Swiggy acquires LYNK Logistics to tap into lucrative food and grocery retail market

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July 13, 2023

Swiggy, a leading foodtech company valued at over $10 billion, has made a significant move into the food and grocery retail sector by acquiring LYNK Logistics Ltd, an FMCG retail distribution company. This strategic acquisition allows Swiggy to expand its presence and enter the lucrative food and grocery retail market.

Following the acquisition, LYNK Logistics Ltd will maintain its autonomy as an independent business, with Shekhar Bhende, the Co-Founder and chief executive officer, at the helm. The leadership and operations of LYNK will remain unchanged, ensuring a seamless transition and continuity in the company’s direction under Bhende’s guidance.

“With this acquisition, Swiggy enters India’s food and grocery retail market, which is amongst the world’s largest and fastest growing, estimated to be more than $570 Bn in size and expected to grow at 8% year-on-year,” the company said in a statement.

Founded by Abinav Raja and Shekhar Bhende in 2015, LYNK provides a platform for leading FMCG brands to enhance their retail reach. With a vast network of over 100,000 retail stores spread across the top eight cities of India, LYNK offers valuable opportunities for these brands to expand their presence in the market.

LYNK utilizes its exclusive and comprehensive technology platform to drive the retail distribution value chain, encompassing warehousing, inventory management, and logistics operations. Its esteemed clientele comprises prominent companies such as Hindustan Unilever, ITC, Tata, Lakme, PepsiCo, Britannia, and many more.

“LYNK is uniquely positioned in the retail distribution space with their brand-first, tech-led operating model and has demonstrated success with multiple FMCG brands. Our experience in supply chain and logistics gives Swiggy the unique opportunity to help LYNK scale up their offerings and empower retailers to serve their customers better, ” Sriharsha Majety, CEO of Swiggy, said.

In a meeting held on July 12, the acquisition procedure of LYNK was approved by Ramco Cements, providing their support to the company.

Recently, both Swiggy and Zomato have been displaying a proactive approach towards acquiring and investing in smaller startups. As an illustration, Swiggy made a noteworthy move in May of the previous year by acquiring Dineout from its previous owner, Times Internet, in a deal worth $200 million. Following this acquisition, the founder of Dineout joined Swiggy and assumed leadership over Dineout’s operations as an independent entity.

As of July 2022, Swiggy has invested approximately $250 million in merger and acquisition deals. The prominent player in the foodtech industry has been actively pursuing inorganic growth strategies, aiming to enhance its technological infrastructure and strengthen its delivery capabilities through various strategic partnerships and acquisitions.

Zomato temporarily halts registration of new users for Zomato UPI, plans to resume soon

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July 13, 2023

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According to reports, Zomato, the foodtech startup, has temporarily halted the registration of new users for its UPI payments platform, Zomato UPI.

As per sources mentioned in an ET report, the ability to sign up for Zomato UPI has been deactivated for the past few weeks. Presently, users who haven’t registered for it prior to the temporary suspension will not see the UPI option in the Zomato app.

Zomato has collaborated with ICICI Bank to provide UPI payment services, as confirmed by the foodtech company. However, Zomato clarified that the UPI feature is currently only accessible to existing users who had already availed of it. The temporary pause in onboarding new users for the UPI service is attributed to Zomato’s intention to incorporate feedback received regarding the onboarding process, as stated by a spokesperson from the company.

“We will start enrolling new users by the end of the month,” the Zomato spokesperson added.

Zomato UPI was introduced in May as a peer-to-peer (P2P) and merchant transaction service, enabling users on Zomato’s platforms to make payments seamlessly without the necessity of switching to other apps.

In addition to facilitating online payments for food and grocery orders on Zomato and Blinkit, these foodtech platforms also provide customers with the choice to pay at select restaurants listed on Zomato. This payment flexibility is made possible through multiple options, including cards, net banking, and UPI, all accessible through Zomato Pay.

In August 2021, the foodtech platform introduced Zomato Payments, an initiative aimed at providing digital payment solutions including wallets and payment gateway services. Moreover, Zomato offers users the ability to purchase and send gift cards through its app. In the year 2022 alone, Zomato witnessed a significant increase in its customer base for food orders, with 58 million annual transacting customers compared to 49.5 million in 2021.

The foodtech giant is exploring ways to capitalize on the significant volume of traffic flowing through its platforms to stimulate a substantial increase in online payments. In the year 2022, Zomato boasted an impressive count of 58 million annual transacting users and successfully handled a gross merchandise value (GMV) surpassing $2.8 billion in the fiscal year 2022.

In response to the growing trend of tech startups venturing into the UPI (Unified Payments Interface) arena, several prominent foodtech companies have also joined the race. This development is exemplified by the efforts of various players in the industry, such as the renowned ecommerce giant Flipkart.

Zomato’s decision to introduce its own UPI service coincided with the National Payments Corporation of India (NPCI) actively seeking to expand the participant base within the ecosystem. Currently, the UPI landscape remains predominantly controlled by three major players, namely PhonePe, Google Pay, and Paytm, collectively responsible for over 95% of the regular UPI transactions.

Zomato’s remarkable comeback in the stock market continues, as its shares surged by 6% during intraday trading on Thursday (July 13). The stock reached a new 52-week high of INR 84.50 per share, showcasing the company’s impressive performance.

Indian whisky market sees growing demand for imported scotch, affecting domestic brands

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July 13, 2023

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Indian whisky enthusiasts are showing a growing preference for imported bottled-in-origin Scotch whiskies, such as Johnnie Walker and Glenlivet, over premium Indian-made brands. This shift in consumer behavior can be attributed to changes in excise policies, which have significantly reduced the price tags of imported brands by up to 30% in certain key markets.

According to industry insiders, this trend has resulted in a deceleration in the growth of premium Indian whisky brands like Paul John Bold and Amrut Fusion, as well as bottled-in-India (BII) brands such as Black & White and 100 Pipers.

Reduced excise duty on bottled in origin (BIO) imported alcobev products has created “an unequal and unfair playing field that’s impacting the Indian premium liquor segment adversely”, said Vijay Kauthekar, national head of sales at John Distilleries Ltd, maker of Paul John single malt whisky and Original Choice whisky.

“In addition, the ease of doing business for BIO brands is more favourable than for Indian made premium brands in terms of brand or label registration, excise duty, etc.,” he said.

According to the latest import data, the country witnessed a remarkable surge in BIO whisky shipments, with a notable year-on-year increase of 108% during the 2022-23 period. This growth in BIO whisky imports surpassed the rise observed in bulk whisky imports, which recorded a 42% upturn.

Quoting data from the renowned global alcohol market research firm IWSR, the Confederation of Indian Alcoholic Beverage Companies (CIABC) reported that the sales of BIO whisky experienced an impressive growth rate of 113% between 2020 and 2022. In comparison, during the same period, the sales of Indian premium whisky witnessed a rise of 54%.

This trend is mainly attributed to alterations in excise policies within markets like Maharashtra and Delhi, according to industry insiders.

In November 2021, Maharashtra reduced the excise duty on imported BIO Scotch by 50% from 300% to 150%, whereas the duty for Indian products remained at 300%. Similarly, during the period from November 2021 to August 2022, Delhi’s excise policy permitted discounts of up to 50% on the prices of BIO Scotch.

This resulted in a big price disadvantage for premium Indian brands, said Vinod Giri, director general at CIABC. “Indian single malt whiskies, which earlier were 8-10% below competing imported products, became 35-40% more expensive,” he said.

These two states together account for two thirds of the Scotch whisky sold in India.

Erratic rainfall causes 20% surge in rice prices within 10 days

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July 13, 2023

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Industry executives report that the recent unequal distribution of rainfall in the primary rice cultivation regions has resulted in a notable surge in grain prices, with an increase of up to 20% within the past 10 days.

Suraj Agarwal, the Chief Executive of RiceVilla, a rice marketing and exporting company, said that heavy rainfall in northern India has increased the price of the new basmati rice by 9% in the last one week, while scanty rains in Bihar, Jharkhand, West Bengal, Karnataka, and Andhra Pradesh have pushed up the prices of the common variety of rice -IR 64, which is distributed through public distribution system – by 20%. “This is partly because of the higher minimum support price and also due to lesser rain,” said Agarwal. “Traders are holding back the stock.”

The fluctuating rainfall patterns are impacting crops such as moong, urad, and soya bean. As of July 10, the cultivation of pulses and soya bean has declined by over 10% compared to the previous year, while rice cultivation is lagging behind by more than 13%.

Alok Ranjan Ghosh, Director of agriculture of Bihar, said “paddy nursery coverage now stands at 96.6% and the paddy coverage is at 17.7%”.

As per Ghosh’s observations, only a single district has experienced above-average rainfall, while 10 districts have received normal precipitation. Twenty-two districts have faced a deficit in rainfall so far, and five districts have received insufficient rain.

“We are expecting good rainfall in the next three days which may give a boost to the paddy crop,” said Ghosh.

Bihar’s annual rice production stands at 77.17 lakh tonnes. In India, the price surge of rice is four times higher than the international rate, which has increased by 5% over the past two weeks.

Sting sets new record as PepsiCo’s fastest-growing brand, outpacing traditional soft drinks

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July 13, 2023

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Sting energy drink (Representative Image)

According to executives, Sting, the energy drink from beverage maker PepsiCo, has become the company’s fastest-growing brand, surpassing other long-standing brands like Pepsi cola and Mountain Dew.

George Kovoor, senior VP-beverages at PepsiCo India, said, “Sting’s growth trajectory is steeper and stronger than any other soft drink brand launched in India in the soft drink industry over the past three decades.”

According to analysts, the sales of energy drinks do not experience the same seasonal spikes as carbonated soft drinks. For instance, Sting’s contribution during the December 2022 quarter exceeded its sales for the entire year, indicating sustained growth throughout the year rather than relying on specific seasons.

Due to unseasonal rains in the peak summer quarter of April-June, the growth of aerated soft drinks has actually declined by more than 20% this year.

Motilal Oswal Financial Services said in a company update on Tuesday, “Unseasonal rainfall coupled with lower temperature can lead to muted volume growth in the June quarter. However, realisations are expected to increase, on the back of a growing mix of energy drinks, fruit-based juices, and value-added dairy products”.

UK dairy sector welcomes new regulations for fairness and transparency

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July 13, 2023

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milk supply — Milk (Representative Image)

Industry bodies have expressed their appreciation for the introduction of new regulations aimed at fostering fairness and transparency within the UK dairy sector.

The Department for Environment, Food & Rural Affairs (Defra) has formulated fresh guidelines enabling farmers to contest the pricing of their produce by supermarkets and other buyers, while also streamlining the process of raising concerns regarding supply contracts.

The National Farmers’ Union (NFU) said the regulations, set to come into force later this year, “mark a significant step forward”.

For quite some time, dairy farmers have voiced their grievances about the lack of equitable treatment they receive from supermarkets, particularly concerning the pricing of liquid milk.

The government’s recently introduced regulations, announced on July 12th and inspired by the Farm to Food Summit conducted in May, aim to foster stability and accountability within the dairy supply chain. These regulations empower farmers by granting them the ability to contest pricing, prevent unilateral contract modifications, and ensure their concerns are heard. The ultimate goal is to establish a more equitable and transparent system for all stakeholders involved in dairy production.

The new rules follow the discussion with industry players, including the NFU and Dairy UK, and the government said it “has listened to feedback from farmers and processors to ensure the new regulations address previous concerns and provide tailored support for those in the industry”.

Farming minister Mark Spencer said, “Farmers must be paid a fair price for their produce and these regulations will provide price certainty and stability for farmers by establishing written milk purchase agreements with clear and unambiguous terms.

“This represents a key milestone in our commitment to promote fairness and transparency across food supply chains to support farmers and build a stronger future for the industry, and will be followed by reviews into the egg and horticulture sector supply chains this autumn.”

In addition, the government is actively working on developing regulations that seek to enhance relationships within the UK pig supply chain.

The introduction of dairy regulations will provide farmers with greater clarity regarding pricing terms. Contracts will explicitly outline the factors that contribute to the milk price, enabling farmers to challenge prices if they perceive a deviation from the prescribed process. This ensures a more transparent and accountable system for determining milk prices.

It will no longer be possible for buyers to impose changes to contracts without agreement.

Farmers’ contracts will also include “clear rules” on notice periods and contractual exclusivity.

An enforcement mechanism will be created to guarantee the regulations are followed.

NFU dairy board chair Michael Oakes said, “These new regulations mark a significant step forward in the government’s efforts to increase fairness and transparency in the dairy supply chain.

“For a long time, unfair milk contracts have held British dairy businesses back, and these changes will give dairy farmers much-needed business security and confidence, as well as helping to share risk along the dairy supply chain.”

A Dairy UK spokesperson said, “Dairy UK has always believed that this regulation should strike the right balance between greater transparency and maintaining the flexibility the industry needs to compete in a volatile and increasingly competitive marketplace.

“We’ve appreciated the engagement provided by Defra during the development of the regulation. We look forward to seeing the final SI [statutory instrument] and to continuing to work with Defra on the implementation of the regulation.”

PVR Inox introduces new pricing offers for food and beverages, reducing costs by up to 40%

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July 13, 2023

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On Wednesday, PVR Inox unveiled its latest pricing offers for food and beverages, targeting both weekdays and weekends. The company confidently stated that these new offers would significantly reduce customers’ expenditures on F&B by up to 40 percent.

This decision comes at a moment when there has been extensive discussion regarding the high-priced food choices available at cinemas, with numerous individuals expressing their dissatisfaction on social media platforms. The prominent multiplex chain has been attentive to the voices of consumers and has taken this action to tackle several concerns raised by movie enthusiasts.

According to the multiplex chain, customers will now have the opportunity to buy a variety of food items, including hotdogs, burgers, popcorn, sandwiches, and beverages, with enticing combo deals starting at a mere INR 99. These affordable options will be available from Mondays to Thursdays, specifically between 9 AM and 6 PM. Additionally, on weekends, moviegoers will have access to Bottomless Popcorn, allowing for unlimited tub refills, as well as attractively priced Family Meal Combos, reducing food and beverage expenses by up to 40 percent.

For us, opinions of all our valued patrons matter the most. Here's a happy update for all movie lovers in India #PVRHeardYou https://t.co/xUIGVqbfTA pic.twitter.com/0m8cNYYqOg
— PVR INOX Ltd (@INOXMovies) July 12, 2023

“Resonating with patrons is the key to successfully running a cinema chain. All our efforts are directed towards catering to audiences as we wish to provide them with an unparalleled cinematic experience when they visit our premises. We have been actively listening to consumers’ thoughts on our F&B pricing strategy and have therefore curated cost-effective F&B deals that will appeal to moviegoers and also address their concerns.” said Sanjeev Kumar Bijli, Executive Director, PVR INOX Ltd in a statement.

He further added, “Our merger, which placed us amongst the top cinema chains in the world, now offers us a larger canvas, allowing us to cater to a wider segment of the audiences and curate the best offerings for them. We are certain that our reformed packages will appeal to the smaller group sizes visiting cinemas on weekdays, and the larger groups, including families, who prefer watching films on weekends, ensuring their needs are met.”

Tim Hortons celebrates grand opening of 700th store in China, expanding into Northwest region

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July 13, 2023

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TH International Limited, the sole operator of Tim Hortons coffee shops and Popeyes restaurants in China, recently achieved a significant milestone by inaugurating its 700th coffee shop. This expansion also includes venturing into China’s Northwest region, aligning with the company’s overarching strategy for expansion and growth.

Tims’ ongoing geographical expansion across China is led by its 700th store, which marks a significant milestone as the first one to open in the northwest city of Yinchuan.

“Our development team did an amazing job with our 700th store in Yinchuan. We designed this location to capture the unique culture and contrasts of this special part of China, and we hope both local guests and tourists feel that when they visit us. We look forward to opening more stores in the region as we continue to expand,” shared Yongchen Lu, CEO of Tims China.

As part of Tims China’s disciplined growth strategy, the Yinchuan store is among the many franchised stores being opened in June and July. This expansion plan aims to extend Tims’ geographic reach to surpass 1,000 locations by the end of 2023. By utilizing franchising, Tims can establish stores in desirable locations, collaborate with excellent local partners, and achieve greater capital efficiency.

To fuel its growth, Tims intends to open additional stores in other cities with untapped potential in the coming months. This strategy is reinforced by the impressive monthly same-store sales growth of over 16% recorded from February to May of the current year.

Multiplex operators rejoice as GST Council cuts tax rates to 5% on food and beverages in cinema halls

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July 13, 2023

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Multiplex operators expressed their appreciation for the GST Council’s recent announcement to reduce tax rates on food and beverages sold in cinema halls. They believe that this decision will greatly contribute to the recovery of the theatre industry following the impact of the Covid-19 pandemic and also help in avoiding potential legal disputes. The GST Council, led by the Union finance minister and including representatives from all states and Union Territories, made the significant decision on Tuesday to decrease the service tax imposed on food and beverages consumed in cinema halls from 18% to 5%.

Food and beverages (F&B) play a crucial role in generating revenue for the cinema exhibition industry, particularly for multiplexes, which derive up to 35% of their earnings from this segment.

PVR INOX Ltd CFO Nitin Sood said, “The entire cinema industry welcomes the clarification issued by the GST Council today that food and beverages sold at the cinemas will get covered under the definition of ‘restaurant service’ and would be liable to GST @5 per cent (without availment of input tax credit).”

“The above clarification will help resolve the industry-wide issue for the sector which includes more than 9,000 cinemas across the country in avoiding disputes/ litigation from a GST standpoint, giving tax certainty and help in revival of the theatre business post-pandemic,” he added.

Following the pandemic, the film exhibition industry faced significant challenges as theaters remained closed in 2020 and gradually reopened with certain restrictions. However, starting from March 2022, they were permitted to operate at full capacity without any limitations. This development brought a positive change as content pipelines began to flow once again, rejuvenating the industry.

Karan Taurani, SVP of Elara Capital, said, “From the financial perspective, it will have zero impact but from a litigation perspective, there is a relief. Now there is clarity for the sector, which has emerged now that for any food products you have, GST would remain at 5 per cent.

“Various states were asking the GST Council to imply a higher GST and there was no clarity and cinema operators were in litigation with state governments,” he said, adding, “Now this notification brings everyone on the same track and now all food items whether its samosa or popcorn or else, will be charged at 5 per cent.”

According to him, the cinema business is currently witnessing a tremendous increase in the variety of food and beverages, thanks to the introduction of premium dining options.

Abneesh Roy, the Executive Director of Institutional Equities at Nuvama Group, mentioned that prominent exhibitors such as PVR were already making F&B bookings with a 5% Goods and Services Tax (GST) rate.

“PVR was charging at 5 per cent taking a view that food and beverage sold in cinemas is similar to restaurant service where it is 5 per cent,” he said.

Before the pandemic, India boasted a staggering number of over 9,000 cinema screens. Unfortunately, a portion of these screens had to shut down in the aftermath of the pandemic due to financial difficulties resulting from the prolonged closure of the industry. When theaters finally reopened, they had to adhere to various restrictions, which persisted for an extended period.

Foraged secures $2.7 Million in funding to expand premier marketplace for wild and specialty foods

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July 13, 2023

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Foraged, the premier marketplace for wild and specialty foods, has recently unveiled the successful completion of its latest seed funding round, securing an impressive $2.7 million in investments.

Bessemer Venture Partners spearheaded the funding round, with notable participation from prominent figures such as Jeremy Stoppelman, the Co-Founder and CEO of Yelp; Eric Baker, co-founder of StubHub; Harley Finkelstein, president of Shopify; and Micha Koffman, founder and CEO of Fiverr.

According to Foraged, the raised capital will be allocated towards bolstering its range of tools and features, aiming to provide a more streamlined and comprehensive platform for both buyers and sellers within the online marketplace.

Established in 2021, Foraged emerged in the United States with the mission to empower small-scale food producers, including farmers and foragers, by enabling them to cultivate sustainable enterprises. By providing convenient access to naturally occurring foods, Foraged aims to nourish individuals while supporting the growth of local businesses.

Jack Hamrick, Co-Founder and CEO of Foraged, said, “Mainstream awareness of wild foods has been quietly, but intensely growing over the past few years. More people than ever have discovered that there are alternatives to the local supermarket. This funding not only validates the potential of our platform but also moves us closer to realising our vision for the food system of the future – where consumers can discover and connect with independent food producers in a more meaningful way.”

Foraged enables small-scale food producers to access an end-to-end, turnkey solutions for their business, handling “everything from shipping (especially for perishable goods) to secure payment processing via Stripe to a mobile app for messaging customers, uploading photos of products and managing local pickups”.

According to the company, vendors can now effortlessly venture into the ecommerce realm, enabling them to be promptly discovered by an extensive customer base spanning across the entire country. This breakthrough facilitates consumers in accessing a variety of elusive food items that were previously unavailable in the online market.

Jeremy Levine, partner at Bessemer Venture Partners, said, “Bessemer is excited to lead this financing round. We believe in Foraged’s mission to empower independent food producers and provide consumers with a unique shopping experience. Foraged has reimagined the way consumers think about where and how they get their food.”

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