Jul 23, 2019

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Little water left, but sate has most bottling units in country


Small eateries log on to food delivery apps, discover new customer base



In small cities, the apps are helping outlets expand their business and in metros, iconic joints are getting new customers
India’s food services market is pegged at ₹4.2 tn, 65% of which comprises unorganized and unlicensed joints
NEW DELHI: ndore’s cult food joint Johny Hot Dog that sells vegetable, mutton and egg cutlets stuffed in soft hot buns is planning to open a second outlet.
It’s taken Johny Hot Dog nearly 40 years to do so. “I never had the resources," says Vijay Singh, the 62-year-old owner of the food outlet that was launched in the early 80s as little more than a hole in the wall.
But Singh’s business has grown over the past year-and-a-half, and it’s thanks to UberEats, on whose platform he registered in 2017, that he is gaining the confidence to expand. For Singh’s is an outlet that has never had delivery staff and offers no seating. For its business, it relies entirely on a daily queue of hungry customers drawn to Singh’s stuffed buns, priced attractively at₹25, ₹30 and ₹100.
Singh says food aggregators have been a “boon" to his business—daily sales are up at ₹1 lakh from ₹25,000-30,000 earlier.
Just like Johny Hot Dog in Indore, thousands of small eateries line markets and streets up and down the country, relying on local customers to keep their business going. But as India’s organized food delivery ecosystem, backed by investors, proliferates to touch ₹12,140 crore, such tiny joints—kulfi makers, paan sellers and dhabas—are benefiting from their reach and scale.
While in Indore Singh’s business is booming, in Old Delhi, a few iconic joints have found a new customer base online for the first time. Anil Sharma, owner at the over-a- century-old Kuremal Kulfi that sells the dessert stuffed in fruits has recently listed with food ordering apps. Though business online is still small, Sharma says he is discovering demand in places he didn’t know existed.
Jung Bahadur Kachori Wala, a nearly half-a-century-old shop in Delhi’s Chandni Chowk, is listed on Zomato, UberEats and Swiggy, and registers 100 deliveries a day, says its owner Nitin Verma. In exchange for the 18-22% commission on each order, the apps help Verma deal with order cancellations, lag in payments, etc.
“Aggregators have enabled democratization of consumption from such small restaurants," says Ajay Kaul, senior director at private equity investment firm Everstone Capital and former head of pizza chain Domino’s (Jubilant FoodWorks Ltd) in India. Kaul added that with more and more people choosing to eat out, both dine-ins and takeaways are being converted into deliveries.
For online food delivery companies, outlets such as Singh’s are indispensable.
That’s because despite the popularity of food chains such as McDonald’s, Domino’s and Cafe Coffee Day, local stand-alone food joints still trump large chains of restaurants due to their familiar cuisines and affordable pricing. Moreover, large chains are still scaling their presence in India’s smaller cities from where online food aggregators are drawing their share of new restaurants on their platforms and adding business.
Gurugram-based Zomato adds over 400 restaurants on its platforms daily, and “a bigger share of this comes from small eateries followed by big chains, irrespective of the size of the city", says Rakesh Ranjan, vice president-food delivery at Zomato.
While the top 15 cities have a sizeable contribution from organized players, emerging cities, says Ranjan, still host most of the small eateries. For Zomato, nearly 80% of the restaurants in emerging cities are very small in terms of operations—some no more than 150-200 sq. ft. “Food delivery has helped them increase revenue by two-three times within a year," says Ranjan.
For Zomato, small eateries and dhabas in emerging cities contribute up to 80% of orders.
India’s food services market is estimated at ₹4.24 trillion. Of this 65% comprises unorganized, unregulated and unlicensed joints, according to the National Restaurant Association of India.
For Bengaluru-based Swiggy, backed by Naspers and Tencent Holdings among others, and operating its services in 245 cities of India with more than 110,000 restaurants on its platform, smaller establishments and stand-alone restaurants drive 35% of the food service aggregator’s business. That is increasingly the case as the company moves into tier III and IV cities.
“As we continue to widen the choice of restaurants on the platform, a large number of them consist of smaller establishments and stand-alone restaurants that are FSSAI-registered," said a Swiggy spokersperson.
Since its launch in India in 2017, UberEats has seen a significant increase in the number of local restaurants and eateries across metros as well as non-metros, says Bhavik Rathod, head of Uber Eats for India and South Asia. He adds that a majority of the company’s orders come from popular local restaurants rather than quick-service restaurants or chains. This is especially true for cities such as Indore, Bhopal, Vizag and Kochi.
But initial glitches around payments, commissions and discounts continue to dampen the experience for those who have boarded the platform.
In Delhi’s Connaught Place area, Pandey’s Paan is listed across multiple food aggregators such as Swiggy, and Zomato, says Hariom Pandey, who runs the outlet. While Pandey is happy with the overall experience, he says that sometimes “the area managers run discounts without any knowledge or permission. We have to wait for a long time to get any reply to our mails. Basically, it ends up being a long process".
Disappointed by a delay in payments and fewer orders, Rai Sharma, owner of Pt Babu Ram Devi Dayal Paranthe Wale has been forced to delist from these apps. “We began facing problems regarding payments a few months ago," he says. He prefers to work with deliveries for which he is paid on the spot. “We only allow deliveries when they pay up front. After which, we don’t care if they sell it for ₹200 or ₹500. We don’t want to work on credit any more."
Even though small restaurants form the backbone of the business for aggregators, unlike the large established chains they grapple with regulatory, logistical and hygiene issues. Last year, Food Safety and Standards Authority of India (FSSAI), India’s food regulator, forced online delivery firms to delist restaurants that were not complying with its food safety rules after it received consumer complaints over quality and hygiene.
As a result, thousands of restaurants were removed. Zomato says overall awareness among small eateries about FSSAI certification is low. The company provides DIY kits and works with FSSAI to get such eateries compliant.
Swiggy does not on-board any outlet without an FSSAI licence, the spokesperson said. The company has also tied up with third-party vendors to facilitate the licence procurement process for new restaurants.
Small eateries still don’t fully get the power of this business, says Ankur Pahwa, partner and national leader for e-commerce and consumer internet at EY India. “The teething troubles they have initially tend to overwhelm them and they fall out easily. It is just a matter of trust and sophistication coming around the model—such as tech integration around ordering to billing to reconciliations, along with prompt payments and transparent returns policies that will help them eventually," he says.
Everstone’s Kaul adds that while the discounts and cashbacks bring in artificiality and ad-hocism to the delivery business, once these stabilize, the real equilibrium will set in with definite changes in habits.

BT Buzz: FSSAI plans to make Indians 'eat right'; food companies in no mood to relent

FSSAI could be willing to bring the change from the top, but Indians will become more health conscious if the authority also sustains its customer outreach, as changes in food habits need to begin from home.
In the last week of June 2019, FSSAI came out with a draft notification Food Safety and Standards (labelling and display) Regulations, 2019 to enable citizens to know more about the composition of food products, for making informed choices.
A homegrown snack food, traditional sweets and restaurant chain company recently decided to reduce the salt content of raita, an Indian condiment, served across its food outlets. The decision did not go well with customers who started complaining about the taste difference. The company reasoned that it was a healthy practice that they intended to follow, but ended up providing extra salt powder to those who insisted on the 'authentic' taste.
What prompted the company to experiment this was a commitment it had made to the Food Safety and Standards Authority of India (FSSAI) a year ago, to make its food service outlets a responsible place to eat by voluntarily promoting safe and healthy eating practices through the introduction of recipes with reduced fat, sugar and salt.
An extra sachet of sugar, salt or ghee could perhaps enable Indian food service industry (National Restaurant Association of India estimates the market size of the sector at Rs 4,23,865 crore in 2018-19) maintain a balance between their commitment to be a responsible eatery and keep their customers happy.
But, FSSAI's attempt to make Indians 'eat right' is brewing trouble across food businesses, especially for the fast growing food processing and packaged food industry. The 'voluntary' commitment is now indirectly becoming a legal requirement for the processed food market (projected market size of $543 billion by 2020) and unlike fast food service outlets, they cannot add separate sachets to their tetra packs containing fruit juices, gulab jamuns, biscuit packets or potato chips, and hence face fresh market challenges.
In the last week of June 2019, FSSAI came out with a draft notification Food Safety and Standards (labelling and display) Regulations, 2019 to enable citizens to know more about the composition of food products, for making informed choices. The notification said that "in a bid to encourage consumers make healthier food choices", the draft regulation calls for mandatory display of "red colour-coding on front-of-the-pack labels on packaged food products that have high-fat, high-sugar and high-salt content levels".
This requirement, proposed to be implemented in a phased manner over three years is what is worrying the industry. "Once it is implemented, 90 per cent of Indian products will have red labels. All your heritage drinks and rasgullas will be framed as bad products. They (FSSAI) want all Indian ethnic and traditional foods to be stopped," Subodh Jindal of All India Food Processors Association (AIFPA) complains.
The packaged food companies have also been asked to declare nutritional information such as calories (energy), saturated fat, trans-fat, added sugar and sodium per serve on the front of the pack. In addition, food labels will declare per serve percentage contribution to RDA (recommended dietary allowance) on the front of the pack. But, the 'colour coding' is what troubles the industry most as it tends to show their products in poor light while the health 'risks' associated with every such product is purely based on the quantity of consumption, frequency of consumption, health of the consumer and a host of other factors.
Pawan Kumar Agarwal, CEO, FSSAI, is well aware of challenges ahead. "While we were developing regulations, we knew as a nation we should move towards a reduction in salt, sugar and fat consumption in the country as the current level of per capita consumption (of all three) are high. So, we started off with a campaign. On July 10, 2018, FSSAI launched the Eat Right India campaign and in that function, several companies had given their voluntary commitment to reduce the salt and sugar content in their products," he says.
On 16 October 2018, FSSAI flagged off a 'Swasth Bharat Yatra', a pan India cyclothon, to spread the message of 'Eat Right Movement' across the country. The six-track cycle rally that began from six different locations covered the entire country and culminated in New Delhi in January, 2019. "Swasth Bharat Yatra was aimed at creating the mass awareness. A slew of measures is needed. But this change has to come from the top (processed food producers). This by no way meant to decelerate the growth of food processing sector. FSSAI is committed to innovation, but that does not mean you produce unhealthy foods," Agarwal says.
In fact, the new labelling requirement is the last of a series of amendments FSSAI has been planning to promote healthy diet and food safety. As part of its supply and demand side interventions, it want food labels to serve as a primary link of communication between the manufacturer and consumer and cover both food safety and information of consumer interest.
The comprehensive revision of Food Safety and Standards (Packaging and Labelling) Regulations, 2011 saw the drafting of three separate regulations to specifically deal with packaging, advertisement and claims and labelling. The FSS (Packaging) Regulations and FSS (Advertising and Claims) Regulations were notified in 2018. The labelling one is the last in the series.
In addition to the nutritional information and colour coding, the new labelling regulation also prescribes provisions for labelling food allergens as an important tool to reduce risk of exposure and prevent anaphylaxis for individuals with food allergies.
Early adoption
Days before the draft notification, Mondelez International, the makers of Cadbury chocolate and Oreo biscuits, announced the launch of a new variant of its popular Diary Milk Chocolate with 30 per cent less sugar content in the Indian market. "This is the most significant innovation in the brand's history in India. As we continue to define the taste of chocolate, we understand our consumers, and are conscious of our commitments to them. Cadbury Dairy Milk 30% Less Sugar is another very special innovation that will provide our Cadbury Dairy Milk fans with a less sugar option without compromising on our world-renowned taste and quality," Deepak Iyer, President, Mondelez India, said.
The company states that the new less sugar variety has been in development for almost two years with a dedicated team of scientists, nutritionists and chocolatiers at the company's research and development facilities in India and the UK. "The team has been working to find a way to achieve the much-loved Cadbury Dairy Milk taste whilst delivering 30 per cent less sugar with no added artificial sweeteners, colours or preservatives. By harnessing our leading-edge understanding of ingredient technologies and taste science, the team successfully replaced the physical functionality of the sugar in solid chocolate in a way that preserves the structure of chocolate and stays true to the unique texture and taste profile of Cadbury Dairy Milk."Also Read:Food companies can't lie now! FSSAI to prohibit terms like pure, natural, authentic on packaged foods
Last year, Swiss multinational food and beverage giant Nestle had also announced a similar launch where a new variety of Milkybar Chocolate contained 30 per cent less sugar while retaining the taste. The company is known to be working to reduce sugar content in all its products by 10 per cent without any change in taste.
With its Eat Right India campaign, FSSAI is also joining global food regulators that are trying to get industries cut down on the sugar content on their products.
"We recognise it is a contentious issue. Therefore, we have taken a lot of time even to come out with the draft. In fact, we even withdrew an earlier draft a year ago when we found out there were more views to be heard. An expert committee (with a cardiologist and two eminent nutrition experts as members) was formed to look into the matter. Views of all stakeholders were considered before preparing the current draft," Agarwal says.
The authority though is willing to address all issues that are pending. It will accept suggestions and objections from stakeholders until July 31. It has also proposed a three-year multi-phase implementation timeline for the new regulation to become applicable in the country.
Food processors, especially small and medium scale units are in no mood to relent. Coming days will see intense lobbying from both sides and the implementation of the regulation will depend on the outcome of pulls and pressures that are likely to follow now.
FSSAI could be willing to bring the change from the top, but Indians will become more health conscious if the authority also sustains its customer outreach, as changes in food habits need to begin from home.

Unsafe food items seized

The Food Safety Department in Ernakulam has confiscated at least six samples of unsafe food items from eateries and substandard food items from various outlets.
Samples were collected from the places where the items were made and laboratory results had been received, said Ernakulam Food Safety Assistant Commissioner B. Sivakumar.
The results have been given to the RDO for further action, he said. Among the unsafe items, chicken fry from two restaurants was found to have synthetic colours which were not permitted. Preservative used in a cake from a bakery was found to be unsafe. Rusk, cupcake and a few other bakery items were also found unsafe, said Mr. Sivakumar. Sale of unsafe food items was punishable under law, he added.
Among substandard items, tea dust and coconut oil were confiscated. Outlets selling substandard items would be made to pay fines and the sale of the items would be stopped, he said. The results received were of samples collected in June, he added.

Safe Food drive from today

Part of campaign to check communicable diseases in the city
The district administration’s Safe Food drive will begin on Tuesday to ensure that water and food are made available to people in hygienic conditions.
The drive is part of the campaign to check communicable diseases. District Collector S. Suhas has ordered the inspection of street food vendors and other eateries in the district as part of the drive to ensure safe food. The decision was taken at a meeting involving many departments, including Health and Food Safety which will lead and co-ordinate the drive. On Tuesday, inspections will be held in Thrikkakara municipality.
In the coming days, inspections will be held in all areas under local self-governments in the district. Besides the quality of food and water, the health status of workers will be checked. Those without health cards will be given five days to get a check-up and a doctor’s certificate.
Closure notice
If food is found to be unsafe for consumption, closure notices will be issued. Officials of Revenue, Food Safety, Health, Civil Supplies and Police participated in the meeting. Deputy Collector P.D. Sheeladevi and District Health Officer P. N. Sreenivasan were among those who participated.
Inspections will be held three days a week, even during the night. Roadside eateries operating in violation of rules will be asked to shut down.
Ernakulam Food Safety Assistant Commissioner B. Sivakumar said the inspections would be intensified as per the Collector’s orders. Aspects related to licensing, hygiene and sanitation of the place where food is made and sold, storage of food and health status of workers will come under scrutiny.