A passage to India
Is India the new China? Daring entrepreneurs, including highprofile cricketers, certainly think so, but the market is as complex as it is massive. Journalist Anuja Nadkarni and photographer Abigail Dougherty journeyed to India to see for themselves.
Touring India with the Black Caps, cricketer Geoff Allott was struck by the lack of Kiwi products available in the vast country.
But after retiring from the sport in 2001, his travels to India always stayed with him and about nine years ago, Allott started Quality NZ, a meat, seafood and wine exporting business to fill the gap he found in India’s food market.
‘‘When I was in India as a cricketer, staying in amazing hotels, what became quite obvious was the lack of New Zealand products,’’ Allott said.
He found setting up in India to be easier than he expected due to the shared history between the two countries, from fighting side by side at Gallipoli, to Sir Edmund Hillary conquering Mt Everest and the shared passion for cricket.
He realised that New Zealand’s quality meat and seafood could compete against produce from France and Switzerland in India’s most luxurious hotels.
Former Black Caps captain Brendon McCullum is a shareholder in Quality NZ and the directors include another former captain, Stephen Fleming, and player Shane Kingston.
Despite his business facing tariffs of about 35 per cent to export meat, the opportunity in India was too good to pass up, Allott said.
Quality NZ exports lamb and seafood including blue cod, green-lipped mussels and orange roughy to a number of Indian hotel chains, including the
Marriott, across 25 Indian cities.
At the beginning, Allott spent 18 months researching the Indian market and several years living in the country to set up the supply chain.
New Zealand High Commissioner to India Joanna Kempkers said the country was facing a turning point. Its economy was expected to overtake China’s as its government became more open to building international trade.
‘‘India is also expected to have the largest population in the world. That has huge opportunities for New Zealand businesses and there is interest there,’’ Kempkers said.
‘‘The last 20 years have been about China, the next 20 years will be India for NZ business.’’
But with 1.34 billion people, 22 major languages, 720 dialects and six major religions, it would be naive to call it an easy market, Kempkers said.
Allott said the business had to treat India like a ‘‘bunch of micro-countries’’.
‘‘Each of our 25 cities are almost as different countries because of the diversity between states,’’ he said.
Despite the high tariffs, and the lack of a bilateral free trade agreement, other New Zealand companies have also started tackling India’s enormous market.
In June last year Fonterra launched a range of products in India under its Dreamery brand through a joint venture with Indian retail giant Future Group.
The joint venture, called Fonterra Future, was Fonterra’s second go at the Indian market.
The dairy cooperative’s first attempt, with Britannia International in 2001, fell through in 2009.
Fonterra India and Sri Lanka markets managing director Sunil Sethi said this was because the cooperative’s approach was ahead of its time.
‘‘The value added products had not really taken off. Given the changes in consumer behaviour, the improvement changes in the logistics and supply chain the timing is just right.
The Dreamery range is marketed as being a high-quality product targeted to the country’s growing middle-class urban population.
Seventy per cent of India’s population is below 45 years old.
They live in urban areas, lead active lifestyles, have greater disposable income, are better travelled than previous generations, and want to consume higher quality and higher nutritional dairy products, Sethi said.
New Zealand Trade and Enterprise regional director for India, Middle East and Africa, Tony Martin, said that because India had been difficult to crack – especially for food and beverages – Fonterra’s re-entry had been a ‘‘massive win’’ for New Zealand.
‘‘The modern retail trade has mushroomed over the last few years. Now you’ve got all these top-end supermarkets and retail outlets that didn’t exist 20 years ago,’’ Martin said.
Fonterra’s presence in India could help improve Indian consumers’ understanding about New Zealand products, he said.
In October Fonterra also launched its Anchor brand through Future Group.
Future Group sells Anchor whipped cream, butter sheets, mozzarella cheese and cream cheese in 1600 stores in the metropolitan cities of Mumbai, Pune, Bangalore, Ahemdabad and Hyderabad.
At the time of the launch Fonterra Asia Pacific chief executive Judith Swales said India’s appetite for dairy showed no signs of slowing.
‘‘Over the next seven years, demand for dairy from Indian consumers is set to increase by 82 billion litres – seven times the forecast growth for China,’’ Swales said.
‘‘The country’s young population is looking to level up its dairy consumption with new products that meet their expectations of higher quality and better nutrition.’’
Trade between India and New Zealand is now worth almost $3 billion.