Bimal Thakkar, Managing Director, ADF Foods, Armed with a Bachelor of Commerce and Diploma in Export Management, Mr. Bimal Thakkar has 21 years of experience in development of brands, new products and tapping new markets (domestic & overseas) for the Company. Bimal has done his studies in International Business and Marketing from Trade Development Institute of Ireland. Bimal’s youthful exuberance and vision has propelled the growth and outlook of the business and the Processed Food Industry in particular. His business acumen and market sense coupled with dynamism has led to innovation and a diversified product portfolio. Having played an instrumental role in promoting the Company’s products in international markets, development of brands, tapping new markets for the products and fund raising, the Company is now set for expansion – both organic and inorganic under his able guidance and leadership.
ADF Foods had been started as a humble venture back in 1932 of a small retail store selling Dry Fruits & Nuts, soon diversified into a Major Food Processing Company manufacturing Ethnic Indian pickles, chutneys, canned foods frozen foods and spices under various Brand Names which are today leaders in their segments and categories. ADF’s international brands like Ashoka, Camel, Aeroplane, Khansaama and Truly Indian have reached many parts of the world. All this garnished with acquisitions of independent resources and a seasoned management. These factors today work towards fulfilling company's primary objective of creating value in the international food markets. This also fulfills the Company’s corporate objective of becoming a World Leader in Quality Ethnic Indian Foods. Apart from marketing and distributing its own Brands, ADF Foods also are contract manufacturers for leading Multinationals and Mainstream Retailers worldwide.
Replying to Anil Mascarenhas of IIFL, Bimal Thakkar says, "Ethnic foods have come of age and have wide Diaspora of consumers both in India and abroad ".
Brief overview on the market. What is the size and opportunity?
Globally Processed Foods Industry was Rs160 trillion in 2008 and has been growing annually at a rate of 4-5% YoY basis since then. In India the said market was of Rs3.7 trillion in 2008 and expected to grow at 8-12% p.a. Branded foods is expected to grow at 20-25% on YoY basis in India.
* Source: Ministry of Food Processing Industries
What are some of the emerging trends in ethnic foods?
Ethnic foods have come of age and have wide Diaspora of consumers both in India and abroad. Over the years consumers tastes and preferences have evolved and more and more number of people are taking to ethnic foods. The change can also be attributed to rising number of Indians traveling and settling overseas. New cuisines like Thai food, Mexican food, Mediterranean, Italian are also gaining ground alongside longtime growth and presence of Indian and Chinese cuisines in India. The change in pattern of lifestyles is also evident from the rise in number of restaurants dedicated to serve International ethnic foods in various cities in India.
You recently launched Soul. Tell us more about your plans for the same.
We have launched SOUL as our umbrella brand to launch for Packaged Ethnic Food (Indian & International) for the Indian subcontinent. We launched in Mumbai in Mid of February 2010 with our range of Olive Oil Pickles (made using Virgin Olive Oil), Traditional Pickles and Ready to Eat Curries and Mango Chutney & intend to be Pan India in next 12 to 18 months.
You have chalked out an aggressive growth strategy. How would it be funded? What are the resources available to you?
The Company has accumulated cash reserves which it plans to utilize. Additional requirements for funds shall be met out of medium to long term debt.
What kind of acceptance are you seeing to packaged foods in India?
Indian Consumers are traditionally accustomed to home cooked fresh food. Hence in the past, packaged foods were always looked upon with a suspicion of either poor quality or not fresh due to presence of preservatives.
However, due to change in demographics with more nuclear families, better informed consumers, increase in number of working couples, improved technology and better quality standards has given fillip to the packaged foods industry per-se. Modern Retail outlets in the form of Super markets and Hyper markets have further garnered more exposure & market penetration for Packaged foods.
What kind of inorganic growth are you looking for? Which are the segments you would look at growing inorganically?
We are looking for acquiring businesses, assets, distribution networks, etc which have synergy with our existing processed and packaged foods business and enables us to move up the value chain. We are looking specifically at opportunities overseas in the Ethnic Foods segment for inorganic growth.
Comment on your overseas markets. Where would you be looking for acquisitions? Would it be more for marketing or products?
We are EOU and Star Export House as rated by DGFT. We are the biggest exporter of Processed Food products from India and have been awarded APEDA Export Order for 2007-08 and 208-09 and CNBC Award Best FMCG (Fast Moving Consumer Goods) Company in the Agri-Business Sector (SME Sector) and Best Overall Exporter of the Year Award (SME Sector) 2008-09 by DHL - CNBC International Awards.
We are looking for acquisitions overseas essentially in US, UK and Australia. The acquisition should enhance and supplement our objective of moving up the value chain and allowing us to own distribution channels.
You intend to take the company from Rs1bn to Rs5bn in the next five years. What is the strategy for the same?
We will be pushing for growth by means of both organic & inorganic growth. We have entered domestic market very recently in mid - February 2010 and see huge potential for growth. The domestic turnover will account for about 40% of our Total turnover in five years time. Internationally our existing business has been promising and acquisitions should help broaden the base further to assist in achieving our targets.
To what extent have you managed to capture the culture and tradition in your products?
Our products have been catering to the Indian Diaspora world wide. Our learnings in the business over the years has helped us provide the best of traditional recipes to suit the taste buds of Indians and suitably amending it for non-Indian consumers. Hi-tech machineries installed in our plants further enable us to capture the essence of the cuisines & products and improve their shelf life. Thus a win-win situation for the consumer.
Brief us on your research initiatives?
We have a dedicated team of Quality Assurance Cell and Product Development. The team consistently works on innovating and renovating new and improved means of making and processing existing products and also developing new products.
You had introduced whole wheat parathas in the International market. How is it doing now? What are the other products which have found international appeal?
Our whole wheat parathas have been accepted very well in the International market and now we also offer Whole wheat chapattis, Tandoori nans, etc. Our ready to eat curries and snacks have received very good response and growing YoY basis, alongside our Virgin Oil pickles and chutneys, our original menu leaders.
What about your Dry Fruits Stores. What are you plans there?
In 2006-07, the family of promoters had distribution of assets and thereafter the Dry fruit stores business is no more part of this company/ group.
You have a number of international brands like Ashoka, Camel, Aeroplane, Khansama and Truly Indian. Would you look at consolidating these brands or are you planning more?
Each of our Brands has a certain USP and is targeted at a specific customer segment in the market. More so they do not necessarily cater to same consumer base and are non-competitive in nature. Hence, it makes more sense for business to have all of them on stand alone rather than being consolidated. We have added SOUL in our Brands during the year 2009-10 for the Indian subcontinent.
Tell us about your contract manufacturing.
We do contract label business for top Food conglomerates, overseas. We are very selective in the kind of business houses or retailers we deal with. The company has developed specific recipes to suit their customer preferences and the business is growing steadily YoY basis.
What kind of opportunities does the rural economy offer you?
In India, we are currently focusing on metros, mini-metros and Tier I cities. We will consider extending to rural India after capturing metros and Tier I cities. Further, as the organized retail spreads its wings into retail sector in rural economy then perhaps it would be a better time for processed and packaged foods business to enter.
You plan to bring in cuisines from different parts of the world too. Tell us more about it.
In India, SOUL is our umbrella brand. Under its aegis, we shall introduce in future other ethnic foods and recipes also on selective basis. The cuisines that we select will be something that Indians are familiar with & appeals to taste buds.
To what extent do you push the ‘healthy’ factor in your products?
Apart from health, we have a strong commitment to quality and hygiene of the product that we serve to our consumers. We love food and we love to feed as envisioned in ADF motto goes "Feeding the World". Our commitment to company motto is re-iterated in slogan for SOUL "Food is Love". We have introduced virgin Olive Oil based pickles which is not only a new introduction but also a very healthy alternative for those who are health conscious. Our Ready to Eat Curries are healthy products they are NO TRANS FATS and / or NO CHOLESTEROL.
With growth in the organised retail in India, what opportunities are you seeing?
Organised retail will be a major catalyst in driving the demand for processed food products and presents tremendous growth opportunities. Changes in lifestyle of Indian consumers and the growing middle class will influence the growth of Processed and Packaged foods industry.
You started as American Dry Fruits Stores in 1932. How has the company evolved over the years?
We started in 1932 as a small retail store. In early 1960s we acquired CAMEL Brand which was then over 50 years old and ventured into processed foods business. With Indians migrating to different parts in the world we followed them to those countries and continents. We launched AEROPLANE - our economy brand for meeting the needs of global consumers and those with lesser purchasing power. We then launched our flagship Brand ASHOKA which is positioned as "Value For Money" Brand. To cater to the varied customer requirements we expanded our product menu from pickles to chutneys, pastes, canned foods, ready to eat foods, and frozen foods.
In 1990, we incorporated the company and in 1992 came out with IPO which was 18 times oversubscribed. The company used the funds to expand the then existing Nadiad Plant and acquiring and installing new facility at Nashik in 1994-95. The company’s manufacturing facilities in Nadiad and Nashik, both are HACCP (Hazard Analysis and Critical Control Point) and BRC (British Retail Consortium) accredited. We are also certified with ISO 9001:2000 and ISO 22000:2005.
What is the shareholding pattern? Any plans to raise or dilute stake? Would any of the brothers look at an exit?
About 41% of the shareholding is held by the promoter group and balance is with public. There is no intention to dilute the same and the stake may be raised if the company needs funds for further growth and expansion. None of the existing family members are looking to make an exit from the promoter group.
Comment on your marketing activity.
The company has been building Brands and supports them aggressively in all markets by promoting above the line via advertising and promotions on channels like Sony TV, Zee TV, Star TV etc. The company also does below the line promotions by offering consumer promotions, tasting/ sampling, etc.
What is your staff strength? Your hiring plans. What kind of people do you look to recruit among freshers?
The company is managed and administered by qualified and experienced Sr. management and Middle management. There are 54 managers in the top two layers of management operating from different offices of the Company across the globe. The company has embarked on its high growth path and will definitely recruit more number of people in accordance with the demands of the job concerned.
Do you recruit from B-Schools? Any message to entrepreneurs?
The company, currently, does not participate in Campus recruitments in B-schools. We believe, "The entrepreneur is essentially a visualizer and actualizer...He can visualize something, and when he visualizes it he sees exactly how to make it happen."
Your message to shareholders?
We are committed to enhancing value to the shareholders in particular and all the stakeholders in general. The shareholders have supported the company and management to achieve the results that it managed to achieve and we are thankful to them.