Food and Beverage Sector in India Monthly Update January 2012
Top Story 100% FDI allowed in single brand retail The Indian government has allowed 100% FDI in single brand retail under the government’s approval route. However, the government has put on hold provisions for 51 % FDI in multi‐brand retail. The conditions to be adhered include : Products should be sold under the same brand internationally, i.e., products should be sold under the same brand in one or more countries other than India, ‘Single Brand’ product retail trading would cover only products which are branded during manufacturing, the foreign investor should be the owner of the brand, proposals involving FDI beyond 51 % would need to ensure mandatory sourcing of at least 30 % of the value of products sold, to be done from Indian ‘small industries One of the biggest beneficiaries of the latest policy announcement will be brands like Ikea, the Swedish furniture retail giant and Starbucks. After the multi‐brand retail FDI complications, this news comes as a relief to the industry. This is also likely to bring investments and improve the infrastructure and job prospects of the Indian economy. In this way small and medium scale industries will also co‐exist along with the MNCs. This would enhance competitiveness of Indian enterprises through access to global design, technologies and management practices.
News Update
General
Agro Tech Foods to set up new plant in next couple of years Agro Tech Foods has plans to increase its capacity and venture into ready to eat food products, peanut butter, oil sprays and branded chocolate. To fuel this expansion they have earmarked INR 1 bn. The company will extend its Sundrop brand to high‐margin variants like ready‐to‐eat meals, oil sprays in cans and peanut butter in bottles and tubs, as it looks to grow both volumes and margins. The company plans to build the pea nut butter plant in Gujarat. Agro Tech plans to increase its manufacturing strength from two to six in three years, and will fund the capacity expansion internally. With the help of its parent company ConAgra Foods, Agro Tech wants to build a stronger and wider portfolio in India, and thus increase its market share Starbucks ready to enter India As the government has allowed 100% FDI in single brand retail in India, Starbucks is thrilled to enter India. It has signed the memorandum of understanding (MoU) with Tata Coffee for formation of a strategic alliance for sourcing of coffee beans. They also agreed to explore the opportunities for opening coffee shops in India. Starbucks is looking to Food and Beverage – Monthly Update
provide high quality coffee, handcrafted beverages along with legendary services and unique Starbucks experience. It will have a clause to source at least 30 % of the raw materials from the domestic small and cottage industries. Beer sales on an upswing in the run up to the new year The Delhi government's excise department grossed revenue of over INR 750 mn as excise duty in the last week of December, 2011. The week registered an increase of 24% in revenue collections to that of 2010. The revenue from imported liquor was 17% higher compared to 2010 and that of IMFL by 16.7%. Beer sales rose by 24%. Majority of the women in Delhi preferred to buy their favorite brand within the confines of a mall. Within Delhi, south Delhi witnessed higher preference for alcoholic drinks. High Times in DLF Mall in Saket witnessed a sale of INR 0.5 mn in New Years Eve of which 25% of the buyers were women. Indian coffee –a rage in Europe Instant coffee has become a hit in European markets. The exports figures have almost doubled in case of some countries from 2008 to 2010. This is primarily because the recession hit Europe has moved from costlier variety to cheaper varieties like instant coffee of private labels. CCL Products (India) Ltd and Tata Coffee Ltd. are the major exporters to the European subcontinent. Total coffee exports registered a 20 % growth in quantum to 0.346 mn tons in calendar 2011, over 2010. In rupee value terms, exports grew 63 % to INR 48.59 bn for 2011 over the previous year. Indian companies had been aggressive in their pricing strategy so as to gather more market share. India's instant coffee exports to Russia have close to doubled in the past three years, whereas these have more than trebled to the US. The challenge lies in the fact that the Indian companies have to protect their market share amidst tremendous competition from Brazilian companies. Nescafe plana new initiative by Nestle India Nestle has announced the 'Nescafe Plan', to support coffee farmers and help it optimize its coffee supply chain It launched the first Nescafe coffee demo farm and training centre in Karnataka under the initiative. This farm aims to improve productivity and sustainability. The company is looking to provide farmers with high‐yielding, disease resistant plantlets suitable for Indian conditions. In this way the company will ensure an effective supply chain of good quality of coffee for its consumers apart from improving the farming practices and livelihoods of the farmers Inbisco to set up new factory in Gujarat Indonesian player Mayora Group's Indian arm Inbisco is ready to set up a new factory in Gujarat and signaling completion of most of the works on its earlier plant near Hyderabad. The new plant will be built at a cost of INR 10 bn and is likely to be ready in next 18 months. The plant will be manufacturing chocolates, biscuits and noodles. Gujarat government will be providing the necessary infrastructure. The factory in Hyderabad
Food and Beverage – Monthly Update
which was built by investing INR 250 mn is ready and likely to be operational by March 2012. New water bottling plant from Luthra Water Systems Luthra Water Systems Limited, a Mumbai‐based company is investing INR 300‐350 mn in a state‐of‐the‐art bottling plant for the European market. This plant, based in Ahirwadi Village in Mulshi Taluka, Maharashtra. This plant will primarily produce for the European market. Mulshi Springs is available at Colette, an up market restaurant and water bar in Paris, which is frequented by international celebrities such as Paris Hilton, Lindsay Lohan and Elizabeth Hurley .Commercial production is likely to start from April and exports are likely to begin from the end of this year. Once the new plant is up and running, there will be an additional capacity of 0.15 mn bottles per day. In about two years, Luthra Water Systems anticipates that it will reach a turnover of about INR 600‐750 mn which is about twice the money being invested to set up the plant Domino’s Pizza to go gung ho on advertising The quick service restaurant brand has allocated a marketing budget of INR 340 mn to be spent on digital (including social media), television advertising, and door‐to‐door promotion through distribution of menu cards. Since food like pizza is mostly an impulse factor so the company is taking an extensive marketing campaign so as to remain on the top of the mind for the customers. Other form of advertising would include SEO (search engine optimization) and SEM (search engine marketing). It would also strengthen its presence in facebook. Apart from this, the company will invest in door‐to‐door promotion through distribution of menu cards that will include various offers and discounts. The research and development team works to ensure that a menu is developed in view of the consumers' need for the next two years. KFC to focus on innovation so as to build brand loyalty KFC in order to increase market share would like to increase its foot print, innovate its food menu, increase its serving hours and increase customer base. KFC is desperate to increase its footprint as the margins are low. KFC would like to increase its number of outlets from 150 to 500 by 2015. By revamping the menu it wants to move from being a lunch and dinner vendor to an all‐day joint, and will look a breakfast and after‐dinner options. This would also include vegetarian food items as well as liquid refreshment offerings. Also, KFC wants to reach a wider consumer base by having low‐priced dishes and stepping up home delivery. It has starting price of INR 25 targeting the college goers. IRCTC to set up Rail Neer plants In order to meet the increasing demand of mineral water, Indian Railways Catering and Tourism Corporation (IRCTC) has decided to set up four new plants at different places in the country. One plant each would be set up at Ambernath (Mumbai), Delhi, Hyderabad and Nagpur. The Hyderabad and the Nagpur plant would be set in private‐public partnership. This mineral water would be supplied in both running trains and railway platforms. In near future Railways intends to push sale of 'Rail Neer' in the non‐railway Food and Beverage – Monthly Update
market as well. All the plants of IRCTC have state‐of‐the‐art technology. Being fully automatic, there is no human touch with water in course of filling and packaging. Thus, the purity of water is fully maintained.
News Update
Regulatory
Plan to increase the production capacity of the dairy sector The Union government is planning for a multi‐state project so as to raise milk production from 2012‐13. The total outlay is of INR 20.4 bn for the first phase. The plan would have the producer cooperatives registered under the Companies Act to cover the entire value chain in milk production process. Officials of this project said this would provide the same legal and regulatory framework enjoyed by companies but would protect the basic principles of cooperatives like voluntary and open membership, democratic member‐ control and independence. Producer companies would be set up primarily in areas where cooperatives were not present or had low procurement. The financing would be available from the company/co‐ op, members of the company and seed money from the NDP. This would also include World Bank credit of INR 15.84 bn. Other aims of NDP ‐I are increasing productivity through scientific breeding and feeding, a pilot model for doorstep artificial delivery services through professional service providers, animal ration balancing programmes and fodder development. Maharashtra to launch mobile vans to control milk adulteration Since it has been found that 65% of the milk in India is adulterated, Maharashtra government has decided to launch a fleet of 15 mobile vans so as to check the adulteration in milk all throughout the state. The project is estimated to cost INR 1 bn. The extra money would be made available in the forthcoming budget. In Maharashtra, seven districts like Pune, Nashik, Satara, Sangli, Solapur, Kolhapur, Ahmednagar are known as the milk hub. Around 0.25 mn litres of milk is procured in the state everyday through 30,714 primary cooperative milk societies, 77 Taluka milk unions and 29 district milk unions. However, the officials say it would be extremely difficult to keep a tab on each and every type of milk produced.
Food and Beverage – Monthly Update
News Update
Expansion Plans
Larger portfolio from Pizza Hut In a recent addition to its menu Pizza hut has added 15 localised pizzas derived from regional tastes like Sev puri, Chettinadu paneer, Chicken achari, Nimbu mirchi etc. These new items are a part of the portfolio from Pizza Hut to mark their 15 year anniversary in India. In fact, Pizza Hut wants to focus on more than just pizzas. It has come up with offerings like pasta, appetizers and a larger collection of beverages. This is part of its strategy to make the transition from a quick service restaurant (QSR) to a casual dining restaurant. In order to increase its reach Pizza Hut is targeting a store count of 250 from that of existing 131 by 2015. Also, they would like to maintain the in‐store dining experience. In order to penetrate the market even further Pizza Hut has introduced less than INR 100 offerings across its menu, from appetizers, pizzas, pastas and desserts. A few months ago, they had also introduced the ‘3‐course meal for INR 99 to get more people hooked to the brand Cheesilicious pizza a new addition in the menu of Domino’s In order to counter its arch rival Pizza Hut, Domino’s Pizza has come up with a new variety of cheese pizza. This new cheese pizza, with which Domino's has rewritten the rules of the genre by introducing a new base made with gouda and cheddar in addition to the standard mozzarella. The pizza comes with a brilliant golden crust of cheese bubbles which melts in mouth, leaving a cheesilicious sensation Indian market is the fifth largest market for Domino’s pizza and the largest in Asia. Domino’s has come out with this new offering in winter‐a time when people consume more pizzas and more likely to eat out. New range of “parathas” from West Coast Fine Foods West Coast Fine Foods has announced the launch of the "Kawan" range of frozen heat & eat parathas with offerings in Tawa, Flaky, and Whole Wheat variety. The company feels that the time‐starved working Indian consumer is spending less time in the kitchen and is adopting the branded ready to heat & eat option to suit their lifestyle. The trend is fuelled by both socio‐economic factors and lifestyle reasons. The company has announced that the parathas have no artificial preservatives & are transfat free which will make it easier for consumers to satisfy their hunger in a healthy manner. The entire range of Kawan Parathas would be available at all leading retail stores across more than 60 cities in India. WestCoast Fine Foods (India) markets and distributes frozen food products in the Indian market under their premium positioned brand ‘Cambay Tiger’ and a mass market brand ‘Frish’
Food and Beverage – Monthly Update
Plethora of vodka brands in last one year At least half a dozen vodka brands have hit the market in last one year as most young consumers prefer this white spirit. Also, this type of drink helps to build image. The companies are bullish about vodka as India has very young demographics aged below 25 and the number is growing. The advantage with vodka is that it gives us a flexibility of how and when it can be consumed. It cab be consumed at both lunch and dinner time. Companies are launching value‐added offerings to break through the clutter. United Spirits, has launched its new premium brand Vladivar vodka in dual flavours ‐ orange & pepper and lemon & mint. All these companies face a daunting task in marketing as the flavours are available only in select cities. The various new brands launched include Ice (Jagjit Industries), Sobeiski (NV group),Maya (Sainov Spirits), Knight Rider (Mohan Meakin) etc. Radico Khaitan continues to be the market leader with 90% market share. SRS Value Bazaar now in Faridabad SRS Value Bazaar, a multi‐brand retail store chain which is a part of SRS Limited, is now in Faridabad at Crown Plaza Mall. Spread over 5,500 sq.ft. this the new store offers products such as food and groceries, fruits and vegetables, health and beauty products and other FMCG products. The company wants to set up outlets in new and underserved areas which have a potential to grow in the days to come. The company would like to offer its product in competitive prices to get a sizeable market share. SRS plans to further expand its retail operations by adding 20 more outlets in 2012 in cities such as Gurgaon, Noida, Greater Noida, Ludhiana, Jaipur, Patiala, and Indore and further strengthen its presence in Northern India. It recently raised INR 2.03 bn in its maiden IPO and is now a BSE listed company. CCD to focus on food Café Coffee Day (CCD) which has a presence of 1200 outlets in India, is in its way to revamp its menu. They are looking to looking to strengthen its food services at a time when the cafe culture is in a growth trajectory with the entry of new players. The move is a pre‐emptive measure by the company to counter the stiff competition. The company wants to position itself as a hang out zone among the youth. At this moment CCD is following a value for money approach whose average ticket size is between INR 100 and INR 150 for coffee and food together. The company would like to increase the ticket size by providing an enticing menu. In the last few years, CCD has introduced an assortment of beverages and combo meals. Special winter menu from Punjabi by Nature Punjabi By Nature, a chain of fine‐dining restaurants in Delhi‐NCR, has launched a special winter menu in addition to its regular offerings. The winter menu includes delicacies such as Sarson ka Saag, Makki ki Roti, Jalebi with Rabri, Gajar ka Halwa and Kashmiri Kahwa. The restaurant has several awards to its credit which speaks of volumes about the restaurant. Awards include Restaurant Of The Year; Delhi NCR’s Best North Indian Restaurant; Delhi’s Best Restaurant, Café And Bar 2005; and Delhi NCR’s 101 Finest Food and Beverage – Monthly Update
Restaurants. Punjabi By Nature started its journey from Noida in 1998 and later expanded in Delhi and Gurgaon Beam Inc. launches new premixed Teacher’s Scotch American spirits maker Beam Inc has launched Teacher's Scotch alcopops in India. Alcopops are essentially ready‐to‐drink alcoholic beverages that are pre‐mixed with fruit juice or aerated drinks. Beam Inc's alcopop is Teacher's Scotch whisky premixed with cola and soda variant. The company wants to target the young customers. The company is banking on the increasing disposable income of the young Indians who all form a sizeable portion of the Indian population. The company is betting big on the convenience of cans to drive further growth for Teacher's Scotch. The market is estimated at 1.2‐1.5 mn cases in India Kannis forays in Indian market Kannis, a premium quality British pet food company, has forayed in the Indian market. Kannis in association with RP group has introduced its Natural Super Premium Hypo Allergenic Pet Food – a nutrient‐rich whole food formula for dogs of all breeds and sizes. The product has a high quality natural ingredient, including chicken meal and essential healthy fats. The presence of garlic, calcium, phosphorus, magnesium helps the pets to maintain a healthy heart, strong teeth and bones and fit joints. It is a healthy and essential diet option for all breeds and ages as it contains balanced levels of protein, fat and nutrients. The product does not contain any by‐products, corn, soya, gluten, tallow or dairy. The company assures that since high quality ingredients have been used so there has been no use of artificial preservatives. The pet food doesn’t even contain genetically modified ingredients. Red Mango, the US frozen yoghurt chain debuts in India US based Red Mango, has opened its first outlet at the Ambience mall in New Delhi occupying an area of 13,000 sq ft. The company is planning to open 200‐250 outlets in next 5 to 10 years. The company is planning to expand in cities like Delhi, NCR, Mumbai and Bangalore before moving into tier 2 cities. As a part of the strategy the company will initially open its own stores and later expand through the franchise route. The company imports 100 % of its ingredients from the US and claims that the products taste the same everywhere in the world. In India, the chain would sell frozen yogurt for 89 paisa per gram by weight and there is no restriction flavors or toppings. Red Mango will also sell low fat and low calorie sandwiches, wraps, and green salads to attract health conscious consumers. It also plans to customize its offerings to suit Indian palate. Eighth outlet of McDonald’s in Gurgaon McDonald’s, a quick service restaurant, has opened its eighth outlet in Gurgaon at Omaxe City Centre. Spread over 2,938 sq.ft., the new restaurant will accommodate around 140 people at a time. The company hopes to introduce the brands in new segments and new markets in vicinity which were under served earlier. The new restaurant is built on the concept of MFY (made for you) where the food is prepared as the customer places the Food and Beverage – Monthly Update
order. McDonald’s has 242 restaurants in India of which 117 are in North and East and 125 in West and South India GFA in expansion mode Geneva‐based multi‐brand franchisee operator Global Franchise Architects (GFA) is on an expansion drive in India. It has set up its 82nd eatery, a Cream & Fudge outlet, and plans to add 18 more by March 2012 as it makes an entry into the eastern and northern regions. It has opened its first outlet in eastern region by appointing Gama as its master franchise for the region. It operates through a portfolio of food outlets like Coffee World, Pizza Corner, Cream & Fudge and The Donut Baker. The company is of the opinion that the Indian market is ready for outlets like theirs which offers customized food Disney enters Indian branded chocolate market Disney Consumer Products (DCP), the business unit of The Walt Disney Company has come up with a new chocolate category ‐‐ novelty (crafted in different shapes and designs) chocolates ‐‐ in India with the launch of its new range of products under the ‘Fun House’ brand in Andhra Pradesh. This category is relatively new in India and has an approximate market size of INR 50bn and enjoys a growth rate of 20%. Since DCP is already present in other consumer goods like fashion, toys, home décor which will have a strong positive rub off effect on these new type of chocolates as well. Just Falafel to enter India Just Falafel, one of the biggest fast food chains in the UAE, has decided to enter Indian market in the second quarter of 2012. They plan to launch over 600 outlets in India. The company has received tremendous response from the prospective franchisers. The franchisers will have the responsibility of owning and running the outlet. Each outlet will entail an initial investment of INR 6 mn to INR 7 mn depending on the size and location. Just Falafel has more than 25 outlets in UAE selling deep fried balls or patties made from ground chickpeas and or fava beans. Potential franchise partners have recognised the success of Just Falafel's formula and the company is getting a surge in demand from the UK, India and Canada Country Chicken to foray in India Country Chicken, the Australian fast food restaurant chain, plans to have 50 outlets in India by the end of 2012. However, the company’s first outlet will be opened in Coimbatore, next month. The company has plans to open 35 outlets in Tamil Nadu and expand in to Bangalore and Maharashtra this year. Star Quick Service Restaurants, the partner for Country Chicken in India, had established a plant in Chennai at nearly INR 60 mn to supply processed products to all its outlets in the country. It also plans to open another plant in Vellore with an investment of INR 1.05 bn depending upon the market pull for its products. The company is also trying to spread its footprints in tier 2 and tier 3 cities. They are targeting at an investment of INR 1.2 bn by the end of 2012. Food and Beverage – Monthly Update
Pepsi launches Lay’s Baked PepsiCo India has come up with a new range of baked chips, Lay’s Baked. Launched in three flavours – Original Salted, Cream herb and onion and Sunkissed tomato. The company said that Lay’s Baked would be available in top 60 metros and towns across India through modern trade and retail trade outlets. They would be available at price points of INR 15 and INR 30. The company said that it would like to offer customers a healthier range of snacks. Through this new launch the company wants to reach to the health conscious customer and thus increase its market share. McDonald's goes for a major revamp McDonald’s goes for a major revamp all over the country. In order to attract more customers they are changing the more familiar red and yellow to a more muted one so as to get more adult customers. The red‐and‐yellow company logo will be replaced by white across its 240 restaurants over the next three‐four years and the decor will change from neon‐yellow and bright‐red interiors to pale colours. However, the designs will be different in different stores depending on their location This is in line with their global strategy. As a part of their strategy they are going to revamp their menu so as to attract more clients. The change is already underway in an outlet each in Mumbai and New Delhi. The company hopes to appeal to the adult customers without losing out the younger ones. Dominos in open 80 more stores in this fiscal Domino’s Pizza is in an aggressive mode. In order to dominate the Indian pizza market they would like to open 80 more stores by March 2012. The company which was growing at a CAGR of 48% would like to target tier 2 and tier 3 cities in the expansion drive. It is to be noted that the company was already present in 96 cities with 411 outlets (as on 30th Sept, 2011) all over India. This expansion drive will be supported by mainstream as well as social network campaigns. In fact the company has already started an online campaign called Khushiyon ka fest in Facebook which has attracted 0.8 mn fans. The company wants to maintain its market share which they claim is 54% of the total pizza market. Eureka Forbes launches bottled water brand Aquasure Eureka Forbes has launched a new bottled water brand called Aquasure. The company is looking to tap the existing 10 million of Aquaguard and AquaSure on‐the‐go consumers. Eureka Forbes has entered the bottled water market through the 'franchisee' route and each franchisee is expected to invest around INR 20 mn in the purification and bottling set‐up. The company will sell the product under the brand name 'AquaSure', in 20‐litre and one‐litre bottles. The market is fiercely competitive and the capacity of warehouse and effectiveness of supply chain will determine the success story of the brand. The product has been priced at INR 10 for a 500 ml bottle and available in cities like Mumbai and Delhi. Food and Beverage – Monthly Update
Amul to introduce frozen yoghurt in February Dairy major Amul is now adding one more dairy product in its portfolio‐the frozen yogurt. Frozen yogurt, which is a tangy combination of ice‐cream with probiotic yogurt base, is a globally established category is however relatively new in India. It is interesting to note that various MNCs are entering the Indian dairy market with a plethora of products. Amul is set to give these brands a run for their money as it plans to launch the new product across 70,000 outlets across the country in first week of February against nearly 40 outlets managed by the international brands. The new product will be launched under the brand name of ‘Amul Flaavyo’. The Amul Flaavyo Frozen Yoghurt is presently made available at select scooping parlours of Amul. Amul has a chain of 500 scooping parlours across the country. Amul will be launching consumer packs across the country while we will be making Amul Flaavyo Frozen Yogurt available in smaller packs of 125 ml, 500 ml and also five litre packs in two flavours ‐ mango and strawberry. Each scoop of Amul yoghurt will be priced at INR 35 per scoop to that of international brands which are priced at INR 100. Nadur launches goat milk in 500 ml packs Nadur Goat Farms, Udipi, has launched goat milk in Bangalore and Mumbai in 500 ml packs. The product will be available though modern retail. According to the company the milk comes from the healthy goats raised through a unique and superior method. Goats are fed nutritious food and kept in hygienic conditions resulting in nutritious and odourless milk. Then the milk is instantly pasteurized, chilled and packed in 500 ml pillow pouch packets and transported through highly efficient cold chains. The milk is 100% pure and farm fresh without any traces of additives or preservatives. Jumbo King in expansion mode Jumbo King, Mumbai‐based quick service restaurant (QSR) chain, plans to increase its store‐count from the current 41 to 100 over the next 18 months. They want to expand all over Maharashtra and venture into Gujarat, Karnataka. They plan to take the franchisee route and hence won’t raise any fund for this expansion. The company is looking at creating a well‐defined niche around 'on the snacking' concept and becoming the dominant player in this category. The company wants to target those families which have double income and as a result has less time for cooking. The company is also in touch with the rail and bus authorities in order to expand even further. Dhara launches new rice bran oil Dhara has announced the launch of Dhara Life‐ refined rice bran oil. The new rice bran oil is meant for the health conscious people. It has naturally balanced fat composition apart from the presence of Oryzanol. Oryzanol is known to have cholesterol‐lowering properties. These properties make it an ideal choice for general frying applications. This segment is witnessing healthy growth as awareness is increasing. The product will be available in 1 litre poly pouch and 5 litre jerry can across leading retail outlets and modern retail formats in Delhi and Mumbai. Food and Beverage – Monthly Update
100 ml milk Tetra Pak at INR 4 KMF (Karnataka Cooperative Milk Producers' Federation) has introduced Nandini Good Life toned milk in 100 ml tetra pack at INR 4. This was introduced so as to increase affordability and thus reach a wider customer base. With this product the company wants to reach the most remote parts of the southern states. KMF’s strong presence in south India will ensure more consumers have access to safe, hygienic and nutritious milk in Tetra Pak. The new product would be made available to consumers in Karnataka, Tamil Nadu, Andhra Pradesh and Kerala Quiznos to expand in India American quick service restaurant chain Quiznos will set up 150 outlets primarily in North and West India within the next 5 years. Quiznos' entry in India was the brand's first foray in South‐East Asia. Quiznos entered India last year with the launch of its first outlet in Hyderabad. Quiznos has entered into a master franchise agreement with Delhi‐based restaurant management company Sub‐One Hospitality Services to open outlets across states like Punjab, Delhi/NCR, Rajasthan, Gujarat and Maharashtra. The franchisee outlets will be available in different formats like kiosks, food court and standalone restaurants. Yum! Restaurants to invest INR 5 bn for expanding in India Yum! Restaurants India, a subsidiary of Yum! Brand Inc. is planning to expand in India aggressively and will spend INR 5 bn by 2015. The company plans to increase the store‐ count for KFC by over 500 and Taco Bell to 100, and Pizza Hut restaurant base to 400. The expansion will be supported by introducing innovative products, made specifically for the Indian consumers in addition to their global favourites. The company believes in constant innovation and has introduced quite a few new dishes in last two years including a whole range of vegetarian options. In order to connect to the youth they have introduced unique krushers range of beverages and a youth‐specific value menu, called Streetwise, which starts at INR 25. Pizza Hut has already introduced weekday special meal, which comprises a three‐course meal for INR 99.
Industry Expert Speak FDI upto 100% in single brand retail with mandatory clauses –Anand Sharma, Commerce and Industry Minister, Government of India “We have now allowed FDI up to 100 % with the stipulation that in respect of proposals involving FDI beyond 51% there will be mandatory sourcing of at least 30 per cent of the total value of the products sold would have to be done from Indian ‘small industries/village and cottage industries, artisans and craftsmen. This step will provide stimulus to domestic manufacturing value addition and help in technical up‐gradation of our local small industry”
Food and Beverage – Monthly Update
Transactions (November 2011January 2012) Date
Buyer
Target
Deal Size (INR mn)
% stake
Deal Status
Type of Transaction
6th January 2012
Bain Capital TPG KKR
Parag Milk Products
3750
NA
Not Private Equity Completed
20th December 2011
Everstone Capital
Pind Balluchi
1000
45
Not Private Equity Completed
11th November 2011
Ventureeast
VKS Farms
250
NA
Completed Private Equity
Annual Financial Results – Revenue (INR mn) Companies FY '08 FY '09 Amrit Corp Ltd 260.837 339.346 Amrutanjan Health Care Ltd 744.317 906.738 Anik Industries 7,583.7 10,209.8 Bombay Burmah Trading Corp. 3,715.5 4,119.5 Ltd Britannia Industries Ltd 27762.501 34212.28 CCL Products (India) Ltd 4,129.6 4,682.5 Dabur India Ltd. 23,657.2 28,122.4 Emami 6,180.3 7,489.3 Hatsun Agro Products Limited 8,676.8 10,135.7 Heritage Foods (India) Ltd 5,880.3 7,967.5 N.A. 166,639.8 Hindustan Unilever Ltd. 146,591.0 ITC Ltd. 165,561.4 Jubilant Foodworks Limited 2,113.2 2,806.1 KSE Ltd. 2,894.7 3,502.5 Kwality Dairy India Limited 3,330.4 5,828.0 Marico Ltd. 19,050.4 23,884.2
FY '10 FY '11 363.465 454.742 897.789 1,054.088 12,232.8 12,788.3 42,409.2 51,444.2 37748.621 4,375.3 33,958.0 10,217.1 11,415.6 9,003.8 180,319.3
46071.969 3,650.2 40,817.4 12,590.0 13,568.5 10,960.9 200,245.9
191,358.7
222,736.6
4,239.3 3,714.1 10,541.2 26,607.6
6,782.8 4,541.5 16,080.4 31,283.1
Food and Beverage – Monthly Update
Modern Dairies Nestle India Ltd. Radico Khaitan Ltd. Tata Coffee Ltd United Breweries Ltd
4,135.6 43,252.2 8,094.1 9,222.6 15,805.8
4,594.9 4,379.5 51,395.5 62,609.4 6,960.3 8,355.5 11,184.3 12,896.3 19,294.6 22,755.0
4,670.7 72,132.9 9,964.6 12,966.5 N.A. 563.3 1,947.4 2,675.2 3,354.1
Zydus Wellness Limited Annual Financial Results – Income (INR mn) Companies FY '08 FY '09 FY '10 FY '11 Amrit Corp Ltd 14.979 27.795 25.956 186.756 Amrutanjan Health Care Ltd 50.27 923.94 114.717 102.119 Anik Industries 232.6 107.9 110.6 100.9 Bombay Burmah Trading Corp. 456.9 190.5 362.9 1,176.3 Ltd Britannia Industries Ltd 1774.389 1514.848 1031.799 1343.489 CCL Products (India) Ltd 354.5 169.9 280.0 259.2 Dabur India Ltd. 3,331.3 3,905.0 5,010.8 5,685.7 Emami 901.9 918.6 1,697.3 2,287.2 Hatsun Agro Products Limited 173.3 118.7 27.9 187.5 Heritage Foods (India) Ltd 9.4 (357.2) 55.1 11.1 Hindustan Unilever Ltd. N.A. 20,036.1 21,566.3 22,960.5 ITC Ltd. 31,577.6 33,245.9 41,681.8 50,179.3 Jubilant Foodworks Limited 77.6 73.0 329.7 717.4 KSE Ltd. 25.8 32.1 82.7 45.0 Kwality Dairy India Limited 46.2 93.8 179.5 459.4 Marico Ltd. 1,690.7 1,887.2 2,316.7 2,864.4 Modern Dairies 66.0 (260.0) (17.8) (410.7) Nestle India Ltd. 5,340.8 6,550.0 8,186.6 9,341.2 Radico Khaitan Ltd. 265.4 65.4 415.4 728.0 Tata Coffee Ltd 238.8 238.8 238.8 238.8 United Breweries Ltd 541.7 460.9 896.4 N.A. Zydus Wellness Limited 45.548 238 452.7 594.8
Food and Beverage – Monthly Update
Events Calendar Food Pro Hyderabad Venue: Hyderabad International Trade Exposition Centre 2012 Date: Feb 17th to Feb 19th 2012
IIHM Food Fest 2012 Venue: Gulmarg House, Aurobindo Marg, Near Saket , New Delhi Date: 11th February, 2012 Mob: 9911377749
Research on India (ROI) is a leading source for market research on various sectors in India that offers premium research content from worldwide publishers of market research reports. Contact us: W: https://www.researchonindia.com T: India (Toll Free): 1800 102 1133; International: +91 (33) 4027 6214/5 E: support@researchonindia.com Connect with Us Disclaimer: This monthly update is published for general information only based on press articles and company releases. Research on India has not independently verified any of information and is not responsible for any loss or damage arising from use of this document.
Food and Beverage – Monthly Update