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

AgriBusiness & Food Industry w May 2012

Cover Story

...10

Basmati Export

India & Pak to compete and cooperate Tea to Pakistan

India to replace Kenya for Pak’s tea imports Dairy

...14

EDITORIAL

dairy

Dudhiyas stand between Mother Dairy and Farmers

Second White Revolution

Health & Nutrition

Misguiding Labels on Popular Food Brands

Commodity

Sugar

Agriculture outsourcing

– R.J.Rayanade

Artificial price cut takes flavour off coffee – M R Subramani

The iconic Dorabjee’s finally expands Local expansion and online business on anvil

RETAIL NEWS

l K.K. Modi plans 1,000 retail outlets at IOC petrol stations l Reliance Retail to raise $900 million from RIL

CORPORATE NEWS

l Now, Basmati goes to Iran directly

l Badal wants border to be opened for trade boost FOOD & BEVERAGES NEWS

Ethics & principles to follow

— Sanjeev Chopra

DAIRY NEWS

l Gujarat Govt & Amul to promote camels' milk

Branding to Retailing Journey

retail

...18

CSE Research Study

Agri Affairs

Possibilities & Challenges – G. Chandrashekhar

Pawar flags off National Dairy Plan

inside...

AgriBusiness & Food Industry w May 2012

l Amul launches protein-rich Amul Pro l Saudi ARABIA’S Agro -Food Sector in 2012

l MP’s milk parlours to sell Campco chocolates

AgriBusiness & Food Industry w May 2012

Chief Editor

S. Jafar Naqvi

Consulting Editors

T.V. Satyanarayanan K Dharmarajan

Chief Co-ordinator

M.B. Naqvi

Editorial Co-ordinator Syed M K 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

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Editor : S. Jafar Naqvi

Vol 9....... Issue 5 ...... May 2012

orial Edit

t is heartening to note that true to its mandate, the Food Safety and Standards Authority of India (FSSAI) is going about in a professional way to set up an effective mechanism to ensure sale and supply of safe and wholesome food all over the country. The chairman of FSSAI – an independent statutory authority created in the wake of the passage of the consolidated Food Safety and Standards Act – has written to all states to put in place a sound and efficient structure to administer the Act, which came into effect last August. One of the important functions of FSSAI is to provide scientific advice and technical support to Central and state governments in matters of framing policy and rules in areas that have a direct or indirect bearing on food safety and nutrition. The need for such an authority and effective implementation of the Act are obvious, considering the spate of cases flouting food safety norms in different forms, in different segments of food business. Every now and then there have been reports of adulteration of food and food articles by unscrupulous elements, who, by and large, go scot-free. There have been many instances of sub-standard food items being supplied even to school children under the popular Mid Day Meals Scheme. No doubt some of the private organizations catering poor quality food to schools have been blacklisted on complaints from parents. Then, there are road side eateries selling fried food like Samosas, Pakoras, French fries, Golguppas and fruit Chaat – some of them in front of educational institutions – with no guarantee of safe water or good quality ingredients going into the making of these items. Another serious area of concern is labeling on packs of even noted food brands. Delhi based Centre for Environment Studies recently raised the hackles of big players by questioning the veracity of their claims printed on the labels that their products are trans-fat free. Trans-fats, nutritionists aver, would clog arteries, increase blood pressure and put the heart under strain. True, over the years, a plethora of laws and regulations have been in existence to check malpractices. The multiplicity of such laws, coming under various ministries, was in fact a problem, causing confusion in the minds of consumers, manufacturers, investors and traders because of their inconsistency, inflexibility and their inability to cope with scientific developments. It was to remove all the anomalies and to streamline the entire legislation that the latest Food Security and Standards Act was framed and adopted. The latest measure consolidates various pieces of legislation and orders concerning food-related issues under various departments and ministries to overcome administrative hurdles. New rules and regulations have been formulated and notified. The Act makes it mandatory for Food Business Operators in the country to be registered or licensed in accordance with the procedures laid down. Licensing or registration of these operators is an important activity of FSSAI. The chairman of FSSAI has, in his letter to the states, stressed the need for a well-coordinated effort, involving local bodies, civic bodies in towns and Panchayats. The latest Act is designed to be on par with international standards, to ensure safe and quality food to consumers and to check misleading claims and advertisements by those in food business. However, as the familiar saying goes, the test of pudding is in its eating. Much would depend on how effectively the law is implemented down the line. 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 May 2012

Cover Story

Basmati Export

India & Pak to compete and cooperate

ndia and Pakistan share a common heritage in the field of Basmati rice, said Tariq Puri, Chief Executive, Trade Development Authority of Pakistan. Puri was in Delhi to oversee “Pakistan Lifestyle” exhibition-cum-cultural show (April 12 to 15), which was the first collaborative exhibition of TDAP and India Trade Promotion Organisation (ITPO). While talking about the urgent need to end all the trade barriers between two neighbouring countries, he put his focus on Basmati export as both countries are market leaders in this segment. The exhibition was inaugurated by Commerce and Industry Minister Anand Sharma and Pakistan Commerce

Anand Sharma at Inaugration Ceremony

AgriBusiness & Food Industry w May 2012

Secretary Zafar Mahmood, who arrived in New Delhi along with 650 Pakistani businessmen. The exhibition is one of the steps taken by both India and Pakistan to enhance bilateral commerce and open new channels for shipment of goods. "Informal trade is many times more than the formal trade between India and Pakistan. We have to ensure that the gap between formal and informal trade disappears," Sharma said while inaugurating the four-day exhibition. Using the exhibition as the right tool to bridge the trade gap, Puri called on India and Pakistan to formulate a joint strategy on marketing and export of premium basmati rice to counter the non-tariff barriers imposed by other countries. “I think time has come now and we have to work together to formulate a new strategy for marketing the much soughtafter basmati rice to other parts of the world. We need to fulfill each other's needs and then take on the other countries,” he said. “With this kind of heritage of basmati, we are required to devise a common strategy to counter non-tariff barriers of other countries.” Technological Cooperation Basmati, he said, is an area where we have a common heritage. We want to see how we can leverage this together – that can produce much more positive results than each nation going separately. This message has been very well accepted on both sides. As per plans, some buying will take place from India which has the equipment, the plants, to extract rice bran oil and refine. We’re looking at such machinery and rice-steaming

(L-R) Tariq Puri, TDAP chairman, Rita Menon, CMD of ITPO, Shahid Malik, Pakistan High Commissioner addressing a press conference at the curtainraiser for Pakistan's First Lifestyle Exhibition in India, in New Delhi

Cover Story equipment too. The people involved are here to conclude agreements. The government’s facilitating them. We will also support them financially. Puri said, “We discussed issues like importing machinery and technology for post-harvesting of rice, including steaming for value addition variety of rice in Pakistan. We also talked about the Geographical Indication (GI) issue and need to work together on this important issue to sort out problems that crop up time and again”. He also added, “We want to benefit from the Indian technology. India is good in rice value addition. Once we start negotiating in machinery equipment and plant from India.” Terrorism & Trade Puri said terrorism should not be allowed to take business hostage. ‘Business is a phenomenon which has its own contours and dynamics – it finds its way, no matter what is happening in the country. Even in the most explosive regions, trade goes on. Business is what contributes to the well-being of the common people,” he said.

His other comments: About Expo It shows Pakistan’s creativity in every sphere of our manufacturing – textiles, furniture, leather, carpets and rice. We want to exhibit our top quality, top brands and top creative people. The idea is to showcase the best of Pakistan and the message is loud and clear – we are in business and we’re very proud we have such warm acknowledgement from the Indian market where consumers like our products. This could be a huge step towards trade normalisation. The ‘Made in India’ show in Lahore was a great success. My Indian counterpart, Rita Menon of the India Trade Promotion Organisation, has been very supportive, so this is a very positive moment. Obstacles & Possibilities Mindset, non-tariff barriers and visa issues are main obstacles. Once these are resolved, the potential is limitless. All the trade we’ve been doing through third countries can take place directly. That’s a very big step forward. It’ll boost confidence in business communities on both sides. One special message I would like to convey – we want to encourage investment in both countries. The Pakistan investment regime is open, whereas the Indian investment regime is restrictive only for Pakistan. We need a level playing field for investment – this creates an environment where business groups hold stakes in both countries. We’ve asked the Indian government to seriously consider normalising the investment regime. They’re working on it. We are also talking about opening bank branches to facilitate business. I think the feeling is common on both sides. This time, we have to put together a process of trade normalisation which is irreversible. That’s the only way we can move forward. Pak Rice Exporters’ delegation in India A 30 member trade delegation of Rice Exporters Association

China allows Indian basmati import

hina has allowed import of Indian basmati rice although it might hurt exports of the same product from its close ally Pakistan. This is a politically sensitive move, suggesting that Beijing would no more walk the extra mile to protect Pakistan’s interests. China has been importing Pakistani Basmati for last few years. Islamabad is known to have been persuading China not to allow Indian Basmati as it will affect its export basket. Pakistan is pushing China to buy more of its cotton yarn after New Delhi slapped a ban on cotton exports. of Pakistan, under the leadership of Abdul Rahim Janoo, ExChairman REAP and Safder Hussain Mehkri, Vice Chairman REAP and Deputy Leader of the Delegation, visited All India Rice Exporters Association (AIREA), New Delhi. Vijay Setia, President, All India Rice Exporters Association (AIREA), welcomed the delegation and apprised them about Rice Bran Oil and Rice Steaming Plants Machinery and Technology. Abdul Rahim Janoo introduced delegate members to AIREA and informed that Pakistani Exporters would like to import Rice Bran Oil and Parboiling plants in Pakistan for betterment of rice exports and its products particularly the value addition in rice. Vijay Setia assured his full cooperation with REAP members for introducing the necessary technology in Pakistan. The delegate members also had a good interactive meeting at AIREA with business community of India. Safder Hussain Mehkri said this is the 3rd Pakistani Trade Delegation to India to improve Rice Technology in Pakistan. He and Abdul Rahim Janoo invited AIREA members to visit Pakistan in the farm of a delegation to increase cooperation. Vijay Setia accepted the invitation. n

AgriBusiness & Food Industry w May 2012

Cover Story

Tea to Pakistan

India to replace Kenya for Pak’s tea imports the teas that were shown to us today, I am convinced about the quality. If these teas are shipped to Pakistan, you will get a premium. Unfortunately, the teas that reach Pakistan port lack quality,” said Janoo. Another member of the delegation, Khawaja, said the Orthodox and CTC teas from South India were quite competitive. “To make a bigger pool, the offering should improve quality-wise and price-wise. Vietnam is also in the race, offering cheap teas,” he added.

C. S. Bedi, Chairman, (left) Indian Tea Assoication and Mohammed Hanif Janoo, Chairman of Pakistan Tea Association at a press conference in Kolkata

akistan is targeting to double its tea imports from India by 2015 — from 24 million kg in 2011 to 50 million kg. A memorandum of understanding (MoU) to this effect was signed between the Indian Tea Association and the Pakistan Tea Association (PTA). The managing partner of PTA, Mohammad Hanif Janoo, said besides the South Indian teas, consumers in his country were keen to try out other types of CTC teas from Assam and Dooars. The delegation also attended a tea-tasting session. “We believe that this will open up opportunity for trade, in general, between the two countries,” ITA Chairman C. S. Bedi said. This was the first visit by a Pakistani tea delegation since 2007. Big Importer & Consumer Pakistan is one of the top three tea importing nations with a consumption of 220 million kg and an official import of 120 million kg. Its main supplier is Kenya. But as

Kenya’s tea production fell drastically due to its focus shifting towards other horticulture crops, Pakistan found hope in India. Demand for MFN Status On the demand by Indian tea exporters to get the Most Favoured Nation (MFN) status, Janoo said that other than countries such as Bangladesh, Nepal and Sri Lanka all other exporting countries had to pay the tariff. Focus on quality tea The Pakistan tea delegation that toured South India stated that they were ‘not happy' with the quality of teas they were getting so far. Chairman of Pakistan Tea Association Mohammed Hanif Janoo said the trade would look to source more teas from India, particularly from the South, if only the teas were ‘well-made and heavy'. Pakistan imports about 23-24 million kg (mkg) of tea from India, of which the quantities from the South is said to be in excess of 20 mkg. The members of the delegation, comprising 13, visited some broking houses in the city. “After taking a look at

AgriBusiness & Food Industry w May 2012

Indian assurance The Executive Director of Tea Board, Ambalavanan, stressed the need for removing this perception about ‘low quality' of teas from India. “To ensure that only quality teas are shipped out of this country, we should put an end to production of cheaper teas. Tea Board is in the process of setting up a Quality Council for South India. This council will do a random check before the teas are permitted to be exported,” ED said. The Tea Board has also assured the delegation of the Pakistan Tea Association that it would look into issues pertaining to quality. The Tea Board Chairman, M.G.V.K. Bhanu, has also assured to put in force a system for random checking of tea being exported to Pakistan. The assurance was given following concerns expressed by the delegation of the association that was on a visit here over the quality of a few lots they had bought from India. Transportation Hurdles According to experts, land route may pose several hurdles for North Indian tea exporters. Kochi port is much closer to Karachi port than Kolkata or Haldia port. Also, there is no direct shipping service between Kolkata or Haldia and Karachi.

Cover Story None of the national carriers of the two countries call at each other's ports. “There is no restriction as such on our national carriers to call at each other's ports following the signing of the bilateral shipping protocol between the two countries a few years ago, but where is the cargo volume to warrant such services on regular basis?” asked S. Hajara, Chairman and Managing Director, Shipping Corporation of India. No wonder, north Indian exporters fall back upon feeder vessels shuttling between Kolkata or Haldia and a hub port, generally Colombo, offering transshipment facility to connect mainline vessels calling at a Pakistani port, particularly Karachi. The whole exercise is time-consuming, hence costly. Border route not so easy A leading exporter said: “It takes nearly a month for a consignment of Assam tea to reach Karachi.” The delay adds to the cost. As it is, north Indian teas are costly, rendered costlier by the additional transport cost. The transit time between Mombasa (Kenya) and Karachi ports, on the other hand, is much shorter. Many north Indian exporters, therefore, are keen on rail or road transport through the Attari-Wagah border. It will not take more than 10-12 days for north Indian tea consignments to reach Lahore through the Attari-Wagah border, it is believed. Once the route opens up, it should be possible to export not only bulk teas but also packet teas having good market across the border, it is pointed out. But transporting teas through the Attari-Wagah border is beset with problems. As late as March 20, the Government of Pakistan issued a notification giving out the list of items to be allowed into Pakistan from India through the border. There are 137 items — mostly fresh vegetables, cotton yarn, etc, — tea is not one of them. North Indian tea exporters have to first lobby with the Union Government for taking up with the Pakistan Government the issue of including tea in the approved list. Next, road and rail transport via the border is not as simple as it is often made out to be. The advantage of road

desert areas on both sides of the border with huge logistical problems.

transport is that it is a door-to-door service. But the cost of such a service, it is said, is not cheap and, more important, the route to be followed may not be safe and secure. Assam tea, if transported by road to Amritsar, has to pass through several states, not all of which are particularly known for good law and order situation. Pilferage, political disturbance, natural calamities and wildcat localised bandhs on trivial issues and various other factors might stall truck movement. Insurance cost therefore will be high, it is thought. Container problems The Railways, enquiries reveal, are reluctant even to discuss the subject unless approved by the Union Government. Once the Government announces its approval of rail movement of tea from Assam and North Bengal to Amritsar and beyond, only then will the Railways start working on details like the demarcation of the path, freight, rolling stock, etc. Ideally, tea should move in containers, but that is not possible now. As Anil Gupta, Managing Director, Container Corporation of India, explains, a separate protocol has to be signed first between the two countries to facilitate container movement by rail. Right now, there is no such protocol agreement with Pakistan, not even with Bangladesh; it exists only with Nepal. The rail service between Munabao (Rajasthan) and Kokhrapar (Sind, Pakistan), restored in 2006 after a gap of 30 years, is favoured by neither Pakistani importers nor Indian exporters, as the route cuts through

Documentation For seamless movement of tea by rail or road from Assam to Lahore, a combined transport document has to be prepared such that the document is negotiable at all checkpoints. Interestingly, at present, large quantities of teas travel entirely through the unofficial channel to Pakistan. The size of tea trade through the unofficial channel will be about 100 million kg annually, and some portion of it may be routed through the Attari-Wagah border also. The disproportionately high per-person consumption of tea in the border areas of India's Punjab vis-à-vis the rest of the country only confirms it. MFN Optimists Diehard optimists, mostly among the north Indian exporters, look forward to the MFN (most favoured nation) status rumoured to be granted by Pakistan to India by the end of this year. Once the status is bestowed on India, it is believed that there will be freer trade also covering tea between the two countries by land route. The optimism is based on several positive developments recently, such as commissioning of integrated check-posts on the AttariWagah border, easier visa norms, frequent visits of high-powered delegations in both the countries: all suggesting that Pakistan is the flavour of the season. The optimists seem convinced that once regular trade picks up through the land route, the volume of unofficial trade will be curbed and, more important, it will be possible to give Kenyan exporters a run for their money. After all, domestic transport in Kenya, that is, movement of teas from the gardens to Mombasa port, leaves much to be desired, and also, Mombasa does not have state-ofthe-art cargo-handling facilities, it is pointed out. In other words, the actual cost differential will not be much.

AgriBusiness & Food Industry w May 2012

Dairy

Pawar flags off National Dairy Plan

he National Dairy Development Board (NDDB) has rolled out its ambitious, 15-year National Dairy Plan, envisaging an outlay of Rs 17,300 crore. Its first phase was flagged off by Union Agriculture Minister Sharad Pawar in Anand, the place synonymous with the first White Revolution decades ago. The Gujarat Chief Minister Narendra Modi was the chief guest at the ceremony, held at the NDDB headquarters. The Plan is widely acclaimed as India’s Second White Revolution. Stating that the NDP would solve the milk shortage in the country, Pawar said: “As per the outlay of the phase-I, Rs 2,242 crore has been approved by the Centre and in the Sixth Five-Year Plan (2012-17) it is to be implemented in 14 milk producing states.” These states are: Uttar Pradesh, Punjab, Haryana, Gujarat, Rajasthan, Madhya Pradesh, Bihar, West Bengal, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Orissa and Kerala. Pawar said the scheme will be largely financed through International Development Association (IDA) of the World Bank and implemented by NDDB through End Implementing Agencies (EIAs) located in the States. He said through NDP, productivity of milk producing animals will be increased to meet the rapidly growing demand for milk in the country. This can be accomplished through a scientifically planned multi-state initiative. Pawar asserted that the plan will provide India’s 70 million small-holder rural milk

producers greater access to the organised milk sector. “The demand for milk is projected to be around 200 million tonnes in 2021-22 as against the production of 122.8 million tonnes in 2010-11,” said Pawar. “It is therefore necessary to maintain an annual growth of over four per cent in the next 15 years, which can be achieved through NDP”. While admitting that private sector milk producers are gaining strength at the expense of the cooperatives, particularly in the northern states controlling 70 per cent of milk production, Pawar said: “NPA will target at strengthening village based milk procurement systems which will ensure long term benefits for the milk producers at the rural level. This will also strengthen the cooperatives’ base.” IDA will give Rs 1500 crore while the Central Government will contribute Rs 175 crore for the 1st phase of the Plan. The balance (Rs 567 crore) will come from the beneficiary states. The aim of the Plan is to increase output from the existing 122.8 million tonnes to 200 million tonnes by 2021-22.

AgriBusiness & Food Industry w May 2012

Private dairy sector wants share in Rs 17,300-cr NDP

rivate dairies have alleged discrimination in not being made part of the Rs 17,300 crore National Dairy Plan (NDP) that was formally launched by the Government in April, 2012. Ten years ago, co-operatives procured 16.5 million litres a day (MLPD) of milk that was more than the 12.5 MLPD procured by organised private dairies in the country. The situation has completely reversed now, with private procurement zooming to 40 MLPD. While co-operatives have also increased their procurement to 25.9 MLPD, much of their growth has come from just two entities – Gujarat Co-operative Milk Marketing Federation (Amul) and the Karnataka Milk Federation (Nandini). “If the Government is really serious about NDP, it should also include us (private sector) in its plans. That would be a truly inclusive strategy,” said Rajendra Singh, Managing Director of the Delhibased VRS Foods (Paras Dairy). Ten years ago, there was only one private sector player – Nestle India Ltd – that was handling more than one MLPD of milk. Today, there are eight others: Hatsun Agro Product, VRS Foods, Tirumala Dairy, Heritage Foods, Sterling Agro Industries (Nova), Bhole Baba Dairy Industries (Krishna), Dynamix Dairy Industries and Parag Milk Foods (Govardhan). Another six dairies including Dodla Dairy, Keventer Agro, SMC Foods (Madhusudan), Creamline Dairy (Jersey) and Gopaljee Dairy procure over five lakh litres a day. Out of their total 26 MLPD today, over 9 MLPD is accounted for by Amul and almost 4 million by Nandini. The 15-year NDP, being implemented by the National Dairy Development Board in 14 States, seeks to augment milk

Dairy Ten years ago, there was only one private sector player – Nestle India Ltd – that was handling more than one MLPD of milk. Today, there are eight others: Hatsun Agro Product, VRS Foods, Tirumala Dairy, Heritage Foods, Sterling Agro Industries (Nova), Bhole Baba Dairy Industries (Krishna), Dynamix Dairy Industries and Parag Milk Foods (Govardhan). Another six dairies including Dodla Dairy, Keventer Agro, SMC Foods (Madhusudan), Creamline Dairy (Jersey) and Gopaljee Dairy procure over five lakh litres a day production in the country by improving productivity of milch animals and provide rural milk producers greater access to the organised milk processing sector. Such a move is expected to help plug the projected shortfall in milk production by 2020. The demand for milk is projected to rise 7 per cent by 2020, while the production is growing at 4 per cent resulting in an estimated shortfall of 3 per cent. Milk demand is set to touch 200 million tonnes by 2020, up from 122.8 million tonnes in 2010-11. Such demand from private players assumes significance as they have played a key role in development of dairy sector in Uttar Pradesh and Tamil Nadu. They have developed their own network of milk production centres and have been investing in the required infrastructure. “In spite of the excellent growth recorded by private sector, the Government policies have always been favouring co-operatives. Further, for all policy discussions, private diaries are ignored,” said R.G.Chandramogan, CMD, Hatsun Agro Food. “The preferential duty concessions, both for export and import, must be equally extended to the private sector at par with co-operatives,” he said.

to launch 9 new plants

Rs. 3,000 crore expansion plan on card

he Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF), makers of Amul brand dairy products, will be setting up nine new plants in the next four years at a cost of Rs 3,000 crore and also expand the capacity of the existing plant, to a top GCMMF official said. Managing Director of GCMMF R S Sodhi said the dairy products maker has plans to touch Rs 30,000 crore turnover by 2020. "In the next four years, we are

investing around Rs 3,000 crore in setting up nine new plants and the capacity of the existing 40 plants will be increased," Sodhi said during the launch of Amul Pro, a protein-rich beverage in Andhra Pradesh market. "We have 14.5 million liters per day capacity and it will reach to 18 million liters per day after the expansion," he added. Sodhi said they increased the milk procuring price by almost 50 per cent in the last three years to farmers in order to keep the activity lucrative. He said current generation of farmers is not finding milk business as viable and the situation may lead to depend on imports like other Asian countries. "So we thought if we do not take up this seriously India will become like other Asian countries such as Pakistan which depend on import of milk. We took a lead and increased price to farmer," he explained. According to Sodhi, the GCMMF currently pays including bonus Rs 34.40 for buffalo milk and Rs 22.50 for cow milk. Replying to a query on exports to European Union, Sodhi said, and conditions such as using machines for milking is deterrent for exports.

India's Largest Exhibition on Dairy

Products & Technologies

25-26-27, August 2012 Gayathri Vihar, Palace Ground, Bangalore

Tel.:+91-11-26681671 / 2045 E-mail:dairytechindiamtpl@gmail.com

www.dairytechindia.in AgriBusiness & Food Industry w May 2012

Dairy

Dudhiyas stand between

Mother Dairy and Farmers

or the last three months, Mother Dairy Fruit & Vegetable, a wholly owned subsidiary of National Dairy Development Board (NDDB), has been laughing all the way to the bank. Its monthly earnings are anywhere between Rs 72 crore and Rs117 crore, more than those of rival Gujarat Cooperative Milk Marketing Federation (GCMMF), which makes and markets the Amul range of products. That’s because Mother Dairy has been procuring milk at prices that are Rs 4 to Rs. 6.50 per litre lower than the Rs 31 that GCMMF pays its farmers-members. Unfortunately, this has been at the expense of small farmers in North India who now get Rs 17 for every litre of milk they sell to Mother Dairy compared with Rs 30 earlier. But Mother Dairy hasn’t changed the sale price of milk of Rs 37 per litre (double-toned sells at lower prices). The Mother Dairy management, however, refutes procurement is at Rs 17 a litre. “It is the dudhiya, the middleman, who sources milk at Rs 17. Our farmer prices are between Rs 24.50 and Rs 27 a litre,” said a senior official. But that doesn’t change the fact that a wholly owned subsidiary of a government body is milking additional profit - if you just compare the procurement prices of last year. That’s in sharp contrast to what has been happening in the cooperative sector. In western India, farmers continue to get the old price of milk, and the price to consumers remains the same. GCMMF, on the other hand, recently increased by Re 1 per litre the price it pays to its memberfarmers for each litre of milk it procures (it now pays Rs 31). And the selling price still remains the same at Rs 38 (for the whole milk grade). In south India, where the government has introduced a

minimum support price (MSP) for milk procurement, the consumer price fluctuates from time to time. As a result, companies such as Hatsun (sales of around Rs 1,600 crore) have found the going quite rough. A similar situation confronts north Indian milk companies such as Paras (sales: Rs 896 crore) and Gopalji (sales: Rs 500 crore), who feel being squeezed out — though some have tried to make a dent in Delhi by undercutting Mother Dairy. Unfortunately, there is no price support mechanism in the north. “That’s because the dhudhiyas have powerful political backing. They block our vehicles and prevent us from collecting milk,” said a spokesperson for Mother Dairy. While that may be the case, the increased spreads of Mother Dairy show which way the benefits are flowing. “Mother Dairy also enjoys having kiosks at strategic locations to sell milk without any significant rental expenses. It enjoys the privilege of being a cooperative without functioning like one,” said an industry source. Compounding the woes is the ban on exports of milk by the ministry of agriculture in February last year. Not that India’s milk exports are large — they comprise a little over 1 lakh tonnes a year, or 1 per cent of milk and milk product exports. To be fair, the ban did have a psychological effect, cooling prices a touch. But it was at that time that NDDB made a request to the government to allow it to import, duty-free, 50,000 tonnes of skimmed milk powder (SMP), which it is believed to have got at quite attractive rates. NDDB was also allowed to import, duty free, 15,000 tonnes of butter oil too. This, however, did not please the industry. On November 11, 2011, at a meeting chaired by the secretary, dairy and animal husbandry, ministry of agriculture, industry players tried persuading NDDB to desist purchasing milk from overseas suppliers and offered 20,000 tonnes of SMP too. Not surprisingly, prices at the farmer

AgriBusiness & Food Industry w May 2012

Mother Dairy is selling milk at Rs 37 a litre, but cattle breeders get only Rs 17 a litre. Dudhiyas (Middlemen) pocket the huge margin

level in non-co-operative sectors of north India crashed, instead of merely cooling. Retail prices to consumers in many parts of north India from non-Mother Dairy outlets have also fallen, but have made little impact because they do not have the branding and distribution clout of a Mother Dairy. However, some cooperatives such as Saras in Rajasthan and Vita in Haryana have been more fair in reducing consumer prices for milk when procurement prices fell. Mother Dairy has not done so. Not surprisingly, there has been a renewed clamour for the removal of the ban on exports. The removal of the ban could ease some of the problem. There is also an increased discomfort at the close relationship between NDDB and Mother Dairy. There is a third demand as well. Ever since NDDB decided to get the government to grant it the status of a deemed financial institution, many believe that NDDB has begun working more as a financier than as a development institution that it was meant to be. It recently informed the media that the World Bank would soon approve the first phase of the Rs 17,000 crore National Dairy Plan worth around Rs 2,000 crore. NDDB hopes to promote some joint venture companies and new-generationcooperatives. Analysts fear that instead of promoting the co-operative sector and small farmers, NDDB could actually hurt the interests of both small farmers and the cooperative movement. Analysts said milk procurement in the north has plummeted by half over the past five years. At UP cooperatives, it has dropped from 10 lakh tonnes to barely about 5 lakh now (much of the milk goes to private players, and Mother Dairy, a private company though owned by NDDB, also tries to procure from the same pool). Contrast this with Gujarat where the GCMMF saw its procurement swell from 75 lakh tonnes to 140 lakh tonnes during this period. n

Dairy

Second White Revolution Possibilities & Challenges — G. Chandrashekhar

he launch of a Rs 17,000-crore National Dairy Plan (NDP) to enable India's milk production to meet a projected demand of 200 million tonnes (mt) by 2021-22, is a timely initiative. With output last year estimated at 125 mt, the target calls for raising our annual yield by 7.5 mt, as against the average 4 mt achieved over the last 10 years. That makes it an extremely ambitious considering the growing pressure on fodder and feed resources, besides rising opportunity cost of rural labour: Grazing, feeding, cleaning and milking buffaloes daily is not an enticing proposition for today's workforce, including those from agricultural families. But the fact that Indians are voracious milk drinkers and there is no other food item registering as much increase in consumption from higher incomes — one reason why its prices have shot up disproportionately in recent times — presents few alternatives to significantly augment domestic production. It means investing hugely in scientific breeding, artificial insemination, animal nutrition, fodder development and farm-level mechanisation. These interventions certainly require programmes of the scale and scope of the NDP. The problem with the NDP, though, is its being implemented by the National Dairy Development Board (NDDB), which is formally mandated to work only with cooperatives. This may have made sense in the Operation Flood days, when only a handful of organised private dairy players existed. Further, they were all regarded as ‘Polson' — a dairy that

symbolised exploitation of farmers in the 1940s. But this reputation has lost meaning, especially in the last ten years that have seen milk procurement by organised private dairies more than treble to 15 mt. Cooperatives, during this period, have managed to increase their procurement by only 60 per cent, to 10 mt. Moreover, two-thirds of this growth has come from just two alreadyentrenched cooperatives: Amul and Nandini. The problem may not be of NDDB's making as the poor governance structures in some of these states where NDDB is yet to make a mark, are also to be blamed. Nevertheless, the fact remains that NDDB's performance in nurturing cooperatives in recent years, especially in the Hindi heartland states with the maximum milk production potential, has been dismal. That being the case, it is legitimate to ask why NDDB has been made the implementation agency for the NDP. More important, what is the logic of excluding private sector from such an ambitious programme, when much of the milk procurement growth and establishment of fresh milk processing capacities is now coming from it? The time has come, perhaps, to even change

NDDB's charter to enable it to finance private dairies, at least for the milch animal productivity improvement and other backend extension activities being undertaken by them. The case for revisiting NDDB's role becomes stronger if one looks at its own subsidiary, Mother Dairy. The latter is today effectively a private company that competes with Amul or Nandini and is not even obliged to table its annual report in Parliament! It is time, indeed, come for the Government's dairy policies to reflect the new ‘post-Polson/postOperation Flood' realties.

AgriBusiness & Food Industry w May 2012

Agriculture outsourcing Agri Affairs

Ethics & principles to follow — Sanjeev Chopra

This edition of Agri Affairs is based on Nicolas Marcelo Perrone’s paper ‘Responsible Agricultural Investment: is there a significant role for law to promote sustainability’, circulated among stakeholders by Columbia University’s Law School and the Earth Institute

t is now obvious from all accounts that ‘agricultural outsourcing’ as a phenomenon is here to stay, and that Indian entrepreneurs are not lagging behind their global peers in acquiring lands in third countries for production of food, flowers, fuel and other agro products. While the jury is still out on whether this is the ‘new land grab’ or ‘optimizing resources’ for meeting the food and fuel demands of a growing world population, there is a general consensus that a set of guidelines should be in place to ensure that the investments follow certain established norms, and do not create a situation of inequity and turmoil in the regions or areas which are subjected to it. Research paper This edition of Agri Affairs is based on Nicolas Marcelo Perrone’s paper ‘Responsible Agricultural Investment: is there a significant role for law to promote sustainability’, circulated among stakeholders by Columbia University’s Law School and the Earth Institute. The paper assumes significance as the world food prices are beginning to surpass the 2008 peaks, thereby confirming the rising trend in food markets. Higher prices pose a challenge to both food importing and exporting countries, especially

as many countries which have the potential to raise agriculture production are constrained by lack of capital and technology. While on the one hand international organizations and governments of food importing countries are looking to FDI by multinational enterprises, for many ‘host countries’ and their populations, this is associated with socio-cultural, ecological and economic dispossession. The direct involvement in production, rather than in trade has created deep rooted skepticism due to the potential effects of these projects on local population, which could also suffer loss of livelihood and access to nutrition even as commercial production of agri commodities rises to meet global demand. The counter factual is equally strong: without new technologies and investments the lands have not yielded enough produce, and the inhabitants continue to depend on external assistance for meeting many of their basic minimum needs, including those of access to health, education and life skills. Challenges The challenge therefore is to promote investments that are sustainable and responsible - both from the point of view of the investor as also the host community. The need for such a compromise has been acknowledged by the FAO, IFAD, UNCTAD and World Bank. The most important objective of this joint effort is to recommend a set

AgriBusiness & Food Industry w May 2012

of voluntary guidelines based on the ‘principles for Responsible Agriculture Investments that respects rights, livelihoods and resources’. These are collectively called ‘Principles’. Respecting biodiversity, resources & aborigines’ rights First and foremost, land and resources associated with it must be respected. Thus where common lands are in question, the rights of the pastoralists to the land, especially grazing rights and rights to draw water have to be respected. The onus is now on the investor to carry out his own independent assessment of whether any livelihood is affected, and if so, a provision has to be made to ensure that the loss is compensated .Again, every agro climatic zone in the world has a normal water recharge capacity. If the investor draws water which is many times higher than the recharge, he is guilty of ‘hydrocide’: which means that he is causing long term damage to the environment. Then there is the question of food security – which in the broadest sense means and includes the right to draw resources to produce marketable goods. Thus many forest dwellers extract herbs, honey, fibre, nuts and fruits from wilderness which may be affected if forest is to be replaced with plantations. It is obviously not possible to draw an exhaustive list, but it is expected that if the Principles are applied in a generic

Agri Affairs sense, equity can prevail. However, it is also quite clear that the success of these principles depends more on the support of the states and an empowered civil society rather than on goodwill alone, though the latter cannot be discounted. Legal angle As the paper notes , the basic asymmetry arises from the fact that while the obligations which the Principles purport to impose do not have a legal basis, the investments are protected by sovereign guarantees, and can be enforced by the courts. The corporates may accept these principles for improving their image and to score CSR brownie points with their shareholders and employees as long as the bottom line is not affected. However as with every innovative legislation, this is a good beginning and even if it cannot be enforced by the tribunals, the global civil society and media have a yardstick by which to measure whether or not an investment is responsible or not. Moreover, these days, most disputes

are resolved not just by recourse to law, but also through arbitration. It is here that the real force of these Principles will come into play. When investors commit to observe these Principles, they do not assume a legal obligation; however they do constitute an important role in shaping shareholder expectations, and will also impact the minds of arbitrators in the event of a dispute. They will also help states to pass necessary regulations for the investor which may become

binding in the country in which the corporate is registered as a legal entity. As such they can help to strike a balance between investors and host country populationsâ&#x20AC;&#x2122; concerns, promoting sustainable FDI in agriculture as a partial solution to the growing needs of food and fuel across the globe. (The author is Joint Secretary & Mission Director, NHM & NMMI, Union Ministry of Agriculture)

AgriBusiness & Food Industry w May 2012

Beverages

Barista turns 13 Focus on building Lavazza brand

R. Shivashankar, Director, South Asia

Barista turns 13, it plans to build on the Lavazza label that acquired it a few years ago. Although, it added an Italian name in recent years, but to most people in India, it's still the Barista of the leisurely cappuccino and sandwich. Thirteen years in India have seen it go through much change in management, the most recent being in 2007 when the Turin, Italy-based coffee roaster Lavazza acquired it. Barista is now entering a new phase, says R. Shivashankar, Director, South Asia, whose job it is to increase the India business' contribution to the €1.2-billion (Rs 6,870 crore) Lavazza. With a turnover over Rs 200 crore, Barista will be remembered as the pioneer and “true introducer” of the café culture, he said. Birthday resolutions include turning the company around through cost control, new products and expansion – adding 50-100 more stores, quite a few more upmarket ones – in the next three years. It has 160 at present.

Steaming up the market Shivashankar credits Barista with playing a significant role in the growth of coffee consumption in India, which, he said, has grown at a CAGR of 5 per cent. It also had a lot to do with coffee, essentially a South Indian drink, spreading to other parts of the country, which is a tea-quaffing nation. (For every seven cups of tea consumed, only one cup of coffee is consumed. The per capita consumption in India is 80 gm, compared to 6.5-7 kg in some parts of Europe.) The café business, Shivashankar said, has slowly but surely created a need for coffee both at home and away from home. With the Indian coffee retail market set to grow at 40 per cent per year there is a major change in consumer perception over the years and its popularity now. He also claims credit for Barista providing holistic experiences and keeping things fresh with new menus and customer engagement activity that runs the gamut from Scrabble contests to tarot readings. Harish Bijoor, brand strategy specialist and CEO, Harish Bijoor Consults, who has extensive experience in the coffee business, observed that in many ways, the café revolution's story here has been one of inventive re-engineering to suit Indian desires and aspirations. He credits Barista with adding “ambience cues to the café that then became a trend”. “It opened up a new adda for the young and the wellheeled. It got youngsters who would otherwise hang around and meet outside a hot Priya Cinema (Delhi), to walk in and date at a cool joint called Barista.” However, its undoing lay in its correcting its price and offerings to

AgriBusiness & Food Industry w May 2012

match competition, in the form of Café Coffee Day. “The low-cost bug bit Barista a bit too early in its life-cycle,” said Bijoor. While the image remained reasonably intact, profit-lines sank. “You just cannot be a low-cost cafe player and continue to offer high-cost stuff in terms of location, ambiance, food, beverage and more. In many ways, what bit Air Deccan hard and tight, bit Barista as well,” he remarked. Barista Lavazza's other business in India is that of vending coffee beans and machines through Fresh & Honest Café. This accounts for the larger part of the business, at 60 per cent. K. Sivakumar, Chief Operating Officer, said this business has nearly 75 per cent share of the four- and five-star Horeca (hotels, restaurants and cafes) categories. “It's a freshly-brewed, real coffee experience at the touch of a button”. As the company grows older, it's slated to take on a more global role. A €20-million factory to roast and grind coffee beans is coming up at Tada in Andhra Pradesh. It will serve the Indian sub-continent at first but is envisaged to be Lavazza's manufacturing hub for the Asia-Pacific region in the near future. Lavazza, in fact, has plans for India becoming its second largest revenue generator, next only to Italy. Currently, India contributes only 3 per cent. Barista Lavazza claims a 15 per cent share of the organised café retail market of 1,600 cafés in India. It has operations in Sri Lanka, Oman and the UAE. Italian Experience In the days ahead, the focus will be on offering a larger, and more Italian, experience in its cafes, said Nilanjan

Beverages

Barista is now entering a new phase, says R. Shivashankar, Director, South Asia, whose job it is to increase the India business' contribution to the €1.2 billion (Rs 6,870 crore) Lavazza. With a turnover over Rs 200 crore, Barista will be remembered as the pioneer and “true introducer” of the café culture, he said

in a country with a set of aspiring consumers as ours, every brand will enjoy its own space. If Barista plans a growth of 30 cafes in the span of the next three years, that in itself is writing a self-fulfilling prophecy of being a niche player in a market that will grow at the pace of 400 cafes a year over the next three years,” he said.

Bhattacharya, COO, India and SAARC at Barista Lavazza. The cafes occupy three formats: Espresso bars are the starter – and most widespread – versions; Crème are more high-end, and Espression, Lavazza's international format of café, offers premium fine dining and Italian cuisine, replete with its own kitchen and a global, Lavazza look and feel. The second one in India opened just last week in Bangalore; there is one in Delhi. Along with the Italian taste and feel, there'll be a lot of Italian brand as well, said the executives. Bhattacharya said the Lavazza brand will be consolidated in multiple ways through brand equity, coffee quality, stores and service quality. In fact, Lavazza said it will do away with the Barista brand ultimately. Bjoor said, “It will be a crime because the name carries fond and affectionate memory tags”. Also, bringing a piece of the Italian café into India cannot be a

low-cost venture, and that would make Barista a niche player in the Indian market, he added. Competition When asked about the growing competition in the café arena, from the other home-grown teenager Café Coffee Day (which now has over 1,200 outlets) to Costa Coffee and Gloria Jean to the latest entrants Dunkin Donuts and Starbucks, Shivashankar said Barista will co-exist. The outlook for coffee and cafés is extraordinarily bright, there are some very big players coming in and coffee consumption is bound to go up, he said. Harish Bijoor said the dominant players in this space, over the next couple of years, will be Dunkin Donuts and Starbucks, in that order. As the market steams up, it will be interesting to see where Barista settles. “In a country the size of India, and

Tie-up with Visa Restaurant chain Barista Lavazza has tied up with Visa to launch a new facility at its outlets which will enable customers to withdraw money. “As per Reserve Bank of India guidelines, Visa debit cardholders can withdraw an amount of up to Rs 1,000 in a day at any Barista Lavazza outlet,” the company said. This will enable all Visa debit cardholders to not only pay for their coffee and snacks but also withdraw cash at over 170 outlets located across the country, it added. There will be no charges levied on the cardholder for the cash withdrawal transaction. “Further, cardholders are not obliged to make a purchase to get cash. The service is currently rolled out in Delhi NCR and Mumbai. It will be extended to other parts of the country over the next few weeks,” the statement said. As part of this association, Barista Lavazza is also offering up to 30 per cent discount on customised meal deals to all Visa debit cardholders. n

AgriBusiness & Food Industry w May 2012

Health & Nutrition

Misguiding Labels on Popular Food Brands CSE Research Study

elhi-based NGO, Centre for Science and Environment, has alleged that leading food manufacturers are guilty of "large scale misbranding and misinformation" by claiming that their food contained zero trans-fats even though tests showed that they have heavy doses of it. ”Most popular junk foods contain very high levels of trans-fats, salts and sugar - which inevitably lead to severe ill health and diseases like obesity and diabetes," the CSE said. It released the results of laboratory tests carried out on 16 major food brands that the young particularly like, such as Maggi and Top Ramen noodles, MacDonald's foods, KFC's fried chicken and Haldiram's Aloo Bhujia. These findings were disputed by the manufacturers. Trans-fats clog arteries when they get deposited on the walls of the arteries making the passage narrower, while large amounts of salt leads to increase in blood pressure making the heart work overtime. CSE noted that the kind of food under test has enough trans-fats, salt and sugar to lead to an early onset of diseases in the young. It accused the companies of not disclosing the real contents of their products. Lab tests CSE's lab tested samples of popular foods such as potato chips, snacks like Aloo Bhujia, noodles, soft drinks, burgers, French fries

and fried chicken. Their results showed that having just one serving of these foods "completely overturned one's daily diet chart." The National Institute of Nutrition (NIN) and the World Health Organization (WHO) prescribe benchmarks of how much salt, sugar, carbohydrates and fats every individual can have on a daily basis to stay healthy. Citing an example, CSE said, "The

”Most popular junk foods contain very high levels of trans-fats, salts and sugar - which inevitably lead to severe ill health and diseases like obesity and diabetes," the CSE said NIN benchmark for maximum salt for one person is 6 gram, while the WHO puts it at 5 gram. The normal 80-gram packet of Maggi noodles that many of us gobble up almost on a daily basis has over 3.5 gram of salt - enough to take care of over 60 per cent of our daily salt intake." But much more than salt the real concern was the threat from the trans-fats which were disclosed by the companies, CSE noted. The WHO says that in a balanced diet, a maximum of 1 per cent of total energy should come from trans fats. Therefore, an adult male can have 2.6 gram of trans fats per day, while an adult female can have 2.1 gram and a child (10-12 years) can have 2.3 gram. But CSE found that Top Ramen Super

AgriBusiness & Food Industry w May 2012

Noodles (Masala) which claims to have no trans-fats actually contains 0.7 gram of it per 100 gram. Similarly, Haldiram's Aloo Bhujia label says the product has no trans fats, but the study found 2.5 gram per 100 gram. PepsiCo's Lays (Snack Smart) was sold till February 2012 through huge advertisements to say that these chips are healthy because they have zero trans fats, but every 100 grams of it has 3.7 grams of trans fats. Companies’ response The companies strongly denied the allegations in the CSE report. PepsiCo said, "All products manufactured by PepsiCo in India are fully compliant with all the regulations, including those on labelling, prescribed by the FSSAI (Food Safety and Standards Authority of India)." It said that its products under the Lays, Uncle Chips, Kurkure and Cheetos brands are trans-fat free. Nestle in its response said, "We respect the work being done by organizations like CSE to improve consumers' understanding of healthy and balanced diets. Maggi is intended as a light meal and can safely be consumed as part of diversified balanced diet." McDonald's said, "In India we take a lot of effort to ensure our food is safe for our customers and have stringent quality processes at every stage. At McDonald's stores we use RBD Palmolein oil which is naturally trans-fat free." ”As per our analysis for many years, trans fats level is well within international recommendation,” Nestle. ”We go to a lot of effort to ensure

Health & Nutrition our food is safe for customers and have stringent quality checks,” McDonald's. Norms being flouted CSE's contention is otherwise. Its report says, "A child eating one MacDonald's Happy Meals finishes up 90 per cent of all his daily requirement of trans fats. The packet of Happy Meal makes absolutely no mention of this massive dosage of trans fats." As per FSSAI rules, a product can claim to be trans fats free if it contains less than 0.2 gm of trans fats per serving but CSE found several brands flouting the norm and yet calling themselves trans fat free. CSE's Director General Sunita Narain said, "What makes junk food so unhealthy are the high levels of salt, sugar, fats and carbohydrates in them. Our new study, which looks at the nutritional value of these foods, is to make people aware of what these foods really contain and what they will do to our health." Maggi Noodles’ single pack contains 3.5g of salt. Daily recommended intake is 6g. It has negligible fibres and 70 per cent carbohydrates. Top Ramen Super Noodles (Masala) has 0.7g trans fats per 100g, though company claims zero trans fats. PepsiCo's Lays (Snack Smart) has 3.7g trans fats per 100g. Pepsi sold it as zero trans fats chips but claim knocked off later. KFC's Chicken Zinger has 16.9 per cent fats and McAloo has 8.3 per cent fats. 35 per cent calories in vegetable burger come from fats, while nonvegetable burger generates 47 per cent. WHO says an adult male can have 2.6g of trans fats a day, female 2.1g and a child 2.3g Misleading labels ’Sugar-free cream cookies’, ‘wholegrain’ cereal bars, ‘all-natural fruit juice’: it’s hard to ignore the all-toohealth-conscious labels on superstore shelves, but can you take them at face value? Usually not, experts say. “Most claims on labels are incorrect, not scientifically proven, or highly exaggerated,” says Dr Anoop Misra, director, Fortis-C-DOC Centre of Excellence for Diabetes, Metabolic

Diseases and Endocrinology. “Unrelated claims also mislead. Candy is obviously fat-free, but advertising makes buyers overlook the fact that it is pure sugar,” adds fitness expert Raghav Pande. Breakfast cereal, for instance, may promise the goodness of wholegrain, fibre and other nutrients, but a quick reading of the full list of ingredients shows why it won’t help you fight the bulge. “Most cereal is packed with sugar, high-fructose corn syrup and additives that are not part of a healthy diet,” says Pande, adding that processes that increase shelf life of food also destroy nutrients. The nutritional downside notwithstanding, processed food remains much in demand for its convenience. “People have little time to cook and end up eating a lot of packaged food,” says Dr Misra. “They don’t realize or can’t help the fact that processed food is full of preservatives, carbohydrates and fats, and without any redeeming nutritional quality.” An awakened consumer was shocked into reducing his intake of processed food after he started reading the fine print on labels. “I used to get swayed by the claims made on labels, but when I became serious about losing weight I decided to educate myself. I realized that packaged food is not healthy,” he said. But he is in a minority in a city with a major weight problem that’s only compounded by the lack of regulation for food labels. A study by Diabetes Foundation (India), National Diabetes Obesity Cholesterol Foundation (N-DOC), and Fortis, published in the Scientific Journal last September, revealed that half of Delhi’s population is obese, 51.6 per cent has high LDL cholesterol and 68.9 per cent has abdominal obesity (linked to various diseases).

law. Clarity comes with judgments, but that doesn’t happen here because there are no convictions,” says Bejon Misra, former member of FSSAI, and founder of the Healthy You Foundation. Misra says the government needs to step in for consumers, since they are the most vulnerable and lack the means to take on offending companies. “There should be educational programmes on radio, television and other media to familiarize consumers with labelling terms. At present, consumers are overloaded with information they don’t understand.” In 2010, Misra’s foundation proposed a front-of-pack labelling system, along the lines of an international model accepted in about 50 countries, to make it easier for consumers to identify nutritious food with a clear sign. But the proposal has not been accepted yet. In fact, ambiguous food labelling remains very much a worldwide problem with even the US’ Food and Drug Administration unable to regulate claims, according to a report by consumer advocacy group, Center for Science in the Public Interest. WHOLEGRAIN / MULTIGRAIN The law does not lay down how much wholegrain bread, biscuits or noodles should contain to qualify for a wholegrain label. So, your brown bread may be more maida than atta. Similarly, multigrain means more than one cereal has been used, whole or refined. ‘MADE FROM REAL FRUIT’ As in the case of 'wholegrain', there’s no regulation for foods claiming to contain real fruit,

Labeling regulations Although the Food Safety and Standards Authority of India has set labelling and packaging regulations, and food standards, manufacturers exploit the grey areas. “The laws in our country are excellent and technically sound, but there needs to be more clarity on the application of

AgriBusiness & Food Industry w May 2012

Health & Nutrition

Sugar is a sweet poison?

ow could something so sweet be so bad for you? That’s exactly the point. Sugar in all forms -- from the refined stuff in the bowl on your table to honey and high fructose corn syrup -- is a key contributor to many of our diet-related diseases and conditions, including obesity, type 2 diabetes, heart disease, high blood pressure and cancer, according to Dr. Robert Lustig, professor of clinical pediatrics at the University of California, San Francisco. Dr. Sanjay Gupta, Childhood Obesity Expert, said sugar is the source of American public health crisis. While Americans' sugar intake has declined significantly since the 1970s, their diets are now filled with processed foods containing the artificial sweetener, high fructose corn syrup, the show reported. "The problem is they're both bad. They're both equally toxic," Lustig said. According to recent estimates, about 16 per cent of the total calories in American diets comes from added sugar -- mostly in the form of soda, energy drinks, and sports drinks, grain-based desserts like cakes and cookies, sugar-sweetened fruit drinks, ice cream and other dairy desserts and candy. These highly palatable foods and beverages contribute a lot of calories with few nutrients, and crowd out healthful fruits, vegetables, and whole grains and the nutrients those foods provide. But not all experts believe sugar alone is the dietary devil. "It's important to highlight that

we get ourselves into trouble whenever we focus on one dietary attribute exclusively and ignore all the rest," said nutrition scientist Dr. David Katz, the well-regarded founding director of Yale University Prevention Research Center. Although Katz agrees that an excess of sugar -- fructose or any other form -- is harmful and that it’s wise to limit it in the diet, he added, “It's not sugar that's the poison, but the dose that makes the poison.” Currently, the American Heart Association recommends up to 100 calories (25 grams) per day of added sugar for women, and 150 calories (about 38 grams) for men. That’s much less than you might think: 100 calories of added sugar is found in 1/2 cup chocolate ice cream (56 calories) plus one cup of low fat chocolate milk (45 calories). One can of regular soda contains 126 calories from added sugars. Despite emerging evidence that links high added sugar intake with chronic health problems, until we know more, it doesn't help to completely eliminate sugar if other areas of our diet are lacking. Or as Katz explains, "When we focus on just one nutrient -- however important it is -- we tend to lose the forest for the trees. The food industry will be happy to give [us] whole new cart-loads of 'low sugar,' artificially sweetened junk food. It will be low in sugar, but will still be junk food." There are easy ways to lower your daily added sugar load: PRECAUTIONS: Sidestep soda. Instead of grabbing for a sugary drink, hydrate with club soda, seltzer, plain or sparkling water,

as opposed to flavours. Candy, beverages, breakfast cereal and snacks usually contain only small quantities of highly processed fruit extract or juice.

Processed food can legally pass as transfat free if there’s less than 0.2 grams of trans-fat per serving. But if you have large portions, or more than one a day, you still end up ingesting a lot of the bad stuff.

TRANS-FAT FREE Trans-fat in food increases bad cholesterol (LDL) in the body.

LOW-FAT While ‘low-fat chips’ indeed have less fat than the regular deep-fried chips,

AgriBusiness & Food Industry w May 2012

or unsweetened iced tea -- all of these can be sweetened naturally with some fresh fruit or veggie slices or a splash of 100 percent fruit juice. Look past the lump. Sugar grams listed on Nutrition Facts panels on packaged and processed foods and beverages lump naturally occurring sugars -- lactose in milk and fructose in fruit -- and added sugars together. Until that changes, rely on ingredients lists to know whether the product you are purchasing contains added sugars. Learn the lingo on labels. Although it’s no surprise that baked goods, dairy products like flavored milk and yogurt, salad dressings, sauces, and condiments have added sugar, some sources like whole wheat bread, peanut butter, and crackers may seem less obvious. Look for the following terms on ingredients lists—they all spell sugar: high fructose corn syrup, white sugar, brown sugar, corn syrup, corn syrup solids, raw sugar, malt syrup, maple syrup, pancake syrup, fructose sweetener, liquid fructose, honey, molasses, anhydrous dextrose and crystal dextrose. Find your sweet spot. Before you reach for dessert, have some fresh or frozen fruit or some unsweetened low-fat milk or yogurt to fill you up before you dig in. Choose only the sweets you love most, and stick to a small portion, such as a few bites of cake or ice cream, one small cookie, or small square of chocolate. If you go overboard on added sugars, know that you’re human; cut calories elsewhere that day and try to avoid a sweet attack the next day.

they are not fat-free. You will still gain weight by eating large portions. SERVING SIZE Cola has around 40 calories per 100ml. But do you really stop at half a cupful Calories, fat, sugar or sodium content of a food should be calculated according to the real serving size.

Commodity

Sugar

Branding to Retailing Journey â&#x20AC;&#x201C; R.J.Rayanade

ifferentiation is a key to success in large commodity markets which are largely governed by price competitiveness! The Pioneering and visionary efforts in sugar branding were taken by Mawana Sugar, Delhiâ&#x20AC;&#x2122;s leading corporate from Sugar Industry way back during 1993. Over the years total 20 sugar brands entered Domestic market and established themselves successfully. The present retail boom will further boost demand for branded sugar to cater changed consumer requirements of value added sugar products. This will lead to setting up of ultra-modern sugar packaging facilities by manufacturers themselves to meet requirements of supermarkets directly. Present excess Sugar production has forced sugar factories to think differently and cope up fast changing consumer psychology. The introduction of flavored sugar and development of value added sugar variants is indication of fast changing Industry. Consistent quality and Grain size etc of product is basic requirement for branded sugar and lot of work has been done in the Industry in this direction. Brand Managers and Marketing set ups are developed by leading corporate Sugar players which otherwise would be unheard in sugar Industry. Contract Packing set ups needed by Retailers nearby most of cities will be big opportunity particularly for co-operative sugar sector which will in turn create local employment for rural India. The co-packing set ups can be used even to explore possibility for export of value added sugar in retail packs.

Sugar factories located near metros will be most benefited in the era of Retail revolution in the offing. The retail sugar packaging set up by manufacturers will drastically reduce the distance between farm to fork which is main mantra of retailers. The main criteria for setting up such facilities are: v Round the year operation of such facility instead of seasonal process of Sugar manufacturing. v Consistent quality of sugar preferably refined or Uniform crystal sugar with low sulphur content as per international norms. v Special efforts for Hygienic packaging of sugar by avoiding entry of dust or foreign particles by use of dust collection as well as metal detection system in the packaging facility. This will help in meeting stringent quality expectations by alert customers of Branded products. v Automated packing set up to avoid any manual handling of sugar v Huge requirement of retail sugar packs if clubbed with quality product then sky is the limit for its market. v ISO and HACCP certification by such facilities will help in promotion of the branded products. v Value added sugar will help in catering to High end pharma, soft drink & Hospitality Industry. Recently Kisanveer Co-operative sugar factory from Maharashtra has succeeded in introducing pharma sugar which is indication of change in mind set even by co-operatives to come out of crisis situation. Definitely the industry will ride the retail boom! (The author is the General Manager, Nichrome India Limited)

Sugar sector looks forward to decontrol

. Ramanathan, President, South Indian Sugar Mills Association â&#x20AC;&#x201C; Tamil Nadu, welcomed the extension of the tax holiday under Section 80(IA) under the Income Tax Act for power projects commissioned up to March 31, 2013, the benefit of External Commercial Borrowings and the reduction in withholding tax to 5 per cent from the present 20 per cent being extended to power project. These would benefit the cogeneration project coming up in the sugar industry. The industry also commended the investment linked deduction of capital expenditure made available at enhanced rate at 150 per cent for eligible business. Warehousing for storage of sugar is added to this list and weighted deduction of 150 per cent is available on expenditure incurred for Agri Extension Services. The industry will benefit from the reduction in basic customs duty to 2.5 per cent from the prevailing 7.5 per cent given for sugarcane plant and harvesting machine. The sugar industry, however, anxiously awaits a major policy reform to decontrol the industry. The issue is now before the Dr Rangarajan Committee. Farmer-friendly measures such as hiking agricultural credit, continuing interest subvention with added rebate for prompt payment, support to agricultural research with a corpus contribution of Rs 200 crore to develop plant and seed varieties and plans for a Government-owned Irrigation and Water Resource Finance Company to focus on financing micro irrigation and waste water management would help strengthen water conservation, would all benefit sugar industry which is dependent on the sugarcane farmer, he said.

AgriBusiness & Food Industry w May 2012

Commodity

Artificial price cut takes flavour off coffee – M R Subramani

ave arabica coffee prices been dragged ‘artificially'? Many in the coffee sector think so, particularly when commodities such as soyabean, mustard and chana have rallied on reports of short-supply. The sector's thinking has been sparked off by a Rabo Bank comment that the sharp fall in coffee prices in the last few weeks is ‘artificial'. Last year, prices of arabica milds under which Indian arabica coffee falls increased to a record $3.07 a pound. The rise was on lower carryover stocks, poor crop in countries such as Columbia, Mexico, India, Kenya and Tanzania besides rising consumption. A few days ago, the price dropped to levels of $1.70 without much change in fundamentals. Though the price increased following the bank's comment, it is still ruling lower at $1.8535. UNDERVALUED “The fall in prices is against fundamentals. Last year, the Brazil crop was lower, while disaster struck the Colombian crop. There was shortage of arabica milds,” said A.K. Bhandari, former President of the United Planters' Association of Southern India. “There is no surplus and there was a deficit during NovemberDecember. Though Brazil crop is

stated to be a record this year, coffee will not be harvest until June. Even then, short-supply will continue till August since the new crop will hit the market only in September,” said Bhandari. Ramesh Rajah, President of Indian Coffee Exporters Association, said: “Basically, all commodities have tended to fall. That tends to put extra pressure. However, there is no doubt that coffee is undervalued. Definitely, arabica market will have to move up”.

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“There is no reason for arabica prices to drop to levels of $1.70,” said Bose Mandanna, former Vice-President of Coffee Board and a planter. “For South Americans, $2 a pound is the break even point. Even in India, production costs are higher due to labour and fuel,” said Mandanna. FARM GATE PRICES Currently, farm-gate prices for arabica parchment are Rs 8,050-8,200 for

Commodity

a 50-kg bag against over Rs 10,000 during the same period a year ago. Arabica cherry is ruling at Rs 4,100-4,200 against over Rs 4,700 a year ago. However, things are better in the case of robusta. Farm-gate prices of robusta parchment are ruling at Rs 5,900-6,050 for a 50-kg bag against Rs 4,850, while robusta cherry rates are Rs 2,700-2,850 against Rs 2,500. “People were concerned on the fall in prices. But when someone like Rabo Bank says the drop has been done artificially, then someone has done it,” said Bhandari. “It is an unusual comment. Rabo

Bank is strong in financing commodities than any other bank,” said Rajah. “Ever since Rabo Bank's comment, prices have tended to be volatile,” said Mandanna. “Prices have to reflect the fundamentals in the short-term. We expect a reversal especially when global consumption is rising by 2.5-3 million bags (60 kg each) annually, while supplies are not in tune with that,” said Bhandari. Prices are likely to rise to $2.20 in the near term. “After that we cannot say how prices will behave,” said Bhandari. n

Drop in custom duty may add aroma to coffee

ustoms duty cut is expected to facilitate farm mechanisation and help promote cafe culture in the country. The new proposal is likely to strengthen the coffee sector as well and have double impact for the industry. At the estate level, it will offer opportunity to introduce farm mechanisation and facilitate roll-out of more cafes/stores thereby boosting domestic coffee consumption. Basic customs duty on power weeding machine for coffee plantations, coffee grinder, coffee processing machine, sprayers, coffee packaging machine, coffee bagging machine and mechanical harvester for coffee plantation has been reduced from 7.5 per cent to 5 per cent. The budget concessions were given for these equipment/machineries up to March 31 last year before being withdrawn. Now, it has been re-introduced. “Due to labour shortage in all the major coffee-growing regions, farm mechanisation is inevitable. Now with reduction in Customs duty it will facilitate some amount of farm mechanisation,” said Jawaid Akhtar, Chairman, Coffee Board. “The budget does not offer major benefits. But minor relaxations in customs duty for imported equipment will give us access to new and latest technologies for efficient plantation management,” M.D. Kumar, Executive Director-Finance, Tata Coffee, said. In addition to coffee plantation machinery, basic customs duty (BCD) on coffee vending machine and brewing machines other than those used for domestic purpose is being reduced from 10 per cent to 5 per cent. A concessional rate of BCD of 2.5 per cent is also being provided to parts required for the manufacture of such machines. “Duty cut on processing machinery is likely to facilitate roll-out of more cafes and offer employment generation in non-coffee growing regions, where café culture is slowly picking up,” said Akhtar. Venu Madhav, COO, Café Coffee Day, said the proposal will lead to increase in manufacturing more vending machines. The company currently makes about 5,000 machines an year.

Montek wants Tea to be declared as National Drink

lanning Commission deputy chairman Montek Singh Ahluwalia has said the panel will support the industry's move to declare tea as the National Drink of India. Ahluwalia, who was in Jorhat to attend the celebration marking 75 years of Assam Tea Planters' Association (ATPA), said, "I am going to write to Union commerce minister Anand Sharma if tea can declared a National Drink. This also has historical connection as the first indigenous tea planter Maniram Dewan was hanged by the Britishers in 1857. So tea has its roots in the freedom struggle." He added the tag will definitely help in brand-building. Tea is now grown and consumed across the country and its consumption is much larger than that of coffee. "However, we need to thoroughly look into it". Ahluwalia said the twelfth FiveYear Plan will focus on secondary agriculture and tea will be one of the focus areas. "Demand for tea is going to rise tremendously - both domestically and internationally. We will ensure that we will overcome the problems in production and cater to the increasing demand and make foray in new markets internationally." Per capita tea consumption Per capita consumption in grams is extremely high in UK (2100 grams), followed by Russia (1640), Egypt (970), Pakistan (840), India (730), Canada (720), Australia (700). Tea is the National Drink of China and Britain, while Pakistan’s National drink is Sugarcane.

AgriBusiness & Food Industry w May 2012

Retail

The iconic Dorabjee’s finally expands Local expansion and online business on anvil

orabjee’s, the heritage Punebased store has begun to expand within the city and may even do business online. Call it a landmark, term it an easy-tolocate rendezvous point or just dub it the store from where innumerable culinary adventures can begin, Pune's oldest superstore Dorabjee & Co lends itself to many a metaphor. But foremost of them all, this is the place to look for anything and everything to do with food – from breakfast to snacks to full-fledged meals. The spread is pretty aweinspiring: cold cuts, cheeses, fresh fruits and vegetables, canned food, meat, fish, beverages, chocolates, icecreams, cereals, even freshly roasted and ground coffee … basically everything you would need for anything ranging from a daily dalsabzi routine to ingredients for that fancy, gourmet meal. “This is where to find what you can't get anywhere else in the city,” said a housewife, for whom a weekly visit to the store has been a habit for

over three decades. “If it's not available here, chances are it's not to be found anywhere else in the city,” she said. Dorabjee's spacious interiors and well-stocked shelves lend credence to this confidence as food from across the globe jostles for attention with local produce. In the cheese section, for instance, Baramati Natural Cheddar Cheese lies cheek-by jowl with Swiss Emmental, Gruyere and Cumin Gouda from Holland; Belgian fat-free ham and Spanish bacon share space with pork products from local producers, and hardcore Puneri delicacy Puran Poli sits just a step away from Mexican tacos. History Strategically located on the arterial Moledina Road at the very border of the city and the Cantonment area, the Dorabjee's story began somewhere in the mid-1860s as Treacher and Co, a store owned and run by an Englishman. The retail outlet essentially served the needs of the British garrison stationed in the city. In 1911, it was bought over by Dorabjee Pallonji Patell, who

AgriBusiness & Food Industry w May 2012

subsequently passed it down to his wife's brother, incidentally also a Patell. Today it is owned and managed by descendants of the second Patell. The preferences of its earliest clientele accounted for much of the merchandise that graced the shelves, and laid the foundation for its identity as the place to get premium foods, one that is maintained to this day. Its 19th century origins also explain the erstwhile colonial-style construction of the building that was felled at the turn of the 21st century, an inevitable prey to modern-day compulsions. The upside of the re-construction exercise was that it enabled a complete overhaul of operations as well as massive renovation and expansion, and the floor space of today's Dorabjee's is probably five or six times – perhaps more – that of the original store. Through its 100-plus-years existence as Dorabjee's, the superstore has naturally seen several ups and downs, and new incumbents in the driving seat, before its metamorphosis into a sprawling multi-storeyed superstore that focuses firmly on food. The visionary Captain The person largely credited with putting Dorabjee's on the growth path in recent times is Thrity Poonawala, who came into the picture in the late 1980s. Her petite frame and gracious manner belie her capacity to take the tough decisions that she must have had to take to revive the enterprise's flagging fortunes. The first step entailed jettisoning some parts of the business – pharmaceuticals, for instance, for which Dorabjee's had some agencies. “We decided to concentrate on food and go for the serious shopper,” Poonawala said. The decision to stay away from the frills and entertainment options offered by malls and stick to food

Retail

Global Brands highlight India growth

Indian Consumers most confident: M Card Survey

Thrity Poonawala, Owner & MD, Dorabjee’s, Pune

oca-Cola and Yum Brands, which are often proxies for US investor participation in emerging consumer markets, highlighted India growth when they reported the quarterly numbers last week. This follows decelerating China growth for many global brands and coincides with India’s moves to revive economic buoyancy. Yum Brands served its first ever standalone India numbers —8 per cent growth across 471 stores of KFC, Pizza Hut and Taco Bell — at a time growth and profit from China slightly missed investor estimates. Coca-Cola’s local volume sales jumped 20 per cent compared to 9 per cent in China and 4 per cent in Brazil. The soft drink giant’s Indian volume had a third straight quarter of break away lead over the Chinese dragon. Economic growth in China (8.1 per cent) and India (6.1 per cent) slumped to lowest in three years during January to March quarter. China has been at work to realign an overheated economy even as it faces a tricky leadership succession in the ruling Communist party this year. While China continues to be the biggest story, some global brands are pulling out India numbers to allay investor nervousness with the Dragon cooling off—probably a reminder that they are spreading out in the next biggest market. Many global brands have opened stores outside big cities to mine spending power in smaller centres like Aurangabad, Bhopal and Bhubaneshwar. “We came up with an accessible and affordable strategy to participate in the broader India story. There is brand recall beyond the metros but we wanted people to try our products and stay with them-—through competitive pricing and delivering value,” said Shriti Malhotra of The Body Shop, with presence in 30 cities. Indian consumers were most confident among their Asian peers, said a recent MasterCard survey. “There’s robust consumption and entrepreneurial play happening in smaller cities and towns, while big city experts are missing it. Aspiration levels feeding on media consumption and improved education is leading to demand even in small towns,” said Sanjay Jain, director at Taj Capital, a Delhi-based advisory firm, who added “anyone in doubt of economic growth must check cement prices rising over Rs 100 per bag in eastern India”.

was more about insurance than investment, she adds. With clarity on the road map ahead, the store quickly gathered strength. In the early 1990s, Poonawala and her family bought out the property (held by a trust), and around the year 2000, the old building was pulled down and the plot redeveloped. Not only was more space available for retailing, and a complete makeover effected, the basement parking helped to bring back shoppers who had been staying away on account of parking difficulties. Around two odd years ago, Dorabjee's was ready for further expansion. Space that had been leased out to other retailers was taken back to facilitate this. Today, the three levels are connected with escalators for easy shopping and it is entirely easy to spend a full morning browsing. Shoppers can grab a quick snack at the small eatery in the foyer or have a leisurely bite in the cafeteria on the top floor. Recently, Dorabjee's opened a branch at Vimannagar and a second one on NIBM road is on the cards. “We may look at e-commerce in the near future. The idea is on the anvil,” said Poonawala who is now more than happy to share her daily responsibilities in the family-owned enterprise with her son Farsheed and daughter Tina Umrigar. Amongst the legion of admirers of this family-run store was the late film maestro Raj Kapoor who was keen to shoot inside the store for a film. Categorically denied that privilege by the erstwhile proprietor, he included a long shot of it in the famed movie Sangam. Unlike most modern retailers, Thrity doesn't care for either jargon or statistics. So she has just some idea of the number of SKUs in her shop, and isn't ready with details of average footfalls on weekdays or weekends. What she does know is that the key to success is keeping the customer happy, and all the management's efforts are directed towards achieving this objective.

AgriBusiness & Food Industry w May 2012

Retail

News FDI in Retail

Local sourcing fails in single-brands retail

he government will consider waiving the local sourcing requirement for foreign investors in single-brand retail on a case-to-case basis to attract investments, a senior government official said. In January, the government raised the foreign direct investment (FDI) limit in single-brand retail from 51 per cent to 100 per cent with some riders, including mandatory sourcing of 30 per cent of inputs from local small- and medium-sized companies. The sourcing requirement, however, seems to be discouraging retailers from increasing their stake beyond 51 per cent and is also keeping away those considering an India foray. The sourcing clause may be removed for those single-brand retailers who can establish that it is not possible for them to procure goods from local small enterprises because of technology or product sophistication. "There is a possibility that some companies may not be in a position to source the required 30 per cent inputs from local small industry for the simple

reason that these may not be producing what they want. There is a need to consider such cases," the official said. The industry ministry is likely to seek the opinion of other ministries before taking a decision. "This is a highly sensitive issue that needs to be tackled with care. We will go about it carefully," the official said. So far, less than Rs 200 crore in FDI has come into single-brand retail. Some big retailers, who wanted to come in through the 100 per cent FDI route, are now facing a hurdle in the sourcing norm. After the sourcing rider was announced, Sweden's Ikea put on hold plans of entering India. The home products giant said sourcing from small units is an obstacle that needs to be reviewed. Small units have a total investment of up to $1

million or about Rs 5 crore. Adidas, too, said that meeting the local sourcing norm from SMEs will be difficult for the company and its sister concern Reebok, as both are moving to large manufacturers for economies of scale. However, no company has approached the department of industrial policy and promotion (DIPP) yet seeking a rollback of the requirement, the official said. The DIPP is a government department that frames policy on FDI. Most foreign single-brand retailers are still assessing if it is possible for them to meet the 30 per cent sourcing clause before they increase their stake beyond 51 per cent. The government had initially said that the 30 per cent sourcing could be waived in the case of very high precision goods, but the final policy was silent on the issue. There is a realisation in the government that local sourcing seems to work well in multi-brand retail, but may not be feasible in the case of single brand. The government had proposed allowing 51 per cent FDI in multi-brand retail, but it could not be implemented due to stiff political opposition.

K.K. Modi plans 1,000 retail outlets at IOC petrol stations

nthused by the success of its 24x7 retail outlets in New Delhi, the $1-billion K.K. Modi Group plans to open nearly 1,000 such outlets at petrol stations owned by State-promoted Indian Oil Corporation (IOC) across the country. In a major expansion drive to increase market capitalisation to $5 billion (Rs 25,000 crore) by 2015, the Group will set up a chain of six more chemical industries at Dahej in Gujarat where it has so far committed investments of Rs 1,500 crore in the three existing industries. The Group had earlier roped in Sarthak Behuria, former Chairman of IOC, as its President. It signed an agreement with IOC two years ago

to open convenience stores at its outlets. IOC has nearly 26,000 petrol stations across India. “We have so far opened 10 retail outlets at IOC petrol stations. Now we would be scaling it up to 50 in 2012-13 and 200 in the fiscal thereafter. In all, we are planning to open nearly 1,000 retail outlets in a phased manner, with an estimated investment of Rs 2,500 crore,” K.K. Modi, Chairman said. The Group is the pioneer in India of the 24x7 convenience outlets – with the brand TwentyFourSeven – which run round the clock in the national capital. These are New Delhi's only organised retail stores in the round-the-clock convenience store format. Under the agreement, IOC would

AgriBusiness & Food Industry w May 2012

invest around Rs 1 crore per retail outlet and the KK Modi Group's share will be Rs 1.50 crore by way of stocks and logistics, he said.

Retail

News MyGrahak.com to use portable swipe machines

nline grocery retailer MyGrahak.com said it will deliver not just grocery at its customers’ doorsteps but will also allow them to pay through credit card on delivery through a portable swipe machine the sales person will bring along. “Customers can shop in the comfort of their home without worrying about long queues and parking at malls,” Ambuj Jhunjhunwala, founder-CEO, MyGrahak. com said.

He claimed that the portal is already clocking a turnover of Rs 1 crore and growing at about 25 per cent “Indians traditionally order groceries through the telephone and MyGrahak is merely an extension of that concept,” he said. The one-year old company has introduced its services in the Delhi-NCR region. “We plan to introduce the service in most major metros,” said Jhunjhunwala. Currently, it sells 11,500 products in categories like food and beverages, FMCG and dairy products. “The average bill size at our portal is Rs 1,261. Also what we save on the real estate space, we use it to build warehouses. At

present we have a company-managed 7,000 sq feet warehouse to service our customers,” he said, adding the company is looking to set up mother warehouses at various places. The online food and grocery category has been seeing hectic growth. PE firm Ascent Capital is understood to have invested $10 million in the first round of funding in Bangalore based BigBasket.com. Another player in this category, Aaramshop.com which went live last year, has tied up with mom and pop stores to attend to the daily needs of consumers.

Reliance Retail to raise $900 million from RIL

eliance Retail plans to raise up to Rs 4,500 crore or $900 million from its parent company, Reliance Industries Ltd to accelerate store openings and grow aggressively in select formats, even as some of its rivals look to shutter outlets and curtail expansion in the cash guzzling retail business. "The funds will primarily be invested in adding several big-box stores as well as in expanding aggressively in the consumer durables and apparel formats," a senior Reliance Retail executive said. The company plans to double the number of its consumer durable stores and increase the number of apparel stores by 30 per cent. A Reliance Retail spokesperson declined to comment. The Reliance Retail board will decide the mode of the Rs 4,500 crore fund infusion. The funds are expected to come in several tranches. The maximum share capital of Reliance Retail as per its Memorandum of Association and Articles of Association can be Rs 15,000 crore and since it was set up in 2006, Rs 5,732 crore has been pumped in as equity into the company. "This would increase multi-fold in the years to come, on the back of aggressive investment planned to grow the value format," RIL chairman Mukesh Ambani had said during at the company's annual general meeting last year.

The capital-intensive retail sector has proved to be a tough proposition for many companies. Retailers such as Subhiksha and Vishal Retail went under as they were unable to service the borrowings that financed their aggressive expansion plans. Kishore Biyani's future Group, the country's largest retailer, is looking at inducting strategic partners and financial investors across formats as it tries hard to pare its near Rs 8,000 crore debt. Retail Retail, on its part, got off to a stuttering start and was unable to meet most of its ambitious targets in its early years. After several rounds of restructuring and leadership changes, it remains a lossmaking unit. But with its parent company, Reliance Industries, sitting on cash and cash equivalent of over Rs 42,000 crore at the beginning of this financial year, the retail arm has access to deep pockets to fund its expansion plans. The country's second largest retailer after the Future Group, Reliance Retail runs about 1,200 stores across multiple formats in 86 cities covering six million square feet. Reliance Fresh, its fruit, vegetables and grocery stores, constitute the mainstay of its business and accounts for 50 per cent of the 1,200 stores. In addition, it operates a line of specialty stores across different format

Mukesh Ambani

such as apparel (Trends), books (Timeout), consumer durables (Digital), footwear (Footprints) and jewelry (Jewels). Its other retail chains include joint ventures with Marks & Spencer, Vision Express and Hamleys. While the company has traditionally focused on smaller format stores, it is now stepping up its presence on bigbox stores or hypermarkets that are built on about 60,000-80,000 sq ft and stock everything from food to apparel to furniture. So far, the company owns less than halfa-dozen hypermarkets, but the company under the leadership of two retail veterans from China-Rob Cissell, former COO of Walmart China, and Shawn Gray, former vice-president incharge of store operations of the same company - has been buying real estate for big box formats expansion.

AgriBusiness & Food Industry w May 2012

Retail

News Retail growth can translate into employment growth, say experts

ndia has a very strong growth story in the e-commerce space and will continue to grow despite changes in the global marketplace" said Gaurav Kachru, CEO and CoFounder, Dealsandyou.com. ASSOCHAM estimates that Indian Online Retail industry will be Rs. 7000 Crore by 2015, a 250 per cent growth from current position. The optimism is spreading in the e-retail job market. “There is a qualitative difference in the kind of jobs e-retail offers. The main difference is that e-commerce companies don't need physical sales staff,” said Vidya Nataraj, CoFounder, BlueStone.com. There is very high demand in data analytics profile as the companies have to deploy dedicated resources to track customer behavior and offer personalized buying recommendations. However, she added that most jobs available in e-retail space are similar to offline platform such as back-end

supply chain, warehousing, technology, marketing, sourcing, customer support functions and merchandising. There is a job at every level in the e-retail space. For entry level candidates Kachru said, "The average age of employees in e-commerce companies is likely in the range of 26-27 years, which reflects the high composition of people with relatively lower experience". For experienced professionals, Peyush Bansal, Founder and CEO of Lenskart.com said, "Online retail jobs are more challenging and require more proactive behavior. Hence, more middle level jobs are available as they can use their experience and innovative approach to excel." In the early stages of the business, companies need multi-tasking and innovative people. But as a business gains scale, it will require some of the skills sought after in traditional businesses as well. Kachru looks for three traits

beyond basic functional skill sets: the ability to learn quickly; the ability to deal with and drive change; and speed of execution. "All three are critical for people to succeed in a rapidly evolving environment like the state of digital commerce in India", added Kachru. Nataraj of Bluestone.com feels barriers to entry in online retail space are less. So, candidates should be able to respond and innovate more quickly to changing market conditions. "Online retails jobs are more analytical and technical oriented, therefore require a lot of innovative thoughts and perfect time management", elaborated Bansal.

UK supermarket drops GM-free poultry policy

K supermarket chain, Morrisons, has dropped its GM-free feed requirement for poultry meat and eggs, as it looks towards strengthening its focus on sustainability. The decision to permit the use of GM feed in its poultry supply chain was announced at its recent farming conference in Harrogate, Poultry

World has reported. The move follows years of industry lobbying, after supermarkets unilaterally banned all GM in poultry feed in 2001, even though they continued to allow it in other livestock rations. David Evans, head of agriculture at Morrisons, said the company recognised that feed was becoming a major item of expenditure for livestock producers. "Uniquely, poultry farmers have faced restrictions on the use of GM-feed, but this policy will be increasingly difficult and costly to maintain as the availability of non-GM protein, namely soy, decreases," he admitted. "We are moving to permit the use of GM feed in the poultry supply chain and are strengthening the focus of sustainability, through the increasing use of certified sustainable soy," he added.

AgriBusiness & Food Industry w May 2012

NFU chief poultry adviser Kelly Watson welcomed the move. "The availability of non-GM soya is declining all the time as producers worldwide switch to GM alternatives. The cost of non-GM has pushed up poultry feed prices, so this move to allow GM will help make feed more affordable, while making poultry production more sustainable. We would like to see other supermarkets follow suit." The Soil Association has castigated Morrisons’ decision to drop its GM-free feed requirement as a “huge step in the wrong direction” and is now calling for all GM products to be clearly labelled. Other major UK supermarket chains, Sainsbury's and Tesco have confirmed that all of their fresh and frozen poultry produce would continue to be fed nonGM feed.

Retail

News UBI to focus on retail sector

nion Bank of India will focus on lending to retail sector and aim at improving customer service in a bid to retain and lure clients, new chairman and managing director Debabrata Sarkar said. Sarkar, who was earlier the executive director of Allahabad Bank, took charge as the chief of Union Bank after MV Nair retired on March 31. The bank should focus on lending to farmers, small businessmen, and retail sector, Sarkar said addressing senior officers of the bank. He said the bank's ratio of retail advances is very low given its large branch network and strong delivery channel and technology platform.

Currently, the bank's retail advances portfolio stands at nearly Rs 16,000 crore, which is little less than 10 per cent of its total loan book. This compares with an average 20-25 per cent retail portfolio of other lenders. "Every Indian has aspiration to own a car and house and we should look at converting these aspirations into business," he said. The bank has more than 3,200 branches and 3,800 ATMs, and its total business - advances and deposits - touched 4 lakh crore as on March 31, 2012. He also stressed on the need to focus on customer services, which would enable the bank to increase its customer base. The

bank should also focus on recovery of bad loans and rigorously monitor all loan accounts to prevent them from slipping into bad loan category, he said. As on March 31, the bank's gross non-performing assets stood at 3.33 per cent, while net NPA was 1.88 per cent of total advances. Allahabad Bank has announced that Tilak Raj Chawla will replace Sarkar as executive director. Chawla started his career in 1977 with Punjab National Bank. In 1996, he joined Dena Bank as assistant general manager and was gradually promoted to the post of chief general manager in July 2011.

Videocon to treble retail store count by next year

he diversified Videocon Group, which is into oil & gas, telecom and DTH service, apart from manufacturing and retailing of consumer electronics, is planning to treble its multi-brand electronic retail chain Digiworld stores to nearly 1,200 by next year. The Group operates 400 Digiworld stores at present, including the franchisee ones, and plans to add at least 100 outlets by the end of this calendar year.

“We are planning to open another 100150 Digiworld stores by December. Next year, however, we will be much more aggressive and open 500-600 stores to take our footprint to nearly 1,200 outlets,” Videocon Industries Director Anirudh Dhoot said. “Further, we want to increase it by 300400 stores a year and make it a household name,” he said. The firm normally invests about Rs 1 crore for a store and works on the model of 50 per cent franchise and 50 per cent own. “Our target is to take our consumer durables business to Rs 10,000 crore this year and want a quarter of that coming from our Digiworld and Next stores,” Dhoot said. The company aims to strengthen its position against Korean rivals like LG and Samsung and will invest over Rs 5075 crore on R&D. “We will be investing

Mark your dates 25-26-27, August 2012

www.graintechindia.com

about Rs 50-75 crore on new products. Last year we spent Rs 50 crore,” he said. Videocon also plans to up manufacturing, especially of refrigerators. “Every year we have a capex of Rs 50-100 crore". "Capacity will rise by half a million more on the refrigerator side. We now rollout 30 lakh refrigerators,” Dhoot said. About 70 per cent of Videocon products are manufactured in the country. The firm is in the process of setting up a new mobile handset plant involving an investment of up Rs 75 crore. The company, looking to sell around 2.5 million mobile handsets next year, is currently scouting for a suitable location for the new plant, and is keen on Kerala, Madhya Pradesh and Chhattisgarh, Dhoot added.

3rd

Gayathri Vihar, Palace Ground, Bangalore, India

AgriBusiness & Food Industry w May 2012

Corporate

News

Tea growers seek subsidy to survive hailstorm damage

he Nilgiri Small Tea Growers' Association has appealed to the Tamil Nadu Government and the Tea Board to disburse a survival subsidy to farmers who have lost tea due to hailstorm. “Right now, about 5,000 kg of green leaf a hectare ready for harvest till May-end has been totally lost. At prevailing prices, this works out to a loss of Rs 60,000/ha in two months. Against this, we have represented to State Government and Tea Board for a lump sum survival subsidy of Rs 10,000/ha. If the crop loss continues beyond two months, the ‘rush season' would be lost and the Government

to tea fields in Thothanadu belt spread over Kenthorai, Thummanatty, Thuneri, Morigal, Kappachi, T Maniatty, Kambatty and Kattabettu. Tea bushes remain covered with hailstones on both hill tops and valleys. During our survey, we could not see even a single bush in this area which has escaped the hailstorm,” he said.

and Board must continue to help farmers during that period,” the Association President, H. Thiagarajan, said. “The hailstorm struck on Saturday afternoon but we could pick up heavy hailstones even today,” Thiagarajan, said. “The damage has been extensive

EXTENT OF DAMAGE “We estimate that tea bushes in about 4,000 hectares have been affected by the hailstorm. It will take up to six months for these bushes to come for full harvest again. Nearly 10,000 growers will lose their income from tea during this period,” he disclosed.

Turkey to buy Indian wheat

fter Iran, India finds yet another wheat market in Turkey. The West Asian country has shown interest in importing wheat, which is likely to pace up India's wheat export that stands at around 6 lakh tonnes. "A Turkish company, Tarimex, has shown interest in importing wheat. However, the quantity is unknown. But if this works out, Indian wheat will find an unconventional market," said an official at the Agricultural

and Processed Food Products Export Development Authority, a Central government agency. This has come as a glimmer of hope for Indian wheat exporters who seem to have lost the race to the cheaper grain from Russia and Australia in global market. According to sources, India may price wheat at $300 per tonne for Turkey, which is around $50 higher than the Russian wheat. But Turkey needs the grain to meet its increased export targets of pasta and wheat flour. According to USDA reports, Turkey will import 3.5 million tonnes wheat. This will come on the back of increased pasta exports (to around 4, 00,000 tonnes) as well as wheat flour exports (to around 2 million tonnes). Turkey buys wheat mainly from US, Russia, Ukraine and Kazakhstan but sells

pasta to about 137 countries that include major buyers like Japan, Iraq, Libya and other African countries. For India, the wheat production of 88.31 million tonnes is driving up the exports. "Markets like Turkey, Iran and Iraq may not be regular importers for us. But at a time when traders are struggling to export wheat, this can bring in the much-needed solace," a trader said. The bilateral trade volume between India and Turkey stands at about $7 billion with India contributing $5.9 billion. Recently, Turkish Ambassador to India Dr Burak Akcapar sought signing the Free Trade Agreement (FTA) with India. He expected it to grow to $20 billion in the next few years by expanding the scope to textile equipment, chemicals, electronics, electrical appliances and kitchenware.

High basmati prices pinch exporters

asmati prices have shot up by about 30-35 per cent in the past weeks. This steep increase, despite a bumper harvest in 2011-12 and not during the peak export season, has left exporters in a tizzy. Some have even stopped booking new contracts and exports.

CARTELISATION Sources said the price hike has nothing to do with market fundamentals and trading volumes are razor thin. A trade cartel seems to have pushed up the price to justify valuation of their assets to their financiers during the yearend, they claimed.

AgriBusiness & Food Industry w May 2012

Such a hike in prices would enable the trade to over-valuate assets including stocks. The aromatic paddy prices, that ranged between Rs 14 and Rs 17 a kg during the harvest season in November, are currently quoted at Rs 22-27 a kg. Similarly, the price of milled rice has

Corporate

News shot up from around Rs 34-35 a kg to around Rs 50 a kg. DOMESTIC PRICES Interestingly, domestic retail prices of basmati have not seen any change so far. “It's all driven by sentiments,” said Vijay Setia, President of the All-India Rice Exporters Association commenting on spurt in prices. “The farmer is not going to gain from this increase and it will benefit only the stockists and exporters,” Setia said reiterating his demand that export prices should be linked to the minimum

support prices. A majority of the farmers sell their produce immediately after harvest that stretches from November till midJanuary. There are small arrivals in some mandis that may benefit some farmers; Setia said adding that people who are not fully covered are stocking up. NO NEW CONTRACTS “The price behaviour is erratic and there is a shortage being created. It's too high a price and there's something wrong,” said Anil Mittal, CMD of KRBL,

the country's largest exporter. KRBL has stopped booking new contracts and is honouring only long-term commitments, he said. HIKE ON CARDS? Some players are contemplating price hikes in the domestic market. “There will be an impact of this increase and we will have to consider a price hike,” said Dr Ayushman Gupta, Business Director, Best Foods. “Buyers will have to move in line with the calibrated market,” Dr Gupta added.

Badal wants border to be opened for trade boost

pening borders of Punjab with Pakistan for trade will provide impetus to the state’s economy and will be a “major boon” for farmers, Chief Minister Parkash Singh Badal said. Speaking to media persons on the fourth day of his thanksgiving tour of Lambi — his constituency — the chief minister said: “The visit assumes significance as improving bilateral ties and promotion of trade will benefit both the countries in general and Punjab in

particular. Punjab being a land locked state had been a victim of the wrong policies of the successive Congress government at the Centre, who have virtually ignored the state’s economic development.” “If the borders of the state are opened for cross border trade with Pakistan, then it will prove to be a major boon for the farmers of Punjab, who are on the verge of economic disaster due to the exorbitant hike by the Centre in agricultural inputs,” he added. Badal claimed that trade will open up new avenues for Punjab’s traders and farmers as through Pakistan, they will be able to establish trade links with the Arab

world. “The SAD-BJP government has been regularly urging the Union government to open the Hussainiwala and Attari borders for trade with Pakistan but all efforts have proved futile,” he said. Asserting that the Centre must ensure that while exporting agricultural commodities to Pakistan it should give preference to Punjab — the food bowl of the country — Badal said: “Punjabis have a lot of expectations from the current visit of Zardari. So, the Centre must take an initiative to safeguard the economic interests of the state.”

Now, Basmati goes to Iran directly

fter almost a decade, Indian basmati rice exporters have now started direct shipments to Iran. This follows the operationalisation of a new payment mechanism that allows importers from Iran to make payment in Indian rupee. Iran is the largest market for Indian basmati and accounts for over 20 per cent of the country's annual shipments. “The direct shipments to Iran have commenced with the rupee payment system in place. We expect exports to grow by 10-15 per cent this year,” said Vijay Setia, President of All India Rice Exporters Association and Director, ChamanLal Setia Exports. Direct exports

to Iran will reduce the logistics costs for importers and may prompt them to buy more, he said. The US and European Union sanctions against Iran had forced the Indian exporters to route their shipments through third country, the UAE, for the past seven-eight years. Adding to their woes, the recent volatility in Iranian currency had triggered a payment crisis. As part of the recently worked out bilateral payment mechanism, UCO Bank is the nodal agency from the Indian side while Persian Bank is its counterpart in Iran to facilitate the transactions. . “We are entertaining small orders from Iran,” Setia, said.

KRBL, the country's largest basmati exporters is yet to begin direct exports to Iran. “We are waiting for basmati prices to stabilise,” said Anil Mittal, CMD, KRBL. Basmati prices have shot up by 35 per cent in recent weeks. “The payment issue is resolved and soon the business should be back to normal. There is a natural acceptance of basmati in India and exports are going to improve,” said Dr A.K.Gupta, Advisor, APEDA. Currently, the balance of trade is heavily in favour of Iran as India imports from that country about 12 per cent of its crude oil requirements.

AgriBusiness & Food Industry w May 2012

F&B

News Amul launches protein-rich Amul Pro

rmed with an enterprise value of $3 billion and a turnover of $2.4 billion, the world's fifth largest food products brand, Amul launched its protein-rich product for children Amul Pro at a competitive price of Rs 25 less than its nearest competitor Bournvita from the Cadbury stable.

The product will be launched soon across India, said R S Sodhi, Managing Director of the Gujarat Cooperative Milk Marketing Federation (GCMMF), that markets the 40-odd products of Amul brand, after launching the new product, Amul Pro, in which the catchword â&#x20AC;&#x2DC;Pro' means protein. It is expected to challenge the brown beverage market leaders Bournvita and Boost, and corner a 10 per cent share in the Rs 3,000-crore Indian market within the first year. Amul, already exporting products mainly for the Indian Diaspora, is also looking at setting up milk processing plants in the US and elsewhere. â&#x20AC;&#x153;However, no final decision has been taken yet,â&#x20AC;? he added. In India, Amul will invest around Rs

3,000 crore in the next five years to set up new plants and enhance its daily milk processing capacity from the existing 145 lakh litres to 180 lakh litres. It currently has 52 such plants. Amul, which sponsored the Formula One and IPL events in recent past and will also be sponsoring the Indian contingent at the London Olympics this year, is targeting the youngster segments for boosting sales. Amul Pro, with the additive Docosohexaenoic Acid (DHA) to strengthen brain power, is also targeting children in the age-group of 2-15 years, Sodhi said. India's biggest food brand and multinational, Amul, has seen its turnover treble to Rs 16,000 crore in the last five years, with a more than 20 per cent growth.

Beverage giants compete to meet high summer demands

ith the mercury rising and the fizz getting louder, beverage makers are launching new products and campaigns with catchy taglines to grab a share of the $10 billion Indian market, amid growing consumer base and fierce competition. PepsiCo, which has started the new year with some product-centric innovations and big brand campaigns, has launched two new flavours of its soft drink Mirinda - Orange Masala and Orange Mango. "Through this unique local palette-led innovation, we expect to drive consumption frequency and penetration," Deepika Warrier, executive director, marketing, PepsiCo Beverages, said. "We have launched innovative and consumer-focussed initiatives to drive consumption. We are also investing heavily in expanding distribution and have created a state of the art, segmented G2M strategy based on

three filters - portfolio class, town class and outlet class," Warrier added. Warrier refused to comment on the ad spend, but said PepsiCo is spending on 360 degree campaigns designed around all their brands. The firm has also started a new campaign, Change the Game -- from cricket to football after the Indian team's dismal show in England and Australia. Other players have taken the health route to lure customers. Cadbury India, part of US-based Kraft Foods, has launched Tang Mango focussing on the drink's nutritional value.

"Tang has yummy fruit flavours and is fortified with essential vitamins and minerals -- thereby balancing refreshing goodness for the kids," said Narayan Sundararaman, director, powdered beverages, Gum and Candy, Kraft Foods. The firm is also working on a range of flavours to suit local tastes. "The focus will also be on sampling for consumer awareness and trial generation." The soft drinks industry in India is $10-billion-strong, and growing at 6-7 percent per annum, says the ministry of food processing industries. Yet, per capita consumption of in India is 5-6 bottles (same as Nepal's) compared to Pakistan's 17 and Sri Lanka's 21. Both players and industry watchers expect the market to explode in the years to come, given the country's young demographics and rising affluence. They say new drinks in the industry - energy drinks, flavoured water, sports drink, mixture of dairy and juice - are all coming up because people want them.

To subscribe AgriBusiness & Food Industry Call : 011-64521572 or E-mail : mediatoday@vsnl.com

AgriBusiness & Food Industry w May 2012

F&B

News Cocoberry to diversify

he India-made Cocoberry brand of frozen yogurt is adding product categories to compete with MNCs in the health and wellness segment. Cocoberry will soon market beverages, breakfast cereals and fresh fruit at the premium end of the FMCG market. G.S. Bhalla, Founder & CEO, Cocoberry said, “We would try and differentiate our products from what is already available in the market. The range would comprise organic, non-fat and gluten-free products in categories like beverages and breakfast cereals.” It will also launch the ‘Cocoberry Fresh' sub-brand to sell fresh fruit, berries being the first to be launched. In breakfast cereals, Cocoberry would make sure it does not have products like Kellogg's. “None of our products in breakfast cereals would be similar to that of Kellogg's,” claims Bhalla. Cocoberry is already competing with brands such as Baskin Robbins and Haagen-Dazs in the frozen yogurt

segment. It has differentiated its frozen yogurts with a low-fat offering. “There are larger players like Danone and Nestle in the health and beverage segment already but we believe there is still opportunity in this category as it is growing at almost 40 per cent,'' said Bhalla. Subcontracting its products to a host of vendors, the Cocoberry brand is poised to expand its distribution with more outlets across the country. It has decided against having franchises and would spend heavily on setting up companyowned stores on high streets and enhance its presence through the modern trade outlets. “Unlike most of the other FMCG players we still need a larger distribution network. We intend having 150 stores across 20 cities to sell our entire range of FMCG products,'' added Bhalla. Currently Cocoberry is present in nine cities and has 42 outlets. Staying away from getting funds from the capital market, the family-owned

G.S. Bhalla

Cocoberry will approach private equity players for its next round of funding. “Currently we are funded through private equity players and would need another Rs 50 crore for our next phase of expansion,'' added Bhalla.

Restaurants cash in on cricketers’ popularity

ard Rock Cafe's sell drinks like Stumped, Free Hit, a mojito called Power Play and the rum-based drink, Rum Striker. While waiters at Mumbai’s Ankur ask, "Want to try the Tendulkar Cosmopolitan?" The waiter explained, "It's just like Sachin himself. We are calling it the allrounder. You can also get into the spirit of things with a Brett 52! That's inspired from B-52. We used Irish cream and crushed ice, so it's just like Brett Lee himself - cool and calm". The Elbo Room got the players on a grill when it comes to food appetisers. Its list include Fancy a Rangoni Dhoni Kebab, Virat Achari Paneer Tikka, Badshahi Tendulkar Jhinga, Gambhir Chicken Wings on Fire, Sehwag's Murgh Pahadi Kebab and a Murg Harbhajan-SheekSingh Kebab! For continental food lovers there are torrp (open sandwich) that's doing justice to all the teams. For the Kings X1 Punjab they have a Singh Murgh Tikka Makhani

Torrp, for Delhi Daredevils, Sehwag Paneer Tikka Makhani Torrp, a Warne Lamb Kofta Torrp from Rajashthan Royals and the Tendulkar Garden Fresh Torrp for the Mumbai Indians!

in sugar craft and chocolate and even an entire cricket field with players playing a match," she informed.

Orders pouring in! While Pure Sin chocolates has named a combination of smooth milk chocolate with cashews, raisins, almonds after current flavour Virat Kohli, called Nuts About U and a creamy chocolate dessert Chip Of The ol' Block, after dada, Sourav Ganguli, dessert entrepreneur Neeru Mehra is also thrilled that cricket fanatics are making the cash register ring! "We're already getting huge orders for the kick-off. "Folks want cupcakes in blue, green and other team colours. We've done red velvet 'season ball' cupcakes and ones with figures of cricket players, as well as personalised jerseys with numbers and names as per clients' choice. In addition, there's a demand for bat and ball-shaped cookies, wickets, knee guards and shoes

AgriBusiness & Food Industry w May 2012

F&B

News

Saudi ARABIA’S Agro -Food Sector in 2012 Saudi Arabia: The Largest Market in the Middle East for Agro - Food Products and Technologies

The Kingdom of Saudi Arabia with a population of 28 million is the largest individual market in the region. The Agro-Food sector in the Kingdom is witnessing an upward trend, due in part to a population growing at a steady 3 percent rate annually with 70% under the age of 30. Business opportunities in the Agro-food sector in the Kingdom are also being driven by a move towards a sophisticated lifestyle with an increasing demand for western foods, organic food and diet nutrition. In 2011, 15% of Saudi consumers have seen a rise in their disposable incomes, which contributed to a 28% increase in consumer spending, 5% of which was spent on food. Ready-to-eat packaged food sales are expected to show positive growth, rising by around 5% annually.

The Saudi Government has Set the Task of Achieving Food-Security

The Saudi government has launched a number of initiatives across the agricultural and food sectors, in order to achieve food security for its citizens. As a matter of fact, the government has established several official bodies to invest in both agriculture and in food production companies in cooperation with the private sector, such as:

l The Saudi Organic Farming Association (SOFA) with a capital of US$ 400 million l Saudi Company for Agricultural Investment and Animal Production with a capital of US$ 800 million For More Details : JEXO INTERNATIONAL Mr. Askari Jafri (President) Cell: 98198 42172 / 98212 32172 B-24, Vrindavan, Vishwakarma Nagar, Nehru Road, Mulund (West), Mumbai – 400 080. INDIA, Phone: +91-22-6502 2588 E-mail : jexointl@gmail.com, jexointl@yahoo.com Phone: +966 1 229 5604, Fax: +966 1 229 5612 E-mail: saudi-agrofood@recexpo.com, noel.puno@recexpo.com

FieldFresh Foods aims to export Del Monte products to SAARC

ieldFresh Foods is planning to export its Del Monte brand products to the SAARC countries. FieldFresh Foods is a 51:49 joint venture between Bharti Enterprises and the Philippine's Del Monte Pacific. Its new manufacturing facility in

Hosur, Tamil Nadu is expected to serve as a hub for exports. Yogesh Bellani, Business Head, Del Monte Foods, FieldFresh Foods, said, “We have just started a small quantum of exports to Maldives from the port of Chennai. The Hosur facility would serve as the hub for future exports to the neighbouring countries.'' Going forward, the Del Monte brand of beverages and culinary products will be exported to Nepal, Bangladesh and Sri Lanka. Set up with an investment of Rs 127 crore, the Hosur facility has the capacity to make fruit drinks at 300 cans and 200 pet bottles per minute. “We expect exports to contribute between 5-7 per cent of our topline and would be happy to serve the SAARC countries with our brand of beverages and processed food,'' added Bellani. While the North and West are its biggest markets today, the Del Monte brand is poised to enhance its visibility in south especially with its beverages in pet bottles. “Cans are sold mostly in the northern markets while pet bottles are used in the

AgriBusiness & Food Industry w May 2012

south. This summer we are enhancing our distribution for pet bottle beverages in three southern States,'' added Bellani. Currently the Del Monte brand of ketchup and packaged food reaches 35 cities across 60,000 outlets. While there is intense competition in the foods category, Del Monte claims it has made a mark with its ketchups. “We are up against the big boys in ketchup like Maggi and Kissan, and are among the top four ketchup brands in the country today,'' claimed Bellani. More than competition, the company's biggest concern is input cost inflation and the ability to hold on prices. As Bellani said, “From crude oil to packaging materials, there are cost pressures on the supply side and we may just be forced to pass these on to the consumer.'' The Del Monte brand has seen minimal price hikes of 3-4 per cent but this might change in future. Almost 60 per cent of FieldFresh's over Rs 200-crore turnover comes from retail sales while the balance comprises the B2B segment where it services hotels and institutions.

F&B

News Indian diet is too oily: Study

il is seeping into Indian diets like never before. The per capita consumption of edible or vegetable oils in the country shot up from around 3 kg annually in 1950 to 14.2 kg during 2010–11. The trend has begun to ring alarm bells owing to its severe health implications in the form of a rising tide of cardiovascular complications. Experts also fear shortages in the future if the consumption continues to grow at the current pace. The dramatic rise in demand began in the mid-1990s when the doors were thrown open for liberal imports. 'The per capita oil consumption has surpassed all earlier predictions and may continue to increase at a blistering pace in the years to come, if the present conditions of declining vegetable oil prices and increasing incomes continue,' a new study published in leading Indian scientific journal Current Science noted. The pattern could spawn shortages and India would then have to depend heavily on imports, the study, conducted by the Hyderabad-based Directorate of Oilseeds Research, warned. However, alternative strategies to boost oilseed production could help forestall a crisis. The increasing oil consumption was mainly attributed to three factors: economic boom resulting in better standards of living, decline in edible oil prices and growth in embedded oil consumption owing to proliferation of fried processed food products.

'Both higher incomes and lower prices have contributed to the rising consumption,' Dr D.M. Hegde, who authored the analysis, explained. Consuming fats is an essential nutritional need, most of which is met through visible fat sources - vegetable oil, ghee, butter, etc. In view of this, a certain increase was necessary to meet the challenges of malnutrition. But the rise in consumption has surpassed the country's nutritional needs by a wide margin. An average fat intake of 29 grams per person per day is enough to meet the nutritional requirements of Indians, which translates into an annual vegetable oil requirement of 10.585 kg per person. The per capita consumption has already reached 14.2 kg, which means the average consumption has risen to 38.9 gm, much beyond the nutritional need of visible fats. Edible oil consumption is closely linked to economic development. The trend has been witnessed in the developed world in the past and is playing out in emerging economies currently. China's per capita consumption of vegetable oils was just 3.09 kg during 1976–80, which increased to over 23 kg by 2008–09. Rising oil consumption has both health and economic implications. For an adult, not more than 30 per cent of the total calorie intake should be from fats. Excessive intake of fats, especially saturated fats, is known to increase the risk of cardiovascular diseases. Health

experts attribute the sharp rise in heart diseases in India to unhealthy diets, among other factors. Excessive oil intake in various forms is to blame for this. The increasing oil demand is an economic challenge, too. During 2010–11, the country imported about 9.2 million tonnes of vegetable oils costing around Rs 38,000 crore. The import bill is bound to go up with rising consumption. The total vegetable oil needs of the projected Indian population of 1,685 million by 2050 works out to 17.84 MT to meet the nutrition requirement. 'The needs of vegetable oils to meet the nutritional fat requirement even by 2050 can easily be met if we increase the production of supplementary sources of vegetable oils, besides increasing productivity. But it may be difficult to match the unbridled increase in vegetable oil consumption with supply if the current trend of consumption persists,' Hegde said.

Delhi and Gujarat consume 30% of ice-cream in country

hmedabad consumes more ice cream than bigger cities like Mumbai and Pune, according to a report by the Associated Chambers of Commerce and Industry (Assocham).

The report said almost 35 per cent of ice cream sold in India is savoured by the western region - Gujarat, Rajasthan, Maharashtra and Goa. And, Ahmedabad tops the list in the region. The group's report takes into account countrywide consumption between April and December 2011. Put together, Delhi and Gujarat consume about 30 per cent of the total ice cream in the country. "The acceptance of ice cream as a dessert is higher in the western region, especially as compared to other cities. Another reason is the population here has a power to spend," said GCMMF MD RS Sodhi. GCMMF markets Amul ice cream that dominates major metro markets of Maharashtra

and Gujarat, like Mumbai, Pune, Ahmedabad, Vadodara and Surat. "Demand for 500 ml and onelitre packets has doubled in recent years. Though the volumes come from traditional flavours, consumers like experimenting. International flavours, including different varieties of chocolate, are going to be in this season," said Rajesh Gandhi, Managing Director of Vadilal Industries, who is also the President of the Indian Ice Cream Manufacturers' Association (IICMA). The report pegs the total size of the ice cream market in India at Rs 3,000 crore, of which 60 per cent is controlled by the organized sector.

AgriBusiness & Food Industry w May 2012

Commodity

News

Growers gift organic potatoes to Bihar’s MLAs, a farmer sets world record in productivity

ihar’s legislators have received a unique gift – organically grown potatoes – to relish and encourage farmers in their constituencies to adopt the farming practice which has led to a record yield of the tuber in the state. A week after a young farmer of Darveshpura village in Nalanda district set what is claimed to be a world record in potato production through organic farming, the agriculture department has gifted organic potatoes from the crop to all 243 legislators. “Organic potatoes from Darveshpura, packed in decorated bamboo baskets, have been gifted to legislators to propagate organic farming,” Agriculture Minister Narender Singh said. Singh said organic potato from a village in Nalanda, the home district of Chief Minister Nitish Kumar, was gifted to legislators to give them an opportunity to taste its rare flavour and encourage farmers in their own areas to adopt the practice, particularly for vegetables. With the state government launching inter-state marketing of organic vegetables, the agriculture department aims to remove doubts about low production associated with organic farming and encourage other farmers to adopt it. Singh said organic farming will fulfil Nitish Kumar’s dream of India’s second green revolution taking off from Bihar.

In Darveshpura, the potato farmer, also called Nitish Kumar, has harvested 72.9 tonnes of tuber per hectare. The world record so far was 45 tonnes per hectare held by farmers in the Netherlands, officials said. Union Agriculture Minister Sharad Pawar had mentioned this rare accomplishment in his written reply to a question in Parliament. Nalanda District Magistrate Sanjay Kumar Agrawal said several officials and agricultural experts were present in the field at the harvest time to verify the claim and record it. Nalanda is already the leading potato producing district in Bihar with farmers growing the crop on over 27,000 hectares. Nalanda, about 80 km from the State capital of Patna, is the Chief Minister's native district. It is also the main potato producing district in Bihar with farmers. Bihar is the third largest potato producing state after Uttar Pradesh and West Bengal.

Darveshpura was also in the news last year when farmers of the village created a world record by producing 224 quintals of paddy per hectare. Young farmer, Sumant Kumar, produced the record yield, beating the world record, held by China’s Yuan Longping, of 190 quintals of paddy produced per hectare. The Indian Council of Agricultural Research (ICAR) has certified Sumant Kumar’s record. The SRI (system of rice intensification) method of paddy cultivation – part of organic farming – was introduced in the state three years ago. Initially the farmers were reluctant to adopt this new technique despite the state government providing free seeds, fertiliser and experts to guide them. But now more farmers have expressed interest in adopting the method. As per the European Union’s agriculture department, organic farming is a system of cultivation which includes wide crop rotation as a prerequisite for efficient use of on-site resources and very strict limits on chemical synthetic pesticides and synthetic fertiliser use, livestock antibiotics, food additives and processing aids and other inputs. The practice includes taking advantage of on-site resources, such as livestock manure for fertiliser or feed produced on the farm; and choosing plant and animal species that are resistant to disease and adapted to local conditions.

Pulses area not to increase, says experts

he area under pulses is unlikely to increase in the near future, according to an industry official. Unless the government incentivises farmers to grow pulses, acreage will remain the same in India, said Anurag Tulshan, Cordinator – Eastern & North Eastern Region, India Pulses and Grains Association. The area under pulses has been stagnant for quite some time now. Refusing to comment on whether the current rally in chana futures is justifiable, he said that speculation may also be there as chickpea production has declined this year.

Sudhakar Tomar ( L), Honorary Chairperson (Communications and Sponsorships) and Co-ordinator of CICILS 2012 World Pulses Convention, and Anurag Tulshan, member of the Executive Committee, at a press conference in Chennai to announce the 2012 annual global pulses convention

Although, harvesting has not been completed till now, initial estimates

AgriBusiness & Food Industry w May 2012

indicate a considerable drop. However, the Government should not ban futures trading in chana. It should rather regulate the market more vigilantly. “In fact, we are of the opinion that tur and urad futures, too, must be reintroduced, as futures trading is an early warning mechanism,” Tulshan said. With over 25 per cent of global production, India is a dominant player in the global pulses market. It produces 16-17 million tonnes of pulses a year. On the other hand, it consumes around 21 million tonnes a year with the shortfall is being met through imports.

Marine

News AP Aqua Feed to get China-made equipments

he Muyang Group of China is all set to supply the latest machinery to help an Andhra-based firm to set up a fullyautomated aqua feed plant. The Yangzhou headquartered, Muyang Group, a leader in feeding machinery and agriculture engineering, has signed a deal with Shree Vijay Aqua Feeds to supply the machinery worth Rs 30 crore. The latter is setting up a Rs 80 crore plant in Saripalle village near Bhimavaram in West Godavari district of Andhra Pradesh. The machinery for the fully-automated extruded floating fish feed and pelleted shrimp feed plant is scheduled to arrive

in May. “We expect to commission the plant around December 2012. It will have a capacity of 40 tonnes/hour and 180, 000 tonnes a year,” B.K. Murthy, Managing Director of Shree Vijay Aqua Feeds, said. Muyang Group, with operations in 85 countries is a solution provider in feed manufacturing, grain milling, food processing, bulk solid handling and storage etc. The latest machinery is expected to help improve yield and quality of aqua feeds to meet global export standards for Shree Vijay. The Vijayawada-headquartered, 12year-old group with a turnover of Rs 400 crore, exports 57,000 tonnes of fish and

shrimps presently, with the US being the major market. It has developed the complete “farm to fork” value chain from hatching, feed and culture to processing and exports. The agreement with the Chinese firm was done recently, when the Muyang Group President Fan Tianming visited India. Shree Vijay trades over 60,000 tonnes of aquatic feed a year. It has set up over 300 acres of semi-intensive farms with a capacity of over 1,900 tonnes a year and block freezing capacity of over 40 tonnes a day, Murthy said.

CIFT inaugurates business incubation centre

he Central Institute of Fisheries and Technology (CIFT) inaugurated a 5,000-square metre business incubation centre at their premises in Kochi. The centre was inaugurated by Dr S Ayyappan, Secretary, Department of Agricultural Research and Education (DARE) and Director General, Indian Council of Agricultural Research (ICAR). The business incubation centre will nurture the development of technologybased and knowledge-driven agribusiness ventures. The centre will help ventures during the start-up period (2-3 years) by providing an integrated package of technology, work space, shared office services, access to specialised equipment and pilot plant. Value-added services such as

management assistance, market research, business planning, access to seed capital, technical assistance, training, accreditation and networking support would also be provided, a press release issued here said. The primary goal of the centre is to produce successful businesses that are able to operate independently. The incubation centre can accommodate nine ventures at a time. Dr Ayyappan said, “Innovation and integration of available technologies is the need of the hour for which agri-incubator centre like the one at CIFT, Cochin should lead the country. Forty technologies have already been commercialised in the ICAR system through units set up all over India.”

The business incubator facility at CIFT is a ‘one-stop-shop' for budding entrepreneurs. About 100 such incubators are to be set during the 12th Plan. The ICAR scientists are presently on a ‘farmer first' drive devoting 25 per cent of their time for farmer-friendly technologies. Secondary agriculture is gaining momentum in the ICAR system in which CIFT is a pioneer by introducing the production of chitin and chitosan from prawn shell waste about 30 years back. Delivering the Presidential address, Dr T K Srinivasa Gopal, CIFT Director said that the Institute had helped in setting up India's first ‘zerowaste' seafood industry at Sulthan Singh's Unit at Karnal in Haryana.

NID to design milk packs for Parag

ackaged milk and other dairy products of Parag - Uttar Pradesh's flagship milk brand would soon be available in stylish packs designed by the Ahmedabadbased National Institute of Design (NID). The state government asked the milk development and dairy department to "re-orient" its marketing and development strategies and get all milk products of Parag, the brand of the Pradeshik Cooperative Dairy Federation (PCDF), packaged in style by NID.

The directions were given by Chief Minister Akhilesh Yadav at a high-level meeting. He also asked the officials concerned to work out the financial details for setting up a modern dairy plant in Lucknow which would handle 5 lakh litres of milk every day. He said the Samajwadi Party (SP) government would make all efforts to make the dairy sector a small scale industry. The chief minister also asked Agriculture Production Commissioner (APC) Alok Ranjan to tailor make a marketing strategy for the PCDF and

to devise mechanisms to make it more effective, and ensure wider publicity of Parag products that include butter milk, butter, cottage cheese, milk, curd, kheer and ghee. He also directed officials to set up Parag outlets at the Indian Institute of Management (IIM) Lucknow and other educational institutions.

AgriBusiness & Food Industry w May 2012

Dairy

News Gujarat Govt & Amul to promote camels' milk

f the camel is called the ship of the desert, it would surely provide you some cooling in this summer as well. Yes, it may sound unconventional but the taste of ice-cream made from camel's milk would not only give you a cool tasteful snack but also nutrition values to fight illnesses like tuberculosis, diabetes, hypertension etc. The Gujarat state government is also mulling over the development of a network for the marketing and distribution of camel's milk and its products. The large network of Amul might also be utilized for the state government's plan. A group of camel rearers from the Kutch visited the state assembly on Monday and served ice-cream made from camel's milk to the MLAs. How did these MLAs find this ice-cream is a different thing but Bhikhabhai Rabari, president of Kutch Unt Uchherak Maldhari Sangathan (KUUMS) is optimistic of popularising camel's milk.

Rabari said, "MLAs have liked the icecream. Our product is already popular but now we want to market camel's milk as it has very good qualities." He said, "Camel's milk has only 2.5 per cent fat and it is full of vitamin C which is not found in the milk of cow or buffaloes. Camel's milk has more sodium, calcium, phosphorus, zinc and magnesium as compared to cow's milk. This milk also controls insulin in type-1 diabetes. Further, this milk is very good in curing tuberculosis. Its shelf life is 9-10 hours when kept at room temperature." Utilising these qualities for making it popular, State Animal Husbandry Minister Dileep Sanghani said, "The state government has planned to develop distribution system of camel milk in the next financial year. This will provide livelihood support to the camel rearers of the state and milk will be available to the needy citizens. We are mulling over utilising Amul's distribution network for the supply of camel's milk on large scale." Camel milk dairy Gujarat will soon get its first commercial dairy for processing of camel milk into various products in Kutch district. A proposal in this regard has been received by the Government from the Kutch District Cooperative Milk Union or

the Sarhad Dairy. A local union of camel breeders Kutch Unt Uchherak Maldhari Sangathan (KUUMS) has been formed to develop milk collection networks, while a Kutch-based NGO Sahjeevan has been roped in to mobilise the camel breeders and spread awareness with regard to economic and nutritional importance of camel milk. Also, the Gujarat Milk Marketing Federation (GCMMF) or Amul has agreed in principle for marketing of the camel milk which is high in nutrition and low in fat, a state government official said. “The Government is planning to set up a dairy for commercial processing of camel milk, for which provision has been made in the 2012-13 budget,” the Director of Animal Husbandry, Dr A.J. Kachhiapatel said. He said that a proposal for setting up a milk processing unit of capacity of 2,000-2,500 litres has also been received from Sarhad dairy. This project has been taken up with two objectives — one to provide an alternative for income generation for the local community of cattle breeders or ‘maldharis’ and other to increase the use of camel milk which is high in nutritional properties, low in fat and easy to digest, Dr Kachhiapatel said.

MP’s milk parlours to sell Campco chocolates

he Mangalore-based Campco Ltd will soon sell its chocolates at milk parlours in Madhya Pradesh. Addressing presspersons here on Monday, K. Padmanabha, President of Campco (Central Arecanut and Cocoa Marketing and Processing Cooperative) Ltd, said that the Madhya Pradesh State Cooperative Dairy Federation has agreed to sell chocolate products of Campco Ltd in its milk parlours. An agreement will be signed in the presence of Chief Ministers of Karnataka and Madhya Pradesh in this regard. Boost Cooperation Subhash Mandge, President of the federation, said that it is an effort to boost cooperation between cooperatives.

Madhya Pradesh federation has around 6,500 milk cooperative societies producing around 12 lakh litres a day. Milk is being retailed through milk booths (that open during the morning and evening hours) and through milk parlours (that operate for around 18 hours a day). Initially, Campco chocolates will be retailed through 397 milk parlours in the State, he added. Padmanabha said that Campco's products are already being retailed through the network of milk federations in Karnataka and Kerala. Efforts are being made to extend such arrangements with the milk federations of Bihar and Rajasthan. Campco's chocolate factory at Puttur in Dakshina Kannada district produced 16,000 tonnes of chocolate and other

cocoa-based products during 2011-12. Exports The cooperative exported chocolates worth Rs 5 crore to Nepal, and semi-finished chocolate products worth Rs 3.6 crore to African countries in 2011-12. Efforts are on to export Campco products to other countries also, he said. During the current fiscal, the factory would produce health drink for Himalaya Drug Company. The cooperative is investing Rs 21 crore for the expansion of the factory. The expansion is likely to be completed by January, he added. Suresh Bhandary, Managing Director of Campco Ltd, was present.

AgriBusiness & Food Industry w May 2012

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AgriBusiness & Food Industry w May 2012

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