Friday, August 17, 2018

Lucky Number 3 : Fonterra trying their luck for the third time in India

Dear friends,

Last fortnight was full of news related to new  investments and entry of a few Multinational in dairy space. 
1.      Hindustan Unilever bought frozen dessert business of  Karnataka based Vijaykant Dairy and Food Products under the Aditya milks brand.
2.      Fonterra signed a JV with Future group
3.      Coke planned to relaunch their dairy based vio beverage vertical
4.      ITC began their polypack milk sales in Bihar
5.      Parag milk foods expanded their operations to North India by acquiring dairy processing infrastructure of Danone at Sonepat in Haryana .
6.      Britannia commenced milk procurement directly from the farmers near Pune as well as looking for some other location out of Maharashtra to expand their dairy business by setting up a plant .
7. became the largest player selling around 27000 Liters fresh milk  through online platform and got further rounds of funding. Similar IT set up was also launched in Chennai through a promoter having an integrated dairy farm.
8.      Keventer's launched door delivery supplies of fresh milk through their online portal in Delhi and NCR.
Hearing all these news in just a fortnight is quiet motivating and inspiring for all stakeholders from the dairy sector. Still the issues of surplus stocks, over production of milk, below expectation pricing of milk for farmers are a few which needs quick redressals before certain regions in  Indian dairy sector enter into flush.

The good part is that the different departments of government and ministries are all ears to the suggestions and recommendations emerging out from various farmers group, think tanks  and industry associations for the betterment of industry and sustainability of Indian dairy farmers.

An august  forum of NDRI Graduates consisting of eminent personalities from dairy industry are planning a brainstorm on how to get Indian dairy farmers right price for their produce during their annual event on 14th and 15th sep 2018 at Karnal. We are also organizing a similar round table  in our annual conference on optimizing costs for sustainable dairying on 12th and 13th October at Pune. It would be only when every one would be contributing with their experience to find a plausible solution to this menace.

Now let me share a personal experience which led me to think more deeply on the impact of analog products in panir and cheese category on farmer's income. 

A couple of months back I received a call from a milk processor from Mumbai. He had a good sales of around 3 MT of panir per day and he was paying a good price to the farmers for milk. Suddenly a branded product from a leading dairy in western India launched a product which was sounding line panir and was made up of vegetable fat with milk solids. This product was available at around 60 % of the price of original panir . Similar cheap products were available in unpacked category also ( so called adulterated panir using vanaspati) due to absence of any standards for analog products under FSSAI.

The sale of this entrepreneur in Mumbai dropped down to 600 Kgs of panir per day and he was really in a mess. The farmers were contacting him regularly and he was not in a position to face them.Though he was trying to find solutions to make use of some technology by making panir cost effective and competitive with this analog product. When I worked on numbers then I found that if some technology could increase the yield of panir from 20 % to 30 % with full cream milk, then and only then his price could be compared to this analog product. On similar lines Mozarella cheese requires an increase in yield from 11 % to 15 % to match the price of analog with standardized milk.

I began to look at the manufacturing processes for both the products but could not find any quick solution and I better leave this issue for the research Institutes/organizations in dairy and food space space to launch studies to get better high yielding technologies  for making panir and cheese. 

In order to get the standards defined , I recommended it back to FSSAI to look at developing not only standards for analog products but also to develop labeling norms so as to prevent any culprit to sell analog dairy products with look alike names like Cheez, Paneera, Cheezy, Pizza Topping etc.

In my earlier blogs I have already mentioned about the immense adulteration in ghee segment and power of analog cream, butter (margarine) and ghee ( cooking medium ) to refrain farmers from selling their  production to  dairy industry with the shift in demand to these low cost unhealthy alternatives. 

I also request the research Institutes/labs to find appropriate technologies to identify mixing of vegetable oils in desi ghee at both qualitative and quantitative manner. We have a few sponsors who are ready to award the researcher for establishing protocol of testing adulterated ghee in a fool proof and scientifically proven manner. If required such studies could be imparted to IITs, ISC,NPL ,NDRI, and NCL also.

While the whole world including India is looking at Food frauds as the next big challenge, it is high time for industry and authorities to come together and prevent these culprits to sell products to innocent consumers due to sheer  ignorance and awareness. We have also recommended that a separate logo of non dairy product must be developed and be appropriately positioned on the packaging of such analogues so that the consumer is made aware . Even restaurants selling such analog products in their recipes must also mention that "analog panir or analog cheese used".

Looking at the large production levels of Ghee, Panir, channa and increasing demand of cheese in QSR and HORECA in the country, such practices may devoid our farmers to sell at least 10 % of their produce to the market. Most of the rasogolla manufacturers have already stopped making rasogolla with fat thus this analog might not affect the demand of milk but they might shift to making rasogolla with smp only.

At the end of the game the loser is either the farmer or the consumer. May I request all the stake holders of the industry to think over it and raise their voice and make representations to FSSAI through associations, groups or even at individual level .

It is high time for all of us to raise our voice. I alone may not be sufficient enough to handle this national crisis starting from adulterated milk itself.

Happy e learning.

with best regards

Kuldeep Sharma

Chief Thinking Officer 
Suruchi Consultants
C-49 sector-65

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