IndiaNews. FOOD & FOOD INGREDIENT REVIEW August September 2005 CONTENTS
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1 FOOD & FOOD INGREDIENT REVIEW August September 2005 CONTENTS Editorial Food Industry Overview p.3 Stock markets zoom to new height Outsourcing the new buzzword p.4 New Food Bill in Parliament Challenge to Tetrapak monopoly p.5 US rejects 256 Indian food consignments Ready-to-eat food sector growing Nutritional value on food packs to be mandatory p.6 Imported food for the platter Karnataka to expand organic farming Organic food manufacturing unit p.7 States to write a new contract for agriculture Aquaculture p.7 Shrimp prices begin to recover in US markets p.8 Export Performance of Marine Products p.10 Rita, Katrina impact to buoy Indian marine exports Dairy, Meat & Poultry p.11 Milk no longer in plastic pouches Amul milk in Lucknow Ice cream mix from Amrit p.12 Dodla Dairy expands network Rajasthan Dairy gets uplift Gopaljee to launch cow milk Venkys DSM group tie up for vitamins p.13 Arambagh chicken for Japan Egg powder maker to invest in poultry farm p.14 Bird flu threat to India, Bangladesh Bromark heralds fair-price revolution in chicken Alcoholic Beverages p.15 Wine board to help industry Indian wine to grow ten times in ten years Foster s plans to launch wine brands Dessert wine from Sula p.16 Indian wine market Foreign investment in Indian wines Seagram to set up winery Champagne may set up winery in MP p.17 Liquor companies post 27 pc increase in sales Seagram garners 25 pc share of premium whisky market Domestic spirits to find place in Flemingo stores Fortune Brands acquires Teacher s scotch whisky Alcoholic Beverages (Contd.) p.18 Soft drink bottler turns to liquor bottling Heineken talks to Jaipurias Ravi Jaipuria likely to partner InBev in India p.19 Radico plans expansion SABMiller set to roll out draught beer UB Group endorses Punjab barley UB expansion plans p.20 Som Distilleries to open pubs Non-alcoholic Beverages p.20 Railways to open two bottled water plants Kerala Pollution Board orders closure of Coke unit Cola majors grapple with attrition p.21 New entrants jumping to grab a slice of fruit juice market p.22 Parle Bisleri plans fruit juice foray Burn and Full Throttle from Coke Mr. Orange to expand Pepsi, Coke appeal against mandatory declaration p.23 Herbal juices from Mamta Leh Berry in a new incarnation Contents continued on next page IndiaNews is published every 2 months by: GIRACT 24 Pré Colomb, 1290 Versoix Geneva Switzerland Tel Fax info@giract.com
2 FOOD & FOOD INGREDIENT REVIEW August September 2005 CONTENTS (Continued) Tea p.24 Tea industry scenario depressing Brooke Bond flavored tea South finds favour in ready tea p.25 White tea fetches Rs. 1,601 a kg Tea Board to tackle quality issue Bengal tea workers end strike p.26 Tata Tea readies acquisition war chest Tata tea to focus on tea bags Cardamom tea p.27 Diversity of South Indian tea gardens p.28 Beeyu joint venture for Sri Lanka foray Coffee p.28 Parliament panel moots support price for coffee p.29 Coffee growers feel pinch as crop comes under pest Coffee output to take a hit on pests, rain Coffee exports may dip to 10-year low UK coffee chain to open 300 outlets p.30 Tata Coffee plans tie-up with Uganda Government Tata Coffee plans new factory Rasna mulls foray into coffee retail Food Service & Retailing p.30 Indage brings Nando s chicken p.31 Fast food on expansion mode Pizza Corner outlets in Bangkok Lombard St exits Pizza Express p.32 Chowking Food plans to enter India Trent to inject Rs. one billion National Capital Region to boast of 50 malls p.33 Organized retail to surge Family owned shops rule Indian retail space p.34 Poor planning chokes malls RPG stake in Foodworld may go to a consortium Snacks p.35 Indians gorging on snacks Parle Agro looking at confectionery Britannia losing grip over biscuits market p.36 Wild n fruity for children Cookies and crackers from ITC Candico sets up pick-n-mix stores Culinary Items p.36 Contract farming of aloe vera p.37 Riddhi Siddhi to double exports Tapioca starch prices zoom on supply crunch p.38 Heinz scouts for acquisitions Nestle unit in Uttaranchal New Horlicks variant p.39 Noodles from Cinnovation Ready-to cook gravies Cereal flavor Mushroom pickle p.40 Colour use in foods NGO ties up for stevia farming Stevia production likely to leap Sugar p.41 Sugar output may top 18 m tons Inclusion of sugar in Doha round sought Indian sugar to Pakistan Sugar industry upset over jute packaging order p.42 UP sugar sector witnessing investment boom Raw sugar import norms amended Expansion plans Balrampur Chini, IFC sign carbon credit agreement p.43 Pact with oil companies for ethanol Unit to make ethanol from sorghum Sugar troubles p.44 Sugar mill in Himachal Oils p.44 More palm oil from Indonesia likely Edible oil imports at record high Soya oil import triples Soyameal sold to South Korea p.45 India focuses on Asia to step up meal exports Soya cultivation falls p.46 Wipro to log out of vanaspati Coconut oil price crashes Parakh Foods asks Cargill to buy out JV p.47 Government cuts base import price Colavita Olive Oil Contents continued on next page Vol GIRACT 2005
3 FOOD & FOOD INGREDIENT REVIEW August September 2005 CONTENTS (Continued) Spices & Flavors p.48 Vanilla exports down 90 per cent High price forces pepper buyers to look beyond India p.49 Ginger prices rise Garlic export to Pakistan and Bangladesh Garlic imports from China stopped due to fungus p.50 Stocking pushes up nutmeg, mace prices Four firms lose export permit on EU complaint Tamarind price crash Saffron prices stagnant for six months p.51 Floods to push turmeric prices Cardamom output to rise Prices of thickeners in Mumbai Paras to aim for retail market p.52 Domestic Prices Foodgrains p.53 Setback to kharif crop likely New barley, wheat strains DNA testing of basmati for EU Rice exports to be robust even as output set to fall p.54 Basmati exports at all-time high Hybrid rice acreage likely to rise Pulses output likely to drop Arsenic content lower in Indian rice Satnam starts UK plant Fruits & Vegetables p.55 Almond prices zoom, benefit to walnut p.56 Onion export prices up South East Asia boosts rose onion p.57 No antidumping duty on Indian mushrooms in USA Mushrooms for US FoodService Dutch help for white button mushroom project p.58 Canadian company plans potato processing unit in Gujarat American dry peas in India GM eggplant field trials Jupally gherkins to US, Canada p.59 Karnataka plans to become cashew hub Cashew exports may gain Turkish hazelnuts in India p.60 Karnataka grape growers upbeat over export orders Grape production in Punjab Bumper apple crop in Himachal p.61 Melons from Afghanistan for India Pomegranate research centre Kashmiri apples get a pack house Major Food Companies p.62 Unilever boss can t digest HLL food biz ITC has hopes from agri-business Related Publications p.63 IndiaNews p.64 Japanscan 12 October is the festival of Dussehra or Vijayadashmi. It symbolizes the victory of good over evil. In many parts of India, ten-headed effigies of demon-king Ravan are burnt on the evening of Dussehra. Vol GIRACT 2005
4 Food & Food Ingredients Review Editorial On a visit to India, one notices prominent and garish signboards of the type, VIP Wines or Gulshan Wines or Golden Wines. None of these so-called wine shops sell wine. A few of them do stock and sell a small quantity of wine, but more as an exception than a rule. Their primary merchandise is Indian Made Foreign Liquor (IMFL) whisky, rum, vodka, gin and beer. Mr. Sharad Pawar, Union Minister for Agriculture, who is himself an agriculturist with experience of growing vines and who hails from Maharashtra (the wine state of India) wants to change this. He wants to de-link wine from other alcoholic drinks. He wants to promote sale of wine through shops that do not sell IMFL and wants to stop IMFL shops from misusing the word wine. We wish success to Mr. Pawar in his efforts to bring a new perspective on wines in India. There is a growing realization in the Government of India that wine should be promoted as a product that brings benefits to farmers. The government is seriously considering setting up a Wine Board for promoting the domestic wine industry. While the government will take its own time in mulling over proposals, the market is voting in favour of wine. Consumption of wine in India grew at a rate of 14 per cent during , and this is just the beginning. A study by Exim Bank predicts that, in the next ten years, the wine industry will grow ten-fold. Such heady projections have, on the one hand, encouraged domestic wine companies to expand as fast as possible. Domestic wine companies were so far concentrated in Western India (Maharashtra, Karnataka and Goa). Now, they are looking at other states to expand their operations. The optimistic projections have, on the other hand, attracted foreign wine and liquor companies to look at Indian wine market with a new seriousness. In this issue, we report about Seagram setting up a winery and Foster s plans to launch wine brands in India. To help foreign companies planning to enter Indian wine sector, the Government of India has permitted automatic approval of foreign direct investment in the sector. In other words, wineries are now considered like any other food processing industry and are not classified with the sinful alcoholic drinks, where each proposal for foreign direct investment must wade through the painfully slow bureaucratic maze. While wine seems to be the new sunrise industry in India, the real star is fruit juice sector, which is said to be growing at 40 per cent per annum. Carbonated beverages are falling out of favour. Cola companies find themselves getting into news for all the wrong reasons. Politically, the left as well as the right, love to hate cola companies. While Coca-Cola has been having problems in the communist-dominated Kerala, it has also been facing protests in Rajasthan, a state ruled by rightwing BJP. The negative sentiment has affected cola sales. Colas loss has been the gain of fruit juices. New entrants are getting ready to exploit emerging opportunities in the sector, even as the cola companies try to put up a spirited fight and to make their mark in the fruit juices sector as well. (Continued on next page) Vol GIRACT
5 Food & Food Ingredients Review Editorial (Continued from previous page) Both fruit juices and wines are riding on the economic boom in India. Indian stock markets are on an unprecedented bull-run. In just about 75 days, the Mumbai Stock Exchange Index has gone from 7,000 to nearly 8,500. Foreign institutional investors (FIIs) are pouring money into Indian stock exchanges this is seen as being one of the reasons for the flare-up. The FIIs are surely not stupid- they are investing because they see growth backed by sound economic fundamentals. The food industry is affected in more than one way by the economic boom. The cola industry is losing out because, as incomes rise, people move up the aspiration ladder to fruit juices. Of course, the low-price strategy adopted by cola companies, made colas a down-market product and has boomeranged. Another example is the drop in oilmeal exports because of increasing domestic consumption. The poultry industry has been witnessing double-digit growth rates. Oilmeal, which was earlier being exported, is now finding its way into feed for domestic poultry. The growth in the Indian poultry industry has so far been fuelled by rising domestic consumption. Poultry exports have been very low. However, this may change. Arambagh Hatcheries, a respected name in the industry, is talking with Marubeni Corporation of Japan for supply of 1,000 tons of chicken per month to Japan. If Arambagh can satisfy the selective Japanese, it will be easy to satisfy almost everyone else in the world and we should wish the best to Arambagh in its efforts. But Arambagh is not alone. There are many Indian companies manufacturing food products for many of the most reputed names in the world. While outsourcing of IT and back-office functions from USA and Europe to India has attracted wide media attention, the outsourcing of food manufacturing has received scant attention. Indian food companies active in this area are not eager to talk about it. But this can be an opportunity for both food marketers of the developed world and manufacturers in India. Let us raise a toast to that a toast of fine wine from India! Vol GIRACT
6 Note: The contents and editorial page given above are excerpts from IndiaNews published by GIRACT. The excerpts have been published by Hindustan Studies & Services Ltd. at the website with due permission from GIRACT. For further details about IndiaNews, please contact or Vol GIRACT
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