Future Group has launched India Food Park, an avant-garde, large-scale food processing facility, under PPP model in Tumkur, Karnataka that integrates entire food value chain from farm to fork under the same roof. While the group stands to gain immensely, it will also offer great value to farmers, other food manufacturers including MSMEs, agri-entrepreneurs, traditional as well as modern retailers, and eventually consumers.
Founded over 20 years ago, Future Group, India’s ace business conglomerate, has been a trailblazer in its own right ever since. Today, apart from operating well-known retail chains namely Big Bazaar, Central, Foodhall, Planet Sports, Brand Factory, Home Town and eZone, its allied businesses include lifestyle fashion, food and FMCG, insurance, logistics infrastructure, supply chain, and skill development. From the outset, Future Group has been focusing on developing delivery formats, creating retail realty, making consumption affordable for every consumer segment – for classes as well as masses. Food, one of the biggest consumption categories in India, invariably finds a prominent place in its business portfolio. The group’s food-led FMCG business, operated by its subsidiary Future Consumer Enterprise Ltd (FCEL), spans sourcing, processing, manufacturing, brands, retailing and distribution of food products.
Stepping up to a bigger game, FCEL has now come up with “India Food Park” (IFP) in Tumkur, near Bengaluru city in Karnataka under public-private partnership (PPP) model. It is a first-of-its-kind integrated food park to be commissioned and has been developed with close partnership and support of Union ministry of Food Processing Industries and the state government of Karnataka. Recently inaugurated by Prime Minister Shri Narendra Modi, IFP integrates the whole food value chain– from farm to fork– under the same roof with exceptional infrastructure and technology. The facility has already started production.
Kishore Biyani, Group CEO of Future Group, states, “India Food Park is an ambitious project that has the potential to aid thousands of farmers, directly employ 10,000 people and quadruple the value of the food products that enter through the gates. It is one giant Rasoi (kitchen), where the golden harvest of Indian farmers will find new value in the hands of Indian consumers.”
FCEL-owned India Food Park is a sprawling 110-acre world class facility which boasts of cutting edge cold chain infrastructure, pulping and IQF lines, spiral freezers, mechanised sorting facilities, packaging and quality testing centers. It also houses rice, spice flour mills, grain silos, warehouses and R&D centers. Committed to environmental sustainability, IFP has built up rain water harvesting capacity of 4.5 million metric tons.
Notably, the park has 7500 square meter of earmarked MSME facilities for entrepreneurs and food producers, a plug and play facility, with flexibility and inbuilt modularity, and packaging units. Several home-bred and multinational companies will also be establishing own production facilities at the park. After completion, IFP will have close to 50 units for food processing and exclusive plants for manufacturing of Indian savories and snacks, frozen food products, chutneys, pasta, dry fruits and nuts, chocolates, etc.
For procurement of agri-produce, collection centers are being established a number of locations as in Kolar, Chikkaballapur, Doddaballapur, Chamarajanagar, Chikmagalur and Shimoga to facilitate farmers to directly sell their produce to the units operating from the park. Products developed at IFP will be retailed via Future Group’s retail formats viz. Big Bazaar, Food Bazaar, Foodhall, KB’s Fairprice, Big Apple and Aadhaar.
They will be also sold through general trade as well as other modern retailer platforms.
VALUE FOR ALL
Experts believe that public–private partnership is the way forward to improve quality as well as affordability of food in a developing nation like India. India Food Park-like initiatives are also expected to provide the much needed boost to country’s food manufacturing industry. Additionally, it will help tame supply chain costs and wastage, thereby making the entire food value chain more robust and efficient. The common infrastructures at IFP will benefit medium and small scale enterprises as well as foodpreneurs with limited capital but seeking state of art manufacturing facilities. Echoing premier Modi’s “Make in India” sentiment, Future Group will also encourage entrepreneurs to set up manufacturing units at IFP.
As per FCEL, India Food Park aims to positively impact the livelihoods of farmers, manufacturers and agri-entrepreneurs in Tumkur and far off. It will generate employment for almost 10,000 people in due course. It is anticipated that sizeable share of the produce from the park will be exported overseas, thereby bringing in more revenues.
Alongside farmers, manufactures and marketers, India Food Park project offers a lot of value to end-consumers as well, in terms of product quality, variety and availability. IFP, being a fully automated facility, will produce food complaint with highest quality standards. Utilizing its mechanized sorting, grading and thermal ripening facilities, it will offer, for the first time in India, packaged fruit and vegetables that have unfailing high quality and hygiene, are free of ripening chemicals and available through the whole year. What’s more, the food park will help launch new food products that cater to local palate and food traditions. Adding to it, the large-scale freezing and cold chain capacity will enable introduction of more frozen and ready-to-eat food varieties in the country’s market.
FUTURE GROUP’S GAINS
India Food Park is a natural fit into Future Group’s growth strategy. Since FCEL is an integrated food and FMCG company, therefore it stands to gain immensely from the project. Shedding light on the implications for FCEL, Biyani explicates, “India Food Park will substantially enhance FCEL’s ability to drive innovation and product development in food products and create a captive production capacity for the company’s brands. This integrated food park will help us reduce supply chain costs and wastage across the food value chain besides improving quality and hygiene to create food products in India that compares favorably with the best in the world.”
FCEL believes that it has the real potential to be the largest FMCG company in India. Through India Food Park, the company not only gets own captive manufacturing capacity for in- house private food brands but it will also augment innovation and product development in its food products. As such, improvement in quality standards and line up of innovative food products will increase company’s brand value and overall profitability.
Food and food products is one of the largest consumption categories in India offering vast business scope. While FMCG retail is low margin business, the manufacturing companies generally enjoy margins ranging between 8% and 18 %. Hence, the group’s foray into food processing, manufacturing and branding will help it tap those margins as it will sell its products in own chain stores besides traditional shops and modern retailers. Importantly, the food park will allow FCEL to focus more on selling of own merchandise instead of third party offerings. In the coming years, Future retail outlets are likely to stock 70 to 80 percent of their food products from own supply chain.
According to reports, Future Group has thus far invested Rs 250 crore (approx.) in the last four years to develop the first stage of India Food Park in Tumkur. It is said that to fund subsequent phases of development, investments to the tune of Rs 1,000 crore will be required over a period 3 to 5 years. Going forward, Future Group is betting high on food processing sector and mulling opening more food parks. The second facility will be set up in Kolkata, West Bengal to cater to eastern region. The group is contemplating opening parks in couple of other states as well.