Nestle India announces INR 4,200 Crore investment plan by 2025 to boost growth and rural presence

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July 29, 2023

On Friday, Nestle India declared its dedication to investing approximately INR 4,200 crore by 2025. This substantial investment will encompass various ventures, including the establishment of their tenth factory in the state of Odisha.

The leading packaged food company envisions its next phase of growth to extend beyond metropolitan areas and also focus on expanding its presence in semi-urban and rural regions, which presently contribute around 20 percent to its overall sales. Simultaneously, the company is placing significant emphasis on seizing the premiumisation opportunity.

Speaking at a select media roundtable, Suresh Narayanan, Chairman and Managing Director, Nestle India, said, “Our investments in Make-In-India have been significant. From 2020 until the first half of 2023, we have already spent about INR 2,100 crore on the augmentation of manufacturing capabilities. Now, another INR 4,200 crore will be invested from 2023 to 2025. This includes about INR 894 crore of investments in the new factory in Odisha.”

In addition to establishing the new plant in Odisha, the recent investments will also support the phase-3 and phase-4 expansion of the company’s Sanand factory, along with capacity enhancements at the Moga factory.

During the June quarter, the company experienced a substantial 15 percent increase in total sales, accompanied by a notable volume growth ranging from 4 to 5 percent.

“The next phase of growth is not just going to come from strengthening our portfolio in urban India but also in semi-urban and rural India. We are seeing growth not just in mega towns and metros but also in Tier 1-6 towns,” Narayanan said.

He emphasized that the company’s current focus lies in expanding its distribution network in semi-urban and rural areas across 12-13 States. Additionally, they aim to enhance their product portfolio’s relevance in these regions by introducing suitable packaging options.

Amid the rising aspirations of Indian consumers, the packaged food leader is further bolstering its premium offerings in diverse categories, such as chocolates and coffee.

“While a third of our portfolio is price-point-led, wherever we have opportunities for premiumisation, we are doing it aggressively,” he added.

Narayanan emphasized that although headline inflation is manageable, the worrisome aspect lies in the persistent issue of food inflation.

“With the kind of torrential rains that are taking place, what impact will this have on the winter crops, It’s anybody’s guess… I would still say the specter of food inflation is going to remain. It’s not something that we can wish away that quickly,” he said.

Coffee Day Global case: NFRA imposes INR 2.15 Cr fine and bans 2 auditors, 1 audit firm

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July 29, 2023

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On Friday, the National Financial Reporting Authority (NFRA) imposed fines totaling INR 2.15 crore on three parties, including two auditors, and also imposed varying periods of prohibition on them due to audit deficiencies in Coffee Day Global Ltd for the financial year 2019-20. The incident in question involves the misappropriation of funds amounting to INR 3,535 crore from seven subsidiary companies of CDEL to Mysore Amalgamated Coffee Estate Ltd (MACEL).

Coffee Day Global Ltd (CDGL) and MACEL are subsidiaries of the listed entity Coffee Day Enterprises Ltd (CDEL).

After, markets watchdog Sebi shared its investigation report in April 2022, NFRA initiated investigations into the professional conduct of the statutory auditors of CDGL.

In its order, NFRA imposed a penalty of INR 2 crore on the audit firm ASRMP & Co and INR 10 lakh on A S Sundaresha. Further, they have been barred for a period of four years and 10 years, respectively.

The first two years of the restraint period of ASRMP & Co and the first five years of the prohibition period of Sundaresha would run concurrently with the debarment period imposed by NFRA through its order in April in the case of CDGL for FY2018-19.

In addition, the regulator also levied a fine of INR 5 lakh on Madhusudan U A and restrained him for a period of 5 years.

All of them have been barred from undertaking any audit in respect of financial statements or internal audit of any company or body corporate during the debarment period, according to the order.

In its probe, NFRA found that the auditors (ASRMP & Co, Sundaresha and Madhusudan) failed to exercise professional judgement and scepticism during the audit of CDGL where there was fraudulent diversion of funds to MACEL worth INR 1,105.10 crore and evergreening of loans through structured circulation of funds among other group companies.

The regulator noted that the auditors also failed to obtain sufficient appropriate audit evidence during audit of deferred tax assets involving misstatement of INR 244 crore and misstatement of INR 26.19 crore in related party disclosure relating to purchase of coffee beans from MACEL.

The total material and pervasive misstatements amounted to INR 1,615.04 crore of CDGL, which the auditors did not identify and report in their independent auditor’s report.

The auditors failed to report that Internal Financial Control over financial reporting was completely absent in CDGL.

Therefore, CDGL’s auditors for the FY2019-20 had failed to meet the relevant requirements of the Standards on Auditing (SA) and provisions of the Companies Act, 2013 and also demonstrated a serious lack of competence and due diligence on their part.

Earlier, the auditors had given a Disclaimer of Opinion in the independent auditor’s report based on their inability to obtain sufficient appropriate audit evidence regarding recoverability of INR 1,105.10 crore from MACEL.

Swiggy integrates morning grocery delivery service ‘InsanelyGood’ into main app to bolster traffic

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July 29, 2023

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Swiggy, the leading food delivery major, has taken a significant step to enhance its services. In a bid to bolster traffic to its morning grocery delivery platform, InsanelyGood, the company has seamlessly integrated it with its main app, as informed by sources familiar with the matter.

In March, the service formerly known as SuprDaily underwent a rebranding and is now recognized as InsanelyGood. Presently, it operates exclusively in Bengaluru, where Swiggy, its parent company, has its headquarters. This decision followed a reduction from operating in six cities the previous year, a strategic move aimed at minimizing cash-burn.

According to a source familiar with the matter, the service is planned to remain exclusive to Bengaluru in the foreseeable future. Customers placing orders on the platform before 11 pm can expect their orders to be fulfilled by 7 am the following day.

“(InsanelyGood) is currently a pilot in Bengaluru and can be accessed through the ‘InsanelyGood’ tile on the Swiggy platform, which takes you to the app. The InsanelyGood app is also available to download,” a Swiggy spokesperson said in a statement.

Swiggy, backed by Prosus, acquired the firm in 2018 and later integrated it into a unit under its parent entity in 2021. This strategic move brought Swiggy into direct competition with other players like Tata-owned BigBasket, Amazon Fresh, and Reliance-owned Milkbasket. Notably, Milkbasket is currently undergoing a significant downsizing of its team, as initially reported by Entrackr.

Integrating multiple services into a single app is not a new concept in the grocery industry. For example, BigBasket consolidated its main scheduled delivery service, quick commerce offering, and beauty store onto its primary app, which they internally refer to as their ‘super app.’ This approach allows customers to access and utilize various services conveniently from one centralized platform.

In addition to InsanelyGood and its core food offering, Swiggy’s main app serves as a host for several other services. These include their pick-and-drop service, Genie, the restaurant scouting and booking app, Dineout, the quick commerce service, Instamart, and the aggregated selling platform, Minis. By incorporating these diverse services into a single app, Swiggy aims to provide users with a comprehensive and seamless experience for various needs.

In June, Prosus, the prominent investor in Swiggy and the Dutch-listed arm of South African technology investor Naspers, disclosed that the company’s losses had surged by 80% compared to the previous year in the January-December 2022 period. However, during the same period, Swiggy also experienced a notable 26% growth in food-delivery Gross Merchandise Value (GMV).

According to the Founder and group CEO, Sriharsha Majety, in May, the firm’s core food delivery business achieved profitability in March 2023. This milestone was reached after considering all corporate costs, but excluding Esops (Employee Stock Ownership Plans).

Avril Group expands into plant-based foods with majority stake acquisition of Hari&Co

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July 29, 2023

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Avril Group, a company in France specializing in agri-food, has recently obtained a controlling interest in Hari&Co, a local plant-based food manufacturer.

Emmanuel Brehier and Benoît Plisson, the Founders and Directors of Hari&Co, will remain associated with the company as shareholders holding minority stakes.

Eutopia and Triodos Investment Management, previous investors in the company known for its veggie burgers and meatball alternatives, have divested their shares in the firm.

Avril said it was “committed” to the development of plant protein and said the deal for Hari&Co “strengthens its position in mass consumption”.

Hari&Co distributes its products through the French retail channel, and according to an Avril spokesperson, the company has successfully established “over 5,000 sales points” with various retailers. Additionally, Hari&Co serves foodservice customers with its plant-based food offerings.

In addition to the French market, the vegan food maker also has a smaller presence in Italy, supplying more than 250 stores, the spokesperson said.

“This project is fully in line with our strategy. Following the acquisition of Vivien Paille last year, we are pursuing the development of French sectors and the promotion of legumes, from the farm to the table,” Avril CEO Jean-Philippe Puig said.

In the previous year, Avril acquired Soufflet Alimentaire, a France-based supplier of rice, legumes, and chickpeas, from its agribusiness counterpart, InVivo Group. Following the acquisition, Avril rebranded the business as Vivien Paille.

In October of the previous year, the prominent French poultry company, LDC, acquired Avril Group’s Ovoteam eggs business and the egg brand Matines.

In April 2021, Avril announced its intentions to divest its eggs and pork operations. The decision was driven by the company’s strategic shift and its desire to consolidate activities around four key areas: condiments and cooking oils, plant-based products for both humans and animals, ingredients, and energy.

Last year, Avril snapped up a majority stake in Italian firm Eccellenza Italiana, which sells products including condiments and olive oil in France.

Reliance Retail’s Milkbasket sees top-level resignations after JioMart deal

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July 29, 2023

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Reliance Retail-owned subsidiary, Milkbasket, recently underwent a major transformation as it achieved full integration with JioMart. However, this significant milestone was accompanied by notable departures within the upper echelons of its management, as reported by Entrakr.

In May, the Chief Financial Officer (CFO) Gaurav Srivastava, along with Milkbasket’s only Co-Founder Yatish Talvadia and Chief Operating Officer (COO) Abhinav Imandi, stepped down from their positions following the merger of the company with JioMart.

According to the report, four of Milkbasket’s Co-Founders had already departed from the company by the previous year. Additionally, the report highlighted that nearly a dozen senior executives have resigned from their positions at Milkbasket, and there are expectations of further resignations in the weeks to come.

Srivastava served as Milkbasket’s CFO for a duration of five years, preceded by his role as the company’s Vice President-Finance. Prior to this, he gained experience working with renowned consulting firms such as KPMG and EY.

As of now, Milkbasket (Aaidea Solutions Ltd) has not yet released its financial results for FY23. In FY22, the company experienced a significant increase in losses, rising by 98% to reach INR 66 crore, while its revenue declined by 19% to INR 421 crore from the previous FY21 figure of INR 522 crore.

Before the acquisition, the company successfully raised $33 million in funding from various sources, including Inflection Point Ventures, Mayfield India, Unilever, Beenext, Blume Ventures, Kalaari, Lenovo Capital, and several angel investors, as mentioned in the report.

Marico’s Q1 FY24 net profit surges 15.6% to INR 436 Crore, despite minor dip in total income

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July 29, 2023

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According to a BSE filing, Marico, a leading FMCG company, recorded a significant increase in its consolidated net profit for the first quarter ending June 30, 2023. The company’s net profit rose by 15.6 per cent, reaching INR 436 crore, compared to INR 377 crore in the corresponding quarter of the previous fiscal year.

Nevertheless, the company experienced a minor decrease in total income, amounting to INR 2,523 crore during Q1 FY24, in contrast to INR 2,575 crore recorded in Q1 FY23.

According to the regulatory filing, Marico’s total expenses declined to INR 1,956 crore in Q1 FY24, showing a contrast to the corresponding quarter of the previous fiscal, where expenses amounted to INR 2,076 crore.

In Q1 FY24, the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) reached INR 574 crore, indicating a 9 percent increase from INR 528 crore reported in Q1 FY23. Additionally, the EBITDA margin for Q1 FY24 improved to 23.2 percent compared to 20.6 percent in Q1 FY23.

Throughout the quarter, the FMCG sector maintained its optimistic outlook, consistent with the previous quarter. However, as expected, noticeable signs of significant growth in rural areas on a sequential basis were not evident.

According to the company’s statement, the growth primarily stemmed from urban areas, while the rural markets saw growth from a smaller base. In terms of product categories, packaged foods sustained their positive performance, while beauty and personal care products closely followed the trajectory of rural market growth.

In its quarterly update, the company expressed optimism about a gradual recovery in volume growth, mainly driven by the rural sector, thanks to the ongoing reduction in commodity and retail inflation. However, the company also highlighted the importance of closely monitoring the distribution of rainfall and the impact of recent erratic weather patterns on the agricultural cycle. These factors could significantly influence rural incomes, making them critical to observe for future developments.

In the fiscal year 2022-23, the FMCG major achieved a turnover of INR 97.6 billion ($1.2 billion) from its products sold in India as well as selected markets in Asia and Africa.

Karnataka cabinet raises Nandini milk price by INR 3 per litre, citing support for milk producers

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July 29, 2023

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Starting from August 1, the Karnataka cabinet has made the decision to increase the price of Nandini milk by INR 3 per litre. Nandini is the renowned brand under which products are offered by the Karnataka Milk Federation (KMF).

The decision was taken on Thursday in the cabinet meeting in view of the demands of the milk producers.

Defending the move, Chief Minister Siddaramaiah said on Friday that Karnataka is selling milk at the lowest price whereas in the other states it is much higher.

“The milk (toned) that costs INR 39 will be sold at INR 42 per litre. Elsewhere it is sold between INR 54 and INR 56 per litre. In Tamil Nadu the price is INR 44 per litre,” the Chief Minister said.

Commenting on the decision, Deputy Chief Minister D K Shivakumar said, “We have to give money to the farmers (milk producers). Today in the entire country it’s (toned milk) INR 56 per litre. In our state people are getting at a very less price.”

He also said the government had decided to hike milk price by three rupees to help farmers.

Dunzo commits to pay 12% annual interest on withheld salaries amid financial challenges

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July 29, 2023

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Homegrown rapid-grocery delivery company Dunzo has committed to paying its employees a 12 percent annual interest on the salary component that was withheld since June.

Furthermore, as reported by MoneyControl, the startup reassured its employees that it is making steady progress in clearing all pending debts and aims to settle them by September 4.

Earlier this month, Dunzo made an announcement stating that it would defer wages for approximately 500 employees and impose a salary cap of INR 75,000 from June, regardless of an employee’s pay package.

Initially, the company had set July 20 as the deadline to clear all pending dues. However, an email was subsequently sent out, extending the deadline to September 4.

“Thank you for your patience and continued support. We understand the inconvenience this (delay in salaries) has caused and want to ensure that we provide the possible support for the delay,” Dunzo’s payroll team said in an email to employees.

“There will be interest paid of 12 per cent per annum,” it added.

When the final payout is made, all employees who have been affected since June will receive interest for two months, from July 4 to September 4.

An interest rate of 12 per cent per annum translates to an interest rate of 1 per cent per month, according to the report.

For example, a worker who was earning INR 1 lakh monthly but was only paid INR 75,000 in June due to Dunzo’s decision will now receive 12 per cent annual interest on the remaining INR 25,000.

Meanwhile, Dunzo has received legal notices from at least seven companies since March this year.

The company had received legal notices from Google India, Nilenso, Clover Ventures, Facebook India Online Services Private Limited, Cupshup, Koo and Glance.

In total, Dunzo’s outstanding vendor debts amount to approximately INR 11.4 crore, nearly double the previously estimated INR 5-6 crore.

Coca-Cola named official beverage partner for upcoming ICC World Cup

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July 29, 2023

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Coca-Cola, the renowned beverages company, announced on Friday that it has secured the exclusive partnership as the non-alcoholic beverage sponsor for the upcoming Cricket World Cup, organized by the ICC.

In a joint statement, Coca-Cola and The International Cricket Council (ICC) revealed their renewed collaboration for the upcoming 2023 ICC Men’s Cricket World Cup.

“The partnership entails Coca-Cola becoming the exclusive non-alcoholic beverage partner of the ICC,” it added.

Coca-Cola will use its global reach to connect with fans around the world and inculcate true sportsmanship through a series of online and offline activations.

Coca-Cola India Vice President, Marketing, Arnab Roy said, “We believe that the ICC Cricket World Cup is the biggest cricket event for the country. Partnership with the ICC provides us with a great opportunity to bring together our customers, consumers, brands and cricket”.

The beverage major plans brand activations with its portfolio, including fan engagements, social media campaigns and promotions to win tickets to the World Cup alongside unique on-ground experiences during the ICC Men’s Cricket World Cup 2023.

ICC Chief Commercial Officer Anurag Dahiya said, “We are excited about our partnership with Coca-Cola, which promises to deliver a refreshing cricketing experience set to captivate audiences and present a grand showcase of their emotions”.

Last month, the ICC had announced the schedule for the Men’s ODI world cup, which is set to commence on October 5 in Ahmedabad, where England and New Zealand will face each other.

The Biryani Basket unveils its cloud kitchen in Gurgaon, bringing authentic biryani to your doorstep

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July 29, 2023

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The Biryani Basket has unveiled its innovative cloud kitchen in Gurgaon. Passionately committed to delivering the finest biryanis and tikkas, the team behind The Biryani Basket aims to redefine the biryani experience altogether. Their ultimate goal is to bring the authentic and delectable taste right to your doorstep, ensuring an exceptional dining experience without stepping out of your home.

Within the confines of ‘The Biryani Basket,’ masterful chefs have meticulously curated a menu that showcases an extensive range of flavors and biryani variations. With their culinary expertise, they have succeeded in offering a diverse selection that caters to every palate, ensuring an unforgettable dining adventure for all who indulge in their delectable creations.

Dr. Aakash Bansal, Founder at ‘The Biryani Basket’, said, “Our motto at The Biryani Basket is to elevate your biryani experience. We take immense pride in curating a menu that caters to the discerning palates of our customers, offering a delightful selection of biryanis and tikkas that will transport them to the vibrant streets of India. We are excited to bring this exceptional dining experience to the doorstep of Gurgaon residents.”

With meticulous attention to detail, each biryani at ‘The Biryani Basket’ is crafted using only the finest ingredients, fragrant spices, and time-honored cooking techniques. This unwavering commitment to authenticity guarantees a truly delightful culinary experience for every discerning palate that graces our tables.

At ‘The Biryani Basket,’ an enticing array of tikkas awaits, ranging from succulent Chicken Tikka to mouthwatering Paneer Tikka. Indulge in this diverse selection and treat your taste buds to a symphony of flavors that cater to both meat-lovers and vegetarians alike.

The Biryani Basket is thrilled to announce a special celebration for its customers. For a limited period, patrons can indulge in a ‘Buy One, Get One Free’ promotion on biryanis. The offer promises to delight taste buds and is not to be missed.

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