Vital for Indian quick-service chains to develop own infrastructure

By RJ Whitehead 25-Feb-2013

The rapid change in India’s food consumption habits has spurred domestic and foreign quick service restaurant (QSR) chains to implement aggressive expansion plans. 

And according to a new Rabobank report, this growth is set to accelerate. However, to sustain their growth and develop their profits, QSRs will have to build their own supply chains from the ground up—not an easy task in a country with a woefully underdeveloped and often corrupt infrastructure.

“QSRs in India will see double-digit growth in the medium- to long-term as food consumption habits there are changing fast,” said Asitava Sen, head of Rabobank India F&A Research & Advisory. 

“A young population, higher rate of urbanisation, larger disposable incomes, higher protein consumption, increased participation of women in the workforce and exposure to western lifestyles are leading to the experimentation with, and adoption of, new dietary habits and more occasions to eat out for all levels of society”. 

Perfect timing
As a result, Sen believes the time is right for global and Indian QSR chains and their supply chain partners to expand in India. This growth will support the development of a new generation of Indian food processors and supply chain partners, with significant potential for “commissaries” to establish themselves as a link between QSRs and food producers and processors.  
The Indian foodservice industry was worth a total of Rs460bn (US$8.6bn) in 2011 and is expected to see compound growth of 10% until at least 2015. 

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Its not just about the food

By Ankush Chibber, FoodNavigator-Asia columnist 19-Feb-2013

In the second article in a new a series examining Indian diets and health, our resident food columnist tells a personal tale of how he has seen his own diet change with the times.

It’s hard to argue against Dr Carrie Ruxton’s well-expressed viewpoint  on this website a few days ago.

Having said that, the response has been overwhelming, and has mostly come from my fellow Indians who don’t believe a Westerner should be telling us about our foods. It’s hard to argue against Dr Carrie Ruxton’s well-expressed viewpoint  on this website a few days ago. 

I am going to dive in here and say that while the West has some questions to answer of its own on areas beyond food and beverage, the fact that our waistlines are going the way much like theirs have done before us is mostly spot on. 

But the real culprit is not the food we make and consume in our homes. 

Let me use my own life as an example. I am a child of the early 80s who grew up while travelling all over India. My father’s monthly income from a government job was never more than Rs800 for most of the decade. 

To put that in a contemporary perspective, that sum equates to how much you would now pay for two weekend movie tickets in any of our metros.

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India must accept that traditional foods aren't necessarily the safest

By Dr Carrie Ruxton PhD, registered dietitian, Scotland 14-Feb

In the first article in a new a series examining Indian diets and health, a British dietitian urges India not to make the same mistakes that were made in her country, but instead safeguard the health of future generations. 

India is almost unrecognisable today from the country I visited in 1988 when I studied briefly at the Sri Venkateswara University College in Tirupati. 

Then, it was rare to see anyone who was overweight. Back then, cars were not as abundant as they are today, and cheap meals of delicious pulses and chapatti or dosa with potato masala could be purchased in small, noisy restaurants. Garam chai was everywhere, to be savoured in small, clay cups that were then thrown away to become part of the dust once more.

Nowadays, India is a modern, thriving country, although the slums remain as a guilty reminder that the wealth of the twenty-first century has bypassed many in the population. 

Western foods and soft drinks abound, sold in glossy outlets at increasingly affordable prices for the new middle classes. However, the traditional side of Indian dietary culture isn’t far away as evidenced by the views about children’s weight, ghee and other Indian delights expressed by the Diabetes Foundation of India survey . 

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US: SEC launches action over trading in Heinz options

By Dean Best | 18 February 2013

The US Securities and Exchange Commission has launched legal action against unknown traders over claims they broke rules when trading in Heinz options before the US$28bn deal to buy the food giant was announced.

The SEC claims traders broke rules
by buying options  in Heinz ahead of
the takeover announcement

The SEC claims traders had information about the transaction ahead of the announcement when they bought call options on Heinz's shares on Wednesday (13 February), 24 hours before the ketchup firm revealed the takeover bid.

A Swiss account through which the SEC claims Heinz options were traded has been frozen. The SEC said the account reaped over $1.7m from trading in the options before Heinz's deal with Warren Buffett's Berkshire Hathaway and private-equity firm 3G Capital was announced on Thursday.

The regulator said the timing and the size of the trades was "highly suspicious". It said the account through which the options were purchased had not traded in in Heinz securities in the last six months. Trading in Heinz call options in the days before the deal was announced had been "minimal", it said on Friday.

"Irregular and highly suspicious options trading immediately in front of a merger or acquisition announcement is a serious red flag that traders may be improperly acting on confidential non-public information," Daniel Hawke, chief of the SEC's market abuse unit within the regulator's division of enforcement, said.

The SEC wants the court to order the traders to pay back their "ill-gotten gains with interest" and pay financial penalties.

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GLOBAL: Buffett's Berkshire Hathaway, 3G Capital to buy Heinz

By Dean Best | 14 February 2013

Heinz has agreed to be bought by Warren Buffett's Berkshire Hathaway fund and private-equity firm 3G Capital for US$28bn - the largest-ever takeover in the food sector.

Heinz deal set to be largest
takeover in food industry

In a shock announcement today (14 February), the US food giant said its board had approved a deal worth $72.50 a share. Heinz said the offer was a 20% premium to 

the company's share price when the market closed yesterday.

"As a private enterprise, Heinz will have an opportunity to drive further growth and advance our commitment to providing consumers across the globe with great tasting, nutritious and wholesome products," Heinz chairman, president and CEO Bill Johnson said.

"The Heinz brand is one of the most respected brands in the global food industry and this historic transaction provides tremendous value to Heinz shareholders."

Explaining the reasons for the offer, US billionaire and famed investor Buffett praised the company's brands. "Heinz has strong, sustainable growth potential based on high quality standards, continuous innovation, excellent management and great tasting products. Their global success is a testament to the power of investing behind strong brand equities and the strength of their management team and processes."

Buffett's Berkshire will team up with 3G Capital. Alex Behring, 3G Capital's managing partner, also pointed to the ketchup manufacturer's brands. "We have great respect for the Heinz brands and the strong business that management and its employees operate around the world. We approached Heinz to explore how we might work together to expand the value of this storied brand."

Heinz shareholders will have to approve the deal but it is expected to close in the third quarter of 2013.

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Lite Bite Foods awarded F&B concessions at Mumbai Airport's Terminal 2

Saturday, February 16, 2013 08:00 IST 
Our Bureau, Mumbai

Lite Bite Foods has been awarded the food and beverage concessions at the new Terminal 2 at Mumbai's Chhatrapati Shivaji International Airport (CSIA). 

Lite Bite Foods has been awarded Package 1, comprising 21 outlets [including the International Security Hold Area (SHA) Food court and the domestic SHA departure non-food court outlets] and Package 3, comprising a total of nine pre-security and at arrivals outlets, taking the total number of Lite Bite Food outlets at Mumbai airport's new terminal to 30.
 
Once complete, the new Terminal 2 will cover 439,000 sq m, and will be able to accommodate 40 million passengers per year, catering to both domestic and international passengers. Lite Bite Foods promises to offer travellers from Mumbai's best-in-class services and a wide range of cuisines by bringing in their popular brands, Punjab Grill, Zambar, Asia Seven, Fresc Co, Baker Street, Pino’s, Street Foods of India and Pollo Campero.

Amit Burman, chairman, Lite Bite Foods, was ecstatic about this news and said, “That this will make LBF one of the biggest players in F&B travel retail and is proud to share that this concession will double the size of our company both in sales turnover and the organisation size.”

Rohit Aggarwal, executive director, Lite Bite Foods, added, "All of us at LBF are very excited on winning this concession. MIAL has created a world-class terminal, and we intend to do our part to live upto their vision & expectation by offering the highest culinary standards and an enhanced customer experience.”

Sharad Sachdeva, chief operating officer, who heads business for LBF is a travel retail expert and will bring much of his rich experience into this project. He said that after securing these key concessions at Mumbai Airport, his vision for an IPO in the next three years seems clearer.
 
Within a short span of five years, Lite Bite Foods has established itself as one of the leading players in the organised F&B retail space. LBF currently operates over 60 outlets across India and overseas. They plan to add another 100 outlets in the next three years. The diversified group operates under its existing three verticals – quick service, casual dining and fine dining restaurant concepts.

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Maaza row: Bisleri in no mood to move SC; measured response by Coca-Cola

Saturday, February 09, 2013 08:00 IST 
Abhitash Singh and Ashwani Maindola

The five-year long row between two beverage majors Coca-Cola and Bisleri International over the Mazza drink trademark took a fresh turn as the Delhi High Court ordered that Bisleri could not market Maaza in India but use the brand in overseas markets.

While Bisleri is in no mood to move the Supreme Court over the issue, Coca-Cola has welcomed the dismissal of appeal by Delhi High Court on January 24, filed by Ramesh Chauhan's Bisleri International challenging the injunctions passed against it.

A spokesperson from Coca-Cola said, “The Delhi High Court decision was in our favour.” However, he refused to comment on the ruling by HC that Bisleri could use the brand name in overseas market. The decision is likely to hamper Coca-Cola's overseas operations in this segment.

However, Coca-Cola did not respond to the Intellectual Rights Infringement allegations by Bisleri.

Meanwhile, Bisleri spokesperson, in an email reply to FnB News said, “High Court order does not in anyway affect our present and future operations. We are not and have not sold Maaza in India. We have been making Maaza in the overseas market and will continue to do so. Also we can make Maaza in India for export, as per the High Court order. So there is no need to go to the Supreme Court.”

While Coca-Cola said, “Bisleri International in September 2008 issued a legal notice to our company contending that the Coca-Cola company was neither the owner nor proprietor / assignee of the trademark Maaza.”

Bisleri stated, “The Coca-Cola company had only been granted a licence to use the trademark Maaza and its formulations and claimed it had repudiated the licence and called upon the Coca-Cola company to cease manufacture/production of Maaza and stop using the trademark Maaza, including by its affiliates and franchisees to clear stocks of Maaza that may be lying with them or else threatened to cancel/revoke the trademark Maaza that was assigned to Coca-Cola and enter upon the premises where manufacture or production of Maaza was being undertaken.”

After this the Coca-Cola company promptly moved the Delhi High Court seeking injunctions against Bisleri International, Ramesh Chauhan and certain others.

"The High Court on October 15, 2008, restrained Bisleri, Ramesh Chauhan, their employees, agents and sister concerns for using the trademark Maaza and further from using or disclosing the know-how, formulations and other intellectual property used in the preparation of beverage bases and beverages sold under the Maaza trademark," said Coca-Cola in a statement issued to FnB News.

The reply added that the Delhi High Court specifically restrained Golden Agro, a company controlled by Ramesh Chauhan, from assigning rights under a certain licence granted by the Coca-Cola company to it. The court also appointed local commissioners to determine whether beverages under the trademark Maaza were being authorisedly manufactured by certain entities at the behest of the defendants.

"The Delhi High Court on October 20, 2009, rejected the various contentions of the defendants and made the interim injunction order passed on October 15, 2008, in favour of Coca-Cola absolute and further upheld the jurisdiction of the Delhi High Court to try this suit," said the statement.

Chauhan and Bisleri International challenged this October 2009 order of the Delhi High Court in the instant appeal. The court found no merit in the contentions of the appellants and dismissed the appeal, according to the statement.

When asked to comment on the issue, the Indian Beverage Association declined to say anything, adding, the companies were free to save their respective interests.

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Call it anything but food safety

By Ankush Chibber 07-Feb-2013

Apparently, India’s food safety rules and regulations are just as stringent as those in other, more developed countries. And that’s according to a proper source, one who should know his onions. 

But it’s all a load of rubbish. As a journalist who knows this industry inside and out, when I read this sort of guff, I feel like hitting my head against the wall. Repeatedly. 

At the same time, there are plenty who buy into this incredible self-appropriating myth of security - how many Indian mothers are flashing a smile of relief and reassurance now they have heard the news?

No matter what rubbish we are told, we know the reality. We are Indians. Even we don’t trust what we are given to eat much of the time. But speaking at a conference in Kerala, N Anadavally, a food safety consultant with the United Nations, reassured India’s consuming public that the country’s food safety rules and regulations are just as thorough as you would expect to find in New York, London or Paris.
And of course we should believe her, just like we should believe a cricket commentator when he lauds a young Indian batsman who makes a fifty on a flat track at home against a poor string of medium-pacers. Brilliant job that.

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FSSAI extends deadline for licensing, registration to February 4, 2014

Thursday, February 07, 2013 08:00 IST 
Abhitash Singh, Mumbai

After getting the notification from the health ministry, the Food Safety and Standards Authority of India (FSSAI) has further extended the licensing and registration deadline for food business operators (FBOs) to February 4, 2014. This is the third time the country's apex food regulator has granted an extension to FBOs.

Even after a one-and-a-half-year time frame, which included a six-month extension, FSSAI was able to register 11 lakh out of the country's 5 crore FBOs and gave licence to only 3 lakh FBOs so far against the target of 50 lakh. Even though FSSAI was not in a mood to extend the deadline, the pressure from the health ministry compelled it to extend the deadline for registration and licensing for one more year.

The first deadline to obtain licensing and registration was extended from August 4, 2012, to February 4, 2013, under the Food Safety and Standards Authority of India (FSSAI) and now the deadline has been extended to February 4, 2014.

As per the new rules, anybody who was engaged in selling anything edible – roadside tea stalls, dhabas, fruit and vegetable hawkers, grocery shops, milk vendors, canteens, caterers, restaurants, hotels and food processors failing to get licence or register by February 4, 2013, were to be penalised by the food regulator.

A Madhavan, assistant director, enforcement-I, FSSAI, informed FnB News, “The deadline for registration and licensing for all the FBOs in the country has been extended by one year. I am sure that this year we will be able to complete our targets. The health ministry will help us in getting more manpower in order to complete the job on time.”

When quizzed whether a year would be enough for FBOs or the deadline would be further extended, he replied, “No, we will be coming up with technologies and infrastructure will be developed in order to complete the procedure on time.”

One of the objectives of enforcement is to ensure that registration/licensing provisions are fulfilled and food items are hygienic, wholesome and free of contaminants.

Tejinder Singh Renu, honorary secretary, Vidarbha Taxpayers Association (VTA), Nagpur, said, “FSSAI has shown haste in introducing the new regulation without adequate consultation with the states. With poor awareness, regulators are finding it difficult to convince the food business operators, particularly mid-sized and small ones, to get themselves registered under the new regime.”

He added, “Many bodies of food business operators have been opposing the regulations from the day it was implemented, because the new regulations would result in harassment of small vendors, who would also have to take registration in addition to all other licences required from state government agencies.”

“They should set regulations not only by taking scientists, advisors and people from the health ministry into confidence, but also traders and leaders of the bodies for food business operators,” said Renu.

Click here to download the FSSAI advisory/notification.

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Indian mums: ‘Ghee is good, refined is righteous and butter is better’

By RJ Whitehead,01-Feb-2013

An major new survey has uncovered a worrying lack of awareness of diet and eating habits by both children and their parents. 

And in a development that will startle Western observers, it found that the vast majority of mothers believe that saturated fats are good for their child’s health.

The results come from a three-year study of 1,800 children aged between nine and 18. The research took place by the Diabetes Foundation of India (DFI) and its findings were recently accepted by international peer-review journal Annals of Nutrition and Metabolism.

Researchers also learnt that while 19.2% boys and 18.1% girls were either overweight or obese, and a massive 65% of their mothers were in a similar condition. This equates to at least 15m overweight children in India.

Parents no role models

The shocking nature of these figures might well stem from the fact that parents’ awareness levels about diet are low, and many think that their child’s obesity was no more than baby fat, and it would eventually go away, the survey revealed.

Many also consider food healthy as long as it is “hygienically prepared”; and worse, 89.2%, 79.2% and 55.1% respectively believe that refined vegetable oils, ghee and butter are good for health.

While mothers might think they have been setting a good example, the DFI study suggests the opposite: while up to 92% of the kids surveyed said they had more than two snacks a day, almost 64% of mothers indulged the same way.

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Diageo faces struggle to make United Spirits pay: Analyst

By Ben Bouckley 30-Jan-2013

Two of United Spirits' leading
brands (Picture Copyright: Diageo)

The potential upsides in Diageo’s potential acquisition of a majority stake in India's United Spirits (USL) are clear but achieving acceptable profitability from the business may be tricky, according to one analyst. 

 Diageo took a 27.4% stake in USL last November, and had planned to launch an open offer to shareholders to take a further 26% stake in the firm by January 18, where both transactions would total $2.1bn.

This last move is currently on ice due to Indian competition concerns, and Diageo is due to update shareholders on the situation when it releases its half-year results tomorrow.

But presuming that transaction does go through, Ross Colbert, an analyst on Rabobank’s Food & Agribusiness Research and Advisory Global Beverages Sector Team, said that Diageo’s acquisition was a clear example of “opportunities and challenges in emerging markets”.

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Beast of bureaucracy makes logjam hard to avoid

By RJ Whitehead,29-Jan-2013

If there’s one thing India doesn’t need, that’s more bureaucracy.

 As the saying goes, the British introduced it, then the Indians perfected it post-Independence. 

And even as the country celebrated its sixty-fourth Republic day last week, all the form-filling and paper-pushing–and consequent palm-greasing–have continued unabated well into the twenty-first century. 

Rather than them fading out, even more bureaucratic processes are being introduced by the day, and one of the most recent examples of tedious triplicate concerns any new or existing food products that are classed as “proprietary”.

Last month, the Food Safety and Standards Association of India (FSSAI), the government-promoted body that has recently taken over as the country’s food watchdog, announced that it would start a new system of issuing approvals, meaning that any products that are not classified in the Food Act will need to follow a regulatory “new product approval” guideline, as laid down by the FSSAI.

Proprietary foods as a definition doesn’t just cover the latest in pre- and probiotics and newly formulated breakthroughs; no, it deals with items as simple as low-calorie ice-creams, digestive biscuits and low-sugar jams. And it doesn’t matter how thoroughly a company announces its product’s ingredients on packs and in advertising, it will still need to attain FSSAI approvals.

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Diabetes on the rise among India’s southern poor

By RJ Whitehead, 25-Jan-2013

A countrywide screening programme on diabetes trends in India makes for startling reading, no least for those in the south who live in slums. Rightly concerned about the prevalence of diabetes in India, the country’s health ministry has been closely following the disease among the population, and the latest study was conducted under the National Programme for Prevention and Control of Cancer, Diabetes, CVD and Stroke (NPCDCS).

Its figures highlight two highly unexpected and alarming trends. The first is that the south, which has traditionally and positively led the country in most health indices, now also leads the way in the prevalence of diabetes. The second trend is that the disease has seen a dramatic increase among slum dwellers and the poor.

Rich man's disease

Diabetes is traditionally considered by Indians to be a rich man’s disease, and medical experts blame increasingly poor eating habits and sedentary lifestyles for the rise of diabetes among the urban poor.

Indeed, the latest findings suggest that one in every four people living in the urban slums of Chennai suffer from diabetes—a figure over three times higher than the national average of around 7%.

"It is a false belief that only those eating burgers and pizzas can get obese and develop diabetes. High consumption of fried items such as kachori, samosa and gulab jamun can also led to the onset of diabetes," Dr H P S Sachdev, senior consultant pediatrics at Sitaram Institute of Science and Research, told Times of India this week

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Industry should stand poised for breakfast cereal boom in India: Analyst

By Kacey Culliney,18-Jan-2013

Cereals in India is a great example of the 

shift from  non-packaged 

to packaged, says Ayton

Manufacturers should stand poised to cash in on India’s burgeoning packaged breakfast cereal market, an analyst says. The Indian breakfast cereal market was pegged at $139m for 2012, with market growth doubling over the last six years, according to new Mintel research.

Peter Ayton, global consumer analyst at Mintel, described the market as interesting as it epitomizes opportunities presented by the shift away from non-packaged, low-value goods.

“Cereals epitomize the growth potential there is in India with the shift to packaged goods. Packaged breakfast cereals is a really interesting sector in India because it’s not only replacing non-packaged items but also cooked, traditional breakfasts,” Ayton told BakeryandSnacks.com.

“It’s creating a national market in place of a traditional food type that is very regional,” he said.

“It is still a small market in the scheme of things but it is growing fast and the background to this is affluence. There’s growing affluence and greater urbanization but another factor is that the in-home market is pretty good in the country.”

Ayton noted that overall consumer expenditure in India is set to increase by 13% each year for the next three years.

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