Blog: Optimism over India; Unilever upbeat on costs
Dean Best | 12 May 2008
India is a market - and an economy - in flux.
As the country's growing middle class drives growth of 9% a year, India still faces challenges in transport, distribution and infrastructure, as well as swathes of red tape.
Nevertheless, for all these problems, the message last week from India's food industry rang out loud and clear: this is a country - and a sector - with huge potential.
Last week, food industry executives from around the world travelled to the Indian city of Mumbai for the Food Forum India 2008 conference. just-food was there too, reporting from an event that was upbeat and confident about the changes taking place in the market.
The heady atmosphere even led one top retail executive to claim that India could act as a "trailblazer" for the global food industry. The promise of food retailing in India is tangible; the sector is valued at US$350bn and is growing in the high double-digits each year.
However, investing in India remains fraught with problems. From the lack of modern agriculture and inadequate distribution, to fierce local opposition against the growth of organised food retail, challenges abound. While India is seen as providing all the answers to food manufacturers and retailers suffering in stagnant Western markets, the industry would do well to remember that lots of unanswered questions remain, too.
Elsewhere last week, some claimed to have found the answers to one of the burning issues facing the industry - soaring commodity costs.
Unilever's first-quarter results suggest the Anglo-Dutch conglomerate is proving adept in managing its costs. Cost savings and success in convincing retailers to push through higher prices boosted profits, Unilever said. The company insisted the strength of its brand portfolio is helping in the battle to win higher prices from retailers. Unilever's product roster is robust but the company is still taking no chances, with speculation emerging over the future of its Bertolli brand.
Alas, not all food manufacturers are finding it easy. US poultry giant Pilgrim's Pride again pointed the finger at Washington's biofuels policy for its rising corn bill and recent financial woes.
It's likely more tales of financial anguish will be heard throughout the food industry in the weeks ahead.
Danone completed its US$12.5bn acquisition of WhiteWave Foods this week. The move will roughly double Danone's presence in North America, where WhiteWave is a top four dairy player. ...
Premier Foods plc revealed today (28 March) it has secured a deal with its pension scheme trustees that will see the UK food maker reduce its pension burden....
Hain Celestial, under the scrutiny of the investment community in recent months and facing some challenges in its domestic market, has announced another shuffling of its management pack....
FrieslandCampina, which today served up higher profits but lower sales for 2016, is ready to offload the last non-dairy business owned by the Dutch cooperative giant....
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