Sensex marginally up; auto up, FMCG down

    Indian equities opened flat to positive on Thursday, in view of September F&O expiry and ahead of the . The indices dipped briefly due to negative pressure from Asian markets. 
     Leading the gainers were auto shares, followed by metals, power, and healthcare. Losers were from the FMCG and oil & gas space. 

     “Today, the Indian markets could open flat to marginally up and trade in a range ahead of derivatives expiry. 20,100 on the Sensex is a crucial level to breach for further upsides. FMCG, Metals and Oil & Gas stocks could underperform today,” said HDFC Securities 

Tata-Pepsi JV to first focus on affordable packaged water

      The proposed joint venture between Tata Global Beverages (TGB) and PepsiCo, announced this April to develop beverages in the health and wellness space, is likely to begin with developing affordable water.

     Discussions are on, say sources, on the possibility of pricing a one-litre bottle of water below Rs 10, perhaps even around Rs 5. The joint venture may also offer fortified water and low-priced beverages in the earth and wellness space to attract health-conscious customers.   

        The joint venture, say persons in the know, will not develop products related to tea, as PepsiCo already has a tie-up with Unilever on tea beverages across the globe. It is expected to cover areas other than India, too.

           The Indian packaged water market is already worth Rs 1,500 crore to Rs 2,000 crore and constitutes 15-20 per cent of the overall packaged beverage industry, which sees around Rs 12,000 crore of annual sales. The water market is growing at around 20 per cent yearly, but margins are very low, as many companies do heavy discounting in the retail market. The market is divided into two distinct segments, institutional and retail. 

FMCG cos focus on special products for wider rural penetration

In a bid to penetrate deeper into the rural areas, FMCG giants, including Britannia, GSKCH and Nestle are developing specialised nutrient-enriched products to cater to malnourished population. 

"Many people in India lack key nutrients like iron, iodine and Vitamin A...and fortification of food will help in overcoming this problem. It is our clear vision that we want to develop fortified affordable products for Indian consumers," Nestle Global Head (R&D) Klaus Zimmermann said. 


"We have developed an energy snack, which is highly fortified with iron, required to give to those children who are highly deficient in iron," Britannia Industries Managing Director Vinita Bali said. 

Britannia has tied up with the Tamil Nadu and Pondicherry governments to supply these biscuits as part of various mid- day meal programmes in the region. 

FMCG cos hire in small towns to fire up growth

• Small towns are emerging as the new big hiring zones, as consumer goods companies drive deep into the country. Companies are hiring field staff in areas like Kalpa in Himachal Pradesh, Mangaliya in Madhya Pradesh, Kota in Rajasthan and Shirdi in Maharashtra to sell products as diverse as shampoos, edible oil and even pizzas.
• The triggers are a combination of a good monsoon this year, farm-loan waivers, higher disposable incomes in rural India, media penetration, low-priced unit packs of 5 and 10 and government programmes like the Mahatma Gandhi National Rural Employment Guarantee Scheme.
• Consumer goods giant Hindustan Unilever is hiring 25,000 ‘shaktimaans,’ or sales and field staff, to sell its products in nearly 1.5 lakh villages, while Dabur India intends to hire 200 ‘feet on street’ and indirect employees through its stockists in villages and small towns.
• “Our share of top line from semi-urban and rural markets is touching almost 50%. Naturally, we are looking at these consumers very closely,” says Dabur’s vice president-HR V Krishnan.

Reliance Brands eyes acquisition, plans own label

Reliance Brands, a subsidiary of Mukesh Ambani-led Reliance Retail, is scouting for acquisition in the domestic market, besides launching its own luxury label in the next 18 months.

The company, which at present predominantly focusses on men's range, plans to focus on women and kidswear categories.
     
"We have become serious about launching our own brand and have already started work on that and dedicating resources on the same. If everything goes as planned, in the next 18 months it should get going," Reliance Brands President and CEO Darshan Mehta told PTI 


"In the next two years we are likely to announce tie-ups with two more international brands," he added without mentioning the names.
    
On the expansion of the existing labels, Reliance Brands plans to have three more Diesel stores, 10 outlets for Timberland, five outlets for Zegna and four stores for Paul & Shar  .. 

From beverages to noodles, its expansion time for FMCG firms

Some of the country’s leading FMCG companies – they include Nestle, Coca-Cola and Tata Coffee – are investing over Rs 1,800 crore in the next few months to expand capacity or for inorganic growth, 
       Nestle India is investing Rs 950 crore to set up two units to manufacture instant noodles and infant foods in Karnataka and Haryana. The Karnataka unit will be up and running in the first quarter of next calendar year, while the Haryana unit will begin commercial production by the end of next of next calendar year. It also plans a fifth facility to manufacture instant noodles, which will be put up for approval in the next two months   

LINK...http://www.business-standard.com/india/news/from-beverages-to-noodles-its-expansion-time-for-fmcg-firms/409010/

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