If KK Pillai has his way, you may soon be able to savour the same brand of samosas that made a trip to outer space. Pillai is the managing director of Nikasu Frozen Foods International which made the snack that astronaut Sunita Williams carried with her to the International Space Station.
Based in the Cochin Special Economic Zone, Nikasu has managed to become the largest supplier of spring rolls and samosas to the US where it retails under the popular Laxmi brand (belonging to distributor House of Spices). In the UK, its products are sold as 'Taj' by Solanki Foods and are available at the supermarket chain Tesco.
Another young but doughty exporter, Aakriti Foods, that makes Indian curries is also keen to launch its brand Mom's Pride in India.
It specialises in non-vegetarian curries, rice preparations such as Hyderabadi dum biryani and egg fried rice. AK Kohli, its Delhi-based promoter, claims he's supplying 33,000 cartons of Mom's Pride products each month to both the UK and the US.
Suddenly, a number of small and medium sized exporters of ready-to-eat and ready-to-cook food are eyeing the Indian market. And some of them have turned up at the 27th India International Trade Fair in New Delhi in the hope of making inroads into the domestic market.
It's not difficult to see what is driving such players homewards. The immediate trigger is the appreciating rupee, which has hit their export income in a big way. (Nikasu claims 20 per cent erosion in its turnover in the last one-and-a-half years).
Two, the Indian organised retail market is actually creating a huge demand for such products as branded supermarket chains are vying with one another to offer variety to their consumers.
Three, the rising per capita income and a whirlwind lifestyle, in a market of more than one billion people spending an average 50 per cent of their household expenditure on food, provides for an enticing consumer base.
"The tendency to source ready-to-eat food from the supermarkets is on the rise. What makes it easier to reach consumers is the bevy of retailers such as Reliance and Bharti-Walmart," Pillai notes.
Clearly, food manufacturers are eyeing the 300 million consumers who have already incorporated such products in their meals. Another 200 million are expected to move into this group by 2010, according to the food processing industry estimates.
To tap the market, Aakriti Foods has tied up with Mumbai-based distributor Benzy Food & Beverages Pvt Ltd (its parent company, Akbar Group, has a Rs 2,000 crore or Rs 20 billion turnover) to supply its ready-to-eat Indian curries and rice.
This ensures that major malls and retail chains such as Reliance Fresh, Big Bazaar and Big Apple will start stocking Mom's Pride products. But Nikasu's frozen food products need a reliable cold chain infrastructure to crack the Indian market.
That's an uphill task given that India's cold chain and storage infrastructure is highly inadequate. Though the government is helping out with special bogies in trains, frozen food travelling from, say, Cochin to Delhi sees a price hike of between Rs 10 and Rs 12 per kg.
However, keen to enter India, Pillai is figuring out whether to open up Nikasu's own cold storages or liaise with a third-party logistics provider.
The Indian government, too, is doing its bit to help these players. It is lining up no less than 53 food parks to help SMEs set up capital intensive shared-facilities such as cold-storages and quality control labs. The Customs duty on packaging machines too has been reduced.
Finally, the exporters will have to deal with the price-sensitive Indian market. Kohli rues, "Our production method using LPG is costlier than the usual steam-cooking method, making our products more expensive than the existing Indian brands."
Philip Koshi, partner at Azad Foods Industries, provides another perspective on cost. His firm exports non-vegetarian combination meals to New Zealand, Australia and West Asia.
He feels that taxes such as VAT and octroi, that add up as these products travel across India, ensure that companies can only recover a meagre percentage of their mark-up.
Currently, Azad Foods is happy to concentrate on the export market, with a marginal presence in the domestic market through two ready-to-eat meal brands -- Azad Foods and Pick n Move.
Provided that taxation is "rationalised", Azad Foods could become a sizeable Indian player if Reliance expands its non-vegetarian retail stores, feels Koshi. The company supplies directly to Reliance in Chennai.
The ready-to-eat food exporters may have the US and UK drooling, but it remains to be seen if they have got the right recipe for India.
