Indian market for high-end food items to double in 5 years: Symrise

Declan MacFadden, president of Symrise Asia Pacific, a German group manufacturing and marketing food flavours and fragrances has been impressed by the double-digit growth in the Indian consumer sector and has chartered a business plan for South Asian markets, which spans from India through to South-East Asia

Singapore: The Indian consumer market for high-end food products is set to double to 200 million people in the coming five years, given the ambitiously driven entrepreneurship of Indian businessmen in developing new food-based opportunities, reports PTI.

“We expect the middle-class Indian consumer market to double over the five years from the current 100 million out of the 1.2 billion population and as such, we are positioning ourselves to serve them well before that,” said Declan MacFadden, president of Symrise Asia Pacific, a German group manufacturing and marketing food flavours and fragrances in the region.

Mr MacFadden has been impressed by the double-digit growth in the Indian consumer sector and has chartered a business plan out of its Singapore office for South Asian markets, which spans from India through to South-East Asia.

“We strongly believe in India and the Indian economic growth and we are convinced that our customers from the private sector will lead the growth in the Indian food sector,” said Mr MacFadden in an interview with PTI.

He underlined Symrise’s Indian business strategy with its 17-year-old Chennai office, where 100 experts continuously monitor market trends, especially on the preferences of Indian consumers or their taste buds.

“Based on these consumer insights, they create new prototypes to fulfil these consumer needs and work in close collaboration with their customers to help bring these products to the market,” he said.

Symrise produces all flavours for the Indian market from its Chennai factory.

“We have been in Chennai since 1994 and our business has grown by double digits annually, which shows the strong consumer demand,” he said.

He specifically highlighted Symrise’s “taste enhancement” molecules, which would help to maintain the consistent taste of seasonal fruits such as weather-prone mangoes.

Mr MacFadden continued, “The Indian market is also reacting to the need for more healthy and nutritious foods in response to the strong rise in obesity and subsequent increase in diabetes in the population.

“Many food manufacturers are looking at reducing sugar, salt, fat, etc, in their products and Symrise works with these companies to make these healthy alternatives taste as good, or even better, than the original product.”

Mr MacFadden, a regular on the Indian market circuit since 1984, said, “There is willpower in the country’s private sector and we see them taking up all opportunities in the Indian market.”

However, Mr MacFadden called for more government-supported initiatives in controlling food wastages, especially from farmer to consumer.

“We hear and see some 40%-50% of the harvested food being wasted, all due to lack of proper transportation and logistics chains. This is one area that requires the urgent attention of all,” he said.

He expressed concern about the continuing infrastructure deficit in India and urged that more should be done by officials in laying out infrastructure for ensuring every piece of fresh food reaches the poor, the biggest segment of the Indian market.

Mr MacFadden said he believed the technologies and retail market management systems from more developed countries would be available for India to help control food wastage.

He noted that cold storage chains and large scale professional retail groups were now emerging in the market and that this would lead to an explosion of new processed foods and beverages being launched in this market over the coming years.

India would remain one of the major sources of food for global markets, given that agricultural land in other emerging economies is shrinking due to increasing urbanisation and industrialisation demand.

Processing and packaging technologies are already being used by Indian food industry and the microbiological contamination from traditionally sun drying has been eliminated significantly, he noted.

The Indian food sector is fortunate to have a reasonably clean slate in food production compared to other Asian countries, where food production and processing have been traumatically hit by major contamination scandals, said Mr MacFadden.

“This is an area where India must be continuously vigilant, as it will allow the country to lead the global market in food supplies,” he stressed.

However, Mr MacFadden was concerned about the inflation rate in India.

“If more food can reach the consumer, the level of inflation would be much controlled, making it affordable for the lower level of consumers,” he said.

The next big venture for the Indian market would be to set up food quality controls as manufacturing and processing industries develop.

“As for now, there is insufficient quality control in the earlier parts of the supply chain, but we can expect the Indian authorities to introduce measures, given the potential of increasing the high quality food exports to the global market,” he said.

Mr MacFadden saw Indian foods further expanding into global markets as international consumer tastes for Indian foods were increasing, just as more and more middle-income Indians were taking to Japanese, Chinese and other ethnic foods.

“Given the right management and infrastructure, such as cold chain logistics, we can see India growing into a major food market as well as a global supplier,” he said.

“These are the many opportunities we see to stay ahead of competition in India and to always aspire to provide a lead in managing the future needs of consumers in these markets,” said Mr MacFadden.

Symrise experts, including those based in Chennai, are constantly studying market opportunities, survey trends in large and small markets.

“We have to keep our data on market needs ahead of demand if we are to serve our customers well,” he said.

Symrise is already serving India’s large food companies by providing both domestic consumer studies and global expertise to help develop the consumer-desired products.

“We provide our expertise to price attractive packages, be it a small tea bag or a ‘two rupee snack package’ for the low-income, as well as higher-end processed food for the rapidly increasing middle-income consumer,” stressed the Asian head of Symrise, the supplier of flavours and fragrances with a global market share of 11% last year.


Information gap: No handshake

A common databank is needed to make portability work. We don’t have it

Portability will be a non-starter if the features of a policy are not easily portable—as there would be many impediments from the consumers’ angle. There can be a huge issue among the insurers as well, if they cannot, and do not, easily share your data. There is no centralised insurance databank in India which is an essential step to improve the delivery of health insurance in India. The regulator is working on a system of making medical history data available in electronic format across insurers but it is not clear when the system would be up and running.

According to industry experts, insurers, especially in the public sector, don’t have a core system and there is no sharing of data across even divisions of the same company. So, today, it is not easy to port a policy even within the same insurer across divisions. Authenticity of the medical history data with the insurer, in some cases, may be questionable and would lead to disputes after portability. The new insurer is completely at the mercy of the existing insurer to give accurate data.

In such a situation, insurance companies will have to implement the guideline which specifies that the medical details will be shared with the accepting insurer within seven days. Enormous efficiency will be required to achieve this. It may need major changes in processes and database infrastructure to retrieve information of one customer across several years of renewal.

This calls for an agency like the credit bureau, which will run a centralised databank containing all the medical details of customers (pre-existing diseases, claims history, insurance history, coverage limits and so on). There will be a need for a unique customer identification number. The current reports from Insurance Information Bureau are inadequate to achieve this goal. According to Sudhir Sarnobat, “There is a need for an independent agency similar to CIBIL (Credit Information Bureau (India) Ltd) to create a common insurance database. It need not be from the regulator. CIBIL took 10 years; an insurance database can be developed in five years. Insurers may have to put in capital to build it. It can be used to come up with correct premium pricing. The unique ID of the customer will offer ease of information without going to the branch or division of the insurer.” Dr Amarnath Ananthanarayanan, CEO and MD, Bharti AXA General, also feels that, “The evolution of a common database across insurers will be of tremendous benefit for insurers as it will be a risk assessment tool. It will help to understand and access risk and charge the right premium. If an insurer charges high, then they lose the customer; if low, then they will have losses; if right, then they will get customers. Currently, insurers sometimes play safe in underwriting with exclusions to stay out of risk. With a common database, there will be less exclusions and lower premium for good customers who maintain health.” But a database with different attributes of records would be useless. That leads to the fact that medical data of policyholders need to be standardised. The group insurance policyholders’ medical data is not captured by all insurers. Some data may be available with TPAs but it may be incomplete. The common database may not give complete information if data is missing.

With databases comes the issue of data protection. In the US, the Health Insurance Portability and Accountability Act (HIPAA) strictly regulates the sharing of health information; you have to give your written permission. For example, without your authorisation, your medical service provider cannot give your information to your employer, use or share your information for marketing or advertising purposes, or share private notes about your healthcare.



Hoshang Nekoo

6 years ago

Wait and watch. Try gathering the data of experience of ease and difficulty an insured person faces to get the policy transferred, and how many have taken advantage of it. How many have switched over from PSU insurers to Private Insurer and vice a versa. Cake walk will be for insured person below 45 years of age with no claim history. For the rest time will tell.

Aparna Ramachandra

6 years ago

The thoughts are noble and if it happens it will be a landmark in consumer activism. Am being skeptical because the insurance industry thrives on false information, misselling and paybacks. So expecting transparency is an utopian thought. However if we pursue and kind of make it mandatory we might succeed. Like the reluctant banks who now have to share their data with CIBIL

Tips on portability: Want To port?

You will need lots of support

The terms and conditions of an insurance contract are not easy to understand. Buying correct health insurance is not easy; porting of insurance will be as difficult. You have to accept the terms of the new insurer and may lose some of the benefits you already had with the existing insurer. Here are some tips for you.

•    Advises Fali Poncha: “Policyholders have to understand the sub-limits, co-pays and other terms of the new policy before porting. It will entail finding a policy with more or less same terms. If you want to increase the sum insured, the differential sum insured will be treated as a new application and rules for the new customer will be applicable for it.”

•    Some private insurers have already started plans to poach customers with portability. If you already have a policy with one of the four public-sector insurers with a life-long renewal, why would you port to a private insurer offering maximum renewal age? Look for private insurers with life-long renewals.

•    Check if you will need to undergo a medical test.

•    Give ample time for the portability process to work. Apply for portability at least 45 days before the expiry of the existing policy. This will give time to the new insurance company to do a medical test, retrieve information from the existing insurance company and then underwrite and accept the risk.

•    If you are confused, don’t port. The customer looking to port should preferably employ a broker to get good guidance and advice regarding the insurance company to select. The customer does not pay the broker.



Hoshang Nekoo

6 years ago

Mr. N Kini, When VRS was declared in Banks and other companies Insurance Companies including Life Insurance co. advertised in the media inviting people to become an agent. Free walk in interviews etc. The new recruit had to undergo Training as stipulated by IRDA. The class room attandance, the final test taken at many centers and with what knowledge on insurance the candidate came out to go into the field is anyone’s guess. Most of them got the Visiting Card printed as an Insurance Advisor licensed by IRDA. With many insurance agents in the field for over3-4 decades never called themselves an insurance advisor. What happened next was they started eating into established business of senior agents by offering so called incentives to the clients. With no field experience and the product knowledge such agents are now in plenty. Therefore do not compare an agent of repute with new recruited agents who is only out to complete the quota and grab some ones business. It is for the person taking the policy to verify experience and standing of the agent before taking out the policy and regret later.

nagesh kini

6 years ago

Thanks Raj for your two reports on Health Insurance Portability.
What IRDA has done in the name of Portability is a half baked circular, if at all it can be considered to be one. It is full of gaping loop holes that make the entire exercise abort before take off.A lot of them need to be ironed out before it is operationalized on july 1,2011.Else it will be like the cartoon literally jumping from the frying pan into the fire.
Unfortunately more particularly for the elders, moving away from the existing insurer and another refusing cover can be dangerous to say the least.
IRDA has necessarily to build in safeguards to come out uninjured from this 'loveless marriage' with a seamless divorce.
MoneyLife with the Insurance Brokers needs to come out with BASIC policies with essential features.After the common insured seek simple Health Hospitalization covers. More light needed on Critical Illness covers that most agents don't promote, god knows why!
In response to Hoshang Nekoo, I'd like to clarify that most of them indulge in mis-selling as they are not at all conversant with the policies. They just want to complete their quotas. They simply play the vanishing trick when it comes to rendering assistance in filing claims. I know of an agent advising a senior CA that he'd have to forego no claim bonus for a overnight hospital claim on a policy where the NCB is a mere 5% increase in the sum insured that has a 30% cap that was reached. Most of the agents are part timers not fully equipped to answer deeper queries.

Hoshang Nekoo

6 years ago

Why do you advocate going to a broker. An agent gives much better service to Medicalim Policy holders then a broker in the event of a claim. IRDA has made agent stick for years together to one Life and General Insurance Company irrespective the insurance company is good or bad in its dealing or has no better product to offer which the other competitor insurance company has. On the other side IRDA gives license to a newly appointed BROKER to deal with several insurance companies be it Private or PSU having at their disposal insurance product to suit customers need. Therefore don’t blame the agent who is also licensed by IRDA to be in business that is left with only the product of his insurance company is suitable or not suitable to persons need. In any way the agent is honest to sell his Insurance product he is given to sell and in no way cheating the customer. Perhaps IRDA will put a thought to remove the restriction on agents who are agents for 2-3 decades.

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