Mccain Foods India Pvt Ltd

Strategic Direction

• McCain Foods India Pvt Ltd is expected to increase its focus on retail sales of frozen processed food during the forecast period. The company plans to conduct a sampling campaign and host cookery sessions across India. These are likely to focus on the Punjab state initially, where the company believes there is a strong potential for frozen processed food.

Company Background

• McCain Foods India Pvt Ltd is the Indian subsidiary of Canadian company McCain Foods Ltd. The company was founded in 1998 and is wholly-owned.
• The company is solely focused on frozen processed food, mainly frozen potato products. The company initially focused solely on foodservice sales and imported its products. However, towards the end of the review period the company began to supply retail frozen processed food and also constructed its own production plants.
• Towards the end of the review period, the company focused on expanding its frozen food distribution and logistics network to over 40 cities across India, focusing on ensuring a reliable service and delivery system for its clients. However, it lacks a presence in rural areas, smaller towns and smaller cities.

Production

• McCain Foods India Pvt Ltd opened a potato processing plant in Gujarat, with an investment of US$14.6 million. Production commenced in June 2007, with the plant initially able to process 40,000 tonnes of potatoes a year. Eventually, the plant is expected to process 100,000 tonnes of potatoes annually. The company purchases an estimated 85% of its potatoes from the state, with this share likely to increase further as the plant’s production capacity increases.
• The company uses a contract farming model, purchasing potatoes from over 100 farmers across the cities of Anand, Borsad, Panalnpur and Deesa. The company invested in modern technology for farmers in Gujarat, including drip irrigation and sprinklers, seeking to ensure maximum yield.
• The company exports an estimated 10-15% of its Indian production for sale in South and Southeast Asia and in the Middle East.

Competitive Positioning

• McCain Foods India Pvt Ltd did not have a significant value share in overall retail sales of packaged food in 2007. However, it dominated sales of frozen processed potatoes, where it accounted for 66% value share in 2007.
• The company gained share in frozen processed potatoes in 2007 over the previous year, due to an increasing range of grocery retailers offering freezer space for products. The company’s range benefited from its expanded distribution network and a growing presence in supermarkets/hypermarkets. Its most significant products in retail are French Fries, Smiles potato shapes and SuperWedges.
• The company is a major supplier of French fries and other potato products to both multinational and domestic consumer foodservice players and institutional players in India. It has supply contracts with McDonald’s, KFC, Pizza Hut, the Oberoi Group, Taj Group, Mary Brown, TGIF and Haldiram's. The company faces little competition in this niche.
• The company’s share grew towards the end of the review period, benefiting from the continued expansion of consumer foodservice as a whole and its major clients in particular. The company is careful in the selection of new foodservice clients, recognising that its performance is closely tied to that of its clients.
• The company focused its new product development on retail frozen processed food towards the end of the review period, seeking to offer products that appeal to Indian consumers. 2008 saw the company launch Aloo Tikki and Tandoori Nuggets, using Indian spices.

Source:    Euromonitor International from company reports, Trade press