packaged food
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Packaged food - Packaged food - Triggers for Triggers for innovationinnovation
Apurb SinhaMita Tanna
Executive PGDM (2010-11)
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HistoryHistoryAnything that is ready to be
consumed is called ready to eatIt would be a good thought to
refer to history books to see what people eat during the wars of Ramayana and Mahabharata
RTE food theory is ancient solution for today’s modern world
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HistoryHistoryAfter world war II in US. Problem of
not able to carry enough food to feed the soldiers
Introduction of canned goods with whole food.
Canned meats were replaced with lightweight preserved meats to save weight and allow more rations to be carried by soldiers carrying their supplies on foot
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In 1963, the Department of Defense began developing the Ready-to-Eat with modern food preparation and packaging technology along with outsourcing it to commercial companies
Post war, many commercial food companies were left with surplus manufacturing facilities
developed new lines of canned and freeze dried foods that were designed for use in the home
TV dinner from aluminum to microwaveable materials usually plastics
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Key featuresKey featuresConvenienceTime savingEnergy saving
◦During preparation◦During consumption
Effort saving
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NeedNeedIncrease in urbanization and change
in lifestyleShortage of timeIncreasing price of energyLack of cooking skillsImproved ability of cooking gadgetsIncreased demand of new tasteConvenienceFood safety and hygiene conditionTechnology advancesChanging social and economic
parameters
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Need continuedNeed continuedSocial Changes
◦Split and nuclear families◦Larger working women class◦Migrants◦Sense of freedom and independence
amongst teenagers and young adults◦Changing priories
Cultural exposure◦Media ◦Oversea travel◦ Increased exposure to west
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Need contd.Need contd.Income
◦Improved standard of living◦Increased disposable income◦Education◦Modern thinking
Change in life style◦Concept of breakfast at home is
fading◦Carrying lunch from home
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Need contd.Need contd.◦Working couple◦Lack of time in morning hours◦Availability of food next door◦Change in corporate culture. Meeting
and eating are not mutually exclusive activities now
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Commonly used phrasesCommonly used phrasesReady-to-eatReady-to-fryReady-to-serveReady-to-cook
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Types Types Military MREKid’s MealsSurvival kitsSpecial needsCare packages
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Primary stake holdersPrimary stake holders
Primary Stake Holder
Primary Stake Holder
Military
Military
Working
couples
Working
couples
Working Men/Wom
en
Working Men/Wom
en
Students
Students
Bachelors
Bachelors
TouristsTourists
Nomadics/
Mavericks
Nomadics/
Mavericks
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Secondary stake holderSecondary stake holderMarket researchersProduct designersProduct manufacturesPackage designerCover designersPolicy makersTransportersWarehouses – cold storages
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Secondary stake holdersSecondary stake holdersCold shelf manufacturersStore managersAC manufacturersAC operatorsStock keeperBuyers
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ClassificationClassificationReady-to-eat & Ready-to-Serve
◦Idlis, dosas, pav bhaji, meat◦pre-cooked sausages, ham, chicken
products, curries, chapattis, rice,◦vegetables like aloo chole, navratan
kurma, channa masala
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ClassificationClassificationReady-to-cook
◦instant mixes like cake mixes, gulab-jamun mix, falooda mix, ice-cream mix, jelly mix, pudding mix etc.,
◦pasta products like noodles, macaroni, vermicelli etc
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Factors affecting packagingFactors affecting packaging
Product characteristics◦The type of food and its composition,
moisture, fat, protein, flavour etc◦Form and shape of the product –
smooth, regular, irregular, with sharp edges etc.
◦Nature of the product – crisp, brittle, sticky etc.
◦major ingredients – oil based, fat rich,dry
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Packaging contd.Packaging contd.Spoilage
◦Biological spoilage due to micro-organisms
◦Abiotic spoilage due to chemical reactions like oxidation, hydrolysis and enzymatic reactions.
Environmental factors ◦like light, humidity and temperature.
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Value parametersValue parametersTime to cookTime to consumeStandalone productUse of energy (heating, cooking
etc)Requirement of cooking skillsVariety in tasteRegional varietyConvenienceFood safety & hygieneCalories consumed
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Value parameters contd.Value parameters contd.Shelf life - packagingCostPreservativesTaste and qualityEasy to carryLast touch (mother/wife)
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Value parameter mappingValue parameter mapping
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Distribution chain for small Distribution chain for small retailerretailer
Consumer
Source :Friend from HUL
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Distribution chain for Big Distribution chain for Big retailerretailer
Consumer
Source :Friend from HUL
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Markups/PricingMarkups/Pricing
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ProcessProcessBuy Plant
Buy Raw material
Manufacture
Supply
Plant manufactur
ers
Wholesalers
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Manufacturing- corn curlsManufacturing- corn curls
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Equipments requiredEquipments requiredFlour mixer
To mix corn meal with water to prepare the flour for Kurkure
Rotary dry extruder
To cook the corn meal and extrude the Kurkure from the die. The Rotary Die twists and curls the meal before extruding giving a uniform texture
Automatic Frying Machine
To fry the Kurkure in hot cooking oil. The uniform frying introduces the crunchy taste to the Kurkure
Cooling Conveyor To cool the fried Kurkure and reduce the temperature before packing
Automatic Seasoning System
To add required seasoning to the fried and cooled Kurkure to give the different flavors to them
Pouch Packing MachineTo pack the Kurkure into attractive printed pouches with gas flushing
Ref: Labh group of companies
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Equipments/Land CostEquipments/Land CostEquipments Description Qty
Unit price cost
Plant combo 500 kgs per 8 hr shift 1120000
0120000
0
Working table 1 5000 5000
weighing MachineTo weigh raw material and finished products 2 10000 20000
Big containersto do any intermediate processing if required 1 2000 2000
Equipment cost122700
0
Facility Rentarea 5000 sq ft(MIDC Turbhe) source: magic bricks 10000
Label & Packing material 750000
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Raw materialRaw material
Raw material required Qty Required
Per KG cost
Wheat flour 30Salt 10Seasoning powderEdible oil 50preservatives
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Human resourceHuman resource
Human resource requirementmanager 1Production/technical specialist 1machine operators 3labours/helpers 6
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Food act - GenerallyFood act - Generally1. if the article sold by a vendor is not of the nature, substance or quality
demanded by the purchaser and is to his prejudice, or is not of the nature, substance or quality which it purports or represented to be;
2. if the article contains any other substance which affects, or if the article is so processed as to affect, injuriously the nature, substance or quality thereof;
3. if any inferior or cheaper substance has been substituted wholly or in part for the article so as to affect injuriously the nature, substance or quality thereof;
4. if any constituent of the article has been wholly or in part abstracted so as to affect injuriously the nature, substance or quality thereof;
5. if the article had been prepared, packed or kept under insanitary conditions whereby it has become contaminated or injurious to health ;
6. if the article consists wholly or in part of any filthy, putrid, rotten, decomposed or diseased animal or vegetable substance or is insect-infested or is otherwise unfit for human Consumption;
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International LawsInternational Laws1. India - Prevention of food adulteration act, 1954 of India2. FDA – USA 19383. The Food Standards Act 1999 – UK4. The EU integrated approach to food safety - European Food Safety
Authority (EFSA) 5. Food Safety standards- ANZ
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Packaged Food – Laws Packaged Food – Laws IndiaIndiaFood Safety and Standards Act , 2006Prevention of Food Adulteration Act
(PFA) 1954 and RulesThe Standards of Weights and
Measures Act, 1976Standards of Weights and
Measures (Packaged Commodities) Rules, 1977
Meat Food Products Order, 1973 (MFPO).
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ClearancesClearances
1. Factories Act2. Labour Laws3. NOC from fire angle from Fire Dept.4. Approval of Building plan from industrial centre corporation / local
administration.5. Power Release Certificate6. Consent to Establish under Environment Act
Microsoft Office Excel 97-2003 Worksheet
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Recent trendsRecent trendsHealth consciousNo trans-fatNo sugar High grain foodsWellness foodNo preservativesOrganic foodNatural
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Govt. PoliciesGovt. PoliciesAutomatic approval of foreign equity
participation up to 51% Income tax rebate of 100% of profit
for five years and 25% of profits for the next years for packaging of foods
The National Policy aims to increase the level of food processing from 2% to 10% in 2010 and to 25% in 2025
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Govt. PoliciesGovt. Policies The level of institutional credit to be provided by banks
and financial institutions has been increased from US$ 17.41 billion during 2003-04 to about US$ 23.76 billion in 2005-06
Automatic approvals for foreign investment up to 100%, except in few cases, and also technology transfer
The government has decided to give a boost to research and development in this sector with its decision to set up the National Institute for Food Technology and Management in collaboration with Cornell University of the US.
Zero import duty on capital goods and raw material for 100 per cent export-oriented units. Custom duty on packaging machines reduced. Central excise duty on meat, poultry and fish reduced to 8%
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Govt. PoliciesGovt. Policies Income tax rebate allowed (100% of profits for 5
years and 25% of profits for the next 5 years) for new industries in fruits and vegetables besides institutional and credit support.
Government - developing 30 mega food parks which would cover the entire food processing cycle 'from the farm gate to the retail outlet'.
Government would provide a grant of US$ 12.53 million for each one, private investment to the tune of US$ 75.21 million would be encouraged in these parks.
The first five such parks would be set up in Punjab, Maharashtra, Andhra Pradesh, Jharkhand and the North-East region in the first phases.
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VALUE
1.Taste2.Quality3.Quantity4.Safe packaging5.Nutrition
CHANNELS
1.Procurement2.Manufacturing3.Distribution4.Retailing
RELATIONSHIPS
1.Supplier2.Vendor3.Retailer4.Distributor5.C & F agent
CLIENTS
REVENUE STREAMS
Retailers
Big
Small
COST CENTRES
Raw Materials procurement, Manufacturing,
(Outsourcing), SG & A, Marketing, Advertising
KEYPARTNER
1.Raw material suppliers
2.Machine supplier
3.Packet printer
4.Dealer
5.Retailer
6.C& F agent
KEYRESOURCES
1.Raw Materials2.Machines3.Labour4.Packaging
KEYACTIVITIES
1.Procurement of raw material2.Mixing of raw material3.Manufacturing4.Packaging5.Weighing6.Checking the standards
Osterwalder Business ModelsCustomer Acquisition
Wholesaler
C&F Agent
Retailer big small
Tasteing joints
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Primary SurveyPrimary Survey
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Customer Segmentation Customer Segmentation
• Young and busy• New flavors, products, quality, attractive packaging
• Old and choosy• Easy to digest, less spicy, natural flavor
• Price conscious• Value for money, smaller packs
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Preference of each Preference of each segmentsegmentTasteHandy packagingLong shelf lifeSafe packagingCost
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StrategyStrategyThree product range based on
segmentation
Old & Choosy◦Food based on Atta, vegetable and
cereals◦Decent packaging that highlights
nutrition values◦Promotion near community stalls,
temple
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Strategy contd.Strategy contd.Young & busy
◦New flavors like Italian, cheesy..◦Attractive and colorful packaging◦Taste trails at the malls and meeting
joints
Price conscious◦Smaller packs◦Less price as compared to rivals◦Decent quantity
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Health consciousHealth consciousParticipation – invite recipesPromotions as healthy foodsUse of natural ingredients like
vegetablePackaging - focus on nutrition
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Customer expectationCustomer expectationPrice is no longer a deciding
factor for most of the consumersConsumer delightReady to try more variations