PepsiCo to invest INR 778 Crore in Assam for first food manufacturing plant, paving the way for North-East expansion

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September 7, 2023

PepsiCo, a prominent beverage and food maker, has announced its commitment to invest INR 778 crore to establish its first food manufacturing plant in Nalbari, Assam. Spanning across 44.2 acres, this state-of-the-art plant is projected to commence operations in 2025. The initiative is expected to generate both direct and indirect employment opportunities for 500 individuals from the region of Assam, as conveyed in a statement released by PepsiCo on Wednesday.

Marking a significant milestone, the company, renowned for its extensive portfolio of beverage and food brands such as Pepsi, 7UP, Mountain Dew, Slice, Tropicana, Mirinda, Lay’s, Kurkure, Uncle Chips, and Quaker Oats, is making its inaugural investment in the North Eastern region.

PepsiCo India has entered into a three-way Memorandum of Understanding (MoU) with the Assam Skill Development Mission and the Directorate of Employment & Craftsman Training. This partnership aims to promote women’s empowerment and establish a secure and encouraging work environment, ultimately bolstering women’s employability in the region.

“The plant targets to intake 100 per cent diverse talent and aiming atleast 75 per cent women representation and intends to set up its first Community Learning Centre at Women’s ITI campus, Nalbari to upskill women over the next two years,” it said.

The new Nalbari greenfield facility will serve as a catalyst in PepsiCo’s ongoing commitment to supporting and enhancing the livelihoods of more than 5,000 farmers in the coming years.

PepsiCo India has disclosed that the facility will additionally offer farmers growth prospects through technology adoption, access to top-quality seeds, and affordable machinery. The company’s objective is to procure 50,000 tonnes of potatoes from the state to produce its renowned Lay’s chips brand.

Furthermore, it was noted that the plant will stimulate the need for an additional 60,000 tonnes of cold storage capacity in the upcoming years.

“India is amongst the fastest growing markets for PepsiCo in Africa, Middle East and South Asia (AMESA) region, and we are committed to invest in the nation to build capacity. Our first foods manufacturing plant in Assam is a testament of our long-term vision and unwavering support to the economic growth of the country by creating an equitable and sustainable ecosystem,” PepsiCo CEO – Africa, Middle East & South Asia Eugene Willemsen said.

This plant is poised to integrate the finest elements of PepsiCo’s global expertise, while contributing to Assam’s holistic advancement, he said.

PepsiCo India President Ahmed ElSheikh said, “In alignment with the government of India’s Self-Reliant India vision (Atmanirbhar vision), our investment in the greenfield facility in Assam stands as a significant milestone in our pursuit of this goal. Through the creation of employment opportunities and by empowering the farming community, our aim is to support the government’s drive for self-sufficiency in potato production.”

A Bhumi Pujan ceremony was organised by PepsiCo India. Assam Chief Minister Himanta Biswa Sarma along with key senior dignitaries from the state government attended the function, said a statement.

PepsiCo entered India in 1989 and has grown to become one of the largest food and beverage businesses in India.

India’s thriving market offers ample opportunities for domestic and British scotch whiskies: Scotch Whisky Association

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September 7, 2023

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On Wednesday, an industry association pointed out that India’s robust long-term economic growth and its domestic demographic makeup provide ample opportunities for both Indian and Scotch whiskies to thrive in the world’s largest whisky market.

The Scotch Whisky Association (SWA) additionally conveyed that the potential decrease in import tariffs as part of a free trade agreement between New Delhi and London would not only enhance the export prospects of Scotch whisky from the UK but also usher in increased variety for consumers, thanks to the entry of smaller producers into the market.

India and the UK are currently in discussions to establish a free trade agreement.

It will also lead to reduced import costs, benefiting India-Made Foreign Liquor (IMFL) brands.

The association also said that imported Scotch whisky will pose “very little” direct competition to local Indian whisky because of its small size here.

SWA stated that a significant proportion of Scotch whisky exports to India is in bulk, with bottled versions accounting for only 24 percent of total exports. Moreover, the majority of Scotch whisky sold in India is locally bottled.

India and the UK are continuing their negotiations to iron out differences in the proposed free trade agreement (FTA).

Following the G20 Trade and Investment Ministers Meeting (TIMM) at Jaipur, the progress of the negotiations was reviewed by Commerce and Industry Minister Piyush Goyal and UK’s Secretary of State for Trade Kemi Badenoch on August 26.

As New Delhi gears to host the 18th G20 Heads of State and Government Summit, SWA and International Spirits and Wines Association of India (ISWAI) jointly look forward to a successful India-UK Free Trade Agreement (FTA).

Over substantial reduction in India’s 150 per cent tariff on import of Scotch whisky, SWA CEO Mark Kent said it will pose very little direct competition to Indian whisky.

“Demographics and the strong prospects for India’s long-term economic growth mean there is plenty of room for Indian and Scotch whiskies to prosper in the world’s biggest whisky market. Only 24 per cent of exports to India are bottled in Scotland. Most Scotch whisky sold in India is bottled locally, while bulk Scotch whisky is an important ingredient in Indian whisky,” he said.

As the IMFL and Scotch categories have grown, so has the investment in facilities in India and the jobs and growth that delivers, both in the tourism and hospitality industries, he added.

Scotch whisky is the world’s most traded spirit, with worldwide consumption of 1.3 billion bottles.

However, it is less than half the volume of Indian whisky production.

G20 Summit spurs liquor companies to rely on in-home stocking as Delhi prepares for weekend shutdown

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September 7, 2023

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Liquor companies are optimistic that residents of Delhi will choose to enjoy their beverages at home as the city prepares to close markets and malls for a three-day period this weekend.

A significant decline in sales is expected for bars and restaurants due to the closure of all commercial establishments in the New Delhi district from September 8 to 10. However, industry executives are optimistic that this shortfall could be offset by heightened consumption in hotels hosting a substantial number of world leaders and delegates.

“While stocking up is possible at the hotels which are largely booked because of the G20 summit, small to medium restaurants may not see many customers as people would avoid venturing out during this period,” said Nita Kapoor, chief executive officer of International Spirits and Wines Association of India (ISWAI). She expects a jump in at-home alcobev consumption as “people are expected to spend the long weekend at home with friends and family… due to traffic disruptions”.

Nevertheless, executives noted that a significant number of individuals are planning to leave the city during the extended weekend, commencing with Janmashtami on Thursday, potentially affecting sales.

“It is anticipated that HORECA (hotels, restaurants and cafes) sales will experience a standstill,” said Amar Sinha, chief operating officer of Radico Khaitan, maker of 8PM whisky and Magic Moments vodka.

“For those who choose to remain in the city (during the weekend), they are likely to stock up on their tipple in advance.”

YouMee expands its culinary delights to DLF Avenue in Saket, offering a multifaceted Asian experience

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September 7, 2023

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YouMee is delighted to unveil its latest establishment at Commons, DLF Avenue in Saket. This expansion signifies yet another achievement for the restaurant brand, as it persistently introduces its splendid and multifaceted Asian culinary offerings to passionate food lovers right in the heart of the city.

Nestled in the lively heart of Commons at DLF Avenue, the newly opened branch has meticulously crafted a menu showcasing a diverse selection of Asian delicacies.

“We are excited to bring the YouMee experience to the vibrant neighbourhood of Saket,” said Rohit Aggarwal, Co-Founder and managing director of Lite Bite Foods. “Our team has put in a lot of effort to ensure that this new branch captures the essence of our brand while offering a wholesome experience for our valued patrons.”

Visitors can anticipate a contemporary yet inviting ambiance at the DLF Avenue location, thoughtfully designed to create a warm and welcoming environment for families, friends, and solo diners seeking a memorable culinary journey.

Tata Consumer Products and Haldiram’s deny reports of potential stake acquisition

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September 7, 2023

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Tata Consumer Products Ltd (TCPL) and Halidram’s jointly announced on Wednesday that they are not currently engaged in any discussions regarding the potential acquisition of a 51 percent stake in the prominent snacks maker and restaurant operator.

As per reports, the FMCG division of the Tata Group is currently in negotiations with Haldiram’s to acquire a controlling stake; however, they express reservations about a steep enterprise valuation.

Haldiram’s stands as a prominent producer of snacks and operator of restaurants.

“The company is not in negotiations as reported” to acquire Haldiram’s,” TCPL said in a regulatory filing.

The submission was made in reply to queries raised by both the NSE and the BSE seeking clarification regarding the reports.

According to a company spokesperson, “Tata Consumer Products does not comment on market speculation.”

Upon reaching out for a response, the management of Haldiram’s opted not to provide any comments on the issue.

Later issuing a statement, Halidram’s said, “We categorically deny recent reports of a 51 per cent stake sale and wish to clarify that we are not engaged in any discussions with Tata Consumer Products.”

TCPL possesses a portfolio of brands that encompasses products like Tata Salt, Tata Tea, Tetley, Tata Coffee, Tata Soulfull, and Eight O’clock within the realm of tea, coffee, and beverages. Additionally, they also offer Himalayan and Gluco+ in the liquid beverages category.

The company is actively pursuing growth and diversification within the foods and beverages sector.

Swiggy aims for promising IPO in 2024, banking on Instamart’s profitability

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September 7, 2023

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Swiggy’s intention to go public appears promising, given the strong profitability of its food delivery operations. Furthermore, the company has established a profit objective for its grocery delivery division, known as Swiggy Instamart.

Following intense competition in the rapid commerce sector for approximately two years, it has come to light, through insights from three well-informed sources, that discounting and expenses related to acquiring consumers are beginning to stabilize.

“Swiggy has been witnessing significant improvement in Instamart’s economics in the July-September quarter,” said one of the sources requesting anonymity. “Encouraged by the level of efficiency [consumer acquisition cost and repeat purchases], the company has set an internal target to make Instamart profitable by March-April 2024.”

The profitability of Instamart is expected to be the catalyst for the company’s anticipated listing in August-September 2024. Entrackr was the initial source to report on Swiggy’s plans for a public listing and the profitability of its food delivery segment back in February.

According to a report by Reuters, Swiggy has extended invitations to JP Morgan, Morgan Stanley, and Bank of America to prepare the company for its upcoming IPO next month.

“If the company manages to bring Swiggy Instamart in [the green], it will be a sort of turnaround as it bled heavily in the past year,” said the second source who also wished not to be named.

No immediate response was received from Swiggy in response to the queries that were sent.

Swiggy witnessed a significant increase in losses, soaring by 80% to reach $545 million in FY23, primarily attributed to substantial investments in its grocery business, as indicated by Prosus, a major backer, in their annual report. Meanwhile, the company’s earnings in the last fiscal year (FY23) reached approximately $900 million. In FY22, Instamart contributed INR 2,036 crore in revenue to Swiggy’s total income of INR 5,705 crore.

Insiders indicate that the company is currently in the process of determining its appropriate valuation for the public market, with expectations that it is unlikely to accept a valuation lower than the $11 billion mark. According to TheKredible, the firm achieved a valuation of $10.7 billion during its most recent funding round in February 2022, securing $700 million in funding.

When a grocery or rapid commerce startup focuses on achieving profitability, it typically signifies two key factors. First, it has reached a point where it deems its level of repeat usage as sustainable, allowing it to stabilize its operations before seeking new users. Second, the expenses associated with acquiring new users from this point forward are no longer sustainable. Embracing this reality and aiming for profitability often results in a substantial reduction in costs related to user acquisition and marketing. If profitability isn’t achieved in a reasonable timeframe, the startup may need to explore options such as securing additional funding or potentially seeking a buyer in the future.

No matter its level of funding, Swiggy is the kind of startup that genuinely has the opportunity for an IPO, thanks to its substantial market presence. It is expected that this move will become feasible in FY25, affording the company a brief window to maintain its growth momentum (which significantly influences valuations) without experiencing a sudden decline in its pursuit of profitability.

Mumbai-based startup Madmix valued at INR 12 Crores following successful pre-seed funding

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September 7, 2023

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Madmix, a Mumbai-based startup specializing in healthy food, formerly known as Daily Staple, and owned and operated by Mel Sante Food Production Pvt. Ltd., has achieved a significant milestone by successfully securing a substantial investment during its pre-seed funding round. The company is now valued at approximately INR 12 crores, with Prime Securities leading the investment round. Notable investors, including Authum Investments and Team India Managers, also participated in this funding endeavor.

The capital raised will be allocated towards enhancing marketing initiatives, expanding the sales team, and fueling future product development endeavors.

This well-timed infusion of capital is poised to propel Madmix into a transformative phase of growth and potential, following two years of self-funding. Despite operating with limited financial resources, the company successfully extended its global footprint, entering markets in Nepal, Hong Kong, New Zealand, and the USA. Furthermore, it has left a substantial mark in India, with its products now accessible in more than 650 stores across the country.

Moreover, coupled with Madmix’s recent rebranding and forward-looking strategy, the company is positioned to reach new heights in the realm of health-conscious and pioneering food offerings.

Madmix offers a variety of ready-to-eat snacks crafted from millets, such as jowar, featuring a selection of puffs available in five distinct flavors. Additionally, they have introduced a millet-based ready-to-cook product line, encompassing dosa, idli, chilla, bread mix, and flour mix. Madmix is dedicated to replacing unhealthy dietary choices with wholesome alternatives, and their ongoing commitment to innovation drives the development of new and nutritious products.

Gaurav Palrecha, Founder & Director, Madmix said, “We’re thrilled by the incredible support our investors have shown – it’s a true validation of our journey into the realm of madness. Consumers are becoming more conscious and are making healthy choices and we want to support them in their journey. These funds will enable us to achieve our growth numbers and we’re just getting started!“

Mr. Apurva Doshi, Sr Vice President, Equity Capital Markets, Prime Securities Limited said, “In India, snacking is more than just what we eat, it is a tradition and an important part of our cultural identity, as quoted by report ‘State of Snacking Report: A Global Consumer Trend Study’. We think the Company is revolutionising the idea of snacking with its ready-to-eat snacks and ready-to-cook range. We strongly believe in the Company’s prospects and this funding will aid the Company as it marches on in its growth journey.”

Mrs. Niru Kanodia, Director, Team India Managers Limited said, “The idea of mindful and healthy eating will drive the demand for snacking in India. We firmly believe that Madmix is rightly placed and offers balanced nutrition in every product combining with health and taste.”

Madmix, a health-focused startup with a mission to offer nutritious and delectable food items at affordable prices, is deeply committed to inventing distinctive and delightful flavors. Their team of experts is devoted to crafting innovative taste experiences that will captivate and satisfy your palate. Madmix consistently explores fresh combinations and techniques to bring you exciting and unforgettable flavors. The company’s ultimate goal is to ensure customer happiness and contentment with their products.

ZappFresh outperforms D2C meat delivery rivals with profitable growth in FY23

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September 6, 2023

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ZappFresh has maintained a more modest scale in comparison to its direct-to-consumer (D2C) meat delivery competitors like Licious and FreshToHome, who are often seen as the prominent players in the industry. Nevertheless, ZappFresh has not been at a disadvantage, as its consistent performance over the past two fiscal years clearly illustrates.

While Licious and FreshToHome have experienced substantial losses, ZappFresh has managed to maintain profitability throughout FY22 and FY23.

“We did INR 70 crore revenue in FY23,” said Deepanshu Manchanda, Founder and Chief Executive Officer of ZappFresh.

This essentially indicates that the operational revenue for FY23 remained unchanged from the INR 56 crore earnings recorded in FY22. Manchanda explained that the company’s focus on sustainable growth over the past two fiscal years, rather than aggressively pursuing expansion, was the key reason for this marginal growth.

Operating in the Delhi-NCR and Bengaluru regions, the company offers a range of fresh meat, seafood, and ready-to-cook products through its mobile app and website.

“We deliver around 4,500 orders on a daily basis with an average basket size of INR 600,” Manchanda added.

As expected, the acquisition of materials constituted the most significant cost category for ZappFresh in FY23, making up 40-50% of the total expenses, according to the founder. Meanwhile, employee benefits and advertising expenses each contributed 10% to the overall costs.

In addition, the company effectively managed its expenses in the preceding fiscal year and saw an increase in profits compared to FY22.

Manchanda revealed that the company’s FY23 profit amounted to approximately INR 3.5 crore. “…we are looking to end the ongoing fiscal with two-fold growth in profit after tax.”

The company, founded seven years ago, has accumulated over $9 million in funding thus far. The co-founders retain approximately 40% of the ownership stake, with SIDBI being the largest external stakeholder, holding 21%, according to data from TheKredible, a platform specializing in tracking startups and providing intelligence on them.

ZappFresh’s recent acquisition of Dr. Meat, valued at approximately $3 million, is expected to contribute significantly to the company’s growth.

“We are confident to hang around INR 200 crore in collection in the ongoing fiscal year,” added Manchanda.

As previously mentioned, ZappFresh’s competitors operate on a larger scale; however, they have incurred substantial losses. For instance, in FY22, FreshToHome reported revenue of INR 102 crore but also recorded a loss of INR 477 crore.

In FY22, Licious, which is backed by Temasek and is the sole unicorn in the D2C meat delivery sector, generated a revenue of INR 682 crore. However, during the same fiscal year, Licious incurred a loss of INR 855 crore. Both companies, Licious and FreshToHome, have not yet disclosed their financial figures for FY23.

Tata Group eyes majority control of Haldiram’s in $10 Billion valuation standoff

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September 6, 2023

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Tata Group’s consumer division is currently engaged in discussions to acquire a minimum of 51% ownership in Haldiram’s, a well-known Indian snack food manufacturer. However, sources familiar with the matter have revealed that Tata Group is expressing reservations regarding the proposed valuation of $10 billion.

Should the negotiations reach a successful conclusion, this agreement would position the Indian conglomerate to directly rival both Pepsi and the retail arm of billionaire Mukesh Ambani’s Reliance group.

Haldiram’s, a widely recognized brand in India, is reportedly in discussions with private equity firms, including Bain Capital, regarding the potential sale of a 10% ownership stake, as per their sources.

According to insiders, Tata Consumer Products, the owner of the UK-based tea company Tetley and a strategic partner of Starbucks in India, is currently in talks to acquire the stake.

A third individual with firsthand knowledge of the negotiations revealed that Tata expressed an interest in acquiring a majority stake exceeding 51%. However, Tata has communicated to Haldiram’s that the proposed valuation is considerably steep.

The potential acquisition represents an exciting opportunity for Tata, the person said, adding, “Tata (Consumer) is seen as a tea company. Haldiram’s is huge in the consumer space and has a wide market share.”

The insiders shared this information under the condition of anonymity.

A representative from Tata Consumer Products stated that they “do not provide comments on market speculations.” Haldiram’s Chief Executive Krishan Kumar Chutani and Bain declined to offer any comments.

Haldiram’s, a family-operated enterprise, can trace its roots to a modest shop established in 1937. It has gained renown for its crispy “bhujia” snack, which is available for as low as 10 rupees and can be found in local mom-and-pop stores.

According to Euromonitor International, it holds approximately 13% of India’s $6.2 billion savory snack market, a share comparable to Pepsi, renowned for its Lay’s chips.

Haldiram’s snacks are additionally available in international markets such as Singapore and the United States. The company operates approximately 150 restaurants that offer a diverse range of local cuisine, sweets, and Western dishes.

One biscuit less, one lakh more: ITC Limited pays hefty price for packaging error

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September 6, 2023

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The adage “A small mistake can snowball into a major blunder” became a harsh reality for ITC Limited when they were forced to compensate a customer with INR 1 lakh due to a packaging error in a Sunfeast Marie Light biscuit packet. This incident took place approximately two years ago when P. Dillibabu, residing in MMDA Mathur, Chennai, purchased two biscuit packets in December 2021 from a Manali retail store. His intention was to use them to feed stray animals. To his disappointment, he found that one of the packets contained only fifteen biscuits instead of the advertised sixteen, as reported by the Times of India.

Dillibabu made efforts to seek clarification from both his neighborhood store and ITC but was left dissatisfied with their responses. Growing increasingly frustrated, he decided to file a formal complaint with a consumer court. In his complaint, he emphasized that each biscuit was priced at 75 paise. Upon his calculations, he pointed out that with the company producing nearly 50 lakh packets per day, ITC could potentially be causing a daily public loss of INR 29 lakh due to the discrepancy.

In its defense before the court, the FMCG giant contended that the product’s sale was based on its weight rather than the quantity of biscuits contained within. They asserted that the product was advertised with a net weight of 76 grams. However, upon inspection, the commission determined that it actually weighed only 74 grams. ITC’s legal representatives cited the Legal Metrology Rules of 2011, which permit a maximum allowable error of 4.5 grams for pre-packaged commodities. Nevertheless, the judge disagreed, clarifying that this rule was applicable solely to items categorized as ‘volatile’ in nature.

As a result, on August 29th, the court determined that ITC had participated in ‘unfair trade practices’ and directed the immediate cessation of the sale of the particular batch of biscuits in question. Additionally, the judge decreed that the company must provide the consumer with compensation totaling INR 1 lakh. This conclusion marked the end of a case in which what appeared to be a minor mistake ultimately incurred a substantial cost for the company, all stemming from a single biscuit!

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