Beverages & Food Processing Times Dec'12 (I)

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Food processing sector fastest growing sub-sector last fiscal

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ood processing sector has emerged as the fastest growing sub-sector of the manufacturing sector during last financial year, a top official said.

Food processing units, being set up in Mega Food Parks, would be provided with entire basic infrastructural facilities like warehouses, storage facilities, testing labs and fruit-ripening chambers, Rakesh Kacker, Secretary, Ministry of Food Processing Industries, said.

After inaugurating Mega Food Parks Summit here, organised by

the Ministry and Assocham, Kacker said the food processing industry has consistently registered growth rate faster than that registered by agricultural sector.

"Thus the industry was consistently adding value to the agriculture sector," he said.

On National Mission on Food Processing, Kacker said the mission was launched with the specific purpose of enhancing involvement of states in efforts to further the growth of the food processing industry.

As a part of its promotional efforts to push further the food processing sector in potential states across India, Kacker said the Ministry of Food Processing Industries has already finalised four schemes on technology upgradation and cold chains for non-horticultural crops, among others.

Emphasising the need to maintain appropriate quality standards in the food industry, Kacker said a newly created body, Food Safety and Standards Authority, is playing the regulatory role in this regard.

"However, MoFPI was keen to start a process of selfregulation by industry. Towards this end, MoFPI was in touch with apex industry organisations and trying to develop a system of selfcertification by food processing units. Quality Council of India has been tasked with drawing up a roadmap for this purpose," he said.

Initially, this will run parallel to statutory certification required to be obtained by units but eventually there could be blending of statutory and voluntary certification, Kacker said.

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Beverages & Food Processing Times-Dec-I-2012

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Micro ingredient solution for Indian poultry industry

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BCA, a division of AB Agri, the Agricultural Group of Associated British Foods plc. (ABF), is participated at Poultry India exhibition,held recently in Hyderabad. Poultry India was an ideal platform to introduce ABCA to the Indian market.

The company is dedicated to providing the animal nutrition and livestock industry with a professional service in India and other Asian countries.

The livestock industry in India is the second largest contributor to gross domestic product (GDP), after agriculture, and accounts for 9 percent of the total GDP. The objective of ABCA is to offer poultry and feed producers in India a new range of innovative, reliable and sustainable feed ingredients that improve poultry performance through better nutrition and health, leading to improved return on investment. Progressive research and development of innovative new products are all central to uncovering enhanced nutrient utilisation by farm animals.

Through sharing the technical resources of nutrition and management advice, ABCA works together with poultry companies to produce safe, healthy meat and eggs in a cost-effective and sustainable manner.

ABCA integrates with its' parent company ABF and acts as an innovator in marketing new micro feed ingredients and sustainable feed additives. AB Agri has interests across the food - as a producer and seller of animal feed and ingredients. Announcing at the company's official launch in India, Mr David Yiend, Chief Executive, AB Agri said “AB Agri is a balanced diversified business operating in many parts of the food chain from plough to plate supplying its products across 70 countries. ABCA's entry into the Indian market is another great milestone for us providing feed manufacturers and livestock farmers with safe and sustainable solutions to enhance animal performance and produce safe and high quality food products”.

Mr James Charteris-Hough, Managing Director, ABCA emphasised that India is an important market to the Company and added that, “ABCA aspires to become a preferred choice in the area of innovative yeast derivative products for Indian animal nutrition and health industries”.

At Poultry India 2012, organised by the Indian Poultry Equipment Manufacturers Association, ABCA showcased its innovative animal nutrition product range together with nutritional advice on flock management.

Romila iyer, Business Manager of South Asia said, “Poultry India offers a great platform for the companies to interact and showcase their products and services.

At ABCA we plan to establish wellbalanced portfolio of innovative products/solution and introducing value added products to animal production and feed-market, coupled with our resolute focus on our customer's needs, will be the cornerstone for our marketing strategy”.

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Beverages & Food Processing Times-Dec-I-2012

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Beverages & Food Processing Times-Dec-I-2012

Food Processing News

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Rabobank Report: "Raj-accino"- The Rise Of Coffee Culture In India

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abobank has published a new research report on the rise of the coffee culture inIndia, due to the efforts of a few specialist coffee chains and instant coffee players.

In a new report titled "Raj-accino," Rabobank's Food & Agribusiness Research and Advisory group says that coffee drinking has spread across the country and consumption has doubled.

Specialist coffee shop chains, which have established themselves as a 'hangout' for urban youth, are projected to reach 4,000 in numbers by 2015 (21% CAGR).

This growth is a result of favorable demographics, rising income levels, rise of mid-sized cities and high population density. High real estate costs, manpower attrition and difficulties in managing the supply chain will continue to be the key challenges.

Although specialist coffee chains' contribution to India's total coffee consumption by volume may not

be significant, these coffee shops have added more visibility to the coffee culture. The first specialist coffee shop by Cafe Coffee Day opened up in 1996, and the company has since grown to a market leading position, with 1,350 coffee shops spread across India. At present, there are around 2,100 specialist coffee shops in India, and given that there are multiple international coffee shop chains trying to expand their base in this important market, consumers are likely to have even more options within the next three years.

For a burgeoning segment of the Indian population, coffee chains are also offering a new snacking/leisure experience. These coffee chains offer an experience similar to that in developed markets. The opportunities for coffee chain growth arise from the favorable demographics – low per capita consumption and increasing income levels, the rise of mid-

sized cities, and a high population density with its associated potential for expansion of the coffee shop network.

"The impressive growth expected of specialist coffee chains in India offers numerous opportunities for both local and international players, provided that they can overcome inherent obstacles," says Nitin Kalani, Rabobank beverage analyst and author of the report.

Sourcing coffee beans is not the key barrier for specialist coffee chains, with coffee beans accounting for an insignificant proportion of the total cost of a cup of coffee. For example, the cost of coffee beans in a cappuccino is about 8 percent of the sale price. To be successful, operational efficiency (e.g., managing rent and labor costs) is more important than focusing solely on raw material costs.

Real estate overheads are a major concern, with coffee chains facing

strong competition for acquiring prime premises. Furthermore, coffee shops must be big enough to accommodate a large number of people, with around 95 percent of consumers in India preferring to drink on-site rather than to take away (compared to around 60 per cent in the U.S.). Competition for industry manpower is likely to continue to be a challenge due to high rates of staff attrition. On top of this, the sourcing of other beverages, food and merchandising – all an essential part of the coffee shop experience – continues to be a problem as players struggle to establish quality, reliable supplier relationships.

India remains a tea drinking country, with sales of the traditional beverage still outperforming that of coffee. With growth in coffee consumption outpacing that of tea however, coffee culture is expected to continue to flourish for the

foreseeable future.

The Rabobank report on the growing Indian coffee culture is available to media upon request.

Rabobank Group is a global financial services leader providing wholesale and retail banking, asset management, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries. In North America, Rabobank is a premier bank to the food, beverage and agribusiness industry. Rabobank's Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture. www.Rabobank.com

Mondelez to invest in cocoa production in India, Africa

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ondelez International, which was recently formed following the separation of the confectionary and grocery businesses of American food major Kraft, has announced that it will invest $400 million (or Rs 2,200 crore) into cocoa production in India, Ghana and the Dominican Republican over the next ten years in a move aimed at securing supplies.

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The company, which has brands such as Cadbury and Oreo, will work closely with cocoa producers in these countries as well in the Ivory Coast, which is the largest cocoa-producing country in the world. The development comes at a time when Mondelez is looking to increase revenues from emerging markets. The company already derives a sizeable chunk of its $35 billion revenues from markets outside the US. But faced with the prospect of slow growth in developed markets, it has been turning its attention to markets such as India, China, Brazil and Russia in the last few years.

During her first official visit to India last year, Kraft's global chairperson, Irene Rosenfeld, who initiated the split between the confectionary and grocery businesses and has been put in charge of Mondelez, had said that she was keen to see the company in the top five list of food majors in the country. India currently remains small when compared to Brazil, Russia and China for Mondelez.

But the business in India has been growing at over 25 to 30% per annum over the last few years. The company closed the 2011 calendar year with sales of Rs 3,359 crore - a growth of 35% over the previous year. The company is likely to retain this momentum in the current calendar year too despite a slowdown in discretionary food spends.

This has partly to do with the action initiated by the company on the brand front. Mondelez has integrated Kraft brands - Oreo, Tang and Toblerone - which were distributed independently in the country prior to the $19.7-billion acquisition of Cadbury in 2010.

Since then Mondelez has rapidly gained share in categories such as biscuits, which were new areas for it.

In chocolates, it retains leadership through Cadbury, which has an over 70% share in India. In biscuits, it has a share of about six to seven%.

In a recent interaction with Business Standard, the company's director, snacking & strategy, Chandramouli Venkatesan, had said that it was looking to consolidate its presence in cookies and creams, which constitutes 40% of the Rs 12,000-crore biscuit market by value, higher than the staple glucose segment. Oreo is a cream cookie.

The company recently launched a chocolate cream variant of Oreo in addition to the classic vanilla variant, which is popular across the world. Kraft had priced this new variant at a slight premium to its vanilla flavour available at Rs 5, Rs 12 and Rs 25 respectively. The Rs 5 price point has been done away with for the new variant, with the company opting instead for price points of Rs 15 and Rs 30.

It has also been pushing the new variant aggressively at retail outlets in a bid to improve penetration. The company also continues to innovate in categories such as powdered beverages with a thick format of Tang introduced earlier this year.

Beverages & Food Processing Times-Dec-I-2012

Food Processing News

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Food processing units needed in Odisha: , Industries Minister

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he state government is keen to promote nonmineral-based industries such as food processing in a big way, industries minister Niranjan Pujari said. Speaking at the valedictory session of 17th Enterprise Odisha 2012, an event organized by Confederation of Indian Industry (CII) at the exhibition ground, Pujari said the state had many mineral-based industries but only a few agro-based and foodprocessing units. "The industry sector will be sustainable if we have a good mix of all kind of industries," the minister said.

The minister said Odisha has a robust agriculture sector and there is vast scope for value addition to agriculture produce. In the absence of food processing units, the state is not able to make the best of agriculture, he said.

Pujari said the state is looking for investors in the automobile sector which is in its nascent stage. Speaking on shortage of raw materials and problems faced by industries like Vedanta, he said the government is trying its best to sort out the issue. CM Naveen Patnaik had inaugurated the event. Naveen had asked the industry to find ways to reverse the country's economic slowdown.

UP approves new food processing policy

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ith an aim to boost investments in the state, the Uttar Pradesh government approved implementation of the new Food Processing Industrial Policy 2012.

In a Cabinet meet, presided by Chief Minister Akhilesh Yadav, it was decided to implement the new food processing industrial policy, official sources said. The Cabinet also gave consent to set up a swimming pool in the international sports complex in Saifai, the native village of the chief minister in Etawah.

Further, the Cabinet gave approval to create a revolving fund of Rs 30 lakhs to provide medical treatment to employees and former employees of Vidhan Sabha Secretariat in the Sanjay Gandhi Post Graduate Institute of Medical Sciences, Lucknow.

With a view to help poor students, it also approved compensation of fees for those in private schools in the state. Besides, it approved changes in the guidelines of MLAs' local area development fund, making provision for extending help to the tune of Rs 25 lakhs for medical treatment to victims of accidents, fire incidents or critical ailment, sources added.

Hi-tech slaughter house on the anvil in Patna

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f things go according to plans, Patna may soon have a hi-tech slaughter house. An expression of interest on the website of Bihar urban infrastructure development corporation limited (BUIDCO) has been posted about setting up a modern slaughter house on a five-acre plot at Rama Chakberia on Patna-Gaya Road. The estimated cost of the slaughter house would be Rs 26.34 crore.

The proposed structure would have the capacity of slaughtering 200 buffaloes besides 350 sheep and goat on eight-hour shift basis. Ministry of Food Processing Industry, Government of India (MoFPI), has approved Rs 11 crore grant for the project. The bidders can avail the grant subject to the condition that it meets the MoFPI guidelines.

According to the proposal, the selected agency would have to set up backward linkage and livestock reception yard, a lairage, slaughter lines for sheep, goat and buffalo, effluent treatment plant (ETP), dry rendering plant, forward linkage with meat, transport facility under cold chain system and meat packaging plant. To keep the plant and adjoining areas healthy, the agency would have to install a rendering-cumcarcass utilization plant for disposal of cadavers and meat waste.

However, BUIDCO managing director Anupam Kumar Suman said, "The project has to be implemented in 24 months. It is a semi-mechanized project but the agency would be free to install a fully mechanized plant."

He said, "The food processing sector would be deemed to include modern slaughter house and rendering plant, ETP, fruits and vegetables processing plant, processing plant for meat, meat products, fish and fish products, milk or milk products, cold storage for perishable food products, any food park duly approved by the Ministry of Food Processing, government of India or any state government or union territory."

Earlier, Patna Municipal Corporation (PMC) had constructed a boundary wall around the allotted land but due to the local residents' protest they had failed to proceed with the project. The slaughter house will be made under public private partnership (PPP) mode.

PMC maintains one goat abattoir near Ashok Cinema.

"Maintaining a goat abattoir is far easier than providing hygiene to the cow abattoir. The existing cow abattoir runs in an unhealthy and unhygienic condition and there is no option than to shift it," said PMC commissioner Pankaj Kumar Pal.

Beverages & Food Processing Times-Dec-I-2012

Food Processing News

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Time for PPP model in food processing: Pranab Food processing ministry has approved

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resident Pranab Mukherjee said in Ludhiana that it was time for publicprivate partnership (PPP) in the food processing industry as

investors were coming forward and state governments should explore the opportunity.

Despite being the second largest producer (after related stories To save farmers, help lend push to crop diversification: CM to Prez China) of fruits and vegetables in the world, India lags behind in food processing as postharvesting operations are not up to the mark, the President observed.

Mukherjee was in Ludhiana to inaugurate the international conference on 'Sustainable Agriculture for Food and

Livelihood Security' at Punjab Agricultural University (PAU).

The three-day conference is being organised as part of PAU's golden jubilee celebrations.

This was his first visit to Punjab as the President. "I was looking forward to my visit to PAU, an institute that helped the country become self-reliant in terms of foodgrain production. PAU played a pivotal role in the dissemination of knowledge to farmers when the country needed it the most to come out of the foodgrain crisis," Mukherjee said.

He emphasised upon collaboration between the union and state governments so as to formulate a coherent and comprehensive agricultural policy aimed at facing the challenges of sustainable agriculture.

The President said a large number of policies were susceptible to failure, so it was vital to identify the areas of prioritisation, followed by immediate action.

"Agriculture is the lifeline of the people in our country. That's why it is given due priority in every union budget, wherein the interests of small farmers as well

as investors are taken care of," he added.

The President termed the Committee for Agricultural Costs and Prices (CACP), the National Food Security Mission (NFSM) and the National Horticulture Mission (NHM) as the initiatives taken by the central government to give a boost to the agricultural sector.

Sharing his experience as the union finance minister, Mukherjee said several steps had been taken to reduce storage wastage of foodgrains and improve the availability of credit to farmers.

The President called upon scientists present at the conference to deliberate upon the failure and desperation of a section of the farming community as prosperity had eluded a large chunk of it.

Speaking on diversification, Mukherjee said farmers should be kept away from the cost of diversification, which should go hand in hand with marketing reforms, enhancement in productivity, farm mechanisation and entrepreneur development.

Food-processing growing faster than agri sector: ASSOCHAM

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he agrarian sector of India, which was once a major contributor to the country's economy, is gradually losing its popularity among the country's youth who are lured in by more lucrative opportunities in other fields.

Last year, agriculture contributed just 5% to the country's GDP. “The reason for this below average performance of the agriculture sector is because the next generation is moving out of farming activity. Farmers' children are all educated now and are looking for well-paying jobs,” suggested J Crasta, co-chairman, Southern Regional Development Council, ASSOCHAM, during a seminar on Mega Food Parks, in the city.

In stark contrast, the food processing sector contributed over 15% to the GDP. Recognising food

processing as the next sunrise sector, the Union government has come out with various schemes to boost its growth. Apart from setting up mega food parks across the country, the ministry of food processing iIndustries has already finalised four schemes on areas such as technology upgradation, cold chains for non-horticultural crops, human resources development, and other promotional activities.

Of the 30 mega food parks which are in various stages of development, 13 have already obtained the final approval. Food parks in West Bengal, Tripura, Assam, Punjab, Uttarakhand, and Karnataka are at advanced stages of completion, while the mega food park located at Chitoor District in Andhra Pradesh is already operational and has received a warm response, said

Rakesh Kacker, secretary, ministry of food processing industries.

These units have been designed to provide full-fledged infrastructural facilities like warehouses, storage facilities, testing laboratories, fruit ripening chambers, etc.

“This will benefit entrepreneurs who may not otherwise be able to dole out huge sums of investment for the latest technologies. They can now use these facilities at the park by paying a user fee,” said JP Meena, joint secretary with the ministry.

Emphasising on the need to maintain appropriate quality standards in the food industry, Kacker said that though the Food Safety And Standards Authority was playing the regulatory role in this the ministry was keen to start a process of self-regulation by industry.

Steps Taken by the Centre to Promote Food Processing Industries in the North East

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he Ministry of Food Processing Industries in coordination with Small Farmers` Agri-Business Consortium (SFAC) under Ministry of Agriculture is implementing Mini Mission-IV under Horticulture Mission for North-East & Himalayan States. Under the Mini Mission-IV component of this scheme, assistance at higher rates i.e. @ 50% upto Rs. 4 crore for setting up of new food processing units and upto Rs. 1 crore for Upgradation/modernization of existing units is available to industries involved in processing of horticultural produce in the above States. Further, this scheme is operational during 2012-13 also.

Funds under the scheme are

disbursed through SFAC to the beneficiaries.

Small Farmers` Agri-Business Consortium (SFAC) provides soft loan under Venture Capital Assistance Scheme in the country including North-Eastern Region.

Under this scheme, venture capital for agri-projects upto 10% of the total project cost or 26% of the total project equity or Rs. 75 lakhs, whichever is lower is provided.

Under the Centrally Sponsored Scheme – National Mission on Food Processing (NMFP), the Ministry of Food Processing Industries extends financial assistance to food processing units including fruits & vegetables units in the form of grants-in-aid to the implementing agencies /

entrepreneurs @25% of the cost of plant and machinery and technical civil works subject to a maximum of Rs. 50.00 lakhs in general areas, or @33.33% subject to maximum of Rs. 75.00 lakhs in difficult areas such as Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Sikkim and North-Eastern States, A&N Islands, Lakshadweep and ITDP areas in the country. The same pattern of assistance is available under NMFP through States / UT Governments.

This information was given by Dr. Charan Das Mahanta, Minister of State for Agriculture and Food Processing Industries in written reply to a question in the Lok Sabh.

62 cold chain facility projects

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he ministry of food processing industries has approved 62 projects so far for establishing cold chain facilities to be implemented by the private and co-operative sectors.

As per the Vision 2015: Strategy & Action Plan for Food Processing Industries in India'' document of April 2005, the level of processing in India is very low and varies from sector to sector and is estimated at 2.2% in the case of fruits and vegetables. As compared to this, in developed countries it is very high__80% in USA and 70% in France. It is high in many developing countries as well 80% in Malaysia and 30% in Thailand.

Through its various schemes for financial assistance and other promotional measures, the ministry of food processing industries facilitates creation of post harvest processing infrastructure including processing facilities aimed at reducing wastages, enhancing value addition and increasing shelf life in the country, as per information provided by the minister of state for food processing industries.

Under the scheme for cold chain, value addition and preservation infrastructure financial assistance in the form of grant-in-aid at the rate of 50% of the total cost of plant and machinery and technical civil works in general areas, and at the rate of 75% of the total cost of plant and machinery and technical civil works is provided by the ministry in difficult areas subject to a maximum of Rs 10.00 crore.

The initiatives are aimed at filling the gaps in the supply chain, strengthening of cold chain infrastructure, establishing value addition with infrastructural facilities like sorting, grading, packaging, processing and preservation for horticultural and non horticultural products like marine, dairy, poultry, etc.

Other agencies of the government such as National Horticulture Board (NHB), Agricultural and Processed Food Products Export Development Authority (APEDA), National Cooperative Development Corporation (NCDC) and state government also provide assistance for cold storages under their respective schemes.

Mega parks to woo investments in food processing

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bout 30 mega food parks are being set up across India to attract investments in the processing sector, minimise wastage and optimise production for domestic and export markets, an official said.

"Of the 30 mega food parks, 13 have been given final approval and seven of them are at advanced stage of implementation in Andhra Pradesh, Assam, Karnataka, Punjab, Tripura and West Bengal," Food Processing Industries Secretary Rakesh Kacker said at a day?long summit on the sector here.

Of the remaining 17 projects, 15 were accorded in?principal approval in September while two are yet to complete formalities for final approval.

Under the 12th Five Year Plan, the ministry has launched the national mission for food processing in April in cooperation with state governments to ensure better outreach of various schemes chalked out for the sector.

"As the food processing sector has emerged as the fastest growing sub?sector of the manufacturing sector during last fiscal (2011?12), the units being set up in the mega parks will be provided basic infrastructure such as warehouses, storage facility, testing labs and fruit ripening chambers," Kacker said at the summit on 'Mega Food Parks: An Investment Destination'.

Addressing members of the Associated Chambers of Commerce and Industry of India (Assocham), stakeholders and officials, Kacker said the central

government was keen to decentralise implementation of schemes for the sector in which states would be free to tailor them as per their requirement.

"To promote the sun rise sector in potential states across the country, the ministry has finalised four schemes ? technology upgradation, cold chains for non?horticultural crops, skill development and promotional activities for backward and forward integaration," he said.

Stressing on the need to maintain quality standards in the processing units, the secretary said though the Food Safety & Standards Authority was playing the regulatory role, the ministry favoured a process of self?regulation by the industry itself.

"We are in discussion with the apex industry organisations to develop a system of self?certification by food processing units. The Quality Council of India has been directed to draw a roadmap," Kacker noted.

Noting that the food processing sector was critical to achieve growth in the farm sector, Kacker said growth in the sector was essential to meet the twin national objectives of inclusive growth and food security.

"There will be a surge in demand for food products due to shift in demographic profile, as 65 percent of the 1.2?billion population is below 35 years of age and size of middle class is set for over a 10?fold jump to 583 million people from 50 million currently," he noted.

Beverages & Food Processing Times-Dec-I-2012

Dairy News

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McDonalds' soft serve should be classified as ice-cream for determining excise duty: Supreme Court

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he Supreme Court has ruled that the 'soft serve' sold at McDonalds India's outlets should be classified as ice-cream for the purpose of determining excise duty, upholding the excise department's claim.

The department had issued three show-cause notices to the fast-food restaurant chain for April 1997March 2000, saying 'soft serve' would attract the 16% duty plus an additional duty levied on icecream. McDonalds India (Ms/ Connaught Plaza Restaurant (Pvt) Ltd) had opposed the classification, leading to the dispute.

In a judgement last week, the apex court ruled, "We are unable to accept the argument that since 'soft serve' is distinct from 'ice-cream' due to a difference in its milk fat content, the same must be construed in the scientific sense for the purpose of classification."

The two-member bench comprising Justices DK Jain and JS Khehar said, "In absence of any statutory definition or technical description, we see no reason to deviate from the application of the common parlance principle in construing whether the term 'ice-cream' is broad enough to include 'soft serve' within its import."

Earlier, the Customs, Excise and Gold (Control) Appellate Tribunal in Delhi had concluded that 'soft serve' should be classified as 'edible preparations, not elsewhere specified or included' and 'not bearing a brand name', attracting nil duty. The tribunal upheld McDonalds' claim that 'soft serve' could not be classified as ice-cream since ice-cream contains 10% milk fat whereas 'soft serve' does not contain more than 5% milk fat.

Both the company and the excise department had filed appeals in the tribunal after three adjudications following the department's proposed penalty on the assessee and its managing director.

Ruling that the tribunal had erred in classifying 'soft serve', the apex court also said that there was no merit in the company's contention that 'soft serve' could not be regarded as ice-cream since it was marketed across the world as 'soft serve' and not icecream.

"The manner in which a product may be marketed by a manufacturer does not play a decisive role in affecting the commercial understanding of such a product. What matters is the way in which the consumer perceives the product at the end of the day notwithstanding marketing strategies," the court ruled.

"The true character of a product cannot be veiled behind a charade of terminology, which is used to market a product," court said. "In other words, mere semantics cannot change the nature of a product in terms of how it is perceived by persons in the market, when the issue at hand is one of excise classification."

The court also dismissed the company's argument that as per culinary authorities, ice-cream must necessarily contain more than 10% milk fat content and be served only in a frozen to hard stage for it to qualify as ice-cream.

Classifying 'soft serve', which contains 5% milk fat content, as ice-cream would make the product stand foul of requirements of the Prevention of Food Adulteration Act, McDonalds' lawyer claimed.

Rejecting this claim, the court said that such a hard and fast definition of a culinary product like icecream, which has seen constant evolution and transformation, is untenable.

Food experts suggest that the earliest form of icecream may have been frozen syrup, the court added, concluding that there is no clear or unanimous view regarding the true technical meaning of ice-cream. In fact, there are different forms of ice-cream in different parts of the world that have varying characteristics, the court said.

"Besides, even if we were to assume for the sake of argument that there is one standard scientific definition of 'ice-cream' that distinguishes it from other products like 'soft serve', we do not see why such a definition must be resorted to in construing excise statutes," the court said.

"Fiscal statutes are framed at a point of time and meant to apply for significant periods of time thereafter; they cannot be expected to keep up with nuances and niceties of the gastronomical world."

Beverages & Food Processing Times-Dec-I-2012

Dairy News

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Dairy major Fonterra sets up local office as India thrust grows

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ew Zealand-based dairy giant Fonterra, one-time partner of Bangaloreheadquartered Britannia, has announced it is setting up a local office in a bid to step up its presence in India. The new office, in Delhi, will be led by expatriate Hamish Gowans, who will be designated as general manager.

The move to have a local presence comes at a time when the Aucklandheadquartered group, formed in 2001, is fine-tuning its strategy for India following two aborted attempts to get a foothold in the country. Following the split with Britannia in 2009, when the latter acquired Fonterra's 49% stake in the seven-year-old joint venture Britannia New Zealand Foods, the Kiwi giant had attempted to tap the local market by entering into an agreement with the Indian Farmers Fertiliser Cooperative Ltd (IFFCO) to set up a large dairy farm at the latter's Nellore Kisan SEZ This was

in 2010. But the Rs 1,000-crore project, which envisaged having 40,000 high-yield cows that produced high-quality milk, did not take off following the Board of Approvals for Special Economic Zones rejecting IFFCO's proposal.

With the independent office now, Fonterra, which has revenues in excess of $17 billion, is expected to go solo in the country. Fonterra's president Greater China and India Kelvin Wickham said the opening of the new office would help the company get a better understanding of the local dairy market.

"India's dairy industry is growing rapidly. With 20 million more mouths to feed every year and an increasingly affluent population, the demand for high quality dairy nutrition continues to grow at a rapid pace - annual dairy consumption is forecast to reach around 180-200 million tonnes by the end of the decade," Wickham said. "Today India produces around

one sixth of the world's milk and almost all of this is consumed locally. The country has a large, complex dairy industry and, while Fonterra has developed a strong knowledge of the country's dairy

Anmum - producing powdered milk, ready-to-milk, yoghurt, cheese, butter and other dairy products that are exported to markets in the Middle East, Australia, Africa and Asia.

environment, it is clear we need to have dedicated leadership on the ground to further strengthen relationships and develop opportunities," he added.

Globally, Fonterra has three core brands - Anchor, Anlene and

According to industry estimates, Fonterra is responsible for over 25% of the world's dairy exports. In New Zealand alone, Fonterra is the largest cooperative group with over 10,000 farmers owning it. The group was formed following the

merger of the two largest cooperatives in New Zealand - the New Zealand Dairy Group and Kiwi Co-operative Dairies - with the New Zealand Dairy Board.

Gowans, who takes over as the India head, has an understanding of emerging markets, says Wickham, having managed exports of Fonterra's products to countries in Asia. He is expected to help the dairy major galvanise its operations India as its seeks avenues to establish itself and grow. But with well-entrenched local players such as Amul and Mother Dairy as well as private players such as Britannia, Nestle and Danone, the road ahead, say experts, is not likely to be easy.

Besides national level-players, the dairy markets in India has a number of regional brands that massively undercut to drive penetration.

Thanks to all this most private players have opted to operate in the value-added or premium dairy market in India.

Australia explores tie-ups in Indian dairy sector

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tirring Indian milk with Australian technology for production of value-added items. This was the key theme discussed between Indian dairy players and an Australian dairy team at a joint meeting.

The Australian team, led by Michael-Carter, Trade Commissioner, expressed interest in exploring India-Australian tie ups in the areas of animal husbandry, dairy development and livestock research.

It was observed at the meeting that while the Indian dairy sector is witnessing phenomenal growth in terms of milk production, it is facing challenges in the form of export growth and development of value- added products.

On the other hand, Australia has lesser production of milk, but significant expertise in the areas of processing and livestock development. “Australia is currently the third largest exporter of dairy products in the world and our strength in accessing export markets can be leveraged by India companies through tie-ups with Australian dairy firms and co-operatives,�

Carter said.

M.V. Reddy, Andhra Pradesh Director of Animal Husbandry, pointed out that the Indian dairy sector could explore imbibing Australian technology to increase average milk production and fodder management.

In a follow-up to the meeting, another Australian dairy delegation will visit Hyderabad in March during the second edition of the Dairy Show and meet with dairy entrepreneurs and farmers from Andhra Pradesh and other parts of the country.

Andhra Pradesh produces 11.6 million litres of milk, but only about 13 per cent was being procured by the organised sector, leaving farmers with surplus production.

Also, the procurement price here is the lowest compared with other milk producing centres at Rs 17 a litre, compared with Rs 19.50 in Maharashtra and Rs 22 in Gujarat.

Beverages & Food Processing Times-Dec-I-2012

Dairy News

9

How a transformed Mother Dairy is spreading its wings from Delhi to Dublin

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ast month, a rep from the Irish Dairy Board dropped by at Mother Dairy's Patparganj plant in East Delhi to shoot the breeze with Managing Director Siva Nagarajan. They met in the plush confines of the company's Innovation Centre conference room and as the conversation progressed, Nagarajan --or Naga as he's fondly called -- served up a pinkish cup of rice kheer to the Irishman.

He devoured it in no time and asked for a second helping. Naga obliged and then asked why he asked for another cup. It transpired that he had at the back of his mind rice pudding in Germany from a firm called Mulder. He wanted to do a mental comparison of the two products. Naga made sure the meeting ended on a sweet note as the Irishman asked for tech transfer for kheer and a bevy of other products that Mother Dairy manufactures.

Mother Dairy has been recalibrating its Delhi-centric approach over the years, expanding

to other parts of the country, and even overseas. The top management today comprises hires from multinational companies who bring in much needed agility and leanness to an organisation that counts a million people in its supply chain dispensing 30 lakh litres of milk a day.

From selling commoditised milk to exporting mangoes to Japanese customers or banana purees for sorbets in the European market to identifying gherkins as an export item off Bangalore or even offering golgappaflavoured kulfis at Rs 5 a pop to the domestic consumer, Mother Dairy straddles an enviable range. In its march to capture new markets and emerge as a leader across categories, the Rs 5,279 crore company is hiring global consultants to tweak its systems, keeping a mindful eye on fair price

Dairy foods intake cuts hip fractures risk

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ncreasing consumption of dairy foods may help reduce risk of osteoporotic fractures in the population aged over 5 and reduce healthcare costs, a new study has suggested.

The study was based on a new analytical model that links nutrition and fracture risk, and health economics. It was based on data from the Netherlands, France and Sweden, countries which have varying levels of dairy product intake in the population.

Calcium is contained in different types of foods (including in certain fish and greens), however around 60 to 70 percent of daily calcium intake in Western Countries is derived from dairy products.

In addition to calcium, dairy products also provide a large variety of essential nutrients such as minerals, vitamins and proteins that, along with vitamin D, are also beneficial to bone health.

Low dietary intake of calcium has been associated with decreased bone density and increased risk of osteoporosis, a disease where bone becomes less dense and prone to fracture.

The researchers calculated the number of disabilityadjusted life years (DALYS) lost due to hip fractures associated with low nutritional calcium intake and the number of hip fractures that could potentially be prevented each year with intake of additional dairy products.

The benefits were highest in France with 2023 prevented hip fractures, followed by Sweden(455) and the Netherlands (132). This represents a substantial health cost savings of approximately 129 million, 34 million and 6 million Euros in these countries, respectively.

"Our study likely underestimates the potential cost savings of increased dietary calcium in that it relies on existing figures for the senior population and does not take into account the long-term benefits to the younger generation," said study co-author Professor Rene Rizzoli, Professor of Medicine and Head of the Division of Bone Disease at the University Hospitals of Geneva.

"Adequate nutritional intake and regular exercise during childhood and adolescence, both necessary for the development of peak bone mass, may contribute to bone strength and reduce the risk of osteoporosis and fractures later in life," he added.

to the farmer and value to the consumer, the twin peaks that are embedded in the DNA of the

company.

The corporate makeover There's clearly a change in thinking from a cooperative setup back in 1974 when Mother Dairy was

created as part of the 'Operation Flood' programme of the National Dairy Development Board (NDDB). In 2000, Mother Dairy Fruit & Vegetable Private Limited (MDFVPL) was incorporated as a wholly-owned subsidiary of NDDB to take over the assets, functions and personnel of Mother Dairy Delhi and Fruit & Vegetable Project.

But it was in FY200708, on the recommendation of a study by Accenture, a corporate structure actually started taking root. That year, Dhara Vegetable Oil & Food Company Limited, another wholly-owned subsidiary of NDDB, was amalgamated into the fold of MDFVPL. Soon after, taking cues from the study, three strategic business units

(SBUs) - dairy, horticulture and oils - were created and functional structures were designed. Gradually, a fourth SBU, dairy products, was incorporated. "The accountability matrix was also fixed at that point of time, implying each functional head was accountable for everything in their respective domains," says Saugata Mitra, Chief People Officer, MDFVPL, who served Japanese consumer electronics majors Sony and Sharp before taking up a position with Mother Dairy.

All through the transition and beyond, the six-member board led

by Chairperson Amrita Patel, has been more than supportive, says Naga. "This board has a sense of appreciation of what the consumer wants and what the farmer has to go through. It understands fairness and doesn't do anything with a short term point of view," says Naga, who has wide-ranging experience in theFMCG space and worked with Philips before signing on at Mother Dairy. He demonstrates with an example.

Beverages & Food Processing Times-Dec-I-2012

Dairy News

10

Flush with milk, TN emerges second largest dairy player after Gujarat

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ith nearly 70 lakh litres of milk being handled daily by the cooperative and the organised players in the private sector, Tamil Nadu has emerged the second largest dairy player after Gujarat.

announced that co-operatives in Tamil Nadu were procuring about 27 lakh litres of milk daily. The milk is sold as liquid, packeted milk

litres daily. While for the large players this is an opportunity to expand their procurement base to grow the business, the smaller

Though a far second, with cooperative in Gujarat alone handling 1.2 crore litres of milk, two of the largest players in Tamil Nadu, the Tamil Nadu Cooperative Milk Producers Federation and the private sector Hatsun Agro Product Ltd together procure nearly 50 lakh litres of milk directly from dairy farmers.

According to industry sources, on going flush season is seeing a rapid increase in milk production and the co-operative and private sector has managed to keep procurement going even as in neighbouring States the dairy industry is declaring a 'procurement holiday'.

Following a review last week, the Dairy Development Department had

base by expanding market geographies are the only option for sustained growth. Dairy output is growing with farmers seeing an opportunity for weekly, assured income from milk supplies while agriculture is a seasonal operation.

But the increase in milk procurement needs to be utilised.

While farmers' income is protected, the surplus has ensured there is no 'inflation' in milk while prices of dairy products have dropped. While Hatsun Agro's margins are squeezed it is an opportunity to expand procurement in the long-term, he said.

and processed into various dairy products. In the private sector, Hatsun Agro procures about 21-24 lakh litres of milk daily and according to the Tamil Nadu Dairy Association, which represents over 100 small dairy companies that sell branded milk in packets, some of them procure up to 25,000-50,000

players are also growing though there is some short-term pressure on maintaining procurement.

DIVERSIFICATION R. G. Chandramogan, Chairman and Managing Director, Hatsun Agro, says, diversifying the product

The company's presence in a diverse base including, milk powder exports, countrywide marketing of branded products including ghee, dairy whitener and milk powder is enabling milk absorption. Nearly 13 lakh litres of milk is processed into branded milk, ice-creams and related products while the balance is converted to dairy ingredients. The

company's veterinarians carry out over six lakh artificial inseminations annually, which will maintain availability of about one lakh additional female calves to keep the production pipeline going.

R. Rajasekaran, Secretary, Tamil Nadu Dairy Association, said the wide industry base is helping in keeping the procurement going.

Even if some small players stay away, the produce is absorbed by the larger players. Deficient monsoon, agri-labour shortage is driving farmers to dairying as there is assured and regular income.

Typically, production increases by 4-5 per cent annually but this year the growth is set to double.

Deficient monsoon also means that from January when the dry fodder availability goes down, output could drop. Also fodder concentrate prices are increasing with prices going to Rs 19 a kg from Rs 12 kg .

India and international year of cooperatives T

he United Nations has declared this year as the International Year of Cooperatives. FAO chose for the World Food Day on October 16, the theme “Agricultural Cooperatives Key to Feeding the World”.

According to FAO, cooperatives across all sections provide over 100 million jobs around the world, 20 per cent more than multinational enterprises. In 2005, the Indian Dairy Cooperatives, with 12.3 million members, accounted for 22 per cent of the milk produced in the country.

Sixty per cent of members are landless or have very small plots of land. Women make up 25 per cent of the membership.Cooperative credit societies are performing a valuable role since they extend credit to farmers at a low interest rate.They occupy 7.4 per cent of the financial space in the economy according to B Yerram Raju.

Raju also points out in a recent article (Inclusion, July-Sept 2012) that there is an unfortunate fall in the share of cooperatives in the rural credit market from around 62 per cent in 1992-93 to about 34 per cent in 2002-2003. The Constitution (97th Amendment) Act 2011 enacted by Parliament is designed to aid the promotion, ownership, control and management of cooperatives by members and seeks to reduce state control in partnership. It is to be hoped that all state governments will formulate new Cooperative Acts in line with the 97th Amendment before too long.

Yerram Raju also points out that while there are as many as 97,410 cooperative banks, of which more

than 98 per cent are rural cooperatives, barely 50 per cent of them are active in the rural credit system. The National Commission

worth of dairy produce. 'Amul' has become a household name. Kurien rightly diagnosed that a major ailment of the cooperative sector is

on Farmers called for the revitalisation of the cooperative credit system and suggested that the rate of interest should be 4 per cent for loans extended to farmers.

Some state governments like Madhya Pradesh are giving loans at interest rates even lower than 4 per cent. The rejuvenation of the cooperative credit system is essential for achieving the goal of “financial inclusion”. In addition to the financial sector, there is need for cooperatives both at the production and post-harvest phases of farming.

Thanks to the late V Kurien, and the late Tribhuvandas Pa tel, the cooperative sector assumed a dominant role in our dairy industry, particularly in Gujarat.

The Gujarat Cooperative Milk Marketing Federation is one of the largest organisations of its kind, handling nearly Rs12,000 crore

the absence of professional management. He had difficulty in finding competent managers for the new dairies set up under the Operation Flood programme. This led to the organisation of the Institute of Rural Management at Anand. He also set up a Vidya Dairy in the Anand Agricultural University.

This is a unique training school imparting practical experience from milking to marketing. In our country, with a very large number of small and marginal farmers and with the growing feminisation of agriculture, the cooperative pathway is the most beneficial one for enhancing rural livelihood and nutrition security. The achievements of the dairy sector provide many lessons to policy makers such as the following: First, there is need for an end-toend approach for ensuring the

success of the dairy or other farm enterprises. Convergence in the provision of services relating to breeding, nutrition, healthcare and processing and marketing is an essential requirement for success.

Second, a quality literacy movement should be launched to spread knowledge of Codex alimentarius standards of food safety as well as animal hygiene and sanitation. Third, cooperatives should be professionally managed and authority and accountability should go together at all levels.

Fourth, human resource development is important both at the farmer and professional levels.

Farmer level capacity building can be done in Krish Vigyan Kendras, Vidya Dairies, as well as in the farms of outstanding dairy entrepreneurs (farmer to farmer learning). Fifth, public policies in the fields of import and export of animal feed (concentrates), input and output pricing and investment and infrastructure development should ensure the sustainability and survival of small-scale dairy farming. Finally, the fact that women play a pivotal role in dairy farming should be kept in view, while developing support systems.

Gender specific needs, such as creches for infants and medical help for adults should be met.

Among outstanding examples of the success of cooperatives, mention may be made of the Indian Farmers Fertiliser Cooperative (IFFCO), which is a unique venture with 39,824 cooperative societies as members.

The Krishak Bharati Cooperatives (KRIBHCO) has become the world's premiere fertiliser producing cooperative.

NCF has suggested that even

where cooperative societies do not function well, cooperation can be promoted among farming families in a village based on shared goals and enlightened self-interest. The self help group model which is now helping women to get the power of scale in small scale enterprises could also be adopted in farming. Farmers can form ecosocieties, which will ensure that environmentally benign technologies like integrated pest management, integrated nutrient supply and scientific water management are adopted. Contract farming is another pathway for providing the advantages of group cooperation in production and marketing.

Section 25 companies can also be promoted where farmers are engaged in enterprises such as hybrid seed production and the manufacture of the biological software essential for sustainable agriculture.

We have nearly 25 per cent of the world's farmer population and poverty and malnutrition are widely prevalent among marginal, small farm and landless labour families. Farm size is diminishing and prime farmland is being sold for nonfarm purposes. A socially viable method of getting small scale producers together, either in the form of cooperatives or selfhelp groups is urgently needed to maintain young farmers' interest in farming. If farm economics or ecology go wrong, nothing else will go right in agriculture.

(M S Swaminathan is an agricultural scientist who led India's green revolution )

Beverages & Food Processing Times-Dec-I-2012

Dairy News

11

Danone, Fonterra eye Tirumala Milk D airy giants Danone and Fonterra are among potential acquirers of a controlling stake in Hyderabadbased Tirumala Milk Products after promoters and private equity investor Carlyle Group started work on a share sale plan.

The 15-year-old Tirumala , the second largest private supplier of liquid milk in the southern states, will ask around Rs 2,500 crore, or $450 million, in enterprise valuation, said sources directly familiar with the process.

Carlyle, which invested less than three years ago, holds 20% stake.

A group of five first-generation rural entrepreneurs jointly own the remaining majority shares.

The PE investor and the promoters have short-listed three global investment banks as they get ready to launch a sale.

"Investment banker/s will be mandated shortly after a few

global buyers show interest. The

process begins.

sale will be open only to foreign strategic acquirers and the original founders plan to retain a part of their stake," said a source mentioned earlier.

French foods behemoth Danone is among the interested suitors who have approached the company, expressing serious intent to buy a large stake.

Fonterra of New Zealand is another foreign player, but talks with the latter is in very preliminary stages. Investment bankers have pitched names of other global acquirers but clarity would emerge only after a formal

Emailed queries to Danone and Carlyle Group remained unanswered at the time of going to press. Fonterra could not be reached immediately. Tirumala is expected to end the current fiscal with Rs 1,500-crore revenue, with an operating profit estimated at 9-10 %. The company with a strong distribution network across Andhra, Karnataka and Tamil Nadu has stayed focused on liquid milk, butter ghee and some ethnic sweets. It has not forayed into higher priced processed dairy products that

Indian ice cream market to grow of 17% during 2012-2017

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ncreasing affluence, a large young population, product innovation, growing institutional sales, etc. are expected to be the catalysts in driving the Indian Ice Cream market in the coming years.

Research firm IMARC Group expects this market to grow at a CAGR of 17% during 2012 - 2017, according to its latest report titled “Indian Dairy Market Report & Forecast: 2012-2017”. The report which has done a comprehensive analysis of the Indian dairy market expects the share of the organized sector to increase significantly in the coming years.

According to an analyst at IMARC Group, “Although, the unorganized sector currently accounts for a larger share of the Indian ice cream market; it is shrinking considerably in the urban areas. In the rural areas, however, kulfis/ice creams made by small/cottage industry are popular. In small towns and villages, there are thousands of small players who produce ice creams/kulfis and cater to the local demand. The market for the organized sector is restricted to the large cities in the country. In the coming years, however, the penetration of organized players such as Amul and Kwality Walls are expected to increase in the rural and semi urban areas as well”.

According to the report, a notable shift in the consumption pattern of ice creams in India has been from impulse purchase by youngsters as fun food to its regular use as a dessert. Driven by this rising trend, the report found that the share of take-home sector over the last five years has increased significantly and currently accounts for more than 60% of the total ice cream market in India. This study, an updated and far more extensive and analytical version of our popular 2011 study, provides and draws upon a comprehensive analysis of every major dairy segment in India. The study, which has been undertaken using both desk research and two waves of qualitative primary research, has analyzed three aspects of the Indian dairy market. The first section quantifies the Indian dairy market into fourteen major segments and investigates the current and future opportunities in each of these segments. The second section provides an in-depth understanding of dairy consumption patterns among Indian consumers and the potential of value added dairy products. The third section investigates into the usage of natural colouration in dairy products and evaluates their current and future potential.

dragged down some of its rivals with investments and lower profitability, besides high voltage competition in metros.

The company processes 1.6 million litres milk daily across a string of plants in the three southern states. The founders are most likely to retain a big minority stake, considering that any foreign buyer would need a strong local partner to manage operations in a heavily fragmented industry with strong regional flavours.

Sources said there has been discussions of strategic M&A in the Indian dairy sector for a while, but no big deal has been clinched yet. Private equity deals have valued assets in this sector anywhere between 12 and 15 times their operating profits.

India is among the top global markets by per capita consumption of milk, with an

estimated business of more $80 billion, which could more than double by the end of the current decade.

Another large private dairy firm, New Delhi-based Sterling Agro, has mandated NM Rothschildto find buyers, leading to another potentially big deal in the sector.

Banking on white business Carlyle holds 20% in the Hyderabad-based Tirumala Milk Products, which is the second largest milk supplier in southern states Five other first-generation rural businessmen jointly own remaining majority share in the 15-year-old milk co Tirumala has a strong network across AP, Karnataka & TN, and has not ventured beyond liquid milk, butter ghee, sweets PE investor, promoters have zeroed in on 3 global investment banks for the sale which is open to foreign groups only.

Beverages & Food Processing Times-Dec-I-2012

Brand Report

12

THE IMPLEMENTATION OF FDI IN RETAIL A DEBATE OF BLAME, POWER AND TRIUMPH The future is rarely a linear extrapolation of the past. Circumstances change and new challenges arise.

Hence it is important to identify challenges of the future and start working now to meet them.

P

olitics and publicity run on the same track. BJP's top notch leader Sushma Swaraj in the utmost foray to impede the implementation of FDI in retail used her position to play blame game and tarnish certain Multinational companies that actually benefited the Indian immensely.

The issue of multinationals acting against the interests of the Indian farmers has been debated over the time in the wake of the government's proposal to introduce 51% foreign direct investment in multi-brand retail sector.

BJP has been opposing the move to introduce FDI in multi-brand retail since the government had introduced the thought of FDI in retail. Whatsoever wasn't it the NDA who has cultivated the idea of FDI in this regime. Sushma Swaraj known for her orating ability was put in the front by the opposition to foil of this investment.

Ms Swaraj, blamed and cited that PepsiCo as an example of how multinational companies shortchange Indian farmers on one pretext or the other. She pointed out that PepsiCo sourced most of the potatoes needed for manufacturing chips from abroad, saying Indian potatoes were not large enough for the size of chips it produces.

In fact, the argument over potatoes resulted in some hilarity in the House when Congress MP D S Hooda claimed that farmers in his native Haryana were ready to provide 24-inch-long potatoes for PepsiCo's chipmanufacturing plants. Taking a swipe at the young parliamentarian, Swaraj had remarked: So excited is he at eliciting support for the

Congress's FDI proposal, he is ready to grow a two-foot potato!

I hope he can tell the difference between a potato and a bottle gourd.

Multinational food majors McDonald's, PepsiCo and KFC got a taste of real Indian politics when Parliament started a debate on allowing FDI in multi-brand retail where the ruling front and opposition traded charges that left the US firms upset and dumbfounded.

The FDI debate left a sour taste for McDonald's, Pepsi, KFC and many multinational companies.

McDonald's refuted Sushma Swaraj's allegation that the fastfood giant does not source even basic commodities such as potatoes from within India, while PepsiCo issued a clarification that it is the largest procurer of potato in the country.

KFC, which is on an expansion spree in India, did not comment, but it must have been shocked to hear communications and IT Minister Kapil Sibal say, "Many said KFC will drive the dhabas out of the market. Dhabas have driven out KFC. Sushma Swaraj had alleged McDonald's about their fries, saying that they never buy potatoes from local Indian farmers, saying the potatoes are too small here. But in a rare instance of a multinational refuting a politician, McDonald's India (North and East) in a press statement said: "We confidently and proudly state that ingredients used in our products are sourced locally that includes the French fries.

McDonald's India, said it was honoring a prior investment commitment with the government that it would source its entire raw materials from the

country. And import only on rare occasions when local supplies ran out. Swaraj's subsequent attack, while opposing the government decision to allow foreign supermarket chains to open stores in India, was on PepsiCo, commenting that, "Pepsi promised to buy potatoes and tomatoes from farmers (in Punjab), but backed out later."

In its defense, PepsiCo India, the largest snacks player in the country, said that it sources all its potato requirement from within the country and works with over 24,000 farmers across nine states including West Bengal, Punjab, Gujarat, UP, Maharashtra, Karnataka and Bihar.

According to PepsiCo, they are the largest procurer of potato in India and procured 240,000 MT of potato from Indian farmers in 2012, which is more than double of had been procured five years ago. This giant company has set up a state-of-the-art potato seed facility in Punjab and all the seed is provided to farmers across the country is grown by Punjab and Haryana farmers.

PepsiCo works with farmers throughout the crop cycle — providing quality seeds, technical expertise, facilitating loans from banks, harvesting expertise etc."

PepsiCo has been operating in India since 1989, has significantly expanded its footprint in India and currently has 38 beverage bottling plants and three food plants. With several food and beverage brands in the country, PepsiCo is estimated to have about eight Rs1, 000 crore brands.

Amid the controversy over the way multinational food and beverage companies have been importing critical raw materials instead of procuring them locally, PepsiCo, the soft drinks and snacks giant, said it would double the procurement of potatoes from Indian farmers from the current 2.4 lakh tonnes over the next five years.

This company has been working with about 24,000 farmers and last year we procured about 2.4 lakh tonnes of potatoes through contract farming. PepsiCo will continue this program and now trying to expand the programme in order to double the procurement over the next five year. This company has contract farming arrangements in about seven states and is now said to be focusing on expanding its procurement process in the Indian agriculture sector.

Before commenting on basis of

certain irrational facts, this opposition leader of Lok Sabha should have made an effort to find and understand what PepsiCo has done in helping farmers improve yield and income: The company' has created a costeffective, localized agri-supply chain for its business by building a stature as a development partner by helping farmers grow more and earn more. It introduced new high-yielding varieties of potato and today PepsiCo India has introduced world-class, top-quality, highyielding potato varieties. Highyielding potato seeds have allowed farmers to produce world-class potatoes and obtain higher returns.

Also by introducing sustainable farming methods and practicing contact farming this company has provided world-class agricultural practices available to farmers and helping them raise farm productivity. In fact its biggest highlight is that this company believes in working closely with farmers and state governments to improve agrisustainability and crop diversification and also facilitating financial and insurance services in order to derisk farming.

PepsiCo pioneered contact farming in order to improve the performance of a tomato processing plant in Punjab; it imported and tested highyielding varieties that thrived best in India. Consequently, yield improved by over 300% and the length of the tomato season more than doubled, resulting in a substantial increase of farmer incomes. Today, the success of contact farming has spread and PepsiCo engages with over 22,000 farmers across the country to grow a variety of crops. Through this partnership, PepsiCo has transformed the lives of thousands of farmers by helping them refine their farming techniques and raise farm productivity.

KFC is now a prominent presence in Indian cities and towns. The red and white signboard has become evidently even more visible. Yum! Brands, the parent company that owns the KFC brand, has set in motion an expansion plan to open 500 stores by 2015. It isn't being over-ambitious. About 1,800 people visit each of the 190 existing restaurants every day. In December alone, there will be 40 new KFCs popping up all over the country. Despite the fact that

there are less than 200 outlets now, India is expected to be such an important market that Yum! Brands India reports directly to the headquarters in Louisville, Kentucky.

So Kapil Sibal's statement seemed quite contrary to the statistical figures. Though KFC declined comment on Sibal's statement in the parliament, the truth is that the chain has been expanding furiously and has already become Yum! Brands largest-selling fast food chain, overtaking Pizza Hut. Also, Yum! expects KFC to account for 60% of the $1 billion sales that the company is expected to generate by then.

Ultimately the research done by opposition to stop FDI in the retail sector, was not apt. Ms Swaraj did try to blemish these companies and their effort t to directly benefit the farmers.

Today we need capital and funds as well as world class agri –businesses to compete. No doubt, the entry of FDI in this sector can definitely bountifully position the agri industry in the top notch level. FDI would also be benefiting the Indian farmer immensely without the intervention of the middlemen.

Alas the FDI has been passed in the parliament, what else is left to say! Except, it is an important thing. It will boost the government's confidence to implement key economic reforms and would definitely help the government in passing the other important and pending reform measures very quickly Indian industry has welcomed the approval accorded by Lok Sabha to FDI in multi-brand retail, saying it will send a strong signal to foreign investors and enable the government to take up further economic reforms. FICCI – The association of associations has hailed this development and fully supports the government.

The country needs to move forward and it's high time to send a strong signal to foreign investors.

FDI will introduce new technology and investment in marketing agricultural produce.

India must take full advantage of modern technology and operational and management experience of big supply chains in the food retail business to make this happen. The future is rarely a linear extrapolation of the past. Circumstances change and new challenges arise. It is, therefore, important to identify challenges of the future and start working now to meet them.

Beverages & Food Processing Times-Dec-I-2012

Oils & Fats

13

VEGETABLE OILS AND FATS functions of the body. Its major functions are: *it helps supply energy (9 cal/gm) *it also helps absorb fat-soluble vitamins (A,D,E and K) *provide essential fattyacids whichare the building blocks for the hormones needed to regulate body functions *it helps to give a satiety feel i.e. provide a sense of fullness

V

egetable oils and fats are recognized as essential nutrients in human diet. It is the most important ingredient in any food recipe as they provide taste, texture and above all nutrition. Apart from enhancing the palatability of the food, it also plays a vital role in the metabolic

*it acts as an insulator to maintain body temperature To understand the nutritional and functional importance of fats and oils, it is necessary to understand their chemical composition.

Chemical Composition: Fats and oils are made up of

“triglycerides” resulting from the combination of one unit of glycerol and three units of fatty acids. The fatty acids comprise of carboncarbon chains When they are solid at normal room temperature, they are referred to as “fats” and when they are liquid at that temperature, they are called “oils.”

The main components of edible fats and oils are triglycerides. The minor components include mono and diglycerides, free fatty acids, phosphatides, sterols, fat-soluble vitamins, tocopherols, waxes, etc Classification of Oils and Fats: Oils and fats can be further divided into the following categories: Saturated fats (SAFA) Those containing only single carbon-to-carbon bonds are termed “saturated” and are the least

reactive chemically.

These fats are derived from animal products such as meat, dairy and eggs. But they are also found in some plant-based sources such as coconut, palm and palm kernel oils.

These fats are solid at room temperature.

Unsaturated fats Those containing one or more carbon-to-carbon double bonds are termed “unsaturated.”

Monounsaturated fats and polyunsaturated fats are two types of unsaturated fatty acids. They are derived from vegetables and plants. .Monounsaturated fats (MUFA) – These contain one double bond.

They are liquid at room temperature but begin to solidify at cold temperatures. This type of fat is preferable to other types of fat and

Thus one has to have minimum or no trans fats and right balance of SAFA, MUFA and PUFA in our diet Knowing the right fats to eat can help us to maintain a healthy heart and a healthy body

BENEFITS OF FROZEN DESSERT AGAINST ICE-CREAM The FSSAI defines Frozen dessert as – “a product obtained by freezing a pasteurized mix with milk fat and/or edible vegetable oils and fats having a melting point of not more than 37° C in combination and milk protein alone or in combination/ or vegetable protein product with the addition of nutritive sweetening agent”.

Milk fat is an expensive ingredient in many developing countries and vegetable fats provide an inexpensive high quality alternative.

The use of vegetable fats results in lower costs and higher production output. It also makes it possible to give the frozen dessert a better nutritional profile.

Salient Features of the vegetable fat used in frozen dessert: · The fat based with sharp melting properties at body temperature is highly desirable to ensure good organoleptic characteristics. · The fat must have a bland taste that does not mask any added flavours Advantages of using Vegetable fat over Dairy fat/cream: 1.Frozen Dessert made from Vegetable fat is Trans free and Cholesterol free, whereas Ice cream made with Dairy Fat contains Trans fats and cholesterol which is not good for health.

2.Dairy cream is not as stable as compared to Vegetable fat.

3.Dairy cream used in Ice Cream has to be stored in refrigerator whereas one can store Vegetable fat at room temperature.

Nature of Fat

100% vegetable f at

.Polyunsaturated fats (PUFA) These contain two or more double bonds. They are also liquid at room temperature. These are found in safflower, sesame, corn, cottonseed and soybean oils.

ESSENTIAL FATTY ACIDS – These fatty acids are "essential" because our body is not able to synthesize them and must be obtained through the diet. These include omega-6 (Linoleic) and omega-3 (Linolenic) fatty acids, which have been linked to lowering triglyceride levels. Common sources of essential fatty acids include vegetable oils, fish, grains, seeds, and green vegetables.

TRANS FATS There are some fats that are formed due to modification of oils by a process called Hydrogenation.

These are known as TRANS FATS. Unlike other members of the fat family (saturated, polyunsaturated and monounsaturated fats), trans fats, or trans-fatty acids, are largely artificial fats. Studies have shown that trans fats are linked to heart disease.

Trans-fatty acids (TFA) are found in small amounts in various animal products such as beef, pork, lamb and the butterfat in butter and milk.

Despite the many benefits oils and fats have, too much in our diet can cause major health problems.

Although all fats have the same amount of calories, some are more harmful than others. Intake of fats also affects the blood cholesterol levels which is directly linked to heart disease, the most common being the coronary heart disease or CHD in short.

Cholesterols are primarily of two types: *LDL or Low density lipo-protein also known as ' The BAD Cholesterol' as it builds up on the walls of arteries

4.Frozen desserts are easier and often faster to make as compared to Ice creams.

Vegetable Fat

can be found in olive oil, nuts, peanut oil, canola oil and avocados.

Dairy Fat (AMF) 100% animal fat

Cholesterol

Absent

Present

Melting Point

31-34° C

29-35° C

IV

32-35

26-38

FFA

0.1%

2.5% max

Odour

Odourless

Odour present

Trans fat

Absent

Present

*HDL or High density lipo-protei also known as ' The GOOD Cholesterol' as it helps remove cholesterol from the walls of arteries .Saturated fats : Too much of it raise LDL cholesterol .Monounsaturated fats – Lower LDL cholesterol and maintain HDL cholesterol .Polyunsaturated fats – Lower LDL cholesterol and too much of it lowers HDL cholesterol . Tr a n s f a t s – R a i s e L D L cholesterol and lower HDL cholesterol

By: Dr. K.D. Yadav Sr. Vice President (Technical ) Kamani Oil Industries Pvt Ltd. Mumbai, India.

Beverages & Food Processing Times-Dec-I-2012

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Beverages & Food Processing Times-Dec-I-2012

Dairy News

15

Australia explores tie-ups in Indian dairy sector Dutch to set up two centres, help potato, dairy sector

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tirring Indian milk with Australian technology for production of value-added items. This was the key theme discussed between Indian dairy players and an Australian dairy

facing challenges in the form of export growth and development of value- added products.

On the other hand, Australia has lesser production of milk, but significant expertise in the areas of

M.V. Reddy, Andhra Pradesh Director of Animal Husbandry, pointed out that the Indian dairy sector could explore imbibing Australian technology to increase average milk production and fodder management.

In a follow-up to the meeting, another Australian dairy delegation will visit Hyderabad in March during the second edition of the Dairy Show and meet with dairy entrepreneurs and farmers from Andhra Pradesh and other parts of the country.

team at a joint meeting.

The Australian team, led by Michael-Carter, Trade Commissioner, expressed interest in exploring India-Australian tie ups in the areas of animal husbandry, dairy development and livestock research.

It was observed at the meeting that while the Indian dairy sector is witnessing phenomenal growth in terms of milk production, it is

processing and livestock development.

“Australia is currently the third largest exporter of dairy products in the world and our strength in accessing export markets can be leveraged by India companies through tie-ups with Australian dairy firms and co-operatives,” Carter said.

T

he Netherlands will set up two centres in the field of post harvesting for potato crop and dairy sector in Punjab to help farmers enhance the yield.

“One Centre of Excellence (COE) will be set up in Punjab for post harvesting of potato

Andhra Pradesh produces 11.6 million litres of milk, but only about 13 per cent was being procured by the organised sector, leaving farmers with surplus production. Also, the procurement price here is the lowest compared with other milk producing centres at Rs 17 a litre, compared with Rs 19.50 in Maharashtra and Rs 22 in Gujarat.

Kwality Dairy retains BBB+ status by India Ratings

I

ndia Ratings, subsidiary of rating agency Fitch, has affirmed New Haryanabased Kwality DairyLong-Term rating at 'BBB+' with a Stable Outlook owing to company's strong operational track record with sales and net profit CAGR of 74% and 90% over FY07FY12 (year end March), respectively.

The rating agency said, this reflects the stable demand for milk and related products, which

is likely to increase with growing population. In addition, the gradual shift in consumer preferences towards branded milk products would enable higher growth for the organised sector in the dairy industry.

According to agency, the rating of the dairy company is because of its position in the dairy industry, with milk procurement and distribution networks. The North India based dairy also supplies to FMCG companies

and modern retail chains.

In FY12, Kwality reported revenue of INR24.2bn (FY11: INR16.1bn) with an EBITDA margin of 6.9% (6.3%) and a net profit of INR923m (INR459m).

Kwality was incorporated in 1992 by Kwality Ice Creams (India) Limited in West Bengal.

The company was acquired by the current promoters in 2002 and its registered office was subsequently shifted to Haryana.

Commission sees rosy future for dairy sector once quotas end

T

he EU is on course for a smooth phasing out of milk quotas by 1 April 2015, with dairy exports set to grow on the back of strong demand from emerging countries, such as India and China, according to a European Commission report published on 11 December. Despite a dip in dairy prices this summer – a move that prompted farmers to protest in Brussels in November – Commission officials say the medium to longer term outlook is favourable, with the end of quotas to provide significant opportunities for growth. The second so-called 'soft landing' report – which analyses the evolution of the EU's milk market since the mid-2010s – notes that quotas are “no longer relevant to limiting production” in most countries, with total EU milk deliveries remaining some 4.7% below last year's quota.

The quota price, paid by farmers seeking additional quota, is already at or close to zero, the Commission states. Under rules agreed as part of the so-called health check of the Common Agricultural Policy in 2008, the EU approved a gradual production increase – 1% every year – until the quota end date.

But several highly competitive milk producing countries, such

as Austria, the Netherlands, Germany and Ireland, complain that the continuation of the quota system discriminates against their growing production. Austria overshot its milk delivery quota by 4.2% last year, triggering a superlevy penalty of some €33 million, while Ireland and the Netherlands (both €16 mn), Germany (€10 mn) and Cyprus (€1 mn) also faced significant penalties. These countries call for an adjustment of thresholds for butterfat as a means to limit the impact of the superlevy on their national production.

Meanwhile, other countries, such as Poland, Spain, Slovenia and Portugal, see ongoing talks on reforming the CAP as an opportunity to prolong quotas to protect their industries. Their calls for market protection have found support from French Conservative MEP Michel Dantin, Parliament's rapporteur on market management, who is pushing for the reintroduction of a supply-management system in the reformed CAP. Under his plans, the EU executive could grant milk producers aid if they cut supplies by at least 5%, while fining others in times of oversupply on the domestic market. The suggestion is strongly rejected by the European Dairy Association – a

lobby group representing dairy processors – which says that such moves would “only lead to a weaker competitiveness of the EU dairy sector globally”.

Commissioner Dacian Ciolos has also been keen to warn the EU against undermining previous agreements at Council level. “I am optimistic that the milk package, which entered into force in October, will provide new elements for strengthening the producer's role in the dairy supply chain”, he said.

The EU executive is set to publish a further report on the sector, particularly on the impact of the end of quotas on disadvantaged regions, by mid2014.

crop and second COE will be for dairy sector (genetic and animal health),” the Netherlands Counsellor for Agriculture Nature and Food Quality, Arie Veldhuizen, said.

These two COE are expected to be established by next year, he said.

“The main objective of setting up COE is to better the production and yield. We will

showcase our technology in these centres and see how we can help Indian farmers in improving yield,” he said here on the sidelines of AgroTech.

“The officials and experts from the Netherlands will hold a meeting with Punjab government officials and progressive farmers tomorrow here to work out the modalties for setting up the COE for potato,” an official of Punjab Horticulture department said here.

“Dutch can help Punjab potato growers in handling, storage and processing of potato crop,” state official said adding that assistance could also sought from Netherlands experts to prevent increase in sugar content in stored potato crop.

Punjab is a major producer of seed potato crop with annual output of 21 lakh tonne, covering 80,000 hectares of area under cultivation. Part of the Indo-Dutch Joint Agriculture Working Group, Netherlands plans to set up 8 such COEs across the country.

Beverages & Food Processing Times-Dec-I-2012

News

16

Mirinda re-creates cult song magic to introduce new Mirinda flavours in Tamil Nadu

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epsiCo has launched a campaign for the Tamil Nadu market featuring brand ambassador Asin, to introduce Mirinda's apple and grape flavours. The film is themed on a remixed version of popular Tamil film song 'Vasantha Kala Nadigalile' from the film 'Moondru Mudichu'.

Featured here is a 30-second edit of the film, which shows Asin trying to get rid of her suitors to grab the apple and grape Mirinda bottles. After getting all three flavours in her hand, Asin rows away into the sunset, only to have her boat rocked by the two guys as the 'galatta' love triangle continues.

The film is set on a boat in the middle of a lake, like the original 1976 song. The agency has roped in Gautham Vasudev Menon to direct the film. For the benefit of readers not tuned into Tamil cinema, the original song features in K Balachander's movie featuring Rajinikanth, Kamal Haasan and Sridevi.

Senthil Kumar, national creative director, JWT India, said, “Pepsi's south-specific work across all its brands have always been very special to me and my team at JWT South. And Pepsi was the first brand to recognize the fact that the south market needs to have south-specific work and just dubbing a Hindi ad in Tamil or Telugu would not work here. This has led to many memorable commercials that have the hearts of the south Indian consumer and the brands have grown in both equity and market shares as a result.''

Mirinda had started the 'galatta' series of films with Mirinda Bride, where Asin essayed the role of the bold new south Indian bride. Next came Mirinda Market, which unleashed the Chennai lingo of double meanings with Asin essaying the role of a market rowdy. This was followed up with Mirinda Auto, which took on the overcharging auto meters of Chennai. And then the brand came up with Dance Master, who was tuned into the 'galatta' mode by Asin playing a mad modern student of dance.

Ruchira Jaitly, executive vice president marketing, beverages (flavours), PepsiCo India, said, “Mirinda has always stood for great unique taste that brings alive the 'galatta packed' moments, and these two new fruity flavours add to the brand's essence that is unlimited fun and full of madness. These flavors add local familiarity to a bestselling global drink and with this we hope to dial up consumption frequency and penetration for the brand.�The launch is supported by a 360degree campaign including radio, cinema, online and consumer engagement programmes.

Beverages & Food Processing Times-Dec-I-2012

Corporate News

17

Cadbury invents chocolate that 'doesn't melt'

C

adbury is producing chocolate that does not melt and can survive hot temperatures.

The confectionery company's scientists have invented a new Dairy Milk chocolate bar that can withstand up to 104 degrees Fahrenheit (40 degrees Celsius) for three hours.

The team of scientists figured out a way to break down sugar particles into smaller pieces, which in turn reduces the amount of fat covering them.

This makes the Dairy Milk able to withstand significantly warmer conditions.

However, this chocolate will only be available in tropical countries such as India and Brazil.

Cadbury said: "Production of temperature-tolerant chocolate would allow production of chocolate-containing product more suitable for hot climates, particularly in less economically developed countries where the supply chain is ill-equipped to handle temperature fluctuations."

Nestlé Strengthens Global Expertise in Confectionery The company's investment in its PTC in the city of York will enable it to accelerate confectionery product development for the UK and the rest of its worldwide business.

At the PTC, teams of technologists, scientists, engineers, food chemists, confectioners, nutritionists and other experts work on developing innovative ideas for confectionery, from new manufacturing, raw material processing and packaging methods, to the reformulation of existing products.

Nestlé has expanded the miniature factory, or pilot plant, at the heart of the PTC, where new technologies are developed and tested before being used in its factories around the world.

“All Nestlé PTCs around the world provide a 'critical mass' of expertise in particular product categories.” Stefan Palzer, Director of PTC York.

The company has also enlarged the PTC's sensory testing facility, where panels of experienced confectionery tasters evaluate prototypes and finished products on a variety of factors including smell, bitterness or sweetness, and taste preference.

The investment is one of a number Nestlé has made in its global research and development capabilities recently.

Earlier this month the company opened its first R&D centre in India and the Nestlé Institute of Health Sciences in Switzerland, while in October it announced it would increase the number of R&D units it has in China from two to four.

“All Nestlé PTCs around the world provide a 'critical mass' of expertise in particular product categories,” said Stefan Palzer, Director of PTC York, at the opening ceremony.

“Here in York, our specialist teams develop breakthrough technologies for chocolate, wafer and fruit-based confectionery, and

number of placement students and apprentices.

Their work is essential for the continuous improvement of the

chocolate ingredients and coatings for ice cream products.

“The expansion will enable us to intensify product and packaging prototyping using sustainable and high quality raw materials, innovative manufacturin g processes and reliable and efficient equipment.

“It means we will be able to develop ideas more rapidly from the initial concept to the finished product you see for a sale on a shelf.”

Mr Palzer was joined at the event by David Heath MP, Minister of State for Agriculture and Food; Fiona Kendrick, Chairman and Chief Executive Officer of Nestlé UK and Ireland, and Ciaran Sullivan, Managing Director of Nestlé Confectioner y in the UK and Ireland.

Nestlé's PTC in York employs about 185 people of more than 30 nationalities, including a

quality, texture, nutritional profile, sustainability and

affordability of Nestlé confectionery products.

Many employees who are recruited and trained in York will be assigned to other Nestlé operations or research and development centres in the future.

The PTC in York currently offers 13 industrial Collaborative Awards in Science and Engineering (CASE) studentships with universities in the UK. These training grants, funded by the Biotechnology and Biological Sciences Research Council, provide students with research training experience through collaborations between academic institutions and partner organisations.

The PTC also has a variety of research and development partnerships with other local and international universities, institutes and suppliers.

It has recently been granted funding of almost GBP 1 million from the UK Technology Strategy Board for two projects to stimulate business-led innovation in the country.

Nestlé's PTC in York is located on the same site as its confectionery factory that produces popular brands including Kit Kat, Aero, and Milky Bar. The extension work on the PTC was completed according to the principles of 'lean construction', a global standard for designing and constructing more efficient and environmentally sustainable buildings and systems.

The PTC is designed to minimise waste of materials such as water, carbon dioxide, and energy while maximising output.

Beverages & Food Processing Times-Dec-I-2012

Food News

18

Baby food and child nutrition market in India

T

he Baby Food and Child Nutrition Market in India is growing rapidly owing to the increased awareness among parents regarding proper nutritional well being of their child. In the recent years, the country has also witnessed growth in the number of young working mothers who suffers from shortage of time and has to depend on processed child nutrition products. In addition to this, some major corporate activities such as joint ventures, mergers and acquisitions by some of the top multinationals has also taken place in this sector, which indicates prominent signs of prosperity of the baby food and child nutrition market in the coming years.

The report begins with the introduction section which offers a brief description about child nutrition, its various aspects and its role in the proper development of a child. After this, the various factors determining the nutritional requirements of a child are mentioned along with the breakup

percentage of energy spent by a child on different activities. It is then followed by the classification of the child nutrition products based on different compositions. It then moves into the market overview section, which provides an overview of the global baby food and child nutrition market with details about its current market scenario and growth. Apart from this, the section also highlights about the major global players of this market in the infant formula category along with their respective market shares. The next section provides an insight about the Indian baby food and child nutrition market, highlighting the market size and its growth in the upcoming years. It also provides information about the major players in the Indian market with their respective market shares. In addition to this, survey results about consumer preference for child nutrition products and major brands in different baby foods categories are also provided. The next section

elaborates on the value chain analysis of the sector.

A separate section on import and export of baby food and child nutrition products is also provided,

also provided.

An analysis of the drivers explains the factors for growth of the industry that include increase in disposable income, increase in

highlighting the growth in import and export values over the years.

Then, details regarding major importing and exporting nations are

number of new born babies, increasing working women population and increased reach and availability due to growing retail and pharma outlets The key challenges METAL DETECTION SYSTEMS from … include regulatory challenges, rise …applications in the Food / Pharmaceutical / Textile / Tyre / Mining etc… in ingredient price, high pricing and Pipe-Line version for Conveyorized version Gravity feed version for cultural aspects. for PACKED & The next LIQUID / VISCOUS / PASTE / POWDER & GRANULES section speaks UNPACKED products MEAT etc…

C.E.I.A – (AR) Italy

etc…

DEDUSTER & METAL DETECTOR - COMBI SYSTEMS from …

LEAK DETECTION & OPTICAL INSPECTION machines from …

PharmaFLEX – Belgium …

CONVEL – Italy … … for LIQUID Filled Pharmaceutical (Vials / Ampoules / Cartridges etc…

… for Pharmaceutical (Tablets / Capsules) Confectionery (coated gum / lozenges etc…

End-of-Line “BULK” Packaging Solutions from …

PATTYN Packing Lines nv. - Belgium Carton ERECTION

Bag LINING

FILLING

Bag CLOSING

Carton CLOSING

about the Government regulations for baby food and child nutrition products which include the Infant Milk Substitutes (IMS), Feeding bottles and Infant foods Amended Act 2003 and the various regulations by the Food Safety and Standards Authority of India (FSSAI).

In the next section, different initiatives taken by the Government of India to facilitate growth of this sector is mentioned which include modification in Packaged Commodities Rules 2011, Milk and Milk Product Order (MMPO ) and other initiatives taken in terms of custom duty relaxation in different industries that are related to this sector either directly or indirectly.

The major trends identified in the sector include innovation in product variants, inclination towards health and wellness foods, collaborations and acquisitions and innovative brand building activities.

The competition section offers a competitive landscape of the players by providing their financials and key financial ratios. It also provides elaborate information regarding the organizations. Key financial parameters constitute the financial performances of the players which are followed by business highlights. Porters Five Forces Analysis has been incorporated for a brief but effective understanding of the market scenario.

The report concludes with a section on strategic recommendations

Health foods Complan, Horlicks, Saffola's wrong claims exposed Health food products and cooking oil to biscuits are facing prosecution for wrong claims.Think twice before you use a cooking oil that is good for heart and corn flakes that make you lose weight or a drink that makes your kids grow tall and have the memory of an elephant.Food Safety and Standards Authority of India (FSSAI) under the Union health ministry probed the claims of leading food and cooking oil manufacturers.

Based on the report, 19 brands now face prosecution proceedings.

It was found that the health value of a product in advertising and on the label were different. Food Safety and Standards Act (FSSA) says any nutrition value claims by visual or written as well as orally have to be backed by scientific data.

The FSSAI verified the labels on various food products, their advertisement in the media as well complaints from consumers. Based on this the companies were asked to come up with proofs to justify their claims.

MOISTURE & DENSITY Measuring Instruments with

TEWS Elektronik – Germany (based on MICROWAVE Resonance technology)

THICKNESS SORTING & VISUAL INSPECTION machines from…

MASCHINPEX – Germany … for Coated / Uncoated tablets / Hard Gelatin capsules / lozenges / candies Food / Pharmaceutical / Confectionery industries etc…

Complan, a health drink brand, could not produce any data to show that those drank this grow twice faster.

Horlicks with claim to make children “taller, stronger and sharper” too had no evidence. Ironically both these products marketed in the West makes no such claim.

SNS Pro-Pack Equipments Pvt. Ltd.

Only in India, kids are used on the cover of the food product Complan and Horlicks. Complan Memory which has images of kids with books has been booked for wrongly giving the impression that this drink gives students more memory power.

B-904, Sneh Bandhan, Off E.E Highway, Mulund (E), Mumbai: 400081 INDIA Tele-Phone: +91 22 25636640 / 65013015 / 9820303233 Tele-Fax: +91 22 2563 8024 Email: Neel.Desai@technoptions.org Web-site: www.technoptions.org

Kellogg's Special K cornflakes is marketed as the ideal breakfast for those wanting to lose weight since it is a low-fat food. There is no scientific study to back this claim. Saffola oil is good for cardiac care and Britannia Vita Marie biscuits reduce cholesterol were the claims.

None of them are found to have any such health benefits.

Exclusive Representation in INDIA:

emerging … beyond technology

FSSAI's three-member committee went through the replies and gave the report and ways to stop these companies from indulging in such acts. It asked the regional officers empowered to start prosecution. These products targeted the kids and promised height increase, more stamina and increase in memory power. For the adults, the promise of lowering cholesterol, improving cardiac health and solving obesity related issue were the common claims.

Beverages & Food Processing Times-Nov-I-2012

Corporate News

19

As biscuit growth slows, Parle moves faster into snacks, sweets

I

ndia's largest biscuit maker Parle Products Pvt. Ltd is pushing aggressively into snacks and sweets as it seeks to shield itself from a slowdown in the growth of biscuit sales.

Within the next three years, Parle expects confectionery and snacks to generate 16-18% of its sales from less than 10% currently, saidPraveen Kulkarni, general manager (marketing).

“Rather than looking at Parle as a biscuit company, we want to be seen as a food company,” said Mayank Shah, group product manager. “So, while we will further consolidate our position as a biscuit major, the focus would be there on new things such as the western and traditional snacks that we have launched.”

Parle gets over 90% of its revenue from popular biscuit brands such as Parle-G, Hide & Seek and Krackjack. Compared with rivals such as Britannia Industries Ltd and ITC Foods, the maker of Sunfeast biscuits, Parle has been slow in expanding into new product categories. Over the past few years, Parle's main focus was growing its biscuit sales through increased distribution and new products as demand for biscuits was particularly strong from 2007 to 2010.

However, this year, biscuit sales have slowed sharply. According to industry body Indian Biscuit Manufacturers Association, biscuit volumes grew just 9% in the six months to September, a drop from the 11-16% rise in the previous years. The soaring costs of key ingredients such as wheat and sugar forced biscuit makers to hike their prices, hurting demand. Parle's biggest rival, Britannia, the maker of Tiger and Good Day biscuits, reported at least five straight quarters of decline in biscuit volumes.

Parle's biscuit business has grown much slower than the 25% jump in sales of snacks as well as the 15% rise in sales of sweets such as Mango Biteand Melody, marketing head Kulkarni said.

Parle recently launched its Indian snacks Parle Namkeen to compete directly with 'Haldirams offerings. It also sells chips under the Parle Wafers, Musst and Monaco Smart Chips brands.

Given the slowdown in biscuit demand, Parle and Britannia will have to make a stronger and quicker push into new product categories, analysts say.

Parle chairman Vijay Chauhan, in an interview Mint published on 28 November, forecast revenue at about Rs.10,000 crore for 2012-13, which would be a 28% rise over last year.

Shah said that based on current

market trends and given that snacks are growing much faster

10% from confectionery over the long-term”.

than biscuits, Parle would “like 60% of its sales coming from biscuits, 30% from snacks and

Shah said the firm will tweak its business model according to market trends. “Ideally, the sales

mix for us would be according to the category sizes. Biscuits as a category is (significantly) higher than snacks right now. So we will continue launching new products in the premium biscuit category.”

Britannia sells breads, health snacks, namkeen, oats and other foods apart from biscuits. ITC also sells various products such as ready-to-eat foods under the Kitchens of India brand, Bingo! potato chips and mint candies.

Neither Britannia nor ITC disclose sales of specific products.

“The core capability for FMCG (fast-moving consumer goods) companies is distribution which can be leveraged across products. There is not much of a challenge as far as product

innovation is concerned, so you will see FMCG companies diversifying into related product categories and most big companies are already doing that,” said Anand Ramanathan, associate director at consulting firm KPMG. “ITC has been doing it aggressively but even the others have been doing it in a small way.”

To increase its focus on snacks, Parle has used its wide network of wholesaler contacts to set up a separate distribution channel for the category, Kulkarni said.

“Parle has a very good distribution network. They reach towns, not just cities. So they have the experience and the infrastructure to scale up fast,” Ramanathan said.

Beverages & Food Processing Times-Dec-I-2012

20

Beverages & Food Processing Times-Dec-I-2012

Vadilal enters flavoured milk market, looks at 5-7% share in three years

I

ce-cream and frozen processed foods major Vadilal Industries Limited has entered the Indian flavoured milk market with its new Power Sip under the Vadilal Quick Treat umbrella brand.

This new initiative is part of Vadilal's long term strategy to offer a wider range of frozen food products to consumers and its first major product launch in the beverages market, a press release from the company said.

According to it, the potential for growth in the Indian flavoured milk is very good with an estimated annual growth rate of 15-20 per cent.

"Vadilal will utilise its strong ice cream retail distribution network to make this new product a popular brand across India over the next few years," it said.

The release said Power Sip will come in a 180 ml bottle priced at Rs 18 with three flavours - rose, elaichi and kesar. More flavours like chocolate, badam and coffee will follow in a few months. No preservative are used in Power Sip and it has a long shelf life of six months, it said.

"Flavoured milk is largely an impulse category product and Vadilal will focus on making Power Sip available at tourist places, railway stations, bus stands, airports, schools & college canteens, etc. This brand targets people on the move who seek quick, healthy and hygienic way to refresh and re-energise. In today's changing and busy lifestyle, market for beverages in India is growing fast. Flavoured milk has become an experience which is relished by one and all. It has a huge potential to become a regular drink among various age groups," the release said.

Mr. Devanshu Gandhi, Managing Director of Vadilal Industries Ltd said, “Power Sip is being launched in Ahmedabad first and over the next six months it will be sold across Gujarat.

Thereafter, we will introduce this new product in Maharashtra, Madhya Pradesh and Rajasthan.

Rest of India will follow in the second and third years. Our target is to capture 5-7% market share over the next three years and make Power Sip a Rs 30 crore plus brand. This is our first major launch in the non-ice cream dairy sector and we plan to introduce more products in this space in future.”

Mr. Rajesh Gandhi, Managing Director of Vadilal Industries Ltd added, “After establishing the company as the second largest ice cream player and a leading player in the frozen processed foods market, we are now strategically looking at those segments which offer us value chain benefits and strong growth. The flavoured milk segment fits in well with our wide distribution network and a strong projected growth rate of 20% per annum in future. With an extensive distribution network of over 50,000 retailers, 250 stockkeeping units (SKUs), 550 distributors and 32 CNFs across India, we are well placed to make Power Sip a successful national brand.”

The release said Vadilal has strong backward linkages with the farmer community for milk procurement for ice creams at its plant near Ahmedabad.

From a small outlet in Ahmedabad over 80 years back, Vadilal Industries Ltd has today emerged as India's second largest ice cream player. The company is also one of the largest frozen processed food players in India with significant exports of frozen vegetables and ready to eat snacks, curries and breads.

Output of food products and beverages set to fall marginally The output of manufactured food products and beverages is set to fall marginally this year after Maharashtra and Karnataka, the two major sugar producing states are likely to produce less sugar during the peak sugarcane crushing season (November-March) on account of lower sugarcane availability. Moreover, the diversion rate of sugarcane towards the manufacture of sugar is also expected to fall in Maharashtra. This is expected to pull down the country's total sugar production by 10.3% during the current fiscal.

Output of edible oils like groundnut oil and cottonseed oil is expected to fall by 5.3% and 8.4%, respectively, during 2012-13. A shortage in groundnut and cotton production and ban on the imports of oilseeds is likely to lead to a fall in the production of these variants. "We expect output of tea and biscuits to fall by 0.9% and 2.9% respectively, during the year," CMIE ( Centre for Monitoring Indian Economy) said in its latest report.

But inspite of a fall in the above mentioned commodities, a healthy rise in the output of majority of the other commodities is likely to arrest the fall in the overall index. "We expect output of manufactured food products like milk and milk powder, instant food mixes and coffee to rise by 2.5%,'" CMIE said.

Corporate News

21

Beverages & Food Processing Times-Dec-I-2012

Beverages News

22

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The Supreme Court sought records of a Food Safety and Standards Authority of India's (FSSAI) committee which said carbonated beverages do not pose health hazard and there were no benzene residues in the soft drinks.

Justice K.S. Radhakrishnan and Justice Dipak Misra called for the records of the FSSAI's technical committee after counsel Prashant Bhushan said the authority's Sep 12 order was given by its committee on advertisement and labelling, not by the scientific panel on food additives.

As Bhushan focused on the health hazards of carbonated beverages, Justice Radhakrishnan observed that the "best course is to educate people not to consume beverages."

"All cricketers are promoting soft drinks on television," he said.

Assailing the order which was submitted to the court, Bhushan said the order, issued Sep 12 by FSSAI assistant director Kamal Kumar, was like affixing the authority's stamp on a report by soft drink manufacturers.

Bhushan, appearing for petitioner Centre for Public Interest Litigation, told the court that the order said benzene residue in carbonated beverages was formed only under certain conditions when agents like benzoates and ascorbic acid were present together with heat, ultraviolet light and metallic ion mixture.

"However, in the absence of benzoic acid and ascorbic acid together, benezene residues are not generated (in carbonated beverages)," the order said.

It said that according to studies by Indian Council for Medical Research, the consumption pattern of the beverages was only 500 ml per day in a "worst case scenario which do not appear to pose any health hazard."

The order said Indian Beverage Association had confirmed to the FSSAI that in India, benzoic and ascorbic acids were not present together in the beverages.

Seeking the minutes of the technical committee which had a hearing for eight days, Bhushan asked if the FSSAI had itself done any test to determine the presence of benzoic acid in carbonated beverages.

Bhushan told the court that the FSSAI was not accepting the findings of its own lab in Ghaziabad.

Senior counsel K.K. Venugopal, who appeared for one of the respondents, told the court that all the prayers made by the petitioner NGO have been satisfied after the union government enacted a law comprehensively addressing the issues raised in the petition.

He told the court that it was nearly eight years since the court was seized of the matter.

Additional Solicitor General P.P. Malhotra, who appeared for the government, said the technical committee was authorised to look into the additives.

He said Bhushan had appeared before the committee on five occasions but had never raised this objection.

However, Justice Radhakrishnan said the issue raised

by Bhushan was serious and called for the records of the meetings of the committee.

FSSAI appoints Intertek to execute food safety testing The Food Safety and Standards Authority of India (FSSAI), the apex food safety body under the aegis of the Ministry of Health, has appointed product testing and certification firm Intertek to undertake testing, inspection and auditing of food business operators (FBOs) in the country.

The Intertek food laboratory in Gurgaon has been accredited by the National Accreditation Board For Testing Laboratories ( NABL). The labs capabilities cover residual pesticides, antibiotics and heavy metals, among others.

FBOs need to test their food samples at defined intervals every year, a statement issued by the organisation said. In addition, Intertek will be responsible for multiple factors inspecting food businesses, ranging from basic hygiene requirements, to periodical audits. The accreditation has authorised Intertek to give away food safety management system certificates to food business operators.

"We have experienced change in the behavior of people and with more awareness coming in," Rajesh Saigal, MD, Intertek India said in a statement.

The FSSAI Act, implemented last year in August, requires all food manufacturers to obtain necessary licenses and comply with mandatory food safety and hygiene standards mentioned in the act.

Beverages & Food Processing Times-Dec-I-2012

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Beverages & Food Processing Times-Dec-I-2012

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Consulting Editor Basma Hussain

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