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Manufacturers gear up to join India’s fortification frenzy

By RJ Whitehead , 14-Feb-2017

© iStock
© iStock

It appears that food companies have been taking positively to Delhi’s new focus on food fortification.

Reports suggest that since the Indian food regulator released its draft standards on the fortification of foods such as flour, oil, milk and salt, there has been a flurry of new-launch activity in this segment. Though still at a draft stage, the standards were made operational immediately when they were notified in October. 

The FSSAI said at the time that its role was now to promote fortified foods in the country and take steps to encourage their production, manufacture, distribution, sale and consumption. It will also advise and promote the use of fortified food in government-funded distribution programmes.

The notification seems to have tempted a number of Indian companies to cement their positions in the market straight away.

Among them, leading milk supplier Mother Dairy now sells only fortified milk in Delhi-NCR, in a move to help address malnutrition in the capital. Its entire 3m litre supply to the capital now contains added vitamins A and D, with the 25 paise (US$0.004) cost of adding these to each litre of milk absorbed by the company.

"We are already adding vitamin A in our token milk sold at milk booths. Now we have decided to add vitamins A and D in both token milk and poly-packed," Mother Dairy managing director S Nagarajan told PTI.

Meanwhile, rice manufacturer Asbah said it will invest over INR50m (US$7.5m) to launch new “fortified rice” in the domestic market. 

A relatively new brand, Asbah sells basmati rice, dalia, poha, suji and maida in its home market, while also exporting basmati. 

"We have really progressed and our products are being sold in major cities. As part of our expansion, we are focusing on fortification of rice. We are investing more than Rs 50 crore," said Gaurav Jain, director of Asbah’s parent, DCP.

He said the draft notification had spurred the company to investigate fortified products, which had hitherto not been available due to a lack of regulations.

We are going to be the first to take benefit of it and deliver a fortified rice product in the market," Jain said.

Other companies reported to be developing new fortified products include Cargill, which has shown interest in a fortified edible oil, and Tata Beverages with a fortified tea.

Late last year the retailer Future Group was said to be "very keen on fortification", while several states are reported at advanced stages of adopting fortified foods in government programmes. 

About 70% of pre-school children and over half of women suffer from anaemia due to iron deficiency. India’s government sees food fortification as a simple, proven, cost-effective and complementary strategy.

 

More stories from South Asia…

Indian food delivery sales hit $300m despite paltry start-up investment

Online orders grew by 150% last year, despite what appears to have been a difficult year for Indian food delivery startups.

Faced with a funding squeeze that forced several companies to scale down or close, the segment received just US$80m in investment in 2016, compared to US$500m the previous year, according to RedSeer Consulting.

Yet this trimming has worked well for meal suppliers, with online food delivery now reportedly accounting for around a third of all business at restaurants associated with online delivery platforms, in a market worth US$300m.

With customers and restaurants both embracing these online food delivery services, the order volumes have shown a healthy growth but the fundamental issue of unit profitability and operational efficiencies need to addressed to build a sustainable business in this sector” said RedSeer chief executive Anil Kumar.

More than 80% of orders are now placed in India’s five biggest cities, causing established platforms to limit their expansion to lower-tiered markets. But more positively, this situation has prompted them to achieve operational efficiencies and greater profitability in these cities. Several Internet kitchens have also come up with niche offerings in these cities, RedSeer’s report added.

Sequoia Capital and Info Edge-backed Zomato are among the key names in the segment, alongside Bessemer Venture Partners-backed Swiggy and Lightspeed & Zodius Capital-backed FreshMenu.

Elsewhere in Indian food technology, Delivery Hero acquired Rocket Internet's FoodPanda in an all share deal in December, Uber announced that it would expand its on-demand food delivery app UberEATS to India last month.

 

Nepal’s offered agriculture road map as it prepares for federalism 

Adjusting Nepal’s complex agricultural economy to a federalist system laid out by the new constitution will require some adjustment, though a new paper from the International Food Policy Research Institute proposes several policy measures to ease the transition.

The paper looks at how wisdom gleaned from similar structures of government can help Nepal’s farmers weather the change in a sector that provides work for two-thirds of the population, and accounts for one-third of the GDP and half of all exports. 

A smooth transition in management of the agricultural sector to the new federal system is crucial to ensuring stability, said Daniel Resnick, a senior research fellow at IFPRI and an author of the report.

Agriculture forms the backbone of the Nepali economy. To preserve its role the government must clearly map out the divisions of authority at each level and establish vertical coordination across all levels of government, while avoiding a one-size-fits-all solutions.”

The authors conducted an original survey of 100 agriculture officials at a local level, as well as more than two-dozen interviews with high-level stakeholders. Their analysis considers examples from India, Indonesia, Kenya, Malaysia and South Africa.

Nepal is much smaller than our other examples, and adapting their lessons will require a smaller scale,” said Resnick. “As decentralisation proceeds, local governments should not receive obligations that exceed their ability to provide services, or the citizens could quickly lose faith.”

But Nepal’s decade of experience with local government and decentralisation will ease this transition, said Jordan Kyle, another author. 

The new constitution has strong provisions for food security, and the last ten years have taught citizens how to articulate their demands for local agricultural planning priorities. Without that experience, federalism would have been a much harder change,” Kyle said.

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