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Posts Tagged ‘PepsiCo

Cornflakes and oats invasion, 10 rupees at a time

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What does a breakfast cost in India? Depends what you choose to eat or cook. A breakfast for three in urban south India, with dosa, averekal akki and ragi roti (and three small filter coffees), will cost within 100 rupees at an ordinary udupi cafe. A kilogram of wheat rava or rice rava, from which you can cook several upma breakfasts, will cost no more than 50 rupees from a small grocer in a middle-class ward of any town or city. A packet of poha (beaten rice) costs around 45 rupees a kilogram.

Now consider the cornflakes and oats breakfasts that are being marketed both by food MNCs in India (such as Quaker Oats, which is PepsiCo India, FritoLay Division; or Kellogg India; or Saffola, Marico Limited). [See the new post, ‘Let them eat biscuits’.]

Quaker Oats sells sachets of oats-based breakfasts for 10 rupees each. These are flavours such as ‘Homestyle masala’. ‘Kesar kishmish’, ‘Lemony veggie’ and ‘Strawberry apple’. Saffola sells sachets of oats-based breakfasts for 15 rupees each, and its flavours are ‘Curry and pepper’, ‘Masala and coriander’ and ‘Pepper and spice’. Then there is Kellogg’s which has for example ‘Corn flakes strawberry’ and ‘Corn flakes chocos’, both for 10 rupees.

The per kilo prices of these almost-ready breakfasts (warm milk or hot water to be added) can be seen in the table below:

Why has this happened? Part of the reason is that food products manufacturers, and in particular breakfast cereals companies, find it is cheaper to pack dry ready-to-eat (milk or water to be added) portions in strips of single-use sachets than in a plastic containers. The prices at which these are sold are in simple multiples – 5, 10 and 15, with the grammage being adjusted for these prices. This is the ugly side of the ‘bottom of the pyramid’ market, a foul term that ignores the mis-nutrition these food companies are responsible for in their pursuit of the price-conscious consumer (rural and urban alike). It also ignores the environmental aspect of such packaging, the costs of which are borne by towns and cities in the form of increasing per capita loads of plastic, packaging and laminated sachets.

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Written by makanaka

October 14, 2012 at 17:01

Floating candy, micro loans and Chinese tomatoes

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One week of food for the Casales family in Mexico (Menzel and D'Aluisio, 2005)

One week of food for the Casales family in Mexico (Menzel and D'Aluisio, 2005)

This eclectic selection of reports does have one common theme. And that is a measure of desperation. The global triple crisis – that of finance and credit, of climate change, and of food and hunger – has pushed the poor to desperation, but it has also pushed companies and institutions to desperation. Desperate measures is what links the stories of a floating supermarket in Brazil, normally safe microloans going bad, fertiliser overuse in north India and Chinese tomatoes in Italy.

1. Nestlé’s ‘floating supermarket’ makes its voyages under Amazon skies. The ‘Terra Grande’ vessel is an investment by the Swiss food group designed to reach isolated riverside communities in the Amazon region. The vessel is designed to enhance Nestle’s reach among the lower income consumers that make up a core part of its market. The company has been in Brazil for 89 years and products like its powdered milk are staples among Brazil’s poorer consumers. As the economy continues to grow quickly, Nestlé is hoping that rising incomes among the poor will bring its higher priced goods within their reach, too.

2. Microfinance markets in Nicaragua, Morocco and Pakistan have seen default levels climb to more than 10 percent, the threshold that marks a “serious repayment crisis,” according to a February report from Washington, D.C.-based policy and research firm Consultative Group to Assist the Poor. Delinquencies in Bosnia and Herzegovina stayed below that level only because of “aggressive loan write-offs,” the report said. While there has been no evidence of a “widespread repayment crisis” in India, “a number of industry analysts have highlighted industry vulnerabilities,” the report said.

Here is a slice of Bloomberg’s reportage on the problem in India: “Savita Ramesh Rathore stood at the door to her dimly lit workshop in Mumbai’s Dharavi slum, filled floor-to-ceiling with bundles of old clothes, and tallied up the cost of her son’s wedding last year. ‘Jewels, clothes, food, the town hall,’ said Rathore, 50, who makes towels from discarded clothes. She borrowed 30,000 rupees ($645) from moneylenders charging 60 percent interest and took additional loans from friends to pay for the wedding. Three months ago, she got a 10,000 rupee loan from urban lender Hindusthan Microfinance Pvt. to repay some of that debt.”

One week of food for the Ayme family in Ecuador (Menzel and D'Aluisio, 2005)

One week of food for the Ayme family in Ecuador (Menzel and D'Aluisio, 2005)

3. A new study by Greenpeace Research Laboratories shows that agriculture in Punjab is on the brink of an ecological catastrophe, the result of the overuse of highly-subsidised synthetic nitrogen fertilisers by farmers striving to step up their output. Dr Reyes Tirado, a scientist from the University of Exeter, sampled wells in 50 villages in the areas of Muktsar, Bhatinda and Ludhiana, and found that 20 per cent had nitrate levels above the World Health Organisation recommended safety limit of 50 mg per litre.

Farmers are aggressively using the nitrate fertilisers with the aim of boosting their annual yield. But scientists warn that this overuse is gradually exhausting the soil, which will eventually leave it unfit for food production. PepsiCo, the cola company which also makes potato chips, sources potatoes from farms in Ludhiana, and lost no time in claiming fatuously that it encourages its agricultural suppliers to use less nitrogen-based fertilisers.

4. Italy’s agriculture minister declared “We will defend the Italian tomato” in response to reports by Coldiretti, an agricultural association, that Italian imports of Chinese tomatoes had soared by over 170 per cent in the past year and now made up 10 per cent of the country’s processed tomato market. Chinese tomatoes are being imported into Italy for processing into paste and then re-exported with an Italian label to countries like Ghana which buys about 28,000 tonnes from Italy each year. Chinese exports of food and drink to the EU have doubled over the past decade, reaching 3.2bn euros in 2009.