AGRI BUSINESS & FOOD INDUSTRY - November 2012 by Media Today Pvt. Ltd.

AgriBusiness & Food Industry w November 2012

inside...

Cover Story

Agri Affairs ...35

...12

Organized Retail: Advantages & Bottlenecks — Sanjeev Chopra

EDITORIAL

F&B Dabur Juices Success depends on understanding Indian taste and palette – Preethi Chamikutty

Clean-In-Place Systems Necessity in the Food Industry – T.K. Radhakrishnan

Del Monte Sketchup Contest Participants use Sauces to paint Popular Figures

FRUITS Strawberry & Guava India needs to have a robust policy to boost production & exports

MARKETING Shades of Marketing 'Healthy Foods' Brands Fail to Lure Consumers?

SHORT STORY The Man Who Took 15 Urchins to McDonald's – Anwar Huda

BRANDING

Siraj Hussain, Additional Secretary, The Union Ministry of Agriculture

Agri & Food Summit 2012

Focus on warehousing and farm-funding to cut wastage

– Anwar Huda

Sweets

...32

Local Taste

Regional Preferences force F&B Brands to tweak products 34

Chitale Bandhu

Pune’s iconic sweets maker sells 3,000 KG Bhakarwadis a day!

Prices are increasing but demands too: Srikrushna Chitale

Investments Venture Capital & Private Equity Eyeing food services sector aggressively

AgriBusiness & Food Industry w November 2012

...36

CUISINES India's Rich Cuisines Need To be Mapped and Chronicled – Reshmi Dasgupta TRADE NEWS w Walmart trains farmers for quality products w HRS showcases innovative food processing solutions at International FoodTech 2012 w Wipro to invest $25 million in JSM Corp w Kerala HC asks Spices Board to resume cardamom auctions w FCI wants Rs. 14,300- cr for rice procurement w India negotiates with Iran for wheat exports w Mother Dairy launches 'Maa Jaisa Koi Nahi' campaign

AgriBusiness & Food Industry w November 2012

orial Edit

ffirming that India has to act now to launch a new revolution in agriculture, the Boston Consulting Group, in a recent report, goes on to emphasize that this country, having more than one-tenth of the world’s arable land, has ample scope to convert agriculture into an opportunity.

Chief Editor

S. Jafar Naqvi

Consulting Editors

T.V. Satyanarayanan K Dharmarajan

Chief Co-ordinator

M.B. Naqvi

Editorial Co-ordinator Syed M K News Editor Anwar Huda 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 9248669027 hyderabad@mediatoday.in Mumbai 9702903993 mumbai.office@mediatoday.in Pune 9881137397 pune@mediatoday.in Bangalore

9342185915 / 9341473494 Bangalore.office@mediatoday.in bangalore@mediatoday.in

Ahmedabad

9727866249

Admn. & Marketing Office

MEDIA TODAY PVT. LTD. T-30, Ist Floor, Khirki Extn., Malviya Nagar, New Delhi- 110017 (India) Phone : 91-11-26682045 Fax : 91-11-26681671 E-mail: mediatoday@vsnl.com Web. : www.mediatoday.in

Subscription

India : Rs. 1000/- for 1 Year / Rs. 1950/- for 2 Years Overseas : US$ 120 for 1 Year / US$ 230 for 2 Years Single Copy in India : Rs. 50/Single Copy Cost for Overseas : US$10

Printed, published and owned by M.B. Naqvi, Printed at Everest Press, E-49/8, Okhla Industrial Area Ph-II, New Delhi - 110 020 and Published from E-11/47 A, New Colony, Hauz Rani, Malviya Nagar, New Delhi-110017 (INDIA)

Editor : S. Jafar Naqvi

Vol 9....... Issue 11 ...... November 2012

In its report, entitled “Indian Agri-Business – Cultivating future opportunities “, the Group warns that any failure to usher in the new revolution would mean further erosion of food security, and missing an opportunity to leverage the potential of agri-business to augment employment and create more small businesses. The report is indeed timely, since the 12th Five-Year Plan now awaits approval by the National Development Council, the highest forum, which is expected to meet soon. The question is: How do we go about to bring in a new farm revolution? Most relevant in this context is a thought-provoking address by former President Dr A P J Abdul Kalam at the 84th Foundation Day of Indian Council of Agricultural Research (ICAR), the country’s apex farm research body. Appropriately, the topic he chose for his address was, “Research missions towards 350 million tonnes of food by 2020.” Dr Kalam, who always sets his sights high, has not only suggested a target, which on the face of it may look difficult to achieve, but has also showed the way to achieve it by charting out plans for it, and by citing practical examples of path-breaking successes. Obviously, what the country needs to do is to enhance, what he calls, “productivity of farmers at the bottom of the pyramid,” and there are instances aplenty in various states, as pointed out by Dr Kalam, where small farmers, through proper leadership, have achieved spectacular results. Take the case of Paliganj farmers of Bihar, where the Technology Information Forecasting and Assessment Council (TIFAC) was entrusted with the task of doubling the production of rice and wheat near RP Channel through innovative, integrated farming and marketing methods. The strategy that contributed to the success there is simple – availability of good quality farm inputs at the right time, application of best technology and use of best of irrigation facilities. No wonder the results are spreading to other parts of the state, as well as eastern Uttar Pradesh and other areas having similar agro-climatic conditions. Paliganj farmers are now determined to create a new mode of technology-based crop system for agriculture. Gujarat’s experience is equally edifying. Bidding adieu to its chronic problems of receding water tables, poor soil and water conditions and undependable rains, Gujarat agriculture has shown how rich dividends can be reaped through propagation of scientific farming practices and water conservation. While the whole country has recorded only 3 per cent growth rate annually in agriculture production in the last few years, Gujarat has been able to attain almost 9 per cent growth rate, that too, consistently for the last seven years or so. The key to Gujarat’s success has been mission mode action. Similarly, in Tamil Nadu, members of Precision Farmers’ Associations have doubled the yield in 45 crops, compared to the national average, thanks to total guidance by scientists of state agriculture university. This project has not only increased productivity and enhanced profitability, but also empowered the farmers socially, economically and technically. The need of the hour in this country is a productivity revolution, through what Dr Kalam advocates as a mission approach by adopting integrated and synchronized action among all stakeholders through meticulous planning, funding, scheduling, storing, agriprocessing and marketing. This is the strategy that 12th Plan should adopt to bring about the next farm revolution. 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 November 2012

CoverStory

Agri & Food Summit 2012

Focus on warehousing and farm-funding to cut wastage – Anwar Huda

unions’ agendas, among other things. These are some of the reasons why agriculture is not attractive to corporate sector. But the government thinks otherwise. It wants massive involvement of corporate sector and PPP model but cannot guarantee that a private company will earn as much profit on a certain investment as it might do by investing in some other sector. It is not that agriculture is not profitable business, but all the above issues are acting as a drag for the corporate sector to take interest in agriculture. .

Siraj Hussain, Additional Secretary, The Union Ministry of Agriculture

griculture seems not to excite corporate sector. Reasons are many such as fragmented landholdings and other formidable structural problems,” said Siraj Hussain, Additional Secretary in the Union Ministry of Agriculture, in his Keynote Address to Agri & Food Summit 2012, in New Delhi. The 4th edition of the summit, held on the World Food Day, October 16, saw large participation of key figures from the agri-food sector, including those running top warehousing firms like Sohanlal Commodity Management and Shree Shubham Logistics. The summit, with ICICI Bank as the presenting partner, focused on the current issues concerning India’s agriculture and food industry.

Speaking on the theme,“The evolving food & agriculture sector in India Where are we heading?” Siraj Hussain appeared worried and was just short of accepting the cumulative failure of government and corporate in the agri sector. “We failed to achieve targeted 4 % growth,” he said. Corporate Vs Government The summit exposed the division of agendas and thought processes of government and corporate sector. Corporate sector wants good returns on investment that seems not to be possible in agriculture due to subsidy regime, bureaucratic hurdles, months and years of waiting to get a project cleared, pricesensitiveness of the government, tight regulation, high running cost, lack of IT and research and technology, labour

AgriBusiness & Food Industry w November 2012

Top Question Top question of the summit was: Where will the money come from? Private equity players are interested but scared due to many bottlenecks concerning agriculture. All these issues surfaced at the summit. Suggestions were made and participants appeared optimistic. And that was a good sign. Excerpts from Keynote Address: Poor Growth & structural Problems It was hard to achieve good growth in agriculture. In 10th Plan it was 2.4%, in 9th Plan it was 2.5 % while in 11th Plan it was 3.3 %. We failed to achieve 4 % in 11th Plan. But in 7th and 8th Plans, growth was 7 %. Now we are again targeting 4 % in the 12th Plan. For this, we need your (Corporate) involvement and suggestions. But I think corporate intervention will be more robust if we manage to remove structural problems. 83 %

CoverStory

farmers hold small fragmented land. 60 % land is rain-fed, which means we have to depend on the vagaries of nature. Marketing is poor, especially in east India. Government is absent in commodities like pulses, vegetables and oils. They are controlled by corporate sector. It has played exploitative role in this segment. If farmers are not getting good prices, we have a reason to be sad. Reliable model in commodities is a huge challenge. Empowering Farmers If farmers get encouragement to grow pulses, things will improve. States are given powers to decide on many agricultural matters, so this is also a reason for lack of consensus on key issues and whimsical taxation regime. Punjab, Haryana, and Andhra Pradesh have high taxes. Although, economists were divided in their opinion about the increment of MSP, but government took a bold decision and increased MSP to help farmers meet high input costs. It should be a joint effort of corporate sector and the government to provide remunerative MSP to farmers. Pulses are selling Rs 80 to 100 KG then why should farmers not get at least Rs. 38 as MSP. Poor Information Dissemination Government failed on the field of information dissemination. There are a lot of attractive schemes getting launched but you may not know about them. For example, Rashtriya Krishi Yojna (RKY) is a fantastic scheme. Visit this portal and

you will see a lot of corporate-attractive features. Planning Commission has put aside Rs 60,000 crore for various agrischemes. Production and productivity in agri, fisheries, and horticulture will increase once these schemes are implemented properly.

Uttarakhand and J&K. Private sector is not willing to invest there. As you know marketing is vital for agrisector and farmers’ well-being. Easy movement of goods is important to boost marketing. States have to cooperate among each other.

PPP Model PPP in building required infrastructure to support agriculture and agri-business is vital. Government is trying to involve corporate sector, and funding is available through various sources like banks. Innovative projects are there. We have liberalized exports of agri-products and there is no big ban. And processed agri-products will never face ban despite drought or any other reason.

Cold Chain Woes In cold chain, private sector hasn’t made any substantial investments as government was expecting. Shortage of electricity, long-winding process to get files cleared and other issues are said to be responsible. On this, we need your suggestions.

Warehousing Woes Shortage of ware housing is bothering everyone. Government has increased its guarantee of payment years from 7 to 10 years to woo investors. We are increasing capacity to store but since production is too much, you may see for some more years visuals that may upset you. So, don’t get upset if you see foodgrains lying in open field. But we are working hard to increase capacity. 9.4 MT capacity projects have been sanctioned for corporate sector. By March, 2013, another 5 MT will be added. Second Green Revolution The government wants another green revolution in east India including Bihar, Chattisgarh, Bengal, and even

Contract Farming Some states have allowed contract farming but results have been mixed. I suggest ICICI to carry out study on it to know the good and bad part of it. Sessions The summit had some very useful sessions, having key persons of the agri food and financial sectors as speakers. 1st Session The topic of the first session was “Raising Capital for developing a sustainable Indian food & agriculture sector”. The panelists said that arranging capital is a burning issue faced by Indian food & agri sector. They answered a host of questions such as how to bring a transformation in agriculture &

AgriBusiness & Food Industry w November 2012

CoverStory

TN adds 1.3 lakh tonnes storage facility

torage facilities for agriculture produce in Tamil Nadu has increased to 9.30 lakh tonnes from about 8 lakh tonnes earlier. This follows the opening of 1,141 agriculture produce godowns and storage facilities with a total capacity of about 1.30 lakh tonnes. These have been set up in Farmers Cooperative Marketing Societies and Primary Agriculture Cooperative Societies with funding under the Rural Infrastructure Development Fund, according to an official press release. Storing agriculture produce in these facilities during peak production season will help farmers get better prices. Also they can get loans of 60-80 per cent on the value of the produce. The infrastructure has been created in line with Chief Minister J. Jayalalithaa’s announcement in the Assembly in August this year to create additional storage space for agricultural produce to support the farmers, the release said.

allied sectors in India, what are the various alternatives for funding food & agri business, what are the various debt products agri promoters can utilize, how does the investment climate in the sector fare, how to tackle the diversified and demanding issues in food sector such as food safety, cold storage capability & infrastructure, lack of research & food security, and how to tap in the potential of the unorgainsed players in the Indian food & agri-market. Gopal Srinivasan, CMD, TVS Capital, moderated the session. Sanjay Sancheti - Country Manager, Olam Agro India Ltd, Abinash Verma - CEO, Indian Sugar Exim Corporation, Nagarajan Sivaramakrishnan - MD, Mother Dairy, Girish Nadkarni, Partner, IDFC Alternatives, and Ajay Gupta - Head, SME & Agri, ICICI Bank Ltd were the speakers.

AgriBusiness & Food Industry w November 2012

Gopal Srinivasan expressed his concern as the investment in agri sector is negligible. “In a country with US$300 billion GDP and 48% per cent people involved in agriculture, the contribution of agriculture to GDP is just 15 per cent, and it attracts 3 per cent of all FDI. Marketing cap is also too low --3 per cent, while investment from equity sector is just 1.3%. Are these facts are not making us think hard? Why not much investment?” he asked. Sanjay Sancheti said that there is no constraint on demand side. “Issues exist on supply side. Fragmented landholdings, low productivity, lack of unified marketing due to unfriendly state legislations are some of the reasons behind paltry investment in this sector.” Abinash Verma blamed lack of R&D and uncertainty for the poor investment. “40 per cent varieties of sugar are rejected varieties. Apart from that, we are not sure about the farmers’ mind. They can change crops according to their need. If farmers are uncertain, we are uncertain”. Nagarajan Sivaramakrishnan of Mother Dairy praised the dairy sector for achieving absolute and successful connect with farmers. “No other agrisector has achieved that success. I also say that even Mother Dairy is not successful in replicating dairy success in its Safal vegetable and fruit segment. We have to create a channel between demand and supply. Develop ecosystem, build business model around constraints and increase productivity by innovative means”

CoverStory

India needs large, hi-tech warehouses – a report

gricultural produce worth Rs 50,000-60,000 crore is lost annually due to poor post-harvest infrastructure and insufficient supply chain management, according to a report on Indian Agribusiness. Most warehouses and logistics providers lack adequate scientific and technical facilities to store and transport perishable commodities such as seafood, fruits, vegetables, said the report on “Indian Agribusiness – cultivating future opportunities” by Boston Consulting Group. About 30-40 per cent of horticulture produce is wasted annually due to inadequate storage and transportation facilities, it said, pointing out that the shortfall for warehouse capacity is likely to touch 70 million tonnes (mt) to 80 mt by 2015. “The country currently requires 130140 mt of dry storage for a production of approximately 220 mt of foodgrain, 27 mt of oilseeds, and 35 mt of other cash crops such as cotton, jute,” the report said. The post–harvest supply chain is one of the critical levers that can resolve some of the key issues plaguing agriculture in the country. On the other hand, it provides a huge opportunity for the private sector to look at a profitable business. The warehouse sector is currently highly fragmented with its presence being confined primarily to local players. The key challenge to the industry is to tackle the domination by unorganised players with low capacities and poor handling, stacking and monitoring facilities. Intense competition from small truckers to non-registered business entities that offer a smaller space for storing goods is another challenge to Girish Nadkarni felt, “Investors will put money if we bring down losses, increase productivity, and bring mechanization. Fragmented landholding is also a disturbing issue.” And subsidy regime (subsidy to farmers) is also discouraging corporate sector to put money in this sector. The government imports a lot of fertilizers at high global prices, but and subsidy makes it cheap here. How can a private company

be overcome. The problem in the sector was that a majority of the warehouses are about 5,000 sq ft in space, against an average size of approximately 50,000 sq ft in developed countries. Smaller sizes limit the ability of warehouse owners to invest in highquality construction, technology, and modern material handling equipment, the report said. Other problems facing the sector are uneven distribution of warehousing facilities with most of the sector concentrated in Uttar Pradesh, Andhra Pradesh, Punjab and Harayana and lack of supporting infrastructure such as power and specialised transport. Though the Centre has come up with various measures such as the Warehousing Development Act and allowing 100 per cent FDI investment, the traditional business model of the sector is not economically viable, according to the report. Stating that several global players have built successful business, it said the sector in the country is still at a nascent stage. Based on cost-benefit analysis, the report said, the recommended approach for an entrepreneur in the sector was to build strong presence in a select geography, expand offerings, become a strong pan-India player and look for multi-revenue streams. Third-party logistics is emerging as key concept in the country and this involved a single logistics provider managing end-to-end logistics for a firm. While it will take time for focussed agri-based logistics business model to evolve, the key to third-party logistics will be building scale, optimising logistics, ability to provide valueadded services and access to quality sub-contractors. manufacture fertilizer and sell the same on that price? “That is why you do not see any investment in urea. Lack of confidence is the key reason.” Ajay Gupta talked about issue of scale. “If scale is low, profits are low. Amul is a huge brand, but its share in dairy sector is just 5 per cent. Then what to say about other brands?” He suggested an enabling atmosphere, deregulation of market, timely credit to

farmers as some of the ways to attract investment in farm sector. 2nd Session The topic of the second session was “Agri Logistics & warehousing”. The panelists focused on key issues such as how to tackle the storage deficit of agri-warehousing in India, how can demand in agri warehousing be driven by increased agricultural output, what measures need to be taken to improve ailing India’s supply chain management, how can public private partnership model be effective in the current scenario, how high leasing costs are forcing companies to outsource warehousing activities, and how to overcome the shortage of cold storage facilities. The session was moderated by Sanjeev Mantri, Head, Rural & Inclusive Banking, ICICI Bank Ltd while the panelists were Aditya Bafna, ED, Shree Shubham Logistics, Amith Agarwal, ED, Star Agri Warehousing & Collateral Management Ltd, Sandeep Sabharwal - CEO, Sohan Lal Commodity Management Pvt. Ltd, Gaurav Sekhri - MD, Tinna Viterra Pvt. Ltd, Pranav Jhawar - Executive Director, JICS Logistics Ltd. Citing a quotable quote from Charles Dickens’ A Tale of Two Cities, moderator Sanjeev Mantri said, “Your worst time is the best time”. He elaborated that a man learns a lot of wisdom and experiences during his worst time, and great men take it as an opportunity to build their business around it. Talking about warehousing, he said, “It is the most critical auxiliary business that supports farming and agri marketing. We need 35 MT capacity in coming years, for which Rs. 19,000 crore is needed”. Sandeep said food products worth Rs. 60,000 crore are wasted due to lack of proper storage facility. “We need not just physical buildup like silos, but we also need to develop information highway, technical intelligence and expert staff. Apart from this, we need a real-time

AgriBusiness & Food Industry w November 2012

CoverStory

information system just like what we have in banking. For example, if you buy something through credit card, you get an instant SMS alert.” About the 10-year payment guarantees by FCI to the warehouse owners, he said it is still low. About controlling losses at warehouses, he said that his company succeeded bringing down losses from staggering 10 per cent to 0.61 per cent though the use of technology and right planning. On the Warehouse Development & Regulation Act (WDRA) accreditation, he said it is not fair as it gives accreditation to only warehouse and not the company or many warehouses at a time. “It is not logical”. Amith Agarwal emphasized on the importance of owning warehouses than controlling it on lease basis. “You need to have your own infrastructure to offer all services. In lease, leveraging is not good. Opening a warehouse is easy but managing it is too tough. I would also say PPP model is good as you leverage some costs through subsidy and other supports. But the biggest challenge is buying right land, at right place on right price. “It is a capital-intensive field, so government should give more subsidies.” Pranav Jhawar stressed on

Quality and Quantity (Q&Q) issue. “Warehousing is preservation of commodities. So it must be taken very seriously. But high investment, high running cost makes the whole business look less attractive. Here we need robust government support that takes care of all issues”. Gaurav Sekhri praised warehousing entrepreneurs as they have made it easy for firms to procure commodities from rural areas. But he added that technology control is a ‘must’ as the risk is too high. For this, many firms have adopted SAP system (Business Management Software) and other latest tools like forklift, stackers and conveyor belt. Talking about silos, he said, “They are good only for PDS or bulk storage. Quality control is not easy in it”. Aditya Bafna lamented that government is only concerned with paddy and wheat, and not other commodities like pulses. He also blamed fragmented landholdings for the lackadaisical attitude to investment in farming sector. Lamenting high movement charges he said, “Warehousing charges per ton grain is the lowest in India—US$1 per ton, while it is US$ 3 in China, and more than that in the US and Canada. But transporting cost is the highest in India. If this is controlled, costs can be minimized.

AgriBusiness & Food Industry w November 2012

3rd Session The theme of this session was “Seeds & Fertilizers”. The top questions that were brain stormed were how big is the market for hybrid seeds in India, what are the challenges in developing, producing & marketing hybrid seeds in India, how can we bring about innovation in the seeds & fertilizers market, does India have adequate seed processing facilities & what opportunities do they open up to the agro companies, what are the investment opportunities in agrochemicals space, and are companies in fertilizer manufacturing space looking for acquisitions. 4th Session The topic of this session was “Food Processing, Packaged Foods & Dairy Products”. The questions that were discussed included what are the emerging opportunities in Indian agri and food processing industry, what are the new scalable innovations in the Indian packaged foods segment, is ready-to-eat food segment gaining traction in India, how does the road ahead lie for the sector, what is the scope of value added products like desserts, puddings, custards, stirred yoghurt, sherbets, what can drive margins in the years to come, and how to improve production, processing & marketing infrastructure. 5th session This was VCCircle Special Panel on the topic of “Recognising the innovators & new wonders in Indian food & agri sector”. VCCircle highlighted the new & innovative successful entrepreneurs in Indian Agri & Food space who shared their entrepreneurial journeys. The speakers also discussed the new emerging categories and innovations that are changing the Indian food & agri landscape. n

AgriBusiness & Food Industry w November 2012

f&b

Dabur Juices

Success depends on understanding Indian taste and palette â&#x20AC;&#x201C; Preethi Chamikutty

ay back in the summer of 1997, when Indian consumers were still revelling in the delights of foreign colas and carbonated soft drinks, one company decided to bring to market juices, till then a virtually alien beverage category, at least in the branded space. For the first three years, consumer products marketer Dabur's decision to flag off the Real range of juices seemed a mistake. The juices found few takers, for various reasons. For one, juices are expensive, at least vis-a-vis fizzy drinks and the

array of unbranded alternatives available across the country (from sugarcane to coconut water). For another, most packaged juices have preservatives that kill the natural taste. But Dabur persisted. The growth was slow and sputtering. Along the way rivals entered the fray, Pepsi with Tropicana and Coke with Minute Maid being the two most notable ones. The difference, of course, was that for the cola majors juices was a very niche and small category, unlike for Dabur which was pinning its entire hopes in beverages on juices.

"Our success lies in understanding the Indian palette and being able to customize our product to suit a larger part of the market. We have as many as 20 flavours of juice," explains Praveen Jaipuriar, marketing head for foods at Dabur

AgriBusiness & Food Industry w November 2012

It took an entire decade for juices to begin making some serious contribution to Dabur's coffers. As theIndian middle class and its purchasing power burgeoned, and as health & wellness became an aspiration, juices started becoming visible in more urban homes. To put the acceptance in perspective with numbers, it took 10 years for the juices franchise to be worth Rs 200 crore, by 2007. Five years later, juice segment is a Rs 650 crore division for Dabur, second only to Dabur Amla hair oil, which was launched 47 years before the juice. "Our success lies in understanding the Indian palette and being able to customize our product to suit a larger part of the market. We have as many as 20 flavours of juice," explains Praveen Jaipuriar, marketing head for foods at Dabur. Pegged at Rs 1,100 crore, the juice market today is growing at 25% yearon-year. Nielsen figures sourced by Brand Equity indicate that Dabur was a leader by far for the six-month period from April to September of 2012 with a

f&b 52% share; Tropicana follows with 38%. The juices category is different from the ready-to-drink segment, which has brands like Frooti, Slice and Maaza. "When Dabur took a bet on pure 100% juices, the market was still predominantly ready-to-drink beverages, but today their bet is paying rich dividends," says Devendra Chawla, president of Future Group's Food Bazaar retailing format. As Dabur persisted, it also kept trying â&#x20AC;&#x201D; with innovations, not just in tastes but in packaging and in flavours. For instance, Dabur in 1997 launched its juices in 1 litre tetrapaks. "When we decided to launch juices we were very clear we didn't want to add preservatives; so we started looking for options to increase the shelf life of the product," says Jaipuriar. He adds that juices in tetrapaks can remain fresh up to eight months when not opened and don't have to be stored in a cool place if unopened. After building Real into a power

brand in juices on the platform of purity (no artificial flavours and preservatives), Dabur saw a sharper-focused opportunity within the health ambit. So it extended Real with the Activ sub-brand, a range that has no added sugar, has fibre added, and comes in vegetable plus fruit combos. The most recent addition to the juices basket is Real Burrst on the platform of refreshment, thereby taking on the fizzy drink labels. The communication for the new offerings is also clear-cut. For instance, Dabur chose Bollywood fitness figure Bipasha Basu to endorse the healthy range of Activ juices; the Real range that is targeted at moms and kids has real-life mother Sonali Bendre spelling out its benefits. Modern trade has provided a solid impetus to Dabur's juices business, thanks to the ability of organised retailing formats to provide visibility that translates into immediate gains. Before the arrival of modern trade, Dabur

pushed Real through unconventional outlets like bakeries and chemist shops; Jaipuriar says that even today neighbourhood panwallas stock Real juices. The next big trigger for juice brands is to get non-metro consumers to contribute more to sales. Growth of juice consumption in tier 2 and 3 cities is double the rate of tier 1 cities in the 100% juices category in Big Bazaar stores, points out Chawla. "The juice culture exists not just in Delhi or Chennai but also in small towns of Uttar Pradesh and Punjab. (That's because) modern trade is all over," says Homi Battiwalla, director, juice & juice drinks at Pepsi-Co. Battiwala adds that the next challenge is to bring down costs. "We are seeing a good growth story across India. It is now up to us to make juices affordable and relevant to more consumers." Courtesy: ET

AgriBusiness & Food Industry w November 2012

f&b

Clean-In-Place Systems

Necessity in the Food Industry – T. K. Radhakrishnan (DGM, SBU – Food Systems, HRS Process Systems Ltd.)

oods are natural media for growth of micro-organisms. The food processing equipment, therefore, demands frequent sanitization and cleaning to maintain hygienic conditions and prevent product spoilage. However, use of cleaning agents and detergents for scheduled repetitive cleaning of the equipment result in effluent discharge; and the consequent environmental hazards definitely cannot be overlooked. Such requirement coupled with limitations has led to the advent of Clean-InPlace systems which have become a necessity in the food processing industry. What is CIP? CIP stands for Clean-In-Place. CIP is a method of cleaning the interior product contact surfaces of pipes, vessels, process equipment and other associated fittings without disassembly. Cleaning liquids are circulated through the process pipe lines or sprayed over the internal surface of the equipment at required concentration, temperature and velocity for certain length of time. The parameters are specific to the nature of the foods and the design of the equipment. What is the procedure for CIP? CIP involves various cycles like pre-rinsing with water to remove the superficial residue, followed by rigorous cleaning with alkali or acid, and concluded by final rinsing with water to wipe out the residual chemical and food residue. Typical CIP temperature varies between 65°C to 85°C and typical cycle time varies between 10 mins to 20 mins, as per requirement.

What are CIP systems? Each equipment can be provided with an independent CIP module for a localized cleaning. Such local CIP setup involves dedicated tank for cleaning liquid, individual pump selected as per velocity requirement, separate heating system and devoted instrumentation. However, such localised modules involve high water usage, increased chemical usage, high energy consumption and excessive effluent volumes. Advancement to these local CIP systems is the centralised Integrated Automated CIP stations. Such systems can perform the CIP of the entire process plant from one source; and the cycle sequence can be automated with PLC logic and the operator can conveniently control and monitor the CIP cycles from a single work station. Advantages of CIP systems! Centralised CIP systems are advantageous in reducing the consumption of water, chemicals, steam and power; eventually limiting the effluent discharge. In such systems partially soiled water can be re-used in the pre-rinse step; cleaning solutions can be re-used by dosing only the required amount of chemical to maintain the concentration; a single heating system with a set of pumps and instrumentation can sufficiently perform the CIP of the entire pipe line and process equipment. Components of CIP System Typically, centralised CIP systems consist of multiple tanks for process water, pre-rinse water and cleaning liquids. Each CIP circuit consists of pumps, filters, heating system and a set of instrumentation and control. The CIP solution is heated in heat exchanger provided with steam and condensate setup. High capacity centrifugal supply

AgriBusiness & Food Industry w November 2012

pumps and self-priming centrifugal return pumps are provided to match the equipment CIP requirements. For small scale plants flow diversion plates can be provided to select the equipment to be cleaned. In large scale plants, which demand sophisticated automation, mix proof valves can be provided to isolate the CIP circuits from one other. The number of CIP circuits and the volume of the CIP tanks are decided depending on the plant area and the quantity of the equipment to be cleaned. All the CIP circuits can be controlled and monitored from a single workstation. Automated CIP stations also enable logging of the CIP data for troubleshooting and analysis. Integrated centralised CIP modules have become a necessity in the Food Processing Industry including pulp, beverage, dairy, confectionery sectors and so on. The economics of the cleaning process in conjunction with plant sanitation and strict hygienic requirement cannot be neglected any more. Food Safety standards like HACCP and ISO demand effective CIP procedures, to eliminate microbial contamination of the foods being processed, which might consequently lead to food poisoning at the consumers’ end. Eventually, the demand for properly designed and automated CIP systems is increasing by day; and installation of new stations or replacement of the older setup is no more an option that can be omitted. (Author Radhakrishnan is a senior member of HRS Process Systems Ltd. With an extensive experience of handling green-field and brownfield projects for food processing, he is heading the Food Systems BU at HRS Asia Division, providing end-to-end solutions for fruit pulp, beverage, vegetable processing, dairy and similar industries. He has been instrumental in new product development to cater to ever-growing demand of the food processing industry)

f&b

Del Monte Sketchup Contest

Participants use sauces to paint popular figures

t’s a saucy twist to the oft-quoted ‘the medium is the message’. The medium is ketchup, Del Monte’s, specifically, and the message, of course, is that you should consume more of it. Sketchup, a contest that combines food and art, is how the company’s choosing to get closer to its customers in a day and age when real-time engagement is the favoured strategy for brands that want to grow organically from the bottom. Del Monte, which came to India in 2007 through FieldFresh Foods, a joint venture between Bharti Enterprises and Del Monte Pacific Ltd wants to engage its customers through belowthe-line activation and by consolidating its distribution network. Sketchup required the contestants to draw, using Del Monte’s sauces – Tomato Ketchup, Zingo, Twango and Mustard Now. Started mid-August 2012, it has resulted in the number of Facebook likes going up by approx 60,000. Sketchup got 15.5 million viewers online and offline and 367 entries were received for the contest. Speaking about the initiative, Yogesh Bellani, Chief Operating Officer, FieldFresh Foods Pvt Ltd, said, “The contest was to engage with youth who are key influencers in the ketchup and sauces category. This year, our entire marketing budget will be spent on below-the-line advertising and getting the brand as close to the customer as possible. Brand is, after all, nothing but a relationship with its customer” In the second week of October, the company kicked off Quest’Italia 2012, which in its earlier edition was known as QuizItalia, a quiz that engages with the

school kids. This year Quest’Italia will reach out to 1,000 premium schools in eight cities, plus three million students through an online quiz. This quiz started on October 8 in Pune. Bellani says, “Children are the lead influencers in deciding snack and meal options. While the preference for various alternative cuisines is rising in India, parents are actively looking for healthier options. Through Quest’Italia, an edutainment initiative, Del Monte is innovatively engaging with these young potential consumers and enhancing their knowledge about Italian cuisine by sharing interesting insights and tantalising their taste buds.” LOOKING SOUTHWARDS Historically being a North-based business, Del Monte is now focusing on consolidating its distribution channels in Chennai, Hyderabad and Bangalore. “We have of late increased our efforts at on-ground consolidation. We want to be available in more and more locations,” adds Bellani. With its fruit beverage manufacturing facility in Bangalore, and Southern markets accounting for 50 per cent of the mango market, the company is focused on growing in the South. It also markets tinned fruit, pasta, olive oil and other culinary aids. With sampling paying off, the company is also getting aggressive in the sachet ketchup market. “We are planning a tiffin box-style pack of 20 sachets that will soon be launched. The packaging is under development,” says Bellani.

He said the sachet market was growing between 20 and 25 per cent annually. The company claims it is selling close to 30 million ketchup sachets every month. “Out-of-home consumption is on the rise with mushrooming quick service restaurant (QSR) chains, cafes and restaurants. With every samosa or sandwich, a sachet finds its way onto the consumers’ radar, a free advertisement and sampling exercise for us. In this way our B2B business is actually fuelling our retail business and word-of-mouth advertising,” adds Bellani. Del Monte caters to quick service restaurants (QSR), hotels, low-cost airlines and cafes in 90 cities across India. Their retail business covers the top 50-60 cities, largely through modern retail. In early 2012, Del Monte began exports to Maldives and Nepal and is currently evaluating opportunities in Sri Lanka and Bangladesh. It also services certain QSRs in the Asia Pacific region. The winter period is a big outof-home consumption time and the company sees almost 30-35 per cent spike in sales in its business-tobusiness sales and 25-30 per cent spike in retail sales. “There is festivity and general bonhomie in the atmosphere and hence the rationale for getting the right marketing engagement for the winters,” adds Bellani. This winter things get saucier – the company will launch a new range of mayo, dips and and sandwich spreads.

AgriBusiness & Food Industry w November 2012

FRUITS

Strawberry & Guava

India needs a robust policy to boost production & exports As India's share in global strawberry trade is minimal, coordinated efforts need to be taken to provide enabling technology to farmers. As strawberry crop can be cultivated in small areas requiring intensive care, it can become an additional source of income to small and marginal farmers

trawberry (Fragaria ananassa), an important fruit of the Rosaceae family, occupies an important place amongst small fruit plants grown throughout the world. Strawberries are highly perishable and globally traded in its frozen form. They are a rich source of Vitamin C and iron. It is a delicious fruit and on account of its rich aroma, it makes an excellent ingredient for ice-creams and jams. It is also used in producing purees, juice concentrates and preservatives. Strawberries are grown in many regions, with commercial production being undertaken in temperate and sub-tropical regions of the world. Global output Global strawberry production was 43 lakh tonnes in the year 2010, the major producing countries being the US, Turkey, Spain and Egypt. These four countries contribute to nearly 50 per cent, of which US alone contributes 30 per cent of the global production. Cyprus and the US, with 58 and 56 tonnes respectively have the

highest yields in the world. The other strawberry exporting countries include Spain, Egypt, Mexico and Netherlands, whereas Germany and Canada constitute the major importing countries in the world. The global trade of strawberries was valued at $5,320 million in 2009. India Scene In India, traditionally strawberries were cultivated in the hills of Himachal Pradesh, Uttarakhand, Jammu and Kashmir, West Bengal and Maharashtra. However, in recent years, cultivation has also been successfully undertaken in the plains of Maharashtra around Pune, Nashik and Sangli. The PanchganiMahabaleshwar (Satara district) region accounts for more than 85 per cent of the country's production, with an average annual production of around 18,000 tonnes. Varieties Important strawberry varieties cultivated in India are Chandler, Tioga, Torrey, Selva, Belrubi, Fern and Pajaro. Other varieties include Premier, Red cost, Local Jeolikot, Dilpasand, Bangalore, Florida 90, Katrain Sweet, Pusa Early Dwarf and Blakemore. Strawberries

AgriBusiness & Food Industry w November 2012

grow well in temperate climate, however, some cultivars can also be grown in subtropical climate conditions. Climate & Soil Daylight period of 12 hours or less and moderate temperature are important for the formation of the flower-bud. Each cultivar has a different day length and temperature requirement. Sandy loam to loamy soil with pH 5.7-6.5 is ideal for cultivation. Total export of fresh strawberries in 2010-11 was (8.4 tonnes valued at Rs 3.9 lakh). The export volume has been constantly decreasing from a high of 249 tonnes in 2008-09. India also exports processed strawberries in the frozen form or as syrup. Processed strawberry exports in 2010-11 were 29 tonnes. Export Destinations The major export destinations from India are UAE, Sri Lanka and Bahrain. India imported 18 tonnes of fresh strawberries on an average in the last three years. Since strawberries are highly perishable, they are packed in flat shallow containers of various types (cardboard, bamboo, paper trays, plastic etc.).

FRUITS Value added products They are also processed for making jam, jellies and syrup. Kissan, Mapro, Mother Dairy, Century, Malas, Manamaand Karnataka-based Ken Agri-tech are the leading strawberry processors in India. According to industry estimates, 20 per cent of fresh strawberries production is processed in India. Diseases The leaf spot and grey mould are the primary diseases affecting strawberries. They also need to be guarded against infestation by insects and pests such as white grubs, cutworms and hairy caterpillars, which reduce the overall production and cause Albinism (lack

of fruit colour during ripening), a physiological disorder in strawberries, which may also be caused due to erratic climatic conditions and high levels of nutrition. It results into strawberry becoming irregularly pink or turn white and at times even swollen. They develop an acidic taste and become less firm. Such Albino fruits are often damaged during harvesting and are susceptible to Botrytis infection and decay during storage. Strawberry as an ingredient, whether fresh or processed, presents immense opportunities to supplement the growing needs of food processing industry in India. Need for suitable policy In order to fully utilise the potential

of commercial strawberry cultivation, there is a need to develop suitable policy for area expansion, in a cluster based approach in potential regions. R&D and extension activities need to be undertaken to provide farmers high yielding planting materials. Efforts should be made to integrate post harvest and cold chain operations in such growing areas. As India's share in global strawberry trade is minimal, coordinated efforts need to be taken to provide enabling technology to farmers. As strawberry crop can be cultivated in small areas requiring intensive care, it can become an additional source of income for small and marginal farmers.

Guava

A fruit with great export potential

uava or Psidium guajava from family Myrtaceae, as it is scientifically known, is believed to have originated from Southern Mexico to Central America. The fruit is a rich source of fibre, vitamins A and C, folic acid and several other minerals and contains three times more vitamin C than an Orange. Currently, India is the largest guava producing country, however, it is also cultivated throughout tropics and sub tropics, normally as a horticulture crop, with global production largely concentrated in India, Pakistan, Brazil, Mexico, South Africa, the US, Thailand and other countries. Guava is well adapted and can be grown throughout India. Traditionally the fruit is grown in Uttar Pradesh, Bihar, Maharashtra, Orissa, West Bengal, Chhattisgarh, Andhra Pradesh, Madhya Pradesh in more than 2 lakh hectares with a total production at around 25 lakh tonnes. Guava occupies 3.5 per cent of the total fruit crop area in the country and is one of the major fruits though it is considered as a minor fruit in global trade.

The top three states, UP, Bihar and Maharashtra contribute nearly 40 per cent of the total production in India. Owing to a good demand for the guava processed products, India has started exporting various forms of guava, as fresh or dried fruit, pulp, juices, nectars etc. to various countries. It is widely used in various forms such as jams, jellies, ice creams etc.

Major varieties cultivated in the country are Allahabad Safeda, Sardar (Lucknow 49 or L-49), Lalit (Pink flesh), Anakapalli, Banarasi, Arka Mridula, Nagpur Seedless etc. Allahabad Safeda and Sardar are widely cultivated due to the commercial acceptability and demand in export markets. Planting season starts from June

AgriBusiness & Food Industry w November 2012

FRUITS

Fruit ripening is a psychological process: U. Surendran

ipening is a psychological process involving the induction of a variety of metabolic process, making the fruit sweeter and more palatable. Plants send unique ripening signals using hormones and most of the processes are enzymatically regulated and catalyzed. The process of fruit ripening is primarily regulated and catalyzed. The process of fruit ripening is primarily regulated by a gaseous plant hormone called ethylene (C2H2). The ethylene is produced and released by rapidly growing plant tissues. It is released by the growing tips of roots, flowers, damaged tissue and ripening fruit. Hence, the act of picking matured green fruit can cause a wound which

activates ethylene production and induce the ripening process. The phytohormone (ethylene) is said to regulate the expression of several genes involved in fruit ripening so as to modulate the activity of various enzymes involved in the process of ripening. New enzymes are made because of this ethylene signal and they catalyze reactions to alter the ncharacteristics of the fruit. These include hydrolases to help break down chemicals inside the fruits, amylases to accelerate hydrolysis of starch in to sugar, pectinases to catalyze degradation of pectin. In simpler words, the action of these enzymes causes the ripening responses. Chlorophyll is broken down and sometimes new pigments are made so that the fruit skin changes colour from green to red, yellow or blue. The degradation

of starch by amylace produces simpler sugar. The breakdown of pectin results in a softer fruit. Acids are broken down so that the fruit changes from sour to neutral. Besides, these enzymes break down large molecule organic molecules into smaller ones that can be volatile (evaporate into the air) and we can detect as an aroma. However, these phenomena will be observed only in climacteric fruits such as mango, apple, banana, guava, pineapple etc. These fruits are able to continue ripening after being picked, a process accelerated by ethylene gas. Non climacteric fruits such as watermelon, strawberries and oranges, do not ripen after harvest.

to July and can continue to December based on the rainfall conditions of the region. Fruits can be harvested after 2-3 years from planting and usually the peak production occurs after 8-10 years. Guava is available in abundance during the peak months of July to August in North India, November to December and from March to April in the other parts of the country. Except May and June, Guava can be found in the markets in one or the other States in India.

forms such as pulp and juices. After the introduction of multi fruit processing infrastructure in India by many private entrepreneurs, processed guava product exports increased initially, however, has witnessed a slowdown in the recent years. In 2010-11, fresh or dried guava exports were valued at Rs 0.63 crore which has come down from the Rs 3.04 crore in 2007-08. New Cultivation Practices Though India is the largest producer of the fruit, its contribution in the global trade of fresh or processed form, is minuscule. During 2010-11, India exported processed guava products worth Rs 16 crore compared with Rs 18 crore in 200809. Traditional cultivation and crop management of guava were marred by serious issues due to pests, low productivity and large canopy required to manage the orchard. The Central Institute of Subtropical Horticulture in Lucknow has developed

a new method of Guava cultivation using high density planting with meadow orchard that allows shorter plant height, better light interception and ease of cultural operations such as pruning of the branches, pesticide sprays, harvesting etc. Meadow orchard is a modern way of cultivating fruits by use of small trees having modified canopy. While traditional guava orchards can accommodate up to 300 plants in one hectare of land, meadow orchard can accommodate up to 5000 plants. Moreover, guava plants in meadow orchard start yielding in the first year of planting itself where as traditional plants start from the third year. It is important to note that to achieve good results by this method, farmers need to train and prune the orchard at regular intervals. Guava, though is a simple crop requiring minimal resources, has a long way to reach the market size and export potential of other fruits such as apple, mango and grapes. n

Export India exports fresh or dried guavas to West Asian countries such as United Arab Emirates, Bahrain, Qatar, Oman, Yemen, Kuwait etc, the Netherlands, United Kingdom, Indonesia among others, but the export value has come down in recent years as most of the fresh fruits are either consumed within the country in fresh form or processed to various

(The author is a scientist at Centre for Water Resources Development & Management, Kozhikode, Kerala)

To subscribe AgriBusiness & Food Industry

Call : 011-64521572 or E-mail : mediatoday@vsnl.com

AgriBusiness & Food Industry w November 2012

MARKETING

Shades of Marketing

‘Healthy Foods’ brands fail to lure consumers? — Amrita Nair-Ghaswalla

ealth and wellness foods are not going down well with Indian consumers, despite marketers making a play for them. Mayank Shah of Parle Products insists taste scores over calories and it is a fallacy that increased consumer awareness and growing health concerns will ensure health foods grow at a healthy rate. “The health and wellness (H&W) category of foods is primarily consumed by choice, not compulsion. The primary reason is taste. If it is not tasty, it will not be sold,” says Shah. Consumers may cut down on the frequency of consumption, but will not give up on taste, he declares. Mayank Shah is the group product manager at Parle Products, which owns biscuit brands such as Parle G, Monaco, Hide n Seek and Krackjack. He insists health-conscious consumers are not necessarily looking for products with additional benefits and nutrients, and are turning down the market's many offerings. Though earlier estimates had suggested that demand for H&W food would rise due to the growing incidence of lifestyle diseases, wider availability and communication and marketing initiatives, the story has not gone according to plan in India. “Yes, child nutrition is a major issue here, but we don't really understand the issue in all its magnitude. Many people in Orissa, the central part of the country and the East don't have two square meals a day. Given this scenario, how can we talk about lifestyle diseases?” asks Shah. Nay Sayers The H&W category, as a trend, has had an over-arching influence on the development of the food and beverage (F&B) industry in India.

According to a research report by the Tata Strategic Management Group, the H&W F&B sector in India was estimated at Rs 16,000 crore in fiscal year 2011 and is expected to grow at nearly 22 per cent reaching Rs 36,000 crore by fiscal 2015. The report classified H&W products into three dominant sections. The better-for-you segment comprises lowcholesterol, edible oils, 0 per cent transfat snacks and biscuits, slim milk, curd, ice creams and diet colas; functional or fortified category, which comprises iodine-fortified salt, iron-fortified biscuits, health food drinks and breakfast cereals fortified with micro-nutrients; and the natural category, which is 100 per cent natural fruit juices and pickles without preservatives. Concerned about lifestyle diseases, urban consumers are showing increasing preference for low-fat, low-sugar, low-carbohydrate and low-cholesterol products, it says. Several corporates too have jumped onto the bandwagon. In the biscuits category, Britannia launched its fortified tiger biscuits with vitamins and iron and a ‘Health Kit’ called Nutrichoice Health Starter Kit. The company is attempting to

The health and wellness (H&W) category of foods is primarily consumed by choice, not compulsion. The primary reason is taste. If it is not tasty, it will not be sold,” says Shah. Consumers may cut down on the frequency of consumption, but will not give up on taste-Mayank Shah, Parle Products

FoodIndustry Industryww November griBusiness &&Food November2012 2012 26 AAgriBusiness

convert all its products to trans-fat- free and position them as both enjoyable and healthy. ITC placed its Sunfeast Marie Light Oats variety in this category, as the earlier orange and Original versions have reportedly done well. United Biscuit came up with its popular brand of Mcvitie’s Digestive, in the whole grain fibre category. Parle too launched Digestive Marie. Similarly, the probiotics market saw some action. Nestle launched probiotic dahi in 2007 under the Nesvita brand, to counter the stiff competition from local players, such as Gujarat Co-operative Milk Marketing Federation, which offered a range of probiotic lassis and ice creams under its Amul brand. The same year, the National Dairy Development Board launched a probiotic curd, b-Activ, under the Mother Dairy brand. When the Danone-Yakult joint venture entered India in 2009, Yakult’s products started appearing on shelves. Three years on, some of these ‘healthy’ products are unavailable in the market. A report by Euromonitor International has also alluded to the slim sales in the category. “Between 2002 and 2007, India maintained a commendable Compound Annual Growth Rate (CAGR) of 12 per cent, but the H&W market remained underdeveloped. Though India is the second most populous country in Asia Pacific, it accounts for only 4 per cent of the region’s total H&W food and beverage value sales,” the report adds. Parle Products too attempted its own H&W offerings, but learnt the hard way. It had to withdraw Monaco Smart Chips, a baked product. The company had tried to fuse together the ‘do good’ (with Marie and glucose biscuits) and ‘feel good’ (indulgent snacks) categories for Monaco Smart Chips, which super star Aamir Khan endorsed. However, barely a year into launch, the product was off

MARKETING the shelves. Wrong Choice Market research agencies had forecast that the H&W market was set to grow at 25 per cent and expected to reach $7.5-$10 billion by 2015. The market was expected to grow in urban centres with its established modern retail channels. But Shah insists that “it is too early to invest in the segment.” In a country that faces the dual challenges of nutritional deficiency and obesity, a number of food players have been introducing healthier variants of their existing products or launching a completely new range of products on the H&W platform. Shah insists most have got the story all wrong. “Take a look at what happened to Pepsi. In the last five years, it has lost out to Coca-Cola. With its excessive focus on health, Pepsi is far behind. There is nothing wrong with that (health), but one needs to understand the category they are in. If you completely ignore the category code and forget about the taste, the consumer is not going to accept your

ideas about looking after his health,” he adds. Pepsi Max, PepsiCo's no-sugar cola, had to be discontinued less than a year after launch. Citing another example, Shah says, “Look at what happened to Saffola Zest (a baked snack). It was the launch of a health offering and unlike many other snacking options. The health benefits were promised. They made it fortified, but the taste was horrible. It bombed. The company had to withdraw the brand.” Stating that the Saffola Zest case turned out to be “a good learning for Parle never to compromise on taste,” Shah adds, “We cannot afford to say ‘thoda kum taste chalega’ (a little less tastier is fine). The consumer does not buy your theory.” The Indian market has not yet “evolved to a stage where we have the consumer spoilt for choice,” Shah adds. “That time might come, in 25-30 years. We need to understand that these are a few pockets we are talking about, not all India. Incomes have to grow here. In

the US, food contributes very little to the total spend. We still have to evolve to that level here.” Ssedentary lifestyles are only a feature of the metros and are not the real India, Shah claims. “The balance 90 per cent of India has yet to experience these luxuries and the varieties and choices on offer,” he says. Though biscuit majors such as ITC and Britannia have been developing healthier products with several options, Shah argues that healthier biscuits can be successful if manufacturers focus on taste. Insisting that in the case of Parle, there is absolutely no compromise on taste, Shah adds, “Though we have several big brands, and ParleG is the world's largest selling brand in terms of volume, our only limitation is in terms of assortment. There has been a clear focus on growing each category rather than introducing new variants.” Courtesy: Hindu Business Line

AgriBusiness & Food Industry w November 2012

SHORT STORY

The Man Who Took 15 Urchins to McDonald’s – Anwar Huda

‘W

hy, I love my family, so much so that I do not have time to love others?’, Charlie asked himself while sitting alone on a weather-beaten bench in his neighbourhood park, his eyes recording all the painfully beautiful movements of over a dozen urchins playing and dancing in the mud and wet grass there, enjoying the free bounty of Nature. Pushp Vihar, like a lung for South Delhi, is spread across several hundred acres and dotted with innumerable trees of all types providing shades and wind to several thousand flat dwellers who live there as Central Government employees. Suddenly, the old man, as if signaling utter love for Mother Nature, folded his old-style, huge ‘Stag’ mark umbrella with curvedhandle, and allowed soft rain to embrace him. He lapsed into his terrible past, days of penury and deep struggle for his education. It was a time when men like Ganna Juicewala, a painter and a cycle puncture-maker helped him with frequent dole-outs of small but vital money, so that he might continue with his study and get a high-profile job to make them proud. Sometimes, he had to sit with the juicewala and wait for an hour until a customer came and bought a glass of juice. Then, he would get ‘8 aana’ to survive for the day. God was kind to him, and he became a proud owner a business. As he rose in his career, he never forgot those who helped him reach there. But today, he mathematically studied his fortune and the quantum of blessings that Almighty poured upon him, and he poured upon his family. He could not remember how many times he took his children

when they were children, and now his grandsons and grand daughters to highend restaurants where he had to treat money as mere paper to let them splurge in expensive delicacies and related fun activities that were there. ‘Well, that is not a sin, but….’ he whispered and felt a strong chill of guilt scurrying through his heart and mind. He remembered his old days when he valued ‘8 aana coin’ more than his car he values today. As if memory by association, he also recalled a research study on the negative effect of fast food on rich kids which he read recently. Why rich kids? Because those, who badly need fats and carbohydrates, do not have means to eat even a bowl of rice and sabzi twice a day, and those, who do not need this, are burdened with the problem of plenty and are frequent customers of fast food chains like McDonald’s. True that the Government is slowly waking up to the fact and also implementing necessary measures for eateries and schools to follow. But who cares? The thin but agile figures of the playing street children and their painful but natural smile accompanied by the dance of the drizzle connected Charlie to his original shelf so powerfully that he, defying his weak torso, sprang up from the bench and walked briskly towards the kids, who were until now almost unaware of his presence. His approaching towards them sent no delight as he might assume, but they felt apprehension lest the old man may shout or slap them for playing in the park, that is usually visited by the affluent class. They stopped playing and turned silent. The old man stood in front of them, and for the unfortunate kids, he seemed like the Sphinx. After a few moments of dramatic, severe and tense silence, Charlie screamed like a little boy, ‘Can I play with you?’

AgriBusiness & Food Industry w November 2012

Half an hour later, all the eyes of the staff and the rest of the guests at Saket McDonald’s were focused on the same kids, chaperoned by Charlie who all had just entered, making the shiny floor slightly wet. The Unit Manager rushed towards the old man. ‘Who are they, Sir?’ ‘They are my other grandsons’, Charlie said with a fabulous smile. Then, he turned towards the cashier and commanded in his baritone voice, ‘Take their order!’ This is information age, and even street kids know what are pizzas and burgers. So, they happily, hungrily placed orders for 15 jumbo combo Burgers, and left no seats empty. Staring at the kids from a corner, Charlie, for the first time in life, realized the true purpose of life as a human being. The joy--celestial in beauty, earthy in nature-almost haunted him for a few moments and he feared to collapse due to the extreme ecstasy and agony of that joy. Small rivulets of tears were scaling down his cheeks gently. Charlie had always been a shrewd businessman, but he had a heart of a human. Taking out the cash from his four-decade old wallet, his tongue, as if on its own volition, was telling the Manager, ‘If nature does not make distinction between the boys who have too much too soon and the children who have brought tears of joy in my eyes as you see, how could a man reserve his compassion for his kith and kin alone…..? Dear Friend, if a cool breeze could come from nowhere in a sunny, humid evening, why not mercy……? ‘The food is beautiful when it is shared’, Charlie told the staff and some of the guests who all were looking inspired by this extraordinary simple act performed by this old man with falling tooth. (Written on 1st & 2nd August, 2012, in New Delhi)

AgriBusiness & Food Industry w November 2012

BRANDING

Local Taste

Regional preferences force F&B brands to tweak products

hree years ago when, for the first time in its history, beverage maker PepsiCo tweaked the taste of its Pepsi cola brand with higher fizz in Andhra Pradesh to challenge rival Thums Up's dominance in the state, it was an unheard-of move. The jury is still out on whether it paid off well for PepsiCo or not, but increasingly makers of consumer goods, from biscuits and packaged snacks to beverages and even hair oil, are customising products to cater to regional preferences. Reason: they are either unable to challenge regional brands or capture market share in smaller but captive markets. "The next wave of growth in packaged consumer products will come from community-specific and regional-focused efforts. Many companies are working closely with us in this direction," says Devendra Chawla, president (food & FMCG) at the country's largest organised retailer Future Group, although he declined to mention specific examples. PepsiCo Foods' Rs 1,000-croreplus national snack brand Kurkure is now selling locally relevant variants like Mumbai Chatpata, Bengali Jhaal and South Spice Mix mainly in captive markets like Maharashtra, Kolkata and Chennai, respectively. India is among the few markets where the New York-headquartered PepsiCo has regionalised its brands to such minute detailing. Says Vidur Vyas, PepsiCo's marketing director - foods: "Making Kurkure regionally relevant is core to our strategy. It

helps us gain share in key markets." PepsiCo has been facing stiff competition from local brands like Balaji and Garden in the west and Haldiram's in the north. It has been losing share to such regional biggies in the Rs 7,500 crore salty snacks market, a category it dominated till four years back. The country's largest biscuit maker Parle Products challenged West Bengal stronghold brand Bisk Farm by launching its Top crackers in the state last year in the buttery segment, and managed 15-20% share in general trade within the year. Enthused, Parle rolled out products like Fulltoss Jhalmuri Kolkata Bhel in that region. Says Mayank

Shah, group product manager at Parle Products: "Locally relevant products have helped us not only help in getting a foothold in new markets, but they are also great testing grounds." British firm United Biscuits, maker of McVitie's, says it has begun customising its products for different

FoodIndustry Industryww November griBusiness &&Food November 2012 2012 30 AAgriBusiness

cities. The digestives segment is growing more rapidly in markets like Chennai; indulgence products like cream biscuits sell better in Punjab and Delhi. "Regional differences are becoming quite stark now...the metros especially have a life of their own, and are almost like unique countries," says Jayant Kapre, president, UB. The biscuits category, at 12,000 crore, has been growing at 10-12%, but is fraught with challenges like low margins and price-sensitivity. Future Group which rolled out its own brand Ektaa two years back, under which it only sells commodities catering to regional tastes, is looking to add more variants. It has been selling rice in variants like Red Matta from Kerala, Sona Masoori from Andhra Pradesh, Govind Bhog from West Bengal and Basmati from Punjab at its Big Bazaar and Food Bazaar stores under the Ektaa umbrella. Future Group's Chawla says: "India is like many countries put together as taste varies every 200 km; besides, the size of each region is large enough to launch region-focused brands." The retailer expects Ektaa to be a 100-crore brand within two years. Dairy giant Amul, which sells butter, ice-cream and cheese nationally, says its regional products like fermented milk drink Shrikhand has captive markets like Gujarat and Maharashtra. The same is the case withAmul Basundi, a traditional Gujarati dessert made from concentrated milk. Says R S Sodhi, MD of Gujarat Cooperative Milk Marketing Federation (GCMMF), maker of Amul: "The regional products don't have a huge national market but they are meeting our expectations and those of consumers as well. They complete our portfolio."

AgriBusiness & Food Industry w November 2012

SWEETS

Chitale Bandhu

Pune’s iconic sweets maker sells 3,000 KG Bhakarwadis a day! Prices are increasing but demands too: Srikrushna Chitale

very city has a sweet tooth. Chennai has jangiri and mysore pak, Kolkata gets high on rosogollas, Delhi gorges on rabdi jalebi and Pune is famous for its pedhas. One place that has been whetting Pune’s appetite for sweets and savouries (namkeen) over 62 years is the famous Chitale Bandhu. Chitale generates a more profound recall value for its Bhakarwadi, a crisp and spicy Maharashtrian snack which has a long shelf life. Set up in 1950 in a 500 sq. ft. shop, Chitale Bandhu has had a successful journey with two company-owned shops in the city’s vibrant localities of Bajirao Road and Deccan Gymkhana. Besides, there are eleven franchises spread across the city through which the brand sells. The Chitale brand also exports its namkeen, especially bhakarwadi, to the US, Israel and Singapore. With an annual turnover of about Rs 200 crore and 2,500 to 3,000 customers shopping on average a day across two shops, the Chitale brand has been a part of celebration for many of the city’s households. The menu at Chitale is as rich as its heritage with over 60 different sweets and 40 namkeen. However, it is their bhakarwadi which sell like hot cakes. Three attendants serve the customers on the bhakarwadi counter, where it is often normal to find queues. Started in 1970, bhakarwadi was an instant hit. “In 1972, we installed machines to give shape and size to bhakarwadi as the queues started increasing,” says Srikrushna Chitale, proprietor of the Bajirao Road branch. Today the bhakarwadi sells about 3,000 kilos a day. In the early 1970s,

it was about 300 kilos. People are very critical to Chitale’s business, which boasts a 300-strong workforce. The success of the Chitale brand is that it has kept pace with the times and with people’s aspirations. Be it introducing machines to sort and cut different products or be it the computerised billing system that the shop introduced in 1985, the Chitales have ensured that they remain in vogue even as they try and maintain their traditional class. “Even as we mechanised there was no question of compromising on quality. It was the first time that any mithai shop introduced computerised billing in Pune,” adds Chitale proudly. The family, which also sells the popular Chitale milk separately, works on a joint-divide concept. “We are a joint family… but we are a joint-divide family. In joint families, it happens that internal household problems come into the business. That is something my grandfather, B.G. Chitale, saw really early. He told us, ‘Don’t live

AgriBusiness & Food Industry w November 2012

together.’ He said everybody should have their own house,” says the younger Chitale. “We are all living in nuclear families … but live close to each other. Any business problem, we all sort it out together.” The women of the household advise on product development and product innovation. “Ours is a kitchen-driven business … so their expertise always comes in handy,” he says. Both shops have a modern customer management process. This is evident when the security at the gate hands a grey plastic card to the customer at the entrance. This is a programmed card which can store up to 40 products in its memory. So, a customer buying at different counters can simply hand over his card to the attendant who enters the quantity purchased. This, when presented at the billing counter, eases the bill payment process and saves time. It is, however, not a sweet run for the Bandhus always. The business has its own set of challenges. The products

SWEETS

Srikrushna Chitale

sold are highly perishable in nature and require robust inventory management. “Everyday we monitor our production. If yesterday there was rain, we just curtail the production because the previous day’s production might continue today. We manage demand and supply on daily basis,” he adds. Other than for milk, which gets supplied through his uncle’s factory in Bhilawdi near Sangli, getting good raw materials is a challenge. “We have a tough time in ensuring that we procure good quality raw material. Pesticides and fertilisers have also adversely impacted the quality of raw materials,” he rues. Inflation does not seem to have dented customer’s propensity to throng Chitale Bandhu, however. “Our business, on an average grows at 10 per cent and

typical margins are 13-14 per cent. There have been no changes. Five years ago we used to sell 10 per cent of cashew mithai than what we sell now. Cashew prices have shot up but demand has also gone up. We feel people have a lot of money.” However, consumption of sweets and savouries is not restricted to festivals. “People consume mithai even without any occasion. It might not be as much in the North. Here, there are very few people who consume one kilo but there are many who buy a quarter of a kilo,” says SR. He learnt much of his business by observation. “When I was in VII standard, I used to sit in the shop and observe. It was very easy for us as we

stayed above the shop when we started. But my son has to acquire the knowledge after graduation. He has to go to the factory,” he adds. The Chitales do not plan to professionalise the company as they feel it robs them of their independence. “We do not even want to go private (limited) because it takes away certain executive powers that might be required to run our business successfully. The young people do not get enough of a free hand to run the business then,” he says.

FDA to educate people about adulteration in Khoya & Sweets

he Food & Drug Administration (FDA) department is going to educate and spread awareness among masses regarding purity of food and milk products during festivals like the forthcoming Diwali and on the other hand, an instant kit to determine purity of milk has become popular in KAVAL cities. An instant impurity detection kit is helping consumers in various cities check adulteration in 'khoya' and sweets. These kits are helpful and quick compared to laboratory tests which take days to

confirm if sample is adulterated. Food safety officials are promoting consumers to use the kits or other timetested methods to detect on the spot if the khoya or mithai has impurities. But, since these kits use solutions such as tincture of iodine and sulphuric acid, other traditional methods are also being employed. “A few drops of tincture of iodine can test the quality of khoya. If it turns bluish, it is adulterated. Sulphuric acid also rule out adulteration," said an official. Adulteration causes serious risk to human

health. Presence of harmful starch, urea mixed milk, caustic soda, 'ararot', artificial sweetening chemicals, nonapproved colored sweets (like heavy metals incorporated malachite green, etc) and unhygienic conditions lead to acute gastritis, serious diarrhoea, dysentery, dehydration, kidney inflammation, etc.

AgriBusiness & Food Industry w November 2012

CUISINES

India’s rich cuisines need to be mapped and chronicled – Reshmi Dasgupta

e are sitting on a treasure trove in India and are largely unaware of it. Like most things in this country, our cuisine also awaits ‘discovery’ and documentation by foreigners, for validation. Call it the zealousness of a recent convert or epiphany, I am bedazzled by Indian food and amazed by the skills of its top exponents. Yet for all the Indians who

venture into the far corners of this country to explore our cuisines, there is not enough food for thought—the books. After reading Chitrita Banerjee’s Eating India, a rare but by no means extraordinary account of one established writer’s culinary peregrinations, I am left hungering for more. Particularly since for every assertion she made, I could think of contrary ones I had heard in my family. That only underlined the plethora of individual stories connected to even the most mundane

food items and the most well-known customs. Admittedly, there are books on food in the most parts of India, but each region has barely one or two. There is room for dozens as all palates are unique. India’s cuisine remains to be exhaustively mapped and chronicled from several angles. First, we need those broad, sweeping strokes, elaborating on the ‘cuisine classique’ aspect, as the west has done on French food, for instance. For that, one needs scholarship as well as taste. Then there are the countless ‘petite cuisines’ for want of a better phrase. What our grandmothers (and maybe a few grandfathers!) cooked, the murabbas and achars made by the ladies etc. And all the tales that swirl around them – like the ‘marriage’ of mustard seeds before making kasundi! Sadly, our forebears rarely wrote down their recipes and food philosophies, preferring instead to go by word of mouth, pun intended. But more recently – say the generation now in their 70s and 80s did. My mother has handwritten and even some type-written and circulated by friends. And these are by no means rare. Every family has some, and individually they do not amount

AgriBusiness & Food Industry w November 2012

India’s cuisine remains to be exhaustively mapped and chronicled from several angles. First, we need those broad, sweeping strokes, elaborating on the ‘cuisine classique’ aspect, as the west has done on French food, for instance. For that, one needs scholarship as well as taste anything more than a family resource. Collectively though, they form an important narrative with historical relevance for they point to regional availability and practices. That brings us to the third aspect: connections. For all that we are an ancient civilisation, we are still to identify all that makes us one people. Food is a profound tool for it needs no language in order to be embraced. And the home-cooked genre is its most warmly welcoming avatar. There is, however, hardly enough information on these individual family cooking traditions for cross referencing. Social networking sites, blogs and the internet itself can be binding agents –cyber cornflour! – but curiosity has to bring those ingredients together. Without making knowledge even more of a burden for our kids, an imaginative module for older kids can be devised, to stoke culinary curiosity— showing how food has been influenced by history, family, religion, even caste. That would make them look at food with different eyes. Epiphany came late for me, which is why I’ve now become a culinary chauvinist. I hope others will ‘convert’ earlier and validate our cuisines in our own eyes – and those of the rest of the world – so that we will not have to depend on outside confirmation! Courtesy: ET

agriaffairs

Organized Retail: Advantages & Bottlenecks — Sanjeev Chopra

ecently, I was invited to make a presentation on “Organized Retail : Advantage Farmers, Industry and Consumers” in an event held by Assocham, and deliver a valedictory address to the third International Water Summit organized by the Indian Chambers of Commerce, both in New Delhi. This column is based on the interactions at these forums. In the first seminar, I gave an overview of the farm sector, the recommendations of the Saumitra Chaudhuri Committee Report, the initiatives taken by the Ministry with reference to the National Centre for Cold Chain Development, the Vegetable Initiative for Urban clusters and the PPP IAD (public Private Partnership for intensive agricultural development) under RKVY, and the policy regime which supports linkages from farm to fork. The main thrust of the argument was that the proposition of Indian agriculture

being a gamble with monsoons and markets was still valid – though some monsoon proofing had been achieved on account of interventions through the National Disaster Relief Fund, which now had very clear norms – both on trigger points and the scale of assistance. However, in spite of all the policy pronouncements on market issues, the farmers were still at the receiving end

– both when production fell because of poor monsoon, and in cases of glut in a good year. Organized Retail had an important role to play in integrating the supply chain, and ensuring that the farmers got a good share in the consumer’s rupee. However to posit that all the farmers’ woes would be sorted out because of retail, including FDI in retail was not a valid proposition. The real benefits to the producer would come because of reforms in agricultural marketing which was the main stumbling block, not just to organized retail, but also to farmers organizations trying to consolidate and sell the produce directly. In fact the Saumitra Chaudhuri report was clear that there was not just one ‘silver bullet’ to resolve all the problems of the farmers. (The author is Joint Secretary & Mission Director, NHM & NMMI, Union Ministry of Agriculture)

AgriBusiness & Food Industry w November 2012

INVESTMENTs

Venture Capital & Private Equity

Eyeing food services sector aggressively

he food services sector is expected to see a 50 per cent rise in investments this year to about $750 million, as food suppliers and retail companies look to scale up business and stay competitive by tapping the large potential of the domestic market. “Most of the investment is now going towards supply chain management and building cold-chain storage infrastructure. Last year, about $500 million was invested in the sector,” said Mahendra Swarup, President, India Venture Capital Association. Of the total investments of $750 million in 2012, about $165 million has gone into purely front-end retail, such as FMCG, food and beverage firms. It is estimated, that each such food company, with at least 10-15 outlets, will have to invest $7-10 million on the back-end alone. Investors said the “huge rise in interest” is because growth in the sector has been “phenomenal” for the past few years. With quick-format restaurants posting the sharpest rise, growth has been about 30 per cent, year-onyear. So, a three- to seven-year long investment is expected to give at least two-and-a-half times increase in returns. “With many funds focussing on IT and e-commerce firms, this has been an underserved industry till the last few years, especially the backend infrastructure,” an official from a PE fund said. Added Swarup: “The idea is to

build a hub-and-spoke model for halfprepared food. There is huge demand for this where the kitchen area is small, such as food courts in malls and office complexes.” With real-estate costs posing a challenge, such a model becomes tough for the smaller food firms — which are the target for such funds, as they help in scaling up. Among recent investments, World Bank arm IFC has reportedly put in $6.5 million into food-supply chain firm Snowman Logistics. Other similar investments include Swastik Roadlines (India Equity Partners) and JICS Logistics (IL&FS Private Equity) and Staragri Warehousing and Collateral

Last year in August, India Equity Partners invested $35 million in Delhi-based South Indian restaurant chain, Sagar Ratna. Before that, ICICI Venture had invested $33 million in Devyani International, which operates franchisees of Pizza Hut, Costa Coffee and KFC. Most of the investment is now going towards supply chain management and building cold-chain storage infrastructure. Last year, about $500 million was invested in the sector

AgriBusiness & Food Industry w November 2012

Management Ltd (IDFC Private Equity). Demographic edge “We're bullish on the consumer sector, for Baring it's a core area. Given the demographics and vast population of this country, this will continue to attract a lot of capital,” Keshav Misra, Partner, Baring PE Partners India said. Baring is investing about Rs 500 crore in FMCG firm Marico along with GIC, Singapore. Other reports have indicated

that New Silk Route Partners may invest in South Indian vegetarian restaurant and fast food chain — Adiga, while Sequoia has already invested $5 million in Pune-based kebab and wraps chain — Faaso's. Last year in August, India Equity Partners invested $35 million in Delhibased South Indian restaurant chain, Sagar Ratna. Before that, ICICI Venture had invested $33 million in Devyani International, which operates franchisees of Pizza Hut, Costa Coffee and KFC.

Retail

News Walmart trains farmers for quality produce

s Wal-Mart Stores Inc ramps up its operations in India, it needs to find more farmers like Yogesh Todkari. His acre of cauliflowers is big, leafy, and a deep shade of green, thanks to modern irrigation and quality nutrients and seeds - all provided by the world's largest retailer. Most farmers in India, though, don't meet Wal-Mart's standards. "They train us and assist us right from when the crop is sown to when it's harvested. They give us a higher price than the market for better quality," said Todkari, 29, who works the field in western India with his elderly father. Investing in farmers to help them improve quality and efficiency, and getting around the army of costly middlemen, will be key to whether global chains like Wal-Mart and Tesco Plc succeed where local operators have failed to make a profit. It will also be a test of whether India's politically fraught decision to allow in global supermarkets in order to modernise its food supply chain proves to be the right one. "We plan to procure as much as we can via direct farming so the procurement from traders in local markets is as little as possible," said Krishnakant Reddy, who is in charge of direct farming in south and west India for Wal-Mart, which already operates in India through 17 wholesale stores. Under the reforms, foreign retailers must source at least 30 percent of their goods from local, small industries. India recently let in global supermarkets, despite heavy political opposition, in the hope of improving the supply chain and bringing down wastage and costs in a country where one-third of fresh produce rots and food inflation remains persistent.

Wal-Mart, by far the most aggressive foreign supermarket operator in India, expects to open its first store selling directly to the public in 12-18 months, and aims to turn a profit in 10 years, something it hasn't managed in China after 12 years. To get there, Wal-Mart plans to sign up 35,000 farmers over the next three years, up from the 6,700 it has now. Fresh produce accounts for about 30 per cent of Wal-Mart's sales in its wholesale outlets in India. Wal-Mart must buy in small batches from small plot-holders in a country where more than 80 per cent of farms are under 2 hectares. That means contracting with thousands of farmers will still yield only a few thousand tonnes. In North America, retailers like Wal-Mart can buy from a few hundred farmers who provide hundreds of thousand of tonnes of produce between them. "It's going to be a huge challenge and requires a lot of work on the ground," Reddy said during a recent visit to Narayangaon, a few hours from the city of Pune where Wal-Mart runs one of its seven Indian farm procurement centres. Cutting Out the Middle Man Wal-Mart is trying to learn from the difficulties of Indian chain operators such as Reliance Industries and Shoppers Stop, most of which rely on middlemen after struggling to establish a strong direct farm supplier base. Skirting the entrenched network of middlemen, who opposed the government's decision to allow in supermarkets and includes both traders and local markets run by state Agricultural Produce Marketing Committees (APMCs), isn't easy. States require all farm produce to be sold through government regulated markets, and impose registration and

AgriBusiness & Food Industry w November 2012

transaction taxes on buyers, in addition to fees charged by middlemen operating in the markets. In some states, including Karnataka, buyers can purchase directly from farmers, but still have to pay taxes and fees both to the APMC and middlemen. In Maharashtra, where Narayangaon is located, Wal-Mart must truck the produce it buys from Todkari about 20 minutes away to an APMC market and pay fees before delivering it to stores. "The APMC fee is actually a tax for doing nothing and that is detrimental to direct farming," said Raj Jain, who heads Wal-Mart in India and like the Confederation of Indian Industry, a large trade group, wants to get rid of the APMC

system. Traders were among the most vocal opponents of letting in foreign retailers, a move whose impact will be dulled by allowing states to opt in or out. Under populist pressure, most states plan to keep global operators out, at least for now. "The government is thinking of cutting us out without even thinking about the families who depend on this. We facilitate trade in these markets. Thousands of jobs across India depend on this," said Rajesh More, a trader at the APMC market in the neighbouring village of Manchar. There are an estimated 50 million small traders involved in the farm-tostore agriculture business across India, according to the Confederation of All India Traders. The Congress party-led coalition government in New Delhi defended its decision to allow in foreign retailers as benefiting farmers and reducing dependence on the middlemen network. Congress is also the ruling party in Maharashtra.

Retail

News Retail employees may get better salary due to FDI

oreign Direct Investment (FDI) in retail may have created a lot of fracas in the industry, but it is likely to have a positive impact on the salaries of people employed in the sector. Industry players feel that the overall perks and compensation could increase by 15-25 per cent from current levels. Industry experts say that the packages paid by Indian employers have to be at par with the foreign players or else the sector could see a rise in attrition rates. At present, attrition rate in the sector is at 25-30 per cent and is usually due to low packages, poor working environment and odd timings. “Retail is going to be a more organised and established industry in the country, and it works in various formats such as hyper mart, super mart and cash-andcarry. FDI in retail will create competition to retain talent. As a result, they will have to pay more and provide a better working environment,” said Sunil Goel, Director

of executive search firm, GlobalHunt. Though the sector has created employment across levels and can absorb a large pool of grass root level resources, FDIis bound to have a negative impact on front-end jobs. Foreign players would bring technology-based expertise with them which would not require more people, said B Venkataramana, Chief People Officer, Landmark Group India, a part of Dubai-based retail chain. This means, there would be less requirements across profiles such as sales, supply chain executives, security personnel, attendants,

in-shop supervisors, floor managers and warehouse supervisors. “People employed at the storelevel are bound to reduce by 30-40 per cent. Retailers will be forced to pay fat salaries to less people. However, it will bring in good human resource practices and employers will demand niche skills,” he said, on the sidelines of the India Retail Forum. “People move with a brand name and professional environment. They would like to associate themselves with a Walmart instead of some AC Sharma kind of store,” said Ketan Vyas, MD (India) of German-based shoe care company Woly. However, according to Indian Staffing Federation (ISF), apex body of the flexi staffing industry, FDI has the potential of creating around 4 million direct jobs and almost 5-6 million indirect jobs over the next decade.

Rentals spike up in smaller cities as retail giants launch projects

on-metros are likely to witness hectic competition in the cashand-carry business. Timing its launch to the festival season, French retailer Carrefour has opened its third store in Meerut, while its German competitor Metro Cash and Carry is opening doors in Amritsar. Walmart already has a presence in these two cities. The French retailer had been cautious in opening stores in India, but things picked up post the Government’s decision to allow foreign direct investment in multi-brand retail. Sources said the company was keen to enter front-end retail trade. It now operates only in the cash-and-carry space where the Government allows 100 per cent FDI. Carrefour plans to have over 3 lakh sq ft of space under retail umbrella by 2013. “With the Agra (store) to be opened some time next month, Carrefour would

have covered a key catchment area in the cash-and-carry business in North India,” sources said. Similarly, Metro’s Amritsar store will complement its presence in the North, a key area for sourcing and cash-and-carry retail trade. Walmart, in a joint venture with Bharti Enterprises, already operates such stores in Meerut and Agra. Metro Cash and Carry, which operates 10 stores in India, has presence in Jalandhar and Ludhiana. Industry experts say that demand for logistics and warehouse space in nonmetros has gone up significantly. According to a recent CBRE report, the availability of large land parcels at relatively low cost, connectivity to multiple markets across States and industrial clusters have turned some tierII and III cities as favoured destinations for the development of logistics parks and warehouses. As a result, rentals have

surged across most micro-markets. Anshuman Magazine, Chairman and Managing Director, CBRE South Asia, said, “The rising level of activity in logistics and warehousing space across metros as well as tier II cities is testimony to the growing confidence of domestic and international retailers in India. There will be significant reorganisation in warehousing industry and network planning by organisations in the country.” Interestingly, players other than cash-and-carry, such as Swedish furniture chain IKEA, are also looking at non-metros. Its senior official, Jessica Anderen, recently met Commerce and Industry Minister Anand Sharma. Sources said IKEA would be looking at stores spread over 1 lakh sq ft. Such huge land tracts are available only in non-metros or cities adjoining cities such as Mumbai or Delhi.

AgriBusiness & Food Industry w November 2012

Corporate

News

International Foodtec India 2012 Mumbai

HRS showcases innovative food processing solutions

HRS Process Systems Ltd. (HRS PSL), part of HRS Group, UK participated at the International Foodtec India, a satellite exhibition of Anuga Foodtec in Cologne (Germany), in Mumbai during September 11 – September 13, 2012. HRS showcased information on their range of products like Unicus® Scraped Surface Heat exchanger, Hygienic Piston Pump, Aseptic Filler, HRS ParaDice, Evaporators and systems for Food / Fruit pulp / Beverages / Aseptic processing as well as solutions for processing dairy, nutraceuticals and health supplements.

“Food processing requires the most hygienically trusted equipments and HRS’ expertise assures the most up-todate solutions by ensuring sustainability with a competitive edge. Our aim was to reach to a much wider spectrum of food and beverage processing companies through this expo, and the exhibition with its immense footfall was a great platform to exchange information on our innovative and value added food processing solutions”, said V Gokuldas, Managing Director, HRS Process Systems Limited. The event attracted close to 5000 visitors in three days and HRS has generated interest in their UHT sterilizer, PHE based pasteurizer for diary industry as well as for beverage processing and fruit pulp processing lines. HRS has over a decade of experience in supplying state-of-the-art solutions

AgriBusiness & Food Industry w November 2012

for heating, cooling, pasteurizing, sterilization, evaporation and aseptic processing of various fruit pulps / beverage for the food / fruit / beverage industry. Established in 2003, with headquarters in Pune, HRS PSL has three regional offices in Delhi, Baroda and Hyderabad along with the group companies in UK, Spain, Germany, USA, Peru and UAE. HRS PSL offers effective heat transfer solutions for an extensive range of processing applications across a spectrum of industry sectors like Chemical, Petrochemicals/Oil & Gas, Pharmaceutical, Oil & Fats, Fertilizer, Cement, Steel, Power, Agro Chemical, OEM (Original Equipment Manufacturers), Paint, Paper & Pulp, Textile, Automotive, Sugar, Distillery & Breweries, Dairy, Food & Beverage, among others.

Corporate

News Govt to remove restrictions to promote food parks

he government is planning to revamp its existing schemes of food parks to promote food processing industries in the country. It plans to remove restrictions over the number of food parks and cold chains inviting more entrepreneurs interested in setting up food parks and cold chains. "In 11th Five-Year plan, we had allocated only 30 food parks out of hundreds of application received. It was difficult selecting the projects. We have now proposed to relax norms for food parks to accommodate more projects. For this, we have asked the government to allocate more funds under this scheme," said food processing industries secretary Rakesh Kacker. The ministry proposes to run two parallel schemes in the 12th Five-Year plan (2012-2017), one for food parks spread over 50 acres and other for 30-acre parks. The government is likely to allocate of Rs 14,000 crore for ministry of food processing industries in the 12th Five-

year plan with a significant amount for the development of food parks. "We will reduce the subsidy amount and split it into capital subsidy and interest subsidy. At present we are giving a subsidy up to 50% of the project cost to the maximum of Rs 50 crore for food parks and Rs 10 crore for cold chains," he said. He said that foreign direct investment in multi-brand retail will push up food processing activities in the country. "People will set up more food processing units and cold chains in view of foreign direct investment in supply chain. The relaxation in rules will lure more investors in this industry," he said. He said that the progress was little slow in the 11th Plan due to issues over land acquisition and project financing. "But now things have been sorted out. Banks are coming up readily to finance projects and state governments are helping park developers in land acquisition," he said. Under the central government's Food Parks scheme, the government has

approved 15 such parks in the first and second phase, while another 15 was approved in the third phase. "We have given final approval to 13 projects so far out of which 4 are in advanced stage of completion. These include one each in Hardwar (Uttaranchal), Nalbari (Assam), Jangipur (West Bengal) and Srini (Andhra Pradesh)," he said. The food parks are likely to have spinoff impact on the local economy by engaging local farmers and suppliers. "They will also generate jobs for local community creating a self-sustaining ecosystem," he said.

Govt extends ban on export of edible oils Export of

he government today extended the ban on export of edible oils until further orders, but exempted foreign shipments of edible oil in branded consumer packs with a ceiling of 20,000 tonnes. â&#x20AC;&#x153;Prohibition on export of edible oils has been extended till further orders,â&#x20AC;? said a notification issued by the Commerce and Industry ministry. Export of edible oil was initially prohibited for a period of one year with effect from March 17, 2008, which was extended from time to time and was presently valid up to September 30, 2012. But, the government provided exemption for export of edible oil in branded consumer packs with a ceiling of 20,000 tonnes for one year till September 2013.

fish oil continues to be free, it added. Export of edible oils has been banned as the country is heavily dependent on imports. D o m e s t i c production of edible oil is just around 7 million tonnes, against the annual demand of 17-18 million tonnes. The shortages are met via imports. In 201112, the country imported 9.78 million tonnes of edible oil.

AgriBusiness & Food Industry w November 2012

F&B

News Coco-Cola registers 15% growth

overall Eurasia and Africa region where volume grew 11 per cent in the quarter. “Growth in the quarter was led by India, up 15 per cent, Middle East and North Africa, up 22 per cent, Russia, up 7 per cent and South Africa, up 7 per cent,” it said. Still beverages volume growth in India was driven by strong performance in juices and juice drinks, including Minute Maid Pulpy and Maaza mango juice drink, Coca Cola said. The company said sparkling beverage growth in India was driven by a strong system focus behind brand Coca-Cola as well as customised integrated marketing campaigns centered on music and sports. During the quarter, brand Coca-Cola volume in India grew 34 per cent and Sprite grew 15 per cent, with balanced

growth across its portfolio of package sizes, the company said. The Coca-Cola Company reported worldwide volume growth of 4 per cent in the third quarter, the company said. In the third quarter, the company’s net revenues stood at $12.34 billion, up 1 per cent compared to $12.24 billion in the same period previous year. Commenting on the company’s performance Muhtar Kent, Chairman and Chief Executive Officer, Coca-Cola Company said: “We realised growth in the quarter across all five of our global geographic operating groups, despite continued volatility in the worldwide economy. We have been able to crack the calculus for growth in this environment.”

Kellogg to again localize its Indian portfolio

innovation in the category; the flavours chosen were hardly apt for the cereal category. "It was localisation for the sake of it," says the consultant. Adds Debashish Mukherjee, partner and vice-president at global consulting firm A.T. Kearney: "The breakfast cereal category works more for consumers with global palettes... so whether localised variants will be a growth driver for this category will depend on how consumption patterns evolve." Since Kellogg's first attempt at localisation, the convenience foods market has exploded. The breakfast segment alone is estimated at Rs 600 crore, growing at 18-20%, with Kellogg's the leader with a roughly 55% share. Others angling for a slice of this segment include PepsiCo, Marico, Bagrrys, Dr Oetker, Britannia and McCain. Like for most global consumer goods companies facing weak sales in developed markets, for Kellogg Co, too, India and China figure amongst the top priority markets in which consumption of convenience foods is growing.

everages major Coca-Cola today reported a 15 per cent increase in growth in sales volume in India for the third quarter ended September 28 on the back of strong demand. The company, which reported 4 per cent increase in its income at $ 2.31 billion for the quarter, said its growth in India was driven by sparkling and still beverage segment. “In India, we gained volume and value share in total NARTD (nonalcohol ready-to-drink) beverages as well as in sparkling and still beverages in the quarter, with both sparkling and still beverage volume growth of 15 per cent,” Coca-Cola said in a statement. India was one of the major markets that drove the company’s sales in the

ereal-maker Kellogg India is taking a second shot at localising its India portfolio, more than a decade after a launch of coconut and elaichi variants of its cornflakes had met with lukewarm response. The maker of cornflakes, Chocos, Special K and Heart-to-Heart oats is rolling out variants like pudina, tomato and garam masala for its oats range to begin with; it is likely to follow the launch with localised variants of its other products as well, two officials with direct knowledge of the development said. "Kellogg is betting big on this launch... it wants to directly take on PepsiCo's Quaker, which has begun selling oats in localised variants," one of the officials said. The Indian arm of the $13-billion world's biggest cereal maker joins the growing number of multinationals being forced to localise and adapt to

local tastes. India is the only country where Yum Restaurants' owned KFC and Pizza Hut sell a 'thali' concept; McDonald's aloo tikki burger remains the burger-and-fries chain's largest selling product in India; and US sandwich chain Subway India sells hot subs -- in almost all other markets it sells its trademark product cold. But not all localised products work. McDonald's steamed veggie muffins, for instance, didn't. And PepsiCo's totally localised innovation - non-aerated nimbu pani Nimbooz - is not too visible on shop shelves, at least in the non-summer months. About 14 years back, Kellogg had rolled out a breakfast cereal sub-brand called Kellogg Mazza in variants like elaichi, coconut and rose, but the product fizzled out; marketers say this was because of the lack of a marketing push. A marketing consultant who did not want to be named attributes Kellogg's lack of success with its early efforts at localisation with its inability to match the

AgriBusiness & Food Industry w November 2012

F&B

News ITC set to become No. 1 in FMCG sector

n August when ITC cornered a share of more than 28% in cream biscuits in urban India as per Nielsen data, it was a wake-up call for the largest cream biscuits maker Britannia. Although Britannia did not share data with ET, numbers obtained from an industry official suggests that ITC may have nosed ahead of Britannia in this segment by roughly 1 percentage point, at least for the month of August. However, both ITC and Britannia declined to confirm this (Britannia did not respond to an email with questions on the threat from ITC). Biscuits is just one fast-moving consumer goods (FMCG) category in which the cigarette, hotel, paper and packaging giant has garnered scale and share. Within foods, salty snacks and noodles are two categories in which ITC is making rapid gains; and, in personal care, the Kolkata-headquartered marketer is making headway with its shampoos, skin care, and soaps. This combined assault within the consumer space - along with contributions from fragmented categories like stationery - helped ITC's noncigaretteFMCG business clock a top line of Rs 5,545 crore in fiscal year 2012, with foods bringing in 60% of those revenues. More importantly, the company has hit near breakeven levels, according to a recent Credit Suisse report. "Despite being relatively new in all these segments, we have been witnessing rapid growth

and have established significant market standing across most categories," says ITC Ltd executive director Kurush Grant, who heads the FMCG business that includes cigarettes, packaged foods, personal care products and stationery products. If, in cream biscuits, ITC is taking the fight to Britannia's labels like Bourbon, Treat and Pure Magic with its own battery of brands like Dark Fantasy, Choco Fills and Dual Dream Cream, in noodles it has thrown down the gauntlet at Nestle's Maggi. As per the recent Credit Suisse report, ITC's instant noodles brand Sunfeast Yippee! has gained double-digit market share within two years of launch, and is the second largest brand after Maggi. Nestle has now started to offer aggressive discounts and incentives to retailers on Maggi to protect its market share. Although a Nestle India spokesperson termed the initiative as a dealer engagement programme, a recent report by Kotak Institutional Equities said

Nestle's discount scheme for Maggi is possibly the first in 10-15 years. Credit Suisse also points out that in salty snacks, ITC had gained a 15% market share in June with Bingo! potato chips, a business that has broken even in five years. PepsiCo is the leader in this business, and its spokesman said the company has strengthened its market position over the past year with the help of 25 new product and variant launches, including Baked Lay's, Aliva Multigrain Waves, Kurkure Puffcorn and Kurkure Monster Paws. In personal care, the Credit Suisse report says ITC has gained a 6% share in the highly competitive soaps market within four years of launch and 2% in shampoos. Manish Jain, a financial analyst withNomura Equities Research, says the gain in market share in soaps is impressive, considering the presence of established players like Hindustan Unilever and Godrej Consumer Products. "The shampoo performance has been somewhat underwhelming, although the anti-dandruff segment is growing faster. To correct this, ITC has re-launched various varieties," adds Jain. Devendra Chawla, president, Food Bazaar category at India's largest retailer Future Group, says the success rate of ITC' FMCG brands is better than the norm in the FMCG industry in which 70% of the launches don't make the cut after the first two years. "ITC has shown the courage to launch multiple products in a year unlike most other FMCG companies that might launch at best 2-3 products annually," says Chawla.

AgriBusiness & Food Industry w November 2012

F&B

News India one of the top markets for Starbucks, says Howard Schultz

tarbucks expects its Indian business to eventually rank among its top five markets, CEO Howard Schultz said as the coffee chain entered one of its last untapped markets. "India represents one of the most significant opportunities that we have in all of Starbucks. India should be one of the largest markets in the world for Starbucks. I would say one of the top five over time," he said. Schultz is son of a US soldier who grew up in public housing in New York. He added that a lot of thought had gone into setting Indian prices at levels that are competitive, a significant departure in business practice for a brand that has globally positioned coffee drinking as an elite experience. "We don't want price to be a barrier. People are surprised, but this will give us a competitive advantage in the market." A cup of coffee at Starbucks will cost anywhere between 95 and 155

depending on the size while iced coffee and blended beverages will be 115-200. These prices are at a moderate premium to that of largest local rival Cafe Coffee Day, which has around 1,350 coffee chains. It sells a cup of coffee at around 80 and cold coffee and beverages for less than 150. "While Starbucks has maintained its premium positioning, such pricing will come with its own set of negatives. India is a price-sensitive coffee market. Starbucks generally sells a coffee cup for $3 in most markets while India's price at $1.5 will be considered premium," said a

Eat fruits & vegetables to remain happy and optimistic: Study

ating at least eight portions of fruits and vegetables every day will keep you more cheerful and optimistic about the future, scientists say. The researchers analysed surveys involving 80,000 Britons, which included questions on their diet and general feelings. Each person was

given a score between 0 and 10 based on their satisfaction with life. The study found that those who ate around eight portions of fruit and vegetables a day had an average score that was one point higher than people who did not eat any. The link remained even when people's exercise levels and overall diet - both of which can influence mood - were

senior official in a rival company. "We welcome Starbucks and feel the entry will help grow the coffee market in India," said K Ramakrishnan, president (marketing) at Cafe Coffee Day. Starbucks, whose Indian unit is a joint venture with Tata Global Beverages, plans to open two additional stores in Mumbai next week - before coming to New Delhi early next year. Indian Coffee Market These plans appear to be less ambitious than the ones announced earlier this year. At a press conference announcing the joint venture, officials had talked of investing Rs 400 crore over time and establishing 50 stores by the end of calendar 2012. accounted for. Although it is not known exactly how fruit and vegetables improve wellbeing, they contain chemicals known as antioxidants, which are thought to reduce stress levels. Recently studies have found that children who eat more fruit and vegetables are less at risk of depression in later life. Andrew Oswald, of the Warwick University's Department of Economics, which conducted the research, said: "This study has shown surprising results. We know that fruit and vegetables carry a lot of antioxidants and those protect us against attacks on the body. "But how that works through into our minds and emotions, researchers have no idea."

To subscribe AgriBusiness & Food Industry

Call : 011-64521572 or E-mail : mediatoday@vsnl.com 44

AgriBusiness & Food Industry w November 2012

F&B

News Wipro to invest $25 million in JSM Corp

ipro founder Azim Premji has agreed to invest $25 million (about Rs 130 crore) in JSM Corp, which runsHard Rock Cafe and California Pizza Kitchen restaurants in India. The investment will be through Premji's venture capital and private equity fund Premji Invest, three people close to the development said. Jay Singh, co-founder and executive director of JSM, refused to comment. "As a policy we do not comment on financial related matters of the organisation," he said. JSM Corp will use the funds to expand and building brand, an investment banker privy to the company's plans said.

The plan is to have 100 outlets by end of FY14, the banker said. JSM currently has 12 outlets and its portfolio includes Shiro lounge, Hard Rock Cafe and California Pizza Kitchen. Sources also said Yes Bank was the advisor in the deal with Premji Invest. Private equity investors are active in the Indian restaurant space. "The trend of investments in eating out joints has gone up," Jaideep Ghosh, partner with KPMG, said. "As India progresses demographically where its affluent and middle class population drive consumption, restaurant business is set to soar further. From a private equity investor's perspective it makes for a compelling investment case to put money in a business that has steady cash flows and is not dependent on economic cycles," he said. Recent PE investments in the restaurant space include TVS Capital's investments in Om Pizza, which runs Papa John's pizza chain, and Indian Cookery, which operates the Yellow Chilli brand of restaurants of chef Sanjeev Kapoor. Early

this year, New Silk Route invested in South Indian chain Adigas Fast Food. Other deals in the space include, Everstone Capital's $20-million investment for a 45% stake in JS Hospitality Services; Sequoia Capital's $5-million investment in Pune-based kebab and wraps chain Faaso's; India Equity Partners' $35-million investment in Delhi-based South Indian restaurant chain Sagar Ratna; and, ICICI Venture's $33-million investment in RJ Corp's Devyani International, which runs Pizza Hut, Costa Coffee and KFC chains across India. The biggest investment till date in hospitality sector by a private equity investor remains New Silk Route's $75-million investment in Cafe Coffee Day in 2010.

Verbeek Hatchery gets EU-AI Certificate Verbeek Hatchery, headquartered in Lunteren, the Netherlands, is the second poultry business in the European Union to be officially awarded with compartmentalisation. The EU-AI certificate implies that the entire hatchery production complex, including the subsidiary Verbeek Poultry International, its vaccine production site VPI, the vaccine hatchery, and five vaccine egg supplier companies are jointly recognised as a compartment. The facilities have met extremely strict hygiene requirements and can therefore be treated as a compartment in case of an outbreak of Avian Influenza (AI). Deputy agriculture minister Henk Bleker presented the certificate to Pieter Kruit, general director of Verbeek Hatchery. At the moment, the Netherlands are compartmentalised into 20 zones. Should AI be discovered in one of

them, strict transport regulations will become effective. The compartmentalisation for Verbeek implies that its facilities are exempt from these requirements â&#x20AC;&#x201C; and business can continue as usual. The Scottish breeder Ross was the first to be recognised as a separate compartment. Others have applied for compartmentalisation, but withdrew their application as the requirements were considered too strict. Verbeek Hatchery has officially met the requirements since October 2011.

AgriBusiness & Food Industry w November 2012

Health & Nutrition

News Herbal foods too have side effects, say doctors

hen a corporate executive recently landed in the emergency ward of Mumbai’s Hiranandani Hospital with palpitations, doctors first checked his heart. When tests ruled out any cardiac problem, they found an unlikely culprit: too many cups of green tea. “After talking to him, we realised he had had over a dozen cups of green tea within the span of a few hours,’’ said cardiologist Ganesh Kumar. Some brands of green tea contain caffeine, an agent that boosts heart rate. “Green tea is supposed to a natural agent to control blood pressure, weight, etc, but everything has to be consumed in the right measure,’’ Kumar added. As the natural revolution gains in popularity, doctors believe it’s time to sound a health warning, especially to patients already on various allopathic medications. Studies have shown seemingly harmless supplements can have dangerous side-effects when consumed in excess. The healthy spice, garlic, is a natural way to keep blood pressure in check, but it may not always be the right dose for those taking blood-thinning pills; it could worsen bleeding disorders. Side Effects *Garlic can keep BP in check but can worsen bleeding disorders. *Saw palmetto, extract of berries,

control hair fall but can cause hormonal side-effects. *Chondroitin, derived from hooves of cattle, helps osteoarthritis patients, but could worsen bleeding during operations. *Ephedra (somlata herb) can help asthma & bronchitis patients, but raise BP. *Glucosamine has chemicals that mimic insulin but may cause hypoglycaemia (low sugar) during surgery. Counter View The jury is now out on the apparently beneficial and harmless herbal supplements. While doctors say they could be triggering off adverse reactions in the body as side-effects when consumed in excess, nutritionists smell a ploy. “There are no side-effects to natural supplements. It is all a ploy of the pharmaceutical industry to check the growing popularity of natural herbs and supplements,’’ said nutritionist Naini Setalvad. Precaution According to nutritionist Shilpa Joshi, people should always inform their doctors about the supplements they are taking. “We take natural or Ayurvedic stuff thinking these are ghar ka nuska, but if taken with other medications and in high concentrations, it can be potent. If we consult doctors on such issues, the

Pistachio reduces damage caused by acute stress: Study

cientists say eating a handful of pistachio nuts a day can help reduce the damage done to the body by acute stress. Experts at Pennsylvania State University have claim that the nuts help lower blood pressure and heart rate in difficult situations. In a study participants were given a variety of healthy diets, some

containing pistachios, some without. The scientists then measured their subjects’

AgriBusiness & Food Industry w November 2012

doctor can change the dosages of either his medication or give the right amount of supplements that is needed for the patient concerned.’’ Most Indian patients have their grandmother’s nuska packed in their medicinal chest, and use haldi as a disinfectant or ginger as an antiseptic. Orthopaedic surgeon Dr Sanjeev Agarwala, who heads the department at Hinduja Hospital, “We are more comfortable with natural supplements than with proprietary (branded) drugs because of our heritage that is steeped in ayurveda. But there is little scientific evidence to support this belief.” Fenugreek seeds, for instance, are the easiest way to control the release of sugar into the bloodstream. But, as nutritionist Shilpa Joshi has found among diabetic patients, the tendency is to be liberal in using the methi seeds. The latest edition of ‘Alternative and Complementary Therapies’ has pharmacist Catherine Ulbricht from Massachusetts General Hospital spelling out the potential dangers of mixing herbal supplements and therapeutic agents; their interaction can diminish or increase drug levels. “‘Natural’ does not equal ‘safe,’” she said. “If something has a therapeutic action in a human body, this substance can also cause a reaction or an interaction,” she added.

cardiovascular responses, first as they took a challenging mental arithmetic test and again as they immersed their feet in cold water. The largest drop in blood pressure was associated with eating about 1.5 oz of nuts a day. "Daily events, such as a tight deadline or public speaking can increase blood pressure,” said Dr Sheila West, lead author of the study published online in the journal Hypertension. "These results are significant because they show that physiological responses to stress are affected by the foods we eat,” she noted.

Health & Nutrition

News Soft drinks, even diet colas can cause severe health complications: Study

hose taking soft drinks daily are at 20 per cent higher risk of getting heart disease than those who don't, a new study suggested. Also, people who drink diet sodas every day have a 61 per cent higher risk of bursting a blood vessel. What is alarming is that even children, who consume 40-70 ml of soft drinks a day, may put on 3-5 kilos every year. "Youngsters don't drink water but readily gulp down colas. They have to be told that what you do when you are a 10-year-old shows on your heart when you are 40 years old," said heart surgeon Dr Ramakanta Panda of Asian Heart Institute, Mumbai. And that for Mumbai's doctors is a worrying factor, as children in Indian cities are getting increasingly hooked on to soft drinks. "The intake could have gone up to 100 ml a day now," says Dr Anoop Mishra, an endocrinologist with Fortis Hospital in Delhi, who conducted the study for Delhi-based Diabetes Foundation three years ago. But what makes soft drinks such a health hazard is that taking a cola a day is equivalent to having seven to eight spoons of sugar at a time, says Dr Shashank Joshi, an endocrinologist with Lilavati Hospital in Bandra. The carbohydrates or sugars only provide empty calories without any

nutrition, merely adding to one's weight. "It's a well-documented fact that sugary soft drinks lead to high cholesterol, high blood pressure and diabetes," he said. The latest study from Harvard School of Public Health in Boston shows sugary drinks hit men's heart hard. The diet and health habits of 43,000 men were followed from 1986 to 2008, showing that 3,683 men who had sugary beverage every day had coronary heart disease in comparison to those who didn't. Another study from the University of Sydney found that children who drank one or more soft drinks each day had narrower arteries in the back portion of their eye- a factor linked to higher risk of heart disease and high blood pressure. Doctors believe it's time society adopted a hard stance against soft drinks. Dr Panda is tying with an NGO to create

Mango can help to cut flab: Study

ating few mango varieties could help you lose weight, but only if you eat the skin you normally throw away, Australian researchers have claimed. The researchers have advised that eating the wrong variety of this fruit could have the opposite effect.

University of Queensland scientists have found the skins of the common Irwin and Nam Doc Mai varieties contain compounds that inhibit the formation of human fat cells. On contrary, the skin of the Kensington Pride mango has compounds that promote fat cell growth, according to AAP report. Mike Gidley said lab tests involved exposing human fat cells to extracts from the skin and flesh of three varieties. He said there was a long way to go, but the findings opened up the possibility of a supplement that could help fight obesity. “The next stage is to identify the useful

health awareness in school. Dr Joshi believes it's time to ban soft drinks from homes and schools, while Dr Mishra says soft drinks' consumption should be restricted to once or twice a week. Dr Jagmeet Madan, who heads SNDT University's Nutrition College, said that children are discerning enough to understand when told that empty calories found in colas is bad. "We can tell them that there are 'sometime foods' and 'everytime foods'. It is only when 'sometime foods' like colas become 'everytime foods' that the problem arises," she added. A paper published in this week's American Journal of Nutrition provides a heartening observation. The article by researchers of University of North Carolina at Chapel Hill hints that a person's overall diet may decide just how harmful is the soft drinka-day routine. It found that people who had a prudent diet (freshly cooked meals) had lowest risk of heart diseases in comparison to people who eat processed food (including meat) along with soft drinks every day. "One should physically work the effects of a sugary drink off," added Dr Mishra.

molecules in the peel that inhibited fat cell formation,” Gidley said. Mango contains a variety of phytochemicals and nutrients. The fruit pulp is high in prebiotic dietary fiber, vitamin C, diverse polyphenols and provitamin A carotenoids.In mango fruit pulp, the antioxidant vitamins A and C, Vitamin B6 (pyridoxine), folate, other B vitamins and essential nutrients, such as potassium, copper and amino acids, are present. Mango peel and pulp contain other phytonutrients, such as the pigment antioxidants – carotenoids and polyphenols – and omega-3 and -6 polyunsaturated fatty acids.

AgriBusiness & Food Industry w November 2012

Commodity

News

FCI wants Rs. 14,300-cr for rice procurement

ood Corporation of India (FCI), the government's nodal foodgrain procurement agency, has sought an additional Rs 14,300 crore during this fiscal for rice procurement in the 201213 marketing season. As per FCI, paddy procurement, that commenced this month, has reached around 5 lakh tonnes in the first week of October. The government has set a target of procuring 40 million tonnes (MT) of the staple in 2012-13 marketing season (October- September). "FCI has asked for an additional sum of Rs 14,300 crore for the current fiscal as the agency expects to procure 24 MT of rice in the current kharif marketing season against its estimate of 17.5 MT," a senior Food Ministry official said. The agency explained that of the total 34.06 MT expected to be procured in the kharif marketing

season, which lasts from October to March, around 10 MT of the staple would be from the Decentralised

Procurement (DCP) states and the rest 24 MT would have to be procured by FCI, the official added. A DCP state procures and distributes foodgrains itself and the foodgrain subsidy is released by the Government of India on a quarterly basis after distribution of foodgrains

by the state government. FCI in the 2012-13 budget estimate had projected 17.5 MT of rice to be procured in the kharif season. Now with the additional 6.56 MT of rice, the cost would come to Rs 14,300 crore as the estimated acquisition cost for the staple is about Rs 2,182 per quintal, the official said. The acquisition costs includes the minimum support price (MSP), which is Rs 1,250 per quintal for common paddy and Rs 1,280 for grade A, as well as storage, milling and the cost of transporting the grain. The Food Ministry's estimated fund requirement for the procurement of foodgrains and other items is Rs 42,880 crore. With the new addition, it would go up to about Rs 57,200 crore, the official added. In the last marketing year, the government had targeted to procure 35 MT of rice and has nearly reached that level.

ICO’s new market development plan may help growers

he International Coffee Organisation’s (ICO) new market development strategy with a focus on agronomical practices is expected to help growers. The shift is for value creation and differentiation instead of traditional promoting coffee consumption strategy. The new strategy has been professed by Andrea Illy, Chairman of ICO’s Promotion and Market Development Committee, and is currently in circulation among the ICO-member countries for their approval. “Illy’s proposal is to help small producers (growers) get higher income by helping them to improve their agronomical practices,” Jawaid Akhtar, Coffee

Board Chairman, said. Akhtar represented India at the recentlyconcluded ICO’s International Coffee Council (ICC) meet in London. In the draft plan, presented to the International Coffee Council (ICC), Illy has kept in mind the development of the coffee sector in the 10 years since the crisis of low prices in 2001 and ICO’s role. He also recommended that the committee’s efforts should continue, with renewed objectives and a holistic multi-stakeholder approach be planned. Illy has presented two-pronged approach for coffee promotion and market development. First is to promote value through quality, health and sustainability. Possible actions such as measuring the impact of the main value components on coffee consumption.

AgriBusiness & Food Industry w November 2012

Continuing existing knowledge dissemination programmes, such as the healthcare professions–coffee education programme (HCP-CEP) and stimulating new programmes. Second is to support producing countries in de-commoditising coffee through programmes to increase income, with a particular focus on small growers, with the ICO acting as a facilitator and knowledge provider.

Commodity

News

India negotiates with Iran for wheat exports

ndia is negotiating with Iran for exporting two lakh tonnes of wheat in December and 10 lakh tonnes annually for the next three years, Food Corporation of India said. "Negotiations are being held with Iran government for export of 2 lakh tonnes of wheat in December 2012 and in the long run 1 million tonnes each for the next three years," FCI Chairman and Managing Director Amar Singh said. India lifted ban on wheat exports in September, 2011 through private trade on account of record production in two consecutive years. Later, two million tonnes of wheat exports were allowed from the government stock. But, Iran has not been importing Indian wheat since 1996 due to quality issues. The two nations are in talks for the last couple of months to sort out the issue. An Indian delegation has recently visited Iran in this regard.

Singh said: "We are still negotiating with Iran and nothing has been finalised yet." In his presentation, he said that the government has approved 6.4 lakh tonnes of wheat exports from the central pool out of 20 lakh tonnes approved by the Cabinet Committee on Economic Affairs (CCEA). "Government has decided to export 2 million tonnes of wheat from central pool vide CCEA decision, which is to be exported by March 31. The export is to be undertaken through STC, PEC and MMTC. "A total of 6.40 lakh tonnes has been approved and about 3 lakh tonnes has been shipped. Remaining quantity would be shipped by next month," it said. Wheat is being exported to Bangladesh,

South Korea, Thailand and Indonesia, he said. The country has surplus stocks due to record production and procurement in the last two consecutive years. As on October 1, the FCI has a stock of 66.52 million tonnes, against 51.78 million tonnes in the year-ago.

Kerala HC asks Spices Board to resume cardamom auctions

he Kerala High Court asked the Spices Board to resume cardamom auctions that were not held for over three weeks now following a decision to raise the minimum bidding rate from Rs 0.50 to Rs 5 by the Board. In its direction, the Court told the Board to cancel the licences of those auctioneers/ traders who are not participating when the auction is resumed. The Court has given the direction on a petition filed by a group of growers praying for resumption of the auction. The petitioners agreed to the minimum bidding rate recommended by the expert committee, constituted by the Spices Board. The traders are also understood to be ready to accept Re 1 as the minimum bidding rate instead of Rs 0.50. Meanwhile, at an auction held under the auspices of the Indian Farmers Movement (Infam) at Muvattupuzha on Friday, 350 kg of cardamom arrived and of this, 110 kg were sold, M.C. George, National Trustee, Infam, said. He said that the graded varieties

AGEB, AGB and AGS were sold at Rs 1,310, Rs 985 and Rs 790 a kg, respectively. End-users were the buyers. A meeting of farmers would be convened on Sunday to work out the future strategy, he said. Meanwhile, P.T. Thomas Idukki M.P. is reported to have requested the Union Commerce Minister in a letter to amend the relevant portions in the Act regarding cardamom auction so as to enable the growers to sell their produce directly on the open market instead of at the prevailing auction system. Following raising of the minimum bidding rate from Rs 0.50 to Rs 5 by the Spices Board, all the traders stayed away

from the auctions held in Kerala and Tamil Nadu from September 25 in protest against the decision of the Board. According to the growers, stocks are piling up and that in turn would spoil the quality of the produce. Small and medium growers are put in serious financial crisis. At the same time, the suspension in trading activities during the peak harvesting season has rendered workers in the plantations and as well as in the trading hub, Bodinayakannur, jobless, market sources in Bodi said.

AgriBusiness & Food Industry w November 2012

Dairy

News AP to set up livestock heritage farm

ndhra Pradesh Chief Minister N. Kiran Kumar Reddy said that the State plans to set up a livestock heritage farm and develop Araku Valley near Visakhapatnam as a global agriculture heritage site. Addressing the high-level Segment of Conference of Parties

(COP) 11 at the Convention on Biological Diversity, the Chief Minister said that livestock heritage farm is aimed at preserving the unique cattle breeds of Ongole and Punganur, sheep breed of Deccani fame and poultry breed of

Aseel. The Araku Valley will be developed as an agricultural heritage site recognising the contributions made by tribal families to the development of climate-smart agriculture. He said that necessary documentation was prepared for submission to the Food and Agriculture Organisation.

He said that sustainable use of biodiversity and its resources would pave way for economic development and more so help poorer sections of society. To mark the historical convention here, the State is creating a biodiversity complex in Hyderabad. It would host a biodiversity museum with the support of the National Government. Thanking the Prime Minister, Manmohan Singh, for supporting the initiative, he said that the commemorative pylon has been developed to acknowledge the participation of delegates from all over the world. The monument captures organic evolution of life over millions of years. The Biodiversity Park is expected to connect with various countries that participated in the event. Members would plant a sapling there. As the sapling grows each year, it should signify the growing efforts of mankind to conserve and preserve biodiversity, he said.

India’s milk production to rise by 5%: USDA

ndia’s milk production is estimated to rise by 5 per cent to 129 million tonnes in the current calendar year on account of strong prices and growing demand, United States Department of Agriculture (USDA) said. The country had produced 123 million tonnes of milk in 2011, it said. “Calender Year (CY) 2012 milk production is estimated at 129 million tonnes, 4.87 per cent up over CY 2011. CY 2011 fluid milk production is raised at 123 million tonnes, 1.23 per cent higher than previous estimates reflecting strong monsoon and good fodder availability,” USDA said in its latest report. Non-fat Dairy Milk (NFDM) stocks grew significantly in 2012 as output rose in response to remunerative prices and the

government’s prohibition on milk powder exports, it added. The government had imposed a ban on

export of skimmed milk powder (SMP) in February last year due to rising prices of milk but had removed the ban in June 2012. India produces approximately 17 per cent of the world’s total dairy

AgriBusiness & Food Industry w November 2012

production and consumes virtually all of this. “The country follows a ‘low-input/low-output’ dairy output model characterised by production costs and yields amongst the lowest in the world”, USDA said. The CY 2012 production estimate for NFDM remains unchanged at 4,50,000 tonnes. The US agency also revised the butter production estimate for 2012. Butter production has been revised up 2,000 tonnes to 4.53 million tonnes. For 2011, the butter production has been revised upwards by 10,000 tonnes to 4.33 million tonnes due to good milk production and a favourable 2011 monsoon, it added. According to government data, India, the world’s largest producer of milk, had produced about 127 million tonnes of milk in the 2011-12 fiscal.

Dairy

News Mother Dairy launches 'Maa Jaisa Koi Nahi' campaign

airy products brand Mother Dairy has launched a new campaign titled 'Maa Jaisa Koi Nahi' which highlights the pivotal role of mothers in a child's life. Created by Ogilvy & Mather, the TVC portrays love and care that a mother has towards her child and urges everyone to drink a glass of milk every day to remain healthy. The communication revolves around 'slice-of-life' situations depicting how children take their mother's love for granted, irrespective of what age they are in. The objective is to gently remind the kids of what all their mothers go through just to keep them happy without ever

expecting anything in return. The least they can do in return is to drink a glass of milk today so that tomorrow they can take care of their mothers. The TVC has been launched on a panIndia with Hindi, Marathi, Telugu and Tamil edits. The print and social media too are being tapped in different cities across India. Mother Dairy had a month back also changed the packaging of its milk packets. The new look of village graphics highlights how milk from the farm reaches the consumers home. Now with this new TVC coming on air, the brand aims to trigger the hearts of consumers and go closer to them by making consumption of milk a ritual of

every morning. Company spokesperson from Mother Dairy Fruit & Vegetable said, "Since the time a child is born, mothers play a pivotal role in developing this good habit of drinking milk, thus ensuring good health of her family. "It was time to pay a befitting tribute to the millions of mothers of this country who have silently been the pillar of strength and support for their children. Therein was born our communication idea, out of a simple, an age old truth that we all know of, but somehow fail to acknowledgeMaa Jaisa Koi Nahi."

ASEAN-India Expo

Test-kit for detection of antibiotics residues in milk at display

griculture Minister Sharad Pawar inaugurated the ASEAN-India Agri Expo along with Ministers

and representatives of the ASEAN member countries, on October 18. The Exposition has been organised concurrently with the Second ASEAN-India Ministerial Meeting on Agriculture and Forestry meeting to showcase technologies of the region to further promote and intensify cooperation between India and ASEAN nations in agriculture, forestry and allied sectors. The three-day event jointly organised by the ICAR and the Confederation of Indian Industry was attended by Ministers and senior officials of the ASEAN nations and India

with a view to collaborate more effectively for greater utilization of resources in agriculture, industries and trade. The Expo displayed exhibits from different Indian institutes such as the test kit for detection of antibiotic residues in milk at dairy farm and new colour based test for anionic detergent in milk developed by the National Dairy Research Institute, Karnal. Exhibits from institutes of ASEAN countries are also on display at the Expo.

AgriBusiness & Food Industry w November 2012

Coming Soon

Out of Stock

AgriBusiness & Food Industry w November 2012

Reach Over 11000 APEDA Members

Date of Publishing 24-25 Every Month Date of Posting 1-2 Every Month

Postal Regn. No. DL. (S) - 15/3028/2010-12 R.N.I. Regn. No. 2003/11672