Govt Approved three proposals for FDI in food retail

E-commerce platform, Flipkart is entering into the food retail segment with its new entity called Flipkart FarmerMart. This move will help the platform to directly compete with its rival Amazon in this segment. With an equity capital amount of Rs 1,845 crore, FarmerMart will be selling the produce locally.  

“In line with the Government of India's FDI (foreign direct investment) policy, which allows 100 per cent FDI in food retail for food produced and manufactured in India, Flipkart is applying for the appropriate licenses from the government,” Kalyan Krishnamurthy, the company’s group chief executive officer, said.

“We’ve secured all internal approvals for the same already. We’re looking forward to invest more deeply in local agri ecosystem, supply chain and working with small farmers, farmer producers’ organisations (FPOs) and the food processing industry in India, helping multiply farmers’ incomes and bring affordable, quality food for millions of customers across the country,” Krishnamurthy said.

The Franchise India report had suggested that the online grocery market is expected to be worth Rs 2.7 billion by 2019. Walmart which already has cash and carry stores and connections with the farmers across the country will help Flipkart in running its new entity.

The foreign direct investment (FDI) in the food processing sector rose 24 per cent in 2017-18 to USD 904.9 million, according to an official data. FDI inflow into the sector stood at USD 727.22 million during 2016-17 financial year.

The sector attracted FDI worth USD 505.88 million and USD 515.86 million in 2015-16 and 2014-15 respectively, the data showed.

The government had in July last approved American e-commerce major Amazon's proposed USD 500 million investment in retailing of food products in India.

At present, 100 per cent FDI in food processing sector is allowed through automatic route. In 2016, the Centre allowed 100 per cent FDI through approval route for retail trading, including through e-commerce, in respect of food products manufactured and produced in India.

Food Processing Minister Harsimrat Kaur Badal had in February this year said FDI in the sector could touch USD 1 billion in 2017-18.

The sector would attract an investment of USD 14 billion over the next 2-3 years as committed by the domestic and foreign investors during the world food summit, she had said.

The World Food India 2017, organised by the ministry, attracted participation from 61 countries, 60 Global CEOs and more than 200 global companies.

The Food Safety and Standards Authority of India (FSSAI) has proposed to introduce GMO labeling for the first time revealing the presence of genetically modified (GM) ingredients clearly state it on their labels.

The country’s food regulator also suggests mandatory declaration by packaged food manufacturers about nutritional information such as calories, total fat, trans fat, sugar and salt per serve on the front of the pack. Since the country has no provision for GM labeling in its regulatory mechanism currently, consumers are clueless whether packaged food items they buy have genetically engineered (GE) ingredients.

The FSSAI had last month released a 42-page draft notice — Food Safety and Standards (Labelling and Display) Regulations, 2018 — making it mandatory to label such foodstuffs as “contains GMO/Ingredients derived from GMO” if such items contain 5% or more GE ingredients.

Pitching for a colour code, the draft proposes that the high fat, sugar, and salt will be colored ‘red’ in case the value of energy from total sugar is more than 10% of the total energy provided by the 100 gram or 100 ml of the product. It has similar provisions for trans-fat and sodium content.

Draft says that the nutritional information may additionally be provided in the form of a barcode. The color coding will make it easier for consumers to know about the nutritional value of food products.

The issue of labeling of food products having GM ingredients has, however, drawn flak from certain quarters.

Sridhar Radhakrishnan, co-convener of the Coalition for a GM-Free India, who sent the group’s objections on the draft to the FSSAI told TOI that the labelling move will, in fact, allow the GM foods to enter food supply chain when it is anyway illegal to sell GM foods in India currently. “We need preventive action at this juncture rather than regulatory action”, he said.

India’s leading travel food and retail company, Travel Food Services (TFS), has come up with a new range of ready to eat and drink options at Terminal 1B and 1C of the domestic airport, Mumbai, a new concept ‘Vending Man

These vending men will with the food range be equipped with a Tab and a Bluetooth printer for instant billing and invoicing for the instant billing system.

Inspired by another successful concept by TFS – food@gate, Vending Man has been conceptualised to cater to last minute requirements with its neatly packaged ‘Grab and Go’ options. These vending men are a boon, especially to last minute arrivals and passengers on a busy schedule, who do not have the time to spend at the various outlets. By offering quick and easy access to hot and fresh food, the move promotes the ‘grab and go’ concept for passengers on a busy schedule.

A typical Vending Man would carry a mobile tray with a limited range of best-selling products and will keep moving at the gates. The inaugural menu will have cooler drinks and will soon add munchies and quick bites as well.

“We, at Travel Food Services, are committed to constantly elevating the travel FnB experience in India, and Vending Man is an extension of the same. Considering the volume of travellers and the rush at terminal gates daily, we wanted to create an option for busy passengers to have easy access to quality, freshly packaged, to-go food products. While we are currently testing with two vending men, we plan to increase the number to cater to all kinds of F&B needs of travelers,” said Gaurav Dewan, COO and Business Head, Travel Food Services.

Along with the food and beverage products on offer, a Vending Man will also carry other items like tissues, condiments, and straws. You can find these vending men roaming the gates between 08:00 AM and 10:00 PM daily. Currently available at Mumbai Airport, it is expected to soon expand to other cities across India as well.

JHS Svendgaard Laboratories, a manufacturer of oral care products has combined with Patanjali Ayurved to set up exclusive Patanjali stores at airports across the country.

“There is a captive audience at airports, which Patanjali will tap into through these stores,” JHS Svendgaard Managing Director Nikhil Nanda said.

Nanda further explaining the plans said the company wants to set up 100 stores over the next two years depending on availability at airports. The first such store was opened at New Delhi’s T2 terminal at Indira Gandhi International Airport.

“The intent of setting up airport stores is to provide access to international travellers, since Patanjali products are being sought across world markets,” said SK Tijarawala, spokesperson for Patanjali. He added that the company is open to entering into multiple retail partnerships with other firms as well.

The airport shops are being set up by JHS Svendgaard Retail Ventures, an arm of New Delhi-based JHS Svendgaard.

Patanjali which has registered revenue growth over 20 times to Rs 10,561 crore in FY17 from Rs 453 crore in FY12, sells an extensive range of daily-use products including shampoo, toothpaste, biscuits, noodles and packaged water.

JHS Svendgaard makes a range of toothpastes for Patanjali, Dabur and direct-selling firm Amway. It also manufactures oral care products for Elder Health Care and JL Morisons. It plans to expand beyond its core business to other personal care products and cosmetics, Nanda said.

Without divulging into the deal details Nanda said, “We are in acquisition talks with two companies which make products other than oral care. That will give us a market beyond oral care as well as a national footprint.”

JHS Svendgaard's private label toothpaste brand Aquawhite has acquired licenses for children’s characters including Pokemon and Jungle Book to extend Aquawhite to premium toothbrushes.

McDonald’s flagship store at Park Street, which has been a witness to an eventful decade on the city’s food street, shuts down for good on Saturday.

The sprawling eatery opposite Flurys shuts down after the landlord, Park Street Properties (PSP), secured a favourable court order over a rent dispute with the lessees.

The once illuminated and bustling outlet wore a desolate look with its fancy interiors pulled down. The legal team of PSP inspected the outlet before closing it. One of the owners of PSP said their immediate plan was to restore the place before deciding what to do with it.

On Saturday afternoon, representatives of Dipak Singh and Sanjay Singh (of Munna Maharaj)  the lessees handed over the keys to the sprawling 3,500sqft outlet to the owners after removing all furniture and fittings.

The spat between PSP, owned by the Karnani family, and the Singhs (of the Munna Maharaj fame) has been in the court for the past few years. PSP had filed an eviction suit against Dipak Kumar Singh and Sanjay Singh in 2009-10.

PSP had filed an eviction suit against the lessees due to a dispute over the rent. They got a favourable order, which was challenged in the higher courts. But it was ultimately delivered in PSP’s favour.

CPRL, the Indian franchisee of McDonald’s, is locked in litigation with the American burger brand with the latter barring CPRL from using the brand, trademark and other intellectual properties.

All the five McDonald’s outlets in Kolkata and one in Howrah had been forced to shut before Christmas when Radhakrishna Foodland Pvt Ltd, the authorized supplier to McDonald’s in east and north India, discontinued the supply due to growing uncertainty.

Court representatives visited the Park Street eatery twice over the past six months to serve the court order, but the restaurant continued to operate as there was confusion over who will remove the furniture. PSP was unwilling to take responsibility of the furniture.

The Union Cabinet Minister of Food Processing, Harsimrat Kaur Badal, has urged UK companies to participate in India's food processing value chain, saying a market worth $600 billion is waiting for the British firms.

Badal was addressing a round-table in London to promote her ministry's first-ever World Food India summit in New Delhi in November and called on British companies to use the platform to finalise their entry and collaboration plans.

Badal, at the Indian High Commission in London, said, "India has a $600 billion retail sector, of which 70 per cent is just food retail. This is set to treble in the next three years and in the next five years, Indians will be spending 50 per cent more on food. That is the kind of huge market we have. This market is waiting for you in India to participate in any part of the food processing value chain."

She said, "India-UK share many warm bonds and I hope we can take our food diplomacy to the next level with World Food India."

Using Amazon's commitment of a $ 500 million dollar investment in the Indian food sector as an example of the growing foreign investor interest in the industry, the minister highlighted a range of incentives being offered by the Indian government in the form of mega food parks and cold chain schemes.

Badal said, "As we are creating the right infrastructure, we think the platform is now ready for World Food India, which is going to be a platform for people to meet and take partnerships to another level. Geographically, India is also very close to food importing countries, like UAE or Japan, and we have a highly skilled cheap labour force and one of the fastest growing economies in the world."

The Confederation of Indian Industry (CII) supported summit to be held between November 3 and 5 in New Delhi is planned as a biennial conference to bring together various states of India to showcase business opportunities as well as their own unique cuisine as part of a Food Street, which is also likely to be replicated in the UK.

CII said in a statement, "The summit is designed to offer an unusual peek into India's food and culture as well as opportunities to invest and prosper from one of the world's largest consumer markets."

Soon after allowing 100 per cent FDI in food processing and packaged food sector, the government has announced to incorporate 100 per cent FDI in food retail.

“Food worth Rs 92,000 crore is wasted in India every year because of poor facilities but, this wastage will come down sharply with the government's plan to set up numerous agro processing clusters across the country and nod to 100 per cent FDI in food retail,” said Harsimrat Kaur Badal, Minister for food processing.

The government is also looking at a proposal to set up cold storage in existing mandis across the country for fresh fruits and vegetables to help farmers, added the minister.

The government is also on road to transform India's food economy with an addition of 32 lakh tonnes of food processing capacity worth Rs 9,000 crore in the past two years, which is expected to reduce wastage by 10 per cent.

The new addition of processing capacity (set up by the mega food parks) will reduce wastage of fruits and vegetables worth Rs 9,000 crore per annum because the same value of these commodities can now be processed," Badal said.

The minister said 100 per cent FDI in multi-brand retail of "swadeshi food produced and manufactured in India" is a significant step that will generate employment, help farmers and reduce wastage of food.

"Food processing is an employment intensive sector and to facilitate investments, a single window facilitation cell has been created to handhold overseas and domestic investors in food processing sector," she said. 

Lite Bite Foods has announced its association with HMSHost, the world’s largest provider of food and beverage services for travel retail destinations like airport, train stations and highways.

With this move, Lite Bite Foods aims to acquire the rights to launch and operate outlets at several key Domestic and International Airports across India and Asian countries.

The joint venture will operate under the name Lite Bite Foods HMSHost and will be based out of Gurgaon or Hyderabad.

While HMS will own 51 per cent of the joint venture, LBF will own the remaining 49 per cent.

“Lite Bite Foods has in its fold a number of strong food retail brands like Baker's Street, Punjab Grill and FresCo, and Autogrill is among the oldest and the leading F&B service provider for travellers across the globe. The new company has the combined value of Autogrill's international expertise and experience and Lite Bite Foods' extensive local market and cuisine knowledge and network of established outlets. This agreement represents each organization’s strong commitment to provide the best F&B retail experience to our consumers across all travel channels. Together, we will bring an exciting new force to the country's travel food retail industry and revolutionise this emerging channel,” shared Amit Burman, Chairman, Lite Bite Foods.

The association combines the global resources and expertise of HMSHost and Lite Bite Foods. The partnership will capitalize on the strong reputation HMSHost has developed as a leading provider of food and beverage services for travellers. Lite Bite Foods will use its expertise in operating outlets at Delhi & Mumbai airports and its robust presence across the country.

Further to this, Rohit Aggarwal, Director, Lite Bite Foods said, “Lite Bite Foods HMSHost proposes to acquire the rights to operate outlets at the Airports in India and neighboring countries, at these locations, we plan to increase the brand presence of all our brands at strategic locations.”

Adding to the same, Sharad Sachdeva, CEO, Lite Bite Foods said, “With millions of passengers travelling annually, the transit hubs like Airports & Railway Station have become a strategic location for our brand’s presence. We are very excited about this JV and this association will definitely help extend our brand in neighboring countries as well.”

“This partnership is an important step forward in the strategy of expansion in emerging markets, especially in Asia, which the Group has been adopting in recent years,” said HMSHost International CEO Walter Seib. “We are confident that the know-how developed by Autogrill on an international level and Lite Bite Foods’ knowledge of the Indian market will enable the two companies to successfully expand in all the travel channels in the country. We are thrilled to work with one of the most reputable family companies in India which have been very successful in the food & beverage sector as well.”

Starbucks Corp, one of the largest coffee retail chains has announced that it will close all 23 of its La Boulange retail locations by the end of September as the stores were not sustainable for its long-term growth, reported Reuters.

However, the coffee chain will continue to sell La Boulange items such as blueberry scones, iced lemon pound cakes and marshmallow dream bars at its outlets across the United States and Canada.

Starbucks, which bought La Boulange bakery owner Bay Bread Group for $100 million in 2012, said it would also close the two manufacturing plants serving the La Boulange bakery cafes.

The company has 22 La Boulange retail outlets in San Francisco and one in Los Angeles.

Pascal Rigo, the French baker who founded La Boulange, will leave Starbucks, the company added.

Starbucks also said it would also close its Evolution Fresh retail location in San Francisco. It had acquired Evolution Fresh, a premium juice company, for $30 million in 2011.

The company said its goal of growing its US food business by an incremental $2 billion in the next five years remains unchanged.

Food sales grew 16 percent in the second quarter ended March 29, while sales of new breakfast sandwiches rose 35 percent year-on-year, it said.

Starbucks shares, which have risen about 29 percent this year, closed at $52.965 on Nasdaq on Tuesday.