Gyan Research weekly newsletter on #Food processing sector

1. © Gyan Research and Analytics Pvt. Ltd., 2015 1
Policy News
 Ultra Mega Food Park in Andhra Pradesh
The Andhra Pradesh government will setup an 'Ultra Mega Food Park' in Kurnool district to boost the
agro-processing industry in the state. The park will be spread over 758 acres and have agri biotech and
R&D centres. Under the manufacturing set up, it will include PVC and PE pipes, micro-irrigation systems
and tissue culture. Technology innovations will constitute water-harvesting demonstration unit, product
and crop demonstration centre and renewable energy hubs.
Industry News
 Chocolate sales fall in 1Q2015
Volume sales of chocolate declined 2 percent in 1Q2015, for the first time in more than a decade.The rise
in price along with reduction in pack sizes by the chocolate companies could be the reason for the drop in
sales. However, value sales grew 10 percent during the period, as against 18.6 percent in 1Q2014. Indians
eat around 117 gm of chocolate a year on a per-capita basis, which is the lowest among emerging
markets.
 Yippee’s new ad raises sales
ITC Sunfeast’s instant noodles, Yipee has launched a new advertising campaign emphasizing on quality
and safety to gain consumer trust, after the ban on Maggi. Yipee’s new commercial, which is being
telecast on music, kids and general entertainment channels, shows the company’s sophisticated
manufacturing facilities and thorough testing procedures. Sales of Yipee have gone up significantly after
the campaign.
 Private dairies fight price war with freebies
Private dairy owners in Southern India are including freebies as a marketing strategy to combat
competition from milk cooperatives and retain customers. Further, private players have been forced to
reduce product prices to be in competition against the subsidy-supported milk cooperatives, who can sell
their products at lower rates. However, the inclusion of additional quantities of milk per packet at no
extra charge and freebies such as coffee sachets, are putting pressure on the profit margins of the private
operators.
Investment News
 Coca Cola takes minority stake in Suja
Suja Life LLC has sold minority stakes to Coca-Cola Co. and to Goldman Sachs Group Inc's merchant
banking division. According to a Reuters report, Coca-Cola acquired the minority stake for USD 300
million. Coca Cola will now distribute Suja’s smoothies and organic juices. The deal is I line with Coca-
Cola's strategy to enter fast-growing beverage categories to mitigate sluggishness in its soft drinks
business.
Food Processing News
August 15, 2015 – August 21, 2015

2.  FAL to enter the fruit juice market
Australian food and beverage company, Flavor and Life (FAL) intends to enter the Indian market by
October with its packaged brands 'Coco Joy' and 'Juiced Up'. Following a direct distribution model, it will
first enter the top 10 cities, followed by Tier II cities. Investment of USD 3-5 million dollars is planned this
fiscal for this purpose. 'Coco Joy', containing coconut oil and coconut milk, will be priced at INR 60 per
250 ml can and the juices at INR 60-80 per can. The company also aims to introduce vitamin water,
isotonics and nutrition bars by next year. Increasing health-consciousness among Indian consumers is
expected to drive the company’s sales. The market is growing at about 15 percent annually.
 Amul announces cheese plant in Gujarat
Top dairy product brand Amul announced investment of INR 600 crore to set up a Greenfield cheese
plant in Palanpur, Gujarat. This will triple its cheese output and increase its current 65 percent share in
the Indian cheese market. The new plant will produce mozzarella and processed cheddar cheese initially.
The company plans to reach out to restaurants and hotels, which are dependent on local brands for
cheese. Amul intends to continue focusing on the domestic dairy products market, which is growing in
double digits.
© Gyan Research and Analytics Pvt. Ltd., 2015 2
Food Processing News
August 15, 2015 – August 21, 2015
Weekly Snapshot
Exports of Key Processed Foods
Processed Products FY2014 FY2015
Basmati Rice 4,866 4,518
Non Basmati Rice 2,918 3,335
Guargum 1,980 1,552
Wheat 1,556 829
Other Cereals 194 202
Floriculture 143 145
Fresh Fruits and Vegetables 1,451 1,222
Animal Products 5,313 5,411
Other Processed Foods 4,181 4,068
Source: Agricultural and Processed Food Products Export Development Authority

3. © Gyan Research and Analytics Pvt. Ltd., 2015 3
Food Processing News, August 15, 2015 – August 21, 2015
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