Starshine Brands, a prominent player in the food and beverage industry renowned for its flagship restaurants including Ivoryy, Aviary, Chhupa Rustam, Drops Beach Bar, Hola Goa, and Casa Nova, has revealed its expansion plan spearheaded by Manish Sharma, the company’s CEO & MD.
The expansion plan includes the launch of 30 more outlets for Ivoryy across 12 cities, including Indore, Bhopal, Goa, Delhi, Bhubaneswar, Lucknow, Hyderabad, Pune, Gurgaon, Chandigarh, Meerut, and Kolkata.
Currently, Starshine Brands operates in Goa, Delhi, and Bhopal, with plans to solidify its presence in tier 2 cities recognized for their promising growth potential, substantial consumer buying power, and relatively sparse market offerings.
Additionally, another 20 outlets will be established across India for Chhupa Rustam, Casa Nova, and other brand offerings.
The company’s expansion strategy prioritizes customizing each outlet to serve local markets and meet specific demands.
Starshine Brands emphasizes its dedication to delivering a distinctive culinary journey, with food being the primary unique selling proposition (USP) of the brand.
“We believe that tier 2 cities present a tremendous opportunity for growth. These cities have a burgeoning market, and our goal is to provide them with a premium experience that combines excellent food with a vibrant atmosphere,” said Manish Sharma, CEO & MD, Starshine Brands.
Within the next year, Starshine Brands plans to open 30 outlets with the goal of reaching a revenue target of 100 Crores by 2025.
This expansion includes well-known brands like Ivoryy, Aviary, Casa Nova, Chuppa Rustam, and Hola Goa (Night Club).
It is noteworthy that the brand has announced its partnership with the renowned figure, Osama Jalani, who will be affiliated with Chhupa Rustam.
As part of its expansion strategy, Starshine Brands will implement menu changes aimed at achieving a perfect mix to cater to the diverse tastes and preferences of the local clientele.
Sweets and restaurant chain startup Bansooriwala’s is gearing up to add 4 outlets in the Delhi-NCR region this year with an investment of INR 8 crore.
The company stated that the first outlet is scheduled to open on the Delhi-Mumbai expressway in the coming months. With the launch of these outlets, the firm anticipates a fourfold increase in revenue generation for FY 2024-25 compared to FY 2023-24.
“Our expansion into North India marks an exciting chapter for Bansooriwala’s as we strive to bring our authentic Indian sweets and culinary experiences to even more discerning customers,” said Vikrantt Singh, Founder and managing director of the company.
Bansooriwala’s meticulously crafts each product, ensuring authenticity by exclusively using pure desi ghee. Renowned for its array of beloved cuisines such as gulab jamun, pav bhaji, chole bhature, and motichoor ladoo, the brand has garnered a reputation for excellence.
Established in 2021, the company presently operates four outlets within the Delhi-NCR region.
Apparel exporters body AEPC stated that the industry is actively pursuing sustainable production practices to bolster the sector’s competitiveness in the international market.
Apparel Export Promotion Council (AEPC) Chairman Sudhir Sekhri said the mantra given by Prime Minister Narendra Modi to boost textiles exports through 5F – Farm to Fiber, Fiber to Factory, Factory to Fashion, Fashion to Foreign – will energise the textiles export sector.
Addressing a gathering after inaugurating Bharat Tex 2024, one of the largest-ever global textile events organised in the country, on Monday, the prime minister promised all support to the textiles sector, stressing that it will play a crucial role in making India a developed nation by 2047 when India will complete hundred years of independence.
Sekhri said the expo will help promote the brand India in the international markets.
“For such a long time we did not have an international show of such a global standard and scale. We are working on sustainability and ethical production practices by ensuring ESG (Environmental, Social, and Governance) compliance which will give us an edge in the international market,” he said.
Mithileshwar Thakur, Secretary General AEPC said many global organisations and international trade bodies including Better Cotton Initiative, International Apparel Federation, and Cotton Egypt Association are partnering with Bharat Tex 2024 to facilitate discussion and deliberations on issues like global trends in textiles and apparel, sustainability, circularity, traceability, innovation, and green financing.
The membership, priced at between INR 149 and INR 299 per month for various users, allows for free deliveries of orders above INR 99.
The service will extend additional discounts for purchases meeting a certain threshold, ranging from INR 299 to INR 599 for most users. Additionally, it will include orders from Zepto Cafe, the company’s snacks and beverage division.
“Over the discount threshold, we are offering prices comparable to discounted offline grocers like DMart… the threshold is determined by a number of user behaviour metrics that will make it tailor-made for individual users,” said Devendra Meel, vice president of strategy and head of Zepto Pass.
By introducing ‘Pass’, Zepto has become the second quick-commerce company, following Swiggy Instamart, to provide subscription benefits. In contrast, Zomato, a competitor of Swiggy, does not offer benefits from its Gold subscription for its quick-commerce service Blinkit.
Zepto is significantly discounting the initial offering, pricing it at INR 19 to INR 39 for the majority of users.
“Pass will obviously hit our profit and loss sheet initially, but even with the hit we are confident of turning profitable at an earnings before interest, taxes, depreciation and amortisation (Ebitda) level in the next two quarters,” stated Aadit Palicha, cofounder and chief executive.
During the pilot program, Pass users raised their average spending by more than 30% compared to non-pass users, Meel remarked. He further stated that the company anticipates acquiring 1 million Pass subscribers within the first month of launch. Zepto currently boasts approximately 5 million registered users.
“We expect the growth through Pass to be cheaper than through pure marketing spend… eventually Pass will be bringing in a large chunk of the overall business,” Meel said.
Subscription models are increasingly recognized as pivotal tools for enhancing engagement and fostering customer loyalty within the food delivery and quick commerce sectors.
Zomato reported in its statement for the June quarter that its ‘Gold’ program contributed more than 30% of the total gross order value (GOV) of its food business, which amounted to INR 7,318 crore for the quarter.
Meanwhile, Swiggy has been endeavoring to broaden the reach of its ‘One’ subscription service by integrating it with telecommunications subscriptions and financial products like credit cards.
“We want to become the main grocery destination for all of our users by offering them the best prices available… we also want to use this service to bump up average spend per customer,” Palicha said.
India continues to be a bright spot among the major economies and the retail market is expected to reach $2 trillion in next 10 years, presenting a large opportunity for retailers, a new report showed on Wednesday.
India is the fastest growing country among top five global economies and expected to become the third largest by GDP in 2030.
“The Indian retail sector will more than double in size to $2 trillion in the next decade across categories and formats, and the successful retailers are the ones who continue to challenge the perceived growth profitability trade off,” said Abheek Singhi, Managing Director and Senior Partner at BCG.
Store expansions continue to happen and with increasing urbanisation, there is more consumption expected to happen in tier 1 to 4 cities.
“While e-commerce continues to grow, net new user addition has seen a slower pace in the year and the role and proposition of online needs to be re-imagined,” the report mentioned.
Organised retailers need to sustain performance and continue to grow shares.
“Retail is going through key shifts impacting the pace and shape of growth,” the findings showed.
“Income growth remains steady, and consumers are optimistic on their personal income outlook. At the same time, consumers increasingly look to spend on ‘experiences’ or save more through newer/nascent vehicles.”
According to Kumar Rajagopalan, CEO, RAI, by focusing on personalised customer experiences, exploring new collaborations, and leveraging AI for efficiency, “we can propel India’s retail industry towards unprecedented growth and global competitiveness.”
According to a report by JM Financial Institutional Securities, the decline in the share of food expenditure to 46.3 percent in the rural consumption basket could have significant implications for the next decade. This shift creates opportunities for increased discretionary spending.
The recent household consumption survey for 2022-23 in India presents an encouraging outlook, particularly for the rural economy. The decrease in the proportion of food expenditure in the rural consumption basket indirectly suggests an increase in rural income. This stands in contrast to corporate commentary over the past 4-6 quarters, which lacked substantial evidence of a resurgence in rural consumption, according to the report.
The rise in the proportion of durable goods (6.9 percent compared to 4.9 percent previously) aligns with a decrease in the share of expenditure on footwear and clothing. This trend clearly signals a rise in rural income, particularly driven by non-agricultural activities.
Effective fiscal policy measures ensured that the impact of fuel costs on consumption patterns remained stable, even amidst volatility in Brent crude prices.
The growing preference for beverages/processed food and toilet/household consumables aligns with the corporate commentary indicating heightened penetration by FMCG players in rural areas, according to the report.
Within the consumption basket, the increase in the share of conveyance has been even sharper than in urban areas. When compared with urban areas, consumption disparity is the lowest in lower fractile, indicating the effectiveness of public policies in reducing poverty, the report said.
As per the report, the change in consumption pattern is largely a by-product of increased income, as it is generally seen that the share of spending on food decreases as income increases.
Regarding policy aspects, with food comprising a smaller share of the consumption basket, governments will need to adjust their policy actions to address items that still burden consumers’ budgets. While initial analysis might suggest that government policies would prioritize subsidized electricity over free food in the future, it’s worth noting that food programs entail lower cash outlay and offer greater political advantage. Therefore, despite first-level thinking suggesting a shift, the report anticipates that food programs will likely persist.
Secondly, the findings within this report would necessitate a restructuring of the significance placed on food within the CPI basket, thereby mitigating the volatility linked to it accordingly.
Reliance is currently exploring the possibility of partnering with British fashion retailer Primark to introduce its label to India. This venture would place Reliance in direct competition with Tata’s Zudio, Max owned by the Landmark Group, and Shoppers Stop’s recently launched value format, InTune.
The well-established 55-year-old brand, known for its affordable clothing and footwear, has been assessing the Indian market for several years. According to two individuals familiar with the matter, the brand might collaborate with Reliance either through a joint venture or licensing agreement. Unlike many other international retailers that focus on malls, the majority of their stores are expected to be situated on high streets, owing to their large-scale format, as per company executives.
Primark, renowned for its success as a value-priced retailer, has experienced remarkable global revenue growth in recent years, except for two years impacted by Covid-19. Its average prices undercut even those of retailers like H&M and Uniqlo. Although China remains Primark’s primary sourcing country, India follows closely as the second-largest hub for supplying the company, with a range of small to large factories. Primark has already integrated nearshoring into its supply chain strategy, enabling direct delivery of goods from Indian suppliers to local retail units. This approach ensures cost efficiency, flexibility, and responsiveness to local market demands.
According to Devangshu Dutta, founder of retail consulting firm Third Eyesight, Reliance, being the largest retailer in India and boasting a portfolio of numerous international brand partnerships, holds a substantial advantage due to its access to real estate and operational synergies.
“India is an obvious growth market choice for large brands and retailers such as Primark,” he said. “In the end, though, it will come down to how effective the merchandise and the marketing is in connecting with the diverse needs of Indian consumers across the country.”
Primark, under the ownership of London-listed Associated British Foods, operates over 400 stores worldwide and aims to further extend its presence across both new and established markets, targeting a total of 530 outlets by the conclusion of 2026. In the affordable retail sector, Reliance already offers Trends and its recently launched fashion and lifestyle store, Yousta, which directly competes with fast-fashion giants like Zara and H&M in India. With a vast retail network exceeding 18,774 stores encompassing supermarkets, electronics, jewelry, and apparel outlets, Reliance has also forged partnerships or acquisitions with over 80 global brands to cater to local consumers.
Reliance didn’t respond to queries. A Primark spokesperson said, “As a growing international business, we’re always open to new opportunities. However, we don’t comment on speculation about where we might expand to next.”
Experts said India’s consumption patterns have traditionally favored a narrow base of affluent consumers, who have wielded considerable influence over the market. However, there is currently a burgeoning opportunity for value-oriented brands to flourish and broaden their appeal.
Otipy, an agritech startup that offers fresh produce through its Android and iOS applications, has partnered with the government-backed open network for digital commerce (ONDC) to expand its customer reach using the network’s seller apps Pincode and Paytm.
Established in 2020 by Varun Khurana and Prashant Jain, Otipy, a venture under Crofarm Agriproducts, operates as a B2B2C social commerce platform specializing in fresh produce such as vegetables, fruits, dairy products, and various grocery items.
Otipy utilizes its technology to source fresh produce from farmers, leveraging predictive demand calculations from its prediction engines. It guarantees delivery to customers within 12 hours of harvest. Additionally, Otipy boasts an industry-leading low wastage rate of just 3%.
Khurana explained that the company has successfully streamlined its supply chain, ensuring that produce moves from the farm to customers’ homes within a 12-hour window. Additionally, they conduct thorough tests on the products for contaminants such as heavy metals and pesticides.
Initially serving the Delhi-NCR region, Khurana mentioned that the startup expanded to Mumbai following a successful Series B funding round in 2022, raising $32 million from investors such as SIG and Omidyar Network India. He stated that the startup currently maintains an annual recurring revenue (ARR) of INR 240 crores.
Otipy aims to extend its presence to cities such as Hyderabad, Bengaluru, and Chennai by the end of the current year. This expansion is anticipated as the startup intends to secure its Series C funding of approximately $75 million in the latter half of the calendar year 2024.
Khurana believes that the collaboration with ONDC will enhance the company’s strategy to expand its footprint across India.
Through ONDC, Otipy aims to establish a presence at various touchpoints for its end consumers. Additionally, it will prioritize bulk procurement directly from farmers and Farmer Producer Organizations (FPOs).
“The move beyond NCR has shown that our business model is capable of handling multi-city operations. With the ONDC integration, we believe we will be increasing our user base by getting onboard large buyer apps that have partnered with ONDC. We are expecting to increase our existing user base of 1.5 Lakh per month to 10 Lakh by the end of the year,” Khurana said.
“With Otipy on the Open Network, it not only stands to benefit from an extensive reach of the network but also reinforces its commitment to fostering a sustainable and inclusive ecommerce framework,” said ONDC’s MD and CEO T Koshy.
Initially, the startup will integrate its platform with PhonePe’s Pincode and Paytm, with plans to later expand to other buyer platforms.
It’s worth mentioning that in FY23, Crofarm Agriproducts, the parent company of Otipy, experienced a notable 56% increase in total revenue from operations, reaching INR 96.43 Cr compared to INR 61.84 Cr in the preceding fiscal year.
Nevertheless, its losses surged by 49% to INR 100 Cr in FY23, up from INR 67.29 Cr in the preceding fiscal year.
In addition to Otipy, the company also possesses Farm Tale, a distributor of milk products, and One Farm, a distributor of grains and oils.
Otipy competes with Ninjacart, Farmiso, Citymall, and other similar companies.
As per a market study, the Indian agritech startup ecosystem anticipates a total market opportunity valued at $24 billion by 2025. Analysis reveals that these startups have collectively secured over $2.4 billion since 2014.
Conversely, Otipy became the second agritech startup to join ONDC, following SaaS-based B2B agritech startup FarMart, which joined the network in September of the previous year.
PepsiCo India is expanding its portfolio of potato chips snacks with the introduction of a new sub-brand under its flagship label Lay’s Shapez, featuring heart-shaped potato-based pellets.
The Lay’s Shapez Heartiez lineup features both masala and caramel flavors, marking Lay’s entry into the sweet-flavored chips market.
Saumya Rathor, Category Lead – Potato Chips, PepsiCo India, said, “As a category leader, we believe it’s important to keep bringing innovations in the snacking segment to meet evolving consumer needs.. This sub brand has been developed for the India market. As the snacking landscape evolves, there is a discernible trend toward a surge in demand for innovative, textured, and uniquely shaped snacks, and pellet-based offerings.”
According to industry estimates, the pellet snacks segment in India is valued at INR 1800 crore and is experiencing a year-on-year growth of 18 percent.
“Lay’s Shapez Heartiez has been launched in direct response to the growing need for fun, and crunchy snacks that go beyond traditional offerings in the rapidly expanding potato-based pellet chips market,” she added.
Rathor emphasized that the new sub-brand’s products are priced strategically at popular points of INR 5, INR 10, and INR 20 to encourage trial purchases and broaden the consumer base.
In 2022, the snacks and beverage giant introduced Lay’s Gourmet, marking the brand’s debut in the kettle-chips market segment.
“We have seen strong traction for Lay’s Gourmet as we are continue to deepen its distribution in metros and mega cities,” Rathor added.
PepsiCo India has been increasingly introducing new products in the snacks category recently, spanning both the Lay’s and Kurkure brands.
This comes at a time when established snack brands are facing heightened competition from regional and local players.
Earlier this month, PepsiCo announced that its India business achieved mid-single-digit organic revenue growth for the full year of 2023. While the beverage unit experienced double-digit growth in volumes, the snacks segment encountered a “low-single-digit decline.”
Fast-moving consumer goods (FMCG) companies have increased prices by as much as 10% in efforts to stimulate top-line growth, which has been hampered by a prolonged downturn in demand.
In February, the majority of product categories such as tea, coffee, health drinks, hair oil, shampoo, and detergent powder experienced gradual price rises, with the notable exceptions of edible oil and soap. According to consumer goods distributors, the toothpaste category witnessed the most significant price hike.
Hindustan Unilever Ltd., the largest consumer goods manufacturer in India, has implemented a price increase of 2-10% for its Pepsodent line, as reported by its distributors. Colgate Palmolive India Ltd. has also raised prices by up to 10% across various products, including Charcoal Clean, Sensitive Clove, and Strong Teeth. Furthermore, the price of Colgate Visible White, in the 100-gram size, has seen a 15% increase. Additionally, Dabur has increased the price of its 200-gram Meswak toothpaste by 8%.
In the detergent sector, HUL has increased the prices of its brands Rin and Surf Excel Quick Wash by 3-4%. Similarly, Procter & Gamble, a competitor, has raised prices for its 700 gm and 1.5 kg Ariel detergent packs by up to 4% and 2.5%, respectively.
While milk prices have mostly stayed steady, HUL has implemented a 1% price increase for Boost and a 4% increase for Horlicks Chocolate Delight. In a similar vein, Cadbury has raised prices by 2% for Bournvita Pro Health and 4% for Bournvita Lil Champ. Additionally, Zydus Wellness has also raised prices by 5-8% for Complan.
According to a monthly price check report by Emkay, soaps and edible oils were the sole categories experiencing negative pricing, whereas other categories witnessed gradual price increases throughout the month.
Regarding edible oils, the brokerage observed that Marico kept its prices steady for Saffola variants, whereas individual commodity oil producers reduced prices following recent government directives.
In the biscuit category, there have been varied pricing strategies, with Britannia‘s INR 25 Good Day Butter experiencing a 17% reduction through increased volume. Britannia reduced the price of Nice Time by 13%, while increasing prices for 50-gm Bourbon by 20% and 160-gm Milk Bikis by 7%, according to Emkay.
In the last quarter ended December, FMCG companies experienced weaker than expected topline growth. This was attributed to the ongoing decline in market pricing growth and the failure of anticipated demand recovery from Q3 FY24. Management’s outlook on demand remains cautious, with hopes pinned on a resurgence during the robust summer season and improved monsoons ahead.
“In the near term, we remain cautiously optimistic,” HUL’s Managing Director and Chief Executive Officer Rohit Jawa said in a post-earnings media briefing. “We expect the gradual recovery in market demand to continue, aided by increased government spending, a recovery in winter crop sowing, and better crop realisations.”
Rural income growth will be a key factor in determining the pace of recovery, said Jawa.
Among other companies, Emami Ltd. announced a 3% price hike, whereas Dabur India Ltd. implemented a 2.5% increase across its food portfolio in the third quarter, with a portion of it reflecting in the current quarter.
“Price increases, definitely will come,” according to Dabur Chief Executive Officer Mohit Malhotra. “I think price increases going forward in the year will depend upon how inflation is actually trending.”
Regarding non-food items, aside from toothpaste, Dabur has increased the price of Dabur Sarso Amla hair oil by 5%. Marico Ltd. has also raised prices by 11% for 200- and 300-ml units of Parachute, while Bajaj Consumer has implemented a 3% price increase for the 475-gm Bajaj Almond Drops.
While copra prices have experienced moderate inflation on a month-on-month basis, the primary raw material for hair oil companies is anticipated to undergo a price correction starting in April with the onset of the flush season. However, Marico foresees prices having an upward bias once the seasonal months conclude.
“If you look at history of Marico the sweet spot for us, especially in Parachute, is a scenario as follows: low food inflation, copra inflation, therefore we position gains as we deliver high volume growth and profitability is protected,” said Marico MD and CEO Saugata Gupta. “We see that scenario likely to happen in the second half of next year.”
Analysts expect further price hikes to help companies with earnings delivery.
“Contrary to the common perception of FMCG companies effecting price cuts to pass raw-material benefits, players are emulating the case for price growth in line with inflation ahead,” according to Nitin Gupta, senior research analyst at Emkay Global Financial Services Ltd. “We now see the emergence of a scenario where further price hikes should help companies drive margins, which will support double-digit earnings momentum.”
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