FOOD Konnect

Wednesday, 28 August 2013

India’s Food Security Bill nears finishing line

28-Aug-2013

India’s controversial Food Security Bill has moved a step closer to reality after the country’s lower house, the Lok Sabha, approved the controversial Rs1.3lakh crore (US$20bn) plan to provide cheap grain to the poor – a key part of the ruling Congress party's strategy to win re-election next spring.

Under the terms of the Bill, the government will sell subsidized wheat and rice to more than two-thirds of its 1.2 billion population.

India’s finances and it’s ability to meet the vast cost of the scheme has made it unpopular with many sections of society, while the government has been accused of being a cynical vote-winner ahead of next year’s general elections.

However, finance minister P Chindambaram was adamant that the nation can afford the scheme.

"As the rollout takes place in different states on different dates, the money would be made available. In fact, after providing for the food security bill, we would still remain within the limits that were accepted in the Budget papers," he said.

A case of semantics: Snax biscuit brand denied trademark

By Annie-Rose Harrison-Dunn, 28-Aug-2013

Indian snack company Britannia Industries has lost a trademark battle for its Snax brand despite winning in a similar case against PepsiCo back in 2009.

Britannia, which said it has been using the brand name since 1965, has been denied the right to trademark its Snax biscuit brand name since it resembles too closely the word snacks.

According to the final judgment of the Indian patent authority IPAB: "The trademark Snax is phonetically similar to the word snacks. Snacks means some light food. When a trademark has a direct reference to the quality of the goods for which registration is sought for such mark shall not be granted".

This rule is enforced in order to prevent one player from monopolizing the use of a common word that characterizes a good.

A history of trademark troubles

Britannia won a legal scuffle with PepsiCo in 2009 for use of the Britannia Snax trademark, yet was unsuccessful in this latest case, which claimed just the word Snax.

Britannia itself was in trouble back in 2011 when Kraft Foods sued it for trademark and copyright violations, claiming Britannia’s Treat-O biscuit was a copy of Kraft’s well-known Oreo biscuit.

Spotlight on Indian economy

Media attention has focused on the Indian economy recently since its apparent resilience to the 2008 world economic crisis seems to be coming to an end. In the two years following this crisis the country recorded 9% GDP growth, yet in the past few weeks the value of the rupee has plummeted to a sixth of its value against the US dollar.

India’s food industry laid low by increased wastage

By Ankush Chibber, 28-Aug-2013

India’s food production industry is being crushed under alarming post-harvest losses that may cross US$36bn in 2013-14, new research into the country’s agri-processing sector has revealed.

According to the study done by the Associated Chambers of Commerce and Industry in India (Assocham), India is trailing only China when it comes to food production, but the country’s post-harvest losses continue to be a concern.

At least 30% of fruits and vegetables were rendered unfit for consumption due to spoilage after harvesting, negligent attitudes, absence of food processing units and the unavailability of modern cold storages. At present, only 22.3% of produced fruits and vegetable actually reach the wholesale market in India.

Innovative mechanisms

“India’s current levels of food processing continue to be low in perishable categories like fruits and vegetables [2-3%], poultry [6-8%] and fisheries [10-12%],” said Rana Kapoor, Assocham’s president.

“This can be turned around by adopting innovative institutional mechanisms to upscale both our warehousing and logistics infrastructure.”

He pointed to effective collaborations between the public and private sectors as one cure and sighted the “Vision 2015” plan put forth by the Ministry of Food Processing Industries.

FDA clearly ramping up scrutiny of Indian pharma businesses

By RJ Whitehead, 27-Aug-2013

With two more warning letters sent by the US drug regulator to Indian companies for violation of acceptable manufacturing practices, America has brought to six the number of India-based drugmaking facilities against which it has taken action over the past three months.

Moreover, these six warnings from the US Food and Drug Administration’s Centre for Drug Evaluation and Research (CDER) account for almost two-thirds of all the letters it has sent out globally over that period.

They seem excessively high when taken in the context of just 10 India-bound warning letters sent by the CDER between 2010 and 2012 - out of a global total of 130.

Targeting India

Given that many of these communications refer to established companies that operate under consistent practices, these numbers might indicate that the FDA has set out to target Indian companies.

Moreover, the US regulator is planning to grow the number of staff in its Indian bureaux to 19 from less than five in 2009, giving further evidence that the FDA plans to monitor Indian activities more closely.

Its two Indian offices, in Delhi and Mumbai, monitor the quality of foods and drugs made in India, the second largest drug exporter and the seventh largest food exporter to the US. Nearly one quarter of the spices, oils and food colourings used in the US comes from India, the largest producer, consumer and exporter of spices globally.

In the most recent development, the CDER issued warning letters to Promed Exports and Posh Chemicals, accusing both companies of manufacturing violations. And, echoing the prominent cases of pharmaceutical majors Ranbaxy and Wokhardt earlier this year, the centre also suggested that Posh, which is headquartered in Hyderabad, had manipulated its data - a much more serious charge.

Research finds urban Indians have little time for healthy breakfasts

By RJ Whitehead,27-Aug-2013

Only 3% of Indians regard breakfast as an essential meal, nearly three-quarters do not eat an adequate breakfast each day and one in four skip it completely, according to a study sponsored by Kellogg’s.

Eighty-four per cent of all subjects felt that breakfast should be light and 91% preferred it to be home cooked. Seventy-nine per cent of the people surveyed felt that fruits were important for a balanced breakfast. The long-term research project by the Nirmala Niketan College of Home Science in Mumbai, began in 2009 and covered over 3,600 respondents between the ages of eight and 40 in Delhi, Mumbai, Kolkata and Chennai. It found that fears of weight gain and a lack of time in the morning fuelled Indians’ lack of focus on breakfast.

Not the most important meal of the day

"Even among those who eat breakfast, we found glaring deficits in nutrients as per the recommended dietary allowance.

“About 72% of the subjects are having nutritionally inadequate breakfast, especially in terms of iron and fibre intake," Malathi Sivaramkrishnan, research director at the institute said.

Among adolescents, it’s worse, with one in three skipping breakfast completely to control weight, said Sivaramkrishnan. Yet nutrients missed by skipping breakfast are not being compensated through other meals in the day.

Residents of Kolkata were the most likely to miss out on a balanced breakfast, followed by Mumbai and Delhi, while those in Chennai opted for the most nutritious morning meal.

Amul plans to enter cookie market, new plant coming up at Mogar, Anand

Tuesday, August 13, 2013 08:00 IST
Abhitash Singh, Mumbai

The country's biggest dairy brand Amul has plans to venture into a new territory - the fast-growing cookie space - by setting up a plant to produce 20 tonne of cookies a day.

Interestingly, the big players in the cookie and biscuit sectors are not perturbed but seem to be happy with this development and feel that it will aid the growth of the overall market.

Speaking to FnB News, R S Sodhi, MD, Amul Dairy, said, “The cookies market is really growing, in fact, booming. We are planning, but it is at an initial stage and we can't reveal anything about it right now. We have been selling cookies in chocolate, multigrain, butter and coconut varieties for two years in the Anand region, catering to neighbouring markets of Ahmedabad and Vadodara in central Gujarat.”

Revealing the Unique Selling Proposition (USP) of his new products, an optimistic Sodhi said, “Thinking about the long-term prospects we are looking at a 40 per cent annual growth for cookies, buns and bread that account for over Rs 20 crore. The USP of our cookies would be the use of Amul butter and consumers would like it.”

About the investment and the plant, Sodhi said, “The automated plant will be set up at Mogar in Anand. Since the planning is at initial stage, I can't say about the investment because we are not in a hurry to take our non-dairy business national.”

As for the overall market, Sodhi pointed out, “This segment is very competitive and is a low margin category. One has to put a lot of investment in branding too, though we succeeded during the test trials, we will have to wait and watch.”

Commenting on Amul’s plans, Parle Products group product manager B K Rao stated, “ The company is growing at a very rapid pace. The overall market for biscuits is Rs 15,000 crore. I am very much aware of the Amul entry into cookies market. Its entry into the market will expand the overall segment and there will be very good competition.”

He added, “Our most of the packets are priced at Rs 5 and maximum Rs 15-20. If Amul sells for bigger price points, then it will not be easily accepted by the consumers.”

When asked about impact of Amul’s entry on Parle, Rao said, “Parle has already made its reach in the national market and it has been appreciated by everyone. Amul will be coming up with premium cookies, which will be priced at higher rates making it difficult for the consumer to buy. So I don't think Parle will get the heat, if Amul enters the biscuit market.”

Iqbal Singh, owner of Prince Food Products, Punjab, a biscuit manufacturer concluded, “The biscuit sector in India is of more than Rs 10,000 crore and there are many small and big players in the market and thus the entry of Amul in this segment will be beneficial for the biscuit industry.”

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India quicker than China to adopt private labels

By RJ Whitehead, 12-Aug-2013

India’s modern food retailers are adopting private labels at a faster pace than their counterparts in China - and in Europe before them - according to a new report from Rabobank, which says Indian retail reforms will likely boost the uptake of affordable private labels.

Rabobank examined private label products and found that growth in the segment is closely linked to the outlook for modern retail market penetration.

Last year, Indian regulators eased restrictions on foreign direct investment in multi-brand retail, encouraging growth in modern retail alongside India’s 8m traditional retailers.

Gathering pace

Shiva Mudgil, an analyst for Rabobank’s food and agribusiness research and advisory in India, said: “While it took Europe 50 years to achieve 28% market penetration of private food labels in retail, Rabobank expects India and China to reach the same level in just 15 to 20 years.”

Rabobank believes that modern food retailing in India will reach 15% market share by 2020, and achieve 26% by 2025. At the same time, it expects the private label market share in modern retail to be around 10.5% in 2020, and reach 25% by 2030.

“Currently, India’s modern retail market is relatively small, accounting for 6.5% of total food retail. But major national retailers such as Reliance Retail, Aditya Birla Retail and Bharti Retail, have private labels in food categories so we see significant growth potential,” added Mudgil.

“Today private labels in India’s modern food retailers account for about 4.5% across all categories. However in staples like rice and wheat flour, it can be as high as 30% to 50%, due to high price sensitivity and low brand recognition,” he said.