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"High taxes natural disincentive to growth of the industry"
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Monday, 29 September, 2014, 08 : 00 AM [IST]
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fiogf49gjkf0d  Cremica Group, a diversified food products company from India, is one of the leading players in the food retailing and food service industry. It serves as a one-stop solution provider to all leading food service chains, food retail chains, hotel groups and airlines in the country.
In an e-mail interaction with Anurag More, Akshay Bector, managing director, Mrs Bector’s Food Specialities Ltd, enumerated his company’s offerings, pointed out how changing lifestyles and rising income levels were leading to increase in the consumption of condiments and offered his views on issues like taxes. Excerpts:
How is the condiment industry doing in India?
The condiment market in India is estimated to be worth about Rs 1,000 crore today. Goldman Sachs invested in our business in 2006. Its sales were worth Rs 20 crore at that time. In the last eight years, the business has grown twelvefold.
We are finding that the changing lifestyles and rising income levels are leading to a big increase in the consumption of condiments.
The growth of the food services sector helps in familiarising customers about new types of products, and is helping innovative companies like us to launch new products in the market.
In keeping with this, only 30 per cent of the products are going to large food service companies.
Cremica has become a widely-distributed brand and a serious player in the retail market.
Brief us about Cremica’s product offerings.
Cremica is known for product innovations and offering customised and localised food products.
As far as possible, we try to offer natural products to our customers.
In fact, Cremica tomato ketchup and Opera kettle chips were rated the world-class products by leading publication like Hindustan Times recently.
We offer a wide variety of consumer products, including mayonnaise, salad dressings, sandwich spreads, chip dips, tomato ketchup, fruit crushes, Chataka Indian sauces and Opera Kettle Chips.
Cremica launched India’s first vegetarian mayonnaise and pizza-pasta spread. The Indian chutney range was introduced to meet customer needs.
Similarly, our recent launch of Indian flavoured sandwich mayos is proving to be a huge hit in the market.
Opera Kettle Chips have been highly successful, and were already available in premium outlets in most metropolitan cities in the country within their first year.
The product is likely to penetrate at a rapid pace, and addresses the needs of highly-differentiated customers. We would continue this process in the coming years.
What is Cremica's share in the food industry?
Today, Cremica is a leading food product conglomerate, leading the food processing business through its range of products, its internationally-certified production facilities, the consistency of its quality and its unmatched expertise in the industry.
What are the challenges faced by the food industry? How is the industry coping with the challenges?
The high rate of taxes on food products are a natural disincentive to growth of the industry. Most advanced economies have very low taxes on food products.
The taxes levied on food products and food service businesses need to be brought down in line with other advanced economies, and also in line with the tax rates on basic food commodities.
Large-scale investment needs to be galvanised, and the government needs to consider programmes that recapitalise this sector and provide incentives to derisk the growth by large-scale reduction in interest rates by bringing in an industry upgrade programme in line with what was done in the textile industry.
What trends have the food industries witnessed?
The consumption of high-value food products is increasing. This is the result of a rapid expansion of the Indian economy, which, in turn, is resulting in changing lifestyles and aspirations.
We expect this trend to continue in a major way moving forward, and this would lead to exponential growth in the market.
How are the government regulations for the industry?
We hope that the current government would look at energising the large-scale food procesing set-up, particularly with respect to the availability of perishable foods, which is critical to avoid food inflation and help sustain growth.
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