Innovative eyes a pie of value-added foods category

Innovative Foods, which was recently acquired by the Tata Group, is looking at acquisitions in value-added food products segment like snacks, processed seafood and chicken products in India and abroad, Chief Executive Officer Sheila Nair said.

Innovative Foods is present in the frozen and ambient ready-to-eat and ready-to-cook foods under the Sumeru brand. Currently the company has a presence in categories like parathas, sea food, curries, spring rolls and samosas amongst others.

Recently, the Tata Group acquired 70 per cent stake in the Kerala-based company through Residency Foods and Beverages, a subsidiary of Indian Hotels.

"The value-added products is the fastest growing category in the food processing industry. The company is evaluating options for inorganic growth in these categories," Nair said.

As part of its growth plans in the domestic market, it would be expanding the product range under the Sumeru brand and widen its retail presence in the smaller towns and cities.

Nair said, "The company would be extending the products in niche categories like Indian flat breads and health foods. The emergence of organised retail and penetration of cold storage chains will enable the company to enter tier-I and tier-II cities over the next year and a half."

Innovative Foods is estimating an year-on-year growth of 30-40 per cent with an aim to become a leading domestic frozen food firm. Apart from retail sales, it is also banking on institutional sales and exports business for growth. It supplies to fast food chains like McDonalds, Pizza Hut, KFC and other restaurants and caterers.

Nair said it was premature to elaborate if the company would develop products for the Taj Group's own chain of hotels. Innovative Foods is present in markets like the US, the UK, Mauritius and Japan.

Over the year, it expects the share of exports to increase, which currently comprises one third of the company's revenues.

In July, Residency Foods and Beverages had bought a majority stake in the Kerala-based Innovative Foods from Amalgam Group. The acquisition estimated at under Rs 20 crore, was the company's strategic step to diversify into food business. The Rs 16.5 crore Innovative had posted a loss of Rs 4 crore in the last financial year.