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Del Monte readying to create new snack-food segment in India

By RJ Whitehead , 03-Oct-2012

American snack food giant Del Monte has revealed that it has plans for an imminent entry into the Indian snack-food market with a range of fruit-based packaged snacks.

The Californian food and beverage company is already present in India with packaged fruit, but this latest move will target the youth market with smaller package sizes. The new range will arrive on shelves over the next six to 12 months, according to reports by the Xinhua news agency.

Currently, India's health snack market accounts for around only 5% of an estimated INR100bn snack-food market.

Premium price, evolving market

Del Monte plans to price its packs a little above average current Indian prices. However, traditional snacks, such as potato chips, puffs and nuts, cost much less.

"Pricing is important, along with innovation and uniqueness," said Yogesh Bellani, chief operating officer of FieldFresh Foods, the 50-50 joint-venture between Bharti Ventures and Del Monte Pacific.

Bellani said that after testing the market for around six months, the company will launch packaged fruit-based health snacks, primarily targeting “munching on-the-go” youths, adding that many of these young people are seeking snacks with different tastes and nutritional values.

Globally, Del Monte sells fruits, fruit chillers, fruit salads and fruit gels, although in bigger packs. "Packs of 40g and 50g will be launched for the first time," Bellani said.

In India, Del Monte already sells packaged fruits, such as pineapple slices, peach halves and fruit cocktails, in pack sizes starting at 340g. The packaged fruit market in India is estimated at INR3bn , and is growing at between 15 and 18%, said Bellani, adding that around 55% of packaged fruit is imported.

Del Monte's health snack products will include packaged fruits like apricot, mango and papaya, dried fruits and dried prunes. "We are not in competition with the normal snacks players. Instead, we are trying to develop a completely new segment in the Indian snack market," Bellani said.

Growth alongside existing lines

He added that entry into the health snack market was expected to double the company's revenues in the packaged fruits segment, which currently accounts for about 15%, while 30% of revenues come from beverages, 30% from culinary and around 25% from its Italian range.

Initially, the health snack products would be sold at schools, colleges and office canteens, as well as cafes and railway canteens.

"We will not invest in developing an entirely new distribution network. Instead, we will leverage our existing ones," Billani said.

The company also plans to launch at least five products in existing categories. In culinary, it will introduce mayonnaise and a range of salad dressings and toppings, he said.

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