ITC Ltd, which aspires to register revenue of Rs 1 lakh crore from the new FMCG businesses by 2030, said on Friday the "tax structure" on processed food products "does not treat them as providing impetus to the agriculture economy".
"Unfortunately, there seems to be a view that packaged branded food products are a source of elitist consumption. Therefore, the tax structure does not treat them as providing impetus to the agricultural economy," ITC Chairman Y C Deveshwar told shareholders at the 106th annual general meeting here. He also said the current levels of processing of less than 10 per cent is way behind that of major food producing countries. "Given the tremendous potential of the food processing industry to transform the future of the agricultural sector and create jobs, it is critical that this sector is allowed to grow faster with strong policy impetus," he said. The tax incidence on food processing must be viewed from the perspective that it adds tremendous value to farmers and helps in ameliorating huge agri-wastage, Deveshwar said. He also said the company has decided to foray into fruits, vegetables and other perishable segments and investments are underway to climate-controlled infrastructure for an efficient supply chain to unlock the potential latent in this area. Deveshwar said that around 20 integrated consumer goods manufacturing and logistics facilities were under various stages of development. He said agro-forestry sector, as a source of raw material for wood-based industry, is "woefully constrained by policies that not only prevent job creation in India but promote avoidable imports".
India currently imports significant part of its demand for wood and wood based products, given a regime of near zero import duties. Taken together with a policy framework that does not permit corporate farming, it leaves the hapless farmer to compete with automated farms overseas," he said.
Euromonitor International which is a market research organisation on consumer products, commercial industries, demographics trends and consumer lifestyles in India, has said that the industries with low income elasticity, such as hot drinks, home care and packaged food etc are less likely to be impacted adversely due to the short-term cash crunch.
They further said irrespective of the change in the income of the consumer, the relative change to the growth in the industry will be less than when compared to industries such as beauty and personal care, alcoholic drinks and soft drinks, which require more discretionary spending.
However, there is a pain point for traditional grocery retailers as majority of them are yet to adapt to digital payment mode. As per insights shared by Euromonitor, traditional retail still account for more than 90 percent of packaged food value sales in India. Janaki Padmanabhan, Country Manager, Bengaluru division, Euromonitor, said, "Since a big part of these retailers are not well equipped with card payment machines, it is likely that sales during this period will have gone to modern/internet retailers, which offer consumers the convenience of paying by card."
Additionally, Padmanabhan said essentials with lower income elasticity such as rice, edible oils and dairy products will be impacted less when compared with products such as ready meals and processed fruits and vegetables. However, she said the impact felt will also depend on the frequency of purchase of packaged food through various retail channels.
Fingerlix, a food start-up, brings fresh, ready-to-cook solutions with its wide range of products such as batters, mixes, curries, dals, parathas’ and ‘fully-ready’ accompaniments to go with them. Company’s ready-to-eat products are easy to make with minimum amount of efforts required. User needs to just heat the product after pouring it down in the vessel and then needs to add some extra ingredients according to his or her taste.
The company claims that all of its ready-to-eat products are fresh with absolutely no preservatives. Targeted at today’s progressive homemakers, Fingerlix serves freshly cooked and processed food prepared in its state-of-the-art hygienic kitchen. Apart from providing home cooked food, it also equips its customers with an option of customizing each dish according to their taste. Fingerlix ready-to-cook delights are now available at various retail outlets and supermarkets across Mumbai including Haiko (Hiranandani, Powai), Reliance Retail (includes Reliance + Sahakari Bhandar) and Hypercity. Customers can also shop for these ready-to-eat products through company’s website and app. The company was founded by Shripad Nadkarni (Director), Shree Bharambe (CEO), Varun Khanna (VP-Sales & Operations) and Abhijit Berde (Product Development & Executive Chef).
Commenting on the launch, Shree Bharambe, CEO, Fingerlix, said, “Fingerlix was created to help homemakers prepare ‘customised-to-their-taste’ food at home every day without the slog. Since all the ingredients we use are absolutely fresh and the products are free from preservatives, Fingerlix food is ideal for daily consumption. It doesn’t just take away from the hassles of cooking but also adds fun to home food with its exciting array of dishes. Our endeavour is to be the constant partner of those who love their tasty traditional meals at home but don’t always have enough time at hand to spend long hours preparing it. As all Fingerlix products are preservative-free, they come with a shelf life of five days.”
Sadhvi Niranjan Jyoti, Union Minister of State for Food Processing Industries, while addressing the National Cold Chain Summit 2016, revealed that the Central Government will provide all the necessary support to scale up the growth of UP’s food processing industry.
During the summit which was jointly organised by Union Ministry of Food Processing Industries (MOFPI) and Indian Chamber of Commerce (ICC), the minister also revealed that a wide array of fiscal incentives was being offered in the food processing sector. Remunerative prices for farmers have become an imperative for sustainable growth of the country.
She stated further that this summit will act as a catalyst to the state and will open many opportunities for UP in food processing business. This one day summit was focused on promoting and harboring the cold chain market and services in UP and also to educate and make people aware about the opportunities available in this lucrative business.
A Research Paper on Cold Chain Market and Services in Uttar Pradesh was also released at the inaugural session where UP Minister for Horticulture and Food Processing Mool Chand Chauhan was also present. Sharing his views on the summit, Chauhan opined that the summit provided a great platform to discuss the issues, bottlenecks and required strategies for promoting faster growth of the food processing industry. Uttar Pradesh is an ideal place to catapult the success story of the food processing industry because of its natural resource base and demographic advantages.
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