Web Sify
Follow us on
Mail
Print

Bhupesh Bhandari: All about potatoes

Source : BUSINESS_STANDARD
Last Updated: Fri, Dec 07, 2012 07:42 hrs

p ppThe recent debate in Parliament on foreign direct investment in multi-brand retail has been interesting to say the least The highlight was that McDonald&rsquos found itself in Sushma Swaraj&rsquos line of fire The fast-food retailer she thundered was importing basic inputs like potatoes and was procuring little from Indian farmers &ldquoAsk McDonald&rsquos about their fries They never buy potatoes from local Indian farmers saying the potatoes are too small here&rdquo she said Her argument was that Indian farmers stand to gain little from the entry of large transnational retailers like Walmart &mdash they will import all their stuff from their existing low-cost suppliers spread across the world mostly in ChinappThis is the time to analyse the French fries served by McDonald&rsquos in India French fries and therefore potatoes are integral to McDonald&rsquos business Till recently it was found that as many as 30 per cent of the people visited McDonald&rsquos only for its French fries Naturally the company takes it seriously Unlike our leaders McDonald&rsquos is one company that has all data at its fingertips all the time footfalls ticket sizes impact on business of menu change et cetera Thus 40 per cent of the fries in a pack should be above four inches another 40 per cent should be between four and two inches and only 20 per cent can be below two inches If the store manager finds that the consignment doesn&rsquot fit this description he is entitled to reject itppIt&rsquos a fact that when McDonald&rsquos came to India in 1996 it had a problem with locally produced potatoes Indian potatoes had high moisture 85 to 88 per cent and low solid content The problem with such potatoes was that they soaked up a lot of oil while frying This made them lumpy not crisp The sugar content was high in the potatoes the sugar caramelised upon frying and gave the fries a brownish tinge Lastly Indian potatoes were short and round where McDonald&rsquos was looking for big and oblong potatoes the ideal size is four to six inches and the ideal weight is 200 to 250 grammes So McDonald&rsquos sought the government&rsquos permission to import potatoes and promised to develop the local crop in the near futureppIn 1997 McDonald&rsquos asked McCain Foods its global partner for help McCain Foods sent two agronomists to India The right varieties of potatoes were identified and the saplings were transported to the Lahaul region of Himachal Pradesh The seeds derived from these saplings were given to farmers in Gujarat The cultivation of potatoes requires ample sunlight cool nights and porous soil This makes it a winter crop Uttar Pradesh Punjab and West Bengal accounted for almost 90 per cent of the country&rsquos output McCain chose Gujarat because it does not get any rain in the winters The farmers were advised to use drip irrigation and not flood their fields with water This was done to reduce the moisture content in the potatoesppThe yield improved farmers began to grow potatoes in large numbers and McCain set up a processing plant at Mehsana in Gujarat with an investment of 25 million This unit meets McDonald&rsquos entire demand for French fries and potatoes It does not import potatoes That&rsquos not all McDonald&rsquos buys fresh lettuce from Pune Delhi Nainital and Ooty cheese from Dynamix Dairies at Baramati in Maharashtra fresh buns and sauce from Mrs Bector&rsquos Foods at Phillaur in Punjab and Khopoli in Maharashtra chicken and vegetable patties from Vista Processed Foods at Taloja in Maharashtra and dairy products from Amrit Food in Ghaziabad Uttar PradeshppMcDonald&rsquos had got East Balt Commissary of Chicago which supplied buns to the first McDonald&rsquos outlet over to India to train the people at Mrs Bector&rsquos It also brought Schreiber Foods International its global supplier of sliced cheese in touch with Dynamix Dairies After that many other food companies have started to do business with Dynamix Dairies McDonald&rsquos prices in India are amongst the lowest in the world Its India operations took more than 10 years to break evenppMs Swaraj&rsquos next target was PepsiCo The beverage and snack maker she said had reneged on its promise to buy from local farmers &ldquoPepsi promised to buy potatoes and tomatoes from farmers in Punjab but backed out later&rdquo she said In response the company said that it buys all its potatoes locally In fact its potato procurement has more than doubled in the last five yearsppThe treasury benches did little better Replying to Ms Swaraj Information Technology Minister Kapil Sibal said the fear of multinational retailers was blown out of proportion had not he asked Kentucky Fried Chicken been made to bite the dust by the dhabas &ldquoMany said KFC will drive the dhabas out of the market The emdhabas emhave driven out KFC&rdquo he said The facts are different KFC has 221 outlets in the country and wants to raise the number to 500 by 2015 it has been reported Mr Sibal was perhaps right when he said there won&rsquot be a mushrooming of Walmart stores overnight thanks to the sky-high real estate prices The large-format stores will become unviable even before they start There could be another reason as emBusiness Standard emreported of the 53 cities with a population of a million or more where Walmart and others can go only 16 fall in states that are in favour of opening up the sectorp


blog comments powered by Disqus
most popular on facebook
talking point on sify finance