India's food-tech industry to grow at 25 pc CAGR to USD 8 bn by 2022-end

Source: ETRetail.com, Jan 28, 2019

New Delhi : Rising internet penetration, increasing ordering frequency and favourable consumer disposition are some of the factors driving growth in the Indian food-tech industry that is poised to grow at a compound annual growth rate of 25-30 per cent to USD 8 billion by the end of 2022, a report by Google and Boston Consulting Group (BCG) said on Tuesday. “Riding on the wave of higher consumption in a growing market and maturing dynamics on the supply side, we expect the industry to grow from USD 4 billion to USD 8 billion in the next three years, a massive 25 per cent growth rate,” the report titled ‘Demystifying the Online Food Consumer’ said.

It added that funding in the food-tech space has grown by 35 times in the past five years.

Macro trends such as rising internet penetration, increasing ordering frequency, favourable consumer disposition, expanding reach in smaller tiers and expanding network of restaurants on food-tech platforms pan-India continue to drive momentum in the industry, the report said.

As a consequence, reach of food-tech aggregators has grown six times from 2017 to 2019. At the same time, consumers are spending more than double the time to explore and order online — from 32 minutes per month in 2017 to 72 minutes per month in 2019.

The study cited peer or network advocacy (52 per cent) plays a critical role in drawing people to try online food ordering for the first time. This was followed by advertisements (19 per cent) that emerged to be a strong driver in metros and among the higher income groups across the country.

“The food tech industry is nascent but one of the fastest growing in the country… Food tech has now made its presence in greater than 500 cities in India and with consumer confidence growing, there are new opportunities for the players to ‘win with the consumer’ in an evolving market,” Google Director (Travel, BFSI, Classifieds, Gaming, Telco and Payments) Roma Datta Chobey said.

Overall, online spending in India is expected to grow at 25 per cent over the next five years to cross USD 130 billion.

The report also flagged the impediments that hinder adoption by consumers.

A fifth of the respondents stated a lack of trust in the app as the main barrier to usage — they believe that the role and control of the aggregators in the actual food preparation is low.

Delivery charges (18 per cent), food quality concerns (13 per cent) and lack of customisation (10 per cent) were other reasons customers cited for not having experimented with online food ordering so far.

Interestingly, while delivery charge was the top reason for not ordering food online in metro cities; in tier-I cities, lack of trust in apps (29 per cent) emerged as the primary roadblock.

“Food tech start-ups have revolutionised the way Indians eat. There is now a greater demand for healthy, home-cooked meals leading to emergence of new business models like cloud kitchen and meal subscriptions. Ordering food online is now a habit,” BCG Senior Partner and Managing Director Abheek Singhi said.

There is large headroom to increase reach, engagement and usage frequency for food-tech apps, he added.

Government hikes authorised capital of FCI to Rs 10,000 cr

Source: The Economic Times, Nov 27, 2019

NEW DELHI: The Cabinet Committee on Economic Affairs chaired by the Prime Minister Narendra Modi has approved to increase the authorized capital of Food Corporation of India (FCI) from existing Rs 3,500 crore to Rs 10,000 crore.

With the increase of authorized capital, additional equity capital can be infused in FCI through union budget, to fund the foodgrains stock, perpetually held by FCI. This will reduce the borrowings of FCI, save interest cost of FCI and reduce food subsidy in consequence.

The operations of Food Corporation of India require maintaining perpetual stock of foodgrains which needs to be funded by the government through equity or long term loan. The government is providing equity to FCI for maintaining stocks. The present authorized equity capital of FCI is Rs 3,500 crore and paid up equity capital as on 31.03.2019 is Rs 3,447.58 crore.
FCI was constituted under the Food Corporations Act, 1964, to implement the food policy of Government of India. Its primary objective is to ensure minimum support price to farmers, maintain buffer stock of foodgrains and distribution of foodgrains under National Food Security Act and other welfare schemes of the centre.

Government may restrict import of all types of refined edible oils

Source: ETRetail.com, Nov 27, 2019

NEW DELHI: The government is considering putting restrictions on the import of all kinds of refined edible oils while continuing to keep crude oils under the free category.

This will help India encourage import of more crude oils, facilitating better utilisation of the refining capacity of the domestic industry. Currently, both refined and crude edible oils are under the free category of foreign trade, resulting in an unrestricted inflow into the country.

If the proposal gets through, refined oils can be imported only after obtaining an import licence while crude oils can continue to be shipped in on the basis of the import export code, without the requirement of any kind of licences.

“The need to amend the existing trade policy has arisen as the duty on both crude and refined palm oil is going to be lowered from January 1, 2020. The duties are set to go down to 37.5% from 40% on crude palm oil and to 45% from 50% on refined palm oil, effecting a low differential of 7.5 percentage points between the import duty of crude and refined palm oil.

This will encourage import of refined oil, affecting the domestic oil-refining business,” said a senior consumer affairs ministry official.

According to the Solvent Extractors’ Association (SEA), a trade body, the existing refining capacity in the country is around 30 million tonnes, but only 45% this is being utilised.

“If refined edible oils are put in the restricted category, the import of crude oil will increase and domestic refiners will get business and in turn jobs will also be created. Currently, due to lower tariffs, refined oils are directly imported and packaged for selling in market,” SEA executive director BV Mehta said.

The country imports around 15 million tonnes of edible oil a year, forking out Rs 70,000 crore.

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Burger King’s India sales up 66% in FY19

Source: ETRetail.com, Oct 07, 2019

MUMBAI: Fast food chain Burger King posted a 66% growth in sales in India in the year to March 2019 and significantly narrowed losses on the back of aggressive expansion, entry level pricing and largest vegetarian menu within global quick service restaurant chains.

The US chain that entered the Indian market in 2014 posted sales of Rs 644 crore in FY18-19 while its losses reduced to Rs 16 crore. A year ago, it had sales of Rs 389 crore with net loss of Rs 63 crore, data sourced from Veratech Intelligence showed. For Burger King, India has been the fastest growing market in terms of store expansion.

Last fiscal, it added about 58 stores, taking the store count to 187. Read the rest of this entry »

Food ministry pushes for increase in allocation of subsidised food grains

Source: The Economic Times, Sept. 17, 2019

NEW DELHI: The food ministry has revived the proposal to increase by 2 kg each the allocation of subsidised food grains to 810 million poor people covered under the National Food Security Act.

Food minister Ram Vilas Paswan has written to Prime Minister Narendra Modi seeking his approval for this proposal, which has been lying before the Cabinet for some time.

If the proposal gets clearance, it will help the government offload massive stocks piled up in granaries ahead of the fresh procurement season, which starts in October. Read the rest of this entry »

FSSAI frames law to promote food donation

Source: ETRetail.com, Aug 27, 2019

New Delhi: Food regulator FSSAI has framed a regulation to promote food donation by businesses and reduce wastage. “Food Authority has come up with the Food Safety and Standards (Recovery and Distribution of surplus food) Regulations, 2019, so as to provide a legitimate backup to the food donation in India,” the regulator said in a statement.

The purpose of these regulations is to establish a uniform national regulation to protect organizations and individuals when they donate food in good faith.

The Food Safety and Standards Authority of India (FSSAI) seeks to encourage the donation of food and grocery products to nonprofit organizations for distribution to needy individuals. Read the rest of this entry »

India becomes Bacardi’s second- largest rum market by volume

Source: ETRetail.com, Aug 19, 2019

MUMBAI: India has outpaced Mexico to become Bacardi’s second largest market for rum by volume, as consumers gradually shift to pricier products across the spirits segments in a largely whiskey-dominated market.

Bacardi sold about 1.7 million cases of its eponymous brand in India, compared with 1.4 million in Mexico in 2018. A year earlier, both countries had similar volume sales at 1.4 million cases, according to the International Wine and Spirits Research (IWSR). The US remained the largest market for the Bermuda-based company with rum sales of 6.4 million cases.

“We see lot of consumers upgrade to higher-priced rum and other spirits which helped us grow about 19% last year since most of our brands are into premium segments. India is also a top priority market for us globally, and we have been investing in bringing newer brands and supporting infrastructure last year,” said Sanjit Randhawa, the managing director at Bacardi India. “The market also bounced back after highway ban and regulatory issues a year ago.” Read the rest of this entry »