At Rs 325 per litre, Canola oil is beyond the reach of common man in India although it has obvious health benefits compared to other edible oils available in the country. Jivo Wellness has started a new packaging plant for canola oil and intends to carve a market share for itself in the highly competitive branded edible oils segment by making the product affordable to the masses. In an interview to Rakesh Neelakandan of Commodity Online, R P S Kohli, Director of Jivo Wellness says health and wellness attributes of canola oil combined with affordability will help his products to penetrate Indian households. Excerpts from interview :
Can you tell us your background and how you have zeroed in on canola? Do you have any previous experience in this sector?
In the midst of a pretty fast corporate life as Director of Koutons Retail India Limited, I realized the need for having a ‘purpose’ in life. To the shock of my family and friends, I resigned and moved away in search of that purpose. I met and was inspired by 80 yr old Baba Iqbal Singh (Retd. Director-Agriculture) who was heading a Himachal based NGO “The Kalgidhar Trust”, working in the field of providing Education to rural poor in rural North India. The desire to serve the downtrodden society through this NGO made my dreams come true. I realized the true essence, purpose and fundamentals of life through his guidance. Feeling the compelling need for more resources to support the noble cause, we decided to enter righteous business of changing people’s lives. The search for simple yet life changing products that can encompass the lives of the whole country, culminated with accumulation of research on Canola Oil by Baba Iqbal Singh who did and is presently doing extensive research on Wellness products. Hence, Jivo Wellness was born.
Thus the mission was formed: “We are in the business of simply creating a Healthy India!”
Although we have no experience in FMCG business but we believe that any business requires honesty and dedication and although it would be gradual but these do prop up every business.
What is the inspiration behind setting up the first organized sector Canola oil plant facility in India; edible oil market is a red-ocean…
We observed that Canola Oil although being the healthiest oil category was being sold in India as a premium product with prices as high as Rs. 325/- per litre. To bring it within the reach of the common man, it was essential to integrate bulk imports and refill to cut down on costs. No market is a red ocean if you can create a niche for yourself. Smaller players do have the advantage of being fleet footed and adapt to market dynamics fast compared to large players. Every business scale has its unique advantage and we intend to work on our strengths.
What is the production capacity of your plant and how higher it can get escalated without any further fund infusion? What has been the experience so far? Is it in the expected lines? If no, why?
We have a production cap of half a million litres per month with the present plant. This can be further scaled up to 1.5 million litres without any addition of funds. The experience has been good and enlightening and most markets have responded favourably. The disappointing part lies with the Industry and bulk users. They have a casual attitude as far as wellness is concerned and food safety laws are lax in our country. Restrain needs to be exercised and food processors should also carry some social responsibility. And the least that we all can do is to see that our consumers are served only healthy food.
For your brand and production, you also need raw materials? Canola is not as popular as any other crop. How do you plan to procure raw materials and from where?
The Indian version of Canola crop has a poor output per acreage and is also prone to pests and vagaries of the weather. Since we are not allowed to import seed, we intend to import processed oil only from Canada other than growing a small quantity in India.
How canola cultivation fare in Punjab? Can you explain how and why the farmers should make a shift to Canola plant?
Canola is a winter crop and needs lot of cold weather to preserve the Omega-3 present in it. In India, with the present quality of seed needs fine tuning, since acreage, low oil expulsion and vulnerability to pests is high. This is the only deterrent to farmers.
You also spoke of a Rs. 45 crore investment in canola seed crushing facilities in Punjab. Where does it stand now? How technology-intensive a venture this is?
We have realized that the price difference between imported oil and homegrown variety is quite high and hence the investment into seed crushing facility is on hold till we get level playing field.
You had envisaged Rs.1000 million businesses by next year. Are you close to achieving it? What made you think people will shift to Canola from their traditional oil? What are the benefits for users? 10% market share you have planned by 2015 is substantial considering the fact that it is very difficult to shift brand and product loyalty.
We have just completed our first quarter and the results are extremely encouraging. We are buoyant on our projections that we had set for Oct 2012.
The best part is that we have realized that once a consumer tastes Canola Oil, such is the impact that he/she gets hooked on to the product. It is light textured, non-greasy and neutral flavoured which is very conducive for Indian cooking. Users realize that it is very light to digest and gives long term benefits of lowering blood pressure and diabetes.
The challenge is logistics and creating awareness. More than 95% users are repeat users. Rising health costs have made consumers rethink about their food habits and lifestyle. And with Canola Oil , the taste is better and health benefits are very much visible in a short time.
You claim your brand maintains 1:2 ratio in omega-3 to omega-6 which makes it the best oil. On what basis you have put this claim?
The Center for Genetics, Nutrition and Health-Washington, American Heart Association, US National Cholesterol Education Program Diet, USFDA, and thousands of researchers and Dietary recommending bodies recommend a ratio of 1:2 for Omega-3 to 6.
Dr. Gabe Merkin, Harvard University and Baylor University College of Medicine (One of a very few doctors board-certified in four specialties: Sports Medicine, Allergy and Immunology, Pediatrics and Pediatric Immunology), says “For most of the time humans have been on earth we have eaten foods containing omega-6's and omega-3's in a ratio of about 2:1. However, over the last 50 years, the ratio has changed to from 2:1 to 10-20:1. Our diet now includes huge amounts of oils that are extracted from plants and used for cooking or in prepared foods. These oils (such as corn oil, safflower oil, cottonseed oil, peanut oil, soybean oil) are primarily omega-6s. We have decreased our intake of omega-3's, found primarily in whole grains, beans, Canola Oil, Flax seeds and other seeds, and seafood”.
Eating too much omega-6 and too little omega-3 causes clots and constricts arteries to increase risk for heart attacks, increases swelling to worsen arthritis, and aggravates a skin disease called psoriasis. It may block a person's ability to respond to insulin, causing high insulin and blood sugar levels and obesity. It increases hormone levels of insulin like growth factor-1 that causes certain cancers.
The World Health Organization recommends that polyunsaturated fats make up 3 - 7% of the energy in the diet. Experts advise that one should consume a minimum of 3% of energy from omega-6 fatty acids and 1% from omega-3.
It is this imbalance that helps promote so much heart disease today.
The first step in achieving a healthy balance is to minimize the use of oils rich in omega-6 fatty acids. Oils such as corn, sunflower, safflower and cottonseed are high in omega-6. Many margarines, salad dressings and mayonnaise are made from these omega-6 rich oils. Also, many processed foods contain these and similar oils. Check the labels.
A high ratio, it is thought, can lead to thickening of the blood possibly leading to blood clots, a worsening of some autoimmune diseases and an increase in some inflammatory diseases, and more, including cancer. A lower ratio can is associated with a lower breast cancer risk. And there is a wide range of lifestyle diseases that are thought to be susceptible to a high ratio between the 2, including many that are related to inflammation in the body.
What’s is the market share of canola oil in the Rs.10,000 crore packaged branded edible oil market in India?
It is a new entrant and it is too early to gauge this. The focus presently is to satisfactorily convert users from high Omega-6 oils to a more balanced Canola Oil.
Increasing the market share of canola oil can be looked at from various angles: health, cost, dietary habits…what will be your focus…?
Primarily health and wellness is the focus. Today cost wise we have been successful in pitting Canola Oil at an advantage with most of the market leaders.
Indians are oil friendly which means they love food cooked in heavy oil. But the per capita consumption in India is far lower than many other countries. Is it because of the lack of purchase power or health consciousness?
I believe the weather and lifestyle have a major role in this. Although oil friendly, we have the poor classes who have a high metabolism due to lot of manual work but somehow they cannot afford. Next, we have the middle class and the upper classes who although can afford but due to sedentary lifestyle cannot breakdown the fat consumed and on top of this the sultry hot weather during most part of the year deters users from oil rich food.
Which oil do you closely compete with? How will you contain competition, when there are multiple brands available in India which claims zero fat?
We are competing with all those brands who claim to be healthy. The true test is in the kitchen, when the whole household realizes the changes and benefits of Canola Oil. They by word of mouth will contain competition for us. This is a honest realization after getting thousands of feedback from direct users. The claim of zero Trans Fat remains hollow because most of them convert in Trans Fat when fried and this knowledge needs to be imparted to users.
How will you penetrate the coconut oil dominated Kerala, Tamil Nadu markets. How about Maharashtra? In other words, how will you make Jivo canola a Rs.5000 million brand in India? Will it be a product for masses or a premium product?
As I have told you, the consumer referral is very strong and although it is gradual but the market grasp is much better than other means. High saturated fat (95%) in coconut oil is quite unhealthy and people who are wary of rising medical costs realize this. Our mission of “creating a healthy India” would only be accomplished if this is a product for the masses.
KFC, McDonalds’move to use canola in food items; how do you intend to cash in on this? Are you already catering to their needs?
Not only KFC, McDonald’s but Taco Bell, Burger King and hundreds of other chains have now converted in US, Canada and even Israel. But in India as I have told earlier, Food safety laws still allow us leverage in abnormal Trans Fat and Saturated Fat in processed food and Fast Food.
What tempted you to go with Richardson Oilseed Ltd? What prompted you to go for partnership with Precision group in Kolkata?
Richardson Oilseed is the largest Canola Oil producer in the world and a technically sound company. Precision group was looking for an opportunity into wellness and we provided them with the same. With common interests in place, Precision has aggressively marketed in Kolkata and now moving into Eastern India. Jivo has become a household name in Kolkata now.
Where does canola crop fare in the GM debate?
With the ongoing food crisis never looking to improve, India may have to re-think its positioning on the GM issue. Canola is an oilseed crop, which is grown primarily in regions of Western Canada, with some acreage being planted in the Pacific Northwest and north central United States. Each canola plant produces yellow flowers, which, in turn, produce pods, similar in shape to pea pods but about 1/5th the size. There are herbicide resistant conventional canola seed varieties that have been genetically engineered to be resistant to herbicides such as Roundup. Richardson Oilseed Limited (Richardson) currently sources these seeds as well as others to produce its products.
After processing (refining, bleaching and deodorizing of the oil) there is no genetically modified material remaining in the oil. The modified material is present in the DNA that is expressed as a protein. All DNA and protein are removed during oilseed processing. All that remains is 100% pure canola oil. In addition, we have had our finished oil products analyzed by independent DNA testing labs for the presence of GE materials. All testing has demonstrated that the finished oil does not contain any GE materials.
As published in: http://www.commodityonline.com/news/Canola-for-masses-is-our-aim-RPS-Kohli-35891-2-1.html
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