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Ingredient Supplier May, 24 2017

"We believe that everybody deserves safe food"

In an email interaction with Restaurant India, Deoki Muchhal, Managing Director, Cargill Foods India talks about their edible oil market.

By Nusra
Sub Editor

What is the anti-counterfeiting technology that you have launched to check brands authenticity?

Cargill believes in nourishing the world in a safe, responsible and sustainable way and follows global standards around food safety. Cargill strongly condemns counterfeiting and is making all possible efforts to eradicate the problem from its roots. Hence, it has introduced new-age anti-counterfeiting technology in its products. One of its popular regional brand - Gemini Cooking Oil is a market leader with 26% share in Maharashtra. To begin with, the initiative against counterfeiting has been launched on this brand. This anti-counterfeiting technology has a unique feature with a two-way process to check the authenticity of the Tin SKU. This process includes a 3D Hologram of Cargill which signifies the authenticity of the product. On looking at this hologram using the phone’s torch light, one can see ‘1865’ written – the year of foundation of Cargill’s operations. Besides, the customer can download an app called ‘Mojo Tags’ to scan batch code of the product and receive the reassurance of the genuineness of the product. This is the first time an edible oil brand in the country is making use of technology to fight the problem of counterfeiting.

What are the steps you have taken against counterfeits through legal action against Genuine oil?

Cargill prides itself on its quality and state of the art refining process and stands against any attempt to sabotage consumers’ health. The first counterfeit brand “Genuine” was identified recently after the release of new technology on Anti-Counterfeiting in February. This “Genuine” brand’s logo and pack label is deceptively similar to Gemini. With the help of the Court Officials and local Police Authorities along with a high court order Cargill Foods India conducted a raid on MM Oil Enterprise on April 6, 2017 in its premises at Dahiser Mori, Maharashtra. The raid resulted in seizure of Finished goods (contained in the impugned packaging) aggregating to 9580 Ltrs. (about 9.5 Tons) were seized. Apart from it 14.34kg of packing material was also seized.

To combat the proxy products how are you educating consumers and wholesalers in the market?

The news of the raid against Genuine Oil has already reached to Trade. To combat fake and counterfeit products, we have conducted workshops and training sessions for Consumers. Retailers, Wholesales/ Sales force starting February 2017 to reinforce knowledge on the authentic packaging of the product. We plan to run this programme for next 7-8 months to educate maximum customers.

Annually how much loss of revenue Cargill Foods is bearing due to proxy oil products sold in the market?

A study by KPMG-FICCI suggests that about 80% of the consumers are victims of deceptive counterfeiting. Most of the fake products and counterfeiting happens in smaller cities and rural markets. Estimated loss to Cargill Foods India due to counterfeits is approx. 15-20% of the overall GEMINI Sunflower business.

How big is the proxy market of edible oil in India?

The edible oil market size is 21 million tones, out of which 6 million tones is organized while the rest 15 million tones is unorganized. Counterfeiting in India is rising at an alarming rate, especially in the FMCG sector.A report by FICCI-KPMG suggests that out of the total counterfeit market, 65% is from this sector. Edible oil industry is one of the most unorganized sector in terms of distribution in India, hence, it holds a larger risk of duplicity. Therefore, ensuring that the right product reaches the consumer becomes utmost important. Purchasing a fake product brings loss to the business as well as may be a potential health hazard for the consumer. Counterfeiting is something Cargill Foods India takes very seriously as a fake product implies losing consumers’ trust. Educating the consumers and our wholesalers is a must to beat this menace. With Gemini Cooking Oil, we start our first step towards addressing this major issue of counterfeit goods.

What is the total size of organized edible oil industry in India?

The size of the organized edible oil market in India is roughly 6 million tones.

What are the global food safety standards that you follow?

Cargill Foods India believes everybody deserves safe food every time they sit down to eat, whether with their family for a home-cooked meal or on the go from one place to the next. Food safety is at the core of everything we do at Cargill, and it’s fundamental to our success. We define food safety as protecting people at every step of the supply chain. We take a comprehensive, science and risk-based approach to food safety in our policies, operations and supply chains. Every day, we strive to continuously improve. And, we know we can learn from and share with others which is why we are part of the Global Food Safety Initiative, helping spread best practices all across the globe.All our plants in India are state-of-the-art, combining latest refining technology with trained technical teams. All our processing plants comply with world-class international quality assurance and food safety standards including HACCP and FSSC 22000.

What is your current market presence and market share of Gemini cooking oil in Maharashtra and in the country?

Gemini Cooking Oil is available at all modern trade stores and kirana stores across the country. Market research agencies put Gemini as a clear market leader in some specific pockets in the country, with a 26 % in Maharashtra & 67% in Pune.

What are your future expansion and acquisition plans in the cooking oil space in India?

Cargill Foods India has created a level of connection with the consumers for all brands in their respective regions. This customer trust and loyalty in Cargill Foods India has enabled our brands to emerge as the unbeatable market leaders in their respective regions. We are expecting to grow faster than the market. We may acquire more companies to add to our growing size. We are gearing up to launch more wellness products. Thus, we are constantly aiming at a consistent improvement of Cargill Foods India which has already acquired the status of being one of the most preferred FMCG brands in the country with an enviable product portfolio.

What will be the investment?

On Anti-counterfeiting Technology we have spent about one crore rupees and Cargill also plans to invest more on health and wellness segment.

What is your current CAGR, annual revenue and future target?

We have a healthy CAGR of 15%. Market estimates suggest our cumulative revenue (including commodities trading) for Cargill India be in the range of Rs 8,000-10,000 crore annually in India. Within this, most of our growth has come from its growing consumer and retail business in the recent years. The consumer and branded retail business (Cargill Foods India) contributes about 50 per cent to the overall India business. That practically puts our retail business in India in the range of Rs 4000-5000 crore (Industry Sources).

Future targets to make our all brands as no.1 position in the market. Would be working towards creating more acquisitions to enhance the portfolio of healthy products with a clear focus on development of health and wellness category. We diligently follow our supreme growth mantra, 2X in 2 years and 4X in five years.

Related: Almond milk can replace milk in any cuisine: Rohit Bhagat

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