Simon George, president, of Cargill India, stated that the company is anticipating double-digit growth in its financial year ending May 2023, and now it has forayed into the South Indian market with its manufacturing facility in Nellore, Andhra Pradesh. The company has invested $35 million in the new unit to grow its market in the region.
According to Cargill, its annual profits stood at $165 billion for the fiscal year ended May 2022, and for that reason, India is becoming an important market globally and will play a large role in its growth strategy for the Asia-Pacific (APAC) region.George said, “Our main purpose remains to be able to connect the staples to farmers to produce products for the consumers… “We will offer innovative food solutions that are based on global trends and insights; however, we will modify them as per the needs of the Indian consumers.”
Demand from tier 2 and tier 3 regions in India has increased in comparison to last year, according to George. The company has seen a significant shift in consumer preferences and has also observed a spike in demand across organized trade.
According to the president, the market is characterized by high volatility and unpredictability; the company seeks strong relationships with its consumers and plans to unlock the entrepreneurial efforts of customers and channel partners. The company said it has reorganized as a large food ingredient business with its three businesses—edible oil, cocoa & chocolate, and starches and sweeteners—coming together.
The food corporation took this step to scale its operations in India and meet the consumer’s preferences and demands. Currently, it has 13 manufacturing units in India, out of which 6 are from its food ingredient segment, including edible oil, starch, and cocoa chocolate.
The company is a market leader in the retail edible oil sector across the north and west of India. Going ahead, it plans to deepen its footprint in these high-value key markets.
Cargill will also be expanding its presence in emerging channels, including big e-commerce portals, and in terms of geographical expansion. It will concentrate on becoming a national player by expanding into the southern and eastern parts of the country.
The company is refreshing its edible oil brand, Gemini. On Thursday, the company launched its sunflower oil brand Gemini Pureit to expand its presence in the South Indian market. This will be available to consumers across stores in states including Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu.
The food giant has plans to do a similar kind of campaign for its edible oil line, Nature Fresh, in the coming months. Focusing on product innovation, the company opened its innovation lab in India last year and has similar centres in Shanghai, Beijing, Singapore, and other parts of the world like Europe, America, and Latin America.
From a B2C perspective, this quarter, the company’s three segments—the consumer retail market, the food service market (HoReCa), and the bakery segment—saw strong sales growth during the festive and wedding seasons. It expects this demand to continue until March 2023.
Inflationary pressures and the value proposition On inflationary pressures, George said these are across the world, and there can be fluctuations in demand and supply that may impact the pricing of products. So, the company is planning to focus more on understanding the supply chain.
George also said that resilience in the food system is about being able to be more innovative or looking at different ways to produce a product that can be affordable to consumers. Organized companies that work on food safety and focus on quality will tend to grow in markets like India.
As consumers are opting to purchase quality branded products more than loose products, Cargill aims to bring a value proposition to the consumer because that is one way we can win by both volume and margin. As there is a shift taking place from the unorganized sector to the organized sector, the company is looking forward to a long-term strategy and sustainable growth.