Final oil & foods march 2014

Issue Date of Publication - 25th of Every Month Date of Posting - 28th of Every Month

Vol 09 Issue 05 March 2014

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Year of Publication

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Influential Women in the Global Food and Beverage Industry Agriculture: Steps to sustainable livestock Flourishing global market of flexible packaging Juices, carbonated drinks, water and health Livestock in Indian Economy

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Editorial

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Vol. 09, Issue 05, March, 2014

From the Desk of Editor

ndia’s beleaguered economy moving in the right direction, but still far from healthy.

Asia’s third-largest economy has been struggling to recover from a stagflation-type situation where economic growth has been stuck below 5 per cent for the past seven quarters while price continue to rise at a fast clip.

Reduction in food prices has offered some relief to the government headed by the Congress party, which is trailing in opinion polls ahead of the polls that begin on April 7.

Reasonable reduction of vegetable prices especially that of onions and potatoes helped retail inflation in February to settle at a 25-month low of 8.1 per cent. The Consumer Price Index-based inflation was at 8.79 per cent last month.

Decrease in inflation could steer the Reserve Bank to lower interest rate in the next monetary policy review slated for April 1. The Industry has been demanding a cut in interest rates to boost economic growth, which has slowed to a decade-low level.

According to CPI data, overall inflation in the food basket slowed to 8.57 per cent in February from 9.9 per cent in the previous month. The rate at which vegetable prices increased eased to 14.04 per cent as against 21.91 per cent in January.

Retail or consumer inflation also slowed in protein-rich items such as eggs, fish and meat to 9.69 per cent in February versus 11.69 per cent in January. The rate of price rise slowed to 9.93 per cent for cereals and related products from 11.42 per cent in January. However, price of milk and allied products picked up in February to 10.37 per cent from 9.82 per cent in the previous month.

While our government is struggling to combat inflation and control the prices, three food engineers from the Indian Institute of Technology, Kharagpur have developed formulations to fight malnutrition in children. These formulations are for five inexpensive ready-to-eat therapeutic foods, have been transferred to the industry for mass production.

The details of other ingredients have not been, because of the confidentiality agreement with the industry. A hundred grams of these foods would provide 500-550 kcal energy and the vitamins and minerals as prescribed by United Nations Children’s Fund (UNICEF) for children suffering from severe acute malnutrition (SAM) in India.

Malnutrition is more common in India than in Sub-Saharan Africa. One in three malnourished children in the world lives in India. Unfortunately this country has with about 8.1 million children are suffering from SAM. In India, around 46 per cent of all children below the age of three are too small for their age, 47 per cent are underweight and at least 16 per cent are wasted. Many of these children are severely malnourished.

Malnutrition in early childhood has serious, long-term consequences because it impedes motor, sensory, cognitive, social and emotional development.

The product formula and process technology has been transferred to GCPL, New Delhi, for commercial production. The product would be produced in a ready-to-eat paste form, packed in pouch/tube and ready for pilot scale unit by June.

The easily-digestible foods will provide enough energy, vitamins and proteins to SAMsufferers as prescribed by UNICEF. All the foods will be in the ready-to-eat form for easy consumption by the affected children and cheap. They have been developed using peanut, potato and Bengal gram as its primary ingredients.

I have been advocating the removal of junk food from the school premises for a long time, though we talk about being the best industry today ...we talk about latest discovery, we discuss inflation, then why we are then ignoring our kids health issues? Why aren’t we looking up for solution? That is why I decided to end my write up with this issue. A Delhi high court panel to look into dietary habits of school-going children is split on the question of banning sale of junk food in and around educational institutions.

The panel of experts have to examine harmful effects of junk food and recommend guidelines to make available good quality, safe food to students in school canteens. It includes environmentalist Sunita Narain, nutritionists, doctors, scientists and representatives of the food industry. In its draft guidelines to be submitted in court, fissures have emerged over the need to completely ban food items commonly categorized as junk food in and around 500 yards of schools.

The differences have emerged in a draft report prepared for regulating Food High in Fat, Sugar and Salt (HFSS), popularly known as junk food. The report was prepared earlier this year by an expert group set up under the high court-appointed committee.

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Contents Pg 10

Influential Women in the Global Food and Beverage Industry Agriculture: Steps to sustainable Pg 14 livestock

Flourishing global Pg 21 market of flexible packaging

Juices, carbonated drinks, Pg 26 water and health Livestock Pg 42 in Indian Economy Opportunities in the fastest growing Food Processing Pg 55 Industry

NEWS PLASTINDIA 2015; a path to substantial growth for food packaging industry by 2016 30 Mother Dairy explores new way to tap summer consumers 32 Global Dietary Fiber Market to Grow at a CAGR of 13.1% to 2019-Report 32 DuPont Nutrition & Health launches the Dahi Creations Kit in India 33 Starbucks’ sees fastest growth in company’s history in India 33 EU warn to ban import of Indian Fruit, Vegetables 34 Kisan Group enters food with snacks launch 35 HC panel has different outlook on school junk food 35 Demand for meat will come from developing countries 36 MPEDA’s drive for Seafood co-Branding 36 Venky’s to obtain poultry business from holding firm for $12M 37 India is now the world’s largest exporter of beef our stripping Brazil 38 CMB Engineering Launches First Academy of Canmaking and Seaming 39 West Bengal govt ventures into Food & Agri produce retail 39 New technologies on Oils and Fats displayed in an Expo at IICT 40 World coffee output may rise marginally this year 41 Tea exports from India dip 13.24 pc in Apr-Feb 41 Unilever targets busy parents with gelato launch 41 Vol. 09, Issue 05, March, 2014

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Women Power

Influential Women in the Global

By Basma Hussain

Food and Beverage Industry With women day celebrated on 8th March, at Oils and Food decided to do a feature on the most influential women in the food and beverage industry globally. It has been intercepted that the food and beverage industry may be more hospitable than others to women executives – who are not shy about getting their way once they reach the top.

T

here’s probably no other Indra Nooyi, Chairman & CEO, PepsiCo manufacturing class whose Inc. ultimate purchasers are so heavily tilted toward the female demographic.

So it should come as no surprise that two of the most powerful companies in this business are headed by women.

After doing thorough research on the list on powerful women in the industry, several names surfaced, including academics, heads of some retailer companies and non-CEOs in the food industry. But we cut that list down to the following seven, who prove that, especially in the food & beverage industry, no one can infuse heart and soul into a multibillion-dollar company like a woman.

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Women Power Indra Nooyi reportedly fronted an all-girl rock band while in college.

If there’s any legitimacy to seeing “a woman’s touch” in running a major food & Beverage Company, it’s exemplified

by PepsiCo’s Chairman and CEO Indra K. (Krishnamurthy) Nooyi. Her 2007 “Performance with Purpose” vision for the company, while promising steady financial success was overwhelmingly about being a good corporate citizen the world over -delivering healthier foods and beverages, respecting the environment and improving the communities and countries in which PepsiCo operates.

Nooyi became just the fifth CEO in PepsiCo’s 41-year history in October 2006, 12 years after joining the company.

Born and educated in India, Nooyi earned a bachelor’s degree in chemistry, physics and math from Madras Christian College.

She moved to the U.S. in 1978 to earn a master’s degree from Yale University.

She has a husband and two daughters in Connecticut.

Before joining PepsiCo in 1994, she had experiences at Boston Consulting Group, Motorola and Asea Brown Boveri (now ABB). Once at PepsiCo, she participated in several mergers and acquisitions that changed PepsiCo from a soda and Restaurant Company into what the company claims is the world’s largest convenient Food and Beverage Company.

Named CFO in 2001, she helped spin off Pepsi’s restaurants into Yum! Brands and the company-owned bottling operations into Pepsi Bottling Group. She was instrumental in the $3.3 billion acquisition of Tropicana in 1998. And she led negotiations on the $13.8 billion PepsiCo acquisition of Quaker Oats in 2001.

Her reward was a seat on the board and the title of president, placing her in line to succeed CEO Steve Reinemund, who already was turning PepsiCo into an international food processor stressing health and wellness in new product development.

As president and CFO from 2000 to 2008, Nooyi was credited by analysts with fine-tuning the company’s global strategy when both Pepsi and Coke faced a challenging environment in their core market for carbonated soft drinks, as more health-conscious consumers switched to juices and water.

One of her first goals was improving the Vol. 09, Issue 05, March, 2014

nutritional value of PepsiCo’s portfolio.

She recruited Mehmood Khan, a former Mayo Clinic endocrinologist, naming him chief scientific officer to head up R&D. Together they’re executing a strategy that has been turning more of the company’s items into “better for you” or even “good for you” products. In the most recent (2012) assessment of that goal, 20 percent of the company’s revenues were from “nutritional” products.

In her “Performance with Purpose” vision statement, she called out three bullet points: Transforming our portfolio to provide a wide range of foods and beverages, from treats to healthy eats, to sustain topline growth Finding innovative ways to reduce our impact on the environment, which enables us to lower our costs at the same time Providing a safe and inclusive workplace for our employees around the globe to attract and retain the best talent, and investing in the communities in which we do business to retain our license to operate.

One of her favourite communities to do business is her native India. The company plans by 2020 to invest $5.5 billion in that country – a nation in need of investment but also an already great market for PepsiCo’s products and a significant corporate beachhead.

The investment is expected to expand product development, manufacturing (doubling PepsiCo’s production capacity), infrastructure (expanding in rural markets and deploying new technologies with retail customers) and agriculture (expanding PepsiCo’s collaborative farming program provides farmers with access to good quality seeds, technical agronomic expertise, bank loans and crop insurance).

PepsiCo’s investments are aligned with India’s interests.

In 2013, PepsiCo was ranked No. 1 on CoreBrands’ list of the most respected companies. There were similar rankings for respectability from Fortune, Ethisphere and the Reputation Institute.

PepsiCo also has received several global awards for water conservation, which has become another pet project of Nooyi and the company.

And how is she rewarded for these efforts?

Last year, she had to fend off the public call for the split of the company by investor 11

Nelson Peltz, whose investment firm Trian Fund Management owns 12 million shares of PepsiCo. Apparently PepsiCo’s $65 billion in sales and $6 billion in profit weren’t good enough to make Peltz an even wealthier man. He called PepsiCo’s namesake beverage business a dog.

Schauna Chauhan Saluja, CEO, Parle Agro

She heads the over Rs.1, 500 crore FMCG giant Parle Agro. she has expanded her company’s global presence by exporting to 20 countries and she added Appy Fizz and Frooti successfully to that global portfolio.

Schauna understands innovation and used Twitter to manage the company’s inventory, also making Hippo snacks a success story. Because she refuses to stop until she lives her dream of making Parle the number one FMCG Company in India.

On her radar, they have also started to aggressively expand globally. Countries like Bangladesh, Nepal, Sri Lanka, Africa, Gulf nations and even some markets in Europe are part of our immediate global expansion plans. It goes without saying that the rest of the world is being targeted as well, at as aggressive a pace.

As a leader her biggest strength is her love for her work. As a team player she works closely with her team towards achieving big business goals. Since her core area of focus is in operations, she has a keen eye for detailing and believes in leading by example.

Schauna admires Warren Buffet because of his beliefs and his way of doing things.

It’s not just for business but also society at large.

Her biggest achievement is adding a new factory in Orissa within a year with the aim of bolstering manufacturing capacities.

Women Power Irene Rosenfeld, Chairman & CEO, Mondelez International

Irene Rosenfeld worked 30 years at the essentially same company … which changed names from General Foods to Kraft to Mondelez.

Irene Rosenfeld is a prime example that sometimes you need to leave your company before you can lead your company. She has about 30 years with Kraft Foods, a predecessor and a semisuccessor, except for a two-year dalliance with PepsiCo. Now, of course, she is chairman and CEO of the barely-a-yearold Mondelez International.

Her online bio says she holds a Ph.D. in marketing and statistics, a master of science in business, and a bachelor degree in psychology from Cornell University.

After a brief stint at a New York advertising agency, Rosenfeld joined General Foods in 1981 in consumer research. As she moved up in the company, it became a roller coaster of acquisitions, mergers and spinoffs that few chief executives (mercifully) get to experience. For some, she participated in or was in charge; for others she was just a passenger.

First came the acquisition of General Foods by cigarette-maker Philip Morris Cos. in late 1985 – at the time, the largest non-oil acquisition. In December 1988, Philip Morris acquired Kraft Inc., and two years later, combined the two companies as Kraft General Foods. In 2000, Philip Morris acquired Nabisco and merged it with Kraft Foods Inc. She is credited with leading the successful integration of the Nabisco acquisition,

and the restructuring and turnaround of a number of key businesses. She served on the senior team that launched Kraft’s initial public offering of stock (while still majority-owned by Phillip Morris) in 2001. Then, in 2004, she left to become chairman/CEO of Frito-Lay, a division of PepsiCo. She must have enjoyed all those mega mergers and acquisitions, because as soon as she returned to Kraft in 2006 as CEO (adding the chairman’s title nine months later) she directed the spinoff of Kraft from Phillip Morris. As an independent company, Kraft in 2010 pulled off one of the biggest food acquisitions, paying $18.5 billion for U.K.-based Cadbury plc.

With Nabisco long under Kraft’s belt, the combination made Kraft Foods a global powerhouse in snacks and confectionery – higher growth categories than Kraft’s traditional grocery products.

It wasn’t long before Rosenfeld engineered another blockbuster, the late-2012 split of Kraft into Kraft Foods Group, a mostly North American grocery products company, and Mondelez International, a mostly global snack and candy company.

Rosenfeld went with Mondelez as chairman and CEO. And while Mondelez took off like a rocket, sales actually declined in the second and third quarters of 2013 (although profits stayed strong). So there’s no taking her hands off the steering wheel just yet.

Denise Morrison, Campbell Soup Co.

Denise Morrison is one of four sisters, all of whom have successful business careers.

Sister Maggie Wilderotter is chairman and CEO of Frontier Communications.

In the previous decade, Campbell Soup 12

Co. staked a very big claim on reducing sodium in its soups and juices. What seemed like a good bet backfired, and Douglas Conant, who had achieved his own turnaround at the company, handed over the reins to Denise Morrison. Who immediately shifted gears.

Consumers today crave novelty, bolder flavors and foods that help them feel alive, engaged and connected and no company is connected to consumers’ lives quite like Campbell, and we are well positioned to respond to the opportunities that the changing consumer landscape will present over the next decade.”

Novel and bolder products have taken shape in the form of Slow Kettle Style soups in plastic tub packaging, Campbell’s Go soups (in flavors like Coconut Curry, Creamy Red Pepper With Smoked Gouda and Spicy Chorizo With Pulled Chicken and Black Beans) and Skillet Sauces launched in innovative pouches.

Morrison, who has a bachelor’s degree in economics and psychology from Boston College, enjoyed a quick climb up the adder at Campbell, reaching the top in just eight years – although she has more than 30 years in the food industry. She began her career at Procter & Gamble Co. and held senior leadership roles at Nabisco, Nestle, PepsiCo and Kraft.

Morrison joined Campbell in 2003 as president of global sales and chief customer officer, then became president of Campbell USA, then a senior corporate vice president and president of the key North America soup, sauces and beverages business. She was named executive vice president and chief operating officer in 2010 and also was appointed a board director. In 2011 she became Campbell’s 12th leader and first female chief in its 144-year history.

It was apparent she had a dual charge: reestablishing the company’s leadership in its traditional markets and expanding its reach into new, higher-growth areas. And reinvent, she did. In addition to putting some of the salt (and flavor) back in its iconic red label soups and launching the Go soups and Skillet Sauces, she made acquisitions that took Campbell into new territory. Bolthouse Farms, acquired in 2012, moved the company into superpremium beverages as well as fresh produce. In 2013 the company moved into baby and toddler foods by buying Vol. 09, Issue 05, March, 2014

Women Power Plum Organics. Also that year, Campbell juggled its overseas portfolio, selling its European simple meals business but acquiring Kelsen Group, a producer of baked snacks, including the Kjeldsens and Royal Dansk brands of cookies.

Just last month, the Food Marketing Institute gave Morrison its Albers Industry Relations Award for her contributions to the food retail supply chain. The award celebrates “excellence in trading partner relations … and the betterment of the food chain through holistic contributions and innovative products.”

Margaret Hamburg, FDA Commissioner

The U.S. Food and Drug Administration exert tremendous regulatory power over food and pharmaceutical companies, and its policies have a broad effect on how food is processed and packaged.

In 2009, Margaret Hamburg, became the 21st commissioner of FDA, making her one of the most influential figures affecting the nation’s food & beverage industry. Hamburg, a 58-year-old graduate of Harvard Medical School, responded to questions for this story, noting that the agency and food processors have shared goals and priorities.

According to her it is time to work closely together to ensure the safety and wholesomeness of our food supply. “For example, both America’s food industry and the FDA have faced significant challenges over the last decade as a result of the world’s increasingly globalized food system. In fact, few factors will have a greater impact on the industry in the years ahead. Currently, imported food accounts for about 15 percent of the U.S. food supply.

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It’s a smaller world, to be sure, and many U.S. food companies are involved in a more globalized food industry.

One of the most all-encompassing food regulations ever written is being rolled out under Hamburg’s watch. The Food Safety Modernization Act, which Hamburg calls the “most sweeping reform to its food safety system in 70 years,” codifies and specifies a series of initiatives that have been adopted by the food industry over several decades. Hamburg says its phased implementation is coming along nicely.

Born in Chicago but raised in California, Hamburg says her physician parents inspired her own accomplishments.

Before being appointed to steer the FDA, her most notable career achievement took place during her tenure as head of New York City’s health department from 19911997, when Hamburg helped stem a rise in tuberculosis through a policy of effective drug administration. In five years, the TB rate for the city fell by 86 percent for the most resistant strains.

So, how does Hamburg view the efforts of food processors to produce safe and nutritious food? For one, as the agency considers a ban on partially hydrogenated oils and Trans fats, she credits industry efforts for a dramatic reduction in consumption of trans fats — from 4.6g per day in 2003 to about 1g per day in 2012.

Humburg thinks that food and beverage makers are increasingly focused on the positive role they can play, and in many instances, have provided important leadership to develop and advance strategies to improve the nutritional composition of the foods they provide and to improve food safety. There is more to be done, and the FDA is eager to work with industry as partners to better serve the health of the public.

Ruiz Foods, Dinuba, Calif., will mark its 50th anniversary this year. The familyowned company is a leader in Mexicanstyle frozen foods, selling burritos, snacks and entrees under the El Monterey brand in a variety of retail and food service channels. The executives filling the top managerial seats in the company are two women -- Chairman Kim Ruiz Beck and President/CEO Rachel Cullen.

Beck grew up in the family business that was started by her father and grandfather.

She has a master’s degree in administrative leadership from Fresno Pacific University and an undergraduate degree in marketing from California State University, Fresno.

Her affiliation with the family business began at a very early age when she held a series of marketing and sales positions.

More recent leadership roles have included vice president of marketing and sales, then executive vice president of product development and then vice chairman.

She believes that the food industry has been hospitable — in fact, welcoming to women, though she is born in it. She notes that 80 percent of Ruiz Foods’ employees are women. Beck also believes that companies with women in top positions benefit from the female perspective.

Cullen came to the company in 2012 after holding a series of key executive positions with several major food manufacturers including Kraft Foods and Dean Foods.

She holds a degree in chemistry from the University of North Carolina and an MBA from the Wharton School of Business, University of Pennsylvania.

Cullen says she too has found a level playing field among men and women in the food business.

Beck says that as she has gained experience in the business, she has become more aware of other famale food executives, in part due to her involvement in industry Kim Ruiz Beck and Rachel Cullen, Ruiz associations.

Foods

13

Agriculture:

Steps to sustainable livestock

W

ith improved breeding and cultivation, ruminant animals can yield food that is better for people and the planet, say Mark C. Eisler, Michael R. F. Lee and colleagues.

Colin Monteath, Hedgehog House/ Minden Pictures/FLPA Domestic goats and sheep can graze marginal lands, such as those in the Gobi Desert in Mongolia.

The need for efficient food production has never been greater. One in seven humans is undernourished1. Urbanization and biofuel production are reducing land availability, and climate change, lack of water and soil degradation are decreasing harvests. Over the past decade, cereal yields per hectare have fallen in 14

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Food For Thought one-quarter of countries. Meanwhile, developing nations and the growing world population are demanding more animal protein.

The increasing consumption of animal protein is generally considered at odds with Earth’s ability to feed its people. The 1 billion tonnes of wheat, barley, oats, rye, maize (corn), sorghum and millet poured annually into livestock troughs could feed some 3.5 billion humans. But such reasoning discounts the health benefits of eating modest amounts of meat and the fact that foraging animals can consume foods that humans cannot eat.

Crop and livestock farming complement each other2. Half the world’s food comes from farms that raise both. Animals pull ploughs and carts, and their manure fertilizes crops, which supply postharvest residues to livestock. But efforts to maximize yields of milk and meat can disrupt finely balanced systems. The quest for ‘intensification’ in livestock farming has thundered ahead with little regard for sustainability and overall efficiency (the net amount of food produced in terms of inputs such as land and water). With animal protein set to remain part of the food supply, we must pursue sustainable intensification and figure out how to keep livestock in ways that work best for individuals, communities and the planet.

Michael Lee and John Tarlton suggest ways to make livestock more sustainable.

Almost all of the world’s milk and much of its meat come from ruminant (cudchewing) animals — mostly cows, goats and sheep, but also buffalo, camels, llamas, reindeer and yaks. Here we highlight eight strategies to cut the environmental and economic costs of keeping these animals while boosting net gains for the quantity and quality of the food they produce.

Feed animals less human food.

Around 70% of the grains used by developed countries are fed to animals.

Livestock consume an estimated one-third or more of the world’s cereal grain, with 40% of such feed going to ruminants, mainly cattle1.

Some of this is avoidable. Ruminants graze pastures and can eat hay, silage and high-fibre crop residues that are unsuitable for human consumption. Unlike pigs, poultry and humans, ruminants have a series of forestomachs leading to the true

stomach. In the forestomachs, the largest of which is the rumen, microbes break down fibrous plant material into usable calories and also provide high-quality microbial protein. Ruminants can graze in marginal areas, such as mountainsides or low-lying wet grasslands. This helps to reserve agricultural fields for growing human food.

Even where large quantities of cereals are consumed by ruminants, up to 60% of their diet comes from high-fibre feed that humans cannot digest. In the European Union, more than 95% of milk comes from animals fed on grass, hay and silage, supplemented with cereals. Cattle in New Zealand’s exemplary dairy industry obtain 90% of their overall nutrition by grazing pasture3. China’s growing dairy industry initially relied on imported grain and highquality fibre from the Americas. Ongoing research is showing how best to use local crop residues, such as rice straw.

Raise regionally appropriate animals.

The lure of high productivity has led to ill-advised schemes to import livestock to places where they are genetically unsuited. Kerala, a state in southern India, is home to the smallest breed of

cattle in the world. Vechur cows stand at about 90 centimetres tall and make only around 3 litres of milk per day — a dribble compared to the 30 litres per day produced on average by Holsteins, the black-and-white dairy cows of Europe and North America.

Donors, governments and charities aiming to feed whole communities, and to provide income for poor farmers, have imported Holstein breeding stock and semen to Africa and Asia, with progeny now numbering in the millions. But the animals often disappoint. Bred for centuries for maximum milk production in temperate climates, these cows were not selected for fertility or hardiness. They lack resistance to heat, humidity, tropical diseases and parasites, and so must be kept in stalls away from ticks and other disease vectors. Rather than allowing the animals out to pasture, farmers in tropical areas must cut and carry fodder to the animals or purchase expensive, often imported, feed. Even then, the cows produce less than one-third of yields seen in temperate climates and controlled environments.

For poor families, a smaller native cow is a better bet than a larger animal that costs more to keep alive and healthy.

Left: Travel India/Alamy; Right: A. T. Willett/Alamy Unlike Vechur cows (left), Holstein cattle (right) have little resistance to heat, humidity and tropical diseases, and are most productive in controlled environments.

Expand Similarly, breeds of cattle usually farmed in the humid tropics of West Africa have developed resistance to the debilitating disease trypanosomiasis over several thousand years of exposure to the tsetse fly that carries it. In the hope of greater profits and wealth, farmers often replace 16

these animals with larger European cattle, or with zebu breeds from areas north of the tsetse belts. The zebu breeds are less resistant to trypanosomiasis, and European cattle have no resistance. The expense of drugs to combat the disease often outweighs the increase in income.

More can and must be done to encourage farmers to realize the advantages of livestock adapted to local areas. Cuttingedge genomics could guide selective breeding to boost production of animals that are already adapted to their climates and resistant to local diseases.

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Food For Thought Keep animals healthy.

Sick animals can make people sick. In low- and middle-income nations, 13 livestock-related zoonoses (diseases that can infect humans and animals) cause 2.4 billion cases of human illness and 2.2 million deaths each year4. Yet human and livestock disease are generally treated as separate problems. Animal management should include measures to contain transmissible diseases, for example, by improving hygiene, quarantining new arrivals on farms and establishing coordinated, sustained surveillance for diseases that cross the boundaries of species or countries.

Mismanagement and poor welfare render animals particularly susceptible to parasites and disease. Many young animals die of disease before they can lactate, reach slaughter weight or reproduce. This lowers yields, increases environmental impacts and decreases farmers’ ability to select the best breeding stock. With education and some financial aid, farmers could improve husbandry, and more animals would survive to become productive.

Keeping animals at high densities spreads infectious diseases far and fast. The footand-mouth virus costs upwards of US$5 billion each year in vaccinations and lost production worldwide. A UK epidemic in 2001 resulted in the slaughter of 6 million animals. Bovine tuberculosis has cost UK taxpayers alone £500 million (US$830 million) over the past decade — an amount projected to double in the next ten years. Market disruptions and losses are felt across industries including agriculture, transportation and tourism.

European Union law holds farmers responsible for human health and foodsafety issues following the slaughter of their animals. Growing awareness of problems such as antibiotic resistance has led to approaches that rely less on antiinfective drugs and more on management practices, such as reducing overcrowding.

Simple decision-support tools are emerging to help farmers to treat affected individuals rather than entire herds, and to keep animals away from risky pastures or other sources of infection5. Gathering local evidence can confirm the benefits of such strategies and encourage farmers to adopt them.

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Adopt smart supplements.

The productivity of ruminant animals can often be boosted with supplements, some of which encourage microbes in the rumen to grow quickly and to provide better nutrition. In India, a water fern (Azolla caroliniana) cultivated in local ponds provides extra protein to cattle and goats fed on protein-deficient elephant grass (Pennisetum purpureum).

Other plant extracts can alter the rumen microbial population to use nitrogen and energy more efficiently.

This means producing more meat and milk with proportionally less byproduct greenhouse gas and ammonia.

An enzyme in red clover (Trifolium pratense), widely grown in temperate

countries, increases ruminants’ ability to utilize dietary protein6. In field trials, dairy cows with more clover in their diets ate more feed and produced more milk.

In Australia, sheep nibble on the deeprooted perennial tar bush (Eremophila glabra) during dry autumns when most other pasture plants offer poor food value. Tar bush combats gastrointestinal nematodes and acidosis, and reduces emissions of methane, a greenhouse gas 25 times more potent than carbon dioxide7.

Governments and policy-makers should support research efforts to identify the most beneficial microbes and most limiting nutrients, as well as low-cost ways to deliver them.

Source: FAO Expand Eat quality not quantity.

Annual meat consumption in India is just 3.2 kilograms per person, compared with 125 kg per person in the United States in 2007, much of it from heavily processed foods, such as burgers, sausages and ready meals. The focus should be on eating less, better quality meat. In rich countries, the high quantity and low quality of processed animal products consumed contributes to ill health, with higher rates of cancer and coronary heart disease. For the world’s poor people, however, there are clear 17

nutritional advantages to consuming small amounts of high-quality animal foods, which are rich in protein, essential amino acids, iron and various essential micronutrients that improve chances for normal physical and cognitive development8.

The public-health goal, therefore, should be to balance nutrition across the world, with a target of weekly average consumption of red meat of no more than 300 grams. Trends are in the right direction; numbers of ruminants in the developed world have fallen over the last two decades (see ‘Cud chewers’).

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Food For Thought Tailor practices to local culture.

Close to one billion of the world’s poorest people rely on livestock for their livelihood. Traditional animal husbandry supplies more than just food9. Keeping animals provides wealth, status and even dowry payments. When families encounter large expenses, such as a hospital bill or a wedding, they can sell an animal or two to cover the cost. Many of these benefits are disrupted when conventional grazing and mixed-farming practices are replaced with industrial systems that maximize shortterm production. Policies to encourage humane, efficient management should consider cultural as well as natural factors.

For instance, in traditional herding communities in the Horn of Africa, philanthropic efforts to support the cattle trade have led to larger herds for wealthier individuals, with little evidence that they have benefited poorer pastoralists.

“The focus should be on eating less, better quality meat.”

Track costs and benefits.

Livestock are widely considered to be unsustainable. The livestock sector accounts for 14.5% of human-induced greenhouse-gas emissions, exceeding that from transportation.

However, if other factors are considered, the picture becomes more favourable.

Sustainably managed grazing can increase biodiversity, maintain ecosystem services and improve carbon capture by plants and soil10. A cow produces up to 70 kg of manure per day, providing enough fertilizer in a year for one hectare of wheat, equivalent to 128 kg of synthetic nitrogen that might otherwise derive from fossil fuels. Mechanized arable agriculture and food processing themselves produce greenhouse gases, and costs of switching are exacerbated if meat’s nutritional advantages are considered10. Farm animals also provide hides, wool, traction and biogas, a fuel produced from manure.

Calculating how this balances out is hard, but essential. Life-cycle assessment data should be used to tune livestock policies to socioeconomic and geographic environments.

Pingelly, which has Mediterranean biome conditions and where water conservation is crucial, and the Thiruvazhamkunnu Livestock Research Station in Kerala, India, which has humid tropical conditions and where grazing is strictly limited. At the third, Rothamsted Research North Wyke Farm Platform in Devon, UK, cattle and sheep graze in temperate grassland conditions on three hydrologically isolated, 22-hectare ‘farmlets’ to compare nutrient cycling and productivity under various pasture-management strategies.

There are plans to establish further platforms in South America, North America and China.

There will be no one-size-fits-all solutions.

Changing farming practices is difficult, but farm platforms can evaluate potential for increased profits and other benefits, act as examples to follow, and provide information for policy-makers. We hope to identify better practices to optimize the Study best practice. use of livestock in different regions, using To explore the multidisciplinary strategies local resources, breeds and feedstuffs — described here, we are building a global and produce tangible evidence to convince network of research farms. Three such local farmers. ‘farm platforms’ are operational. Two focus on the use of naturally adapted livestock and native plants: the University of Western Australia Future Farm in

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Vol. 09, Issue 05, March, 2014

Flourishing Global Market of

Flexible Packaging

T

he flexible plastic packaging market has grown over the next decade as emerging market consumer’s increase their consumption of a variety of packaging consumer goods and new opportunities for the packaging industry emerge through premiumization of food and beverage packaging and increasing healthcare needs in developed markets. Also as consumer trends and demographics change globally to require more convenience goods and smaller portioned goods, the demand for flexible (converted) plastic packaging will increase.

The global flexible packaging market is largely driven by the growth in its end-use Vol. 09, Issue 05, March, 2014

The flexible packaging has emerged as the most vital packaging system. With consumer trends and demographic changes, need of small and smarter packaging has increased. Apart from being convenient its design is catching the attention of consumers.

Their market in Asia pacific is very growing and developing.

Modern developments in flexible packaging are bringing pouches, films and foils to the market on an unprecedented scale. We profile in the feature about the global market of flexible packaging and about some of the flexible packaging market’s most promising innovations to safeguard product quality, enhance visibility, and improve environmental sustainability and more.

industries. The penchant for consumption of packaged products such as packaged food & beverage, personal care products, and pharmaceuticals is resulting in its growth. Consumers’ push for convenient packaging would result in the growth of the PP/PE pouches, polythene and polypropylene sachets, PE and PP bags, and other types of flexible packaging manufactured by PP/PE pouches, sachets and PE,PP bags manufacturers and other factories. These novel pack types with varying sizes and innovative closures are expected to gain momentum in the near future. This market consists of various stake holders, such as packaging manufacturers, traders, distributors, and 21

raw material suppliers of food, beverage, personal care products, pharmaceuticals, and flexible packaging products.

The global flexible market has made little strides in terms of value and regaining the volume lost during the economic slowdown. However, the market has grown considerably in the last few years and is expected to grow at a faster pace in the near future. Factors such as growing consumer preferences towards consuming convenient packaged food & beverages, personal care products, and pharmaceutical is helping this global packaging industry to grow. Increasing innovations in the packaging industry help to drive down the cost and new package

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Vol. 09, Issue 05, March, 2014

Packaging Trend types act as an important driver for the flexible packaging market.

The important materials used in flexible packaging market are polyethylene, polypropylene, BOPET, EVOH, polyamide, paper, aluminium, cellulosic, and PVC. This raw material is converted into films that are further converted into pouch, sachet, and bags in which the products are packaged.

Flexible packaging has also benefited from a wider range of new products being developed by brand owners in an increasingly competitive consumer marketplace. Barrier flexible packaging will continue to grow in importance as the major retail chains demand greater product protection and longer shelf life.

Flexible packaging has reached market maturity in the developed nations of North America and Western Europe and future growth will be modest. Flexible packaging is seeing stronger growth in developing countries.

Demand in North America’s converted flexible packaging market has been underpinned by recovering economies and flexible packaging formats being used as alternatives to traditional rigid packaging.

Asia-Pacific has the highest market share and is estimated to grow with a CAGR of 7.1% during the period under review.

Europe is growing with a CAGR of 3.9%, and is driven mainly by the East European markets. ROW is also expected to experience growth in flexible packaging market in the future. The CAGR for ROW is 6.0% from 2013 to 2018.

The four most potential nations for flexible packaging market are India, China, Russia, and Brazil which are poised to exhibit the fastest growing trend. Many people play up the recyclability aspect of sustainability as it relates to packaging at the exclusion of the front end of a package’s life cycle. The carbon footprint of various packaging types has to consider many factors. For example, pouches offer tremendous energy savings both in their production and transport. Comparing rigid containers versus pouches, you can ship one truckload of flat pouches that have the equivalent product-holding capacity of upwards of 15 to 25 truckloads of empty rigid containers. Packagers can also save hundreds of thousands of dollars in packaging material costs and secondary packaging operations systems due to Vol. 09, Issue 05, March, 2014

simplifications of packaging systems, for the packaging industry emerge such as the elimination of labeling, through premiumization of packaging and capping, etc. increasing healthcare needs in developed In the flexible packaging market, markets.

pharmaceutical packaging is the fastest growing market with a CAGR of 7.1% during the forecast period. Due to the increased awareness for public health, increasing product processing units, convenience packaging, and rising consumption of generic drugs, the pharmaceutical packaging industry is exhibiting strong gains. Following it, the food packaging is estimated to be the second fastest growing market in 2013, due to the rise in consumption of packaged food. Growing health concerns and knowledge about the nutrition value is driving the market for packed products to preserve the end-products.

Asia is the largest regional market with 29.1% of global market volume in 2011, followed by western Europe and North America. Asia is also the fastest-growing market for consumer flexible packaging, with a forecast CAGR for 2011-16 of 7.9%. The region is forecast to represent 55.0% of total world flexible packaging consumption growth during the period 2011-16. India and China are the fastestgrowing national markets for consumer flexible packaging, together accounting for 44.0% of world flexible packaging consumption growth during the forecast period.

The flexible packaging market is recorded growth over the next decade as emerging market consumer’s increase their consumption of a variety of packaging consumer goods and new opportunities 23

Indian flexible packaging market India now represents 5% of the world flexible-packaging market and is poised for gargantuan growth. India represents a US$ 3 billion market that is expected to continue growing at around 15% a year until 2015, but businesses and investors need to understand the business environment before they can expect to be successful here.

India is, in flexible packaging as in so many other things, a land of opportunity. With a middle class the size of Europe, Indian consumers have the purchasing power to match their counterparts in the West, and the Indian retail sector is rushing to satisfy them. India is poised for huge growth

Packaging Trend within the retail sector, as well-developed, major retailing expands within Indian cities. With only 5% of food currently packaged, and retails like Wal-Mart, the opportunities in flexible packaging are clearly enormous. Added to this are large, mostly coastal, government-supported food manufacturers manufacturing cash crops for export throughout Asia and beyond.

The Indian converting industry is distinctly two-tiered: serving the major food producers are very well developed converters producing European standard flexible packaging with German and Italian equipment. Outside the main centres, there is a less organised market, with a large number of small converters producing flexible packaging of generally lower quality.

But Indian export trade in converted flexible packaging has been growing, with long-run customers across Africa, the Middle East, USA, Asia and Europe recognising the high quality available from the major contractors.

Some of the end-users are rather unfamiliar to Western converters. By some estimates, for example, 25% of all laminate sales are accounted for by small sachets of chewing tobacco, although they are the subject of Indian government legislation to combat litter. Pack sizes are generally smaller to match consumer purchasing power.

The Indian flexible packaging market will develop on the same lines as the Chinese. However, the dynamics of the two territories are completely different.

A bureaucratic and challenging political landscape, an increasing focus on environmental issues and the presence of established players, sometimes owned by the very manufacturers they supply, means that, while it may well be time to ‘dip a toe’ in the Indian market, there are still substantial hurdles to clear.

The future of flexible packaging Flexible packaging has been shaking up the packaging industry for many years now, especially in the food packaging market, where flexible materials are introducing a wide range of new design concepts to minimise waste (both in terms of conservation and cost), attract consumer attention and maintain the freshness of the products within.

Protecting fresh food: subtle yet innovative solutions Extending food shelf-life and keeping fresh produce and meat in particular -appealing to consumers for longer is a constant consideration in the food retail world, and it’s an area in which flexible packaging has major potential.

This demand for packaging which helps support product freshness certainly explains why Curwood’s new FreshCase red meat packaging, a fairly innocuouslooking vacuum pack, scooped the top prize in the DuPont Awards for Consumer P a c k a g i n g Innovation.

FreshCase might not look like much, but it’s specifically designed to allow the red meat inside to look its absolute best. The package’s flexible polymer film protects steak or other red meats with hermetic sealing to allow a shelf-life of up to 14 days without any loss of quality, compared to around four days for standard foam trays.

This is a potential boon for supermarkets and other large-scale retailers, which could benefit from longer selling periods without having to mark down the price of products.

The true innovation of FreshCase is a natural substance that is added to the film’s contact layer, which prevents the harmless but unappealing discolouration that turns red meat a purple hue in standard store packaging. In this way, red meat can be displayed in its most appealing form throughout its shelf-life.

With this array of retail advantages (not to mention the packaging’s lighter weight and easier transportability compared to 24

rigid containers), it seems likely that flexible packaging will be the default selection for meat in the future, especially as this technique matures and reduces in cost.

Green appeal: eco-friendly flexible Flexible packaging inherently brings with it a number of environmental advantages when compared to other packaging types.

Packaging weight can be reduced with the use of pouches and other flexible developments for retail packaging, which allows savings on packaging costs as well as material waste. Furthermore, new innovations in the flexible space are incrementally improving the environmental performance of pouches and films.

Several recent products are showcasing a number of environmentally-friendly options made available by flexible packaging. National Flexible’s SuperEco laminate film, for example, has been Vol. 09, Issue 05, March, 2014

Packaging Trend

used by UK-based organic food company Infinity Foods to re-launch its brand of pre-packed health foods in a package that is oxy-degradable.

National Flexible’s specialised blend of film features a sealing layer which protects foods such as nuts, rice and lentils like standard film, but after use the film naturally breaks down into water, carbon dioxide and organic biomass.

Cutting waste and costs with flexible packaging Of course, the environmental benefits of flexible packaging are often linked to financial advantages through the reduced use of plastic materials, lower weight in the supply chain and other factors. In reality, these bottom-line benefits are likely doing more to promote the growth of flexibles than any amount of eco-friendly features could.

One company that has clearly been working hard on improving both the Vol. 09, Issue 05, March, 2014

environmental and commercial performance of its packaged products is global food and beverage giant Kraft Foods. This ethic has been most aptly demonstrated in its YES pack (yield, ease, sustainability), a condiment container developed for use in the catering industry.

The pack’s new flexible material uses 60% less plastic packaging than its rigid predecessor, as well as requiring half the energy to manufacture when compared to a comparable HDPE container, but other design innovations ensure that catering companies can improve efficiency as well as their environmental footprint.

The YES pack, based on an original packaging design by Smart Bottle, allows for 99% product yield as condiments such as salad dressing can be squeezed out of the pack. Waste is also minimised with the YES pack’s simple pouring system, which incorporates a small nozzle and easy grip handles to reduce spilling and dripping, according to Kraft.

Adhesives for the packaging market: playing catch up Many of the environmental and functional advances made by flexible packagers simply wouldn’t have been possible without the development of a more basic building block of flexible packaging adhesives.

As laminate and film products seek to improve their environmental and safety performance, laminating adhesives have to keep up while maintaining high performance standards.

Many adhesives specialists have now 25

developed high-performance adhesive substances which also conform to biodegradability and compostability requirements, such as the European Union’s EN13432 standard. EN13432 stipulates that 90% of biodegradable packaging must be converted to CO2 within 180 days, as well as also including requirements on heavy metal content and the inhibition of natural plant growth.

At drupa 2012 in Dusseldorf, German company Henkel’s adhesives division launched two new products for flexible packaging. The adhesives, both launched under the company’s Liofol brand, contain no petroleum-based solvents or harmful toluene diisocyanate (TDI).

As well as these environmental and safety advantages, the new adhesives exhibit high performance standards including long workability periods and good wetting behaviour for glossy laminate appearance. Also, in light of the fact that flexible substrates can struggle with chemically active fillings, the adhesives incorporate a hardener which contains a silane-free adhesion promoter to boost chemical resistance to acidic contents.

The new Liofol products demonstrate that adhesives have to do it all if they’re going to keep up with the demands of the flexible market.

Juices, carbonated drinks, water and health Beverage consumption in Indian households has steadily increased over the last decade as more families are spending on non-food items indicating a clear shift in food preferences. Not only that, the trend transcends the urban-rural divide.

Apart from that health is becoming top most issues for most consumers.

I

ndian Council for Research on International Economic Relations (ICRIER) and the Indian Beverage Association (IBA) mutually adjoined that more and more people are now shifting towards packaged drinks.

The organisations depicted that the consumption of non-alcoholic beverages in India is to grow between 16.5 and 19 per cent over the next three years. In this

category, the fastest-growing category is fruit-based beverages. At present, the Indian packaged juice market is valued at Rs 1,100 crore ($177.78 million), and it is further projected to grow at a CAGR of 15 per cent over the next three years.

A majority of India’s beverage market is unorganised, but this segment caters to about 75% of the consumers’ demand but, in the last three years, global giants Coca26

Cola and PepsiCo Inc have tried to meet the rising demand for packaged beverages by investing in building capacity and developing bottling infrastructure in the country.

Along with the increased disposable incomes of Indians, the non-alcoholic beverage segment in the country has also evolved both in terms of the number of product variants available in the market Vol. 09, Issue 05, March, 2014

Beverages and the number of companies in the market states the ICRIER and IBA reports.

Also the abundant supply of raw material, and the ready availability and affordability of skilled labour are some main reason for the rise of the non-alcoholic beverage sector. The biggest reason is definitely the strong consumer base in India. The sector is currently contributing one per cent to India’s gross domestic product (GDP).

According to IBA’s report the non alcoholic beverages by corporate manufacturers were expected to grow at 16.5% per annum and those by noncorporate makers at 19% per annum. The estimates were based on an assumed gross domestic product growth of 7%, which is higher than the 5% growth forecast by several economists.

According to a report by market research firm Business Monitor International, the non-alcoholic beverage market in India - comprising carbonated drinks, juices, packaged drinking water, milk, ready-todrink tea, tea, coffee and sports drinks - is expected to touch the $5.8-billion mark by 2015.

Many international and big companies have plans to invest in India’s beverage sector. ITC Ltd is eager to get B Natural-, the Bangalore-based Balan Natural Food Pvt Ltd’s brand, and would market packaged fruit juices under its foods category. PepsiCo India plans to set up a plant at Sri City Industrial Park in Andhra Pradesh, which would be the company’s largest in India. The plant will be producing the full range of beverages ranging from carbonated drinks, fruitbased drinks and sports drinks.

by Pepsi is going to cover both food and beverages and the company has decided to double the capacity of their business over the next seven years.

Not to be left behind, Coca-Cola India said it planned $3 billion new investments in India till 2020 to further capture growth opportunities in fast-growing, non-alcoholic, ready-to-drink (NARTD) beverages. This would take Coca-Cola’s India investments between 2012 and 2020 to $5 billion.

As per Euromonitor, Coca-Cola enjoyed leadership position in carbonates in 2012, accounting for 60 per cent of the total value of sales. It maintained a strong position with two brands — Sprite and ThumsUp. Also, stronger distribution in the existing categories and entry in new markets in rural India helped the company retain its strong position.

Pepsi is the only other significant player in carbonates with 36 per cent retail value share in 2012, according to Euromonitor.

Pepsi has 42 plants in India, including franchises. India is one of the largest market for the company and Pepsi will continue to expand the range of foods and beverages in its portfolio. In India it has eight brands that generate Rs 1,000 crore or more in annual retail sales — Pepsi, Lay’s, Kurkure, 7UP, Slice, Miranda, Mountain Dew and Aquafina.

Apart from raising capacity, Pepsi will expand its selling and delivery infrastructure. It will also step up

Fizzing colas PepsiCo and Coca-Cola are in a competition of another kind. If they do come about as promised, investments amounting to a total of $10 billion will come in from the two cola giants by 2020.

Elections or no elections, PepsiCo’s firm would invest $5.5 billion (Rs 33,000 crore) in India by 2020 to more than double its capacity here. The company has so far invested $2 billion in India since its entry in 1989. It said new investment would be made to strengthen its capability in various strategic areas, including innovation, manufacturing, infrastructure and agriculture.

The Rs 33,000 crore investment made Vol. 09, Issue 05, March, 2014

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collaborative farming that the company claimed has benefited 24,000 Indian farmers. Since entering India, Pepsi claims it has created opportunities for more than 200,000 people through direct or indirect employment and agriculture collaborations.

On the other hand, Coca-Cola said it had already invested more than $2 billion in India since it re-entered the country in 1993. The fresh investments will raise the amount to $7 billion. Coca-Cola India directly employs over 25,000 people and indirectly more than 1, 50,000 people. The carbonates market is projected to grow at 10 per cent annually in terms of retail volume, according to Euromonitor.

Growth will be driven by rural areas, as urban areas are facing a degree of saturation, as well as shifting to healthier options, such as fruit/vegetable juice and bottled water. Companies are targeting rural areas to build share. Coca-Cola has equ¬ipped retail outlets in remote rural areas with solar coolers. Smaller pack sizes are driving sales in rural areas whereas PET bottles are pushing sales in urban areas.

Coca-Cola bought up Parle’s four big soft drink brands — ThumsUp, Limca, Gold Spot and Maaza — which gave the company an instant 60 per cent share of the Indian soft drinks market when Pepsi had less than 30 per cent.

The Indian Packaged Fruit Juice Market India’s packaged juice market has charted

Beverages

a high growth trajectory, thanks to its easy availability, anytime-anywhere consumption, and convenience.

Within the beverages market, the fruitbased beverages category is one of the fastest growing categories, and has grown at a CAGR of over 30 percent over the past decade. As of March 2013, the Indian packaged juices market was valued at Rs 1,100 crore (~USD 200 million) and projected to grow at a CAGR of ~15 percent over the next three years.

The packaged fruit juices market can be divided into three sub-categories: fruit drinks, juices, and nectar drinks. Fruit drinks, which have a maximum of 30 percent fruit content, are the highestselling category, with a 60 percent share of the market. Frooti, Jumpin, Maaza, etc. are the most popular products in this category. Fruit juices, on the other hand, are 100 percent composed of fruit content, and claim a 30 percent market share at present. In contrast, nectar drinks have between 25 and 90 percent fruit content, but account for only about 10 percent of the market.

The rising number of health-conscious consumers is giving a boost to fruit juices; it has been observed that consumers are shifting from fruit-based drinks to fruit juices as they consider the latter a healthier breakfast/snack option.

Dabur is the market leader in the Indian packaged juices market with its brands Real and Real Activ. Other players include Parle, Fresh Gold, and Godrej.

Some of the other brands of fruit juices and drinks include Frooti, Appy, Mazza, Minute Maid, Slice, Fresh Gold, and Del Monte. Considering the attractiveness of the segment, diversified consumer food companies such as ITC are working towards making a foray into packaged juices.

As per studies, the most preferred pack size is the individual (small) pack which is convenient, and easy to carry and consume.

These are in great demand as out-of-home consumption is on the rise. Tetrapaks are most popular among manufacturers as well as consumers. Some companies are also offering their products in tins (e.g.

Del Monte) and PET bottles (e.g. Mazza);

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however, they are more expensive than Tetrapaks, which adds to production costs, and, as a result, affects the market price.

Fruit juices have created a space for themselves in regular household menus, as a part of a family’s breakfast, social gatherings, and evening snacks. As a result, consumers are picking up multiple family packs at one go, which is an emerging consumption trend.

There are several reasons behind the growth of the Indian packaged juices category: Changing consumer lifestyles, increased health awareness, hygiene concerns, growing category of informed buyers, rising disposable incomes, booming modern retail, habitual purchase, and introduction to new flavours.

Among all challenges, it is difficult to control the cost of production at the price points of juices, primarily because of rising food inflation. The continuous, year-long supply of raw materials, and the non-stop production of juices for the full season, is another production-linked issue which needs to be managed carefully.

Also of vital importance is controlling transportation and logistics costs.

Packaged juices are gradually cementing their place in the urban household in the metros and tier I cities; however, replicating the same success in tier II and III cities is still a struggle as residents in these regions still prefer fresh juices over packaged ones because they are comparatively cheaper, and also in sync with the traditional belief that juices are best consumed freshly pressed.

Vol. 09, Issue 05, March, 2014

Beverages It is appropriate to say that the packaged juices market in India is still evolving. As there are many national and international brands on the verge of succeeding and expanding further into the field, new entrants can also cash in on this opportunity by positioning/promoting packaged and bottled fruit juices as part of the consumers’ daily diet. Simultaneously, it is critical to ensure affordability for consumers, while maintaining the hygienic aspects and quality of products throughout the year.

Think healthy drink healthy Thousands of bottles of cola drinks are gulped down every summer. But of late, with health issues top of mind, many consumers are picking up water, juices and non-carbonated drinks instead. With their fingers strongly on the consumer pulse, the cola majors are keeping pace and stepping up focus on non-carbonated drinks and juices to quench the thirst of their health-conscious clientele.

While carbonated drinks like Pepsi and Coca-Cola still account for the secondbiggest chunk of the non-alcoholic drinks market in India, their growth rate has decelerated by 15-20 per cent over the last three years. Non-carbonated drinks (which include fruit drinks, nectars, juices and energy drinks), on the other hand, are likely to grow at a healthy CAGR of 35 per cent and are expected to touch `54,000 crore by 2015 from Rs 22,000 crore in 2012.

Many Consumers today realize the need for nutritional interventions in their daily lives. Water provides an apt opportunity for hydration with nutrition. Hence the market for non-aerated drinks and packaged water is growing at a fast pace. The 50:50 JV between Tata Global Beverages Ltd and PepsiCo India Holdings Pvt Ltd to form, NourishCo Beverages Ltd. Has recently launched India’s first nutrient water Tata Water Plus—which will be rolled out panIndia shortly.

There is a huge opportunity in the packaged beverage market being fuelled by a rise in disposable incomes, changing lifestyles and a burgeoning younger middle class. India’s per capita consumption of beverages is very low compared to other markets. This presents industry players with the opportunity to tap the huge untapped potential that this Vol. 09, Issue 05, March, 2014

segment offers. Another giant player – the coca cola is out to leverage its “Made in India and Made for India” brand portfolio consisting of Maaza (the country’s largest mango drink), Minute Maid Pulpy Orange and Minute Maid Nimbu Fresh, Burn (energy drink) and Kinley drinking water.

Rival PepsiCo’s non-carbonated beverages portfolio consists of Slice, Tropicana, Aquafina, Gatorade, Tata Water Plus and Tata Gluco in the hydration segment. With two Rs 1,000-crore plus brands, Slice and Aquafina, the non-carbonated offerings from PepsiCo are a significant part of their portfolio and are growing rapidly. They complement their carbonated soft-drink brands and have been witnessing robust growth.

Market research firm Nielsen pegs the growth in juices between April 2012 and March 2013 at 22 per cent. According to Assocham, the juices market in 2012 was dominated by Dabur’s Real fruit juices with 50 per cent market share and PepsiCo’s Tropicana with a 45 per cent market share. Mango drinks have emerged as the fastest-growing category over the last five years... Besides this, ready-toserve fruit beverage range is also seeing healthy growth.

Traditional Indian beverages such as lassi, sharbat, thandai, nimbu pani, badam doodh and coconut water are also being replicated by savvy drink-makers.

PepsiCo is delivering a wider choice to consumers and as part of their portfolio diversification, as they have introduced new innovations this season including Tropicana fruit powders, Tropicana 100 per cent Orange Medley, Pepsi Atom, and 7UP Nimbooz Masala Soda.

Meanwhile, the action is also heating up in the packaged drinking water segment. As per estimates, the total water hydration market in India is pegged at Rs 4,200 crore, including the bottled, bulk and pouches business. Bottled water accounts for Rs 2,300 crore, pouches account for 1,200 crore and bulk water at 700 29

crore. Still, the market for water is underpenetrated and growing at about 20 per cent CAGR per annum.

Almost every national beverage player has a water variant and organized brands like Himalaya, Bisleri, Kinley and Aquafina vie with thousands of local players for a slice of the market.

Coke is equally upbeat and is taking relevant initiatives to be able to meet the growing consumer demand and category opportunity.

Conclusion Obviously the non alcoholic beverages market is on the rise, because of the change in the consumers trends and demographic.

Consumption of non-alcoholic beverages in India is to grow between 16.5 and 19 per cent over the next three years. In this category, the fastest-growing category is fruit-based beverages. The estimates were based on an assumed gross domestic product growth of 7%, which is higher than the 5% growth forecast by several economists.

According to a report by market research firm Business Monitor International, the non-alcoholic beverage market in India - comprising carbonated drinks, juices, packaged drinking water, milk, ready-todrink tea, tea, coffee and sports drinks - is expected to touch the $5.8-billion mark by 2015.

The market is sure booming as both Coca Cola and PepsiCo have these humungous plans to invest in India, while the juice market at the value of Rs. 1100 crore is an evolving market that’s endearing the consumers with health and value for money manner.

Event Report

PLASTINDIA 2015;

a path to substantial growth for food packaging industry by 2016

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ndia is predicted to be amongst the top ten packaging consumers by 2016 with the demand set to reach US $24 billion. Food packaging can facilitate a major growth in the near future for polymer consumption as the retail sector flourishes.

Packaging accounts for 48% of all commodity polymer consumption and is growing at the rate 15% annually, huge by all standards. The main application areas are multilayer films, BOPP films, shrink & stretch wraps, thin wall moulding, thermoforming and blow moulded containers. Within packaging, food packaging is on the top.

To achieve this growth, Plastindia Foundation is organizing the ninth edition of Plastindia 2015 from February 5-10, 2015 at Pragati Maidan, New Delhi. This international exhibition is supported by the Ministry of Chemicals and Fertilizers and will be one of the three largest shows in the plastics industry globally.

With strong international participation Plastindia 2015, spread over 125,000 sq. meters of area, will have over 2000 exhibitors from over 40 countries and over 150,000 business visitors.

Joining hands with the Plastindia Foundation, the apex body of major associations, organizations and institutions, including Government & semi government organizations associated with plastics are major internationally acclaimed partners such as Messe Dusseldorf GmbH, Adsale Exhibition Services Ltd, Pilatus International Co Ltd and supported by EUROMAP – The European Plastics and Rubber Manufacturers Association, the British Plastics Federation, . The Foundation’s main objective is to promote the development and growth of the Indian Plastics Industry in India and is dedicated to national progress through plastics.

Focusing on the increased use of plastics in the healthy and safe packaging of food, 30

Mr. Prabuddha Dasgupta one of the most respectable packaging professional said that, “In the current business environment, the key areas of growth are agriculture, retail, food processing, medicines and plastic packaging plays a vital role in ensuring quality products reach the consumer.

Plastics are perhaps the most versatile group of materials used in packaging.

However, in international markets or at duty free shops overseas and in India as well, Indian packaged food is very difficult to find on shelves; the primary reason being, lack of high quality of packaging solutions. With the increased use of technology which has provided high quality and safe plastic for various applications in the Indian food industry, the industry will become more competitive and will gain cost effectiveness. PLASTINDIA 2015 will make this happen and be the gateway to skyrocket such opportunities”.

With rising demand for innovative solution in food packaging in India, the multibillion plastic packaging industries is scaling new heights. However, in order to become more competitive in global markets, Indian food packaging industry heavily relies on plastic applications in food industry. The main objective of Plastindia Foundation is the promotion, development and growth of the Indian Plastics Industry in India.

The six-day mega event, Plastindia 2015 will bring under one roof major global and Indian Plastics Industry innovators. The exhibition and conference will reveal the cutting edge technological developments, equipments and products.

Vol. 09, Issue 05, March, 2014

Vol. 09, Issue 05, March, 2014

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News

Mother Dairy explores new way to tap summer consumers

M

other dairy India’s largest ice cream manufacturer and a trend setter in the industry has decided to explore newer segments with the consumer groups it has been targeting. The company is planning to target consumers of fruit-based drinks and fruit juices with a portfolio of frozen treats that will have 1740% fruit content. Called Fruitolicks, these ice candies will be sweet, colourful and lickable and will be sold for Rs 10 a piece.

The company is also planning to launch a new range of frozen desserts called sorbet made from sweetened water, flavouring and a significant amount of fruit pulp.

Subhashis Basu, dairy head at Mother Dairy Fruit and Vegetable, feels that the Rs 2000-crore domestic ice cream market will gain traction if major players continue to innovate. “Apart from a high-voltage umbrella campaign that we will launch next month, we will also inform consumers through local advertising why our frozen

desserts are healthier than fruit-based drinks,” he says.

Compared to the US that boasts a per capita consumption of 17 litres of ice cream per year, India lags far behind with 300 ml.

Mother Dairy, which is the third largest ice cream maker after Kwality Walls and Amul, has over the last six months invested more than Rs 80 crore to increase capacity, upgrade technology and pay for retail assets like ice cream carts to increase its reach.

For someone who does 40% of his yearly ice cream business in the peak summer months of April, May and June, Basu can ill afford to sit back and relax. “People will curse me if they hear this but I was praying for the weather to turn on the heat,” he says.

Apart from foraying into 25 cities from just being a dominant player in the north, Mother Dairy is also focusing on its premium brand Classic in the take home category and its more affordable impulse products.

Currently, these two segments contribute

Global Dietary Fiber Market to Grow at a CAGR of 13.1% to 2019-Report

The positive attributes the increasing penchant for of dietary fiber propels health benefits, the market their use as specialty is likely to witness a robust ingredients in end-use growth in the years ahead. industries such as food Dietary fiber is an important and pharmaceuticals. The segment of the specialty food dietary fiber market is ingredients segment and is classified on the basis of fast gaining acceptance due type, such as conventional, to its documented health benefits. In terms of end-use, novel, soluble, and functional foods remain the insoluble. This report leading market for dietary estimates the market size fibers. The pharmaceutical of the dietary fiber market market is set to exhibit the in terms of both value and strongest volume increases, volume. Functional foods, followed by meat products. bakery & confectionery, Bakery & confectionery, dairy, beverage, meat products, and pharmaceuticals are the end- dairy and beverage sectors also exhibit user applications for dietary fiber. With strong potential. On the other hand, 32

nearly 60% to its total sales volumes from only 35% three years ago. Another launch in the premium category is also is the offing in vanilla flavour, which is the largest-selling flavour in the world with 40% market share.

And last but not the least, Mother Dairy might soon enter the scooping business following the likes of Baskin Robbins and Haagen Dazs with ice cream boutiques in various locations across the country. “We are working on the model at the moment,” says Basu. increasing regulations and strict labeling requirements may act as key restraints hindering the growth of the market.

Major players like Cargill Inc. (U.S.), E.I. DuPont de Nemours (U.S.), Lonza Group (Switzerland), Roquette Freres (France) are scaling their business by bringing in new products and pursuing mergers and acquisitions in developing markets. Top eight players in the dietary fiber industry held a market share of around 65.0% depicting the participation of other small players in the industry.

The global dietary fiber market in terms of volume is projected to grow at a CAGR of 10.4% from 2014 to 2019. Although dominated by conventional fibers, the novel fibers segment is projected to drive the growth 2014 to 2019. The penetration of conventional fibers is high in the developing countries and these are expected to witness a sluggish growth in the years ahead due to the rapid growth and acceptance of novel fibers. The R&D activities, technology developments and unearthing new sources of fibers for the market creates opportunities for the novel fiber segment.

Vol. 09, Issue 05, March, 2014

DuPont Nutrition & Health launches the Dahi Creations Kit in India

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asy to use kit allows manufacturers tocreate the idealDahi DELHI, India,Mar. 13, 2014 –A traditional and staple dairy item in India, Dahi has varied and diversified flavors and textures across India that reflects preferences that vary by region and even by household. DuPont Nutrition & Healthhas developed a creations kit that allows Dahi manufacturers to play with high performing cultures and design curdsaccording to their customers’ needs.

Simplifying Customization The Dahi Creations Kit makes commercialization and customization of this traditional Indian food easy. Dahi manufacturers only need to select cultures from the kit and either use them singly or combine and adjust to create the flavor, acidity, texture and mouthfeel that will please their target customers.

“We see the need to help our customers achieve the ideal Dahi profile they want without much complexity. The Dahi Creations Kit is like pre-fabricated building blocks for manufacturers to simplify their culture selection processand produce a consistent, good quality dahithat is able to survive challenging distribution

and storage conditions.” commented KeshavKrishnamani, Regional Product Manager,Sub-Saharan Africa & South Asia.

Building the Ideal Dahi The Dahi Creations Kit gives great control and flexibility in building specific sensory attributes. It provides all the cultures that manufacturers need, consisting of a range of DuPont™Danisco® starter cultures for building flavor, texture and body, protective cultures for improved shelf life and HOWARU® premium probiotics for added health benefits.

Dr. Anders Henriksson, Senior Application Specialist explained, “This Creations Kit includes cultures that can be used by manufacturers to create dahi with very traditional flavors. It is simple to use and gives opportunity to design a wide range of dahis to suit the taste of people all over India.”

DuPont™ Danisco® is the brand for a range of products that help provide enhancedbioprotection, improved

Starbucks’ sees fastest growth in company’s history in India

Vol. 09, Issue 05, March, 2014

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News nutritional profile, better taste and texture with greater cost efficiency and lower environmental impact, to meet the needs of manufacturers of food and beverages, dietary supplements and pet food. Through the work of the global network of food scientists and technologists in DuPont, the Danisco® range is supported by a uniquely broad spectrum of know-how across applications and processing.

DuPont Nutrition & Health addresses the world’s challenges in food by offering a wide range of sustainable, bio-based ingredients and advanced molecular diagnostic solutions to provide safer, healthier and more nutritious food. Through close collaboration with customers, DuPont combines knowledge and experience with a passion for innovation to deliver unparalleled customer value to the marketplace. More information is available at www.food.dupont.com.

DuPont (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit www. dupont.com.

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n just over a year of operations, India has become Starbucks fastest growing market yet, according to the Press Trust of India.

The U.S. coffeehouse giant partnered with India’s Tata Global Beverages and opened its first Indian Starbucks in Mumbai October 2012. The company has since opened 40 stores across the subcontinent in just 17 months.

“With 40 stores in four cities (in 17 months) and nearly 1,000 partners, India is the fastest growing market in Starbucks history,” TataStarbucks chief executive Avani Davda said in a statement.

According to the sources, the coffee chain now exists in Mumbai, Delhi, Pune and Bangalore, with coffee plantations in the southwest Indian state of Karnataka.

Starbucks operates more than 20,000 stores in 64 countries across the world, serving more than 70 million customers each week.

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EU warn to ban import of Indian Fruit, Vegetables

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uropean Union has threatened India to ban Indian fruits and vegetables entry into their territory. This is second time in recent months, EU gave this warning.

India’s agri commodity exports are under threat in major global markets over non-adherence to quality specifications prescribed by key international agencies.

As recently as March 14, export promotion body, the Agricultural Produce Export Development Authority (Apeda), had issued an advisory to Indian fresh fruit and vegetable exporters to adhere to global quality norms.

“The EU has raised serious concerns regarding the interception of harmful organisms in fresh fruits and vegetables exported to the European region. The EU has also threatened to take stern action (including a ban) unless the situation improves. We have assured the EU that India is fully committed to providing safe and pest-free exports of fresh fruits and vegetables to the EU and all necessary steps are begin taken in this direction,” said B K Boyal, director of Apeda in its advisory.

India has steadily increased its fresh fruit and vegetable exports to the EU in the past three years. From the level of Rs 129 crore worth of shipments in 2010-11, India’s exports of fresh fruits and vegetables shot up sharply to Rs 165 crore in the financial year 2012-13. But, India is estimated to surpass Rs 200 crore during the current financial year in terms of fresh fruit and vegetable exports.

The warning from the EU has come at a time when India is looking to increase its exports all-round to raise foreign currency income and reduce the current account deficit.

“India has committed that effective April 1, 2014, all exports of fresh fruits and vegetables to the EU would be routed through Apedaapproved pack houses wherein inspections, examinations/testing of export consignments will be conducted under the supervision of plant quarantine personnel,” Boyal said.

Indian exporters have already received such warnings in the past over its groundnut and sesame seed exports to the EU. “As on date, we have no information on any export ban on our grapes to the EU,” said Ashok Sharma, chief executive, Mahindra and Mahindra Agri and Allied Business.

Apeda, according to an official, has already conducted extensive ecognizedon programmes to apprise the trade about the impending scenario. The authority has, therefore, warned that exports of fresh fruits and vegetables to the EU would be routed only through the pack houses ecognized by it.

“Though the quantity of exports is not big enough to worry, the threat will percolate to other markets, which would have a negative impact on India’s overall agri exports,” said the official.

nuts, pellets + specialty snack processing

fryers + roasters seasoning + coating application accumulation + distribution pollution control oil management controls + info systems

info@heatandcontrol.com | heatandcontrol.com

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Vol. 09, Issue 05, March, 2014

News HC panel has different outlook on school junk food

Kisan Group enters food with snacks launch

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he Delhi high court panel to look into dietary habits of schoolgoing children has a difference in opinion from the previous panels on the question of banning sale of junk food in and around educational institutions.

The panel of experts are to examine harmful effects of junk food and recommend guidelines to make available good quality, safe food to students in school canteens. The board includes environmentalist, nutritionists, doctors, scientists and representatives of the food industry. In its draft guidelines to be submitted in court, crack have emerged over the need to completely ban food items commonly categorized as junk food in and around 500 yards of schools.

The differences have emerged in a draft report prepared for regulating Food High in Fat, Sugar and Salt (HFSS), popularly known as junk food. The report was prepared earlier this year by an expert group set up under the high court-appointed committee.

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isan Group of companies has penetrated the food business today by launching three snack products.

Kisan has been involved in a range of businesses, including manufacturing cement, agricultural equipment and cotton ginning, and is known for its ‘Hi Bond’ brand of cement.

They are presently focussing on entering the food industry phase wise. Initially they have planned to introduce their products in Saurashtra and Kutch. Gradually, Kisan’s expansion plan will extend its network in Gujarat. The entire Gujarat zone will be covered by end of the next financial year.

The food industry is the fifth largest growing sector, and is growing at a 20 per cent growth rate, while the processed food industry’s growth was around 36 per cent last year.

Vol. 09, Issue 05, March, 2014

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News

Demand for meat will come from developing countries

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ncreases in the global demand for meat over the next decade is expected to be driven by improved economic growth in developing countries.

This is according to analysts at the Livestock and Meat Commission (LMC) who also note demand in developed countries expected to remain steady according to the latest annual projections from US Department of Agriculture (USDA).

According to the LMC, the US data shows that global meat consumption is forecast to grow at 1.9 per cent per annum during 2014-2023 with demand from the

developing world driven by rising incomes and growing populations.

“This growth will result in the increasing importance of developing countries, particularly China, India, other areas of developing Asia, Africa and Latin America in the global meat market,” it said.

The LMC also highlighted with increased demand for meat from these regions the USDA has forecast a 22 per cent increase in world meat trade due to improved standards of living and higher levels of disposable income.

Interestingly it added beef production in Asian countries is forecast to grow over the next decade, particularly in India. Demand from developing countries for India’s lower priced and lower quality buffalo origin beef is projected to continue rising rapidly with India’s increasing exports expected to account for 36 per cent of the forecast increases in world beef exports over the next 10 years.

The LMC also highlighted that the USDA has predicted increases in livestock production and per capita red meat consumption in the US over the next decade as the agricultural industry recovers from high feed costs and problems with drought.

It said beef production is projected to decline until 2016 as producers retain heifers to help build up herds and to increase gradually thereafter. Beef cow numbers in the US are expected to increase from 29 million in 2013 to 33 million in 2023. This 14 per cent increase in beef cow numbers and projected increases in slaughter weights will further add to total beef production.

The LMC cited that Australia has generally been the world’s second largest beef exporter behind Brazil but with Australia’s beef herd currently rebuilding after declines due to prolonged periods of drought has meant Australian beef exports are forecast to stagnate over the next decade.

It said the USDA forecasts this stagnation in exports will result in exports from India and the US to overtake Australia and make it the fourth largest global beef exporter.

Canada is another key player in the global meat market according to LMC, but its cow herd has contracted in recent years. With stronger returns producers are expected to rebuild herds and as a result beef exports are projected to rise steadily but not to exceed the levels recorded in the previous decade.

MPEDA’s drive for Seafood co-Branding

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he Marine Products Export Development Authority (MPEDA) under the ministry of commerce is undertaking a major cobranding drive, which will promote the brand equity of Indian marine products in regulated markets.

Seafood exports from India are expected to touch $4.3 billion in the current fiscal year and $10 billion a year by 2020, according to MPEDA. A J Tharakan, president, Seafood Exporters Association of India, said

there is no large company in this industry, which comprises 400-500 exporters. It consists almost entirely of SMEs, most of them family-run businesses.

There are some 150 major players, with about 100 exporters contributing 70 per cent of total exports. The largest of them have revenues in the region of Rs 100-400 crore. The industry is a 100 per cent net foreign exchange earner.

Leena Nair, chairperson, MPEDA, added that value-added products are gaining momentum. They used to contribute around 36

five per cent of total seafood exports about three years ago, but now contribute around 17 per cent. The target is to increase this first to 30 per cent and then to 50 per cent in the next three to five years.

As market promotion has assumed special significance in view of growing competition Vol. 09, Issue 05, March, 2014

Venky’s to obtain poultry business from holding firm for $12M

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une-based Venky’s (India) Ltd, an integrated poultry firm, is acquiring poultry and packaging business of its holding firm Venkateshwara Hatcheries Pvt Ltd (VHPL) for Rs 75 crore ($12.31 million), as per a stock market disclosure. The

acquisition is expected to be completed by end of this month.

The business being transferred comprises operations in northern region in the states of Haryana, Punjab, Himachal Pradesh and Uttarakhand.

“The acquisition is a part of inorganic

expansion plan of the company which will consolidate poultry operations in northern India thereby increasing operational efficiency due to synergy and strengthen the geographical presence for the company in northern India,” the company said.

Venky’s (India) (formerly known as Western Hatcheries Ltd) was established in 1976, mainly to produce day-old layer and broiler chicks for north Indian poultry markets. Over the years, Venky’s embarked upon new ventures and has steadily grown to over 30 units spread across India.

The company’s product portfolio includes animal health products, pellet feeds, processed and further processed chicken products, solvent oil extraction and Specific Pathogen Free (SPF) eggs. The company’s SPF egg unit (in technical collaboration with SPAFAS of USA) is among four such units in the world.

Venkateshwara Hatcheries, a part of VH Group which is headquartered in Pune and has offices across the globe in London, Morocco, Switzerland, Syria, South Africa, Brazil, Moscow, UAE, Singapore, Bangladesh, Vietnam, Indonesia and The Philippines. The group has production plants in India, Vietnam, Bangladesh and Switzerland and exports to 42 countries.

In 2010, it acquired UK-based Blackburn Rovers Football Club.

and regulation from other seafoodexporting countries, MPEDA believes that there is a need to step up promotional programmes in major overseas markets and develop better rapport with the trade and officials in importing countries, said N Ramesh, director – marketing, MPEDA. He said MPEDA has decided to tie up with established brands for promoting Indian seafood products and, as a preliminary step, it signed a co-branding agreement with Sysco Corporation Inc for the promotion of Indian Black Tiger Shrimp in the United States a few years ago.

MPEDA also signed a similar agreement with Japan’s Aeon supermarket chain recently, and is looking for more such tie-ups in European countries. “Over the next few months we want to have at least 10 such-tie-ups with foreign supermarket chains,” said Ramesh.

The MPEDA logo will be awarded to processors who satisfy the standards fixed

by MPEDA, he noted.

With more and more companies ecognize that demand for value-added products is picking up, and the return on investment is also high, there has been a jump in investment, said Ramesh. MPEDA estimates that in the next four to five years, the industry is poised to increase capacity by 50 per cent with an investment of about Rs 3,000 crore, according to Ramesh.

Over the years, the industry has added capacity in order to export value-added products, Tharakan said. So far, India has been exporting the raw material to China and Thailand, where they are converted into products for the ready-to-eat and ready-to-cook segments.

One key concern, he said, is that the industry doesn’t have a coordinated

conservation and fisheries policy. The states have different policies and this has an effect on the industry. With the exception of Goa, the state governments have not put in place any conservation measures.

While conditions are favourable for exports at present, better coordination between ministries will be needed and export procedures speeded up, to help farmers, the MPEDA officials said. The Central and state governments need to bring in appropriate policies in support of the industry and for the welfare of fishermen in the coastal areas, they added.

The US, the European Union and Japan are the major destinations for Indian seafood exports, while China and South East Asia are also emerging as favourite destinations.

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Vol. 09, Issue 05, March, 2014

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News India is now the world’s largest exporter of beef our stripping Brazil

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or a country where the cow is sacred to adherents of the majority Hindu religion, it seems surprising that India has overtaken Brazil as the largest exporter of beef in the world.

A recent article in the New Indian Express reports that a prime ministerial candidate, Narendra Modi, recently referred to the ‘pink revolution’ as the only revolution happening in India, signifying the growing importance of the country’s meat industry.

It was intended primarily as a dig at the inactivity of India’s ruling United Progressive Alliance party which has been in power since 2004.

But it underlines the point that beef exports have grown by 50% in the past five years to 1.89 million tonnes with main markets being USA, Europe, the Gulf States and South East Asia.

Poultry exports have also grown substantially, reaching 3.5 million tonnes in the latest year for which figures are available, which puts it after USA and Brazil as the world’s third largest exporter.

An official with India’s Department of Animal Husbandry says the country’s Agricultural and Processed Food Products Export Development Authority (APEDA), is out to improve the quality and safety requirements for both the domestic market and the export industry. In the last year, APEDA has approved 170 integrated abattoirs, slaughterhouses and meat processing plants across the country, apart from announcing subsidies worth `15 crore or nearly NZ$3 million to the modernising of abattoirs.

The USDA acknowledges that the government has played a crucial role in enhancing meat production and export. While a larger herd supports an increase in beef production, government programmes also encourage production.

For instance, the ‘Salvaging and Rearing of Male Buffalo Calves Scheme’ and the ‘Utilization of Fallen Animals’ improved carcass utilization programmes were incorporated in the government’s 11th Five Year Plan (2007-12) and will also be included in the 12th Five Year plan, according to the USDA’s annual report.

In India where cow slaughter is banned in many states on religious grounds, the size of the beef export trade and growth in processing plants may appear to be somewhat of an oxymoron.

However a large proportion of the beef trade is actually in buffalo beef as distinct from bos indicus or Brahman, the humped beef cattle typical of India and other warm climates.

Also slaughter is restricted to male and unproductive female animals.

For outside observers who consider the traditional Indian view is that cattle are sacred, as well as casting a suspicious eye over Indian slaughterhouses and processing facilities, this development will make them sit up and take notice of another emerging power in the global meat trade.

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Vol. 09, Issue 05, March, 2014

CMB Engineering Launches First Academy of Canmaking and Seaming

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dvanced customer support for the global community of canmaking and seaming Shipley, UK – 21 March 2014. CMB Engineering, a leading worldwide provider of canmaking machinery, today announced the formal opening of the CMB Academy of Canmaking and Seaming in the company’s headquarters at Shipley, Yorkshire. The new Academy – a first in the industry – will serve as a platform to train the company’s existing customer base, offering in-depth theoretical and practical understanding of seaming and canmaking. Present at the opening of the Academy was Susan Hinchcliffe, Executive Council Member of Employment Skills and Culture, who demonstrated her support for CMB Engineering’s efforts, unveiling a plaque engraved with the name of the Academy.

“The CMB Academy of Canmaking and Seaming is primarly aimed at our customers’ personnnel who are responsible for the care, maintenance and operation of canmaking and seaming equipment,” said Andrew Truelove, General Manager at CMB Engineering. “We will be offering in-depth courses that are truly “hands on”.

All of the team at CMB Engineering are extremely excited to be able to offer our customers an advanced and unique support solution – one that will allow trainees to benefit from both our knowledge and the latest equipment on-site, at the heart of CMB Engineering in Shipley.

The first phase of the Academy includes training sessions on the CMB 5500 Canmaker, a winning combination of the CMB 5000 Bodymaker and the CMB 550 Trimmer, along with a Ferrum F-708 Seamer and an Angelus 120L. The second phase, which will follow later this year, will maintain the Academy’s status as a world-class facility with the addition of classrooms and enhanced capacity. CMB Engineering ultimately plans to further expand the Academy’s scope to include the company’s full line of equipment.

The syllabus for the CMB 5500 Canmaker course incorporates lessons on metal

Vol. 09, Issue 05, March, 2014

forming, which focus on the critical operational areas of the machine. The goal of this course is for trainees to be able to confidently manufacture can bodies that meet stringent industry specifications and also to effectively care for and maintain the technical assets of both the CMB 5000 Bodymaker and the CMB550 Trimmer.

At the end of the course, each trainee will be given a final evaluation based on their ability to run the machine at speed, ensuring that all cans produced are measured to exacting standards. “Whilst the machine will run in short bursts, all cans produced during the course will be closely evaluated to ascertain whether all the critical parameters necessary for the can body have been achieved,” Truelove explained.

The seaming course will be taught on two seamers located in the Academy training hall – a Ferrum F-708 and an Angelus 120L. Three courses will be available: a three-day theoretical course focusing on understanding the double seaming process, a five-day practical course focusing on the

West Bengal govt ventures into Food & Agri produce retail

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est Bengal Essential Commodities Supply Corporation (WBECSC), under the state food and supplies department, Thursday launched its own retail chain of commodities, to promote exclusive products of the state in agriculture and food sector, with a distribution outlet called ‘Roudra Brishti’.

State food minister Jyotipriyo Mullick inaugurated its first store on Free School Street. He said that while consumers will get branded commodities at discounted prices, producers of agricultural products will also get a fair price. “This is only the beginning. We have plans to open such outlets in every district, sub-division and municipal headquarters. ECSC might 39

News

target setting of the seamer to achieve an effective double seam and a five-to-ten day asset care maintenance course. Both seamers will be fully operational and trainees will be able to run the equipment themselves to evaluate the effectiveness of the double seam’s external and internal parameters.

“For seaming, as well as being able to explore the intricacies of the world of the double seam, focus will be placed on the repair and maintenance of the seamer itself,” Truelove continued. “This will entail the removal, overhaul and then replacement of the various sub-assemblies that constitute a fully-operational Double Seamer.”

“The opening of our new Academy is an incredible opportunity for us to strengthen relationships with our global customers and to demonstrate CMB Engineering’s commitment to excellency and quality,” Truelove concluded. “As we look back on 50 years of CMB Engineering at Dockfield Rd, Shipley, this is a testament to our vision for the next 50 year and beyond.” make very little or no profit,” he said.

A state-of-art laboratory, with German equipment, on the fourth floor of the Food Corporation of India (FCI) building was also inaugurated. Set up at a cost of Rs 2.6 crore, it will be used to check food quality. “Previously we had to send food samples to Hyderabad for testing and it took two months for the results to arrive.

Now it can be done here itself within two hours,” said Mullick. He added that the state will open two more laboratories at Siliguri and Burdwan to cater to north Bengal and Junglemahal area. The state is also mulling the idea of creation of 16 mini laboratories in districts.

Agriculture minister Malay Ghatak, who was also present at the function, said, “The motto of the TMC is food for all. All this has been made possible by the chief minister, in spite of the financial crisis that the Centre has put us through. If Mamata Banerjee is made the prime minister, our state will definitely benefit.”

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New technologies on Oils and Fats displayed in an Expo at IICT

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he CSIR-Indian Institute of Chemical Technology organized a “Business-Meet” on “Oils, Fats & Allied Industries, R&D and Regulatory Issues” at CSIR-IICT at Tarnaka. The Solvent Extractors’ Association of India, Oil Technologists’ Association of India (SZ), Indian Vanaspati Manufacturers’ Association of India and Indian Vanaspati Producers’ Association are part of the event.

Indian vegetable oil industry is one of the oldest and a major industry contributing next only to the petrochemical industry.

While, on one hand, the vegetable oil industry has made rapid progress in recent times due to technological innovations, on the other, the industry needs to gear up to face the challenges of globalization, issues of environmental concern and huge imports of vegetable oils into the country.

The ever increasing demands of the quality conscious consumer and stringent food laws imposed by the Government pose not only great challenge to the industry but also offer opportunity to

deliver products matching international quality, IICT has said explaining the reasons for organizing the meet.

This programme was organized by the Centre for Lipid Research of CSIRIICT as a part of year long CSIR-IICT 70th anniversary celebrations.

During the one-day programme, three sessions were organized. In the first session, Centre for Lipid Research showcased technologies / processes developed by the group in the area of oils, fats and allied products with presentations and exhibition followed by visit to the facilities. The second session was an open house session dedicated for discussing R&D issues related to oils, fats and allied products. During this session, some selected senior executives from the industry spoke about the problems of the industry for technological intervention

by CSIR-IICT. The third session was to discuss about the critical regulatory issues related to vegetable oils, fats, vanaspati and allied food products.

The major objective of this meet was to facilitate a common platform for industry, regulatory authorities and R & D organizations of the country to critically review the present specifications and regulations related to oils, fats, vanaspati and related food products and identify the necessary additions/deletions to provide the safe, healthier and quality products to the common man of the country and resolve their concerns as well as identify technological gaps.

The final recommendations based on 40

the deliberations of this meet will be forwarded to FSSAI and other appropriate Government agencies for consideration.

During the inaugural function of the business meet, a brochure based on the activities of lipids group and a R&D Profile of Center for Lipid Research with the compilation of technologies developed by Centre for Lipid Research was released. A few industries also signed agreements with CSIR-IICT for transfer of technologies during the inaugural function.

The R &D activity in Oils and Fats was formally launched in 1945 making the present Lipid Science & Technology Division (formerly Oils & Fats Division) of IICT as one of the oldest divisions. Now, Lipid Science and Technology Division is one of the most active groups of IICT and recognized nationally and internationally as center of excellence in the area of lipid research.

Vegetable oil industry is one of the major industries in the world with a huge turnover next to petrochemicals. For this size of industry, country like India requires a very strong R&D group. For this reason, CSIR decided to establishe the “Centre of Excellence for Lipid Research” to cater the needs of industry, R&D Institutes and academia. Several state-of art facilities established on par with the International Standards in this newly established center including a dedicated building.

The vision and goals of the Lipids Group of CSIR-IICT mainly pertain to Newer Processing Methodologies for Vegetable Oils, Specialty Oleochemicals, Biodiesel, Biolubricants, Surfactants, Algal Lipids and Nutraceuticals giving main thrust to import substitution, rural development, socially relevant and strategically important programmes.

The major activities of the Centre for Lipid Research include contract R&D in the areas of vegetable oils & allied products, technology Transfer/ Technology Licensing, Detailed Project Report, feasibility Studies, Technical/ Advisory Consultancy, New Product/ Process Development, testing and Analytical Services and Human Resource Development Programmes.

During the last ten years, the lipids group has executed more than 100 grant-inaid and industry-sponsored programmes worth more than Rs 50 crores.

Vol. 09, Issue 05, March, 2014

World coffee output may rise marginally this year

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lobal coffee production is estimated to increase marginally to 145.8 million bags in the ongoing 2013-14 marketing year despite a small drop projected in major producing countries like Brazil, Indonesia and India.

World coffee production stood at 145.1 million bags during 2012-13 crop year (October-September). One bag contains 60 kg of coffee.

“Total coffee production in 2013-14 is provisionally estimated at 145.8 million bags, a 0.5 per cent increase on 2012-13,\” the International Coffee Organisation (ICO) said in a report.

Production of Arabicas is expected to decrease by 3.8 per cent to 85.4 million bags, but that of Robustas is projected to rise by 7.2 per cent to 60.3 million bags this year.

Among Arabica varieties, production of ‘Other Milds’ is likely to drop by 9.1 per cent due to ongoing outbreak of coffee

Unilever targets busy parents with gelato launch Vol. 09, Issue 05, March, 2014

leaf rust disease in Central America.

Production of ‘Brazilian Naturals’ and ‘Colombian Milds’ is also expected to decline by 2.2 per cent each this year.

Coffee output in Brazil, the world’s largest producer, is expected to decline by 3.3 per cent to 49.2 million bags in 2013-14, but a record volume for an offyear in Brazil.

Similarly, production in third largest producer Indonesia is expected to decline to 11.66 million bags from 12.73 million bags, while output in India, the world’s fifth biggest producer, is also seen to be down at 5.19 million bags from 5.3 million bags in the review period.

Production is also expected to be lower in countries like Bolivia, Burundi, Costa Rica, Cuba, Ecuador, Guatemala, Kenya, Mexico, Nicaragua, Tanzania and Uganda this year.

However, coffee production in Vietnam, the world’s second biggest grower, is expected to increase to 27.50 million bags in 2013-14 marketing year, as against 22.03 million bags in the last year.

Coffee production in Ethiopia is likely to increase to 6.6 million bags from 6.36 million bags in the review period.

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nilever’s US ice cream brand Breyers has introduced Gelato Indulgences, specifically targeting couples that are too busy to go out.

Breyers Gelato Indulgences features a creamy gelato with a sauce and gourmet topping for the “ultimate” stay-at-home treat.

A new campaign advertising the launch will “show couples how to create the perfect date night at home.

With its uniquely indulgent trio of textures, Breyers Gelato Indulgences can help busy parents create a great date night right at home, any night of the week.

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News

Tea exports from India dip 13.24 pc in AprFeb

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ndia’s tea exports fell during April-February this fiscal. India is the second-biggest producer of tea. According to a report tea exports from India dipped by 13.24 per cent to USD 695.64 million during AprilFebruary this fiscal due to slowdown in global market.

The exports during the same period last fiscal stood at USD 801.82 million, a commerce ministry official said.The official, however, said that demand in some countries such as Pakistan, Iran and Russia is gradually improving. Commonwealth of Independent States (CIS), the UK, Iraq and the UAE are major exports destinations for Indian tea.

In February, exports were up by 12.36 per cent to USD 64.92 million against USD 57.78 million in February last year. Further, tea exports to Pakistan, one of the biggest international markets for tea, are gradually picking.

Pakistan is one of the top three tea importing countries with a consumption of 220 million kg. As per estimates, during January-December 2013, Pakistan imported 25 million kg of tea from India, compared to 20 million kg in the corresponding period of 2012.

In 2012-13, India’s tea exports were 216.23 million kg. The total output was 1,135 million kg in the same period. On the output front, as per the data of the Tea Board, during April-January period of the fiscal, the production was 1137.61 million kg. The main tea growing areas in the country are- Assam, Darjeeling, Tamil Nadu, Kerala and Karnataka.

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Livestock in Indian Economy I

ndia’s livestock sector is one of the largest in the world. It has 56.7% of world’s buffaloes, 12.5% cattle, 20.4% small ruminants, 2.4% camel, 1.4% equine, 1.5% pigs and 3.1% poultry.

In 2010-11 livestock generated outputs worth Rs 2075 billion (at 2004-05 prices) which comprised 4% of the GDP and 26% of the agricultural GDP. The total output worth was higher than the value of food grains.

Animal husbandry is an integral component of Indian agriculture supporting livelihood of more than twothirds of the rural population. Animals provide nutrient-rich food products, draught power, dung as organic manure and domestic fuel, hides & skin, and are a regular source of cash income for rural households. They are a natural capital,

which can be easily reproduced to act as a living bank with offspring as interest, and an insurance against income shocks of crop failure and natural calamities.

Driven by the structural changes in agriculture and food consumption patterns, the utility of livestock has been undergoing a steady transformation.

The non-food functions of livestock are becoming weaker. Importance of livestock as source of ‘draught power’ has declined considerably due to mechanization of agricultural operations and declining farm size. Use of dung manure is increasingly being replaced by chemical fertilizers. On the other hand, their importance as a source of quality food has increased. Sustained income and economic growth, a fast-growing urban population, burgeoning middleincome 42

class, changing lifestyles, increasing proportion of women in workforce, improvements in transportation and storage practices and rise of supermarkets especially in cities and towns are fuelling rapid increases in consumption of animal food products. Between 1983 and 2004, the share of animal products in the total food expenditure increased from 21.8% to 25.0% in urban areas and from 16.1% to 21.4% in rural areas.

Despite significant increases in livestock production, per capita consumption of milk (69 kg) and meat (3.7 kg) in 2007 has been much lower against corresponding world averages of 85 and 40 kg2.

Demand for animal food products is responsive to income changes, and is expected to increase in future. Between 1991-92 and 2008-09, India’s per capita income grew at an annual rate of 4.8% and urban population at a rate of 2.5%.These trends are likely to continue. By the end of 12th Plan demand, for milk is expected to increase to 141 million tons and for meat, eggs and fish together to15.8 million tons.

Global market for animal products is expanding fast, and is an opportunity for India to improve its participation in global market.

Livestock sector grew at an annual rate of 5.3% during 1980s, 3.9% during 1990s and 3.6% during 2000s. Despite deceleration, growth in livestock sector remained about 1.5 times larger than in the crop sector which implies its critical role in cushioning agricultural growth.

Distribution of livestock is more equitable than that of land. In 2003 marginal farm households (≤1.0h hectare of land) who comprised 48% of the rural households controlled more than half of country’s cattle and buffalo and two-thirds of small animals and poultry as against 24% of land.

Between 1991-92 and 2002-03 their share in land area increased by 9 percentage points and in different livestock species by 10-25 percentage points.

Livestock has been an important source of livelihood for small farmers. They contributed about 16% to their income, more so in states like Gujarat (24.4%), Haryana (24.2%), Punjab (20.2%) and Bihar (18.7%).

The agricultural sector engages about 57% of the total working population and about 73% of the rural labour force3. Livestock employed 8.8% of the agricultural work Vol. 09, Issue 05, March, 2014

Live Stock force albeit it varied widely from 3% in North-Eastern states to 40-48% in Punjab and Haryana. Animal husbandry promotes gender equity. More than threefourth of the labour demand in livestock production is met by women. The share of women employment in livestock sector is around 90% in Punjab and Haryana where dairying is a prominent activity and animals are stallfed.

The distribution patterns of income and employment show that small farm households hold more opportunities in livestock production. The growth in livestock sector is demand-driven, inclusive and pro-poor. Incidence of rural poverty is less in states like Punjab, Haryana, Jammu & Kashmir, Himachal Pradesh, Kerala, Gujarat, and Rajasthan where livestock accounts for a sizeable share of agricultural income as well as employment. Empirical evidence from India as well as from many other developing countries suggests that livestock development has been an important route for the poor households to escape poverty.

Nonetheless, there are number of socioeconomic and environmental challenges that need to be overcome through appropriate policies, technologies and strategies in order to harness the pro-poor potential of livestock.

Improving productivity in a huge population of low-producing animals is one of the major challenges. The average annual milk yield of Indian cattle is 1172 kg which is only about 50% of the global average4, and much less than in New Zealand (3343 kg), Australia (5600 kg), UK (7101 kg), US (9332 kg) and Israel (10214 kg). Likewise the meat yield of most species is 20-60% lower than the world average.

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The growth in milk production decelerated from 4.4% during 1990s to 3.9% during 2000s. There remains a huge gap between the potential and the realized yields in Indian livestock. Only 27-75% of the dairy animal potential yield is realized in different regions of the country5 because of constraints related to feeding, breeding, health and management. Output worth Rs 283 billion (at 2003 prices), which was equivalent to 25% of the value of milk produced in 2002, was lost due to these constraints. Feed and fodder scarcity is identified as the most limiting constraint accounting for half of the total loss, followed by problems in breeding and reproduction (21%) and in health (18%).

Crossbreeding of indigenous species with exotic stocks to enhance genetic potential of different species has been successful only to a limited extent .Limited AI services owing to deficiency in quality germ plasm, infrastructure and technical manpower coupled with poor conception rate following artificial insemination have been the major impediments. After more than three decades of crossbreeding, the crossbred population is only 16.6% in cattle, 21.5% in pigs and 5.2% in sheep.

Livestock derive major part of their energy requirement from agricultural byproducts and residues. Hardly 5% of the cropped area is utilized to grow fodder. India is deficit in dry fodder by 11%, green fodder by 35% and concentrates feed by 28%. The common grazing lands too have been deteriorating quantitatively and qualitatively.

Frequent outbreaks of diseases like FMD, BQ, PPR, Influenza etc. continue to affect livestock health and productivity. India has about 55000 veterinary institutions including poly clinics, hospitals, dispensaries and stockman centers.

Veterinary and animal health services are largely in the public sector domain and remain poor.

India’s huge population of ruminants remains a major source of greenhouse gases adding to global warming.

Reducing greenhouse gases through mitigation and adaptation strategies will be a major challenge.

The sector will also come under significant adjustment 43

pressure to the emerging market forces.

Though globalization will create avenues for increased participation in international trade, stringent food safety and quality norms would be required.

Livestock sector did not receive the policy and financial attention it deserved. The sector received only about 12% of the total public expenditure on agriculture and allied sectors, which is disproportionately lesser than its contribution to agricultural GDP. The sector too has been neglected by the financial institutions. The share of livestock in the total agricultural credit has hardly ever exceeded 4% in the total (short-term, medium-term and long-term).

The institutional mechanisms to protect animals against risk are not strong enough. Currently, only 6% of the animal heads (excluding poultry) are provided insurance cover. Livestock extension has remained grossly neglected in the past.

Only about 5% of the farm households in India access information on livestock technology. These indicate an apathetic outreach of the financial and information delivery systems.

Access to markets is critical to speed up commercialization of livestock production. Lack of access to markets may act as a disincentive to farmers to adopt improved technologies and quality inputs.

Except for poultry products and to some extent for milk, markets for livestock and livestock products are underdeveloped, irregular, uncertain and lack transparency.

Further these are often dominated by informal market intermediaries who exploit the producers.

Likewise, slaughtering facilities are too inadequate. About half of the total meat production comes from un-registered, make-shift slaughter houses. Marketing and transaction costs of livestock products are high taking 15-20% of the sale price6.

The extent to which the pro-poor potential of livestock can be harnessed would depend on how technology, institutions, policies and financial support address the constraints of the sector. The numberdriven growth in livestock production may not sustain in the long run due to its increasing stress on the limited natural resources. The future growth has to come from improvements in technology and service delivery systems leading to accelerated productivity, processing and marketing.

Grain Market Report HIGHLIGHTS The IGC Grains and Oilseeds Index (GOI) rose 2% m/m, including a 3% increase for wheat, 2% for maize and 1% for soyabeans. Rice was virtually unchanged. However, the index is down 16% y/y as the supply outlook for grains, rice and oilseeds markets is significantly more comfortable than last year. Volatility in CME maize and soyabean futures has steadily declined from elevated levels in August and September, as forecasts for bumper crops have mostly been realised.

The output forecast for total grains (wheat and coarse grains) in 2013/14 has been lifted by 10m t this month, to 1,940m, up 8% y/y. While demand is also expected to rise, by 5% y/y, inventories are seen recovering by 39m t to a fouryear high at the end of 2013/14. The global trade forecast is raised by 3m t, to 273m, exceeding the previous record in 2010/11.

Gains in wheat prices over the past month stemmed from crop concerns in Argentina and the Black Sea region. Overall, however, wheat output is expected to rise by 6% y/y in 2013/14 and closing stocks are seen up by 7m t, at 182m, although this would still be below the level seen in 2011/12. The 2013/14 forecast for the global maize harvest has been raised by 5m t this month to a record 948m, and stocks are seen recovering to a 13-year high of 152m. Price activity has been mixed in a relatively tight range, with US prices declining on the good supply outlook and better than expected yields, while Black Sea export prices gained on harvest delays and tight logistics.

Rice markets were also mixed, with good export demand and weather-related crop worries underpinning values in Vietnam, but Thailand’s prices fell further on limited buying interest and pressure from heavy intervention reserves.

Rice output is forecast up 1% y/y in 2013/14, with world ending stocks expected to rise for a ninth consecutive year. Strong export demand partly lifted soyabean prices this month, but gains were capped by good harvest progress and yields in the US, together with recently improved weather in South America. The global soyabean crop is seen up 4% y/y in 2013/14, with a 12% rise in aggregate stocks.

A market focus on the prospects for India’s grain and rice exports highlights the expansion seen in 2012/13, resulting from ample supplies. Export volumes are expected to decline in 2013/14 but remain at relatively high levels, with the outcome hinging on relative prices. A proposed cut in the floor price for exports from centrally-held wheat stocks is expected to be approved at the beginning of November. While this could stimulate increased export demand for milling wheat, sales for feed will likely remain low due to competition from cheaper maize.

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Report SUMMARY OUTLOOK FOR KEY GRAINS AND OILSEEDS WHEAT • The IGC GOI wheat sub-Index increased by 3% m/m, led by concerns about crop prospects in Argentina and the Black Sea region.

• The forecast for world wheat production in 2013/14 is 4m t higher than last month, at 696m, and up 6% y/y with a substantial recovery seen in the CIS. • Higher food and feed use is expected to lift world consumption by 2% to 690m, and end-season stocks are put at 182m, up by 7m y/y.

• The world trade forecast for 2013/14 is raised by 1m t to 142m; a small increase y/y as demand from China and Egypt outweighs declines elsewhere.

MAIZE • The IGC GOI maize sub Index ended up 2% m/m, as gains in spot export prices in the Black Sea region and South America more than offset a drop in US quotations.

• The forecast for world maize output in 2013/14 has been raised by 5m t to a record 948m, driven by a rebound in the US. • Led by expanding global feed use, world consumption is expected to show strong 6% growth, and trade is also forecast to increase by 6% y/y, to a new record.

• After recent tightening, global ending stocks are set to rebound sharply, with carryovers in the major exporters seen at a 26-year high.

RICE • While the IGC GOI rice sub-Index was broadly unchanged m/m, markets were again mixed, with values in Vietnam underpinned by export demand and crop worries, but weaker in Thailand on limited buying interest and heavy intervention reserves.

• World production is projected to expand by 1% y/y, to an all-time high in 2013/14, with larger crops in Far East Asia, notably India; global demand is set to rise by 1%, led by Asia.

• The 2013/14 world carryover is likely to increase for the ninth consecutive year, with major exporters’ stocks at a new record.

• Global trade is tentatively expected to rise in 2014, with higher sales to Far East Asia, though China’s needs remain uncertain.

Market Focus: Prospects for India’s grain and rice exports Against a background of ample supplies, India’s rice, wheat, maize and barley exports have increased significantly in the last two years. Forecasts for 2013/14 indicate that total shipments are likely to be still high, but lower y/y, given greater competition from other origins, although the outcome will hinge on relative prices.

India grain and rice exports (respective marketing years)

While continued exports from central stocks were authorised for 2013/14, following an easing of global values, the minimum export price of around US$300 fob was relatively high. Nevertheless, the completion of earlier business as well as exports by private traders from the open market helped to maintain solid shipments in the first three months of the MY. However, preliminary estimates suggest the pace slowed from July, with competition from lower-priced supplies at other origins, especially the Black Sea.

OILSEEDS • The IGC-GOI soyabeans sub-Index was up by 1% m/m, as good US crop prospects and recently improved planting weather in South America were offset by strong export demand.

• Global soyabean output is projected to expand by 4% y/y in 2013/14, to a record 282m t, on expectations for bumper crops in South America.

• End-season stocks are set to increase by Wheat: India monthly exports 12% in 2013/14, led by major exporters, and global trade (Oct/Sep) is set to expand by 10%, driven by a rebound in import demand from China.

• Based on ample supplies in Canada, the world rapeseed/canola carryover is expected to grow by 27% y/y, to 6.1m t.

Wheat Despite strongly rising consumption, bumper harvests in recent years have seen India’s wheat stocks increase to burdensome levels. In response to growing surpluses and a shortage of storage capacity, the government relaxed Vol. 09, Issue 05, March, 2014

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Report Rice: India centrally-held stocks

a ban on exports by private traders in September 2011. However, high domestic prices relative to global levels initially hindered sales, with shipments totalling just 0.8m t by the end of the marketing year (MY) in March 2012.

The stocks problem was exacerbated by a subsequent record harvest, with heavy government procurements from farmers boosting centrally-held reserves to around 50m t by the beginning of July 2012.

This was one-third higher y/y and much bigger than the desired level of 20m t (buffer norm plus strategic reserve), with much stored in poor conditions. In order to help control the growing stockpile, the government opened tenders to private traders to export supplies from the central pool.

At about the same time, the competitiveness of India’s exports improved after a sharp rise in world wheat prices was sparked by deteriorating global production expectations. A fall in world maize production saw prices for that grain increase steeply too, encouraging animal feed manufacturers to seek lower-priced alternatives.

During the 2012/13 (Apr/Mar) marketing year, India’s wheat shipments soared to 6.7m t, mostly to other countries in Asia.

Nevertheless, the carryover of centrally held wheat stocks still grew by 4.2m t y/y, to 24.2m, the highest since 2001/02.

Although a stronger rupee has contributed to some increase in US dollar-denominated export quotations in recent weeks, at

around US$270 fob (Kandla) they remain well below the minimum price for exports from central reserves. In order to stimulate exports, the government is expected to reduce the minimum price to US$260 from the beginning of November. Based on shipments to date, MY 2013/14 (Apr/ Mar) exports are forecast at 5.0m t.

Any pick-up in exports would help to further reduce government-controlled stocks. These are already below last year’s levels due to lower than expected government procurements from the 2013 harvest; as at 1 October, the wheat central pool was placed at 36.1m t, down by 7.1m y/y, but still above the official target of 14.0m at that date. Increased purchases by private traders direct from farmers are reported to have contributed to this season’s decline in government procurements.

Rice Boosted by a series of good summer-sown (kharif) harvests, coupled with a near four year ban on non-basmati rice shipments, centrally-held rice stocks have increased markedly in recent years. Mostly reflecting limited storage capacity, the government lifted restrictions on rice exports in September 2011, with sales surging to an unprecedented high. Marketing year (Oct/ Sep) exports in 2011/12 totalled 10.2m t, up from 2.8m the previous year, and around three times larger than the prior five-year average. Based on data for the first ten months, 2012/13 exports are seen at a similar level of 10.1m t.

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As noted previously (see GMR 436 Market Focus: Update on India’s rice exports in 2013), the dramatic expansion of the country’s shipments was underpinned by increased demand for competitively-priced non-basmati supplies from buyers in subSaharan Africa. Moreover, with the Thai government’s paddy intervention buying programmes effectively pricing exporters out of key markets in that region, Indian traders gained substantial market share.

In addition, deliveries to Asia, including high-value basmati grades, rose sharply.

Rice: India exports by major type

Despite rising consumption and recent heavy exports, inventories of rice remain relatively large, suggesting that India is likely to maintain a significant presence in the world market for non-basmati rice in 2013/14. Additionally, aided by a generally favourable Southwest monsoon, plantings for this year’s kharif rice crop are estimated to have increased slightly y/y and, assuming another year of aboveaverage yields, total rice production in 2013/14 is forecast at an all-time high.

India’s 2013/14 rice exports are projected to decline by around 14% from the previous year, to 8.7m t, but that would still be about 60% higher than the average of the previous five years. To an extent, the forecast y/y fall reflects likely greater competition from other suppliers, notably Thailand, linked to much narrower export pricespreads for key broken grades (see Vol. 09, Issue 05, March, 2014

Report chart). Additionally, global import demand is expected to expand only slightly in 2014, especially in sub-Saharan Africa.

Rice: Export quotations at key origins (25% broken)

Maize High prices and strong demand have encouraged additional maize plantings in recent years and, with a steady improvement in average yields, India is now among the world’s largest producers and exporters (see also GMR 432 Market Focus: India’s maize output and trade). A larger surplus has enabled India to expand exports and the country has, in recent years been the largest single supplier to Vietnam and Indonesia, two of the fastest growing markets in Far East Asia.

Helped by adequate monsoon rains and a rise in plantings, 2013/14 production is forecast to increase to 22.5m t, from 21.8m last year. However there are some quality concerns, with rains during harvesting raising the moisture content of some crops.

Indian maize is typically lower in quality compared to the four main exporters and its supplies, therefore, are usually priced at a discount to attract demand. However, owing to much larger global supplies and the fall in world prices, maize from India

is currently uncompetitive and demand has weakened.

Reflecting the change in relative world prices, feed millers in Vietnam recently turned to Brazil, securing as much as 0.4m t for delivery in early 2014. With stiff price competition from both South America and Ukraine and, with some buyers seemingly concerned about quality, India’s marketing year (Nov/Oct) exports are forecast to dip to 4.2m t, from 4.8m the previous year.

Barley Barley exports are forecast at 300,000t in 2013/14 (Apr/ Mar, excluding malt), placing India as the world’s seventh largest exporter.

Shipments were similar in 2012/13, up from a nominal amount the previous year, overtaking Kazakhstan and the US. Exports are almost exclusively to feed barley destinations in Near East Asia. Whilst production has been on an upward trend, from 1.1m t in 2005/06, to a forecast 1.7m in 2013/14, the desire to reduce domestic grain inventories is likely to have contributed to the increase in shipments.

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Opportunities in the fastest growing

Food Processing Industry I ndia is the biggest producer and consumer of food and has the world’s largest young population. With the changing lifestyle, increasing affordability and both husband and wife working, the demand of semi processed and ready to eat food is increasing at a breakneck speed of 30 per cent per annum.

The food processing industry in India is a sunrise sector that has gained prominence in recent years. Availability of raw materials, changing lifestyles and relaxation in policies has given a considerable push to the industry’s growth. This sector is among the few that serves as a vital link between the agriculture and industrial segments of the economy. Strengthening this link is of critical importance to improve the value of agricultural produce; ensure remunerative prices to farmers and at the same time create favourable demand for Indian agricultural products in the world market. A thrust to the food processing sector implies significant development of the agriculture sector and ensures value addition to it.

The Indian food processing industry holds Vol. 09, Issue 05, March, 2014

tremendous potential to grow, considering the still nascent levels of processing at present. Though India’s agricultural production base is reasonably strong, wastage of agricultural produce is sizeable.

Processing of fruits and vegetables is a low 2%, around 35% in milk, 21% in meat and 6% in poultry products. By international comparison, these levels are significantly low - processing of agriculture produce is around 40% in China, 30% in Thailand, 70% in Brazil, 78% in the Philippines and 80% in Malaysia. Value addition to agriculture produce in India is just 20%, wastage is estimated to be valued at around US$ 13 bn (Rs 580 bn).

India, with an arable land of 184 mn hectares is, the highest producer of milk in the world at 90 mn tonnes p.a., second largest producer of fruits & vegetables (150 mn tonnes), third largest producer of foodgrains and fish and has the largest livestock population. Considering the wide-ranging and large raw material base that the country offers, along with a consumer base of over one billion people, the industry holds tremendous opportunities for large investments.

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The Ministry of Food Processing Industries The Ministry was set up in 1998 and the industry segments that come under its purview are: • Fruit & Vegetable processing (including freezing and dehydration) • Grain Processing • Processing of Fish (including canning and freezing) • Processing and refrigeration of certain agricultural products, dairy products, poultry and eggs, meat and meat products • Industries related to bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery, malt extract, protein isolate, high protein food, weaning food and extruded food products (including other ready-to-eat foods) • Beer, including non-alcoholic beer • Alcoholic drinks from nonmolasses base • Aerated water and soft drinks • Specialised packaging for food processing industries.

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The Ministry of Food Processing Industries, GoI, has estimated the size of the Indian food market at US$ 191 bn (Rs 8,600 bn). The processed food market is projected to be over US$ 100 bn, of which the primarily processed food market accounts for 60%, while the value-added processed food market is around 40%.

The average annual growth of the food processing industry has been around 8% between FY01-FY06. The segments that have driven the growth are the beverages and meat & meat products and processed fish sectors. The food processing industry in India has a share of 1.5% in the total GDP of the country, and as part of total manufacturing accounts for 9%. India’s share in world trade in respect of processed food is about 1.6%.

An extensive and highly fragmented industry, the food processing sector largely comprises of the following subsegments: fruits & vegetables, milk and milk products, beer & alcoholic beverages, meat and poultry, marine products, grain processing, packaged/convenience food and packaged drinks. A large number of players in this industry are small sized companies, and are largely concentrated in the unorganised segment. This segment accounts for more than 70% of the output in volume terms and 50% in value terms.

However, though the organized sector is comparatively small, it is growing at a much faster pace.

Scope of the Indian Food Processing Industry Abundant Raw Material India’s world Rank in production of 1 milk, ginger, chickpea, banana, guava, papaya, mango, buffalo meat 2 rice, wheat, potato, garlic, cashew nut, groundnut, dry onion, green peas, pumpkin, gourds, cauliflowers, sugarcane, tea among top five coffee, tobacco, spices, oilseeds With such a huge raw material base, we can easily become leading food supplier in the world. (But we haven’t, because of the obstacles discussed later).

Geographical advantages 1. 46 out of 60 soil types are present in India.

2. More than 26 types of climatic conditions= can cultivate large variety of fruits, crops, vegetables.

3. Large coastline, villagers in 13 states engaged in fishing as their secondary activity.

4. Variety domestic animals such as cows, buffaloes, goats, chicken, lamb, sheep.

5. Large irrigated area under cultivation.

Ample supply of fresh water for human, plant and animals.

New Demand In the upcoming years, there will be good demand for healthy, modern food products due to following reasons: 1. Youth population (age group 15 – 25): doesn’t shy away from trying new food products.

2. More Nuclear families: usually working couple => less cooking time + expensive maids=need ready to eat / ready to cook food.

3. Rising incomes, middle class and rich families=can afford processed food.

4. Emergence of Tier 1 Source: D&B Research and Tier 2 cities, shopping Structure of the Indian Food Processing Industry mall culture.

5. Growing migration from rural to urban India + rising income = demand for bread, butter etc.

6. Media penetration, advertisements=> “demand” is created for health-drinks, noodles, cream-biscuits, cornflakes etc.

7. Celebrity chefs, cookery channels= new Food Processing Units in Organised Sector 56

dishes, international cuisines introduced=>demand for their ingredients, vegetables in India.

8. Diabetes, obesity, Blood pressure, lifestyle diseases =>demand for healthy food.

As a result, food processing industry is expected to reach year 2015 2020

turnover USD >250 billion >300 billion

Government Initiatives • Many food processing sectors that were earlier reserved for small scale industries (SSI) have been dereserved • FDI limits have been relaxed, Excise duties have been reduced, export subsidies given • National mission on food processing, Vision2015 for food processing, • New schemes for mega food parks, cold chain etc.

• Many states have reformed their outdated APMC laws.

Together they facilitate the expansion of food processing industry in India.

West Bengal : Setting standards in Food Processing The state is a leading producer of many horticulture and agriculture items. It is also a significant producer of freshwater fish, shrimp, eggs and meat. Good investment opportunities exist in the areas of food processing industries, the important ones being fruit and vegetable processing, meat, fish and poultry processing, confectionaries, beverages, fast foods and milk products. According to FAIDA report of McKinsey, West Bengal is one of the three leading states in India in the food and agro-processing sector Vol. 09, Issue 05, March, 2014

Growth The food processing industry in the country is on track to ensure profitability in the coming decades. The sector is expected to attract phenomenal investments of about Rs 1,40,000 crore in the next decade.

Changing lifestyle with traditional joint family systems giving way to `nuclear families’ where husbands and wives are both working, the demand for `packaged and preserved’ food products is rising.

Very soon, fast foods, ready meals, snacks and processed foodstuff will hold the centre stage.

Opportunities West Bengal has identified food processing as one of the thrust areas for the State’s future industrial development. In fact, West Bengal comprising six agro-climatic zones offers extensive and diversified variety of environs for the development of temperate, sub-tropical and tropical horticulture produce and therefore have the capacity to cater the market with various items round the seasons. Although horticultural cultivation has a long history in West Bengal, the establishment of a research station on a small 25-acre farm at Krishnanagar, Nadia, during 1934, which now covers around 198.09 acres, marked the beginning of horticultural activities in the state.

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Horticulture, thereafter, grew up gradually the state produces wide range of varieties, through research and development both scented and non-scented. It is also programmes over the years. a significant producer of oilseeds where the main varieties are groundnut, linseed, More potential mesta, nigerseed, rapeseed, mustard, The state has achieved significant growth sesamum and soyabean. in agricultural production over the past Meanwhile five agri export zones across decade. It is now among the country’s the state for pineapple, lychee, mango, top two producers in a wide variety of potato and vegetables where the investors agricultural produce and has attained could enjoy both Central and state self-sufficiency in most key crops. This government incentives and benefits. self-sufficiency has resulted in reasonable amount of marketable surplus for most Major centres of the key crops. Moreover, the state has The state is also a major centre for tremendous possibilities in medicinal vegetable production, with good offplants and herbs. Out of the 145 different season production of temperate types. medicinal plants grown in the state, the There is a lot of scope for fresh vegetable State Medicinal Plant Board has stressed exports. There must be emphasis on upon the cultivation of 32 medicinal premium quality and high yield to replace plants, which are in demand in both the high priced supplies from Australia and domestic and international market. the US. The state has a good potential The state has significant production levels for exporting flowers such as gladioli, in some of the key crops on an all-India gerbera, tuberose, rose and orchids to level. It is the largest producer of rice and countries such as the Netherlands, West the second largest producer of potato in Asia, the UK and Japan. Japan is a large the country. The average yield of potato consumption market for flowers. It is one in the state is not only higher than the of the largest importers of orchids. Other India level but also higher than the world than export market, flowers can also be average yield. Grains produced in the state sold in the local and interstate markets. include cereals such as rice, wheat, maize, The state also grows different varieties of barley and a variety of pulses such as tur, medicinal plants and herbs, which have masur, mung, gram and khesari. In rice, significant demand in the country as well

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as abroad. The World Health Organisation has predicted that by 2020, the total transaction in medicinal plants would amount to $3 trillion per year and by 2050, the market for medicinal plants and its derivatives would be valued at $5 trillion.

The state also grows various aromatic plants and the State Medicinal Plant Board encourages farmers to cultivate different aromatic plants.

Natural advantage West Bengal is a significant producer of many horticulture and agriculture items, which gives it a natural advantage to invest in fruit and vegetable processing, spices and grain processing industries.

Besides this, the state also produces other food products such as fish, meat and poultry products in abundance, which also have enormous processing prospects.

Some of the leading investments in the food processing industry in the state: Companies such as Dabur, Frito-Lay, Venkateshwara Hatcheries and Nestle have initiated projects in the food-processing

sector or have started marketing products manufactured in the state. “ILEAD (Institute of Leadership, Entrepreneurship and Development) is organizing a seminar on business opportunities in the fastest growing food processing industry in Bengal on 25th (Friday) & 26th (Saturday) April 2014 at Dale Carnegie Hall in iLEAD Campus at 113J Matheswartola Road, Kolkata – 700046.

The seminar would include presentations by the food processing machinery manufacturers, consultants, franchisors, etc from USA, UK, Germany, Holland, France and Belgium. It would also include participation from the food processing machinery manufacturers of India, nationalized banks offering soft loans for food processing industries, Government of West Bengal and other stakeholders from the industry. The Ministries of Industries and Trade, Government of West Bengal is the co-partner and main sponsor of this seminar, which is expected to attract more than 200 participants

from various cities of India as well as the neighboring countries such as Nepal, Bhutan, Sri Lanka, Bangladesh, Myanmar and Thailand.

The co-partner of the event, i.e. the Ministries of Industries and Trade, Government of West Bengal is likely to announce additional incentives and subsidies for the food processing industry of West Bengal during the event. The event would also provide the right opportunities for the budding entrepreneurs to clarify their doubts as well as make their suggestions and recommendations to further incentivize setting up of such industries in Bengal.

The seminar will be an international event organized for the first time in this part of the country and it would provide the right opportunities to know everything about the viable and lucrative food processing projects particularly the plastic packaging manufacturers who would like to diversify into the food processing industry for backward or forward integration of their existing business.

121, 1st Floor, Rassaz Multiplex, Station Road, Mira Road (E), Dist Thane - 401 107, Maharashtra

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Vol. 09, Issue 05, March, 2014

www.foodbevtech.com

www.foodbev.in

Exhibitors Profile

Exhibitors Profile

• Process Techhnology Automation • Packaging Technlogy • Automation • Processing Control & Regulation Technology • Food Retailling • Food Safety & Quality Mangement • Environment Technology, Biotechnology • Conveying Transport & Storage Installations • Dispensing & Vending Machines • Food Service

• Manufacturers/Importers and wholesalers of Food & Beverages • Dairy Products • Bread and Bakery • Oil & Fats • Frozen Food / Chilled Food • Fine Food / Gourmet • Fish & Sea Food / Meat & Poultry • Trade Agencies • Nutraceuticals Products / Organic Foods • Functional Food • Ingredients, Colours & Additives

Visitor Profile • CEO’s & Top Executives from Food & Beverage Industry • Sr. Executives from Production, Quality Control, Maintenance • Purchase Departments • Professionals from R & D Institution, Supply Chain Distributors • F & B Managers etc.

• Top officials from Regulatory Agencies of Central & State Governments • Food & Beverage Consultants • Hypermarkets / Supermarkets • Grocery Stores / Convenience • Stores / Retailers • Departmental Stores • Food and Drink Importers / Distributors / Wholesalers • Foodservices and Hospitality Counsulting • Hotels / Resorts Management • Foodservice Government, Military, School, Hospital • Foodservice - Industrial • Bakeries / Confectionaries

For further details contact Amolsingh Pardeshi amol.pardeshi@cii.in

Saurabh Rajurkar

saurabh.rajurar@cii.in

Confederation of Indian Industry (WR) 105 Kakad Chambers, 132 Dr Annie Besant Road, Worli, Mumbai 400 018. Phone : +91 22 24931790 • Fax : +91 22 24939463 / 24945831 • Web: www.cii.in