Amul mulls foray into frozen vegetable market

Madhvi Sally, ET Bureau Sep 21, 2011, 04.02am IST

AHMEDABAD: The emerging frozen vegetable business is drawing the attention of FMCG majors. Cooperative giant Amul responsible for White Revolution in the country is assessing commercial viability to venture into frozen green vegetable business.
National Dairy Development Board-controlled Mother Dairy is the market leader in frozen peas with its Safal brand. After their fierce fight on the dairy front, Amul and Mother Dairy will now lock horns in the vegetable market.
Amul Dairy, the flagship of the Rs 9,774-crore Anand-based Gujarat Cooperative Milk Marketing Federation, has launched bakery products in the last couple of years and is aiming at strengthening its presence beyond traditional dairying in the processed food business.

A senior official told ET, "Amul Dairy is technically equipped to freeze and pack vegetables at its paneer unit. It is capable of launching frozen peas, corn and mixed vegetables anytime it decides to go ahead. Amul is assessing commercial viability of its project for vegetables besides expanding its bakery business." Amul Dairy markets liquid milk in Gujarat, Maharashtra and West Bengal and clocked a turnover of Rs 2,111 crore during the fiscal year 2010-11, up by 25% over the previous fiscal.

The total processed annual capacity of green peas in India is at 1.5 lakh tonne. Major players in the sector include Mother Dairy, McCann, Godrej Tyson Foods, Sumeru Food, Allana, Welga, Vadilal and Pagro Foods.
Mother Dairy business head (horticulture) Pradipta K Sahoo said the peas market was annually growing by 20-25% over the last three years. "Steady demand from consumers, year-around availability and considered to be closer to fresh product with nourishment value are expected to give a boost to the frozen vegetable market," he said while adding that Safal had a market share of 50% in organised retail.
Thanks to a growing demand from the hospitality sector, many small players are operating in Punjab, Himachal Pradesh and Uttarakhand. "With the processing of peas taking only two months (from December to February) a year, the units can be used to process vegetables like cauliflower, baby corn, carrots and other product development in frozen snacks," said Sahoo.
Ahmedabad-based Vadilal, one of the leading ice-creams manufacturers in the country, invested Rs 15 crore on food processing units in 2010 with a 10,000-tonne capacity. The company sells its products across northern and western India with demand coming from tier-1 and -2 cities. "Demand for frozen vegetables is increasing in the country and we may even cater to tier-3 cities provided there is a 24-hour power backup," said Vadilal Industries MD Rajesh Gandhi.
However, the biggest challenge that the companies face is reaching new regions due to lack of cold chains and erratic electricity supply.