Demand for health, wellness goods in staples high: Cargill
Premium- Health through food is becoming a little less negotiable for Indians, says Piyush Patnaik, MD of Cargill India oil biz
Cargill India Pvt. Ltd, which sells edible oils under the Sweekar, NatureFresh and Gemini brands, said it is expanding its healthy edible oil portfolio and baking range as in-home consumption of food continues to remain high during the covid-19 pandemic.
Health through food is becoming a little less negotiable in the minds of the consumers, said Piyush Patnaik, managing director, Cargill oil business in India. “Over the last few quarters, we have relaunched our NatureFresh Acti-Heart and doubled our footprint on our Gemini Rice Bran business. We are also expanding our olive oil portfolio," Patnaik said.
Demand for specialized ingredients such as fats and baking powder has grown as consumers are experimenting with cooking at home, he said.
“Our Rath Vanaspati oil is finding huge traction in many parts of India for making traditional dishes and sweets at home that they were earlier probably consuming outside," he added.
Baking products such as NatureFresh Professional Lite (fat) have seen a surge in demand on the back of increased in-home cooking. “So, in both—within the health and wellness space and in the home indulgent space—we are making further additions,"
he added.
Cargill sells branded oils through more than 200,000 outlets in India. The company competes with Marico’s Saffola and Adani Wilmar’s Fortune cooking oils.
In-home consumption rose after the coronavirus outbreak last year, benefiting companies that sell flour, pulses, spices, tea, snacks, cookies, and edible oils.
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In the last quarter, however, demand for staples was largely “normal", Patnaik said. “We didn’t see any demand disruption during the second
wave. So, from June onwards, we are seeing a reasonable better situation on demand all across," he said.
Cargill’s oils business draws half of its sales from the retail or branded consumer edible oil business, while the other half from the business-to-business sales, which comprises sales to large restaurants, hotels, and large packaged foods companies.
Meanwhile, demand from restaurants and the food
services industry has remained slow.
“Categories like noodles, biscuits etc., those industries are growing, and we are obviously large suppliers to those industries, so we are also growing with them. However, instant consumption products like finger snacks and chips are not growing so well, at least not in the last 12 months. So that part of the business is a little sluggish. Foodservice is definitely a lingering pain from our business and structural point of view," he said.
India has also been witnessing food inflation, especially in edible oils.
Nearly 60% of the edible oil consumption in the country is met through imports.
Last month, the government announced several measures to arrest high prices of edible oils, including cutting basic import duty on crude palm oil and refined palm oil.
Patnaik said that while this has reduced the imports costs, how that translates into consumer price depends on prices in the global markets.
“So if the cost has gone down by Rs5000, and the global markets go up by anything more than Rs5000, then the consumer prices will not move down," he said. “But if it doesn’t move up, then obviously the consumer prices will go down in time, in sync with the reduction in duties," he added.
Meanwhile, he said edible oil prices have been cooling off over the past four to eight weeks.
“Our pricing policy is very transparent and competitive. We always maintain the best value price equation possible. If I look back the last four to eight weeks’ time, the prices have come down for all the edible oil players, including us, on the retail side," he said.
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