India: Kagome sees great potential in tomato products (part 1)
- François-Xavier Branthôme
“…a colossal demand as well as potential for processed tomato in India”
India is the quintessential ‘apple of my eye’ for the world’s business community because of its vastly untapped and latent markets covering a broad range of products. Some of the global food leaders have gauged the potential of bright red tomatoes, consumed across the length and breadth of the nation.
Rohit Bhatla, MD of Kagome Foods India (KFI), keeps a constant eye on the juicy tomato market. The Managing Director of Japanese company Kagome foods, has both the will and dedication to herald a new tomato era in India, having a vibrant population of 1.3 billion inhabitants. Interestingly, the country has a bubbling population of connoisseurs of good food with a discerning palate.
Rohit Bhatla explains “The Indian food processing market is growing faster than any other. Whether it is salads, home-cooked meals, ready-to-eat packets, or a specific ingredient-based offering, the country’s busy diaspora wants nutritious food, without investing too much time and effort into the process.”
According to industry estimates, the contribution of the food processing industry to India’s GDP through manufacturing has been more than 8% in FY17. The Indian food and retail industry is expected to grow to USD 482 billion by 2020.
The food processing market is ripe for the picking, and brands such as Kagome, that offer processed tomato foods, are leading the charge in making preservative free products. They leverage their own vertically-integrated value chain, which guarantees consistent quality and price throughout the year, without added preservatives, colour or flavour. “The role of technology in scaling up operations in the sector will be tremendous”, Rohit Bhatla added.
The majority of the tomatoes produced in the country are consumed fresh with the remaining being processed into products such as tomato paste, tomato juice, tomato sauce, tomato ketchup. Processed tomato products such as tomato ketchup are commonly served with food products such as burgers, sandwiches, pizza, fries, etc. Moreover, processed tomato products such as tomato paste and tomato sauce also have wide application in various Indian cuisines.
On the evolving market for processed tomatoes, industry experts say that there is a colossal demand as well as potential for processed tomato in India; local diverse market and increasing use of tomatoes in inland cuisine and many other factors like job opportunities by brands like Kagome make conducive environs for the growth of the tomato business. According to them, the best part of the story is consistent offerings by processed tomato manufacturers to the consumers (B2B/B2C) despite the fluctuating rates of the tomatoes throughout the year.
The best example of this development potential came last October, when the prices and supply of tomatoes were hit after erratic and extended monsoons affected tomato producing states like Maharashtra and Karnataka. In order to face the shortage, Indian government decided to offer puree as an alternative to costly tomatoes.
In Delhi and the National Capital Region (NCR), Indian households were struggling this festive season as the retail prices of tomatoes went as high as INR 60-70 per kilogram (USD 0.84-0.98/kg or Euro 0.76-0.89/kg). Tomato and onion are used in at least 60% of common Indian savoury recipes. This affected the lifestyle of most Indians.
The Union Government looked to remedy the situation. "To mitigate the shortfall in availability of tomatoes in Delhi, Safal [the largest organised retail network of fruits and vegetables in the National Capital Region of India] has agreed to provide tomato puree from all its outlets in Delhi at INR 25 (USD 0.35 or Euro 0.32) per 200 gram pack which is equivalent to about 800 grams of tomatoes," said a press release by the Secretary of the Department of Consumer Affairs.
However, "fresh tomato taste is different from puree”, said a consumer in a Safal outlet in South New Delhi. “We don't use puree for daily cooking purpose. Tomato prices have gone up and we are buying in small quantities". Similar sentiment was shared by others consumers and experts who said not many people are used to tomato puree and will take a long time for consumers to shift to processed ones suddenly in times of price rise.
The second part of this article (“Kagome promotes an integrated value chain for tomatoes”) will be published shortly.
Source : newspatrolling.com, Kagome India, businessinsider.in, deccanherald.com
India: Kagome sees great potential in tomato products (part 2)