Patanjali Foods on Friday experienced a nearly 64% year-on-year (YoY) dip in net profit for the quarter ending in June 2023, totaling INR 878 crore. Despite this, there was a positive trajectory in revenue from operations, which surged by almost 8% compared to the previous year, reaching INR 7,767 crore.
Expenses for the quarter climbed to INR 7,691 crore from the INR 7,038 crore recorded a year earlier.
The significant decline in net profit can be attributed to sluggish sales growth and a pronounced deterioration in operational performance.
The operating profit, computed as EBITDA (earnings before interest, taxes, depreciation, and amortization), witnessed a 57% year-on-year drop, amounting to INR 169 crore. Furthermore, the operating margin contracted by 326 basis points, settling at 2.17%.
The core edible oils segment registered a 13% decline in quarterly revenue, reaching INR 5,891 crore. Meanwhile, the food and FMCG division saw a growth of 8.2% in revenue, totaling INR 1,952 crore.
The significant decrease in EBITDA was primarily driven by an operating loss incurred in the edible oils segment. This division recorded an operating loss amounting to INR 147 crore in the quarter.
The Food & FMCG category expanded both in terms of value and volume, contributing approximately a quarter (25%) to the overall sales. Branded sales during the quarter constituted a substantial portion, accounting for around 71% of the company’s total revenue.
The company attributed the subdued conditions in the edible oil sector to a persistent decline in prices. Despite experiencing a reduction in revenue, the company managed to uphold its market share. Remarkably, there was a notable 36% year-on-year increase in volumes.
Exports turnover experienced a remarkable 128% year-on-year surge, reaching INR 162.45 crore. Branded sales, which encompass both the foods and FMCG segment as well as edible oils, totaled INR 5,527.78 crore.
Despite grappling with escalating inflation and broader macro challenges, the Foods and FMCG segment achieved an EBITDA of INR 360.80 crore, accompanied by an EBITDA margin of 18.48%. The company attributed this accomplishment to effective cost efficiency measures.
On Friday, shares of the company ended 2.2% down at INR 1,293.90 on the National Stock Exchange.
On Friday, the appellate tribunal of the bankruptcy court issued a stay on the admission of Coffee Day Enterprises Ltd (CDEL). This action came about due to a challenge presented by the promoter, Malavika Hedge. The challenge highlighted that the default, which took place during the “calm period” in March 2020 amid the global pandemic, occurred while lenders were prohibited from approaching the National Company Law Tribunal (NCLT) regarding loan defaults.
Starting from March 25, 2020, due to the spread of Covid-19, the government implemented a one-year prohibition on lenders from initiating insolvency proceedings against companies for defaults that occurred during that period.
On July 20, 2023, the Bangalore NCLT admitted CDEL to corporate insolvency, following a petition filed by IndusInd Bank, as reported by SnackFax.
The Café Coffee Day chain, originally initiated by the late founder V G Siddhartha, is under the ownership of CDEL. Shailendra Ajmera, the interim resolution professional supported by EY, refrained from providing a comment.
While IndusInd Bank asserted that the default transpired on February 28, 2020, the company contended that it took place on April 30, 2020. CDEL’s promoter alleges that the lenders altered the default date subsequent to filing the insolvency application.
The National Company Law Appellate Tribunal (NCLAT), in its ruling dated August 11, has directed the respondent (bank) to submit a response by August 25. The applicant (the promoter) has been given the opportunity to file a rejoinder by September 14. As part of the granted stay, the tribunal has set the next hearing for September 20.
As per the directive, the bank classified the accounts as non-performing loans on June 30, 2020. Subsequently, on December 7, 2020, the lender initiated the loan recall, urging the borrower and guarantor to settle the loan within a 15-day timeframe.
The borrower says that default occurred on April 30, 2020 – which is the period from March 25, 2020 to March 25, 2021 and ‘thus the petition could not have been filed.’
After providing six opportunities for the company to respond, IndusInd Bank reported the default date as February 28, 2020 to the National e-Governance Services (NeSL).
As of March 31, 2022, Coffee Day Global held a debt of INR 960 crore, encompassing an inter-corporate deposit of INR 119 crore obtained from Tanglin Development Ltd, an affiliated entity. According to the company’s FY22 annual report, it possesses 495 café outlets in 158 cities and 285 CCD Value Express kiosks.
Don’t be surprised if you notice a slight increase in the weight of your snack packs, soap bars, and toothpaste tubes. Last year, in response to significant inflation, FMCG companies had reduced the weight of retail packs for everyday necessities without adjusting their prices. However, with the recent stabilization of key ingredient prices and a decrease in packaging costs, these companies have begun to restore the original weight to the packs.
According to industry experts, the savings from reduced input costs are being transferred to consumers by reintroducing additional weight into the product packaging. This is particularly evident in product categories that are commonly priced at INR 10, INR 20, and INR 25, where frequent price adjustments can be inconvenient for consumers.
“We have put back grammage on some of our snacking brand packs as inflation cooled off for many of the commodities we use,” said Ahmed ElSheikh, president of foods and beverages major PepsiCo that makes Kurkure and Lays snacks. “We are hopeful that inflation will not escalate again, which also depends on the rains and crop cycle.”
Over the past year, the retail costs of refined sunflower oil, soya bean oil, and palmolein have witnessed a reduction of 20-25%. This drop can be attributed to a favorable harvest of edible oil seeds and a decrease in global prices for these commodities.
The expenses associated with soda ash, a vital component in the production of soaps and detergents, as well as packaging costs, have both experienced a decrease. Although the costs of wheat and sugar are still gradually rising, the inflation rate is currently lower compared to the previous year.
“Pricing changes are not always feasible in highly competitive categories. So, the optimum way to pass on benefits is by increasing weight of packs and putting back grammage,” said Mayank Shah, senior category head at biscuits maker Parle Products that competes aggressively with Britannia and ITC.
Abneesh Roy, executive director at Nuvama Institutional Equities, said besides lower cost of key ingredients such as edible oils, companies are also benefitting from a reduction in fuel and packaging costs. “Hence, for categories like biscuits, snacks, and confectionery, companies are directly increasing grammages,” he said. “For personal care categories such as soaps, detergent and shampoo, we are observing that extra grammage is being offered by way of consumer promotions.”
Jaideep Nandi, managing director of Bajaj Consumer Care, said the maker of Almond Drops hair oil and moisturising soap has increased grammage “in select packs in a few strategic markets”. Additional consumer offers have also been stepped up, he added.
Distributors have indicated that FMCG companies are reintroducing up to 10% of the product weight in certain packaged items, a weight reduction that had been implemented around the middle of the previous year. However, in most cases, these companies have not correspondingly decreased prices.
“We have not seen many price cuts in sync with reduction in costs of some commodities such as edible oils and packaging materials… But what is happening is that packs are starting to revert to the weight of what they were early last year,” said an executive of a leading Delhi-based distribution association. He requested not to be named since he is not an authorised spokesperson.
The government of Telangana has allocated a land area of 82,000 acres to the prominent oil company, Lohiya Group of Industries. This allocation is intended for the cultivation of oil palm as well as for the establishment of facilities dedicated to the processing of oil palm.
The land allocation took place in the districts of Karimnagar and Jagityal, facilitated by the Department of Agriculture and Cooperation.
Mahaveer Lohiya, the Managing Director of Lohiya Group of Industries, commended the government’s initiative, expressing appreciation for its potential to diminish India’s reliance on imported crude palm oil. He highlighted how this move could effectively serve a wide range of industries across the country.
“Our expertise and world class standards in the industry have been recognised over the past few decades and we are honored to be chosen to be part of the government’s initiative,” he said.
As per information from the Telangana State Food Processing Society, the current extent of oil palm cultivation spans 45,000 acres across Khammam, Kothagudem, and Suryapet regions.
The government has officially announced a supplementary objective encompassing 8.24 lakh acres across 25 districts within Telangana. These zones have been assigned to nine different companies throughout the state. The overarching goal of the Telangana State Oil Palm Mission is to expand oil palm cultivation to over 20 lakh acres within a span of 3 years, aiming to achieve this milestone by the fiscal year 2024-2025.
Vinod Cookware, a cherished household name renowned for its exceptional kitchen solutions in India, proudly presents the Vinod Connect Non-Stick Cookware Set. This groundbreaking ensemble of culinary essentials marks a new era in cooking experiences. Crafted with precision, its sleek design harmonizes with induction cooktops, and features detachable handles imported from Italy, reflecting both elegance and functionality.
At the heart of this cookware lies a revolutionary 5-layered non-stick coating, meticulously engineered to elevate your cooking endeavors into a realm of efficiency and intelligence. The detachable handles not only epitomize sophistication but also enhance practicality, enabling space-efficient storage and effortless maintenance.
Consisting of three indispensable pieces – a 28 cm Tawa, a 24 cm Frying Pan, and a 24 cm Kadhai – this 3-piece set stands ready to adorn kitchens across the nation. Seize the opportunity to acquire this remarkable collection through retail outlets spanning India and the official Vinod Cookware website. Furthermore, in celebration of Independence Day, patrons can revel in an exclusive limited-time offer: a generous 25% introductory discount, available exclusively on the Vinod Cookware website.
Not only does this ingenious cookware address the requirements of home chefs, but it also emerges as an excellent choice for gifting. Crafted with meticulous precision and infused with cutting-edge technology, this set epitomizes the unyielding dedication of the cookware brand to provide distinctive culinary solutions to Indian homes.
A distinctive attribute that truly distinguishes the Vinod Connect Cookware is its ingeniously designed space-conserving storage mechanism, rendering it indispensable for kitchens embracing minimalism and compactness. By embracing spatial efficiency without compromising on functionality, this cookware ensemble empowers contemporary households to optimize their kitchen layout, enabling users to cook with both unparalleled convenience and flair.
Commenting on the new product launch, Sunil Agarwal, Director, Vinod Cookware, said, “Whether it’s sauteing vegetables, frying snacks, or preparing curries, this set proves to be an indispensable companion across all types of kitchens. Embracing the concept of smart storage, this cookware set brings unparalleled ease to urban kitchens, allowing users to utilize their kitchen space effectively. It is an ideal product for urban dwellers and professionals with busy lifestyles. With its emphasis on convenience and storage, the Vinod Connect Cookware Set is set to redefine how culinary enthusiasts and professionals experience cooking in modern times.”
Founded by Rajeram Agarwal in 1962, Vinod Intelligent Cookware stands as a foremost manufacturer of high-quality stainless steel cookware. What began as a local production of stainless steel bowls and dishes has evolved into a global presence, boasting a diverse catalog of over 400 products. The brand’s international journey commenced in 1990 with exports to prominent destinations including the U.K., the U.S.A., Germany, and France, among others.
The brand’s excellence has garnered significant recognition, evident through accolades such as The Best of Bharat Award 2022 bestowed by e4m Pride of India. Additionally, Vinod Cookware’s prowess extends to being hailed as the premier Non-Stick Dosa Tawa brand according to the discerning evaluations of Mishry Reviews, a platform renowned for assessing over 2000 products within the realm of Cooking and Dining.
Guided by an unwavering commitment to progress, Vinod Cookware consistently embraces the latest advancements in technology and contemporary materials that harmonize seamlessly with the demands of the Indian Kitchen.
This momentous occasion saw the convergence of preeminent culinary leaders and celebrated chefs, hailing from various corners of India and the world.
The Institute of Hotel Management, Chennai, has undergone a remarkable evolution since its inception in 1963. Over the span of several decades, it has ascended to become a distinguished stronghold of hospitality education, earning accolades both on the domestic and global stages. Notably, marking its 60th anniversary, the Institute of Hotel Management (IHM) Chennai recently hosted a resplendent Diamond Jubilee celebration. This momentous occasion saw the convergence of preeminent culinary leaders and celebrated chefs, hailing from various corners of India and the world.
The daylight affair held at the IHM Chennai campus brimmed with excitement as Dr. K. Manivasan IAS, Principal Secretary to the Government of Tamil Nadu – overseeing Tourism, Culture & Religious Endowments Department – graced the occasion as the esteemed Chief Guest. Adding to the honor, Shri D. Venkatesan, Regional Director of India Tourism for the South, West, and Central Regions, adorned the event as the Guest of Honour.
A significant highlight of the event was the inauguration of an additional Girls Hostel, made possible through a generous grant from the Ministry of Tourism and the Government of India. This new facility enhances the campus’s infrastructure and accommodations.
Amidst the luminous gathering, members of the IHMCAA (Institute of Hotel Management Chennai Alumni Association) and other dignitaries representing the Ministry of Tourism, the Government of India, and the National Council for Hotel Management, joined in releasing the official souvenir magazine. The occasion also included the felicitation of numerous individuals, adding an extra layer of distinction to the event’s festivities.
Cosmos, a renowned entity under the ownership of EssEmm Corporation, has firmly established its reputation for excellence within the hospitality and food processing sector. In a gesture of magnanimity, Cosmos generously contributed state-of-the-art commercial kitchen equipment valued at INR 10 lakhs to the Institute of Hotel Management (IHM) Chennai. This gracious contribution serves to enhance the institute’s capabilities and directly benefits its aspiring students.
Speaking at the event, Dr.K. Manivasan IAS, Principal Secretary to the Govt.of Tamil Nadu, said “This Institute, which has produced some of the finest chefs and hospitality industry professionals that India has seen, began with one building in Taramani with barely 60 students and has now grown to accommodate nearly 1000 students from across the country on its campus. This Institute is not only recognized across the country but across the world in the fields of academics, administration and more.”
During its formative years, IHM Chennai was commonly identified as the Madras Catering College, a nomenclature that affectionately bestowed the students with the nickname ‘MadCats’. In a recent initiative, numerous of these MadCats united to formally establish the IHM Chennai Alumni Association. This collective endeavor aimed to partake in the jubilant festivities commemorating their beloved alma mater’s Diamond Jubilee.
Malepati Chakravarthy, a 1977 alumnus, now President of the IHMCAA said, “IHM Chennai alumni are in senior positions within the hospitality industry around the world as CEOs, COOs, Vice Presidents, Executive Chefs and General Managers. They fly the flag of our institute high and we are extremely pleased to be able to conduct these celebrations, for the next generation to be inspired by the legacy of our college.”
S. Bipin Kumar, who graduated in 1988, took charge as Secretary of the Alumni Association in 2022. He added, “Some of our MadCats have even gone on to become internationally renowned, with Michelin stars and other leading global hotelier awards to their name.”
Parimala. R, the Principal in-charge of IHM Chennai, is also an Alumnus, who graduated in 1993 and began working at the Institute within a few years. Parimala said, “Today as I look back upon my 30-year association with this campus, I feel a sense of both pride and nostalgia. I am glad that together with the Alumni Association, we have been able to put together a grand celebration that is worthy of the milestone.”
The evening proceedings featured a splendid gala dinner, graciously hosted by the Alumni Association, which welcomed more than 400 alumni in attendance.
The Institute of Hotel Management Catering Technology and Applied Nutrition in Chennai operates as an autonomous entity under the Ministry of Tourism, Government of India, and was founded in 1963. The institute offers a diverse range of career-focused programs, including a 2-year Post Graduate program in M.Sc. Hospitality Administration, a flagship 3-year Degree program in B.Sc. Hospitality and Hotel Administration, conferred by Jawaharlal Nehru University, a 1½ year Diploma course covering Food Production, Bakery & Confectionery, and another 1½ year Craft course encompassing Food Production & Patisserie, F&B Service, and additional courses.
Through the institute’s meticulously organized campus placement programs, a 100% job placement assurance is extended to all students within various sectors of the service industry. Currently, we proudly hold the 13th position globally in the “Best Hotel Management Institutes of the World” category for the year 2023, as recognized by CEO World Magazine, USA.
As a food entrepreneur, you may need to work with a food manufacturing company to produce your products on a larger scale. But, do you understand Food Manufacturing Contracts?
A food manufacturing contract is a legal agreement between a food manufacturer and a food company, restaurant, or retailer. The contract outlines the terms and conditions under which the manufacturer will produce food products for the company. The agreement covers various aspects of the production process, such as the type and quantity of products to be manufactured, delivery schedules, quality standards, pricing, and payment terms.
It is the process of producing food products on a large scale using various technologies and techniques. It involves the transformation of raw ingredients into finished food products that are safe, palatable, and of high quality. The food manufacturing industry includes a wide range of activities such as processing, packaging, and distribution of food products to consumers, retailers, and other businesses.
Food manufacturers may produce a variety of products including snacks, beverages, baked goods, canned goods, frozen foods, and more. The contract provides clarity and legal protection for both parties, ensuring that each understands their roles and responsibilities. It also helps to establish a long-term relationship between the manufacturer and the company.
For beginners in the food industry, understanding food manufacturing contracts is crucial for several reasons and obviously to dodge multiple problems that might arise:
1. Protection of legal rights: A food manufacturing contract is a legal agreement between two parties that outlines the terms and conditions of their business relationship. By understanding the contract, a beginner can protect their legal rights and ensure that they are not exploited or taken advantage of.
2. Quality control: The contract outlines the quality standards and specifications for the product being manufactured. Beginners need to understand these specifications to ensure that their product meets the required quality standards.
3. Production timelines: The contract outlines the production timelines and delivery schedules. Beginners need to understand these timelines to ensure that they can meet the delivery deadlines and maintain a steady supply of their products.
4. Cost control: The contract outlines the costs associated with the manufacturing process. Beginners need to understand these costs to ensure that they are not being overcharged and that the contract is cost-effective.
Key Components of Food Manufacturing Contracts
In this beginner’s guide, we will provide you with an overview of the key components of a food manufacturing contract and the importance of understanding them.
1. Understanding the Parties Involved
A food manufacturing contract should clearly state the names and contact information of the parties involved. This includes the manufacturer and the customer. It’s important to ensure that all parties are identified correctly and that the contact information is up-to-date.
2. Product Specifications
The food manufacturing contract should include detailed product specifications that outline the ingredients, packaging, labelling, and other relevant details. This section should also include any requirements related to quality control, testing, and product safety.
3. Manufacturing Process
The manufacturing process section of the contract should outline the steps involved in the production process, including the timelines, quantities, and quality control measures. This section should also cover any special requirements for storage and shipping.
4. Pricing and Payment Terms
The pricing and payment terms section of the contract should clearly state the cost per unit, as well as any minimum order requirements, payment terms, and payment schedules. This section should also outline the terms for any discounts or penalties related to quality or delivery.
5. Term and Termination
The term and termination section of the contract should clearly state the duration of the agreement, as well as any conditions under which either party can terminate the contract. This section should also include provisions for resolving any disputes that may arise during the term of the contract.
6. Confidentiality and Intellectual Property
The confidentiality and intellectual property section of the contract should outline the obligations of both parties to protect any confidential information and intellectual property involved in the manufacturing process.
7. Insurance and Liability
The insurance and liability section of the contract should outline the insurance requirements and liability limitations for both parties involved in the manufacturing process. This section should also include any provisions for indemnification and liability for damages or losses.
8. Governing Law and Jurisdiction
The governing law and jurisdiction section of the contract should specify the laws and jurisdiction that will govern the agreement. This section should also include any provisions for resolving disputes through arbitration or mediation.
It is important to review all aspects of the contract and seek legal advice if necessary before signing any agreement. By following these guidelines, businesses can establish a strong partnership with their manufacturer and ensure that their products are produced to the highest standards of quality and safety.
Kolkata’s renowned Chinese restaurant chain, Chowman, has achieved a significant milestone by being selected as the exclusive brand from West Bengal to be featured on the highly anticipated show, ‘Brands of Tomorrow,’ set to air on Disney Hotstar.
Presented by AIL (Advaita Innovation Lab), the ‘Brands of Tomorrow’ docu-series unfolds the captivating narratives of forward-thinking Indian brands spearheading innovation. Across six compelling episodes showcased on Disney Hotstar, this series serves as a jubilant tribute to brands that are actively shaping India’s future economy through their impactful products. A celebration of their enduring legacies, the series seamlessly combines inspiration and entertainment, leaving audiences with a profound admiration for the art of innovation.
In this captivating series, Chowman’s remarkable journey takes center stage, tracing its evolution into a prominent player in the Food and Beverage industry. Debaditya Chaudhury, the visionary behind Chowman, narrates the tale of this illustrious brand that had humble beginnings. As a trailblazing establishment that made upscale dining accessible to the middle-class population of India, Chowman perfectly embodies the essence of ‘Brands of Tomorrow,’ showcasing its societal significance and transformative influence.
This recognition marks yet another achievement in Chowman’s remarkable 13-year culinary expedition, adding to its extensive list of accolades.
Suchayan Mandal, Chief Strategist of Brands of Tomorrow and Co-Founder of AIL-India, said, “When I conceived the idea of highlighting Make-in-India brands that are innovation and impact driven, it wasn’t really easy. On one hand, you have the poster boys of the Indian startup ecosystem that are doing wonders and on the other hand, you have brands that are breaking barriers but never been interpreted as “brands”. And that is where I realised the gap. We needed to showcase more brands that are born in India and make our country the global superpower. Gen Zs in India aren’t like any other generations we have seen. They are aware, conscious and all they need is a little aspiration to build big. To the Gen Zs, I present to you ‘Brands of Tomorrow’ for you to get inspired and get going.”
The first installment of ‘Brands of Tomorrow’ is poised to cast a spotlight on Chowman, positioning it as the trailblazing brand that lays the foundation for forthcoming episodes. These subsequent segments will illuminate the journeys of Zoff Spices, Freakins, Nasher Miles, Power Gummies, and Regrip. Mark your calendars for the release date: August 15th, 2023.
AIL-India (Advaita Innovation Labs) was founded on a deep-seated enthusiasm for brand storytelling and has swiftly risen to prominence as a premier brand storytelling studio in India since its inception in 2021. Against the backdrop of a post-2016 surge in innovative startups, AIL-India addresses the need for compelling narratives that forge connections between brands and their target audiences. With its headquarters situated in Kolkata and a widespread national footprint, the studio specializes in shaping brand stories and devising strategic communication strategies, catering to ambitious brands with global aspirations.
DrinkPrime, the innovative startup from Bengaluru that’s transforming the way people access clean drinking water, has once more seized the spotlight by introducing their newest project, #DrinkPrimeForPets. This trailblazing initiative presents pet owners with the chance to furnish their cherished four-legged friends with top-tier purified water, without any cost.
Under the umbrella of the #DrinkPrimeForPets movement, any individual who subscribes to DrinkPrime and is a pet owner can now receive a free allocation of 10 liters of DrinkPrime’s ultra-pure reverse osmosis water for their pets. This declaration has sparked a significant conversation on multiple online platforms, with individuals recognizing their previous lack of knowledge and displaying appreciation for this enlightening program. The dialogue has rapidly spread across social media, with lively exchanges inundating both Twitter and Instagram.
In a realm where the lines between residence and workplace have become indistinct due to the emergence of remote work and the aftermath of Covid-19, a growing multitude of people are adopting the role of pet owners. Nonetheless, numerous neophyte and even experienced pet guardians remain uninformed about crucial caregiving routines, such as recognizing the importance of furnishing their companions with hygienic and secure drinking water to uphold their well-being.
The process of urbanization and swift progress has heightened worries regarding water pollution, giving rise to uncertainties about the caliber of water accessible to both individuals and their animal friends. A perception persists that pets boast more robust digestive systems than their human equivalents, causing the habit of offering tap water as sustenance to pets.
Dispelling this misbelief and striving to inspire authentic transformation, the forward-thinking creators at DrinkPrime have embarked on a courageous journey by extending complimentary purified water to their esteemed subscribers who are pet parents. This endeavor not only intends to enlighten but also proactively involves pet guardians in enhancing the well-being and enduring vitality of their animal companions through the provision of secure, top-notch water.
Manas Ranjan Hota, Co-Founder & COO, DrinkPrime, said, “It is our firm belief that pets deserve the same level of care and attention as any other member of the family. We are committed to raising awareness about the vital role water plays in pets’ health and well-being. The #DrinkPrimeForPets initiative reflects our dedication to making a positive impact in the lives of pets and their caretakers.”
As the conversations continue to gather momentum online and throughout communities, DrinkPrime’s #DrinkPrimeForPets initiative stands as a testament to the brand’s commitment to innovation, education, and the well-being of all creatures, great and small.
Moreover, the influence of this endeavor reaches far beyond the boundaries of private residences. Stray creatures, particularly city-dwelling dogs, heavily depend on human assistance for their sustenance. Through the promotion of mindful water usage and attentive caregiving routines, the #DrinkPrimeForPets initiative possesses the capacity to steer caregivers of these homeless animals onto the correct path, cultivating a more wholesome and empathetic setting for our beloved quadruped companions.
Subsequent to menu adjustments that analysts view as primarily driven by cost reduction rather than taste preferences, Subway outlets in India will no longer provide the complimentary cheese slice option with their sandwiches.
As a major player in the Indian restaurant franchising scene, the American chain Subway boasts a network of approximately 800 outlets. In a recent development, they have introduced an additional charge of INR 30 ($0.40) for the inclusion of a cheese slice in the majority of their sandwiches. However, as an alternative, they are now presenting customers with a complimentary option of a “cheezy” sauce.
The escalation in ingredient prices, encompassing dairy products, has exerted pressure on global fast food chains in India to manage costs while ensuring customer contentment.
In India, Domino’s has set a promotional price of only 60 U.S. cents for its most affordable pizza. However, the franchisee in the region has openly expressed apprehensions about a significant 40% increase in the cost of cheese during the fiscal year that concluded in March.
In recent weeks, numerous Subway and McDonald’s establishments in India have opted to exclude tomatoes from their menus, attributing this decision to concerns regarding quality. This move follows a staggering price surge of approximately 450%, leading to all-time high costs for tomatoes.
To address the scarcity, India has turned to importing tomatoes from Nepal.
The cheese sauce now available for free at Subway India was “developed for qualitative reasons alone”, said Everstone Group’s Culinary Brands, which manages the supply chain for all 800 outlets and is the master franchisee for around 200.
The shift in quality is evidently not appealing to everyone’s palate.
Subway has “replaced the cheese slice with liquid cheese blend … You just lost a loyal customer,” one unimpressed customer, Sumit Arora, wrote on X, the social media platform formerly known as Twitter.
According to a store manager at a Subway outlet in New Delhi, the newly introduced cheese sauce is priced at INR 400 per kilogram. Market prices indicate that cheese slices typically carry a cost of around INR 700 per kilogram.
A cheese slice, said Culinary Brands’ marketing head Mayur Hola, “can be added on at a small cost”. “Ingredient costs are not something we comment on … this is simply an upgrade to make our subs better.”
When inquired about Subway’s decision, Karan Taurani, a consumer discretionary analyst at Elara Capital in India, explained that the surge in cheese, grain, and vegetable prices has compelled restaurants to devise “innovative” approaches.
“It is a way of putting inflationary pressure on the customer rather than going for a blanket price hike,” he said.
In India, the price range for a Subway sandwich typically falls between INR 200-300 ($2.4 to $3.6). However, should a customer opt to include the previously complimentary cheese slice, the cost will now be elevated by up to 15%.
Subway representatives did not provide a response to a comment request.
In the current week, the central bank of India revised its inflation projection for the ongoing fiscal year to 5.4%, citing increased pressures stemming from food prices.
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