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McCain Foods sets up operations in India, to invest Rs 700 million in Gujarat

04-October-2005
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McCain Foods sets up operations in India, to invest Rs 700 million in Gujarat

McCain Foods India, a wholly-owned subsidiary of Canadian food major McCain Foods, is geared up to set up operations in India. It has plans to invest Rs 700 million in a potato processing plant in Gujarat’s Mehsana district. Following the good response for the product, McCain, which has been importing Smiles brand in the country, has decided to set up base here.

Jaideep Mukherji, Country Manager, McCain Foods India, said, “We have been introducing the products in all major cities over the past few years and Smiles has received an excellent response, which has exceeded our initial expectations, kids clearly love the product and the feedback from several consumers (particularly the mothers) find the product a very convenient snack option for their kids. Consumers also appreciate that McCain Smiles can be baked and even when fried, it absorbs very little oil.”

The Canadian major has not yet set a market share or a volume target as such since the frozen snack food or finger food is a very evolving category. Their targets are set in terms of distribution, i.e., increasing accessibility to consumers and creating opportunity for tasting the product for new consumers. This year, the target is that about 500,000 new consumers should try the product across India and McCain is confident of repeat purchases.

Smiles is not the only brand that will be launched in India as there are plans to introduce several innovative products, not only from McCain’s international basket but also those especially customised to Indian tastes and preferences. Currently, McCain products such as McCain French Fries, McCain Wedges, McCain Smiles and McCain TastiTaters are available in India in large retails shops and malls. These are international frozen products with innovative and colourful packaging.

About a year from now, once McCain’s production facility in Mehsana will be operational, the company will be able to process potatoes, package and sell in India as well as other neighbouring countries like Sri Lanka, Pakistan and the Middle East.

Mukherji added, “India provides a wide spectrum of opportunity for McCain products largely because potatoes form a significant part in the diet of Indian families and there is huge consumption of potato preparations for both snacks and meals. McCain plans to set-up an R&D facility at the plant to develop new products tailored to locals tastes and introduce the same once ready, adding a few more products from its international range that are suitable for the market.”

“The frozen food market in India is at a nascent stage. It is typical of a market, which is in the early stages of development of processed food segment. There are very few products, low consumer awareness combined with an inadequate frozen food distribution network, lack of freezer space at retail end. The key to grow such markets is a range of high-quality affordable products made available close to consumers. These can stimulate demand and address the other issues. We have worked in similar markets by getting in early, stimulating demand and growing the market,” Mukherji pointed.

Currently, Smiles is available in a pack of 450 gm priced at Rs 65 and sampling at malls and retail outlets are already on. The focus will be on expanding the frozen distribution network to make processed potato products like Smiles widely available at multiple retail points.

Though there has been no advertising campaign so far, McCain India’s initial focus will be on communicating the brand through retail and PR.

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