ENTREPRENEURSHIP NEVER DIES!-A CLASSICAL EXAMPLE IN FOOD PROCESSING

What will one do when a lottery is won for a billion rupees? Normally such a winner will keep the money in deposits earning interest and live happily for ever! What about investing that money in Industry with an intention to earn more returns beyond the 9% interest being offered by most Banks? Considering the road blocks, impediments and excessive risks  that are to be faced by an entrepreneur in this country, very few can be expected to venture into industry. According to a news report, the reputed founder of MTR brand of processed foods, who took that company to stratospheric heights with hard work for more than two decades and sold the same to a multinational company some time back for a whopping Rs 360 crore does not seem to be content with sitting back and enjoying a leisurely life. His entrepreneurial spirit does not seem to be quenched in spite of his enormous success in his first avatar and with courage and conviction he has started the food business all over again with a new venture, his commitment still being on traditional foods of India for which he had slogged for years as head of MTR Foods earlier. Knowing him well there is no reason to doubt about his success in the second avatar for which the country is looking forward. Here is a critique on his new vision and expectations.

India's packaged food industry, including snacks and ready-to-eat foods, is likely to touch $30 billion by 2015 from $15 billion last year, according to an April 2012 report by industry lobby group Associated Chambers of Commerce and Industry of India (Assocham)."It's too early, but our likely (product) mix would be 50% from traditional Indian snacks, both south Indian and north Indian, and 50% from other things like beverages (lassis, milk shakes, fruit juices), ready-to-eat, spices, etc.," Maiya said in an interview. "We started our business selling 56 varieties (of snacks) in 2010-end; now we have 65."MTR, on the other hand, gets a majority of its business from masala powders, spices and breakfast and meal mixes."Snacks is a new area for us and we're still building our presence there. We're currently testing our products in Karnataka. We have internal benchmarks and standards and till the time we beat those, we will not want to expand (in snacks)," said Vikran Sabherwal, vice-president, marketing, at MTR. "In beverages, we have a badam (almond) drink product, but we don't see ourselves becoming a mainline beverage player. Our competence lies in packaged foods and we will put most of our efforts behind that," he said.Maiya expects his new company to triple sales to Rs.120 crore in the current financial year from Rs.30-40 crore last year. MTR expected to close the 2012 calendar year with sales of roughly Rs.430 crore, chief executive Sanjay Sharma said in an interview in October. While he was at MTR, Maiya introduced new product categories in India on a large scale such as ready-to-eat foods and so-called softee ice-creams. He said he plans to do the same—open up new product categories—with his new company. "We're coming out with frozen foods and fruit chips made from jack fruit, mango, apple, banana and pineapple. Another innovation is nanotechnology-based products. For example, buttermilk powder—you just add water and you get buttermilk. It's taken me almost six years to do all this. After leaving MTR, this is all I've been doing," he said. Maiya's company is also significantly expanding its distribution network both within and outside India. The company already exports snacks and beverages to customers in six countries including the US, Germany, Japan and this year, it plans to sell in another 12 countries such as South Korea, China and Canada, Maiya said".

MTR Foods which had established its brand name within India as well as in many other countries, presently owned by a Norwegian company, may find it difficult to prosper in this country having no clue regarding the dietary habits of Indians and this is reflected by the fact that its turn over is stagnating around Ra 500 crore for the last few years ever since it bought out this ethnic food company. No new successful products are emerging from its stables and it is unlikely that it would survive for long. With its erstwhile owner coming to the market with many products similar to that being made by them, MTR Foods may wither away sooner or later. Of course India is a large enough market for many players but only those with their pulse close to the consumer can succeed and former MTR boss seems to have a distinct edge at the present reckoning.    

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

THE "FOOD HUBS"-A CONCEPTUAL MECHANISM FOR LOCAL PRODUCE MARKETING

Increasing farmer suicide cases in India is a disturbing trend that ought to be addressed by the government and there is some how a feeling persisting with successive governments that giving subsidies can take care of farmer problems. No wonder India cannot raise the level of value addition to the agricultural commodities and to a large extent this can be traced to very low entrepreneurial aspirations among the farming community. While saluting hundreds and thousands of villages in the country where millions of farmer families toil hard to produce adequate food for self consumption as well as earning a livelihood through sale of surplus production to non-farming population, the subsistence level of living in grossly under developed village environment with sub-human conditions and daily miseries make them permanently disabled to do any thing constructive. Why the country is not attempting to create village based processing facilities by providing necessary inputs for value addition to the basic commodities is despicable. Even if these unfortunate "second class" citizens of the country are provided the needed financial inputs through government agencies, from where do they get other inputs like technology, infra support and marketing muscle? Here is an example coming from a developed country like the US which has understood the critical importance of food in the local economy and facilitate the processing and marketing of locally produced food materials through creation of "Food Hubs" which link the farmer, local technical resources and the consumer in a sustainable way.  

"By developing a local "food hub," organizers hope they can provide a centralized facility that can buy and aggregate locally produced food and make it available to larger, institutional buyers in the area on a regular basis. "A food hub is that linkage between the local farmers and the institutions, like schools, hospitals, the jail, the grocery stores and the restaurants that want to have access to local foods," said Eileen Horn, who directs the work of the Food Policy Council. "The customers are asking for it, and there's public interest in it, but they can't access enough consistent supply." Horn and other members of the Food Policy Council told Douglas County Commissioners last week that efforts to develop a local food hub in Douglas County will be one of their top priorities in the coming year. "What the Food Policy Council has been talking about in terms of a food hub is really what could be that central site that could aggregate, warehouse, maybe have some cold storage and some light processing for food so it would make it simpler for our community members to access that food from a single point," Horn said in a recent interview. The Food Policy Council was established by the County Commission in 2009. "Basically the Food Policy Council works to identify the benefits, the challenges and the opportunities for a local food system in Douglas County," she said. "So we're looking at what could be the health benefits for the community; what could be the local economic development benefits for our community; and then what are some of the barriers we could look at from a policy perspective to help build a vibrant food system that would support our local farmers and our community members." Traditionally, Kansas agriculture is known for producing a limited number of commodities in vast amounts – wheat, corn and soybeans, as well as beef and pork. But Horn says smaller-scale producers in Douglas County and the surrounding area are now producing large volumes, and a surprisingly wide variety of fruits and vegetables on nearly a year-round basis. She said much of that is the result of local growers investing in "high tunnels" — semicircular hoop structures that are relatively inexpensive and function as modified greenhouses to extend the growing season. "That has really changed the game in terms of season extension, because now you can get greens – there are local greens available in grocery stores right now, in January, and that's because of the season extension and high tunnels and greenhouses that people are utilizing," she said. Local and regional food hubs have grown in popularity in recent years, in part because of support from state and federal departments of agriculture.

India is a country dominated by middle men and pre-harvest contractors who exploit the helplessness of the farmer in cornering the harvested produce at ridiculously low prices and selling the same at exorbitant prices to the easily vulnerable consumer! Elimination of such intermediaries from the system can substantially increase the farmer income while making the same available to the consumer at very reasonable cost. Milk industry under the cooperative sector has demonstrated that producers can get as much as 70-80% of the consumer price by eliminating most of the private players from the scene. The much hyped APMC yards, supposed to be helping the farmer are becoming joke of the country and any how they are going to be dismantled soon under the pretext of economic liberalization and much hyped foreign investment regime. The Agro-industries Corporations in different States which could have been powerful interlocutors with the farmers have been made to wither away through lack of government support. Local foods have great relevance because they are fresh, easily accessible, cost-wise cheaper and have minimum carbon foot print. Sooner such hubs are created better it will be for the farmers and consumers of this country!

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

BUSINESS INCUBATORS-NEED OF THE HOUR FOR FOOD ENTREPRENEURS

A major advantage for big food processing companies is their deep pocket and their ability to innovate using in-house R&D facilities and experienced food professionals. In sharp contrast a small entrepreneur with limited cash in hand faces a huge risk in setting up a venture even under best of the conditions. In a country like India bank financing may be some what easy provided banks are convinced that one has a viable project with low risk. But most entrepreneurs find it difficult to get either the appropriate technology or some minimum hands-on experience for ensuring success after establishing the venture. Here is where the concept of an Incubation Center becomes relevant for the growth of food processing industry. In many countries of the West there are specialized incubation centers catering to diverse interests and food processing incubation centers are also working successfully escorting the entrepreneur till the venture starts production in its own facilities. For an incubation center to be successful there are several pre-requisites which include state of the art equipment and supporting facilities, a good knowledge about food processing, experienced food experts with networking background, closeness to a major food industry cluster and above all a commitment to stand by the entrepreneur till success is achieved. Here is a critique on the importance of incubators in the development of industry.

At many specialty incubators, the goal is more about economic bootstrapping than building the next technology blockbuster. Encouraging entrepreneurship among the poor is a common theme. For instance, La Cocina, a culinary incubator in San Francisco, helps immigrant women with low incomes get food businesses off the ground. First-time entrepreneurs need plenty of guidance with the intricacies of opening restaurants and packaged food businesses. Azalea Perez Olivares, events coordinator and spokeswoman for the food nonprofit, said that the reality check comes during regular informational orientations held before anyone can submit their applications. The message is deliberately sobering. "We try to be realistic—that the majority of food businesses fail," she says. Staff and food industry volunteers mentor those who are selected for the program. Participants almost invariably have to rewrite business plans after better researching the competition and learning about the financing needed to turn their idea into a business. After getting the basics in order, the would-be food entrepreneurs can use the incubator's shared kitchen, which has eight work stations over 4,400 square feet. Food-safety regulations require all food businesses to use a professional kitchen, rather than cook at home. The women who go through the program come out with contacts in the food industry that they would probably never otherwise have been able to get. Additionally, buyers from Whole Foods (WFM), the specialty grocery chain, visit to take a look at the food coming out of the program. So far, 13 businesses have graduated, including a pickle maker and a baker of Irish shortbread that's covered in chocolate. A handful have opened restaurants, such as a graduate who originally sold his Japanese rice balls from a cart.

Who can set up incubation centers and are they viable as a stand alone activity bringing reasonable returns on investment are questions for which there are no clear answers under Indian conditions. Will the large industry cooperate with such incubators for providing hands-on experience for new entrepreneurs wanting to take advantage of the facilities? Are the research institutions in public funded universities and under CSIR, ICAR and others are "fit enough" to undertake the challenges? It may be recalled that way back in early 1990s Ministry of Food Processing Industry (MFPI) provided a grant of Rs 5 crore to Central Food Technological Research Institute at Mysore for setting up a Food Engineering Center which could be eventually converted into an incubator but till to date no one knows the fate of this "Center"! If GOI is serious about development of food industry in the country, it has to create a SPV for setting up such incubators in all the states, preferably in areas where knowledge about food and food processing corridors exist side by side. Institutions like CFTRI, DFRL, NIFTEM, Universities where training facilities exist and others involved in food related developmental work, must join hands and pool their resources to set up a number of food business incubators for creating a new generation of small time entrepreneurs that will boost the role of food industry in the national economy..  

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

IN DEFENSE OF FOOD PROCESSING- OTHER SIDE OF THE STORY!

It is fashionable these days to demonize processed foods, with many really convinced that processing destroys the health conferring properties of food significantly if not totally. Is it not amazing that even to day there are powerful people's movements shunning pasteurized milk or frowning upon cooking of eggs? While one has to respect their beliefs and convictions, it is wrong to impose their narrow view on others who are more adventurous and realistic in consuming products which have undergone some form of processing. If processed foods with long shelf life and convenience built into them are not available in the market the living quality of millions of families would have been compromised. Once in a while some one has the guts and conviction to refute the opinionated views of critics of food technology and here is an excellent example of the same.  

"1. People typically think of food processing as something bad, but they fail to consider that many of the most loved foods and beverages require processing for consumption.
    * In its raw state, a cacao bean isn't edible. But thanks to food processing, the bean is turned into every form of chocolate that is available.
    * Coffee beans aren't edible in their raw, unroasted state. Roasting is a form of processing that turns those beans into a consumable form.
    * Wine undergoes processing to turn the grapes into liquid before they are aged in barrels.
2. Food processing also helps support a strong world economy. Imported foods like cheeses, pastas and bottled drinks undergo many of the same types of processing that dairy products and other foods undergo in the U.S. The processing is designed to make these foods safe to eat, and to prevent insects and other contaminants from entering the packaging.
3. Many people rely on processed foods to help them eat a balanced diet because they don't have the ability, time, or energy to prepare foods themselves.
    * Busy mothers with picky eaters often rely on processed foods for easy snacks for when they don't have time to prepare foods that their kids will eat.
    * People with disabilities often live alone with the help of mobility solutions, but they still may have a hard time with the physical requirements of preparing foods from scratch.
    * Individuals who don't know how to cook are typically consumers of processed foods because they don't know how to make meals.
    * Teens often snack while their parents are out of the house, leading them to rely on processed foods.
4. Processing also makes it possible for seasonal produce, which contains many essential vitamins and minerals, to be packaged for later consumption. This makes it possible for people, especially those who live in rural areas without easy access to supermarkets or other food sources, to eat a healthier diet all year.
Obviously, there are two sides to every story. People must understand that, while some forms of food processing are unnecessary and even dangerous, not all fall into this category. So the next time you hear someone overgeneralizing about processed food, take a few minutes to set them straight. You just may teach them a thing or two!"

Many of the stated advantages listed above are just common sense but are ignored by those who passionately preach their beliefs. One of the most convincing arguments in favor of food technology is that it enables man to extend the food supply protecting more lives which otherwise might be extinguished due to food shortages. After all, most foods are seasonal in nature and therefore cannot be produced round the year, no matter what technology is deployed in the field. That necessitates preservation of foods for some time till the next harvest. Imagine how seriously the market forces would have reacted if there are shortages with demand outstripping supply! This is an aspect that cannot be ignored easily whenever the relevance of food processing is debated. Next time somebody fulminates on negative consequences of food processing, the above fact sheet should help in rebutting such ill founded assertions.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

WEALTH AND HEALTH FROM WASTE-NEW DEVELOPMENTAL PROGRAMS

Industrial wastes generated during processing of foods pose problems of disposal and in many countries anti-pollution laws forbid letting them out of the factory without reducing the BOD and solids content to very low levels. Take for instance the condition in a fruit processing unit where hardly 40-50% of the fruit is utilized for preparing various products and the waste generated include the solid wastes as well as enormous volume of water that need to be disposed off. While solid wastes have some demand for use as cattle feed, the liquid waste has very high BOD and requires to be treated for reducing its pollution load. It is in this context that any attempt to economically utilize these wastes will be beneficial to the industry. The international program recently launched with India as as partner to beneficiate the food industry wastes is indeed laudable provided the results are utilizable by the industry in these partner countries freely without any intellectual property restrictions.

"Primarily, the project focuses on utilising the molecules generated from food processing waste of mango, pomegranate, orange and rice bran. The ingredients have been used to develop aqua feeds and bakery items like biscuits, jams and jellies. In this regard, upscaling the research for the industry will be the next step in the right direction, since in India, a number of food companies are looking at the possibility of maximisng their potential.  Dr D Seenappa, chief scientific officer (IF) and university head, animal sciences and fisheries, inland fisheries division, UAS, Bangalore, informed FnB News, "The project is all about identifying and introducing innovative and industry-relevant approaches for the valorisation of fruit and cereal (rice bran) wastes. This is being currently achieved through holistic conversion into functional and health-benefitting beverages, foods and aqua feeds by means of environmentally and economically sustainable protocols and technologies. Production of food processing waste is being minimised and has helped to build a synergistic research programme between the EU and India to serve the future knowledge-based economies." Peel wastes of mango, orange, pomegranate and rice bran in powdered form have proven to show high levels of carotenoids, polyphenols, pectins, high fibre and carbohydrates. These have demonstrated health benefits with high antioxidant and immunity resistance properties. Peels which are been sourced from the food processing industry have been characterised, stabilised and assessed to be converted into powder form by food chemical engineers and scientists, according to Dr Seenappa. In addition, prebiotic and probiotic effects of the peels are evaluated. Mono dose products like fruit paste, snack foods, enriched beverages, breakfast cereals and biscuits have already been developed. From the EU, seven countries - Italy, the UK, Spain, Hungary, the Netherlands and Germany - have teamed up professionals with domain expertise in food and chemical engineering. India has five partners represented by the North East Institute of Science & Technology (NEIST), Jorhat, Assam, with the Indian scientific coordinator as P K Goswami; Euro India Research Centre (EIRC), Bangalore; University of Agricultural Sciences, Bangalore; Nature Fresh Logistics Pvt. Ltd, Pune; and Vaighai Agro Products Ltd, Madurai".  

The above project is neither the first one nor the last on waste utilization processing and there are good technologies already available in many areas that are being used to day by some industries improving their economic performance significantly. Pectin from apple wastes, essential oils from citrus wastes, alcohol from molasses, triacontanol from sugar cane mud, mango seed fat extraction, color fractions from beetroot, blue grape peel and others, rice bran oil extraction, wheat germ recovery for tocopherol rich oil, orange fruit fiber, oat bran for high fiber food, etc are classical examples of waste processing industry. One can hope that the new multi nation project will come out with technically and economically viable processes to supplement the present pool of such technologies.  

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

IGNORE THE HOME, SHOW CHARITY ABROAD-THE NEW GOI APPROACH

It is amusing to read that India is acting like a super power going valiantly to help Africa rise like a food industry giant through extending credit and technical help. What is not understandable is regarding the capability and strength of this Ministry to really plan, design and implement food industry clusters for which enormous experience is needed. One gets rather nervous hearing about such grandiose plans because this Ministry, in spite of its pedestrian existence for the last two decades plus has practically nothing to show as its accomplishments within the country! The 'proclamation"by the Babus in the Ministry is indeed pathetic. Where are the people, qualified and competent to undertake this task? Is the Ministry going to hand over the money to some "favorite' consultants without bothering about the success of the so called "Mission"? Can India afford such lavish spending in a foreign country when the small food industry is languishing across the country? Whatever is the worth of this policy pronouncement, one thing must be made sure and that is to make India a laughing stock abroad for inappropriately executed and inordinately delayed projects which ultimately fail to take of.  There are many "monuments" in some parts of Africa bearing testimony to such crude attempts in the past! Reading the announcement is nonetheless interesting for what it does not say than what is said!

'The ministry of food processing industries is planning to set up a food processing cluster in Africa. The proposed cluster would entail an investment of Rs 117 crore to be spent primarily on the setting up of common infrastructure for food processing parks which includes cold storage, food testing labs, incubation centres, standard designed factories, pre-cooling chambers and other modern technologies used by the industry. This cluster is part of India's $5-billion credit line for Africa announced at the India-Africa Forum Summit last year. "The cluster is likely to come up within next three years. We are floating a competitive bid to appoint a project management agency which will help the ministry in implementing this project," said a top ministry official."

There are some Technological Institutions involved in food technology development but none of them possesses the required management dynamics to design and execute manufacturing projects as exemplified by their relatively obscure presence in the industrial landscape of the country. One wonders how many incubation centers have been established by the Ministry in India during the last 5 years! Also debatable is the success of so called Food Parks touted as achievements by the Ministry. A more logical step would have been to rope in private sector players and experienced consultants to lay out a road map to attain the objective. Good projects with trouble free functioning in foreign countries can be a standing testimony to the technological prowess of the country and spending millions in the name of foreign assistance will have no lasting impact.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FOOD IRRADIATION-ISO'S NEW INITIATIVE

Food irradiation process on which enormous investments were made both in terms of valuable money as well as time is still to take off in spite of its proven efficacy and safety to human beings. Every day one is confronted by revelations that enormous amount of food produced in the world is lost irretrievably due to spoilage and other causes and according to one estimate this lost food would feed the entire world. Similarly food poisoning episodes due to contamination with many pathogens like Salmonella, virulent E.coli, Pseudomonas, Listeria etc are continuing posing serious safety problems in many countries. Why is that industry is reluctant to use this technology for the welfare of the consumers?. There are several reasons, most important of which is the regulatory authorities' insistence on mentioning irradiation on the label. It is a paradox that GM foods need not be labeled in a country like the US but irradiated foods must label it!  

"A new ISO standard—ISO 14470:2011—provides state-of-the-art requirements for food irradiation, commonly used to improve quality and safety in food processing. According to a press note by the International Organisation for Standardisation (ISO), a developer and publisher of international standards, the standard will benefit manufacturers, irradiation operators, regulators, customers and, ultimately, consumers. The new standard pertains to requirements for the development, validation and routine control of the process of irradiation using ionising radiation for the treatment of food, not only providing requirements, but also guidance for meeting them. The note adds, food irradiation is the process where food is exposed to ionising radiation in order to improve its safety and quality. It is intended to be used only on food that has been produced under good manufacturing practice (GMP) principles. The irradiation of food can be used for different purposes including control of pathogenic microorganisms and parasites, reduction of the number of spoilage microorganisms, inhibition of the sprouting of bulbs, tubers and root crops, extension of product shelf life or phytosanitary treatment.The main objectives of ISO 14470:2011 are - Provide requirements for the irradiation of food consistent with current standards and practices; Provide directions for a technical agreement between the customer and the irradiator operator; and Establish documentation system to support the controls on the food irradiation process". 

The new ISO standard is good but for whom these standards are made is a question that does not have any ready answer. Of course small quantities of food products are irradiated, especially with low doses for some specific purpose whereas pharmaceutical and medical industry uses them extensively. If finalization of ISO standards for food irradiation heralds a new initiative for popularizing the technology, then it is timely. Otherwise it will remain as a sterile exercise with not many takers for it in the near future.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com