The presence of global food brands in India go back on a history spanning more than 150 years. For example, a number of European and American brands that entered India in the late 1800’s and early 1900’s includes the Lever Brothers (now Hindustan Unilever), GlaxoSmithKline (now GSK), Nestle, Imperial Tobacco Company (now ITC), Cadbury (now a part of Mondelez) among others.
Consistent with the trend in previous years, 2022 saw the entry of many international food brands in India, either in terms of investment plan announcements or new product launches. For instance, Swiss multinational company Nestlé in September announced an investment plan of Rs 5000 crore in India by 2025. US-based Herbalife Nutrition injected approximately Rs 37.5 crore in a new state-of-the-art facility in Bengaluru this year, making it one of the company’s largest technology hubs.
Then we saw PepsiCo, one of the largest food and beverage companies in the US, announcing an investment Rs 186 crore for the expansion of its food manufacturing facility in Uttar Pradesh. Adding this to the previous investment, the total will now stand at Rs 1022 crore in India’s most populous state. Further, Diageo India, UK-based alcoholic beverage company, in August has announced an investment of Rs 45 crore for its state-of-the-art Craft and Innovation Hub in Ponda, Goa.
In such a scenario, where international firms have been constantly exploring the Indian market, Indian food companies are also increasingly taste-testing international territories. Direct investment trends over the past ten years have been analysed, and it is clear that inward and outward investment flows were slow in the early half of the decade, but gained steam in the latter half. A developing country like India constantly seeks opportunities to invest extensively outside, as it helps the economy as a whole. Overseas investments by Indian food companies also helps in improving the performance of the country’s service and food manufacturing sector and aids the battle against rising unemployment rates.
Desi brands going global
One of the most important steps to enter the global marketplace is through overseas investments, and recently, India has taken the necessary steps to establish its presence in the global arena. According to McKinsey & Company, India will play a key role in expanding Africa’s revenue to $160 billion by 2025 through IT services, infrastructure, agriculture, pharmaceuticals, and consumer products.
In sync with this observation, we recently saw Britannia acquiring control of Kenafric Biscuits, a private limited liability firm incorporated in Nairobi, Kenya, by subscribing to 51 per cent of the equity share capital of the company. The acquisition was led by Britannia Industries’ wholly-owned arm Britannia and Associates (Dubai). This acquisition is intended to allow Britannia Industries to manufacture and sell biscuits in Kenya and the broader African markets. The company has already set up manufacturing facilities in Egypt and Uganda.
Elaborating on this development, Varun Berry, Executive Vice-Chairman and Managing Director, Britannia Industries says, “We have just signed up for a joint venture with a controlling stake in Kenya. There used to be a brand called Britania which had a different spelling, and as a result of this deal we will have control over that brand so that we will not have an infringer in Africa doing the same brand that we have in our door.”
Besides Africa, the Middle East and the US are other attractive destinations for Indian food brands lately. For example, Hyderabad-based nutraceutical firm Deccan Healthcare recently announced international expansion plans. The company is introducing four variants of nutraceuticals to address text neck syndrome, digital eye strain, brain fog, and energy burnout due to prolonged digital screen-time viewing. It plans to launch these four variants in the domestic market through the online distribution channel catering to its specific target audience and through collaborations in international markets including in the UAE and USA. In UAE, the company will offer its products through Medisouk (online) and subsequently through the retail offline outlets.
According to Minto Purshotam Gupta, Chairman and Managing Director, Deccan Healthcare, “We would continue to increase our footprint in offline stores and expand into domestic and international markets in UAE and USA. We are currently exploring placing our products in 600 retail stores in the USA which is the largest market in our segment.”
Mumbai-based ayurvedic nutrition brand Kapiva is also in line for global expansion, starting with the UAE and US. With this international expansion, the brand is targeting a global revenue of Rs 100 crore by end of FY 2024-25. As per Kapiva’s market research, the US market showed increasing interest in ayurveda with the popularity of preventive healthcare in the aftermath of the pandemic, which the brand aims to leverage.
“With our modern and new-age offerings, we aim to introduce modern ayurveda to every household in the UAE and US, to improve their daily wellness quotient. With this expansion, we aim to expand our consumer-base by half a million consumers”, says Ameve Sharma, Founder, Kapiva.
Adding on, New Delhi-based ayurvedic company AIMIL Pharmaceuticals has rolled out aggressive expansion plans in the international market. The company will expand into 25 global markets, including Europe, the CIS region, the Middle East, Africa, and the Indian Ocean islands.
Speaking on the expansion activities, Dr Ikshit Sharma, Executive Director, AIMIL Pharmaceuticals says, “This expansion plan is in line with the ever-increasing global demand for authentic science-based ayurvedic products for better health. We aim to introduce more innovative products as per markets’ needs and target 100 countries in the next two financial years. We expect to generate a revenue of Rs 100 crore from this vertical in the next five years. “
Then there is Bengaluru-based iD Fresh Food which has been growing at 40-45 per cent year-on-year, and is looking to expand into Singapore, Saudi Arabia, UK, and US. It will also be expanding into the Arab States of the Gulf Cooperation Council (GCC) like Kuwait and Qatar. According to recent reports, the company plans to set up six new factories- three in the US, one in the UK, one in Singapore, and one in Saudi Arabia.
New Delhi-based plant-protein startup Greenest is another company that is exploring the US market. In a move to boost exports of unique agricultural processed food products from India, the government, through its apex export promotion body, Agricultural and Processed Food Products Export Development Authority (APEDA), recently facilitated the export of the first consignment of plant-based meat products of the startup, from Gujarat to the US. The company is in active discussions with customers from other countries to leverage the demand for Indian traditional plant-based and vegan products.
A similar trend is visible in the beverage segment as well. Bengaluru-based Salud Beverages has signed an 11-country, inter-continental distributions deal with Maritime and Mercantile International (MMI), leading distributors in the world and part of the renowned Emirates Group. The MMI deal makes Salud a global brand that will be available across 11 nations. Salud propelled its journey with the United Arab Emirates in September, subsequently pursuing collaborations with other international markets.
Further, Goa-based startup Latambarcem Brewers (LB Brewers), manufacturer of craft beer, has entered into Oman, to market craft beer and is expecting to sell about 50,000 cases this fiscal year worth Rs 2 crore. LB Brewers plans to expand its overseas presence and is exploring entry into three more countries, including those in the Gulf region.
“We are entering into global markets to sell our craft beer. We have appointed a distributor in Oman for marketing of our premium craft beer brand Maka Di. The demand for beer is huge in Oman, especially from the NRI population. Considering our popularity in the Indian marketplace, we are expecting a tremendous initial response from the large Indian population residing in Oman,” says Aditya Ishan Varshnei, Co-founder and Chief Executive Officer, LB Brewers.
Reality check on brand-value
With a bundle of opportunities lined up for food and beverage companies internationally, it would not only be a big push for the industry’s growth and branding but also for the country’s economy in the long run. But establishing a strong brand and garnering stable revenue requires a lot of effort.
In overseas markets, Indian brands generally enjoy a strong value and high perception only among the diaspora- the people of Indian origin. The positive perception of Indian brands is usually higher in Gulf countries, where there is a larger Indian expatriate population, compared to Europe or the US.
Vivek Chandra, Chief Executive Officer, LT Foods says, “Today, we make Indian food for India and push it abroad which is not going to work. We have to set up an innovation centre in the US to make food for the Americans, where the centre is staffed entirely by American Chefs and product-development people who produce convenience food. We are not just delivering convenience, we are delivering the convenience that is relevant. I think this mindset is important to build brand-India.”
A survey was carried out by Statista research in 2017 involving 40,000+ respondents from 52 countries on their perception of products from the various countries of origin. In the survey, Germany was ranked highest while India was ranked 46th out of a total of 52 countries – with the perception of India being lowest in European countries and Australia.
Therefore, there is an undeniable need to improve the perception of Indian brands in the global market amongst the native residents, to achieve further success.
Image credit- getty images