India's Packaged Foods are the Least Healthy, Reveals Study
India's Packaged Foods are the Least Healthy, Reveals Study

According to a latest oxford study, the packaged Food and Beverage goods sold in India are the least healthy in terms of the levels of salts, sugar and saturated fat contents in it. The survey collected data from Australia, Canada, Chile, China, India, Hong Kong, Mexico, New Zealand, Slovenia, South Africa, the UK, and USA. Through Health Star Rating (HSR) nutrient profiling system, the data of 2013-18 was collected.

The study which was published in “Obesity Reviews” used Australian health star rating to conduct a research on over 400,000 food and beverage items from 12 countries to rate them. It rated them according to the levels of energy, saturated fat, total sugars and sodium contents.

The countries which ranked highest in terms of nutrients are the UK, USA, Canada and Australia. However, India, Hong Kong, China and Chile ranked lowestChinese packaged foods and beverages had the highest saturated fat and sugar content, while India ranked highest in energy content. The UK had the lowest sugar content followed by Canada and Slovenia.

“Many of the world's large food and beverage manufacturers have signed up to the International Food and Beverage Alliance, and have made pledges to reduce levels of nutrients of concern such as sodium, saturated fat and sugar and these findings identify some immediate opportunities for action,” the report published on the medical journal said.

The author Dr Elizabeth Dunford was concerned about how packaged foods and drinks are driving a double burden of diet-related diseases in many low and middle-income countries.

“Globally we’re all eating more and more processed foods and that’s a concern because our supermarkets shelves are full of products that are high in bad fats, sugar and salt and are potentially making us sick. Our results show that some countries are doing a better job than others.  Unfortunately it’s the poorer nations that are least able to address the adverse health consequences that have the unhealthiest foods.” she said.

Prof Vivekanand Jha, Executive Director of the George Institute for Global Health, India said, “This study is a wake-up call for countries like India where the packaged food industry is burgeoning and expanding its reach to small towns and villages.

“Policymakers and the food industry need to work together to reformulate products to reduce the ever increasing risk of obesity and its consequences,” he added.

 

 
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Going hybrid: Why QSRs are tapping the frozen food segment
Going hybrid: Why QSRs are tapping the frozen food segment
 

Ready to eat (RTE) meals in India are a far cry from the dismal frozen TV dinners of the West. Using innovative technology and a smart selection of recipes, these are meals that can bring the restaurant home as well as conjure up home breakfasts.

This growth is linked to the changing demographics of urban India. Young working couples and single people looked for easy dinners that would satisfy cravings for Indian food and be a valid alternative to pizza, pasta or 2 minute noodles. The Indian ready-to-eat food market was valued at 261 million dollars in 2017 and is projected to grow at a CAGR of over 16 percent from 2018 to 2023 to reach 647 million dollars by 2023.

The pandemic and the lockdowns have brought a surprising new impetus to the business. With restaurants shut, mounting concerns about food hygiene, a store bought RTE meal seems like a safer and easier bet for most. Especially for all those who haven't sharpened their culinary prowess and live off instant foods, these heat and eat meals are fast becoming the new essential.  

Companies operating in this category have reported a 30 to 45 percent spike in demand and believe that this trend is here to stay. While the market is seen being saturated by many new brands, an interesting shift has come into notice. Many restaurants based QSR chains have either entered into the ready-to-eat frozen food category or have aggressively expanded their existing offerings during the pandemic period.

Pandemic accelerated the growth

According to Prasuk Jain, Owner of Pink Wasabi and Game Palacio, product segment and geographical landscape along with user friendly apps, tech enabled driver networks and the growing demand of consumer expectations has paved the way for ready to eat meals. Multiple lockdowns and physical distancing also gave an enormous boost to delivery becoming important for the restaurant industry.

The biggest announcement from the QSR segment was when QSR giant, WOW! Momo looked at capitalising on their brand ‘Made for Home’. The venture claimed that its momos have no MSG and no preservatives and have a shelf life of nine months. The product is available in five flavours, Veg Darjeeling momos, Chicken Darjeeling momos, Masala Chicken momos, Corn and Cheese momos and Chicken Cheese momos.

The frozen momos are exclusively available online on Bigbasket in cities such as Delhi, Gurugram, Noida, Kolkata, Mumbai, Pune, Bengaluru, Chennai, Hyderabad and Ahmedabad. Sagar Daryani, Co founder and CEO at WOW! Momo had said in a statement, "Our success in Quick Service Restaurant business has taught us to be close to our consumer; and our foray into FMCG is to take this bond one step ahead. We want to be a part of every grocery order in the country - we want to be the food for all times; that's with you all the time."

As the company aims to expand to multiple categories such as sauces, snacks and much more, Daryani also confirmed that the company’s decision of foraying into the FMCG and frozen food category was to make the business model more hybrid taking cues from the unprecedented times. In 2020, the QSR chain also teamed up with Café Coffee Day (CCD) to set up kiosks in CCD stores all over India.

Entering the lesser saturated market

When it comes to the frozen momo category, Prasuma Momos have been the market leader for a while. When asked does QSR chains venturing into the frozen food segment can be of any threat to such companies, Lisa Suwal, Founder of Prasuma Momos believed that when it comes to Momos, the more, the merrier. 

“Zomato's annual survey said that it sold Momos to over one crore people in 2021, and it's safe to assume that Swiggy would have sold just as many. Considering that we are a country of 1.2 billion people, these two platforms account for sales to less than one percent of our population at the very most. Consumers are happy to try new brands since switching cost and trial cost is low, so customers will switch to brands that offer better, yummier products. This is to say that we believe the market is large enough for many players to co-exist and satisfy customer cravings as best we can,” she pointed. 

There are many other examples as well. Bikanervala has recently launched its ready-to-eat range of curries and would soon be foraying into the frozen food category with products such as frozen samosas and vegetarian kebabs, under its INR 1,100 crore FMCG brand, Bikano.  The brand has 110 restaurants across the globe, and it will be soon taking online orders, which would later be followed by the launch of its own app. Through the lockdown, it's only the delivery business that has worked for them. Earlier, delivery used to contribute around five percent to the revenue and going forward it's going to be as high as 20 to 25 percent, the company added.

Going hybrid is the future

“The inhibition of customers to go out and eat but still wanting the same fresh flavour and taste at the comfort of their own home. Ready to Eat Meals are easy to prepare. It's a great option for people working from home. Many QSR brands have entered this domain recently, Pack A Pav has been doing a great job. We at Veer Ji also provide Fresh Marinated Chaap, Ready to fry. It is prepared fresh and remains good for 10 days if refrigerated,” Vijeta Khilnani; Founder of VEERJI informed.

The change can be witnessed from the other side of the business too. In order to go hybrid and tap all the possible potentials, FMCG companies too are entering into the QSR domain. Packaged consumer goods and services company CavinKare announced its foray into the quick service restaurant segment selling fried chicken, pizzas, and burgers under the Jango’z brand. It has already launched an outlet in Chennai, with plans to set up over 100 outlets across the country by 2026. Entry into the QSR space is in line with the company's refreshed CavinKare 2.0 strategy.

Above all, it becomes easier for a QSR brand to enter into the frozen food segment when compared to a fast casual or a fine dine brand. QSR chains have standardised processes and recipes which they follow for quick turnover of orders. This help in finalising a perfect concoction of packed food.

But, among all, one company that has mastered the art of both, restaurant as well as frozen food format is Haldirams. The Delhi based company has come a long way, with a large number of restaurants and an extensive network of C&F and distributors across India. The brand has a global reach too, with its presence in more than 100 countries across the globe.

Launched in International Market between 2012 to 2013 Haldiram's Frozen Food range is already one of the most popular product categories, with delectable offerings such as Breads, Parathas, curries, snacks, chutneys, combo meals, sweets, Mom's Special, Dakshin Express, and Jhatpat Meals. The brand learned about diversity much before the pandemic made the other players aware.

 

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How Covid-19 pandemic has fuelled the growth of packaged food
How Covid-19 pandemic has fuelled the growth of packaged food
 

One of the fastest growing economies in the world and a sourcing hub for agricultural products, India has the advantage of a huge domestic market and raw material. There has been a phenomenal growth in the size of the food processing market due to reasons of change in consumption patterns, increasing urbanization, alterations in the gender composition of the workforce, and rising consumption rates. In addition, over two-thirds of the country’s population is young with rising incomes which has in turn created a large market for food products.

There has been a significant development of the production, manufacturing, processing, distribution and marketing of food products. On top of this, diets and taste changes because of reasons such as prices, size of disposable income, individual preferences, globalization etc. This has fuelled the growth and acceptance of packaged/processed foods by Indian consumers.

Also Read: Healthy Snacking is changing the face of snacking in India

Market Insights

A well-known fact is that many of the domestic and multinational companies are anticipating profits from the upwards trajectory of the confectionery industry in India. The Food and Beverage (F&B) services industry has been a thriving business sector with an exponential growth in the recent past and is poised to develop even more in the times to come. The food automation market is likely to hit $12.50 billion by 2027, a rise at the rate of 7.10 percent.

The Indian food processing segment is also undergoing a significant growth cycle with multinational companies cementing their position and presence within the Indian market. The robust macro-economic indicators and strong policies have led to an incredible increase in foreign investments and collaborations in the past few years. In the period between April 2000 and June 2017, the food processing industry in India received FDI to the tune of $7.81 billion, rendering it the 13th largest sector receiving FDI in the country.

The industry is expected to expand at a compound annual growth rate (CAGR) of 11.5% up to financial year 2023 to touch a value of Rs. 15,971.9 billion. Rising foreign investments and collaborations in the food processing segment of India signal an increase in the food and confectionery items that are being offered by global MNCs as well as domestic companies. The anticipated growth rate demonstrates that the segment has a massive growth potential and will go on to add to the development of the Indian economy.

Key Growth Drivers and Deterrents of the Industry

India is witnessing a rise in the population coupled with increasing urbanisation that has given a huge boost to the food industry. The fast-paced lifestyle and back-breaking schedules have made it difficult to maintain an adequate work-life balance for the consumer. As lifestyle diseases like hypertension, diabetes and heart ailments rise due to the sedentary lifestyle, people have started making the switch to healthy foods. Now consumers are steered towards demanding products that are highly nutritious and keep illnesses at bay, and they want these to be convenient to procure.

May Interest: Cross Border Kitchens Launches All-Day Snack Menu under its brand Chutney India

In light of these changing consumer patterns, responsible and ethical food processing is the need of the hour. Hence, packaged products like ready-to-eat foods, intermediary food items and frozen food items are fast gaining popularity. People working from home are especially raising the demand for confectionery items such as chocolates, raw pastes, and various such products. Due to the global health concerns surrounding COVID-19, the consumption of snacks has increased dramatically.

Since every household earns a two-fold income, there is a larger share of disposable income which people are spending on quick snacks. The new found mall culture and metropolitan lifestyles are further pushing higher-customer spending. In addition, the practice of farm to table is hitting the trending list. Millet cereal's meal recipes are now making their way into imaginative cuisine. The largest development in the food industry is bulk food. Since they are known to be really good for health and cut down on carbohydrates removing gluten, their significance is increasing.

However, the industry does face certain hindrances to its growth. It suffers from low availability of raw materials as certain crops are seasonal and cause delay in the whole process. Farmers require the capital for equipment and fertilizers to improve the quality of their produce. In many cases, there is a lack of storage infrastructure, which results in food wastage and loss. There is poor connectivity of certain rural areas with locations where food processing units are situated. As a result, the produce takes a lot of time to reach these units, again leading to a lot of wastage. Lastly, there is a dire need to adopt technology as much of the produce is inspected manually, and farmers lag behind in the competition with the global market.

 

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Haldiram's takes a Bite Out of Startup Ecosystem, Invests in Venture Catalysts
Haldiram's takes a Bite Out of Startup Ecosystem, Invests in Venture Catalysts
 

The FMCG sector, the larger segment which includes CPG sector, has a very strong potential in India. The segment’s market value is estimated at about 50 Billion USD and growing strongly at about 7-10%. The country, with its young population, growing income levels and increased spending, presents a unique opportunity for CPG start-ups. Much like the Health & Wellness that has seen many successful start-ups without a single-brand consolidation, the rest of the CPG space also offers chances for businesses to flourish.

Munching on the sector, Haldiram’s one of the fastest growing brand in India and internationally has invested in integrated incubator Venture Catalysts. With this partnership, Venture Catalysts aims to boost its overall understanding and facilitation of start-ups in this sector. The Consumer Packaged Goods sector, comprising goods consumed every day by the average consumer, has shown significant growth potential in the Indian market, and the current association aims to utilize this opportunity.

Venture Catalysts aims to leverage Haldiram’s expertise to intricately evaluate its investments in the CPG sector and achieve – a much stronger foothold in evaluation, industry relevant mentoring, identifying market opportunities, and developing better consumer understanding in the CPG space.

Haldiram’s began its journey in 1937, when starting a business was not a ‘trend’ but an extremely difficult, highly uncertain step. Today, it has become one of India’s most recognized and loved brand whose success is a benchmark for other businesses. The core responsibility of Venture Catalysts continues to be the development of start-up eco-system in India, which will be further empowered by Haldiram’s experience of building strong brands.

While Haldiram’s investment amount in VCats is confidential, but the funds have already been strategically allocated to strengthen the team, processes and presence of VCats to ensure the creation of an ecosystem built to suit the needs of the CPG industry.

 

“The collaborative model is highly customized and will vary from start-up to start-up depending on what the requirement is for all the teams involved. There can be various companies wherein Haldiram’s could even be interested in taking a lead investment in the start-up and hence a far deeper engagement and association with the founders to guide them through the journey as well, resulting in a win-win situation for all the stakeholders involved,” shared the statement.

 

“Over a course of more than eight decades with over 400 products, Haldiram’s has established its position as a leader, risk-taker and quality seeker in the industry. We have always strived to focus on identifying market opportunities and make the best use of them through product diversification and listening to the consumer intently. We want to share the knowledge acquired over the years and contribute to the burgeoning start-up ecosystem in the country,” shared one of the spokesperson at Haldiram’s.

Commenting on the association, Anuj Golecha, Co-Founder, Venture Catalysts said, “The association with Haldiram’s gives start-ups in our CPG portfolio an immense boost. The success and reputation of the brand in the sector is known to everyone and its business principles and product quality serve as a benchmark for potential entrepreneurs in the sector.”

VCats is already one of the largest early stage Incubators across Asia and is now planning to step this up with a stronger global foot print, having recently entered the UK market as well. Post this collaboration, it plans to invest in 10-15 relevant CPG start-ups in the next 12-24 months and build strong start-up stories such as men’s grooming brand Beardo, female hygiene start-up PeeSafe and India’s first herbal energy shot drink FYRE.

“The alliance with Haldiram’s sets a benchmark for other enterprises to enter into active collaborations that look to empower the start-up ecosystem. The Haldiram’s growth story and the way in which they have built an empire from the ground-up, and this is the ideal example that we want to set for the enterprises that are a part of the VCats set-up right now,” added Dr. Apoorv Ranjan Sharma, Founder, Venture Catalysts.

 

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Breaking Myth: All Packaged Foods are Bad for you
Breaking Myth: All Packaged Foods are Bad for you
 

A couple of generations ago, convenience foods or Ready to Eat/ Ready to Cook food was an absolutely unimaginable concept – the only form of cooking was making it from scratch. Fast forward a few decades– convenience foods have not only become daily needs of homemakers but also chefs who are not leveraging the benefits of convenience packaged foods. Preservative-free and natural packaged foods are causing a revolution in the HORECA industry by providing consistency, lower wastage and higher yield.

The Growth of RTE and TRC categories

Ready to Cook and Ready to Eat foods have been gaining immense popularity because of the convenience and the eclectic variety that they offer. Today, several brands offer food options that reflect the authentic taste of Indian dishes. With rapidly changing socio-economic factors, the demand for convenience foods is increasing steadily. Not only are the millennials buying them, but contemporary parents are also turning to these pre-cooked meals to tackle the time crunch caused by accelerated lifestyles. Anamalgamation of factors like rapid rate of urbanization, diminishing culinary skills, rising income, and an increase in the millennial work force have amplified the growth of this industry. Furthermore, the rise in the number of Indian travelers and students who prefer to carry along the taste of their favourite comfort food across oceans has helped drive this growth further. Food technology has been one of the most rapidly evolving sectors. Today it is possible to preserve food without preservatives by using technologies such retort sterilization, High Pressure Processing (HPP), freezing and several more. These technologies enable fully cooked food to be shelf stable at room temperature or controlled temperatures for weeks or months. Moreover, good quality fresh raw materials negate the need of adding any artificial ingredients such as MSG, artificial colors etc.  Several reputed brands are using cutting edge technology to stick to their all-natural promise. Moreover, companies are going the extra mile to source daily fresh frame produce to get fresh tasting products without any additives.

Go healthy or go home

Consumers wish to indulge in healthy yet tasty meals. Brands are making the best use of super-nutritious ingredients like brown rice, ragi, flax seeds, oats, etc. to keep up with the consumer trends. Moreover, brands are now even picking up global trends and offering organic and vegan Indian products for these niche consumers.

Uplifting the HORECA sectors

The HORECA sectors (Hotel/Restaurant/Café) are making optimum use of RTE/ RTC foods in a bid to cultivate consistency, great taste and innovative flavours across all their outlets around the globe. This has enabled global QSR chains to ensure their food tastes nearly the same -whether in India or in USA. It has indeed helped in overcoming geographic limitations whilst enabling them to serve consumers in a quicker, more efficient manner.  Brands are especially catering to this industry by rolling out smarter and more innovative options to equip chefs with increased ease of preparing these dishes, proving to be great time-savers for everyone. Convenience foods are finding greater application in leading in-flight kitchens, restaurant chains, QSRs, hospitals, caterers and so on. RTE/ RTC foods are not threats to chefs but are aids that let a chef do his/her magic better by leaving the mundane jobs to packaged foods.Chefs have more time to focus on innovation and speed. Using convenience foods as a base, the uniformity and authenticity of various signature dishes can be retained seamlessly. The future is very promising for the collaboration between convenience foods and HORECA industry.

Innovation is the future

In any industry, innovation is the real game changer. In the RTE and RTC space, players have reinvented their products in multiple ways, rangingfrom healthy snacks, vegan meals, allergic and, gluten- free to even superfoods. The future of India’s convenience food industry in most has numerous opportunities and possibilities for growth, development and innovation. We are yet scratching the surface; Indian food has gotten very popular amongst foreigners over the past decade and you can now find Indian Ready Meals across international chains such as Walmart, Costco, Whole foods, etc. India will play a major role in shaping the future of the global food industry going forward.

 

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How This Startup Is Creating a Path Breaking Concept in the Snacking Space
How This Startup Is Creating a Path Breaking Concept in the Snacking Space
 

India is one of the top five markets for packaged foods in the world, and the second largest in Asia. British market research Company Euromonitor International expects that total sales of packaged food will increase by roughly seven per cent annually within the next five years. In the year 2020, packaged food sales will reach 47 million tonne. According to the forecasts of Euromonitor, India will become the third biggest market for packaged food in 2020, after China and the United States.

In conversation with Restaurant India at TIE Food Summit 2018, Hitesh Ahuja, Co-Founder, Yumlane, shares how they have grabbed every single opportunity in the snacking space and made it big in the business.

Yumlane operates in four cities—Mumbai, Pune, Bengaluru and Hyderabad. “Instead of focusing on more cities, I think more of this year will be penetrating deeper and getting us ready for the next phase of growth,” Ahuja said.

The Heat & Eat Journey

The Indian middle class is growing and they simply love to buy and experiment with every new product hitting the market. With the modern India, and all of us getting exposed to more and more new cuisines and foods, the consumption is on the rise. Consumers’ changing dietary habits and willingness to try new things are pushing the numbers even higher. In addition, children are having more say in buying decisions.

Generally people have more disposable income to experiment with new foods. For us, Ahuja said,” We believe that catching on this trend was more important. While we started out doing multiple products, we tested out on various old and new foods and decided that the Indian consumers are used to pizzas in any meal of the day. So we thought of taking that out, making it more affordable with newer flavors and keep it as a convenient food in their homes without any preservatives.”

When it comes to snacking, however, Indian consumers have unique preferences and habits that retailers and manufacturers should understand to ensure success. Adding further he said,” There is a market where we tested and got results and since then the business has grown adding more cities in our kitty.”

Stand Out in the Crowd

Ready to eat meals came at a time when many consumers have traded down from restaurant meals in favor of retail prepared foods that require simple heating prior to eating. And a major influence on the longevity of this dining shift is the premium positioning of the many recent retail rollouts.

Commenting on the competition in the market, Ahuja mentioned,” We are creating a category of Heat & Eat in India which is very similar to what Maggie did with noodles way back in 1980’s. We also feel that consumers are ready for it as they are looking into more new ways to consume foods. So, both these things are marrying the timing and the concept. So factors like these make Yumlane a very unique startup in comparison to other market leaders.”

Keeping the Quality in Check

Consumers are becoming more aware of the importance of safe and high quality products. When we started out, Ahuja explained,” We always wanted to sell a good product and packet in a way that it is hygienic.

As young children, we have eaten enough street food, but the way things are and the way the next 10 years look like, it is hard to say that eating out on the streets will be considered as an alternative option.

“From a hygiene standpoint, our products are the same, but well packed, with no preservatives, keeping the product fresh for the consumers. We have been able to solve with our satisfaction a good product challenge, which gives us the confidence to talk about distribution, about building a brand, and so on”, added Ahuja.

 

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"I believe 'innovation' is the key to success"
"I believe 'innovation' is the key to success"
 

FMCG is a big scale game. There are lots of problems involved in the initial business. Right from convincing vendors to getting the product placed in the market. Fizzy Food Labs, talks about their experience on how they started. Convincing the vendors to look at the long term strategies was one big task, followed by convincing retailers, especially modern trade retailers like Reliance Trends and Big Bazaar etc. was a challenge as typically any newer category that comes in doesn’t contribute to the sales that much but eat up all the space.

When did you start Chefs Basket?

We started in 2012. Varun and I both quit our jobs to come up with Chefs Basket. Officially the company was formulated in 2012 August with its first range of products introduced in 2013. Manish joined us a year later in 2013. So that is how the core team comprises of Varun, me and Manish.

How did the idea come up?

Love for food and passion towards making a brand is what really sparked it. We understood that there is very limited brand play happening in India. There are practically only 10 big players in the market at present. We travelled abroad. We used to see the number of brands that used to exist on their shell as compared to here. So, we saw over the next 10 years a lot of brand play is going to happen in India and we decided to choose the FMCG route in food space rather than the food service route.

What made you take the plunge?

Life was too comfortable. We thought we guys aren’t married; this is the right time to take the plunge. We both knew we wanted to do something in food space. It becomes extremely difficult to manage your business idea parallel, while doing your job. It took us almost a year to start the brand. The idea kept getting more refined with time and finally chef’s basket evolved in 2013.

Talk to us about Fizzy Food Labs?

Fizzy Food Labs is name of the company. We have two brands- ‘Chefs Basket’ launched in 2013 and ‘Colonel & Co.’ launched in November 2015. 'Colonel & Co.’ is new and is a snack segment that is priced at Rs 50 which includes nachos and salsa packed together in a tray. We have already become the number two player in the market of our second product and by the end of this year we are aiming to come at the top. As of today ‘Colonel and Company’ is present in almost 4k stores in Mumbai and Delhi and 1200 stores in Bengaluru.

What are the cuisines and offerings of Chef’s Basket?

It offers Italian, Oriental and Mexican cuisine. We have a range of pasta kit, thin crisp pizza kit, thai curry noodle kit, oriental Manchurian and schezwan noodle kit and in dessert tiramisu and chocolate trifle kit. The whole idea is to give customers a food kit with all different ingredients to cook themselves. It should on an average take about 10-15 mins.

What made you bring such cuisine to the Indian market?

Back in 2013, we started with two cuisines, Italian and Mexican. The number one cuisine in non-Indian space was Chinese. We didn’t want to do Chinese. So we did a little market research and found that the second cuisine that was growing was Italian and growth rate in Mexican was highest and thus we chose these cuisines.

What is the packaging technology you use?

Under fresh range we have refrigerated products like hummus, pesto, salsas and we use the MAP (Modified Atmospheric Packaging) technology. For sauces we use high quality retort. We do not add any preservatives whatsoever. We use the technology called retorting.

What do you base your huge success on?

I believe ‘innovation’ is the key to success. Innovation in product format and product type is what we aimed at. I think that is one big thing that was missing in categories we were playing in. It is extremely important for FMCG products to innovate. So any product we introduce going forward we would look to go into new category rather than being a part of existing category.

What are your expansion plans?

In India, we are targeting the top 18-20 cities over next 6-8 months and we are also planning to export to Middle East and South East-Asian markets. We are also exporting our second product 'Colonel & Co.’ to 4 golf countries this month.

 

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Is packaged food accompanied by convenience and health
Is packaged food accompanied by convenience and health
 

Indians have been following the western trends, partly because of the mass media influence and partly because of the entry of international chains in the country. Brands see a huge opportunity of launching their products and services into the developing country with the population standing at 1.25 billion; which is offering them a market with vast scope. India shows a growth rate higher than any other country in the food packaging sector. According to NRAI food service report, Indian packaging industry is estimated to be USD 35 billion growing at 15% CAGR. This offers immense growth potential for Indian packaging industry. Food packaging accounts for 48% of total packaging industry, contributing largest share in the industry.

Why did the trend emerge?

Just like all other food and wellness trends these days, this one too is affected by the rising consumer health-consciousness. Concerns about the unhygienic status of food being cooked outside encouraged a significant change in the preference and choices of customers. This played an important role in the vitality of products like yogurt. In addition, factors such as increasing disposable incomes, sophisticated consumer’s health concerns in urbanised areas led to the entrance of such goods and products.

Markets of the first world countries like the US have already reached their saturation point and a slowdown in global packaged food markets has already been seen where Asian countries seems to be a hope for this slowing business. The populations of mature markets are not growing at the pace required by food packaging industry thus finding new markets to launch upon is what these brands are looking forward to.

Rising incomes and younger households in the developing countries ensure the growth of packaged foods there. Additionally, unmarried youth and nuclear families with working parents depending on such sources of food impact its growth. Consumers can be seen buying more canned beverages and frozen foods during their monthly grocery shopping.

Ready to cook meals

Everyone desires to eat home cooked meals but is too lazy or has no time to do so. In times like these, packaged food comes to the rescue. The idea of opening a packet and putting it into a pan for a minute and enjoying the fresh, flavourful and hygienic food at the comfort of homes is always soothing. This is what tempts consumers and thus manufacturers into making these products. Convenience and influence of western world can also be the added reasons for the industry to flourish.

Average rate of annual spending on packaged food has increased by 22.5% annually during the years 2010 to 2015, statistics indicate. Releasing the survey, Mr. D S Rawat, Secretary General ASSOCHAM said, “The consumption of packaged food is much higher in the urban areas, especially metros, where life is fast-paced and stressful.” The main categories of packaged food are bakery products, canned/dried processed food, frozen processed food, ready-to-eat meals, dairy products, diet snacks, processed meat and health products and drinks, points the survey.

They do have a few limitations including small shelf life and lack of variety but the Indian consumer doesn’t seem to care much about it and it rarely affects the selling rate.

Cold pressed beverages

Cold pressed juices are gaining popularity day in and out in the whole wide world. They are made by pressing, or “masticating” juice from vegetables and fruits. These juices are not only safe to drink a few weeks after being packed, but they contain high amounts of nutrients too.

India has quickly become one of the leading regions in the global cold pressed juice market. In order to cater to the demands of consumers, numerous companies have launched juices manufactured through the use of pasteurized technology. Some of the key companies operating in the global cold pressed juice market are Just Pressed, Pressed Juicery, Raw Pressery, PepsiCo Inc.etc. According to a research conducted, global cold pressed juices market is projected to grow at a CAGR of over 10% during 2016-2022.

Juices not pressed, add flavours and a mammoth amount of sugar to their beverages. The health conscious customer has now opted for a higher priced but good for self-well being products.

In the light of the day, it can be said, that India is surely moving towards the convenience of life and opting for packed and canned products. Although studies suggest that this trend is far from reaching the rural areas, the pace of urbanisation may show us otherwise. 

 

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Why packaged food is the 'new love' for Bengaluru
Why packaged food is the 'new love' for Bengaluru
 

Over the years packaged food industry is mushrooming in India like never before. The total processed foods market size currently stands at Rs 2500 crore, out of which RTC’s market size is Rs 700 crore (barring noodles and pasta) and is expected to grow around 20-25 per cent over the next five years.

It’s all about TIME

To an astonishment South Indian market especially Bengaluru is becoming the play market for the packaged and processed food segment in the country. Players like MTR, Maiyas Beverages and Food and CP Foods are ruling the fast evolving Bengaluru market which is ruled by tech and corporate crowds. "There has been a major shift in food habits in the metropolitan cities. About 79 per cent of households prefer to have instant food due to steep rise in dual income level, standard of living and convenience,” shared a research by ASSOCHAM.

With 20-25 per cent growth on average, the industry is set to touch $50 billion market by 2017. “The consumption of packaged food is much higher in the urban areas, especially metros, where life is fast-paced; attracting lot more companies to launch new types of products and variants,” added the research.

Entering the race

Citing the growth the segment and the land offers, Charoen Pokphand Foods Public Company Limited (CP Foods), one of the leading agro -industrial and food conglomerate with a presence in over 40 countries announces the launch of its entry into the packaged foods business in India.

Specially crafted by its in-house chefs the company will be unveiling a range of branded products that will include CP Frozen Chicken, CP Chilled Chicken, CP Easy Snacks- Veg and Non Veg and CP Eggs amongst many others that will cater to different taste buds.

"India is a key market for CP Foods globally and the launch of CP packaged foods is an extension to our commitment to deliver high quality chicken and value added products straight from farm-to-fork. The packaged food industry is estimated to grow up to $50 billion by 2017 and we aim to play a significant role in it with the launch of India’s “Best” chicken processing plant in Chittoor.” said Sanjeev Pant, Senior Vice President, CP Foods India.

The group has also brought MC Mary Kom as CP Foods India's Brand Ambassador. Speaking about her association with CP Brand, World Boxing Champion MC Mary Kom said, “As a Mother and being an athlete by profession, I understand the importance of good nutrition for our bodies and that there should be no compromise when it comes to high quality, nutritious and tasty food for myself and my family.”

In India, CP Foods is the first poultry manufacturer to introduce “Air Chill Technology” which is a method of chilling dressed chicken which ensures freshness, food safety and longer shelf life. CP branded products is made with high quality chicken raised in Bio Secure (i.e. environmentally controlled & hygienic farms). A complete integration of supply chain right from the farm to the consumers is completely controlled and managed by CP Foods, thus ensuring total quality, food safety and high nutrition. The CP food production and processing facility is in Chittoor in Andhra Pradesh and CP Food Innovation Centre is in Bangalore.

Hence, with new players in the segment, the industry is really going to disrupt the fast evolving food market.

 

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Maiyas Beverages & Foods to focus on packaged food division, keep restaurants local for next two years
Maiyas Beverages & Foods to focus on packaged food division, keep restaurants local for next two years
 

Maiyas Beverages and Foods was launched in 2008, and today they have more than 150 hybrid food products. With a focus on packaged food division, the group is targeting at revenue of Rs 150 crore, for this fiscal. Meanwhile, it has built a strong foothold in restaurant segment by getting a footfall of about 4000 in a day at its six outlets in Bengaluru.

When did you decided to sell MTR to Orkla?

We had two different set of investors in MTR earlier, and it was in 2006 that we decided to exit them and as a process to exit them, we had to sell MTR to Orkla for Rs 364 crore.

How has Maiyas Beverages & Foods grown over the years?

Today, our main focus is on packaged food division, and we are targeting revenue of Rs 150 crore by the end of 2015.  Meanwhile, we are running six restaurants in Bengaluru, and are targeting revenue of Rs 40-45 crore from the restaurant segment.

How focused are you in growing your presence as a restaurant brand and as a packaged food manufacturer?

When it comes to restaurant, we will be only local for next two years. But, in terms of packaged food, we are today strong in Karnataka. The plan is to expand it aggressively in Tamil Nadu, Kerala and Andhra Pradesh for the next one year. Beyond that we will also start expanding into Western market including Gujarat and Mumbai and north in NCR region and Kashmir.

Who is your biggest competitor in the market?

MTR is our biggest competitor today. And, if you look at individual categories, Namkeen category Haldiram is the biggest player in this space. But, South India has no big organised player, so we are very lucky to cater to the region.

When did you join your company after a stint with an IT- Comapny?

I am a software engineer by background. I joined an IT company and quit the job in first four months. And, then I came back and joined MTR in 2005. I went for a six month training in kitchen, learning the cooking skills as MTR used to have a retail concept Namma MTR, wherein MTR showcase its cold storage product under that portfolio. And, I was allowed to work and managed that business more seriously and extend what the end consumers’ required. I got product training as well as the consumer insight. So, one and half years in MTR, I was handling all these things.

How much your technology skills are adopted at Maiyas?

After doing software engineering, I did management training from IIM-Bengaluru. And today, I have very smartly adopted those skills into Miayas Beverages & Foods by making it a completely automated food company. We have the ERP running which actually started running even before the company was started.

You recently launched a consumer website. How much presences do you have online and offline?

In India, 90 per cent of our business is offline today and it works on a Kirana shop model. But, the online model is for a different product portfolio all together. We give a 360 degree experience to our customers’ via this website which is a complete consumer website. 

What is your expansion in terms of growing your portfolio?

Today, our entire focus is expanding the distribution channel. We are in about 9000 outlet in Bengaluru and are planning to reach 15000 outlets in next six months. And will be adding another 5-6 outlets of restaurants in next two years time.

What is your share in the packaged food industry?

We sit at a very niche state today, and our share is approximately 15-20 per cent.

 

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Mumbai based Stuffed to enter packaged food segments, open more restaurants
Mumbai based Stuffed to enter packaged food segments, open more restaurants
 

Shreyans Vijay was an investment banker for nine years and a graduate from IIT-Bombay. He and his wife Ridhima, who was a software engineer and an equities trader, quit their jobs to start this venture. They started their first outlet in Andheri East with a small investment but reached break-even in just four months. Read more about their story:

How did you get the idea for Stuffed?

Finding good food other than typical Indian or Chinese or a Pizza is still a big problem in Mumbai. Even though, people, especially the youth have become more and more globalized, the availability of different cuisines is still missing. Back in the days, we used to travel all the way from Powai to Carter road to have a Shawarma. Then, we thought why not make this amazing dish available to much wider consumers and that’s when we decided to quit our plush jobs and started Stuffed.

Recently you have raised a funding of Rs 2.5 crore. Where can we see those funding to be used?

From a current store count of three, we aim to reach more than 10 stores by mid 2016. So, most of the funding would be used in that expansion. Besides having QSR outlets, we are also working on getting into the pre-packaged food segment. This sector has remained dormant for some time but lately it is seeing improved traction from customers. This will also give us instant access to a much greater geography.

How does Stuffed differ from other brands?

We aim to break out of the monotony that's crept into our food. We give a very refreshing menu to our customers, which at most times are stuck with the usual choices available in the market. One basic philosophy which we have always believed in is that “The food should be fulfilling”, that led to the name ‘Stuffed’.  We are the only restaurant that serves both regular as well as large Shawarmas. The large Shawarma has been introduced keeping in mind the appetite for lunch and dinner. We want to change the notion of Shawarma as a snack. Even the pastas and salads that we serve are more than what you get at more established outlets.

What is the main challenge in operating this business? How do you manage it?

The biggest challenge is of labour. The industry is such that there is extremely high attrition rate of employees. Moreover, with the advent of other new age companies like ecommerce, etc. the cost of labour has gone significantly up. It’s difficult to find skilled employees at the budgets you would have fixed one year back. That’s why we are working on simplifying our processes so much so that even a new employee can get trained in just two days.

What are the cuisines served by you?

We serve a very contemporary cuisine which includes Lebanese, Italian and Fast food. We are largely known for our Shawarmas, Pastas and Salads. We have put in a lot of effort to ensure that our food fits the Indian palate but at the same time does not lose its health quotient.

What is the number of orders that you get presently. And the target in next few months?

Currently, we do more than 100 orders from each of the outlets. The target is to increase the penetration and take this number to more than 200 by December end.

What is your expansion plans?

With the latest round of funding we would be increasing the store count to 12 and getting into the packaged foods segment. Currently, we would like to add most stores in Mumbai only, before going to other cities.

 

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4 reasons Starbucks Chairman Views India as biggest biz ground
4 reasons Starbucks Chairman Views India as biggest biz ground
 

Starbucks, world’s largest coffee chain, which entered India in 2012, observes major business opportunities in India to unfold in 2016.

The group CEO and Chairman Howard Schultz was on a one day visit to India, and he sees India a land of opportunities and success.

"We see a major business opportunity here. In 2016, we intend to bring our speciality tea brand Teavana here, which we acquired in the US two years ago," added Schultz.

Four reason that motivates Starbucks coffee to expand in India:

Land of opportunity: As the country is welcoming new trends and brands, this could be the best time for any restaurant and cafe chain to spread their wings in a country, which is really getting them a good return. The coffee chain has been posting increased customer traffic for the last few quarters, despite the increase in prices of its coffee items. In Q4, the company witnessed a 4% increase in customer count, effectively resulting in 3% growth in the traffic for the fiscal 2015.

‘Millenials’ a growth booster: The Indian audience is overall responding very well to the influx of international chains in the market. Brands like Carl’s Jr, Burger King, Starbucks Coffee, Dunkin’ Donuts, are gaining customers’ attention by bringing in the new and tweaked menu as per  likes of the local customers’. Hence, it could be another reason for the cafe chain to target Indian market.

Digital disruption: With 2015 turning out to be the year of social wars and tech disruption, Starbucks, which is a youth centric brand can garner biggest traffic from the social media. And, as the tech-disruption gives an opportunity for people to get the food delivered to their home, the cafe chain is also focusing on growing its delivery business in India. "One of the areas where we have grown significantly and become the best-in-class is social media. We have built tremendous value in that, and we’ll bring it here next summer," Schultz added.

Rise of RTC and RTE products: As predicted by the industry leaders, 2016 will be the year of packaged food growth and this could give Starbucks an opportunity to build a significant presence in the consumer packaged goods segment where it sees a bright opportunity.

Starbucks operates in the country under a 50:50 joint venture with Tata Global Beverages and runs 75 outlets across seven cities under the label of Tata-Starbucks since October 2012.

Though the company had said at the launch that it would open 50 stores in the first year of operations, in over three years it has reached only 75.

 

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What's trending in packaged food industry?
What's trending in packaged food industry?
 

Recently food manufacturers have developed new innovative food packages and ready-to-eat processed food to keep up with the ever changing tastes of consumers. The main categories of packaged food are the bakery products, canned/dried processed food, frozen processed food, ready-to-eat meals, dairy products, diet snacks, processed meat, health drinks. And with this growth, the industry is set to witness a quantum jump to $50 billion by 2017 from $32 billion.

According to a latest survey by Assocham, "There has been a major shift in food habits in the metropolitan cities. About 79 per cent of households prefer to have instant food due to steep rise in dual income level, standard of living and convenience. The consumption of packaged food is much higher in the urban areas, especially metros, where life is fast-paced; attracting lot more companies to launch new types of products and variants."

Building on quality

Packaged food is always sealed, so there is a protective layer that minimizes the damage of the food. This reduces the chance to be contaminated, rather the food will be fresh and delicious and also less risky of causing food borne diseases. Packaging of food is not only important to keep the things inside clean from dirt, germs etc. It provides information regarding what's inside, its nutrition content, who made it and when it is manufactured, all sorts of important information that is needed, especially if a person is allergic to any of the ingredients. It has other advantage; during transportation it would be problematic without packaging. Packaging also provides information on how to prepare as the recipes is given inside the packaged food. 

With every advantage they are also disadvantages in packaged food as one can't see the product inside properly and this makes it difficult to know what you're buying. The information in the packaging can even mislead a person. Packaging of a product even makes it expensive. With the same it also limits the choices of size to buy that package. Sometimes, the packaging of products like cans is difficult to open.

Considering the nutritional factor

Nutrition labels on the packaged food helps to provide information about the nutritional value of a food. The main goal is to help consumers in making healthier food choices. Therefore, “Nutritional and critical limits has to put on the packet” shared Dr. JLN Sastry, Head of Health care research, Dabur India Ltd.

Dietary supplement is another product which has gained a lot of importance in the recent times amongst the people. These includes not only medical foods nor functional foods, the use of dietary supplements for persons diagnosed with diabetics, cancer, heart disease, HIV and other chronic illnesses. “There should be practical guidelines for the people so that people can eat and enjoy the food which includes these supplements”, commented PP Roy, R&D Dirctor, Kelloggs India Ltd.

In terms of product safety, packaging must be done safely and also include ways to identify and track it in case a recall is necessary, like a batch ID and the date it was manufactured. The product must also be protected against microorganisms and insects. Any part of the package food has to meet certain regulations. “The only thing is the regulation which does not allow you to put anything on it”, pointed Sanjog Surve, Director, Abbott Nutrition R&D.

Certain general hygiene rules has to be follow for all the food businesses and for some certain types of food businesses like the food businesses which are handling or processing foods of animal origin such as meat, fish, milk processors, more specific hygiene rules should be followed.

Way ahead

The new term which is coming these days are ‘Green packaging’ for the materials and procedures and an environmentally friendly and effective solution. This green packaging is mainly used for fewer resources or using materials that are reusable, recyclable, biodegradable or compostable.

So, now every restaurants and hotels monitor as well as keep a track of when food is packaged and use. Hence, it is said to apply the same attention for hygiene and proper handling of food in the kitchen. “All the food items have to be checked until 6 times in the FSSAI labs” added Sastry.

 

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Packaged food market to reach $50 bn by 2017: Survey
Packaged food market to reach $50 bn by 2017: Survey
 

In the last few years, packaged food market in India has witnessed a good growth. And, citing this growth, the country’s packaged segment is all set to witness a quantum jump to $50 billion by 2017 from $32 billion at present due to increasing popularity of ready-to-eat items, says a survey.

"There has been a major shift in food habits in the metropolitan cities. About 79 per cent of households prefer to have instant food due to steep rise in dual income level, standard of living and convenience," said a survey by industry body Assocham.

The poll highlighted that 76 per cent parents, mostly both working, with children under five-years in the big cities, are serving easy-to-prepare meals at least 10-12 times per month in some form or the other.

"The consumption of packaged food is much higher in the urban areas, especially metros, where life is fast-paced, attracting lot more companies to launch new types of products and variants," Assocham Secretary General D S Rawat said.

The paper also pointed out that there is a large divide between urban, semi-urban and rural consumers. Urban areas account for 80 per cent of the demand for all packaged food.

The survey noted that about 76 per cent nuclear families feel they have less less time to spend in the kitchen, while nearly 79 per cent bachelors prefer convenience food. It is in this background that home delivery business model for cooked food has grown multi-fold, it said.

The main categories of packaged food are bakery products, canned/dried processed food, frozen processed food, ready-to-eat meals, dairy products, diet snacks, processed meat, health products and drinks.

Food manufacturers have also started concentrating on manufacturing new innovative food products and ready-to-eat processed food to keep up with the ever changing tastes of consumers.

 

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Maggi controversy stepping stone for packaged food industry: Nomura report
Maggi controversy stepping stone for packaged food industry: Nomura report
 

The Maggi controversy is likely to be a stepping stone in the evolution of country's packaged and processed food industry, which could result in better labelling, packaging and testing norms for the entire sector, a Nomura report said.

"We see the entire controversy as a stepping stone in the evolution of India's packaged and processed food industry," said Manish Jain and Anup Sudhendranath of Nomura in a research note, adding similar tests are likely to be conducted on other similar products and companies.

According to the Japanese financial services firm, the next logical step for the Food Safety and Standards Authority of India (FSSAI) would be to tighten the labelling, packaging and testing norms for the entire sector, which in turn is positive for the consumer.

"This is a positive from the consumer's perspective and would help expedite the migration from the unorganised to the organised sector," the report said.

Maggi brand has been under the regulatory scanner due to allegations that the product contains higher than permissible levels of lead and traces of monosodium glutamate (MSG).

While Maggi's brand equity has more than likely been dented from a near to medium-term perspective, Nomura believes the company is taking all the right actions and will rebound strongly from the same.

"We strongly believe that Nestle India will rebound with a revamped product and packaging, which will slowly rebuild the brand equity," Nomura said and added that some other bigger brands of the company like infant nutrition portfolio and coffee business are likely to remain "insulated".

In October 2003, Cadbury brand was marred by a controversy when worms were found in their chocolates. However, recovery for the chocolate giant started by late 2004 and by June 2014, things were back to normal, Nomura said.

Another such incident was the coke pesticide issue. In 2006, the Centre for Science and Environment alleged that Coca Cola and Pepsi were among a dozen soft drinks that contained high levels of pesticides and insecticides.

However, as was the case with Cadbury, the giants emerged strongly from the controversy with sales of the brand doubling between 2008-14 at a compounded annual growth rate (CAGR) of around 17 per cent, Nomura added.  

 

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