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Indian Condiments and Pickles Opportunities for Commercial Production in Australia

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Indian Condiments and Pickles Opportunities for Commercial Production in Australia Indian Condiments and Pickles Opportunities for Commercial Production in Australia by Suku Bhaskaran Australian Food Marketing Centre, Victoria University of Technology A report for the Rural Industries Research and Development Corporation October 1999 RIRDC Publication No 99/138 RIRDC Project No AFM-3A @1998 Rural Industries Research and Development Corporation All rights reserved. ISBN 0 642 57984 9 ISSN 1440 - 6845 Indian Condiments and Pickles – Opportunities for Commercial Production in Australia Project No: AFM-3A Publication No: 99/138 The views expressed and the conclusions reached in this publication are those of the author and not necessarily those of persons consulted. RIRDC shall not be responsible in any way whatsoever to any person who relies in whole or in part on the contents of this report. This publication is copyright. However, RIRDC encourages wide dissemination of its research, providing the Corporation is clearly acknowledged. For any other enquiries concerning reproduction, contact the Publications Manager on phone 02 6272 3186. Researcher & Contact Detail Mr Suku Bhaskaran Australian Food Marketing Centre Victoria University City Campus (C069) Level 10 300 Flinders Street MELBOURNE VIC 3000 PO Box 14428 MELBOURNE CITY MC VIC 8001 Phone: 03 9 248 1053 Fax: 03 9 248 1021 Email: [email protected] RIRDC Contact Details Rural Industries Research and Development Corporation Level 1, AMA House 42 Macquarie Street BARTON ACT 2600 PO Box 4776 KINGSTON ACT 2600 Phone: 06 272 4539 Fax: 06 272 5877 Email: [email protected] Website: http://www.rirdc.gov.au Published in October 1999 Printed on environmentally friendly paper by Canprint 2 Foreword This report reviews the opportunity to establish in Australia an import-replacing and export-oriented South Asian culinary products industry based on the produce of our new and emerging rural industries. The report indicates that a viable South Asian culinary products industry can be established and that this could enhance the viability of producing new rural crops such as mangoes, lemons, spices and ginger. This report, a new addition to RIRDC’s diverse range of over 400 research publications, forms part of our Asian Foods R&D program, and complements several other reports based on research that were commissioned by the Corporation. These reports have proven to be extremely popular with industry and government and have gone into numerous reprints. Most of our publications are available for viewing, downloading or purchasing online through our website: • downloads at www.rirdc.gov.au/reports/Index.htm • purchases at www.rirdc.gov.au/pub/cat/contents.html Peter Core Managing Director Rural Industries Research and Development Corporation 3 Acknowledgements The study was conceptualised and developed by the Australian Food Marketing Centre, Victoria University. The research was supported through a grant from the Rural Industries Research and Development Corporation. Dr Jeff Davis of the Rural Industries Research and Development Corporation provided advice, made valuable comments and editorial input on the draft report. Support from the Rural Industries Research and Development Corporation, financially and in many other forms, is gratefully acknowledged. The report is based on published trade literature and extensive field study. During the field study more than 250 key informants in food companies (manufacturers, retailers, wholesalers, importers and exporters) in Australia, the United Kingdom, India, Malaysia and Singapore were interviewed. We also received valuable input and advice from raw material suppliers, suppliers of machinery and equipment and building contractors. We would not have been able to complete this study without the support and guidance of these specialists. The principal researcher and author of the report was Suku Bhaskaran but some chapters in the report were prepared by or in collaboration with other persons. The authors and co-authors, where relevant, are acknowledged in the individual chapters. Ms Angelina Rizk was responsible for the word processing, layout and presentation of the report. While several individuals contributed to the preparation of the report, responsibility for the views expressed and for any errors, omissions and limitations is solely that of the principal author. Suku Bhaskaran 4 TABLE OF CONTENTS Page Foreword 3 Acknowledgments 4 List of Tables 8 List of Figures 8 List of Diagrams 9 About the Author 10 Executive Summary 11 Chapter 1: Background and Overview of Study 14 1.1 Background 14 1.2 Overview of Trends and Opportunities in Product Market 15 1.3 Relevance and Benefits 15 1.4 Methodology 17 1.4.1 Market Opportunity in Australia: Import Replacement 17 1.4.2 Evaluation of Export Opportunities 18 1.5 Overview of Report 19 Chapter 2: Market Trends in Australia for South Asian Culinary Products 20 2.1 Research Methodology 20 2.2 Market Characteristics and Trends 21 2.2.1 Sales Trends in Supermarkets 21 2.2.2 Brand Market Share in Supermarkets 23 2.2.3 Product Lines – Supermarkets 24 2.2.4 Sales in Other Market Segments 25 2.2.5 Market Size 26 2.2.6 Product and Brand Sales Mix in South Asian Stores and Food Service Outlets 28 2.2.7 Brand Market Share: Supermarkets, South Asian Stores & Food Service Segment 28 2.2.8 Distribution 31 2.3 Specialist Food Suppliers 31 2.4 Other Importers and Wholesalers 31 2.5 Consumer Market Characteristics 31 2.6 Shift in Principal Purchase Source by Ethnic Consumers 33 2.7 Processing Sector 33 2.8 Conclusions 33 Chapter 3: Product Market Trends for South Asian Culinary Products in the United Kingdom 37 3.1 Introduction 37 3.2 Methodology 37 5 3.3 Market Overview 37 3.4 Market Segments 39 3.4.1 Food Service Markets 39 3.5 Retail Markets 41 3.6 Manufacturers 46 3.7 Margins and Competition 50 3.8 Advertising 51 3.9 Conclusions 52 Chapter 4: Case Study, Patak (Spices) Ltd - The Rising Star 54 4.1 Authentic Origins 55 4.2 Key Ingredients for Success 56 4.3 Authentic and Accessible 58 4.4 Patak’s Around the World 61 4.5 Indian - Not Ethnic 62 Chapter 5: Case Study, Sharwood’s - The Next Challenge 68 5.1 Colonial Beginnings 69 5.2 The Ethnic Niche Expands 71 5.3 Intense Rivalry in the Authentic Indian Niche 71 5.4 The Foodservice Sector 72 5.5 Manufacturing and the International Scene 72 5.6 New Product Development 73 5.7 Promotion 74 5.8 The Future 74 Chapter 6: Market Characteristics – India, Malaysia and Singapore 82 6.1 Introduction 82 6.2 Research Methodology 82 6.3 Market Overview – India 83 6.4 Market Overview - Malaysia and Singapore 87 6.5 Conclusions 89 Chapter 7: Production Facility: Pre-Feasibility Report 96 7.1 Introduction 96 7.2 Assessment of Project Viability 96 7.2.1 Assumptions 96 7.3 Production Process 99 7.4 Profit Analysis 110 Chapter 8: Findings and Conclusions 154 8.1 Project Overview 154 8.2 Summary - Key Elements of the Project 154 8.3 Summary - Key Findings 155 6 Appendices Appendix 2.1 Names of Importers and Distributors 34 Appendix 4.1 The Regions and Cuisine of India 64 Appendix 4.2 Product Names and Descriptions 66 Appendix 5.1 Sharwood’s - The Beginnings of the Chutney Trade 76 Appendix 5.2 Magical TV Success for Green Label Chutney 77 Appendix 5.3 Sharwood’s Product List (Retail) 78 Appendix 6.1 Companies and Product Range 90 Appendix 7.1 Wholesale Fruit and Vegetable Suppliers 113 Appendix 7.2 Brief Technical Specifications, Processing Plant 118 Appendix 7.3 Building Plan 121 Appendix 7.4 Effluent Treatment 122 Appendix 7.5 Specifications - Equipment for Good Receipt, Processing and Packaging 127 Appendix 7.6 Specification - Service Equipment 131 Appendix 7.7 Raw Material and Ingredients for Manufacturing Pickle - 60 Tonnes 133 Appendix 7.8 Raw Material and Ingredients for Manufacturing Mango Chutney - 240 Tonnes 134 Appendix 7.9 Raw Material and Ingredients for Manufacturing Curry Paste - 180 Tonnes 135 Appendix 7.10 Raw Material and Ingredients for Manufacturing Curry Sauce - 60 Tonnes 136 Appendix 7.11 Raw Materials Requirements – Plant Capacity 540 Tonnes 137 Appendix 7.12 Raw Materials for Producing 60 Tonnes of Pickles 138 Appendix 7.13 Raw Materials for Producing 240 Tonnes of Chutney 139 Appendix 7.14 Raw Materials for Producing 180 Tonnes of Curry Paste 140 Appendix 7.15 Raw Materials for Producing 60 Tonnes of Curry Sauce 141 Appendix 7.16 Costs of Packaging Material 142 Appendix 7.17 Specifications, Spices 143 Appendix 7.18 Specifications, Other Ingredients and Additives 146 Appendix 7.19 Details of Built Up Areas and Estimated Cost 148 Appendix 7.20 Plant and Machinery 149 Appendix 7.21 Wholesale Price of Finished Products in Glass Bottles 151 Appendix 7.22 Costs of Fuel: Power, Water and Other Utilities 152 Appendix 7.23 Personnel Cost 153 Selected References 158 RIRDC Publications 159 7 LIST OF TABLES Table 2.1: Major Sources of Imports, South Asian Culinary Products, Chutney and Pickles 27 Table 3.1: Trends in Sales Turnover of South Asian Culinary Products, Retail Segment 38 Table 3.2: Curry Paste, Curry Sauce, Chutney and Pickles: Retail Turnover 43 Table 3.3: Curry Sauces, Sales Trends of Product Varieties 43 Table 3.4: Major Manufacturers - Product Category Sales, Market Share and Sales Trend 47 Table 3.5: Patak’s and Sharwood’s UK Business in South Asian, Accompaniments and Ingredients, 1997 and 1998 48 Table 3.6: Wholesale Price Comparison for Selected Product Lines: Sharwood’s and Patak’s 49 Table 3.7: Prices on Sainsbury’s Shelves, 15.7.98 50 Table 3.8: Comparison of Advertising Expenditure – Patak’s and Sharwood’s 51 Table 4.1: Fastest
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