ICRA forecasts robust growth for QSR industry in India

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April 20, 2023

According to ICRA’s estimation, the leading five companies in the domestic quick-service restaurant (QSR) sector are expected to open around 2,300 new outlets between FY2023-FY2025. The estimated capital expenditure for this period is approximately INR 5,800 crore, excluding refurbishment costs, which is twice the amount seen during the pre-Covid era.

With a positive demand outlook, the domestic QSR industry is planning to undertake significant store capital expenditure in the medium term. The majority of this capex is expected to be financed through internal accruals and cash reserves, as the industry has raised funds through pre-IPO/IPO routes in the last two fiscal years to support the planned capex in the near to medium term.

Commenting further, Suprio Banerjee, Vice-President and Sector Head, corporate ratings, ICRA Limited, said, “The capex spree in the QSR industry is likely to be driven by favourable demographics, steady urbanisation in India, growing per-capita GDP and significant headroom available in terms of QSR penetration, compared to a developed economy like the US.”

He added, “Increasing formalisation of the sector is expected to improve the penetration levels considerably. Also, higher technological absorption amid the changing consumer behaviour post Covid, wherein delivery as a medium is much more accepted, shall support the increasing penetration. The CAPEX over FY2023-FY2025 is estimated at around INR 1,800 crore to INR 2,000 crore (excluding refurbishment) per annum, which would be around approximately 2.5 times that of the levels seen in FY2020 (pre-Covid).”

In FY2023, the domestic QSR industry experienced a remarkable revival in both average daily sales and revenues. This growth was fueled by various demand drivers, such as shifting food consumption habits, favorable demographics, increasing purchasing power, continuous urbanization, and the addition of new stores. Additionally, factors such as improved value proposition from QSR players with enhanced product and service offerings, widespread adoption of user-friendly and convenient delivery applications, and technology-enabled delivery networks contributed to the industry’s growth.

As the impact of the pandemic diminished and vaccination coverage increased, the QSR industry gained strong growth momentum. The industry saw a significant recovery in ADS levels, which increased to INR 85,789 in FY2022 from INR 67,479 in FY2021. Further, the ADS rose to approximately INR 97,696 in the ninth month of FY2023 compared to approximately INR 85,355 in the ninth month of FY2022.

ICRA estimates that the robust industry revenue expansion of approximately 30-35 percent in YoY terms for FY2023 will result in growth moderating somewhat but remaining strong at 20-25 percent in FY2024. This growth is attributed to the increasing demand and penetration, driven by the rapid expansion of stores. However, there are downside risks to these projections due to the possibility of further Covid waves or a significant weakening in purchasing power due to a high inflationary interest-rate regime.

In the long term, revenue growth will be supported by various factors, such as rising QSR penetration levels, a shift from the unorganized to the organized segment, and a preference for branded QSR players due to hygiene and convenience factors, including delivery over dine-in.

Despite the healthy recovery of operational metrics, including ADS and sales per store, in FY2023, gross margins were negatively impacted by inflation and competition. For the sample analyzed from Q1 FY2022 to Q3 FY2023, gross margins have been contracting sequentially, indicating the QSR players’ partial ability to pass on the increase in raw material costs fully. This inability is due to stiff competition from both the organized and unorganized segments.

“India’s dependence on imports for edible oils further exposes the players’ margins to geo-political risks and forex fluctuations. The high lease costs, as well as rising overheads related to a growing delivery model, also impacts the cost structure. The operating margin in FY2023 and FY2024 is, therefore, expected to be flattish (despite the benefits of scale economies) and is likely to remain in the range of 20-22 percent compared to 20 percent in FY2022. The coverage metrics, however, are expected to improve in the near to medium term, given the limited borrowing levels anticipated for the store expansion and a favourable demand scenario,” Banerjee added.

Sweeten up your Eid menu with Chef Sanjeev Kapoor’s delicious Green Pea and Pista Kheer recipe

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April 20, 2023

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Eid is a time of joy and celebration, and food plays a significant role in marking the occasion. Families gather together to share meals and indulge in sweet treats, and one dessert that should be on your Eid menu this year is Chef Sanjeev Kapoor’s Green Pea and Pista Kheer recipe.

This unique twist on the classic Indian dessert is made with blanched green peas and American pistachios, giving it a distinct flavor and texture that is sure to impress your guests. The recipe is simple and easy to follow, making it an ideal dessert for those who want to add a touch of creativity to their Eid menu.

With regards to this specific recipe, Chef Sanjeev Kapoor offered his perspective, mentioning that “Pistachios are not new for Indians. However, we have been using them mostly as a garnish on Mithais, Biryani etc. It is only in the last few years that Indians have started to snack on pistachios and American pistachios stand out because of their quality, consistency, and food safety. They are also one of my favorite ingredients to work with in the kitchen and add a unique flavor, texture, and nutritional value to any dish. Whether you are using them in a savory dish or a dessert, American pistachios are a versatile and flavorful ingredient and I highly recommend trying them in your cooking.”

So why wait any longer? Let’s begin with the recipe:

Preparation time: 10-15 minutes

Cooking time: 15-20 minutes

Ingredients:

1 cup blanched green peas
1 cup American Pistachios
¼ cup chopped American Pistachios
1½ tbsps ghee
4½ cups milk
½ cup sugar
½ tsp green cardamom powder
Blanched, peeled and slivered American Pistachios for garnish
Dried rose petals for garnish

Instructions:

Bring sufficient water to a boil in a pan. Add American Pistachios and blanch for 3-5 minutes. Drain the pistachios and put them into cold water to stop the carry over cooking to avoid discoloration.
Peel the pistachios.
Heat ghee in a non-stick pan. Add green peas and sauté for 1-2 minutes. Add the peeled pistachios and sauté for 1-2 minutes. Take the pan off the heat and allow it to cool slightly.
Put the green peas and pistachios in a blender jar. Add 1 cup milk in two batches and blend to a coarse paste.
Heat remaining milk in another pan. Bring it to a boil.
Add the blended paste and mix till well combined. Cook for 5-6 minutes, stirring continuously.
Add sugar and green cardamom powder and mix well. Cook till sugar melts.
Add chopped American Pistachios and mix well. Switch the heat off.
Transfer the kheer into a serving bowl. Garnish with slivered American Pistachios and dried rose petals.

For those looking to add a touch of creativity to their Eid celebration, Chef Sanjeev Kapoor’s Green Pea and Pista Kheer recipe is definitely worth considering. The blend of blanched green peas, American pistachios, and aromatic spices create a unique and delicious dessert that is sure to impress your guests. The addition of American pistachios not only adds a distinct texture and flavor to the dish but also provides a nutritional boost. It’s a perfect way to incorporate healthy ingredients into your dessert and still satisfy your sweet tooth.

With its simple preparation and unforgettable taste, it’s sure to become a new favorite among your family and guests.

Indonesia’s Green Rebel Foods dives into South Korea’s alternative meat industry

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April 20, 2023

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Green Rebel Foods, a food tech startup based in Indonesia, has announced its entry into the plant-based protein food market in Korea. Bryan Toh, the Global Vice President of Green Rebel, disclosed the launch of Green Rebel in Korea during an event held at a restaurant located in Seoul’s Seocho district on Thursday. Toh also provided insight into the rationale behind this decision.

Green Rebel is a food tech firm that offers plant-based protein-based Southeast Asian cuisine. Having already extended its presence in Indonesia, Singapore, and the Philippines, the company is now focusing on Korea and Vietnam as its latest markets for expansion.

Despite being relatively unknown in Korea, the Indonesian startup, Green Rebel, has already made its mark in Southeast Asia. The company has collaborated with over 800 global brands, such as Starbucks and Domino’s in Indonesia, Malaysia, and the Philippines, as well as high-end hotels like Shangri-La, Westin, and Marriott.

In the previous year, Indonesian Starbucks outlets rolled out two plant-based pies across 464 locations and managed to sell over 111,700 units within six months. Additionally, Domino’s Pizza in Indonesia also introduced two exclusive menus that employed Green Rebel’s plant-based components and sold 38,500 pizzas. The success of these offerings led to an extension of their contract for another year.

In particular, Green Rebel formed a relationship with Korean food company CJ CheilJedang in July last year after successfully attracting investment. Toh stated that “CJ Group is a large company that leads not only the food and beverage industry but also various subsidiaries, such as logistics and entertainment, which can be utilized for various collaborations. The collaboration with CJ Group can be extended not only to the Korean market but also to global markets.”

CJ CheilJedang Corp. has expressed a keen interest in penetrating the Southeast Asian market, where Green Rebel has already established a competitive presence with its halal-certified products infused with Southeast Asian spices and flavors. This situation presents several opportunities for collaboration. However, it is worth noting that the plant-based protein food from Green Rebel and CJ CheilJedang exhibit distinct taste characteristics.

Israeli food tech startup granted first-ever permit to produce cow-free milk, revolutionizing dairy industry

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April 20, 2023

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As per the announcement of Prime Minister Benjamin Netanyahu on Wednesday, an Israeli food tech startup is all set to produce cow-free milk with the necessary approval.

Although Netanyahu did not disclose the name of the food tech firm that is expected to receive the approval in the next few days, Tech12 reported that Remilk, an Israeli company specializing in the production of cultured dairy and milk, is the recipient of the permit. However, the startup still needs to obtain regulatory approvals in Israel.

At the beginning of this year, Remilk received approval from regulators in Singapore to sell its milk that is free from cows, and the US Food and Drug Administration issued a letter stating that the startup’s animal-free whey protein can be used safely in food items. This happened after the company began marketing its protein in the United States the previous year.

Remilk, which was established in 2019, uses a yeast-based fermentation method to produce milk proteins that are chemically indistinguishable from those present in dairy products made from cow milk. According to the startup, the outcome is completely identical to genuine milk, but does not contain lactose, cholesterol, growth hormones, or antibiotics.

Remilk produces milk proteins by extracting the genes that encode them and inserting them into a single-cell microbe, which is genetically engineered to express the protein. The final product is then dehydrated into a powder.

On Wednesday evening, while visiting Steakholder Foods, a Rehovot-based company that creates lab-grown meat products, Prime Minister Benjamin Netanyahu made the declaration. He sampled 3D-printed structured cultivated fish and meat cultivated from animal cells obtained through ethical harvesting methods, rather than slaughter.

“Today we ate fish that was produced without fish and meat that was produced without cattle. This is a global revolution,” said Netanyahu. “Israel is a global leader in the field of alternative protein and we will see to it that we continue to lead.”

“Soon we will have new permits and new heights that will change the world,” he added.

According to a report by the Good Food Institute (GFI) Israel, a non-profit organization promoting innovation in food technology, Israeli startups in the alternative protein sector raised $454 million in funding, placing Israel second after the United States in 2022.

Food technology was included in the Israeli government’s list of top five new national priorities for substantial investment over the next five years in 2022. The Israel Innovation Authority announced a plan earlier this year, with a budget of up to NIS 50 million ($13.7 million), to establish an R&D center for advanced fermentation technology of microorganisms, including yeast or fungi, to produce alternative proteins on a larger scale and maintain the country’s leading position in the sector.

Innovation, Science, and Technology Minister Ofir Akunis, Prime Minister’s Office Director-General Yossi Shelley, Health Ministry Director-General Moshe Bar Siman Tov, Innovation Authority Director Dror Bin, Osem-Nestlé CEO Avi Ben-Assayag, and Tnuva’s Chief Innovation Officer Shay Cohen were among the attendees at the Steakholder Foods presentation.

‘Organic Oasis’ in Lucknow takes organic dining to next level with cow as inaugural guest. Watch here!

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April 20, 2023

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A restaurant in Lucknow, Uttar Pradesh, recently made a unique move towards pure organic dining by inviting a “cow” as a special guest for its inauguration ceremony. The restaurant, aptly named “Organic Oasis,” welcomed the animal with traditional rituals and even served it some delectable food.

In a video shared by ANI, a brightly dressed cow can be seen strolling around the newly opened “Organic Oasis” restaurant in Lucknow. The footage also shows the cow being taken to the entrance of the kitchen.

#WATCH | Uttar Pradesh: A restaurant in Lucknow, 'Organic Oasis' that offers food made out of organic farming produce, was inaugurated by a cow. pic.twitter.com/YWcfKqJQcX
— ANI UP/Uttarakhand (@ANINewsUP) April 18, 2023

The Hindu religion regards cows as sacred animals, imbued with special significance. This belief stems from Hindu mythology, which associates cows with various gods and goddesses. For many Hindus, the cow represents divinity and is linked with natural benefits.

The restaurant’s distinctive selling point is that all its food is made solely from produce sourced from organic farming. The owner explained that the idea for the establishment originated from a rising trend among people to prioritize their health and search for nourishing, chemical-free foods.

“Our agriculture and economy are dependent on cows, so we had our restaurant inaugurated by Gaumata,” owner of the restaurant, former Deputy Superintendent of Police said.

According to the owner, customers will be able to discern the difference in the taste of the food at their restaurant, as compared to other establishments that rely on chemical fertilizers and pesticides. The owner is confident in the superior quality of their organic produce.

The owner is convinced that once individuals have savored the flavors of Organic Oasis’ food, they will want more and request it frequently.

The Animal Welfare Board of India issued a notice earlier urging cow enthusiasts to celebrate February 14, globally known as Valentine’s Day, as “Cow Hug Day.” The government advisory board stated that embracing a cow can enhance emotional well-being and promote individual and collective happiness.

The welfare board emphasized that cows are the “backbone of Indian culture and rural economy” and represent “cattle wealth and biodiversity.”

“It is known as “Kamdhenu” and “Gaumata” because of its nourishing nature like mother, the giver of all providing riches to humanity,” it said.

India’s sugar industry to meet local demand and export despite El Nino forecast, confirms official

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April 20, 2023

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According to a senior government official, India is expected to produce enough sugar in the upcoming season to cater to the domestic demand as well as have surplus quantities available for export, despite apprehensions about the El Nino weather phenomenon.

The sugar industry in India has expressed worry about the impact of the El Nino phenomenon on the production of sugarcane and subsequent sugar output, as this weather pattern is often linked to insufficient rainfall in the country. Nonetheless, Subodh Kumar Singh, who serves as the Joint Secretary at the Department of Food and Consumer Affairs, has attempted to alleviate these concerns.

“IMD (India Meteorological Department) has forecast a normal monsoon. So, production of sugar will also be in a normal range,” Singh told ET. “Even if production is impacted, it will not be that huge that there will be ashortage of sugar,” he added.

India, ranked as the world’s second-largest sugar producer, after Brazil, has the potential to significantly contribute to the global sugar supply through its exports. However, due to the forecast that India will not export any additional sugar during the ongoing sugar season that concludes in September, international sugar prices have surged to an 11-year high.

“Whatever (monsoon) forecast we have, we will be in a position to export some quality of sugar next year,” said Singh.

US truffle maker Sabatino secures private-equity investment to fuel growth

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April 20, 2023

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Sabatino Tartufi, a producer of truffles, has secured an investment from Traub Capital Partners (TCP), a private-equity firm based in the United States.

The specifics of the financial transaction were not made public.

With the newly obtained funds, Sabatino Tartufi, which is a family-owned business, plans to enhance its facilities and infrastructure, in addition to strengthening its distribution channels and elevating brand recognition.

In this investment round led by Three Hills Capital Partners (THCP), a multinational investment firm with offices in the UK, Italy, and Luxembourg, both Sabatino Tartufi and TCP, based in New York, will also be participating.

Sabatino Tartufi, established in 1911, is a manufacturer, importer, and distributor of products that use truffles as a primary ingredient. The company has production facilities in Connecticut, USA and in the Umbria region of Italy, with a combined workforce of over 100 employees. In addition to five branch offices across the United States, Sabatino also has a presence in Canada, Japan, and Hong Kong.

Sabatinos CEO Federico Balestra said, “TCP is the ideal partner for Sabatino as they have a history of backing companies in the aspirational lifestyle categories. Our new partners will provide us with strategic capital and will ensure clients and consumers are supported to the highest degree.”

He added, “We are now in a position with this unique partnership to broaden the reach of the truffle experience more than was ever possible before.”

Sabatino Tartufi provides its products to both end consumers and manufacturers, primarily through its online store and various specialty stores located throughout the United States.

“We are proud to partner with Sabatino, a clear leader in the fine foods world,” said Mortimer Singer, Co-managing partner of Traub Capital Partners.

“Sabatino’s commitment to quality and innovation aligns with TCP’s philosophy and approach. We believe we are uniquely positioned to actively support Sabatino in achieving their strategic growth plans.”

In 2018, TCP acquired Signature Brands, a manufacturer of dessert decorating products, marking their first direct venture into the food industry.

Lance Contento, Managing Director at Three Hills Capital Partners, said, “Partnering with Sabatino is an exciting opportunity for us to build on the already strong growth momentum in the market for truffle-based products and support the Company’s future development, notably in Europe.”

Portugal announces temporary exemption of VAT on essential food products

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April 20, 2023

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In a bid to alleviate the burden on household finances following a 7.8% inflation surge in March, Portugal plans to exempt certain food products from VAT.

Portugal’s government has announced the elimination of the 6% VAT rate on 46 food categories, such as dairy, meat, and potatoes, according to a statement.

For a duration of six months, a zero VAT will be applicable to a group of “essential foods,” as stated by Prime Minister António Costa.

“The expectation is that, over the six months, inflation will evolve in a direction that will allow the withdrawal of the current measures. If not, we’ll have to sit down at the table again and see what we can do,” he added.

According to Costa, the Portuguese government collaborated with industry representatives to determine the products that would meet the criteria for the VAT reduction.

“The state has done its part, now there is other work that has to be done so that the reduction of the VAT rate has an effective impact on the lives of families,” he added.

Prime Minister António Costa said, “The Ministry of Health identified a healthy basket. After that, APED, the Portuguese Association of Distribution Companies, provided a list of the types of products most consumed by the Portuguese people. We identified 44 products. Through the debate in parliament, these categories were broadened.”

Costa stated that the government’s focus last year was primarily on managing the escalation of energy prices, and the resulting measures were deemed “highly effective.”

“Next, we witnessed a global slowdown of inflation, except for food products, a situation that has several causes,” he said.

Food items such as grains and potatoes, dairy products, legumes, vegetables, fats and oils, meat, and fish, among others, have been included in the list of products with 0% VAT. Specifically, the list encompasses bread, potatoes, pasta, rice, cow’s milk, pork, and chicken.

The Minister of Finance for Portugal, Fernando Medina, has indicated that a basket of goods worth €200 would see an average saving of €12 ($13.15).

Portugal’s Consumer Price Index recorded an inflation rate of 7.4% in March, a decrease from February’s 8.2% and March’s 8.4%.

UK-based Butternut Box acquires PsiBufet, tapping into the growing pet food industry in Poland

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April 20, 2023

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Polish dog-food brand, PsiBufet, has been acquired by UK-based supplier Butternut Box for an undisclosed amount.

Founded in 2016, Butternut Box has expanded its presence throughout Europe, and is currently available in the UK, Ireland, the Netherlands, and Belgium. The acquisition of Polish brand PsiBufet marks the company’s entry into the Polish market. Butternut Box specializes in producing fresh dog food with ingredients of “human quality”.

PsiBufet, established in 2012, also specializes in creating fresh, custom-made dog food.

In a statement, Butternut Box announced that the acquisition of PsiBufet will provide its customers with access to a broader range of products, advanced online customer experience, and better quality fresh food.

According to the company, the acquisition also enables the UK start-up to expand its operations into central and eastern Europe, using Poland as a regional hub for the group’s operations and facilitating further growth throughout Europe.

Kevin Glynn, a Co-founder of Butternut Box, said, “PsiBufet shares our commitment to providing dogs with fresh, wholesome, nutritious meals, and we are excited to bring their expertise and product offerings into our portfolio. This acquisition allows us to scale our operations in Europe and bring the Butternut Box experience to even more dog owners and their beloved dogs.”

Since its establishment, Butternut Box has raised more than £100m ($124.5m) in funding from investors including L Catterton, the private-equity firm established by LVMH, and White Star Capital. In March 2021, the company was certified as a B Corporation, partly due to the launch of its Rudie’s Kitchen fully integrated manufacturing facility.

Piotr Wawrysiuk, Founder and CEO of PsiBufet said, “Butternut Box has been supporting us for over three years. It is not only a capital investor but above all a strategic one, sharing their knowledge and experience. Our companies share a common organisational culture and, above all, a mission: to provide health and happiness to dogs and their humans all over the world. I am pleased that, thanks to the relationship, we will be able to offer customers in Poland the highest quality products.”

In February, Nestlé CFO François-Xavier Roger expressed his skepticism about the financial viability of producing human-grade pet food.

According to the owner of the Purina brand, there is a potential market opportunity for pet food that is of human-grade quality. However, Roger has expressed his skepticism regarding its profitability.

Bikano launches snack packs for IPL 2023, promotes quality time with loved ones

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April 20, 2023

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To boost sales and profits during the IPL cricket extravaganza, Bikano – a popular snack and packaged food manufacturer in India – has launched family or ‘jumbo’ packs of its Chips, Crunchy Munchy, and Chatax.

These snacks come packed with unique flavours and are made using new technology machinery to minimize human hand interference. The Chips, Chatax, and Crunchy Munchy offerings are enriched with the goodness of potato, rice flour, chickpea flour, and a variety of spices.

The Indian snack market is predicted to reach USD 23.69 billion by 2028, growing at a CAGR of 12% from 2023 to 2028. Bikano’s introduction of family or ‘jumbo’ packs of Chips, Crunchy Munchy, and Chatax is significantly contributing to this growth. With IPL providing a vast audience pool, it offers new avenues of engagement and growth for FMCG brands.

Manish Aggarwal, Director, Bikano, Bikanervala Foods Pvt Ltd, said, “Every Indian family values togetherness. And over the years, watching the IPL on TV has been a popular medium for reinforcing this togetherness. We have acknowledged the power, which is why we have strategically chosen to introduce our crispy savouries of Chips, Chatax, and Crunchy Munchy in 100-gram packs. These snacks are not only popular among kids but are consumed by adults as well, making them a favourite snack for the whole family. Moreover, post-Covid-19, consumer preferences have evolved. They prefer snacks that offer better quality, taste, and hygiene. This also has led to a shift in the Indian snacks industry from unpacking and open selling snacks to packing and selling snacks.”

FMCG products such as chips and munchies thrive on impulse buying and family packs serve as a key driver for such categories. The trend of offering family packs is global, and it presents a significant opportunity for brands to expand their sales without compromising on margins, especially during events like IPL. As a result, many companies are now adopting this strategy to boost their sales during this exciting period.

Commenting on the launch, Kush Aggarwal, HOD Marketing at Bikano, said, “This is the best time to introduce family packs to consumers seeking value for money. It makes sense. From a retail perspective, making big packs leads to savings in manufacturing, packaging, and transportation costs. Buying a family pack is a win-win situation for the consumer too. On average, big packs are about 20–25% cheaper than regular packs, making the price-sensitive buyers happy.”

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