Changing habits, changing market

At the Indo-Pak border near Jaisalmer grows guar, a binding agent and an essential ingredient in ice-creams. And, this area is the sole producer of guar in the world, making it a key supplier of binding agent to ice-cream manufacturers worldwide.
India is also the largest producer of vanilla pods, used to make vanilla essence. A small but key ingredient in bakery products and confectioneries, vanilla is grown in very few, select regions worldwide.One of these is Kerala.
For some time now, farmers in both Rajasthan and Kerala have been working with Danisco India, the four-year-old Indian subsidiary of the $3.5 billion, Denmark-based Danisco. Once the quality of guar and vanilla improves, these farmers will be able to command better pricing worldwide.
The nascent food ingredients and fragrances industry in India is slowly coming into its own. The major players, which have affiliation to international biggies in this hush-hush industry, have been here for about 10 years now. However, customer apathy towards processed foods industry and hygiene products meant slow growth for them. Lack of technology has been a deterrent too. Says Arun Bewor, MD, IFF India: “While India is a large producer of oranges, we do not produce orange oil. The peels are just thrown away. Ditto for mangoes. So, we end up importing these products.�
The industry is changing colour now. It is not only developing downstream processes, but is also partnering with clients to help expand their business. It is penetrating deeper geographically and looking at exports too.
Dragoco India recently invested Rs 18.5 crore to set up a new premises that has manufacturing lines for shampoos, soaps, detergents, confectionery and creams. For, the company does not merely prospect for ingredient buyers. It actually develops new products, packages them, gets the customer approval on fragrance or flavour and then finalises it with his raw materials, says C Venkat, CEO.
Besides having the likes of HLL and Godrej as clients for fragrances and Nestle and Perfetti for flavours, Dragoco has over 100 second-rung confectionery makers in the north alone as its clients.
N Prasad’s client list too ranges from HLL, Coke and Seagrams to Beverley Beverages in Ludhiana. “We gave entirely new recipes to Beverley Beverages and the brand is now doing very well,� says Prasad. Clearly, they are growing the Rs 400 crore market for fragrances and Rs 200 crore market for flavours.