Health through food is becoming a little less negotiable in the minds of the consumers, Piyush Patnaik, managing director, Cargill oil business in India said.
Consumers are looking for more health and wellness quotient in their baseline staples. Secondly, within the micro-indulgence space as well as the home-baking trend—where consumers use specialized ingredients such as fats and baking powder—demand has grown on the back of consumers experimenting with cooking more dishes at home, he said.
“Over the last few quarters, we have relaunched our NatureFresh Acti-Heart and we have also doubled our footprint on our Gemini Rice Bran business. We are also expanding on our Olive Oil portfolio,” Patnaik said.
More such products are in the pipeline for brands Gemini and NatureFresh.
“In the micro-indulgence space, our traditional brands Rath Vanaspati oil—is finding huge traction in many parts of India for making traditional dishes and sweets at home that they were probably consuming outside,” he added.
Its specialty baking products such as NatureFresh Professional Lite (fat) have seen a surge in demand on the back of increased in-home cooking. “So both within the health and wellness space and in the home indulgent space—we are making further additions,” he added.
Cargill’s branded oils reach over two lakh outlets in India. It competes with the likes of Marico’s Saffola and Adani Wilmar’s Fortune cooking oils.
In-home consumption of essentials picked pace in the aftermath of the pandemic, especially during the first wave, benefiting companies that sell flour, pulses, spices, tea, snacks, cookies, and edible oils.
In the last quarter, however, demand for staples was largely “normal” and with limited disruption to supplies, Patnaik said.
“We saw normalised demand. Having said that we didn’t see any demand disruption in the second wave. From June onwards we are seeing a reasonable better situation on demand all across,” he said.
Cargill’s oils business draws half of its sales from the retail or branded consumer edible oil business while the other half from the business-to-business sales which comprises of sales to large restaurants, hotels and large packaged foods companies.
Meanwhile, demand from restaurants and the food services industry has remained slow. Patnaik said that food services continue to remain a “pain point”, especially across catering and banqueting services.
“So categories like noodles, biscuits etc are industries that are growing and we are obviously large suppliers to those industries, so we are also growing with them. However, instant consumption products like finger snacks and chips, etc, those are not growing so well, at least not in the last 12 months. So that part of the business is a little sluggish,” he said.
India has also been witnessing heavy food inflation—this is especially true for edible oils. Nearly 60% of the edible oil consumption in the country is met through imports.
Last month the government announced several measures to arrest high prices of edible oils, including cutting basic import duty on crude palm oil and refined palm oil.
Patnaik said that while this reduced the cost of import for the Indian players, how that translates into consumer price depends on what happens to prices in the global markets.
“So if the cost has gone down by ₹5,000, and the global markets go up by anything more than ₹5,000, then the consumer prices will not move down,” he said. “But if it doesn’t move up, then obviously the consumer prices will go down in time, in sync with the reduction in duties,” he added.
Meanwhile, he said edible oil prices have been cooling off over the past four to eight weeks.
“Our pricing policy is very transparent and competitive. We always maintain the best value price equation possible. If I look back the last four to eight weeks’ time, the prices have come down for all the edible oil players, including us, on the retail side,” he said.
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