MEGA STORES AND MALLS-CAN THEY SUSTAIN INDEFINITELY?

So much is being talked, discussed and written about entry of giant global retailers into India where most of the population is used to the "pop & mom" stores around the corner of their house for their daily necessities. Of course this also happens to be a hot political issue with some parties arguing the case against allowing FDI in retail sector because of their fear about its consequences on the survival of about 8 million trading units spread across the country which form a sizable vote bank. Those vigorously pushing the case of the foreign retailers are accused of unabashed crony capitalism under the pressure of the "Big Daddy" the American government which is eyeing the vast Indian market with great hope. Emergence of on-line business as a formidable competitor to large super markets and malls for supplying many items of daily needs is raising the inevitable question whether these attractive, glittering, air-conditioned and one stop buying centers will be able to sustain themselves for long. Here is an interesting critique on this perplexing issue.

"There are very few retailers that have that kind of lifespan. There aren't too many that have been around for a hundred [years]. But even if they still exist they may be quite different. For example, you see now retailers trying very much to integrate their physical store with their Internet store. So maybe the physical store becomes mostly a showroom — you don't actually go there to buy things and walk out with them. You go there to look at things and then you order them online and then they're delivered to your house. Or maybe you order them online and you go to the store to pick them up, but the store may not be filled with quite so much merchandise. There are quite a few possibilities and I think it's really foolhardy to guess what this is going to look like frankly in 10 years, much less 50."

Take the case of India where urban land is very expensive and hard to get for setting up such huge business complexes. Will the masses patronize such places when transporting infrastructure is so primitive it may take any where from 2-3 hours to make a shopping expedition to these shopping enters? Even the affluent population with their chauffeur driven vehicles will hesitate before making a trip to these places where parking facilities are grossly inadequate. Here comes the role of on-line marketeers who can book orders from families and deliver them to their house. It is amazing that an internet company like Amazon.com has thousands of consumer items to offer and buyers get their requirements within a matter of 24-48 hours! In Bangalore an on-line company like "Big Basket" supplies fresh fruits and vegetables of high quality within Bangalore area in a matter of few hours without any risk of spoilage. Probably the surmise in the above report that in a few years time people will venture out only to physically see for themselves their choice and it will be the on-line companies who will deliver the goods ordered, a win-win situation for both the seller and the buyer!

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

WILL THE BIG FISH FROM OUTSIDE SWALLOW THE SMALL INDIAN FISH? UNLIKELY

This country is now hotly debating about the desirability of allowing foreign investment in retailing and Delhi is literally on the boil with politicians of all hues and colors expressing their views in the Parliament as well as outside. But does any one have any idea about what is happening at the ground level? Obviously not! Otherwise the discussion would have become an exercise in futility. Whether it is Walmart or Tesco or any other global giant coming to India, if past experience of other similar investors from abroad like Starbucks, McDonalds or KFC is to be reckoned with, it is not easy for any of them to get a firm foothold in India for a long time to come. The reason is that the culture, tradition, lifestyles and attitudes of a vast majority of the people in this country, except for a minority segment, will not allow them to co-habit with the ambiance, luster, lavishness and service offered by the investors from abroad who may have deep pockets and vast experience in luring new customers. Here is a piece of nostalgic reminiscence of a typical Indian citizen after experiencing the pleasure of seeing the foreign players operating in the country, enjoying the same for a few days and then reverting back to the old style of dhabas and chaiwallahs.

'A blind lascivious beggar sings a bhojpuri ditty. Pregnant clouds over Bombay monsoon raindrops like the breasts of Khajuraho; heavy and laden. It is an overcast afternoon and the sun is no more. Humidity and sweat tugs at the will to go on. A long line of India's young and trendy in Converse, in UCB, all Adidas and iPhonery wait for their turn at the recently opened Starbucks. Growing up in India, I remember queuing up outside the very first McDonalds in New Delhi for an hour to have a seven-rupee ice cream. KFC took us to giddy heights of rapture. A chicken wing in hand and a glass of frothy Coke in the other, we had arrived. We were no longer Indians any more. We were cosmopolitan Americans. It didn't last that long. We fell out of love with the Golden Arches and the Colonel and reverted back to our cuisine. The scales fell and we realised that tandoori chicken, a bit of chilli and a pickled onion on the side was timeless. It was forever. Similarly, this is still a nation of roadside and railway station chai-wallahs. City workers, students and manual labourers all frequent little shacks by the roadside for a spot of tea dust in hot milk. Corpulent politicians in spotless tunics, world-weary swamis and lecherous vagabonds squat under flimsy tarpaulins with a kulhad of cardamom chai and a slice of wheat rusk; a rare egalitarianism in a country riven by class and caste.The friendly chai-wallahwith his muzzein-like call in the morning is a constant in an ever-changing India. Starbucks and a host other shiny coffee-wallahs will never equal the pavement camaraderie".

Probably there may be lot of truth in what is said above. But one need not expect that these new mega players with sackful of money will run away soon from the country because their strength is patience, perseverance and vast experience in dealing with people in emerging countries like China, Mexico, Brazil, Indonesia etc. A classical example of am entirely foreign product taking deep roots in India is the Noodles first introduced almost two decades ago and it was after sustaining persistent losses for a long time did this product started making money for the manufacturers. Probably the new foreign players like Starbucks may also become established after a few years if they persist, though losing heavily in the first few years in the bargain. Same applies to FDI in retail also. The task for foreign players is not going to be easy and they should not expect an easy walk over any where in the near future.

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

AIR LINE FOODS MORE RISKY?- NEW FINDINGS

Air travel, especially of long duration, is both tiresome and boring. In-flight music and video entertainment facilities make such travels some what tolerable while the foods served are supposed to be of mouth-watering quality. Modern Air Lines companies even offer diverse menu options to cater to different ethnic and cultural back ground of potential travelers. It is in this context that recent reports damning the safety of these foods emanating from the US are raising some alarm among travelers using US Carriers. While FDA is to be complimented for bringing to surface gross violations of hygiene and sanitary standards in kitchens where the foods are prepared for supply to the air lines. What is appalling is the response of the Carriers brushing aside these allegations lightly and probably FDA may have to take severe deterrent action against such repeat violators immediately lest the passenger confidence on airline foods is shattered. Here is a gist of the report culled out from reliable international media which provides a sad reading.

Airplane food has long been the butt of jokes for being bland, unimaginative and generally unappetizing, but now there is evidence to suggest that the meals served by airlines are not just lackluster, but they might actually make passengers sick. Inspections of airlines and outside caterers conducted by the Food and Drug Administration have revealed facilities crawling with mice, roaches and ants, and food preparation areas swarming with flies. According FDA health violation records obtained by ABC's 20/20, over the past four years, there have been more than 1,500 violations in the airline food industry. The federal agency said that 'significant' problems were found at a much higher rate than in other industry it inspects.

No one is arguing that in-flight catering is an easy job but unless some minimum safety precautions are taken health of many passengers may be adversely affected. It was not along ago that under recessionary trends, air traffic volume started declining and with fierce competition among the players to attract traffic, food was being considered as an instrument to cajole passengers to travel by air. There were even a few reports that some major air line companies were planning to upgrade their menu to offer very high quality preparations on par with 5-star restaurants. Alas that proved to be a non-starter once the air traffic became normal. All air line must understand the basic fact that passengers are not yearning for home foods while they travel but they will never compromise with products prepared in infected and infested kitchens which can put their life in danger. It is time that kitchens preparing foods for air line passengers are brought under a global safety regime and protocols that can be easily monitored by competent food safety specialists on a 24/7 basis.

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

  

GRASS-FED BEEF-EVER INCREASING CONSUMER DEMAND

From time to time consumers are enamored by new trends in product development and generally these are mostly considered as fads unless the patronage grows consistently to establish a new line of industry with lasting impact. For example organic food movement or local foods preference or slow foods movement all started in a small way and they have now established them selves as viable businesses on their own. Similarly Atkins Diet, South Beach Diet and other similar movements started to deal with weight control were once some what popular but have since faded away for which reasons may be many. Now comes another consumer driven business alternative in the form of Grass-fed beef which is supposed to be tastier besides being more nutritious. Probably the main stream meat industry will have to blame itself for creating a strong competitor because of some of its operational practices considered unhealthy by the consumer community. Here is a look at this nascent industry in the US which seems to be posing a serious challenge to the conventional captive system of raising the animals feeding chemicals, hormones, antibiotics etc, frowned upon by the consumers.    

"It's expanded dramatically," said Alan Williams, a grass-fed beef producer and member of the Pasture Project, an effort to get more conventional producers in the Midwest switching to pasture-based systems. "In the late 1990s there were only 100 producers. Now there are more than 2,000. The market has grown from being $2 million to $3 million to over $2.5 billion in retail value." Most cattle raised in the U.S. are sent to feedlots, in Kansas and Nebraska mostly, where the animals are fattened and "finished" on a diet of corn and other grains. This feedlot system has enabled the country to develop its massive beef industry cheaply, efficiently and with less manpower. Cattle ranchers contend that a wholesale, or even partial, transition to a grass-based system would be impractical and would drive up costs. In recent years, however, critics of the feedlot system say the industry's growth has come at too high a cost for the environment, for human health and for the animals themselves. About 40% of the country's corn now goes to livestock, helping make corn the most grown, and most valuable, crop in the country. But corn production is nitrogen-intensive, and critics say that run-off from nitrogen fertilizer has contributed to polluted waterways, most notably the growing "dead zone" in the Gulf of Mexico. At the same time, cattle's corn-centric diets have contributed to fattier, less-nutritious beef that is higher in cholesterol and lower in good fatty acids, some say. Because the cost of that beef is relatively low, consumers can afford to eat more of it, often in the form of fast-food burgers. "Basically, it comes down to time," said Patricia Whisnant, president of the American Grassfed Assn., and a Missouri producer whose Rain Crow Ranch is among the largest grass-fed beef operations in the country. "You take an animal off of pasture, you give him antibiotics and corn, you're looking at harvesting that animal in 12 to 14 months. On grass, you're looking at 24 months, and more likely 28." Altogether, these factors appear to be getting the attention of consumers who are willing to pay a premium for grass-fed beef. Producers and retailers are responding. Until recently, most grass-fed beef was sold directly by the producer to the consumer, who often arranges to buy a whole side of beef through a special arrangement. Some grass-fed beef is also sold directly through buyers clubs".

This reminds one of the parallel movement which was started some years ago to force the poultry farms to change their practices involving raising of the birds in cages packed fully without allowing them any movement. To day there are new guidelines emerging that requires poultry farms to change their operations drastically to meet with standards that ensure reasonable growing environment to the birds. Probably the current trend in the consumer attitude favoring grass-fed beef may also become to morrow's industry standard.

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

KITCHEN VS TOILET-NEW FINDINGS

Food safety is now one of the hottest topics receiving serious attention from the safety agencies, paradoxically in developed countries where foods are supposed to be handled/processed, distributed, stored and tested at laboratories with most modern and sophisticated instruments. Still episodes of food poisoning from pathogens that infect foods are much more in these countries than that reported in undeveloped and under developed countries. Why? Is it because of the extra susceptibility of the population there with low immunity and resistance? How can that be when they have access to best foods that can be purchased in their countries, churned out by their modern food industry? Here is an interesting story coming out from the US which highlights the paradox.

Would you chop your vegetables on your toilet seat? I think pretty much all of us would say No. But maybe we should think again. Dr Chuck Gerba, professor of microbiology at the University of Arizona, studies how diseases are transferred through the environment. This involves swabbing household items and measuring how many bacteria - and what sort - develop. He particularly looks for faecal bacteria such as E.coli and Staphylococcus aureus. His studies have found that on the average in the toilet seat there are 50 bacteria per square inch.  "It's one of the cleanest things you'll run across in terms of micro-organisms," he says. "It's our gold standard - there are not many things cleaner than a toilet seat when it comes to germs." We should be more worried about other household items, it seems. "Usually there are about 200 times more faecal bacteria on the average cutting board than on a toilet seat," he says. In the kitchen it doesn't necessarily get there through actual contact with faeces. It comes via raw meat products or the viscera from inside of the animal, where a lot of the faecal bacteria originate.

The research studies which claim that the toilet seat used every day in these households is microbiologically much superior to the kitchen cutting board probably can be believed because every house wife considers toilet as the dirtiest place at home. Naturally that makes them use some of the most powerful germ killer chemicals known with plenty of water, giving no chance for the microbes to proliferate, though theoretically toilet is the most concentrated source of E.coli! The fact is that same attention is not given to wash thoroughly utensils, cutting boards and other paraphernalia in the kitchen, raising the chance for microbes to survive and proliferate. The problem becomes more acute for those house holds cooking both animal foods and plant derived ones regularly. While such reports may ring alarm bells among many families, there may not be really a dangerous situation as almost all foods are cooked at temperatures above 100C causing a 100% kill of these vectors. Of course salad vegetables and other cold foods may be vulnerable to cross contamination and it is advisable that separate boards and knives are kept for them as far as possible.

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

INDIA TO BECOME A GLOBAL FOOD GRAIN TRADER?-THE RISK FACTOR

Food security for a country implies that adequate food is available to every citizen and there is no short supply. Unfortunately in India this term is being touted to imply that government warehouses hold adequate stocks of food grains, that too rice and wheat to meet the statistical average need of a person. The wide income disparity and extensive property do not allow such citizens to buy their food requirements is gloated over under the excuse that these segment of the population is covered by the inefficient and corrupt Public Distribution System or PDS under which Below Poverty Line families are supposed to get their minimum needs at very low cost. In this scheme Food Corporation of India {FCI) which is the nation's store keeper under GOI is supposed to manage grain procurement from farmers, store them safely and supply the same to so called ration shops spread all over the country. According to many studies it has become clear that more than 50% of the grains do not reach the targeted beneficiary, getting "leaked" on the way! FCI is also used as an arm for export and import of food grains as when there is a contingency. This very same agency is now being asked to get into global grain trading business assuming that such activities can reduce the subsidy burden of GOI. How far this may work out and the long term implications on country's domestic market are discussed in a recent report by an experienced expert on agricultural policies. here is a gist of it.  

"At a time when the Global Hunger Index 2012 ranks India 65th among 79 countries, K V Thomas, minister of state for food and public distribution and consumer affairs, has revealed that the Food Corporation of India (FCI) will soon trade wheat in the futures market. Seeking clearance from the Forward Markets Commission, the minister said: "The market has to perform the economic function of price discovery and price risk management." Well, what I can see as the basic objective is to replace the open market sales scheme with trading in the futures market. In other words, futures trading will provide an opportunity for FCI to make some profits, which in turn can be ploughed back in its procurement operations, thereby reducing the subsidy outgo".

A moot question that begs for an answer is whether India can really sustain itself as a viable food grain business player when the government is trying to usher in a new policy of supplying food grains at ridiculously low price covering almost 70% of the population? The requirement for such populist scheme is going to be huge and FCI is going to be tied to this challenge in the coming years. GOI does not seem to have learned its bad experience in propping up State Trading Corporation (STC) as a state controlled business arm by giving it monopoly in dealing with some portfolio and if FCI is now going to follow the footsteps of STC, one can imagine what would be the result. Unless the management structure and working style of FCI are drastically improved, the new policy may end up in another fiasco. This is not to under estimate the potential for FCI to become a global player in grain business as it is one of the world's largest grain dealers, handling massive quantities of food grains, primarily for domestic market and if this is to be realized GOI will have to relax its iron like grip on the functioning of the organization, giving it a free hand in day to day operations. Will this ever happen? No way, knowing the unlimited power wielded by bureaucracy on every institution in the country to day.

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

   

MANDATORY LIMITS ON "UNHEALTHY" INGREDIENTS-IS IT POSSIBLE?

What is the purpose of the "Front of the Pack Labeling " regulations which are in vogue in most of the countries across the world? The simple answer is to achieve "transparency" in food quality and safety parameters for the benefit of the consumer. The next question is whether it is really effective? Here the answer is yes and no! While the consumer gets a broad insight into the product contained in the pack, for a layman most of the information provided does not make much sense. Besides effectiveness of any law depends on the way it is monitored and implemented and here the governments in many countries have failed their citizens. There might be many reasons for this situation but it is a reality one must face. Nutrition labeling is often touted as a successful way for consumer education and improvement of consumer health. This is at best a long shot based on the perception that "some thing is better than nothing"! In countries where literacy levels are high such labeling practices may be more relevant and naturally consumers there are demanding more transparency. Latest in this saga is the demand by some experts to regulate the industry with statutory limits being imposed for "bad" nutrients so that only healthy foods are marketed. The demand by Australian Heart Foundation based on some scientific and ground realities to force the industry to make only healthy foods is contained in the following report. 

The National Heart Foundation of Australia is today calling on the Australian Government to enforce mandatory nutrition targets for the food industry to make our processed foods healthier. The call follows the release of the Heart Foundation's new paper, Effectiveness of food reformulation as a strategy to improve population health, which reveals: * removing 15-25% of the salt in Australia's processed foods over 10 years, could avert 5,800-9,700 heart attacks and 4,900-8,200 strokes every year a mandatory approach to salt reformulation is twice as cost effective and averts twice the burden of disease compared to a voluntary approach even a modest salt reduction (1-3grams per day) in the population's diet is shown to have potential health benefits. Heart Foundation CEO, Dr Lyn Roberts, said excess salt, saturated fat and trans fats found in processed foods were causing an unnecessary national heart health crisis. "We know processed foods are now a large part of the Australian diet and often contain hidden and excessive amounts of salt, saturated fat, trans fat and energy," Dr Roberts said. Government enforced mandatory targets for all processed food products would be far more transparent and effective at improving health than the voluntary opt-in approach we've seen to date. "Setting maximum levels of unhealthy ingredients in all processed foods will ensure food manufacturers make their products healthier, making a huge difference to our nation's health." Reformulating current and new processed foods involves manufacturers reducing the unhealthy ingredients such as salt, saturated fat and trans fats in their products and increasing the healthy nutrients such as dietary fibre, wholegrains, fruit, vegetables and unsaturated fats.

More interesting is another demand that food products churned out by the industry must be redesigned to enrich them with healthy ingredients like dietary fiber, unsaturated fatty acids, fruits, vegetables etc. How far the authorities in that country will go to accommodate this demand depends on consumer pressure. Also to be borne in mind is whether it is technically feasible to design products to meet the new standards which may be evolved for more healthy and less risky foods in future. Voluntary action being preferred by the industry may be effective to a limited extent as there might be many black sheep among them not adhering to such guidelines. Therefore Governments have the responsibility to force the industry to change its outlook for the benefit of their citizens. Best way to achieve the objective is to form a consortium of government, industry, consumer activists, health experts and food technologists to advice the authorities regarding the standards that are feasible and achievable on a long term basis.

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