ADF to expand due to Indian demand for RTE foods

13-Dec-2011 - Last updated on 13-Dec-2011 at 15:33 GMT

Related tags Middle east

ADF expands in response to increasing consumer demand for RTE foods

India-based ADF Foods is investing heavily in extending production capacity as it looks to expand aggressively in the domestic as well as international markets on the back of growing demand for ready-to-eat foods.

ADF Foods is a Mumbai-based food processor that currently manufactures ethnic Indian foods like pickles, chutneys, canned foods, spices, and even frozen foods like parathas and IQF vegetables.

The company currently exports these products to over 40 countries in North America, Europe, and the Middle East, but wants to grow in the domestic market as well, managing director at ADF Foods, Bimal Thakkar, told FoodNavigator-Asia.com

“ADF Foods will be investing around US$10m in two factories in the next 24 months. We are going to build a green field project in India at a cost of around US$5m crores and this factory would be mainly for the domestic market,” he said.

In addition, Thakkar said that ADF would also be looking at expanding its capacities in North America and it has “earmarked around US$5m for the US factory as well” for this purpose.

Last year, ADF Foods further strengthened its international market presence by the acquisition of US-based Elena’s Food Specialties and its well-known brands PJ’S Organics and Nate’s.

ADF’s current international brands include Ashoka, Camel, Aeroplane, Khansaama and Truly Indian, sold via a network of 175 distributors globally.

Home is where ADF wants to be

Thakkar said, however, that it is the Indian market that is fixed in his sights given that the Indian economy and the packaged foods industry is growing and is poised to grow even further.

“With organized retail expanding, the strong growth of middle class and the increase in number of nuclear families, the packaged foods sector is only going to grow. We decided this was the right time to launch and make our presence [felt] in the Indian market,” he said.

“We are eyeing 40% of revenues coming from the Indian market and the balance of 60% from the international market in the next five years,” added Thakkar.

“We will be pan-India in the next 12 months or so. By this strategic expansion our domestic revenues will eventually go up to between 35% and 40% of the total pie over the next three years,” he said.

RTE is right

In June, ADF entered the Indian market with ready-to-eat (RTE) curries and pickles under the brand name ‘Soul,’ amongst which the company has also the first pickles made in olive oil.

Commenting on the RTE segment in India, Thakkar said that ADF’s RTE products are targeted at people in the metros, where many working couples make a living but to not have the time to cook.

“The market is still at a very nascent stage and the demand for RTEs and other packaged foods has been on the rise as they are a convenient alternative. It involves simply heating the packet for a couple of minutes with just a Snip and Serve Hot method,” he said.