Varun Berry, Vice-Chairman and Managing Director of Britannia Industries
After the release of its Q3 FY24 results, Varun Berry, Vice-Chairman and Managing Director of Britannia Industries, informed analysts that rural growth is not progressing as it did in the past decade.
“We haven’t seen rural growth in the same manner as we did in the past 10 years,” said Berry.
He admitted that urban growth presently surpasses rural growth; nonetheless, he emphasized that the situation will likely improve soon, noting the ongoing expansion of rural distribution by the maker of Good Day biscuits.
“We continue to do so even though we are not gaining the traction we were accustomed to,” Berry added.
The company has expanded its direct coverage to 2.76 million outlets and bolstered its rural distribution by appointing 29,000 rural distributors, compared to 28,000 in December 2022.
During the quarter, the leading food corporation also implemented price reductions and introduced consumer promotions for its key brands.
“To ensure that we don’t maintain the same prices but align them with the inflation of raw materials, we have taken strategic pricing actions in some of our key brands. We have also implemented tactical consumer promotions to drive consumption of those products, as we have observed that consumption trends, especially in rural areas, are not as robust as in previous years,” Berry added.
Compared to the corresponding quarter last year, the company reduced prices by 4 percent to reflect the decrease in raw material costs for consumers. Speaking about competition from regional players, Berry remarked that they are presently experiencing a “honeymoon phase,” and it will require a few months to assess their success.
Berry additionally briefed analysts that the company will closely observe the fluctuating stock prices of commodities, given their high volatility over the past two or three years.
“We remain vigilant on the competitive pricing actions resulting from commodity inflation. Our strategy will remain focused on driving market share, a critical aspect for us in all of our categories,” he said.
Zomato announced via an exchange filing that its board has sanctioned the issuance of 10,88,68,081 equity shares, each with a face value of INR 1, fully paid-up, in response to the exercise of 9,21,33,979 vested options by identified employees of the company and its subsidiaries.
The foodtech giant’s Employee Stock Ownership Plan (ESOP) for 2021 saw the highest allotment with over 9 crore shares, whereas its ESOP for 2018 received an allotment of 1.67 crore equity shares.
After the allotment, the company’s issued, subscribed, and paid-up equity share capital would increase to nearly INR 882 Cr, up from its previous level of INR 871.1 Cr.
Zomato’s stock surged by up to 4% in intraday trading on Thursday, reaching INR 146.25 on the BSE. As of 1:30 PM IST, the company’s shares were trading 3% higher at INR 144.9 on the exchange.
In Q2 FY24, the company recorded its second consecutive profitable quarter, posting a net profit of INR 36 Cr. Meanwhile, its operating income for the quarter reached INR 2,848 Cr.
Ahead of the Q3 earnings, brokerages like HSBC, Goldman Sachs, and Jefferies have recently raised their price targets for Zomato, citing the strong growth in its food delivery and quick commerce businesses.
As the consumption of caffeinated energy drinks continues to soar, particularly among teenagers, athletes, and gym enthusiasts, the industry is facing scrutiny by the government. This surge, marked by significant double-digit growth, can be attributed to the increased affordability and availability of high-caffeine energy drinks compared to previous options.
Food Safety and Standards Authority of India (FSSAI) is re-evaluating existing regulations for energy or caffeinated drinks to make them stricter, a senior executive at the national food regulator said on condition of anonymity.
Brands like PepsiCo, Coca-Cola, and Hell are offering energy drinks at approximately one-fourth of the price of global category leaders such as Red Bull and Monster. They’ve also expanded their reach by selling these drinks in grocery stores. Company executives, referencing data from researcher NielsenIQ, noted that energy drink sales are growing at a rate of 50-55% annually.
Nevertheless, the increasing consumption of energy drinks, especially among young people, is raising concerns due to studies indicating potential health impacts from excessive intake. A report in the medical journal BMJ Open published in January highlighted that excessive consumption of energy drinks is linked to disrupted sleep patterns and insomnia. Additionally, various global news reports have highlighted risks such as anxiety and dehydration, as reported by the health portal Medical News Today.
According to the official mentioned earlier, the FSSAI intends to mandate companies to provide certain disclosures, such as prominently displaying the caffeine content or using labels like “high in caffeine“.
“Even though it is mandatory to disclose caffeine content on the pack now also, we want it to be written prominently,” he added.
The executive mentioned that the upcoming regulations might also require prominently displaying a consumption limit for caffeine on packaging.
In 2016, the regulatory body mandated that all non-alcoholic beverages containing more than 145 mg of caffeine per liter must be labeled as ‘caffeinated beverages’. Additionally, they set a cap on the caffeine content in beverages at 300 mg per liter, regardless of the caffeine source.
“As of now, we have no information on this (new regulations for caffeine drinks). We are unable to comment until we review any regulations that may be under consideration,” stated George Kovoor, Senior Vice President at PepsiCo India Beverages.
“PepsiCo is committed to complying with all laws and regulations of the country,” he added.
Unnikannan Gangadharan, country head of Hell Energy India, said, “If there is (any information on changes), we heartily welcome any regulation which benefits consumers.”
As of press time, queries directed to Coca-Cola remained unanswered.
PepsiCo’s energy drink, Sting, currently the snacks and beverages major’s fastest growing brand, contains 72 mg of caffeine per serving in a 250 ml can, as indicated on its packaging. In comparison, Coca-Cola’s rival product, Thums Up Charged, contains 61.5 mg of caffeine in its 250 ml packs.
Both brands are priced at INR 20 for 250-ml bottles. Additionally, Sting is offered in 250-ml cans, which are priced at INR 35.
Other energy drink brands such as Hell, Hurricane, Hustle, and Rider are being sold for prices ranging between INR 50 and INR 60 for 250-ml cans.
In contrast, a 250-ml can of Red Bull costs INR 125, whereas its 500-ml cans are priced at INR 370. Monster is priced at INR 349-370 for 500 ml cans.
Red Bull and Monster are distributed through select channels such as modern trade stores, high-end restaurants, and bars, rather than being mass-marketed.
On the contrary, Sting, Thums Up Charged, and Hell are marketed similarly to conventional drinks.
In October last year, Hell Energy Drink signed cricketers Shardul Thakur and Mohammad Shami as its brand ambassadors, marking the launch of limited edition packs named Hell Cricket Crazy. Additionally, Hell has co-sponsored the AT&T Williams Formula One Team.
Indian Hotels Company (IHCL), the hospitality firm, recently announced the signing of its first hotel in Dibrugarh, Assam, operating under the Ginger brand.
The hotel is a new development project operating under a fully equipped lease. Its design will be centered on the brand’s lean luxe principles, aiming to provide guests with a dynamic, modern, and effortless hospitality experience.
Suma Venkatesh, Executive Vice President, Real Estate & Development, IHCL said, “This signing is in line with IHCL’s strong commitment to North East India where we have been rapidly expanding our footprint. Dibrugarh, an industrial city in Assam, is an important centre for tea trading and serves as a gateway to prominent tourist destinations in the region. We are delighted to partner with Vela Hotel & Resort LLP for this Ginger hotel.”
Vedanta Baruah, Vela Hotel & Resort LLP said, “We are excited to be associated with India’s leading hospitality company. This will be the first Ginger hotel in Dibrugarh.”
Dibrugarh, famously dubbed as the ‘Tea City of India,’ serves as a significant hub for tea trading, boasting expansive tea gardens. It also houses the renowned Dibru Saikhowa National Park, recognized as one of the globe’s 19 biodiversity hotspots. With the introduction of this hotel, IHCL will bolster its presence in Assam, marking the addition to its existing portfolio of six hotels, including four in various stages of development.
The burgeoning popularity of health-conscious consumers and the influence of social media personalities are driving explosive growth in healthy snack brands. Nevertheless, expanding these businesses into broader markets while maintaining profitability poses a significant challenge.
According to regulatory filings from the Registrar of Companies and Tofler, significant players in the sector, like ITC-backed Yoga Bar, achieved a 31% increase in revenue to INR 88 crore in FY23. Similarly, Tata Consumer Soulfull experienced a substantial 88% revenue growth, reaching INR 64 crore. Additionally, Marico-owned True Elements reported a 24% revenue growth to INR 57 crore.
Nevertheless, these brands, specializing in items like chocolate and protein bars, millet and dry fruit-based snacks, granola bars, oats, and breakfast cereal, also saw an increase in their losses over the course of the year.
“When we invested in The Whole Truth in 2019, it was just an idea, and the company was pre-revenue. We believe that awareness about what people are consuming is increasing, and that awareness levels will start influencing what people consume,” said Manu Chandra, Founder and Managing Partner at Sauce VC, a New Delhi-based early stage consumer-focussed venture capital firm. “The way it has panned out now is beyond what we had anticipated.”
Chandra emphasized that consumers are increasingly mindful of their consumption choices, attributing this shift to the wealth of information readily available on social media platforms.
“Earlier, your source of information would be a trainer or nutritionist but now there are influencers like Andrew Huberman, Cyriac Abby Philips (The Liver Doc), Revant Himatsingka (FoodPharmer) who are household names, and they are the ones who are perpetuating awareness and it’s becoming more mainstream,” he said.
While brands continue to invest in raising awareness, companies are actively exploring diverse strategies to expand their operations.
Suhasini Sampath, Co-Founder of Yoga Bar, stated that the brand anticipates its next phase of growth to come from offline channels. In January 2023, the cigarette-to-hotels conglomerate ITC announced its plan to acquire a 100% stake in Yoga Bar within a three-to-four-year timeframe.
“For Yoga Bar, which has the support of a strong distribution network, offline is a huge growth area. While you can be a brand that can primarily serve through quick-commerce, presence offline is critical. Food, as a category, has low gross margins of 30-40%, which makes it difficult to sustain growth either as a D2C brand or primarily serving online,” Sampath said.
“We’re actually cutting back on D2C because it is impractical to scale beyond a point. Once you cross the INR 100 crore scale, you have to make sure you’re sustainable in the long run and the focus is now moving away to getting the brand into DMart and Reliance Retail,” she added.
Yoga Bar expects to achieve a 50% revenue growth in FY24, surpassing INR 130 crore.
However, The Whole Truth, a relatively newer brand aiming to double its revenue growth in FY24, will continue to focus on the top segment of the market.
“All the brands (in this space) are premium brands and that’s largely because input costs for good ingredients are higher. It’s still largely a top 8-10 cities phenomenon,” said Shashank Mehta, Co-Founder and CEO of The Whole Truth.
In January 2023, the startup secured a $15 million investment round, with Peak XV Partners (formerly Sequoia Capital India) leading the funding.
“It’s not a mass offering that allows us to go to tier-II, tier-III yet, and it is largely being driven by quick-commerce, modern trade, and top general trade play. We can’t build a large food brand in India without going offline…but for brands like ours, the focus is not to go to 80 or 100 cities but to target top 8-10 cities and go deep,” Mehta said.
According to Chandra from Sauce VC, startups within this segment are poised to evolve into mid-sized brands, potentially being acquired by strategic investors if they offer something absent from their portfolio.
Apart from ITC, FMCG giant Marico acquired a 54% stake in Pune-based healthy snacks brand True Elements in May 2022, while Tata Consumer purchased Soulfull, a direct-to-consumer (D2C) brand, for INR 156 crore in 2021.
Hindustan Unilever Limited (HUL), a leading FMCG manufacturer, has announced top-level changes in its management committee, which oversees the company’s operations. As per a statement by the company, Shiva Krishnamurthy (49) will join the HUL Management Committee as Executive Director, Foods and Refreshment. HUL owns brands such as Rin, Surf Excel, and Dove.
According to the announcement, Srinandan Sundaram, currently serving as Executive Director of Foods and Refreshment, will transition to the role of Executive Director for Homecare at HUL.
Deepak Subramanian, the current Executive Director of Homecare at HUL, will be assuming a new position abroad. “The changes will be effective April 1, 2024,” it added.
HUL CEO and Managing Director Rohit Jawa said, “Krishnamurthy is an astute marketeer with strong business acumen and is known to craft great brands. I am glad to welcome him to the HUL leadership team and truly believe that his rich experience in foods and beverages will be of immense help to the business.”
Krishnamurthy, presently serving as the Vice President of Foods and Beverages for South Asia, has been with HUL since 2000. According to the company, he has held various leadership roles across multiple sectors and has been overseeing the tea business in South Asia since 2015.
Sundaram holds the position of Executive Director for Foods and Refreshment at HUL, as stated.
Kartik Chandrasekhar, who was set to join the HUL management committee as executive director, personal care, from April 1, has decided to move on from Unilever.
“The appointment for Executive Director, Personal Care, HUL will be announced in due course. Madhusudhan Rao, currently Executive Director, BPC, HUL, will continue to oversee the business in the interim,” the company said.
Moët Hennessy, the wines and spirits division of luxury giant LVMH, is expanding its product offerings in India to cater to the strong demand in one of its fastest-growing markets in Asia, as stated by CEO Philippe Schaus in a recent interview.
“Currently, we are focusing in India on Hennessy Cognac, Glenmorangie whisky and Chandon Sparkling wine, and to a lesser degree, on our champagnes which are purchased more outside India than within India,” Schaus said.
“However, we are introducing new categories as we speak. India is one of our five biggest markets for Glenmorangie single malt whiskey. We have about 27 in all Maisons in our global portfolio, as we call them because they are more than brands, which include wine brands, champagne brands, and some spirit brands. In India, we will focus on about 12 brands out of 27,” he said.
“We have become the leader in a very interesting category, which is Provence Rose, which is Rose wine from the south of France. We are also making inroads with some of our new spirits, such as our Volcan tequila and Belvedere Vodka which has been in the portfolio for many years. Not all of our portfolio is currently introduced to India, but we are progressively going to introduce more and more,” he added.
Schaus highlighted that one of the most notable investments the company has made in India, and continues to pursue, is in its Chandon winery located in Nashik.
“We have been developing and improving it, with ongoing investments such as the elimination of herbicides, the installation of a solar energy system providing 60% of our energy needs, and the implementation of a new water treatment system,” he said.
“Additionally, we are consistently working on expanding our production capabilities. This investment serves as a testament to our belief in the Indian market and the belief that India deserves its own high-quality sparkling wine,” he added.
The funding round propelled the startup’s valuation to INR 143 Cr, as stated by Upliance in a statement.
Upliance plans to utilize the fresh proceeds to ramp up the production of its first product, the AI-powered cooking assistant “Upliance,” to 20,000 units per annum in the next six months. The startup also aims to utilize the capital to scale up its revenue to INR 150 Cr by the end of 2024.
Upliance was also recently showcased on Season 3 of Shark Tank India.
Established in 2021 by Mahek Mody and Mohit Sharma, upliance.ai markets an AI-driven ‘Smart Jar’ capable of handling numerous cooking functions, including chopping, sautéing, blending, heating, and steaming.
Equipped with a touchscreen interface, the product utilizes machine learning and AI technologies to streamline cooking processes.
“We are extremely excited about having Khosla Ventures as partners. Their investment is a validation of both the potential of upliance.ai and the traction we have seen in the market,” said upliance.ai chief executive officer (CEO) Mahek Mody.
Commenting on the fundraise, Khosla Ventures partner Rajesh Swaminathan said, “Mahek and his team have built a product that early consumers love and has the potential to significantly change people’s daily eating routines. We are also excited about the health benefits and AI integration capabilities possible with upliance.ai. These are the bold bets we like to take.”
Earlier, the Bengaluru-based startup secured $1.5 million in its pre-seed round from Nikhil Kamath-led Rainmatter Fund, Draper Associates, Rukam Capital, Stanford Angels and Entrepreneurs India, as well as undisclosed cofounders of Ather Energy and Unacademy.
According to upliance.ai, they have recorded a revenue of INR 1.5 Cr as of January 2024 and have sold 750 units since the product launch in January of the previous year. The startup has announced its intention to sell 1,500 units by March 2024 and aims to increase its active community members to 10,000 by the end of 2024.
This comes at a time when deeptech startups have increasingly captivated investors’ attention. Despite the significant time investment required before product launches and the need for extensive research and development, the deeptech sector saw hefty capital inflow in 2023, defying the challenges posed by funding winters.
According to data, funding for Indian deeptech startups surged to over $496 million in 2023, a significant increase from $397 million in 2022. To date, the sector has amassed over $1.5 billion in capital, with notable mega deals, such as GreyOrange’s $100 million+ round, occurring last year.
The sector was notably highlighted in the interim Budget 2024. The government allocated a substantial INR 1 lakh crore corpus to support Indian startups, aimed at fostering research and development within burgeoning industries. Additionally, a new scheme was proposed to promote the adoption of deeptech technologies within the defense sector.
KFC has launched a new initiative dubbed KFC Rewards, aimed at offering points to American customers for each transaction conducted through its app or website.
The program enables customers to gather points that can be traded for free menu items from KFC’s Secret Recipe Vault.
Customers enrolled in the KFC Rewards program will earn ten points for every eligible dollar spent.
Customers have the option to redeem their points for various complimentary food rewards, such as an eight-piece Kentucky Fried Chicken Nuggets, a chicken sandwich, or a free side.
The Rewards program showcases a rotating assortment of items, guaranteeing members access to a diverse array of fresh and appealing choices.
Members of KFC Rewards will also enjoy personalized offers, potentially including discounts or complimentary items.
Additionally, the program introduces rotating challenges where members can earn extra points and exclusive offers by ordering particular menu items.
Members can access their options at any time by visiting the Rewards page on the KFC app.
KFC US chief marketing officer Nick Chavez said, “Through our new loyalty programme, we will serve even more joy to our guests with incentives and special experiences that are only for our rewards members.”
Last month, KFC introduced its new Smash’d Potato Bowls in the US.
The dish features mashed potatoes alongside crispy Secret Recipe Fries, cheese sauce, bacon crumbles, and a three-cheese blend.
With a price tag of $3.49, these bowls join KFC’s menu after a successful trial in Pittsburgh last year.
India, the world’s leading rice shipper, may consider extending an export tax on the parboiled variety as part of efforts to ease food inflation ahead of national elections. This move could potentially maintain tight global supply and drive prices to new peaks, as reported by Bloomberg.
According to sources familiar with the situation, the administration led by Prime Minister Narendra Modi, who is vying for a third term in the upcoming elections in the first half of this year, is contemplating maintaining the export levy at 20%. These individuals, requesting anonymity due to the confidential nature of the discussions, mentioned that there is presently no immediate plan to prohibit the export of parboiled rice. The current tax is set to expire on March 31.
Such a decision could contribute to the surge in benchmark Asian rice prices, which have remained close to a 15-year peak since India initiated limitations on the sale of crucial varieties in 2023. This development would pose challenges for certain nations in West Africa and the Middle East, as they heavily depend on India to fulfill most of their essential food staple needs.
A spokesperson representing both the food and commerce ministries declined to provide immediate comments.
Extending the levy would form a component of the government’s proactive strategies to manage food inflation, which surged to nearly 10% in December compared to the previous year. India has already restricted exports of wheat, sugar, and the majority of rice varieties, while also implementing measures to combat hoarding. Additionally, it has prolonged the period of low import duties on edible oils for another year.
However, rice retail prices in Delhi remain approximately 11% higher than they were a year ago. Food Minister Piyush Goyal launched a program on Tuesday to provide subsidized rice to retail customers across the country. The government is already selling wheat flour and chickpeas at rates cheaper than those in the market.
Before the restrictions, parboiled rice constituted roughly 30% of India’s total exports. This variety undergoes a process involving partial boiling of paddy prior to milling, enhancing its nutritional content and altering the texture of the cooked rice. In the 2022-23 period, India held a share of approximately 40% in the global rice trade.
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