packaged food industry in india

8/8/2019 Packaged Food Industry in India

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XYZ Industry

FROZEN FOOD Case

XYZ Industry

FROZEN FOOD Case

By

TEAM NAME: ARIHANT,Deepak Bartwal Shubham Agarwal

[email protected] [email protected]

+91-7666236135 +91-9619578712

PGDIE-39

NITIE, Mumbai

mailto:[email protected]






Stress on Domestic Market

• 70 Crore revenue comes from domestic market

• With a growth rate of 25%, company would reach 213.62 Crore in next 5 years

• Enhance range of products by introducing products like chicken and Green peas

• Food processing industry is covered under Priority Sector Bank

• Development of 30 Mega food plants across the country in 10th plan of MoFPI• Exemption of processed food items of licensing under the Development & Regulation Act, 1951

Why Domestic Market?

0

500

1000

1500

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Freezer Space(Cu. Ft.)

Freezer Space in Indian Market

Stress on Domestic Market



Mixed Type of Distribution Network

Domestic Retail Division

• Need High Reach

Institutional Division

•

Fast Movement to Big Customer• Managing Good relation

Distributor

Model

Warehouse

Model

Manufacturer ControlManufacturer Reach

The Right Distribution Model depends on the

Sophistication of the Market

Low

Low High

High

Considering Indian Demographics and different Customer Need, one type of Distribution

Network can not meet the requirements. Hybrid (Mixed Type) Distribution is one way to

capitalized Indian Fragmented Market.



Logistics Strategy

Investment in Cold Chain Infrastructure is Capital Intensive: Slow Returns

Use of 3 PL (Preferably RFID enabled) services for the transportation purposes

• Less Cost

• More focus on Core Competency

•

Less Security and Quality Concerns• Ease in Export

• Low Cost Sourcing: Less Inbound logistics

• Better Distribution Strategy: Less Outbound logistics

New Plant location in Punjab

• Hybrid Model: Low Cost of Transportation

• Better Service Level and High Reach

New Distribution Network



Why Online Ordering System

Effective online promotions

Attractive Presence

Accurate Information

Secured transactions

Customized Menu

All Time Open

Generate Sales Report

Low Labour Cost

Customer Database

Revenue Generation

Internet usage in India: 7% of population (Approx. 81,000,000)

According to International telecommunication union

Valuable Customer Information Database.

Enables targeted Marketing Campaigns.

Provide Live Sales and Statistics

Greater reach 24*7*365

Save time and reduced Cost

More convenient way to do business Payments and Information

According to Customer

Preferences

Good Brand Value among

Customer

Know the Customer Preferences

Through electronic coupons and

gifts



Quality Issues in Food Value Chain

Field Losses(Pest, Diseases, Rodents etc))

Pre-Processing(e.g. inefficient harvesting, drying, milling)

Transport

(e.g. spillage, leakage)

Storage(e.g. technical deficiencies)

Processing & Packaging(e.g. excessive peeling, washing)

Marketing(e.g. spoilage, rotting in stores)

C

o n s u m e r

P r o d u c e r

Field Consumer

Wastage by Consumer(e.g. overeating, food wastage)

Developing

Countries –

Relatively

high losses inthe initial

parts of the

value chain

Rich

Countries –

High losses at

a later stage

in the food

chain

Consumer may be facing quality

issues related to:

•Taste •Ingredients

•Color & Texture •Juiciness

Frozen Food Value Chain: Quality Issues



Quality Problem in India: – More at starting phase of Value Chain

Solution

– Focus on Quality during Procurement with farmers through CONTRACT

FARMING

Quality Solution: Contract Farmingand HACCP

HACCP: Hazard Analysis And Critical Control Points Approach

“Best Way to maintain quality in Food Supply Chain “

Identifythe

PotentialHazards

Determinethe Points

AndOperational

steps

EstablishCriticalLimits

Establisha System

ToMonitor

Establishthe

CorrectiveAction

EstablishProcedures

ForVerification

EstablishDocumentation



•Due to Poor Financial Health, XYZ can’t go for aggressive branding for all products

•80:20 Rule for Branding: All product does not need equal branding

•High Promotion : Winners and Sleepers

•Less Promotion: Traffic Builders

•No Promotion: Losers

High Sales

Selective Branding through Direct Product Profitability

Branding: ‘Direct Product Profit’ Approach

Sales

- Cost of Goods Sold

Gross Margin

+ Adjustment

Adjustment Gross Margin

- Direct Product Costs

Direct Product Profit

Sleepers• Selectively Display

• Advertise

•

Add Shelf Facings• Reconsider Price

Winners• Heavily Advertise and

Promote

•

Aggressively Display• Maintain Shelf Stock

Losers• Reduce Shelf Allocation

• Shift to Outside Supplier

• Possibly Discontinue

Traffic Builders• Reconsider Price

• Downgrade Shelf Position

• Less Promotion

High

DPP/unit

Low

DPP/unit

Low Sales



• To exploit advantages of SAZ

• To meet higher demand in North India with reduced logistic expanses

• High yield of fruits, vegetables & dairy products

•

Easier to involve in contract farming with more knowledgeable farmers

New Plant at Punjab !

1• Cheap & easy sourcing of raw material

2 • Ease of processing and packaging

3• Funding at low interest rate by government

4• Presence of participants in SAZ with knowledge about industry standards

5 • Reduction on tax on export of processed food

Advantages of SAZ

Plant At Punjab



Continuous Branding and Advertising

Back End Infrastructure Development:

For introduction of new product

New product Introduction in Domestic

Market: Frozen Non-Veg and Green Peas

Distribution Re-structuring: Introducing

Distributor for Better Reach

Online Ordering System: Giving

better service to customer

Plant Location to AEZ in Punjab and

Contract Farming: tax benefit and easy

PurchasingDairy and Fruits & Vegetables

frozen Food introduction

Focus on Foreign Market:

Certification for UK

Year 1 Year 2 Year 3 Year 4 Year 5

ROAD MAP for 5 Years

packaged food industry in india

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