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GUNJAN V JAINVKC NUTS P LTD (INDIA)
Presentation Roadmap
• Knowing/Understanding Dynamic Indian Economy
• Changing India
• Key Consumption Trends
• Food Retail
• The “Business” of Walnuts
India – Dynamic EconomyLarge, High Growth Market
Knowing IndiaIndia At a Glance
Population 1.35 Billion
Consuming Class 250 – 300 Million
GDP Growth Rate 7.5 % (2018 Est.)
Polity Democracy
Food Patterns Diversified
Agriculture Core
Regulatory WTO Signatory
Potential Huge
Understanding India• Strong Economy
– Resilient to the Current Crisis• 200 Million Consumers!
– Unified by Aspiration• Young population
– Part of a Global Village• Small Families
– Open to change• High disposable incomes
– Willingness to spend• Media Revolution
– Part of a Global Village• Imported Foods
– Niche to Mainstream
India – A Dynamic Economy• World’s fastest growing Economy, grew at 7.8% in FY 18-
191
• Country of 1.3 bn2 population of which nearly 65% is
younger than 353
• During FY17-18, India’s Foreign direct investment (FDI)
stood at US$61.96 bn;
• 3rd largest startup base in the world with over 4,750
technology startups4
• Urbanization, growing middle class, & increasing
consumer spending are the driving forces of growth
• Government initiatives – such as ‘Make in India’, Smart
Cities, Infrastructure Development
6
7,1% 6,7%
4,8%
2,2% 2,0% 1,7% 1,6%0,9%
0,3%
IndiaChina
Asea…Mexi…
U.K.Euro…
U.S.Japan So
ut…
GDP growth rates (2016)
India year ends March 31, 2017ASEAN-5: Indonesia, Malaysia, Philippines, Thailand and Vietnam. Source: IMF, Fortune
Source: 1World Bank; 2Doing Business in India, 3Future of India, PWC, 4Financial Express, 5India Brand Equity Foundation
35%
65%
Rural Urban
Rural / Urban Consumption
Split
Source: Crisil Outlook, Fiscal 2017
65%
35%
Rural Urban
Rural / Urban Population Split
Source: India’s Growth Paradigm, EY
383
593
2014 2017
Growing Retail Sector• Emerged as one of the most dynamic & fast-paced
industries due to the entry of several new players
• Accounts for 10%+ of the country’s GDP and ~8%
of employment6
• Ranked 1st in the 2017 Global Retail Development
Index (GRDI) rapidly progressing from a 20th
position in 2014
• Benefited from rapid growth in e-commerce
wherein 100% foreign ownership is allowed in B2B
e-commerce businesses & for retailers that sell
food products
Retail Market size (USD bn)
Source: Retail Report, India Brand Equity Foundation
Source: 6India Brand Equity Foundation *Others include: apparels, accessories, footwear, jewellery, time-pieces and time wear, home & furnishing, consumer durables & IT, health and beauty Source: India Food Report 2016
204 238 278 321 368 424518 490 534 600
1300
2000 2002 2004 2006 2008 2010 2012 2013 2014 2015 2020
CAGR 7.5%
CAGR 15%
India’s Food & Grocery retail (USD bn)
Food & Grocery retail
Others*
Source: India’s Food Service Industry: Growth Recipe, KPMG
Retail Industry, 2016
60-65%
30-35%
7
Food Processing Sector• Food processing industry is one of the largest industries
in India contributing to 14% of manufacturing GDP
• Ranks fifth in the world in terms of production,
consumption & exports9. In FY17 exports stood at
USD1.3 bn10
• Major food processing sector are grain milling, sugar,
edible oils, beverages, fruits & vegetables processing &
dairy products, with rice mills accounting for the largest
share of processing units
• 100% FDI is permitted under the automatic route in
food processing industries - between April 2000 &
December 2016, FDI in food processing industry was
USD7.5 bn11
8
Source: 9, 11 Food processing, IBEF, 10Food Processing, Make in India
Source: Food processing, IBEF
India’s food processing industry (USD bn)
258
482
2015 2020
CAGR 13%
Source: Food processing sector, IBEF
Organised sector has largest share (FY2016)
Organised 58%
Unorganised Sector & Small Scale Industries
42%
Food Industry in a Glance
• India’s Total Food Market: US$ 120 Billion– Projected Size: US$ 900 Billion by 2020
• Processed Food Products: US$ 60 Billion– Projected Size: US$ 300 Billion by 2020
• Average growth rate: 14%• World Ranking: 6th-Largest food consumer
– Projected Ranking: 5th-largest consumer food market by 2025
Indian Economy Expected To Touch Almost US$ 2.2 Trillion In The Next 3 Years In Real
TermsGDP $
1990 2000 2010 2015 2018Trillion
US 6.4 10.8 15.7 16.8 20.5China 0.4 1.3 5.6 8.6 13
Japan 3.3 5.2 5.5 5.9 4.9
Germany 1.9 2.1 3.6 3.9 3.9
France 1.3 1.5 2.9 3.1 2.7
UK 1.1 1.6 2.4 2.6 2.8
Italy 1.2 1.2 2.3 2.4 2
Brazil 0.5 0.7 1.9 2.4 2.1
India 0.4 0.5 1.4 2.2 2.8Russia 0.5 0.3 1.7 2.1 2.5
India has been
Ranked 11th
in the Global FDI Confidence Index 2018, making it the
2nd highest Rankedemerging market for FDI.
Highest population In The Key Consuming Age Group Of 15-59 Years
• Unlike any other top-10 economy (including China), India will have the lowest median age and the trend will be even more pronounced by 2020 as most of the populations age even more rapidly
• This population is more aspirational and aware and with higher spending power and will consume more number of categories than their parents
Median Age : 26 Median Age : 29
364 369492 528
229 25787 96
2010 2020
0-14 years 15-39 years 40-59 years 60 years +
The Indian Market
“THE” most exciting, challenging and complex market in the global food business
• Food mostly eaten at home and eating out considered an excursion
• Availability of ‘Ready to Cook’ (RTC) and ‘Ready to Eat’ (RTE)
• Ready to Cook food still an occasional phenomenon
• ‘Mummy ka magic’ retained as this would define her position and importance at home
2012 2019
• Manifold increase in eating out frequency
• RTE/RTC but with “health”
• More experimental foods
• Fresh consumption increasing
• An emerging generation of Indian women that will have neither the necessary knowledge nor the time to prepare traditional meals on a regular basis
Changes in Consumption Mindset
Rich Dad
Poor Dad
India and It’s Rich Dads• A growing middle
class of 250-300 million
• Spread across the country
• Dual Household with high disposable incomes
Retail Policy
• 100% FDI allowed in Cash & Carry• 51% FDI allowed in Single Brand Retail• 0% FDI in Multi Brand Retail
Changing Consumption Priorities… Yet Food & Grocery To Be By Far The Biggest For Decades To Come
Savings & investment9%
Clothing, footwear and accessories
5%
Consumer durable/appliances
7%
Vacation3%
Eating out6%
Movies and entertainment3%
Books and Music4%
Food and grocery57%
Home textiles1%
Personal care items5%
z
Source: NCAER
Indian Consumers
Health & Wellness – a major trend, here to stay
Statement 2018/ 2008
I think fast food is all junk
I often worry whether my family is getting enough nutrition
I consider my diet to be very healthy
Source: TGI data, IMRB
“of late awareness
actually has increased”
“don’t look muscular, look a
little bit thin and be healthy”
“if you have healthy body you will have a
healthy mind”
“We should be health conscious at this age, less sugar
consumption, parents are diabetic”
“nutritious, hygienic, ready to eat”
Changes in Indian Retail
• Retail revolution even without the direct entry of global retailing giants.
• Several new hypermarkets, supermarkets springing up across the country funded by domestic investment
• Likely investment in retail and supply chain to the tune of $22 billion in the next five years. Over 600 retail malls are being planned across the country.
Changing Supply ChainD
omes
tic
Farmer Consolidator Trader Distributor
Sub-DistributorRetailerConsumer
Impo
rted
Importer
Distributor Retailer Consumer
Changing Retail
India & Walnuts
Walnuts holds an enviable place in consumer beliefs – on the sweet spot of polarities
Nutritious
Fresh
Natural
Traditional
Popular
Ingredient/Complement
Light
Familiar
Tasty
Packaged/Hygienic
Convenient/Long shelf life
Contemporary
Premium, Aspirational
Complete, Stand-Alone
Satiating
Special
India & Walnuts
• Crop- Harvesting in September-October• No Variety-Mix• 100% Grown on Hills• Generally in wild, no specific orchids
Walnut Production-India
97,5
1 1 0,5
Jammu & Kashmir Himachal PardeshUttrakhand Arunachal Pardesh
The Kashmir Walnut Crop• Domestic, unplanned industry in
Jammu & Kashmir where all the walnuts are grown
• Areas in Kashmir: North (Baramulla, Ganderbal, Kupwara, Handwara), Central (Srinagar) & South(Anantnag, Shopian, Kulgam, Pulwama)
• No new area under cultivitation
• Species: Juglan regia
• Taste: Strong, slightly bitter taste and are high in linolic acid
Walnuts in Kashmir Region• Color: Walnuts in the northern area are comparatively lighter in color
because of cooler conditions, than others• Soil Conditions: The saline condition of the soil is higher, therefore,
stronger taste, as in other similar Persian varieties• Cracking facilities: Hand-cracking • Yield per hectare: 1.5 -2.0 tonnes
INDIAN WALNUT PRODUCTION
2017/2018 2018/2019
COUNTR
Y
BEG.
STOCKCROP
TOTAL
SUPPLY
ENDING
STOCK
BEG.
STOCKCROP
TOTAL
SUPPLY
ENDING
STOCK on
march
2019
INDIA 0 37,000 37000 2700 2,700 34000 36,700 5500 tonnes
Production of Walnuts
In Metric Tonnes
43000
3500033000 34000
3700034000
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
India Walnut Crop 2017-18 Distribution
Domestic; 24000; 65%
Export; 10300; 28%
Carry Forward; 2700; 7%
Consumption of Walnuts in India
In Metric Tonnes
WIT
H
MAR
KETI
NG
SU
PPO
RT
2800032000
4400050000
100000
130000
0
20000
40000
60000
80000
100000
120000
140000
2015/16 2016/17 2017/18 2018/19 2023/24 2023/24
Source of Walnut Sold 2018
Domestic; 54%USA; 33%
Chile; 13%
Domestic USA Chile
2400014000
6000
In Metric Tonnes for FY 17-18
Import Duty
• Before 23rd May 18 - 30% + 10 %=33%• Present -100 % + 10 %=110 %
Impact of Tariff Increase
NONE
Short Term
International Prices Reduction
Origin(US$) India(US$) Duty
USA Crop 2017
1.75 2.27 30%
USA Crop 2018
1.00 2.00 100%
Chile Crop 2017
4.00 5.2 30%
Chile Crop 2018
2.8 5.6 100%
Short Term Reasons:
International Soft Drinks
Cashews
WalnutsAlmonds
Pistachio
THE GREAT INDIAN POPULATION & PENETRATION PYRAMID
For Illustration Only
Indi
an P
opul
atio
n
Long Term Impact
Growth Trajectory Slowdown
100000 Tons3 years 5 years
What India Needs
Marketing Campaigns & Support
India China
Population 1.35 Billion 1.41 Billion
Production(InclImports)(Tonnes)
35000 900000
Consumption(tonnes) 50000 850000
Per Capita Consumption(pound/year)
0.01 0.62
Future Production(Tonnes)
30000 1000000
India V/s China
Total consumption of Tree Nuts
• Cashew – 280,000 MT
• Almonds – 150,000 MT
• Walnuts – 44,000 MT
• Pistachios – 25,000 MT
28%
63%
5% 4%
Almonds
Cashews
Waln
uts
Pistach
ios0%
10%
20%
30%
40%
50%
60%
70%
Almonds
Cashews
Walnuts
Pistachios
Almond & Walnuts are on inshell basis
Walnut Promotion
•
Are you the lion or the gazelle?
Indian Nuts & Dried Fruit Trade
Really it does not matter ………………
