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Category: Food

Retail News Asia is committed to providing both local and global retailers with the latest Food and Food & Beverage news throughout the Asian market. This on a daily base.

  • Concerted action needed for M&A breakthrough

    Concerted action needed for M&A breakthrough

    It is forecasted that the value of mergers and acquisitions (M&A) deals in 2017 will not exceed those of 2015 and 2016, thus, the market needs a boost from enterprises and the government to leverage the opportunities from foreign capital to make a breakthrough.

    In 2016, the total value of all M&A deals over the world was $3.5 trillion, a reduction of 27 per cent on-year, but a high value nevertheless. However, this could be considered an ending of the global M&A’s growth period. Due to Brexit and Donald Trump’s new policies, global M&A activities are becoming harder to predict and there may be some shifts in the flow of investment capital in the world.

    According to the statistics of the Institute for Mergers, Acquisitions and Alliances (IMAA), Vietnam hit a 10-year record hike of $5.2 billion in M&A activities in 2015. In 2016, the value of M&A deals was $5.1 billion, even though experts said that in the second half of 2016, the growth was slowed down because not many big M&A deals were publicised at the time.

    It is forecasted that in 2017 without a breakthrough, the total value of M&A deals in Vietnam may not overtake 2015 and 2016 figures. For a breakthrough, the Vietnamese M&A market really requires a boost.

    The most vibrant industries with the highest number of M&A deals in 2016 were the retail sector, consumer goods production, and real estate. The finance and banking industry did not have many outstanding activities last year. Some other fields, such as education and technology, also attracted M&A investment in 2016.

    Foreign capital has been playing an important role in M&A activities in Vietnam with numerous sizeable deals. For example, Japanese enterprises are now strategic partners to many state-owned enterprises, such as Vietnam Airlines and Petrolimex. Similarly, a number of South Korean enterprises joined the Vietnamese market by investing in agriculture, and investors from Singapore have been paying close attention to some real estate projects.

    According to some assessments made by the government and investors, the progress of equitisation and the state divestment from big enterprises is slow. A wide range of Vietnamese enterprises are luring in investors after being equitised or divested by the state, such as Saigon Beer-Alcohol-Beverage Joint Stock Corporation (Sabeco), Hanoi Beer Alcohol and Beverage Joint Stock Corporation (Habeco), Vietnam Mobile Telecom Services Company (MobiFone), and Vietnam Dairy Products Joint Stock Company (Vinamilk).

    Currently, Sabeco and Habeco’s stocks have been listed on the stock exchange. However, most investors said that this step was implemented more slowly than they had expected.

    There are numerous challenges for the growth of M&A in Vietnam, including changes in the US policies, the withdrawal of the US from the Trans Pacific Partnership or the various obstacles to equitisatisation, the problems of enterprises’ quality, and the scale of the Vietnamese economy.

    To achieve at least 2016’s $5.1 billion in deal value, the state divestment in some Vietnamese enterprises should be implemented more quickly and thoroughly.

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  • Vietnam’s pork crisis ain’t over yet

    Vietnam’s pork crisis ain’t over yet

    Vietnamese farmers have been hit by a glut in supply for months.

  • Indonesia, Malaysia Muslims call for Starbucks boycott over LGBT stance

    Indonesia, Malaysia Muslims call for Starbucks boycott over LGBT stance

    Muslims in Indonesia and Malaysia were urged to boycott Starbucks on Tuesday (Jul 4) by major Islamic groups accusing the coffee chain of being pro-gay rights, as concerns grow over rising religious conservatism in both nations.

    Leaders from Muhammadiyah, Indonesia’s second biggest mass Muslim organisation, also urged the government to revoke the company’s business licence for its stance on lesbian, gay, bisexual and transgender (LGBT) issues.

    “The ideology, business and view that they support are against our ideology,” Anwar Abbas, Muhammadiyah’s head of economic affairs.

    Another Muhammadiyah leader, Yunahar Ilyas, said the group was calling on “Muslims to not drink in Starbucks so that the income is not used to strengthen LGBT campaigns”.

    The firm is among a slew of US companies to have spoken up against discrimination in the US, with representatives signing a letter to North Carolina’s Republican governor protesting legislation targeting transgender people last year.

    Hardliners and Islamic groups have led a growing backlash against Indonesia’s LGBT community over the past year, which activists believe was triggered by widespread media coverage of a decision in the United States to legalise same-sex marriage.

    The group Pribumi Perkasa Malaysia this week also called on the government to “re-evaluate the trading licence given to companies that support same-sex marriages and LGBT,” spokesman Amini Amir Abdullah said in a statement.

    The Muslim leaders said concerns about Starbucks arose after reading Starbucks chairman’s comment when tackling a shareholder’s complaint in 2013 that the company were losing customers due to the firm’s stance on LGBT.

    At the time, chairman Howard Schultzman, then the chief executive, responded by asking the shareholder to sell the shares.

    Homosexuality has long been taboo in Malaysia, where 60 per cent of the population is Muslim, and where sodomy is a crime punishable by up to 20 years in prison.

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  • Vinamilk tops most valuable firms list

    Vinamilk tops most valuable firms list

    Forbes Vietnam on Monday announced the Vietnam Dairy Products Joint Stock Company (Vinamilk) topped the 40 most valuable companies in the country with a value of more than US$1.7 billion. This is the second time Vinamilk has reached the top in the Forbes ranking.

    Forbes Vietnam said in its statement that total value of the 40 most valuable firms reached more than $5.4 billion, an increase of 20 per cent from the previous assessment last year.

    Behind Vinamilk was the military telecommunication group Viettel and property developer-retailer Vingroup, whose estimated values were $849.6 million and $299.3 million, respectively. The list closed out with the agriculture group Loc Troi, which was assessed at $13.1 million.

    Loc Troi joined the most-valuable list in 2017 for the first time, along with Quang Ngai Sugar Joint Stock Company, fuel dealer Viet Nam National Petroleum JSC (Petrolimex) and Saigon Tourist.

    In terms of industries, consumer goods producers and financial-banking firms outnumbered others at 19 companies.

    Saigon Securities Inc (SSI) was the only brokerage included in the Forbes Viet Nam list.

    Among other financial institutions were Vietcombank, Vietinbank, BIDV, Bao Viet Holdings, MB Bank, VP Bank and Sacombank.

    Three quarters of the 40 firms are already listed on the HCM and the Ha Noi stock exchanges, including two brewers Sabeco and Habeco, Mobile World Corp, Vietjet Air and property developer Novaland.

    Some of the 40 companies trade their shares on the Unlisted Public Company Market (UPCoM) and the Over-the-Counter (OTC) market, such as Truong Hai Automobile, VP Bank and Techcombank.

    According to Forbes Viet Nam, the evaluation was conducted based on the contribution of the company’s brand to the business performance. The most valuable brands were the firms that recorded high revenue and earnings in the industries they were leading.

    Forbes Vietnam, with support from Viet Capital Securities Co, evaluated the firms’ pre-tax earnings, loan interest rates and intangible assets.

    In addition, Forbes Vietnam was assisted by the companies whose shares are traded on the two local exchanges and UPCoM and OTC markets, while some non-traded and unlisted companies agreed to provide financial data for the evaluation.

    The brand valuation is calculated on the company’s share price-to-earnings (P/E) ratio versus the market’s average P/E ratio for listed ones.

    For unlisted companies, Forbes Viet Nam compared the firm’s scale and scope to others in the same industry to calculate the company’s value.

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  • Big growth for Asia Fruit Logistica

    Big growth for Asia Fruit Logistica

    Asia’s premier fresh fruit and vegetable trade show is set for another record-breaking year on 6-8 September 2017 in Hong Kong. With more than two months to go before Asia Fruit Logistica opens its doors at AsiaWorld-Expo, sales of exhibition space are up by 25% on last year’s total.

    Exhibitor participation from China – traditionally the largest single exhibiting nation atAsia Fruit Logistica – has increased sharply, with the Chinese pavilion expanding by 90% compared with last year’s event.

    Well over 11,000 top-level buyers and trade professionals from more than 70 countries are expected to attendAsia Fruit Logistica.

    Visitors can purchase their tickets online and make up to a 40% saving on their entrance fee compared with buying tickets on the door.

    Asia Fruit Logistica’s business week kicks off with the Asia Fruit Congress, Asia’s premier fresh produce conference event, which takes place the day before the exhibition on Tuesday 5 September.

    Asia Fruit Congress returns with a high-powered programme covering a range of hot topics. Fresh trends in Asia’s food retail market, delivering global brands to local consumers, and the changing global trade landscape are the headline themes on the agenda.

    On the show-floor at Asia Fruit Logistica, visitors can take part in two Hall Forums this year. Asia Business Forum offers daily workshops with practical ideas and solutions for better fresh produce marketing.

    Day one focuses on packaging, looking at its role in terms of both product preservation and merchandising.

    Day two is all about marketing, while day three looks at production and trade issues.

    Meanwhile, the second Hall Forum turns the spotlight on the worlds of hi-tech and logistics. Each morning, SMART HORTICULTURE ASIA, the forum for information management, standards and technology, will explore data management at different stages of the supply chain.

    Each afternoon, COOL LOGISTICS ASIA offers a new series of practical workshops on cold chain management. The wide-ranging programme looks at the future of container shipping, perishable logistics for beginners and exporting to Asia by air.

  • Foreign fast food chains show underwhelming performance in Vietnam

    Foreign fast food chains show underwhelming performance in Vietnam

    Experts say there are several challenges: intense competition from the increasing number of domestic and foreign food companies, high prices (a burger goes for “four times a bowl of Pho”), and the fact that hamburgers and French fries are just not for Vietnamese people.

    Below are some major chains and their progress in Vietnam compared to other markets in Asia.

    Burger King

    Burger King has closed five restaurants in Ho Chi Minh City, Hanoi, and Danang in recent years, citing sub-optimal location, according to news reports, despite an ambitious $40-million investment plan upon its entry in 2012.

    At the time, Burger King expected to open 60 restaurants nationwide, as consumers were excited to try the famous hamburger from the west. However, five years later, the fast food chain has only reached a quarter of this target with 15 restaurants: seven in Hanoi and eight in Ho Chi Minh City.

    The reasons Burger King missed its original goal, according to experts, could be tough competition, high operating costs, and a misunderstanding of Vietnamese taste buds.

    “In the short term, hamburgers cannot become a popular choice for Vietnamese consumers,” said Nguyen Manh Tu, business development director of Blue Kite Food and Beverage Services Company Limited, which has the franchise rights to Burger King in Vietnam, in an exchange with the broadcaster VTV.

    Such an initial drawback would require fast food chains to adjust their menus or strategies. In the case of Burger King, after re-negotiating the franchising terms to reduce the projected store count to 15 and refining its menu, its sales has increased by 50 per cent each year for the last two years, according to VTV. Good customer service and the quality of ingredients, with beef imported from Australia, will continue to be Burger King’s advantage in the eyes of Vietnamese customers.

    Tu added that the future of Burger King will depend largely on the restructuring of Restaurant Brands International, the multinational company that owns several fast food brands, including Burger King.

    Other markets in Southeast Asia have welcomed Burger King long before Vietnam. It entered Malaysia in 1997 and now has more than 50 Burger King restaurants in the country. In the Philippines, Burger King was acquired by local fast food giant Jollibee Foods Corporation, which in 2011 bought a 54-per cent stake in BK Titans Inc., the holder of franchise rights to Burger King in the Philippines.

    McDonald’s

    Originally from the United States, the golden arch logo of McDonald’s is now recognisable everywhere in the world.

    In 1992, McDonald’s opened its largest restaurant in the world at the time in Beijing, and 40,000 customers came to taste a bite of American culture on the first day of business, according to James Watson’s book “Golden Arches East: McDonald’s in East Asia.”

    Four years later, by the end of 1996, McDonald’s had 29 outlets in Beijing, according to Associated Press. Generally perceived by Chinese consumers as a symbol of status and western modernity, McDonald’s grew rapidly in China, a country where its well-trained staff and clean restaurants were a novelty in the 1990s.

    Ten years on, in 2006, McDonald’s had 784 restaurants in China, opening 75 new restaurants a year on average, according to company data. The company also had more than 150 restaurants in Hong Kong during this period, and at one point served half a million fast food fans per day, according to BBC News. (Hong Kong’s population was 7.3 million in 2015.)

    Fast forward five years to 2011, and the fast-food chain had 1,464 outlets in China, meaning it opened 136 new outlets each year during the five-year period.

    Today, there are more than 2,400 restaurants in mainland China, according to the New York Times. However, McDonald’s will sell 80 per cent of its businesses in China and Hong Kong to the state-owned conglomerate Citic and private equity firm Carlyle Group, granting these firms franchise rights. This is part of McDonald’s newfound plan to turn 95 per cent of its restaurants into franchises, thereby saving money and passing the hefty cost of modernising the stores on to franchisees, analysts said.

    Last year, McDonald’s also sold the franchise rights to its restaurants in Malaysia and Singapore to Saudi Arabian Lionhorn Private Limited.

    With a network of 262 restaurants, McDonald’s recorded a year-on-year revenue growth of 16 per cent in 2016 in Malaysia and is looking to repeat this with a double digit growth in revenue and profit this year, according to the company website.

    Meanwhile, almost four decades after entering Singapore in 1979, McDonald’s 120 restaurants claims to serve 1.2 million customers each week. (The island had a population of 5.5 million as of 2015.)

    Another country in the region where McDonald’s has a long history is the Philippines. The first McDonald’s restaurant opened in 1981 in central Manila. More than 36 years later, the Philippines is one of its biggest markets in Asia in terms of store count, only behind China, Japan, and Taiwan, according to company data. The company has always reported double-digit annual growth in revenue in the past 10 years, and in 2016 sales increased by 14 per cent. It opened 45 new outlets last year and is targeting 45 more this year.

    In Vietnam, McDonald’s is seen to be growing slowly. Three years ago, as customers queued up to try the first Vietnamese restaurant in Ho Chi Minh City, McDonald’s planned to open 100 restaurants within the decade (average 10 new restaurants each year). However, the chain now has only 15 restaurants, falling rather short of the target.

    Jollibee

    Jollibee is the Philippines’s home-grown fast-food chain. Filipino-Chinese founder Tony Tan Caktiong started Jollibee selling ice cream in 1978, but eventually shifted to hamburgers to meet market demand. After many years of competing with McDonald’s, Jollibee’s more than 2,000 restaurants controlled 18 per cent of the Metro Manila market, compared to the 10 per cent of McDonald’s, according to Forbes Asia’s 2013 data.

    In a few sentences, Tan explained this feat to Forbes Asia, saying “We found that they excelled over us in all aspects—except taste. It suited Americans, but not really Filipinos. Ours (food) tends to be sweeter, spicier, and more salty. We were lucky as it was not easy for them to change their product because of their global image.”

    Jollibee also wanted to become a global player, as there are large Filipino diasporas in many countries longing for the familiar taste of their hometown food. The company entered the US in the 1980s and Saudi Arabia, Qatar, and the United Arab Emirates in 2008, according to Forbes Asia. New locations were planned in countries, such as Britain, Italy, and Canada.

    In addition to developing its own brand, the company also bought already-popular brands and works to improve them. For example, in China, Jollibee bought the noodle and rice chain Yonghe King in 2014, the congee brand Hong Zhuang Yuan back in 2008, and the beef noodle chain San Pin Wang in 2012.

    Jollibee bought Burger King’s 23 restaurants in the Philippines in 2011. More recently, it also purchased 40 per cent of American burger chain Smashburger and made plans to open at least 1,400 Dunkin’ Donuts locations in China in the next 20 years.

    Jollibee Foods is now the biggest restaurant chain in Asia, boasting about 3,290 outlets worldwide under various brands.

    In Vietnam, Jollibee opened its first restaurant in 1996 and now boasts 80 outlets nationwide. Jollibee is successful among foreign brands on the Vietnamese fast food market. It has been growing rapidly in recent years, with two thirds of its restaurants having been opened in the last five years, according to numbers from dantri.com.vn. The company began granting franchise rights in late 2015.

    At the end of 2016, Jollibee Foods went into a joint venture with Viet Thai International to create SuperFoods Group, thereby gaining ownership of several other brands, such as Highlands Coffee, Pho 24, and Hard Rock Café.

    Jollibee is expected to take the company public via an Initial Public Offering in 2019, an indication of Jollibee’s success as well as ambition to imitate its success in other countries: buying and growing major local brands.

    Thanks to this strategy, Highlands Coffee doubled the number of coffee shops from 60 in 2014 to 130 in 2016, according to news site Soha.

    Subway

    Claiming to be a healthier alternative, Subway is a little bit different. Entering Vietnam six years ago, the world’s biggest fast food brand has set a goal of 50 restaurants in Vietnam by 2015. However, at present, there are only six of them in Ho Chi Minh City, as previously reported by VIR.

    “Like other fast food brands, Subway entered Vietnam late. Initially, we had to adjust our strategies to fit the culture as well as market trends. It takes time for us to adapt to the differences in the Vietnamese market to get the desired foothold here,” Mark Mason McGrath, general director of Subway Vietnam, explained to VIR in February.

    In Southeast Asia, Subway has opened 200 restaurants in Singapore, 100 in Thailand, and 40 in the Philippines. However, Subway has not reached its expected goals in Vietnam.

    Pressure to conform

    In conclusion, most fast food brands entered Vietnam with big promises, probably due to their success in other markets, such as the Philippines, Malaysia or China. However, several brands, such as McDonald’s, Burger King or Subway, set foot in Vietnam much later than other markets, which seemed to be a big disadvantage, while chains that opened long before, such as Jollibee, Lotteria, and KFC, seem to be doing better.

    News reports and expert opinion seem to agree that foreign fast food chains have not been able to win the heart of Vietnamese consumers because they lack that local taste that could entice them to return time and again. There are signs of change, such as rice being added to the menu (the rice and fried chicken combination is unheard of in the west) or Jollibee beginning to use traditional Vietnamese fish sauce to marinate its fried chicken, as the company announced recently.

    According to Jollibee’s data, 90 per cent of customers liked the fried chicken seasoned with fish sauce and would eat it again. Such an adjustment is something other fast food chains should take notice of.

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  • Flamingo Bloom Tea Salon Launches All-Natural Tea This July

    Flamingo Bloom Tea Salon Launches All-Natural Tea This July

    Healthy and hydrating, tea is deeply rooted in Hong Kong culture. Over the centuries, tea has played many roles in traditional wellness practices and beauty regimes — not to mention the city’s social fabric. But despite its wide consumption, there are few contemporary options available for urbanites on the go.

    That’s where Flamingo Bloom comes in. Just in time for the sweltering summer, Flamingo Bloom introduces its handcrafted floral teas on Stanley Street, where the chic tea salon will lure you in with its botanical decor and pops of colour. The commitment to quality continues into every Flamingo Bloom product, from Highland loose leaf teas, such as Honey Orchid Black, to fresh fruit and boba, cane sugar and double-purified water.

    Flamingo Bloom’s all-natural teas are made-to-order and contain no synthetic additives, ingredients or powders. Every tea has been carefully chosen from high altitude tea regions in China and Taiwan, where fewer pesticides are used in the cultivation process.

    “Despite the long tradition of tea drinking in Hong Kong, it can be struggle to find all-natural, high-quality and healthy takeout tea,” says founder Benjamin Ang, who is also behind award-winning restaurants Dragon Noodles Academy and Social Place. “As tea drinkers ourselves, Flamingo Bloom also values total transparency. To ensure every customer can see exactly what’s in their cup, Flamingo Bloom teas are crafted by talented tea-baristas at the open bar.”

    What’s on the menu? The experience begins by choosing one of four base teas: Jasmine Green Tips tea from Fujian; Highland Oolong from Taiwan; Chrysanthemum Pu’er from Yunnan; and Honey Orchid Black tea from Sichuan. A less mainstream tea, Honey Orchid Black is a soothing choice, featuring a nutty taste and delicious caramel aroma.

    Flamingo Bloom brews fresh batches of these base teas every four hours, using only whole tea leaves — never dust or powder — and double-purified water. Crafting these high-quality, loose-leaf teas is an art itself. The Jasmine Green tea, for example, is extremely delicate, requiring specific conditions to brew properly. If either the temperature or timing is off, even by a tad, then the resulting tea will taste bitter and lose its amazing aroma.

    After choosing a base, customers can enjoy their tea over ice, or dress it up with fresh fruit, boba, matcha, French rose, or a salted milk cap — a decadent crown of creamy milk and cheese that’s been whipped using a secret technique. Every cup is totally bespoke, even down to the amount of sugar cane content.

    In addition to custom choices, Flamingo Bloom offers a few signature combinations, including Intense Orange x Jasmine Tips Green; Boba Pearls x French Rose x Highland Oolong; Smashed Strawberries x Jasmine Tips Green; Fresh Fruits x Orchid Black Tea; Salted Milk Cap x Chrysanthemum Pu’er; and Boba Beetroot Milk. Every Flamingo Bloom tea finishes with a cocktail shake to create an airier, frothier and more fragrant brew.

  • Brazil beef imports halted, citing food safety concerns

    Brazil beef imports halted, citing food safety concerns

    1.9 million pounds (861,825 kilograms) of Brazilian beef products were refused entry to the U.S. The United States announced Thursday a halt to all imports of fresh beef from Brazil, the world’s second-largest producer, citing “recurring” food safety concerns.

    The ban will remain in place until satisfactory “corrective actions” are taken, the U.S. Department of Agriculture said in a statement.

    “Although international trade is an important part of what we do at USDA, and Brazil has long been one of our partners, my first priority is to protect American consumers,” U.S. Agriculture Secretary Sonny Perdue said.

    “That’s what we’ve done by halting the import of Brazilian fresh beef.”

    The statement said all meat imports from Brazil had been inspected since March, when some of the country’s top meat producers became embroiled in a tainted-meat scandal.

    During that time, the Department of Agriculture’s food safety and inspection service rejected 11 percent of Brazilian fresh beef imports, compared with only one percent of shipments from other nations, it added.

    Since implementation of the increased inspection measures, 106 lots — approximately 1.9 million pounds (861,825 kilograms) — of Brazilian beef products were refused entry to the U.S. “due to public health concerns, sanitary conditions, and animal health issues.”

    “It is important to note that none of the rejected lots made it into the U.S. market,” the statement added, noting that the “Brazilian government had pledged to address those concerns, including by self-suspending five facilities from shipping beef to the U.S.”

    “Today’s action to suspend all fresh beef shipments from Brazil supersedes the self-suspension,” it added.

    Brazil’s beef production is second only to that of the United States, according to USDA data.

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  • Vietnam’s pepper export revenue loses spice due to oversupply

    Vietnam’s pepper export revenue loses spice due to oversupply

    With supply exceeding demand, farmers are being told to hold on to their stocks and wait for prices to rise. Vietnam’s pepper shipments are forecast to reach around 101,000 tons for the first six months of 2017, up 13 percent on-year, but revenue is likely to fall 13 percent, according to Vietnam Pepper Association (VPA)’s chairman Do Ha Nam.

    “When supply exceeds demand, importers try to pull prices down. Vietnam, which provides some 60 percent of the global pepper output, will be heavily affected,” Nam told.

    In the peak harvest season, farmers need to sell large volumes of pepper to cover expenses, causing prices to fall. Local farmers are stuck in a dilemma: the more pepper they sell, the sharper prices decline.

    Domestic pepper prices have been falling throughout May and June, so the VPA is urging local farmers to hang on to their stocks and wait for prices to recover.

    “If farmers can hold on for the next 1-2 months, prices will rise again,” Nam said.

    The VPA has attributed falling prices to a 15 percent increase in pepper output in for this crop and the 20,000 tons of Cambodian pepper Vietnam has shipped in.

    However, the greatest problem facing the sector is the expanding pepper plantations.

    If the plantations continue to expand at their current rate, pepper prices will suffer as supply exceeds demand in the future.

    To reduce these risks, the VPA has advised farmers to stop growing pepper in unsuitable soil and switch to alternative crops to provide an additional income.

    Despite these warnings, farmers are continuing to expand their pepper plantations.

    The reason is that a hectare of pepper can earn farmers at least VND240 million ($10,600), while the same area of coffee will make them only VND100-150 million.

    In addition to this, Vietnam’s pepper industry also faces food hygiene and safety concerns in foreign markets.

    For example, in order to export 40,000 tons of pepper to the European Union, Vietnamese firms need to import 22,000 tons of clean pepper from Cambodia, Malaysia or Indonesia to process and export.

    Similarly, in order to ship the product to Japan, local companies must import raw pepper to process first.

    This is because in the past, Vietnamese pepper has been found to contain excessive chemical residue.
    To address the issue, Vietnamese and foreign firms are working with farmers to clean up the plantations.

    According to experts, organic pepper is slowly catching on, which may mean lower productivity but should ensure higher prices in a more stable market.

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  • India to become the gateway to the food industry

    India to become the gateway to the food industry

    India is all set to become the global manufacturing hub of the food industry, and to establish its presence and showcase its capabilities, the World Food India 2017 is being held in New Delhi, from 3rd to 5th November 2017. World Food India will be the largest gathering of investors, manufacturers, producers, food processors, policy makers, and food corporations from the global food ecosystem. The three-day event is being organised by the Ministry of Food Processing Industries, Government of India.

    World Food India intends to establish global linkages and facilitate foreign investment in India’s food retail market that services the needs and rising aspirations of the country’s 1.3 billion consumers – a ready market. The food processing industry accounts for over 9% manufacturing GDP and has emerged as critical component of India’s economy.

    World Food India aims to provide opportunities for both investment and trade in the food processing sector for leading Indian and international companies. Encompassing the entire food spectrum from production to consumption, World Food India is looking at creating a better sourcing environment, thereby enabling higher returns for farmers, creating employment, and fostering entrepreneurship. The three day mega event ‘World Food India’ will provide a platform to showcase offerings and services along the food value chain which includes production, processing, packaging, technology, equipment, storage, logistics or retail.

    Global food corporations, MSMEs & everyone connected directly or indirectly to the food sector are showing tremendous interest in World Food India 2017. The cuisines of India are inherently diverse in nature as each state in India come with a unique palate & offering. The World Food India aims to bring all the different states of India, as well as the global powerhouses in the food industry, together – for the first time.

    World Food India will have exhibitions on the food processing industry, a Global CEO conclave, a country session, a state session, and conferences. One key attraction of the event will be the Food Street which will showcase food delicacies of the various states of India and as well as international cuisine. More details on World Food India 2017 can be found on this website.

  • Starbucks Caffeinates Plans for New Stores in Japan

    Starbucks Caffeinates Plans for New Stores in Japan

    Starbucks Coffee Japan plans to open new outlets at an accelerated pace while shifting its focus from urban centers to suburban areas. Over the next three years, the company will spend roughly 15 billion yen ($146 million) to open 260 new coffee shops, which is 60% more than were opened during the last three years. Starbucks now operates some 1,000 stores in Japan, of which around 10% are located in suburban areas along main streets.
    Now that the urban market has become saturated, and even convenience stores have become rivals offering quality coffee, the company is looking to expand outside cities. The plan is to open 75 new outlets in fiscal 2014, 85 in fiscal 2015 and 100 in fiscal 2016. These will be located mainly along arterial streets in suburban areas and near residential districts.

    The stores will offer both seating and drive-thru windows, and they will be open longer hours than the urban stores, which close at 11 p.m. Some of Starbucks’ existing suburban outlets are open until 2 a.m. and remain busy until closing.

    In a typical day, the stores capture business from people on their way to work in the morning, seniors at lunchtime, housewives in the afternoon, as well as from workers and students returning home at night. Rents are cheaper than in the city, and sales tend to be 30-40% higher, with the average suburban store generating annual revenue of 150 million yen.

    But Starbucks is not alone among companies making the push outward to suburban markets, where coffee shops are filling the gap left by the demise of roadside family restaurants. For example, Hoshino Coffee, owned by Doutor-Nichires Holdings, is opening more coffee shops with sit-down service, hand-dripped coffee, and sweet and savory foods. Thirty-five new branches are planned for the current fiscal year. And Komeda is opening coffee shops with brick walls, wooden tables and other cozy touches.
  • Vietnam’s fruit, vegetable exports growing

    Vietnam’s fruit, vegetable exports growing

    Minister of Agriculture and Rural Development, Nguyen Xuan Cuong said the export potential of fruits and vegetables is huge, with the products key to restructuring the sector.

    Cuong said the ministry has focused on promoting the use of modern technologies in agriculture, aiming to create quality products, thus improving the sector’s competitiveness and expanding export markets.

    “Exports of fruits and vegetables will grow in the upcoming time. The sector should develop association models for investing in hi-tech agriculture. Businesses should work with farmer collectives to establish concentrated raw material areas,” he added.

    The minister said growing the agricultural sector, and fruits and vegetables in particular, would largely depend on export value and changes in the market.

    However, if businesses and farmers build production chains of safe fruits and vegetables together with hi-tech agriculture development, the export target of US$3 billion this year will be reached, he said.

    Exports of fruits and vegetables hit $1.38 biliion in the first five months of this year, a year-on-year increase of 38 per cent.

    China, the US, Japan and South Korea markets accounted for nearly 84 per cent of total vegetable and fruit export value. Vietnamese fruits and vegetables have been exported to about 60 markets globally.

    Many farmers have applied the safe agricultural production processes of VietGap and GlobalGap, giving Vietnamese fruits and vegetables a foothold in foreign markets.

    According to the ministry of agriculture, restructuring of the sector is going well, with export structure focused on commodities such as coffee, rubber and fruit.

    Dinh Cao Khue, general director of Dong Giao Food Export Company said their products have been exported to 50 countries thanks to a closed supply chain of materials, collection, processing and trading.

    “We have invested in specialised and concentrated material areas. Product quality should be priorities for both local consumption and exports,” Khue said.

    Experts said export markets such as the US and Europe have potential but also high risk as they have strict requirements on product quality, so domestic producers should strictly follow health and safety requirements.

    Vu Kim Hanh, chairwoman of the Vietnam High-quality Product Association said local agricultural producers should change their mindset in production and organising supply chains. Each segment should have standards to satisfy export markets’ requirements.

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  • 4Fingers to open first delivery-dedicated outlet

    4Fingers to open first delivery-dedicated outlet

    Seeking to cash in on the rising demand for food delivery, crispy chicken restaurant chain 4Fingers will soon open its first delivery-dedicated outlet in the Clementi area. The Singapore brand also plans to handle some of its deliveries in-house to help mitigate the profit leakage from selling through food delivery companies, its Chief Executive Steen Puggaard said in an interview.

    The new thrust is expected to result in shorter delivery times while reaching out to more customers. The new outlet will be about two-thirds of the size of its current shops, but will also have a small shopfront and some seats for eat-in customers. There are plans to open more of such outlets across Singapore in the next one or two years.

    “We recognise that home delivery is only going to grow, so we need to make sure that we match our business model to the way that people are changing in spending their money,” Mr Puggaard said. “We see that as an important change in our strategy to accommodate the fact that people will be eating more and more food at home.”

    The west side of the island was chosen because it was easier to get a good location and the area has seen strong demand in home deliveries, he said. Home deliveries have helped the business by “a lot” and have been growing “faster than anticipated,” he added.

    4Fingers has seen its delivery segment grow to become a seven-digit business this year after the service was introduced early in 2016. The segment can take up to 30 per cent of a shop’s volume. The service is provided only in about half of the fried chicken chain’s stores, mainly those in the central and western areas of Singapore.

    At present, most of 4Fingers’ home deliveries are carried out by Foodpanda. It has recently joined Deliveroo and is also in talks to sign up with Ubereats. Depending on traffic and weather conditions, orders via the food delivery apps usually to take about 30 to 45 minutes to reach the customer.

    However, selling through these food delivery companies means low or even no profit margin for 4Fingers. “Food delivery comes with an additional cost – the commission for delivery companies. All of a sudden, the revenue we are generating with our food is weighed down by the additional cost,” said Mr Puggaard.

    “Companies like Foodpanda, Deliveroo, Ubereats: they basically deal with the customer, then they will tell us what we need to supply, then they will take care of the rest and send us a cheque once a month. We now say that that model does not really work for us. So we are saying, while we are opening up our first delivery-skewed kitchen in the west of Singapore, we will also test our handling of orders from customers and the payment, then using a third party to deliver food to people’s homes.

    “Right now, the cost structure linked with home deliveries actually doesn’t make us any money. It’s something we do for our customers because they want to eat 4Fingers. As long as we don’t lose money, we have to go along with it. But because it has now grown to seven digits this year, we say now is the time for us to begin to find a way where the cost structure makes more sense for us,” he said.

    Mr Puggaard has more than 20 years’ experience in food and beverage, much of it in Singapore, where he is now a Permanent Resident. The Dane began his F&B career with McDonald’s in 1996 in Eastern Europe before coming to Singapore in 1999 to run the regional marketing for the brand. He then made subsequent moves to Burger King and Les Amis.

    Mr Puggaard joined 4Fingers in February 2013 after the previous owners reached out to him to help expand the brand that made its debut in 2009. However, he left after only seven months because he felt the company was not structured for growth then. He rejoined the company in 2014 after a change in ownership and also took a 3 per cent stake in the venture.

    Since then, 4Fingers has expanded to 12 outlets across Singapore, and several more in Malay-sia and Indonesia. Revenue has grown from about S$2 million to S$30 million from its owned outlets, excluding franchised outlets. A majority of the stores are owned by the company. Besides quality food, what makes the brand stand out for eat-in customers is the dining experience, said Mr Puggaard. 4Fingers focuses on details such as design, lighting and music as well as service to enhance the overall experience.

    Even while the business grows in Singapore and the region, 4Fingers is looking to expand fur-ther afar: It will be launching in Australia in the next few weeks. It is also scouring locations in the US and expects to open one outlet there by the end of the year, said Mr Puggaard. There are also plans to open outlets in the United Kingdom and Germany in the first quarter next year.

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  • Vietnamese street food favored over foreign fast food chains

    Vietnamese street food favored over foreign fast food chains

    Several Burger King shops in HCMC and Da Nang have closed, while Lotteria has also shut down ineffective shops. Other giants have not closed many of their shops, but they are cautious developing their chains.

    McDonald’s, when setting foot in Vietnam, stated it would open 100 shops within 10 years. However, after three years in Vietnam, the giant has opened only 15 shops.

    A representative of Lotteria admitted that competition in the fast food market is getting stiff with many foreign and domestic brands.

    Some brands have shut down shops because their menus were not suitable to Vietnamese tastes and the prices were not competitive.

    Nguyen Huy Thinh, managing director of McDonald’s, said it was normal for fast food brands to shut down unprofitable shops, while a representative from Burger King said the chain’s business has been going well with a two-digit growth rate.

    However, Hoang Tung, a branding expert, blames the failure of some fast food chains on the difference between the food and Vietnamese tastes.

    Burger King, for example, develops products based on burgers as the core product.

    “Vietnamese still prefer banh my (sandwich) and banh my is cheaper than a burger,” Tung said. “This is why the burger chain expansion has slowed down, while banh my chains have been booming.”

    Tran Anh Tuan, CEO of Pathfinder, a consultancy firm, also said that some fast food chains are not positioned well in the domestic market, and products don’t change regularly. And the price is too high compared to consumers’ income.

    “Fast food, in foreign countries, is generally for the masses. But in Vietnam, fast food chains target high-income earners,” he explained.

    Fast food… and rice

    While western-style fast food chains are not thriving, Vietnamese and Asian food brands are doing well.

    Anh from Pathfinder said that many Japanese and Korean food chains have appeared i which are closer to Vietnamese tastes.

    “Korean fried chicken chains have been developing rapidly because they have reasonable prices and fit Vietnamese tastes,” he said.

    In the past, only a few fast food chains sold Vietnam rice, but now it is a major dish on menus.

    MOIT has granted licenses to 148 foreign brands to enter the Vietnamese market in the last eight years.

    This includes 42 fast food, bakery, coffee, beverage and restaurant brands, accounting for 43.7 percent of the total.

  • Food delivery and out-of-home dining are thriving in China

    Food delivery and out-of-home dining are thriving in China

    China is one of the world’s largest e-commerce economies, but that doesn’t mean people are only opting to consume in the comfort of their homes.

    In fact, a study by consultancy Bain and Company and Kantar Worldpanel found that the growth rate of FMCG (fast-moving consumer goods) home consumption is only tepid compared to the strong growth of dining out.

    According to that 2017 China shopper report, released on Tuesday, dining out and food delivery are seeing robust growth with Chinese consumers, who have traditionally cooked at home.

    The results revealed that while the value of food purchased for in-home meal preparation grew by only 3 percent annually from 2013 to 2016, food delivery rose by 44 percent and dining out grew by 10 percent over the same period.

    “You can still have family lunches and dinners at home but there is so much variety of delicious food that is available at 30 minutes from where you live or where you work, why would you bother cooking at home?” said Bruno Lannes, partner in Bain’s Greater China Consumer Products Practice.

    The study analyzed responses from a panel of 40,000 households and 4,000 individuals in tier 1 and tier 2 cities.

    The report’s findings this year are a continuation of a “two-speed” trend identified last year, said Lannes.

    In the case of dining, it’s “high-speed dining out and delivery versus low-speed home cooking” and this divergence will present new opportunities and strategies for food businesses, the report added.

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