken.

spot?

Where is the growth coming from, or

Unless you are a diehard pessimist, it is difficult to ignore this revolution in agriculture as well as diets of ordinary Indians. Of course, despite their willingness to experiment, expand and diversify, farmers in India continue to be let down by governments.

The phenomenal growth in horticulture, dairy and poultry farming has deep implications on the diet of the ordinary Indians, and the debate about persistent malnutrition.

Is horticulture Indian farming’s bright

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Production of fruits and vegetables overtook India’s foodgrain production by a whopping 31 million tonnes in 2014-15 (284 million tonnes against 253 million

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COVER STORY vegetables went up from 2.7 kg to 4.3 kg during this period.

There is no denying that higher incomes have led to a diversification of diet from cereals to fruits, vegetables, meat and eggs and this seems to be driving demand, but data on horticulture production needs to be on a firmer footing, said Himanshu, associate professor of economics at Jawaharlal Nehru University, Delhi.

tonnes). This was the third straight year when horticulture output outstripped that of foodgrains. As the graph below shows, foodgrain production dropped in drought years (2002, 2004, 2009, 2014), while horticulture production was either unaffected or stayed on its upward growth trajectory.

the value of the horticulture output grew more than double compared with all other crops put together in the four years between 2008-09 and 2012-13. Fruits and vegetables are grown in less than 5% of the country’s gross cropped area, compared to over 63% of the area used to grow food grains.

How did the sector manage this feat? Are fruits and vegetables more resilient to drought than say rice and wheat? A recent report, Horticultural Statistics at a Glance, 2015, released by the agriculture ministry (on 31 December), and previous reports from the ministry shows the structural change under way in India’s farm sector.

What drove the growth of horticulture sector in India? Better incomes, urbanization and higher consumption of fruits and vegetable seem to be driving the demand which is addressed by small farms. Consumption data from the National Sample Survey Organisation (NSSO) shows that while monthly consumption of cereals per person in rural areas declined from 13.4 kg in 1993-94 to 11.2 kg in 2011-12, consumption of

These numbers show that most horticulture crops are grown with assured irrigation and, therefore, are more immune to monsoon deficits. This varies from 71% of area irrigated for tomatoes to 86% for potatoes. Eight vegetables that make up 74% of the total vegetable production in the country have 73% access to irrigation.

In comparison, only 50% of the area under foodgrains has access to irrigation.

Barring wheat, which is an irrigated crop, irrigation access varies from 16% for pulses to 59% for rice.

Another positive for horticulture is that fruits and vegetables are mostly grown by marginal and small farmers (with less than 2 hectare of land). This means that resource-poor farmers are likely to have benefitted most from the growth in horticulture sector. More so, because

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“The data is suspect as crop cutting experiments (for estimating production) are only done for field crops like potato and onion, while the rest of the production is poorly estimated,” he adds.

The agriculture ministry admits the challenges. Since vegetables are grown in small plots, or in the back of houses, they do not have a single point of harvesting, making assessment difficult, noted the Horticultural Statistics report.

In 2013-14, the ministry discontinued the earlier methodology and replaced it with what is known as CHAMAN (coordinated programme on horticulture assessment and management using geoinformatics).

This uses a combination of remote sensing technology, sample surveys and market arrivals to estimate horticulture output and area.

Hopefully, the new estimation methodology which is piloted in six states now, will help better understand the

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COVER STORY million tonnes compared to 252 million tonnes.

Vegetable prices spike, despite bumper harvest Two successive years of drought had spiked food inflation in India, with pulses and vegetables contributing largely to higher retail prices.

While production of pulses dipped by 14% between 2013-14 and 2015-16 leading to higher prices, the rise in vegetable prices comes as a surprise.

changes under way in Indian agriculture and how the farmer undertook that journey.

But estimates apart, the flip slide to the success story of horticulture is that farmers have been regularly affected by price dips, especially during the harvest season of onions and potatoes.

For instance, onion prices plummeted to Rs.7.5 a kg on Tuesday (9 February) in the wholesale market in Lasalgaon, Maharashtra, due to higher arrivals of the late Kharif crop. In August last year, well after the harvest season, prices shot up to Rs.60 a kg in wholesale markets on fear of drought and lower supplies.

farmers themselves isn’t enough.

Horticulture hotspots of India Horticulture has emerged as a bright spot in Indian agriculture by defying consecutive years of crippling drought and registering record production last year.

Better access to irrigation and higher demand from consumers pushed small farmers to grow more fruits and vegetables. Production of horticulture crops overtook that of foodgrains for the fourth straight year in 2015-16—282

The drought is still there and so being the fear of a lower harvest, but the price dips and hikes imply that farmers are selling it dirt cheap after harvest, and traders are reaping benefits during the lean months.

It happened with potatoes, when in April last year farmers in northern India left their crop to rot in the field as prices dipped to a measly Rs.2 per kg after a bumper harvest.

This means horticulture farmers need better access to markets, facilities like warehouses and cold storages, and credit to help them better manage price risks and avoid distress sales. Just drought proofing often through private investments by

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A bright spot in Indian farming was production of horticulture crops such as fruits and vegetables, which rose consistently over the past few years.

Small farmers reaped a bumper harvest of 282.8 million tonnes in 2015-16, despite a crippling drought primarily due to better access to irrigation. Also, 2015-16 was the fourth straight year of horticulture production outstripping output of foodgrains.

Despite the higher production of vegetables, which rose from 162.9 million tonnes in 2013-14 to 166.5 million tonnes in 2015-16 the highest Indian farmers ever produced vegetables prices rose by over 14% during June and July this year.

The problem is that the bumper harvest

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COVER STORY within three weeks of harvest,” Kohli said.

For instance, India has just 250 pack houses—for grading, sorting, pre-cooling and packaging the produce extending its shelf life—against a requirement of about 70,000.

At present, there are less than 10,000 reefer (refrigerated) vehicles, while the country requires more than 62,000.

“Our focus should be on creation of pack houses, refrigerated transport and ripening chambers instead of large cold storage and warehousing projects,” Kohli said, adding, “Creation of a cold chain with post-harvest management infrastructure will empower farmers to spread their sales to new geographies.”

This will have multiple benefits: Bring better value to farmers and reduce food loss, besides lowering inflation. “Efficient post-harvest management, while extending the marketable life of fresh produce, can have a transformational impact on how farmers access and interact with markets,” Kohli said.

Pravesh Sharma, a former top official with the agriculture ministry, who runs a start-up called Sabziwala that supplies fresh produce from farmers to consumers, agreed that the supply chain is inefficient and fragmented.

is not reaching the end consumer due to lack of efficient supply mechanism, said PawanexhKohli, chief advisor at the National Centre for Cold Chain Development (NCCD), a think-tank under the agriculture ministry.

“Think of the problem this way, we are capable of handling only 60% of the produce. The rest is going waste,” Kohli said.

The images of an inefficient supply chain are stark. A month ago, farmers in Maharashtra were forced to sell onions at Rs.1 per kg when consumers in Delhi were paying over Rs.25 per kg. Desperate

farmers in Karnataka had to abandon their tomatoes by roadside earlier this year as wholesale prices tanked.

There’s more. Last year potato farmers in Uttar Pradesh, the largest producer of the tuber, left the harvested crop to rot as prices crashed.

According toKohli, the solution is to create more near-farm integrated pack houses and induct refrigerated vehicles to transport the produce to the consumer.

“Instead, what we have been doing is constructing warehouses mindlessly without thinking that tomatoes cannot be stored and must reach the consumer

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“Traders often play the market by creating artificial shortages. This could be as simple as stopping four trucks of onions outside Delhi can drive prices up,” Sharma said. “The government has failed to create a competition to these informal cartels who trade in cash without any traceability.”

Sharma added that India needs to recreate the Amul experience (with milk cooperatives) for fruits and vegetables. “So far cold storages have only benefitted potato traders. The government needs to incentivize aggregators and reduce mandi (wholesale market) transaction charges that go as high as 12%.”

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Eggonomics of India

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ndia needs to have 180 eggs per person per year to meet required standards, but currently there are 63 eggs available per person per year. Though India is among the top egg producer countries in the world and the production of eggs in

the country is about 83 billion. And there is a need to increase the production of egg three times more.

Egg production in India is growing at a compounded annual growth rate of over

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8 per cent.With over 28 billion eggs produced in the state per year, Andhra Pradesh accounts for the highest share of over 30 per cent in egg production across India.

Tamil Nadu, with a share of about 20 per cent, ranks second with about 20 billion eggs produced in the state each year.

Maharashtra, Haryana, Punjab and West Bengal are other leading egg-producing

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OPPORTUNITIES IN N.E with growth in overall population and demographics, relative cost advantage, evolution of fast-food chains leading to broad egg acceptability and with eggs being a high nutrition value, affordable and quality source of animal protein.

The government should perk up egg industry in as it is environmentally sustainable and has a very low carbon footprint and eggs have the added benefit of being a more affordable and nutritional food option for consumers. High tariff, domestic monopolies, different standards vis-Ă -vis sanitation, hygiene, price range of animal feed and outbreak of diseases are certain key barriers to the growth of global egg market.

states in India but each has a share of less than 10 per cent in the total egg produced in India.Karnataka, Kerala and Odisha are other significant egg producing states with over 5 per cent share in egg production across India.

The low cost of egg production, high productivity, rise in egg consumption in the north owing to growing per capita income of a young and increasingly urban population and emerging export markets are certain key growth drivers of egg production in India.

rate of over 60 per cent. Asia accounts for about 60 per cent of global egg production followed by the US, Brazil and Mexico as they together account for about 20 per cent, Europe (15 per cent), Africa (about four per cent) and rest of the world accounts for about one per cent.

A look on the Egg industry India is the third-largest egg producer after China and USA and the fourth-largest chicken producer after China, Brazil and USA. There is scope for enhancing the production and getting it more organised is the core requirement to move ahead of consumption resulting in optimum prices and with minimum profits.

Egg consumption is rising across the globe due to rising economic prosperity amid the rising middle class together

The ministry of food processing industries, Centre for Science and Environment and food inspection authorities started

On the flip side, rise in bird mortality rate due to less intake of feed resulting from an upswing in prices of essential feeds like soya, jowar, broken rice, maize and others together with seasonal uncertainties have led to a sharp rise in egg prices of late.

India exports over 50 million eggs worth over Rs 250 crore each year and the winter season is the peak season for exports. Afghanistan, Algeria, Hong Kong, Maldives, Middle East and African countries are leading export markets for eggs produced across India and Brazil, China, Europe, Taiwan and the United States are India’s biggest competitors in this regard.

The global market for eggs is currently at over 2,000 billion and is rising at a growth

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OPPORTUNITIES IN N.E Though the prices of eggs are going up, they are cheaper than many other places in the world. The eggs are sold in numbers and for around six US cents each, while the feed cost per egg is around four US cents. .

The larger layer farms are not expanding further because of disease threat, labour costs, environmental concerns and local issues. The layer units are coming up in new areas. The big farmers are opting to move out and establish units nearer to consumption centres to reduce both transportation costs and disease risk.

keeping track of eggs and chicken and now eggs have become ‘’food items’’ instead of “agriculture produces” which there were referred as few years ago.

results. Hen-housed egg production of many units is more than 300 in a laying cycle of 52 weeks and many farmers achieve 310 eggs.

The small layer units are becoming unviable. Large units with million birds and 100,000 birds in one house are coming up. Some 70% of the layer birds were in the states of Andhra Pradesh, Tamil Nadu, and Maharashtra& Karnataka in south and only Punjab in the north. The eggs were transported to other states.

More production units are coming up in Uttar Pradesh, West Bengal and Bihar now. North-Eastern states are planning production units to get fresh eggs at more reasonable costs saving time and money on transport.

The export of eggs from India is dismal and inconsistent. Three egg-breaking plants are also not comfortable in export of liquid egg products. The growing population of India and increasing acceptability of eggs in the diet of all people in India is absorbing all the production comfortably. Eggs are included in midday meal schemes of schoolchildren and hospitals, which are increasing the consumption.

Growth of the industry can be appreciated by following figures India has developed its own systems of housing and management, which are most cost-effective. The hens are happy in the hands of the Indian farmers and both of them are doing good job in filling up the food needs. The shell eggs are cheapest in India, though the inputs cost is not the lowest. It is due to improved efficiencies achieved by the farmers by producing more eggs per hen housed at low input costs.

Feed prices have been increasing due to rise in grain prices. Indian poultry farmers use low-energy, least-cost feed formulations and produce excellent

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Cage housing with mechanization is the preferred option. While the mediumsized units are opting for open sided houses with California type housing, larger units with more than 100,000 birds are experimenting with multi-tier closed houses with mechanized feeding, egg collection and manure drying.

The recent poultry expo, Poultry India 2013, in November 2013 attracted cage manufacturers from all over the world to India exhibiting the most intensive cage farming options.

The egg production in the country is going to go up and the per-capita availability of eggs which is around 63 now will reach to 100 before 2020.

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OPPORTUNITIES IN N.E producers in Namakkal, Tamil Nadu accounts for the maximum production of eggs in India. In undivided Andhra Pradesh region, Hyderabad is the city with maximum poultry farms and hatcheries. Karnataka, Maharashtra, Gujarat, Madhya Pradesh, Odisha and North Eastern States are some of the other major egg producing regions in the country.

With high egg production with minimum nutritional inputs, today's layer bird is becoming a sensitive machine. The bird needs to be more adaptive and rugged.

The layer bird to suit the Indian market should be very rugged, adapted to a harsh climate and low feed density feed, laying more medium-sized eggs and having a good immune system.

Alternative egg production systems are also gearing up, following encouragement from the government; more layer birds are being distributed in the rural areas. In states with small land holdings and less resources like Kerala in the south and the north-east of India, there could be a boom in rural egg production. This will come from brown layers, which are more robust and so better suited to village conditions.

Role Model The demand for eggs has started scaling up and more farmers have entered into the business of egg production. But the real thrust in egg production came when farmers in Namakkal, a small town in south-west parts of Tamil Nadu marred by a crop failure due to lack of rain, tried their hands at the poultry sector.

The business turned out to be more profitable than farming and many of them took up egg production as a permanent source of livelihood. Not much later, the

town went on to become the largest egg production location in the country!

Namakkal also started supplying eggs to other parts of the country and the Middle East. An interesting offshoot of this development is that the high demand for Namakkal eggs in different parts of the country also led to the growth of the lorry transport sector in the region. And today, the transport and truck body-making industry in Namakkal is equally famous as an avenue for employment generation on par with the poultry and egg production industry. According to industry estimates, the city has exported roughly over 700 crore eggs in the last 10 years.

While diseases remain the biggest threat to the poultry sector, Tamil Nadu Veterinary and Animal Sciences University’s (TANUVAS) Veterinary College and Research Institute has helped the local poultry industry to fight infections and diseases, increase productivity and meet global quality standards.

Due to a major concentration of egg

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However, the outbreak of bird flu in India in the middle of the last decade made the poultry sector face an import ban by UAE and several other countries in the Middle East. This led to the growth of India’s processed egg industry, which includes liquid and powder eggs that are used extensively in bakeries.

This can be validated by the fact that while in FY2008 processed eggs accounted for just 36.1% of India’s total egg exports, by FY2014 the number had surged to over 56%.

Interestingly, demand for Indian egg products has considerably gone up in the international market following the outbreak of avian influenza in US recently.

Due to the restriction imposed by many countries on import of egg products from US during 2015 (even China banned US eggs in 2015), there has been an increase in demand for eggs from India and the egg prices have also gone up. However, there’s a word of caution. There could be a downturn in egg prices in FY2017 as some of these importing countries in a

36 www.agronfoodprocessing.com bid to curb rising cost of eggs can replace egg products by alternate ingredients and reduce usage of egg powder in the recipe of the final product.

Though there is a good demand for eggs in the Japanese market, many exporters avoid entering this market due to stringent quality checks. Many industry insiders give credit to SKM Egg for investing heavily in setting up a plant on the KarurErode Road, away from Namakkal, and meeting the stringent quality parameters required by egg powder importing countries, especially European Union and Japan.

faced by exporters and issuance of various food quality certifications.

To address the disease issue and to promote export of eggs, the industry has been demanding that the government identify pockets in India and create disease-free egg and chicken export zones.

Egg producers need an average working capital for 45 days, which includes inventory and receivable periods. The poultry sector needs investments in research and development to create new varieties of chickens and egg products to

Fragile They Are Diseases are a major threat to the sector. It not only puts a financial burden on people associated with the trade but also brings a bad name to the entire export consignment from a country. India is a big country, and a bird flu outbreak in Karnataka has little chance to get transmitted to chickens in Tamil Nadu or Andhra Pradesh. But, due to a lack of awareness, importers generalize the incident and put a blanket ban on all chickens and poultry products exported from India.

There has never ever been a single outbreak of bird flu in Tamil Nadu. But the fear factor is so high that even if there is an outbreak of bird flu in desi or wild birds in some far away state, import from the entire country is restricted. Regarding this the government should make efforts to keep importers informed about the real situation.

Like many other food products, poultry and egg products also need to go through various stringent quality checks to adhere to the food quality guidelines in the domestic market and as per the parameters of the importing country. Hence, there is also a need to expedite certificationrelated issues with countries that have banned the import of Indian poultry and poultry products.

The government also needs to set up a webbased mechanism to address challenges

meet stringent food quality parameters in various countries and also to market Indian poultry brands.

Loans provided by Indian banks come with a much higher interest rate compared to those provided by banks in developed economies and the volatility in international currencies contributing to further pressure on the profit margins of exporters from India. While big corporations can hedge themselves against forex fluctuations, exporters in the poultry sector don’t have the resources to take the advantage of hedging.

Further, the sector has been feeling the pinch of rising inflation in India. While commodity prices have come down in the international markets, it has gone up in India. Rising cost of maize and soya, which are some of the key raw materials

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OPPORTUNITIES IN N.E used in the poultry sector, has added to the overall production cost. Dumping of egg powder by US and other countries in the European market is also putting pressure on India’s egg exports.

Growth Drivers The Indian government provides various financial incentives to encourage exporters. Agricultural and Processed Food Products Export Development Authority (APEDA) provides transport assistance, which is payable on the basis of gross weight for both air and sea shipments. Eggs, including Specific Pathogen-Free (SPF) variety, are also eligible for this incentive to all destinations except neighboring countries. Under the new Foreign Trade Policy, egg exporters get 3% incentive under MEIS and 1% additional incentive under Duty Drawback scheme. This policy support is key to ensuring that a growing number of investors in the micro and small enterprises categories too take the egg bet.

Adding Value There is big potential for value-added egg products across international markets and given the investment costs in value-added egg products like egg powder, competition is limited in this space (unlike in the whole egg segment). This could be a segment for exporters with big coffers to look at.

Coming back to the whole egg segment, while the recent bird flu outbreaks in US did prove to be an opportunity for Indian poultry industry in the short run, industry’s prospects in the long-term too look bright. A recent report by USbased International Food & Agribusiness Management Association (IFAMA) states that, “considering the size of the India’s poultry sector, its price competitiveness and Indian entrepreneurship, India is set to take a more active role in the global poultry trade especially with respect to exports to the Middle East.” And given that egg is consumed all over the world in huge quantities – as it is a cheap source of proteins and minerals – Indian egg producers can use their low-cost production base to their advantage.

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PEPSI GOING THE HEALTHY WAY

Pepsi has fired the first shot in what could be a new cola war—albeit of the low-cal sort—in India.

And at the heart of this contest is stevia, a plant extract-based sweetener, which significantly cuts down a drink’s calorie count.

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move at sugar reduction in India when, in August, it began testing its lime lemon drink 7Up with plant-based sweetener stevia instead of sugar.

PepsiCo, which makes 7Up, Mountain Dew and Pepsi fizzy drinks, made the first

The move has led to reduction of 30% sugar content in 7Up – the first use of stevia to sweeten 7Up anywhere in the world. The Indian government had urged Nooyi to reduce sugar in its beverages two years back, when she was on an India visit. ‘’Use of stevia will be extended to other

everages and snacks maker PepsiCo will reduce sugar content in its beverages across world markets. The calorie reduction will happen across all markets including India.

The step-up on zero or lower-calorie products will include close to two-thirds of the company's beverages having 100 calories or less per 12-ounce servings by the year 2025.

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brands in its India portfolio’’ While globally, PepsiCo’s mainstay brand Pepsi cola earns over $1 billion annually, cola makers are under significant pressure from health activists and governments to curtail use of calories to reduce obesity levels.

Fizzy drinks contribute to less than 25% of PepsiCo’s global sales now, according to data by global research firm Mintel.

Other unsweetened drinks the company

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CONTROVERSY vegetables in oats brand Quaker. Limelemon drink Nimbooz already combines fruit juice with fizz.

The commitment to boost nutritional content extends to snacks as well, PepsiCo said. The US parent has said that by 2025, three-quarters of its global foods portfolio will restrict sodium to 1.3 milligrams per calorie. Also, three-fourths won’t exceed 1.1grams of saturated fat per 100 calories.

Pepsi-Co said it has made “significant strides and is now frying snacks in many countries using heart-healthy oil”. In India, its snack brands include Lays chips and Kurkure.

PepsiCo also has expressed interest in probiotics with the debut of Tropicana Essentials Probiotics. Healthy foods and beverages have been key to growth for PepsiCo in its most recent earnings report.

makes include Starbucks and Pure Leaf ready-to-drink coffee and iced tea, juices and Gatorade sports drinks.

PepsiCo will reduce sugar content in its juices and carbonated drinks in India by 2025 as part of a global pledge announced

by Chief Executive Indra Nooyi amid a backlash against such products over an obesity epidemic and illnesses such as diabetes. Several countries are also considering a sugar tax to reduce consumption of sugary drinks.

The company began testing the use of plant-based sweetener stevia in 7Up in August, leading to a cut of 30% sugar content.

PepsiCo will move forward with a deal to acquire probiotics beverage manufacturer KeVita, in which PepsiCo already owns a minority stake and distribution deal.

That's the first time stevia was used in 7Up anywhere in the world and in a fizzy drink in India. The company is in the process of taking its vitamin and electrolyte fortified brand 7Up Revive national and has stepped up use of grains, fruit and

This deal would be the first acquisition under PepsiCo's venture arm Naked Emerging Brands, which is tasked with diversifying the large corporation's beverages portfolio with better-for-you options for health-conscious consumers.

As part of the initiative, the company will introduce smaller sizes and bring zerocalorie drinks to India with close to twothirds of the company's beverages having 100 calories or less per 12-ounce serving.

PepsiCo India have started the sugar reduction journey across colas, flavours and juices and will be replacing sugar with natural and artificial sweeteners across their portfolio, and will also reduce portion sizes of beverages in bottles and cans. And this will be extended to other brands such as 7Up, Mountain Dew, Diet Pepsi and Mirinda.

"For the next 10 years PepsiCo will focus on products, planet, and people."

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39 www.agronfoodprocessing.com KeVita's portfolio of sparkling probiotics, master brew kombucha and vinegar tonics center on the purported health benefits of probiotics.

Probiotics have been a key trend in functional food and beverages in recent years because of their potential impact on digestive and immune health, though some experts question those health benefits.

PepsiCo could complete the acquisition as early as this month with an expected value of less than $500 million, the sources said. However, negotiations could delay or stop the deal.

This deal could show how PepsiCo made use of an exit strategy to make a venture capital investments in a startup.

By investing early, major manufacturers can learn the inner workings of a startup's operations and portfolio, while positioning them to acquire the company outright for a lower price tag down the line.

On sustainability, the India business is the first in the global system to get to positive water balance, by recharging and replenishing water. In India, PepsiCo has delivered a reduction of 34% in beverages and 39% in foods. And Quaker has pledged to provide a minimum of 400,000 meals to children.

Other goals include reducing its carbon footprint and achieving increased water savings worldwide. These will include 20% reduction in greenhouse gas emissions across production, packaging and transportation by 2030.

On water, the firm said it will target 15% improvement in water efficiency by 2025 and replenishing all of the water it consumes in manufacturing operations.

Reason behind WHO asserts that taxing sugary drinks can lower consumption and reduce obesity, type 2 diabetes and tooth decay. Fiscal policies that lead to at least a 20% increase in the retail price of sugary drinks

VOl.11 Issue 12 October 2016

CONTROVERSY

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CONTROVERSY with high sugars, salt or caffeine levels.

Countries, such as the Philippines, South Africa and the United Kingdom of Great Britain and Northern Ireland have also announced intentions to implement taxes on sugary drinks.

Selling health in India At Rs100-crore, India’s market for lowcalorie drinks is still a fraction of the Rs25, 000-crore fizzy drinks category.

would result in proportional reductions in consumption of such products, according to the report titled “Fiscal policies for Diet and Prevention of Noncommunicable Diseases (NCDs)”.

Reduced consumption of sugary drinks means lower intake of “free sugars” and calories overall, improved nutrition and fewer people suffering from overweight, obesity, diabetes and tooth decay.

Free sugars refer to monosaccharide’s (such as glucose or fructose) and disaccharides (such as sucrose or table sugar) added to foods and drinks by the manufacturer, cook, or consumer, and sugars naturally present in honey, syrups, fruit juices, and fruit juice concentrates.

Consumption of free sugars, including products like sugary drinks, is a major factor in the global increase of people suffering from obesity and diabetes and if governments tax products like sugary drinks, they can reduce suffering and save lives. They can also cut healthcare costs and increase revenues to invest in health services.

Nutritionally, people don’t need any sugar in their diet. WHO recommends that if people do consume free sugars, they keep their intake below 10% of their total energy needs, and reduce it to less than 5% for additional health benefits?

According to the new WHO report,

national dietary surveys indicate that drinks and foods high in free sugars can be a major source of unnecessary calories in people’s diets, particularly in the case of children, adolescents and young adults.

Fiscal policies should target foods and beverages for which healthier alternatives are available. Subsidies for fresh fruits and vegetables that reduce prices by 10–30% can increase fruit and vegetable consumption.

Taxation of certain foods and drinks, particularly those high in saturated fats, trans fat, free sugars and/or salt appears promising, with existing evidence clearly showing that increases in the prices of such products reduces their consumption.

A number of countries have taken fiscal measures to protect people from unhealthy products.

These include Mexico, which has implemented an excise tax on nonalcoholic beverages with added sugar, and Hungary, which has imposed a tax on packaged products

VOl.11 Issue 12 October 2016

Euromonitor expects that with “lifestyle diseases and conditions such as hypertension and diabetes experiencing an exponential rise in the country, an increasing number of Indians are opting for healthier options. That’s precisely the market that Pepsi seems to want to tap in India, in line with its global plan to reduce the dependence on sodas and focus on a more health-based portfolio.

But there’s some risk involved in replacing sugar because Indians are very picky about taste. Pepsi’s version of a nosugar, zero-calorie drink, Max, launched in 2010, fizzled out within a year because consumers rejected the taste.

Maybe stevia’s sweet success can wash off that bitter taste?

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Decoding Patanjali

An analysis of Patanjali’s success leads one to think that there is some significant evolution in desi consumers and may be finally Indians are unapologetic about their consumption patterns, that they no longer look to the West to validate their choice. But at the same time is true that the MNC’s are susceptible to it or just a hoopla created by the desi giant

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CONTROVERSY

I

t’s difficult to recall the last time an Indian company, any Indian company, created such a stir in the public imagination. For a corporation to do that so quickly in the part of consumer goods is more than remarkable. In fact, it is a phenomenon that deserves analysis.

Patanjali’s rise has been nothing short of meteoric. Within less than two years, Patanjali has shadowed the FMCG sector, taking many multinational participants, by surprise, sending many of them running for cover, and getting them to restrategise to compete effectively. Such an event has never happened before in the history of Indian consumer goods. In fact, when such a history is written, Patanjali will get a whole section to itself.How does an unknown company enter people’s kitchens and bathrooms so quickly and with such low marketing investments?

Is there something unique about this corporation? Can another corporation

41 www.agronfoodprocessing.com

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VOl.11 Issue 12 October 2016

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CONTROVERSY

with similar offerings get the same acceptance? Was there a need gap that this company has filled?

Patanjali business graph Patanjali Ayurved, a privately held company run by Mr Ramdev’s long-time associate Acharya Balkrishna, sells nearly 500 items — from toothpastes, shampoos, and other personal care products derived from traditional herbal recipes, to modern convenience foods such as cornflakes and instant noodles.

Yoga guru Baba Ramdev business makes personal care products and convenience foods. His Patanjali

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Financial analysts call Patanjali a “disruptive force” that will prove a tough competitor to multinational giants such as Colgate-Palmolive, Nestlé, and Unilever in one of their most important growth markets. The rise of Patanjali has been nothing short of meteoric, posing a challenge to the companies that have dominated the consumer scene for years”. ‘’The company’s business model is rewriting the rules of consumer marketing in India’’ At Patanjali’s 150-acre production zone at the foothills of the Himalayas, Mr Ramdev says the operation — in which he claims to hold no economic stake — is not a profit-oriented company. Instead, he says, it is part of a mission to boost India’s economic self-reliance, akin to Mahatma Gandhi’s appeals for Indians to renounce foreign wares during the anti-colonial struggle.

“This is not a business but an ultimate goal for healthy human being and wealthy nation … No personal wealth.

No personal profit.”

Until recently, Patanjali did little advertising, relying on Mr Ramdev’s exhortations to his followers to try

VOl.11 Issue 12 October 2016

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Ayurved is now India’s fastest-growing consumer goods company. Patanjali’s sales, estimated at $300m in the 12 months to March 2015, are forecast to more than double to $750m by end of this year, driven by perceptions that its wares are healthier and more natural than competing products, as well as cheaper.

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CONTROVERSY the sachet price hike is in the base and the price increase in FY17 will be lower with an additional push from the hike in excise in FY16.

All the same Patanjali is doing well and has many followers, if they do not take him seriously, he could be a serious threat in many categories as it’s the only product I know where someone from the lower income strata, middle income strata and top income strata are all customers.

its products, and word of mouth. That changed recently, with a blitz of TV and newspaper ads, many of which urge consumers — and shopkeepers — to support indigenous, Indian-made wares, rather than foreign brands. ‘’Patanjali claims that its main aim is to give competition, so MNCs start thinking of people and are forced to bring prices down as they are only after profits — people are not their priority’’ Shares in Colgate-Palmolive India fell 22 per cent on the Bombay Stock Exchange in the past 11 months, after brokerages observed that Patanjali’s herbal toothpaste was gaining market share, and posed a risk to Colgate’s earnings.

But statistics has another side that Patanjali or many cover up or ignore……

Patanjali has a way to go. Analysts say it has a 4.5 per cent share of India’s toothpaste market — well below the 57 per cent claimed by Colgate.

Also Nestlé felt the heat last year when Patanjali launched its instant noodles just as the Swiss company’s popular Maggi noodles, the market leader, were forced off the shelves in a temporary food safety scare. Nestlé India’s 2015 revenues fell to Rs77bn ($1.1bn), down from Rs 94bn in 2014, as a result of the crisis. But the instant noodle brand Maggi, whose sales were severally hit by the Food Safety and Standards Authority of India (FSSAI) ban regained its leadership position capturing

57% share of the market this year.Within nine months of its relaunch, Maggi noodles now accounts for 57.1% market share of the instant noodles segment riding on its marketing /branding initiatives and new variants. In November, when the company relaunched Maggi after a five-month ban, it had 10.9% of the market share, which climbed to 35.2% in December. ‘’We still are looking for Patanjali noodles status that is still way behind Nissin’s Top Ramen and ITC’s Yippee Noodle…..’’

Patanjali recently launched its own brown-colored health drink Power Vita.

Patanjali's launch of a malted drink has caused concerns on GSK. The concern is understandable as GSK is a single category company and the gross margin is nearly 70 percent which means there is room to undercut significantly on pricing. According to Credit Suisse, Patanjali product Power Vita is priced at only a 6-10 percent discount to Horlicks and thus the pricing is not disruptive. It also says that the new health drink by Ramdev is less risky for GSK as Power Vita is a brown drink while 70 percent of GSK's portfolio is white drinks. Another factor that is favourable for GSK is that GSK draws 80 percent of sales from south and east India while Patanjali's strength is more in north and west India.

The other more valid concern on GSK has been the sharp dip in volume growth in nine months FY16 to 1 percent. However, Credit Suisse expects this to recover as

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Patanjali’s consumer appeal lies partly in its link to India’s traditional medicine system, known as ayurveda, at a time of rising concern about health, stress and environmental degradation. Mr Ramdev has derided competing products as unhealthy, tainted by toxic chemicals, and even “carcinogenic”.

Patanjali’s wares are also priced 10 to 45 per cent below competing products, a significant edge among price sensitive Indian consumers. Mr Ramdev says these prices are made possible by Patanjali’s low administrative costs and salaries, excluding middlemen from the supply chain, and thin profit margins.

The company also spends much less on advertising than rivals, which hire celebrities for product endorsements.

Baba Ramdev says that they don’t have any brand ambassador,. “I am the brand ambassador” Going Back The son of illiterate farmers from northern Haryana state, Swami “Baba” Ramdev leapt into India’s limelight in 2003, when he won millions of followers to his televised, early morning yoga classes broadcast on a Hindu spiritual cable channel.

Since then, Mr Ramdev, who studied Sanskrit and yoga after formal education ended as a boy, has parlayed his fame into political influence. A strident critic of India’s previous Congress-led government, he threw his clout behind Prime Minister Narendra Modi and his Hindu nationalist Bharatiya Janata party, during the 2014 general election

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COMING CHALLENGE betting big in the packaged rice space. It has plans to take on established players like LT Foods, Kohinoor and KRBL in the packaged rice segment with an aim of hitting Rs 1000 crore by next year.

Current Patanjali’s revenues in packaged rice space are around Rs 30-40 crore.

Over the next year, the company aims to cross Rs 1000 crore revenues in this segment over the next year.

Patanjali has already made its mark in Atta, sugar, oil space, and now they are looking at packaged rice space. They plan to launch 50 stock keeping units (SKUs) in different variants and sizes and launch traditional varies both in the north and south. The new variants would include long grain, sona masoori, Patna etc.

campaign.

In the run-up to the 2014 election, Mr Ramdev endorsed Mr Modi as the right man to lead India, even before the BJP had formally named the then Gujarat chief minister as their candidate.

ensuring consistent quality from its supply chain amid rapid expansion. Mr Balkrishna also cites difficulties finding suitable professionals — who do not smoke drink or eat meat — to help expand the business.

Mr Ramdev’s foray into fast-moving consumer goods began in the 1990s, when he and Mr Balkrishna — who met during their religious studies — set up a pharmacy to make Ayurvedic medicines in Haridwar, along the Ganges River.

“We don’t follow the typical corporate culture of an MNC, we have our own values, and the professionals who join us have to believe our values.”

In 2006, they established Patanjali to diversify into toothpaste, shampoo and other personal care products with recipes drawn from India’s Ayurvedic heritage.

Initial capital, says Mr Balkrishna, came from loans from Mr Ramdev’s devotees, and credit from state-owned Punjab National Bank.

Today, Patanjali’s production lines churn out items such as boxed juices, flour, spices and sweetened dried fruits, while other products come from third-party suppliers. So far, Patanjali has invested $74m in machinery and other fixed assets, but Mr Balkrishna says the company cannot keep pace with demand, and will invest another $150m to expand capacity elsewhere in India over the next two years.

Patanjali still faces challenges, including,

The food industry foray Patanjali is opening several food parks and has just planned to create a hullabaloo in the food processing market too. Patanjali is opening Rs 1,600 cr Food Park in Noida, Uttar Pradesh to meet its domestic as well as global demand.

The food park will manufacture all major products. As it is located in the NCR region, which has proximity to the airport and dry ports, it will act as a hub.

When the plant runs to its full capacity, it would have a capacity to produce goods worth Rs 25,000 crore annually, claimed, adding that around 10,000 direct jobs could be provided benefiting 50,000 families. Patanjali is also in the process of setting units in Madhya Pradesh, Assam, Maharashtra and Jammu and Kashmir, besides another plant in the drought-hit area of Bundelkhand region of UP. Baba Ramdev’s Patanjali Ayurved is

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Patanjali will alsoventure into dairy business, adding that the sector will cross the Rs 5 lakh crore mark by 2022.

Production will start in three dairy plants - one each in Maharashtra, Karnataka and Uttar Pradesh. At present, the dairy business is pegged at Rs 3 lakh crore, which will be more than Rs 5 lakh crore by 2022. Patanjali Ayurved is looking to come out with dairy products like liquid milk etc.

Recently, Patanjali Ayurved came under the line of fire for its Patanjali mustard oil advertisement campaign by Customer Complaints Council (CCC) of Advertising Standard Council of India (ASCI). The advertisement, that’s pulled out now, claimed that 'Other than Kacchi Ghani process, most of the other edible refined oils and mustard oil are made using neurotoxin Hexagon solvent extraction process. To make profits at the cost of consumers' health many companies mix cheap palm oil in mustard oil.

Patanjali Ayurved facing a logistical problem Buoyed by demand, Patanjali is now experiencing a supply lag at some of its outlets, as lower retail margins and obscure locations make it hard to keep.

The company launched some 400 stockkeeping units or SKU’s in the past decade ranging from biscuits, oil, soaps, shampoos, flour, juices, noodles and

46 www.agronfoodprocessing.com distribution network through existing mom-and-pop or neighbourhood stores— classified as general trade—as it draws up ambitious plans to launch more products.

Patanjali’s supply-side challenge is unique.Typically, consumer good companies spend years building a deep distribution network. Especially in a market like India, where consumers buy goods of daily use from general trade stores, FMCG companies deploy a large sales team to sell to such outlets. For instance, Hindustan Unilever, India’s largest in the sector, reaches seven million retail outlets.

toothpaste. It has even set up dedicated stores to sell them.But demand is outstripping supply.

Supply issues continue to plague most

(Patanjali) outlets,” with the strong demand for the company’s ghee, toothpaste, and Atta (flour) amidst limited supply. According to the a brokerage firm, Nomura, Patanjali must build a robust

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But, according to Nomura, Patanjali hasn’t invested in deepening its coverage.

Currently, the company sells its produce through various channels—general trade, Chikitsalayas (or clinics along with doctors), Arogya Kendras (health and wellness centres), Mega stores, and Patanjali stores, besides pharmacies and retail chains such as the Future Group’s

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COMING CHALLENGE take the battle to the enemy camp’’ Nestle, another FMCG company that found itself in Patanjali’s line of fire after a ban was imposed on its flagship Maggi instant noodles last year, signaled it would fend off competition and there is no doubt as Maggi Noodle is at number one again..

This, say analysts, is its largest programme of launches in recent years and comes at a time when Patanjali has upped the ante in foods: not only has it launched instant noodles but followed it up with biscuits, Namkeens, juices et al.

Nestle Chairman & Managing Director Suresh Narayanan had said that the company would devote 2016 to increasing its share in the existing categories.

“It is important to run faster than the competition not only in noodles, but in every other category operates in’’

Big Bazaar.

While the Chikitsalayas and Kendras are managed directlyby Patanjali, the stores (Mega and Patanjali) are run through franchisees, which account for nearly 45-50% of its retail outlets, according to Nomura.

Managed by local entrepreneurs, Mega and Patanjali stores have cropped up in by-lanes and tiny neighbourhood, leading to what Nomura calls “haphazard expansion. And, lower retail margins are making it hard for these retailers to upgrade their stores.

With these low margins, store-owners are not able to invest in the look and feel of the store, or provide any value added services such as home delivery, credit facilities, short waiting lines with extra staff or any others perks,and over the long haul, customer retention will become a challenge for such stores.

A lag in distribution could dent Patanjali’s perceived threat to existing FMCG companies, which have been rattled by its rising popularity as a maker of herbal and

natural ingredients-based goods. While category growth may be aided by such expansion (through franchised stores), this effort by Patanjali in the direction of bypassing general trade is not scalable and one does not see a significant threat to established FMCG players under our coverage.

Effect of Patanjali Two things are abundantly clear: one, the established players are now taking Ayurveda seriously, choosing to take on Baba Ramdev’s FMCG enterprise headon; and two, multinational corporations, which normally liked to keep their portfolio as international as possible, have realised that may not be the right strategy: to beat Baba Ramdev, you have to be like him.

That’s why Colgate chose neem and salt to take on Dant Kanti. Ayurveda and herbal have strong brand equity in India -- this is what Patanjali has shown.This is a platform an FMCG company can no longer afford to ignore. ‘’Like Colgate, others too have decided to

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Nestle claims that Maggi now has a 55.5 per cent market share of the Rs 1,5002,000 (Rs 15-20-billion) crore domestic instant noodle market, ahead of rivals such as ITC (Yippee) and Patanjali. The plethora of launches from Nestle will include seven variants of Maggi noodles, Greek yogurt brand ‘Grekyo’ and protein growth brand ‘Pro-Gro’ in the dairy segment, besides multiple products in the chocolate and confectionery category, as also new offerings in coffee and tea.

Nestlé’s onslaught is expected to heighten competition in packaged foods and

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FOOD PACKAGING is promoting ‘Make in India’ and actively seeking foreign investments, yoga guru Baba Ramdev is openly attacking multinationals, calling their products “dangerous” in a concerted ad campaign.

MNCs are terming the campaign a marketing gimmick, but they can’t entirely ignore it either, as Ramdev’s consumer product empire is rapidly growing and challenging their bottom lines.

consumers, who’ve been bombarded by launches and ads by Patanjali.

Launching counter-attacks Baba Ramdev claims that the company would double its turnover to Rs 10,000 crore (Rs 100 billion) in 2016-17 (from Rs 5,000 crore or Rs 50 billion in 201516) on the back of its aggressive push into categories such as healthcare, foods, beverages, personal care and branded commodities such as edible oil, rice and pulses.

Patanjali’s aggression in edible oil, in fact, recently prompted a sharp reaction from the Solvent Extractors Association, which comprises the country’s top branded edible oil makers such as Adani Wilmar, Cargill and Ruchi Soya. The association claimed that Patanjali was making false and misleading claims in the ads for its edible oil, which was damaging the reputation of rivals. It had written to the country’s food and advertising regulators on the issue.

spreads to expand its honey portfolio, where it has been fighting Patanjali tooth and nail.

These initiatives (excluding the honeybased fruit spread launch) appear to be paying off. In the March 2016 quarter, Dabur saw 7 per cent volume growth, ahead of the 3-5 per cent range that the Street had expected.In its just-released annual report for 2015-16, Dabur said it had launched 44 products during the year, a significant number.

Industry disregards ‘MNC Dangerous’ Campaign of Patajali Even as Prime Minister Narendra Modi

While the Food Safety and Standards Authority of India has showcaused Patanjali on the matter, the Ayurveda firm’s frenetic pace of activity continues unabated.

This has prompted most, including companies such as Dabur and Hindustan Unilever, to shift gears.Like Dabur has launched a range of honey-based fruit

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Its stake is a piece of the $40 billion processed food industry, growing annually at 11 percent per year. Stakeholders hope the government will eventually crack down on the “misleading” advertisements of the Baba Ramdev-led Patanjali, whose top brass is considered close to the powers that be.

We live in a democratic nation, where the consumer is king. The consumers decide what is good and what is bad for them.

This country has a policy in place where any multinational company is free to invest in the food processing sector and any domestic company is free to grow, considering the rules and regulations associated with the sector are adhered to.

In a promotional by Patanjali on 104.0 Fever FM, Baba Ramdev himself leading the chargestated that multinational hair oils have cancer-causing mineral oils, biscuits and noodles have refined flour, drinks have cold drink (aerated drinks)

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FOOD PACKAGING allowing foreign equity does not bar the domestic industry.

A large market like India cannot be dented by a single company, more so as it is dominated by small-scale units and the unorganised sector.The fact of the matter is that almost 75 percent of the food processing industry is small- and medium-sized enterprises-sector driven.

Big companies are primarily competing for 25 percent of the market share.

But the market for big players is also not small either. Patanjali, whose turnover was not officially known being a private, unlisted enterprise, recently said its income during 2015-16 was Rs 5,000 crore, with a target of Rs 10,000 crore this year.

In contrast, the operating income for the Indian arm of Nestle – that has a presence in this country for over 100 years – was a little over Rs 80,000 crore last calendar year while for Britannia, which was set up around 125 years ago, it was around 8,500 crore in 2015-16.

and liquor, food items are adulterated, cosmetics have chemicals. These products, and foreign companies, are dangerous for us and our country.

He further added that “since they take the country’s wealth outside and don’t do any charity work here, the alternative is Patanjali’s pure and home-produced campaign, the main aim of which is charity and patriotism. Adopt Patanjali and give economic freedom to our country.”

Such an advertising campaign comes close on the heels of India relaxing its foreign equity norms to allow 100 percent investment in trading of food products that’s manufactured or produced in India, including sales through e-commerce, to cut wastage, check price rise and help farmers.

“In a vibrant economy – whether a domestic company is trying to become a multinational or a multinational is trying

to capture domestic market – they are free to compete against each other’’ Baba Ramdev is now a business professional like any other company.

He’s promoting his brands. If the outlook was that only Indian products will be sold, then there are a number of Indian companies – Dabur and Emami are Indian companies. ‘’This is just a marketing gimmick and nothing else” There has already been a complaint against him (Baba Ramdev) the way he has been advertising and it is just a matter of time before the government will become harsh on him. This is something which is momentary and with time people will understand and the entire image he has built will wane.”

Patanjali has defended the campaign.

“Modi is the head of the government and free to keep the government’s view.

I don’t think there’s any bar on trading and dealing with Indians, alluding that

VOl.11 Issue 12 October 2016

Baba Ramdev is showing his products are approved by FSSAI. The fact is it doesn’t approve a product. It is a regulatory body.

It comes out with different standards.

As an Indian company, Patanjali should follow them. Every company follows those regulations, not just Patanjali.

While Patanjali trades in the fact that there is a need for an institution that trades in home-grown products and uses the profits for the development of the country. As foreign companies are taking the profits with them and that is of no use for India.

Indiawill strengthen only when we promote trade in the country by promoting and manufacturing of swadeshi (homegrown) goods. This will also generate employment.

Patanjali trusts that it does not have any differences with the government. Let them bring FDI. Let them push ‘Make in India’.

That’s their job. Our job is to strengthen our people by providing opportunities.

Where is the controversy?”

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FOOD PACKAGING

Meal Vouchers: A disruptive force waiting to erupt

T

he meal voucher segment in India has a tremendous potential for growth. India has a market of about 8-10 million users for meal vouchers, though only a million people use it. However, now, everyone uses smartphones and companies like Zeta and Sodexo, which are into the meal ticket business, can leverage the ubiquity of smartphones to great effect and grow the market for meal vouchers in India.

The meal benefit industry in India

including meal vouchers/cards and free or subsidised meals provided by companies currently worth approximately Rs 7,500 crore annually.

What are food coupons?

Food coupons are nothing but plain vouchers given by organisations to employees to have a meal at your convenience. The two big companies that issue such coupons are SodexHo and Ticket Restaurant. Your organization

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would tie up with these coupon providers and provide you the coupons as part of your salary package. Normally, organizations make it an optional feature of your package so that anybody who does not want them can opt out.

Companies and organisations are always looking for innovative ways to reward their employees and meal vouchers is one of the ways to do so. In recent years, HR departments have taken to meal vouchers

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FOOD PACKAGING make meal vouchers an employee benefit, accessible to not only large enterprises, but also the medium and small companies.

Employees can also benefit from thewidest acceptance of food merchants across the country,” says CEO and Cofounder of Zeta, Bhavin Turakhia, whose meal vouchers solution is designed to make management and distribution of vouchers extremely smooth for corporates.

in a big way as it helps to pay for an employee’s meals at the office or outside.

A meal voucher is a meal ticket in paper or digital form given to employees as an employee benefit, allowing them to eat at outside restaurants and purchase food and nonalcoholic beverages.

Meal vouchers work to the advantage of both the employers and employees. The employers would like their employees to have adequate meal support to boost productivity and for them to work efficiently. At the same time, employees want to get the right work environment and support for themselves to perform their work duties better. The net result is a win-win for all concerned.

There have been studies conducted that show a direct relationship between employee engagement, workplace productivity and adequate meal support for the employees.

service industry. The employees aren’t complaining either, since meal vouchers save them taxes.

These vouchers work as a motivational tool and create an allegiance among workers who value the consideration for their welfare, building a better employeremployee rapport. However, receiving or granting approvals for expenses is a nightmarish process not just for organisations but for all the parties involved, including the HR, management and employees.

Now, with meal vouchers going digital – meal vouchers by Zeta is one such example – employees can either use or transfer the vouchers to merchants over mobile while HR teams have the ease of one-click distribution via a desktop app.

And all of this in a matter of few seconds.

“Ours is a first-of-its-kind solution to

The meal voucher segment in India has a tremendous potential for growth. The Indian economy is growing at a rapid clip and its Food Retail sector is witnessing an unprecedented boom.

Industry estimates reckon that India has a market of about 8-10 million users for meal vouchers, though only a million people use it. However, now, everyone uses smartphones and companies like Zeta and Sodexo, which are into the meal ticket business, can leverage the ubiquity of smartphones to great effect.

Although the concept is an invention of the West, it is catching up fast in the

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For employees, too, the solution promises ease of access and use, along with tax savings. Zeta Meal Vouchers can be used through various ways like the Zeta app and a physical MasterCard powered Zeta Super Card.

Sodexo, a global player in the meal benefit industry, offers secured pre-paid instruments with security features that are accepted at a proprietary network of merchant establishments spread across over 1,400 cities worldwide. Sodexo Meal Pass Card is a rupee-denominated reloadable magnetic stripe PIN based prepaid meal card offered by Sodexo.

It is a proprietary card that is issued to corporates as part of their employee benefit programs and accepted at Sodexo merchant outlets for food and nonalcoholic beverages.

“Sodexo is the only company in India that provides an Integrated Meal Benefit Program for corporates comprising Meal Card, Resto Card, Cafeteria

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GRADUATE REQUIRED lays down a steady path for the future already,” says Turakhia.

Sodexo also believes that the meal benefit industry in India (including meal vouchers/cards and free or subsidised meals provided by companies) offers tremendous opportunities for growth and is looking to be a leader in this market, which it values to be now worth approximately Rs 7,500 crore annually.

“The meal benefits industry in India still has a lot of headroom for growth.The migration to cards and digital payments is likely to help maintain the growth trajectory for many years,” says Warrier.

Card and Meal Voucher. It is the only company in India that has a Proprietary Meal Card Network. This enables the company to offer a complete bouquet of services for employee benefit programs while operating at the highest levels of compliance,” says MD, Benefits & Rewards Services, Sodexo SVC, Rajiv Warrier.

Why one should avail them?

Well, the benefit is too good to ignore.

The income tax of India recognizes these food coupons or meal vouchers as a tax-exempt entity. i.e. The number of coupons you avail are not included in your taxable salary. So, the amount you would normally paid as income tax would land up in your pocket to spend!

instead of cash in your salary, the tax you save on Rs. 42120/- i.e. (Rs. 135/- x 26 days x 12 months) is: Market for Meal Vouchers The organisations involved in the business of meal vouchers consider it a right time to tap the unexploited sector in the country. Zeta, a leading player in the meal voucher industry, is gunning for the local meal voucher market reckoned at worth Rs 4,000 crore.

“We have over 110 corporates that have signed up with Zeta and are happy customers using our first product – Zeta Meal Vouchers – which was launched in January this year. Our product has seen a warm welcome in the market, which

What is the Tax Benefit?

Income tax rules mentions meal allowance through meal vouchers can be provided up-to Rs.50/- per meal during working hours.

If any employee would consume at least two meals during work hours (breakfast and lunch or evening snacks and dinner), and hence at the rate of Rs.50/- per meal and Rs. 35/- for tea and snacks, the company could provide Rs.135/- per working day as the maximum allowance to the employee.

Hence, if you opt for Meal Vouchers @ Rs. 135/- (Rs. 50/- per meal x 2 Rs. 35/- for tea and snacks) per working day,

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Features & Offerings Zeta has witnessed an exponential growth in the sector with one of its primary products – Zeta Meal Voucher – becoming a runaway success since its launch in January this year. According to Turakhia, the company has been successfully adding a new client each working day. Zeta offers a range of services to its customers.

Zeta Meal Voucher is a fully customised product and provides a 360-degree flexibility to firms. This can be tailored to revolve around the parameters and policies set by an organisation. In addition, the meal voucher is fully in compliance with the RBI norms and IT guidelines. It also offers a single digital platform for employee benefits and tax reimbursement.

53 www.agronfoodprocessing.com The voucher also provides comprehensive payment channels. Zeta’s app operates even without the accessibility of the internet, and for non-smart phone users Zeta has developed a Zeta Super Card.

The company has developed the Zeta app and this assists the users to accomplish a transaction in less than five seconds, using a smartphone. Priority has been given to the interest of retailers and Zeta delivers a complete package that integrates perfectly with the existing POS/EDC terminals of merchants.

Sodexo, which is amongst the top two companies worldwide in the service vouchers and card segment industry, is no less gung-ho about its prospects in the Indian market. The organisation has a substantial grasp of the Indian market as over 6,000 firms across both the private and public sector have opted for the Sodexo meal benefit plan.

Sodexo provides meal vouchers and prepaid cards, which can be loaded with the value of meal benefit. These can be used at over 25,000 outlets across India for buying food and non-alcoholic beverages.

It offers a range of services in the form of employee benefit solutions to clients and their employees. The company also gives value-added deals and promotions that the Sodexo card offers from time to time.

Operating Mechanism Sodexo’s clients agree on the eligibility per employee and place request to load cards with an amount every month or provide an equivalent value of meal vouchers. Sodexo, on most occasions, first issues pre-paid cards and then loads them monthly with the specified amount.

Employees can use these cards for purchasing food and non-alcoholic beverages at any affiliated outlet of Sodexo across India. The merchants are reimbursed by Sodexo for the purchases made at their outlets as per the contract.

Sodexo earns a commission on these transactions from the merchants and a commission of issuance from the clients.

In a similar fashion, Zeta charges a fee

from companies in lieu of the meal voucher service. The firm levies a small fee from the merchants for a tie-up with Zeta.

A Win-Win Meal benefit programmes have a farreaching positive impact on various segments of society. Consumers across the world receive a meal benefit that can be redeemed at the restaurants of their choice, which in turn helps them improve their quality of life. This benefit contributes significantly to the business of small merchants, who in turn can use that money and put it to better use.

For HR professionals, the meal benefit program is a great way to ensure that their employees eat healthy meals during work, which in turn help them to stay fit, increase productivity and remain motivated.

The role of vouchers/cards can be extended beyond its traditional usage.

Government can use it for playing a larger role in the public distribution system nationwide. They can also be used for other purposeful interventions such as fulfilling mass social obligations like the alleviation of hunger amongst underprivileged sections of society.

The growth of the meal voucher business in India was until now rather stunted owing to several issues that come with distribution, management and usage of vouchers. Corporates found it extremely expensive to manage and distribute vouchers. Employees found it difficult to locate stores that accept vouchers. This often resulted in companies not offering meal vouchers as a tax benefit and employees lost out about 12,000 every year in taxes.

However, the market has developed and has immense potential to grow, with approximately only one million employees using meal vouchers in some form or the other. The possible market size is estimated at over 10 million users and companies like Zeta and Sodexo want to be the first ones to tap this goldmine with their unique offerings.

VOl.11 Issue 12 October 2016

GRADUATE REQUIRED Zeta introduces App-based Meal Vouchers for the First Time in India Zeta, the newest portfolio company of the Directi group, introduces Zeta Meal Vouchers, a mobile-based meal voucher platform. Introduced for the first time in India, this revolutionary new solution will provide HR Managers with an instant oneclick distribution platform to employees across cities.

This pathbreaking solution provides HR Managers a simple desktop interface that can be used to initiate transfer of meal vouchers to hundreds of employees at one go. Employees can then receive these meal vouchers on their smartphones and start using them instantly. What’s even more interesting is that Zeta Meal Vouchers can be used across any outlet for purchasing food and non-alcoholic beverages - irrespective of whether the outlet is a Zeta affiliated partner or not.

Zeta CEO and Co-founder Bhavin Turakhia said, "We are really excited about our new initiative and foresee a lot of scope for this product. The meal voucher market today is worth about ₹4,000 crores with approximately one million employees using meal vouchers in some form or the other.

The potential market size is estimated at over 10 million users. However, given the cumbersome distribution process, many corporates and employees shy away from this benefit. We genuinely think Zeta can make this process 10x better than any current practice.”

Conclusion: Keeping the food inflation in mind, it is certainly not a bad idea to avail of food coupons and get extra purchasing power in your hands. This money is obviously your own money and there is nothing wrong in saving tax the right way.

Most of the companies today have food coupons as part of their salary packages to help increase the take home pay of the employees. But in case your company does not have this facility, you need to convince your HR team.

54 www.agronfoodprocessing.com

GRADUATE REQUIRED

Missing stock is harming India’s food security

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he Reserve Bank of India (RBI) recently approved a proposal to restructure around Rs30,000 crore of food credit given to Punjab state agencies, allowing for the conversion of cash credit into a 20-year loan at a lower interest rate. The central bank also sanctioned a cash credit limit of Rs26,000 crore for this year’s procurement by state agencies.

The fact that food security of the entire country is dependent on Punjab’s agricultural performance may have prompted the RBI to adopt this liberal stance. But it raises a crucial question— will window-dressing cash credit of missing stock set a bad precedent for other agrarian states that are heading towards a similar predicament?

In the case of food credit, the procedure involves lending to the corporation, procurement of grains, storage in state godowns and monitoring of stocks by the state government.

The cash credit given to procure grains should thus meet the amount of hypothecated stocks. When this does not happen, there is a clear case of discrepancy or missing stocks.

During April, this year, missing stock worth around Rs20,000 crore was discovered in Punjab’s food purchases, following which the RBI instructed the affected banks to make provisions for the potential losses.

The instruction was despite the general rule that all state government borrowings are treated as sovereign debt—that is, the debt should be paid automatically when the Central government releases food subsidy.

A 2014 investigation by the Comptroller and Auditor General uncovered the magnitude of the scam in Punjab. Of 3,319 trucks hired for paddy transport by the Food Corporation of India and four of Punjab’s nodal agencies, 3,232 were non-existent and 15 were vehicles other

than trucks. The report goes on to show that Rs843 crore of losses was incurred due to the inefficiency of the Punjab State Warehousing Corporation because of delayed availing of loan from the National Bank for Agriculture and Rural Development, delayed handing over of godowns to the FCI, non-adoption of FCI’s storage and preservation norms, inadequate control over milling activities and failure to recover transportation charges.

The issue is not restricted to the state of Punjab. The situation prevails across the country and requires redressal at a fundamental level—better supply management. This is as essential for controlling inflation as it is for food security.

Although India’s productivity is not optimal, over the years the country has achieved enough, even surplus, production levels.

The problem, therefore, lies in preserving this output for future use. According to the Food and Agriculture Organization, around 40% of the food produced in India is wasted and this includes vegetables, fruits, meat, milk, cereals and pulses.

Wastage from the public distribution system, which is meant for ensuring food security in the country, makes up almost half of the total. Considering that India ranked a lowly 97th of 118 nations in the recently released Global Hunger Index, spoilage and pilferage are not things the country can afford.

The unified National Agriculture Market launched this year will go a long way towards settling transaction costs and information asymmetry problems by integrating the market and facilitating price discovery. But warehousing and storage problems will need to be addressed separately.

The concept of a Negotiable Warehouse Receipts system, as proposed by the Shanta Kumar Committee for restructuring FCI,

VOl.11 Issue 12 October 2016

is one way to break the monopoly of state agencies and incentivize farmers. It allows farmers to deposit their produce in registered warehouses for an advance and sell it later when market prices are high. Per the 70th round of National Sample Survey Office data, currently only 13.5% and 16.2% of the paddy and wheat farmers, respectively have sold their produce to procurement agencies.

Strict adherence to quality standards and norms should be made mandatory for the registered warehouses, private or otherwise. A combination of private and public agencies is essential to handle the vast and diverse agricultural output in the country.

Meanwhile, the FCI, which has been failing repeatedly in its initial objectives, should be streamlined and allowed to focus on states’ surplus produce meant for distribution in other states. Most of the produce meant for a state’s own consumption should be left to the state agencies.

Provisions must also be made to liquidate stocks as and when they exceed buffer stocks to minimize wastage.

Efforts should be made to revamp the food processing sector in India to reduce the perishability of food items.

The setting up of mega food parks and cold storage chains as part of the Make In India project, and 100% foreign direct investment through the Foreign Investment Promotion Board (FIPB) route in the marketing of food produced and manufactured in India is welcome in this context.

A robust food-supply chain, which can make value additions through better storage, distribution and processing, will ensure that the agricultural sector remains competitive, transparent and profitable.

This may perhaps also change banks’ negative perceptions of the sector.

55 www.agronfoodprocessing.com

GRADUATE REQUIRED

Adani Wilmar to invest Rs 600 cr in Odisha

A

dani Wilmar Ltd, has planned to set up a large scale edible oil refinery at Dhamra in Odisha's Bhadrak district. The company intends to invest Rs 600 crore on the refinery with an envisaged capacity of 1600 tonne per day.

the country.

The edible oil major has sought 100 acres for its unit proposed in Odisha. It has also called for fiscal incentives and allotment of land at a concessional rate to counter competition from neighbouring states of Bihar and West Bengal where the food processing units enjoy state incentives.

Presently, edible oil refineries in Odisha are not eligible to avail themselves of fiscal incentives nor can they get land at concessional prices under Annexure II of Industrial Policy Resolution (IPR), 2015.

Adani Wilmar, a Rs 17,000-crore company known for its Fortune brand of vegetable oils, engaged in processing of oilseeds and vegetable oils, is a joint venture between Adani Group and Singapore-based Wilmar Group. The company owns port-based refineries and hinterland plants in various states to cater to the market needs of its products across

In a letter to the Odisha industries department, Kripakar Varshney, vice president of Adani Wilmar said, "You will kindly appreciate that our project of modern edible refineries are catalyst for industrial and economic growth of the state, generation of direct employment of more than 1,000 employees and large number of indirect employment in the state and development of ancillary and supporting industries like packaging, transport and logistics. Such refineries

also lead to spurt in the growth of oil seed cultivation in the hinterland, thus helping the farmers."

Adani Wilmar has urged the industries department to modify the list of industries listed in Annexure-II of IPR to enable modern edible oil refineries with investments exceeding Rs 100 crore to avail the incentives.

Fortune brand marketed by Adani Wilmar is a market leader in the vegetable oils segment with about 100 depots and a retail network of over one million.

In value terms, the global edible oils market is projected to register a CAGR (compounded annual growth rate) of 5.1 per cent during 2016-24. As a fall out of increasing demand from developing regions and rising competition in the developed markets, major players are shifting focus towards markets with low per capita edible oil consumption like India, China, Brazil and Mexico.

Central cut taxes on import of Wheat and edible oil

C

entral Cabinet lowered the wheat import tax to 10 percent from 25 percent and cut the import duty on both crude palm oil and refined edible oils by five percentage points to 7.5 and 15 percent respectively, the order on a government website, showed.

the lowest level in nearly a decade and pushing domestic prices close to record highs.

were disappointed about the cut in taxes on the import of crude palm oil and refined edible oils.

Private trade in India has already imported about 600,000 tonnes of wheat in 2016, the most in nine years.

"This is not the right time to cut the import duty. We're a bit disappointed as we're on the verge of harvesting a new oilseed crop.

Traders had expected the government to reduce or even abolish the 25 percent import tariff to make imports cheaper and ease a domestic supply squeeze.

Wheat output in India, the world's secondbiggest producer, has fallen well below the peak of 2014/15, reducing stocks to

"It's a good sign. Lower import tax will step up the availability of wheat in the local market," said Veena Sharma, secretary of the Roller Flour Millers Federation of India, the country's main wheat industry body.

Vegetable oil industry officials in India, the world's biggest edible oil importer,

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The reduction in the duty will put pressure on local oilseed prices," Atul Chaturvedi, president of industry body Solvent Extractors Association of India said.

Local vegetable oil prices have surged a fifth in the past three months."The government should have rather raised the differential between the duties of crude and refined oils to support the domestic refining industry," Chaturvedi said.

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NEWS

Patanjali acquire RH Agro’s rice mill for Rs 70cr

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amdev's Patanjali has acquired RH Agro's rice mill in Sonipat, Haryana, for Rs 70 crore and has taken four other rice mills across the country on exclusive lease, which will help it launch 18 packaged rice brands by the end of this month.

"The acquisition will give us technical know-how in rice processing," said Acharya Balkrishna, MD of Patanjali Ayurved. "We have partnered with thousands of rice farmers in many regions of the country to produce traditional variants."

At present, Patanjali sells three variants of packaged rice — silver, gold and diamond. It meets its procurement needs by buying finished rice and packaging it at its Haridwar facility. The new mills will not only give the FMCG company the capability of producing 3.2 lakh tonnes of finished rice a year from paddy

Other than the mill in Sonipat, which will process basmati, Patanjali has leased two mills in Madhya Pradesh to process the pusa variety. Another mill in Telangana will produce the lightweight aromatic sona masuri to cater to markets in the south, while a mill in Fazilka, Punjab will process rice grains that are grown in the north. Around 150 varieties of rice are currently grown in the country, industry estimates showed.

The rice brands will be made available in 50 SKUs (stock keeping unit) of various sizes," said Balkrishna. Prices will range between Rs 67 for one kilo of Sona Masoori Steam and Rs 2,100 for 25kg of Lashkari (kolam), the company said.

Senior executives at Patanjali said its new rice variants will have a shelf life of two years, which is double that of brands but will also allow it to produce region- available in the market. "Some of our specific rice variants that it plans to sell variants will also take less time to cook locally and export as well. than competing brands," they said.

Post Offices to sell pulses at subsidies rates

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inding a solution to the lukewarm response of states in picking up pulses from the central buffer stock, the Centre has decided the selling of pulses at subsidies rates to customers through post offices. The scheme may roll out in the next couple of weeks.

"We have already talked to the postal department and they are keen to start this.

To make a beginning, we will start selling

chana dal at subsidised prices at some of the post offices since it's still selling at relatively high price," consumer affairs secretary Hem Pande said.

An official release of consumer affairs ministry said the inter-ministerial panel while reviewing the availability and prices of essential commodities on Friday had suggested that in the absence of government outlets in states, postal networks should be tapped for distribution.

Pande said in the next few days they will work out how pulses in packets can be made available at post offices.

"We will see whether our entities can do this. Already one agency, NCCF (National

VOl.11 Issue 12 October 2016

Cooperative Consumers Federation of India), is selling pulses in Delhi through mobile vans," he added.

Early this year, the Centre had struggled to dispose of imported pulses since states did not come forward to take them despite government offering the stock at subsidised prices.

This year, the buffer stock created with import and domestic procurement of pulses is more than 1.5 lakh tonnes and the Centre is in a comfortable position to start their sale through different government outlets.

This is also being an interim arrangement till the time government engages a professional agency to manage the entire buffer stock and its disposal. The government has approved creating 20 lakh tonne buffer stock of pulses.

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NEWS

India- Russia join hands to reduce food loss

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howing serious concern over the huge pre-and post-harvest losses India and Russia are collaborating to set up integrated irradiation centres in India to reduce agricultural losses.

A bilateral agreement for cooperation in the development of a network of integrated infrastructure irradiation centres was signed between the Indian Agricultural Association, Hindustan Agro Co-Op Ltd (HACL) and United Innovation Corporation (UIC), a subsidiary of ROSATOM State Atomic Energy Corporation of Russia, on the

side-lines of the BRICS Business Forum in the national capital.

The agreement is to be implemented through a Joint Venture and aims to set up 25 integrated irradiation centres.

It was signed by Bharat Dhokane Pandurang, Chairman of HACL, and Denis Cherednichenko, CEO of UIC. In irradiation, food products are subjected to a low dosage of radiation to treat them for germs and insects, increasing their longevity and shelf life.

In India, per estimates, post-harvest losses in food and food grains are around 40-50 per cent, primarily due to insect infestation, microbiological contamination, physiological changes due to sprouting and ripening, and poor shelf life.

“The wastage of fruits and vegetables alone is about Rs. 60,000 crores annually.

Including cereals, meat, pulses and flowers, the annual loss is estimated to be Rs. 2,50,000 crores,” Mr. Pandurang added.

He said that there were a few low-level irradiation plants in the country, which are not adequate.

“The use of irradiation will make it possible to reduce the loss of onions in India, which currently go bad because of germination and inadequate storage, by 42,000 tonnes per year on average, as well as to reduce grain losses from [the current] 15 per cent to 3-5 per cent per year,” Mr. Cherednichenko said after the signing.

In the first phase, seven centres will be set up in Maharashtra, which will begin with the upgradation of the current centre at Rahuri in Ahmednagar district.

They added that the irradiation doses are recommended by the International Atomic Energy Agency (IAEA) and the final product is safe.

Maharashtra Pulses bill amended for Centre's approval

M

aharashtra government is ready with an amended draft of the Maharashtra Pulses Price Control (MPPC) bill for the Centre's approval, minister of civil supplies and consumer protection Girish Bapat said.

wanted to keep. We have agreed to this suggestion," Bapat told.

The state government had approved the bill in April after severe criticism for failing to control the prices of tur dal.

"The Centre has raised objections about setting up a special court and the period of punishment. The Essential Commodities Act to curb hoarding practices and ensure delivery of commodities suggests

imprisonment of seven years as the maximum punishment which the Centre

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All suggestions made by the Centre were acceptable to the state, he added.

"We will send the draft without any delay. There is no need to worry about high rates pulses during Diwali," Minister said.

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Rajasthan to launch olive oil by next month

A

fter eight years of harnessing olive saplings brought from Israel, Rajasthan is all set to launch next month its own brand olive oil, which it claims, will be the country's first indigenously-produced brand. The state will be launching its olive oil under the brand 'Raj Olive.

After the product's launch, the state will work on avenues to market it and seek cooperation from experts to increase its production. According to agriculture officials, the state till date has auctioned more than nine tonnes of olive oil and plans to market 4,500 litres under 'Raj Olive' at GRAM through Rajasthan Olive Cultivation Limited (ROCL)- a venture of the state government, India-based Finolex Plasson Industries, and Indolive Industries of Israel.

Rajasthan's tryst with olives began in 2008 with 1.12 lakh saplings brought from Israel and grown here. The saplings were planted in 182 hectares of government arms in seven agri- climatic zones Bassi, Bakalia, Santhu, Barore, Tinkirudi,

Lunkaransar and Bsabasina villages.

for olive cultivation among farmers with the fruit giving higher returns per hectare, besides the subsidies they get after the government declared it the state's 'first plantation crop'.

Demand for olive farming is gradually increasing. While traditional crops like bajra and wheat fetch farmers less than Rs 1 lakh annually, olives can give three to four times.

The state took help from Israel to start cultivations because Rajasthan shared similar climatic conditions. Seven varieties were planted in the farms.

Currently our fruits have oil content of more than 14 per cent, which meets international standards.

ROCL started transferring saplings to farmers in 2009 and till date has produce 11,574 kg of olive oil with Ganganagar, Bikaner, Hanumangarh and Nagore districts being the largest producers.

Rajasthan has seen a growing demand

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According to figures with the ROCL, India currently imports 14,500 metric tons of olive oil from countries like Spain, Italy and Greece, and the bottled varieties of extra virgin and pomace olive oil cost between Rs 700 and Rs 1,000 a litre.

At the Centre of Excellence for Agriculture at Bassi, the state has embarked on developing olive tea in four flavours- mint, ginger, tulsi and lemon.

Olive tea has its own health benefits. It is anti-oxidant which brings down bad cholesterol and prevents cardio-vascular problems.

59 www.agronfoodprocessing.com

VOl.11 Issue 12 October 2016

60 www.agronfoodprocessing.com

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