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4 AgriBusiness & Food Industry w April 2012

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8 EDITORIAL

20 AgRI AffAIRs

Public-Private Partnership in Agriculture Possibilities & Perspectives – Sanjeev Chopra

24 buDgET

Budget 2012-13 National Mission for Food Processing proposed Plan outlay for Agriculture hiked – TVS

30 HEALTH & NuTRITION

Nutra India Summit 2012 Focus on curative powers of food – A Bureau Report

32 bRAND fOcus

Giving dead brands a second life – R. Srinivasan

34 bEvERAgEs

War of the Titans Iconic British tea brand Twinings & Tata’s Tetley clash for Indian markets – Chitra Narayanan

36 cORPORATE NEWs

l Carrefour to enter Agra, Meerut l Bharti Walmart set to expand in South India 40 fOOD & bEvERAgEs NEWs

l Parle Agro to target rural areas l Oreo completes a century

44 cOMMODITY NEWs

l Europe worries over spread of Bt cotton in India l Pawar wants to boost exports of rice, sugar, wheat

46 DAIRY NEWs

l Amul to spend Rs 3K-cr to expand its reach l Danone India launches packaged lassi

inside...Cover Story ...10

Event Report ...26

National Horti Conference

– T v satyanarayanan

Horticulture on the moveExpo – Hailed as one of the best

Kick-start to ‘Year of Horticulture’Taking Production to new peaks— bureau Report

India focus in BioFach 2012It can light the path in organic products, say organizers


www.iplexpo.com


chief Editor S. Jafar Naqvi

consulting Editors T.V. Satyanarayanan K Dharmarajan

chief co-ordinator M.B. Naqvi

Editorial co-ordinator Syed M K general Manager Lalitha V. Rajan Layout & Design Faiyaz Ahmad Mohd. Iqbal Head Office New Delhi: +91-11-26682045 / 26681671 / 64521572 fax : +91-11-26681671 [email protected] Other BusinessOffices

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Editor : S. Jafar Naqvi

vol 9....... Issue 4 ...... April 2012

In the roadmap of Indian agricultural development, a sector getting increasing attention is food processing, which over the last five years has been growing at an average rate of over eight per cent. Clearly, it is in recognition of its growth and to take its activities

further forward that Union Finance Minister Pranab Mukherjee has announced in his budget presented to parliament the starting of a Centrally-sponsored scheme, National Mission on Food Processing, in cooperation with the state governments, with a plan outlay of Rs. 250 crore for 2012-13, the first year of the 12th Plan. This marks a major shift in the role of the Ministry of Food Processing Industries from being an implementing agency to policy formulation with greater involvement of state governments.

The mission, if zealously implemented, can play a vital role in conserving what is produced, particularly fruits and vegetables, 30 to 40 per cent of which goes waste for want of adequate processing facilities. Production of food grains, milk, fruits and vegetables is consistently rising from plan to plan, but as important as production is conserving what is produced for the consumers, and converting the produce into value added products.

Latest production figures were cited by President Pratibha Patil in her address to parliament on the opening day of the budget session. Listing the achievements of the government on the farm front in 2010-11, the President said production of food grains scaled a new high of 241.56 million tonnes while that of fruits and vegetables was also a record 231 milllion tonnes.

The Agriculture Ministry’s estimates for 2011-12 have pegged fruits and vegetables output at a still higher figure, which is good news for the processing industry.

The pre-budget Economic Survey 2011-12, tabled in parliament, points out that over the years there been noticeable achievements and significant improvements in the production and productivity of various horticulture crops, following the launch of the National Horticulture Mission. The major programmes of the mission like supply of quality planting material, productivity improvement programmes through area expansion and rejuvenation, and technology promotion are yielding rich dividends. At present NHM’s activities cover 372 districts in 18 states, and three Union Territories.

A clear proof of the growing interest of government agencies, cooperatives and private sector companies in the cultivation of high value quality fruits and vegetables was the attractive display of these produce and products at the recently concluded Horti Expo in the national capital. Undoubtedly, the consumption patterns of people, especially in urban areas, are changing because of higher incomes and increasing health consciousness. All this is being reflected in higher demand for good quality fresh fruits and vegetables as well as processed horticulture products.

While many participant states at the Expo displayed their processed food products – many of them very innovative – North-eastern region states among them deserve special mention as horticulture has brought more income to their farming communities, which for long had remained economically backward. The fruits produced in the region include kiwi, strawberry, pineapple, and different varieties of citrus, besides fresh ginger, turmeric, black peeper and cardamom. Processed food products like jam, jelly, juice, squash and pickles are finding new markets. The region has a pineapple concentration plant, a cashew processing plant and a ginger processing plant, aimed at fetching better price for the growers.

The proposed National Mission on Food Processing would hopefully promote setting up of more such units, spread all over the country, particularly in the economically backward regions, and thus help reduce wastage of horticulture produce on the one hand and augment income and employment for the people on the other.

comments are welcome at: [email protected] expressed by individuals and contributors in the magazine are their own and do not necessarily represent the views of “Agribusiness & food Industry” editorial board. Agribusiness & food Industry does not accept any responsibility of any direct, indirect or consequential damage caused to any party due to views expressed by any one or more persons in the trade. All disputes are to be referred to Delhi Jurisdiction only. .....Editor

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– T v satyanarayanan

An “aesthetic walk”–this pithy statement by Chief Minister Sheila Dikshit said it all for

thousands of general visitors who flocked NSIC complex in the national capital for three days. For the large number of trade visitors, however, it was more than that: It was a great business opportunity.

After a 20-minute walk round the grand show that was Horti Expo 2012 –not one expo but three under one roof – the Chief Minister said she would have loved to spend more time going round the aesthetically pleasing pavilions than making a speech. But she had to go through the formality of making a speech to

the assembled participants from India and abroad as she was the chief guest invited to inaugurate the expo and the concurrent South Asian Congress on Horticulture. Acknowledged as the largest exhibition of its kind in south Asia, the expo, organised by Media Today Group, showcased outstanding developments in horticulture, floriculture and landscaping in India and many countries abroad. Besides production, food processing, farm inputs and farm machinery occupied an important place in the expo.

Foreign participationBeing a partner country, Holland

put up a grand show and sent a

large delegation. In all 16 countries were represented in the exhibition. Delegations came from Nigeria, Nepal, Sri Lanka, Bhutan, Germany and Israel.

Twenty Indian states and a number of private sector companies put up impressive pavilions to display their skills and performance in production, processing, and marketing, including exports.

Visibly impressed by the wealth of choice fruits, vegetables and flowers in all colours and shapes on display, Sheila Dikshit noted India has become a great centre for horticulture. Even a decade or so ago, she said, India was not producing so many varieties of vegetables and flowers. Broccoli, baby corn, or



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even mushroom, are comparatively recent introductions, but they have secured a place in Indian kitchens. She congratulated Indian agriculture scientists who have developed the production technology for a wide variety of good quality vegetables and fruits.

However, Sheila Dikshit said, a worrisome aspect is that 40 per cent of the vegetable production is going waste, mainly for want of proper storage facilities. Better yields are very necessary, but equally important is creation of effective cold storage facilities to maintain the quality for the consumers. The next step should, therefore, focus on “conserve for consumption.”

The Netherlands ambassador to India Bob Hiensch said that despite limited

land resources, his country ranks as the second highest agri exporter in the world. It has also secured No I place in value addition. He attributed this achievement to use of hitech techniques in production and processing. He pointed out that Holland is already cooperating with government agencies like National Horticulture Mission and National Horticulture Board. This expo itself is a fine example of Indo-Dutch cooperation.

Bhutan’s Ambassador V Namgyel stressed the growing importance of floriculture in Bhutan. The rich fund of expertise and technologies displayed at this Expo could be of much help to Bhutan and other south Asian countries.

In his address of welcome, Joint



Secretary and Mission Director, NHM, Sanjeev Chopra pointed out how increasing family incomes and changing lifestyles are contributing to horticulture getting an important place in agriculture all over the world. The trend is very much evident in India.

Sachid Madan, Co-Chairman of FICCI Agriculture Committee, said fruits and vegetables retailing has an enormous potential in India. It is important to streamline the supply chain. “It is a matter of getting and doing the right things in a systematic manner.”

Large visitor turnoutAt the three-day exhibition, which

Delhi chief Minister sheila Dikshit and The Netherlands Ambasador bob Heinsch Inaugurating the Expo


drew over 15,000 visitors, maximum crowds were seen at Flora Expo, which, as usual, was at its colourful best. The number of Indo-Dutch companies there presented a look of a mini Holland. These companies, Indian states and domestic companies engaged in floriculture were vying with one another to display their best produce. Roses, carnations, gerbera, anthurium, orchids, and what have you -- in fact , a wide variety of flowers, and ornamentals in virtually all colours and shapes were on display.

Prominent among the participant Indo-Dutch companies were Florence Flora, Rise n’ Shine Floritech Sheel Biotech, K F Bioplants and Zopar exports, VWS Bulbs, Sabeer Biotech, Two floral art items at their best were


at Tamil Nadu and Delhi pavilions. The model of a giraffe made of marigold and other flowers and a mother crane feeding its young one made of white Babuna, a chrysathamum variety, were eye-catching pieces of art kept in front of Delhi’s department of environment pavilion. The main attraction in the Tamil Nadu pavilion was a temple Gopuram, eight feet tall, made of roses and other flowers. The Gopuram’s top was decorated with flowers and ornamentals like bird-of-paradise and Torch-ginger to give a realistic look to the model.

A newly developed pink bird-of-paradise variety, large in size, was prominently exhibited at the Kerala pavilion.

The Sri Lanka pavilion had problem on the first day as its exhibits were

quarantined at the Delhi customs. But all those beautiful plant materials were put on display on the second day. The exhibits reflected the amazing variety of plant resources in the country.

Largest producerIndia’s largest cut flower producing

company Ghodawat, based in Kolhapur in western Maharashtra, set up a large pavilion to showcase its performance. An official explained that the company produces a range of flowers and exotic vegetables in its greenhouses covering an area of 120 acres. The aim is to increase its greenhouse area to 500 acres in the next three years. The present production is 2,50,000 stems of roses, gerbera, carnations, gypsophila, tube roses, gladiolus and liliums.

Participant Indian states were represented mainly by their horticulture, environment and gardening departments. Flowers, fruits vegetables and horticulture products from various states presented a grand spectacle, emphasizing the growing popularity of horticulture among the farmers.

Sikkim gave a fine exhibition of its orchids, while Mizoram excelled with its display of anthuriums of different cololurs, besides other flowers grown by women’s self-help groups.

Himachal Pradesh’s Department of Horticulture put on view its cololurful carnations, gladiolus, lilium and other flowers. It was explained that carnation has proved to be a major commercial flower crop for growers in the state. Carnations conforming to

International quality standards are being produced in districts of Solan, Bilaspur, Chamba, Mandi, Sirmour and Kullu. The annual production of cut flowers from the state is 20 million stems with a gross turnover of 75 million rupees.

(L-R) M b Naqvi, sudhanshu, s Dave, vijay sardana & syed M K

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AgriBusiness & Food Industry w April 2012 13AgriBusiness & Food Industry w April 2012 13

F & V sectionIn the vegetable and fruit section,

Madhya Pradesh’s Directorate of Horticulture showcased some impressive varieties of vegetables like brinjal and potato produced by progressive farmers. Among them was a giant-size blue brinjal (round variety) produced by a farmer in Divlakheri village in Hoshangabad district and large Hunsona variety potato grown by another farmer of Jalalkheri village in Ujjain.

The Northeast Regional Agricultural Marketing Corporation (NERMAC) gave a good display of horticulture products from the north-eastern states. They included dried King Chilli (most pungent) from Nagaland, fresh strawberries, kiwi fruit juice, and many other value added products.

Choice varieties of fruits, vegetables and processed food products were also on display at the pavilions of Haryana and Punjab, where farmers are reaping the benefits of Horticulture Mission’s programmes. Among the items at Haryana pavilion attracting visitors’ attention were cherry tomatoes, looking specially small as they were kept near bigger fruits of the same family.

Haryana officials distributed to interested visitors, specially farmers, pamphlets giving elaborate information on how to grow vegetables like potato, tomato, brinjal, ladies’ finger, cabbage and cauliflower. These pamphlets carried details like types of soil needed, water requirements, time of sowing and harvesting and application of nutrients..

Similar guides to farmers for growing vegetables round the year were also available at the Delhi pavilion.

Aromatic cropsThe Directorate of Horticulture of

Rajasthan exhibited not only its fruits and vegetables but also medicinal and aromatic crops like Sonamukhi, Aswagandha,, which are processed and exported as well. An official explained that Rajasthan is a leading spices producer, accounting for 68 per cent of the country’s production of coriander, 39 per cent of cumin, 89 per cent of fenugreek and 24 per cent of garlic. Europe and south Asia are major markets for the spices produced and processed in Rajasthan.

There were many other attractions as well at the expo — nurseries offering a variety of plants, farm machinery and equipment, organic food and so on.

Jain Irrigation, in its pavilion, carried a good slogan: “More crop per drop”, emphasizing the importance of water saving techniques like drip irrigation and sprinklers. Its new introduction is solar powered. drip

irrigation system. The company is manufacturing also solar panels and accessories required for solar pumping systems.

As principal sponsors of the event, National Horticulture Mission, Horticulture Mission for North-eastern and Himalayan States and National Horticulture Board put up their pavilions which provided information on their activities to promote horticulture. APEDA was also prominently present and it sought to highlight its role in export promotion.

Overall, it was a grand show. Regular visitors to the expo series said in one voice that the event has been growing from strength to strength every year, ably serving the cause of horticulture development which has high potential to augment income and employment. n

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Kick-start to ‘Year of Horticulture’Taking Production to new peaks— Bureau Report

Having nudged itself to the centre stage of agriculture development, Indian

horticulture faces a big challenge – How to grow faster to meet the rising demand for horti products.

Against the record growth rate of ten million tonnes per annum in the last five years – to reach a new high of 231 million tonnes of fruits and vegetables – the task ahead is to quicken the pace to add 15 million tonnes annually in the 12 the Plan.

This scenario was projected by Dr H P Singh, ICAR’s Deputy Director General (Horticulture) in his valedictory address to South Asia

Horticulture Congress in New Delhi. While horticulture has made rapid progress in the last few years, Dr Singh said, the big challenge of this sector now is to match the production to meet the rising consumption demand, fuelled by people’s higher incomes, changing lifestyles and health consciousness. Adoption of new technology on a larger scale holds the key to meeting new targets.

Dr Singh noted that horticulture is contributing 23.5 per cent of agriculture GDP, from less than ten per cent of the land under agriculture. From being a hobby of Maharajas and Zamindars in the past, horticulture has emerged to

become the most popular option for the farmers.

Dr. S. M. Khan, DG-Doordarshan News informed about the proactive role that DD is playing in promoting Horticulture through its programmes. DD, he said, would be happy to telecast success story in this field and invited contributions for this purpose.

The congress, held as part of Horti Expo, organised by Media Today Group, was sponsored by Union Agriculture Ministry, which is celebrating 2012 as the ‘Year of Horticulture.’

Advisory CommitteeUnder the Chairmanship of A K


Address of welcome delivered by sanjeev chopra, Js MoA and MD, NHM at the Inaugural function. (L-R) M b Naqvi, sachid Madan, bob Heinsch, sheila Dikshit, cM, Delhi and v Namgyel

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Thakur, Addl. Secretary, Ministry of Agriculture, an Honorary Advisory Committee was formed to facilitate organization of this conference, focused on South Asia as an emerging horticulture market and technology transfer among farmers for future development. The committee members include : Co-Chairman, Sanjeev Chopra, MD - NHM & JS – MoA: Co-Chairman, Dr. Gorakh Singh, Commissioner of Horticulture – MoA: Adviser (Finance), Alok Sheel, JS, Dept. of Economic Affaires – MoF & Chairman SDF Board : Adviser (Exports) Asit K Tripathy, JS - MoCI, Chairman – APEDA : Adviser (Marketing) Bijay Kumar, MD-NHB : Adviser (Processing) Amrit Lal Meena, JS - MoFPI : Member Secretary Shailendra Kumar, Director (Horti)- MoA.

The members of the committee are : Dr. S Baskar Reddy, Additional Director, Head, Agriculture Water & Rural Development, FICCI : Krish Iyenger, JS – NCPAH : Dr. S D Singh, Director Horticulture, Delhi Govt. : Dr. B S Negi, Deputy Commissioner – NHM : Dr. R.K. Sharma, Sr. Zonal Director & Head-Cold Chain – NHB : Primal Oswal, Vice-President-Irrigation Association of India : M B. Naqvi, Chief Coordinator - Horti Expo & Flora Expo : Rathinam R Murthy, President, TNFGA & Member NHB Board : Dr. Sangita Ladha, Director - IHITC, Jaipur : S Jafar Naqvi, President - Indian Flowers & Ornamental Plants Welfare Association (iFlora) & Coordinator - Horti Expo 2012

Chief Guest of Valedictory Session and Award ceremony was S Dave, who is the elected Chairman of Codex Alimentarius. In his brief address Dave emphasized the importance of quality and safety, whether the produce and products are for the domestic or for export markets.

In all bilateral and multilateral negotiations that he has participated, Dave said, he found the utmost concern of importing countries was getting consistent supply of products conforming to quality and health safety norms. Good processing and good packaging are not enough; good agricultural practices are vitally important.

Over 25 presentations were made by speakers at the congress, which had five technical sessions, an interactive session and a panel discussion.

Special SessionIn the special session for senior

officers and foreign dignitaries, which was chaired by Sanjeev Chopra, Joint Secretary, NHM, Agriculture Counselor in the Netherlands embassy Henk van Duijn said quality was of paramount importance in horticulture. Towards this end, his country was cooperating to promote new technology in India.

Education and training played a vital role in quality improvement. In


s Jafar Naqvi delivering vote of thanks to all participants, sponsors and attendies at valedictory session (L-R) , M b Naqvi, s M Khan, s Dave, Dr H P singh, Anand Krishnan & Dr. satyaveer singh

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this context, he said Holland pavilion at the expo was giving video demonstration of new techniques and technology every half hour.

Denmark’s Agriculture counselor Paolo Drostby noted that horticulture has become a key sector in India. Denmark, he said, is a good market for mangoes and other Indian fruits. But the pesticide problem needs to be sorted out.

Counselor in the embassy of China Ge Songxue said China and India shared the similar awareness on agriculture development. The scope for bilateral cooperation in this field is indeed vast.

Minister Counselor in Iran embassy S. Saeid S. Moalemi stressed the role of farm scientists and said; they should interact with farmers. Iran is also organizing some expos on latest agriculture technologies to help the farmers.

Dr. Jose Samuel, Chief Consultant, NHM, chaired the session.

Horti ScenarioIn the first technical session that was

devoted to international and Indian horticulture scenario, Rubert Konijn of Greenport Holland International said Holland’s horti exports were worth one billion euros. It has 10,300 hectares under greenhouse, 80 per cent of which grows horti products. The strength of

Dutch agriculture is high technology to produce more with less energy and other inputs.

In his presentation on India’s agri export potential, T S Vishwanath, Principal Adviser, APJ-SLG Law Offices, said although in value terms the Indian exports look impressive, in terms of percentage of global trade, there is along way to go. A welcome change in India’s agri exports of late is the increasing share of processed food items. One problem on the export front is that the number of sanitary and phyto-sanitary regulations issued by WTO member countries stand at close to 2000. Most of them relate to food additives and pesticides.

It is difficult for small farmers to keep track of all of them. More expos of this nature would help to bring together the farmers, industry, business and government for greater interaction to sort out such issues.

S Bhattacharjee, MD of North Eastern Regional Agricultural Marketing Corporation (NERAMAC) detailed the work being done by the corporation to improve production and marketing of various horti products of North eastern states. NERAMAC, he said, has a pineapple juice concentration plant, a cashew processing unit and a ginger processing plant. N K Jawa, CEO of Fresh and Healthy Enterprises Ltd, a public sector undertaking under the Railway Ministry, outlined the initiatives of his organization in the marketing of fresh produce.

After the tea break, the second technical session, chaired by Henk van Duijn, Agriculture Counselor of Holland, was devoted to latest technologies for improvement of horticulture crops. Harald Braungantdt, President of INDEGA presented a survey of German Horticulture technologies and focused on the role of INDEGA. As MD of the association, he offered INDEGA’s cooperation to Indian horticulturists to promote this sector. President of Netherlands Agro & Food Technology Center Jan Hak said creation of an integrated chain would hold the key to success in potato production, processing and marketing. He stressed the importance of hybrid seeds, greenhouse management and adoption of best technologies to give a boost to this important horti crop.

Issues concerning quality guarantees in seed potatoes, plant breeders’ Right and Inspection were focused by Sierd Folkertsma, of NIVAP, Dutch Seed Potato Association. He stressed on the importance of research and farmer education. Proper storages should be created near the growers’ farms, he said.

Holistic ApproachIn his presentation, Marjin Leijten of

Greenport Holland International called for a holistic approach in horti business. Farmers, government and knowledge institutions, what he called the golden triangle, must work closely together. Public-private partnership would yield good results. Prekash Ramsingh of Lentiz said skill impartation is important not only to farmers, but


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also to those handling the produce so as to maintain quality and prevent food losses. Indian industry needs to improve in packaging and marketing.

The session was chaired by Dr R K Sharma, Zonal Director, & Head Cold Chain, NHB.

The next two sessions — on strategies to double production and on emerging floriculture sector in south Asia — were integrated into one. Errol van Goenewoud, Chief Commercial Officer, Omnivent, noted that potato prices were a political issue in India some time back. He stressed the importance of storage. Proper refrigeration with water and air circulation can improve quality and increase money. Adoption of better technology in harvesting and transportation is equally important. He briefly outlined the merits of Omnivent systems to enhance quality and achieve good returns.

The discussions on floriculture in south Asia was taken up next. Lok Nath Gaire, former Vice-President of Floriculture Association of Nepal made presentation on status of this emerging industry in his country. He said floriculture is growing in Nepal, at a rate of ten to fifteen per cent annually. A major constraint is lack of trained manpower. Some quantities of flowers are being exported to Japan and the Middle East. The growth potential for this industry is high.

Ms Ramya Weerakoon, President of Floriculture Produce Exporters Association of Sri Lanka said the growth of this industry is significant in her country, thanks to ideal climate and availability of skilled manpower. For the last few decades, the export growth has been remarkable. Forty per cent of the exports are to the Netherlands.

Other important markets are Japan, South Korea and the Middle East.

She said Sri Lanka can export exotic plants and greens to India which can enhance the beauty of Indian floral arrangements.

Speaking on lessons from South America and African nations, floriculture expert Avinash Mokate said small and medium farmers should not compromise on quality of plant material as its happens now in India. He said altitude reflects on quality of flowers like roses. Water quality is also very important. Economy of scale can help in keeping costs down.

Victor Monster of Escube Horticulture, Australia made a presentation on Liquidseal, a unique patented product developed for adding value to cut flowers, harvested bulbs and some fruits.

Panel DiscussionA Panel discussion, moderated


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Delegates at Horti congress


by iFlora President S Jafar Naqvi, followed. The participants were Bharat Bojane, Mallikarjun Kumar, Rownak Gutgutia of Florence Flora and Dr Sangita Ladha, Director, IHITC, Jaipur.

The following points were made in the discussion. Indian flower buyers and sellers are not as conscious about quality or variety as those in Europe. The Mandis in India are not well organized, with the result the stress is more on colour and not on variety. Syed Jafar Naqvi in his sum-up said branding is important. “We should create identity of flowers and not sell them as a cheap product.”

Dr. Sangita Ladha, Director, IHITC, Jaipur, chair the session on green sector — on nursery and pot plant industry. Kasper, Asia Manager of Anthura outlined the activities of the company. A K Gutgutia of Florence Flora said his company, which has its own tissue culture lab in Bangalore, gives technical support to farmers. It is also developing pot plants and indoor plants for decorations and these can serve as better gifts than bouquets, as they would last longer. The last technical session was on precision

farming and water management. The session was chaired by Krish Iyengar, Joint Secretary, NCPAH. Ms Ruchi Kanwar of Harvel Aqua India spoke on the advantages of drip irrigation – water saving, labour saving and power saving. It can also increase yield levels up to 52 per cent. R R Shah, MD of Vardhman Fertilizers, spoke of the importance of micronutrients to improve quality of fruit and vegetable crops. Anand Zambre, Joint Director of IHITC, Jaipur said vegetable farmers of Rajasthan are quick in learning new techniques of production for export. They are producing export quality vegetables like zukini and red and yellow capsicum. Winding up the final session’s discussions, Krish Iyengar said since water is becoming increasingly scarce, finding new solutions to save this precious resource has become vitally important.

The two-day congress indeed gave a right start to the ‘Year of Horticulture’ that the Union Agriculture Ministry has decided to celebrate.

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AgriBusiness & Food Industry w April 2012 19AgriBusiness & Food Industry w April 2012 19

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Public-Private Partnership in Agriculture Possibilities & Perspectives— sanjeev chopra

Agri Affairs

Led by changing consumer demand preferences on account of rising incomes

and changes in the demand pattern of household food basket in both urban and rural India, the agriculture produce landscape is undergoing a significant and rapid change.

Concern for food safety, traceability and assured year-round availability of quality agri produce at reasonable prices are demands which have emerged at the top of the supply chain. Organized retail (though as yet only 3 per cent of the total retail market) is doubling its share every three years or so and is likely to play an increasingly important role in influencing the nature of agricultural markets in the coming decade.

A game changer on the horizon is the proposed national food security legislation, which will require the sourcing of huge volumes of food from domestic producers. Traditional production and supply arrangements are unlikely to prove adequate in meeting the challenges posed by these two major developments.

Agriculture GDP is heavily weighted in favour of high value produce (horticulture, animal husbandry, dairy, poultry and fish products); as much as 75 per cent of Agri GDP value today is contributed by these products. Moreover the growth rate of horticulture and allied

sectors is significantly higher than the growth rate in the crops sector. Both the Planning Commission and the Ministry of Agriculture are convinced that the only way India can achieve a 4 per cent growth rate in agriculture is by laying greater emphasis on the allied sectors.

Recent evidence suggests that this segment is increasingly favoured by small and marginal producers as it is labour intensive, offers quicker returns and can engage a higher proportion of women (especially dairy activities). Thus there appears to be immense potential to leverage high returns from non-cereal sub sectors, especially for small producers. This fits well with the XII Plan’s vision for “faster and more inclusive growth” and creative and collaborative effort can result in this vision being translated into reality.

However, several hurdles need to be overcome to reach these highly desirable goals. For one, 83 per cent of land holdings in the country are now marginal or small and unless there

is urgent intervention in aggregating producers through farmers’ institutions, we are unlikely to achieve scale in production and leverage it to the advantage of all stakeholders, especially primary producers.

The fragmented agricultural marketing value chain together with the large number of intermediaries is another major constraint, leading to wastage, low returns to producers and volatility in availability and prices at the consumer end. Estimates of the wastage of perishable such as fruits and vegetables range from 18-40 per cent but they are undeniably too high and penalize both producers and consumers. This calls for intervention -both in the institutional and the technology domains. Thus while cold chain infrastructure and logistics is required to ensure that the produce does not lose its value, the larger question is: will the produce be aggregated by the farmers themselves, or by intermediaries. When both go together, the net outcome is an integrated value chain that ensures

The fragmented agricultural marketing value chain, together with the large number of intermediaries, is another major constraint, leading to wastage, low returns to producers and volatility in availability and prices at the consumer end

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Public-Private Partnership in Agriculture Possibilities & Perspectives

Agri Affairs

a virtuous cycle for all stakeholders. The example of AMUL in milk

demonstrates the benefits of value chain integration in agricultural produce. Yet, an efficient supply chain for cereals, perishables and other high value agricultural produce is unlikely to materialize unless there is parallel investment in aggregating farmers and farm produce at the bottom end, and strong and direct linkages are created between producers and market players, both for retailing raw produce and processed food.

Finally, the growing demand for quality agricultural products creates an opportunity to reduce risk in agriculture through the integration of producers on the one hand and retailers and processors on the other. While production and price risks are the most obvious areas of attention, the potential to create partnerships between farmers’ groups and market players also opens up better links with input suppliers, financial institutions and research bodies. This convergence can lead to better targeting of government expenditures on agricultural subsidies and achieve better outcomes for public policy. Overall, a collaborative effort between the government, farmers and corporates in agriculture is likely to raise the rate of agricultural GDP growth, thereby directly impacting rural poverty.

All this is fine, but how does one go about it. The DAC’s flagship programme offers a way out. In the above scenario, RKVY is likely to be a major window of funding during the XII Plan to support integrated agriculture and allied sector projects. However, there are challenges of limitation of technical, administrative and financial capacity at the state level to absorb the growing level of funding support under RKVY. Project monitoring and assessing project outcomes are also areas requiring strengthening. Lastly, the short term nature of most RKVY interventions in the XI Plan raises questions about the long term impact and sustainability of these investments.

The Public Private partnership in Agricultural Development (PPPIAD) has been conceived of as an additional channel of investments under RKVY, using the technical and managerial

capabilities of the private sector in combination with public funding, to achieve integrated and sustainable outcomes. Together the state government and the corporate can identify a cluster, the produce and the farmers group engaged in the production of the commodity.

The corporate takes the responsibility of providing technical inputs and an assured market, and the government provides the infrastructure and the funds for the technical inputs for which the farmer was entitled in any case. In other words, the state agrees to utilize the services of the corporate for provisioning ‘inputs’, and securing an assured market for the producer. The response from both the corporate and the state governments has been positive – and once a few pilots have been successfully tried out, the model can be rolled out on a pan India basis.

Sometimes back, the column had discussed PPPs in Agriculture and the steps taken by the Government of India to ensure the practical roll-out during the next financial year. The response from the corporates and the state governments has been positive, and it is interesting to see the different set of factors that are propelling this concept.

As markets evolve and become more differentiated, what is being sold to the consumer is not a ‘commodity’, but a ‘Brand Value’, and quality of the produce is not just one of the parameters, but the most critical factor. The only way in which a ‘firm’ can have control over quality is by being part of the production process – and in many cases, even the pre-production process, because quality cannot be added as a ‘preservative’ or a ‘coloring agent’. Thus the corporate which deals cannot build and sustain a brand by going to the market, or even to the farm gate , or even from an aggregator – because their stakes are nowhere close to those of the Brand. Often, several commodities are sold under the corporate logo, and therefore even if one of the precuts sold under this brand receive flak or criticism from the consumer, the negative spiral may get out of control. Thus the corporate would like to exercise a degree of control over the production process.

This control over production is easier when corporates can enter into the production process directly, or when they deal with large farms where production is usually mechanized. However in India, where both land, labour and energy costs are very high, the production model has to be based on the ‘marginal and small farmer’, and ensuring an integration with his production system. Thus one finds that corporates ranging from Nestle to ITC are keen to join this bandwagon – for this gives them the credibility and access to funnel ‘public goods’ towards a production which has an assured market, and therefore assured incomes for farmers.

An elaboration is in order. State governments usually support the farmer by providing him technical inputs, including quality seeds, fertilizers, nutrients and assistance for plant protection, besides facilitating credit through the Kisan Credit cards. These support services come at a cost, including the cost of delivery. Usually, there are limits and or norms: thus usually 50 per cent of the cost of seed, or fertilizer or micro irrigation equipment is provided. Under the proposed partnership, the delivery of these services, as per established norms, and verifiable parameters will be the responsibility of the corporate.

The corporate will also have to equal the support being given by the government through additional benefits, including delivery costs and an assured market. The farmer gains for s/he does not have to hold the land in mortgage to the corporate, or any other institution, and is also not ‘dependent’ on the corporates goodwill – for the farmer is getting his/her entitlement, which was earlier being delivered by the Agriculture Department. The farmer’s gains in the following ways: s/he will not have to run around to get the mini-kits - these should hopefully be delivered at the farm gate, and more importantly, on time. The corporate will have greater flexibility with regard to


purchase of inputs as payments to input suppliers could be made in cash/advance, thereby avoiding the time lag which currently afflicts most government supplies. The extension worker will also be able to establish a more realistic interaction regime with the farmer, as s/he would not be called out for census/election/enumeration duties.

Does this sound like a silver bullet? Aren’t there any challenges? Do we not need independent third party inspections to ensure that the system is not perverted? Can this be upscaled, especially in regions (North East, tribal blocks) and for commodities (other than Basmati rice, potatoes, gherkins and baby corn) and for farmers with marginal land holdings? These are the questions that crop up, and which need to be addressed.

Yes, there are many challenges – from the government system itself. This means an end, or at least a decline in the exercise of patronage at

the grassroots level. All farmers engaged in that ‘commodity’ in that ‘area’ will be covered irrespective of what the Panchayat functionary or the local official thinks. This cuts out discretion, as also the ability to favour one group against another.

As decision making does get centralized, the bank manager also loses his discretion with regard to crop loans. Therefore this intervention has to be made in a non-confrontationist manner, and by engaging with these functionaries. Third party inspection and monitoring, especially by an agency like NABCONS (Nabard Consultancy Services) or the Agriculture Finance Corporation becomes important to ensure that norms are bang followed. Yes, the pilot can be up scaled because once production clusters see value in this partnership; the demand will come from the farmers themselves.

Last but not the least, the state governments have to be on board for the scheme to be successful. This is sought to be achieved by anchoring this under the

Rashtriya Krishi Vikas Yojana (RKVY) National Agricultural Development Programme). Corporates will submit their proposals to the state agriculture departments which will examine them and forward then to the State Level Sanctioning Committee under the Chief Secretary of the state. Once these have been approved by this Committee in which the Government of India is also represented, taking it forward should not be difficult.

How do corporates get their ‘comfort’? Do they have to run around after state governments? No. At the apex level, the Small Farmers Agribusiness Consortium will act as the nodal agency to receive the proposals, examine them and forward them to the state governments after preliminary examination with regard to the viability of the project. The SFAC has already done the hand holding for the National Horticulture Mission in the Vegetable Initiative Clusters… this is the next logical step! n

The Author is JS(MoA) & Director, NHM

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National Mission for Food Processing proposedPlan outlay for Agriculture hiked– Tvs

The Union government is starting a new Centrally-sponsored scheme, National Mission on Food

Processing, in cooperation with the state governments, Union Finance Minister Pranab Mukherjee announced in Parliament while presenting the Budget for 2012-13.

Mukherjee noted that the food processing sector has been growing at an average rate of over 8 per cent over the past five years. The objective of starting the Mission is to have better outreach and to provide more flexibility to suit local needs. The proposed Plan outlay for the scheme is Rs 250 crore for 2012-13.

The total plan outlay for Food Processing Industries ministry for the year is Rs. 660 crore, mainly for scaling up the execution of its major schemes – mega Food Parks, cold chain, value addition and preservation infrastructure and modernization of abattoirs.

Outlay Raised Turning to Agriculture, which, he

said, would continue to be a priority for the government, the Finance Minister said the total plan outlay for the department of agriculture and cooperation is being raised by 18 per cent to Rs 20,208 crore in 2012-13.

The outlay for Rashtriya Kirshi Vikas Yojana (RKVY) has been increased to Rs 9217 crore, from Rs 7860 crore in 2011-12. RKVY has two new sub sub-components: Special incentives for pulses and oilseeds development in selected villages in rain-fed areas, and a scheme to bridge the yield gap in agriculture in Eastern India. Mukherjee was happy to announce in the House the initiative of bringing Green Revolution in Eastern India has resulted in a significant increase in production and productivity of paddy. Those states have reported an

Pranab Mukherjee, Union Finance Minister

Budget

The Finance Minister was happy to announce in the House that the initiative of bringing Green Revolution in Eastern India has resulted in a significant increase in production and productivity of paddy

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additional paddy output of seven million tones in Kharif 2011. In view of this performance, Mukherjee announced a substantial increase in the outlay for this scheme – Rs. 1000 crore for 2012-13 from Rs. 400 crore in 2011-12.

Revamp of Missions To address the needs of agriculture

development in a more effective way in the 12th Plan, Mukherjee said five Missions were being revamped by merging various activities. They are:vThe National Food Security Mission

to bridge the yield gap in paddy, wheat, pulses, millet and fodder crops. The ongoing schemes like development of pulses villages, promotion of nutri-cereals and Accelerated Fodder Development would now become part of this Mission.

vNational Mission on Sustainable Agriculture, which will now include Micro Irrigation, Action Plan on Climate Change and Rainfall Area Development.

vNational Mission on Oilseeds and Oil Palm to increase production and productivity of oilseeds and oil palm.

vNational Mission on Agricultural Extension and Technology, focusing on adoption of appropriate technologies by farmers.

vNational Horticulture Mission that aims at horticulture diversification. This Mission would also include the initiative on saffron. The Mission for Protein Supplement

is being strengthened.

Farm credit Underscoring the importance of farm

credit, Mukherjee proposed to raise the target for agricultural credit in 2012-13 to Rs 5,75,000 core—an increase of Rs 1,00,000 crore from the previous year’s target.

Since research plays a crucial role in the efforts to increase productivity, Mukherjee said, “We have to develop plant varieties that yield more and can resist climate change.” He then proposed to set apart Rs 200 crore for incentivising research, with rewards both for institutions and research teams responsible for such scientific breakthroughs.

Referring to the Food Security Bill introduced in Parliament, the Finance

Minister said it was now before the Parliamentary Standing Committee. To ensure that the objectives of the Bill are effectively realized, Public Distribution System network is being created using the Aadhaar platform. A National Information Utility for the computerisation of PDS is being created. It would become operational by December.

For dairy development, the government has plans to launch a Rs. 2242 crore project with World Bank assistance to boost productivity in the dairy sector.

Duty cuts and changes Here are some of the duty

concessions and changes that the budget offers for the agri sector, including food processing. v Project import benefit extended to

greenhouse and protected cultivation for horticulture and floriculture at concessional basic customs duty of 5 per cent.

vExtending to horticulture produce the concessional import duty available for installation of mechanized Handling Systems and Pallet Racking Systems in Mandis or warehouses.

vCustoms duty reduced from 7.5 per cent to 2.5 per cent on sugarcane planter, root and tuber crop harvesting machine and rotary tiller and weeder.

vBasic customs duty reduced from 7.5 per cent to 5 per cent on special coffee plantation and processing machinery.

vBasic customs duty reduced from 7.5 per cent to 5 per cent and from 5 per cent to 2.5 per cent on some water soluble fertilizers and liquid fertilizers, other than urea.

vWeighted deduction of 150 per cent on expenditure incurred for agriculture extension services to facilitate growth in agri sector.

vFull exemption of basic customs duty of 5 per cent for imports of equipment for initial setting up or substantial expansion of fertiliser projects. This exemption is for a period of three years.

vInvestment-linked deduction of capital expenditures in cold chain facility and warehouses for storage of food grains increased to 150 per cent from the present 100 per cent.

vReduction in basic customs duty on

raw pistachios (from 100 per cent to 30 per cent) and sun-dried dark seedless raisins (30 per cent to 10 per cent).

vFull exemption from basic customs duty being extended to de-oiled rice bran oil cake.

vDeoiled rice ban oil cake exports to attract 10 per cent export duty.

Economic Survey In the pre-budget Economic

Survey for 2011-12, presented to parliament, the Finance Minister said the challenges facing the agriculture sector are far from over. To make 4 per cent agriculture growth a reality, efforts are needed to focus on these challenges.

Noting that the area under food grains has declined in the last three decade, the survey calls for speedy improvement in yield to increase production. A holistic approach spanning farm research, dissemination of technology and provision of agriculture inputs would help achieve higher levels of productivity.

The Indian farmers are mostly small and marginal farmers with small and fragmented holdings. This poses a challenge in terms of adoption of farm mechanization as well as generating productive income from operation. Pooling of landholdings may yield better economies of scale, for which land laws for leasing with sufficient safeguards should be considered.

Efforts have to be stepped up, says the survey, to increase production of milk, milk products, egg, poultry, fish and meat to keep their prices in check for the consumers.

Declining per capita availability of food grains has been a major concern. To ensure right quantities of food items in the food basket of the common man, a thrust on horticulture products is required. It would enhance pr capita availability of food items as well as ensure nutritional security.

Other issues that need to be addressed include augmenting storage capacity, agriculture market reforms and more encouragement to investment in food processing, cold chain, handling and packaging of processed food. n

Budget


India focus in BioFach 2012It can light the path in organic products, say organizers

India and its products secured a sharp focus in the world's largest annual organic products event,

Biofach 2012 (Feb 15-18), held in Nuremberg in Germany.

India was the ‘Country of the Year' at four-day fair, the world’s largest annual organic event, which saw a strong presence of 51 Indian manufacturers, including in textiles. Prominent participants

included Agricultural and Processed Food Products Development Authority (APEDA), the Tea Board and Spices Board.

“Millions of small and marginal farmers practice organic farming by default,” said Asit Tripathy, Joint Secretary in the Ministry of Commerce and Chairman, APEDA. “This is because they do farming in rain-fed areas and cannot afford modern agriculture

that encompasses using fertilisers and pesticides.”

Indian organic products exports currently are valued at $400 million and the target was to top $1 billion by 2015, said Tripathy. “The $400 million makes up just 16 per cent of organic products produced in India,” he said, adding that the domestic organic market was growing.

“Changes were happening in Indian agriculture with mechanisation, corporatisation and contract farming, but in the last 10 years, the Indian Government has woken up to the potential of organic farming.”

Tripathy pointed out that domestic organic products are competing against mainstream products in supermarkets in India.

With the setting up of National Project for Organic Farming, the Government is trying to launch organic certification programme for the domestic market. Default forums have been asked to set up a group of 500 farmers and encourage them to take up certification of their products.

Earlier in his address, Dr Ulrich Maly, Mayor of Nuremberg, said that a meeting of network of organic cities in Germany would be held during Biofach.

Dr Gerd Mueller, German Secretary for Food, Agriculture and Consumer Protection, said that Germany was attempting to expand organic cultivation to another 10,000 farms to meet the increasing demand.

Organic farming can provide food security and feed the world, averred Dr Felic Prinz zu Lowenstein, Chairman of Federation of Organic Enterprises in Germany.

He said that India could show the

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way in organic products in 30 years, especially in sustainable agriculture and food safety.

Andrew Leu, President of UN's IFOAM, said the current focus was on food security and poverty reduction. “If this has to be achieved, logically the focus should be small growers who make 70 per cent of farming in the world,” he said.

The Indian flavour was all too evident in the inaugural ceremony. The fair got off to a rousing start with a traditional Indian dance, followed by the Oscar-winning song “Jai Ho”. A Bhangra dance to the accompaniment of beating of the drums enthralled the audience.

Dr Gerd Muller, parliamentary State Secretary in the Federal Ministry for Food, Agriculture and Consumer Protection, Germany, said in his address that he was “pleased to welcome India and its government.” He also pointed out how Biofach’s entry into India was a success when it was organized in Mumbai in 2011.

India’s model farms for organic teaSpeaking at the Indian Tea Board

pavilion at the fair, Ms Roshni Sen, the Board’s Deputy Chairperson said three model farms have been set up in India on 100 acres each to develop a standard package for cultivation of organic tea. “The farms, set up by Tea Board, are in Munnar (Kerala), Darjeeling (West Bengal) and Assam and they will develop a standard package through research and development.”

The package is being developed with financial aid from the Food and Agriculture Organisation's Centre for Commodities Fund.

While the United Planters Association of Southern India-Tea Research Association is involved in the Munnar farm, the Darjeeling Tea Development Research Corporation is doing the spadework at Darjeeling. The Tea Research Association of India, Tocklai, is in charge of research in Assam gardens.

“We are following a two-pronged

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Thus spake Gandhiji . . .

Mahatma Gandhi’s views on farming were remembered at the signing of an EU-US trade

agreement on organic products during the course of BioFach 2012.

US Deputy Secretary Catherine Merrigan said while winding up her address, “With India being the country of the year at BioFach let me quote Mahatma Gandhi: ‘Live like you die tomorrow and farm like you will live forever’.”

Indian move to alter organic production standards

India plans to bring in changes to the National Project on Organic

Production (NPOP) in line with standards set by the United Nations body on organic products.

Livestock, aquaculture and textiles will all be part of organic production process, according to Dr P.V.S.M. Gouri, advisor of NPOP.

The NPOP is recognised as the national accreditation body for organic products in the country and is under the Agricultural and Processed Food Products Exports Development Authority (Apeda).

“The draft for amendments, in line with the UN body, International Federation of Organic Agriculture Movements (IFOAM), is ready. It will be notified soon,” she said at a seminar “Incredible India” at BioFach 2012”.

Inspection group According to IFOAM, the

number of farmers in an inspection group has to be not more than 500. In India, currently 2,500 farmers can be roped in an inspection group.

“Having less number of farmers in a group helps in better inspection,” Dr Gouri said.

This will help better sampling of organic products grown by farmers and reduce risks of contamination.

The NPOP will have uniform implementation standards, while a module for approval of inputs by certification agencies is also on cards.

All stakeholders in organic production will now begin using the Web-based Tracenet system for certification of organic products based on data available on Tracenet that include all details of farmers, cultivation practices, crop inputs and management and production.


strategy in encouraging organic production of tea. One is to prepare a standard package for cultivation and the other is to rope in small farmers by imparting regular training,” she said.

The move would help India to strengthen its hold in the organic tea market with a production of 26 million kg. About 80 per cent of this is exported to Germany, the UK and the US.

Currently, organic tea is being cultivated on 22,000 hectares and India is one of the few countries that has a national programme for organic

Indian pavilion a big attraction at the fair

The Indian pavilion at Biofach, Germany attracted many

visitors. APEDA had booked an area of 925 square metres in hall No 5, which was the food area, and 200 square metres in Hall No 8, primarily a textile area.

To promote its export of its organic products, APEDA has been regularly participating in Biofach, since 2001. This is not only the world’s largest organic trade fair, but also a meeting point for the organic stakeholders – producers, processors, handlers, exporters, importers, certification bodies, government representatives and consultants from all over the world.

Having recognized India’s robust growth in organic sector, Biofach organizers, this time, invited India to become the ‘Country of the Year’. Minister of Commerce and Industry Anand Sharma readily accepted the proposal.

The activities at the Indian pavilion included cultural progrmmes like folk dances and henna tattoo application, Fashion Show on Indian garments, offer of Indian and European fusion of cuisines with Indian organic ingredients t the Indian restaurant, besides wet sampling of Indian Biriyani made of organic basmati rice. A popular attraction was live demonstrations of Indian cuisines through German TV celebrity Chef Alfred Fahr.

production, apart from China.There are eight certifying agencies in

the organic tea sector and 50 producers have been certified by these bodies. “Other producers are in the process of getting certification,” Ms Sen said.

On setting up an export inspection council in view of increasing complaints on quality grounds against Indian tea, Ms Sen said a monitoring system will be set up during the 12th Plan period.

Ex cricketer Doshi bats for organic foods

Projecting the cause of organic foods at the fair during the conference session

on retail and domestic markets was ex-cricketer Dilip R. Doshi. The spin wizard, fielded by APEDA, has made a name in retail trade.

Doshi, now Chairman cum Managing Director of Entrack Group of companies, went on to impress the gathering with his views on retail market for organic food.

Saying he has been watching the development of organic food market for the last two decades, Doshi added, “I have been always impressed by Germans, especially my partner firms since they don't want even to take one-billionth chance of contamination in plants.”

It must be said to the credit of Doshi, based in the UK, that he was the first person to introduce German organic products in India. He set up his first retail outlet at Ahmedabad in November last year. “In the next few months, we will have outlets in Mumbai and Bangalore too,” he said, adding that his retail outlet has been named as Organic ‘Haus' or ‘House' as it is known in German.

“We have to create awareness and desire among people about organic products,” said Doshi. His online shop for organic products will be active by August.

EU-US trade tie-up for organic productsCoinciding with Biofach was

the conclusion of a historic trade arrangement between the US and European Union that will pave way for organic products certified in the US or Europe to be sold in either region from June 1. The US-EU Organic Equivalence Cooperation, as the pact is called, brings the two largest organic producers and markets together to promote organic farming.

The organic products market is valued at around $60 billion. The EU and the US make up $50 billion of this. Germany, in particular, stands to gain as its contribution to the organics market is $6 billion.

The agreement follows prolonged negotiations and onsite audits on both sides to ensure that regulations, quality control, certification requirements and labelling practices were compatible.

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The agreement eliminates the need for certification in Europe and the US for an organic product manufacturer.

“This partnership eliminates significant barriers, especially for small and medium producers,” said Ms Kathleen Merrigan, US Agriculture Deputy Secretary.

“Organic farmers will benefit on either side from easier access, with less bureaucracy and lower costs to both US and EU markets,” said Dacian Ciolos, the EU Commissioner responsible for agriculture and rural development.

According to Ms Beta Huber of the Research Institute of Organic Agriculture, Switzerland, the arrangement excludes apple and pear exports from the US and livestock products shipments from the EU.

This was due to differing views on the use of antibiotics. The US regulations prohibit use of antibiotics except to control bacterial infections such as fire blight in organic apple and pear orchards.

The European Union allows antibiotics only to treat infected animals.

“For such products, additional documentary evidence will be required,” said Ms Huber.

The arrangement has now led to a call for such “equivalence agreements” with other countries too as India, China and Brazil, for example, have a considerable number of farmers practising organic farming.

Europe’s woes could slow demand for organic products

The outlook for growth in the global market for organic products is positive. However, the pace of growth is likely to be mixed, particularly in Europe due to economic instability.

According to experts of the organic products industry who took part in Biofach 2012 that had India as the ‘Country of the year, the demand for organic products could witness a slower growth in the UK and Italy. However, Germany and France could see a better growth rate.

The US is witnessing better overall growth this year and therefore, it could see its demand for organic products increased to a record $30 billion. This

year, the market for organic products in the US could further grow to $31.5-32 billion, according to Ms Laura Batcha, Organic Trade Association of the US.

“The growth for organic products in the US is currently 10 per cent against 0.6 per cent for conventional food,” she said, adding that farmers' markets in the US increased 17 per cent 2010 – an indicator of growth in organic products.

Dr Helga Willer, Research Institute of Organic Agriculture (FiBL), Switzerland, said that cultivation of organic produce increased to 10 million hectares in Europe last year, while it declined in Asia.

According to Amarjit Sahota, Organic Monitor, the UK, the area under organic farming is likely to touch 2 million hectares this year with Asian organic markets likely to grow approximately by 20 per cent until 2012.

RISE IN DEMANDThe promise for growth comes from

increasing small and medium enterprises sector that is developing awareness of food quality and a cosmopolitan outlook. This has led to rise in demand for organic products in China and India.

Ms Diana Schaack, Agrarmarkt Informations-GmbH, Germany, said that the growth in organic food last year was helped by dioxin and e-coli scandals in Europe.

Dioxins that were reported to have been found in animal feed, pushed up demand for organic animal products, particularly, she said.

The E-coli outbreak during May-June last year changed consumer spending from certain vegetables such as cucumber to organic and conventional foods.

“The year 2011 saw a rebound in prices and production of organic farm produce. Fresh products will continue to dominate the organic market,” she said.

Dr Susanne Padel of the Organic Research Centre in the UK, said the area under organic farming dropped to 50,000 hectares in the UK from 1,20,000 hectares in 2009 due to faltering ‘political commitment'.

“There is stagnation in land being diverted for organic farming, while retail outlets are unwilling to stock organic products,” she said, pointing to the dropping demand.

France, the second largest market for organic products in Europe, has been witnessing a boom since 2008 and already four out every 10 French people consume organic food.

Brazil, too, could see growth in demand for organic products.

However, the growth rate will depend on how the European crisis is solved according to Sahota.

Russia and the US could see healthy growth but much would depend on how supply can match demand since there was a growing imbalance with consumption.

“Food inflation will also have a role to play in growth of organic food,” said Sahota. n

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Nutra India Summit 2012Focus on curative powers of food

A Bureau Report

The 7th Nutra India Summit was inaugurated by Hans Raj Bhardwaj, Governor of

Karnataka in Bangalore on March 15, 2012. The three-day summit is considered as India's biggest Nutraceuticals, Functional Foods, Dietary Supplements and Ingredients Show.

The summit also featured conferences and the health and food expo among other attractions. The theme of the summit was “Nutraceuticals & Nutritionals: Improving the Quality of Life & Lifestyle”.

The Governor lit the ceremonial lamp amid many dignitaries including Prof. Samir K. Bramachari, Secretary, DSIR, Govt. of India and Director General, CSIR, Raghuveer Kini, Additional Executive Director, Pharmaceuticals Export Promotion Council (Pharmexcil), M.N. Vidyashankar, IAS - Principal Secretary, Dept. of IT, Biotechnology and S&T & e-Governance, Government of Karnataka, Dr. V Prakash, distinguished Scientist of

CSIR-INDIA and President, Nutrition Society of India and Chairman, Nutra India Summit, Dr. Pingfan Rao, President, Elect -- IUFoST VP, CIFST, China and Prof & Director, Institute of Biotechnology, Fuzhou University, Fuzhou and Jagdish Patankar, General Secretary, Nutra India Summit.

The Governor along with Prof Samir K. Bramachari released the programme document and an industry report from ‘Frost and Sullivan’. In his speech Governor Hans Raj Bhardwaj said. "Many parts of the world are suffering from malnutrition. In India, the rural sector is the most affected. I've had a couple of meetings with the Prime Minister in which I have spoken to him about the nutrition in India. PM said no single person can build a nation. It has to build by itself. Hence, we need to have a nutritionally fit population. He also added we need to focus on the production and use of Herbal and Ayurvedic medicines in India since it is the native of most of the medicinal crops and herbs."

The governor also suggested the pharmaceutical industries in India should not only encourage the practice of

exporting their products, but also put 40 per cent of their income in R&D. So that, the nation can develop itself without any external funding.

He said better R&D in-turn will eradicate the problems rising due to malnutrition and prevent us from getting indebted to other nations. This can be the solution for eradication of malnutrition as well as having a healthy rural population. He emphasized that relationship of India and china's salvation lies in staying together because of the similarities in cultural and traditional medicine knowledge. “Together India and China can do wonders, “he said.

He praised Lupin pharmaceuticals for the production of best drugs against tuberculosis which is used worldwide and is affordable. He concluded by quoting "Every tear from every eye should be wiped rather than few tears from few eyes."

Prof Samir K. Bramachari said, "Companies such as Dabur, Himalaya, Baidyanath are playing a pivotal role in popularizing nutraceuticals in India. One of the primary reasons behind promotion of neutaceuticals is cost of drug discovery. This is $ 3-11 billion, making it impossible to have drugs for common diseases. This is not affordable for developing countries like India and Africa."

He pointed out that there are few flaws in western technologies and threw light on the importance of traditional Indian medicine which actually cures the diseases by re-establishing homeostasis.

Giving a glimpse of the future he said that there will be no more chemical gulping (pharmaceutical drugs) as nutritional products will act as the future remedies.

He explained the 12th Plan follows the development of ragi and such crops to generate public wellness. “Since above 42 per cent of the children suffer from malnutrition, we should not think about making only money. It is more important to create health,” he said.

He also suggested that a community should be formed on Nutriceuticals and Nutragenomics and drugs of tomorrow should be food. He also put forward some developmental strategies, following which, the government can promote health and wellness among the masses. The serving of foods and drinks in hotels and restaurants should be according to the health conditions of the consumer.

Dr. V Prakash said, "The success of the summit in recent past is attributed to

(L-R)Governor H.R. Bhardwaj; Secretary, Department of Scientific and Industrial Research Samirbrahmachari; and Pingfan Rao, professor and director of the Institute of biotechnology, fuzhou university, china; at the inauguration of a meet on nutraceuticals in bangalore.

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the several organisations and especially CSIR which has a major role in organizing the summit. The importance of nutrition is felt by 'man' right from the moment he is born. The first thing the child sees in his mother is nutrition. And once he grows, he depends on nutraceuticals and then ayurceuticals”.

He added science and technology is a dominating field and such summits and conferences are wonderful ways of sharing the knowledge at an international level and connecting eventually will give confidence to the producers (pharmaceutical companies) and the consumers (common man).

He further emphasized on following the 12th Plan in-order to curtail malnutrition in developing countries. He closed his speech with a statement " Let the world be healthy, Let the world be well, and ensure that no child sleeps hungry."

Dr Pingfan Rao congratulated the organisers and the authorities for putting together this summit. He said, “India and China together can combat the problem of malnutrition by sharing the scientific and technological viewpoints.

Some of the biggest challenges faced by the world are the climate and food security”. He categorized human beings under the ‘most sensitive species’. “Nutrifood and its impact on healthcare is presently the ultimate goal of the world,” he said.

M.N. Vidyashankar gave a glimpse of how life and nature were related in the past and how it is at present. He also quoted "Let food be your medicine not medicine be your food". He revealed that about two years ago, 128 countries participated in promoting nutritional practices and about a trillion U.S dollars were spent on nutrition. He also put forth the idea of making Bangalore as a home for the Nutra summit and focused on organising more such events where the Nutritionists and Dieticians can come in contact with the industries. He concluded his speech with "Health is Wealth".

Raghuveer Kini emphasized the use of traditional medicine in rural and developing countries as the only source of the health. He further said that total drug and pharmaceutical export was at $10.3 billion last year which is only 1.2 per cent when compared with Ayuvedic sector. He encouraged and wished success to many countries which are working to promote Herbal and Ayurveda. He highlighted the presence

of about 40 foreign delegates from 16 different countries and about 70-80 Indian companies who have registered for this interaction. On behalf of Pharmexcil, he promised that his organisation will put all the possible efforts to promote neutraceutics.

Jagdish Patankar praised CSIR and Dr. V. Prakash for making this summit a success. He emphasized on the Open Source Drug Developmental Program in Neutraceutical, which will be a break through and will reduce the cost and increase the production of all the herbal foods and medicines. He also praised the work of Dr. Pingfan Rao for his international contribution towards the development of neutraceuticals and Neutragenomics. He also said that pharmexcil joined for the first time due to which they have 39 international buyers from 16 countries.

The Event consisted of International Conferences, NuFFooDS: The Health & Food Show, Highlight Lectures: Morning Mantra, CEO Summit, Dieticians & Nutritionists Forum, Poster Session "Walkway of Discovery", Nutra Awards, Buyer-Seller Meet, Workshops and Seminars.

The summit offered an ideal platform for Exporters, Importers, Sourcing companies, Production and Purchase Professionals as well as Doctors, Nutritionists and R&D Heads.

The experts feel Nutra India Summit is positioned to play a crucial role in Knowledge sharing and in finding new avenues for business growth for the Nutra Industry. It will facilitate symbiotic linkages between Global Nutra Industry with the Indian Nutraceutical, Functional Foods and Ingredients market.

The Day One featured a highlight lecture by Dr. V. Prakash and Dr. G. Venkateswara Rao, (Acting Director, Central Food Technological Research Institute (CFTRI), Mysore, and the keynote address by Dr. Pingfan Rao.

The second half featured sessions on functional foods, dietary supplements and novel Ingredients for better lifestyle management and emerging consumer trends and behavior patterns driving market dynamics. Day One also featured the CEO Summit themed as "Increasing India's share of the Global Nutraceutical and Nutritional Market", featuring industry leaders.

Health & Nutrition

Soups are one of the best sources of nutrition: Dr. Pingfan Rao

On Day One of the Nutra India Summit 2012, Dr. Pingfan Rao, in his keynote

address, said, “Illuminate Modern Research by embracing Ancient Health for Wellness”.

He further said India and China have a strong connection. Both use ancient practices that are still being followed by these two countries which include consumption of herbs in drinks to stay fit. Citing an example on how tangerine and orange are different from one another, he said, "Tangerine are hot and oranges are mild and we have analysed about 25 fruits by doing mathematical analysis and analysing and determining factors to check the level of hot and cold fruits and tested them on animals. The result showed that Cu+ Fe/Mg ions had an effect on IM (bacterial) toxins."

He further highlighted the consumption of soup as one of the best ways to enhance nutrients in body and it can be used as an effective medicine. Crusian fish can act as lactating enhancer for women undergoing labour. He also stated that traditional Chinese medicine can act as a remedy for any disorder.

Other than Crusian fish, he said, chicken soup can also inhibit the neutrophil chemo taxis invitro, while consumption of bitter melon drink increases the energy levels in the body by forming nano structures. These nano structures can easily penetrate the cell membrane and can reach the site of infection. This can also be isolated and identified using chromatography.

Later he discussed about the beneficial aspects of having even clam soup and how its interaction with the membrane increases the ion concentration raising the energy levels in the body.

Describing acupuncture, he explained how it interacts with the neural cells which trigger the super-oxide and sod to metabolize the sugar and bring up the energy levels in the body.

He put emphasis on encouraging the idea of acupuncture for the treatment of rhinitis using sod and PTD (protein transduction domain).

He concluded by emphasizing the need for reviving the ancient and simple methods of wellness - one the most easiest methods of deriving the required nutrients to the body are soups and the one of the most effective ways of treating aliments is through Acupuncture.


Giving dead brands a second lifeby R. srinivasan

Brand Focus

In a country where half the population was either not born,

or was in diapers twenty years ago, reviving a nearly two decades-dead brand might not seem like a smart idea.

But that is precisely what a host of consumer product marketers are trying to do. From soft drinks to soap, desi ghee to detergents, a host of brands which had virtually been consigned to the pages of history are making a sudden comeback.

Beverages giant Coca-Cola revived the Citra brand of clear lemon soda earlier this month, after nearly twenty years. It had acquired Citra along with Thums Up, Limca and Gold Spot from Ramesh Chauhan's Parle and promptly killed it 19 years ago.

But, just like it found out with Thums Up and Limca, some brands can prove impossible to kill. Despite active de-marketing in the initial years, Thums Up not only hung on

stubbornly, but actually grew – faster than the flagship Coke brand, and even out-muscled rival Pepsi Cola's Pepsi brand in the market. Today, Thums Up is the market leader in the Rs 13,000-plus-crore Indian soft drinks market, with an estimated share of close to 16 per cent.

Rival Pepsi faced a similar story with Duke's, a small, but strong-selling Mumbai brand, which it bought from the Pundole family back in 1994. Duke's, launched in 1899 (making it India's oldest soft drink brand), enjoyed an almost fanatical fan following among both Mumbai's mill workers and Parsi elite. While Duke's soda was a favourite working man's order in an Irani café (along with pao and some salt), Duke's raspberry soda was a must at Parsi weddings.

PepsiCo, too, found that trying to kill off the local brands in order to give its global brands space to grow was a volume-limiting strategy. Although PepsiCo never officially killed Duke's off, it was a fairly dormant brand.

Now recently re-launched with variants such as masala sodas, ice cream sodas and ginger ale, it is proving a quick draw. “Our realisation, consumer insights and local tastes and products influenced us to re-launch,” says PepsiCo India CEO (Beverages), Praveen Someshwar.

Duke's was out of the market for 5-7 years before Pepsi decided to re-launch it, admits Someshwar. “Even though they are small categories, we have to learn to handle these small categories. We will look at taking it to other markets, testing it before we decide. We're launching the fourth one as we speak. And, we are testing out some products in the South, whatever suits local tastes.”

“People want something familiar. In some categories more than others, people actively seek out something they have grown up on,” said Kannan Sitaram, Operating Partner, India Equity Partners and former COO of Dabur.

Loyal to That need for familiarity might explain why brands such as Campa Cola have staged a comeback. Launched by a former Coke bottler after the exit of the cola multinational in the 1970s and once described by Italian design great Luciano Benetton as the “best fake Coke” he'd ever tasted, Campa Cola died out after the re-entry of Coke and Pepsi.

It was re-launched by a Muzaffarnagar bottler and is now a flourishing rural brand in the North. Says Anshul Agarwal of Alankar Bottling, who said he is getting healthy sales growth with practically zero advertising support. “It's just customer pull. Consumers, particularly in rural areas, are still familiar with the brand and they ask for it,” said Agarwal, who An old Campa Cola factory in Delhi


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Brand Focus

has launched a Facebook fan site for the brand.

Familiarity is key to a brand's longevity, admits Sitaram. “It's the Pavlovian loyalty that people have, which explains why brands such as Kalimark have survived. It’s a matter of sheer habit. People are comfortable with that brand, so they don't feel the need to change it”.

Kalimark, one of the brands that survived the onslaught of Coke and Pepsi, is a thriving regional brand in Tamil Nadu. The over 50-year-old brand (launched in 1960) from Kali Aerated Water Works is present in both fizzy and still drinks, has 10 bottling plants across Tamil Nadu - each one being an independent entity owned by the Palaniappa Nadar brothers.

Collectively they sell an average of over five thousand 24-bottle crates a day of Kali cola, along with two sub-brands, Bovonto and Frutang. According to R. Palani Raj, a member of the promoter family, “There are still a large number of die-hard fans for the brand.” In fact, he said, the numbers of these nostalgic fans tribe is growing and “we are not able to meet the demand”.

Fans with long memories also led to the revival of Gopika Ghee, a Punjab brand which Glaxo SmithKline Consumer

Healthcare had acquired and subsequently pulled out of the market. When Bharti Walmart was researching consumer preferences for brands in the area, it found a strong pull for the brand, even though it had been defunct for years. It asked the brand owner to revive it and now stocks it in its wholesale cash-and-carry outlets.

With the rural market now having enough mass to justify major investments in brand revival, a growing tribe of consumer goods makers are seeing a viable future in reviving or re-launching yesteryear brands. Learning how to tap the rural market is critical. According to the National Council for Applied Economic Research, rural India now accounts for one in five computers sold, about one in three refrigerators and even a third of automobile sales and close to half the TV market. Rural consumers now use more deo than urban consumers and so getting the rural equation right can be a bonanza for a brand.

Kannan Sitaram tends to disagree. “I won't call it rural versus urban but a more Westernised English-speaking target versus more Indian, more traditional people.

“The challenge for marketers is they have to speak two languages to market to these two Indias,” he said.

According to him, many brands in India are only talking to the aspirational class and not speaking to the masses. This is where the opportunity exists for the old familiar brands to get a foothold back in.

Well, FMCG marketers have clearly spotted the opportunity gap - both in the poorly penetrated rural market and consumers with a long memory in urban pockets - and are seeing gold in old brands. n

Godrej revives Jumpin

Despite rumours of the Godrej Hershey joint venture falling apart, the FMCG company

is investing in the revival of its near-dormant beverage brand – Jumpin.

The 20-year-old fruit drink brand, one of the oldest in its portfolio, will now be piggybacking on the company's confectionery distribution chain to gain visibility at retail stores.

Mahesh Kanchan, Vice-President and Marketing Head, Godrej Hershey, said, “The opportunity is large for Jumpin today. Currently, the brand is sold in the North and the West but we are planning to extend its footprint into other markets.''

Jumpin is pitted against fruit drink brands such as Frooti and Maaza, in the mango segment primarily. Targeting families through kids, the brand has also incorporated Tom & Jerry cartoons on its packs with promise of some free merchandise.

Earlier, with Jumpin not seen much, there had been much speculation about it being put on the block. But Godrej has silenced this with its new plans.

According to Kanchan, since the company has introduced higher prices for the confectionery portfolio, it has been able to sell it in more outlets and also have Jumpin ride on the same distribution.

According to an analyst, “Godrej is now trying to bring back its dormant brand of Jumpin, much along the same lines on what Pepsi and Coke have been doing with their old brands. Besides, Godrej has realised that since the Hershey portfolio is not coming in, it might as well revive its own brands.”

However, Godrej has restricted its fruit nectar brand of Xs to the modern trade outlets.

Confectionery ChainMeanwhile, Godrej has introduced a new

confectionery brand Choco Rocko, under which it retails pricier sweets, ranging from Rs 2-5. Earlier, it only had confectionery in the 50-paise price point. The premium sweets have enabled it to get a foothold in more outlets.

“All this time, the bulk of our confectionery was catering to customers down the population strata. But now with Choco Rocko, we have higher price points by which we can get better distribution in the A class towns,'' said Kanchan.

Today, the confectionery brands reach out to 5 lakh-plus outlets.



War of the TitansIconic British tea brand Twinings & Tata’s Tetley clash for Indian markets

by chitra Narayanan

Can you imagine paying Rs 3,000 or the equivalent of that in pounds for a cup of tea? Well, if you order British tea brand Twinings at the plush Criterion

restaurant in Piccadilly, you might have to.Whether India is ready for that expensive cup of tea

is a call that Ian Gowlett, Managing Director, Twinings India, has to make. But he is certainly going to introduce a super-premium range (not in that Rs 3,000 range, he quickly clarifies).

“We are unashamedly premium, and our consumers tend to appreciate that and what it means,” Gowlett said. The Twinings strategy is to reach out to people who know the nuances of fine wine or designer clothing. “We look at ourselves as offering special tea moments, catering to different moods and different needs”.

After 14 years of being in India, Twinings, which is owned by Associated British Foods, the fifth biggest food company in Europe, is now buckling down to the task of growing its business here.

This will be done, according to Gowlett, through a four-pronged strategy – upgraded packaging and product; selling the Twinings experience through HORECA (hotel, restaurant and café) and perhaps its own special tea bar; introducing a super-premium tea bag variety as well as super-premium loose tea; and, finally, by driving consumer awareness about the Twinings heritage through ATL (above the line) and BTL (below the line) investments.

As part of the last strategy, it had flown down Stephen Twining, 10th generation scion of the Twinings tea family, to do his tea act in select cities of India. The high tea with Stephen Twinings was served with great pomp and ceremony in a very charming setting.

Gowlett admitted right now India is just a blip on Twinings global sales figures (which he refused to share), accounting for not even a one per cent share. But he pointed that Twinings has already bagged 35 per cent market share in the tea bags business here (which admittedly is a laughably small size), and that like everybody else the company is seeking growth from the country.

The last five years (2006-2011) have seen a CAGR of 26 per cent. “I would like to now deliver five-fold growth in the next five years,” said the former PepsiCo man, who is clearly enjoying his innings with a family business (ABF is owned by the Weston family) after his stint with an MNC.

The easy part for Twinings is that India is a 100 per cent tea-penetrated country and a daily habit; the tough part is that the tea bag habit is not so well ingrained. And unlike others who salivate at the population numbers here, Gowlett is more worried about finding where the Twinings customer is within that population.

“The biggest difficulty in India is not the numbers but finding them. Yes, the metros where we operate have about 100 million people. But trying to search and find people who will truly appreciate the Twinings experience is the difficulty,” said Gowlett.

But fortunately for Twinings, there are others in the tea bag game, trying much the same thing. With Tata Global Beverages-owned brand Tetley also getting aggressive in this segment, and introducing higher value offerings, the market for premium tea bags has suddenly emerged in India. Gone are the days when marketers would struggle to sell the basic tea bag proposition – FMCG veteran Kannan Sitaram, Operating Partner with India Equity Partners, recalled how in his old HUL days, he struggled to sell the concept of tea bags, and is amazed at the acceptance of them now.

Today, not only are institutional sales increasing, but as Vikram Grover, Vice-President (Marketing), Tata Global Beverages, India, pointed out, there is a steady increase in the in-home consumption of tea bags as well.

Although Tetley, which offers six variants apiece of value-added premium tea bags in the black and green categories, said it has been at the forefront of stimulating new tea habits in India, Grover shrugged asides questions on market shares. “Market shares may not be the relevant metric on tea bags as the game in this tiny market is all about market growth - India continues to lag behind the world in terms of usage of tea bags and emergence of newer segments of tea”.

Grover said the Tetley strategy to grow the market for tea bags is to introduce more flavours. “We believe the most important lever for developing this market is the range of offerings and the taste of the products on offer. We did that first with flavoured black tea bags and now we are doing the same with green tea”.

“Unlike regular packet tea, the purchase of tea bags is more

stephen H.b. TwiningIan gowlett

Beverages


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impulse-led, hence most of our marketing strategy is focused on visibility and trial generation at the point of sale. We are also constantly evaluating newer avenues of connecting with consumers, such as online,” added Grover.

Even as Tetley is introducing flavours such as cinnamon, Gowlett insisted that Twinings will not go down the localisation route at all (although it does have anelaichi variant). “Why should I offer a local brew which people here can do better? We are a global company, and our offerings will remain international”.

Globally it has 200 blends, but in India, Twinings offers only 18 – including its bestselling Earl Grey and English Breakfast. It also has indigenous Classic Assam and Darjeeling in its India portfolio. But that, Gowlett explained, is also to do with the duty structures here which curb imports. “India wants to look after its tea industry and we have to be realistic to a degree,” he said, explaining how the Classic Assam they offer is still very, very premium.

Gowlett also said Twinings would be very selective of where it will be available and keep the snob value intact – “There are 16 million retail outlets in India, but we won't be

The Tea Board, according to its Chairman M.G.V.K. Bhanu, proposes to hold district-level conventions of small tea

growers to educate them about proper agricultural practices.“This will help them produce quality leaves commanding

remunerative prices,” Bhanu said. The first convention, as he indicated, would be held in

the third week of April in Sonitpur district of Assam and leaflets explaining how to produce better crops would be distributed among those to be present. Also, the successful small growers from various States would be invited to narrate their experiences.

Focus on small growers“We have chosen Sonitpur as the venue for the first

convention because the district has as many as 12,500 small growers but we intend to hold similar conventions also in other districts with concentration of small growers,” he said.

Sadly, as the Tea Board Chairman regretted, the policy pursued so far lacked the focus on problems facing nearly two lakh small growers accounting for 26 per cent of the country's total tea production. No extension service was available to them nor any scientific knowledge or technology either to boost production or improve the quality of leaves. There were other problems too like the problem of marketing, pricing of produce, resource crunch, not-too-satisfactory equation with bought leaf factories, in fact the list was long.

“We will address most of these issues,” he said. “For the 12th Plan, we have asked for a good amount for the development of small growers but how much will be the actual allocation is difficult to estimate right now”. He, however, made it clear that the models of Sri Lanka and Kenya would

not be replicated here.“We will have our own

model. We want small growers to regroup themselves into self-help groups, set up their own factories and develop own brands,” he observed.

The proposed Small Tea Growers' Development Directorate, with headquarter in Dibrugarh, Assam, and branches in other places, would start functioning from September, he said. A total of 95 posts were being created for the directorate – 82 of them technical and 13 non-technical.

Meanwhile, in a memorandum presented to the Parliamentary Standing Committee on Commerce, the Confederation of Indian Small Tea Growers' Association has demanded opening of Tea Board's field offices at Kokrajhar (Assam), Islampur (West Bengal), Waynad (Kerala) and Itanagar (Arunachal Pradesh).

Simplification of SchemesIt has also stressed the need for simplification of existing

schemes designed to benefit small growers, enforcement of price-sharing formula, introduction of plantation credit card and insurance and welfare schemes for workers in small tea gardens and supplying subsidised fertilisers to these gardens.

In a pre-budget memorandum to the Finance Minister, Pranab Mukherjee, the association has raised similar demands.

Tea Board to hold district-level conventions

M.g.v.K. bhanu

seen in all of them”.Will the Tetley and Twinings strategy of trading up their

offerings pay off? Or remain just a storm in a tea bag?Cashing in on heritage valueThe iconic Twinings brand was established in 1706.

Twining family no longer owns the brand – having sold it to ABF in the 1960s, but 47-year-old Twining remains closely associated with it as Corporate PR and global brand ambassador. He travels round the world, hosting tea sessions and giving people nuggets of tea's history and brewing practices.

In India on his first official visit, he hosted one such session at the Leela Kempinski in Delhi. For a moment he looked taken aback to see only ladies gathered, but quickly recovered his aplomb, and said “Ah, it's fitting to see so many ladies, as tea has been a story of ladies. They have been drivers of the tea tradition”.

It was an occasion for the visitors to learn many aspects about tea brewing and getting the right taste. Twinings' tea blenders have to taste tea for five years and guzzle up to 3,000 cups a day to become masters at their craft. n

Beverages



Chennai-based ‘value-added spice' seller, the Rs 450 crore Aachi

Masala Foods Pvt Ltd, is setting up a 10,000-tonne cold storage facility as a prelude to diversifying into a range of businesses.

A. Padmasingh Isaac, Chairman, said the company will be moving beyond the masala mix and getting into a range of products that may include mineral water, fruit juices and even some South Indian snacks.

It also intends to get into the fast-food restaurant business, where the menu will be “predominantly

Ice cream manufacturers are gearing up for the summer. The 2,500-crore

industry is on an expansion drive eyeing a 15 per cent growth this year despite increasing prices between 1 and 10 across product categories since January.

The branded ice cream market with leading players such as Amul, Kwality Walls, Vadilal and Mother Dairy is banking on a large variety of regional flavours, distribution network and expansion of retail outlets to strengthen their share in the market dominated by unorganized players.

With a 40 per cent market share, Amul is focusing on expanding its reach. "Ice cream demand is increasing annually by 25 per cent. We are going to raise the number of outlets by 12,000 to 92,000. We are adding 1,500 pushcarts to take the number to 4,000

chicken-based,” said Isaac. The company has drawn up a Rs 100-crore investment programme for the diversification.

The cold storage facility is coming up on a 3-acre plot at Gummidipoondi, 40 km north of Chennai.

Aachi Masala, a household name in Tamil Nadu, is known for its spice-based products and its range of ready-to-cook food items and edible oils (sunflower and gingelly). Besides, it also has a range of ayurvedic OTC products such as rheumatic pain reliever, tooth powder and cough syrup under the brand Sabash. In the homecare category, it has mosquito

and adding 700 scooping parlours to a total of 1,700 in the next one year".

RS Sodhi, Managing Director of Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets the Amul brand of products, said Gujarat-based Vadilal group, the second largest player, is making efforts to achieve a sales growth of 30 per cent this summer.

"There is a huge scope for ice cream business in the country with a large segment still in the unorganised sector. We will be increasing our ad spend by 40 per cent this year compared to the previous year," Vadilal's MD Rajesh Gandhi said.

The company has two facilities in Gujarat and Uttar Pradesh with a distribution network of 50,000 retailers and more than 150 'Happinezz' retail outlets.

With its offerings ranging from 5 to 500, Hindustan's Unilever's brand Kwality Wall's is focusing on strengthening its

and other insect repellents, cleaning powder under the brand ‘Twinkle.'

The company, which expects to end the current year with a turnover of Rs 600 crore, is looking for a strategic investment partner to pump in funds for its proposed new businesses, including mineral water, snacks and fruit juices, Isaac said.

position in the market. "We have been adding on average

7,000-10,000 points of sale for the last two-three years. By launching almost two Swirls parlours every week, we now have more than 200 such parlours," said an HUL spokesperson.

Mother Dairy, a subsidiary of National Dairy Development Board (NDDB), will be opening 7,000 outlets across the country over the next two years. It has 1,200 outlets with a strong presence in north India.

With the ice cream division accounting for approximately 4 per cent of the 5,200-crore turnover of Mother Dairy, the company is now focusing on metro cities and the south Indian market apart from Maharashtra.

With distribution one of the key growth drivers in this segment, regional as well as national players are focusing on it. "Market development and increasing per capita consumption of ice cream in India are two key tasks before us," the HUL spokesperson said.

According to industry statistics, the Chinese ice cream market is worth around 20,000 crore, where as the total Indian market size is 2,500 crore, with the organised sector market estimated at 1,500 crore.

Considering that the per capita consumption of ice creams in India is currently at around 250-300 ml compared to 23 litres in the US, 14 litres in Sweden and 800 ml in Pakistan, there is a huge opportunity for organised players in the industry.

Aachi Masala set to diversify

Ice Cream makers expect 15 % growth this summer

NewsCorporate

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The retail division of coffee conglomerate, Amalgamated Bean

Coffee Trading Co Ltd, is increasing its outlets along major highways as it

French retailer Carrefour is sewing up plans to launch its next two stores in

the northern Indian cities of Agra and Meerut.

With German chain Metro entering the Capital last week, and American retailer Walmart already establishing presence in several small North Indian towns, the French firm has been forced to pull up its socks.

The Meerut store is under construction and a location has been identified for the Agra store. Carrefour plans to open the store later this year. The two stores will be smaller than the Delhi store. In December 2010, Carrefour had set up its maiden outlet in Delhi's Seelampur area. The 56,000 sq. ft. store houses over 10,000 stock keeping units

The CompetitionCarrefour had opened its second

store in Jaipur late last year. It has two operational outlets in the country. In direct contrast, German retailer Metro has 10 stores including the Delhi outlet, while Walmart has 17 stores largely in the West and North. Both Walmart and Metro had said on separate occasions that they want

spots a growth opportunity here. K. Ramakrishnan, President (marketing), CCD, said. “We are teaming up with oil marketing companies to set up the outlets near their filling stations.”

The company currently had 48 highway outlets, and planned to double it in the next two to three years. Apart from serving coffee and snacks, the outlets will provide other amenities for the travellers. Overall, the coffee bar retailer intends to expand its network from 1270 outlets at present to 2,000 by 2014.

It is also launching new marketing initiatives to take on the anticipated competition from overseas and domestic players in this segment. It is sharpening

to expand their reach in the country.Carrefour has been cautious in its

expansion. But the entry of Metro and Walmart in northern India has expanded the retail canvas and Carrefour's management would like to take the competition by the horns. Also, there is direction from the global parent to speed up its expansion. Other players in the cash-and-carry business too are eyeing the market in India.

A Carrefour spokesperson declined to comment on the issue. Carrefour is the second largest retailer of the world with revenues topping €90 billion.

India allows 100 per cent FDI in cash-and-carry and single brand retail. However, FDI investment is barred in multi-brand retail.

Purnendu Kumar, Senior Vice-President – Retail, Technopak, said, “The reason why most big players are focusing on tier 2 cities is because they can get bigger margins. Cost of land is cheap and due to sheer volume they

focus on digital media campaign through social networking sites.

CCD has also tied up with a non-profit education institution, FLAME (Foundation for Liberal and Management Education) to introduce a ‘Scholar Hunt' programme, and disburses scholarships worth Rs 5 crore to students seeking graduate and post-graduate programmes in different fields.

Though a non-profit initiative, the company will be trying to gain some marketing mileage out of this. “With our outlets being youth hubs, the Scholar Hunt programme is fitting,” he said.

can do better business. Also by virtue of their B2B business model, these companies are effectively replacing smaller distributors and can get many brands under their umbrella.”

Café Coffee Day takes the highway route

Carrefour to enter Agra, Meerut

K. Ramakrishnan, President (Marketing ) cafe coffee Day, and Prof. Indira J. Parikh, founder and President, fLAME at the launch of ’scholar

Hunt’ in Hyderabad


The government said it is in the process of evolving a consensus

on allowing 51 per cent foreign direct investment in the multi-brand retail sector.

The policy to allow foreign

retailers to open outlets in India was put on hold by the government in the wake of strong objection from opposition and its key UPA ally Trinamool Congress.

After that, the Department of Industrial Policy and Promotion (DIPP) has started wider consultations with stakeholders, including farmers, consumers and the food processing industry.

"We have further liberalised FDI in single brand retail, and a consensus for operationalising the decision taken to open FDI in multi brand retail trading is being pursued," Finance Minister Pranab Mukherjee said while addressing annual session of Assocham.

He said that FDI flows which had considerably slowed down in 2010-11,

have bounced back.Recently, Commerce and Industry

Minister Anand Sharma too has assured that the government is building a consensus on opening the multi-brand retail and it is only a "matter of time" before the decision is notified.

The USD 600-billion segment is dominated by small kirana (mom & pop) shops. The Opposition has expressed concerns that allowing majors global retailers would lead to unemployment among the unorganised sector.

Several global retailers like Walmart, Tesco and Carrefour are waiting in the wings to enter India's multi-brand retail segment.

Process on for consensus in FDI in multi-brand retail, says FM

Bharti Walmart Pvt Ltd is exploring options to expand in Southern

India. The company, which has presence across the Vindhyas in Andhra Pradesh and Maharashtra, is keen to enter Karnataka.

The Bharti Walmart Vice-Chairman, Rajan Bharti Mittal recently met the Karnataka Chief Minister D. V. Sadananda Gowda to explore investment options. Details were not available.

The Karnataka Chief Minister held a road show in New Delhi seeking investments for the forthcoming Global Investors Meet (GIM) scheduled for June 7 and 8, 2012. Besides, Bharti Walmart, 30 other American companies including Cisco and Shell also met Gowda.

“An American delegation had called on the Chief Minister and we were also a part of it. We are looking to foray into various geographies in India,” a Bharti Walmart spokesperson said.

Bharti Walmart's move to explore investment options comes at a time when German retail chain Metro Cash and Carry has expanded its presence in Northern India in Delhi, where

it opened an outlet recently.

T h e French retailer Carrefour is planning an entry into Agra and Meerut. Metro has been operating two stores in Bangalore for several years now.

B h a r t i W a l m a r t already has stores in Guntur and Vijaywada in Andhra Pradesh, while Carrefour is yet to make its Southern debut. Bharti Walmart is the joint venture between Bharti Enterprises and Walmart Stores Inc for wholesale, business-to-business and cash-and-carry operations in India. It has 17 stores in India. Raj Jain, Managing Director, recently said Bharti Walmart is planning to open 10-12 stores in 2012.

GIM 2012Karnataka is looking to attract an

investment of Rs 6 lakh crore in the General Investment Meeting (GIM) this year, said Industry Minister Murugesh Nirani. The previous edition of the investors meet in 2010 generated investment commitments of some Rs 3.92 lakh crore. About 36 investment proposals have taken off and were in various stages of implementation, while another 250 were in the pipeline, he said.

The thrust this year is on attracting investments in sectors such as gems and jewellery, tourism, textiles among others, Nirani said.

Bharti Walmart set to expand in South India

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With IPL-5 coming soon, teams are striking unusual alliances.

For instance, Washington Apples is the ‘official fruit' partner of the Chennai Super Kings.

But there is “synergy” between the

two, insists CSK's think-tank. The key words are ‘fitness', ‘health' and ‘lifestyle'. “And the focus is on winning,” said Chandrabhan Tiwari, General Manager – Marketing, India Cements, which owns Chennai Super Kings.

Keith Sunderlal, representative of the Washington Apple Commission in India, said: “This sort of partnership is new for a general commodities group. We had to first convince the group about cricket, then IPL and then CSK.”

Washington Apples said it sold 70,000 tonnes to India the last crop year. “It is still small compared to the overall consumption of apples in India. But there

is growth potential. India is the third largest export market for us, after Canada and Mexico; and Chennai accounts for 60 per cent of India volumes,” said Sunderlal.

Meanwhile, CSK has planned a slew of activities for the forthcoming season. The team will field an entire apparel range at various price points across 380 outlets in Tamil Nadu. It will also launch formal polos across premium Reebok outlets in the country. CSK recently announced a mascot-naming competition which has seen 54,000 entries. The team will also come out with a new film soon.

Washington Apples becomes ‘official fruit partner’ of CSK

NewsCorporate

So much for women being tagged as compulsive shopaholics — in the

virtual world at least, the reality appears to be just the opposite. When it comes to online shopping, men are the big-ticket buyers with 75 per cent of males spending Rs 10,000 – Rs 30,000 annually, as compared to a meagre 25 per cent of women, a Franchise India report reveals.

Travel and ticket booking still rule the e-commerce pie. As for other products and services, the majority of Indian online buyers are still of the view that the touch and feel of the product is important in the buying decision. In fact 47 per cent of shoppers feel that shopping online is risky both in terms of online payment and product quality.

Conservative ApproachWhile India's e-retail business is

growing, most buyers are still conservative, with nearly half — 49 per cent to be exact — of all buyers still spending a total of under Rs 10,000 annually in online buys.

Numbers notwithstanding, experts believe India's e-commerce market is expected to grow from $10 billion in 2011 to $200 billion by 2020. Furthermore,

nearly $350 million has been pumped into 40 e-commerce start-ups till the end 2011 compared to $43 million in 11 companies in 2009.

Gearing for a bullish run on the back of the internet revolution, Indian online retail industry is slated to touch Rs 7,000 crore by 2015, estimates the report, released in advance of an upcoming e-retail meet.

Gaurav Marya, President, Franchise India, says: “With 100 million internet users supporting the e-revolution, the total number of transactions in India is set to take a leap from the present 8-10 million to 40 million by 2015. It has been observed that Tier-II & Tier-III cities are joining the e-Retail revolution.”

Sun rises for e-retail, though slowly

Mark your dates25-26-27, August 2012

www.dairytechindia.inTel.:+91-11-26681671 / 2045 gayathri vihar, Palace ground, bangalore

India's Largest Exhibition on Dairy Products & Technologies



In 1972, Kolkata's popular sweetmeat brand K. C. Das opened a shop in

Bangalore, now a city with a sizeable Bengali population working in the IT sector. Now, after four decades, other

Bengal brands have begun following the sweet route to other markets.

While K. C. Das operates a larger number of outlets in Bangalore than in Kolkata, Banchharam, a premium sweetmeat maker, recently opened two shops in Bangalore and is set to roll out the third outlet in a month.

Taking a leaf from the Bangalore experience, both K. C. Das and Banchharam are now working out

Coca-Cola Co. and PepsiCo Inc. are adjusting their recipe to

avoid a California law that mandates drinks containing a certain level of carcinogens come with a cancer warning label.

The companies are changing the way they make the caramel coloring used in their sodas. They said the changes will be expanded nationally to streamline their manufacturing processes. They've already been made for drinks sold in California.

Coca-Cola and PepsiCo account for almost 90 percent of the soda market, according to industry tracker Beverage Digest. A representative for Dr Pepper Snapple Group Inc. said all its caramel coloring now meet the new California standard.

The American Beverage Association, which represents the broader industry, said its member companies will continue to use caramel coloring in certain products

plans to set up shops in Mumbai and Delhi. Hindusthan Sweets, having earned its fame with ‘Herbal Rossogolla', is busy chalking out plans to step into the IT hubs of Chennai, Bangalore and Hyderabad.

Sweeter outlookWhat particularly encourages the

retailers from Kolkata to break barriers is the availability of quality raw milk and a higher net realisation.

“Lack of availability of quality milk and poor infrastructure has always hindered our business in Kolkata. Moreover, Kolkata is relatively price-sensitive,” Dhiman Das, Director of K. C. Das Pvt Ltd told Business Line.

The company's earnings from Bangalore have reached nearly Rs 11 crore in 2010-11 as against approximately Rs 7 crore in Kolkata.

The experience is more or less the same with Banchharam Food Products which feels Bengali sweets are enjoying an increasing preference even from the non-Bengali population both in Kolkata

but that adjustments were made to meet California's new standard.

"Consumers will notice no difference in our products and have no reason at all for any health concerns," the association said in a statement.

A representative for Coca-Cola, Diana Garza-Ciarlante, said the company directed its caramel suppliers to modify their manufacturing processes to reduce the levels of the chemical 4-methylimidazole, which can be formed during the cooking process and, as a result, may be found in trace amounts in many foods.

"While we believe that there is no public health risk that justifies any such

and beyond.“We are looking forward to expand

in other cities for growth,” according to company director Subhajit Ghosh. Banchharam is currently operating a chain of six shops in Kolkata.

PackagingAccording to Ghosh, Bengali sweets

being milk-based and highly perishable, proper packaging is essential for growth.

K. C. Das was the first to break the barrier by introducing canned rossogolla with six months' shelf life. Taking a leaf from the leader in business others producers are now engaged in improving the packaging factor.

Banchharam, for example, is now putting up a modern packaging facility in Kolkata to ensure maximum food hygiene.

Hindusthan Sweets has gone a step ahead in opening a quality testing laboratory in assistance with Jadavpur University.

change, we did ask our caramel suppliers to take this step so that our products would not be subject to the requirement of a scientifically unfounded warning," Garza-Ciarlante said.

In Feb, The Center for Science in the Public Interest, a consumer advocacy group filed a petition with the Food and Drug Administration to ban the use of ammonia-sulfite caramel coloring.

Best Pix of the WeekA spokesman for the Food and Drug

Administration said the petition is being reviewed. But he noted that a consumer would have to drink more than 1,000 cans of soda a day to reach the doses administered that have shown links to cancer in rodents.

The American Beverage Association also noted that California added the coloring to its list of carcinogens with no studies showing that it causes cancer in humans. It noted that the listing was based on a single study in lab mice and rats.

Bengali sweets makers go for pan India expansion

Cola giants change recipes to avoid cancer warning

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NewsF&B

HRS Process Systems Ltd.

(HRS PSL), part of HRS Group, UK will launch their

new product – ‘Diced Fruit Pasteurizer’ for the food processing sector in CII organized - Food & Bevtech 2012 starting from April 25-27, 2012 in Mumbai. The new Diced Pasteurizer has been equipped

Three years ago, the Khorakiwala family-owned bakery chain Monginis

Foods claimed it missed a possible franchise deal with Starbucks. Today, it is more open to alliances, and looking to expand through that route.

“We are in talks with a North Mississippi-based food chain,” said Zoher Khorakiwala, CMD, Monginis Foods, describing how the company is looking to forge joint ventures with international food chains eyeing the Indian market.

“Becoming a master franchise is also an option, much along the same lines as what food chains like Dunkin Donuts have done in India through Jubilant Foods,” said Khorakiwala. The Rs 275-crore family owned brand that already has 550 retail stores across the country is now also nurturing global ambitions. It has appointed a franchise in Cairo, and now plans to take the Monginis brand of cakes and savouries across East Africa and West

to cater both fruit and vegetable industry for application like heating, cooling, pasteurization, blanching etc. HRS PSL, one of India’s leading heat transfer specialist that operates at the forefront of thermal processing technology, caters to the food processing market with its innovative Heat Exchangers, Evaporators and systems for Food / Fruit / Beverage Processing.

Asia through the franchise route.But before that it is ramping up its

presence across India. It has been slowly expanding across the country from its origins in Western India (Maharashtra and Gujarat) to Eastern India (Kolkata and Orissa), and is now actively scouting for franchises in northern and southern states.

“The first step is to go pan-India before entering the overseas markets,” said Khorakiwala.

“We should be in Delhi, Chennai and Bangalore in the next 18 months. There would be both manufacturing and retail franchises as they would bring in the local inputs needed for the business to run in every state or region.”

Monginis is also enhancing its e-commerce operations to reach out to places as far flung as Assam and Kanyakumari. “We intend supplying our cakes to reach 15,000 households in tier II and III cities. Through local courier our

Food & Bevtech 2012 is set to witness manufacturers and suppliers of process plant and equipment for the growing food & beverage processing industry under one roof and will be an excellent platform for service providers to showcase their products and services to decision makers from leading Food & Beverage manufacturing companies.

cakes will get delivered in 48 hours,'' said Khorakiwala.

Releasing a new television campaign after a gap of almost 15 years,

Monginis believes in winning the trust of its ‘vegetarian' consumers by promising them ‘eggless' cakes. Growing at 20 per cent CAGR, Monginis has been more of a ‘take away' brand with outlets measuring on an average at 200 sq ft.

HRS to launch ‘Diced Fruit Pasteurizer’ at Food & Bevtech 2012

Monginis to tie-up with global companies

Tata Coffee's in-house research and development (R&D) on crop

diversification on its estates is now paying dividends.

As part of crop diversification, the company planted arecanut along the valleys and marginal areas in its estates. “The area under arecanut is small but has started giving economical yield,” said a senior company official.

Similarly, horticulture crops such as sapota, avocado and tree spice - nutmeg are also tried on experimental basis. It is yet to take a call on large scale cultivation.

Tata Coffee is also experimenting on commercial crops and has selected

for cultivation oil palm, vanilla and natural dye plants — Indigo and Bixa Orellana (Annatto dye plant), medicinal plants, and edible bamboo and fruit trees.

As part of in-house R&D, the company has initiated experiments to improve crop varieties on its estates. Currently, field assessment of high yielding and disease tolerant selection of coffee, pepper and cardamom plants are on.

The company under coffee varietal trial experiment is identifying location-specific high yielding and disease tolerant selection for planting.

Tata Coffee is also monitoring soil fertility on its estates through soil and leaf analysis and the results are calibrated

to formulate optimum fertiliser recommendation and soil amendment application.

“Our fertiliser programme is rationalised based on soil nutrient status, which is optimum and adequate to enhance crop production and productivity,” explained the official.

The company is also monitoring the availability of micronutrients such as ‘zinc, copper, iron, manganese' and secondary nutrients such as ‘sulphur, calcium and magnesium' to improve coffee, pepper and cardamom productivity.

R&D produces dividends for Tata Coffee


NewsF&B

Mark your dates25-26-27, August 2012

www.graintechindia.com

gayathri vihar, Palace ground,bangalore, India

3rd

Food and beverage major Parle Agro has sewn up an aggressive

marketing campaign with emphasis on rural market penetration.

The company, which is into beverages, snacks and water, sees all its business segments growing this

year with revenues possibly heading towards the Rs 3,000-crore mark, up from Rs 2,000 crore it logged last year, according to Ms Nadia Chauhan, Joint Managing Director and Chief Marketing Officer of Parle Agro.

Addressing newspersons, Ms Chauhan said the company has charted out a series of initiatives, including expansion of the distribution network to tap the rural market and by investing over Rs 40 crore in marketing spend this year.

“The southern region is a major market for Parle Agro and we have roped in Tollywood star Siddharth Narayan to endorse our brands. We see this helping us connect better with our potential customers,” she said.

The company has completed the

expansion project of its manufacturing facilities. It has eight self-owned beverage manufacturing units in the country with two of them based in Hyderabad and Chennai. This capacity would see it through for some more time.

Summer months tend to contribute about 60 per cent of the total business when it comes to beverages and cool drinks. “We see the ensuing summer having immense potential in terms of further penetration into rural markets and adding more brands to the existing portfolio. Recently, we have also launched drinks in returnable glass bottles,” Ms Chauhan said.

The company focus has been on promoting brands Frooti, Appy, LMN, Saint Juice and Appy Fizz.

Parle Agro to target rural areas

Ms Nadia chauhan

The ministry of food processing industries is planning to set up

a food processing cluster in Africa. The proposed cluster would entail an investment of Rs 117 crore to be spent primarily on the setting up of common infrastructure for food processing parks which includes cold storage, food testing labs, incubation centres, standard designed factories, pre-cooling chambers and other modern technologies used by the industry.

This cluster is part of India's $5-billion credit line for Africa announced at the India-Africa Forum Summit last year. "The cluster is likely to come up within next three years. We are floating a competitive bid to appoint a project management agency which will help the ministry in implementing this project," said a top ministry official.

The ministry is looking at 4-5 groups of countries for this project. A cluster comprising countries such as Ethiopia, Kenya, Uganda and Tanzania is in race with another group comprising Angola, Botswana and Namibia.

"The location will be decided by African Union. The union will also provide free of cost land with last-mile connectivity, basic infrastructure, fast-track clearance and incentives to attract investment into the cluster. The proposed

cluster would attract more investment if it is established in countries close to Europe which export food products in large quantities," he said.

The cluster will address a particular value chain or a combination of value chains. It will reduce the post-harvest losses and wastages. Some estimates indicate that in the case of perishable commodities such as fruits, vegetables and fish, as much as 50 per cent of production may deteriorate and may be lost due to a lack of proper storage facilities.

"The cluster will be able to process 2.5 lakh tonnes of raw materials a year, primarily horticulture produce. We will rope in private companies to set up their shops in African clusters. This will help these companies to do business outside India and have an access to cheaper raw material. They can market their food products in domestic markets of Africa, at the same time export their products to European and other Asian countries from their African base," he said.

In civil war-ravaged Africa, small-scale food processing industries are mostly in rural regions creating jobs and income for about 60 per cent of the labour force. It has a great potential for food production, but in many areas needs an input of overseas capital in the form of industries and expertise.

Govt plans food processing cluster in Africa at Rs. 117 cr

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NewsF&B

On March 6, 1912 — before the Titanic sailed or sank, before the

first Opening Day at Fenway Park — the National Biscuit Company made its first sale of Oreo sandwich cookies, to a grocer in Hoboken named S. C. Thuesen.

A century later, the brand’s present owner, Kraft Foods, is readying a centennial celebration that looks ahead as well as back.

The commemoration takes the form of what Kraft Foods is calling the first worldwide campaign for Oreo that is fully integrated, including traditional and new media, stores, events, promotions and public relations. There is even a tangible, edible way for consumers to take part: a limited-edition variety called Birthday Cake Oreos.

The campaign is indicative of two trends reshaping consumer marketing. One, referred to on Madison Avenue as authenticity, involves responding to a growing interest among consumers seeking value in the provenance of brands as they search for products whose quality has been tested over time.

The other trend involves efforts to present those heritage brands in updated ways to reassure consumers they can still meet contemporary needs.

“What we’ve really set out to do is something authentic for the brand, true to its roots, that is fresh for today,” said John Ghingo, senior director for global biscuits at the East Hanover, N.J., office of Kraft Foods.

“We want to acknowledge what Oreo has been over the past 100 years,” he added, “and recognize what it means in today’s world.”

As the Birthday Cake name for the limited-time Oreos implies, Kraft Foods and its creative agency, Draftfcb, will try to achieve those goals by framing the 100th anniversary as a birthday party — the entertaining kind, thrown for a child, rather than an adult’s attempt to deny or ignore the passage of time.

The campaign carries the theme “Celebrate the kid inside,” which appears in video and print, online and in social media like Facebook, where the brand has more than 25 million “likes” for its fan page.

A commercial, to run in 15 countries, has vignettes depicting what Ghingo described as “the Oreo ‘twist, lick and dunk,’ the ritual that creates a simple,

c a r e f r e e m o m e n t and allows everyone t o connect.”

Commercials for the United States bring those Oreo moments to life by transforming routine adult activities like a dull commuter train ride and a contentious school board meeting. The dreariness is suddenly interrupted by a gang of children, who march out bearing trays of Oreos and glasses of milk as “You Do Something to Me” plays on the soundtrack.

As the adults discover their inner children, the children hold up signs that say “Next Stop: Childhood” and “Recess for Everyone!”

“Never before in the advertising have we showcased the need” for Oreo in a “problem/solution” format, said Jill Applebaum, senior vice president and group creative director on the Oreo account at the New York office of Draftfcb, part of the Interpublic Group of Companies.

“The kids come in,” she added, “and there’s that moment of childhood delight.”

There will also be print advertisements that riff on popular culture milestones from the last 10 decades. The playful subjects include the invention of the yoyo, the arrival of 3-D movies and the introduction of Pac-Man. The ads call 2012 the year that “Oreos turn 100 years young” and direct readers to “celebrate the kid inside at oreo.com/birthday.”

On the Facebook fan page, fans are getting shout-outs for a birthday of the day, and there will be more than 100 events, styled like birthday parties, to be held in almost two dozen countries at sites that will include Oreo bakeries.

Oreo moments began to be featured in ads more than two decades ago, said John Campbell, worldwide account director on the Kraft Foods account at Draftfcb, as “more moms entered the work force, people got more busy and more of the carefree moments of childhood were being lost.”

“The ‘twist, lick and dunk’ ritual was a wonderful way to respond to that by slowing people down to enjoy cookies

a n d m i l k ,

w h a t they grew up with,” he added. Given what the lives of adults are like now, the idea of Oreo moments “becomes more and more relevant now, with every passing day,” Campbell said. “The time was right to amp that up and play it even harder than we’ve been.”

The anniversary looks ahead in another manner, as Oreo will be a cornerstone brand of a new firm to be formed later this year when Kraft Foods divides into two companies. One, a worldwide snacks firm with annual revenue estimated at $35 billion, will be home to brands like Oreo and Cadbury; the other, a North American grocery products company, will have annual revenue estimated at $18 billion from brands like Maxwell House and Oscar Mayer.

Worldwide sales for Oreo rose to more than $2 billion last year, according to Kraft Foods, from $1 billion as recently as 2007.

Kraft Foods is observing an anniversary, the 75th, of another venerable brand, Kraft Macaroni and Cheese. A humorous commercial by Crispin Porter & Bogusky, part of MDC Partners, appeared during the Academy Awards broadcast on ABC on Sunday.

Some Kraft Foods brands are even older than Oreo, among them National Biscuit Company (Nabisco) cookies like Fig Newtons, introduced in 1892, and Barnum’s Animals, introduced in 1902.

The budget for the Oreo campaign is difficult to estimate because of its singularity. In the United States, Kraft Foods spent $54.1 million to advertise Oreo in 2010, the Kantar Media unit of WPP reported, compared with $36.8 million in 2009 and $56.9 million in 2008. Data is not available for full-year 2011.

Oreo completes a century


NewsCOMMODITY

India has made rapid strides in cotton production ever since adopting

the genetically modified technology 10 years ago. It has also helped the country emerge as a key supplier of the natural fibre to the global market, especially China.

However, the large-scale adoption of genetically modified technology is causing concern to other nations, especially in Europe. This, in turn, could begin to hurt exports of other agricultural products exports, especially ones that are organic and non-genetically modified.

According to available statistics, India exported about 300 organic products fetching Rs 1,960 crore in 2011. In contrast, it shipped out 66 lakh bales (170 kg each) of cotton earning over Rs 15,500 crore. This year, it is projected to export 80 lakh bales and it could end up earning foreign exchange of about Rs 14,000 crore.

Of the nearly 12 million hectares brought under cotton this year, nearly 95 per cent grew Bt cotton.

The Agricultural and Processed Food Products Export Development Authority (Apeda) has fixed a target of touching Rs 5,000 crore in organic

products exports by 2015.“We in Europe, particularly Germany,

are worried over the spread of genetically modified organisms (GMOs) in India. Your Government has to deal with that immediately,” said Ulrich Walter of Ulrich Walter GmbH, Germany. Walter's company is one of the largest importers of organic Darjeeling tea. It is also importing coffee and spices from Kerala, mainly Peeramedu, and holy basil (tulsi) from Uttar Pradesh.

He made these remarks at a session on tea at BioFach 2012 that was held here last week.

“Europeans want to consume products with a clear conscience. Therefore, there is increasing awareness on organic and fair-price products,” said Walter.

He said later that genetically modified and conventionally produced crops cannot coexist. “They may be kept at a distance but still there could be pollution of conventional and organic crop through wind and pollen,” he said, adding that people in Germany were particularly concerned over the strides made by India in Bt cotton.

According to Apeda, 4.84 million hectares are under organic farming in India and 75 per cent of this is grown

in the wild. Again, only 16 per cent of organic products produced in the country are exported.

Among products treated as non-GMOs, soyameal accounts for a major share in exports. Indian organic products are primarily exported by Europe, the US, Canada and Japan. In Europe, Germany and Switzerland are the main buyers.

Gerald A. Herrmann of Organic Services Germany GmbH said that organic products' exports from India were increasing by 33 per cent every year and most products were being marketed as being free from pesticides.

“However, at the recent World Spice Congress at Pune in India one of the speakers pointed out that India topped in cases of pesticide residues being higher than permitted limits,” he said.

Herman Lanting, an agronomist, said that it was increasingly becoming difficult to find non-Bt cotton in India. “India has begun to lose some great traditional varieties such as DCH-32”.

According to Ms Simone Seisl of Remei AG, Switzerland, her firm that sources organic cotton for retailing is finding it difficult as farmers were switching over to Bt varieties. “Though some want to get back, it is a big task to get them going again, particularly due to the switch over”.

However, Mukesh Gupta of Morarka Organics Foods said that Bt cotton is not posing danger since it was grown in irrigated areas. “Organic products are mainly grown in rain-fed areas and there need not be any fear of GMOs getting mixed,” he said in an interactive session at BioFach.

“Every buyer, particularly in Europe, wants a face to any product that he or she buys. They are just not satisfied with buying organic products. In these circumstances, GMOs and mere non-GMO products could put Indian exports under pressure,” said a global consultant.

Europe worries over spread of Bt cotton in India

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NewsCOMMODITY

Th e Agriculture

Minister Sharad Pawar feels that additional exports of sugar, rice and wheat could

be allowed as the country has sufficient stocks.

“There's enough stock to allow export of at least one more million tonnes of sugar, rice and wheat (each),” Pawar said. He was speaking to reporters on the sidelines of the Kharif 2012 strategy conference.

The Government has, so far, allowed 2 million tonnes of sugar exports in the current crop year, while it has lifted ban on the non-basmati rice and wheat exports since September 2011.

So far, sugar exports in 2011-12 have already crossed 1 million tonnes, while they stood at 2.6 million tonnes in the

Despite opening a new trade route from Samdrupjongkhar to Bangladesh via

Gauwhati-Meghalaya, exporters from the east are still using the Phuntsholing-Dawki, Indo-Bangla border route to transport oranges to Bangladesh.

After the new trade route was opened and declared safe in November last year, Bhutanese exporters were allowed by the regional trade office to export oranges in Bhutanese trucks.

But the transport permit from Road Safety and Transport Authority (RSTA) allowed movement of local trucks only through Assam and Bengal leaving exporters uncertain if they would be allowed to travel via Meghalaya using local trucks.

After exporting around 15 truck loads via Gauwhati-Meghalaya route on Indian trucks, exporters diverted their consignment via the Phuntsholing route even though the new route shortened the distance by almost 240 kilometers.

The reason, said exporters, was because transporting their goods via the Gauwhati-Meghalaya route on Indian trucks was proving to be expensive.

previous year. The country is expected to produce 26 million tonnes of sugar, up from 24.2 million tonnes in the previous year, while the domestic consumption is pegged at 22 million tonnes.

Slow Wheat ExportsSimilarly, the non-basmati rice exports

have picked up in the past six months and are estimated to have crossed 3 million tonnes. However, the wheat exports are a bit sluggish and were estimated at 5.5 lakh tonnes. “The wheat exports have been slow, while rice exports have been good,” Pawar said stating that an additional export of one million tonnes of each could be allowed.

For 2011-12, wheat production is expected to be at a record high of 88.3 million tonnes, while the rice output is projected at 102.75 million tonnes.

ChallengesDespite consecutive bumper harvests,

Indian trucks said exporters charged Nu 28,000 a truck to reach the goods to Dawki compared to Nu 18,000 charged by local trucks from Samdrupjongkhar to Phuntsholing to Dawki.

One of the exporters Wangdi said he had requested Information and Communications minister in October 1st year to allow them to transport oranges in local trucks. But they have not received any response so far.

“RSTA told us that a request was put up for approval to the Indian Embassy, which is yet to get a response,” he said. “Exporting via Phuntsholing route using local trucks is much cheaper than the

Pawar said, Indian agriculture faces huge challenges on rising food grain demand amidst dwindling land holdings, changing climate and increasing pressure on water resources. Stating that emphasis during 12th Plan will be on farm mechanisation, Pawar asked the States to formulate State-specific agriculture infrastructure development plan and work on reforms.

Further, Pawar said the issue of cancellation of licences to about 70 district central co-operative (DCC) banks would be taken up with the Finance Minister soon. These banks are unable to recover loans and are facing financial crunch. The RBI has issued notices to 70 DCC banks stating that their licences would be cancelled if they don't complete recoveries by March 30, 2012, Pawar said. Such licence cancellation will hurt disbursal of agriculture credit.

Gauwhati-Meghalaya route.”Meanwhile an increase in orange

production in India this year has also caused a drop in the prices of oranges from Bhutan.

During the auction from December 2010 to February 2011 in Samdrupjongkhar, oranges were sold at Nu 18.10 a kilogram which has reduced to Nu 13.66 a kilogram this year. Eight kilogram makes a pon (80 pieces).

Auction yard manager in Samdrupjongkhar Purna Tamang said the prices have come down because of the fruits’ sizes. “This year’s orange sizes are smaller and the colour isn’t attractive. Most of them this year are sold as keel”.

Some exporters who hired orange orchards are disappointed. “We paid more as hiring charges than what we could sell the products for,” a Phuntsholing exporter who has hired orchard in the east said. “I sold the oranges at Nu 180,000 a truck last year to Bangladesh and this year I am earning about Nu 50,000 less.”

Pawar wants to boost exports of rice, sugar, wheat

Orange exporters choose local carriers to save costs


NewsDAIRY

The Gujarat Co-operative Milk Marketing Federation Ltd

(GCMMF) that owns the Amul brand plans to invest $600 million (Rs 3,000 crore) in doubling its processing capacity for milk and milk products over the next six years.

The co-operative is also enhancing its retail presence to widen market reach by opening more distribution outlets, parlours and cafes, apart from strengthening backward linkages to enhance milk production.

“We are setting up five new dairies in Saurashtra, two in Delhi and one in Mumbai, besides expanding the existing plants. This will double our processing capacity to 22 million litres per day,” said R.S. Sodhi, Managing Director, GCMMF.

Amul, which commands a 25 per cent market share in the pouch milk segment, has a processing capacity of 14 million litres per day.

Its current average milk processed stands at a little over 10 million litres per day. GCMMF, which clocked sales of Rs 9,774 crore in 2010-11, is eyeing a turnover of Rs 30,000 crore by 2020.

Sodhi said GCMMF will finance the bulk of its new expansion plans through borrowings from the National Dairy Development Board and commercial banks.

“We also plan to expand the range of our milk products by setting up new lines to manufacture milk powder, ice-cream, the pro-biotic range of beverages and cheese among others,” he added.

Amul's current milk product range has some 40 products.

To Reach 3,000 More TownsThe country's largest food brand

is also taking other steps to expand its market reach. “We plan to reach out to 3,000 more small towns this year and are adding 200 super distributors,” he said.

Amul will also add about 1,000 parlours to the existing 6,000 that sell all its products under one roof.

Amul, which has voiced its concerns against opening up foreign direct investment (FDI) in the retail sector, said it is prepared to face the challenges as and when they arise. “We are already prepared to face it,” Sodhi said.

Further, the largest co-operative is also strengthening its backward linkages by improving infrastructure. “We are also investing in doubling cattle feed production to 9,000 tonnes per day,” he said.

Besides, Amul is putting up infrastructure in villages such as bulk milk coolers and automated collection systems.

Amul to spend Rs 3K-cr to expand its reach

R.s. sodhi

The World Bank has approved a $ 352-million credit for the National

Dairy Support Project.The project will cover over 40,000

villages across 14 major dairying states in the country, benefiting an estimated 1.7 million rural households. The States included in the project, such as Bihar, Madhya Pradesh, Orissa, Rajasthan and Uttar Pradesh, account for more than 90 per cent of the national milk production, according to a World Bank report.

The project will support the implementation of the first phase of the National Dairy Plan (NDP) of the National Dairy Development Board (NDDB), which aims at increasing the animal productivity, expanding infrastructure for milk procurement at the village level and enhancing milk processing capacity and marketing, among other things.

It is pointed out that while the dairy sector in India had seen significant growth over the decades, the growth rate of milk production has slowed down in recent years. From an average 4.3 per cent per annum in 1990s, the growth rate came down to 3.8 per cent in 2000s.

On the other hand, the demand for milk is expected to increase as the economy grows and the income levels rise. According to the Union Government's estimates, the demand for milk is projected to grow to around 180 million tonnes by 2021-22. This will require milk production to grow by 5.5 per cent per annum over the next decade to meet the anticipated demand.

At the same time, a major concern in the country's dairy sector is low animal productivity. The average milk yield of Indian cows is only about 3.4 kilograms per day as against a world average of 6.3 kg. The productivity is low mainly

for reasons such as poor nutrition, health and low genetic potential for milk production.

In the circumstances, the primary focus of the dairy project is on increasing milk production by genetic improvement of the cows and buffalos and optimal use of feed and fodder. The project will support long-term investments in animal breeding, extensive training to dairy farmers and doorstep delivery of artificial insemination and advisory services on balancing animal feed and nutrition.

World Bank approves $ 352 million credit for National Dairy Support Project

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NewsDAIRY

Summer is coming and beverages have to do their part, quenching thirst and

keeping up energy levels.

Entering the market with a lassi is Danone, a €19 billion, global food company and leader in diary products.

The packaged lassi will be available in three flavours – masala, sweetened and mango. The Managing Director, Jochen Ebert announced the launch of the product in Hyderabad, Mumbai, Pune and Bangalore on Wednesday.

The lassi has been specially developed to suit the Indian palate. It is fortified with four nutrients and priced at Rs 15 for 165 ml. It will be available across retail and modern trade outlets in these four cities, the company said.

Danone India has made arrangements to get the drink exclusively produced at Dynamix, based in Baramati, Maharashtra to meet the demands. The company has its own factory in Haryana, which was made operational in November 2011, and produces yoghurt and chocolate milk cereal snack.

“Our entry into the lassi market follows the packaged yoghurt, which was launched in India two years ago and is doing well. We are learning from the Indian consumer and will keep launching products that suits them with a blend of Danone expertise and Indian taste,” Ebert said.

Nascent MarketThe Indian market for yoghurt is

around 2-3 million tonnes in a year. Over 90 per cent of this is home made. The per capita consumption is 2-3 kg. In the case of packaged yoghurt, the market is around 100,000 tonnes and the per capita consumption is 0.1 kg. In comparison, the per capita consumption in France, Germany is around 25 kg. Therefore we see a big opportunity for these products in the future, he said.

Danone India launches packaged lassi

MPEDA partners with Malaysian body to develop fresh water fish

The Marine Products Export Development Authority (MPEDA)

has entered into an agreement with the Malaysia-based international body INFOFISH for the development and marketing of freshwater fish in India. Post-harvest technology and value addition have not yet received much attention in the domestic freshwater aquaculture sector.

The effort to transfer technology in the culture in fresh water fishes, processing and marketing for production and export of value-added products is the first of its kind in India, a press release from MPEDA said.

The three-year project has four main components: market/product studies, technology transfer, investment promotion and capacity building and dissemination.

The agreement was signed between B. Sreekumar, Secretary, MPEDA, and Dr Mohammed Ayub,

Director, INFOFISH, at a separate function on the sidelines of the just-concluded India International Seafood Show 2012 at Chennai. Speaking on the occasion, Ms Leena Nair, Chairperson, MPEDA, described the agreement as a path breaking project which would enable India to increase its freshwater fish export potential.

While Indian fisheries sector has made rapid strides in domestic and export markets, its aquaculture is mostly centred around saline water species, especially shrimps and cephalopods. India is the second largest aquaculture producer in the world.

Fresh water aquaculture production in India has registered remarkable growth in recent decades although production consists mainly of Indian major carps, which accounts for 70 per cent of the total production.

Production of value added products in freshwater fish for export market is one

of the potential avenues to expand our exports, MPEDA said.

It was envisaged that the new project would give a specific and focused attention to the development of value added products from freshwater fishes and enable marketing to various destinations.


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