You are here: Home » Companies » News
Business Standard

FDI in food processing to push local sourcing

Also, companies are expected to step up their research and development effort to accommodate local produce in their products

Food Processing

Viveat Susan Pinto  |  Mumbai 

Harsimrat Kaur Badal
Harsimrat Kaur Badal first mooted the idea to goad manufacturers to utilise local produce in their products even more

The Budget has given a thumbs-up to domestic food processing, with the proposal to permit 100 per cent foreign direct investment in the marketing of food products made in India.

First mooted by the Union minister, Harsimrat Kaur Badal, it is expected to goad manufacturers to utilise local produce in their products even more. Most food & beverage makers utilise local produce for only some of their products.

For instance, PepsiCo India does contract manufacturing of potatoes in Punjab for its potato chips. It is now stepping up focus in getting processable citrus fruits from local farmers for its juices under the Tropicana brand. In a recent conversation with this newspaper, D Shivakumar, chairman, PepsiCo India, said the first of its products using local citrus fruits, called Tropicana Mosambi, had come out of its unit at Nanded in Maharashtra. “There will be more such products, tailored to local tastes with locally produced fruits,” he’d said. The company had also signed an agreement with the Maharashtra government to promote citrus fruit farming, beside driving joint investment with partners in the area.

Similarly, rival Coca-Cola, which has been working with farmers in the Chitoor district of Andhra Pradesh to improve the processable variety of totapuri mangoes used in its Maaza mango drink, now proposes to take this initiative to oranges.

The bottling arm of Coca-Cola recently signed an agreement with the Maharashtra government, with partner Jain Irrigation, to set up an orange juice manufacturing facility with the specific objective of sourcing locally-produced oranges.

Venkatesh Kini, president, Coca-Cola India and South West Asia, had said at the time of the announcement that the endeavour was to expand its 'Make in India' footprint.

And that they were looking to stitch more partnerships for local sourcing, while seeking to expand the portfolio of products. Currently, the company sources mango pulp locally and a small portion of guava and litchi pulp. The plan was to expand all of this, he said.

Parallely, are expected to step up their research and development effort to accommodate local produce in their products. This, say experts, could be a game changer for the domestic business, which could have a cascading impact on local farming.

For instance, Coca-Cola took almost a year to develop a formulation that used 10 per cent juice in a fizzy drink. The product was launched at the Make in India week recently. The fruit pulp, said company executives, for the product was sourced locally.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, March 02 2016. 00:44 IST