HEALTH AND WELLNESS FOOD MARKET ON UPSWING

The Health and Wellness Food sector in India is in for exciting times. With change of lifestyles in India, the Indian consumer’s awareness of lifestyle diseases in India is also growing . Indian consumers are therefore now favorably inclined to the benefits of health and wellness foods.
 In a report launched by Tata Strategic Management Group, the Health and Wellness Foods market in India is today pegged at Rs 10,150 crores ( $ 2250 Million) which is expected to grow at a CAGR of 33% to Rs 35,700 crores ($ 7.93 Bn) . The global Health and Wellness Foods market is estimated at $ 460 Bn in 2008.
The split between Foods and Beverages is
 Health and Wellness Foods :
Current Size Rs 5050 Crores ( $ 1125 Million)Market Size in 2015
( 24% p.a. estimated growth) : Rs 18,350 crores ( $ 4078 Million)
Health & Wellness Beverages :
Current Size Rs 5150 Crores ( $ 1145 Million)
Market Size in 2015
(22% p.a. estimated growth) : Rs 17350 Crores ( $ 3855 Million)

Some of the fast growing categories in food are Curd/Yoghurt, flour and savoury snacks while in beverages it is yoghurt drinks, fruit juice and energy and sports drinks.

Source : Tata Strategic Management Group

NEXT PLANS BIG

NEXT, the electronics and consumer durables retail chain of the $ 5 billion Videocon Group is planning to double the number of stores it has in India from the current 540 to 1000 stores in the next 3 years. The current turnover ( 2009 -10) of Next is $ 311 Million ( Rs 1400 crores) which is also planned to be doubled in the next 3 years. NEXT has consistently been showing a 50% growth on a year-on-year basis.

NEXT is a multi-brand multi-product showroom and stocks an entire range of consumer durables from Air-conditioners, LCD and Plasma TVs, Home Theater systems, Washing Machines, refrigerators, microwaves to small home appliances. NEXT retails some of the popular brands such as LG, Samsung, Sony, Electrolux, Kelvinator, Whirlpool, Onida, Philips, Kenstar, Videocon, Sansui, including its own brand under its stable. NEXT also stocks Xbox of Microsoft, computers & laptops of Acer, HCL, Lenova, HP.

'MORE' CLOSES 39 OUTLETS

As part of its strategy to shut down unviable store, Aditya Birla Retail has closed 39 of its ‘More’ supermarkets. This includes two thirds of its outlets in Gujarat. Aditya Birla presently operates over 600 ‘More’ supermarkets.

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HAIR COLOUR MARKET IN INDIA

The hair colour market in India has shown a robust growth of 21% in the year 2009 over the previous year. It is important to note that the main growth has come from the mid-level powder brands that have from Rs 118 crores in 2008 to Rs 202 crores in 209. This is a whopping 71% growth.

Size of Hair Colour market in India(2009) : Rs 1200 crores ( $ 267 Million)Growth of the total market over last year   : 21%
Size of the mid-level powder brands         : Rs 202 crores ( $ 45 Million)

Leading Players

Godrej Comsumer : 33 % of the hair dye market
L’Oreal & Garnier : 60% of the hair cream market
Color Mate : 38% of the hair poweder market

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NEW FDI NORMS DISRUPTS RETAILER'S INDIA PLANS

New guidelines have been issued by the Government of India in respect of FDI ( Foreign Direct Investment) in Wholesale or Cash and Carry trade. These would impact global giants like Wal-Mart, Tesco and Carrefour who would now need to relook at their agreements with their Indian partners as well as their strategy for entering the Indian retail space.
 Under the current policy, 100% FDI is permitted in wholesale trading and 51% in single brand retail. No foreign investment is allowed in multi-brand retail.
 The Dept of Industrial Policy and Promotion of the Govt of India has defined wholesale business as sale of merchandise to other retailers, commercial, institutions or other wholesalers for the purpose of trade and business and not for personal consumption.

To plug loopholes that existed in the present norms and to prevent retailers from making a back door entry into the growing retail space in India, new guidelines have been issued. These come into effect from 1st April 2010. It is important to note that a transaction would now be defined as wholesale or retail on the basis of the type of customer to whom the sale is made and not on the basis of volume of sales.

Some of the important guidelines are :

1. To undertake wholesale trade, required licenses, permits as per State Governments Legislations need to be obtained.
 2. Sales would be considered as wholesale only when made to establishment holding a) VAT/Sales Tax/Service Tax/Excise Duty Registration b) holding trade licence issued by a Govt authority c) holding permit for holding retail trade d) institutions have certificate of incorporation.
3. Establishments in Wholesale Trade have to maintain complete records of registration, licence, amount of sale etc on a daily basis.
 4. Wholesale trade would be permitted amongst companies of the same group but such trade is not to exceed 25% of the total turnover of the wholesale activity. Further the wholesale made to the group companies should be for their internal use only. This is to prevent front end retail from coming in the garb of wholesale or Cash and Carry business.
5. The wholesale trader cannot open retail shops to sell to the consumer directly.

It would be interesting to see how the large global players now react to these new set of rules which seems to have majorly altered the playing field.