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“Vadilal has carved a niche in frozen foods industry”
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Monday, 23 December, 2013, 08 : 00 AM [IST]
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Vadilal Industries Ltd, a leading name in the ice cream industry, entered the frozen foods, ready-to-eat and ready-to-serve markets a couple of years ago. In an email interaction with Anurag More, Rajesh Gandhi, MD, Vadilal Industries Ltd, talks about the ice cream, frozen foods, ready-to-eat and ready-to-serve spaces, the food processing sector and more. Excerpts:
Brief us about the current status of food processing industry in India. What is your share in the market? Currently, the Indian processed food market is estimated at US$121 billion and expected to grow at 10% per annum to scale up to US$194 billion by 2015.
Demand for processed foods is increasing rapidly due to rising urbanisation and income levels in India. The preference for healthy and functional foods in the international markets with expanding organised retail, and private label penetration, there is steep rise in the demand for Indian processed food in international markets too.
Moreover, a lot of Indian processed food players are focussing their efforts and resources on brand-specific marketing to generate wider acceptance of products in foreign markets.
New product launches is one of the major trends followed aggressively by key industry participants, making innovation the key growth factor. Consumers all across the world show as much preference for branded products in frozen foods category as other consumer goods. And the industry is witnessing an emergence of strong brands in the category.
Vadilal commenced processed food division in 1991. The company is exporting to USA, Canada, the UK, Kuwait, the UAE, Singapore, New Zealand, and Australia under the brand name of Vadilal Quick Treat and are present in more than 45 countries across the world. The company’s market share stands at around 15 per cent in the organised sector. The company’s processed food division is growing at 30-35% per annum. Within a decade, in India we have managed 50,000 retail outlets, 700 distributors and 40 stock points.
According to you, are the current rules and regulations apt for the industry? Given the size and scope of the processed food industry, it has been key focus for Government of India. The government has framed various encouraging policies and regulations to develop the commercialisation and value-addition in the industry.
However, in order to raise the standards of the Indian processed foods industry to compete with international players, there are quite a few challenges that need government’s attention.
One of the major challenges for Indian players is an adequate and effective cold chain network. The lack of not only efficient cold chains, modernised packaging centres, and reduction of wastage are some other issues that are hurting the players as well as the industry on the whole.
Moreover, continuous power supply in the country and better transportation facilities also form a major concern for the industry which needs government support as well as investments.
How do MNCs look at Indian food processing marketing? MNCs see a huge opportunity in India. Growing middle class, changing food habits and lifestyles, increasing number of nuclear families and working women are some of the growth triggers for the exponential rise in the Indian processed food industry which is growing at 30-35% annually and is expected to maintain its growth momentum in the foreseeable future.
Further there are very few organised players in India in the Indian processed food industry, so the market potential for MNC players is huge.
Any plans to launch new products in food processing? Establishment and expansion of the new products launched is one of the major trends followed aggressively by key industry participants, making the market growth a natural phenomenon.
Vadilal has continued to add new products in its offering depending upon the taste and preferences and valuable feedback of its customers and upgrading technology. In 1990, the company started with processed frozen mango products and now it offers over 60 products ranging from mango pulp, IQF green peas, sweet corn and other vegetables. It is also focussing its efforts on developing its frozen range of IQF vegetables and ready-to-eat (RTE) and ready-to-serve (RTS) products among many others.
Each day, the company strives for more, spares a few more minutes and walks an extra mile so as to provide greater convenience to our consumers. That is why, each year, the company comes up with an array of new products that add value to people’s lives by saving time, eating healthy and providing greater convenience.
With government allowing 100 per cent FDI in food processing, how will it help the industry? The food processing sector is among the most attractive sectors for FDI with food production expected to double by 2020. The estimates of the Confederation of Indian Industry (CII) show that the food processing sector has the potential of attracting $33 billion of investment in 10 years and generate employment of 9 million people. At present, large investments are seen in food & food processing technologies, skills and equipments.
Declared a priority sector, food processing has been allowed a 100% FDI by the Government of India. The Special Economic Zones (SEZs) established by the government do not impose duty on imports of inputs, enjoy simplified fiscal and foreign exchange procedures. The sector is getting special attention from foreign investors through these SEZs. More foreign attention means superior market mechanism and infrastructure can be created. As a result, the Indian players can meet requirements of international trade that will make the Indian food industry more competitive on the global front.
FDI in the sector will also bring along latest technological developments besides sophisticating the Indian industry. It will open up new avenues for the Indian players for new product development & enhancement as well as internal operational stability. In addition to this, it will also expose the industry to various international trends and changing consumer preferences.
What kind of support does the industry seek from the govt? The government should adopt a stable policy for encouraging private trade procurement. A liberal credit policy for farmers, large investments in developing infrastructure for storage and preservation of fruits and vegetables to avoid wastage, industry-friendly movement of the grains are some of the pre-requisites to achieve the desired results in the food processing sector in rural India.
The government should make an effort to increase participation and investments towards improving productivity from the Indian farmers that form the backbone of the industry.
Can you tell us about your product offering in terms of food processing? With the amplification of needs coupled with wide acceptance of ethnic products, Vadilal has carved a niche in the frozen foods industry. Interestingly, some of the Indian vegetarian products have made inroads in the mainstream consumption as well.
Globally, Vadilal Quick Treat has adopted a product-focussed strategy. Started with processed frozen mango products in 1990, the company now offers over 60 products ranging from snacks, Indian breads, curries to Indian vegetables & fruits.
Vadilal Quick Treat offers products in almost all the segments of frozen foods. It ranges from Indian traditional meals, delightful Indian breads and snacks to mouth-watering Indian curries. It also has for the consumer, an extensive range of ‘Individually Quick Frozen’ vegetables and fruits.
Each category offers a wide range of products to choose from. For example, Indian breads have offerings like parathas, naans, kulchas and rotis; snacks like samosas, spring rolls, Gujarati snacks, harabhara kebab and so on. There are more than 20 curries and rice products in the curries category.
Vadilal Quick Treat offers an extensive range of frozen vegetables. Some of which are consumed across the world by NRIs as well as mainstream consumers. The product list includes vegetables such as green peas, sweet corn, mixed vegetables, okra, pigeon peas, lima beans, French beans, Surati papdi lilva, bitter gourd, chillies and so on.
Brief us about your expansion plans. Vadilal Quick Treat has been able to find a successful footing in western India with its processed foods products like mango pulp, IQF green peas, sweet corn and other vegetables. With its frozen range of IQF vegetables and RTE and RTS products, Vadilal has been operational in the states of Rajasthan and Maharashtra besides Gujarat and is now expanding to Delhi and the northern states.
In the next five years, the company aspires to be one of the leading frozen foods brands of India, with a special interest in modern retail for which Vadilal Quick Treat is strengthening its availability at all leading hyper markets and cash and carry formats in the areas of its presence.
In 2012-13, we entered new territories like Delhi, Uttar Pradesh, and Chhattisgarh and are keen to establish ourselves in other territories of India. We have extended our market reach to build a stronger supply chain network by appointing new distributors in various states.
On promotions and brand building front, we are all set to capture greener pastures in India as well as abroad with efforts directed towards creating a stronger brand presence. We are consciously working towards coming up with an array of new value-added and time-saving products that are also healthy and convenient.
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