Friday, February 16, 2018

Market Share versus Growth Share in value added products : Who leads the race ? (55th DP 1 to 15 Feb, 2018)

Dear Friends,

This fortnight ended with a news related to ramping up capacities for value added products as a solution to farmers not getting right price of their produce.. Economically Ramp up means creating capacities before the demand is developed to that level. 

This news caught my attention and I better thought to share my observation on this topic. Apparently it looks a good strategy for dairy industry to plan and meet changing demand in value added products due to change in socio economic conditions. Health and nutrition holds a higher level in aspirational priorities of emerging middle class for their family as compared to their priorities for child education or career.

Now who will be doing it for value added innovative products segment. In Ramp up strategy the standard metrices of management do not prove to be fruitful. Let me give example from Indian dairy industry.

Let us look at 2-3 categories in which innovative dairy products being launched out of standard categories.

Say Greek Yogurt is one of the product which has entered into Yogurt segment. Now considering (guestimate) Yogurt to be a Rs 10000 Crore market. Now we may have Amul, Mother Dairy etc to be legitimate leader in market share for this category .Now the moment we look at this new value added segment then considering it to be a 2 % market of the total market meaning Rs 200 Crores and growing at say 70-80 % because of small base, we find none of the leader is leading the growth share rather it is a new start up i.e Epigamia.

A few of other examples may be as follows :

Frozen Yogurt by Cocoberry
Fresh farm milk by Pride of Cows, 
Natural Ice creams by Naturals
Protein based Beverages for body building by Jago
Live kitchen cum shake and serve milk shake segment by Keventers
Patanjali in Cow ghee ,
Dairy Best in Low cholesterol Ghee , 
Milky mist and Ananda for Panir in thermoformed format  , 
Metro Dairy Jullundhur in Curd in big jar
Quaker OAts with their first Breakfast flavored milk shake endorsed by sachin Tendulkar 
and many more.....

In most of these examples new start ups played well on  growth share and snatched away this opportunity from the big players having large market share. However large players also have some interesting launches like Memory milk, Probiotic ice creams and Rasmalai from AmulNutrifit probiotic from Mother dairy and Raita from Nestle.

Value added innovative health and nutrition segment in Indian dairy sector is just a tip of the ice berg today and opens up opportunity for one and all. In coming days we shall be watching on how the dairy market horizon changes with more and more of start ups coming out with creative business models and interesting products in this segment.

One thing is for sure i.e without captive or outsourced R&D and New Product Development it would be very difficult for existing dairy champions to enjoy the same market position which they enjoy today.

Change is the only constant.

Happy e learning

with best regards

Kuldeep Sharma
Chief Thinking Officer
Suruchi Consultants (ISO 9001:2008 Company)
C-49 Sector-65
Noida 201307

Thursday, February 1, 2018

Food safety and its impact on Indian Economy (54th DP 16 to 31 Jan, 2018)

Dear Friends,

Last fortnight we have seen few news related to Food safety in India and its impact on Indian Economy. We also saw launch of Training of Trainers for dairy sector under FOSTAC program to train Food safety Supervisor in the country. It is mandated now to have a Food safety supervisor for every 25 food handler in a dairy/food factory. Soon Food safety supervisor training will begin in this sector through empaneled partners of FOSTAC across the country.

Such initiative would bring in a paradigm shift in the Safe Milk Mission of the country and its outcome would result in an early achievement for providing safe milk to every consumer in the country.

In this edition I thought of sharing some facts about the future threats of food safety in our country in dairy as well as food and its impact on Indian Economy.

a. The first threat to milk is because of upsurge in supply of silage in plastic bails to the farmers. This is an anaerobic environment , in which spore forming heat-stable bacterial could grow. If such bacteria enter milk , they will be transported to dairy factory and can gain entry, surviving most heat treatments.They may then be able to colonise within foulants films that can build up on milk -contact surfaces and ultimately contaminate products.This threat is over and above the threat of having aflatoxins being found in such silage due to unregulated and improper making of silage or poor knowledge on toxin binders.

b. The concept of using feeding pads in modern farming in housing systems may provide more opportunity than in the past for disease organisms to pass between animals in a herd.

c. Gone are the days when bacteria in milk were considered as free-floating and thus controllable through process parameters on heating. Now the bigger threat is of biofilms on inside surfaces of pipes and vessels. Though there are chances of the spore formers to get killed while heating milk (which are coming out of bio films) but unfortunately heating in dairy operations is only in early stages and practically after pasteurization there is no further area where milk is heated in a liquid milk plant while the surfaces remain under ambient conditions most of the time. 

d. With more and more of automation the dairy plant operators are interacting to the process through monitors and screens. If the system is well engineered and highly efficient then threats are low but what about the unaccountable or unrecorded details related to new strains of bacteria which are emerging .

Recent case of salmonella in Lactalis is one of the example wherein all processes and systems were not negotiated at all however the result is not in favour of processors as well as the consumers.

In 2011 Food Borne diseases in India were 100 million and are expected to rise to 150-177 million in 2030.

This means one out of 9 persons on average fall sick up from one in 12 in 2011. The Food borne diseases cost may rise to USD 7-8.4 Billion by 2030 as against USD 3 B in 2011. 

With increasing GDP and per capita income and changing lifestyle to adopt processed foods and particularly meat based products ( which are more more prone to create Food borne diseases) the likelihood of high burden on Indian Economy on healthcare is inevitable.

However it becomes duty of all the stakeholders to start focussing on their Quality assurance program towards Food safety more than just using it to meet compliance. Even the compliance need to be re-imagined in a dynamic environment with induction of more and more stringent norms from the regulator.

My purpose through this deliberation is just to sensitize all of you towards two important aspects related to future impact of food safety on economy; 

a. Modern farm practices need to be assessed well before adoption and must be viewed from its final outcome from food safety perspective.

b. Food safety is a mindset and it is always better to change it at the earliest. A rising economy with rising cases of food borne diseases and more expenses on healthcare will not do good for any one.

Just think over it and enjoy your weekend with this content as food for thought.

( Acknowledgements : Proceedings of the 2014 Newzealand Milk Quality Conference and Joseph James Whitworth from Food Quality

Happy e learning.

with best regards

Kuldeep Sharma
Chief Thinking Officer
Suruchi Consultants (ISO 9001:2008 Company)
C-49 Sector-65
Noida 201307