World food prices index rises in April, marking first increase in a year: FAO Report

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May 6, 2023

The United Nations food agency’s world price index, which measures the average price changes for a basket of food commodities around the world, experienced a rise in April. This was the first increase in a year. However, the index is still down by approximately 20% from the record high that was reached in March 2022, following Russia’s invasion of Ukraine.

The Food and Agriculture Organization (FAO) has reported that its price index, which tracks the most frequently traded food commodities worldwide, had an average of 127.2 points in the previous month. This is a small increase from March’s figure of 126.5, which was initially reported as 126.9. The announcement was made by the FAO on Friday.

According to the Rome-based agency, the increase in April’s price index was driven by higher prices for sugar, meat, and rice. These gains helped to offset the declines seen in the price indices for cereals, dairy, and vegetable oil.

“As economies recover from significant slowdowns, demand will increase, exerting upward pressure on food prices,” said FAO Chief Economist Maximo Torero.

The FAO reported that the sugar price index experienced a significant surge of 17.6% from March, reaching its highest level since October 2011. The rise was attributed to concerns about tighter supplies due to lower production forecasts for India and China, as well as lower-than-expected outputs in Thailand and the European Union.

The FAO reported that the meat index increased by 1.3% from the previous month. In contrast, dairy prices dropped by 1.7%, while vegetable oil prices and cereal prices also fell by 1.3% and 1.7%, respectively. The decline in the prices of all major grains around the world outweighed the increase in rice prices.

“The increase in rice prices is extremely worrisome and it is essential that the Black Sea initiative is renewed to avoid any other spikes in wheat and maize,” said Torero, referring to a deal to allow the export of Ukrainian grain via the Black Sea.

The FAO has released a separate report on the supply and demand of cereals. In the report, the organization predicts that the world wheat production in 2023 will be 785 million tonnes, slightly lower than the 2022 levels. However, this is still expected to be the second-largest production on record.

“(The) 2023/24 prospects for rice production along and south of the equator are mixed, largely due to the regionally varied impact of the La Niña event,” FAO said.

The FAO has revised its estimate for the global cereal production in 2022, increasing it from 2.777 billion tonnes to 2.785 billion tonnes. This is only a 1.0% decrease from the previous year’s production.

Indian government mulls imposing stock limit to curb wheat and atta prices

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May 6, 2023

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wheatatta — To guarantee sufficient availability of wheat in the market, the food ministry has opted to sell excess wheat stocks under the open market sale scheme every quarter starting in July. (Representative Image)

In an effort to prevent hoarding, the Indian government is considering various measures, one of which is to implement a limit on the amount of wheat that can be stocked. Nevertheless, the ban on exporting wheat and atta will remain in place this year to prevent any potential increase in domestic prices before the 2024 general election.

The prices of wheat and atta have decreased due to the Center’s sale of wheat from its buffer stock earlier this year and the arrival of a fresh crop in the market.

“We will ensure the prices remain stable and there is no chance of relaxing the ban on wheat exports this year even after the end of procurement,” said an official.

In May of last year, India implemented a ban on the export of wheat, with the exception of shipments made under government-to-government agreements for the purpose of food security.

Recently, Union food and commerce minister Piyush Goyal had said, “We do believe that we will have to ensure adequate supplies for the Indian market and once the procurement period is over, we believe that it will be important that inflation is also contained in the country and therefore it is important that the wheat exports continue to remain banned.”

In the meantime, the Food Corporation of India (FCI) and other government agencies have purchased approximately 240 lakh tonnes of wheat at the minimum support price (MSP), and the government anticipates this number to reach 300 lakh tonnes.

“This will be enough to meet our requirement and go for open market sale as well,” said a source.

To guarantee sufficient availability of wheat in the market, the food ministry has opted to sell excess wheat stocks under the open market sale scheme every quarter starting in July.

As of May 1, the FCI possesses 285 lakh tonnes of wheat in stock, whereas the government requires 184 lakh tonnes every year for the national food security scheme, known as the PM Garib Kalyan Ann Yojana.

Although retail wheat inflation declined slightly from 25.37% in February to 19.9% in March, it has remained in the double digits since June 2022.

Nestlé explores potential locations for tenth factory in India, considers East region

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May 6, 2023

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Nestlé, known for producing Maggi noodles and Nescafé coffee, is currently searching for potential locations for its tenth factory in India. As the company’s second-largest market in Asia in terms of sales, Nestlé has already begun preparations for its upcoming manufacturing project in the country.

A representative stated that the biggest food producer globally is exploring the possibility of setting up a manufacturing facility in an area of India where it has no existing factories.

The spokesperson said, “One of the areas that we do not have a representation of a factory is in the east. If we are able to get a good geography and locational fit, we would like to look at the east, but at the moment, [we are] evaluating other regions too to set up the tenth factory. We will make up our minds sooner than later. There is some preliminary work that has been done and then we will make an announcement.”

Nestlé’s annual report indicates that the company has several factories in India that produce beverages, dairy items, and confectionery products. Additionally, the corporation has established a location for its Nutrition and Health Science division in the country.

Last year, the Swiss behemoth recorded sales of SFr1.96bn ($2.19bn), reflecting a 12.9% increase compared to the previous year. Nestlé reported that all categories showed a widespread performance.

Nestlé’s publicly listed subsidiary in India announced a sales increase of 21.3% in the country during the first quarter of 2023. This was reported last month, with sales reaching INR 48.08bn ($588.5m).

Suresh Narayanan, the Chairman and Managing Director of Nestlé India, said, “This is the highest growth for [Nestlé India] in a quarter in the last ten years, excluding the exceptional quarter in 2016 which was off a low base in 2015, All our product groups delivered double digit growth, a notable feature in these past four quarters in a row.”

This week, Nestlé disclosed its plan to close down two of its facilities situated in the US.

Nestlé Health Science, the division of the Swiss conglomerate that concentrates on medical and healthy nourishment, declared in a legal employment notification that it is presently “consolidating its supply chain network to boost efficiency.”

In addition, the company stated that it is considering various options for opening a coffee factory within the same country.

Gritzo introduces new Mango Delight flavor to their Supermilk range, promoting healthy and delicious nutrition for children

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May 6, 2023

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Gritzo, a brand of Healthkart, has recently unveiled a new addition to their customized Supermilk range called “Mango Delight.” This delectable flavor has been meticulously crafted to offer a unique taste experience. The product comes in a 400 gm package, with prices starting at INR 599, and is readily available for purchase online via the Gritzo website and other top e-commerce platforms.

Gritzo’s latest offering, Mango Delight Supermilk, aims to promote healthy living and provide high-quality nutritional drinks. This nutritious and delicious drink is perfect for young taste buds, made with 100% natural mango puree and packed with 21 essential vitamins, minerals, protein, and electrolytes.

The drink is customized to meet the unique nutritional requirements and support healthy growth and development in children of three age groups: 4-7 years, 8-12 years, and 13 years and above. Gritzo also offers separate versions for boys and girls. To gain maximum health benefits, it is recommended to consume the product according to the individual’s nutritional needs.

Commenting on the launch, Subhadeep Dasgupta, Head of Brand at Gritzo said, “We are thrilled to add this intriguing new flavor to our Supermilk lineup. Gritzo has always been at the forefront of child nutrition, and we take pride in offering personalized nutrition to all our consumers through our distinctive product, ‘SuperMilk’. We strive to meet the needs of parents seeking the perfect nutrient-based beverage for their children. Our new Supermilk flavor makes it even more convenient for parents to provide their kids with the essential nutrients they require in a tasty and delightful manner.”

Gritzo aims to personalize its products to meet the unique requirements of each child and acknowledge their individuality.

The Future Market Industry Insights report predicts that the demand for children’s food and beverages will soar to approximately 138 million by 2023. With the world’s population on the rise and increased awareness about children’s nutrition, consumers are seeking out ready-to-make products and functional drinks that are both healthy and tasty. This trend has led to the growth of the healthy beverage market globally.

Gritzo’s Mango Flavored Supermilk is currently available in major cities such as Bangalore, Delhi, Mumbai, Chennai, Kolkata, Assam, Lucknow, Hyderabad, Punjab, Madhya Pradesh, Gujarat, and Rajasthan. Consumers can easily purchase the product online through the Gritzo website (www.gritzo.com) as well as on the leading e-commerce platforms.

ITC raises stake in Sproutlife Foods to 39.42% for INR 175 crores, inching closer to complete acquisition

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May 6, 2023

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After this development, ITC's fully diluted share capital in Sproutlife has increased to 39.42 percent. (Representative Image)

ITC, a prominent FMCG firm, has disclosed in a BSE filing that it has boosted its stake in Sproutlife Foods by acquiring 2,443 equity shares priced at INR 10 each and 7,215 compulsorily convertible preference shares valued at INR 10 each. The company paid a total of INR 175 crores to acquire these shares.

After this development, ITC’s fully diluted share capital in Sproutlife has increased to 39.42 percent.

In January of this year, ITC announced its intention to acquire all of Sproutlife Foods Private Limited, the company behind Yoga Bar healthy foods.

Under a binding term sheet, the company has committed to acquiring all of Sproutlife’s share capital on a fully diluted basis in stages, with the process anticipated to conclude within three to four years.

ITC’s acquisition of Yoga Bar, a D2C brand with a robust online presence, builds upon its recent investments in Mylo and Mother Sparsh over the last 12 months.

WOW Skin Science partners with Dukaan to strengthen D2C channel and provide seamless shopping experience

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May 6, 2023

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WOW Skin Science offers a wide range of beauty and wellness products under the categories of skincare, haircare, nutrition and bath and body products. (Representative Image)

WOW Skin Science, a D2C personal care and wellness brand, prides itself on its commitment to providing high-quality products that enhance the health and beauty of its customers. Recently, the company announced a strategic partnership with Dukaan, a rising e-commerce platform, to further strengthen its direct-to-consumer offerings and solidify its leadership in the personal care and wellness sector.

Sudeep Bansal, Vice President of Growth, WOW Skin Science said, “Our partnership with Dukaan is a prudent move that will enable us to offer our customers an enhanced shopping experience. By leveraging the latest in E-commerce technology, we will be able to provide a faster and more streamlined checkout process, intuitive user interfaces, and advanced features that will make it easier for our customers to find and purchase the products they need.”

Speaking about the partnership, Suumit Shah, Chief Executive Officer, Dukaan, said, “Our platform’s speed and user experience are tailored to meet the demands of modern consumers, and we are delighted that our technology has contributed to WOW Skin Science’s growth.”

WOW Skin Science, headquartered in Bengaluru, specializes in offering an extensive selection of beauty and wellness items that fall into categories such as skincare, haircare, nutrition, and bath and body products.

Dukaan is a SaaS (Software-as-a-Service) platform that empowers merchants with no programming expertise to create their own e-commerce store.

RDC launches Hit A Pint, its first microbrewery in Ghaziabad, serving up fresh beer and fine dining

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May 6, 2023

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RDC’s inaugural microbrewery, Hit A Pint, has begun brewing and serving beer in Ghaziabad. With a monthly production capacity of 3000 liters of fresh beer, Hit A Pint is one of the largest microbreweries in the region.

The beers at Hit A Pint are specifically curated to cater to the Indian taste, and the brewery sources its malt, water, and flavors from Germany. Along with craft beer, they serve a diverse range of beers.

At Hit A Pint, guests can enjoy a wide selection of freshly brewed beers, cocktails, and a diverse menu, crafted by the food and beverage experts at CYK Hospitalities. CYK has been involved in every step of the process, from ideation to execution, including conceptualization, menu engineering, chef recruitment, SOP formation, business planning, food costing, uniform design, logo creation, and branding.

Siddharth Chaudhary, Founder, Hit A Pint, said, “As a microbrewery and restaurant owner, my goal is to create a unique and memorable experience for every customer. From the quality of our craft beer to the freshness of our ingredients, we strive to exceed expectations and leave a lasting impression. We believe that good food and good beer bring people together, and we’re proud to be a part of that tradition.”

Hit A Pint is a fusion of a fine-dining restaurant and a bar, attracting an upscale clientele, with a focus on families. In addition to the conventional seating, the resto-bar features open workstations in one corner, ideal for individuals who wish to work while enjoying their drinks. The bar’s seating arrangement is unique, drawing inspiration from the bars in New York, with unconventional lower seating. The brewery’s spaciousness is accentuated by the bevelled mirrors on the walls, adding to its grandeur.

Marico announces reappointment of Saugata Gupta as MD and CEO; Rajan Mittal as Independent Director

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May 6, 2023

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FMCG major Marico has re-appointed Saugata Gupta as its Managing Director and Chief Executive Officer for another two-year term, as announced by the company’s board on Friday. Gupta’s renewed term will commence on April 1, 2024.

On Friday, during a meeting, Marico’s board approved the renewal of Saugata Gupta’s tenure as Managing Director and Chief Executive Officer for a two-year period starting from April 1, 2024, until March 31, 2026.

After joining Marico in 2004 as the Head of Marketing, he was appointed as the CEO of India Business in 2007. In 2014, he was promoted to the position of Managing Director of the company.

In addition, Marico’s board has designated Rajan Bharti Mittal as an independent director for a period of five years, starting from July 1, 2023, until June 30, 2028.

As the Vice-Chairman of Bharti Enterprises, which has various business interests in Telecom, Space Communications, Digital Solutions, Financial Services, Real Estate, and Agri-Processed foods, Rajan Bharti Mittal has an extensive background in India’s leading conglomerates.

As per the announcement, both appointments are subject to the approval of the shareholders.

Tata Starbucks launches two 24-hour stores in India, reinforcing its commitment to the local market

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May 6, 2023

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Tata Starbucks Private Limited has recently introduced its inaugural non-airport 24-hour stores in Chennai and Calicut, showcasing the company’s dedication to the Indian market. Currently, Tata Starbucks operates 341 stores in four cities throughout the country.

The newly introduced format adds to the company’s existing range of offerings, providing customers with the added convenience of placing orders at any hour of the day. By launching these 24X7 stores, Tata Starbucks reaffirms its long-term dedication to one of the fastest-growing Starbucks markets worldwide. These stores aim to offer customers a familiar and secure “third place” experience, further enhancing their convenience.

“Tata Starbucks has had an incredible journey in India since its inception in 2012 and we are proud to have achieved yet another milestone. The opening of our first 24X7 stores showcases our commitment to evolving our brand and business in India and providing new and meaningful experiences to our customers,” said Sushant Dash, CEO, Tata Starbucks Pvt. Ltd.

By incorporating local culture and craftsmanship into the design, the stores blend the distinctive and inviting Starbucks aesthetic with the character of the surrounding neighborhoods they serve, creating a harmonious fusion. The result is an extension of the surrounding community and a unique atmosphere that reflects the local culture, making customers feel at home.

The Calicut store is designed to resemble a beach house that blends seamlessly into the Calicut Beach environment. The iconic Starbucks Siren symbolizes bringing coffee to life from the ocean, perfectly adapted to the local culture by incorporating Kerala-style murals and metallurgy. These elements help to create a unique and authentic atmosphere that truly captures the essence of the location.

The Chennai store draws inspiration from local culture and subtleties to create a welcoming and homely atmosphere for customers. The new 24-hour store boasts traditional Chettinad architecture, featuring spacious interiors and beautiful ceramic tiles. The store’s design is a unique fusion of intricate Indian architecture and striking European artwork, providing customers with an indigenous yet elegant space to enjoy their coffee.

Along with local additions such as freshly brewed filter coffee, masala chai, and cardamom chai, Tata Starbucks is introducing a new cup size called Picco to these stores. This new size is perfect for first-time coffee drinkers, allowing them to sip and savor their favorite beverages. In addition to the new cup size, the stores will also offer a variety of shareable food items, including the Pesto & Mozzarella Sandwich in Panini, Bhuna Chicken Puff, Hazelnut Triangle, Chocolate Éclair, Egg White & Chicken in Multigrain Croissant, Red Velvet & Orange Cake, Chilli Cheese Toast, and Butter Croissant. This new and improved food menu is sure to delight customers and satisfy their cravings.

Customers at these stores can enjoy Starbucks merchandise and free Wi-Fi services. Furthermore, the My Starbucks Rewards™ loyalty program will also be launched in these cities, offering members various benefits and an opportunity to be a part of the Starbucks India community. This program is designed to reward loyal customers and enhance their overall Starbucks experience.

To provide customers with a safe and convenient Starbucks experience, Tata Starbucks has introduced contactless order and payment methods such as Mobile Order and Pay through the Starbucks India mobile application. This feature allows customers to enjoy their favorite beverages and food items from the comfort of their homes while ensuring a familiar and safe experience.

Marico reports strong Q4 profits despite sluggish sales growth

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May 6, 2023

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Despite a slight growth in revenue, Marico’s consolidated net profit for the quarter ending in March increased by 20.3% year-on-year (YoY) to INR 302 crore. The revenue from operations experienced a marginal rise of 4% YoY to reach INR 2,240 crore.

The company’s earnings were reported after the close of the market, which caused the stock on the National Stock Exchange to end 0.7% lower at INR 493.60.

During the quarter, the consolidated operating profit increased by 14% YoY to INR 393 crore, and the margins expanded by 153 basis points to reach 17.5%.

The owner of the ‘Parachute’ oil brand experienced a 5% year-on-year growth in volumes for their domestic business, which outpaced the industry’s growth of 3% during the quarter.

Marico’s consolidated net profit for FY23 increased by 6.3% YoY to INR 1,302 crore, and their topline grew by almost 3% to INR 9,764 crore.

Despite the challenging circumstances, Marico remains optimistic about its performance in the current financial year, driven by the recovery in domestic volumes and revenue growth trajectory.

Marico’s international business saw a 13% year-on-year growth in revenue in constant currency terms for FY23, compared to 16% growth in the previous year. The company is confident about sustaining double-digit growth in FY24.

Cost Math:

Raw material costs make up more than 50% of Marico’s total expenses. Although input costs as a percentage of sales decreased in the March quarter compared to the December quarter, it still accounted for 52.6% in Q4 as opposed to 55% in Q3.

On the other hand, advertising and promotional expenses as a percentage of sales increased to 9.4% in the March quarter from 8.9% in Q3.

Additionally, other expenses as a percentage of sales slightly increased to 12.9% in Q4 from 11.1% in Q3.

India Performance:

Marico’s domestic revenue saw a modest 2% year-on-year increase to reach INR 1,683 crore, and volume growth decreased by 5%, as the company reduced prices for Parachute coconut oil and Saffola edible oils in response to the declining input prices.

“However, consistent focus on strengthening brand equity across portfolios and execution translated into 90% of the portfolio either gaining or sustaining market share,” the company said in a release.

During the quarter, Parachute Rigids experienced a 9% volume growth, mainly due to the normal course of loose to branded conversions, coupled with the stability of consumer pricing and copra prices.

The year concluded on a positive note for value added hair oils, with a value growth of 13% in Q4, primarily attributed to the increase in volumes.

Saffola edible oils observed a mid-single digit decline in volumes, attributed to the high volume base sustained during the Omicron variant outbreak of Covid-19 last year. Nevertheless, the franchise continued to exhibit healthy offtake growth throughout the quarter.

“In the domestic business, we will drive volume led growth and market share gains across our portfolios, aided by distribution expansion, aggressive cost controls and adequate investment in market development and brand building,” the company said.

Marico anticipates a gradual improvement in revenue growth as pricing interventions take effect in the first half of FY24.

International Business:

Despite facing global macroeconomic uncertainty and currency devaluation headwinds in some geographies, Marico’s international business had yet another exceptional quarter, delivering a constant currency growth of 16%.

The robust performance of each region reflects the fundamental strength of the respective businesses.

Marico anticipates double-digit constant currency growth over the medium term in Bangladesh, driven by its competitive position and substantial growth potential in the market.

Marico expects the expansion into the female personal care category to boost its business in Vietnam in the medium term.

Over the medium term, Marico aims to safeguard the core franchise of ethnic hair care and health care in South Africa.

“The international business has consistently been delivering a resilient performance despite macroeconomic challenges in some of the geographies. We are confident of maintaining the double-digit growth momentum in FY24,” Marico said.

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