AgriBusiness & Food Industry by S Jafar Naqvi

AgriBusiness & Food Industry w August 2011

inside...

Exclusive Interview ...16

Sanjay Dave

Does India Proud

Elected Chairman of Codex Alimentarius “Codex is for consumers everywhere . . .” Commission Agri Affairs ...20

EDITORIAL

Industry Focus

Emerging Trends In Fmcg Sector

BRAND

Branded tree nuts ready to sweep snacks market

Consumer spend on food still high — Shipra Singh

— Chitra Narayan & G K Nair

Horticulture –

the Way Ahead

— Sanjeev Chopra

34 CURRENT ISSUE

Event Report ...26

Street food gets branded! — Swetha Kannan & Anjali Prayag

Carbide-ripened

mangoes rule Delhi market

35 SUCCESS STORY

Dry village transformed into lush orchard! 38

Pre-Event Report

Asia Fruit Logistica 2011

Initiatives

The entire Food Industry under one roof!

Farmers

— M B Naqvi

39 Gujarat

Taipei 3+1 Food Shows 2011

India emerging as one of the important markets for technology suppliers

Report ...36

form their own companies

farmers to set up date winery

Panchkula ready for agri marketing institute

RETAIL NEWS

42 CORPORATE NEWS

Mayors Conference

Highlighting the issues of Meat & Poultry Sector

AgriBusiness & Food Industry w August 2011

FOOD & BEVERAGES NEWS

DAIRY NEWS

INDUSTRY NEWS

AgriBusiness & Food Industry w August 2011

orial Edit T

Chief Editor

S. Jafar Naqvi

Consulting Editors

T.V. Satyanarayanan K Dharmarajan

Chief Co-ordinator

M.B. Naqvi

Editorial Co-ordinator Syed M K Shipra Singh General Manager Lalitha V. Rajan Layout & Design Faiyaz Ahmad Mohd. Iqbal Head Office New Delhi: +91-11-26682045 / 26681671 / 64521572 Fax : +91-11-26681671 mediatoday@vsnl.com Other Business Offices Hyderabad 9848031206 hyderabad@mediatoday.in Mumbai 9702903993 mumbai.office@mediatoday.in Pune 9881137397 pune@mediatoday.in Bangalore

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Vol 8....... Issue 8 ...... August 2011

he Indian farmer is increasingly feeling ‘enough is enough’. It is time, he thinks, to become more articulate, vocal and aggressive to put across what he considers as legitimate demands of his community. The growing rural-urban divide in incomes seems to be a major motive force for the farmer to take up cudgels against a system, which, he feels, has been unfair to his hopes and aspirations. The recent protests in various states – no doubt, with political backing – against acquisition of farm land in the name of development were manifestation of a wider frustration gripping their brethren growing traditional crops. The affected farmers in Singpur and Nandigram in West Bengal, Greater Noida in Uttar Pradesh, Kharkhoda and Faridabad in Haryana, and many other places feel aggrieved that they are not being adequately compensated by authorities making huge profits through sale of these lands. Protests over land acquisition are only the tip of the iceberg. More important, the farming community, in general, feels agitated that agriculture as an occupation is not paying enough. A familiar complaint that farmers are not getting a fair deal for their toil was reflected in a recent national survey, which showed that large sections of the younger generation in the rural areas are reluctant to take to the traditional occupation of farming on the ground that it is not remunerative. While the government announces minimum support prices for major crops as an incentive for crop production, the farmers feel these prices, at which most of their produce is sold, hardly cover the rising costs of labour and inputs, leave aside any profit margin. It is against this backdrop that a section of Andhra Pradesh farmers, owing allegiance to the Confederation of Indian Farmers’ Associations (CIFA), have decided to declare a ‘crop holiday’ in about three lakh hectares of water-rich areas of the state. They want to get the message across to the farmers’ associations in other parts of the country by organizing meetings in Punjab, Tamil Nadu, Maharasthra, and Karnataka. They feel that governments, both at the Centre and states, are taking farmers for granted, thereby forcing them to adopt drastic steps to improve their lot. The plea by Andhra farmers seems to have made an impact in Tamil Nadu where CIFA has urged its members to observe ‘crop holiday’ in about one lakh hectares in this Kharif season. On the other hand, another group of farmers in Andhra Pradesh, shunning the agitation path, has decided to adopt a constructive approach to get a fair price for the produce by forming producer companies, registered with the Registrar of Cooperatives. These companies would interact with bulk buyers, bypassing mandis and middlemen, and take the help of National Bank for Agriculture and Rural Development (NABARD) to meet the credit needs of its members. Some farmers are also toying with the idea of growing alternative crops like vegetables that could yield more profit than cereals. Surely, all these trends are straws in the wind that need to be taken note of more seriously. True, one solution to the farmers’ woes is the launching of a productivity revolution, which should be done without much loss of time. A recent analysis of the agriculture growth in the last one decade in the country shows that only in seven states, the growth has exceeded the targeted 4 per cent, the star performer being Gujarat, which has recorded 8 per cent growth over this period. Gujarat’s success is attributed to its multi-pronged strategy focusing on water conservation and management, improved rural electricity distribution, encouragement for cultivating non-food crops like horticulture and Bt cotton, well coordinated extension efforts and major revamping of infrastructure support. Greater farm growth and increased yields all over the country can definitely bring smiles on the face of farming community. The 12th five year plan, starting next fiscal, should address these issues on the agriculture front with a sense of urgency. Comments are welcome at: mediatoday@vsnl.com Views expressed by individuals and contributors in the magazine are their own and do not necessarily represent the views of “AgriBusiness & Food Industry” editorial board. AgriBusiness & Food Industry does not accept any responsibility of any direct, indirect or consequential damage caused to any party due to views expressed by any one or more persons in the trade. All disputes are to be referred to Delhi Jurisdiction only. .....Editor

AgriBusiness & Food Industry w August 2011

Exclusive Interview

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Sanjay Dave

Does India Proud Elected Chairman of Codex Alimentarius Commission

“The best part in food trade would come when all the countries harmonize their standards with the Codex,” says Sanjay Dave, who has been unanimously elected to the prestigious position of Chairman of Codex Alimentarius Commission, an important body constituted jointly by FAO and WHO of the United Nations. The long association of Dave, Director of APEDA, with Codex activities brought to the fore his flair for capacity building services and a vision for global development of stakeholders. As a first for India, he introduced a web-based traceability solution in table grapes. He led the work for developing and implementing the entire food safety monitory system, which won, for APEDA, a National Gold Award for e-governance from Government of India as well as the e-Asia Award. One of his important responsibilities has been implementation of international food safety standards in India’s farm export industry. As the Director of APEDA, the credit goes to him for steering forward the National Programme for Organic Production, making India a sustainable supplier of organic produce to the world. He was also instrumental in developing IndiaGAP document to enhance the productivity and safety of farm produce and to raise the income levels of growers.

AgriBusiness & Food Industry w August 2011

“Codex is for consumers everywhere . . .” Dave has been contributing to agriculture trade for about 25 years and has served the Codex by holding several responsible positions. For over ten years he has been an active and constructive member of Indian delegations to sessions of various Codex committees engaged in framing standards for safety and quality of food as well as codes and guidelines to protect good manufacturing practices. These standards and guidelines are valued world-wide in international trade. In an interview to AgriBusiness & Food Industry, Dave outlines the tasks and challenges ahead in his new capacity of chairing an international body committed to protection of global food safety and health. Excerpts from the interview:

AgriBusiness & Food Industry w August 2011

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Our hearty congratulations to you on your election to the prestigious post of the Chairman of Codex Alimentarius Commission, an important body constituted by FAO and WHO of the United Nations! Thank you very much for your kind words. What is Codex exactly? Codex is a body of the United Nations (UN) set up in 1963 by collaborative efforts of FAO and WHO to frame international standards, guidelines and practices to ensure health of consumers and fair practices in food trade. Today, there are 184 countries that are members. The European Union (EU) is also a member. Codex Alimentarius Commission has about 20 committees plus a few task forces. Some of the Committees have been adjourned sine die as they have finished their work. Codex Committee on Sugar, which was with UK, has been revived. Now Columbia is the host country to prepare a Codex Standard for ‘Panela’… it is jaggery… we produce a lot of it in our country. So, there is a proposal for international standards for this product; hence, the committee was revived. Are codex guidelines mandatory? Guidelines are framed by Codex, but it is up to the member countries to adopt them, as every nation’s situation is different. Countries see the codex standards and, according to their needs, they modify them. Since the standards are framed through the process of consensus, these are taken as reference point in WTO. If there is dispute between two countries, codex standards are taken as reference point. Actually, under WTO, you must be aware of SPS (Sanitary and Phytosanitary) system. Under the SPS agreement, there are three organizations, known as “three sisters” – for plant health (IPPC), for animal health (OIE) and for human health (CODEX). There are standards for fruits and vegetables, for processed foods, for meat, poultry, dairy, fish, fats and oils, functional foods, mineral water, pesticide residues in food and veterinary drugs. There are guidelines for methods of analysis, food sampling, inspection and certification, food hygiene and labeling. A large number of areas are covered under codex. All these committees are hosted by particular countries and an official of that country is the Chairman of that Committee. For example, fish committee is chaired by Norway; Food Inspection and Certification Committee is chaired by Australia; Processed Foods and Veterinary Drugs committees are chaired by the United States and so on. Does this change from time to time? If a country wants to chair a committee and the current host is willing to give it, they would normally discuss it in advance and come to an understanding. Only then the proposal comes in the commission meeting. Then it can be transferred. For example, the pesticide residues committee is now chaired by China. Are persons in committee from technical side, or government officials, or from the industry? There are government officials with technical background.

They must have an understanding of the subject, as there are science-based decisions in committees. There are expert bodies for food additives, pesticide residues, etc. They evaluate proposals; carry out risk assessment and then present to the concerned committee, which considers the document taking into account science-based recommendations. Then, decision is taken based on consensus. All these committees, whatever they decide, send the final proposal to the Codex Alimentarius Commission, which serves as the apex body. This time, 140 countries were present in Codex Commission meeting. The number is increasing now. I have seen meetings earlier where less than 100 countries participated. Are there some criteria for the countries to participate in codex decisions? All countries are eligible to participate. At present, there are 192 member countries in the UN. Codex has 184 countries. A few countries are still not in the CAC. One of my aims would be to encourage them to be a part of the Codex process. What might be the reason for their non-participation? Are they not in compliance with codex? It’s not that they are not in compliance with Codex. There are so many countries that are not in compliance. Maybe they have not given a thought in this direction. Most of the developing countries have supported the decision for your chairmanship. Please tell us more about it. My election was unanimous. What about our neighbours like Pakistan, Bangladesh, and others? There have been some political differences between India and these countries. Does this have any influence on codex decisions? Codex has really nothing to do with political influences. Codex is for consumers everywhere. I recall going to Sri Lanka in May this year and they sounded like they would support me. Nepal and Bhutan expressed support too. We had sent communication to Pakistan and Bangladesh. They did not oppose my candidature. Overall, I had sufficient support from all regions of the globe.

AgriBusiness & Food Industry w August 2011

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Codex disseminates these standards through websites, CDs, etc. But the question is to what extent countries use them; I feel that it’s still far from reality. I have even thought of developing a logo for codex. I have already put it in the agenda for the 2-day informal meeting to be held in September in Rome. ‘Can codex have a logo and how will it be used?’ - these are my points of discussion. This, again, will be an issue of consensus among Codex members.

Indian Delegation Members

What are the major problems faced by the developing countries with regard to agriculture and food products concerning heath and food safety? The primary focus of codex is health of consumers, whether from developed countries, developing countries, or least developed countries. With regard to food safety, many developing countries do not really understand the document – what is written in there, on what basis to adopt the standards in their country and how to implement them, which is the most important thing. Today, most Indian consumers do not know what codex is all about. It came in newspapers that I was elected Chairman of the Codex Commission, then some people learnt about it. However, an average consumer has no clue about Codex. It’s important for a consumer to be satisfied with the fact that the product he or she is eating is safe. You and I are consumers too. I want safe food, so how do I satisfy myself about its safety? It becomes the government’s or the retailer’s responsibility to ensure that the food being sold is safe. They do this by following certain standards. It’s vital for the producers, retailers, transporters, and everybody related to the food industry to understand the concept of food safety. For this, capacity building is required. The regulatory bodies, on their side, also need to understand the Codex standards and put them in the framework of national food regulations. They need to create documents for providing guidance to the people – how to interpret and implement the standards. This is the biggest constraint faced by the developing countries today. Codex develops standards, but at the end of the day, how much is being used and how to build capacity are some of the major issues I have taken as my responsibility to find solutions to them. We continue to frame standards and guidelines, but what use are they if not implemented? I will be working very closely with FAO that provides training to different countries. Codex does not have that mandate directly, as it’s not possible. But, I will work with FAO and plan the meeting in September this year with Codex Secretariat and I am going to call on Director General and Additional Director General of FAO to discuss this aspect. The FAO has done a lot of work in publicizing the standards. Even

AgriBusiness & Food Industry w August 2011

Where do our (Indian) food processors, farmers, and trade related to food industry stand in the understanding of codex? I think we need to review our food safety standards. The food authority (FSSAI) is considering this. There will be a meeting shortly to find areas of improvement, the standards to harmonize, etc. It will require discussion with the government, industry, consumers, and others. It’s a complete process. Codex is for international standards for export and import of food products. But our indigenous products like Bhujia, Samosa, etc. hardly have a standard. Not only in India, almost every country has its own traditional food items and new products are being developed in the world. Not all products have standards. Please comment. It’s not practically feasible to have standards for each and every product in the world. But we can ensure whether it has been produced hygienically, whether it has been packed and labeled properly, the ingredients have been displayed correctly, the product complies with standards of food additives, pesticide residues and food contaminants, and so on. If you have done all these things, you can say that your samosa or bhujia or mithai complies with codex standards! There was an issue of apples containing higher pesticide residues. Lots of fruits and vegetables have this issue. Australian apples were in the news for this reason. Why didn’t codex have any kind of intervention in this? Whether it is apples, grapes, bananas or any other fruit or vegetable, as per SPS agreement, every country is required to follow the standards of the importing country. The latter cannot discriminate between products to be imported and those produced for its own consumption. For instance, Australia may be having a standard for apples and one for pesticide residues. Now, if Australia imports apples, it will apply the same standards. If a country has no fixed standard, they will have to follow the standard of the exporting country or, in the minimum, comply with codex standards. Considering the apple issue, do you feel India needs to revamp its food standards? Yes. That’s why government has decided to set up food safety authority. Regulations are likely to be notified shortly. Process of review of standards needs to be started soon. The easiest thing to do would be looking at codex standards, as they are internationally recognized. Referring to the grape issue, have you signed some MoU with the Netherlands government?

AgriBusiness & Food Industry w August 2011

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No. What we have actually done is encourage farmers or producers to comply with the standards because we are obliged to follow the importing country’s standard. We have discussed with the Dutch government about finding better ways of analysis so that the cost of testing can be met by the farmers easily. Testing is otherwise expensive. We had sent a team of about 20 or more laboratory analysts in the beginning of this year for training in Netherlands. Does codex include Genetically Modified (GM) produce? Yes. It comes under the Codex Committee on Food Labeling. There are standards on GM products. Some discussions have taken place and, in some cases, work has not been continued for various reasons. Does the issue of GM product standards pose a challenging task for you due to various controversies surrounding it? I won’t say it’s a very big issue. More challenging work before me is setting of MRLs for growth hormones in meat products. That’s a major challenge in codex discussions. Others can still be handled. Any other challenges besides this? My focus would be to see that developing countries have greater role in codex process. We want meaningful participation of these countries and that would require a lot of capacity building. Private standards is a major issue for developing countries. Supermarkets, private companies, etc. have their own set of standards and it gets difficult for the farmers to meet each standard. This has been discussed a lot in WTO meetings. My other focus is how fast we can develop the standards because we need to keep pace with the changing food safety scenario in the world. Of course, codex standards take, on an average, four years for setting the standard. Many times, it requires scientific risk assessment. That doesn’t mean codex is a slow process; but we have to find ways to speed it up. Is there any specific industry that needs your urgent attention? I think all sectors of the food industry need to study and adopt Codex texts. In 2006, I started working with IGNOU to begin a food safety course. It was eventually launched in 2008.

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Today, atleast 150-200 students, including students from SAARC and other countries, are joining this distance learning course. Now I propose to have a 2-year full-time master’s degree course in food safety. We need to set up a big lab in IGNOU. I have already started discussion on the course contents and other aspects. I personally desire that this course must start within my tenure as Chairman of the Codex Commission. It will be a flagship program. Students will be selected through a rigorous process. Students from developing countries, SAARC and Africa are free to join. This is one way of building capacity in our country and other developing countries. Hopefully, the course will start by July next year. A majority of the world population lives in the developing countries. So, don’t you think that the developing world needs codex more than anybody else? The best part in food trade would come when all the countries harmonize their standards and that common standard is codex. Do you know we need about 20 billion meals everyday to feed the growing world population? Imagine the amount of food required and the amount of food safety required! Being the Chairman of Codex Commission, please give your message to Indian commodity exporters or food processors because, ultimately, they have to face the challenge of meeting the guidelines or standards. Be absolutely honest and committed towards food safety because that only will take you forward in international agri business. And don’t forget that India is also an international market. Imports of food products are allowed. You have to compete not only outside India, but also within India. The only key to growth of sales is food safety. There is no short cut to good work or to success. The commitment should come from within you. Don’t say something and do something. This is the message I would like to give to all Indian food business operators, whether farmers, traders, processors, labs, inspectors, etc. You can’t afford to compromise with the safety and quality standards, or you will be out of business sooner or later. Remember, if your product is good, the consumer will come back to you. If your product is bad, the product will come back to you! n

AgriBusiness & Food Industry w August 2011

Agri Affairs

Horticulture – the Way Ahead

— Sanjeev Chopra*

How does one look at the horticulture sector’s growth scenario? As in Dickens’s classic, ‘A Tale of Two Cities’: it was the best of times; it was the worst of times!

ith a production of over 230 million tonnes of fruits and vegetables over an area of 20 million hectares, the horticulture sector in India is now a significant contributor to the agricultural GDP of the country. But, its contribution to farmers’ incomes, livelihoods, nutrition, export earnings, ecology and equity does not get the prominence it deserves because our political economy and commentary is geared to the ‘meta narrative’ of food security, MSP and PSS for wheat, rice, pulses and oilseeds. In fact, one has to be grateful to the runaway inflation of the humble ‘onions and potatoes’ that perishables made it to the national attention grid, but for the wrong reasons! While it is true that the sector has received more funds than ever before and production has increased manifold, the sector now faces the problem of ensuring that the primary producer gets a ‘fair and remunerative share’ of the consumer’s rupee, as in the case of ‘primary crops‘ like wheat and rice. How does then one look at the horticulture sector’s growth scenario? As in Dickens’s classic, ‘A Tale of Two Cities’: it was the best of times; it was the worst of times! It is the best of times because few other sectors have seen such

AgriBusiness & Food Industry w August 2011

exponential growth in terms of funding …from just about Rs 700 crores in the Seventh Plan to Rs 15,000 crores in the Eleventh Plan. The sector now boasts of the National Horticulture Mission, the Horticulture Mission of the Himalayas and the North East, the National Mission on Micro Irrigation and the National Bamboo Mission, besides substantial funding and policy support for the National Horticulture Board and the Coconut Development Board. Besides, there are smaller, but focused missions like the Saffron Mission for Jammu and Kashmir, and the National Bee Board. Many state governments are creating ministries and departments exclusively for horticulture, and there is a general sense of ‘can do‘! However, the primary challenge to the sector emanates from the fact that almost every policy instrument, which regulates this sector was designed primarily for wheat and rice, and by extension, pulses, oilseeds and millets. Thus, when it comes to financial inclusion of farmers, provision for fertilizers, price support, and especially the marketing arrangements, the sector faces the ‘worst of times’. This does need further elaboration. Take the Kisan Credit Card, for example. The

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very design of this financial instrument, which is responsible for providing agriculture credit of more than four hundred thousand crores to the farmer at a concessional rate of interest through interest subvention, caters to the ‘wheatrice’ cycle, and its norms are designed to cover seeds, fertilizers and pest/weed management. Fortunately, the humble potato fits into this cycle as an alternate crop in West Bengal, Punjab and UP, but the marginal farmer who wants to grow strawberry, egg plants, broccoli or okra for the vegetable market, or wants inputs for the small poly house that s/ he has created out of NHM funds does not have access to this concessional credit. Thus, the vegetable grower must take credit at usurious rates of interest, often from the intermediary who, thus, gets control over the produce even before the cultivation cycle starts. True, there is no ‘bar’ to the KCC financing vegetable crops, but unless the ‘norms’ for funding are circulated to the banks and co-op institutions, pious intentions do not get translated into ground reality. Therefore, the first point to note is that the horticulture farmer pays a higher ‘cost’ of credit. This financial exclusion leads to a vicious spiral: because his crop has not

Agri Affairs

been financed, it cannot be insured. Thus, in the case of a crop loss on account of adverse weather conditions and/or pest attack, the farmer does not have a ‘right’ to get compensated. He has to depend on ‘patronage’ and a visit by a central team to assess the damages, and receive a pittance. Even in the revamped agricultural insurance scheme, and Weather Based Insurance, horticulture is an ‘add-on’. However, horticulture crops are more sensitive to climate change and, therefore, require urgent attention. This essayist has made a strong case for convening a meeting with the insurance companies, farmers’ associations and insurance regulator to take the first steps towards designing product portfolios for the vast range of horticulture crops – from saffron in Jammu & Kashmir to areca nut in Karnataka! Let us now move to agricultural inputs, including seeds, nutrients and pest/weed management strategies. In addition to the National Seeds Corporation and the State Farms Corporation of India, almost every state and many agricultural universities have their dedicated corporations to address the issue of seed supplies. Their primary focus has been on HYVs and hybrids for the major crops, and because there is

still a very wide gap between demand and supply in this ‘core sector’, the horticulture sector, more or less, fends for itself. True; in the case of potato, the CPRI has taken the lead role in the development of Foundation seed, and the Indian Institute of Vegetable Research at Varanasi and the IIHR at Bangalore have developed several varieties, the challenge is not the development of a good seed/planting material in the lab – but to ensure its commercial production, certification and regulation to ensure that the farmers are not given spurious seeds. Again, the focus of the seed certification labs in the country is primarily geared to ‘crops’, rather than fruits and vegetables, and face severe capacity constraints in most states. If horticulture were to add its own portfolio, the backlog would be so high that entire seasons would be missed, thereby rendering the exercise redundant. From Products to Processes: Accrediting Nurseries & Redefining their Roles A better option would be to move into a regime of accrediting nurseries that can supply planting materials and seeds, besides stocking seeds of companies having their own testing regimes, or which have the credibility

AgriBusiness & Food Industry w August 2011

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Agri Affairs

and brand name backed by internal research. The National Horticulture Board has recently taken up the task of accrediting nurseries, and the number of stars assigned to each will depend on periodic review and inspection. Thus, while getting the ‘five star status’ is great for a nursery, being able to retain it will be greater, and the possibility of losing the status will impel the nursery to take all steps in this direction. It may take a few years time, but by the end of the XIIth Plan period, it would be possible for the NHM to give directions that state procurement should only be from ‘accredited nurseries’. Over time, the accredited nursery movement may evolve a dynamic of its own, and these could also be the centers for sale of horticulture equipment, bio-fertilizers and other agri inputs. Breaking the ‘land holdings barrier’: Protected Cultivation & Micro Irrigation Taken together, protected cultivation and micro irrigation can break the ‘land holdings barrier’, which has been the bane of Indian agriculture. Given the fact that India is a land of marginal and small holders and that it will not be possible to increase the per capita farm size, the only option is to increase the productive capacities manifold to make incomes rise at a pace that compares with the services sector. This

is where the horticulture sector brings in its unique competitive advantage: with shade nets and poly houses, fanbelt systems and micro irrigation, it is possible for a 300 square meter plot of land to generate an income of up to Rs 3 lakh per annum (an impossibility in a rice-wheat /cotton/sugarcane cycle). True, this will involve higher capital costs – but given the support under NHM , with supplementary grants by the state and institutional funding, it would be possible for the new generation of agripreneurs to break free of the ‘land holdings barrier’. The question is: are we prepared to invest in the sector on the scale that we are doing for airports and national highways? To cover just 1% of India’s cultivable land under protected cultivation, the requirement of funds could be as high as Rs 25,000 crores (back of the envelope calculations). This can, however, generate incomes and livelihoods in a ‘virtuous cycle’, and may be more productive than other interventions, especially as this involves a ‘public private partnership’ in the real sense! Reducing Transaction Cost & Time: Repealing APMC Acts Getting funds for breaking the land holdings barrier may be easier than getting this Act amended. The ‘vested interests’ that control these Markets are not agriculture producers, but traders

AgriBusiness & Food Industry w August 2011

and intermediaries, and because they have ‘controlled’ these institutions for the last fifty years, they have perfected the art of finding both creative and coercive reasons of holding the system to ransom. While the DAC has been reiterating the need to amend the Act, several states including Punjab, Haryana, UP, Rajasthan and Delhi – to name a few - have not accepted this. Of course, every political party sings paeans for the ‘toiling farmer’, but his right to sell his produce at his farm gate has been compromised by every party across the political spectrum. The time has come to make it abundantly clear that unless the Act is repealed, higher production and yields will not translate themselves into incomes for farmers. True, the subject falls under the domain of the state governments, but if an Empowered Committee of State Finance Ministers could take the lead in establishing the VAT regime in the country, this can also be done. The APMC Act was designed to ensure that the farmer brought his produce to the Mandi so that he had greater choice: today, the choice is being restricted because of the Act itself. Moreover, the markets under APMC have failed to keep pace with technology: as a country that prides itself in IT skills and the BPO sector, less than 1% of our agriculture produce is sold through electronic auctions with transparent price discovery. It is time the Competition Commission of India took suo motto notice of the restrictive provisions of the APMC Acts, which have virtually restricted the entry of any new player in this sector, and also prevented any member to introduce new systems. While NHM has been supporting ‘terminal markets’ and many states have come forward to take assistance of up to Rs 50 crores (one third of the anticipated project cost), this has not caught on like wild fire because any modern system will keep a record of transactions. But the ‘guild’ that controls the trade does not want to leave any trail. This is, perhaps, one of the largest ‘unorganized sectors’ in the country. Can one believe, for example, that the total requirements of fruits and vegetables for the NCR region are less than Rs 2 crores per day? In a freewheeling essay on the future

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Agri Affairs

of horticulture in India and the steps that could be taken to put this sector on a high growth trajectory, especially as it is the sub-sector within Indian agriculture that can help increase farmers’ incomes exponentially, besides ensuring that wealth generation, distribution and capitalization takes place in the agrarian region, which will be more equitable and ecologically sustainable. However, the critical element here is connecting farmers to consumers, a challenge that is formidable, but not insurmountable! And the comparison with the support available to the cereal crops is inevitable …. Linking Farmers to Markets! To a large extent, these issues have been thought through in the National Vegetable Initiative, which, in the first phase, aims to connect cities with a population of 1 million with farmers’ clusters. Typically, a city with a population of this size should have at least five to seven thousand vendors, providing door-to-door or at least ‘walking distance’ service to the home makers and institutional consumers. Ideally, with such high volumes, the market should have evolved on its own – after all the production and supply chains are in place, even if they are non-transparent and ‘cartelized’. However, markets depend to a large extent on information about production, warehousing, logistics, distribution channels and their financial holding capacity and consumer behavior. This is where the challenge lies – for unlike the agricultural production estimates, which start giving data from the ‘sowing stage’ itself, there is no organized system for collection of horticulture statistics. True, the National Horticulture Board brings out a Horticulture data base at the end of the year, and the Marketing Division within the Government of India maintains a dynamic portal that records arrivals in the Mandi, the challenge lies in anticipating production and putting this information in the public domain. Moreover, when multiple agencies give information based on their understanding of some crops in limited areas, it tends to distort the market. Take the case of onions, for example. A report

on production losses in the late Kharif onion in some parts of the country on account of unseasonal rains triggered a panic reaction last year (2010), even though the loss of production could have been offset by calibrating the trade policy. However, if there was a system to report sown area, expected production and storage capacity at different levels, the scenario would be different. Prices will still vary according to the production season, but the ‘speculation,’ which affects both farmers and consumers adversely, can be minimized to a large extent. Therefore, strengthening the horticulture data base becomes very important, if the country has to translate production gains in horticulture into higher incomes for farmers. Warehousing, Cold Storages and Warehouse Receipts The next step would be the setting up of a chain of cold storages, much like the warehouses that the FCI, CWC and the state marketing federations have established for cereal crops. It is true that over the last decade, several steps have been taken to enhance the cold chain capacity in the country, but it is still woefully inadequate. There are just about 5,000 cold storages in the country, with the bulk of them concentrated in UP, Punjab and West Bengal. For the potato crop, the country needs another 25,000

throughout the length and breadth of the country, especially in the NHM districts. The WR (Warehouse Receipt ) has to be extended to the cold storages as well because while the ‘receipts/ slips’ issued by the cold storage owners are informally traded, there is no legal sanction behind them, and in any case, banks cannot extend loans against these receipts. This is important because the overwhelming majority of cold storages in the country rent out their spaces to small producers. Distribution Channels If PSUs have a ‘near monopoly’ in the procurement and a lead role in the distribution of cereals (the main agricultural crops), they are conspicuous by their absence in the distribution and marketing of perishables (horticulture crops). With the sole exception of Mother Dairy’s ‘Safal Brand’ of outlets in the NCT of Delhi, the distribution is in the hands of private ‘guilds,’ which do not encourage the entry of new players. The APMC Act helps them for it does not encourage new players, and the existing channels do not find any good reason to invest in a modern distribution channel. As long as the entire produce has to come to a central aggregation point, there is no incentive for primary level grading, sorting and value addition at the farmers’ field. The intermediary’s profit

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Agri Affairs comes from his ‘discretion’ in sorting, grading and assigning value to different lots, and pushing those to different wholesalers and retailers. Thus, the NVI’s emphasis on formation of farmers’ groups and training them to sort, grade and do primary level value addition (lot sizes, lot mixes) can go a long way in improving farmer’s control over his produce. This will, of course, call for professional assistance in organizing these clusters into FPOs (much like the co-op support services, which NDDB provided to the dairy sector). However, the general consensus is that, beyond this level, aggregators will be required to establish and upgrade the supply chains - both, to the existing vendors and to thousands of other ‘Karana’ stores, which are currently not in this domain as they do not have the facility of a ‘cold chain’ in their premises. In fact, more than the distribution of pre-graded, pre-packaged vegetables is the issue of logistics support for the new push cart with pneumatic tires and temperature controlled chambers.

The vegetable vendor also has another set of issues, which are beyond the ken of horticulture: these relate to municipal zoning, livelihood, credit and ‘inspectors’ of different departments from health to legal meteorology and, of course, the police! However, when farmers’ incomes and the health of the consumer is at stake, the horticulture department will have to encourage and support these networks, and use agencies like the SFAC, NHB and Nafed to take these forward with support from all stakeholders, including corporate and municipal bodies. Strengthening the Department The manifesto for the horticulture sector is, therefore, quite ambitious and it also has the financial resources and policy matrix clearly laid out. What needs to be done is well known – the question is – how does one begin? The fact of the matter is that the department does not have the foot-soldiers to implement the vision that has been laid out. Most states have staff vacancies

AgriBusiness & Food Industry w August 2011

ranging from 40-70%, and the staff position itself needs to be reviewed in the light of the new responsibilities and challenges that the sector faces. It has become quite fashionable in policy circles to be critical of the role of government staff, but in the extensive tours which your essayist has taken across states – it is obvious that the departments will have to be restructured to leverage the challenges mentioned above into ‘double digit ‘growth opportunities! In this freewheeling essay, the author gives his perspective on how the horticulture sector has done well, but can do much better. More than finance, the sector requires policy support to enable the farmer to access the market at terms that are fair and equitable to both the farmers and consumers. Fortunately, technology is in place to facilitate these transactions, but the policy bottleneck has to be overcome! *(The author is Joint Secretary cum Mission Director, National Horticulture Mission, Ministry of Agriculture, Government of India, New Delhi).

AgriBusiness & Food Industry w August 2011

Event Report

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Taipei 3+1 Food Shows 2011

The entire Food Industry under one roof!

India emerging as one of the important markets for technology suppliers

— M B Naqvi

ew shows in the world sizzle in the way Taipei 3+1 Food Shows do! They vertically link every level of the food industry - raw materials, manufacturing, technology, and the making, baking and packaging. The food show this year provided vast opportunities to explore the development in food processing machinery and production sector, as Taiwan is emerging as one of the major suppliers of food processing, baking, packaging, and other related technology solutions. The biggest factors are the cost and the high quality and commitment present in Taiwan products. Interestingly, the cost of technology from Taiwan falls within reach of most of the Indian buyers, yet the quality is superior. Talks with various Taiwan suppliers and exhibitors from across the world revealed that Taiwan is an ideal place to source high quality machinery with a reasonable price. They are open to have Indian agents. In fact, they already have Indian agents to discuss possibilities of more machinery imports by expanding the food retail and catering industry. Presently, bulk manufacturers are sourcing machines. “India is the future market and we are trying our best to have more Indian agents,” said one of the Taiwan exhibitors. “It’s just a matter of time; Taiwan companies would be providing technology solutions in India,” said a food machinery manufacturer. Already, joint venture companies have opened and there are plans for organizing workshops in India to cater to the after sales services here. It needs more cooperation between Taiwan machinery manufacturers and Indian entrepreneurs in the food industry.

AgriBusiness & Food Industry w August 2011

More about the show… Beginning June 22, FOOD TAIPEI (the 2011 Taipei International Food Show), FOODTECH & PHARMATECH TAIPEI (Taipei International Food Processing & Pharmaceutical Machinery Show), TAIPEI PACK (Taipei International Packaging Industry Show) and TAIWAN HORECA (the 2nd Taiwan International Hotel Restaurant & Catering Show) wrapped up with stupendous success on June 25 at Nangang Exhibition Hall in Taipei. The three food shows, along with the Taiwan HORECA, provided an incredible platform for buyers to procure Asian foods and machinery, thus, catering to the entire food industry chain. Organized by TAITRA (Taiwan External Trade Development Council), the events hosted about 1,281 participants. They included companies from America, Europe

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and procurement executives from newly-emerging markets in Asia, Eastern Europe and the Middle East. Companies invited for this prestigious group of events included Shanghai City Supermarket, Wuhan Wushang Group, Sichuan Sweetrip Food Co. Ltd., Xiamen Jiahele Trading, Golden Dragon Food Enterprises from Hong Kong, Reliance Fresh from India, PT Indopoly Swakarsa Industry TBK from Indonesia, Huong Viet from Vietnam, Woongjin Foods from South Forea, Paperinfo from Bulgaria, Baniyas Spike Trading from the United Arab Emirates, and Square Consumer Products from Bangladesh. The events provided opportunities to buyers and sellers to carry out one-on-one negotiations to strike lucrative deals and expand their businesses. The notable thing about this year’s food show was the presence of business from 5,150 foreign buyers, which was an increase of 7.45% on last year’s show. China, Japan, Hong Kong, Malaysia and Philippines topped the list of buyers. FOOD TAIPEI The focus of Taiwan’s show was food. This year’s show had 830 local and foreign companies sprawled in 1780 booths. Every food produce was represented with special areas including Tainan, Yunlin and Kaohriung who displayed their top regional products. Every year, the FOOD TAIPEI, through its different pavilions from different countries, showcase the best of the Eastern and Western cultures. This is apart from the wide range of Taiwanese foods that amaze buyers from across the world.

Event Report

The original Taiwanese flavours and savory food products make their show unique. The host country, Taiwan, also had 70 exhibitors under the leadership of the Council of Agriculture. They displayed Taiwan’s ubiquitous charm and its enriched culture. The Taiwan pavilion offered the best in Taiwanese cuisine with its lip-smacking food products, which included fresh and chewy squid and fish balls, lustrous black Taiwanese century eggs and aromatic, fluffy turnip cakes. FOOD TECH & PHARMATECH TAIPEI and TAIPEI PACK This combo of events increased the value of the food show and offered a broader picture of the food industry while increasing accessibility to the latest trends in the industry. Manufacturing and packaging are vital elements of the food industry. Thanks to the speedily shifting trends of consumption and the development of Taiwan’s food processing industry being ahead of times, there has been continuous advancement in the food processing machinery and packaging techniques. To meet the growing market demand and deliver supreme quality in products, it is important for the companies to have a constant R & D process. TAIWAN HORECA This show on hotel and catering featured about 152 vendors as well as 352 booths. The annual 4-in-1 food exhibition presented almost every aspect of the food industry. The buyers from around the world were awestruck by the world-class standards and selections offered by the exhibitions. For countries like India, where semiautomation is the need of the hour, Taiwan offers machinery and packaging technology that caters to the Indian conditions. Not many would know that several of our traditional Indian snacks are produced commercially through machinery imported from Taiwan! Companies like Haldiram, ITC, Kohinoor Foods, MTR, and others already source machinery from Taiwan. The combo of Taipei Food Shows offered a golden chance to present the latest R & D results for food packaging, machinery, hotel and catering industries. The extra ordinary feature of this grand event is that business prospects continue long after the show pulls down the curtains. n

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Industry Focus

Emerging Trends In Fmcg Sector Consumer spend on food still high

— Shipra Singh

Ready-to-cook food segment has a bigger market in India than ready-to-eat, as Indians still prefer the concept of “fresh food”

he journey of typical Fast Moving Consumer Goods (FMCG) is usually short. They are manufactured, put on the store shelves, bought by the consumer in a haste (there is little effort in choosing toothpastes, soaps and other groceries, except for brand loyalists) and used within days or months. The absolute profit on FMCG is relatively small, but the cumulative profit is enormous because such goods are sold in huge volumes. Also, FMCG sector shows a steady growth rate and is not affected by economic turbulences like recessions, and so on. In the recent times, there have been quite a number of ripples in the steady waters of FMCG. A new trend has emerged; consumers have shifted their preferences; a slew of new brands have shaken the top and established brands in India. New trend Even as the mall fever grips the country, several FMCG companies are shifting their focus to high street. They have rightly got the pulse of the city, hence, there has been the mushrooming

of kiosks, parlours (e.g: Amul Parlours), cafes, and other outlets selling FMCG products. Today, Amul boasts of having an Amul Parlour at every one kilometer in urban areas of the country. Retail formats like departmental stores, supermarkets, and specialty stores have altered the retail scenario in India. The noteworthy thing about the top FMCG brands is that they have successfully penetrated the rural markets through their innovative marketing strategies. For instance, Parle entered the Rs.2000 crore cookie segment with its Parle 20:20. With a price of just Rs.5, it toppled the “cookie-is-costly” myth. Today, it has 19% market share (Parle 20:20), marching closer to Good Day, which enjoys 31.5% market share. Another example is Champion Agro Ltd that has 35 agri-retailing outlets in Saurashtra region of Gujarat. It plans to open about 400 outlets for one-stop shopping for farmers in the state by 2016. It expects 50 new outlets by this year-end. New brands topping market shelves Earlier, it would take years for a new brand to find a position in the market. But recently, the new line of brands has challenged the top brands. For example, Hindustan Unilever Limited (HUL) is leading the Men’s

Fairness Cream segment even though Fair & Handsome of Emami ruled this niche. Despite late entry in the cookie market, Parle rules the biscuits segment. In the area of ready-to-cook packaged foods, Nestle Maggi is the leader. Its Maggi Nutri-Licious Pazzta, launched in 2009 end, has grabbed a 42% market share, pulling ITC Sunfeast Pasta’s grand market share of 70% (in 2009) to 40% (in Jan-March 2011). ITC Foods chief executive Chitranjan Dar has this to say, “Both the brands are neck-to-neck but they both have their place in the sun. While Nestle has taken the route of attracting the noodles eater, we are trying to build a more cosmopolitan consumer franchise. According to him, Sunfeast Pasta sales have only increased in an expanding market. The secret behind Maggi Pazzta’s instant success is that the 25-year-old ‘Maggi’ brand has been ruling the readyto-cook food segment and Pazzta simply piggy backed on brand equity of Maggi. Perhaps the same holds true for other new brands on the block that have either managed to threaten or, in some cases, topple the leading brands in the particular segment. Another example includes Marico Parachute (8% market share) that was launched against Emami Navratna (60% market share). According to the Vice President of Indiabulls Securities, Anand Mour, “All these companies are market leaders in the mother category, while other players had established niche sub-segments to gain share and avoid competition.” Retail scenario The total retail sector in India is estimated to be worth $590 billion, with unorganized sector amounting to $496 billion. This is according to ICRIER report. Furthermore, a report “India Organized Retail Market 2010” by Knight Frank India, about 55 million sq. feet of retail space would be ready during 2010-12

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in National Capital Region (NCR), Mumbai, Bengaluru, Chennai, Kolkata, Pune, and Hyderabad. Also, in the same period, organized retail real estate stock is expected to expand from the current 41 million sq. feet to 95 million sq. feet. A recent report suggests that food retail sector in our country is likely to double to $150 billion or more by 2025. In a recent development, the panel of secretaries has approved 51% FDI in multi-brand retail. It comes as a big relief to the worried foreign investors who were eager to invest in India, though the approval has evoked mixed response. The arrival of big retailers to India would decrease the number of intermediaries between the farmer and the consumers in the supply chain. This would lead to lowering of prices by big retailers and farmers getting better prices for their produce. India already allows 51% FDI in single-brand retail and 100% in wholesale cash-and-carry activity. Looking at the growing retail potential in our country, the government has relaxed rules for investments by international firms present in India through technical collaboration and joint venture. With this landmark move, the foreign firm will no more have to get a No Objection Certificate (NOC) from the Indian partner for investing in joint venture operations. According to the CEO of Walmart India, Raj Jain, the current 51% FDI was good enough for now, although it constricted Walmart’s growth in India. When asked about the position of Walmart’s mantra of ‘everyday low price’ and ‘everyday low cost’ in India, Jain said that they have yet to reach such scale in India. “India is a huge country and it will take a long time to do that. Through our cash-and-carry operation and through our agreement with Bharti Retail, in the last 3-4 years, we have set up several supply chains in the North.” On customer service, Jain said, “Where retail falters in India is at the check-out experience. It’s a complete mess because of technology and back-end not being good enough. Fortunately, at Walmart, we have access to the best.” Talking about the Indian retail condition, Jain stated that it is common in India to go to a shop with a list of 20 items, and not finding certain items in the list one goes elsewhere to get them, which is cost-incurred. “In-stock is important and in India it is pathetic because of an inefficient supply chain. We have a 90 plus per cent fill rate and I feel this is not good enough. In my opinion, it should

Industry Focus

be 99% and we are working very hard to reach there. “ Speaking on Walmart’s approach in India, Jain said, “We cannot survive on large formats in India, like in Mexico. The answer lies in multi-formats and not a single format.” Shifting consumer preferences Sustained food inflation in recent years has burdened the consumer. According to the latest survey round 2009-10 by National Sample Survey Organization (NSSO), consumers, despite high prices, still spend a large chunk of their income on food. They also spend significantly on their children’s education. An average rural Indian household allocates 53.6% of its total monthly consumption expenditure on food items. The survey says that cereals constitute the largest portion of an average household’s consumption budget in the country. This is followed by fuel and light, milk and milk products, vegetables and clothing. An interesting shift in consumer behaviour in FMCG sector is the willingness of people to try new products. Being heath-conscious and going green has become a fad and there are a slew of health food items to lure the “eco-friendly and healthconscious” crowd. This has opened vast opportunities in the retail industry. According to Walmart India’s CEO Raj Jain, India is a very large consumer market in Asia, second only to China. The modern retail concept of getting all the groceries under one roof is catching up rapidly with the Indian crowd. The success of Food Bazaar, Spencers, Reliance Fresh, and more proves that the Indian consumer has accepted “one-stop FMCG window” and prefers convenient shopping. Britannia Industries grows on an average 20% a year and ITC’s FMCG business at 30%. Amul has been a leading player with 90% market share in butter, 80% in cheese, 40% in ice cream and 25% in pouched milk. It took 33 years for Amul to reach $1 billion turnover. But this leading food brand of our country has proudly added another billion in just a span of four years. According to the MD of Amul’s owner Gujarat Cooperative Milk Marketing Federation R S Sodhi, the brand has reported a turnover of Rs.9774 crore ($2.15 billion) in 2010-11 and is expected to cross $3 billion by the next fiscal. Talking in general about the FMCG market and the Indian consumer psychology, the CEO (Consumer

Products) of Marico Ltd Saugata Gupta says, “In India, I don’t see ready-to-eat products having a big market because there is still a concept of ‘fresh’, there’s labour available and the housewife would still like to prepare the food. Now, because of time and convenience, what she doesn’t like is negative labour like cutting vegetable, preparing the masala, etc.; so there’s a huge market for intermediate foods, i.e., ready-tocook foods. He added that because of a rise in double-income families, people are short of time in the morning. They can get maid to cook meals in the day, but not for breakfast. That’s why the breakfast category has grown. Today’s consumer is smart and loaded with information. “One of the things we are facing is understanding the new-age consumer. Today, a lot of ad viewing is on YouTube, they are not using TV to watch ads” says Gupta. According to him, any FMCG company today needs to look at the brand reputation in the digital world. “You have got to persist with it (the brand). If I launch a new product every three weeks, the sales guy will lose focus. In today’s market of competitiveness and clutter, you need to nurture a product.” Gupta agreed that there was a trend among urban consumers towards product premiumization. “People are willing to experiment and what has happened is a lot of people travel abroad and there is exposure to global media. There are certain categories where people can show off mobiles, clothes, etc. and there is premiumization there rather than in soaps and stuff.” According to him, there is commodization in soaps, detergents, etc. People are willing to spend money to look good and feel young. In today’s scenario of mixed population, where there are brand loyalists and there are consumers ready to experiment, it’s crucial to understand the end user. There lies an untapped potential in the retail sector with vast scope for new entrants. India, with its appreciable talent pool, large markets and vast raw material resource at cheaper rates, has an advantage. It is expected that India will become one of the best retail economies of the world by 2042. However, the secret to success lies in companies catering to the basic, emotional, and status needs of the consumers. As Saugata Gupta of Marico rightly puts, “The biggest source of competitive advantage for any FMCG firm is how well it knows its consumers.” Consumer insight is an inevitable practice in today’s retail scenario. And for that, an important element is empathy. n

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Brand

Branded tree nuts ready to sweep snacks market — Chitra Narayan & G K Nair

From wasabi-flavoured cashews to cashew noodles to small packs of pistachios, branded tree nuts are emerging as a strong snacking category.

n the face of it, it may seem like an apple versus orange contest -- Rs 40 packet of namkeen versus Rs 200 packet of pistachios. But that's the category that Mark Masten, Vice-President of Global Sales & Marketing at Paramount International, says he is trying to attack with his company's Wonderful pistachios. Wonderful, he says, is positioned as a healthy snacking alternative, so what if its pricing is way above your average teatime snacks! Now come to Kerala, the cashew capital of India. Here, the shelves of stores are flooded with different flavours of cashewnuts – from the exotic wasabi to spicy ginger-chilli. Brands such as CDC – from the government stable of Kerala State Cashew Development Corporation (KSCDC), VLC – from Vijaylakshmi Cashews, and Delinuts from the Kollam-based India Foods Exports Assorted Food Packers Pvt Ltd have unleashed an avalanche of cashew snacks in pouches ranging from 100 gm to 1 kg. In New Delhi, the people behind the Tulsi brand of nuts are now promoting a new ‘mass' brand of nuts. Finely blended almonds, cashews, pistachios and peanuts are being sold in retail packs priced between Rs 5 and Rs 50 under the brand name ‘Magic Nuts'. “Among the new flavours under this brand are honey, sesame and black pepper,” says a spokesperson for Magic Nuts.

Mark Masten, V-P, Global Sales & Marketing, Paramount International

Dr K. A. Retheesh, MD, KSCDC

After rice and sugar, yet another commodity – which till now was sold loose or unbranded – is seeing a burst of branding activity. Tree nuts – pistachios, cashews and almonds – in all sorts of flavours, have entered an arena till now dominated by peanuts (which are cheaper, mass snacks and already branded). While Indian brands such as Delinuts and Magic Nuts are slowly becoming more and more visible on retail shelves, it's the American giant Paramount that promises to revolutionize this nascent category. It is planning to spend $10 million ramping up processing facilities in India and $2 million on a marketing campaign for Wonderful. Already, in a test campaign in Bangalore, it has launched

the Wonderful brand in 17 gm packets priced at Rs 15. In a novel twist to distribution, these are also being pushed through liquor stores. Delhi and Mumbai will soon see a similar roll-out. For the Indian market specially, Paramount has come up with a salt-and-pepper flavour, processed at its plant in Gujarat. “We try and package it as close to the market,” says Masten. Masten also points to how they have taken a leaf out of the FMCG players' book to market the pistachios in smaller, more affordable packs to push sales. “Like Cadbury's we are rolling out small, affordable sachets,” he says, “and will be going after a bigger share of stomach!” On the distribution front, the company, which entered India in 2008, has already reached 11,000 outlets and

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Brand

Packs of the Wonderful brand of pistachio is hoping to take it up to 20,000 outlets. “We plan to boost sales another 100 per cent,” says Masten. A host of below-theline, outreach and other promotional activities are planned. Cashew Capital wakes up In Kerala, a large number of cashew exporters and major processors of cashew kernel has suddenly woken up to the domestic demand. Not only have they introduced valued-added branded products to appeal to the taste of Indian consumers, but also are trying to market these through innovative distribution channels. The KSCDC has tied up, for instance, with Hindustan Petroleum Corporation to sell the products through its outlets. Besides, it has also tied up with government agencies such as the Civil Supplies Corporation, Consumerfed, Handicraft Development Corporation, Agro-Industries and KTDC to use their channels to sell CDC Cashews, says Dr K. A. Retheesh, Managing Director of the Corporation. KSCDC has also entered into tieups with modern retail players such as Reliance Fresh. The cashew business in India is now estimated at about $2 billion (Rs 9,000 crore) and “given the high pace of growth we conjecture that it will touch $4 billion (Rs 18,000 crore) by 2015,” says Dr Retheesh. “The consumption, which was largely restricted to the US and EU,

is on its way towards Asian countries such as India, China and the Middle East,” he pointed out. Meanwhile, Delinuts has a strong presence in airports and luxury hotels. According to Satheesh Nair, Managing Partner, India Foods, these premium branded products are available in the airport and other luxury hotels, inflight sales and are in good demand and, in fact, “we are the leader in this category”, he claims. “We are using a dry roasting technology, in which oil and artificial flavours and preservatives are not used,” he says. Paramount's Mark Masten feels that given the strong health Over endorsement that nuts have got for their cardioprotective properties, the demand is only going to go up.

Pistachios' demand is also expected to peak riding on the back of reduction in prices following a cut in import duty from 30 per cent to 10 per cent. “We have also spent a lot on advertising the brand and building it up globally. Wonderful is today a $300million brand and it is among the top fastest moving brands globally,” says Masten. A lot of nutty experimentation is taking place in the labs. On the anvil from KSCDC are chocolate-coated cashew kernels and cashew noodles. “Even though the quantum of sales may not be large, the boundaries will be significant and it will also boost the CDC Cashews brand image indirectly, being a premium product, thus escalating the demand and sales of our other valueadded products – such as cashew soup, cashew vita, cashew bits and cashew powder. Value addition is mainly for the promotion of branded products. Innovative products will attract the end consumers,” says Dr Retheesh.

16 countries live machines & products on display

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Brand

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Street food gets branded! — Swetha Kannan & Anjali Prayag

Popular favourites go branded in a rising trend that sees both local and international players entering the game.

fter a trip down busy Mint Street in Chennai and sampling the vada pav at a small eatery there, 24-yearold Lingesh Waran, a self-confessed foodie, succumbed to the charm of this Mumbai street delicacy. This immediately set him and his friend Deepak Bhattad on its trail in Chennai and later, Mumbai. The journey culminated with the genesis of ‘Vadaa Paa' kiosks early this year in Chennai. While it's early days for Lingesh and Deepak, initial indications appear positive, with certain outlets having footfalls of 300 people a day. Vadaa Paa is one of the latest entrants in the food kiosk space. The last few years have seen many players such as Burgerman, Nirula's Express (fast food and beverages) and Go Chatzz (North Indian street food), offering both Indian and international cuisine. Salad Chef, Big Mos' Rolls and Wraps, Yo China, Chai Garam, Chokola, Candy Treat, Sweet World, Mr Orange and HAS Juice Bar are the other names heating up the space. The market is not just brimming with Indian players but

Rakesh Raghunathan, Director, Infusion Foods Pvt Ltd

AgriBusiness & Food Industry w August 2011

also has some international players such as the UAE-based Star Engineering Group, which plans to launch a chain of ‘Chickeez' kiosks retailing hot dogs and burgers across India. The big question is: what's ticking with the kiosk model in food retailing? With small capital and fewer overheads, the kiosk model is certainly compelling, especially for first-time entrepreneurs such as Lingesh who started Vadaa Paa immediately after completing his management education in New Zealand. The infrastructure needed is basic – a reasonably large central cold kitchen with blast facility (for freezing food) and kiosks to dispense food. A typical kiosk costs about Rs 1 lakh and there is no need to invest in seating space. “It has relatively lower operational costs – a limited menu and staff, consumption of fuel, the water and electricity is also consequentially lesser than for other formats,” says Pratichee Kapoor, Associate Director, Retail, Technopak Advisors. Running costs are also less. “We just share commission with retail space owners – 10 per cent of sales,” says Lingesh. With real estate costs escalating each day, the kiosk model is a sure winner. Kaati Zone, the Bangalore-based QSR chain, which started with the dine-in format, has now chosen to go the ‘kiosk' way. The reasons? “To battle escalating real estate prices and to give the grab-and-go convenience to people,” says Kiran Nadkarni, CEO, East West Ethnic Foods, which owns Kaati Zone. Kiosks also do not need too much space - typically the size of a kiosk could range from 30-100 sq. ft; it also offers high portability and flexibility in terms of its location and placement. It is like producing in an assembly line. The food is precooked in the kitchen; the kiosk is used to just heat and serve. “Complex food preparations can't be done in the kiosk due to space and other constraints,” says Gaurav Marya, President, Franchise India. Since the overall investment is in the range of Rs 1-3 lakh, the model is highly scalable and replicable, he adds. Variety is also something kiosk owners can experiment with and feedback is almost instantaneous. For instance, the ‘Petawrap' kiosks, which are shaped like autorickshaws, offer

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Brand

With small capital and fewer overheads, the kiosk model is certainly compelling wraps in dizzy combinations – vada pav wraps, Lebanese falafel wraps, masala chana and Punjabi paneer wraps, chicken kebab and Chettinad chicken wraps and more! Bangalore-based Caneo-la offers sugarcane juice in flavours such as mint, ginger, salt and pepper, chaat, and natural flavour. The menu can be localised to the extent of catering to a specific locality/area within a city. For instance, a kiosk at an office complex and one near a college campus can have different offerings on the basis of customer preferences and what sells most, says Pratichee Kapoor. And if you thought this concept works well only with the youth, think again. Says 28-year-old Rakesh Raghunathan of Chennai-based Petawrap (which owes its name to a popular Tamil movie song ‘Pettai rap' – roughly translated it means song of the masses), “We not only have children and youngsters eating, but also so-called conservative people over 50 years of age. Vegetarian and non-vegetarian are made in two separate grillers and all our staff wear gloves, so we don't compromise on hygiene and safety, which is critical in this business.” Petawrap, which draws its inspiration to serve healthy food from the burritos in the US, had even set up stalls at Chennai's Chepauk cricket stadium during the last edition of the IPL. Its kiosks are present in the Cognisant office campus, at Pantaloons outlets and near Krishna Sweets in Chennai. Challenges While kiosks offer several advantages, there are certain challenges too. The major challenge is in getting the supply chain and delivery mechanism right. The food has to be delivered to the kiosks at farm-fresh quality. Maintaining quality safety standards across all outlets is tough. Stock-outs and spoilage due to improper storage are likely as there is not much scope for back-up storage in the kiosks. If this critical piece is taken care of, a business can break even in just six months and get a return-on-investment in 12 months, says Marya. Although the kiosks are made from good-quality glass and steel (there are enough fabrication manufacturers in India), one cannot avoid the effect of the rains, says Lingesh. Also, footfalls depend on the location. So one must take advantage of hightraffic locations such as outside a petrol bunk, inside a mall, office campus IT parks, colleges or training academies. Competition from local vendors is high, as the latter are normally out of tax reach and enjoy the cost benefit, which ends in more competitive offerings. Even among the kiosk operators, competition is building up. Vadaa Paa has a predecessor in Goli Vadaa Pav, which today has 100 kiosks in Maharashtra, Tamil Nadu and Karnataka. Cross-product competition is also building up, as consumers today have various on-the-go foods to choose from – ice-creams, salads, soups, rolls, wraps, candies,

Vadaa Paa outlet at Nungambakkam, Chennai

and even sugarcane juice! Cane-o-la, a Bangalore-based company, transformed the consumption pattern of sugarcane juice in just a few months after its launch. Prakash Baliga, Senior Manager, Cane-o-la, says the unhygienic conditions in which the drink was being dished out kept away consumers. On seeing the potential for the desi version of an instant energy drink, the promoters of Cane-o-la launched a long-term R&D project that lasted almost three years before the rollout of the brand started in 2007. “We created a high-quality ambience, offered takeaways and various flavours,” says Baliga. Cane-o-la now has 14 outlets across Bangalore, Mysore and Cuddapah. The QSR chain has outlets at corporate campuses of Infosys, Wipro and Toyota Kirloskar Motors. Cane-o-La also has kiosks in retail chains such as Big Bazaar and Spencer's. In addition, the company has tied up with the State Government to set up kiosks at public places such as bus terminals. Baliga says business peaks from January to May with outlets selling close to 400-600 glasses per day. Cane-o-la is now looking at expanding to other States, but sugarcane availability would be crucial. Whatever be the challenge, kiosk players stand to gain through expansion, especially through the franchise route. Petawrap, which has six kiosks in the city, is looking at 15 by the end of 2012. It is also in talks for expanding to Bangalore, Hyderabad. Vadaa Paa is looking at three more kiosks in Chennai, before moving to other Southern cities next year. It is also exploring the franchisee route. Being an easily replicable model, kiosks lend themselves well to franchising, says Marya of Franchise India. “But the municipal corporations need to come out with administrative rules and safety standards to govern kiosks so that illegal ones don't crop up. Currently, there are no clear guidelines. If guidelines and standards are in place, the gadiwallah too can become a franchisee – he just needs to evolve and get organised and maybe get himself a brand,” adds Marya.

AgriBusiness & Food Industry w August 2011

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Current Issue

Carbide-ripened mangoes rule Delhi market

t's a well-known fact that mangoes are ripened with calcium carbide by traders and this can prove to be toxic. The chemical is banned under section 44 A of the Prevention of Food Adulteration Act but is being used across the capital, a fact that Delhi government has suddenly woken up to. It is now preparing the ground for a crackdown. According to the government, the capital gets about 5000 tonnes of mangoes everyday. Nearly 60% of these are consumed in the city. The state government wants the traders to shift to ethylene gas which, it says, is harmless and closer to the natural way of ripening mangoes. The toxic and carcinogenic calcium carbide is primarily for industrial use and the acetylene gas produced by it is used for welding metallic steel. It is also said to destroy the sweetness and flavour of the fruit. "Use of calcium carbide for ripening fruits is banned in Delhi. We lifted samples from the mandis about a month back and discovered what was happening. So, I called a meeting of experts to discuss alternatives and they felt ethylene gas was the best solution and a harmless one too. The traders attended the meeting and agreed," said Dr AK Walia, Health Minister of Delhi. l About 5,000 tonnes of mangoes reach Delhi everyday; out of this, 60% are consumed. l Calcium carbide used as source of acetylene gas to ripen mangoes. l Calcium carbide banned for ripening fruits under Section 44A of Prevention of Food Adulteration Act. l Calcium carbide can damage kidney, heart and liver and cause cancer. l State wants traders to use ethylene gas to ripen mangoes as this is safe. l This requires chambers and ethylene generators which cost between Rs. 75,000 to Rs.1 lakh. l Raids found rampant use of calcium carbide. l Expert panel constituted to check mango godowns and prepare roadmap to make fruit merchants aware of use of ethylene gas.

He said an expert committee was being set up that will visit wholesale markets to check godowns and find a solution to end the use of calcium carbide. While he was non-committal on a deadline, he said he wanted to end the practice in this season itself. The traders are skeptical. Delhi Agricultural Marketing Board chairman Brahm Yadav said that shifting to ethylene gas seems unlikely in the coming months. "Storage chambers will have to be created where ethylene gas can be released to ripen the mangoes. As of now such arrangements are unavailable. A realistic target would be the next season," he added. Dr. Walia said the government was soon going to organize special campaigns to educate fruit traders and merchants and encourage adoption of ethylene as an alternative. "The technique is also said to be cost-effective and won't affect the customer. Similar techniques are already being used by Mother Dairy and some states like Punjab and Himachal Pradesh," he added. Dr Walia said people can also adopt the natural method of ripening the fruits at home, which ensures both safety and quality. "People can wrap unripe mango in a newspaper and place them in an air-tight carton, box or kitchen jar at normal room temperature. After four to six days, the mangoes are ready to eat," he added. n

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Success Story

Dry village transformed into lush orchard!

ctivist Anna Hazare catapulted into national stardom following his relentless pursuit of the Lokpal Bill, but the unassuming dhoticlad social worker has been a star in his state, and village, for a long time now. Fifty-year-old Maruti Auti recalls the days when villagers in Ahmednagar's Ralegan Siddhi, 80 km from Pune, lived in abject poverty over three decades ago. "Farming was impossible. We had land but no water", he recalls, taking a break from ploughing his twice-cropped field. The village falls in a drought-prone area with a mere 400 to 500 mm of annual rainfall. There were no weirs to retain rainwater. Out of 2200 acres of cultivable land, just 300 acres was under cultivation. Almost 80 per cent of the villagers depended on work in other villages. Today, the village is completely transformed. About 1750 acres is under cultivation. The per capita income has increased from about Rs 271 to Rs 29,000! Village wells don't run dry in summer. The transformation started in 1975 when Anna Hazare retired from the Army and returned to his village. Struck by the acute water scarcity, Anna met the watershed development expert, late Vilasrao Salunkhe, and learnt what needed to be done. He organised villagers' meetings to recommend that the village follow Salunkhe's recommendations. A ban on open grazing of cattle and felling of trees was imposed. Voluntary labor was adopted to ensure minimum dependence on government doles. Cultivation of water-intensive crops like

sugarcane was banned; crops such as pulses, oilseeds and certain cash crops with low water requirements were recommended. "Initially, villagers decided to repair the existing percolation tank that was leaking. This resulted in collection of water in the tank leading to recharging of ground water. Enthused by this, villagers decided to try out watershed development â&#x20AC;&#x201D; ridge to valley approach for soil and water conservation," explains Datta Awari who works with Anna's Hind Swaraj Trust. This involved building structures to prevent rainwater from quickly flowing away. "On the ridges, shallow soak pits were dug to collect rain water. This would be available to the plantations, increasing plant survival," says Vikram Phatak, an agriculture graduate who works with Anna. Meadow development and forestation of 500 ha of land has made the village green. Fruit trees such as mango, orange, sweet lime and pomegranate were planted in open spaces. "We harvest about a lakh

mangoes every year, which are auctioned to raise money for village works. In between the mango trees, we went in for inter-cropping to grow papaya trees, which too yielded about one lakh papayas," reveals Awari. Since 2002, Anna's trust has undertaken 10 watershed development projects in nearby villages where irrigation potential has increased more than threefold. (Courtesy: Times News Network)

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Report

Mayors Conference

Highlighting the issues of Meat & Poultry Sector

o provide assistance to the meat and poultry sector, National Meat & Poultry Processing Board (NMPPB) organised a “Mayors Conference” recently in New Delhi. The Conference was inaugurated by the Hon’ble Minster of State for Food Processing Industries, Shri Harish Rawat. The Government of India had approved the formation of the National Meat & Poultry Processing Board (NMPPB), the first of its kind in the country, in the Cabinet Committee on Economic Affairs meeting held on December 26, 2008. The Board was notified in the Gazette of India on January 20, 2009 and registered in the Societies Registration Act of 1860 on March 26, 2009. The Board has

been set up to cater to the expanding needs of the Indian Meat & Poultry sector and to ensure that the country becomes a global leader in production, consumption and export of safe, hygienic and quality meat products. The conference enlightened the Mayors, Municipal Commissioners and certain selected Government Officials about the broader issues prevalent in the meat and poultry sector and about the concept of modern abattoirs. It was aimed at creating awareness for hygienic slaughtering, processing and sale of hygienic meat and poultry products in local domestic retail shops; training participants for construction of modern slaughter houses; sensitizing the Municipal officers, supervisors and workers regarding quality issues

in meat and poultry sector and its impact on public health; sharing guidelines about modern meat shops and establishment of modern meat and poultry processing units to new entrepreneurs. NMPPB also mandated to cooperate and coordinate with the meat & poultry concerned renowned National and International Bodies for the mutual development of the sector in both countries. In continuance to its mandate, NMPPB had invited the Netherlands Delegation to the conference for signing of Memorandum of understanding (MoU) with The Product Board for Livestock and Meat (PVV) and The Product Board for Poultry and Eggs (PPE), Kingdom of the Netherlands, together with

Inaugural Address by Vice-Chairman, NMPPB

Lighting of lamp by Minister of State for Food Processing Industries, Shri Harish Rawat

AgriBusiness & Food Industry w August 2011

MoU Signing with Tamil Nadu Veterinary and Animal Sciences University, Chennai

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the Association of Dutch Poultry Processing Industries (NEPLUVI) and the Dutch Meat Association (COV), to strengthen the understanding, cooperation, information exchange and technical exchange. The Netherlands delegation present in the conference included Steven Lak, chairman Dutch Product Board Livestock, Meat and Eggs, Head of Market Access Delegation; Marcel Vernooji, Deputy Director, Deptt. Agriculture, Fisheries and Agribusiness, Ministry of Economic Affairs, Agriculture and Innovation, Netherlands; Siem Korver, Executive Board Member COV, VION Food group; Henny Swinkels, Executive Board Member COV, Van Drie Group; Jos Goebbels, President Dutch Meat Association (COV); Jan Odink, President Dutch Poultry Processing

Report

MoU Signing with Products Boards of the Netherlands

Industry Association (NEPLUVI); Ernst van den Ende, Executive Board Member Wageningen University & Research Centre; and Henk van Duijn, Agriculture- counsellor of the Netherlands embassy to India. Other dignitaries presented in the conference were Ashok Sinha, IAS, Secretary, MoFPI; Ajit Kumar, IAS, Joint Secretary, MoFPI; Asit Tripathi, Chairman, APEDA; Dr U Venketeshwarlu, Joint Secretary,

MoFPI; A. L. Meena, Joint Secretary, MoFPI; and Rupali Banerjee Singh; CEO, NMPPB. The Board had also invited the Tamil Nadu Veterinary and Animal Sciences University, Chennai, to sign the MoU with them, as the organisation is well known for its work in the field of Veterinary and Animal Sciences and is a heritage institute having professional manpower to assist the Board. Chairman of Dutch Product Board Livestock, Steven Lak, briefly explained the purpose of the delegation visit to India. He put forward his future plan for the country and expressed his belief in India and its economy. The conference concluded with the sole objective of enabling Government officials and the Industry to educate them regarding Indian meat and poultry processing sector. n

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ASIA FRUIT LOGISTICA 2011 International Trade Fair for Fruit & Vegetable Marketing

he clock is ticking and Asia’s leading fresh produce trade show is getting closer by each day. The 3-day show, starting on September 7 at the Hong Kong Convention and Exhibition Center, expects more than 300 exhibitors from 30 countries this year, including companies from key supplier nations. Canada and Switzerland are set to exhibit for the first time and Italy, Argentina and the UK have increased their presence at the show this year.

“Trade visitors choose our event because it brings together leading suppliers from around the world and offers the best opportunity to source products and establish relationships. Quite simply it is the best place to do business in Asia,” says Gérald Lamusse, managing director of Global Produce Events GmbH. ASIA FRUIT LOGISTICA runs alongside ‘Asiafruit Congress’, which is Asia’s leading fresh produce conference event. It boasts some of the industry’s leading professionals as keynote speakers. Delegates will hear the latest trends and developments in Asia’s retail sector from big name retailers Tesco Group Food Sourcing – Asia (China), Wellcome (Hong Kong) and Metro Cash & Carry International (Asia). ASIA FRUIT LOGISTICA 2010 had drawn more than 41,000 top decision-makers from 60 countries across the world. More than 300 exhibitors from 30 countries had displayed an intriguing overview of the market. This trade show, along with the Congress, is the only trade event in Asia that focuses on fresh fruit and vegetable business. It provides a platform to create useful business contacts. So, if you want the world to notice you, come to Hong Kong in September. The trade event will give your business the spotlight it needs.

Create a new ministry for fisheries and dairy: KV Thomas

n a move that can rattle Sharad Pawar, food minister KV Thomas has suggested that the agriculture ministry be broken up to create a new independent ministry for fishing and dairy as it has huge growth potential. As head of the agriculture ministry, Pawar is in-charge of the departments of agriculture and cooperation and animal husbandry, dairy and fisheries. "Despite so much potential, I have a feeling that the department has not so far acquired as much development as it should have," Thomas said in a recent letter to Prime Minister Manmohan Singh. He presented data to back his suggestion: Animal husbandry output constitutes over 30% of the country's agriculture GDP. The contribution of livestock and fishery sector to total GDP has been over 6%. "India is endowed with a high population of livestock in the world and is also the highest producer of milk," said Thomas. The letter comes at a time when milk prices have witnessed an unprecedented increase of about 30% in the past year. The Central Statistical Organisation estimates that the per capita milk consumption is increasing but the production has almost

AgriBusiness & Food Industry w August 2011

Despite so much potential, I have a feeling that the department has not so far acquired as much development as it should have — K V Thomas, food minister stagnated. Another area where India has failed to harvest its potential is fisheries, though it is the second largest producer of inland fish in the world. Raising these challenges, Thomas said the Centre had several reputed institutions that can change the allied agriculture sector. Also, the department has sufficient funds to turn the sector to help India's economic growth success story. "There is no dearth of funds…but more attention is paid to agriculture, therefore, diluting the required attention towards animal husbandry, dairying and fisheries," he said.

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Farmers form their own companies

Gujarat farmers to set up date winery

fter getting a raw deal from mandis and middlemen, farmers seem to have decided to tap markets directly. They will have an eye on the commodity exchanges as they aggregate produce from fellow farmer-promoters. A few groups of farmers have formed six producer companies and registered their entities with the Registrar of Companies (RoC) as required by the Companies Act. Corporates such as Reliance, ITC and Heritage, which are into retailing of agri products, too, have been kept in the loop by National Bank for Agriculture and Rural Development (NABARD). It is not just about getting direct access to markets and having bargaining power as they interact with bulk buyers. They will get handsome credit from Nabard this year. “Inti Velugu Mahila Deepam has registered as a dairy company in Nizamabad. An organic cotton company has been formed in Warangal with the help of Oxfam,” Y. Haragopal, a senior Nabard official said. “We have begun interactions with producer-groups for the last few months. Some

rogressive farmers in the driest part of Gujarat, the Kutch area, plan to set up a winery using part of the border district's yearly produce of over 1.50 lakh tonnes of dates. "We want to create our own brand. We have tied up with Nashik-based Gargi Agriculture Research and Training Institute (GARTI) for technology," said Gopal Gorasia, a date palm grower. He, along with fellow farmers Rahul Gala and Chhabil Patel, plans to invest Rs 3 crore in the winery project. This date wine would not be sold in Gujarat. Hence, these farmers are in talks with a leading special economic zone to set up the unit, where the product would be entirely for exports.

Panchkula ready for agri marketing institute

he Haryana Chief Minister Bhupinder Singh Hooda, during the inauguration of ‘Kisan Bhawan', which has been set up over an area of 3.5 acres at a cost of Rs 11.9 crore at Panchkula, announced that an Institute of Agriculture Marketing would be set up at Panchkula for providing the best training in marketing to farmers and agriculture officers. The Kisan Bhawan is equipped with modern facilities like Kisan Conventional Centre, Conference Room, library 13 faculty rooms, two lecture halls, 23 rooms and two dormitories. While advocating the adoption of vertical growth in agriculture, Hooda said horizontal growth in agricultural production had been achieved and states such as Haryana and Punjab were making optimum use of available land. “The country is developing at a growth rate of 7 per cent, but in the field of agriculture the growth is 1.6 per cent only. The answer to this problem lies in going for vertical growth,” he said.

Initiatives of them have evolved into companies now. They will get access to the Rs 1,200-crore fund set up by the bank nationally,” he said. A pilot project will be run in Maharashtra, Karnataka, West Bengal and Andhra Pradesh this year. Earlier, addressing a staff gathering to mark the 30th anniversary of the bank, P. Mohanaiah, Chief General Manager (AP) of Nabard, said the bank was in the process to reposition itself to suite the changing credit requirements. As part of this, it started a new infrastructure development fund to provide financial assistance to public corporations. “For now, it will be Government corporations. In future, we might consider assisting private enterprises too,” he said. The bank was also planning to turn about 10 crore kisan credit cards into smart cards, giving instant access to farmers to their credit accounts with various banks. “Instead of going to banks each time, the IT-enabled cards would save their time and effort by giving them access to ATMs,” he said. Tenant farmers, too, would be given these cards in order to help them get quicker access to credit. "Kutchi dates are fit for wine-making," says Rajan Bachhao, chairman of GARTI. "A winery project near the date-growing belt would be economically viable. Proper branding of the product may work wonders for date growers in Kutch," says Bachhao. Gorasia says a winery with a capacity of 5 lakh litres per annum would require just one acre of land. Date growers lose nearly 25% of yield during transportation and get about three months to sell. "A neighbourhood winery would add value to our yield and a near zero crop loss," he says. "It would create direct employment for 500 people, doubling the farmers' income of date growers here," says Patel, an ex-MLA from Mandvi. Haryana is already number one in wheat and mustard productivity, and leading in milk production, he said, adding that “now, we should grow vertically and adopt modern techniques like greenhouse, drip and sprinkler irrigation, as is being done in Israel.” The Chief Minister said that in a greenhouse, vegetables up to 80 tonnes are produced in one acre, whereas the best prevailing farming techniques could produce 8-10 tonnes only. “The small farmers would be benefited with the new technologies like greenhouses as they would be able to get more production and three yields a year against the two yields and lesser prevalent production,” he pointed out. Hooda urged farmers to adopt water harvesting techniques such as drip irrigation, which uses only 20 per cent of the water and gives better agricultural production. He also stressed for diversification and production of vegetable, fruits and floriculture.

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Future Supply Chain Solutions ventures into multi-brand distribution

uture Supply Chain Solutions, the supply chain and logistics arm of Future Group, has got into the multibrand distribution business. Launched four months ago, the service essentially involves providing distribution services to modern retailers. Future Supply Chain currently distributes over 30 FMCG brands (both domestic and international brands) to 11 retail chains across 1,500 stores in the country. “Traditionally, in the mom-and-pop store format, distributors just sent the

goods to the stores, took the money and moved on to the next store. Today, modern retailers expect distributors to study the shelves on the store Anshuman Singh and understand what's selling and what's not. Which is why we are leveraging our distribution capabilities and providing the same to the modern trade retailer,” said Anshuman Singh, Managing Director and CEO, Future Supply Chain Solutions.

Future Supply Chain, which has started with FMCG distribution, hopes to add other categories. “We expect the brand distribution business to clock revenues of Rs 100 crore next year,” said Singh on the sidelines of a press conference to announce the launch of an MBA programme in supply chain management (SCM). The SCM course hopes to address the huge skills gap in the Indian supply chain and logistics market, which is pegged at Rs 450,000 crore and growing at 10 per cent annually.

Food MNCs' ads focus on adults than kids

he latest Maggi noodles TV commercial features two wrinkled old men, with hearing aids, flying kites on a roof as they argue in trembling voices about the flavour of instant noodles. The commercial comes as a surprise to viewers used to watching kids shout "Mummy bhookh lagi" (Mom I'm hungry), with the mother replying, “two minutes.” Nestle's Maggi is not alone. In the food and beverages sector, top companies such as Pepsico (Frito-Lay), Kraft Foods (Cadbury) and Hindustan Unilever (Kwality Walls), too, are now using adults for TV commercials. So, where have all the kids vanished and why? The answer to that query lies in a European Union Pledge undertaken by 11 food industry giants such as Nestle, Unilever, Coca Cola, Pepsico way back in 2007. Under that oath, the MNCs agreed not to use children under the age of 12 in advertisements shown in the European

Union countries. "Post these discussions, we joined a group of global food and beverage manufacturers to adopt a worldwide voluntary commitment to advertise to children under 12 only products that meet specific nutrition criteria ," said a PepsiCo India spokesperson. In May last year, eight food MNCs such as Nestle, Hindustan Unilever, Pepsico, Kellogg's extended that oath to India in what was called the India Pledge. They, however, had missed their December 31, 2010 deadline to put up the details of their new child-friendly policy online for review. What we are witnessing now are the first steps of putting that pledge into practice. The move has made a wide impact in the advertising industry. Media planners feel that with diversification in the product lineup, it makes sense to steer the conversation away from children. "Every

category is trying to expand m a r k e t share by reaching out to a wider range of consumers, like whole wheat noodles for adults, or 'dahi' for kids as flavoured yoghurt," says advertising copywriter Sudhir Das. Pepsico's Frito-Lay, once marketed aggressively with the children's toy "tazos", has now signed up Saif Ali Khan, a 41-year old father of two, as brand ambassador. The "Meethe mein kya hai?" campaign from Cadbury's Dairy Milk does feature children, but tries to position the product as something of a family dessert. Even Kwality Walls products like Cornettto feature youth in their television commercials.

Online retail industry at Rs 7,000 crore by 2015

he online retail industry in India is likely to be worth Rs 7,000-crore by 2015 due to easy availability of broadband services and increasing internet penetration, according to industry body ASSOCHAM. India is set to become the third largest nation of internet users in the next two years with a large chunk of youngsters

AgriBusiness & Food Industry w August 2011

eager to adopt new technologies with rapidly changing lifestyles, it says. "A booming economy and rising disposable incomes have contributed to the evolution of online shopping," said Associated Chambers of Commerce and Industry of India (ASSOCHAM) Secretary General, D S Rawat.

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Namma MTR outlets get a face-lift

fter rolling out a new packaging identity last year, Bangalorebased FMCG player MTR Foods is now experimenting with revamped Namma MTR outlets. The entire range of breakfast, dessert, snacks, meals mixes and spices have been arranged as per meal occasion, thus, making shopping easier for the consumer, said Sanjay Sharma, CEO, MTR Foods. Apart from packaged spices, the outlets would also sell spices in quantities that the consumers desire. At present, two of the company's outlets are experimenting with the new design, he added. The company would open more

Sanjay Sharma, CEO, MTR Foods, at the opening of Namma MTR’s new store in Bangalore

outlets after assessing the performance of these two, Sharma said. MTR Foods, which was acquired by

Norway-based Orkla Brands International in 2007 for about Rs 400 crore, has been on a ‘revitalisation' drive and has strengthened its range of spices and breakfast mixes. Both these categories contribute about 65 per cent of the company revenues and see growth of 30-35 per cent per annum. Last year, the company also undertook a rationalisation exercise and decided to be present in 150 towns across the country, rather than the 500-town presence that it earlier had. The company had set a revenue target of Rs 500 crore by 2012, and the company was on its way to achieving that, Sharma said.

Thali-style cuisines forever in demand

espite the growing demand for junk and international food, certain local cuisines, served thali-style, will be in demand forever as they are made fresh everyday and are basically home food. This also ensures the customer gets a variety of delicacies to try, says Aji Nair, AVP F&B Operations, Mirah Hospitality, which runs the Rajdhani restaurant chain. People are increasingly plumping for thali-style restaurants to entertain families and large groups, to try ethnic/ authentic cuisine, even that of their own community. Rajasthani, Gujarati and various South Indian cuisines fit this bill. Other cuisines such as Bengali are not as widely popular as people who would appreciate that food are concentrated in pockets. Rajdhani serves a mix of Rajasthani and Gujarati food, Aji Nair said. Rajdhani, which has 30 outlets across 19 cities and one in Oman, plans to add another 18 in the metros, Pune, and enter Coimbatore in 2011-12. It will invest Rs

25-26 crore in expansion this year. The brand originated in the 80’s in Mumbai, but began expanding in 2004-05 when modern retail gathered steam. While it has had to shut down a couple of restaurants, the recent slowdown got it some good real estate deals, Nair said. In 2010, it opened 10 restaurants, spending Rs 20 crore.

The chain has differential pricing across its restaurants and pre-decided daily menus are issued from headquarters to maintain quality. Deals with suppliers are struck much ahead to stay ahead of price swings. At Chennai's Express Avenue mall, for instance, the thali is priced Rs 325 including taxes but in Ampa Mall in the same city, it is now priced Rs 199.

Questioned about the pricing, Nair claimed that despite two price hikes at the 11-month old Rajdhani at EA, there has been no dearth of customers new and old, of all ages. In places such as Shirdi, the thali is priced Rs 175 but lower costs and large number of customers make up for it, he explained. Rajdhani is mostly present in malls, and franchises form only 2 per cent of its business, Nair said. The chain is part of the Mirah group's Rs 160-crore hospitality division, which owns the Citrus chain of four-star hotels; Falafel, a brand of eateries serving Lebanese cuisine; Café Mangii (Italian), Mad Over Donuts, and also is the India franchisee for the Man U café bars (but not in Bangalore). The chain's annualised turnover was Rs 75 crore for the year ended 2011, and is likely to touch Rs 125 crore for year ending 2012, Nair said. So far, the focus has been on Rajdhani. The Mirah group has interests in textiles, construction, entertainment and trading.

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Bharti Walmart’s seventh Indian wholesale store

harti Walmart Pvt Ltd, a joint venture between Bharti Enterprises and Walmart Stores Inc, recently opened a wholesale cash-and-carry store at Raipur, in Chhattisgarh, taking the total number of outlets it operates in India to seven. "We have invested USD 7 million in Chhattisgarh and created over 200 jobs, of which about 40 are from the tribal community. We have already received

a very good response to this store with

over 25,000 registered members," Bharti Walmart Managing Director and CEO Raj Jain said. The new 'Best Price Modern Wholesale' in Raipur is spread over 53,000 square feet and stocks over 5,500 items, including foods, fruits and vegetables, groceries, personal and home care items, hotel and restaurant supplies, apparel and other general merchandise items.

Harilyali Kisaan Bazaar launches Hariyali First for farmers

ariyali Kisaan Bazaar, the rural retail arm of DCM Shriram Consolidated Ltd (DSCL), has announced the launch of Hariyali First — its customer loyalty programme. It is India's largest rural retail chain with 275 outlets across eight States. ‘Hariyali First' is a point based program that has differential point systems for different categories. The benefit of these points is over and above the other offers that might be running at the outlet. The President of Hariyali Kisaan

Bazaar, M. Rajesh Gupta, said, “This is rural India's first ever card based loyalty program. This programme strives to enrich value proposition and add value to the modern shopping experience of the customer by allowing earning and redemption of points on merchandise categories like food and groceries, household and life style

products. It is also a delight to farmers as products required for agricultural needs are also covered under this programme.” He added, “The programme will also help us to understand individual customers' needs and their shopping behaviour. This will serve as a guide to provide even better offerings to the rural customers.”

IFC to fund Jain Irrigation subsidiary

FC, a member of the World Bank Group, is helping Jain Irrigation Systems in India to set up Sustainable Agro-Commercial Finance Limited, a non-banking finance company that will provide loans to small-scale farmers to help them install micro-irrigation systems and improve productivity. The project is expected to benefit more than six lakh farmers with limited access

to credit, in the next five years, said IFC. IFC will invest $2.7 million (equivalent to Rs.12 crore) in equity in Sustainable Agro-Commercial Finance, a subsidiary of Jain Irrigation Systems. S e v e r e water scarcity hampers the growth of the agriculture sector in India. Micro and

drip-irrigation systems help reduce water consumption in agriculture, but are capital intensive. With improved access to credit, more farmers will be able to install microirrigation systems, which will help increase energy and water efficiency. Jain Irrigation is one of India's largest integrated agribusiness players.

CavinKare launches liquid candy at Re.1

hampoos to foods company, CavinKare Pvt Ltd has forayed into the confectionery segment with its liquid candy – Funfills - at Rs 1 price point under the brand Chinni's. The candy comes in five different fruit variants. According

to C.K. Ranganathan, Chairman and Managing Director of the company, the candy is made out of fruit pulp and fruit bits. To start with, the company has launched its products in Tamil Nadu and

AgriBusiness & Food Industry w August 2011

West Bengal markets. The national rollout is set to happen before the end of 2011. CavinKare plans to come out with more variants of this product and also plans new products in the months to come. The company sources this product

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from a “captive third-party” manufacturer in Cuddalore in Tamil Nadu. According to Sanjay Sachdeva, Business Head, Foods & Snacks, CavinKare, the organised confectionery market in India is approximately Rs 3,000 crore with domestic players such as Parle and Nutrine, and international brands such as Perfetti Van Melle, Cadbury and Lotte competing.

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A senior executive of a major confectionery brand says the 2.25-lakh tonne confectionery market in India is so fragmented with equally big unorganised players that it is not so easy to break the clutter and grab a sizeable share there. Even the market

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leader – Perfetti Van Melle – has only a 15 per cent share in terms of value, followed by Parle with 13 per cent share. However, given the price point, “rural India will be interested”. Currently, CavinKare's food portfolio, which includes snacks under the brand Garden, a range of pickles and vermicelli under the brand Chinni's, contributes over 35 per cent of the company's turnover. Last year, CavinKare posted a turnover of Rs 1,040 crore.

Unibic focuses on niche segments for its biscuit brand

nibic Biscuits India, in which Unibic Australia has a majority stake, is not quite averse to another takeover deal after an earlier bid by Marico was aborted because of valuation issues. The takeover would have accelerated Unibic's growth trajectory, but for now the company does not want to be ‘distracted by the takeover experience'. Instead, it wants to focus on building the brand in a niche segment that is high on both the price and wellness factors. “There is a vacant space here as there are no Indian players in this slot,” Nikhil Sen, Unibic's Managing Director said. The company was launched in 2004 and has brands such as Chocolate Chip cookies (Bradman), Oatmeal Cookies (Anzac), Butter, Butter Cashew, Choconut and Jamz Cookies. Unibic Australia holds about 65 per cent stake in the Indian company and

the rest is held by Sen and private equity investors. Marico's takeover attempt was to acquire an estimated 51 per cent stake in Unibic. The company is also considering a foray into other segments such as breakfast offerings on the ‘health' platform. Having strengthened the brand in the southern and western regions, the company will now focus on the northern and eastern markets. Says Sen, “We'll never be a rural brand, and plan to be a national brand in 12-18 months and be present in 21 markets across the country.” Early this year, Unibic launched its sugar-free range of cookies and is now ready to bring out a range of sugar-free cream biscuits for diabetics. Retail sales of the Unibic brand of cookies make up about 80 per cent of the company's revenues. About 10 per cent of

Nikhil Sen, MD, UNIBIC at his office in Bangalore

the revenues come from manufacturing cookies for the HORECA (hotels, restaurants and catering) segment and for Food Bazaar (under the brand Tasty Treat)) and the rest is from exports. The Indian biscuit industry is estimated at about Rs 10,000 crore; the glucose segment constitutes 60 per cent of the market and the premium segment, the rest.

Cargo Service joins hands with Siemens, NIIT Tech for terminal at IGI

argo Service Centre India Pvt Ltd (CSC) in partnership with NIIT Technologies and Siemens Ltd will set up a cargo handling facility for the Integrated Cargo Complex at Indira Gandhi International Airport in Delhi. The greenfield cargo terminal will be implemented through a joint venture company, with CSC owning 74 per cent stake and DIAL owning 26 per cent. The terminal will have a capacity of 1.2 million tonnes. “Unlike countries such as Singapore, where transshipment cargo

(from left) Tilakraj Seth, Vice- President and head of the Mobility Division, Siemens Ltd; Arvind Mehrotra, Executive Vice-President and head Global Strategic Initiatives, NIIT Technology; Tushar Jani, Chairman, Cargo Service Centre India Pvt Ltd and Radharamanan Panicker, Group CEO, at a press conference in the Capital.

account for almost 70 per cent of traffic, in India it accounts for less than 1 per cent. This is one area which we need to tap,” said Radharamanan Panicker, Group CEO, CSC. He said a loan of Rs 170 crore will be raised from IDBI for the purpose. The rest will be internally funded. In all, 25 per cent of the funds will be raised through equity route, he added.

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ITC plans to increase its forest plantations

he Paperboards and Specialty Papers Division of the diversified ITC Ltd, which is in the process of taking up expansion of its manufacturing capacity, has sewn up plans to develop 12,000 hectares of forest cover under social forestry project during 2011-12 and follow this up over the next two years, according to Sanjay K Singh, Divisional Chief Executive, ITC Ltd. The company, which currently has developed about 1,15,000 hectares of forest cover over the last 30 years at Bhadrachalam in Khammam district of Andhra Pradesh, involving local farmers, land holders and tribals, sees this fresh

addition serving twin objectives of meeting raw material requirement for the paper mill and for engaging various stakeholders. "We had no choice but to develop green cover for the raw material requirement for the paper mill. It is estimated that we need about 15,000 hectares to run one new mill. This fresh addition would be able to meet the requirement for a new expansion project coming up at Bhadrachalam," said Singh. "The yield in India was about 6 tonnes a hectare against 25 tonnes a hectare in Brazil. Bringing in best practices, we had to innovate and improve the yield by integrating tribals into the company

business. Every one gains in the system," he said. "While one hears of farmers facing difficulty due to one problem or the other over the years, have you ever heard about any farmer taking to plantations losing or facing hardship?" Singh asked. The diversified group had earlier outlined plans to invest up to Rs 3,000 crore in the expansion of its paper making facility at Badrachalam, which would nearly double its capacity over the next five years to 1 million tonnes an annum from about 4.5 lakh tonnes an annum. The new unit with a capacity of about 3 lakh tonnes an annum has secured State clearance.

France's Groupe Danone to merge distribution in India

rance's Groupe Danone is merging its distribution operations in India with its probiotic drinks joint venture Yalkult Danone India for better synergies, a year after it split with the Wadia Group. The joint distribution structure is expected to result in cost savings through

shared cold-chain infrastructure and manpower efficiency. "Both companies are building businesses in categories that are not established within the retail reality in India. There are significant synergies in doing this," said Jochen Ebert, general manager of Danone, the French foods giant that sells low-fat curd, flavoured yogurt and smoothies in India. As a three-month shared distribution experiment, Danone's products have been hitting retail stores together with Yakult, its joint venture probiotic drink, in Pune since last month. If successful, it could be rolled out across other markets. The companies are betting

AgriBusiness & Food Industry w August 2011

on the growing spending power of the Indian middle class, awareness about foods and mushrooming of supermarket chains. "It's a smart move, as there are strong synergies between the two companies. Danone could have opted for this model either because its own distribution has not been far reaching, the top line it projected has not been achieved or it is just being prudent about its operations," a consumer goods analyst said. Earlier, the two had independently set up cold-chain distribution systems, which are supply chains with controlled temperature to retain product shelf life. Since 2010, Hyderabad-headquartered Danone India has launched its low-fat dahi (curd), flavoured yogurt and Danette smoothies, which are retailed in Hyderabad, Mumbai, Pune and Bangalore.

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Now, calorie-conscious people can have 'Diet Chicken'!

”D

iet chicken" from Suguna is now on the market shelves. After a string of diet fads like low calorie dairy products, diet colas and diet chocolate – now there’s Diet Chicken! Suguna, one of the major players in the fragmented poultry industry in India recently launched the ‘Diet Chicken,’ which retains the taste of chicken with additional benefit of Enriched Selenium (low fat). Chicken is one of the safest meats available today and it is the most widely consumed meat around the world. Chicken is packed with vitamins and nutrients that are essential for positive health, but generally, chicken skin contains majority of fat. Though chicken liver is packed with a lot of essential vitamins, it is high in cholesterol and contains very high

amount of LDL (bad cholesterol). However, according to Suguna, diet chicken has a very low level of fat (1.3g) compared to normal meat (2.5g). “Diet chicken is a boon to people suffering from various cardiovascular ailments and Diabetes; they can relish the taste of chicken with additional benefit of Enriched Selenium. Selenium is a part of selenoproteins and enhances the defensive mechanism for oxidative stress, for the regulation of thyroid hormone activity. Selenium functions as a dietary antioxidant and, thereby, stimulates the immune mechanism in our body” says V.K Mohan, General Manager of Suguna Poultry. He further adds, “Less fat in the chicken contributes towards lowering the blood

cholesterol levels. Even calorie-conscious people who try to avoid non-vegetarian food can have diet chicken, which keeps their optimum lipid status. The Omega -3 fatty acids in diet chicken also helps to maintain normal lipid profile. The diet chicken would be priced between 15 and 20 per cent more than the normal chicken.”

New energy drink to hit the market

ourishCo, the newly formed joint venture between PepsiCo and Tata Global Beverages, is readying to market its first indigenous offering — Gluco Plus, a readyto-drink, mass-based energiser — in the ‘nonmodern' trade formats, taking on the challenge of competing with local fruit juice stalls. Targeting kiranas, small grocery and convenient stores, NourishCo also faces the task of creating a new category in the mass energy drinks category, away from the premium category occupied by brands such as Red bull and Cloud 9. Moreover, PepsiCo will have to take the mass product Gluco Plus to the smaller outlets, where it does not enjoy a wide presence currently. Ashok Namboodiri, Chief Sales and Marketing, NourishCo, said, “Gluco Plus would be available at the kirana and traditional grocery outlets and not in the modern trade formats. We have the onus of category creation in the ready-to-drink mass energy hydration segment and the

focus will be on mass distribution.” It is currently manufactured by PepsiCo at its Aurangabad facility and is at a pilot stage in Maharashtra. Later, with countrywide distribution, the manufacturing would be outsourced. Gluco Plus — sold at Rs 5 for 200 ml — would be pitted against the unorganised fruit juice vendors, as currently no beverage brand is pegged at this price point. “It is going to be a sizeable market as there are no such brands in this category and we see a huge opportunity here, and we would be competing against the street fruit juice vendors,” says Namoodiri. On the other hand, the Tata-owned Himalayan natural mineral water brand would come with its own set of challenges.

While PepsiCo would take on its distribution, Tata is expected to invigorate the brand through additional product development. “There would be more valueadded waters and new opportunities explored within the category by the Tatas in terms of product development, while NourishCo would have a key role to play in premium marketing. The challenge for the brand is in building salience through an undifferentiated way.” Dialogue Factory, a specialised unit of GroupM, will organise a series of BTL (below the line) initiatives for both brands. “There will be BTL activities like extensive sampling for Gluco Plus in both the urban and rural markets. While for Himalayan, the brand will continue to get associated with fashion and luxury events to create an experiential platform,” said Namoodiri. Going forward, NourishCo will look at more opportunities within the hydration category with PepsiCo's sales and distribution network aiding it in reaching out with its brands.

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British scientists create ‘Super tomatoes’ that fight cancer

ritish researchers claim to have developed new "super tomatoes” fortified with minerals, which can

improve your immune system and help prevent cancer. The new varieties, which have hit shelves across the UK, have been enriched with selenium, a powerful antioxidant, which the researchers believe could not only boost the immune system, but also help prevent cancer. The mineral, found naturally in foods such as Brazil nuts, shellfish and liver, is also important for the thyroid gland, which determines how quickly the body uses energy and also produces proteins. Food scientists turned their attention to the mineral because it is lacking in UK diets. Low concentrations in farm soil mean

little of the mineral finds its way into home-grown foods. There is evidence that a deficiency may lead to heart disease and, while it does not tend to directly cause illnesses, it can make the body more likely to catch infections. Dr Carina Norris, of the Nutrition Society, said the tomatoes were a great way to get the nutrient into our diets. "Selenium plays an important role in supporting the immune system and it is thought that getting adequate selenium reduces our risk of cancer," she said. The new tomato follows Vitamin D milk, yoghurts and juice it has developed to tackle health problems.

Junk food could be banned in educational institutions

dmitting before a Division Bench of the Delhi High Court that carbonated drinks and junk foods were harmful to health, the Union Health and Family Welfare Ministry informed the Bench that it had initiated steps to ban sale of these two consumables in and around educational institutions across the country. The Ministry submitted this before the Bench comprising Justice Dipak Mishra and Justice Sanjiv Khanna in an affidavit filed by the Additional Director of the Foods Safety and Standards Authority of India, Dhir Singh, in reply to a public interest litigation (PIL) by NGO Uday Foundation seeking a complete ban on sale of junk food and drinks in educational institutions and within their 500-yard radius. The official also submitted that the Ministry was considering framing guidelines for sale of quality foods and beverages in educational institutions. He further admitted that the Ministry had suggested to the Chief Ministers and the Health Ministers of the States to consider issuing instructions to the head of schools and universities for withdrawal of junk foods and carbonated drinks from the educational institutions under their administration. Doctors and NGOs working in the

area of child welfare have welcomed the Union Health Ministry's initiative to ban fast food in institutional areas. “All States have been asked to impose the ban. Fast foods such as pizzas, burgers, samosas, pakoras and cold drinks will now be out of bounds for school and college students. We welcome the move,” said Apollo Centre for Obesity, Diabetes and Endocrinology senior consultant Dr. S. K. Wangnoo. Health awareness and non-profit advocacy group HEAL Foundation recently conducted a survey on “Canteen eating habits of school children” to understand children's preferences towards healthy and unhealthy foods. It was found that more than 75 per cent of school-going children prefer healthy food in canteens. According to the survey, nearly a quarter of the students consume food from school canteens at least twice

AgriBusiness & Food Industry w August 2011

a week. At the same time, a majority of the students who eat in the canteen are willing to go for healthier foods such as fruit juices (77 per cent), whole wheat noodles/sandwiches (56 per cent) or flavoured milk (60 per cent) provided these options are available. The study was carried out among students belonging to the age-group of 10-18 years at 20 leading schools in Delhi and the National Capital Region. Not only the children and their parents but three-fourths of the canteen operators were also found to be open to the idea of providing healthier foods. “The increasing preference for healthier foods among a majority of children, parents and even the canteen operators points to the need for immediate intervention,” said HEAL Foundation principal consultant Swadeep Srivastava. Commenting on the general lack of will in implementation of the programme, founder chairman Vinod Jain of Tapas, a non-government organisation, said: “Delhi schools banned junk food over a decade ago but things remain unchanged. Now that the court has stepped in, there may be better implementation across various States in the country. Unfortunately, in Delhi, several schools start the programme and forget it midway opting for junk food eventually.”

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Scientists discover rice 'chalk' gene

cientists expect to soon be able to remove a chalk-like part of rice, dramatically raising global harvests amid rising demand for the staple, an international research outfit informed. The International Rice Research Institute (IRRI) announced the breakthrough after a 15-year study on what makes rice chalky, which causes the loss of up to a fourth of grain content in milling, said spokeswoman Sophie Clayton. The discovery follows a 2008 global crisis that saw the price of rice, the staple of half of the world, rise three-fold and pushing an estimated 100 million

people into poverty. "Within a few years, it might be possible to breed a chalk-free grain," Clayton said. The chalky part of rice raises the chances of breakage during milling,

cutting the amount that can be recovered and downgrading its quality, said the institute's nutrition research chief Melissa Fitzgerald. "Until now, rice scientists did not know where in the rice genome the genes for chalkiness resided," Fitzgerald said in a statement issued by the Philippine-based institute. She said field tests in eight countries isolated rice varieties with extremely low chalk, regardless of the growing environment, out of which major regions in the rice genome responsible for chalkiness were studied.

Ramdev to collaborate with foreign firm

amdev recently entered into an agreement with the world's leading packaging solution company Tetra Pak, sources close to the yoga guru said. Patanjali Ayurved Ltd, a company founded by Ramdev, has already launched its first product packaged in Tetra Pak -amla juice. In the US, Ramdev had acquired

an ayurvedic medicine company in the name of Herbo Ved, for an undisclosed sum, to sell the new products there. A year ago, Ramdev set up a mega Patanjali Food and Herbal Park at Padartha in Haridwar town of Uttarakhand, entailing an investment of Rs 500 crore at sprawling 125 acres of land, sources said.

Flavorite Technologies acquired by Heat and Control

eat and Control, a leading supplier of processing and packaging machinery to the global food processing industry, has acquired Flavorite Technologies Pvt. Ltd. Headquartered in Indore, India, Flavorite Technologies manufactures a range of processing equipment for snacks, fruits, and vegetables and has gained a reputation for providing quality products to the local food processing industry. “Partnering with Flavorite Technologies is part of our ongoing commitment to becoming a single source supplier of flexible, high performance equipment and technical support to both small and large processors across the international food industry.” explains Tony Caridis, President of Heat and Control. “Flavorite’s technology is complimentary to the Heat and Control product line. Our combination of talents and

experience will provide ever-more efficient machinery and superior service for our customers. At Flavorite Technologies, Mr. Raman Dhoot will assume the position of Operations Director. Mr. Pradeep Dhadwaiwale has been appointed Technical Director. Raman and Pradeep bring considerable experience in the food processing machinery sector, having worked for Flavorite Technologies for over 10 years. “Thanks to Heat and Control’s technology and extensive sales and distribution network, processors throughout the world will now be able to benefit from continued innovation and exceptional support – from installation to after-sales service,” adds Dhoot. “We’re delighted to join such a forwardthinking, successful organisation.”

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Amul is Asiaâ&#x20AC;&#x2122;s top Indian brand: Survey

h e Campaign magazine, published from Hong Kong and Singapore, has ranked Amul as the No. 1 Indian brand in its list of Top 1000 Brands of Asia for the third consecutive year. Amul is also ranked the No.1 dairy brand, ahead of leading food and dairy

brands of the Asian region, including Dutch Lady, Dumex and Magnolia. Overall, the magazine has ranked Amul as the 89th best brand in its ranking of the top 1,000 brands of Asia, based on a consumer survey conducted in Australia, China, India, Japan, Korea, Hong Kong, Malaysia, Singapore, Taiwan and Thailand, said Jayen S. Mehta, General Manager (Planning and Marketing), Gujarat Cooperative Milk Marketing Federation (GCMMF), which owns the

Amul brand and markets products under the brand name. The other Indian brands ranked by the survey include Kingfisher (at 116), Big Bazaar (184), ICICI Bank (215), State Bank of India (216) and Airtel (221), to name a few. Asia's Top 1000 brand listing is based on a proprietary survey by Campaign magazine. Leading research agency TNS interviewed 3,322 consumers aged 15-64 years, across 10 countries for the survey, published in its July issue.

Premium milk for posh homes in South Mumbai

osh homes in South Mumbai can get milk fresh from healthy and pampered cows delivered to their doorstep. And they are willing to pay Rs75 per litre for the fresh milk! A litre of regular milk is priced at Rs2546, but this premium milk, called Pride

of Cows, packed in PET bottles, will be delivered by trained and uniformed staff. It is the first milk product in the country that claims to be free of any human touch till the time of packaging. This select service is being run by Bhagyalaxmi Dairy Farm, a subsidiary of Mumbai-based private dairy firm, Parag Milk Foods, that sells Gowardhan and Go brand of dairy products. The company is sourcing milk at its 26-acre farm near Pune, where it houses 3, 800 Holstein Freisian breed of cows. The cows are auto-milked in rotary parlours; the milk is instantly pasteurised, chilled and packaged. The concept of fresh milk service is

AgriBusiness & Food Industry w August 2011

popular in developed markets like Europe and the US. To ensure that service is up to international standards, the company has appointed European dairy expert. The company says it is flooded with inquiries from thousands of homes across the city, but only a privileged 5,000 homes in South Mumbai will able to get the milk in phase one of the project. In subsequent phases, Pride of Cows will also cater to locations like Bandra, Andheri and Powai. Devendra Shah, chairman, Parag Milk Foods said he wants to scale up the service to other cities like Pune, Bangalore, and Hyderabad.

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Ice-cream makers demand reduction in taxes

nsisting that ice-cream is not a luxury but a “health and happiness food”, the Indian Ice Cream Manufacturers Association (IICMA) has urged the Government to reduce taxes to boost this industry. The ice-cream consumption in India is estimated at Rs 2,500 crore in the organised sector and this industry has a fragmented market. The per capita consumption is around 300 millilitres, or one scoop, per annum which is far lower than in Pakistan (700 ml), China (three litres) and the developed countries (22

litres), said Rajesh R. Gandhi, President, IICMA, and Managing Director of Vadilal Industries Ltd. Almost half of the sales revenues of ice-cream makers go either into taxes or in discounts. “We have to pay 15 per cent discount each to the dealer and the distributor. Besides, we pay 15 per cent VAT and one per cent excise. In a product with a limited shelf-life and strict manufacturing and transportation conditions, this is a heavy burden on us,” he added. China and other countries do not treat ice-cream as a luxury. Reducing taxes such as VAT to four-five per cent would increase the manufacturers' margins and milk farmers could also get better price for their products, making the industry grow, he said Of the 35-crore litres of ice-cream

manufactured in India annually, nearly 20 per cent is consumed in Gujarat alone, Ahmedabad being the country's ice-cream capital! The newly-formed IICMA currently has 80 member-manufacturers in the count where nearly 200 players make ice-cream in the organised sector. With the Centre's proposed health safety laws, the ice-cream sector is expected to undergo consolidation as unorganised manufacturers could go out of the market unless they followed stringent health and hygiene regime, he said.

A glass of milk has 20 chemicals: Study

ow safe is the glass of milk you drink daily? If a new study is to be believed, it may contain a cocktail of up to 20 chemicals used in various painkillers and antibiotics. Using a highly sensitive test, a team of Spanish and Moroccan scientists found traces of a host of chemicals in samples of cow, goat and human breast milk. Though the doses were far too small to have an effect on anyone drinking them, the researchers said their findings highlighted how man-made chemicals are now found throughout the food chain, a report in the Daily Mail states. The highest quantities of medicines were found in cow milk, and the researchers believe some of the drugs and growth promoters were given to the cattle, or got into milk

through cattle feed or contamination on the farm. The team analyzed 20 samples of cow milk bought in Spain and Morocco, along with samples of goat and breast milk. Their breakdown , which is published in the Journal of Agricultural and Food Chemistry, revealed that cow milk contained traces of anti-inflammatory drugs niflumic acid, mefenamic acid and ketoprofen - commonly used as painkillers in animals and people. It also contained the hormone 17-beta-estradiol, a form of the sex hormone oestrogen. The hormone was detected at three millionths of a gram in every kilogramme of milk, while the highest dose of niflumic acid was less than one millionth of a gram per kilogram of milk.

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Foodgrains output create a record in 2010-11

he country is heading for a record foodgrains production in the 2010-11 crop year at 241.56 million tonnes, with wheat and pulses output touching an all time high of 85.93 million tonnes and 18.09 million tonnes, respectively. Union Agriculture Secretary P. K. Basu attributed the successes to good monsoon, higher minimum support price to farmers and focused policy approach, particularly to enhance production of pulses and oilseeds. As a result of higher pulses output, import of the commodity is said to have gone down this year. The record output was achieved despite drought in 90 districts in the eastern belt, excessive rains in parts of Gujarat and Andhra Pradesh and yellow rust in some wheat-growing pockets. “At this rate, the target of 280 million tonnes in 2020 that the Prime Minister talked

about is achievable,” a senior official said. As per the fourth advance estimates released by the Agriculture Ministry, while wheat output is estimated to be higher by 5.13 million tonnes this year, pulses production has enhanced by 3.43 million tonnes with gram at 8.25 million tones, urad at 1.74 million tonnes and moong 1.82 million tonnes recording significant increases. Rice output this season is estimated at 95.32 million tonnes as against 89.09 million tonnes harvested last year. The target for next year is set at 102 million tonnes. Oilseeds production is estimated at 31.1 million tonnes against 24.8 million tonnes last year with a record soyabean

output of 12.66 million tonnes. Coarse cereals output is also expected to be a record this year at 42.22 million tonnes as compared to 33.55 million tonnes produced last year. A record output of 21.28 million tonnes of maize this year against 16.72 million tonnes produced last year, has contributed hugely to higher coarse cereals out. Cotton production has surged to 33.43 million bales (of 170 kg each) from 24.22 million bales. Sugarcane output is also higher at 339.17 million tonnes against 292.3 million tonnes in 2009-10. In 2009-10, total foodgrains output for rabi and kharif was 218.11 million tonnes. The highest production in recent years was 234.47 million tonnes in 2008-09.

India likely to be self-sufficient in pulses

he Centre says that the country will turn fully self-sufficient in production of pulses in the next 3-4 years, obviating any need for imports thereafter. This comes even as total pulses output for 2010-11 touched an all-time-high of 18.09 million tonnes (mt), according to the 4th Advance Estimates of crop production for the year released by the Agriculture Ministry.

The 18.09 mt is much higher than Krishi Bhawan's earlier two assessments made in April and February and also surpasses the previous record of 14.91 mt achieved in 2003-04. “We can easily produce 20 mt of pulses by bringing in fallow land under cultivation and through inter-cropping. I don't think we have to import pulses after 3-4 years,” the Union Agriculture Secretary P.K. Basu said. In 2009-10, India imported nearly 3.7 mt of pulses valued at Rs 10,390 crore. Last fiscal, imports fell both in quantitative as well as value terms to 2.7 mt and Rs 7,386 crore. This came even as the country harvested record crops of gram, moong and urad.

Besides pulses, the Agriculture Ministry has also revised upwards its 201011 production estimates to new highs for total foodgrains (now put at 241.56 mt), wheat (85.93 mt), coarse grains (42.22 mt), maize (21.28 mt), oilseeds (31.10 mt) and soyabean (12.66). While the cotton output estimate has been downgraded to 33.43 million bales – from the 33.93 million bales in the 3rd and 2nd Advance Estimates – it still translates into a record level. The projection in cotton is at variance with the Cotton Advisory Board that has pegged it at 312 lakh bales. The Textiles Ministry is of the view that production is even lower than that.

Rice exporters body demands review of export notification

he All-India Rice Exporters' Association (AIREA) has flayed the Commerce Ministry's procedures for exports of 10 lakh tonnes (lt) of nonbasmati rice, asking exporters to submit applications within the next two days.

The Directorate General of Foreign Trade (DGFT) issued the notification permitting export of 10 lt of rice from privately held stocks, i.e., sourced from the open market. The 10 lt quantity is to be allocated among individual exporters

AgriBusiness & Food Industry w August 2011

on a first-come-first-serve basis, subject to a cap of 12,500 tonnes for each applicant. The notification said that the applications for allotment would be received from 10 hours on July 21 to 17 hours the following day.

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“Given that the notification was uploaded on the DGFT Web site on July 19 night and the applications were to be submitted by July 22 evening, it hardly gave any time for exporters,” said Vijay Sethia, President AIREA. According to him, it takes a minimum 24 hours to even send rice samples to prospective buyers, leave alone contracting deals. “In this case, it looks as though the notification was meant only for those exporters who had prior intimation that it was coming and have already contracted with buyers,” Sethia said. The notification had set July 27 as the date for announcement of the successful allottees, who would be given three weeks to furnish irrevocable and confirmed letters of credit and performance bank guarantees for 10 per cent of the export value. The last date for exports would be November 18. “If the exports are to be undertaken only by November 18, what was the tearing hurry to invite applications by July 22? First-come-first-serve makes sense only if all exporters, and not just a favoured few, have a fair chance to put in their applications,” said Sethia, drawing parallels with the now-infamous 2G spectrum scam. Sethia also criticised the minimum export price (MEP) of $400 a tonne fixed in the DGFT notification as

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“too low.” It will lead to diversion of rice meant for the public distribution system for exports, besides pulling down world prices to the detriment of farmers in India as well as Thailand, Vietnam and Pakistan. However, the Andhra Pradesh Rice Exporters' Association is of the opinion that the minimum export price fixed by the Union Government for non-basmati rice exports at $ 400 a tonne is quite reasonable. In a statement, Vinod Agarwal, President of the Andhra Pradesh Rice Exporters' Association, said the demand voiced by Sethia was not in consonance with the ground realities in Andhra Pradesh, Chhattisgarh, Orissa and Maharashtra. “There is a glut here and farmers are unable to sell paddy. The FCI is not procuring and rice millers are in no position to take any more rice. The disgusted farmers are observing crop holiday in parts of East Godavari and West Godavari districts. In such a situation, only if we export rice, can we rescue the farmers and the millers. The MEP fixed by the Union Government is quite reasonable,” he said. He said that there was no substance in the fears voiced by Sethia that

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exports at low prices would bring down international prices. Vietnam, Pakistan and other countries were exporting rice at cheaper rates. The apprehension that rice meant for sale through the public distribution system would be diverted for exports was also not a tenable one, he said. He said that out of one million tonnes of rice exports, roughly 4-5 lakh tonnes may be routed through Kakinada port. He said it would bring some relief, but it would be grossly inadequate. “We feel at least two million tonnes of rice exports should be allowed from Andhra Pradesh alone to help the farmers and millers in the current market situation. In the glut situation, exports will not push up prices in the open market and the general public will not suffer. We can ignore market realities only at our peril,” he said.

Gujarat, Maharashtra record highest growth in farm sector

locking a 10.97% of decadal growth rate between 2000-01 and 200910, Gujarat has recorded the highest agricultural growth in real terms (at compound annual growth rate, or CAGR) among 15 non-special category States, according to an independent research and analysis of the Associated Chambers of Commerce and Industries. Maharashtra has closely followed Gujarat with 10.5% of agricultural growth during the last decade, leaving behind many front-running agricultural States, Assocham said. “Steps like investment in agricultural infrastructure to improve irrigation system, employment of latest technologies and establishment of a dedicated power grid to ensure regular power supply for agricultural sector are significant reasons behind high agricultural growth rate that

Gujarat has achieved,” said D.S. Rawat, Secretary-General, Assocham. Chhattisgarh has ranked third with 6% of agricultural growth, followed by Orissa (5.28%) and Andhra Pradesh (5.2%), said the Assocham analysis. “Innovative and efficient management of the State's ground water resources is a major turning point in Gujarat's agricultural miracle, which has converted barren lands into fertile farms, thereby, raising yields and resulting in fall of cultivation costs,” said Rawat. A revolution in agriculture has converted around 15 lakh hectares of additional lands in largely semiarid Gujarat fit for farming, thereby, establishing the state on the top in systematic and scientific development of the farm sector. Improved diffusion of technology

and better utilisation of water through various unconventional initiatives have helped expand area under cultivation and enhanced the crop productivity. Reasonable monsoon season throughout the decade along with rising minimum support prices from the Centre and extension of profitable cash crop BT cotton are the factors that led to superlative performance by Gujarat, it observed. Farmers in the State have adopted more technology and value addition of agricultural produce to supplement their income. Increased agricultural production has not only increased the State farmers' income, but also discouraged them from migrating to urban areas for jobs. Assocham recommended that other states should also focus on small, minor irrigation projects and watershed facilities, which are cheap and affordable.

AgriBusiness & Food Industry w August 2011

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AgriBusiness & Food Industry w August 2011

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