ITC planning to enter food market of GCC

The booming economies of the GCC ( Gulf Co-operation Council ) countries which includes Saudi Arabia , Kuwait , Bahrain , Qatar , UAE ,Oman  with  major south Asian expats from India , Pakistan , Srilanka , Bangladesh and Nepal making majority  of the population Indian food companies have a ready market to exploit . Already we had presence of Food majors like Britannia , Parle , Haldiram  and Dabur in these regions .ITC has plans to enter GCC through its partners in UAE .

A report

Dubai: ITC, a multi business conglomerate, is planning to enter the food market of the UAE and the Gulf Cooperation Council (GCC) through a partnership with the Al Seer Group, a news report has said.



“We are currently not marketing any of our food products in the UAE but we plan to enter the market in a big way. There is an alliance with the Al Seer Group to distribute our confectionery products in the market,” a company source was quoted as saying by Emirates Business, a local newspaper.


The products ITC plans to market in the UAE and GCC include wheat biscuits under brand its Sunfeast, cream and tea biscuits cookies, crackers, candies, eclairs and chews etc.


The company forayed into the biscuits segment in India in 2003 with its brand Sunfeast and has managed to capture nearly 10% of the market.


ITC, with a turnover exceeding $5 billion and market capitalisation of $19 billion, is participating for the first time in the Gulfood exhibition. The firm displayed a number of its confectionery products in Dubai World Trade Centre.

ITC has a strong foods division supplying packaged foods, snacks, confectionery and biscuits.


The group has diversified its presence, from tobacco manufacturing, into packaged foods, consumer goods, hotels, information technology, branded apparel and agri business.

Report Source : http://www.livemint.com/

FSSAI to evolve rules on Imported food items safety and recall

NEW DELHI: The government is about to check the rampant import of food items flooding the market with a comprehensive set of rules that will trigger a recall of foods in case of contamination and issue alerts and warnings on dubious ingredients.

Representatives of the Central Board of Excise and Customs, agriculture ministry, Bureau of Indian Standards, Quality Council of India and the Export Inspection Council, among others, met on Wednesday, under the aegis of the Food Safety and Standards Authority of India (FSSAI), to evolve an integrated system to streamline food imports.


At present, there is an outpouring of colas and juices, chocolates, biscuits and even fruits into the modern trade. The system, the first of its kind, will address a string of issues such as reducing lead time for clearance of foods at ports and peruse of historical data of imported foods, among others.


FSSAI has teamed up with Hyderabad’s National Institute of Smart Government (NISG) to set up an integrated IT-enabled imported food safety system, which is expected to be finalised by mid-2010.


“Different parameters will be used to standardise different categories of foods. In case of frozen imported foods, for example, lead times for clearances at ports could be much lesser, compared to say, beverages like juices,” an FSSAI official said.


Author: Ratna Bhusan
Source- ET

Shree Renuka Sugar Ltd to buy Brazilian Firms

Mumbai, Feb. 21: Shree Renuka Sugars Ltd has swooped on Brazil for the second time in just three months to pick up Equipav S.A. Açúcar e Álcool for $329 million, or Rs 1,530 crore, and become the third largest producer in the world.



In November, Shree Renuka, which will also be No. 1 in the country after the Equipav deal, had brought Vale Do Ivai for Rs 1,100 crore.


Equipav is one of the largest sugar and ethanol companies in Brazil. It has two mills with integrated co-generation facilities in Sao Paulo. They have a combined cane crushing capacity of 10.5 million tonnes per annum (mtpa), or 4,400 tonnes crushed per day (tcd).


Shree Renuka’s buy will be the biggest overseas acquisition by an Indian sugar firm.


The company will fund the deal through internal accruals and money raised earlier via a qualified institutional placement issue.


Equipav also has a co-generation capacity of 203 mega watt (mw). The plan is to expand the combined capacity of the mills and power production to 12mtpa (56,600 tcd) and 295mw, respectively.


Equipav’s requirement of cane comes from around 1,15,000 hectares of land, of which nearly two-thirds are cultivated by the company.


Shree Renuka said the mills had an easy access to the main ports of Santos and Paranagua.


The Indian firm will acquire not less than 50.79 per cent, and the remaining stake in the venture will be held by the Equipav group.


Equipav had a net debt of approximately $822 million, (Rs 3,821 crore) as of December 2009.


Shree Renuka said its investment would be used to fund capital expenditure for expansion, repay debt and increase working capital.


According to the company, the deal is subject to approval of a debt restructuring package by the lenders and certain other conditions customary to such transactions.


Though it did not provide any further details, the company said the deal was likely to be closed in 40 days.

Banco Itau BBA, Brazil and Motilal Oswal Investment Advisors were the strategic and financial advisers to Shree Renuka.


Brazil is the largest producer and exporter of sugar in the world, and India is the largest consumer. The acquisition comes at a time sugar prices are ruling firm both in the international and domestic markets.


According to an analyst, the acquisition is a huge positive for Shree Renuka as it can now secure raw material at a time of supply deficit in sugar.


The company said the buyout would bolster its presence in the central and southern region of Brazil and enhance its competitiveness and size, globally.


Vale acquisition


Shree Renuka’s Vale acquisition included two sugar and ethanol manufacturing facilities in the Brazilian state of Parana, with a combined cane crushing capacity of 3.1mtpa.


Besides, it got stakes in logistic assets, including terminals for storage and loading of sugar and ethanol at the Paranagua port.


On the second acquisition, Narendra Murkumbi, managing director of Shree Renuka, said, “This investment brings us closer to building a global sugar and ethanol business combining the most cost-efficient and scalable production areas in the world along with a leading presence in the largest ethanol and sugar markets of the world.”

The buyout will also help the company meet its raw material requirements.

Source : The Telegraph

Emami to foray into packaged cooking oil market

Emami Group today cut its teeth on food business by introducing packaged cooking oil.




Bollywood actor Preity Zinta launched six variants of the ‘Healthy and Tasty’ brand oil in Calcutta.



Zinta and Indian cricket captain M.S. Dhoni will endorse the edible oil, which has already hit the stores.



Manish Goenka, director of Emami Biotech, said the television commercial, shot by adman Prahlad Kakkar, would go on air in the next fortnight.



The group hopes to clock Rs 300 crore of business from the branded oil business in the first year itself and then raise it to Rs 1,500 crore in three years. Emami is producing palm and soya oil at its own refinery in Haldia. The rest of the variants are being outsourced now. However, Aditya Agarwal, director of Emami, said the group was setting up a refinery at Krishnapatnam in Andhra Pradesh, where palm and sunflower oil would be processed.



It also wants to build another refinery on the west coast, preferably at Pipavav in Gujarat, for palm and ground nut oil to tap the entire market.



Agarwal said the group aimed to invest Rs 1,000 crore in next 3-5 years in farming, processing, refining and brand building in edible oil.



It has begun cultivation in 4,000 hectre plot in Ethiopia for growing corn, maize, soybean, jatropha, sunflower among others.

Source :PTI

Himalaya International to launch fruit Yogurts across major metros

NEW DELHI: Himalya International , India's first frozen food company which exports its products to North America, has launched real fruit blended yogurts in Metro cities under brand name Himalya Fresh.




Speaking on the occasion Manmohan Malik, chairman of the company said that so far only plain & flavored yogurts are produced in India by major companies and Real Fruit blended yogurts has been launched for the first time in domestic market as healthy Breakfast, snack food and desserts.



He told that the company has started marketing its real fruit blended yogurts in NCR Delhi, Mumbai, Bangalore and Pune in the initial phase. The company has started commercial production of real fruit blended yogurts with technical collaborations of US based company Preffered Vegetarian Inc who provided technical assistance for developing low fat vitamin fortified Real fruit yourts in indian market. He told that the fruit yogurt having six week shelf life is hundered percent natural without any chemical and preservatives .



He told that company is importing different varieties of berries like Blue berry, Straw berry and Raspberry fruits from North America while Mango, Peaches, Banana etc fruits are being procured from Indian markets



Manmohan Malik added that the company has set up most modern plant for manufacturing the product with total cost of five crore rupees at Paonta sahib in Himachal Pradesh and all the equipments and machinery has been imported from the USA.



Currently, the company launched fruit yogurts blended with strawberry, strawberry banana, pine apple and mixed fruit in 150 gms pack in the initial phase.

Source : Time of India

Indian consumer willing to pay premium on Food Brands - A survey

Indians have become increasingly wary about the food that they buy, thanks to the rising issues concerning the safety of food and the resultant food-borne diseases. According to the Nielsen global online survey, 97% Indians consider safety of food an important factor in deciding where they shop and 73% Indians are confident in the safety of the food that they purchase from their local store.




As per the survey, India along with Ukraine is the second most willing nation to pay a premium for food that is safe (85%). Saudi Arabia and Phillipines lead with 86% votes in their willingness to pay a premium for safe food.



More than six in ten Indians think that the food manufacturer has the main responsibility for providing them with safe food. Around 30% hold the government responsible for providing safe food and only 8% think that the retailer has the main responsibility in providing safe food to them. However, Indians trust the government the most when a food safety scare arises (32%). With 29%, food manufacturers are the second most trusted entity in case of a food safety issue. Over 26% Indians trust media and only 13% trust retailers when they are skeptic about food safety.



“Food contamination is a problem that Indians face every now and then. Food supply in the country is often fragmented involving a multitude of middlemen, which exposes it to various types of fraudulent practices. In such conditions Indians are very careful of where they make purchases from and mostly go by the name of manufacturer.



The retailer is not seen as the prima donna in India, the manufacturer is,” said Biswarup Banerjee, associate director, marketing communications, South Asia, The Nielsen Company.


Nearly nine in ten Indians (86%) believe that they are responsible for the safety of food they consume at home. This is higher than the global average of 75% who believe that they are responsible for the safety of food that they consume at home.



The most important reason why Indians buy locally made products is because they think that by doing so they are supporting the local farmer or producer.

Source - Nielsen Survey

Food brands major factor for buying decision of Indians- A survey

Indians have become increasingly wary about the food that they buy, thanks to the rising issues concerning the safety of food and the resultant food-borne diseases. According to the Nielsen global online survey, 97% Indians consider safety of food an important factor in deciding where they shop and 73% Indians are confident in the safety of the food that they purchase from their local store.



As per the survey, India along with Ukraine is the second most willing nation to pay a premium for food that is safe (85%). Saudi Arabia and Phillipines lead with 86% votes in their willingness to pay a premium for safe food.


More than six in ten Indians think that the food manufacturer has the main responsibility for providing them with safe food. Around 30% hold the government responsible for providing safe food and only 8% think that the retailer has the main responsibility in providing safe food to them. However, Indians trust the government the most when a food safety scare arises (32%). With 29%, food manufacturers are the second most trusted entity in case of a food safety issue. Over 26% Indians trust media and only 13% trust retailers when they are skeptic about food safety.



“Food contamination is a problem that Indians face every now and then. Food supply in the country is often fragmented involving a multitude of middlemen, which exposes it to various types of fraudulent practices. In such conditions Indians are very careful of where they make purchases from and mostly go by the name of manufacturer.



The retailer is not seen as the prima donna in India, the manufacturer is,” said Biswarup Banerjee, associate director, marketing communications, South Asia, The Nielsen Company.


Nearly nine in ten Indians (86%) believe that they are responsible for the safety of food they consume at home. This is higher than the global average of 75% who believe that they are responsible for the safety of food that they consume at home.


The most important reason why Indians buy locally made products is because they think that by doing so they are supporting the local farmer or producer.

Source :Nielsen

Smaller Companies giving tough competition to bigger FMCG companies/Brands

The acquisition of three Henkel brands by Mumbai-based VVF is not an isolated development in which a small FMCG company beat a large retail group to

buy brands owned by a multinational. There is a silent revolution on in the Rs 85,000-crore FMCG industry in the country: the rise of a number of small companies into national players.



From prominent players like Paras Pharma, Cavin Kare, Zydus Wellness and MTR to lesser-known ones such as Capital Foods, Desai Brothers and Temptation Foods, these companies have started to give sleepless nights to leading consumer product multinationals such as Hindustan Unilever, Procter & Gamble and Nestle.



While it may look like a battle between David and Goliath, the small companies are growing in strength and expanding their presence, with some help from modern retail that let them share shelf space with bigger brands.

The Rs 400-crore Ahmedabad-based Paras Pharma has mastered the art of developing successful household brands such as Moov, Krack, D’cold , Dermicool and Itchguard, across niche product categories. The company has been growing at 15% a year, with FY10 providing strong growth of 25% in revenues.



Its Dermicool brand in the prickly heat & cooling talc category is a market leader with a 33% share. Its deodorant brand Set Wet is No. 2 in the male grooming category after HUL’s Axe and enjoys little over half of the latter’s market share. Its D’cold brand increased its market share while the shares of its competing brands like Vicks Action 500 and Crocin Cold & Flu stagnated. Its hair serum brand Livon dominates the category despite Procter & Gamble launching Pantene Hair Serum.



In a category like tomato ketchup, dominated by Nestle’s Maggi and HUL’s Kissan, Mumbai-based Capital Foods has amassed a highly respectable 20% share with its Smith & Jones brand, launched in late 2007. Its Chinese cuisine under Ching’s brand is also steadily gaining market share against Nestle’s Maggi and HUL’s Knorr.



Zydus Wellness, the divested FMCG business of Cadila Healthcare, has successful brands like Sugar Free, EverYuth and Nutralite, while Rajkot-based Balaji Foods is giving tough competition to Frito Lays in the potato chips category.



Kolkata-based Bisk Farm is a Rs 100-crore biscuit manufacturer competing with Britannia, Parle and ITC.


Read More on

ET

Reliance Dairy to market Milk on larger scale

MUMBAI: Reliance Dairy Foods, a subsidiary of Reliance Retail, is muscling into the country’s branded milk product market with a new brand that will

take on established players such as Amul, Mother Dairy, Nestle and Gowardhan by offering higher margins to retailers and 10% extra milk to customers.



The Mukesh Ambani-controlled company will sell its new milk brand, Life, through general milk distributors, while its existing Dairy Pure brand is sold only through Reliance Retail stores.



The Life brand milk will be available in Haryana, Punjab, Andhra Pradesh, Tamil Nadu, Rajasthan, National Capital Region (NCR) and Himachal Pradesh, a Reliance Retail spokesperson told ET.



“We see this business growing further with the extension of our product portfolio.” Reliance’s aggressive move doesn’t come as a surprise as, according to industry sources, the dairy foods space offers high margins on limited initial investment.



In fact, existing companies such as Nestle India and Parag Milk Foods too have drawn up big investment plans to expand their reach in the Rs 40,000-crore branded milk distribution business that’s growing 10-12% a year.



Analysts say the sector sees high margins of 10-12% that keeps growing. In terms of investment, companies need to make one-time investment for setting up processing units and supply chain units with cold storage facilities.



Pune-based Parag Milk Foods, owner of the Gowardhan brand of dairy products, is investing nearly Rs 160 crore this year to expand capacities for processing 20 lakh liters of milk daily. “We are witnessing 15% growth every year in our annual milk retailing business in Maharashtra and now with new investments, we’ll further expand it to states such as Tamil Nadu, Andhra Pradesh and Karnataka,” said chairman Devendra Shah.



India is the world’s largest milk producer and, according to a study jointly published by the Central Ministry of Food Processing Industries and Federation of Indian Chambers of Commerce and Industry, about 35% of total milk produced in the country is processed.



The organised sector process about 1.3 crore tonnes annually while the unorganised sector processes about 2.2 crore tonnes. This study, prepared by consulting firm Ernst & Young, says there are currently 676 dairy plants in the organised sector that combines cooperative, private and government sector units. India’s total milk production totals 10.28 crore tonnes.



Demand for milk and milk products has increased in urban areas despite recent price hikes. Govardhan increased price of its milk products by 5% over the past two months due to increased prices of cattle food and below-average rainfall.



Gujarat Cooperative Milk Marketing Federation, India’s largest food products marketing organisation and owner of Amul brand, hiked prices of brands such as 'Taaza' and 'Slim and Trim' by Re 1 per litre and by Rs 2 per litre for brands such as 'Gold' and 'Shakti' in Gujarat.



The National Dairy Development Board, a nodal agency for the country’s dairy programmes, says that feed accounts for about 70% of the cost of milk production.



“Prices of cattle feed increased by 20% compared to last year due to insufficient monsoon,” says Maharashtra Rajya Sahakari Dudh Mahasang (Maryadit) chairman Vinayak Patil. His organisation owns the brand ‘Mahananda’ and is planning to expand its network in Gujarat and Karnataka.



Nestle India has also major plans to increase its marketshare in the organised milk segment. However, with products such as Nestle Milk, Pro-Heart milk and Slim Milk, it mainly caters to niche segment and to the aspirant class. When contacted, Amul managing director Bharat Vyas declined to comment on the investment and on future plans.

Read more on
ET

Kishore Biyani to consolidate Food Business

MUMBAI: Pantaloon Retail, the nation’s largest retailer, plans to spin off at least five of its brands and merge them with Capital Foods, as

Kishore Biyani looks to consolidate the foods businesses under one company to get ahead of global giants Nestle and Kraft with his home-grown recipes’ such as pav bhaji masala and lemon pickles.



Mr Biyani, who revolutionised organised retail in India, will have Indian television’s most popular culinary showman, identified with the Khana Khazana brand, Sanjeev Kapoor, as a venture partner. Capital Foods is owned by Future Ventures and other investors.



Dairy products brand Fresh & Pure, Tasty Treat cereals, Golden Harvest spices, Ektaa and Punya edible oils will be merged with Capital Foods, leading to Pantaloon shareholders getting a yet-to-be decided stake in the company, said a person privy to the development, who did not want to be identified before an official announcement. Mr Biyani declined to comment on the development, but said: “We are working on creating a large foods entity which will capture the foods consumption story in India.”



Global food companies such as Nestle, Kraft and Unilever are investing heavily to capture a share of India’s food industry which is estimated to grow to $300 billion by 2015 from $200 billion in 2006-7, according to consultancy Technopak.



Norway’s Orkla had bought a controlling stake in the popular MTR Foods, which sells ready-to-eat pongal and upma, for about $100 million in 2007. Investors are grabbing the stocks in the sector, with Jubilant FoodWorks, franchise to Domino’s pizza in India, gaining 58% on its debut on Monday, valuing it at nearly half the US parent.



“Higher investments in brand building and moving the home-grown brands into Capital Foods will help the company scale up the foods business over a period of time,” said Abhijeet Kundu, vice-president, research, at Antique Stock Broking. “Pantaloon Retail is more likely to do well in foods business given its understanding of the Indian consumer.”



Future Ventures, the private equity unit of Mr Biyani, holds 33% of Capital Foods. While Mr Kapoor owns 10%, the rest is held by Ajay Gupta, the founder of the company which owns brands such as Ching’s Secret, Smith & Jones, Mama Maria, Raji and Kaeng Thai.

Read more on

ET

Khana Khazana to be owned by Capital Food

Capital Foods Ltd, a leading maker of ready-to-eat foods, is reportedly acquiring all brands of celebrity chef Sanjeev Kapoor, reports Business Standard, quoting an unnamed source. The deal will enable Capital Foods add a new line of products in its ready-to-eat segment, frozen foods, jams, pickles and papads, the report adds.




Capital Foods is a processed foods company which makes food brands like Smith & Jones and Ching’s Secret. It manufactures and exports nutrition fast food and Indian food spices. It is also a leading private label supplier to several big retailers like Target and Tesco.



The deal seems to be an all stock deal with Kapoor getting 10% in Capital Foods post transaction. Capital Foods is backed by Indivison India Partners, the private equity fund formerly affiliated to the Future Group, which picked up 33% stake in the foods company in 2006.



Kapoor, who started Khana Khazana brand of foods named after his successful cookery show on Zee TV, will also join the board of directors of Capital Foods.



Ajaay Gupta, managing director of Capital Foods, has confirmed the development to the paper, and added that all ‘Khana Khazana’ brands by celebrity chef Sanjeev Kapoor would be a part of Capital Foods. “Sanjeev as a valuable expert in the culinary industry will bring in his knowhow,” Gupta has been quoted as saying.



Gupta is aiming Rs 2,000-crore turnover in the next three-four years.

Source : http://www.vccircle.com/

Indian Brands to kraft strategy to take on Kraft Food Inc

Mumbai: With the proposed foray of Kraft Foods Inc into India, the branded processed foods sector will soon witness a major tussle between Indian and international players. To take on new rivals, Gujarat Co-operative Milk Marketing Federation (GCMMF) and Godrej Hershey Food & Beverages Ltd (GHL) are drawing up fresh game plans which include extension of distribution network & product portfolio and modern trade retail initiatives.

For instance, after launching Hershey’s chocolate syrup in domestic markets, Godrej Hershey’s is planning to launch its other global brands (including chocolates) in India. “We are evaluating different options in our supply chain management. Also, we are looking at the launch of Hershey’s brands which are relevant to Indian markets,” said Vivek Mathur, managing director of GHL.


On the other hand, Amul is extending its distribution network to reach out to a wider target audience across the country. “We will consolidate our product portfolio and improve the availability of our brands across the country,” said RS Sodhi, chief manager of Amul.


Meanwhile, Nestlé India is getting ready to launch a host of brand building exercises to promote its flagship brands, Munch and Kit Kat, in India. “Nestle is currently fine-tuning its advertising strategy to woo consumers. The company will soon launch new mass media campaigns to promote its chocolate brands in India,” informed industry sources.


US-based Kraft’s $19.7-billion acquisition of Cadbury Plc now pits the world’s second-largest food company against global rivals such as Nestle and Hershey’s in the Indian market too. Recently, Irene Rosenfeld, chief executive , Kraft Foods Inc, has said owning UK-based Cadbury would enable the American confectionery giant to expand its footprint into the developing market, including India.


According to industry analysts, Kraft Foods will utilise Cadbury’s existing distribution network to push its own allied products such as Kraft cheese in India. At present, Kraft’s has no major presence in India except for its three brands––powdered flavoured drink Tang, chocolate brand Toblerone and biscuit brand Oreo.

On Godrej’s strategy, Vivek Mathur, said: “We are planning introduce many initiatives in modern trade channels. Also, we are planning to expand our distribution in premium general trade channels.” GHL (formed in 2007), a joint venture between The Hershey Company (USA) and Godrej Group, at present, operates in multiple categories such as confectionery, beverages and grocery items. In its portfolio, GHL has brands like Hershey, Mahalacto, Nutrine, Jumpin & Sofit.




Source : http://www.financialexpress.com/news/Branded-food-cos-ready-to--Kraft--fresh-battle/578241/

Author :Lalitha Srinivasan