Indira Group of Institutes - indiraiimp.edu.in · Editorial P. G. Vijairaghavan The editorial in this year’s final issue does not want to be another placebo to simulate the feel-good

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The food processing sector is the newsunrise industry on the horizon in theIndian economy. It encompasses a varietyof gastronomic options which are fastbecoming a need for the household in afast-track economy.

Editorial P. G. Vijairaghavan

The editorial in this year’s final issue does not want to be anotherplacebo to simulate the feel-good factor in the country.

Yet, first, the good news. Infrastructure growth this year, has seendouble digits in November, 2009 which is the one big cheerful news itemin an otherwise forgettable trimester of a year. GDP growth is forecast ata commendable 7.75% by the Finance Minister. Which means more jobs,more demand, higher production, greater investments and all roundprosperity. Wish it really worked that way. Read on why all the goodnews can hardly convert into good cheer for the common man. The readermay not necessarily agree with what follows, but the facts cannot beignored….

“Depression” is a word described by the dictionary as i) a conditionof ‘ low spirits’, or ii) a hollow, sunk place, or iii) the time when businessis depressed, or area of low barometric pressure..

How strange that the people of India have been suffering the effectsof depression on all these counts during the last few months! In a waythe citizens are inured to the depression of the first kind going by thequality of public administration that they have been getting for sometime now. Public health gets a measly 0.9% of GDP in India, just aheadof Burundi, Myanmar, Pakistan and Guinea; education another 2 to 2.5%,social security for the poor is still a far cry. This is reason enough fordepression to set in, but while we deal with the abominable state of theaverage Indian, it does not seem like our politicians have taken theircommitment to serve the citizen too seriously. How else does one explainthe fact that for over 3 weeks after declaration of election results inMaharashtra, our lawmakers were unable to form a Government; allbecause of heavy bargaining and lobbying for positions and posts in theCabinet. And thus crucial projects and development work which are theresponsibility of the Government remained stuck in political red-tape,recrimination and blackmail. All this when the State is going throughone of its worst crises in the form of drought and unseasonal heavycloudbursts that have destroyed even the few crops that managed tosurvive the massive drought. And it is not just the three weeks post-results, because all sanctions for development work came to a standstillfrom the date of the notice of election issued by the Election Commission,about 45 days prior to the election date! Which means Maharashtra lostover 70 crucial days of decision making and emergency measures to saveits people from the vagaries of the climate. Which again means that thelackadaisical attitude of the powers that be actually delays therehabilitation of the common man in the economy putting less and lesspurchasing power in his hands, willy nilly affecting business and industryin the country! If this is the state in a developed State like Maharashtra,

Winter 2009 - 3tapasya

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How else does oneexplain the fact that forover 3 weeks afterdeclaration of electionresults in Maharashtra,our lawmakers wereunable to form aGovernment; all becauseof heavy bargaining andlobbying for positionsand posts in the Cabinet.

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one can imagine the fate of the common man in the less developedpart of India. Reason no. 1

If this was not reason enough for depression of the first kind, wehad the second form of depression, the sunk and hollow place – inmore ways than one – because of the extreme and unexplainablechanges in weather conditions this year. Severe dry conditions whenit should have been pouring from June to September, and as if enoughdestruction was not caused to the crops and farmers’ livelihoods, thestory of the depression was complete when it was followed by torrentialand utterly numbing quantities of rain over most days in October!(Max. 138 mm in one day!). This left a considerable hollow in thealready sunken living of the farmers. One can only hope that thisweather behaviour is not repeated next year, or the possibilities seemquite daunting. Forget GDP growth, imports of food items will makeanother depression in our resources! Reason no.2

One does hope that the third incarnation of depression will liftthe fog from the business prospects in the coming months especiallyafter the country’s adept handling of the economic crisis of the pasttwo years. Hope springs eternally in the human breast, of course. Yet,what has caused considerable ‘depression’ in the minds of the averageIndian is the way the climate change jamboree was conducted at Cop15. While some countries have upheld the Copenhagen Accord as agreat step forward, the others have taken it to task for it actually beinga retrograde document. If such a historic session that can causediametrically opposite perceptions to an essentially common humanproblem (human-created?) as climate change where it would be normalto expect a common focus of the entire humanity, one can excusethose who do suffer from depression of the third kind. Though if thestatements coming from the developed world are anything to go by,we may have more to rue about in the coming year when the Headsof Government meet once again for another go at caging theobstreperous beast that climate change has now become.Reason no. 3.

This issue of Tapasya takes a look at the Food Processing industry,where we try and bring some erudite thinking on the state of theIndustry and suggestions on the way forward. This is one industrythat has been low key in profile but with potential to top the growthcharts among segments, for the simple reason that when families turnnuclear, and incomes rise, when the housewife starts to earn too, andis hamstrung by the lack of time to cook for the family, which stillneeds to eat, pre-cooked food is what comes to the resue.

Notwithstanding anything above, Tapasya wishes you the best ofgood living in 2010 !

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One does hope that thethird incarnation ofdepression will lift thefog from the businessprospects in the comingmonths especially afterthe country’s adepthandling of the economiccrisis of the past twoyears.

Winter 2009

All opinions expressed in the articles are those of the authors.The Editor, the Institute and the Publisher bear no responsibility for the same.

All opinions expressed in the articles are those of the authors.The Editor, the Institute and the Publisher bear no responsibility for the same.

Editorial – P. G. Vijairaghavan 3

tapasya Bears FruitUtterly Butterly Delicious : Amul Story – 6P. G. VijairaghavanProfiling B. M. Vyas, Managing Director, Gujarat 11Co-operative Milk Marketing Federation (AMUL)V Kurien : Anand’s Man of Destiny – P. G. Vijairaghavan 18

In Focus : Food Processing IndustryCurtain Raiser : Food Processing Industry – P. G. Vijairaghavan 20Indian Food Processing Sector : Building Bridges Between Industry 22and Agriculture – Vinod KotwalPackaging : Delivering Good Food, Looking Good – G C P Rangarao 26Challenges in Indian Food Processing Industry – Dr. Smita Lele 31Food Processing Industry – Piruz Khambatta 37Indian Seafood Industry – An Appraisal – Sandu Joseph 39Processed Food Industry : The Unrealized Dream – Gokul Patnaik 48A Glimpse into the Indian AlcoBev Industry – Dr. S. Puri 52Retail : Private brands on the prowl – India Knowledge@Wharton 55MiscellaneaIn a Nutshell 59Hot Air on Climate Change at Copenhagen - P. G. Vijairaghavan 61Health, Fitness & GroomingLifestyle Diseases –Ayurvedic Aid – Dr. Balaji Tambe 63Events @ Indira 67

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Utterly ButterlyDelicious :AMUL StoryP. G. Vijairaghavan

The Genesis

When Jawaharlal Nehru is reported to have famously saidsoon after independence, that the public sector industrialunits would be the temples of modern day India, he probablydid not have in mind, Amul, or the dairy sector, which isalmost larger than life. One is tempted to say, if, however,these industrial units are indeed the temples of the nation,surely then, Amul must be the presiding deity of thesetemples!! Creditable though the PSUs role in modernizingIndia may be, to my mind, the story of Amul needs to top itall, for various reasons that make the Amul co-operative

experiment stand out and apartfrom any of these units.

For one thing, the farmers’ milk co-operatives in Gujarat are the sumtotal of the will, commitment andthe aspirations of over 2.7 millionfarmers spread over 14000 VillageDairy Co-op Societies. For another,going from a milk starved nationto a milk-rich nation over a 25 yearspan is an achievement thatperhaps might take some time toimprove upon for any industry.Again, if the relative progressmade in the lives of themembership of the dairy co-operatives is any indication,

perhaps the belief that these are indeed thepresiding deities which have blessed thesmall and medium farmer with the largesseof a prosperous and fulfilling life, will onlyget strengthened. Besides, the co-operatives, as the name suggests enjoyedno capital assistance from the Government,which could perhaps account also for theunparalleled success of the movementtoday!

However, to get a first hand realization ofthe magnitude of the change that Amul haswrought in the lives of the villages, one mustactually meet the actors in this hugelysuccessful drama of hard work, and,confidence of the farmer in the ability ofone man to change the course of their livesfor the better.

One wonders if the co-operative movementin the dairy industry which started inGujarat was in reality an extension of thejust then concluded freedom movement inthe country. Because the main players in thispatriotically charged drama were indeedpart of the larger movement forindependence – like Sardar VallabhbhaiPatel, Tribhuvandas Patel and Morarji Desai,who was to play an important role inshaping much of the Gandhian culture postthe Mahatma. The Amul story in many waysis a typical replay of the profiteering, divideand rule and exploitation of the farmers bymoneybags of the day with the Britishersat the back. Kheda District, known for itsdairy industry was the home of the Polsonbrand of dairy products. The company hadthe contract for supply of milk to theGovernment Milk Scheme at Bombay.Traditionally the villagers were suppliers ofmilk to the Polson plant at Anand, throughmiddlemen and contractors, who incollusion with the company polished off thebutter, leaving the the poor farmer to fendfor himself. When the company did not passon the benefit of higher prices being paid

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One wonders if the co-operative movement inthe dairy industry whichstarted in Gujarat was inreality an extension ofthe just then concludedfreedom movement inthe country.

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by the British Government for the milksupplied to them, the farmers realized thatthey were being taken for a jolly cattle-rideand decided to do something about it.Sardar Vallabhbhai Patel, being from theDistrict was approached for some relief, andthe iron man that he was, he had only onesuggestion - Polson ne kadhi mukho!(Throw out Polson. Take your future intoyour own hands!) if necessary by refusingto supply milk to the Government of theday!

Thus began the march towards theempowerment of the rural farmer inGujarat and it was left to Morarji Desai, astaunch Gandhian and his trusted assistant,Tribhuvandas Patel to take the missionforward.

The Kaira District Milk Producers Union wasformed in 1946 on the basis of the mandatereceived by Tribhuvandas Patel from thevillagers. The KDMPUL was charged withthe function of marketing the milk suppliedby the village societies which were formedand went into business in all earnestness –collecting milk from members in the villagesand the payment was made not on quantity– but on the quality of milk. Two village co-operatives and a sprinkling of farmers madethe initial beginning in 1946 – producingaround 250 litres a day. The figure soonswelled to 450 members and 5000 litres perday by 1948.Thus higher the fat content, thebetter was the price paid for the milk. Milkcollected in the morning was paid for in thenext session. But the problems had only justbegun. Milk production, which oscillateswith the rise and fall in temperature, wouldbecome volatile with below-demandoutput in summer months and excessproduction in the cooler times. Both thesecreated problems of earnings for the poorfarmer, since he never got the benefit ofhigher prices in summer, nor could he sellhis entire production in winter. With no

facilities for storage, he was reconciled to the sale of theexcess milk produced to the wily middlemen who made are-entry, buying up the extra milk at abysmally low prices,exploiting the poor producer no end.

The way out for the co-operative was to set up a processingplant to manufacture butter and milk powder from theexcess milk brought in by them, which the Governmentapproved and with financial assistance from UNICEF andthe Government of New Zealand, under the Colombo Plan,the project to set up a Rs 50 lakh factory was drafted andthe foundation stone laid by the then President of India, DrRajendra Prasad on 15 November, 1954. Less than twelvemonths later, on 31 October, 1955, the Prime Minister ofIndia, Mr Jawaharlal Nehru visited Anand to inaugurate theplant, providing a tremendous impetus to the co-operativemovement in India. Thereafter, there has been no lookingback for the cooperative movement in the dairy industry.

It was not just collecting andselling milk from the farmers thatset the Societies apart. It was theprovision of integrated servicesthat the Society provided to thefarmer that made it an inseparablepart of his life. For the cattle, thereis a veterinary doctor available24x7 and his services are availablewithin hours at a nominal fee ofRs.50 – irrespective of the distancefrom the Society. The artificialinsemination centres of theSociety take care of theproductivity of cattle with state ofthe art facilities for preservation ofsemen of healthy cattle.

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The KDMPUL wascharged with thefunction of marketingthe milk supplied by thevillage societies whichwere formed and wentinto business in allearnestness

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Each villagesociety providess u b s t a n t i a lfunds from itsrevenues forprovision ofbasic amenitiesfor the village –such as

improvement of roads, libraries, schools, hospitals, etc.helping the State in the discharge of its primary functionstowards its citizens.

The Milk Co-operative Structure

The unique quality of the Co-operatives in the milk industryis in many ways symbolic of what India is trying to achievefor its citizens since independence. All for one and one forall can very well be the motto of the sector. It is a three tierstructure, that recognizes no bigwig, or ignores no marginalfarmer on account of size, it practices no discrimination byway of caste, or religion, sex or occupation. Every memberof the village level society, so long as he/she owns a cow orbuffalo, is entitled to a single vote irrespective of the numberof cattle or the quantity of milk supplied by him or her.Members elected a Managing Committee, which in turnelected a Chairman and employees were appointed tooversee the functioning of the Village level society.

The second tier in the structure was the District level co-operative which was composed ofthe Societies in the District whichelected its Board of Directors, fromamong the Chairmen of the VillageLevel Societies. The Board electedits Chairman and appointed aManaging Director, typically anemployee of the Organisation, anda professional to manage theDistrict Organisation.

With operations growing fromyear to year, the need for an apexorganization to liaise with theGovernment of the day requiredthe formation of a Federation. Thiswas achieved with the third tier ofthe structure formed in 1974,

called the Gujarat Co-operative MilkMarketing Federation which markets theentire produce of the District Level Societiesunder the brand name of Amul.

The Growth Story

The success of the co-op movement inGujarat is rooted in the marriage of soundeconomics to a commitment to social good.The interesting aspect of this success is themanner in which the interests of theconsumer, the supplier and the‘middleman’ (in this case the Societies) havebeen seamlessly aligned so that none ofthese entities feels left out of the valuechain. The supplier’s interests are taken careof with the Union buying every litre of milkbrought in to their doorstep and a price thatis equitably pre-decided on the basis of thefat content in the milk paid to him; his cattlecared for by a team of ever-availableveterinary doctors based at Districtheadquarters for a small fee; (in fact, it issaid that a lady member of the Society onceremarked that cattle were at times gettingbetter medical attention than humans inthe village – which responsibility was notthe Society’s!) cattlefeed manufactured bythe cooperatives is available at all times sothat even during stringent times, cattle arenot left to the vagaries of the weather.

For the consumer, Amul has been the storyof how a ‘desi’ organisation alone canfathom the needs of an Indian home andproactively act to provide them. Thus, Amulhas been a source of consistent quality,timely availability and at an agreeable price.Not to be outdone by the multinationals inthe country, Amul has been at pains to reachout to consumers through market researchand introducing newer products to keep theconsumer from straying.

The Societies themselves have beenworking overtime to ingest technology, andcontrol costs, in a 24x7 endeavour to add

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For the consumer, Amulhas been the story of howa ‘desi’ organisationalone can fathom theneeds of an Indian homeand proactively act toprovide them.

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value to the consumer’s aspirations and thesuppliers wallet. The dairy plants areexamples of exemplary hygienemaintenance and professionalmanagement ensures that output never isallowed to chase demand. Products thatdefy traditional beliefs, and yet deliver thatethereal object called value, make the Amulbrand the envy of even multinationals. Forinstance, Amul was the first in the world tomarket skimmed milk powder and buttermade from buffalo milk; a product longconsidered by the West as being impossibleto produce. Not only was the West cynicalabout the possibility of successfullyconcluding the project, it made attempts toderail its progress. But the combined will ofthe members of the Federation led by Dr. V.Kurien, was too much for the multinationalsto take on.

It would be very shortsighted to treat Amulas the story of growth in real terms alone.It is much more than mere numbers, a storyof progress in human terms. It is amovement that has taken the world bystorm. And to realize this one needs to visitthe town of Anand and meet a cross sectionof the members who contributed to itsimmense success and share in the manyflavours of growth. A typical society was theNavli Co-op Milk Producers Union Ltd. a fewkilometers away from Anand . The Secretaryof the Society is Nileshbhai C Patel, who hasbeen in the Chair since 2000. His father wasa member of the Society when it wasformed in the fifties. His pride in running a

Society that today has ISO certification is justified becausethe entire village has found prosperity – almost everyhousehold of the total 1400 boasts of an educatedmember who is based in the United States. More than95% of the 1625 acres is irrigated and a number of cropsand vegetables are grown here. The village procures anaverage of 1500 litres of milk a day. Of the nearly 1100members in the Society, almost 1000 own a maximumof 2 hectares of land and only about 57 own more than 2

hectares. As against a net profit of Rs 11,095 in 1953-54,the society has made a pfofit of Rs 1,58,465 in 2008 raisingthe average per litre bonus plus price difference paid tomembers from Re 0.01 in 1954 to Rs 2.83 in 2008!

Figures apart, the Society earmarks a minimum of 10% ofnet profit for community related projects every year andhas contributed to such developmental projects as buildingof teachers quarters, general hospital, garden, providing milkfor children in kindergarten, Family planning initiatives,earthquake relief etc.

The Gujarat Co-operative Milk Marketing Federation whichis the apex organization of co-operatives has charted ablazing course of operational success during the 35 years ofits existence. With a fully owned Mother Dairy plant atGandhinagar, a string of 30 dairy plants and cattle feedmanufacturing plants with capacity exceeding 3200 mt/dthe story of GCMMF is one of continuous growth. All plantssport state of the art machinery and use of IT which ensuresnot only accuracy, and speed ofoperation, but also thoroughhygiene in treatment of such ahighly perishable commodity, in itsprocessing. With a membershipexceeding 2.7 mn, and over 14000Village Societies under its fold, itis perhaps the single largest co-operative running on such a scaleanywhere in the world. BeingIndia’s largest exporter of dairyproducts is a distinction that sitslightly on its head, because itbelieves in achieving much moreif its Mission 2020 is anything togo by.

The success of GCMMF promptedthe setting up of the National Dairy

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...Amul was the first inthe world to marketskimmed milk powderand butter made frombuffalo milk; a productlong considered by theWest as being impossibleto produce.

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Development Board led by Dr. V.Kurien. After its formation in 1965,NDDB logged its own success storythrough the conduct of OperationFlood at a time when milk was inchronic short supply andGovernment had to import milkpowder to meet the shortfall.Eventually, though, India becamethe world’s no.1 producer of milkin the face of severe competitionfrom the traditional dairyproducers like New Zealand,Australia and Switzerland.

The Amul experiment has beenreplicated in many States andmany countries, alas, but not with

the same degree of success. The reasons are not far to seek.As diagnosed by Dr. V. Kurien, the ownership of the co-operatives needs to be firmly in the hands of the producers– i.e. the farmers, both in financial and control terms.Unfortunately, while financial control may be in their handsthe operational control is seen to be hijacked by politicianswith vested interests and bureaucrats ready to kowtow tothem. This rings the deathknell of the co-operative andinvites other interested groups to it to try their hand atgaining control. A strong professional team andorganizational leadership that can resist all sorts of pressuresto stand up for the rights of the farmer community itrepresents can only hope to convert the vision of co-operation to scale heights of success that Amul has managedto reach. Total trust in the professional management team,high degree of credibility and confidence in dealing withthe vicissitudes of business have created the giant thatstraddles the Indian consumer food market today, that isthe envy of the rest of the world.

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Winning has always meant much to me, but winningfriends has meant the most.

- Babe Didrikson Zaharias

No ad campaign inliving memory, hasrelied so much on onesingle mascot who justrefuses to grow up, forwell over 40 years.

Marketing coupby theAmulGirl !Sylvester daCunha was nopushover when it came tocreatively designing ads. Andwhen he bagged the Amul accountin 1966, he knew how he wasgoing to go about promoting it.The little Amul girl who appearedon hoardings dressed for eachoccasion, but in her trade markpolka dots virtually took everyIndian’s breath away, as much,with her evidently cuddly picturesas with her tongue-in-cheek barbs.Ever in good taste (pun intended!)and with no room for rancour, themoppet who was not abovemaking her views known oneverything that happened aroundher – be it in sports, politics,literature even science, technologyand justice!Amul - the product itself promisesquality, service, price andavailability and delivers ably onthat promise. But it more thanhelps to have a handy moppet tomake it one of India’s most lovedfood brand. And how !No ad campaign in living memory,has relied so much on one singlemascot who just refuses to growup, for well over 40 years. Some ofthe most endearing witticisms arereproduced here. And no one’scomplaining, we are sure !!

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This column focuses on and profiles individuals who, through the power of their hard work and the forceof their personality have become success stories and have created a niche for themselves in society.

Mr. B. M. Vyas, Managing Director, Gujarat Co-Op. Milk Marketing Federation

In conversation withP. G. Vijairaghavan

The position of Managing Director of the Gujarat Co-op MilkMarketing Federation sits lightly on B. M. Vyas, whose 40 years in theFederation is evident in the conviction that he displays and the faith inthe co-op milk movement. A true-blue disciple of Dr V. Kurien, the MilkMan of India, who initiated many like him into the Anand mould. Vyashas been witness to the astounding growth of the Anand experiment andhas seen first hand the transformation of the lives of the farmers of thevillages forming the Societies in the Federation. For many like Vyas, theGCMMF is the symbol of farmers’ empowerment and evidence of thestrength that lies untapped in the toiling millions in India. As he says, itonly needs the right impulses to exploit this power for the common good,and Kurien, according to him, was among the first to realize thishometruth. In a freewheeling interview in his simple, yet elegant office inAnand, Mr B. M. Vyas speaks to Tapasya about what makes Amul aninternationally inspiring business model and the way forward for it.

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Q. At over $1500 mn Amul stands high inthe world competition. The 13 districtcooperative milk producers' union todayprides itself on having 2.79 millionmembers handling 11.22 million litres ofmilk per day. The total milk production in2008-2009 was 3.05 billion litres. Thefigures are indeed mindboggling. Yet, theexports of Amul at around Rs 125 cr,although substantial in real terms, are asmall portion (2%) of your total turnover ofRs.6700 cr (2009). Is this because ofoverwhelming domestic demand orcompetition at the international level? Anyspecial efforts to give exports a fillip?

A. It is not competition at the international

level that keeps our exports relatively low in comparisonwith the overall turnover. In many ways, we have not reallyexerted in that direction because our focus has been ondifferent goals. In fact, our quality has been tried and testedin various countries and found to be world standard. Butthe point is Amul was set up to cater to the needs of thefarmers and to care for the nutrition needs of the nation.From a per capita availability of 50 gm in the early fifties toover 250 gm today, we have come a long way in providingthe country with essential health nutrients. This we couldnot have achieved if our focus had shifted to exports andforeign exchange earnings. Of course, Amul has a strongpresence in many countries, particularly with a large expatIndian population because it gives the NRI an emotional linkwith his motherland. That is why most NRIs abroad swearby the quality and content of Amul products.

Mr. B. M. Vyas has been with GCMMF since 1971, and since 1994 is its ManagingDirector. Trained under the guidance of Mr. Verghese Kurien, Vyas considers hiscommitment to Amul and the farming community as his way of acknowledging thecontribution of his mentor in moulding his thinking in his formative years.

Mr. Vyas considers, among his many achievements, the three fold increase in saleswithin 10 years from taking over as MD - from Rs 980 cr to over Rs 3000 cr, and developingand successfully launching 24 new products, along with a nationwide cold storage chain.On the way, Amul also became Asia’s largest selling fresh milk brand.

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Q. From 87 lakh kg. of milk production per day, to over 231lakh kg per day by 2020 is an ambitious target. This wouldinvolve higher investment in processing plant, veterinaryfacilities, marketing inputs etc. Is GCMMF ready with theinvestment in financial and physical terms to handle this levelof operations?

A. At Amul we are trained to look at the larger goal set beforeus, the vision and the mission of the Federation is what weare continuously concentrating on. This means if we see anopportunity and set ourselves a goal we do not see ourselvesgetting distracted from the path towards it. Finance is theleast of our worries, because we believe that if the projectis viable, and our commitment and attitude is to make itcome true, finance will follow. In just one year, we havegrown from 13000 VLCs to over 14000. This means ourcapacity to raise funds has also grown; our members havethe strength and the confidence that Amul will deliver,therefore, it does not deter us. You will perhaps be awarethat our first dairy plant for which the foundation was laid

by President Rajendra Prasad, inNovember 1954 was inauguratedby Pandit Jawaharlal Nehru inOctober 1955 – i.e. in less than 12months! We have the past to backour future. Going from 0 to 100 ismore difficult than going from 100to 200. Teething problems,problems of infrastructure, butwith higher edu and bettercommunications with farmers andconsumers, credibility established,income levels rising, it is easier tothink of higher investment hroughbetter access to technology, bettermanpower etc. Finance is never aconstraint; constraints are possibleonly in respect of attitude and

commitment, which Amul does not face.

Since ours is a cooperative institution, it isdecided democratically; nothing is forceddown anybody’s throat. All we do is presentthe picture of growth and achievementsthat the Societies have to their credit andshow how much more the potential fordevelopment is. The members take adecision on the basis of their past successesand future prospects. They thus committhemselves to the future projects in termsof investment and other inputs, since it is avoluntary target based on their ownassessment.

Q. Economics is said to be at the root of allsocial injustices. Has the Amul success storyresulted in a tangible change in the socialmores of the villages where the co-operatives are functional, by transcendinglong existing prejudices and biases, likeuntouchability and i lliteracy in thestructure? If so, would it not be worthwhileto replicate this experiment all over ruralIndia, if only to reap the larger benefits ofnational integration?

A. It is true that most social injustices stemfrom economic imbalances. A reasonablywell cared for society does not encourageanti social tendencies which has beenproved by the situation in most villageswhere the Societies are in operation. Youwill hardly find law and order issues in thesevillages, you will possibly have no newsitems on discrimination betweencommunities, or atrocities on the weakersections, no drinking among the menfolk…

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In more ways than one,the dairy co-operativeshave changed the way ourfarmers live and work inharmony.

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In more ways than one, the dairy co-operatives have changed the way ourfarmers live and work in harmony. You willnot find a single Gujarat farmer hascommitted suicide, law and order issue isalmost absent, men and women are betterdressed – with none in torn clothes, in fact,you can go to New Jersey and ask a Patelthere about his ancestry. Invariably you willfind that his parent or grand parent wassupplying milk to the Co-op in Anand. Howdid the son or grandson come to the US ifhis parents were not doing economicallywell?

There is not a great deal of social vices inGujarat – no drinking and violence, nogambling, saving is a habit among thepeople, also because it is the land of Gandhiand Vallabhbhai Patel.

Some times, this situation does getdisturbed for various reasons. For example,there are people from other mores comingin for work and business and settle herebringing in their own ways of living. In theinitial years, they may take time to integratewith the locals, that is when aberrationstake place, but over the years, they becomeas much Gujarati as any here.

Q. 48% of the villages’ income is fromdairying. Women are perhaps the majorparticipants in the entire process of milkcollection and thus it would be fair to expectthem to play a bigger role in the family’sdevelopment and the progress of their owngender – in education, removing socialbiases, and empowering the illiterate

women of the village. Are thewomen members of GCMMF co-operatives better empowered nowthan they were 50 years ago?

A. Most of the dairy activity in thesocieties is looked after by thewomen of the village, the menlook after the farming activity etc.Because the womenfolk earnalmost, if not more than, themenfolk do from farming, there isa sense of empowerment amongthem and since the woman is thefulcrum around which theeconomy of the family evolves andrevolves, she becomes the guidinglight in the family for thedevelopment of the children etc.

Q. Have the villages in the operational area of the GCMMFtaken to the use of technology both for milk processing andin their daily lives through use of computers,telecommunication systems, etc?

A. As you said, almost every member has a son, daughteror grandson or grand daughter abroad – either as a studentor as an educated employee there – they have come of ageas far as use of technology is concerned. From an era whenthey did not have a single telephone in the village to a mobilephone in every household, is a long way. They are of coursein touch with their family abroad through computers, in factthey are very much into technology at the Society whichchecks their product for quality, prints out the receipt andpays them in minutes – all a result of technology.

Q. What according to you is unique with the Amulexperiment that although it has been replicated in manyStates, in collection and marketing of milk and other dairy

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Most of the dairy activityin the societies is lookedafter by the women of thevillage, the men lookafter the farming activityetc.

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products, they have not registered the spectacular successof GCMMF.

A. Other States have done reasonably good in the dairy co-op movement; in TN, Karnataka, Andhra; also Bihar,Rajasthan etc. it is not they have not done well at all. Someof the States could have done better, but certain constraintsdo affect the working of the Societies. For instance,continuity of professionals at the helm is very necessary, ifleadership changes frequently no one can be expected toachieve results. Even so, I would not say the dairy movementhas failed in any of the States, if you see all the losses in theco-op dairy sector put together in the past 20 years, wouldnot cross Rs 200 Cr. of the total business of around Rs200,000 Cr. but in the process the gains are that theconsumer has got quality and affordability and the farmerhas got good prices for the milk supplied by him. Therefore,if Aavin has not made much profit it is probably becausethe consumer has been charged less for better quality milk,or the farmer has been paid more for supplying milk to the

Society. In either case, society hasstood to gain and I do not see anyreason to complain. The sense ofwell being among the farmerswhich you talk about in Gujarat, iscertainly there in many othercentres – take Kolhapur, or Waranain Maharashtra, or Karnataka, orPataliputra, or Andhra Pradesh… indifferent measure success hastravelled to these States too. UP?Well, that is a different story. Buteven there, whatever littleprogress and prosperity is there inUP it is only because of the co-operatives, e.g. Meerut…

Then again, as I said earlier

continuity is absent where there is noprogress. I have never met the sameManaging Director of a Co-op Society in UP.Same as in politics – States also needcontinuity in leadership – take Gujarat forexample, since 1960 it has had only 8, if Iam not wrong, Chief Ministers in almost 50years.

Q. How is the CSR commitment of theGCMMF designed to benefit the commonman? Any specific initiatives taken byGCMMF that could be replicated elsewhere?

A. As you have seen, our entire functioningis a huge CSR operation. What else can youcall it, where the entire village is involvedin taking its own decision, and ploughing inalmost all its excess revenues intocommunity projects. Therefore, we do notneed to specially formulate any specialcommunity projects. For profit makingcompanies it may be very well for them toset aside Rs 5 Cr. out of their total profit ofRs 1000 Cr. and claim to have done so muchfor social transformation, but here we areworking for it 24x7!

Q. Dr Kurien’s phenomenal contribution tothe success of the Kaira experiment cannever be underestimated. What accordingto you would be the projects which couldbe the unfulfilled dream of Dr. Kurien whichGCMMF needs to complete, that wouldmake him proud of GCMMF?

Dr Kurien never worked for targets – eitherphysical or financial. He worked for apurpose. We feel we do not need to identify

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...if Aavin has not mademuch profit it is probablybecause the consumerhas been charged less forbetter quality milk, or thefarmer has been paidmore for supplying milkto the Society.

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projects that would make Dr. Kurien proudof his institutions because, in every singleinstitution he created, he breathesinspiration into the people working forthem every day. I can say that anything thatwill bring the farmer closer to prosperityand well-being, will make Dr. Kurien happy;only, if we can do it earlier, he will be somuch more happy. Dr. Kurien has createdinstitutions here that are forever committedto his vision. He is part of our genes now,therefore his vision is always with us. Also,I remember Tribhuvandas Patel who was inmany ways Kurien’s mentor at Anand andmoulded his whole outlook from a USreturned techie to a technologist totallycommitted to his stakeholders – the farmersof Anand.

Q. How much of the success of Amul wasdue to the marketing coup staged by theAmul Girl, since although Kaira Co-operativewas in existence since 1946, the nation didnot notice Amul till the mascot came tobeing. Or could the fact of having mobilizedmillions of farmers under one umbrella haveprovided the fillip?

Many reasons have contributed to thesuccess of Amul. 1. Dedicated farmers and2. sound professional management.

Professional management subordinated itsknowledge for the benefit of farmers. So theprofessional manager would know how tomanage the investments with the farmer –say, the cows and buffaloes, but if the cowhad a problem in the intestine, he could nothave helped. Here, only a veterinarian could

be of any help and the professionalmanager would subordinate hisexpertise to that of the vet. Theother aspects of branding, like theAmul girl, have played their part tobuild up the brand, which is alsoimportant, and our creativemarketing strategies have beeneffective in bringing the Amulbrand to the consumer in India andabroad.

Q. Maintaining the quality, service,availability, and price of anavowedly perishable product likemilk and its other forms is agigantic operation of ensuringbackward and forward integration– on a daily basis. In this sense, theachievement of Amul is extraordinary. How do you preparethe employees to manage this task? What are the trainingfacilities for your personnel, available to you to keep thewheels perpetually in motion?

A. Managing the trust of millions of farmers does requirethorough and true professionalism and as trustees of thefarmers’ confidence, we take our profession very seriously.Our HR policy is very simple. We employ professionals. If itis to do with dairy technology, we will take only a dairytechnologist, or M.Tech. for veterinary jobs, it is a veterinarydegree holder, if it is Finance we will take only CAs. And soon. They are recruited from campuses directly. That is why,you will see that we ensure the best in class to attend toour requirements, and build them brick by brick, exposethem to the culture of Anand co-operatives, and make themaware of their role in not earning more and more money,but the contribution they make to the prosperity of thestakeholders. That is why you will find that the attrition ratein Amul is so low, everybody realizes that perhaps they may

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Managing the trust ofmillions of farmers doesrequire thorough andtrue professionalismand as trustees of thefarmers’ confidence, wetake our profession veryseriously.

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earn a little more outside, but the contribution tothe nation which they are making here, can neverbe replicated elsewhere!

Q. There are other co-operatives for variousagricultural producers doing virtually similarprocesses like Kaira; but none has had the successof Amul. What in your opinion, is the difficulty toplay out the same role in farmers’ other produce asin milk?

The fundamental requirement for success of anorgnisation is it has to be fair – to the vendor, to the worker,to the stakeholder, to the farmer etc. wherever exchangetakes place, there should be fairness in the exchange. Thus,for example, if you bring one litre of milk I should be able tomeasure the quality of milk and pay you a fair price. So,where earlier the middleman used to feel the quality byputting in his finger to determine fat content and pay thefarmer what he thought was a reasonable price, we removedthis subjectivity by having the milk tested throughtechnology in a fraction of a minute and decide the price,which is obviously fair and just since there is no time tomanipulate or manage the outcome. Similarly, we haveimproved the sense of fairness by resorting to technologyin all aspects of our functioning. On capital side, we havenot once failed to meet our commitment to our stakeholders– not once has our dues to any entity, been defaultedthroughout our 14000 Societies for over 60 years! And ofcourse, our employees who have been trained in the waysof honest dealings by Dr. Kurien himself, which itself inspires

trust among all.

In other co-operatives, noinvestment is done in fairness – forexample, the quality of wheatcannot be measured with anydegree of fairness, for starch,moisture content, etc., onlysubjectivity decides the qualitywhich does not inspire trust in thefarmers. These can be done withtechnology, but are not deployed!If we do not earn trust at the base,the project is bound to suffer.Investment in facilities is not made– e.g. storage facilities forvegetables, fruits, grains and allowthe farmers to use them, so that itall does not go waste. This will

create greater confidence.

Q. Amul has been instrumental in identifyingand integrating itself into its area ofoperation that one can find evidence of itspresence almost throughout the city ofAnand. Institution building has been a greatcontribution from Dr. Kurien. A case in pointis IRMA, which is now playing a substantialrole in rural India’s development. How hasit helped in building the Amul brand?

A. The fact is, Dr. Kurien did not work forhimself. He dissolved his ambitions into thesuccess of Amul and made it his life’smission with a passion. With that in mind,he set up institutions that are life long –Amul, IRMA, NDDB. Because he was therewith his sense of mission, we are here,otherwise most of us may not be here. Hecreated a culture of devotion which you cansee in most of the employees who are herefrom his days. For example, in 36 years ofexistence, GCMMF has seen only 3Managing Directors! We did not join Amulto make a career – the day we joined Amulour career was made! Dr. Kurien was notamong the modern day Managementgraduates who jump from job to jobsearching for that elusive thing they call jobsatisfaction. But here at Amul it is availablein plenty and so we are here for 25, 30, 40years!

Q. Amul had introduced a number ofproducts which were not part of its corecompetence – eg. Fast Foods. How is thissection of products doing within the Amulrange? Finally, what further product

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Dr. Kurien was notamong the modern dayManagement graduateswho jump from job to jobsearching for thatelusive thing they calljob satisfaction.

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Yes, sometimes, ourways are different butthe destination is thesame.

innovations can the consumer expect fromAmul in the coming months?

As a rule, we work on a 10 year platform.All our business plans are dovetailed inconsumer research. No product isintroduced unless it is backed by consumerresearch. We establish the need for theproduct and then go about introducing it.We take our time introducing it. Many timeswe succeed, and more than that we fail, too.Some of our products may have failed tocreate waves in the market. So long as weare able to meet the objectives of consumersatisfaction, we feel it is worth the effort.

Q. Amul has been willy nilly in a fewcontroversies in the past with sisterorganizations and the parent NDDB. Do youfeel this could have any diluting effect onthe co-operative movement in milk

production in India?

Much has been made of smallmatters here and there, yet, thefact remains that we are allworking towards the common goalof bringing prosperity in our areaof operation. Yes, sometimes, ourways are different but thedestination is the same. While wemay believe that the farmer issupreme and calls the shots in thesupply chain, the otherorganizations may not believe so.I cannot have a complaint on thataccount. In fact, when I cannothave reservations aboutmultinational companies and theirways, how can I take exception tomy own sister organizations especially when we haveidentical missions?

AMUL FACTFILE

Members : 13 district cooperativemilk producers' Union

No. of Producer Members : 2.79 millionNo. of Village Societies : 13,328Total Milk handling capacity : 11.22 million litres per dayMilk collection (Total - 2008-09) : 3.05 billion litresMilk collection (Daily Average 2008-09) : 8.4 million litresMilk Drying Capacity : 626 Mts. per dayCattlefeed manufacturing Capacity : 3500 Mts per day

Sales Turnover Rs (million) US $ (in million)

1994-95 11140 3551995-96 13790 4001996-97 15540 4501997-98 18840 4551998-99 22192 4931999-00 22185 4932000-01 22588 5002001-02 23365 5002002-03 27457 5752003-04 28941 6162004-05 29225 6722005-06 37736 8502006-07 42778 10502007-08 52554 13252008-09 67113 1504

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As the fledgeling Kaira Milk co-operative was struggling toget on its feet, in early 1949, a strapping young MechanicalEngineer, educated at Michigan University on a scholarshipof the Government of India, was posted to Anand as DairyEngineer, much to his discomfiture. Seriously contemplatingan early exit from this small and dusty place after the bustleof New York City, but for the fact of his having studied abroadat Government expense, the man happened to meetTribhuvandas Patel, a loyal follower of Sardar VallabhbhaiPatel and Morarji Desai. Soon, however, Tribhuvandasexercised all his persuasive charm on the young man, enoughto ensure he did not further his stated objective of leavingAnand at the earliest opportunity. As it happened, though,the young man, far from leaving Anand to its fate, actuallymoulded it in such a way as to become its darling son, havingvirtually played God to the thousands of poor farmers ofthe District, and Gujarat and eventually changing thecountry’s dairy landscape irrevocably. So much so that forthe farming community in Gujarat he has almost become asynonym for God! The young man who stepped on Anand’ssoil in 1949 was none other than Verghese Kurien.

But the exploitation of the farmingcommunity at the hands of the pre-eminentbrand of the day, Polson, disturbed him noend, and with the guiding light ofTribhuvandas, Kurien took up the task ofsetting things right in Anand, and ensuringthe exit of the Polson brand from, not justAnand, but India. The rest is history, as thetransparent dealings of one co-operativegave birth to one more in a neighbouringvillage, until the whole of Gujarat wasenveloped in a movement that no poweron earth could stop. Neither thecompetition, nor the bureaucracy were ableto stem the tide of co-operation thatseemed to flow from Anand into all theother districts under the ever pro-activeleadership of Kurien. All because the destinywas being dictated by the million strongmembers of the hundreds of Village levelsocieties in the State.

Kurien was no pushover when it came tofacing the nay sayers – be it in themultinational companies that werecompeting with Amul, or the politicians orbureaucrats of Delhi. He had the courageof character to call a spade a spade,irrespective of who he spoke to. In 1965,when the Prime Minister of India, LalBahadur Shastri, visited Anand toinaugurate a dairy plant, and requestedKurien to replicate the Anand experimentin the rest of the country, he agreed, butnot before setting his own conditions beforehim. He would set up the headquarters ofthe national organization – the NationalDairy Development Board, at Anand, notDelhi, because, he wanted to be as far awayas possible from the corrupting influenceof power, and, he would continue to be anemployee of the Gujarat Co-operative MilkMarketing Federation, of which he wasManaging Director. Of course, Shastriagreed, and once again, Kurien createdhistory, not just in India, but in the world,by leading Operation Flood to the top of theinternational value chain and India becamethe world’s largest producer of milk, from amilk starved nation just 20 years earlier!

Kurien was awarded the Padma Shri by theGovernment of India for his services to thedairy industry, but enduring has been theesteem in which the farmers of Gujarat holdhim, which is evident whenever one talks

V. Kurien : Anand’sMan Of DestinyP. G. Vijairaghavan

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to the local farmer in Anand, many considerhim God for he changed their lives for thebetter; and indeed taught them to take theirdestiny in their own hands and transformedit from being one of struggle andexploitation to one of dignity andsatisfaction.

Dr. Kurien was not a product of anyManagement School, it may not be toowrong to say he was cynical of the utility ofManagement school products in promotingAmul. He therefore set up the Institute ofRural Management (IRMA) on a 60 acrecampus at Anand which is today a majorprovider of managerial and research talentfor the dairy industry in India. In fact, as B.M. Vyas, mentions in his interview, Amuldepends heavily on IRMA for itsrequirements, and IRMA has never fallenshort of its expectations. IRMA and NDDB,along with Amul, have established Kurienas not just another dairy entrepreneur, buta creator of institutions which far outlivethe entrepreneur; in the process Kurien, theentrepreneur has been immortalized byKurien the institution builder.

His memoirs, “I Too Had A Dream” hasgraphically captured the persona of

V.Kurien and recounts his uncompromisingnature - be it the principles for which hehas stood at Anand; or his deep sense ofpatriotism and love for the country and itspeople.

We reproduce an excerpt from his addressat a Seminar in 2001 that more thanexplains his passion for brand Amul :

What began way back in 1946 was reallyan effort to carve out a truly Indian company

that would have the involvement ofmillions of Indians and place directcontrol in the hands of the farmers. Itwas a mandate for producing, owningand marketing and above all, buildingyour own truly Indian Brand. Andsuccessfully at that.

You will appreciate that when the livesof lakhs of farmers depend on abrand, and when your history isgrounded in the Independencemovement, when not onlycompetitors but even your owngovernment questions you, then your

resolve to be the best is like the finest steel.

Amul, therefore, is a brand with a difference. That differencemanifests itself in a larger than life purpose. The purpose –freedom to farmers by giving total control over procurement,production and marketing. Amul and all other milk productsproduced by cooperatives were born in struggle. It was theproducers’ struggle for command over the resources thatthey create, a struggle to obtain equitable returns and astruggle for liberation from dependence on middlemen. Itwas a struggle against exploitation. A refusal to be coweddown in the face of what others believed to be theimpossible.

Amul’s birth was thus a harbinger of the economicindependence of our farmer brethren. Amul’s mission wasthe development of farmers, nutrition to the nation, andheart in heart, the real development of India.

Given India’s vast geographical spread, the country had veryfew dairy plants at the time of independence. As the thenPrime Minister Lal Bahadur Shastri had said, ‘One Amul isnot sufficient. Many Amuls are the need of the hour.’ Thisled to replication of the Anand pattern through theOperation Flood programme which has, amongst others,three major achievements to its credit, namely: makingdairying India’s largest self-sustainable rural employmentprogramme, bringing India close to self-sufficiency in milkproduction, and trebling the nation’s milk production withina span of two and a half decades to make India the world’slargest milk producer.

The difference between perseverance and obstinacyis that one often comes from a strong will, and the otherfrom a strong won't. Henry Ward Beecher

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20 - tapasya Winter 2009tapasya

It is an industry segment that is almost

tucked away somewhere in the back of the

economy’s beyond. What one notices about

the industry at first glance is that it is as

unorganised as it can possibly be – in fact,

Tapasya could not find a representative

trade body to speak about the industry’s

cares and concerns, which one found quite

strange – considering it is a segment that

contributes almost 10% of our GDP and has

the potential to do a lot more. This reminds

one of the saying that an elephant is never

aware of its own strengths, until it is forced

to defend itself!

Every survey that we referred to was

unequivocal that it is one of the fastest

growing segments of the economy with

domestic demand and potential exports

likely to peak in the coming decade. The

industry growth has been rapid and the

reasons are not far to seek. The growing

middle class segment in the country,

expected to swell at over 300% upto 2015,

the almost exponential growth of working

couples and nuclear families that leave little

time for the employed woman to be able

to cook at home during work days… In fact,

the Economic Times recently had this to say

about the industry :

Investment opportunities in the Indian food

industry are set to shoot up by a huge 42.5%

now to US$ 181 billion in 2015 and to US$

318 billion by 2020, a FICCI-E&Y study on

India's food industry has said. The study

Flavours of Incredible India_Opportunities

in the Food Industry has noted that the food

industry accounts for a big 30% of the

consumers wallet.

Infact, 70% of the current food spend by the

Indian consumer is on agri produce, the

study says. Two thirds of this is sepnt on

primary and secondary procressed

products. Among agri products, Fruits and

Vegetables (F&V) is the largest consumption

category and accoutns for over 50% fo the

total consumption. Milk, milk products,

meat and meat products account for the

remaining 30% spend and have been

growing at a faster rate as compared to agri

products.

The key drivers of the sector have been

identified as an increase in per capita

disposable income by 8% over the last five

years, leading in turn to an additional per

capita spend on food by 20% in the same

period. The current per capita invome on

food is 1/6th that of China and 1/16th that

of the USA; growth in the size fo the middle

class to av ery rich class that is projected to

increase at more than 300% between 2005

and 2015 even as the youth population

catapults annually by 11%. This will lead to

an increasing demand for food products to

meet demands of convenience, health,

variety and changing palate, the study says.

The study said the growth in food sector

would help in re-organising the supply chain

to enable reduction of post harvest losses,

especially in fruits and vegetables which

now amounts up to 25 per cent by value.

"This would mean an opportunity to set up

warehouses, cold stores and logistics

infrastructure," it said.

The sector would also create a base for

exports of value added food products with

current shipments of tertiary food products

only at 9 per cent of overall food exports, it

said, adding that launch of new products

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Food Processing Industry

FOOD PROCESSING INDUSTRY P. G. Vijairaghavan



About the time we can make ends meet,somebody moves the ends.

- Herbert Hoover

and increasing penetration of processed

foods has a huge investment potential.

Disposable incomes have grown sharply in

the last decade among Indians bringing with

it an understandable demand for ready to

eat foods with women no longer confined

to the kitchen as before; not to mention

the tremendous influence of children on the

market, in this product segment, again

because of the growing practice of their not

being able to access home cooked food for

the same reasons as above. Add to this,

the nuclear families that have become the

norm of late, which precludes the possibility

of the senior ladies in the house minding

the hearth when the younger ones are at

work elsewhere! Some of the best brands

in the prepacked foods are home grown

units set up long ago – like MTR which

initially operated a popular eating joint in

Bangalore, graduating to pre-processed

foods after the business was sold to the

Norwegian company, Orkla in 2007. Or GITS

Foods, or Rasna, another prominent player

in this field.

This special issue takes a look at the broad

picture of food processing through the eyes

of various agencies in the field – the

Government, the trade body, the

entrepreneur, the researcher - in order to

get a view of how well we are getting

equipped to play the markets – both Indian

and overseas, considering that the pre-

cooked, packaged food business is only just

getting to the starter’s line in the race for

world-wide presence.

But there are no prizes for identifying the

home brewn player in the food processing

sector, having been in the arena since the

early independence days and having given

the multinationals a run for their money

during its entire existence, while at the

same time being an example of how an

organization can be the darling of the

market, while being just and fair to all the

stakeholders – the vendors, consumers,

employees and the owners! Tough job but

admirable, no less.

We are, of course, speaking of Amul the

Indian food brand that has virtually

straddled the Dairy market for over 60 years

like a colossus giving the multinational

brands a creamy pasting they never would

have expected from a desi lightweight like

the delicious, mischievous little moppet! All

because one man made it his life’s mission

to stand up for the producer, the consumer,

the employee and everything Indian!

The issue does not profess to analyse the

food processing industry in its entirety in

terms of each segment ; we would have to

devote a couple of issues for it. Yet, with

our limited resource of time and material,

we have attempted to bring together the

best of minds in the country- from

Government to industry, known for their

experience and knowledge of the industry

to contribute their effort. We trust this will

open up vistas of curiosity among the

readers to know more on the subject and,

if possible, to be part of the industry that is

waiting to be explored!

Curtain Raiser


Indian FoodProcessing Sector :Building Bridgesbetween Industryand AgricultureMs. Vinod Kotwal, Director,Ministry of Food Processing Industries,Govt. of India

Ms Vinod Kotwal, Director, Ministry of FoodProcessing Industries is a 1994 batch officer of IP&TAFS,Group ‘A’ Civil service. Her academic qualificationsinclude MSc (Botany) and MBA (Finance) apart fromdoing a course on Leadership from the University ofBradford, UK under the Chevening Scholarship.

Before joining Ministry of Food ProcessingIndustries in July 2008, she has had a rich and variedwork experience in the field of telecommunication inMTNL, Delhi and Department of Telecommunicationencompassing the areas of revenue assurance andrevenue management, Information Technology,Budgeting and planning, financial management andpersonnel management including human resourcedevelopment. The posting in the present Ministry hasgiven her in an opportunity to work in an exciting andevolving area of food processing in the country.

Her hobbies include reading, listening to westerncountry music and appreciating art particularlypaintings.

In Focus

Agriculture continues to play a pivotal rolein the Indian economy even though its sharehas been declining over the years.Agriculture (including allied activities)accounted for 17.8 per cent of the GrossDomestic Product in 2007-08 as comparedto 21.7 per cent in 2003-04. Though theshare of agriculture in GDP has beendeclining over the years, its role remainscritical as it accounts for about 52 per centof the employment in the country.

While the average growth rate of agricultureand allied sectors over three years (2005-06 to 2007-08) has been over 4.9 per cent,its growth declined to 1.6 per cent in 2008-09. Crop productivity remains a key issueas the compound growth rate of yield ofmajor food crops is showing declining trend.Furthermore, contribution of this sector ingross capital formation is also witnessingdownward trend, which is evident from thefact that it fell from 11.7% in 2001-02 to 7%in 2006-07. Thus, slowdown in investmentand declining productivity raises seriousconcern about the economic sustainabilityof millions of farmers. It is estimated that ifthe country has to maintain a GDP growthrate of over 8%, the agricultural sector hasto grow at the rate of at least 4%.

In view of above, food processing industryin India is increasingly seen as a potentialsource for driving rural economy as it bringssynergy between industry and agriculture.A developed food processing industry isexpected to lead to increase in farm gateprices translating into increased ruralincomes, reduced wastages, ensure valueaddition, promote crop diversification,generate employment opportunities as wellas export earnings.

Advantage India

With access to a large natural resource baseof total arable area of around 180 millionhectares and diverse agro-climatic zones, 15million hectares of freshwater reservoirsand 8,041 kilometers of coastline India hasall the favourable conditions for ample food



production as is reflected in the table givenbelow:

Category Production (2007-08)

Food Grains 230 million tonnes

Fruits 63 million tonnes

Vegetables 125 million tonnes

Milk 105 million tonnes

Spices 4 million tonnes

Fish 7 million tonnes

Poultry Population 489 million

Live stock Population 485 million

Despite of huge production every year,processing is quite low i.e. around 2.20 %in case of fruits & vegetables, 35% in milk,21% in meat, 6% in poultry produce and26% in marine products. Value addition isaround 26%. W ith such a large anddiversified production base coupled withlow manpower cost and moderntechnology, the Indian food processingsector is poised for growth.

The Indian food market in 2006-07 has beenestimated at around US$ 200 billion1 and is

slated to reach US$ 310 billion2 in 2015. Food retail,dominated by around 5 million retail outlets in India, is alsolikely to grow from around US$ 75 billion in 2007-08 to US$150 billion3 by 2025. In comparison, the world food industry,which stands at $175 billion, is expected to grow up to $400billion by 2025.

Food Processing Classified

Food processing industry is one of the largest industry inIndia and is ranked 5th in terms of production, consumptionand export. The Indian food industry can been classified intothree broad categories:

1. Agri-products: covering grains and cereals, oils andoilseeds, fruits and vegetables, and beverages

2. Milk and milk products

3. Meat, poultry and marine products

These products are consumed through three levels ofprocessing4, depending on the food category and theproduct as indicated below:

Growth of Food Processing sector

Market size of food processing sector has been estimatedat US$ 80 billion in 2006-07 and the sector grew at a rate of13.1%5 in the same period. The importance of foodprocessing sector can be gauged from the fact that the totaldeployment of the gross bank credit in the year 2006-07

Primary Processed Processed Processed-basic -Secondary -tertiary

Examples of Key products

Agri Products Fruits and vegetables Pulp, dried, preserved, Ketchup, jam, juices,paste, sliced etc. pickles, candies,

chips, etc.

Grains and cereals Rice puff, flour, Biscuits, noodles,malt, rawa etc. flakes, cakes,

namkeens, etc.

Oil seeds Oil cakes Sunflower, mustard,soya, olive oil etc.

Beverages Powder, dust, leaf, etc Tea bags, soft drinks,alcoholic beverages, etc.

Milk and Milk Milk Khoya, cottages Spreadable fatsproducts cheese, cream, etc. (butter and cheese),

yoghurt

Meat and Marine Meat, poultry and Cut, fried, preserved, Preparation such asproducts marine products frozen, chilled, eggs ready to eat meals

Food Processing

Food Processing Industry In Focus


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was around Rs. 43,000 Crore, which is almost 6% of the totalgross credit deployment across all industry segments6.Moreover, the exports of processed food products have beenincreasing over the years and buffalo meat, dairy products,jiggery and confectionary were the major products shippedout of country.

The food and agro processing industry employed 16% oftotal workforce in the organized manufacturing sector in2004-05 whereas it was 32% of the total workforce in theunorganized sector. It also has the potential to generatesignificant employment as the multiplier effect of investmentin food processing industry is 2.5 times than in otherindustrial sectors. Even within food processing industry, theemployment intensity is significantly higher in theunorganized sector as compared to the organized sector forthe same level of investment.

Growth driversfor industry

The spending onfood and foodproducts amountsto 21% of India’sGDP andconstitutes the31% of the Indianc o n s u m e r ’ s

spending, which is the largest portion. A number of socio-economic factors are driving the growth in the sector:

• Higher disposable income: Higheconomic growth has led toincreased disposable income forthe Indian middle class, which isswitching over to healthy andprocessed products. It is estimatedthat disposable income is set torise at an average rate of 8.5% by20157. Also, the middle class isestimated to reach a size of 582million from its current size of 50million by 20158.

• Shift in demographic profile:The median age of Indianpopulation is 24 years andapproximately 65% of Indianpopulation is below 35 years ofage. The large population ofworking age group forms a wider

consumer base for processed products.

• Increasing number of working women:The number of working women, as apercentage of the total female population,has grown from 12% in 1961 to close to 25%in 2005 resulting in demand forconvenience food.

• Increasing incidence of lifestyle diseases:Diabetes, obesity, heart ailments andasthma are on an increase leading todemand for healthy products.

• Increased consumer awareness:International exposure, increased consumerawareness driven by media is promotingnew product categories across urban andrural India.

• Emergence of organized food retail: It isestimated that the total food and groceryretail space will grow at a CAGR of 6% over2006-2011, with the organized share likelyto increase from less than 1% currently to6-6.5%9. This will translate into morebusiness opportunity for processedproducts as well as provide forward linkageto the industry.

Opportunities

All the above changes are expected tocreate opportunities for the variousstakeholders in the sector.

• Large and diversified production base:India ranks second in fruit as well asvegetable production in the world. In 2007-08, it occupied a share of 12% in the world’sfruit production and around 13% in theworld’s vegetable production, whichensures round the year availability ofabundant raw material for the foodprocessing industry.

• Huge and growing consumer market:With a huge population of more than 1billion and an evolving consuming class witha gradual shift towards processed food,India is a growing market for processedproducts.

• Enabling policy framework: To attract

The importance of foodprocessing sector can begauged from the fact thatthe total deployment ofthe gross bank credit inthe year 2006-07 wasaround Rs. 43,000 Crore,which is almost 6% of thetotal gross creditdeployment across allindustry segments.


Source : APEDA

etc.

In Focus


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investment in food processing sector, thegovernment launched the scheme of MegaFood Parks and cold chain in the 11th fiveyear plan. Various policy measures have alsobeen initiated like Income Tax deduction of100 % of profit for five years and 25 % ofprofit in the next five years in case of newagro processing industries set up to packageand preserve fruits and vegetables; exciseduty on meat, poultry and fish products hasbeen reduced from 16% to 8 %, excise dutyon dairy machinery has been fully waivedoff etc.

Status of Food Processing in the States

Andhra Pradesh is the leading state in Indiain terms of number of registered factories(6,402) in operation and second in terms oftotal output for food and agro processingIndustry in India. Tamil Nadu is the secondplaced state in terms of number of factories(3,736) in operations and is ranked fifth interms of the total output. Maharashtra isthe third major state in terms of number offactories (2,238) in operations and leadingin terms of total output. The averageinvested capital per registered factory forthe food and processing industry was Rs.3.3 Crore per factory in 2004-05. Theaverage invested capital per registeredfactory was low in Andhra Pradesh andTamil Nadu at Rs. 1.5 Crore and Rs. 1.7 Crorerespectively. The average invested capitalper registered factory was highest in thestate of Uttar Pradesh at Rs. 8.2 Crore perfactory followed by Maharashtra withaverage invested capital of Rs. 7.2 Crore perregistered factory in 2004-0510

A large number of the processing – around75%- units in the country fall in the MSMEsector resulting in these being unable toexploit the advantages of economies ofscale.

An Enabling Policy Structure for FoodProcessing Sector

The efforts of the Ministry of FoodProcessing Industries towards creation of anenabling policy structure for food

References1 Food Processing: Market and opportunities by KPMG

2 McKinsey & Company

3 Study by McKinsey and Company

4 An appetite for growth: Opportunities in the Indian Food Industry (Studyby Ernst & Young)

5 Ministry of Food Processing Industries

6 Economic Survey of India- 2007-08

7 E&Y Research, 2008

8 NCAER Research

9 Retail Edelweiss report, 2008

10 NMCC Competitiveness Report on Indian Manufacturing Industry, 2009

(The above are the author’s personal views)

A free lunch is only found in mousetraps.- John Capozzi

The efforts of the Ministryof Food ProcessingIndustries towardscreation of an enablingpolicy structure for foodprocessing sector markeda significant milestonewith preparation of theVision Document in 2005.


processing sectormarked a significantmilestone withpreparation of theVision Document in2005. The Vision 2015was a comprehensivedocument whichreflected a clear desireon the part of theMinistry to take agreat leap forward forthe fledgling foodprocessing sector inIndia. This Report thusset some verychallenging targets forthe sector over next10 years and laid aroad map too.

Vision 2015 set the target of trebling the size of theprocessed food sector by 2015 and thereby increasing (a)level of processing of perishables from 6% to 20 %, (b) valueaddition from 20% to 35 % and (c) share in global food tradefrom 1.5% to 3%.

The policy structure of the Ministry is driven by the beliefthat a robust food processing sector would not only enrichfarmers by providing them better prices but also lead togreater farm productivity by attracting more investmentsthus addressing the issue of food security and “foodprocessing for food security” can be the new mantra forgrowth.

In Focus


Mr. Rao has a Post graduate degree in Chemistryfrom Andhra University, Waltair and has been workingas a Scientist at Central Food Technological ResearchInstitute (CFTRI), Mysore for the last 35 years. Workedat Federal Research Institute for Cereal and PotatoProcessing, Detmold, West Germany during 1981-82as exchange scientist. Led several R&D and industrialconsultancy projects, published and presented about100 papers and was responsible for developingtechnologies for packaged ready-to-eat foods, long-lifeIndian sweets and other packaged food products.Worked as Chief Editor of the technology journal IndianFood Industry during 2001-03. Also served as nationalsecretary of Association of Food Scientists &Technologists (India) during 2005. Presently headingthe Department of Food Packaging Technology atCFTRI.

Packaging :Delivering GoodFood, LookingGoodG C P RangaraoDirector-grade Scientist & Head,Food Packaging Technology DepartmentCentral Food Technological Research InstituteMysore

Has a Post graduate degree in Chemistryfrom Andhra University, Waltair and hasbeen working as a Scientist at Central FoodTechnological Research Institute (CFTRI),Mysore for the last 35 years. Worked atFederal Research Institute for Cereal andPotato Processing, Detmold, West Germanyduring 1981-82 as exchange scientist. Ledseveral R&D and industrial consultancyprojects, published and presented about100 papers and was responsible fordeveloping technologies for packagedready-to-eat foods, long-life Indian sweetsand other packaged food products. Workedas Chief Editor of the technology journalIndian Food Industry during 2001-03. Alsoserved as national secretary of Associationof Food Scientists & Technologists (India)during 2005. Presently heading theDepartment of Food Packaging Technologyat CFTRI.

When we enter a supermarket or even aneighborhood grocery store, what we “see”there in fact is the packages – a masseddisplay of packages - and not the actualproducts that we intend to buy and use. Andwe hardly realize it. Packaging is so muchtaken for granted that it has come torepresent the product that it contains andhas become an integral part of the product.The days of seeing, feeling, smelling andtasting the product before buying, as wasthe norm not too long ago, are gone.Walking along the aisles of shelves, we tryto pick up familiar products that we identifythrough the visual elements of the packagedesign, or the unfamiliar ones again throughthe visual elements of the package design.In the former case, the package would haveserved the simple function of identifyingitself, while in the latter, it would havecommunicated messages in order tomotivate the buyer and effect a sale.Package has come a long way fromperforming the simple task of containing aproduct as was the case in early times tothe present day’s job of selling the productthat it contains. In fact, a package does

Food Processing IndustryIn Focus


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much more.

Mass production and distribution of goods

Development of mass productiontechniques resulted in availability ofcheaper goods that needed to bedistributed on a mass scale over geographicregions beyond local markets. Globalizationhas now made it possible for goodsproduced in one corner of the globe to beavailable for use in a country situated inanother corner. Foods, despite theirperishable nature, are no exception.Modern food preservation and packagingtechnologies make foods availablethousands of kilometers away from theplaces of their origin and weeks, monthsand even years beyond the day of theirproduction.

In industralized societies, food industry isthe largest user of packaging materials.Packaging forms an integral part of foodmanufacture providing the link between theprocessor and consumer. In fact, it plays adominant role in the total manufacturingactivity and in marketing. With packaginglines usually occupying 50% of the shop-floor area, packaging and related operationsengage about 60% of the work force ofIndian food industry.

Indian scenario

The impetus to food processing industry inIndia came in the 1970’s and 80’s, resultingin the proliferation of packaged foods andchanging the face of the neighbourhoodgrocery store. Commodities stocked in bulk,weighed or measured on the spot and soldstarted giving way to unit packs –attractively packaged and branded by themanufacturer. The post-liberalisationperiod of 1990’s has seen the mostsignificant development of food industry inIndia, facilitated by opening up of theeconomy that encouraged foreign directinvestment, eased import restrictions onmaterials and machinery, which led tosetting up of state-of-art packaging andprocessing industries. This period also was

a witness to the growth oforganized retailing which in turnprovided increased market accessto the manufacturing industry,especially the packaged foods. TheIndian packaging market iscurrently worth Rs. 85,000 croresand is growing at a rate of 15 percent per annum, more than twicethe global average.

Understanding packaging

Packaging, despite its key role inpreserving food, preventingwastages and facilitatingdistribution and marketing offood, is sometimes regarded as a“necessary evil”, an unnecessarycost, a drain on resources and anenvironmental menace. Such a view, undoubtedly anuninformed one, arose since packages are ultimatelydisposed off while using the product and one is hardly awareof the crucial role that a package plays in delivering theproduct. In order to appreciate the place of packaging inthe economy, one should try to understand what it is. Asimple definition of packaging as “a means of ensuring safedelivery of a product to the ultimate consumer in soundcondition at minimum cost”, shows how it is closely linkedto marketing.

The packaging system

Packaging is the key link in the supply chain that deliverswholesome, safe, nutritious, convenient and quality foodsto the consumer. Packaging functions at several levels. Atthe most basic level — occasionally it is the mostsophisticated one — is the primary or unit package, whichis in direct contact with the product. It provides the initialand usually the major protective barrier. It is frequently theprimary package, which the consumer “sees” and purchasesat retail outlets and uses. Other levels of packaging thatinclude secondary package, e.g., a corrugated fibre-boardbox that carries a number of primary packages, and a tertiarypackage such as stretch-wrapped pallet of corrugated boxes,perform mainly the distribution function. In inter-state andinternational trade, a quaternary package is frequently usedto facilitate the handling of tertiary packages. This isgenerally a rectangular metal container of 8 x 8 ft cross-section and up to 40 ft in length which can hold many palletsand is intermodal in nature - it can be transferred to or from

The Indian packagingmarket is currentlyworth Rs. 85,000 croresand is growing at a rateof 15 per cent perannum, more than twicethe global average.



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ships, trains, and flatbed trucks, by giant cranes. Certaincontainers can also have their temperature, humidity andgas atmosphere controlled and this is necessary in particularsituations such as the transportation of frozen foods or freshfruits and vegetables.

Packaging functions

A total packaging system performs the four major functionsof containment, protection, providing convenience andcommunication. Packaging has evolved from a relativelysmall range of heavy, rigid containers made of wood, glassand steel to a broad array of rigid, semi-rigid and flexiblepackaging options increasingly made from specialisedlightweight materials like plastics, metalized plastics, paperand paperboard, aluminium foil and their combinations.

Containment, the most basic function of packaging is soobvious that it is usually overlooked. With the exception of

large, discrete products, all otherproducts — whether a litre ofliquid milk or a kg of wheat flour— must be contained as a singleunit before they are moved fromplace to place.

The function of protection is oftenregarded as the most importantsince the product has to beprotected from outsideenvironmental effects, be theywater, water vapour, oxygen,odours, microorganisms, dust,shocks, vibrations, stack loads, etc.In case of food products,protection afforded by thepackage is often a part of thepreservation process. For example,aseptically packaged juice in aTetrapak carton cannot retain its

shelf life if the integrity of the package is breached.

Changing demographic trends such as urbanization,increasing incomes, more women in the workforce, nuclearfamilies and single-person households have brought in theirwake an increasing demand for convenience in consumerproducts — ready-to-cook and ready-to-eat foods and ready-to-drink beverages, foods and drinks that can be directlyconsumed from the packages, dispensers that facilitate useof products like sauces, etc. The convenience functiondesigned to be performed by the package allows productsto be used conveniently.

Another aspect of package convenience isthe apportionment function. The packagecontaining the net quantity of the productreduces the output from industrialproduction to manageable, desirableconsumer size, e.g., 1 litre of sunflower oil,25 g portion pack of butter, etc. Put simply,the large scale production of products withits associated economies of scale could nothave succeeded without the apportionmentfunction of packaging to deliver productquantities convenient to use by theconsumer. Besides convenient sizes, therelative proportions of the dimensions ofthe packages are designed to achieveefficiency in building into secondary andtertiary packages, such as corrugated casesand pallets and, occasionally, even thequaternary package of intermodalcontainer. With optimal dimensions inprimary and secondary packages, maximumspace available on pallets and in intermodalcontainers, which are of standard sizes, canbe utilized. As a consequence of thisfunction, material handling is optimizedsince only a minimal number of discretepackages or loads need to be handled at anystage of distribution of goods.

Finally, packaging plays an important rolein marketing products through thecommunication function. The modernmethods of consumer marketing would failwithout a package communicating variousmessages to the ultimate consumer. Thepackage through its distinct form, style andsurface graphics, identifies the brand, thecategory and the product features and evenmotivates the buyer in a supermarketenvironment, which functions on self-service basis without the help of a salesmanto promote products. It is no exaggerationthat a package has been dubbed the ‘silentsalesman’. Besides, modern retailingextensively makes use of barcodes printedon the packages through scanning atcheckout counters for efficient storeoperations.

A knowledge of these functions of

The modern methods ofconsumer marketingwould fail without apackage communicatingvarious messages to theultimate consumer.



packaging and the ambient, physical andhuman environments in which packaginghas to perform will help in the developmentof real, cost-effective optimized packagingdesign. Recent developments in materialsand technologies have made a variety offood products in packed form available offthe shelf with fresh-like quality and ultimateconvenience. Also, increasing demands onshelf-life extension, product safety,consumer convenience, retail operations,cost-effectiveness and environmental issuesare the lateral driving forces in shaping thecurrent food packaging practices.

Strengthening barrier function of thepackage

One of the most important task ofpackaging is to achieve the necessarybarrier effect for the desired shelf life of afood product. With the emergence ofplastics as versatile cost-effective packagingmaterials, the need to find practicalsolutions to restrict their permeability togases, especially oxygen, carbon dioxide,flavours and water vapour has become allthe more significant. Along withcoextrusions for films, bottles and trays,newer coatings, metallizations, fillers, andnanomaterial based inclusions that givetortuous paths to the passage of gases, arebeing developed. Recent plastic beveragebottle innovations include the developmentof cost-effective PET bottles in smaller sizes,the blending of PET with oxygen-scavengingmaterials and the development of asepticfilling for dairy beverages in plastic bottles.External barrier coating of epoxyamine orsilica and thin carbon coating on innersurface on the PET bottle are offering longershelf life for beer and carbonated soft drinkswith prolonged carbon dioxide retention.

Active packaging to extend shelf life

Modified Atmosphere Packaging (MAP) hascome into use during recent years forextending the shelf life of fresh fruit andvegetable produce and their prepared itemsespecially in markets that have a well

established and controlled coldchain and that can sustain a highpriced quality product. Currentapplications of MAP also includewhole or cut green salads, freshmeat, confectioneries, bakeryproducts, sandwiches andconvenience foods like pizza andready meals. The application ofnovel high oxygen MAP is a newapproach for the retailing of freshprepared produce items and iscapable of overcoming the manyinherent shortcomings of currentindustry-standard low oxygenMAP.

Recent research efforts arefocused on development of activeand intelligent packaging. Active packaging changes thecondition of the packed food to extend shelf life or toimprove safety or sensory properties, while maintaining thequality of the packaged food. Food condition here includesvarious aspects that may play a role in determining the shelflife of packaged foods, such as physiological processes (e.g.,respiration of fresh fruits and vegetables), chemicalprocesses (e.g., lipid oxidation), physical processes (e.g.,staling of bread, dehydration), microbiological aspects (e.g.,spoilage by microorganisms) and infestation (e.g., byinsects). Intelligent packaging systems monitor the conditionof packaged foods to give information about the quality ofthe packaged food during transport and storage. They canbe external (attached outside the package, time-temperature indicators) or internal (oxygen, carbon dioxide,microbial growth indicators).

Aseptic packaging – a revolution in delivery of fluid foods

Aseptic packaging has revolutionized the way fluid foods aredelivered – cartoned fruit juices, milk and other dairybeverages, soya drinks, tomato puree, soups, puddings, RTDtea, wine and now low-acid and particulate foods. Recentaseptic packaging innovations include injection moldedreclosable plastic closures, PET bottles for still beveragesand HDPE bottles for refrigerated still beverages, flexibleaseptic pouch, octagonal and wedge shaped cartons in bothpaperboard / aluminium / plastic and transparent silica-coated PET lamination, thermoform / fill / seal systems forbarrier plastic cups with heat-seal flexible closures and snap-on plastic overcaps and vertical form / fill / seal aseptic stickpack machine for tubular packages.

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Intelligent packagingsystems monitor thecondition of packagedfoods to giveinformation about thequality of the packagedfood during transportand storage.



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A relatively newer concept of Extended Shelf Life (ESL), inwhich products are not necessarily processed under asepticconditions to achieve sterile product and package structuresare treated to approach but not necessarily achieve sterility,has come into use for many liquid products. Ultra-cleanpackaging conditions and chilled distribution are generallyused to deliver a superior-quality product with extendedshelf life.

A fallout of the aseptic tetrabrick package is the retortablecarton that is likely to compete with the retort pouch andtray for ready-to-eat foods. Its main advantage comparedto retort pouch is the fast filling speeds of 400 per min, whichis comparable to conventional metal can lines.

Indian successes despite constraints

Availability of food in sufficient quantities to the burgeoningpopulation is a major issue in a country like India, wherenearly a third of the population lives below the poverty line.Though constant efforts are being made to increase foodproduction, we have to contend with high levels of foodwastages resulting from unscientific or inefficient storagepractices and inadequate use of preservation and packagingtechnologies. The view that packaging is an unnecessary costarose due to ignorance of the crucial role that a packageplays in protecting and delivering the product.

India, in fact, is a pioneer in evolving cost-effective packagingsystems that cannot be found in markets of developedcountries. Flexible pouches for milk and edible oil are twoshining examples. Spice powders, instant mixes, instant

noodles, biscuits, confectionery,coffee, tea and health beveragesare some of the major foodcategories, which have now cometo occupy large amounts of shelfspace in super markets owing tothe use of functional andeconomical packaging. Recentmarket successes of packagedatta, cartoned fruit juices andready-to-eat foods in retortpouches point to the consumertrends and increasing appreciationof value addition throughpackaging.

Organized retail and packaging

The present “organised retailboom” in India, is resulting in A friend in need is a friend to be avoided.

- Lord Samuel

India, in fact, is apioneer in evolvingc o s t - e f f e c t i v epackaging systems thatcannot be found inmarkets of developedcountries.


upgradation of technologies and practicesalong the entire value chain of production,packaging and distribution of food products.Self service being the governing paradigmof organized retailing, packaging hasbecome the focal point of marketing andselling. It has become imperative for foodmanufacturers to focus on shelf presence,product differentiation and valueproposition achieved through innovativeproduct-packaging developments.

Packaging and the environment

Proliferation of packaging is being blamedfor the environmental pollution that itsupposedly causes. Considered wondermaterials not too long ago, plastics thatconstitute about 50% of packaging,particularly are getting bad publicity fortheir non-biodegradable nature.Internationally, efforts are on to movetowards sustainable packaging – wherein allpackaging is sourced responsibly, designedto be effective and safe throughout its lifecycle, meets market criteria forperformance and cost, is made entirelyusing renewable energy and once used, isrecycled efficiently to provide a valuableresource for subsequent generations – atrue “cradle to cradle system”.

With greenhouse gas emissions getting tothe top of the environmental agenda,experts are looking at the total carbonfootprint that a package leaves throughoutits life cycle. Seen from this perspective,plastics are no more considered as less eco-friendly than glass, paper and metalpackaging. That is something that India cancheer about since plastics providemaximum functionality at lowest cost whenit comes to food packaging.


Dr. Smita Lele is currently Heading the Food Engg. &Tech. Dept. of the Institute of Chemical Technology(formerly UDCT), Mumbai. After graduating in ChemicalEngineering from then UDCT in 1977, she joined as theFirst woman engineer in Hindustan Lever Research Centre.Later she completed Masters and Doctorate Degrees andtook up academics as a long term career option. She hasbeen consultant to Tetra Pak, worked at PittsburghUniversity as visiting researcher, has guided over 50Masters and 20 PhD students and published 40 researchpapers in peer reviewed international journals. Currentlyshe is Vice President of the Association of Food Scientistsand Tech. (AFST), Mumbai Chapter and has several awardsand accolades to her credit including Fellow of theMaharashtra Academy of Sciences, “Hari Om AshramPrerit Shri. S.S.Bhatnagar Research Award, SavitribaiPhule-Outstanding Woman Achievement Award etc. Thisoutstanding personality with an ability to maintain careergraph of excellence in academics, research and industryalong with balancing domestic responsibilities is a rolemodel for many a young career woman.

Challenges inIndian FoodProcessing IndustryDr. Smita Lele,Head, Food Engineering and Tech Dept.,Institute of Chemical Technology, (UDCT), Mumbai

India is known for its diverse agro-climaticconditions ranging from arid deserts tohumid tropical regions thereby supportinga multitude of crops. We have moved frombeing a food deficit country to a foodsurplus country. India is ranked amongst thetop three producers of fruits and vegetableshowever, as a processor it is in the bottomthree. The food industry constitutes thefastest growing industrial sector in Indiaperhaps as a result of population outbreak.Considering current Global market trends,open policies of Government of India andnew food law, the Indian food processingindustry needs to gear up for forthcomingchallenges. The Farm-to-Table concept offood starts from good agricultural practices.Although food industry has grown, theprojected growth of the decade has notbeen achieved. This may be attributed tothe fact that agriculture is not viewed as an‘industry’ in this country. In spite of beingan agriculture based economy, Indianagriculture has not developed into alucrative industry due to several limitations.Inadequate education, tendency to useexcess chemical fertilizers and pesticides,small lands owned by large number offarmers, lack of mechanization, anddependence on rain water lead to lesserproductivity of the grown crops. Estimatesindicate that unless a farmer makes Rs.100,000 net profit per acre per year, it cannotbe called an Agro industry. In the presentsituation this figure is around 40,000 formost of the crops.

The food processing industry may bebroadly classified as Dairy, Fruits&Vegetables, Bakery, Beverages, Snacks andothers. The total share occupied by each ofthese industries has been illustrated in PieChart 1.

As per the reports of the Ministry of FoodProcessing, food processing industry inIndia is growing at 13.7% even in the midstof global economic meltdown, the time hascome for the food technology revolution inour country after the boom in IT and



biotechnology. The Ministry has announced 100 steps in 100days. Some of the long term initiatives are :

Key areas of action during 2009-2014

• Manpower capacity building

• Infrastructure development with focus on rural areas

• Fiscal incentives to achieve exponential growth

• Making available process able quality of raw material

• Setting the agenda for research and development

• Launching a nationwide campaign to address safety andquality issues

Dairy and Bakery are well established sectors for severaldecades, both as organized and unorganized. Fish, meat andpoultry are growing at fast rate for domestic and exportmarket as well. The real potential lies in the growth of Fruitsand Vegetables (F&V). The traditional Indian food industryhas grown from Pickles and Papads to global success storiesof Indian snacks like Bhujia and Farsan. Products such aspickles, papads, bhujias are basically shelf stable with lowmoisture content hence in this case the major challengeswere mechanization, packaging and of course, effectivemarketing. On the other hand, for processing fruits andvegetables (high moisture) products, appropriate technologyfor food preservation is also an important challenge. Thefocus of well established products such as jam-jelly-ketchupneeds to be shifted to novel and more indigenous productsfrom fruits and vegetables.

Indian dairy industry

India is world’s largest consumer of dairy products utilizing100% of its own produce. The vegetarian population in Indiaaccepts milk as the only consumable form of animal proteinhence adding to the demands. Indian dairy industry hasgradually undergone a change to suit the ever-changingconsumer needs. The focus of the dairy industry has shifted

from milk alone to other value added dairyproducts. The western yoghurt wascustomized to suit the Indian taste and thetraditional dahi was thus introduced in theprocessed form. Further, processedproducts like lassi, chaas and flavoured milkhave witnessed a nationwide acceptance.The untapped potential of this sector isimmense and can be fully realized byadopting newer technologies.

Table 1 gives an over view of variousprocessing technologies and Indian contextof conventional and new technologies forfood processing.

(See table on the next page)

Unavailability of freshly grown fruits andvegetables throughout the year leavesforeign consumers with little choice therebyforcing them to accept semi and fullyprocessed foods in their dailymeals.Consumers in general favor mildlypreserved convenience foods that possesshigh degree of freshness. In a country likeIndia having a supply of food crops throughout the year the consumer mindset playsan important role. The products cookedregularly at home by grandma that involvedtedious methods have already captured themarket as ready-made food. For examplepuran poli and modak (from Maharashtra)as homemade fresh ready to eat (RTE)products are seen at a number of smalloutlets of Mumbai and Pune. The successof two minute noodles has welldemonstrated that the Indian woman hasa preference towards ready to cook (RTC)rather than ready to eat products, the laterbeing viewed as a stand-by, emergencyarrangement. The conviction of an Indianhousewife in her need to contribute to thefood making process at home opens up apossibility for a range of semi processedproducts of Indian origin at organized andunorganized levels. Washed-cut vegetables(minimally processed), idli batter, pani purichutney and wet curry masala are fewexamples that constitute the unorganizedsector. Dehydrated branded items like Gulab

Pie Chart 1 –Market share of various food industries




Tabl

e 1

: Fo

od p

rodu

cts

and

proc

essi

ng te

chni

ques

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jamun mix, idli, dhokla mix,payasum mix made by organizedsectors are well received.

Food processing machinerydevelopment

Machinery for processing of fruitslike mango, dehulling of peas,dehusking of grains etc. are wellestablished. Institutes like CentralFood Technological ResearchInstitute (CFTRI) have played asignificant role in developingbetter machinery for Indian foodprocessing industry, particularly inthe southern part. Due to smallcapacity needs of the processor,indigenous fruit processingmachinery is highly specific to one

kind of fruit. The imported machines for de-stoning, slicing,pulping are having several tons per day capacity and aremore flexible for the raw material. Such machines are usedonly by large scale manufacturers. For RTC / RTE traditionalfood, diverse consuming patterns of Indians make it difficultand challenging to customize processing machinery.Consider for example RTE “Dal”. North Indians prefer thickspicy dal fry where as south Indian Sambar has large chunksof vegetables. The making, filling and sealing are affecteddirectly. A small scale retort processor will be able to handlethese diverse products in the semi automatic plant; howeverhis main constrain is economic viability. Yet another hugemarket is Chapati - mechanization in the form of pressing orsheeting the Chapati is successful. However, exactreproduction of roller pin action, intermediate folding ordirect flame roasting are difficulties in the different types ofchapaties raging from Ghadichee-folded, Fulka and Parathastyle. Failure stories of big players are learning experiences.

Development of packaging

Growth and success of food processing industry lies in thehands of packaging perfection. Packaging industry acts asan efficient vehicle in delivering processed foods from theproduction unit to the consumer market. Packagingmaintains the freshness of the food product, providesconsumers with nutrition and constituent information alongwith enhancing its attraction quotient. It is said that peoplebuy by seeing the food rather than reading the label. Forwet processed foods, packaging is the heart of preservation.For dry products also, the sensory attributes such as

crispiness are the deciding factors andpackaging is the essence of the product. Asa rule of thumb, 15% of MRP is acceptableas the packaging cost. Till last century, inIndia, a good packaging was costing 20 to35 % of the product cost due tounavailability of indigenous packagingmaterial. In last decade, this industry hasdeveloped a range of new packagingmaterials, films, composites that hasopened up several avenues. Local form fillseal (FFS) machines are affordable. Indianmarket has witnessed transformation in thelooks and feel of packaged food. Take forexample the largest selling biscuits. Glucosebiscuits that were sold in two types – unitpack with double packaging or 6 kg (reused)tins with say 50 packs in wax paper wraps,are now completely replaced by unit packsof different sizes having a single polymerfilms with 100% moisture barrier. Higherpriced biscuits are stacked in trays andpacked. Thus both technology and economyhas seen revolution.

Materials that have been conventionallyused in food packaging include glass, metalslike aluminum foils and laminates, paperand paperboards, and plastics. Additionally,a wider range of plastics have beenintroduced in both rigid and flexible forms.Contemporary food packages combinedifferent materials to exploit each one’sfunctional or aesthetic properties. Packagedesign and assembly play a considerablerole in determining the shelf life of a foodproduct. The right choice of packagingmaterial and technology sustains productsuperiority and freshness during itscirculation and storage. Recently severalnovel food packaging concepts have beenlaunched. The introduction of retailsupermarkets and changes in distributionpractices such as centralization of activities,newly emerging trends like internet-shopping and globalization of markets haveresulted in drastic changes in packagingapplications for Indian Food industry. Thecurrent philosophy of packaging


Packaging maintains thefreshness of the foodproduct, providesconsumers with nutritionand constituentinformation along withenhancing its attractionquotient. It is said thatpeople buy by seeing thefood rather than readingthe label.



emphasizes on holistic approach andinnovations such as active packaging,modified and controlled atmosphere areimplemented. Packaging and preservationindeed help in building brands anddevelopment of consumer preferences.WPO (World packaging organizations) hasa slogan “Better Quality of life throughbetter packaging” is indeed the Mantra intoday’s world. Tables 2 A and 2 B summarizbroad applications of various packagingstyles and materials popularly used in Indiaand market share. Obviously, in thedeveloped countries, since the MRP of thefinal commodity is much higher on thedollar scale, better packaging is used yetkeeping the loading below15%.

Table 2 B : Indian packaging market share

Product Value (Rs. Billion)

Flexible Packaging 32

Rigid plastics 28

Printed cartons 24

Glass bottles 16

Metal cans 11

Caps and closures 10

Labels 6

Others 21

Total 148

Potential for fruit and vegetables processing

As mentioned earlier India is amongst the highest producersof fruits and vegetables, China being number one.

Table 2 A : Food products and packaging materials

In Focus


Always acknowledge a fault. This willthrow those in authority off their guard andgive you an opportunity to commit more.

- Mark Twain


Maharashtra, Andhra Pradesh and Tamil Nadu are theleading fruit producing States where as in the case ofvegetables the highest production is in the north and easternregions. According to the survey by the Ministry of FoodProcessing Industries (MOFPI), the installed capacity for F&Vprocessing has doubled from 1.1 million tons in 2001 to 2.1million tons in 2006. Yet there exists a large untappedpotential. Well established products range in vegetableprocessing covers a range of tomato products, next beingpotato as chips. Semi-processed vegetables include frozengreen peas as the main candidate. Mango is the mostprocessed fruit and slice, pulp, jam, beverages and picklesfrom raw mango are the most popular types. Techno-economic viability of a processing industry depends on thecost and capacity ratio. For high value products, particularlyfrom fruits, several small and cottage level units fromunorganized sector have survived although nor grownsignificantly. The vegetable processing industry suffers sinceit falls in low value low bulk bracket. The only way to makeit grow is have specialty products such as spices andnutraceuticals or have clusters of farmers to grow a singlecrop and have high capacity of processing. The generalscenario in India is small land holding by every familyresulting in highly fragmented diversified food cropscultivated in the same geographical location leading totremendous post harvest losses.

Rajeev Gandhi Commission for Sc. & Tech. (RGC), Govt. ofMaharshtra, has taken initiative to encourageimplementation of simple technology such as dehydrationof vegetables and make value added products like vegetablesoups that have good shelf life. The main hurdle still lies indeveloping a marketing chain for low value low bulkcommodity. The concept is that dehydrated vegetables willbe collected at a centralized place and converted to valueadded products after confirming the microbial safety andfood quality of the dry vegetable flex. MOFPI has supportedthe concept of Food Park that will also help survive smallscale industry since common infrastructure for raw materialprocurement and waste utilization will be available centrally.History shows that Amul as a cooperative activity hassuccessfully solved a similar problem and made the dairyprocessing cost effective with a member partner having only5 cattle heads in a house. Thousands of rural householdsengaged in milk production were organized in co-operativemanner for mass procurement of milk, subsequentprocessing and marketing under this “out of the box”scheme. This spurred the White Revolution, which has madeIndia the largest pouched milk brand in the world.

In Focus

To summarize, the question is how theIndian Food Processing Industry, particularlyFruit and Vegetable processing, will grow asexpected? In spite of huge funding byvarious Governmental and otherorganizations for R&D, subsidies foragriculture, educational drives, policies tosupport small and medium sector,entrepreneurship initiatives by the Ministryof Food Processing Industries (MOFPI), weas a country have not hit the bull’s eye. It istime to introspect and ponder -- “WillBirbal’s Khichadi be ever cooked?” Apositive answer could be affirmed - yes itwill if one prevents the heat dissipation! Thehurdles enumerated in this discussion areto be overcome by us and the consumerplays a significant role. Only by developingsuccessful sustainable business model fora low value low bulk commodity, we as acountry will hit the bull’s eye. We must actfast or the Indian market will be soonflooded with Papads and Chapatis with“Made in China” mark!


The vision of Food Processing should be atone end to grow agriculture and at thesecond end to improve rural prosperity sothat agriculture particularly value addedagriculture and food processing can do forrural India what I.T. did for urban area.

There are certain changes which arehappening with the boom in retail sector,customers changing preference forconvenience, and all these wouldautomatically add to the growth in valueadded agriculture sector, but what isrequired from Government is true role as acatalyst. The reforms should be based onsix strategic directions, these are:

1. Create “effective demand” by bringingabout critical taxation interventions viz.100% exemption from all taxes onprocessed food products to ensure thatthe cascading effect of tax which isalmost 20% on consumer selling price ofalmost all food products if removed pricecome down which will create moredemand. The revenue loss which wouldbe compensated by boom which willhappen in Rural sector and createinfrastructure and employment whichwill improve life style of lot of rural India’spoor people.

2. Incentivise Technology, R&D andinnovation. This incentive should be inthe form of accelerated depreciation of200% on R&D for new units in FoodProcessing and Packaging, as well asestablishing more government-fundedfood research centers and improvingeducation in the food processing.

3. Stimulate investments through thedesigning and implementation ofappropriate financial interventions torespond to the unique characteristicsand needs of the industry. The mainreason for doing so is it is the known factthat this industry has gestation periodlonger than any other industry because


Leading India’s largest and the most popular SoftDrink Concentrates brand is a mammoth task, and no oneknows this better than Mr. Piruz Khambatta. Chairmanand Managing Director of Rasna Pvt Ltd., Mr. Khambattahas come a long way over two decades, when he first gotinvolved with the company at the age of eighteen. Hisassociation with Rasna Pvt. Ltd. as Chairman andManaging Director dates back to the year 1997 after hetook over the helm of affairs.

Today, Mr. Khambatta with his ingenuous qualitiesof hands-on-management and innovativeness in products& promotions has developed Rasna into a legendaryIndian success story. Rasna has braved competition fromgiants like International Best Foods, Unilever, Coca Cola,Rallis and a host of smaller players. Yet it has been able todisplay a rock steady market growth and has gained asignificant market share. Currently enjoying 93% of thepie, Rasna has left its competitors far behind.

Rasna has the distinction of being ranked No.1 in thebeverages category as the Most Trusted Brand by BrandEquity’s Nation-wide Survey 2003 conducted by A. C.Nielsen and Economic Times, and rated as the No.15 topbrand in India, including service brands. Relentlessdedication and hard work by the Rasna team also earnedRasna the honor of being adjudged the Most preferredbrand in the Soft Drink Concentrates category at the FMCGMost Preferred Awards 2003.

Rasna has also received the Consumer Award for theyear 2007 and 2006.

Food ProcessingIndustryPiruz Khambatta,Chairman,Rasna International,Ahmedabad


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of the concept of “Return on Investment”(ROI) v/s Returnon “Taste” and “time” (RoTTI) and that is why requiredappropriate finance intervention including priority sectorlands and special interest rate and higher moratoriumperiod.

4. Enable the development of an efficient and competitivesupply chain starting from the Farm Gate. This total supplychain should be treated as priority infrastructure and allbenefits of infrastructure development in terms of niltaxation as well as special finance incentives to be givento this sector. This supply chain will become back boneof the development of the industry.

5. Position India as a preferred outsourcing hub forprocessed foods and as a global food factory, so that likepromotion of tourism in India increased tourism, floridaOrange got promoted in the world, so did New ZealandKiwis, so did California Grapes etc.etc. Indian productscan be promoted by central budget support where Indianexporters position their products in the shelves of worldmarket, so that Indian food products will be on the diningtables of world.

6. Significantly upscale the institutional and infrastructuralset up in the country for facilitating testing, and trainingin food safety and quality management system in linewith international standards. As quality in food is majorissue, there is a need to set up major capacity buildingfor testing all across the country where government canset up international level lab for testing and set up CODEX

cells across the country.

I once again repeat the mostimportant aspect is to ensure thatgreat demand is created forprocessed food products. This canhappen by actually ensuringprocessed food products as cheapas telephone & air tickets byensuring that the effect ofcompound taxation does not applyto this sector in line withunprocessed food. Moreoverthere should be total tax holiday,not just for one to two years butat least for 10 years, be it excise,bet it Vat, bet it other taxes likeTOT tax or Octroi etc. multiplier

The nice part about being a pessimist isthat you are constantly being either provenright or pleasantly surprised.

- George Will

This can happen byactually ensuringprocessed food productsas cheap as telephone &air tickets by ensuringthat the effect ofcompound taxation doesnot apply to this sector inline with unprocessedfood.


benefit because of employment and ruralprosperity, reduction in health cost, creationof rural infrastructure, ensuring nomigration from villages to cities, overallimprovement of quality of life in rural areais much more that the loss to the exchequerdue to the loss of tax and that is why I callcutting the cake and eating it too strategy.

With reforms and concentration of abovepoints by Government, Industries,academia, and all future managers, I amsure we would realize the dream ofchanging the face of rural India as well asmake India proud.


The year gone by has indeed been one ofthe most challenging for the worldeconomy. The unprecedented financialcrisis, acknowledged today as the worstsince the Great Depression has brutallyshaken the foundations of some thestrongest economies in the world. Nearly40 million jobs have been lost. Cumulativelosses from bankruptcy, closures and ailedbusiness are pegged at trillions of dollars.Though Governments across continentshave responded speedily and in rare unison,the path of recovery is expected to be longand arduous. Despite this pall of gloom thatdears on us, there are reasons to remainoptimistic and confident. India’s inherentstrengths provide a strong foundation tobetter withstand the aftermath of thedownturn in the global economy.

Though the Indian Seafood Industry hasmoved from crisis to crisis during the lastdecade due to external factors totallybeyond its control, the industry hasmanaged to survive and keep itsmomentum of growth. However, today itfaces the most challenging time in its historysince seafood exports from India began in1955. The industry is fighting for its verysurvival.

There are fundamental issues, for whichthere are no short term solutions. The basicproblems are:

1. There is sharp decline of catch along bothEast and West Coasts of India due to over-fishing and pollution in our coastal waters.Fishermen are finding it difficult to makeends meet with the low catch and the highcost of operation.

2. Our Aquaculture today is focused entirelyon the Monodon Species or called BlackTiger in commercial parlance. Demand forBlack Tiger in the international marketsfaces sharp decline due to the availabilityof low cost Vannamei shrimp, which can beproduced at almost half the cost ofcultivating Black T iger. The VannameiShrimp is an equally attractive looking andtasting shrimp as the Black Tiger from theconsumer perception.


Mr. Sandu Joseph is a seafood exporter and is alsoinvolved in Project Management, Seafood Marketing,Trade Promotion, Training, Formulation AndImplementation Of Projects.

Working in a National organization for thedevelopment of seafood industry and trade with a widespectrum of activities and background has moulded hispersonality, so believes Joseph.

His key strengths include -

• Helping Seafood Industry in trade issues,marketing aspects and trade complaintsettlement.

• Arrange for market promotion, fair participation,trade delegation market survey and promotionof Indian Seafood abroad.

• Liaise with commercial consultants for BrandPromotion of Indian seafood.

• Organise India International Seafood Show (IISS)

• Implement UNCTAD project “Strategies andPreparedness for Trade & Globalization in India”.

• Printer and Publisher of Seafood Journal

Indian SeafoodIndustry : AnAppraisalSandu Joseph,Secretary,Seafood Exporters Association of India,Cochin


3. India is unable to compete on the aquaculture shrimpfront against its Asian competitors. China, Thailand, Vietnamand Indonesia have all switched massively from Black Tigerto Vannamei. The farm level price for Black Tiger in India isthe lowest ever. It is unviable for the Indian Shrimp Farmerto cultivate Black Tiger at prices now being offered basedon offer prices exporters are receiving from majorinternational buyers. The Indian Shrimp culture industry isin turmoil and farmers are averse to seeding their farms.There will be a drastic reduction in aquaculture productionin coming years unless we find a solution.

1. Export Performance during 2008-09

For the 5th year in succession, the export earnings of marineproducts in dollar terms touched record levels during 2008-09. The export earnings in rupee terms were also the highestever recorded. The overall exports showing the exportgrowth are given below:

OVERALL EXPORTS DURING 2008-09

Details 2008-09 2007-08Growth (%)

Quantity 602835.34 541701 11.29in Ton

Value Rs.crore8607.947620.92 12.95

US $Million 1908.63 1899.09 0.50

1.01 Major Item wise exports

into the second place from 3rd position heldin last year with a share of 15% in dollarterms. Japan was relegated to 3rd positionwith an overall export of 57271 MT havinga value of US $ 278.61 million. Share ofexport to Japan has also gone down to14.34% from 16 % during the pervious year.Exports to USA have fallen further to US $227.29 million (-10.18%) relegating it to 4thposition. But East Asia registered aremarkable growth with 39% increase inquantity, 52% increase in rupee terms and33% increase in US $ terms. The share ofSouth East Asia has increased to 10% from7.5% in US $ terms during the year. Exportto Middle east also registered growth with5.5% increase in quantity, 20.8% in rupeevalue and 7.3% in US $ terms. Share of othercountries is 10%.

1.03 Port Wise Exports

A total 23 land/Air ports handled marinecargo during the year, The major ports inorder of export were Kochi (17.6%), JNP(17.3%), Pipvav (16,1%), Chennai (12.6%),Vizag (10.5%), Calcutta (8.4%), Tuticorin(8%), Mangalore (2.8%) etc. While JNP andPipavav increased their share, Chennai andVizag witnessed a reduction.

Frozen shrimp continued to be the largest item with a shareof about 44% in the total export earnings, even though theirshare in the export during the period dropped by 8% inquantity, 4 % in value and 15% in dollar value. Fish, thelargest item of export in quantity terms with a share of about40% and the second largest item in value accounted for ashare of about 20%. The frozen fish recorded an exportgrowth of about 8% in quantity and 32% in rupee value and15%in dollar earnings. Frozen Cuttlefish contributed 8% inquantity and about 9% in value terms to export basket.Export of Frozen squid grew very remarkably registering agrowth of 67% in quantity, 55% in rupee terms and 41% indollar terms respectively. All other items also recorded agrowth in export during 2008-09.

1.02 Major Export Market

European Union remained the largestmarket for Indian seafood accounting for151590 MT (25%) in quantity, Rs.2800crores (32.5%) in rupee terms and US $ 623million (33%) in dollar terms. Share ofEuropean market has come down from 35%to 32.6% in dollar terms during the year. Avery important feature of the export trendis the increase in export to China. China got



2. Culture Fisheries

2.01 Export production throughaquaculture

Aquaculture contributed significantly in theyear of Global economic recession to theseafood exports of the country although adecreasing trend was noticed both in thearea under aquaculture and overallproduction compared to the previous year.Production of aqua cultured shrimp andscampi has been decreasing during the past

economic crisis, which resulted in the reduction of theinternational prices for the seafood items in general andshrimp in particular. This led to the reduction of shrimpand scampi farming operations by the aqua farmers. Otherfactors that resulted in the decrease in the farming areasare the natural calamities like floods, increase in diseaseprevalence, supply of poor quality seed for farming andcompetition from large scale production of the Pacificwhite shrimp at lower prices in the international markets.

2.03 Shrimps:

During the year under review i.e. 2008-09, shrimpproduction was estimated at 75,996.54 MT that wasproduced from an area of 1,08,788.68 ha. Compared to theprevious year production of 106160 MT from an area of1,22,078.80 ha utilized for shrimp farming, a decrease of28.41% in production and 10.89% in area was noticed duringthe current year 2008-09. The estimated value of the shrimpproduced during the year is Rs.1,710 crore, which registereda reduction of Rs.690 crore over the previous year.

2.04. Scampi:

Compare to the previous year’s production of scampi i.e.27,262.06 MT from an area of 50,206.30 HA, A DECREASEOF 53% in production and around 63.30% in area utilizedhas been registered during 2008-09. The production ofscampi was 12,806.25 MT from an area of 18,421.14 ha.The estimated value of scampi during the year is valued atRs.205.00 crore which registered a reduction of Rs.231.00crore over the previous year (Table -4). In addition to theabove area it is recorded that about 1980.27 ha has beenbrought under scampi farming in the state of Kerala under

the newly introduced scheme of Padasekharams during2007-08. Though production is only 284.30 MT with anaverage productivity of 140 kgs/ha, this had contributed tothe aquaculture production from the state and also the areathat was not utilized earlier could be brought underproductivity purpose.

2.05 Total aquaculture production

The overall production from export oriented aquacultureduring the year 2008-09 was estimated at 88,803 MT andthe value of the same was estimated at Rs.1,915,00 crore,which works out to an average farm gate price of Rs.216per kilogram of wet weight. There was a decrease of 44,619MT production and Rs.921 crore in value respectively whichis 33.44% reduction in quantity and 32.48% in valuecompared to the previous year production of 1,33,422 MTvalued at Rs.2,836 Crore.

Though it is anticipated that all the shrimp/scampi producedby aqua farming will be exported, it is observed that some

two years due to various factors that hasplagued the sector such as increased costof production, recurring disease outbreaks,natural calamities like cyclonic floods.However, efforts are being taken to createincreased awareness among the farmingcommunity regarding the need for qualityimprovement by MPEDA as this is one ofthe major issues for retaining the marketsfor sustainability of production and exportsfrom the country

2.02. Status of aquaculture production

Reports received indicated an overallreduction in aquaculture production duringthe year under report. While shrimpproduction showed a decrease of 28.40%,there was a drastic reduction of scampiproduction by 53% less than the previousyear. This is attributed to the global



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quantities of shrimp and scampi would have been disposedoff in the domestic markets as well due to the increase indemand for the seafood and also to realize better prices forthe produce.

In addition to the above, serious attempts were made todiversify aquaculture into other exportable varieties likefinfish (Asian Seabass) and Crab for farming in cages andponds. During the current year 2008-09 about 10 MT ofSeabass was produced valued at approximately Rs.0.13crores.

B. Trade Issues

1.EU Regulation No.1005/2008

With effect from 1st of January2010 EU will be implementing avery stringent legislation to fightagainst illegal, unregulated andundeclared fishing. As perRegulation (EC) No. 1005/2008 allwild caught fishery products,except those caught in inlandwaters i.e freshwater and lakeswill have to be accompanied by anofficial statement giving the nameof the catching vessel, name of theCaptain and date and quantitiescaught per fishing vessel, etc.

The above referred regulation hascome into force on 29/10/2008 i.e.on the day of its publication in theOfficial Journal of the EuropeanUnion and will be effective from1st January, 2010. The regulationis result of the follow up action of:-

1. The United Nations Agreement for the Implementationof the Provisions of the United Nations Convention on theLaw of the Sea signed by member states on 10/12/1982.

2. The FAO Agreement to Promote Compliance withInternational Conservation and Management Measures byFishing Vessels on the High Seas (FAO ComplianceAgreement) dated 24/11/1993,

3. The Agreement to the Conservation and Management ofStraddling Fish Stocks and Highly Migratory Fish Stocks (UNFish Stocks Agreement) dated 04/08/1995, and the CommonFisheries Policy of the EU as set out in Regulation (EC) 2371/2002.

The regulation consists of a pre amble and three chapters.The first chapter deals with the definitions of IUU and

vessels, etc. The second chapter deals withconditions for access to port of memberstates by third country fishing vessels, portprocedure, inspections, etc. the thirdchapter deals with Catch Certificationrelated to import of fishery products fromthird world countries by member states.Article 12 para 2. of the above regulationspecifically states “ fishery products shallonly be imported into the Community whenaccompanied by a Catch Certificate inConformity with this Regulation“. It is veryclear from this that all seafood exportedfrom India and arriving at any EU port after31st December, 2009 will be cleared onlyon production of a Catch Certificate.

Para 41. of the above regulation alsoreiterates that the provisions of Regulation(EEC) No. 2847/93 relating to sanctionsremain thus applicable to violations of therules of the Common Fisheries Policy as setout in Regulation (EC) 2371/2002.

Let us now look at the requirements of theCatch Certificate.

1. The Catch Certificate should be issued bya Public/Competent Authority who hasbeen empowered by a Notification issuedby Government of India, to attest theveracity of the information contained in theCatch Certificate and empowered to carryout verifications of such certificates onrequest from EU member states.

2. The acceptance of these CatchCertificates validated by the CompetentAuthority shall be subject to the conditionsthat EU has received a Notification from GOIcertifying that it has in place nationalarrangements for the implementation,control and enforcement laws, regulationsand conservation and managementmeasures which must be complied with byits fishing vessels.

These are the two paragraphs which have adirect bearing on the seafood export fromIndia. At present, EIC, which is the NotifiedCompetent Authority, is only empoweredto attest the veracity of the HealthCertificate for import of seafood into EU.They are at present not legally empowered

Though it is anticipatedthat all the shrimp/scampi produced byaqua farming will beexported, it is observedthat some quantities ofshrimp and scampiwould have beendisposed off in thedomestic markets as welldue to the increase indemand...



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to issue the Catch Certificate. It is alsodoubtful whether they have the requisiteinfrastructure and personnel to physicallyconduct a verification audit of the fishingvessels, should the need arise. Therefore,GOI first needs to identify the CompetentAuthority in relation to Regulation (EC) No.1005/2008 and empower them with aNotification as required in Annexure III ofthe above regulation.

The second Notification is a much morecomplex issue. This involves putting in placenational arrangements for theimplementation, control and enforcementlaws, regulation, conservation andmanagement measures for fishing inconformity with International Rules onconservation and management of fisheriesresources. It is given to understand that theGOI is coming out with a National FisheriesPolicy under the aegis of the NationalFisheries Development Board. The specificissues notified under the above regulationmust be addressed in the National FisheriesPolicy. It is also unclear if the proposedNational Control and Enforcement Laws,Regulations would be seen as aninfringement on the sovereignty of the stateover the 12 mile coastal area. As thingsstands today, this will equally be requiredfor products from small scale fisheries alsofor composed fishery products.

If this new legislation is implemented it willcertainly affect the fishing industry andseafood export industry in India. Our mainsource of raw material is from artisinalfishing and small vessel.

2.Antidumping Issues

2.01. 3rd Administrative Review

US Department of Commerce (DoC) hasfinally determined the anti-dumping dutyon imports of Indian Shrimps to 0.79% from1.69% after the preliminary finding of thethird administrative review. The rates willbe applicable to Indian companies engagedin export business with the US. Efforts bythe Union Government, the Marine ProductExport Development Authority (MPEDA)

and Seafood Exporters Associationof India (SEAI) had resulted in thefirst review bringing it down to7.22%, the second review to 1.69%and the final findings of the thirdreview now bringing it furtherdown to 0.79%.

In the final determination shrimpimports from Ecuador will attractantidumping duty of 2.09%,Thailand 4.51%, Vietnam 25.76%and China 112.81%. Therefore,Indian exporters stand to gaincompared with exports from someof the competing countries.

2.02. 4th AdministrativeReview

Federal Register Notice dated April7,2008 (Vol.74, No.65) from USDOC decided for Initiationof AR for certain Frozen Warm water Shrimp from India.The US petitioners requested for review against 332 IndianCompanies. US DOC may rescind a review where there areno exports, sales, or entries of subject merchandise duringthe POR. So if the Producer exporter had no exports, salesor no entries during the POR should have notified theUSDOC with in 30 days.

The department will consider rescinding the review only ifthe producer or exporter submits a statement certifying thatit had no exports, sales, or entries of subject merchandiseduring the POR. Those companies who made shipments toUS during 3rd POR and no shipment during 4th POR shouldnecessarily file a NO SHIPMNET LETTER to USDOC.

US DOC on 13th of May 2009 selected the following as themandatory respondents for the 4th Review.

a) M/s. Devi Seafood

b) M/s.Falcon Marine

c) Liberty Group

2.03 WTO order on Bonding

The enhanced bonding requirements for Indian shrimpexports to the US have been removed with immediate effectfollowing the ruling of WTO in favour of India and Thailand.The ruling by the US Customs and Border Protection thathas come into effect from April 1, 2009, is a majorconsolation for the Indian shrimp exporters who had to payhefty anti-dumping duties at the US ports of entry and alsoexecute bonds for millions of dollars upfront as well. Theruling put up by the US Customs and Border Department

It is given to understandthat the GOI is comingout with a NationalFisheries Policy underthe aegis of the NationalFisheries DevelopmentBoard.



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reads: “This notice ends thedesignation of shrimp subject toanti-dumping or countervailingduty orders as a special categoryor covered case subject to anenhanced bonding requirement”.

There is close to $50 millionoutstanding bonds pending withthe US Customs Department,which are still to be liquidated infavour of Indian exporters. Duringthe year 2005-06, Indian exportershad to execute close to $20 millionas bonds for a total shrimp exportof Rs 950 crore at 10.17 per cent.While the value declined to Rs 800crore the next year the rate alsofell to 7.22 per cent, which wouldhave entailed a bond requirement

of approximately $11.55 million. In 2007-08, Indian shrimpexports to the US were at Rs 750 crore while the duty fell to1.69 per cent, necessitating a bond requirement of $2.55million. While the value of shrimp exports to the US isestimated at Rs 611 crore for 2008-09, the bondingrequirement would have been around $1 million at a rateof 0.79 per cent.

3. Trade issues with China

Beijing has threatened to ban import of seafood and otherfood products from India if New Delhi continues to restrictimport of milk products from China.

The Chinese side, in a response to the extension of ban onmilk and milk products, including chocolate exported byChina to India till December 24,2009, the GeneralAdministration of Quality Supervision, Inspection andQuarantine of China had conveyed that it had encounteredfood safety problems in imported food products from India,including seafood products.

China, however, has not imposed a ban on import of thefood products.

We came to understand that the Indian Government hasconveyed to China that India has taken note of theirconcerns. China has been also told that the decision toextend the ban till December 24 was taken after dueconsultation with authorities concerned and experts in thedairy industry.

Although China has not confirmed it yet, a hint from theChinese government has put Indian fish exporters in a fix.China is our 2nd largest trading partner in volume and 3rd

largest in Value. During the financial year2008-09 China imported 147312 tons ofSeafood worth Rs. 1296 Crores.

4. Rejection in EU Countries

Indian Seafood Industry has faced a serioussituation due to the rejections by the HealthAuthorities in EU Countries and USA ondetection of anti biotic residues in culturedshrimps from India. Japan is also veryconscious on this issue.

During the year 2008, in EU, the totalrejections of shrimp consignments fromIndia due to detection of antibiotic residueswere more than 30 in number. In the first10 months of the current year, the numberof rejections is 55.

EU authorities have informed thecompetent authority in India viz. ExportInspection Council of India (EIC) that theywill be closely observing further rejections.They have now informed Export InspectionCouncil (EIC) that every health certificatemust be accompanied by antibiotic freecertificate of the consignment from theorigin. It is very likely, if not imminent thatEIC may very soon introduce 100 percentcompulsory inspection of all the Indianshrimp consignments Exported to Europe,for antibiotic residue presence. If thishappens, we will surely loose EU market,which now constitutes almost 45% of thetotal cultured shrimp exported from India.Similarly, we will have serious issues on thisground with US FDA and Japan healthauthorities.

What mentioned above is nothing new andevery one of us is well aware of theconsequences of this problem. We havebeen trying to conveniently ignore orremove from our mind this problem. Thesituation has now come for us to takeserious actions on dealing with this issue.

SEAI advised the members, that an exportershould not buy the cultured shrimps , if it isnot accompanied by antibiotic freecertificate from MPEDA.

On the wake of large rejections due toantibiotic residue, EIC made certain

There is close to $50million outstandingbonds pending with theUS CustomsDepartment, which arestill to be liquidated infavour of Indianexporters.



guidelines to put control on aquacultureproducts meant for export. As per theguidelines Exporters are allowed to buy rawmaterials only from farms approved byCoastal Aquaculture Authority.

4. Strengthening of Monitoring & Inspectionof Aquaculture shrimps Exported to Japan

EIC informed that they are going tostrengthen the Monitoring & Inspection ofAquaculture shrimps exported to Japan. EIC,the Competent Authority suggested thefollowing course of action for immediateimplementation:-

1. All establishments approved forexporting fish and fishery products may beappraised about the detection & occurrenceof the hazard pendimethalin.

2. All consignments of aquaculture shrimpsmeant for Japan shall be tested for thepresence of pendimethalin (MRL 0.01 ppm)prior to export.

3. All establishments processingaquaculture shrimps shall be directed toidentify pendimethalin as a hazard and thesame should be addressed in the HACCPworksheet and plan to avoid the futureoccurrence.

Ministry of Health, Labour & Welfare, Japanhas intimated that they have decided toraise the frequency of monitoringinspections related to Agricultural Chemicalresidue to 30% to Frozen Cultured Shrimpproduced in India. EIC advised SEAI toeducate the farmers regarding theconsequence in using the herbicidescontaining pedimethalin.

5. Removal from Rapid Alert System (RASFF)in EU

Indian Seafood exporters have 3 majorissues with regard to exports to theEuropean Union (EU).

1. The various EU member states do nothave a harmonized procedure for eitheracceptance of cargo or removal of animporter from their “Rapid Alert List” if theexporter had faced a consignment rejection.

i) The present EU procedure of Rapid Alert

places an exporter on the Rapid Alert of all Member Statesif a consignment is rejected by the Health Authorities of anycountry. However, if the Exporter on Rapid Alertsubsequently clears Health for a certain number ofconsignments, the unit is removed from the Rapid Alert List.However, the number of consignments to be cleared variesin the case of different member states. As an example:

a) In the case of France, it is 3 consignments

b) In the case of Italy, it is 10 consignments

ii) What is illogical is that, if a consignment is rejected inany one country, the exporter is put on Rapid Alert by allthe member states. However, to get off the Rapid Alert Listof each country, the unit needs to clear 10 consignments ineach of the member states. To date, there are over 30member states and it would take an exporter a life time toget off the Rapid Alert under this procedure.

Logically, if an exporter clears the required number ofconsignments for a particular country and is taken off theRapid Alert from that country, then the unit should beremoved from the Rapid Alert of all the member states.

2. If a consignment is rejected by a member country’s healthauthority in the EU, the consignment is to be returned tothe exporting country to be reexamined by the CompetentAuthority of the exporting country. Also, a certain procedureis to be followed for monitoring by the competent authorityof the exporting country for a certain period.

However, certain countries like the United Kingdom aredestroying cargo if they detect antibiotic residue at the portof entry. The Health Authorities have no right to destroyCargo, valued at hundreds ofthousand dollars, which has notentered the borders of theimporting country. The exporterhas the right to bring the cargoback to origin forre-inspection bythe Competent Authority and it isupto the Competent Authority ofthe Exporting country todetermine how the affected cargoshould be disposed. TheCompetent Authority is recognizedby the EU.

3. At present the antibiotic residuelevels required by the EU forseafood exports are extremelyrigid and beyond the actualrequirements of food safetyaccording to most experts. There

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Ministry of Health,Labour & Welfare, Japanhas intimated that theyhave decided to raise thefrequency of monitoringinspections related toAgricultural Chemicalresidue to 30% to FrozenCultured Shrimpproduced in India.



has been considerable debate on the efficacy of suchstringent requirement for antibiotic residue. We shouldappeal for a certain relaxation in the antibiotic residue levelsthat has been given for wine and dairy products in the EU.

It is very serious NTB for exporters exporting to EU facedwith rejection. Even though SEAI took this issue at variouslevels no solution was arrived at.

C. Future outlook

1. Need for Conservation of Sea catch

It is common knowledge today that the oceans of the worldare completely fished-out, and that capture fisheriesworldwide are on a steep decline. Global warming is leadingto ocean surface temperature rising and acidification ofseawater and, combined with over-fishing, we are facedwith a sharp decline of fish in the world oceans. Fish thatonce seemed an inexhaustible source of food, are almosteverywhere in decline. 90% of large predatory fish like Tuna,Swordfish and Shark have gone, 85% of whales havedisappeared and many smaller fish are also in sharp decline.

As far as capture fisheries in India is concerned, our coastalwaters are almost completely over-fished and catches aredeclining. Every Indian coastal state follows its own fishingpolicy. There is unrestricted coastal fleet expansion; no fish-net size restrictions; massive illegal wild seed collection alongthe coast; no attempt at resource management;uncontrolled pollution of coastal waters; destruction ofbreeding grounds both by industrial pollution and relentlessbottom trawling. As a consequence of all this, our shrimpcapture catches are down by 40%; and fish catches are

virtually disappearing.

Our declining catches are leadingto social unrest along the coastlinewith fishermen competing fordepleting resources. There aredaily conflicts between fishermenof different coastal states overfishing grounds.

In such a situation where theoceans of the world are underthreat and our coastal waters arealmost fished-out, the only futurereally is aquaculture.

Fortunately, we have one of thelargest resources of inland waterbodies and rivers, second only toChina. We, therefore, need toharness our inland water bodies

and unproductive land along our 8000kilometer coastline for sustainableaquaculture.

Our coastal fishing communities areamongst the poorest of the poor and theyneed alternative livelihood during periodsof conservation. Consequently, a policy oncage culture rights in our inland waters andrivers for our fishing communities as asource of alternative livelihood needsurgent implementation.

China realized the importance of theirfisheries sector as a critical component forfood security and therefore, formulated a20-year fisheries plan which has todayresulted in China becoming the world’slargest fishery nation accounting for over50% of the world fish production from bothcapture fisheries and aquaculture.

India, till now, has had no effective,comprehensive and coordinated NationalFisheries Policy like China and other Asiancountries. We do have a National FisheryPolicy, but its more a vision statement. Alsowe have no integrated and effectiveNational Fishery Conservation andResource Management Policy. Hence it ishigh time that we should formulate a policyto conserve our resources for the sake of 2million people directly or indirectlydepending on the Sea

2. Promotion of Aquaculture

To promote aquaculture, which appears tobe the only alternative for the growth of thefisheries sector and for India to emerge asan important global player, there is animperative need for the Central & StateGovernments and the NFDB to effect thefollowing policy changes:-

a. Declare Aquaculture as an agricultureactivity.

b. Compulsorily register all aquacultureestablishments and issue licenses tooperate. Registration should be under boththe Aquaculture Authority and MPEDA.

c. Statutory clearance of Aquafarms frompollution control board, forest department,etc., should be through a single window

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At present the antibioticresidue levels required bythe EU for seafoodexports are extremelyrigid and beyond theactual requirements offood safety according tomost experts.



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system of the Aquaculture Authority.

d. Institutional finance made available onpar with Agriculture.

e. Crop Insurance available at reasonablepremiums.

f. Declare Aquaculture as legitimate user ofland and water. Permit unproductiveagriculture land for conversion toaquaculture. Allow specific quantity ofwater from irrigation canals for fresh wateraquaculture.

g. Prepare master plan for import oftechnology for culture of commerciallyviable fish species like Catfish, Tilapia,Seabass and other high value fin-fish.Broodstock quality improvement throughSpecific Pathogen Free projects, whichfortunately are now under implementation.The recent permission for Vannamei cultureby Ministry of Agriculture will now see adramatic growth in shrimp culture. Evolvea strategy for providing MINIMUM PRICEPROTECTION for Aqua Farmers.

h. Remove all constraints of sanitary permitsfor import of Artemia, Feed Ingredients andother aquaculture inputs.

i. Reduce all import duties on aquacultureinputs.

j. Subsidize airfreight for transport of aquaseeds.

k. State Governments must exempt all Aquaproduce, seed, feed and ingredients fromVAT.

l. State Governments must provide powerat tariff rate similar to agriculture.

m. State Governments must strictly prohibitwild seed collection along the coast.

n. Identify suitable marine zones forestablishing marine fish cages. Lease suchareas to fishermen and fishermencooperatives and promote cage culture infresh water reservoirs, deep salt watercreeks, estuaries and the open sea.

o. Tilapia, Catfish, Seabass and Groupercultures should be encouraged to augmentsupply fish for both domestic and exportmarkets.

3. Need for Industry friendly Research

India, till now, has had noeffective, comprehensiveand coordinated NationalFisheries Policy likeChina and other Asiancountries.

Most writers regard truth as their most valuable possession,and therefore are most economical in its use.

- Mark Twain


Organization

India has some of the best FisheryResearch Institutes in Asia.However, their contribution inextending technical help to theFishermen, aqua farmer andexport processing industry isdismal.

Correct the situation by:-

a) An annual independent Audit onthe usefulness of the researchwork undertaken.

b) Evaluate the extent of researchtransferred from lab to farm.

c) The Institutes should makeavailable to entrepreneurs theirfindings at a fee for commercialexploitation.

We are too important an industry to disappear. Too manylivelihoods are dependent on this sector, that we just cannotallow ourselves to perish.

We have one of the largest resources of inland water bodiesand rivers, second only to China. We have 8000 kilometersof Coastline. Our Exclusive Economic Zones is one of thelargest available for Deep Sea fishing. We have largeunexploited Tuna resources in our EEZ. It is said that thetuna in our waters are dying of old age.

We have the largest number of EU approved factories inAsia. We have internationally competitively priced skilledlabour. We have an effective Quality Assurance Agency inthe Export Inspection Council. So why are we not the secondlargest fishery nation in the world, after China? This is thequestion we need to ask ourselves. The answers are simple.

We need to harness our inland water bodies for sustainableaquaculture. Our coastal waters need conservation andrejuvenation.


Food is the constant need of human beings

and remains a constant challenge. Physical

resources needed to produce food being

finite in nature, many prophets of doom

have long predicted that human population

growing by geometric progression will soon

overtake food production which can only

increase by arithmetic progression. The

scepter of famine and natural disaster, as

predicted by Malthus, always hangs over

our heads like sword of Damocles, if we do

not control population or increase food

production sufficiently to meet the growing

demand.

However, man’s ingenuity has always been

able to overcome such dire consequences.

Scientific innovations in processing

technology have been able to meet the

challenges of increased demand by

increasing food production, cutting down

wastages and preserving food. The first

innovation in food processing can be traced

back to 800,000 BC when fire was

domesticated. By 30,000 BC mankind was

cooking food with ovens of holes with hot

stones. Techniques of frying, grinding and

distillation were invented subsequently.

Canned food made its first appearance at

the London Exposition in 1804. Each of

these innovators had to face skepticism and

opposition from their fellow being. When

Louis Pasteur of France invented his

signature method of sterilizing milk, people

thought he was trying to pass on stale milk

as fresh. However with time, most of these

innovations have been accepted and

assimilated into our everyday life. Some of

the new innovations in food processing

during the last 50 years have indeed

revolutionized our life. Examples are aseptic

processing and technology, the microwave

oven, freeze drying, food fortification and


Mr. Gokul Patnaik is the Chairman of GlobalAgriSystem Pvt. Ltd (www.globalagri.com ), a premierconsultancy organization devoted exclusively to food andagri-business. He is also the Vice Chairman of Katra Group(www.katra.biz). Prior to taking voluntary retirement fromthe Indian Administrative Service Mr. Patnaik had anillustrious career as a civil servant. While in Government,he headed a number of Public Sector Undertakings (PSUs)including the Punjab State Industrial DevelopmentCorporation (PSIDC), Punjab MARFED, Punjab AgroIndustries Corporation (PAIC) and The Agricultural andProcessed Food Products Export Development Authority(APEDA) under the Ministry of Commerce. He is a memberof the Chief Minister’s Advisory Committee on Agriculturefor the Government of Madhya Pradesh. Mr. Patnaik is awell known authority on agribusiness and has contributedmany articles and Papers on the subject. His views arefrequently sought by the Government and Industry bodies.

Processed FoodIndustry : TheUnrealized DreamGokul Patnaik,Chairman, CII Task Force on Agri Marketing andChairman, Global Agrisystems P Ltd.


UHTP of milk and other products. These

innovations have not only helped in

increasing food production but resulted into

safer and tastier food. Processed food

products that we get in the market today

are better in quality and nearer to its fresh

equivalent than ever before. The consumer

concern of food safety and nutritional

adequacy has also led to the processors

taking care of traceability of the products

as well as hygiene and health factors.

in urban India and even tier-II cities. Multiple restaurant

chains such as McDonald, Pizzza Hut, Dominos, Barrista, Café

Coffee Day, Saravana Bhawan, Nirulas are growing rapidly.

The ready-to-eat foods sold by companies such as HUL, ITC,

MTR and Tasty Bites have also carved out a dominant place

for themselves in the food market with their wide range of

‘Heat & Eat’ dishes. Innovation has led to superior products

and services to the customers stimulating demand at all

levels.

Apart from the increasing population and rise in per capita

income, the growth in the Indian food market is driven by

two significant factors. India has the largest population of

young adults in the world. It is estimated that by the year

2025, almost 55% of the total population or about 777 mn

will be in the age group of 20-60 i.e. the major consuming

class as shown in the following chart:

Chart 1 : Consumer Demand- ShortestPossible Shopping & Preparation Time

The consumer demand for convenience has

also led to processed food being prepared

ensuring shortest possible preparation

time. A study undertaken by Anderson

Consultants in US and Western Europe had

revealed that whereas the average time

taken for cooking at home was about 2.5

hours in 1930s, by the year 2010,

technological revolution in prepared foods

have made it possible for housewives and

homemakers to be able to spend only about

a few minutes in the kitchen for preparing

everyday meals as shown in the chart

below:

This trend is likely to continue and it is

expected that more and more consumers

will depend on home deliveries by the year

2020. Although the above study was carried

out in western countries, similar trend is

also visible in India. Eating out is booming

Secondly, increasing number of working wives and nuclear

families with high disposable income creates demand for

convenient foods in the category of ready-to-eat or ready-

to-cook. According to the Ministry of Food Processing, the

industry contributes 9% of India’s GDP and has a share of

6% of the total industrial production. This makes India the

second largest producer of food in the world next only to

China.

Chart 2 : Demography India



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More significantly the food consumption in India is growing

at a healthy rate of CAGR 5.32% and is likely to exceed USD

229.7 by the year 2013. While urbanization, rise in

disposable incomes, changing life style and aspiration are

leading to significant demand for processed food,

Government’s role in creating a conducive environment for

the food industry has also helped. In the last 10 years,

Government has selectively removed SSI regulation in food,

modified MMPO to ease entering into Dairy, repealed Cold

Storage Act, enabled the setting up of agri export zones &

food parks and removed restrictions on movement of food

grains. Several State Governments have also taken

commendable steps to boost agriculture and food

processing. Karnataka has facilitated setting up of a modern

auction market for fruits and vegetables. West Bengal has

laid down an ambitious agri-vision focusing on Horticulture

and Aquaculture. UP and MP have allotted land for contract

farming for wheat and rice. Gujarat and AP are actively

targeting investors offering single window clearance and

investment subsidies.

Government of India has also come out with several schemes

for technology upgradation, modernization of abattoirs,

integrated cold chain and setting up of Mega Food Parks,

setting up of analytical laboratory for food products and

training centers also qualify for Government grants. However

a lot needs to be done and Government must play a major

role in realization of the full

potential of the processed food

sector.

Following are some of the critical

areas where the Government

must take initiatives to unlock the

sector potential:

• Single Unified Market

The Indian market is fragmented

and many laws, rules and

executive orders hinder the free

movement of goods across States.

Thus the attractiveness of India as

a large unified market is lost.

Government should take steps to

remove restrictions on Inter-State and Intra-

State movement and trade in agricultural

and food products.

• Amendment of APMC Acts

The prevalent APMC acts creates a virtual

monopoly of the State in agricultural

marketing. Although Government of India

has circulated a Model APMC Act and urged

the States to amend their respective laws

to provide for establishment of private

markets and allow direct marketing, most

of the States have not amended the act in

line with the requirements. Food processing

companies are unable to source their

products directly from the producers.

Multiple handling of the products not only

result in increase in transaction cost but also

deterioration in quality. State Governments

should amend their APMC acts to allow

private markets for more efficient handling

of the produce and competitive pricing.

Competition will result in better price

realization to the farmers.

• Organized Retail

It is well known that organized retail acts as

a catalyst to the food processing industry

by integrating the supply chain through

investment in superior technology. In many

countries, including some developing

countries like China and Indonesia, more

than 20% of the food now goes through

organized retail. In India organized retail is

still at a nascent stage and is facing many

problems. Government should support

growth of organized retail including Foreign

Direct Investment (FDI) in it.

• Tax on Processing Food

Processed Food is still being considered as

a “luxury” item in some quarters and being

taxed at a high rate. Market fees and levies

Food processingcompanies are unable tosource their productsdirectly from theproducers. Multiplehandling of the productsnot only result inincrease in transactioncost but alsodeterioration in quality.



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are imposed on primary agricultural

products in many States which have a

cascading effect downstream. The VAT and

excise duties on processed foods and other

value-added products are also fairly high.

Australia, Canada and UK have cut down tax

rates and almost all food items are zero

rated except restaurant meals. As we move

towards a GST regime, Government should

consider abolition of taxes on processed

food items which will help in saving huge

wastage of agri-commodities.

• Import duties on Equipments

As food processing industry is technology

sensitive and innovation is the key, a

number of equipments have to be

imported. There is a strong case for either

giving a tax holiday or bringing down import

duty to the minimum level to give a fillip to

cold chain infrastructure and food

processing equipment which will help in

reducing wastages and improving quality.

• Integrated Food Law

Till recently, processed food industry was

subject to a myriad of laws and regulations

implemented by various departments and

local bodies. Parliament has enacted an

Integrated Food Safety and Standards Act

in 2006 and has constituted a Food

Authority. However the rules are yet to be

notified and the Authority has not started

taking action. There is a need to expedite

implementation of the Integrated Food Law.

India has vast natural resources and highly

favorable factor conditions such as low cost

of labour and availability of land to enable

the food processing sector to flourish. It

has diverse agro-climatic zones and

abundant resources to produce every raw

material for processing. All these factors

combine to make India the second largest

The difference between perseverance and obstinacy is thatone often comes from a strong will, and the other from astrong won't.

- Henry Ward Beecher

There is a strong case foreither giving a tax holidayor bringing down importduty to the minimum levelto give a fillip to cold chaininfrastructure and foodprocessing equipmentwhich will help in reducingwastages and improvingquality.

producer of fruit and vegetables in

the world and the largest producer

of milk and many other agricultural

commodities. Unfortunately,

processed industry is still at a

nascent stage – only 2.2% of fruit

& vegetables, 26% of marine catch,

6% of the poultry and 35% of milk

is processed. There is still a long

way to go. Only the combined

efforts of the Government to

create an enabling environment

and the private sector to be

efficient and innovative can help

India to realize its dream of

becoming the ‘Food Factory’ of the

world.



The use of alcohol as drink is an age-oldstory in India and it appears that thetechnique for fermentation and distillationwas available even in the Vedic times. It wasthen called Somarasa and was used not onlyfor its invigorating effect but also in worship.

For the purpose of Alcoholic Industry, Indiais a set of 28 countries. By saying this I meanthat each state has a separate regulationand these are self contained markets.Production is done for that state specificallyand material produced for one state cannotmove into any other state unlike durablesor FMCG. Each state levies taxation at itsown determined rates and duties. IMFL isalso a vital element in each states revenue.The central Government has little controlover the taxation rules of the states.

For the purpose of division the IndianAlcoholic market is categorized by beer,wine, Whisky, White Spirits, Rum, Brandy,Flavored Spirits and Ready to Drink varieties.Further categorization of the above spiritscan be done as follows

1. BAO – Bottled at Origin- here the alcholis bottled and imported completely.

2. BII – Bottled from Bulk in India.. meaningthat the aclhol is imported in bulk butbottled at a bottling unit in India.

3. IMFL – Indian Made foreign Liquor.

Indian Made Foreign Liquor or IMFL as it iscommonly known is categorized by Whisky,Brandy, Rum, Gin and Vodka , these aredistilled, blended and bottled in India.

India is an essentially closed market forBottled imports which promotes a lot ofcontraband traffic especially in the scotch,white spirits and Whisky segments. Whiskyis the largest IMFL sprit at present, whileBrandy outsells whisky across all southmarkets. Rum is consumed particularly inthe South and East market and also theIndian military is a large consumer of Rum.There are key seasonality factors as well..Beer rises in Summer, while Rum rises inWinter.


Dr. Puri is an eminent professional with vastexperience in the alcoholic beverages industry. In his vastexperience spanning 36 years , he has worn several hatsincluding that of Quality, Marketing, Production,Operations, Supply Chain, Group President etc. Duringhis experience he has set up and revamped severaldistilleries and breweries and undertaken severalinnovation in his projects. His professional membershipsinclude CIABC, PFA, BIS, ISWA, Excise, Who’s Who, BYSTetc. Currently he is the Sr. Vice President – Operations atTilaknagar Industries Ltd (TI), Connoisseurs of alcoholicbeverages. TI’s brand portfolio consists of several premiumbrands including Mansion House Brandy which wasawarded the brandy of the year for 2009 by SAP Media(Publishers of the industry magazine called Ambrosia)apart from Courrier Napoleon Brandy, Senate RoyaleWhisky, Castle Club Vodka, Madira Rum to name a few.

A Glimpse into theIndian AlcoBevIndustry…Dr S. Puri,Vice President, OperationsTilaknagar Industries, Mumbai


Also on the seasonality typically the firstquarter is the leanest and Q3 and Q4 arethe strongest quarters in terms of revenue.The festival season starts with the onset ofNavaratri (end Sept-mid Oct), continuesonto to Diwali, Christmas and New yearcelebrations. This is high season. The festivespirit carries on to the next year with Pongaland Holi celebrations. Also, Q3 and Q4 arethe winter months where consumption ofharder spirits generally increases. Q1 (April-May-June) being very hot there is more beersale in that quarter and IMFL dips

On Advertising

Advertising is particularly banned in theoryfor this category although sponsorships andsurrogates are widely used for advertisingthe respective alcohol brands. CommonSurrogates could range from water, sugar,soda, holidays, awards, airlines, Music CD’s,parties etc to name a few. Hence it is alwaysa challenge to advertise your surrogate andconnect it to your product. Direct Consumerpromotions are banned but are done atpoints of consumption e.g. on the purchaseof a nip of a particular brand you might endup getting a nice gift like a pen, wallet etc.

On Distribution

As far as distribution is concerned the storyis as complex as the state taxation. Thereare few states who are open markets likethe FMCG markets wherein you can chooseyour channel and sell thru licensed bars andwine shops. Some states like Tamilnadu andKerala although have a very heavilycontrolled system. In such cases the liquorcompanies sell to the Government owneddistribution companies and retail throughthe government owned wine shops. Theprivate bars and permit rooms buy from thegovernment in such cases. In other marketslike Andhra and Karnataka the distributionis privatized like Tamilnadu but the wineshops are owned and operated by privatehands. Hence Supply chain managementplays a key role in managing thesegovernment based markets even more sincethere are issues of demurrage on stocks..

normally this duration is between3 to 6 months and penalties arealso pretty high.

More Developments

Till lately the IMFL market wasmostly based on molasses. This isnow changing with the opening ofmore Grain Spirit plants.T ilaknagar Industries Ltdmanufacturers of the MansionHouse Brandy is planning to opena 100KLPD Grain Plant early nextyear. Also various innovativeattempts are made and a lot ofsuccess seen in this area. Few tomention are Tetra-Packs forvarious brands, Innovative Pet andGlass Bottles, growth of the glassand pet ancillary industry etc.

There are some threats to the Alchobev market as well.Various taxation and duty laws across the state makeproduction and distribution a very cumbersome process.Furthermore, ever rising molasses prices are directlyaffecting the cost of ENA. Molasses prices are jumping bythe day and there is very little to control these prices. Thelocal state governments also continue putting additionallevies on IMFL regularly as the liquor industry is one of themajor contributors to the state exchequer.

The Alchobev Industry Poised for Growth

The Indian alcoholic beverage industry is poised for a rapidgrowth in both value and volume terms in the times to come.The Indian alcoholic beverages industry is at its tipping pointnow, with high growth rates, across the entire spectrum ofprice points and categories. The industry has seen a doubledigit growth rate for the past decade and this is expected tocontinue.

The consumer base has increased with the rising disposableincome. He is now more in tune with the outside world andhabits. He is now a more social humane with huge links insociety.

As it is known that India is home to nearly one-sixth of theglobal population and is one of the most attractive consumermarkets in the world today. Various research studies haveshown that a rise in the income levels has a direct positiveeffect on alcohol consumption. The National Council forApplied Economic Research (NCAER) projects India's 'very

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Various taxation andduty laws across thestate make productionand distribution a verycumbersome process.



rich', 'consuming' and 'climbers' classes to grow at a CAGRof 15 per cent, 10 per cent and 2 per cent respectively. Withthis growth in income levels, Indian Liquor consumption isexpected to continue growing, at the very minimum, at thegrowth rates witnessed in the last decade. Further the influxof young population at large viz. in the age group of 20-34years the IMFL category is slated to grow as they are themost favorite targets of the IMFL Marketers today.

A traditional social aversion to alcohol consumption has beena traditional feature of the Indian society. However this isfast changing. As urban and semi-urban consumers becomemore exposed to western lifestyles, through overseas traveland the media, their attitude towards alcohol is relaxing.Social habits are undergoing a transformation as mixeddrinks are becoming more popular. The greatest evidenceof this trend is the increase in beer consumption amongwomen. More and more women are consuming beer – thepenetration in metropolitan areas is almost twice as high asthe penetration in other large cities – implying that thegreater tolerance towards alcohol consumption inmetropolitan areas facilitates the consumption of beer. Withincreasing urbanisation, this acceptance is only going to rise.

The Indian alcoholic drinks market generated total revenuesof 12.9 Billion dollars in 2008, representing a compoundannual growth rate (CAGR) of 11.1 % for the period spanning2004-08. Also the industry grew at a CAGR of 15.4% for theperiod ended December 2008 and is set to replicate thesame this year also.

The IMFL market is dominated by Whisky, Rum and Brandywhere Whisky is expected to constitute 55.2% of the marketshare. The very large Brandy market (21 million cases) roseby 7%.

White spirits viz. Vodka and gin is growing at the fastestrate but holds a very small market share.

India is turning to be one of the hottest markets in theAlcoholic space. The Indian Economy is growing atphenomenal pace inspite of the global downturn which hasresulted in the increase in disposable income particularlyamong the vast Indian middle class. Alcohol which was ataboo a few years back is now one of the social needs andcan be easily seen at middle and upper class socialceremonies like marriage/ birthdays etc. The societies arebecoming more open and understanding that controlledconsumption only adds to more pleasurable moments. Thisalong with the growing disposable income provides enoughevidence that there is only one way for the Indian Alcoholspace to go …. Which is UP !!!!

An Ideal example could that be of our veryown Maharashtra based T ilaknagarIndustries Ltd. The company has grownfrom a turnover of about 100 crores 3 yearsback to over 400 crores as of last year. Thisyear also they expect to surpass their ownexpectations. From One unit in Maharashtrathey have over 20 own and tie-up unitsacross the country. They recentlycommissioned one more 50 KLPD plant andare on the way to commission another 100KLPD plant in January next year. TheirFlagship brand Mansion House brand is abrand of millions and was recently given thebrandy of the year award.

For those who want to make a career inLiquor the IMFL space is one of the mostlucrative career options today. Since moreand more discerning people in the countryare becoming liquor friendly, firmlybelieving in responsible drinking, there hasbeen significant growth of the industry ingeneral and our Company in particular.Taking into account the challenges as wellas opportunities, the liquor industry islooking for thorough-bred professionalswho will drive business with a lot of passionand innovative leadership style.

Responsible Drinking and Corporate SocialResponsibility

There are many ills of the Alcohol industryas such. Hence every company promotesresponsible drinking, messages againstdrinking and driving etc. Further a lot ofcompanies engage in CSR activities. Theseinclude adoption of villages, de-addictiondrives, education etc. A lot of money is alsodonated to the well being of the societiesat large.

Watch your thoughts; they becomewords. Watch your words; they becomeactions. Watch your actions; they becomehabits. Watch your habits; they becomecharacter. Watch your character; it becomesyour destiny.

- Anon



If you are in Chennai and in the mood forsome authentic kasundi with your fish, youmay be out of luck. The pungent mustardpaste is part of the culinary tradition of WestBengal and is not commonly availableoutside the state. None of the big, pan-Indiafood companies sells it.

Supermarket chain Food Bazaar, which ispart of India's largest listed retailer,Pantaloon Retail, introduced Tasty Treatkasundi some years ago as a private label --or store brand -- offering. But you won't findit on shelves across all 119 Food Bazaarstores, only in markets with significantBengali populations. Similarly, you are notlikely to come across Tasty Treat khakra andthepla, traditional savory snacks from thewestern state of Gujarat, in Food Bazaaroutlets in north India. "The product mixvaries significantly depending on local tastesand preferences," says Santosh Desai, CEOof Future Brands, which is responsible forprivate label development for the FutureGroup, including its flagship PantaloonRetail. "Unlike national brands where suchdifferences are muted, with private labels,customizing your offering is critical."

Private labels weren't always taken soseriously; in the past, they were consideredcheap, no-name substitutes for "real"brands -- cheap in terms of price as well asquality. They were found mainly in genericproducts such as detergent and toilet paper,and staples such as rice and sugar. Whilemany consumers bought stores' ownbrands, which usually sold at a substantialdiscount to national brands, they didn'toften acknowledge it. For the retailer, theprivate label was one more way to earn alittle extra. As quality improved, though,customers became more accepting, andretailers began to change their attitudes.

Not only are private brands now foundacross a spectrum of products -- fromgroceries and staples to apparel, consumerelectronics and mobile handsets -- they areconsidered brands in their own right. Thefundamental reason for the success ofprivate labels is their price advantage, madepossible by their nonexistent or very limitedspending on product development andbrand promotion. The bulk of the products

More Choices inStore: India'sRetailers AreStocking Up onPrivate LabelBrands

IndiaKnowledge@Wharton

As a natural extension of the growth of the foodprocessing industry, the growing trend of organisedretail in the country has led to interestingdevelopments in the market place. This articlepublished by IndiaKnowledge@Wharton takes a lookat the value of brands to the consumer and theretailers’ effort to meet it.

are reverse-engineered copies of category leaders and theyare promoted within the store, not advertised outside. Theirvalue still resonates with customers, but it is no longer theonly reason private labels are finding their way into morehomes.

In India, the growth of store brands is a function of increasingretail sophistication. Large-format, modern retail stores(known as the "organized" retail sector) -- as opposed tosmaller, traditional "mom and pop" stand-alone stores --are presently only a small portion of total retail in thecountry. A report by investment bank Northbridge Capital,titled "Indian Retail Research 2009," estimates the totalIndian retail market at US$450 billion, growing more than30% a year and expected to cross US$720 billion in 2011. Ofthis, organized retail accounts for just 14%, or US$63 billion-- although this sector is expected to grow 40% faster thanthe overall market to reach US$90 billion in 2010.

Harish Bijoor, CEO of Harish Bijoor Consults and a visitingfaculty member at the Indian School of Business, Hyderabad,wonders whether the definition of "private label" shouldinclude single-store labels as well. "If it does, then privatelabel's share [of the retail market] becomes quite large.Many small businesses in the unorganized sector do sticktheir stores' name on the products they sell."



Why Private Labels Matter

Private labels matter for several reasons, the most importantof which is their higher margins. For retailers, gross marginson private labels are, on average, 25% to 30% higher thanon those of manufacturer brands. In consumer productsespecially, retailers' margins on national brands are in the12% to 17% range, which is not enough to offset the cost ofmodern trade overhead. With a house brand, the margincan be upward of 40%, points out Pankaj Gupta, head ofthe consumer and retail practice at managementconsultancy Tata Strategic Management Group. "From theretailers' point of view, the urgency is obviously because ofmargin play."

The introduction of a store label also gives the retailergreater leverage with manufacturer margins and anincreased ability to ride out business cycles, because theretailer has more leeway in pricing, marketing strategies andlong-term planning.

Retailers view manufacturer brands as little more thancommodities that can be easily procured from any outlet.Store brands, then, help retailers differentiate themselves."As these products are unique to our stores, we benefit[from] the increase in [consumer visits] and overall sales,"says Gunender Kapur, president and chief executive ofReliance Retail. If a store brand becomes popular enoughto become a destination brand, it has implications forcustomer loyalty and profitability. "If a customer remainsloyal to the store but switches brands, that works for theretailer," says Avinash Mulky, professor of marketing at theIndian Institute of Management, Bangalore.

To some extent, the market for private labels will grow onits own. "The more consolidationthere is in retail trade, the greaterthe growth of private labels,"notes Nirmalya Kumar, director ofthe Center for Marketing and co-director of the Aditya Birla IndiaCenter at the London BusinessSchool. According to a September2009 report byPricewaterhouseCoopers on theoutlook for the retail andconsumer products sector,retailers across Asia – andparticularly in India – report astrong increase in the sale ofprivate label goods. "India may beAsia's most receptive market forprivate label goods. Today, privatelabels account for 10% to 12% ofthe retail market there, and

leading brands are far less dominant thanin other countries."

Even the economic downturn has notdamped that enthusiasm. In fact, privatelabel sales typically increase during arecession as cost-conscious consumerstrade down from branded products. Whilebrands tend to return to favor when theeconomy recovers, the correction isn't tothe same degree, Kumar says. "There is apermanent positive effect." Others echothat thought. "As consumers learn aboutthe improved quality of private labels inrecessions, a significant proportion of themare likely to remain loyal to private labels,even after the necessity to economize onpurchases is no longer required," says aMarch 2009 KPMG report titled, "IndianRetail: Time to Change Lanes."

Adding Value

Retailers in India are spurring consumers'decision-making by expanding the scope ofprivate labels. In the book Private LabelStrategy: How to Meet the Store BrandChallenge, which he co-authored with Jan-Benedict E.M. Steenkamp, Kumar writes:"To be successful with private labels,retailers must remember when privatelabels add value. They should 'fill a void inthe category' either in price or in value."That happens in three cases, according toKumar and Steenkamp: where a copycatproduct offers consumers a choice even ifprices are similar; where the market can beexpanded by offering similar-qualityproducts at significantly lower costs; andwhere innovative products that are notavailable through national brands arelaunched.

All three scenarios have been part of theIndian experience. For instance, most storebrands in mass categories such as processedfoods, personal care and home care are"me-too" products. (Interestingly, brands ingrocery items are a more recentphenomenon for both retailers and nationalmanufacturers:

Traditionally, staples in India are purchasedeither in bulk from a wholesaler or loosefrom the neighborhood store. The TastyTreat label took off after a disagreement


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Traditionally, staples inIndia are purchasedeither in bulk from awholesaler or loose fromthe neighborhood store.The Tasty Treat labeltook off after adisagreement overmargins a year agobetween the FutureGroup and Frito-Lay.


over margins a year ago between the FutureGroup and Frito-Lay. The snack companytemporarily broke ties with the retailer, andFood Bazaar promptly stocked its shelveswith Tasty Treat potato chips and a rivalbrand, ITC's Bingo. The result: Thehomegrown chip brand raced ahead. "TheTasty Treat brand outsells better-knownbrands in many products, and we don'tadvertise," says Future Brands' Desai.

Kapur of Reliance Retail notes that hiscompany's multiple-format stores stockprivate labels in categories includingprocessed foods, staples, personal andhome care, and even dairy and beverages."The prices are 10% to 40% lower vis-à-vissimilar branded products, while the qualityis consistently very good. The share ofprivate labels continues to grow as moreand more customers are discovering thevalue and great quality." The introductionof own-label mobile handsets by telecomretailers such as The Mobile Store, HotSpotand Univercell similarly falls in the secondcategory of value creation by private labels."There may be customers down the valuechain who currently buy traded-in phoneswho would be happy to upgrade to a new,branded, reasonably priced instrument thatis feature-rich and comes with a warrantyfor after-sales service," says TSMG's Gupta.

The third category -- offering a product notavailable from name brands -- is perhapsthe most sophisticated way private labelscan create value. This was probably the firststep taken by organized retailers seeking tolaunch private labels in India. Store brandsin apparel were introduced along with thefirst Western-style department stores andhypermarkets. When Shoppers Stoplaunched the STOP brand of Indian wear inthe early 1990s, it was the first brandedethnic women's wear range. "Branded

merchandise was not available, so retailershad to start their own labels," Kumar notes.Similarly, consumer electronics productshave been available for some years throughmost retailers as big international brandsor smaller national/regional brands. But AjitJoshi, CEO and managing director at InfinitiRetail, the Tata group company that runsthe Croma chain of electronics stores, says

that "innovative products encourage early trials and aretherefore interesting for private labels to explore and bepresent in." More than the usual laptops and toasters, the"Handpicked by Croma" brand is drawing attention becauseof its introduction of products including wine coolers,jewelry cleaners and binoculars.

Store brands in high-involvement categories such asconsumer electronics seem contrary to conventionalwisdom. "Indian consumers can be aggressively brand-conscious, especially when it comes to durables," Bijoor says."The brand is seen as a guarantee of quality and also hasflaunt appeal." Joshi notes that in electronics, private labelshave "higher acceptance in products and categories thathave low brand preference and high functional appeal. Incategories that are predominantly driven by leading brands,it is a challenge to get visibility and conversions. Penetrationin brand-neutral categories like peripherals and accessoriesis easier. We have a fair presence in the small appliance andIT category, both of which allow us the flexibility to offertechnologically superior products at high perceived value."

'Just Another Brand'

By that logic, do private brands lend themselves to anyparticular category of product? "For most consumers, aprivate label is just another brand. Hence, the categorieswhere consumers have less loyalty to better-known orpromoted brands are the categories where retailers shouldtry to push private labels," says Harminder Sahni, managingdirector of retail consultancy Wazir. Commoditized itemswith low levels of product innovation and emotionalinvolvement from the consumer, then, are ideal candidatesto become store brands. But given the regional variationsin India, there is tremendous scope for customization evenhere. Kasundi and thepla are cases in point, but Desai alsocites a to-be-launched staples brand that is a "highly localizedeffort," with even the variety of wheat differing from regionto region.

How do private labels get potential customers' attention?For starters, they advertise -- but not for all brands, not atthe same scale as national brands, and, often, not in thesame media. Unlike national brands, which may opt for 360-degree campaigns using television, radio, print and onlinemedia, retailer brands typically rely on local advertisingavenues such as radio, leaflets and newspaper inserts.

The bulk of the communication, though, happens at thestore level. That's because most retailers accept that 80%of purchase decisions are made at the store shelf, and thestore is where they have maximum control. Thus, mostretailers work on creating multiple touch points within thestore, through extensive in-store advertising and placementstrategy. "Private labels benefit most by comparisons, soretailers will try to drive sales, for instance, by strategic



Optimism means expecting the best, butconfidence means knowing how to handlethe worst. Never make a move if you aremerely optimistic.

- The Zurich Axioms

positioning of the product next tothe most expensive competitor,"says Bijoor.

In-store interactions also have animportant role. The traditionalIndian shopper prefers to touchand smell food grains beforebuying. Working on that insight,Food Bazaar outlets display opencontainers of rice, wheat andlentils to encourage customers torun their hands through the grainsand check the quality.

Similarly, grinding mills installedinside many outlets reassurecustomers that the flour they arebuying is fresh – and fresher thanthe national brands.

Retail stores' sales personnel alsoplay a role, especially when communicating the store brand'sadvantages. The price angle is rarely the focus of the salespitch. Instead, the emphasis is on how the

house brand is superior or similar in quality to the leadingbrand. Most retailers in India source their private labelproducts from "contract" manufacturers. The KPMG reportpoints out that "[in] India, very few players are intomanufacturing of private labels and are very dependent onthird parties. For example, Vishal Retail is increasinglyshifting from manufacturing to third-party sourcing primarilybecause of increase in categories for private labeling andvolumes." Importantly, big brands often source from similarthird-party suppliers, a move that has implications for theretailer. Not only do margins increase, the quality of theprivate label product is likely to be closely matched withthe national brand. For consumers who are sitting on thefence, that argument is often the clincher, retailers say.

Who Loses Market Share

Despite the activity surrounding private brands, Indianretailers recognize that it is highly unlikely that a private labelwill unseat the number-one player in any category. In fact,the conventional wisdom is that when a private label entersa category, it is more likely to take away market share fromthe brands in second and third place. "Private label productstypically offer a wider choice to the consumer and shouldnot replace leading category brands that help set consumerexpectations," Joshi says.

Most retailers are aiming for about 50% revenue from theirown labels, though there are exceptions.

Pantaloon, the Future Group's apparel store, has an own-brand ratio of more than 80%, while the ratio is even higher


for Trent's Westside stores. Consultantsadvise against tilting too much in favor ofprivate brands. If manufacturer brandsdecide to walk out and the in-store varietyis compromised as a result, customers mayfollow.

Manufacturer brands react to the influx ofprivate labels with understandablewariness, especially during the launch phaseof a store brand, when its nuisance value isstill to be evaluated. If the retail label looksto be successful, the retailer's bargainingpower increases. An addition to the productportfolio means greater competition for theretailer's limited shelf space. The result?Better margins for the retailer and morepromotional offers for the customer. At theextreme, if too many players occupy acategory, the retailer may opt for brandrationalization and do away with thenonperformers.

Retailers aren't tough only withmanufacturer brands. They are equallyuncompromising when it comes toevaluating the performance of their ownbrands. Barely a month after launch, Mela-- a home furnishings brand -- wasoverhauled after Future Group chief KishoreBiyani decided it wasn't working in theexisting format. Another in-house brand,Fashion Station, has been phased out onsimilar grounds. "If you are in the businessof retail, your religion is making money forevery square foot," Desai notes. "Buildingbrands comes only after store-levelefficiencies are achieved."

© IndiaKnowledge@Wharton

In Focus

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Despite the activitysurrounding private brands,Indian retailers recognizethat it is highly unlikely thata private label will unseat thenumber-one player in anycategory. In fact, theconventional wisdom is thatwhen a private label enters acategory, it is more likely totake away market sharefrom the brands in secondand third place.


(Retailing has come a long way since the days of the local grocer or street cornergift shop. The scale of operations have seen a voluminous growth with theparticipation of giants like Wal-Mart, Marks and Spencer, etc. In India too, the smalltime shopkeeper is under tremendous pressure from established Industrial Groupswhich are breathing down his neck. The conditions in India, however, are differentfrom those obtaining in the developed countries and the ubiquitous retailer of thepast, may yet continue to hold on to his business. But for how long, is anybody’s guess.Add to the changes in retailing through brick and mortar shops and malls, is the fastgrowing business of e-tailing which confers many conveniences on the shopper in theprocess threatening even the by-now thought to be entrenched multi-national, multi-locational mega shopping establishments.

The following is an excerpt fromRetail Management by Patrick Dunne andJohn Lusch published in India by CengageLearning India P. Ltd.)

In a Nutshell

Many observdrs of the American business scene believe that retailing is the most “staid andstable” sector of business. While this observation may have been true in the past, quite thecontrary is true today. Regailing which accounts for 20 percent of the worldwide labor forceand includes every living individual as a customer is the largest single industry in most nationsand is currently undergoing many exciting changes. It is important to note that a recent studyconcluded that the number one reason CEOs were replaced was for “mismanaging change”While this study looked at all types of businesses, this finding would be especially true in retailing.

According to the Census Bureau, currently just over 1.1 mn retail establishments are sellingphysical or tangible products in the United States, with total annual sales of nearly $3.8 trillion,or nearly $11,000 per capita. Ten retail establishments exist for every 1000 households. Thisequates to average annual sales of nearly $3.45 mn per store. Most retailers, however, aresmaller, and many have annual sales of less than $750,000.

These figures do not reflect the changes that have occurred behind these dollar amounts. Thenumber of new retail enterprises that were developed in the last two decades is truly amazing.Most of these new businesses have actually been new institutional forms, such as Internetretailing, warehouse retailing, super-centers and home delivery of both fast food and groceries.Change is truly the driving force behind retailing. Let’s explore some of the trends that areaffecting retailing today.

E-tailing

The great unknown for retail managers is what the ultimate role of the Internet will be. Mostobservers recognize the value of online shopping for travel, clothing, cosmetics, and music.

The Nature Of Change In Retailing

Miscellanea


Experience is the comb that life gives youwhen you go bald.

- Thai saying

But it is still unclear if online shopping will reach its projections for ‘everyday’ needs. Probablythe best example of this dilemma is what the future holds for online shopping for books. TheInternet, with entrants like Amazon.com, was supposed to destroy the traditional bricks-and-mortar bookstore. Despite such projections, the early returns are mixed.

Yes, the discounters stocked all the best sellers and Amzon offered free delivery and lowerprices, but the bookstores are maintaining their profitability. Two possible explanations aregiven. First, that faced with these threats, bookstore management became more business-oriented. Supply chains were streamlined and some of the ‘well-read but not profit oriented’staff was replaced with stern business-minded types. Special deals on best sellers were used tomatch competitors, and better sales techniques, especially suggestion-selling were developedso that, once in the store, customers were sold items the competition didn’t carry. Second, thetraditional retailer stressed the major limitation of the Internet as a retail channel. The bookstoresdifferentiated themselves from the online competition by becoming a retreat from the house.They began to offer coffee, chairs to relax, poetry readings and lectures. In addition, theyconceded the fact that e-tailers can often undercut their bricks-and-mortar rivals, but onlinecustomers must wait at least a day for their books to be delivered, often at inconvenient times.This campaign was so successful that Amazon recently announced that it would sell pages ofany book for pennies per page, thereby enabling readers to read the first chapter, while waitingfor delivery.

What the future will bring for online shopping, which now accounts for about three percent oftotal retail sales, remains to be seen. However, it is the promise of e-tailing’s efficiency that hasconsumer still excited.

Another dramatic change caused by e-tailing is a shift in power between retailers and consumers.Traditionally, the retailers’ control over pricing information provided them the upper hand inmost transactions. The information dissemination capabilities of the Internet are makingconsumers better informed and thus increasing their power when transacting and negotiatingwith retailers. E-tailers have provided consumers with detailed pricing information about productsranging from autors to office supplies, thus enabling them to negotiate better deals. Some e-tailers, such as Priceline.com are shifting power to consumers by allowing them to set theirown prices and then letting retailers fight for customers. Clearly, e-tailing is adding a newcompetitive dimension to retailing. However, e-tailers must worry that many consumers willuse the internet for research and then buy the product in neighbourhood stores.

Miscellanea


Hot Air on Climate Change atCopenhagenSo, Copenhagen has come and gone… andas was expected, the common man is lefttwiddling his thumb. It has proven to be atwo week holiday for the hundreds ofpoliticians and bureaucrats from all across,who headed for it, ostensibly with a missionto protect the environment. So what ifglobal warming accelerates, and the Arcticglaciers melt, and the Amazon forests arejust a memory, what if rivers change course,droughts and cyclones, desertification andfloods become the rule… Growth...be it acountry’s economy or a leader’s own riseto international Nobel stardom, isparamount in today’s world. More so, forthe developed world which has beenbaulking at the continuing recession thatarrested its march towards retaining globaleconomic supremacy, whatever the cost .

The Inter-Governmental Panel on ClimateChange, a scientific inter-governmentalbody formed by the World MeteorologicalOrganisation and the United NationsEnvironment Programme was charged withoverseeing the implementation of theUnited Nations Framework Convention onClimate Change (UNFCCC) has beenunequivocal in expressing its fears onclimate change.

The key conclusions of the SPM (Summaryfor Policy Makers) were that :• Warming of the climate system isunequivocal.• Most of the observed increase inglobally averaged temperatures sincethe mid-20th century is very likely dueto the observed increase inanthropogenic (human) greenhousegas concentrations.• Anthropogenic warming and sea levelrise would continue for centuries dueto the timescales associated withclimate processes and feedbacks, evenif greenhouse gas concentrations wereto be stabilized, although the likely

amount of temperature and sea level rise varies greatlydepending on the fossil intensity of human activityduring the next century• The probability that this is caused by natural climaticprocesses alone is less than 5%.• World temperatures could rise by between 1.1 and 6.4°C (2.0 and 11.5 °F) during the 21st century and that:• Sea levels will probably rise by 18 to 59 cm (7.08 to23.22 in) [table 3].• There is a confidence level >90% that there will bemore frequent warm spells, heat waves and heavyrainfall.• There is a confidence level >66% that there will be anincrease in droughts, tropical cyclones and extreme hightides.• Both past and future anthropogenic carbon dioxideemissions will continue to contribute to warming andsea level rise for more than a millennium.• Global atmospheric concentrations of carbon dioxide,methane, and nitrous oxide have increased markedlyas a result of human activities since 1750 and now farexceed pre-industrial values over the past 650,000years.In IPCC statements "most" means greater than 50%, "likely"means at least a 66% likelihood, and "very likely" means atleast a 90% likelihood.

With these damning predictions made by the IPCC, it wasexpected that those charged with guiding the destiny of theworld will realise the precarious nature of global living todayand act with a sense of purpose and urgency, if not toreverse, at least curb further damage to the ecology, andwork to preserve the planet for the future generations. As ithappened, the world expected too much from them; theyjust did not have it in them to rise above opportunisticconsiderations and got mired in their GDP growth, cost andcontrols, targets and caps, per capita and absolutegreenhouse gas emission etc.

It is a travesty of the faith placed by 6.2 billion people, in192 leaders who got together at Copenhagen, that theycould not rise above these ‘trivial’ considerations (againstthe bigger picture of surviving the century). History, if itcan still be read in the coming century, will never forgivethese 192 men and women for bringing the planet closer toself-destruct. The world expected that the developed

P. G. Vijairaghavan


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countries would show the realisation and ability to let therest of the world share in the bounty of a beneficial naturalendowment to help the less fortunate among them, to growand reach reasonable standards of development for theirpeople ; to share the wealth of the planet equitably andfairly.

At the root of this failure is the unforgivable urge to clingto timeworn cliches of ‘harming’ the developed economiesshould they resort to cuts in greenhouse emissions withoutsimultaneous, equal and reciprocal action by the lessdeveloped. How much our leaders were blinded by theirown brand of ‘patriotism’ is evident from the fact, that theydid not realise that climate change cannot be restricted bygeographical borders, simply because the weather is a globalphenomenon; it does not recognise state borders or maps.Thus, the effects of climate changing practices, or the lackof it, can be felt in states which are not responsible for thegeneration of these effects. Therefore, the 95% emissionsfrom the United States need not necessarily affect the USalone, it could as well be reflected in the changing weatherpatterns in either Canada, or Mexico, or even South America.For this reason alone, the US has to be held singly responsiblefor pushing the planet close to extinction. The low emissionsfrom the less developed or least developed countries couldcause little or no damage to the neighbouring lands. Thenet losers ultimately will be those with less emissions; readthe poorest among the poor countries. This is where theefforts to control climate change need international ratherthan national action. The Copenhagen summit, as indeed,all the summits before, has, if anything, highlighted thebankruptcy of thoughts in the world leaders and the lack ofstatesmanship - which has failed to consider the problem inits holistic entirety. The Accord has proven to be more of analibi and a fig leaf, for the millions of dollars that have gonedown the drain as cost of the summit – as some body put it– the real action was outside the Bela Centre wherethousands of demonstrators for a clean environment werebeing given the treatment by the Danish police. Symbolically,representing the treatment the least developed anddeveloping world got from the haves at the Summit. Theblamegame has begun – not just for the failure of the summit– but to put the cause of the crisis at individual countries’door. While it is right to identify the sources of the greatestand least corrupting countries in this regard, it should havethe corollary of the intent to rectify the past wrongs on theirpart, and to start on a clean slate. This is where the solutionto the problem surfaces.

To say that countries like the United States will merrilycontinue to wreak havoc on the world, while expecting therest of the world (read ‘underdeveloped”) to pay for theircontinued sins betrays once again the lack of realisation orwillingness to acknowledge, that in this game of survival, at

least, we all sink or swim together. Thecitizens of the world understand thatTyphoon Kristina in Louisiana, CyclonePhyan in Asia, the Mithi river changingcourse in Mumbai, snow in Dubai,cloudbursts and unseasonally hightemperatures in London, vanishing speciesof flora and fauna (Jean Christophe Balouetand Eric Alibert, in their book, ExtinctSpecies of the World (New York: Barron's,1990), estimate that we are losing about100 species of animal and plant life everysingle day) are all signs of the comingapocalypse. It is only the leaders that weelect who show remarkable lack of visionand sensitivity to appreciate the oftrepeated cliché that we have inherited thisplanet from our future generations.

In the ultimate analysis, Copenhagenbecame an event not about saving theplanet, but about saving the face for ourpoliticians. It was about the nextPresidential elections in the U. S., it wasabout posturing by the BASIC countries,only to cave in under the sheer weight ofthe personality of the US President, and forthe nth time, keeping the least developedworld out of the ambit of development, justso some of the ‘victorious’ could tell theirelectorates, ‘Yes, we said, we can, and wedid it’. Of course, they did it… No agreedcuts in emission. Verification of process ofimplementation in developing countries.Peanuts in financial help to the worstaffected. And it is anybody’s guess what thefate of the Kyoto Protocol is going to be.And for all the loud posturing by thedeveloping countries led by our ownrepresentatives, they gave in finally like apack of cards, in the process letting downtwo-thirds, of the world.

Cop 15 has certainly achieved theunthinkable. Taking the world for a ride.

Into waiting oblivion.

Character is like a tree and reputation itsshadow. The shadow is what we think it is;the tree is the real thing.

- Abraham Lincoln


Miscellanea


Health, Fitness & Grooming

The lifestyle of the 21st century is definitelytermed as ultra-modern and a highlyevolved one. Yet one wonders how such anadvanced lifestyle could be so faulty that itgives rise to more and more difficult andcomplicated illnesses? Should our lifestylebe labeled as sick instead of sunny? Weunderstand that human beings made thesociety and started living in a communityfor helping each other live a better life. Theaim was to shield against the violence ofenvironment and to create an advantage ofprotection given to each other. The growthand development of such lifestyle was itselfbeing termed as evolution of mankind. Soactually the lifestyle should have progressedtowards offering a more healthy and diseasefree life for individuals. It is a surprise thathow the so called modern lifestyle is in factonly bringing more problems at physical,spiritual and psychological levels.

Let us have a bird’s eye view of some of themajor hazards of our millennium:

• Air, space and thought pollution: Air, thevery prime necessity of every individual,that which we breathe in and out everyminute is polluted like never before.Whether by industrial processes that emitinnumerable toxic elements in theatmosphere, green gases or vehicularpollution, the fact remains that theatmospheric air is most impure in our age.Not only is the air polluted by these toxicelements, even more dangerous is thethought pollution. Four out of five personsare either highly stressed, depressed, angryor upset due to some reason or another andthese negative thoughts fill up ouratmosphere continuously.

• Emotional stress in relationships: Due tothe carrier oriented attitude of youngstersand to some extent due to the socialsituation and pre-requisites, the generaltrend nowadays is to marry only by the ageof thirty.

The requirements of the body and thedevelopment of hormonal changes do not

Born in June 1940 with an early background inmechanical engineering, Dr Tambe is now a famousAyurvedic doctor. Above all his aim is to help people findhealth at all three levels: mind, body and soul. A greatSpiritual Guide, he is also an expert in Yoga, Music,Meditation & Cosmology. Dr Tambe has long been apioneer of the lost art of Ayurvedic rejuvenationtreatments Panchakarma and Kayakalpa, which he hasre-established at his centres in India and Europe. Hisunique methods, which incorporate Ayurveda, Yoga andMeditation, have already benefited thousands.

In 1982, Dr Tambe founded Atmasantulana Village-one of the first contemporary and authentic AyurvedicPanchakarma Centres in India. Today, people from Indiaand all over the world enjoy the benefits of the HolisticHealing therapies offered there. Santulan treatmentcombines Ayurveda, Yoga, Meditation & Healing Music,together with planning a healthy lifestyle. There is a fullyfledged pharmacy on the premises manufacturingtraditional Ayurvedic medicines. With more than fiftypeople living and working there, it was named the bestmodel in Vedic community living at the Expo 2000Hannover, Germany.

Since founding Atmasantulana, Dr Tambe hasestablished more centres in Pune and Mumbai as wellas in Europe, in Munich, Frankfurt, Westerwald andGleichen. Throughout his career Dr Tambe has personallydeveloped more than 100 medicines to treat chronicdiseases such as heart disease, blocked arteries,paralysis, hypertension, cancer and AIDS. He has alsodesigned physical therapies with near miraculous results,such as “Kundalini” massage for back and spinerejuvenation, or “Herbal Smoke Therapy” forpsychosomatic disorders.

Lifestyle Diseases– Ayurvedic AidDr. Shri Balaji TambeAtmasantulan Kendra,Karla

Lifestyle Diseases– Ayurvedic AidDr. Shri Balaji TambeAtmasantulan Kendra,Karla


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take into consideration the socialand financial requirements, theyfollow nature’s rule which has notchanged since the beginning of thetime. Naturally, the man andwoman either have make-breakrelations or involve intopartnerships without marriagewhich gives a differentpsychological pressure. On theother hand the hormones playtheir role and bring a bigdisturbance since they have beennot given an opportunity to act intheir own way in a given time.

• Time tension: All of us are usedto living by deadlines rather thanlifelines. We are continuouslyrunning short of time and are

making rigorous efforts to catch up with it. The phobia ofcompleting the task before the given deadlines starts rightfrom the young students, colleges, universities andpermeates every office, home, industry, city and the nationas a whole. Workers are expected to work in three shifts forincreasing the production, what is forgotten that this isagainst the biological body clock. We are trying to changethe quality of time but this ultimately hits back. This isimpossible as time affects everything but time itself is notaffected by any human efforts.

• Fashion trends: At the physical level, modern times give alot of importance to the outer presentation and thusdifferent fashion trends are adopted for attire, jewelry,haircuts, etc. This too becomes a reason for constantpressure and complexes, resulting in suffering and finallydiseases. As it is the area of the bladder, uterus and thegenitals needs a certain temperature balance for remainingin perfect health. All over the world, in the beginningmankind designed dresses suitable for the environmentalconditions prevailing in a particular geographical region. Inwarmer climatic zones, the clothes were never tight aroundthese parts of the body. Only in extremely cold temperatures,did people wear denim trousers. Wearing jeans in tropicalcountries especially by women can lead to manygynaecological and hormonal disturbances.

• Nuclear Families & neglected food: The luxurious andcarrier oriented lifestyle demands that both the partnershave their own work places and income sources. The Indianconcept of joint families is labeled as ‘old-fashion’ and in

Ayurveda suggests thatthe breakfast needs to besumptuous and freshcooked, this is discardedas too inconvenient.

Telephone manners may seem simple butthey demand a special technique. Here aresome guidelines:• Thoughtful callers consider the otherpersons lifestyle and hours beforeringing.• Anonymity isn’t good manners from acaller.” Hi, it’s me.” is arrogant.• Always greet the person who answersthe phone and then ask for the personyou wish to speak to.• Always look for clues that suggest thatyou may have called at a bad momentor that person needs to cut short thecall.• Always take messages efficiently. Theyshould be written down carefully withthe callers name and number and putwhere they can’t be missed.• It is polite to return the call on the sameday unless you are out of town.• Nobody should use another person’sphone without permission• Don’t put people on hold for too long.• Wrong numbers are swiftly realized ifyou give your number while answeringthe phone.• Please apologize if you have dialed awrong number. Do not hang upwithout speaking.• Never ring off on an answeringmachine without speaking. Alwaysleave a clear, short message with yournumber.• Use phonetics like Alfa, Bravo, Charliewhen giving an address or spelling aname.• The greatest of all telephone rudenessis to put the telephone down onsomeone when he is speaking.

TELEPHONE MANNERSSuneeta Kanga, Trainer- Corporate Grooming,International Etiquette,Fine Dining and WineAppreciation. She can bereached on her websitewww.suneetakanga.com, email : [email protected]



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the process the natural working ofthe family unit for looking after thebody, mind and soul of everyindividual in the family has beenneglected. Readymade food packsor fast food has replaced fresh,home cooked food. Ayurvedasuggests that the breakfast needsto be sumptuous and fresh cooked,this is discarded as tooinconvenient. Also as per nature’scycle according to Ayurveda, theafternoon meal is the main timefor food when the sun’s energy ismaximum outside as well as thedigestive fire in the body is at itshighest point. However usually ourlunch consists of a little quantityof dry food to fill in the emptinessof the stomach. Also there is zero relaxing time after lunch,one jumps back to work, this being the reason that manyprefer to eat less at lunch so that the heaviness anddrowsiness is prevented. All this is compensated at dinnertime by a complete, heavy meal. Our eating systems areexactly opposite as to that prescribed in Ayurveda whichsays, ‘Eat breakfast like a king, lunch like a prince and dinnerlike a pauper’. Also meals need to be taken while sittingrelaxed, in a friendly, homely atmosphere. Our lifestyle isfull of open air parties with buffet dinners, they are surelyan open invitation to diseases.

Our lifestyle has gone so far from the natural Ayurvedic waythat it is difficult to reverse it back at once but surely weneed to find a balance at a tolerable limit so that we cancarry on our modern lifestyle yet enjoy good health.

Stress and anxiety are the two key words which can sum upthe overall effect of all the problems of our lifestyle. In thelong run they give rise to the most of the common ailmentslike high blood pressure, obesity, diabetes, depression etc.The earlier signs indicative of such ailments in the futureare usually neglected. They may be in the form of lack ofconcentration, boredom, lack of interest in studies andprojects etc, which are commonly observed in around 80%of professional graduates.

Ayurveda suggests that if we could try to make a few changesin our diet and behavior, they would go a long way to giveus a healthy and joyful life.

• We are what we eat: The most neglected and yet very

It is important that thefood we eat has thepotential that it can betransformed right up tothe seventh stage ofproviding everyindividual the vitality orenergy.

Business CallsEven in these days of computer and faxmachines the telephone is still thecompany’s artery to the world. Most of therules of private calls apply, but business callsneed extra skills.• Use polite, concise - but not abrupt -speech.• The first secret of being effective andpersuasive on the phone is to smile; itmakes the voice sound friendly.• If a lengthy discussion is needed, the callershould ask if it’s a good moment to talk ornot.• If someone else in the office is on animportant call, others should keep thenoise level or hubbub down.• A switchboard operator should always sayshe is putting someone through, and acaller who can’t immediately beconnected to the right person, should betold what is happening.• If it is company policy for the switchboardto check the nature of the call beforeputting someone through, her/ hismanner should be helpful, not obstructive.• Questions should be politely phrased.“May I say who’s calling” Or “Can I tell herwhat it’s about?”• Efficient Executives can deal with callsrapidly and courteously and take mostcalls that come through.The trick inkeeping calls short lies in setting the pace.If you are brief and businesslike mostcallers will copy you.• A business call is not a chat. It shouldtherefore be a just a single exchange ofenquiries of how the other person is,before launching into the issue at hand.• When an unwanted caller needs to beblocked, start with saying that you thinkhe is with someone and then ask the nameand what it’s about. Then if the call istaken or not nobody feels insulted.• You can also say that the person is in ameeting with a senior executive andcannot be disturbed, is visiting a client, ata conference or some other professionaland believable excuse. Then you can say-“if you can tell me what it’s about maybesomeone else can help you.”



important factor is the food we eat. According to Ayurveda,the food that we eat undergoes seven stages oftransformation starting with rasa-plasma, rakta-blood,maunsa-flesh, meda-fat, majja-bonemarrow, asthi-bonesand finally veerya-vitality. It is important that the food weeat has the potential that it can be transformed right up tothe seventh stage of providing every individual the vitalityor energy. Ayurveda goes further to the development of oja-the essence of all the dhatus which is providing the energyrequired for all our activities. Junk food, canned food etc.have minimum capacity of transformation to the latterstages and hence are best to be minimized. All of us need toinsist on sattvik, fresh home cooked food that is light easyto digest and gives maximum energy and vitality. Everyperson needs to understand his constitution and prepare atime table for the whole year taking into consideration theseasonal changes, work loads, type of work, age, sex andsocial conditions along with the geographical conditionswhere they are living. This will give an understanding of whattype of food can offer them the balance.

• Water is precious: But not so precious that we have todrink too little! Drinking sufficient water is the key to goodhealth. Ayruveda suggests that drinking enough quantitiesof boiled drinking water is a must for optimum health. Boilingnot only purifies the water but also makes lighter and thiswater is easily accepted by the body. Soft drinks or aerateddrinks cannot replace the requirement of water.

• Early to bed, early to rise….As far as possible avoid latenights, staying awake after midnight leads to increase in pittadosha causing indigestion and many problems thereof.

• Fast life, fast food, fast death! Avoid excess of deep fried,oily and junk food

• Walking –the best exercise: Walking every day for about30 mins and practicing yoga and pranayam is ideal, avoidstrenuous exercises

• Sleep well: Avoid late nights, sleep in time and for enoughhours 6-7 according to individual constitution

• Take a break: Remember to take a short break when youfeel stressed or tired either mentally or physically. Avoid anyforce on the body or the mind

• Give yourself a treat: Abhyanga massage described inAyurveda is an easy to do home remedy for all individuals.Oil application is ideal for Vata balance, the imbalance ofwhich is the major culprit in al 21st century ailments.Abhyanga helps to improve the circulation and offersrelaxation to the body and mind, normalizes the flow of the

rasa and rakta dhatus in the body andreduces the hardening, improves theelasticity of the blood vessels. Ayurvedicpanchakarma- a purification andrejuvenation therapy is a must for everyperson with high blood pressure. Theswedan-steam and snehan lubricationtherapies help to improve the circulationand the therapies virechan-laxative therapyand medicated oil enema basti give very goodresults in cases of hypertension.Panchakarma helps to balance the threedoshas vata, pitta and kapha , the imbalanceof any one or more of them is the cause ofdisease. Post panchakarma treatmenst likeshoridhara, shirobasti, panda swedan, hrudbasi etc. are performed depending on thecause of the high blood pressure.

• Connect within: Efforts need to be madethat the stress endurance capacity at workas well as in relations may be increased. Giveyourself enough time for relaxation,enjoying individual hobbies, listen torelaxing and healing music, practicemeditation techniques to keep the mindquiet and calm. Sitting quiet for 10 minuteswith closed eyes before sleeping isbeneficial, deep breathing, pranayam andyoga nidra – a sleeping meditation orrelaxation therapy are excellent remediesfor connecting within to experience innerpeace and joy.


To put the world right in order, we mustfirst put the nation in order; to put thenation in order, we must first put thefamily in order; to put the family inorder, we must first cultivate ourpersonal life; we must first set ourhearts right. Confucius


Events @ Indira

GyangangaLecture SeriesTakes OffThe Indira Group of Institutes opened its heart tothe unadulterated wit and widom ofMr R. Gopalakrishnan, Executive Director, Tata SonsLtd on Saturday, 10 October when he inauguratedthe Tapasya Gyanganga Lecture Series at the DhruvAuditorium and made the maiden address underthe Series on the subject of “Innovation andIngenuity” with special reference to the TataExperience of over 100 years.

The Tapasya Gyanganga Lecture Series has beenconceptualized by the Indira Group under the aegisof Tapasya, the triannual journal. The purpose is tomake available to the young students the wisdomand wealth of the experience of icons in Business,Sports, Arts, Media, Journalism, Literature etc. sothat these role models can be theirinspiration to contribute actively tonation building in a big way. TheSeries is being mooted as an ongoingevent featuring atleast 3 speakers ofeminent standing per year.

In a presentation that was laced withhis trademark wit and eruditethinking, Mr. Gopalakrishnanemphasized that innovation is not aformal exercise which can be directed

by the corporate, setting standards and limits for the same,much in the same way as it may set standards for productionand sales. He underlined the need for a climate of innovationand empowerment in the organization considering the needsof the market and the stakeholders. In fact, he was at painsto insist that innovation does not recognize hierarchy or

position and even the juniormost in the organization; why, even an outsider,can come up with a path breaking suggestion that can change the way themarket looks at a product or service. He gave the examples of Tata Salt, whichtook the country by storm, first by introducing the innovative product througha unique business model of outsourcing the major constituents of the cycle;and then revolutionized the customer’s thinking through some imaginativeadvertising – the Desh Ka Namak campaign!

So too was the introduction of the mini-truck Tata Ace which created a brandnew segment in the commercial vehicle market and the rest, as they say, washistory! And of course, the Nano which could not have been ignored at thetalk, and which today, is at the head of Tata Motors’ innovation story. Whoknows, it might change the way the middle class travels in the cities of India!

A 400 strong faculty and student audience kept Mr. Gopalakrishnan busyreplying to a number of questions during the highly interactive session.Mr. P. G. Vijairaghavan, Editor - Tapasya & Convenor of the Tapasya GyangangaLecture Series explained the concept of the Series and introduced the Guest,while the Chairperson Ms Tarita Shankar welcomed Mr. Gopalakrishnan, andGroup Director Mr Chetan Wakalkar moderated the interactive session.


Indira School of Businss Studies (ISBS), Pune, introduced a certifiedcourse in Innovation Management, for its Business Managementstudents.

ISBS successfully launched the course in 2008, with “Igeniou” andits mentor Mr Titus Young, from Singapore.

ISBS concluded its second certified course in Innovation Management, in Sept’ 2009 with the globally acclaimedMr. Roger La Salle, a professional engineer, successful business entrepreneur and an international expert ofbusiness innovation, who brings with him a lifetime of experience and successful business creation.

Roger is the author of several books on Matrix Thinking and in 2004 was appointed Chair of Innovation at theprestigious “The Queens University” in Belfast. He is Director of a number of companies both in Australia andinternationally and was formerly an expert panellist on the Australian television program, the New Inventors.

"La Salle Matrix Thinking®"Innovation Management at Indira School ofBusiness Studies, Pune

Tearful HomageStudents of Indira School Of Communication pay rich tributes to themartyrs of the 26/11 tragedy. Students of the Indira School of

Communication performed a strikingskit, a video show, poetry recitations,speeches and a remarkable lamplighting ceremony, to pay tributes tothe martyrs of 26/11 tragedy. On thesullen anniversary of the sad incident,students of the BAJM course tookcentre stage at the pool sideauditorium in the campus.

Among the items presented was amoving poetry recital by second yearstudents, Shirin Dubey and PankhuriJain. The poems were scripted byShirin, an aspiring scribe.

Events @ Indira


EmergingIndia@IIMPIndira Institute of Management, Punehas a tradition of conducting ThematicInduction Programme. This year itcame up with a very unique andrelevant theme i.e. “Emerging India”.Ms.Supriya Sule, (MP) was the guestof honour and inaugurated theprogramme.

Also present were Dr. Arun Nigvekar,former chairman UGC and chief mentorSeamless Education Academy whoenlightened the students on EmergingIndia and Mr. Ramakrishnan Ganesh,VP-HR, Oracle Financial Services wasalso the part of the programme andwho gave the overview of HR and jobprospects in HR.

ISBS invited NHRD Pune Chapter, to host a workshop, on Performance Management. Theparticipants in the workshop were Corporates, Faculty and HR students of ISBS. Thirty fiveparticipants visited the ISBS Campus from the corporate world and the full day’s workshopwitnessed tremendous value addition for the participants. The trainers in the workshop wereMr. Prince Augustin- Senior Vice President, Human Capital, Mahindra & Mahindra and Ms.Carmistha Mitra, National OD Manager-Hindustan Coca Cola Beverages.

Workshop on “Performance Management”By NHRD in collaboration withIndira School of Business Studies

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In yet another CSR initiative under“Samvedana”, ISBS Faculty andStudents approached an NGO inPune called Balika Gram which isproviding shelter as well aseducation to children whoseparents are afflicted with leprosy.It was conveyed to ISBS that theNGO would tremendouslyappreciate medical screening ofits inmates who are young girls,to ensure complete health safety and counseling.

Indira School of Business Studies, Pune therefore took it upon themselves to organize such health checkup on a regular basis and the first such initiative was organized as a Medical Check-Up Camp on 15thNov 2009.

ISBS arranged the services of Dr. Neelam Dhamale (Pediatrician), Dr. Rajendra C.Shinde (Dermatologist),Dr. Nandita Nair (Gen Physician) & Dr. Vikrant Aggrawal (Gen Physician), who gave them suggestionsabout general hygiene, ways to cure the ailment and ways to prevent the spreading of the disease. Alldoctors worked on honorary capacity.

“Samvedana”-An Initiative by

Indira School ofBusiness

Studies

ISCD’s Outdoor Management Training session at Karnala Fort

Events @ Indira

"The Outdoor Management Training (OMT) Session for ISCD Shivajinagar PGP SMU first Semesterstudents took place 445 meters above the sea level at Karnala Fort.

Karnala is 61 Kms South of Mumbai on the Mumbai - Goa Highway and is a Government protectedsite.

The students wereprovided insights on 'Co-ordination, SettingGoals, Planning,Pushing one self toachieve targets,strategising andmost importantlyTeam Work.'


The third Induction Programme was conducted forFirst Year Engineering students of 2009 – 10 batch on11th and 12th September 2009, in college campus.

Distinguished personalities like Mr. Achyut Godboleof Softexcel Consultancy Services, Mr. DeepakShikarpur of Autoline Design Software & Head ITsector MCCIA, Mr. Balaji Reddie of the Deming Forum,Mr. Sham Bhagwat a trainer in ‘seven habits ofsuccessful people’, and Mr. Anil Rao a yoga teacher,Mr. Ramani Iyer of Forbes Marshall, Mr. MadhavDeshpande of Symphony Software, Mr. Sandeep Israniof Tej Gyan foundation, Prof. Khaladkar a training andplacement officer and Mr. Madkikar of ContechEngineers shared with students the way to achievetheir dreams.

Induction Programme@Indira College of Engineering and Management’

Indira Group of Institutes-one of the leadingnames in the field of management educationhas now forayed in the distance educationsegment by inaugurating ‘Indira InternationalDistance Education Academy’ (I-IDEA). It hasbecome the first private institution in thecountry to offer AICTE – UGC - DEC approvedPost Graduate Programs in Managementeducation with specializations like Marketing,HR, Finance, Operations, Systems andInsurance & Risk Management throughDistance & Online learning.

This new venture of Indira Group was inaugurated by Prof. Om Prakash Mishra, Pro Vice Chancellor -Indira Gandhi National Open University at Indira Universe Campus in the auspicious presence of HemantJoshi, Partner - Deloitte Haskins & Sells. Ms. Tarita Shankar, Chairperson - Indira Group, Chetan Wakalkar,Group Director - Indira Group and Manjoo Phadke, Director – I IDEA were also present at the function.

INDIRA GROUP FORAYS INTO DISTANCE EDUCATION

Events @ Indira


Events @ Indira

The List Of Awards For Ms Tarita Shankar

I) ‘Edupreneur of the Year Award’ at the Dewang Mehta Business School Awards,November 2009.

II) ‘Pride of the Profession Award’ by Stars of the Industry Group and Fun & Joy atWork.

III) ‘Visionary Leader Award’ by DNA & Stars of the Industry Group at Innovative B-School Awards.

IV) ‘Samaj Bhushan Puraskar’ by Akhil Bharat Brahman Mahasabha.

V) ‘Hall of Fame Award’ at the 16th Dewang Mehta Business School Awards, Mumbai.

VI) ‘Best B School Visionary Award’ by Deccan Herald.

Indira Group once again created history winning 11 Awards at the Dewang Mehta B-School Awards function in Mumbai

Indira has received the awards in various categories as under:

Edupreneur of the Year Award - Ms Tarita Shankar, Chairperson, Indira Group ofInstitutes

Nurturer of Talent Award - Prof. Chetan Wakalkar, Group Director, Indira Group ofInstitutes

Brand Leadership Award - Indira Group of Institutes

Business School with Best Infrastructure - Indira Group of Institutes

Business School that Encourages Leadership as a part of the Curriculum - Indira Groupof Institutes

Business School with Best Academic Input (Syllabus) in Retail /Services - Indira Groupof Institutes

Business School with Best Industry Interface - Indira School of Business Studies

Best Teacher in Marketing Management - Prof. Pravin Dange, Indira School of BusinessStudies

Business School with Best Academic Input (Syllabus) in International Business - IndiraGlobal Business School

Presentation Contest - 3rd Place : Anup Nair & Anurita Saxena, Indira School of BusinessStudies

Best Student in Management Contest - 9th Place: Nilesh Kshirsagar, Indira College ofEngineering & Management.

Its TheSeason OfAWARDS ForIndira Again !2009 proved to be not very differentfrom the past years when it came towinning Awards and recognition forquality in education. Coupled withthis was the hail of recognition forthe Chairperon, Ms Tarita Shankarwhere she bagged most of theAwards for leadership in education !No wonder we are proud to beIndiraites !

IGBS Organizes Melting Pot – 2009Indira Global Business School Melting Pot 2009 saw Ms Shaina NC, Fashion Designer, as Chief Guest whenshe graced the occasion along with Chairperson and Group Director IGI.


Dr. Sri. Beldona, Associate Prof., GraduateManagement School, University of Dallaswas the principal speaker at a Seminar onInternational Marketing and Strategyorganized at the Indira Global BusinessSchool in September 2009.

Mr. Tony Manwaring, Chief Executive, Tomorrow’sCompany, United Kingdom. (Co-Organization). Speakingto the students of IGBS.

Events @ Indira

Documents

Indira Group of Institutes - indiraiimp.edu.in · Editorial P. G. Vijairaghavan The editorial in this year’s final issue does not want to be another placebo to simulate the feel-good