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Food Processing in India

HiccupsHiccupsith

Issue No. 10, Special SIAL 2012

Media India

InterviewSheila Dikshit, Chief Minister, Delhi 6“There are no full stops in Delhi” Dharampal Gulati (Mahashayji), Chairman, MDH 12MDH: The spicy story of success

Leena Nair, Chairman, MPEDA 18“Many fish species have found suitable markets abroad”

Jawaid Akhtar, Chairman, Coffee Board of India 22 Coffee Board: Brewing up the Indian coffee industry

DossierFood Processing: Growth with Hiccups 28An analysis of the current state of the food processing industry in India and the road ahead, which seems full of challenges.

Food retail: A growing appetite 34The recent decision by the Indian government to finally allow FDI in multi-brand retail has cleared the path for many of the global retailing giants.

Logistics of processed food 38Logistics of processed food is a not child’s play as it calls for shelf space, time sensitivity and transportation under specific ambient conditions.

Organic farming: A healthy growth 42As the organic food makes waves worldwide, the Indian farmer and urban consumer are also waking up to the opportunities in the sector.

Advertorial Jharkhand - The ideal destination for investment in food processsing 48

Brief Food Brief 52

Content

BIZ@INDIA Special SIAL 20124

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This year, a broad-based exhibition with a fully exhaustive food product offering by SIAL, is all set to roll the carpet from October 21-25, 2012 in Paris. Therefore, it’s time to get some foodie (Not in terms of fulfill your tastebuds, of course!), but to get the savoir faire of the Indian food processing industry, the retail market - which hasbeen hogging the headlines for FDI (Foreign Direct Investment) for a long time, logistics of processed food, organic food, and much more.

After thousands of years, the Indian kitchen is getting a makeover as consumers, especially those in largemetros; begin to change their eating habits to suit their working habits. And processed food has become thenew basic need. However, the food processing industry is still at a nascent stage as only two per cent of the Indian food production is being processed. The Ministry of Food Processing Industries aims to increase India’s share in the global processed food trade to three per cent in the next eight years. Though the governmenthas for long emphasised on the importance of the food processing sector, there are a number of challenges aheadfor the government and the private sector in this industry.

Taking this further, the challenges are thwarting the logistics of processed food because it calls for shelf space,time sensitivity and transportation under specific ambient conditions. Logistics fastens the entire supply chainfrom farm to consumer ensuring that the goods are moved at the right time so as to avoid building unnecessary inventory. Therefore modernization in cold chain infrastructure, storage facilities, transportation,and technology can create a supply chain, which can be efficient, agile and adaptable. In some domains, especially the marine products, India has clearly made its mark on the global market, but in most other areas,it still has a long way to go before it can be considered as a major player in the sector.

The Indian retail sector has caught the world’s imagination in the last few years. Topping of most attractiveretail destination list, the retail giants - Wal-Mart, Carrefour and Tesco sizing up potential partners are finallyready to taste the flourishing Indian market as the government led by Prime Minister Manmohan Singh hastaken the decision to allow FDI in multi-retail brand.

Well into her third term, Sheila Dikshit, Chief Minister, Delhi has left no stone unturned in making the capital a modern city. She shares the development efforts taken so far in 14 years. While, the veteran spice maker,Dharampal Gulati, chairman of the Indian spice brand MDH narrates his journey that how he has created sucha big brand, though he came to Delhi about 65 years ago with barely Rs 1,500 in his pocket. ■

Hope, you will enjoy processing this food for thought!

Happy Reading!

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Chief Minister, we will start by looking at past 14 years that you have been incharge of Delhi. What do you think are the biggest changes that have occurred in the capital?The ethos of the way Delhi was governed 14 years ago has completely changed. We have tried to make here a responsive and sensitive government, not only just to environment but also to traf-fi c, to requirements and needs of the people at different levels of social rank. For instance, we tried to make better and bigger roads for the car owners, we tried to give the common persons better public transport - buses and metro. Education has changed enormously. Earlier, we used to have just about 2-3 universities. However, today, we have 6-7 universities

which could be started because we pushed them like National Law School, IIIT (Indraprastha Institute of Information Technology).We have women’s university for technical education which is a fi rst-of-its-kind in India. Our schools are doing extra-ordinarily well. Now, we are planning to focus on school children, get on to second stage, not just scoring 97 per cent marks but what is beyond that; what is the character we can build, skills that we can bring up, etc.

The medical care has changed enormously. Today, we have about 47 hospitals out of which 38 or so belong to the government. Specialty hospitals like the Institute of liver and biliary sciences - which is to treat liver diseases - is the only

Well into her third term, Sheila Dikshit, Chief Minister, Delhi saw a dream to make Delhi a world class city. To make her dream come true, she has been instrumental in formulating initiatives that will not only take the capital on a growth path but also enable the citizens to have a better life such as Delhi Metro, specialty hospitals, increasing number of universities, to name a few. In this interview with Biz@India team, the Chief Minister outlines the quality changes that have occurred in the capital.

“There are no full stops in Delhi”

“Delhi has no restriction that it will not get into food processing. We basically import fi rst and then we export. We have a group of people who would come especially because of FDI coming up.

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Interview: Sheila Dikshit, Chief Minister, Delhi

one-of-its-kind in India and the best in Asia. We tried to bring specialty in heart institutes and in ambulances too. Thirty of them are working in Delhi and then some more dispensaries and so on.

And they remain within the access of a common man, at the time of crisis?Yes, absolutely. Our government caters entirely to the common man. And, of course, there is a quota on which the private hospitals also have to give the treatment for the poor. Then we have the infrastructure which has come out and is visible to anybody – be it fl yovers or metro which has increased from mere 3-4 km to over 192 km, and in next few years, it will be over 300 km. We are thinking of bringing in monorail and we are trying to ease traffi c as much as we can by bringing in panel roads and fl yover but the situation is something like we have to catch up with it all the time because Delhi is a metropolitan city and of course, the capital. When you compare it with other cities in India, it’s an affl uent city so we have a lot more demands and requirements. Power has been a great success because if you remember, just about two months ago when the entire northern India was almost

blacked out, Delhi was the only place which had only about 2-3 hours of power cut. It was perfectly alright, when compared to others. Now, if there is a breakdown, Delhi would not get affected.

The same concern is for water. We have done a lot of work on water. We are doing the interceptor system where the water going into the Yamuna is cleaned up before it is drained into the river. This should be ready in few years. We are also trying to change the sewerage system. It’s a diffi cult task because housing colonies keepcoming up, demands keep on rising, more and more requirements are there. So, we have to catch up with all the things. I must say, one of our good historical decisions has been the recognition of unauthorized colonies. We decided that we can’t remove four million people out. It’s a failure of governments that we have not been able to give them the kind of housing that is required. But again this is a challenge because around half a million people keep on coming in year after year. Consequent-ly, the historical decision was to give legal status to unauthorized colonies, adding to this were the resettlement colonies that had come in 1947 and those also are going to shift to free-hold; and this process is also on. So I can look back with some sat-

7BIZ@INDIA Special SIAL 2012

Interview

We have done a lot of work on water. We are doing the interceptor systems where water going into the Yamuna is cleaned up before it is drained into the river. That should be ready in next two years.

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Connaught Place

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isfaction that Delhi is very vibrant, cosmopolitan and attractive city and so the challenges that we meet; one or two with another one.

Looking back at 14 years; where do you feel you have reached? Are you entirely satisfi ed?No, we are not satisfi ed with many things. I can’t pin-point but we tried our best, I can tell you that in all sincerity. Whatever it is, we gave a good economic situation, a very vibrant economy, and our collection of taxes has been very good. Now I would say, that, we met the challenges, satisfactorily. But all the challenges have not stopped. There is one tomorrow, and one day after. It could be fl oods one time, it could be draught another time; so it’s an ever moving city.

You know our culture. Today, we are blessed with vibrant culture - from magic show to kite fl ying to classical music, dances and so on and more kinds - Punjabi, Hindi, Sanskrit and everything. So I can’t say that we could not do this better. We have tried our best. And when we tried our best, I can’t say that we didn’t try. That sincerity of trying, we have a very good, nice and responsive government here. But I can only say that it does not stop here, there are no full stops in Delhi.

As you entered in 15th year of your tenure, what would you like to communicate to the citizens of the capital and other Indians? What are your plans?I think, the dream that we started with was that Delhi should be

changed to a world-class city. We have come somewhere near it. But it hasn’t yet overcome all the challenges. And these are basic challenges like water supply, garbage - making city clean, etc.

This year, we have been very fortunate that the kind of dengue we have been having for so many years, this time it was not there. So, somewhere some cleanliness has happened. Effi cient government that we wanted, desperately looking for, and effi ciently responsive to the citizens, we have this service link of our offi ces that all our services are time bound. We will give these services to the citizens within that stipulated time. Howev-er, I’m still a little wary of the kind of burden that we have put


Rashtrapati Bhavan ( Presidential Palace)

Urban infrastructure has improved a lot in Delhi

Interview

today on democracy; whether we’ll be able to deliver as fast as we plan. So these are the challenges that we have and vigorously, we should make our country’s capital the best capital in the world. As a woman, Chief Minister, how do you think the life of the ordinary woman has changed?I’ll tell you one thing. We started a Ladli Yojana for girl child who could not go to school because the parents didn’t think it was worth it. So up to a particular, I think it’s Rs 100,000 a year family earning. If they send their daughters to school, by the time she has fi nished her 12th, she will get Rs 100,000. This is the Ladli Scheme.

Then we started the Kishori Scheme this year, for which we have got at least 300,000 – 400,000 Ladli girls. Then we have got Personal Hygiene Kishori Scheme where we give sanitary napkins to all the girls studying in our school and about 700,000 – 800,000 girls are availing of this drive for cleanliness and hygiene.

Subsequently, we brought about 120 of GRCs (General Resource Centres) where we

teach women skills where they come. It’s a club that we have formed with skill management. So they come and learn from each other. They teach each other, they go out of those resource centres and they learn something with which they can earn something even while sitting at home like knitting and cooking. It could be making napkins, or handicrafts, little bit of weaving, and there are so many things- basic cleanliness, personal hygiene, how to cook food, which are the fresh vegetables and which are not, what should be avoided, etc.

We have also empowered women whom we give Rs 1,500 a month. We give Rs 30,000 for her daughter’s wedding. And we have also started the Anushree Yojana. We give Rs 600 to families other than BPL (Below Poverty Line) to 300,000 people to give that money to the senior woman in the house so that she can go and buy her food and basic necessities. They don’t come under BPL. We are very keen to get on to a situation where people can have, those who qualify for their ration, can have the choice to buy the cash or food, whichever they want. If they want

BIZ@INDIA Special SIAL 2012 9


to go to the shops, that’s fi ne. But, if they don’t want to, we are planning to give them money instead. This is something we have written to the Government of India several times and said that give us this choice. Let the woman decide what she wants. She may need medicines, she could need Atta (wheat), and she could need something else, for the child, so give her the fl exibility. So I hope that you’ll be able to push that through. Then we can make Delhi kerosene free.

What was the logic behind that?The logic behind that was again the kerosene was being diverted. It was going to the black market so we thought let us develop about 200,000 families without gas. Thus, we thought we’ll make it and the fi rst initial thing is that we give them Rs 3,049 to get the chulha (stove), burners, cylinder, the pipe and the regulator; and then thereafter to buy the ancillaries.

Two issues that concern women in Delhi. Do you think you are satisfi ed with:

1. The gender ratio; and2. Security of women in Delhi

The gender ratio – for which the city of Delhi should be concerned about, worried about, perhaps even ashamed of. But we are trying our best to stop infanticide, feticide and talk about it. A lot of campaigns have been conducted, we meet women groups. It’s not becoming worse but at the same time, it’s not becoming better either.

For safety of women, there is a feeling that the women are not safe. This is very bad even if the statistics which the police gave us that it’s going better on and on and the level of women being teased or attacked is also becoming less. The important thing for you is to feel safe. This perception is not there. We keep on talking to the police about it. Of course, lot of things which are not hither to taken as part of the police job is.There is domestic violence, rapes within families and neigh

borhood, something which did not happen fi ve years ago; not talked about. So it gives the impression that things are really bad.

In the last interview you had mentioned that in terms of pro-moting employment within the city and state, you look service oriented industry, you had mentioned technology. Can you also look at food processing be-cause Delhi has lots of farms around it, not within Delhi. Is that an industry which can work for Delhi because it does not take much space and it gives lot of value addition as well?

You see, we have no restriction that we will not get into food processing. We have huge (market place) mandis, but Delhi is not the one- fruit is certainly on top and little bit of vegetables, whereas grain agriculture is certainly not. We basically import fi rst and then we export. But yes, we can have a group of people who would come especially because of FDI (Foreign Direct Investment) coming up. We can have food processing in the capital and we welcome them very well. There is some food processing which is going on, including (pickles) achars. A lot of achars are made here in a very small sector. But I don’t think Delhi imports achar, traditional murabbas (savoury or sweet jam pickle) and things like that. Delhi makes this itself. So, this kind of food processing is there already. But I think there should be an impetus to a more modern system.

But is your government looking at formulating policies and encouraging the sector?You’ve given me the idea. I frankly don’t speak over it. There seems to be a demand for it. Food processing normally needs canned processing which is done at places like Mother Dairy. This kind of processing, I don’t think, we have the capacity. The reason being - we don’t grow it here. But the mandis are big enough. So it’s a good idea. We will explore it for sure.

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To begin with, please take us through the journey from when you started the company to where it stands today. The spices business that we deal in had started before I was born. As years passed, it grew gradually and I have seen it all. I still remember, my grandfather told me, “Son, I want you to become a

big man, a successful man.” At fi rst, I started my business in glass works. Then I entered into spices. In between, I also jumped into cloth business and shifted to hardware work, and a couple of fi elds more. After doing all this, I fi nally returned to our family business of spices. We used to sell spices and mehendi (Henna) at our

Across India, he has become the face associated with spices. Featured on television spots, print ads, hoardings. Chairman of MDH Dharampal Gulati, known to his friends and colleagues as Mahashayji, has come a long way in his life. Not very interested in education, he got into the family business of spices at an early age. Over 70 years later, he is still very much in charge and recounts the journey of his life in an interview with Biz@India. Excerpts:

“The simple way to ensure processing is, if the raw material is good, the end product will automatically be good. We have never agreed on the material which is less than the best. We have one simple rule - buy the best, supply the best.

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Interview: Dharampal Gulati Mahashayji

Interview


shops. I took interest in henna making and selling it. As Muslims were the regular users of henna, I used to go to their colonies and sell from door-to-door by shouting on top of my voice, “Come sisters, for the colorful mehendi!” As the time passed, the business grew and we made lots of money, but all of a sudden, there was partition saga and everything was lost. We managed to save our lives and came to Amritsar.

My family, including my father, was also with me. My father wanted to start work in Amritsar, but I told him clearly that I would like to go to Delhi and start working there. I came Delhi but had no idea what am I going to do. I merely had Rs 1,500 in my pocket. While strolling through the streets of Delhi, I reached Chandni Chowk. I saw Muslims there who were doing good business of selling combs. This idea also struck me. I thought that I will do the same business and earn money. I went to one of the sellers and asked him the cost of one piece. He told me Rs 8 for one. I told him that I would buy if he gave it to me in Rs 5. I bought combs worth Rs 650. I started selling these in Karol Bagh. Time passed and I realized that selling combs is not my type of business. I did not like the work and thus, I could not continue doing that business. I left the work. I bought a land in

the back lanes of Karol Bagh for Rs 100,000. The area was around fi ve acres. Now, the question arose that what business would I start there. I thought of starting with spices only. There were diffi culties but I decided to go ahead. Spices could cause irritation in hands, eyes or could even spoil clothes. I started making spices myself. I used to pound red chillies and grind haldi (turmeric) on chakki (grinder) with my own hands. I bought a small shop in Karol Bagh, a 9 x 6 square foot place. We installed a pounder to grind haldi. Also in a short while, we installed another pounder for red chillies and dhaniya (Coriander). This helped us to produce more variety of spices. Now, we had red chilli powder, haldi and dhaniya and we started showcasing it. People started pouring in asking for these products. People came in and said we have never tasted spices like this. With God’s grace, the work continued, and slowly, our business progressed.

How did your business grow in those years? I bought a shop in Pradhan Market in 1953. My younger brother was with me. We both worked very hard and our business continued to grow. We advertised fi rst time in a newspaper named “Pratap” on the front page “Mahashay Di Hatti of

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Spices could cause irritation in hands, eyes or could even spoil clothes. I started making spices myself. I used to pound red chilies and grind Haldi (turmeric) on chakki (Grain Crusher) with my own hands.

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Achieving consistent fl avour is the biggest challenge in which MDH claims expertise

Sialkot- Degi Mirch Wale”. We had a very good name in whole of Punjab, right from Sialkot all the way to Peshawar. Slowly, our earlier business partners at Sialkot also joined Mahashay Di Hatti (MDH). We experienced a big growth in our business. We have actually worked very hard with our partners to reach where we are today. But like any big fi rm, we do have our own share of problems.

Till date, I wake up early in the morning, go for a walk, play outdoor games and do yoga. I daily brush my teeth twice a day. And I don’t have any problem in my teeth. I am 89 years old and still, I am continuing with my work with vigor, not for money anymore, but now I earn to serve. I love to distribute my money for good causes.

I don’t have any addictions till date. I just pray to God that he keeps me wise and my mind clean. Because when money fl ows in, people tend to divert from their morals. We have three factories in Gurgaon, and three in Delhi. I have a hospital in my mother’s name. I have opened schools in my father’s, mine and my son’s name. I tell my son that “Son, service is of three kinds - Food service, cloth service and knowledge service”. Spreading knowledge is the biggest service. When you serve someone with education, they always remember you. Every year, we spend around Rs 20 million in the social service. I am not addicted to anything, but service. I just need people’s love.

Follow my six rules and peace will remain in your life forever: • Honesty• Hard work• Always talk politely• God’s greatness• Blessings of parents, and• Love for the nation

When you started this company, it was just you and your younger brother. Today, how big is your team?Initially, we started our work with nine people. But teams changed over years. In 1959, we took big leaps. In 1985, I and my brother got separated. Now me and my son work together. We have no grudges and we all are happy in our lives. We are committed to serve our people in the best possible way.

Today, if combined all the factories you have, what is the total number of staff you have in your company?I have never made a count but yes, it would be more than 1,000. But it’s an estimated fi gure.

Have you been doing business in all the spices since the beginning or have they been added in the portfolio grad-ually?Gradually. When I started, it was with haldi. Then I made chaat masala (Sweet & Sour seasoning), kitchen king, jaljeera (Cumin seed drink fl avor), and kept introducing new products in the market continuously.

So the fi rst lots that you made of haldi, what was its

quantity of it and whom did you sell it to?At that time, it was in packs of 150 grams that I sold. Then we prepared methi (fenugreek) powder. We saw the need of making chaat masala after that. At that time, Punjab had only channa masala (powder of chickpeas), and degi mirch (kind of red Chilli), haldi, mirch and dhaniya in the market. But we slowly increased the variety and introduced all our products.

Today, if we ask you the volume of the products made, so what is the total amount, in kilograms or in number of packets that goes out in the market? The books can tell you the best about it. I don’t know exactly about these details.

What is your turnover? As far as I know, it is easily above Rs 5 bn. And our target is to reach Rs 10 bn. I will surely achieve this target. I need blessings - I stay alive and continue growing my business.

Have you launched other products besides spices? We also have amla (Indian gooseberry) candies and pickles in our product portfolio. We have also made Hawan Samagri (materials used during Hindu religious ceremonies), soya wadis (chunks). We have also made incense sticks. This, I feel, is a good product line for now.

In all these years, didn’t you ever feel like – it’s enough now. That you have earned so much and do not want to work anymore?

See, till the time we are here, we are alive, we can’t stop our work. Yes, the feeling comes that how much will I work and for whom. But you see, we are working for this world, the people. In this world, we have three types of sons. One type is who would uphold the name of his parents. Other variety is, who builds upon the name of his parents, and the third one is who would ruin the name of his parents. I believe that we have so much work left that we can’t stop working. We work for Arya Samaj (a section of Hinduism) and we have so much to be done there. We have our schools; we have just opened one Arya Samaj school in Nagaland,

Interview

Fully equipped quality control labs of MDH


others we have in Madhya Pradesh in the tribal region called Jhan-gua and some other underdeveloped parts of India.

These days, many companies produce spices. So how do you compete? What is the strategy for it?We have no competition. Purity and quality is the only strategy. No question of competing with others. We are doing what we should do. Why should we compete with anybody? The one who harvests, if he only starts cutting the crop, what will he eat? There is a famous saying - if you grow thorns, how will you eat mangoes?

Since how long you have been exporting your products?It’s been around 40 years since we started exporting our spices.

Which is the biggest market for you outside India?Our biggest market is London, UK. Then we also have USA. Canada is a very big market for us. Then we have a factory in Middle East in Sharjah. In London, we have our own offi ce and a very big warehouse.

So, you handle Europe from London offi ce?That’s right. We handle Europe from London.

I would like to ask one question, however it’s a bit techni-cal. It’s a practice in European Union, that if they have any doubt on the quality of food, like rice, or anything, they send the whole consignment back to the country of origin. Have you faced such problems?It is very true that they do a very thorough checking of all the food products before it enters their country. They test each and every sample of what is sent there, but it has never happened that our material has been returned or even questioned, for that matter. Our material has never been returned.

Do you think that they do this in order to save/ protect their market?We can’t comment on this as we have never faced any problem, due to this. We produce best quality goods so our products have never faced any problem. So we can’t really comment on it. We are honest, so God also protects us from these issues. It has never been a problem for us. We have natural products. We don’t add any artifi cial preservative, etc. in our spices so we don’t face any problem. Our product is 100 per cent pure.

What are your expansion plans? Will you go to Africa? Do your products go to all the countries of Asia? See, the fact is that our spices are distributed in more than 100 countries at present. At some places, it’s a direct export and at the other places, it’s indirect supply. Our commercial partners send the spices at many places.

I’ll tell you one simple fact. Punjabis are there all over the world. You’ll fi nd Punjabis in Siberia too, which a snow covered land. A Punjabi can’t live without his food. So, wherever a Punjabi is present, our spices are also present. And it’s not that only Indi-

ans eat spices. Americans, Australians, there are so many people who eat spicy food. Our spices go to most of the Indian restaurants in foreign countries.

These days, there is a new trend that has started in Europe, ready-to-make Indian food. You just have to heat it and you can eat it. So would you also like to enter this product- line?Honestly telling you, we don’t have time for new markets as of now. Our hands are really full with spice business only.

So how do plan to reach your goal of Rs 10 bn?To achieve double digit growth from Rs 5 bn to Rs 10 bn, we are working hard.

So will you enter new markets for this or..?No new markets. We have to reach our 100 per cent production potential. We are not able to do full production for our present markets so we will concentrate to fulfi ll our present challenge. We just need to produce more and that is what we require right now. Our main emphasis is on our quality. We produce only to that limit where we can maintain quality. If the demand is more, we don’t hamper the quality. We supply what we produce. And we produce only that much that is feasible.

How do you keep control on the quality in order to create value for customers?The fi rst that we do is that we take the best of the raw material. We choose it ourselves with full quality standards. I’ll show you. (He rubs one masala on his palm and gives us to smell. It smells so pure!) You can smell our heeng(Asafoetida). It’s 100 per cent pure. You can smell it. (As we open the little bottle, we can smell the pure heeng).

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MDH spices getting ready to occupy shelf space

As you have so many factories, how do you control quality in all your factories?We check and ensure the raw material ourselves.

So how do you take care of the processing?The simple way to ensure this is, if the raw material is good, the end product will automatically be good. We have never agreed on the material which is less than the best. We have one simple rule - buy the best, supply the best.

Over the last 10 years, food infl ation has been very high, especially in India. How has that impacted you?Yes. You will be surprised to know, there was a time when we got butter Rs 30 per kg. It is now Rs 300 per kg. The prices for spices that were not more than Rs 2-3 per kg in those times have increased enormously. I remember I used to buy 100 grams of dalchini (Cinnamon) for 6 paise (Rs 0.06) which is now sold at Rs 30-40 per 100 grams. Prices have increased enormously in these years.

This must be affecting your business also? You also have to increase your prices along with it. Obviously. We used to sell this small packet (he shows the pack) for Rs 6 earlier. Now the cost of this is Rs. 42! This happens. The prices keep increasing in the market.

But what I am asking is this must be affecting your business. You are buying your raw material at one price today and the next year it increases. So does that affect your business?If the prices increase too much for us, we can’t increase our selling cost proportionately. We can sell our products at low profi ts till a certain limit, but we can’t sell them all at no-profi ts. We increase our prices according to the raw material but we have to decrease our profi t margins.

And, in all these years, do you have regular farmers with whom you deal or it keeps changing? We take it from Mandi (market place). We take different raw material from different places. We prefer to get our material produced at their source destinations. And we take the raw

material for the whole year at one go. It helps us to maintain the quality throughout the year e.g., amchoor (mango powder), dhaniya, dalchini, etc. The main challenge that we face is to maintain the uniform taste over the years.

So, how do you achieve that?That is our expertise. For e.g., if you buy mangoes today and tomorrow, one may be sour and other may be sweet. Same taste will not be there. Thus, mixing all the ingredients together and achieving the consistent fl avour is the biggest challenge in which we claim expertise. And, we always ensure this. Flavour is something which is very important; therefore, I ensure it myself for our products.

And you have also trained your son in this fi eld?He is fully trained in this and I should say that is a step ahead of me in this. (Laughs loudly).

You also feature in all the advertisements of MDH. Is there a strategy behind this? This is absolutely right. There is a strategy behind this. I still remember the day; we had to make a fi lm about this. There was a scene when the boy and the girl were getting married. The question arose that who will play the role of the father of the girl. So I was given a coat to wear and I acted as a father. That was my fi rst acting. After that we took a conscious decision. We thought that if we take any brand ambassador for our product, suppose we take Bollywood actor Shah Rukh Khan for our product, we can never restrict him that he would not do any other ads with other brands. Now you see Bollywood actor Amitabh Bachchan today, he is there in the car ad, chocolate ad, hair oil ad, and many other ads. So you can’t remember the product if you see Amitabh. You see Shah Rukh, you won’t remember a product, you will not remember a product when you see Indian cricketer Sachin Tendulkar, why, because they are advertising for 10 products. But when you see me on the screen, you know it’s for MDH. We choose brand ambassadors so that they give the confi dence to the viewer, build a trust that the product is good. So, if the person, who is making the product, is the brand ambassador himself, there is no better way to instill the product confi dence in the people.

I recently visited a school in Dilshaad Garden. While addressing the kids, I asked them if they knew me. They all said, yes. I asked them if they like our products, they said a big yes in unison. They knew that I belong to MDH and MDH belongs to me. The thing is, a product like spices, can be sold when trust is built. A household while using spices, or a hotelier, or anyone, needs a confi dence in the quality of the product. Now when the person who makes the product himself, when he speaks and tells about the product himself, that creates the biggest trust. When we met Former President Pratibha Patel a while back, she said she gets to watch Mahashay Ji hundred times a day! You know there was a very big article about the companies worldwide, whose chairmen and the MDs promoted their brands themselves. We were also the part of it.

Interview

Haldi: The fi rst spice with which MDH started the business


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It is now 40 years since MPEDA was created. How would you like to trace the achievements of MPEDA since then?Indian fi shery exports date back to the 1940s with the export of dried fi sh and fi sh manure mainly to countries like Hong Kong, Burma, Sri Lanka and Singapore. Our fi rst shipment was of frozen shrimp in 1953 from the port of Cochin in South India to USA. In the year, 1961-62, the total quantity exported was 15,732 tonnes worth $ 8.23 million. At that time, 60 per cent of the exports by volume and 40 per cent by value were constituted by dried marine

products. In order to coordinate the efforts in production, market promotion and export facilitation for the sector, Marine Products Export Development Authority (MPEDA) was constituted by an Act of Parliament on August 24, 1972. Since then, MPEDA has played a pivotal role in comprehending the production, infrastructure development, quality control and marketing activities associated to the sector. Such relentless efforts and interventions helped us to increase the production output from capture and culture fi sheries and to diversify in processing

Since its inception four decades ago, Marine Products Export Development Authority (MPEDA) has been playing an essential role in comprehending the production, infrastructure development, quality control and marketing activities associated to the seafood sector. The customer-centric MPEDA understands the preferences and changing market dynamics to cater to the custom-er’s demand and ensures quality in seafood it provides to its customers. In her interview with Biz@India, Leena Nair, Chairman, MPEDA talks about marine exports, quality, EU market and much more.

“Out of 438 seafood processing establishments in the country, 251 are approved by the European Union. In addition, we also have 36 EU-approved cold storages.

“

Interview: Leena Nair, Chairman, MPEDA

“Many fi sh species have found suitable markets abroad”

Interview


techniques and species marketed. During 2011-12, the marine product exports reached a historical $ 3.5 billion mark through the export of 862,021 tonnes of marine products.

How has the global marine products market evolved over the years and how has India kept pace with it?Frozen products have always been on priority among global markets. However, there is a growing preference to chilled / fresh and live items too. The markets show varied preferences to the seafood from India. Though the preference from India is largely for frozen products, we also export items in other processed forms like live, chilled, dried and salted, canned, etc. The preference for varieties varies with market. While markets like Japan and USA prefer shrimps, others like EU prefer value added and cephalopod products. Markets like China and South East Asian countries prefer low value fi shes and cephalopods. However, our overall stronghold remains frozen shrimp. MPEDA as well as the exporters are able to sense the preferences and changing market dynamics to cater to the customer’s demand accordingly.

Over the last few years, marine exports from India to EU have been facing severe problems, notably consignment rejections. Why is this happening and what role can MPEDA play in ensuring that Indian exporters do not face the same problems?Of course, in the EU market in about four years back, there were some teething issues on rejections due to residues especially that of antibiotic. We are committed to honour the regulations prevailing in every market for smooth fl ow of seafood trade. As a measure to check the antibiotic residue issue, MPEDA has brought in Pre-Harvest Testing of farmed shrimps/scampi and established laboratories across all the maritime states for the same. With this, the incidents of rejection have been brought down drastically. We had just 14 rejections during 2011 and fi ve in 2012 compared to 32 during 2009.

How has quality improved over the years? Are your quality benchmarks the same as those in the EU?We always strive to improve quality. Out of 438 seafood processing establishments in the country, 251 are approved by the European Union. In addition, we also have 36 EU-approved cold storages. All the units follow HACCP (Hazard analysis and critical control points) principles to ensure food safety. India can export to EU, if our quality benchmarks are same as those in EU. Quality assurance is a continuous process aimed to provide the customers, the best seafood from our clean coastal waters and farming systems. As I mentioned earlier, introduction of Pre-Harvest Testing has helped in improving the quality of farmed varieties. We are also upgrading our fi shing vessels and harbours / landing centres on phase-wise manner to improve post harvest handling. Regular capacity building is done among stakeholders for quality improvement through our extension arms - NETFISH and NaCSA. Besides, we also comply with the Catch Certifi cation scheme brought in by the EU in 2010.

What are innovations that we are seeing in the Indian marine products industry and how is MPEDA helping/encouraging these innovations?

The changes are evident from post harvest handling. From dried marine products, we moved on to conventional frozen block products. Now-a-days, a variety of products are made, including ready-to-cook and ready-to-eat products like fi sh biryani, fi sh pickles, kneaded (kamaboko) products, breaded and battered items, canned and retort pouch products, etc. Many fi sh species, that were unexploited or under exploited like ribbon fi sh, tuna, jelly fi sh and bill fi shes, have found suitable markets abroad. Through Rajiv Gandhi Centre for Aquaculture, MPEDA’s R&D wing, we also develop and transfer technologies to diversify aqua farming. Entrepreneurship is also on a rise for other cosmetic and pharmaceutical / neutraceutical products from fi shery origin.

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MPEDA also provides fi nancial and technical assistance to the stakeholders for infrastructure and adaptation of technology, which has helped the industry as a whole.

What are the objectives for 2013-15 for the global and notably the EU markets?Our focus is to achieve an export target of $ 6 billion by 2015. India has introduced farming of Pacifi c White leg shrimp, Litopenaeus vannamei with a view to augment shrimp production which was otherwise improving at a slow pace. We expect the global acceptance for our principal shrimp species, the Black Tiger and vannamei, which will push the exports further up. The global economic slowdown has affected the demand and pricing of the EU market. However, we are hopeful that with the resilience shown by some EU economies, the entire market will be back to track by 2013 and continue their good demand for Indian cephalopods and shrimps.

What challenges do you face in attaining those objectives? How will you overcome those?There are few. The general slowdown in the global markets, especially in the EU, which was once our most important markets over a period of four years, poses a serious challenge to certain product segments. However, to a certain extent that defi cit is being compensated by markets like USA, Japan and South East Asia. The TBTs (Technical Barriers to Trade) that are being brought in by various nations in different forms under the pretext of addressing public food safety, risk the trade. There is also a growing affi nity towards certifi ed products. MPEDA has already initiated measures in this direction to make our products more competitive.

What is the objective at SIAL 2012? Please provide some details about the participation at SIAL?MPEDA will showcase a variety of value added frozen, canned and retort pouch products at stand no. 5A T047 in SIAL 2012. These products will display the variety and quality of Indian seafood before the customers and importers alike.

“ We expect the global acceptance for our principal shrimp species, the Black Tiger and vannamei, will push the exports further up. The global economic slowdown has affected the demand and pricing of the EU market.

“



It is now 70 years since Coffee Board was created. How would you like to trace the achievements of Coffee Board then?The Coffee Board has been established under the Coffee Act, 1942 with the main objective of facilitating the development of the coffee industry in India. Coffee is the most important plantation commodity in the world. It is grown in over 80 developing countries, but mainly consumed in the developed countries. Commercial cultivation of coffee had started in India more than 100 years back with the modest area of around 76,000 hectares and at present, coffee is grown in over 400,000 hectares.

The Coffee Board, over the last several decades, has been able to encourage the cultivation and increase the area under coffee. Consequently, there has been a steady growth in production and today, the India produces over 300,000 tonnes of coffee, enabling the country to increase its exports and earn substantial foreign exchange. Consequent to total liberalization during 1996, the coffee trade has become open and the marketing of all the produce are carried out by the traders and exporters. Thus, the role of Board has changed from that of a controller to a facilitator. Presently, the Coffee Board is served as a friend, philosopher and guide to the coffee industry.

Today, coffee is in abundance, and there is a wide variety of beans to choose from, thanks to improved methods of cultivation, increased production and the liberalisation of the Indian coffee industry. Moreover, the quality of Indian coffee is well recognized in the international market comparable with some of best coffees of the world. The credit for creating the fl avour of coffee in India as well as in the foreign shores, goes to Coffee Board of India. Jawaid Akhtar, chairman of the board, talks about the Board, Indian coffee industry, types of specialty coffees and much more.

“Board undertakes brand promotion of Indian coffee by participating in the International conferences/events and organizes ‘Flavour of India’ and Cupping sessions, etc, to reinforce presence in the traditional strongholds while exploring high value importing destinations.

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Interview: Jawaid Akhtar, Chairman, Coffee Board of India

Coffee Board: Brewing up the Indian coffee industry

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Currently, the main functions of the Board are: • Promotion of Agricultural & Technological Research in the in-

terest of the coffee industry, • Provide technical and development assistance to coffee estates

for improvement of production, productivity and quality of coffee,

• Promotion of the sale and consumption in India and elsewhere of the coffee produced in India,

• Welfare measures for farm workers, • Management of all other operations / facilitations for develop-

ment of coffee industry.

Achievements:The Central Coffee Research Institute - the headquarter of the Research Department of the Board - is involved in undertaking research for evolving improved plant varieties of Arabica and Robusta having high yielding potential and tolerance to pests and diseases and standardization of technologies for improving the productivity and quality of coffee. The Research Department has so far released 13 varieties of Arabica and three varieties of Robusta. It has also developed / standardized agronomic practices aimed at improving productivity, control measures against major pests and diseases, appropriate processing techniques for quality improvement and pollution abatement. The network of fi ve regional research stations located at Chettalli (Karnataka), Chundale (Wynad, Kerala), Thandigudi (Tamil Nadu), R V Nagar (Andhra Pradesh) and Diphu (Assam) have been involved in

evaluation of varieties and technologies under different agro-climatic zones in the country to study their suitability.These new technologies have been transferred to the growers by the Extension Department of the Board. The transfer of technology and the developmental assistance extended by the Board to the coffee growers resulted in four-fold increase in the productivity from 204 kg/ha in 1950-51 to 838 kg/ha in 2010-11. The area under coffee has also increased from 92,523 Ha in 1950 to 404,645 Ha in 2010-11. The country’s coffee production has crossed 300,000 million tonnes from a level of about 19,000 million tonnes in 1950-51. At the same time, the quality of Indian Coffee is well recognized in the international market comparable with some of best coffees of the world. Indian Robustas are recognized as the best in the world with highest premiums.

The Board is promoting the sale and consumption in India and elsewhere of the coffee produced in India. To enhance value realizations under Plan scheme Export Promotion, exports to far off destinations as well as export of high value and value added coffees are incentivized. Board undertakes brand promotion of Indian coffees by participating in the International Conferences/ Events and organizes Flavour of India and cupping sessions, etc, to reinforce presence in the traditional strongholds while exploring high value importing destinations. The country’s coffee exports have witnessed steady growth in volumes as well as realizations. During 2010-11, the country’s coffee exports touched an all time high of 298,000 million tonnes with export earnings of $724 million. As regards internal market, the Board has been promoting coffee awareness and enterprise development by conducting periodic consumption surveys as inputs to prospective entrepreneurs, promoting consumption of coffee by organizing exhibitions, workshops, coffee festivals and building capacity in the area of roasting and brewing besides providing support to entrepreneurs for value addition. Domestic coffee market has also shown steady growth in the last one decade. Consumption has grown at an annual rate of six per cent in a decade from 2000 to 2010. The Board is providing capacity building and welfare support to the labour engaged in coffee plantations and curing establishments. Apart from training the labour in farm works, they are also imparted training in operation of farm machineries, the use of

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“The country’s coffee production has crossed 3,00,000 MT from a level of about 19,000 MT in 1950-51. At the same time, the quality of Indian Coffee is well recognized in the international market comparable with the some of best coffees of the world.

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which improves effi ciency of the labour and reduce drudgery. The Board also extends fi nancial support to the wards of the farm and curing works labour for education. They are also brought under Personal Accident Insurance-scheme (PAIS) of the Price Stabilization Fund Trust. Through intro-duction of scientifi c mechanization, it has been attempted devel-op skill and lessen the drudgery for the farm workers also. Thus, Board has been working to fulfi ll the objectives of overall development of the coffee industry in the country as a result of which production, productivity, exports and domestic market are showing steady growth.

What are innovations that we are seeing in the Indian coffee products industry and how is Coffee Board helping/encouraging these innovations? How does Indian coffee fare in the global markets, who are you competing against? India is also the world’s largest tea producer, does this image of a tea nation hamper marketing of Indian coffee?The Coffee Board used to control the marketing of coffee well into the mid 1990s. Since 1995, the Coffee Board has restructured itself into guiding the coffee industry. Coffee Board supports, facilitates the coffee value chain by supporting the roasters and capacity building for enterprise development besides promoting coffee awareness on health related issues.Coffee Board efforts include researching consumption patterns and enhancing the product’s popularity among potential retailers and consumers. Processing, packaging and marketing of coffee in the domestic market would also provide ample opportunities for employment generation especially through small and medium enterprises. To facilitate these enterprises, Coffee Board has been extending appropriate support to the entrepreneurs to acquire the suitable technology to manufacture and package good quality coffee powder during the 11th plan and proposed for continuation during 12th Plan along with providing the entrepreneurial training. The exciting growth in the domestic market over the last 10 years with average growth rate of 5 to 6 per cent is opening up avenues for value creation along the coffee value chain by creating entrepreneurial opportunities and skilled job creation. Coffee has become a cup–full of opportunities- for producer, processor, equipment dealer, retailer, café chains etc. This growth is

supported only after thought by a prolifera-tion of new cafes and kiosks in underserved neighborhoods such as Café Coffee Day, Lavazza, Costa Coffee, Coffee Bean & Tea

Leaf, Glorea Jeans, Aromas, Au Bou Pain etc. Starbucks’ plans to open

around 50 coffee shops in India by end 2012 through its joint

venture with Tata. Given the strong expansionary capacities of Starbucks and Dunkin’ Donuts and their Indian ambitions,

there will undoubtedly be considerable dynamism in

the domestic coffee sector over the coming years. These inves

ments will see consumers converting to higher-value, better-quality products

and demanding increased range.Coffee and tea are not competing commodities in India.

We are a large tea producer and large tea consumer. In case of Coffee, we are a small producer (four per cent of the world’s pro-duction) and even a smaller consumer. Coffee, however, is defi -nitely making inroads into young India as an aspirational beverage of choice. However favourable demographics allow space for both the beverages in the life of Urban India. Though there might be some substitution here and there, increase in coffee consumption in India is not at the cost of tea consumption. We do not perceive that the image of a tea nation hamper marketing of Indian coffee.

What is Specialty Coffee? What are the different types of it?The term “Specialty” is generally used to describe beans of best fl avour which are produced in specifi c region. The specialty coffees are grown in ideal climate and they have distinctive fl avor in the cup, without any defects and they are superior to main stream/conventional coffees both in visual and cup quality. Coffee is considered “Specialty” when it is perceived and valued by consumers for a unique character that differentiates from other conventional coffees and for which they are willing to pay a premium. Monsooned Malabar coffees, Mysore Nuggets Extra Bold (Washed Arabica) and Robusta Kaapi Royale (Washed Robusta) are the three important Specialty coffees developed by Coffee Board of India.

Monsooned Malabar Coffees: These Monsooned coffees are very popular in the world’s specialty coffee market and they are fetching very good premium. These coffees are specially prepared with the onset of South-West monsoon in the coffee Curing Works situated in the West coast of South India. The dry processed Arabica beans (A grade) and


Interview

Robusta beans (A grade) are used for preparing Monsooned coffees. The process of monsooning commences with the onset of South-West Monsoon in India. The green coffee beans are exposed to monsoon winds in specially constructed warehouses. The coffee beans absorb moisture from the air and make the beans swell in size and change in colour. The monsooning process changes the bean colour into yellow and reduces acidity and imparts a mellow taste. These coffees are mainly used in blends to mellow and impart richness to more acidic type coffees.India is the only country producing this unique specialty coffees and Coffee Board has obtained geographical indication for these coffees.

Mysore Nuggets Extra Bold (MNEB):These specialty coffees are prepared from washed Arabicas grown in the regions of Baba Budan Giris, Chikmagalur, Biligiris, Coorg in Karnataka and Shevaroys in Tamil Nadu. The beans are very bold, uniform in appearance, bluish-green in colour and with a clean polished appearance and are free from defects. In the cup, these coffees exhibit full aroma, medium to good body, good acidity and fi ne fl avour.

Robusta Kaapi Royale (RKR):This Specialty coffee is prepared from washed Robustas from the regions of Coorg, Wayanaad, Chikmagalur and Travancore. The beans are bold, round to pointed ends and grey to bluish-grey in colour. The cup ensures full body, soft, smooth with slight acidic note.Apart from the above said specialty coffees, we have also other specialty coffees from High Grown coffees, Estate Branded coffees and Organic coffees with unique cup profi les.

High Grown coffees:The coffees grown at higher elevations, i.e., 4,000 ft and above are known to process a distinct fl avour and acidity in the cup due to slower development of the beans. The coffee beans are dense and have good fl avour.

Estate Branded coffees:Estate coffees are those that originate on single plantation with common soils and with distinct identity in terms of fl avour and aroma. The specialty of these coffees may be due to elevation, variety, cultural practices and special processing techniques.

Organic coffees:The certifi ed organic coffees with unique cup profi les are also projected as specialty coffees.

How has quality improved over the years? Are your quality benchmarks the same as those in the EU?Coffee Board is constantly working for the improvement of Indian coffee quality. The technical know-how developed by the Research Department is transferred to the coffee growers through extension centres situated in all coffee growing areas. Coffee Board is periodically conducting training programs, seminars and workshops on production of quality coffee at the Estate level, preserving of coffee quality during secondary process at the coffee curing works, during storage and transport to create quality awareness among coffee producers, processors and exporters. Coffee Board is extending technical guidance and fi nancial assistance for the purchase of latest coffee processing machineries, construction of drying yards, storage structures etc., under coffee quality upgradation programmes. Coffee Board is also conducting “Flavor of India- Fine Cup Award- Cupping Competitions” annually to encourage the coffee growers to produce best quality coffees.Coffee Board has prescribed standards for the physical quality and moisture content of green coffees. The grading and garbling (sorting) of Indian coffees is based on the size of coffee beans and the percentage of imperfections. The tolerance level for each grade and for the presence of imperfections is specifi ed and expressed in percentage by weight. It is also specifi ed that all the coffee grades should be totally free from foreign and extraneous matters.Coffee Board has also implemented the ICO/FAO coffee quality programmes and has also developed guidelines for good agricul-tural practices, good hygienic practices, good storage and

Robusta Kaapi Royale

Monsooned Malabar Coffees


transport practices for preserving coffee quality. The Board is giving emphasis not only for quality standards but also for the food safety. Generally, the Indian coffee quality benchmarks are the same as those in EU and other countries.

What are the objectives for 2013-15 for the global and notably the EU markets?The objective of coffee export promotion is to maximize export earnings by enhancing the market share of value added coffees and high value differentiated coffees in important high value international markets by constantly reinforcing our presence in traditional markets like EU markets.

What challenges do you face in attaining those objectives? How will you overcome those?Though, the production of coffee is gradually increasing, the scope to enhance the coffee production in the country to meet the growing demand in the export and domestic market is limited at least in the medium term. As there is a constraint in increasing the volume of overall coffee exports in a medium term period owing to limitations in expanding the production base and increased onus on expanding domestic coffee consumption, the key to sustain as well as to augment the export earnings.In this direction, a major area to be focused on is to produce more of value added coffees like Roast & Ground coffees and Instant cof-fees and market them in important international markets as Indian brands. The brand building efforts to market fi nished coffee products as Indian Coffee Brands in overseas markets require focused communication and promotional efforts which would call for substantial investments in a sustained manner. Hence, there is an imperative need to provide appropriate incentives to the entrepreneurs to motivate them to market the value added coffee of India as Made in India Coffee. Another area that needs continued focus is to augment the Indian coffee exports to far-off high value markets through incentives. These incentives help make our coffees competitive by partially setting off impact of transaction costs built up in value chain.

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Coffee processing


VISIT US ATSIAL FAIR, PARIS21 - 25 OCTOBER 2012STALL No. 5 AT-047

VISIT US AT

SIAL FAIR, PARIS

21 - 25 October 2012Stall No. 5 AT - 047

VISIT US AT

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The traditional Indian meal is no longer cooked the same way, at least not in all of the 350 million households. In some homes, in the upmarket localities of Mumbai, Delhi and a

handful of other cities, cooking the red kidney beans and chickpeas no longer takes hours of stewing in low-heat, but can be served up in less than four minutes and through the microwave.

An increasing number of Indian homes, especially those where both the husband and wife have jobs and those where young Indi-ans stay alone or share apartments with their friends, the ready-to-

eat and ready-to-cook foods are gaining space, largely due to the complications of cooking a good Indian meal and also the time spent in doing so. With the shift in end user needs, a rapid progression in the global food landscape can be witnessed. There is an ever-increasing demand for processed and convenience food. Frenzied schedules have made ready-to-cook and ready-to-eat food a new favourite among the younger generation. Even urban centres in India are following this trend.

Despite this mushrooming demand, though witnessed in pockets only, the supply side has failed to keep up with the demand.

After thousands of years, the Indian kitchen is getting a makeover as consumers, especially those in large metros; begin to change their eating habits to suit their working and partying habits. Ravinder Bhatia looks at the trend and analyses the current state of the food processing industry in India and the road ahead, which seems full of challenges.

Growth with hiccups Food Processing Industry in India

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The accomplishments of the green and white revolutions which remain landmark in the Indian agricultural scenario, have, however, not been matched by simultaneous developments in supply chain management, and in new technologies for better processing, reservation, and storage of food. Pockets of shortages and near starvation, substantial wastages due to spoilage, quality defi ciencies, and inadequate returns to the farmer are still very much in evidence. The imparity between the current demand and supply offers immense scope for the manufacturers, retailers and suppliers of processed food.

India is the world’s second largest producer of food next to China, and could easily displace China to be the biggest. Yet, over 40 per cent of the Indian agriculture produce fails to reach consumers and ends up rotting either in badly constructed and maintained storage homes, on the farms itself or on the long and treacherous route from the farm to the consumer. This fi gure has remained stubbornly high despite a decade-old push by the government to encourage investments, Indian and foreign, in this key sector.

The market Increasing incomes are always accompanied by adjustment in the food basket. The proportionate spending on cereals, pulses, edible oil, sugar, salt and spices is waning in urban India while the opposite is happening in the case of milk and milk products, meat, egg and fi sh, fruits and beverages. For instance, the proportionate expenditure on staples (cereals, grams, pulses) declined from 45 per cent to 44 per cent in rural India while the fi gure settled at 32 per cent of the total expenditure on food in urban India. A large part of this shift in consumption is driven by the processed food market, which accounts for 32 per cent of the total food market. It accounts for $29.4 billion, in a total estimated market of

$91.66 billion. Food processing is a large sector that covers activities such as agriculture, horticulture, plantation, animal husbandry and fi sheries. It also includes other industries that use agriculture inputs for manufacturing of edible products. The Ministry of Food Processing, Government of India indicates the following segments within the Food Processing industry:

• Dairy, fruits & vegetable processing• Grain processing• Meat & poultry processing Fisheries• Consumer foods, including packaged foods, beverages and pack aged drinking water.

The industry is still at a nascent stage as only two per cent of Indian food production is processed. Currently of the total production, only six per cent of fruits and vegetables, 26 per cent of marine, six per cent of poultry, 20 per cent of buffalo meat and 35 per cent of milk is processed. This is quite low in comparison to the food processed in developed countries where 60 to 80 per cent of food is processed. The Indian food processing industry stands at $135 billion and is estimated to grow with a CAGR of 10 per cent to reach $200 billion by 2015. The food processing industry contributes seven per cent to India’s GDP. The industry employs 13 million workers directly.

In recent years, however, the market for branded processed food products has expanded. As per a study conducted by McKinsey and the Confederation of Indian Industry, the total food industry is over Rs 2,500 billion ($ 69.4 billion). Of this, value-added food market comprises Rs 800 billion ($ 22.2 billion).

Wheat processing in harvest season


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The processed food industry provides safe convenience foods to consumers, and promotes diversifi cation and commercialisation of agriculture by providing effective linkages between the farmer and consumers in both domestic as well as international markets.

Value addition of food products is expected to increase from the current eight per cent to 35 per cent by the end of 2025. Fruit & vegetable processing, which is currently around two per cent of total production, will increase to 25 per cent by 2025. The highest share of processed food is in the dairy sector, where 37 per cent of the total produce is processed, of this only 15 per cent is processed by the organized sector. The food processing industry in the country is on track to ensure profi tability in the coming decades. The sector is expected to attract phenomenal investments of about Rs 1,400 billion in the next decade.

India’s position in the global export of agri-cultural food was a distant 21st for the year 2007, with a share of 1.6 per cent. While the sector grew at an impressive 14.7 per cent in 2008-09 despite the global slowdown, the fi gures are transforming substantially as the export of processed food and beverages is growing steadily. The Ministry of Food Processing Industries aims to increase India’s share in the global processed food trade to three per cent in the next eight years. As per estimates, the Food Processing Industry represents over six per cent of India’s GDP. It accounts for around 13 per cent of the country’s exports, six per cent of total industrial investment and approximately 12-15 per cent of manufacturing GDP.

Structure of the Indian Food Processing IndustryAs per Confederation of Indian Industry’s (CII’s) estimates, the food processing sector has the potential of attracting $ 33 billion of investment in 10 years and generates employment of nine million person-days. The government has formulated and implemented several plan schemes to provide fi nancial assistance for setting up and modernizing food processing units, creation

of infrastructure, and support for research and development and human resource development in addition to other promotional measures to promote the growth of the processed food sector.

The sheer magnitude of the fi gures indicates the vast opportunity that lies ahead for entrepreneurs in this space. Especially for SME entrepreneurs as organized players remain at the fringe of this market accounting for close to only a third of the country’s total agri-processed products. A large part of the market is dominated by unorganised and small-scale sectors.

Infrastructure hurdlesThe most crucial challenge today that the Indian food processing industry is facing is the lack of suitable infrastructure in the shape of cold chain, packaging centres, value added centre, modernized abattoirs etc. Improvement in general infrastructure is also a must requirement for the industry to progress.

Some other important initiatives that are needed are:• Promotion of rural backyard poultry in a cooperative

marketing setup• Establishment of livestock marketing system• Encouraging private veterinary clinic Promotion of appropriate crossbreeds while conserving indigenous breeds of livestock• Development of cooperative dairy fi rms• Enhancing livestock extension services• Provision of an insurance package to avoid distress• Institutionalising a framework for utilising synergy between restoration and creation of water bodies for water harvesting and fi shery

Land of Opportunities

Abundant availability of raw material: India has a wide-ranging and large raw material base suitable for food-

processing industries. India produces annually 90 million tonnes of milk (highest in the world), 150

million tonnes of fruits and vegetables (second largest), 485 million livestock (largest), 204 million tonnes food grain(third largest), 6.3 million tonnes fi sh (third largest), 489 million poultry and 45,200 million eggs. India’s agricultural production base is huge. Low cost

production base for domestic and export market can be set up considering India’s comparatively

cheap labour force and lower cost of production. India has access to signifi cant investments to facilitate food-

processing industry.

•Demographic trends: The food-processing industry has a bright future due to demographic environment in India, which is a key positive.

•Rising income levels leading to large customer base: India with its population of more than one billion accounts for close to 17 per cent of the global population. It is one of the most attractive consumer markets in the world with the increase in income levels across the population segments. Food and grocery comprise the

In India, most foods are consumed in

the fresh form and a small quantity is processed for value addition

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Source: FIDA / Ministry of Food Processing Industry

Unorganised

Small ScaleIndustries

Structure of Indian food processing industry * Figures are in %

Organised


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largest share of the spending pie followed by personal care items, thus offering a lot of scope for the food-processing industry. According to NCAER (National Council of Applied Economic Research) data, the consuming class, with an annual income of $980 or above, is growing and is expected to constitute over 80 per cent of the population by 2009-10. The increase in income levels and higher tendency to spend provide great opportunities for companies across various sectors.

Relatively young population: India has a relatily young population with close to 55 per cent of popultion in theage group of 20- 59 years. This group is also high in cosumption and therefore, this trend is ex-pected to provide a further boost to the growth of consumption in India.

Changing lifestyles: Increase in literacy and exposure to western lifestyles by more and more urban consumers have led to change in mind-set and preference. Increase in the population of working women and increase in nuclear double income families in urban areas are some of the other factors that are infl uencing the lifestyles. As a result, there has been an increase in demand for processed, ready-to-cook and ready-to-eat food. According to Euro monitor, money spent by Indians on meals outside the home has more than doubled in the past decade to about $5 billion a year, and is expected to further double in the next fi ve years. Thus, there lies signifi cant growth potential for the sector and its investment attractiveness.

Increase in consuming class in rural areas: Nearly 70 per cent of India’s population resides in rural areas and account for nearly 50

per cent of India’s consumption. Even with increasing urbanization and migration it is estimated that 63 per cent of India’s population will continue to live in rural areas in 2025. Average income levels for rural India will increase with higher agri-incomes and a gradual shift from farm to non-farm employment. Thirty seven per cent of rural households could move into the middle income-and-above consuming class by 2010, put comma according to NCAER survey, put comma from just 15-17 per cent in the late 1990s. This will result in a consuming class of 56 million rural households by 2010 more than half of India’s overall estimated middle class by this time. This will open up vast and relatively unexplored section of India to companies.

The OutlookThe future of the Indian farmer depends on the success of the food industry as India’s story is primarily linked to the growth of incomes in the agrarian sector of the economy. Increasing liberalization of the economy has tried to lift the shield that the food and agriculture sector once enjoyed in the country. This has exposed the sector both to the opportunities and challenges of the global food economy.

The market forces are forcing the Indian agriculture producers to improve the quality of their farm produce while continuing to maintain their cost competitiveness in order to be able to contend effectively in the global food market. Even in the domestic market, rising per capita incomes and changing demographic profi le of the population has ensured the growing demand for processed and convenience foods. Increasing consumer awareness about health and hygiene has shifted the focus of the market to “safe” foods.

The Indian food-processing sector is undergoing an absolute revolution - all the way from the plate to the plough.Indian food processing industry has seen noteworthy growth and changes over the past few years, driven by changing trends in markets, consumer segments and regulations. These trends, such as changing demographics, growing population and rapid urbanization are expected to continue in the future and, therefore, will shape the demand for value added products and thus for food processing industry in India. The Government of India’s focus towards food processing industry as a priority sector is expected to ensure policies to support investment in this sector and attract more FDI. India, having access to vast pool of natural resources and growing technical knowledge base, has strong comparative advantages over other nations in this industry. The food-processing sector in India is clearly an attractive sector for investment and offers signifi cant growth potential to investors.

Government aid to boost infrastructureThere is a lack of suitable infrastructure in the shape of cold chain, packaging centres, value added centre, modernized abattoirs etc. Improvement in general infrastructure is also an aid for energizing of sector. Government attaches highest priority to development and expansion of physical infrastructure for facilitating prompt growth of industries. In order to address the problem of infrastructure in food processing sector, the government has implemented the scheme for A number of processed food brands are now available in India


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infrastructure development comprising the following components:

Food Parks SchemeThe idea behind setting up of food parks is that small and medium entrepreneurs fi nd it diffi cult to invest in capital-intensive activities. Therefore, as a part of the strategy to develop food processing infrastructure, the Ministry has been pro actively pursuing the task of setting up of food parks in different parts of the country. In the food parks, common facilities like cold storage, food testing and analysis lab, affl u-ent treatment plant, common processing facilities, packaging centre, power supply, water supply, seminar / conference / training facilities etc can be assisted. Financial assistance for food parks is provided at 25 per cent for general and 33.33 per cent for diffi cult areas subject to a maximum of Rs 40 million. Under the scheme, two food parks were assisted under 8th Plan, 39 under 9th Plan Scheme and 10 under 10th Plan. Twenty two food parks have become operational.

In a bid to boost the food sector, the government is working on agri-zones and the concept of mega food parks.Twenty such mega parks will come up across the country in various cities to attract FDI in the food processing sector.The government has

released a total assistance of $ 23 million to implement the Food Parks Scheme. It has so far approved 50 food parks for assistance across the country. The Centre also plans $22 billion subsidy for at least 10 mega food processing parks.

Packaging CentresThe Scheme aims to provide facilities for packaging, which may help in enhancement of shelf life of food products andmake them internationally acceptable. Assistance at 25 percent of the project cost in general areas and 33.33 per cent in diffi cult areas subject to a maximum of Rs 20 million is provided for establishment of packaging centre. Assistance is available to all implementing agencies. So far assistance of Rs 1,450 million has been sanctioned to one packaging centre in Jammu & Kashmir.

Integrated Cold Chain FacilityThe scheme is intended to improve viability of cold stoages and enhance cold storage capacity. Assistance at 25 per cent of the project cost in general areas and 33.33 per cent in diffi cult areas subject to a maximum of Rs 7.5 million is provided for establishment of cold chain facilities. During 10th Plan, an amount of Rs 4,010 million


Food theme parks are under construction in India

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has been sanctioned towards assistance for three cold storages in Gujarat, three in Maharashtra, one each in UP, Kerala, Manipur, Meghalaya, Andhra Pradesh, Haryana, Delhi and Goa. During 9th Plan, assistance of Rs. 148.6 million was extended to 53 cold storages.

Value Added Centre (VAC)The Scheme is intended to enhance value addition lead-ing to enhanced shelf life, higher total realization and value addtion at each level of handling and also to facilitate traceability. Assistance at 25 per cent of the project cost in general areas and 33.33 per cent in diffi cult areas subject to a maxmum Rs. 7.5 million is provided for establishment and modernization of value added centre. So far, three VACs i.e. one each in Maharashtra, Himachal Pradesh and Punjab have been sanctioned assistance involving an amount of Rs. 1,100 million during 10th plan.

Irradiation FacilitiesThe scheme aims at enhancing shelf life of the food product through irradiation techniques by preventing infestation like in fl our, sprouting and change in chemical composition of the product (as in potato). Financial assistance at 25 per cent of the project cost in general areas and 33.33 per cent in diffi cult areas subject to a maximum of Rs. 50 million is provided for establishment of irradiation facilities. So far four irradiation projects i.e. two in Maharashtra and one each in West Bengal and Haryana have been sanctioned assistance involving an amount of Rs. 78.9 million.

Modernized AbattoirThe Scheme aims at scientifi c and hygienic slaughter, causing least pain to the cattle and ensuring better by-product utilization. Assistance at 25 per cent of the project cost in

general areas and 33.33 per cent in diffi cult areas subject to a maximum of Rs 40 million is provided to local bodies for modernization of abattoirs. So far only one case i.e. of Municipal Corporation of Delhi has been approved for grant of Rs. 40 million.

Modern Abattoir


Abattoirs are increasingly getting modernised

Packaged food at stores

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Indian Food Retail Market

Though the Indian food processing industry may be moving ahead in bursts and spurts, the business of food retail is defi nitely booming. Most large Indian corporates have already entered this business, which is also bound to attract the multinationals as soon as the law of the land allows it, observes Ranvir Nayar.

A Growing Appetite

The recent decision by the government of Prime Minister Manmohan Singh to fi nally allow foreign direct investment (FDI) in multi-brand retail has cleared the path for many of the

global retailing giants to fi nally get the taste of the booming Indian

market, the largest economic group, still outside their network.It might take WalMart, Carrefour etal more than a year to really set up shop in a sizeable manner in India, but be sure when they do open their fi rst stores in India, their focus would be on the foods and


beverages, which is where the real meat of Indian retail lies. According to analyst fi rm Technopak, the food and grocery market in India was estimated at $325 billion in 2011 (69 per cent of the overall retail) and is expected to grow to $425 billion by 2016 (63 per cent of the overall retail).

Currently, this market is overwhelmingly dominated by millions of vendors and grocers, in their shops or street-side vegetable and fruit markets and the share of the organised sector is less than three per cent. The Technopak study says that the organised food and grocery retail market in India was estimated at $9 billion in 2011 and is expected to grow to $34 billion by 2016, representing only eight per cent of the total market even in that year.

This low penetration by the organised sector is despite the fact that over the last decade or so many small, medium and indeed large corporates have entered the business. Today, the largest conglomerates like Tatas, Reliance, Aditya Birla etc are actively present in the food retail business with their respective brands and expanding furiously across the country.

According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), an industry association, by 2020, supermarkets would have more than doubled their share of the food retail business. For the organised segment, the total food service business currently stands at over Rs 800 billion, driven by the rapid urbanisation,

growing disposable incomes and is likely to become the fastestgrowing industries in coming years. India is among the world’s major food producers and ranks as the largest in production of livestock, milk and cereals, the second largest in fruits and vegetable products, and among the top fi ve in rice, wheat, groundnuts, tea, coffee, tobacco, spices, sugar and oilseeds.

According to D S Rawat, secretary general, ASSOCHAM, in 2010, the sales of 20 largest private retail chains had 50 per cent contribution from food items with sales of Rs 125 bn. This amounts to fi ve to six per cent of the urban food retail market compared to only one per cent six years ago.This has triggered interest among private equity investors who made investments worth Rs 5 bn in the fi rst half of 2011. ASSOCHAM says that these investments are expected going forward due to rising consumer appetite.The recent government’s activity to introduce FDI in the retail sector also to boost the food industry in the country.

The recent National Sample Survey Organisation data on consumption indicated that there was a perceptible diversifi ca-tion of food intake both in urban and rural India. There is a shift towards high-value foods, comprising milk and milk products; fruits and vegetables; meat and fi sh. Besides, the demand for processed foods is also on the increase. Consequently, the demand for cereals, particularly millets, is on the decrease. Further, the share of food

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expenditure to total expenditure is decreasing with shift towards non-food, comfort and lifestyle goods. These changes in consumption are refl ected in retail marketing as well. Food retailing is expected to grow with both organised and unorganised sectors co-existing. Many stud-ies indicate that the retail sector is growing at 20 per cent per annum during recent years.

The sector has been growing at over 15 per cent a year for the last two decades, on the back of the rapid rise of the Indian middle class and its increasing appetite for purchases, due to a high disposable income. Accoridng to consultancy fi rm AT Kearney, India was ranked fourth in the global food retail index in 2011 (two positions ahead of China) and second in terms of the global foreign direct investment (FDI) confi dence index, which was next only to China. The organised retail sector accounted for about fi ve per cent of the total retail trade in the country has rapidly evolved over the last ten years, with the entry of organised players like Food World (RPG); Spencers; Tatas; Birlas; Reliance; Rahejas; Pantaloons; Bharti-Walmart; Margin Free; Smart; Namdharis; Trinetra; Heritage, etc. All these players are presently active in certain regions mainly due to the restrictive nature of agricultural market legislations as agriculture and food is a state subject in the federal structure of the Indian Union.

Organised retail is expected to grow with more vigour in the coming years, with the better performance of the economy.

Concentrating on the untapped rural retail market with huge demand is highly necessary which additionally provides scope for offering other goods and services necessary for agriculture, which

in turn will have a positive impact on the production performance of the sector. The unorganised sector

is offering keen competition to the organised sector as the overhead and transaction costs of the former are much lower. The organised sector is incurring higher cost due to higher rent; wages; logistic costs; and loss due to shrinkage, wastage and unsold inventory. The corner grocery stores are also changing to meet the challenges of organised retailers by offering branded prod-ucts; parking space; customised services such as home delivery and credit facility, etc., apart from providing for bargains. These stores will continue, but their number will slowly come down in the future and they would have to adopt coping mechanisms to sustain in the business.

Supermarkets are viewed as niche markets for high-income urban consumers. Consumer surveys, though limited, have idicated that supermarkets are not the preferred destination for

consumers of food items like fresh fruits and vegetables; milk and milk products; eggs and fi sh, while

organised retailers hold considerable share in grocery; processed foods and fast-moving consumer durables. The organised retailers are still experimenting with various formats of supply chain and are fi nding it diffi cult to organise backward linkages involving large number of marginal and small farmers in to their business model, making it too diffi cult for them to source the raw material competitively. The forward


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Organised

retail is expected

to grow with more

vigour in the coming

years, with the

better performance

of the economy.

“

“

linkages are also weak due to the absence of required infrastructure as creating their own requires time and huge investments.

Also, despite discounts, offers and advertisement, supermarket chains have not been able to attract the customers signifi cantly. The format has been too novel and it may take some time for supermarkets to experiment and come up with an acceptable model and for consumers to get acceptance. While organised retailers would come up with best offers with effi cient supply chain, consumer would develop store loyalty along with their willingness to have shopping as an experience. The maintenance of quality, hygiene and in-house branding by modern retailers has a clear edge over unorganised stores, but has other disadvantages of location (being few); fi xed quantities; cash sale and unavailability of home delivery facilities.

In case of fresh products, it helps in providing modern infrastructure such as cold chain; processing; storage; logistics, etc., that help in the long-run growth of industry. In fact, if the modern retail chains or supermarkets link farmers to markets, it will serve as an additional/alternate market channel which can benefi t the farmers in realising higher returns through increased competitiveness. The core strength of the organised retail players lies in their capacity to expand the market which appears to be advantageous to unorganised producer–farmers.

ASSOCHAM says that the factors that have fuelled this industry’s growth are the arrival of food multinationals; rising popularity of quick-service restaurants; modern retail trade; technological advancement; changing urban lifestyles and so on. The main categories of packaged food are bakery products; canned/dried processed foods; frozen processed foods, meal replacement products and condiments. Some emerging new categories in this segment are processed dairy products; frozen ready-to-eat foods; diet snacks; processed meat and probiotic drinks. Some key players in this industry are Hindustan Unilever (tea; instant coffee; biscuits; pulses; instant beverages); Nestle (instant coffee; milk and milk products; ready-to-eat foods); PepsiCo (aerated drinks; fruit juices; cereals; snacks) and Indian chains such as Haldirams.

ASSOCHAM’s Rawat says the food ingredients market is also increasing at a rapid growth rate, as consumers increasingly demand bigger, bolder tastes; foods that are healthy, and ingredients that are natural or sustainable. Rawat further said that consumers are becoming more sophisticated and want more upscale fl avours and ingredients. The Indian food processing market is one of the largest in terms of production, consumption, and export and import prospects. The paper also pointed out that there is a large divide between urban and rural consumers in India. Urban residents consumed 78 per cent of all packaged food in 2011, while rural residents consumed just over 22 per cent.

Contrarily, the argument against FDI is mainly related to the future survival of the unorganised sector. The em-ployment in this sector is quite considerable. It is estimated that there are 13 million kirana stores (grocery shops) in the country of which 8.6 million are involved in the food retail business. These stores provide employment to the family and a vast majority of them employ one or two persons. With global majors participating in both wholesale and retail trade, it is feared that they will supersede the whole supply chain and may leave many stakeholders jobless. This argument is not totally untrue a

Reardon, a noted researcher on supermarkets, has observed monopoly tendency of supermarkets by cornering the market share in the long run. But the current trend of growth of retail industry in India provides ample space for all kinds of players. There is adequate opportunity for small, medium and large players as the organised retail players are not in a position to enter in to B- and C- (small) cities and towns. International experience has clearly shown that both formats: organised and unorganised retailing would coexist with the market competitiveness increasing, thus promoting effi ciency. Many countries, viz. China; Brazil; South Korea; Indonesia; Poland; Thailand and Vietnam have considerable share of the organised sector, with the small players still playing their role in the supply chain. The crucial issue at such a juncture is to upgrade the unorganised sector by adopting coping measures to offer better quality products at competitive prices to meet the demands of consumers.


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Not an easy process

Logistics of processed foods

Breakfast is a breeze, lunch is in the bag, dinner in a dash and speedy snacks... This is how the way processed food has fi t into our lifestyle. However, in our comfortable zone, we hardly care for how these foods reach to us in the quality condition. To keep pace with the burgeoning industry, logistics is struggling in terms of many challenges. Jasleen Kaur traces the logistics challenges prevailing in the industry.

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With today’s busy lifestyles, who couldn’t use a hand getting a ready meal on the table? One of our basic needs is food – sustenance. However, with the changing times, this basic

need has been converted into our new basic need – processed food. Processed food has become part of our lifestyle because it fi ts to the trademark, i.e. convenience and alternatively, our taste buds which salivate for scrumptious processed food. Increasing number of nuclear families and working women, changing lifestyle, organised retail and changing demographics and rising disposable incomes - there are not many alternatives to the convenience and delight that processed foods give us, especially when neither resources nor time is on our side.

Life has become so comfortable that rarely anyone thinks about how these foods have been delivered with the great care and a planned approach so that the ‘comfort’ reaches in the good condition, on time and most importantly, without losing its quality. Therefore, logistics has an imperative role to play in the food processing market.

No one can deny the fact that the India’s processed food market is riding the crest of the country’s economic boom. In consonance with the global trend, over the years, demand for processed food has increased. It is quite perceptible that the food processing fi gures have transformed in the country over the last few years. India is the second-largest producer of food in the world next only to China and has the potential for development of a very large food processing industry, even with the capacity to be fi rst on the world record. The food processing sector has been growing at an average of over eight per cent in the past fi ve years. Budgetary allocation, for the current fi scal in the sector, has been fi xed at Rs 6.6 bn, up from Rs 6 bn 2011-12. Moreover, the proposed scheme – National Mission on Food Processing - could well be a turning point for the industry.

The Vision Document 2015 envisages increasing the value addition from 20 per-cent to 35 per cent by 2015. RakeshKacker, Secretary – Ministry of Food Processing Industries at the “Food & Bev Summit 2012” organised by Confederation of Indian Industry (CII), mentioned that the food processing industry in the country has surpassed the rate of growth in the agriculture sector, which indicates “we are adding more value to agriculture”.

Logistics of processed food is a not child’s play, correspond-ing to the burgeoning growth of the sector in the country. It calls for shelf space, time sensitivity and transportation under specifi c ambient conditions, logistics fastens the entire supply chain from farm to consumer ensuring that the goods aremoved at the right time so avoid building unnecessary inventory.

Storage of fi nished and semi-fi nished products requires modern technology especially if the products are peris-able like fruits, vegetables or non – vegetarian items like meat, fi sh and poultry. Modernization in packaging, storage and transport areas have become compelling today. The project-ed growth of the food processing sector will never be met if these supplementing factors are not in place and adequate.

Infrastructure has always remained a subject of rant and its growth is sluggish in the Indian context. The reasons are multiple

and diverse. There is a skew towards consumption of fresh when one looks at from consumer behaviour standpoint. There are very low realizations/yields at the farm levels and there are very small land holding patterns. This is coupled with poor road network to farms. Therefore, the moot question is how to streamline the supply chain process in order to create value for the customers.

The approach has to be collaborative. Retailers have a huge challenge in managing their backend and networks given the replenishment challenges of perishable commodi-ties and even other commodities with specifi c usage cycles. An optimized distribution network with sound infrastructure coupled with smart use of technology to estimate demand, inventory, procurement and production would go a long way in streamlining supply chain of the burgeoning food processing market.

Increasing cost of fruits and vegetables has also been putting tremendous pressure on the supply chain management to maintain quality. N K Jawa, CEO, Fresh and Health Enterprises, a subsidiary of CONCOR (Container Corporation of India) is of the opinion that though the rate of infl ation is much higher in the fruits and

vegetables segment, people have added them to their eating habits. The large quantity comes to India and people here are ready for pay for that. Therefore, logistics players are working towards quality to maintain demand in the sector.

An effi cient cold chain operation is the answer to the perfect supply chain of processed foods. A veteran logistics service provider Ravi Kannan, CEO, Snowman Logistics, said, “A well developed cold storage and food processing industry is expeced to increase farm gate prices, reduce wastages, ensure value addition, promote crop diversifi cation, generate employment op-portunities as well as export earnings,” adding, “Retail growth is one of the growth drivers of cold chain sector. There has been increasing requirement of cold chain

logistics from supermarkets/hypermarkets as fresh supplies as required.” Echoing similar concerns, Jawa urges for cold chain in-frastructure in warehousing and transport. “If investment will take place in modern infrastructure, progress will take its own.”

Infrastructure development will take this industry to new heights in the near future with the help of adequate investments and exports. The Ministry of Food Processing views the cold chain infrastructure as a key requirement and expects to invest over Rs 45 bn over a period of fi ve years. Preference among multinational companies to deal with organised service providers is expected to see the organised temperature-controlled warehousing market to grow at the industry growth rate. The fruits and vegetable addressable market for temperature-controlled services is 155.2 million tonnes in2010-11. In the beverages market, only the in-bound logistics (fruit pulp and concentrates) require temperature cotrolled services and this is estimated to reach Rs 180.8 mil-lion by 2012-13 growing at a CAGR of 22 per cent.

The government has for long emphasised on the importance of the food processing sector and its role in enhancing the shelf life of food and reducing wastage. Relaxation in the regulatory

Logistics of processed food is a not child’s play,

corresponding to the burgeoning

growth of the sector in the country.

“

“

policies is fuelling growth to the sector. It has accorded it a high priority, with a number of fi scal reliefs and incentives, to encourage commercialization and value addition to agricultural produce, for minimizing pre/post harvest wastage, generating employment and export growth.

“Measures taken by the government will help new players to enter this business and help existing players to expand their facility. This will ultimately help consumers and retailers which require cold chain logistics,” added Kannan.

The development and growth of the food processing industry in India has created demand for cold chains, reefer container movements, requisite port terminal facilities for handling reefer cargo with organisations, which have stepped in to provide warehousing and distribution solutions. India has about 250 reefer transport operators which include organised and unorganised players involved in the business of transportation of perishable

products. About 25,000 vehicles are involved and dairy (wet milk) constitute about 80 per cent, thereby leaving a fl eet of only 5,000 refrigerated transport vehicles for all other categories. This fl eet of 5,000 million refrigerated trucks is available for transportation of all perishable commodities put together which includes both domestic and export demands. While as per the World Bank report, over 3,000 million reefer trucks are required for domestic production of fresh produce alone by 2017, according to the Global Cold Chain Alliance.

The potential lies in this segment in the coming future as most of the players and many international retail brands are making their foray in the Indian market with the introduction of the FDI. By 2015, the sector is expected to touch $ 175.2 billion. To improve the industry competitiveness, the industry needs to have a supply chain that is effi cient, agile and adaptable and that can handle larger volumes, expand reach, balance costs and address the demographic variations while providing scalability.

Shampayan Ghosh, Deputy General Manager – Commercial & Logistics, Mother Dairy Fruit & Vegetable Private Limited (Dairy Product Division) spoke on logistics challenges prevailing in the food processing industry.

How big is the food processing logistics market in India? Food and food products are the largest consumption category in India with a market size of approx $ 115 billion and by 2015, it is expected to touch $ 175 billion. Food processing logistics caters to shelf space, time sensitivity and transportation under specifi c ambient conditions.

How do you streamline the supply chain solutions in the terms of creating value for customers? There are different logistics, material handling and ware-house activity and solution, depending upon the nature of

From farm to fork

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A lineup of logistics challenges

product in food processing industry. For frozen and ambi-ent temperature product viz. ice cream, chocolate, dairy products; reefer vehicle and cold storage are used for trans-portation and warehousing respectively. Other food prod-ucts which are not so temperature sensitive, for them dry vehicle along-with respective storage are ensured. In all the above, the hygiene is being maintained, depending upon nature of food product.

An effi cient cold chain operation is the answer to the perfect supply chain of processed foods. What is the current status/ contribution of cold chain market? Is it suffi cient or a lot more is required?In India, currently, there is lack of modern logistics facility such as Logistics Park, integrated cold chain solu-tions, last mile connectivity, dependence upon road over rail, technology adoption and government support via in-centivizing private public partnership are some of lacunae that exist in cold chain logistics in India.

How adequate is the infrastructure for the industry? What other problems, despite infrastructure, are associated with it? How these can be overcome?The inadequate support infrastructure which is the biggest bottleneck in expanding the food processing sector, in terms of both investment and exports includes: long and fragmented supply chain, inadequate cold storage and warehousing facilities, road-rail and port infrastructure. The other problems are Comprehensive National Level Policy on food processing sector, Food Safety Laws and implementation, inconsistency in central and state policies, and, availability of trained manpower.These can be overcome with the initiatives, such as overcoming long and fragmented supply chain, providing impetus to supply chain, need for second green revolution in agriculture, implementation of GST (Good and Services Tax), credit access to food processing industry, and, FDI in food processing sector.

The government has for long emphasised on the importance of the food processing sector and its role in enhancing the shelf life of food and reducing wastage. What role can government play to keep it no more stringent? Despite of continual efforts and initiatives of the government to provide the required stimulus to the sector, processing activity is still at a nascent stage in India with low penetration. The level of processing is currently low across the product categories. For example, only 2.2 per cent of the total production of food and vegetables is processed, as compared to 65 per cent in the US or China. At the same time, though India is a key producer of food products, having an adequate production base for inputs etc; produc-tivity levels are very low in the country. While India remains a top producer of food, production yield levels are among the lowest amongst the BRIC countries.

How do you see the potential of this segment in the coming future as most of the players as many international retail brands are making their foray in the Indian market? The government has outlined a plan to address the low scale of processing activity in the country by setting up the mega food parks, with integrated facilities for procurement, processing, storage and transport, promote private sector activity and invite foreign investments in the sector. The government allows 100 per cent FDI in the food processing and cold chain infrastructure. The recent budget has announced several policy measures, especially for the cold chain infrastructure, to encourage private sector activity across the entire value chain. In order to raise India’s processed-product quality to international standards, to address health concerns and harness the export opportunity, the government is establishing a network of quality control and testing laboratories and testing centers across India, supported by R&D through research institutes. Having the above reforms and focus, it is imperative that in coming days there is high potential and also it will generate employment opportunity also. xxxxxxxxxxxxxxxxxxxxxxx

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Trend

s



India continues to be a very largely farming country, with nearly two-thirds of the population depending directly upon agriculture for their livelihood. Yet, one can fi nd, since about

a decade, a fl ood of food products imported from the four corners of the world. These mass-grown products with a liberal use of chemical fertilisers and pesticides now form an integral part of the life of the famous Indian middle class which seems to have the eyes only for new brands, with attractive and colourful packaging and of course the ready-to-cook or ready-to-eat foods.At the other end of the world, in the United States and in Europe as well, the societies are beginning to learn again about healthy eating habits. A reverse movement based on organic food has become so strong and pervasive so as to forcing the big global brands to introduce products in this range as well and bring to the market their organic products, in packaging that is increasingly turning environment friendly, highlighting the benefi ts of the organic food.

Organic farming involves cultivation without the use of any chemical fertilisers and pesticides, with an environment-friendly

approach. It is a farming method that preserves the capacity of reproduction and regeneration of the soil, availability of adequate nutrition for the plants and is defi nitely one of the best ways of soil management.

In a recently released report, Yes Bank, a private sector bank, said the global organic food and beverages

market is expected to grow from $57.2 billion in 2010 to $104.5 billion by 2015. Europe

accounted for over 50 per cent of the global market, with sales of $27.8 billion, the report added. The Asia-Pacifi c organic food market stood at $ 3.5 billion in 2010.

India has a rich ecosystem, with extremely fertile soil and a cuisine rich in

vegetables. It also has large tracts of farming lands, which have remained untouched by

chemical fertilisers and pesticides. These are often found in the mountain states or the remote

and distant parts especially in the north eastern states as well as some of the tribal areas and extremely poor

parts of the country, making them ideal for organic agriculture. These farmers did not make any use of chemicals for generations, largely due to the very high cost of chemical inputs for the farms.

43

As the organic food makes waves around the world, the Indian farmer is also waking up to the opportunities of adopting organic cultivation and the urban, well-to-do consumer is overlooking the price differential to shift to organic food. Christine Nayagam observes that with booming domestic and export markets, the organic farming in India is here to stay.

Organic farming in India

A healthy growth

Trend

s

“The famous Indian middle class which

seems to have the eyes only for new brands, with attractive and

colourful packaging and of course the Ready to Cook or Ready to Eat foods. and in Europe the societies

are beginning to learn again about healthy eating

habits.

“

And almost all of them own rather small farms, another key requirement for organic farming. Hence, all these areas were already involved in organic farming, even though they were not aware of the term and neither the potential that it held. And even if it is still limited, organic food is beginning to fi nd space on shop shelves in the Indian market, restricted currently largely to metro and mini-metro cities. But it is true that the Indian organic products offer unique opportunities to the international fi rms, especially those in the United States and Europe.

Over the last decade, however, many of the state governments, farming cooperatives and non-governmental organisations have realised that the farming practices that the small and poor farmers had been using for generations could immediately catapult their standards of livelihood and open new opportunities for them

by simply organising these farmers and getting certifi cations for them. So, some state governments, notably Sikkim and Arunachal Pradesh in the North East have declared themselves to be completely organic and free of chemical fertilisers or pesticides in farming, thus making every farm in the state an organic farm.Now, the governments, or at least some like Sikkim, have begun helping their farmers fi nd markets for their organic products, both within India and especially for the export markets. Sikkim, clearly, holds the edge here. It went organic in 2003 and the movement has been led directly by the Chief Minister Pawan Kumar Chamling.

“It is a universal fact that there is a growing appeal among people being in favour of organic based food commodities which fetch prices four to six times higher than chemical based products.

Rajasthan

Punjab

Haryana

Himachal Pradesh

Madhya Pradesh

Rice WheatCottonSoyabeanTeaSpices Cluster Beans HerbsBasmati Rice HoneyWild CollectionCoffee

Maharashtra

Gujarat

Odisha

West Bengal

Kerala Tamil Nadu

Important States and Commodities

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In keeping with my government’s concern for preservation of the sensitive ecology and environment, our state with an average fertilizer consumption rate of 5.8 kg per ha, is the third lowest fertilizer consumption state in the country. Traditionally, our farmers practiced organic farming and hence the possibility of reverting back to this age old practice is not diffi cult. Against this backdrop, I propose the following policy interventions towards realizing the vision of transforming Sikkim into a ‘Total Organic State’,’’ announced Chamling when adopting organic label for the entire state.

This trend has since been adopted by a number of other smaller states, Nagaland, Meghalaya and Arunachal Pradesh in the North East and Uttarakhand in the central Himalayas, on the western borders of Nepal. Each state has its own organic crop mix ranging from rice, coffee, herbs, spices, fruits, vegetables, honey etc.Though the bigger states were slower in moving towards organic farming, they have now put in place the infrastructure to encourage their farmers to adopt organic farming. So we have organic cotton in Madhya Pradesh, Gujarat, Maharashtra and Orissa, organic tea in West Bengal, organic coffee and herbs in Tamil Nadu (see map).

According to Yes Bank, amongst the large states, the ones with the largest acreage under organic farming are Madhya Pradesh (440,000 hectares), Maharashtra (150,000 hectares) and Orissa (95,000 hectares). Among crops, cotton is the single largest crop accounting for nearly 40 per cent of total area followed by rice, pulses, oilseeds and spices. India is the largest organic cotton grower in the world, and accounts for 50 per cent share of total world organic cotton production.

The development of organic agriculture is a real new dawn for the farmers of these states, most of whom have been struggling with extremely low returns on their investments and suffer from Monsoon’s vagaries and of course the middlemen and the extremely volatile prices. Thus, the move towards organic farming, where the markets are less volatile, consumers more

reliable and markets well defi ned and continuously growing could save the farmers of India.

However, for the moment, for the farmers adopting the organic farming are still in a transitional phase and their costs remain high. Also, as more and more farmers adopt organic farming, the price of organic food may decline. However, as the prices decline, it could also encourage a larger section of the Indian and indeed global populace to adopt organic products for their meals.

And India could then be one of the largest organic producers in the world. Currently, it ranks 33rd in the list of countries with the highest acreage of land under organic production. But its ranking slips down dramatically when the acreage under organic farming is taken as a proportion of the total cultivable land, which stood at 4.43 million hectares in 2011.

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Production & export of organic foodCurrently, India produces around 3.88 million tonnes of certifi ed organic products, which is a mix of all edible products, ranging from basmati rice, dry vegetables, honey, tea, spices, coffee, fruits, cereals and herbal medicines (see chart).In 2011, India exported 86 organic items, with an overall volume of 69,837 tonnes, valued at over $157 million, a growth of nearly 33 per cent over the previous year. The exports are primarily destined for the European Union, the United States, Australia, Canada, Japan, Switzerland, South Africa and the Middle East.

Government aidThe Agricultural and Processed Food Export Development

Authority, a body of the Commerce & Industry Ministry of the Indian government manages the exports of organic products

from India. The Indian government has also set up the National Programme for Organic Production, the NPOP, which is mandated for giving labels for the organic products, by integrating the standards and regulations by taking into account the international standards such as CODEX and IFOAM. The NPOP norms are recognised by the European Commission and Switzerland as being equivalent to their own norms.

Production, promotion, market development and regulation of organic farming are the major objectives of the project. It envisages setting up 50 model organic farms in the country and provides assistance for setting up commercial production units of organic inputs like bio-fertilisers, fruit and vegetables waste compost and vermiculture. Besides promoting the establishment of commercial production units for organic inputs, the plan would also address issues relating to capacity building in this segment. According

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ciiccicicicirggangaangagaaaggagOf Of Of OOfof rrrOtt ot grgagrggarr iinininniannaanaOrgrOrgOOOO ggof Ofof Offf ininininofporrrrrpooorppxpp rorrrportooortppoopppp rrrrtoortpxxxxexexexxxxppeeee ort op oortrpoopppttcttttttt oooooooooononononnonoooioioiiioooooooon &&&&&&&&&&&&& e& eexe ppxpxpxxppxpxxpxxxxxpxxpooppoopooortttrttpoopoonnnnnnn &&& eexeexe rttooooroooppopiiiiioiitiiiiiiiiiiiiiiiiiiiicucuccuccucuduuuurrroProPPPPPPPrroodddodododduoodddddooodod cctctttuucudduudduu &&&&&&&&&&&&&&&&&&&&&n &&& e pxpxxppppexxexpopopp rtort ofooortrtort ofoort foff& pppppppp&&&&&&&&& eee oooopoooopopoppppccccccccccccctuuuuuuu f gagagaaagggofof OOrggrgOrrgOOOorrrrtrtt ort oorrrrrrtooe&& e&&&& e&& nicicicccccgggg

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from India. The Indian government has also set up the Nationalf O i d i h O hi h i d d

Data for organic products (2010-11)

Total Production 3.88 million M.T.

Total quantity exported 69837 M.T.

Value of total export $ 157.22 milllon

Total area under Certifi cation (Including web harvest) 4.43 million hectares Total area under certifi ed organic cultivation 0.24 million hectares

Share of exports to total production 4% approx

Increase in export value over previous year 33% approx

Oil Crops (except Sesame) 17966 25.73 Cotton & Textile 17363 24.86Processed Food 8752 12.53Basmati Rice 5243 7.51Tea 2928 4.19Sesame 2409 3.45Honey 2409 3.45Rice 1634 2.34Dry Fruits 1472 2.11Cereals 1348 1.93Spices Condiments 1174 1.68Medicinal and Herbal Plants/Products 627 0.90Coffee 320 0.46Vegetables 167 0.24Aromatic Oil 39 0.06

Product Category Export Volume (MT) % Share

Refrence APEDA

2012

2013

2014

2015

Organic Food Industry growth Ratio (2012-2015)

* Figures in bn Rs.

to RNCOS (an Indian market analysis company), with the government support, the organic food market in India is estimated to grow at a CAGR of around 15 per cent during 2011-2013.

Growing momentum Though price of organic food is still an issue for many

consumers, the organic movement in India has caught pace and now you can fi nd organic food in various food stores, both specialized such as Navdanya, a cooperative mounted by the renowned environmentalist Vandana Shiva and also the general large format food retail stores. Indian organic food market is growing at a steady rate of 40 per cent annually. According to ASSOCHAM, an apex industry body, organic farming in India is likely to be worth Rs 100 billion by 2015 from the current levels of about Rs 25 billion. Indian organic food market is growing at a steady rate of 40 per cent annually more so because of a growing population with high disposable income and more and more health consciousness.

“Private sector with facilitation from the government has played a pivotal role in driving organic movement in the country,” says D S Rawat, secretary general, ASSOCHAM. Organic farming could create millions of jobs in the agri sector as it can spur over 30 per cent of employment per hectare as against non-organic farming and this ratio could further increase if on-farm processing, value addition, packaging and direct marketing are considered, says an independent research of ASSOCHAM.

Although organic farming is picking up pace in India, the sector has been jostling with lack of awareness, knowledge and confi dence about organic farming and food products among both farmers and consumers. Trainings programme for farmers and producers and marketing are indeed key elements in developing this industry.

Yes Bank says that the Indian organic foods industry presently is metro-based, with about 95 per cent of the brands existing in top 10 metros like Delhi (NCR), Kolkata, Mumbai, Pune, Chennai, Bengaluru and other tier II cities.

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25 bn Rs.

50 bn Rs.

75 bn Rs.

100 bn Rs.

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• Being ideally located in Eastern India, Jharkhand caters food products to 1/3rd of the country's population.• The State has almost 18 lakh tonnes of surplus vegetables.• The State produced record 56 lakh metric tonnes of paddy. • The State is situated between rice bowls of Eastern India.• The State has :

• Proactive visionary leadership.• Launched new Jharkhand Industrial Policy 2012.• Single Window Policy being implemented• Industrious workforce with harmonious industrial relationship• Over 100 thousand croare invested in other sectors (steel, power, aluminum, cement, automobile).

• Excellent opportunities exist for organic farming (rice, pulses, maize, vegetables, groundnuts) largely because of non-use of chemical fertilizers, pesticides and herbicides in farming.

• Mega Food Park in 56 acres with project cost of 106 crore being set up at Getalsud, Ranchi.

Jharkhand: Ideal destination for investments in food processing

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• Provision exists for developer of Food Park to sublease Government / IADA land to other food processing industries.• Food Processing Industries accorded priority in Jharkhand Industrial Policy 2012.• Agro-Food Processing Industrial Units with only 50 crore investment covered under Mega Classifi cation.

• Preferential land allotment by IADA to enterprises using local agro raw material.• Comprehensive Project Investment. Subsidy for non-mega Food Processing Units upto 15 per cent of investment in Plant and

Machinery, Pollution Control Equipment, Alternative Power Generation and Employees Welfare (maximum $ 50 million).• Food Processing Units to be reimbursed 75 per cent of Net VAT paid per annum for 5 to 9 years.• Food Processing Units declared as seasonal units for relief from minimum electricity charges during closure.• No Mandi Fee (Market Fee) on notifi ed agriculture produce purchased or use as raw material from outside the State.• Implementation of NMFP (National Mission on Food Processing) Scheme for assistance in the ratio of 75 : 25 (Government of

India : State)• Following benefi ts available to other MSME will also be available to Food Processing Industries.

• Extensive Opportunities exist in• Setting up Food Park • Cashew Processing Unit.• Quality feed producing unit for cattle, fi sh, piggery and poultry.• Cold chain, preservation facilities.• Organic farming of pulses and oil seeds.• Exploiting the commercialisation of agro - forestry products• Processing units for medicinal plants.• Honey production and processing units.

49

Department of Industries, Government of Jharkhand, IndiaPh: +91-0651-2491844/2490746, Telefax: +91-0651-2491884/2491587

Email: [email protected], [email protected], [email protected]: www.jharkhandindustry.gov.in, www.jharkhand.gov.in

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BRAND GUARDIAN Karan A ChananaChairman (AMIRA GROUP)

THE WINNING CHEMISTRYAmira food products have been served worldwide for almost a century now. It started as a trading house for agro-commodities in 1915. As it grew, its knowledge and insights into customer tastes and preferences increased. AMIRA improved the product deliverables to serve across the globe. AMIRA has emerged as a brand that continues to diversify and explore new opportunities in the global arena focusing on providing excellent food materials.

The brand has built a reputation for quality products, fair prices ensuring customer satisfaction that has been the directing force in AMIRA’s growth. AMIRA has established a network of over 122 distributors spanning across 28 states in India, through traditional stores and modern retail stores. AMIRA works towards creating a community with continuing generations of service to evolve as a Global Strong Food Brand, apart from already making the best rice brand in the world; it wants to make the best of everything they trade in.

AMIRA has followed a perfect positioning strategy for the competitive global market. It not only makes the most premium basmati but provides the best value for money as well as making what they claim, “THE BEST BASMATI MONEY CAN BUY!”.

THE ULTIMATE BENCHMARK OF ACHIEVEMENTThe Ministry of Commerce has recognised AMIRA as a 3 star export house after being merited for ‘outstanding contribution torice exports’ in India. Exports has given it a robust growth, banking upon special grade products. AMIRA has been also awarded with the status of ‘Global Growth Company’ from the World Economic Forum. Its products & production are ISO

certifi ed and recognised for the quality code it follows. It is also approved by the FDA in the USA that provides immediate access to the most demanding markets of Europe & Middle East.

AMIRA Foods has set another benchmark in the industry with Brand AMIRA being honoured with this prestigious title THE INDIAN POWER BRANDS; THE GLOBAL SUPER POWER EDITION chosen by the Indian Consumer. The parameters of thisrecognition are based on the most powerful companies of India that have the potential to be “SUPERPOWERS”.

Chairman of the AMIRA Group Karan a Chanana was awarded Power Brands Hall Of Fame Corporate icon/Leader Award 2011 at the Power brands Hall of Fame Awards for his contribution in Food Industry and demonstrated Leadership & Excellence in establishing an International Brand Identity and in turn become an Indian media vehicle globally.

AMIRA’s belief in relationships is the means to bond people and cultures across the world through the common language of food. This is the power of ‘Food Connect’ and this is the pulse of its business.

GEARING UP FOR THE FUTUREToday Brand AMIRA is available across India with presence in all major retail chains like Bharti Walmart, METRO Cash & Carry, TESCO Star Bazaar, Hypercity and many more. AMIRA has set up offi ces in USA, UAE, UK, Malaysia, Singapore and has a brand presence in over 20 countries. It has an extensive portfolio of brands that not only meet local requirements but has successfully met the dynamics of the demanding international markets. AMIRA’s next mission is to offer quality food by not only exports but to spread out well across globe by 2015.

Karan A Chanana helped in the transition of the AMIRA GROUP from a family-run operation into a professional business enterprise. Under his stewardship, the AMIRA GROUP has established itself as the largest privately owned rice exporter in the country.


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Punjab to focus on crop diversificationThe Punjab government has asked the Federal government for Rs 50 billion in the 12th fi ve year plan for crop diversifi cation in Chandigarh and also asked the Centre to prepare a roadmap to bring the state out of wheat-paddy cultivation. “There is a need to immediately launch a technology mission for diversifi cation of agriculture in green revolution areas with an allocation of Rs 50 bn, on the pattern of the mission for bringing green revolution to eastern India,” the Chief Minister, Parkash Singh Badal told media while holding a meeting with a Central team led by Union Agriculture Secretary Ashish Bahuguna in Chandigarh.

Non-grape wines, the new rageNon-grape wines – made from fruits such as lychee, mango, pineapple and now strawberry – today account for less than fi ve per cent of India’s total wine production. However, the recent trends suggests that they will soon command a larger share of the wine pie.

Holding confi dence that fruit wines have great potential, Pune-based Akalpit Prabhune, an alumnus of the city’s fi nest engineering college, gave up a 10-year long career in IT to set up Hill Crest, a new wine company, and go commercial with pineapple wine a year ago. The product – branded Rhythm - has been so well received in Pune, that he and Gulu Jagtiani, his Mumbai-based partner, are now launching a strawberry wine under the same label, Prabhune shared, adding, “The slightly sweet taste of these wines makes them popular with people setting out on the wine journey.” J P Gupta, chairman and managing director, Nirvana Biosys (a Haryana-based wine company), endorses Prabhune’s optimism on fruit wines. A little over a year ago, Nirvana launched lychee wine under the brand name Luca, following this with a mango wine six

months on. It also has grape wine under this label and estimates it will make a total of 0.6 million???? 600,000 litres this season. “Last year, fruit wine varietals contributed less than 20 per cent of Nirvana’s total wine production. Today, the fi gure is closer to 40 per cent, and growing,” Gupta says, adding that the mango wine has met with a warm reception overseas and the company recently despatched a large export consignment to Japan where it sells for as much as $40 for a bottle.Nirvana has plans to introduce edible rose and herbal wines too and if the trend continues may consider converting the entire facility to fruit wines, Gupta says observing that with over 500 varieties of mango, India is sitting on a huge, and monopolistic, opportunity. Fruit wines, according to Jagdish Holkar, Chairman,

Indian Grape Processing Board, have existed in India in states where grapes cannot be grown. He informed that he has been invited by the Arunachal Pradesh government to give a fi llip to local products like kiwi wines. The board has just launched an initiative to promote traditional wines in premium hotels in six Indian cities in India via the B2B channel, and wants to promote fruit wines as well. The only hitch in popularising them is the inordinately high excise duty which grape wines are spared thanks to a wine policy by some States, a vintner says.

Record rice exports from IndiaRice exports from India are estimated to be a record 10 million tonnes in 2011-12 marketing year, that ended in September 2012last month, on strong demand and competitive prices, says a report. India re-entered the rice exports market in September 2011 after a four-year ban on exports of non-basmati rice. According to the US Department of Agriculture (USDA), rice exports estimated for India are revised upward by two million tonnes to a record 10 million tonnes in the 2011-12 marketing year (October-September) after taking into account the offi cial trade reports. It said that the country is estimated to have shipped 8.2 million tonnes of rice in the fi rst nine months of the 2011-12 marketing year. Of which, 5.5 million tonnes was non-basmati rice and 2.7 million tonnes basmati rice.“Assuming some spill-over of export shipments lying at Kakinada to October, rice exports during July-September are likely to exceed 1.8

Food Brief

Brief

BIZ @ INDIA Special SIAL 2012 53

million tonnes, which will take rice exports in 2011-12 to a record 10 million tonnes,” it added. Quoting trade sources, report, the USDA said that export of basmati and non-basmati rice hasve been steady during the months of July through September on strong export demand. That apart, the USDA mentioned, “Indian non-basmati rice for export remains very price competitive, with Indian common rice varieties ranging from $375—450 per tonnes on freight on board (FOB) in the fourth week of September.” The “unexpectedly” strong export demand for rice has resulted in port congestion at Kakinada in the east coast with reports of about 6,00,000 tonnes of rice currently lying in the port for export shipment.Lower rainfall in July-August, particularly in coastal Gujarat and Andhra Pradesh, has also facilitated movement of rice for export, it added. The report also said that the government is likely to continue with the current rice export policy due to surplus domestic supplies and abnormally large government food grain stocks. The government rice stocks stood at 25.59 million tonnes as on September 1, nearly 2.9 million tonnes higher than the last year’s level. India, the world’s largest rice grower, had produced a record 104.32 million tonnes of rice last year due to good monsoon.

Italy’s farm equipment firm enters IndiaItalian agricultural machinery manufacturing company Maschio Gaspardo Group has entered in India and set up a new facility at Ranjangaon near Pune. The company has invested Rs 2 bn in this facility and will invest another billion

rupees over the next fi ve years. At the beginning, the Pune plant will manufacture rotary tillers, mulchers and seeders for the domestic market. The annual capacity of this plant is 20,000 units. Initially, it will manufacture over 500 machines per month. Maschio Gaspardo group specializes in the production of agricultural machinery for tillage, sowing, seeding, landscaping, forage-making, sprayers and crop care. It has also set up an R & D centre in India. Over 60 per cent localization has been achieved in this plant and remaining will be imported from Italy and China. The Pune plant will

currently employ 120 people and will be increased to 250.To start with, the new plant will manufacture products for Mahindra & Mahindra and New Holland India. Plans are also underway to serve the needs of Maschio Gaspardo Group’s other global customers, by providing local supply to their India and Asia Pacifi c facilities. It has already sold over 0.017 million ?????17,000 units to Mahindra and Mahindra since 2010. Gaspardo had a partnership with M & M for its OEMs.

Commenting on this, Alessio Riulini, dDirector (D in caps), Maschio Gaspardo India, said, “The growing importance of Indian agricultural market gives this country a central position in Maschio Gaspardo Group’s global strategy. Pune is an ideal location for our new plant because the city provides a strong infrastructure and a rich talent pool of skilled workforce in the manufacturing sector. Our new plant represents a key milestone in

Maschio Gaspardo Group’s long-term vision of investing in fast growing markets and aligning our manufacturing footprint with the needs of our global customer base.”

He added, “Indian market requirements are very limited as compare to USA or Europe as fi eld sizes, conditions of soil, power of tractors are lesser than other markets. The new plant will aid Maschio Gaspardo Group to achieve its aim for 2012; to exceed $ 280 million turnover.”

New tea trading centre for KochiThe Tea Trade Association of Cochin has decided to set up a state-of-the-art Tea Trade centre at an estimated cost of Rs 1 bn. This will be funded partly through the Union Commerce Ministry and partly through equitycontribution from various stakeholders. The proposal is supported by The Tea Board of India. It will be set up at 10 acres provided by the Cochin Port Trust. The association’s managing committee has approved the feasibility study for establishing the centre and has decided to identify the potential investors among its members.

The tea centre will aim at consolidation of various activities connected with tea trade under one roof with key focus on centralizing the warehousing operations, which is presently done by 40 independent warehouse operators. In addition, the tea centre plans to introduce the concept of common processing facilities, which will be used by various stakeholders as an initiative to promote production of value added tea in the domestic market dominated by trading in dust variety of tea for domestic

consumption. According to V Unnikrishnan, outgoing chairman of the association, the centre could lead to enhancement of tea exports from the centre taking advantage of the facilities of Kochi port. The Cochin Port Trust chairman Paul Antony said, Willingdon Island in Kochi port is the main tea auction centre in South India with large number of brokers, buyers, and sellers transacting about 70 million kg of tea every year.

Spices Board’s food safety training centreThe Spices Board has decided to partner with CII (Confederation of Indian Industry) and USFDA (US Food and Drug Administration) to set up a collaborative training centre for food safety and supply chain management. This is to clear apprehension and concern on quality of spices and spices products exported from India. A Jayathilak, chairman, Spices Board, said that the centre, the fi rst-of-its-kind in India, is the culmination of the decision taken in the aftermath of the World Spice Congress held in Pune in February 2012. The collaborative training centre for food safety and supply chain management in spices botanical ingredients is being set up to facilitate capacity building and developing product specifi c testing procedures in the sector of spices and botanical ingredients. Spices Board and CII – FACE (Jubilant Bhartia Food and Agriculture Centre of Excellence) is partnering with JIFSAN (The Joint Institute for Food Safety and Applied

Nutrition) / USFDA in establishing the centre.The fi rst phase of the training in Kochi was attended by over 60 offi cials and functionaries from 50 organisations from both the government and non government sector consisting of processors, trader, exporters, etc. The phase two for selected deleparticipants attending phase two, would be involved in a series of workshop and gates will be held in the US for two weeks. In phase three, training programmes in different regions of India will take place. The training centre assumes importance in the context of most of the countries especially the US and EU bringing in stringent legislations regarding the standards of spices imported to respective countries. This will give producing countries

like India, an edge over the other competitors on the export front. The centre would strengthen the supply chain management for both domestic and international trade through providing technical support to organisations through training, information sharing and technical consultancy to organisations selected by the Board, in the upgradation of their manufacturing, processing facilities, quality control assurance system, implementing hygiene and food safety management system, etc. Various stakeholders in the supply chain will be provided with training, counselling, consultancy, etc to build up their capabilities and enable them to be globally competitive.

National Hybrid RiceConsortiumIndian Council of Agriculture Research (ICAR) is establishing a National Hybrid Rice Consortium to bring all stakeholders onto a common platform to share research knowledge and put it to use in order to build the hybrid rice ecosystem. ICAR has held several rounds of consultation meetings with public agencies and private fi rms on the need and on the framework for such a consortium. “We have appointed a committee to come out with terms of reference for the consortium. We will share them with all the stakeholders and after considering the feedback we will announce the launch of the consortium,” Swapan K Datta, deputy director-general of ICAR, told media on the sidelines of the sixth international Hybrid Rice Symposium. In all likelihood, the consortium will be formed in a monthsoon. Private fi rms will pay a membership. Government universities and research agencies will get membership free of charge. The stakeholders will bring in their research output to the platform. “Those interested can use them after paying a certain amount. The consortium would maintain a database of the research knowledge and its authors. This is to keep tabs on the unauthorised use of the material or inventions,” he said. Initially, the consortium will take care of the hybrid rice. “We are planning to extend this to other crops as well in the future,” the ICAR offi cial said. “After working for years, some scientists

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Food Brief


and research bodies discard certain lines. They don’t use them any longer. They can bring such research updates to the platform. We will give the receivers non-exclusive rights,” he added.

Israel to help Gujarat in agri trainingIn a bid to replicate the success of Israel in the farm sector, the Gujarat Government will set up a farming educational institute in collaboration with Israel, offering post-graduation and PhD programmes with practical training and degree from Israeli universities. Also, Israel plans to set up three centres of excellence focused on vegetables, mangoes and post-harvest practices for dates and bananas. This was indicated by Chief Minister Narendra Modi at a national convention on “The Next Frontier of Agri-Business & Technology” and “Agri Asiatech 2012” in Gandhinagar recently. “Gujarat is in talks with Israel to set up an agricultural educational institute in collaboration with its universities to offer post-graduation and PhD programmes… The negotiation is in the fi nal stage,” Modi said. Orna Sagi, Counsel General to India, Israel, said, “Bilateral relations with India were at a new height. To share our experience and facilitate transfer of technology, we are going to set three centres of excellence in the state of Gujarat, each dedicated to vegetables, mangoes and post-harvest practices for dates and bananas, respectively.”Iran is the largest buyer of Indian soyameal Iran is now the largest buyer of soyameal from India in recent months

displacing Japan from the top slot. Until now, Iran has been largely sourcing soyameal from Latin American countries such as Brazil and Argentina. Soyameal is used for live stock feed in sectors such as poultry, piggery and fi sheries.In April-July 2012, Iran imported 440,000 tonnes of soya meal accounting for over half of the India’s exports. This is according to the data collated by Soyabean Processors Association of India (SOPA). “Iran’s buying has provided a fi llip to our exports,” said Rajesh Agrawal, spokesperson for SOPA, adding, “They (Iran) have come at a time when no other country is buying in such large quantities due to prevailing high prices”. The recent bilateral payment mechanism that allows importers in Iran to make payments in Indian rupees is aiding the soyameal exports. Iran’s total requirement of soyameal is estimated to be between 1.2 and 1.5 million

tonnes. “We are in a position to supply at least 40-50 per cent of their demand,” Agarwal said.Soyameal prices have more than doubled in the past 10-12 months from the levels of around $280 a tonne to a high of $680. This price rally was triggered by the drought-reduced crop size in Brazil and Argentina last year. Further, prices continue to rule high as the worst drought in 56 years faced by the US, the largest producer, has shrunk this year crop by 12 per cent. The contracts for the new season starting October have been settled at $610 a tonne. “We have a good window till January-February next year, when the South American crop comes into the market. Also the fi rm domestic demand is expected to keep prices fi rm,” Agarwal said. India exported four

mn tonnes of soyameal worth Rs 70 bn in 2011-12. Japan, which accounted for 30 per cent of the India’s exports last year, has been the largest buyer for the past fi ve years. Vietnam, China, Korea, Myanmar and the Philippines are the other large buyers of India soyameal.

South Africa seeks Indian investmentsSouth Africa has sought Indian investment for its fl ourishing food processing sector. At a conference on “Challenges and Opportunities in agro sector in South Africa”, Deputy Minister of Department of Trade and Industry Elizabeth Thabethe said that the agro-processing sector offers opportunity for investment with the backing of the South African government through policy and various incentives. Undoubtedly, agro-food processing in South Africa is a sector that is not only open for new investments and the region, but one that is in fact viable, she added. South Africa climatic condition is conducive for growing diversity of crops, livestock and fi sh. There were other sub sectors with investment potential too. The establishment of preferential trade agreements such as the African Growth and Opportunity Act for the US market and a Free Trade Agreement (FTA) with the European Union, confer generous benefi ts for potential investors. Bilateral trade between India and South Africa has increased from $45 million in 1993 to $7 billion last year. Further, India ranks among the top 10 investing countries in South Africa, with investments estimated at over $6 billion to date. The challenge now lies in increasing the pace of growth and consolidating the gains being made, Thabethe said. In a bid to strengthen the trade ties between India and South Africa, various agreements, including the General Trade Agreement, Cooperation on defense issues, SME development and Capacity building through the India Technical Cooperation Programme have been formulated.xxxxxxxx

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Food Imbalance

Unemployment

Economic Exclusion andPolitical Instability

Rise of New Power

Global Imbalance of Power

DebtHuman Health

EnvironmentalSecurity

Lack of Credit and Unemployment

Political Instability

Recession

Lowest Saving Rates Corruption

Inequality, In�ation & Corruption


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to Inclusion & IntegrityFrom Indignation & Inequality

@BIZ INDIAIssue No. 9, OECD Forum 2012Special

Debt, Eurozone Crisis, Unemployment, De�cit

G R O U PMedia India

Governance challenges in 2012

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Poverty

Food Imbalance

Unemployment

Economic Exclusion andPolitical Instability

Rise of New Power

Global Imbalance of Power

DebtHuman Health

EnvironmentalSecurity

Lack of Credit and Unemployment

Political Instability

Recession

Lowest Saving Rates Corruption

Inequality, In�ation & Corruption


€

€ €

€

to Inclusion & IntegrityFrom Indignation & Inequality

@BIZ INDIAIssue No. 9, OECD Forum 2012Special

Debt, Eurozone Crisis, Unemployment, De�cit

G R O U PMedia India

Governance challenges in 2012

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SIAL 2012

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