THE "FOOD BOWL" OF NEW ZEALAND-AN INNOVATIVE SET UP

The big difference between SMEs and large corporate food processing is the power of innovation for which latter is equipped with necessary R & D infrastructure. SMEs can never be able to mobilize enough resources in developing and testing new products which acts as an impediment to compete effectively with larger players to establish viable markets. Many countries do provide some sort of state support to these fragmented industry through public funded R & D though it is another matter that these facilities invariably become moribund without serving the purpose. It is rarely realized that any R & D carried out in isolation without involving the user industry is of academic interest and waste of public money. Against such a scenario the efforts of New Zealand government in setting up what is called a Food Bowl in the country with state of the art facilities for product development and pilot testing for assessing the feasibility and acceptability of the products in the market. Here is a take on this innovative approach in this country which deserves a big applause.   

"Auckland's new Food Innovation Centre based in Manukau - Te Ipu Kai, the Food Bowl - opened today and is set to become a key component of New Zealand's developing network of food science and technology innovation resources. The Food Bowl is an impressive 2000 square metre export certified purpose-built and multi-faceted pilot plant that will support food manufacturers to cost effectively develop and test new products for commercialisation, specifically for the fast moving consumer goods market. The first of its kind in New Zealand, the new innovation centre is being hailed by the Mayor as a critical piece of infrastructure for Auckland, helping to address gaps in the food product development pipeline while accelerating the growth of high-value exports based on Kiwi innovation and research. "The food and beverage sector is a significant contributor to Auckland's economy with firms earning approximately $4.7 billion each year. The new food innovation centre will provide additional support to this thriving sector and is a solid platform for taking it to the next level," says Len Brown. "Investing in infrastructure to support Auckland's economic growth is essential to achieve our vision of the world's most liveable city. Enhancing food and beverage exports and creating more jobs is fundamental." Located at Auckland Airport, New Zealand's primary export hub, the new centre features state-of-the-art flexible food and beverage manufacturing facilities, able to operate 24 hours a day, seven days a week. Over time, the centre is intended to attract a cluster of associated food businesses. Representing a capital asset of $18.1 million for the food sector, the centre is estimated to provide benefits that exceed $26 million by June 2014, according to Tony Nowell, Chairman of New Zealand Food Innovation Auckland, operators of the centre".

It is not that in a country like India there are no institutions of excellence in Food Research and once reputed CFTRI, DFRL and Food Tech training institutions have become more or less redundant because they are all working like "frogs in the well", living far away from ground realities. The much touted NIFTEM, a 100% government project which is yet to take shape is not going to be different from its older counterparts, again due to the fact that there is no viable industry linkage for undertaking programs that are relevant to the manufacturing sector. Putting a couple of industry managers on their governing body does not make these institutions industry relevant but tackling problems and future needs of the industry, short term as well as long term, only can make any meaningful impact. One can only wish that GOI takes a leaf out of the purposeful efforts in New Zealand in strengthening its food manufacturing and export sector through visionary programs like the Food Bowl.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FDI IN INDIAN RETAIL SECTOR-IMPENDING POLICY CHANGE

Listening to some of the political comments which were orchestrated after the proposal to allow FDI in Indian retail system remind one of similar kind of sound bytes heard during the early decades of independence on the issue of encouraging large industries vis-a-vis the SMEs. To day whether one likes it or not large industrial monopolies have established themselves firmly in the business landscape of the country. Have the SMEs disappeared because of this development? A realty check will reveal that both large industries and small ones are co-existing without much of catharses. What has happened is that consumers are benefited immensely by the vast expansion of the product basket and dramatic improvement of product quality. Organized sector of food business whether in fruit processing or bakery sector, has not been able to even capture 50% of the market! Probably there is a synergistic development where product promotion by the big players gives sufficient space for smaller players to carve out a significant share, the latter's advantage being lower consumer price for their products. Similarly it is doubtful whether small retailer will ever disappear from the Indian landscape because of establishment hi-tech, glittering and air conditioned supermarkets operated by transnational companies. It is interesting to watch the performance of political parties on this issue.

"Along with price rise, unemployment has been increasing in this country. 50 per cent of our population, comprising of small traders, street-vendors and the self-employed sustain themselves through retail businesses. The UPA government wants to deprive them of livelihood by allowing FDI in multi-brand retail," BJP spokesperson Shahnawaz Hussain said. BJP will oppose this policy through which the government proposes to allow 100 per cent FDI in multi-brand retail in cities having population above 10 Lakh. The party has always counted on the support of small traders and feels that neighbourhood store-owners would be adversely affected by the entry of foreign brands like Walmart, Tesco and Carrefour. "The government should try to build a political consensus on this issue. The Rajya Sabha Standing Committee report had stated that FDI should not be allowed in retail as small shopkeepers would be affected," Mr. Hussain said. He alluded to this step being taken under foreign pressure, and mentioned the recent visit of US Secretary of State Hillary Clinton to India in this regard. "There is a suspicion that this government is working under pressure. Whenever some big leader, especially from the U.S., visits India the government forms a bigger committee to over-rule the decision of its Standing Committees," he said. A Committee of Secretaries, headed by Cabinet Secretary Ajit Seth, has cleared the proposal to have FDI in retail.

The experience so far indicates that organized retail has not made any dent so far in spite of the vast investments made by organized retailing giants within the country. According to estimates the retail business in the organized sector is hardly 4-5% and if FDI is allowed in this sector the scenario is not going to change much. The so called unorganized retailers are not going to stay quiet as being seen these days when many of them have modernized their outlets with scientific stock management and reduced loose vending. Added to this it is not realized that no transnational retailing organization will venture into rural areas with indifferent infrastructure, limited income, rampant illiteracy and it is here more than 70% of the country's population eke out a living. Besides Indian traders are no easy push over with their uncanny knack for business opportunities and they will remain a force o reckon with even under the worst scenario.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com