Internship 2

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CHAPTER 1

CHAPTER 1 INTRODUCTION

INTRODUCTION

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INTRODUCTION

This is an Internship report about the Kansons Food Pvt Ltd. Company deals This is an Internship report about the Kansons Food Pvt Ltd. Company deals with the production of Bake and confectionary products. The food industry has with the production of Bake and confectionary products. The food industry has given us a food supply so plentiful, so varied, so inexpensive, and so devoid of given us a food supply so plentiful, so varied, so inexpensive, and so devoid of dependence on geography or season that all but the very poorest of citizens can dependence on geography or season that all but the very poorest of citizens can obtain enough energy and nutrients to meet biological needs. Indeed, the obtain enough energy and nutrients to meet biological needs. Indeed, the Country’s food supply is so abundant that it contains enough to feed everyone in Country’s food supply is so abundant that it contains enough to feed everyone in the country nearly twice over

the country nearly twice over — — even after exports is considered. The overlyeven after exports is considered. The overly abundant food supply, combined with a society so affluent that most people can abundant food supply, combined with a society so affluent that most people can afford to buy more food than they need, sets the stage for competition. The food afford to buy more food than they need, sets the stage for competition. The food industry must compete fiercely for every penny spent on food, and food industry must compete fiercely for every penny spent on food, and food companies expend extraordinary resources to develop and market products that companies expend extraordinary resources to develop and market products that will sell, regardless of their effect on nutritional status or waistlines. To satisfy will sell, regardless of their effect on nutritional status or waistlines. To satisfy stockholders, food companies must convince people to eat more of their products stockholders, food companies must convince people to eat more of their products or to eat their products instead of those of competitors. They do so through or to eat their products instead of those of competitors. They do so through advertising and public relations, of course, but also by working tirelessly to advertising and public relations, of course, but also by working tirelessly to convince government officials, nutrition professionals, and the media that their convince government officials, nutrition professionals, and the media that their products promote health

products promote health — — or at least do no harm. Much of this work is a virtuallyor at least do no harm. Much of this work is a virtually invisible part of contemporary culture that attracts only occasional notice. invisible part of contemporary culture that attracts only occasional notice. TheThe

Food Processing Industry is a mature sector that loosely tracks underlying

demographic trends, such as population and income growth. Companies generate

revenue from the sale of food and ingredients to a whole host of customers,

ranging from supermarket chains and local bodegas to restaurants and other

players further down the processing chain

.

SOCIETAL ATTACHMENT:

The ways in which food companies use political processes

The ways in which food companies use political processes — — entirelyentirely conventional and nearly always legal

conventional and nearly always legal — — to obtain government and professionalto obtain government and professional support for the sale of their products. Its twofold purpose is to illuminate the support for the sale of their products. Its twofold purpose is to illuminate the extent to which the food industry determines what people eat and to generate extent to which the food industry determines what people eat and to generate

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much wider discussion of the food industry's marketing methods and use of the much wider discussion of the food industry's marketing methods and use of the political system.

political system.

WORLD WIDE RESEARCH:

Past 25 years, the nutrition had found that food industry practices are discussed Past 25 years, the nutrition had found that food industry practices are discussed only rarely. The reasons for this omission are not difficult to understand. Most of only rarely. The reasons for this omission are not difficult to understand. Most of us believe that we choose foods for reasons of personal taste, convenience, and us believe that we choose foods for reasons of personal taste, convenience, and cost; we deny that we can be manipulated by advertising or other marketing cost; we deny that we can be manipulated by advertising or other marketing practices.

practices. Nutrition Nutrition scientists scientists and and practitioners practitioners typically typically believe believe that that foodfood companies are genuinely interested in improving health. They think it makes companies are genuinely interested in improving health. They think it makes sense to work with the industry to help people improve their diets, and most are sense to work with the industry to help people improve their diets, and most are outraged by suggestions that food industry sponsorship of research or programs outraged by suggestions that food industry sponsorship of research or programs might influence what they do or say. Most food company officials maintain that might influence what they do or say. Most food company officials maintain that any food product can be included in a balanced, varied, and moderate diet; they any food product can be included in a balanced, varied, and moderate diet; they say that their companies are helping to promote good health when they fund the say that their companies are helping to promote good health when they fund the activities of nutrition professionals. Most officials of Government agriculture and activities of nutrition professionals. Most officials of Government agriculture and health agencies understand that their units are headed by political appointees health agencies understand that their units are headed by political appointees whose concerns reflect those of the political party in power and whose actions whose concerns reflect those of the political party in power and whose actions must be acceptable to the judiciary.

must be acceptable to the judiciary.

Being an Intern, I did my summer internship at Kansons food pvt ltd. Two Being an Intern, I did my summer internship at Kansons food pvt ltd. Two months internship is a integral part of MBA degree of ASIET under A P J Abdul months internship is a integral part of MBA degree of ASIET under A P J Abdul Kalam Technological University. The Internship help me to understand how the Kalam Technological University. The Internship help me to understand how the theoretical ideas are put into action

theoretical ideas are put into action

The country has entered into a period of liberalization and this is bound to The country has entered into a period of liberalization and this is bound to influence the food industry. The per capita consumption of food, snacks and influence the food industry. The per capita consumption of food, snacks and products will grow. Th

products will grow. The Indian food induste Indian food industry is undergoing a verry is undergoing a very exciting phasey exciting phase of growth for the next decade.

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1.1.

1.1. _{OBJECTIVES OF THE INTERNSHIP}_{OBJECTIVES OF THE INTERNSHIP} The internship programme

The internship programme was pursued in the KANSON’Swas pursued in the KANSON’S to achieve theto achieve the following objectives:

following objectives:

-1. To understand in detail about the overall working of the organization 1. To understand in detail about the overall working of the organization 2. To study about diff

2. To study about different departments &erent departments & it’sit’s functioning functioning 3. To study the organizational structure of the company 3. To study the organizational structure of the company 4. To understand the manufacturing process of the company 4. To understand the manufacturing process of the company 5. To understand the product profile of Kansons.

5. To understand the product profile of Kansons.

1.2 INDUSTRY ANALYSIS 1.2 INDUSTRY ANALYSIS

The Indian food industry is poised for huge growth, increasing its contribution to

world food trade every year. In India, the food sector has emerged as a

high-growth and high-profit sector due to its immense potential for value addition,

growth and high-profit sector due to its immense potential for value addition,

particularly within the food processing industry.

The food industry, which is currently valued at US$ 39.71 billion!, is expected to

grow at a Compounded Annual Growth Rate (CAGR) of 11 per cent to US$ 65.4

billion

billion by by 2018. 2018. Food Food and and grocery grocery account account for for around around 31 31 per per centcent of India’sof India’s

consumption basket.

consumption basket. Accounting for about 32 per cent of the country’s total foodAccounting for about 32 per cent of the country’s total food

market, The Government of India has been instrumental in the growth and

development of the food processing industry. The government through the

Ministry of Food Processing Industries (MoFPI) is making all efforts to

encourage investments in the business. It has approved proposals for joint

ventures (JV), foreign collaborations, industrial licenses, and 100 per cent export

oriented units.

Market Size

The Indian food and grocery market is the world’s sixth largest, with retail

contributing 70 per cent of the sales. The Indian food retail market is expected to

reach Rs 61 lakh crore (US$ 915 billion) by 2020. The Indian food processing

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industry accounts for 32 per cent of the country’s total food market, one of the

largest industries in India and is ranked fifth in terms of production,

consumption, export and expected growth. It contributes around 14 per cent of

manufacturing Gross Domestic Product (GDP), 13 per cent of India’s exports

and six per cent of total industrial investment. Indian food service industry is

expected to reach US$ 78 billion by 2018.The Indian gourmet food market is

currently valued at US$ 1.3 billion and is growing at a Compound Annual

Growth Rate (CAGR) of 20 per cent. India's organic food market is expected to

increase by three times by 2020.

The online food ordering business in India is in its nascent stage, but witnessing

exponential growth. The organised food business in India is worth US$ 48

billion,

billion, of of which which food food delivery delivery is is valued valued at at US$ US$ 15 15 billion. billion. With With online online foodfood

delivery players like FoodPanda, Zomato, TinyOwl and Swiggy building scale

through partnerships, the organised food business has a huge potential and a

promising

promising future. future. The The online online food food delivery delivery industry industry grew grew at at 150 150 per per cent cent year-

year-on-year with an estimated Gross Merchandise Value (GMV) of US$ 300 million

on-year with an estimated Gross Merchandise Value (GMV) of US$ 300 million

in 2016.

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Investments

According to the data provided by the Department of Industrial Policies and

Promotion (DIPP), the food processing sector in India has received around US$

7.47 billion worth of Foreign Direct Investment (FDI) during the period April

2000-December 2016. The Confederation of Indian Industry (CII) estimates that

the food processing sectors have the potential to attract as much as US$ 33

billion

billion of of investment over investment over the next the next 10 10 years and years and also talso to generate o generate employment ofemployment of

nine million person-days.

Mr Tomasz Lukaszuk, the Ambassador of the Republic of Poland had also

highlighted the keen interest shown by Polish companies looking for

opportunities in India to expand collaboration and invest food processing.

Some of the major investments in this

Some of the major investments in this sector in the recent past are:sector in the recent past are:



 US-based food company Cargill Inc, aims to double its branded consumerUS-based food company Cargill Inc, aims to double its branded consumer business

business in in India India by by 2020, 2020, by by doubling doubling its its retail retail reach reach to to about about 800,000800,000

outlets and increase market share to become national leader in the

sunflower oil category which will help the company be among the top

three leading brands in India.



 Mad Over Donuts (MoD), outlined plans of expanding its operations inMad Over Donuts (MoD), outlined plans of expanding its operations in India by opening nine new MOD stores by March 2017.

India by opening nine new MOD stores by March 2017.



 Danone SA plans to focus on nutrition business in India, its fastestDanone SA plans to focus on nutrition business in India, its fastest growing market in South Asia, by launching 10 new products in 2017, and

growing market in South Asia, by launching 10 new products in 2017, and

aiming to double its revenue in India by 2020.



 Uber Technologies Inc plans to launch UberEATS, its food deliveryUber Technologies Inc plans to launch UberEATS, its food delivery service to India, with investments made across multiple cities and regions.

service to India, with investments made across multiple cities and regions.



 Di Bella, the Australia-based coffee chain, plans to invest Rs 67 croreDi Bella, the Australia-based coffee chain, plans to invest Rs 67 crore (US$ 10 million) for setting up around 20 new outlets in Mumbai, besides

(US$ 10 million) for setting up around 20 new outlets in Mumbai, besides

entering Delhi and Bangalore by 2017.



 KKR & Co LP, the US-based private equity firm, plans to invest about RsKKR & Co LP, the US-based private equity firm, plans to invest about Rs 520 crore (US$ 77.38 million) in dairy company Kwality Ltd, which will

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be

be used used to to strengthen strengthen its its milk milk procurement procurement infrastructure infrastructure and and increaseincrease

processing capacity.



 Henry Ford Health Systems (HFHS), a US-based health and wellnessHenry Ford Health Systems (HFHS), a US-based health and wellness group, plans to enter India by signing a franchise partnership with

group, plans to enter India by signing a franchise partnership with

Chandigarh-based hospitality and food services firm KWalls Hospitality,

and set up 'Culinary Wellness' branded stores across the country.



 Mondelez International, the US-based confectionery, food, and beverageMondelez International, the US-based confectionery, food, and beverage major, inaugurated its new manufacturing plant in Andhra Pradesh set up

major, inaugurated its new manufacturing plant in Andhra Pradesh set up

for Rs 1,265 crore (US$ 190 million), with an annual production capacity

of 250,000 tonnes.



 PureCircle, a Malaysia-based natural sweetener producer, plans to investPureCircle, a Malaysia-based natural sweetener producer, plans to invest around Rs 1,300 crore (US$ 200 million) in India to set up a

around Rs 1,300 crore (US$ 200 million) in India to set up a

manufacturing plant and make the country its regional production and

export hub in the next five years.



 Swiggy, a food delivery start-up owned by Bundl Technologies PrivateSwiggy, a food delivery start-up owned by Bundl Technologies Private Limited, has raised Rs 230.34 crore (US$ 33.80 million) in a Series C

Limited, has raised Rs 230.34 crore (US$ 33.80 million) in a Series C

funding round, with its existing investors SAIF Partners, Accel Partners,

Norwest Venture

Norwest Venture Partners and Partners and Apoletto Apoletto Asia Asia Ltd contributiLtd contributing 79 ng 79 per centper cent

of the new funds raised.



 Gujarat Cooperative Milk Marketing Federation (GCMMF), popularlyGujarat Cooperative Milk Marketing Federation (GCMMF), popularly known as 'Amul', plans to invest Rs 5,000 crore (US$ 733.6 million) to

known as 'Amul', plans to invest Rs 5,000 crore (US$ 733.6 million) to

establish ten new processing plants as well as expand the current capacity

to touch 32 million litres per day (MLPD) capacity by 2020.



 Private Equity (PE) firm India Value Fund Advisors (IVFA) plans toPrivate Equity (PE) firm India Value Fund Advisors (IVFA) plans to invest around US$ 100-150 million in the food business in India over the

invest around US$ 100-150 million in the food business in India over the

next two years.



 Zomato, a restaurant search and discovery platform, has raised US$ 60Zomato, a restaurant search and discovery platform, has raised US$ 60 million from Singapore government-owned investment company

million from Singapore government-owned investment company

Temasek, alongss with existing investor Vy Capital, in order to explore

new business verticals.

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

 ITC Limited plans to invest Rs 800 crore (US$ 117.4 million) to set up aITC Limited plans to invest Rs 800 crore (US$ 117.4 million) to set up a world-class food processing facility in Medak, a district located in

world-class food processing facility in Medak, a district located in

Telangana. The company has also formulated plans to enter the dairy

market.

Government Initiatives

Some of the major initiatives taken by the Government of India to improve the

food processing sector in India are as follows:



 In Union Budget 2017-18, the Government of India has set up a dairyIn Union Budget 2017-18, the Government of India has set up a dairy processing infra fund worth Rs 8,000 crore (US$ 1.2 billion).

processing infra fund worth Rs 8,000 crore (US$ 1.2 billion).



 Union Budget 2016-17 proposed 100 per cent FDI through FIPB (ForeignUnion Budget 2016-17 proposed 100 per cent FDI through FIPB (Foreign Investment Promotion Board) route in marketing of food products

Investment Promotion Board) route in marketing of food products

produced and manufactured in India.



 The Government of India has relaxed foreign direct investment (FDI)The Government of India has relaxed foreign direct investment (FDI) norms for the sector, allowing up to 100 per cent FDI in food product

norms for the sector, allowing up to 100 per cent FDI in food product

e-commerce through automatic route.

commerce through automatic route.



 The Food Safety and Standards Authority of India (FSSAI) plans to investThe Food Safety and Standards Authority of India (FSSAI) plans to invest around Rs 482 crore (US$ 72.3 million) to strengthen the food testing

around Rs 482 crore (US$ 72.3 million) to strengthen the food testing

infrastructure in India, by upgrading 59 existing food testing laboratories

and setting up 62 new mobile testing labs across the country.



 The Indian Council for Fertilizer and Nutrient Research (ICFNR) willThe Indian Council for Fertilizer and Nutrient Research (ICFNR) will adopt international best practices for research in fertiliser sector, which

adopt international best practices for research in fertiliser sector, which

will enable farmers to get good quality fertilisers at affordable rates and

thereby achieve food security for the common man.



 The Government of India allocated Rs 1,500 crore (US$ 225.7 million)The Government of India allocated Rs 1,500 crore (US$ 225.7 million) and announced various measures under the Merchandise Exports from

and announced various measures under the Merchandise Exports from

India Scheme (MEIS), including setting up of agencies for aquaculture

and fisheries in coastal states and export incentives for marine products.



 Government of India plans to allow two Indian dairy companies, ParagGovernment of India plans to allow two Indian dairy companies, Parag Milk Foods and Schreiber Dynamix Dairies, to export milk products to

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Russia for six months, after these companies got approval for their

products by Russian inspection authorities.



 Ms Harsimrat Kaur Badal, Union Minister for Food Processing Industries,Ms Harsimrat Kaur Badal, Union Minister for Food Processing Industries, Government of India inaugurated the first of its kind Rs 136 crore (US$

Government of India inaugurated the first of its kind Rs 136 crore (US$

20 million) mega international food park at Dabwala Kalan, Punjab. She

has also expressed confidence that the decision to allow 100 per cent

Foreign Direct Investment (FDI) in multi-brand retail with 100 per cent

local sourcing condition, will act as a catalyst for the food processing

sector, thereby controlling inflation, uplifting the condition of farmers,

and creating more jobs in the country.



 FSSAI has issued new rules for importing products, to address concernsFSSAI has issued new rules for importing products, to address concerns over the entry of sub-standard items and simplify the process by setting

over the entry of sub-standard items and simplify the process by setting

shelf-life norms and relaxing labelling guidelines.



 The Ministry of Food Processing Industries announced a scheme forThe Ministry of Food Processing Industries announced a scheme for Human Resource Development (HRD) in the food processing sector. The

Human Resource Development (HRD) in the food processing sector. The

HRD scheme is being implemented through State Governments under the

National Missi

National Mission on on on Food Processing. Food Processing. The scheme The scheme has the has the following following fourfour

components:

components: o

o Creation of infrastructure facilities for degree/diploma courses inCreation of infrastructure facilities for degree/diploma courses in food processing sector

food processing sector o

o Entrepreneurship Development Programme (EDP)Entrepreneurship Development Programme (EDP)

o

o Food Processing Training Centres (FPTC)Food Processing Training Centres (FPTC)

o

o Training at recognised institutions at State/National levelTraining at recognised institutions at State/National level



 FSSAI under the Ministry of Health and Family Welfare has issued theFSSAI under the Ministry of Health and Family Welfare has issued the Food Safety and Standards (Food Product Standards and Food Additives)

Food Safety and Standards (Food Product Standards and Food Additives)

Regulations, 2011 and the Food Safety and Standards (Contaminants,

Toxins and Residues) Regulations, 2011 which prescribe the quality and

safety standards, respectively for food products.



 Spices Board, set up by the Ministry of Commerce to develop andSpices Board, set up by the Ministry of Commerce to develop and promote Indi

promote Indian spian spices ces worldwide, aiworldwide, aims spice ms spice exports exports of of US$ 3 US$ 3 billion billion byby

2017.

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

 The Government of India has approved the setting up of five numbers ofThe Government of India has approved the setting up of five numbers of Mega Food Parks in the states of Bihar, Maharashtra, Himachal Pradesh

Mega Food Parks in the states of Bihar, Maharashtra, Himachal Pradesh

and Chhattisgarh. The Government plans to set up 42 such mega food

parks across the country in next three to four years.

Road Ahead

Going forward, the adoption of food safety and quality assurance mechanisms

such as Total Quality Management (TQM) including ISO 9000, ISO 22000,

Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing

Practices (GMP) and Good Hygienic Practices (GHP) by the food processing

industry offers several benefits. It would enable adherence to stringent quality

and hygiene norms and thereby protect consumer health, prepare the industry to

face global competition, enhance product acceptance by overseas buyers and

keep the industry technologically abreast of international best practices.

Exchange Rate Used: INR 1 = US$ 0.015 as on February, 2017

Disclaimer: This information has been collected through secondary research and IBEF is

not responsible for any errors in the same

Food Processing

The Food Processing Industry is a mature sector that loosely tracks underlying

demographic trends, such as population and income

demographic trends, such as population and income growth. Companiesgrowth. Companies

generate revenue from the sale of food and

generate revenue from the sale of food and ingredients to a whole host ofingredients to a whole host of

customers, ranging from supermarket chains and local bodegas to restaurants

and other players further down the processing chain. This sector is p

and other players further down the processing chain. This sector is praised forraised for

its ability to deliver consistently positive investment returns. Indeed, over

its ability to deliver consistently positive investment returns. Indeed, over thethe

past 20 years, Food Processing stocks have, on average, delivered high

single-digit annual total returns (share-price appreciation and dividends), with much

digit annual total returns (share-price appreciation and dividends), with much

less volatility than the broader market indexes. It is, therefore, of little surprise

that food stocks are well suited to fairly conservative investors with low

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growth, ample interest coverage, and

growth, ample interest coverage, and solid balance sheets, also establish thesesolid balance sheets, also establish these

companies as "safe harbor" selections during major economic and stock market

downturns.

Top-Line Drivers

Food, of course, is one of life's basic necessities. As such, underlying demand

tends to be steady through prosperous and difficult economic times. That said,

food companies benefit from population growth. Also, higher aggregate personal

income affords people "richer" diets and those on the margin may rely less on

homegrown staples. Proactive efforts are arguably most critical for top-line

growth. Companies endeavour to capture a greater share of household budgets

through strong branding and the strategic positioning of their offerings.

Trend-right products and re-formulations that are easy to prepare, portable, and

right products and re-formulations that are easy to prepare, portable, and

healthful usually gain good traction. Expansion into new geographic markets is

also a key growth driver. Cross-cultural expansion can prove difficult, though,

given entrenched regional cuisine and tastes.

Cross Currents

Though food demand is reasonably predictable, there are certain cyclical

undercurrents that present nimble investors the opportunity to strategically

position

position their their food food industry industry exposure exposure for for above-average above-average investment investment returns. returns. InIn

challenging economic times, for example, people tend to forego vacations and

restaurant outings. Consequently, food companies with significant

hospitality-sector exposure often experience a falloff in end-market demand and lagging

sector exposure often experience a falloff in end-market demand and lagging

share-price performance. Budget-constrained consumers might trade down

within the food sector, be it from expensive national brands to cheaper

private-labels or from pricey proteins, like steak and ground sirloin, to chicken and eggs.

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Sub-Segments

Food companies fall into various sub-segments, and painting them all with one

broad

broad stroke stroke can can lead lead to to surprising surprising deviations deviations from from expected expected performance.performance.

Investors should be cognizant of where a producer resides within the

commodity-"value added" spectrum. Poultry and other commodity-type producers have little

"value added" spectrum. Poultry and other commodity-type producers have little

individual influence over product pricing, and are susceptible to such vagaries as

weather-related crop damage and cross-border trade sanctions. Commodity-like

producers

producers are are also also constrained constrained by by long long harvest harvest (in (in the the case case of of grains) grains) and and lifelife

(livestock) cycles. Therefore, those companies tend to have difficulty quickly

adjusting "production" capacity. These factors result in relatively high earnings

and share-price volatility, as compared with the rest of the Food Processing

Industry. Through innovation and branding, successful marketers of value-added

goods face less direct competition and have more control over pricing.

Accordingly, they enjoy stable returns.

Cost Considerations

Success also depends on the ability to control costs and leverage fixed/near-fixed Success also depends on the ability to control costs and leverage fixed/near-fixed expenses. Over its history, the industry has, at times, suffered margin pressure expenses. Over its history, the industry has, at times, suffered margin pressure due to severe input cost inflation in the form of higher prices for ingredients and due to severe input cost inflation in the form of higher prices for ingredients and fuel (used to power processing plants and distribute goods to the retail trade). In fuel (used to power processing plants and distribute goods to the retail trade). In periods

periods of of commodity-price commodity-price deflation, deflation, however, however, the the "stickiness" "stickiness" of of retail retail priceprice hikes supports profitability. When input costs spike, value-added producers, with hikes supports profitability. When input costs spike, value-added producers, with their strong brands, are better positioned, and can pass along much of the higher their strong brands, are better positioned, and can pass along much of the higher expense to customers. Makers of private label brands have good cost leeway, expense to customers. Makers of private label brands have good cost leeway, given the absence of big marketing outlays.

given the absence of big marketing outlays.

Size matters for many of these companies. Distribution costs are often nearly Size matters for many of these companies. Distribution costs are often nearly fixed. As such, a larger portion of each incremental sales dollar tends to flow fixed. As such, a larger portion of each incremental sales dollar tends to flow

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down to the bottom line. Processors with an expanding brand portfolio can down to the bottom line. Processors with an expanding brand portfolio can quickly realize significant economies of scale. A wide portfolio of popularly quickly realize significant economies of scale. A wide portfolio of popularly selling brands also puts these companies in a stronger bargaining position, selling brands also puts these companies in a stronger bargaining position, vis-a-vis major customers in the retail trade, which has increasingly invaded the vis major customers in the retail trade, which has increasingly invaded the grocery space. Small food processors, however, as potential takeover targets, grocery space. Small food processors, however, as potential takeover targets, may be the direct beneficiaries of industry consolidation.

may be the direct beneficiaries of industry consolidation.

Food Processing stocks are typically in vogue during recessions, when investors Food Processing stocks are typically in vogue during recessions, when investors shun more-economically sensitive issues. That said, they are susceptible to sector shun more-economically sensitive issues. That said, they are susceptible to sector rotation, when investors look to time the market bottom of cyclical issues. On rotation, when investors look to time the market bottom of cyclical issues. On balance, food industr

balance, food industry exposure does y exposure does serve most investorserve most investors well, regardless s well, regardless of theof the economic backdrop. These generally stable franchises produce fairly consistent, economic backdrop. These generally stable franchises produce fairly consistent, if unspectacular, investment returns throughout the business cycle. Processors, if unspectacular, investment returns throughout the business cycle. Processors, the large names with strong brand portfolios, in particular, are suitable for the large names with strong brand portfolios, in particular, are suitable for somewhat conservative investors. But numerous sub-segments do enable more somewhat conservative investors. But numerous sub-segments do enable more venturesome investors to strategically position their portfolios for venturesome investors to strategically position their portfolios for outperformance. Commodity-type producers, for example, may appeal to savvy outperformance. Commodity-type producers, for example, may appeal to savvy market timers. All in all, the Food Processing Industry has something to offer to market timers. All in all, the Food Processing Industry has something to offer to nearly everybody.

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CHAPTER 2

CHAPTER 2 ORGANIZATIONAL ANALYSIS

ORGANIZATIONAL ANALYSIS

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2.1. Company Profile 2.1. Company Profile

ESTABLISHMENT ESTABLISHMENT

For over decades, The KANSON’S have been setting new standards in Food For over decades, The KANSON’S have been setting new standards in Food Industry. The KANSON’S are the experts in providing farm to fork food Industry. The KANSON’S are the experts in providing farm to fork food solutions. From processing the finest quality of food grains to baking and solutions. From processing the finest quality of food grains to baking and milling, The KANSO

milling, The KANSO N’S N’S are are committed committed to to deliver deliver the the best best in in everything everything theythey do. They have an extensive range of healthy and wholesome breads and cakes, do. They have an extensive range of healthy and wholesome breads and cakes, fresh-milled flours, convenience products and ethnic foods. The most recent fresh-milled flours, convenience products and ethnic foods. The most recent addition in the line of food products is the fast-expanding range of wellness and addition in the line of food products is the fast-expanding range of wellness and health-foods.

health-foods.

The KANSON’S pick the choicest of food grains such as wheat, oats, millets and The KANSON’S pick the choicest of food grains such as wheat, oats, millets and rice from various parts of our country as well as abroad. Our supply-chain rice from various parts of our country as well as abroad. Our supply-chain management brackets together the best of sources such as M.P., Telangana, management brackets together the best of sources such as M.P., Telangana, Australia, United Arab Emirates and Tamil Nadu to name a few. The Australia, United Arab Emirates and Tamil Nadu to name a few. The KANSON’S make sure that the quality and taste never gets compromised.

KANSON’S make sure that the quality and taste never gets compromised.

The KANSON’S’s expertise and success is the result of their commitment to The KANSON’S’s expertise and success is the result of their commitment to quality and years of research and experimentation. Over the years, their quality and years of research and experimentation. Over the years, their

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customers have come to expect the best from KANSON’S. And they have customers have come to expect the best from KANSON’S. And they have continued to deliver the finest and healthiest Foods to them.

continued to deliver the finest and healthiest Foods to them.

COMPANY PROFILE

Kansons foods pvt ltd was established in 1993, the company setup its Kansons foods pvt ltd was established in 1993, the company setup its headquarters in Kozhikode and also developed its branch located in the industrial headquarters in Kozhikode and also developed its branch located in the industrial development plot Angamaly, Ernakulam district. The Kansons are the development plot Angamaly, Ernakulam district. The Kansons are the manufactures of food products. The company is marketing their products in the manufactures of food products. The company is marketing their products in the brand na

brand name knome known as wn as APPLE. TheAPPLE. They are y are the the sister sister concern of concern of Kansons Kansons group group ofof Companies. NILA, a name synonymous with catering service in Kerala and its Companies. NILA, a name synonymous with catering service in Kerala and its neighboring states actually started off as baker’s way back in 1993. It later on neighboring states actually started off as baker’s way back in 1993. It later on developed into a retail chain (Nila Bake House) which is very popular in central developed into a retail chain (Nila Bake House) which is very popular in central Kerala today.

Kerala today. Nila

Nila Bakers Bakers and and Confectioneries Confectioneries a a private private ltd. ltd. Company Company was was inaugurated inaugurated onon April 14, 2011 by Padmashree Yusuf Ali. This company was formed to cater to April 14, 2011 by Padmashree Yusuf Ali. This company was formed to cater to the wholesale market in South India. State of the art factories installed by them the wholesale market in South India. State of the art factories installed by them with latest technologies available enable them to manufacture quality products in with latest technologies available enable them to manufacture quality products in a hygienic atmosphere.

a hygienic atmosphere.

Kansons foods pvt ltd is one of leading manufactures in Kerala and also Kansons foods pvt ltd is one of leading manufactures in Kerala and also distributing their products in Lakshadweep and gulf countries. They offer variety distributing their products in Lakshadweep and gulf countries. They offer variety of quality products like Bread, Bun, Rusk, Cakes, Cookies etc. The way they of quality products like Bread, Bun, Rusk, Cakes, Cookies etc. The way they source their ingredients is absolutely key to the quality of their products and they source their ingredients is absolutely key to the quality of their products and they source all their ingredients to ensure the highest ethical and quality standards. source all their ingredients to ensure the highest ethical and quality standards. They are certified FSSAI, CFTRI etc. The manufacturing unit is indulged in They are certified FSSAI, CFTRI etc. The manufacturing unit is indulged in using the most sophisticated machineries and technology. So bulk orders for using the most sophisticated machineries and technology. So bulk orders for export also are executed in a time bound manne

export also are executed in a time bound manner. The company’s expertise andr. The company’s expertise and success is the result of their commitment to quality and years of research and success is the result of their commitment to quality and years of research and experimentation. Over the years, their customers have come to expect the best experimentation. Over the years, their customers have come to expect the best from KANSON’S. And they have continued to deliver the finest and hea

from KANSON’S. And they have continued to deliver the finest and healthiestlthiest Foods to them. The brand has occupied the customers heart due to the refining Foods to them. The brand has occupied the customers heart due to the refining

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quality and unmatched taste ever since its inception. Ever since its inception, the quality and unmatched taste ever since its inception. Ever since its inception, the company

company has has been been delivering delivering its its exceptional exceptional product product which which has has led led to to thethe everlasting sustainability in the food industry.

everlasting sustainability in the food industry.

Kansons had a modest beginning in 1993 as a partnership venture. The Kansons had a modest beginning in 1993 as a partnership venture. The association between M/s P.P Musthafa, C.P Usman, C. Unnikrishnan M. association between M/s P.P Musthafa, C.P Usman, C. Unnikrishnan M. Unnikrishnan & K.N Shanmukhan entered this field as a natural extension to Unnikrishnan & K.N Shanmukhan entered this field as a natural extension to their existing bakery business. With total dedication and hard work of the their existing bakery business. With total dedication and hard work of the management and staff, Kansons Group steadily over the years and today it ranks management and staff, Kansons Group steadily over the years and today it ranks amongst the finest catering services in Kerala and Tamil Nadu.

amongst the finest catering services in Kerala and Tamil Nadu.

HISTORY

The very name Kansons brings to mind quality integrity and commitment. The very name Kansons brings to mind quality integrity and commitment. Launched in the year 1993, Kansons has since become a house hold name Launched in the year 1993, Kansons has since become a house hold name amongst food lover all over Kerala , with more than 100 outlets and around 2000 amongst food lover all over Kerala , with more than 100 outlets and around 2000 direct and indirected staff team. Strict adherence to quality and hygiene has direct and indirected staff team. Strict adherence to quality and hygiene has propelled

propelled Kansons Kansons to to the the top top position position among among caterers caterers in in Kerala, Kerala, ConstantConstant innovations, evolution and expansion are the manthrastha have made Kansons innovations, evolution and expansion are the manthrastha have made Kansons what it's today.

what it's today.

Kansons started its food business as 'Nila Bake House' at Ottappalam in 1993 , Kansons started its food business as 'Nila Bake House' at Ottappalam in 1993 , and started its production units at Ottappalam, Pattambi, and perinthalmanna and started its production units at Ottappalam, Pattambi, and perinthalmanna with in 2 years. Now Nila bake house is having more than 60 outlets around with in 2 years. Now Nila bake house is having more than 60 outlets around these production points. In order to feed the entire market of kerala other than these production points. In order to feed the entire market of kerala other than KANSONS's own outlets Kansons started mechanised bakery factories named KANSONS's own outlets Kansons started mechanised bakery factories named 'Nila Bakers and Confectioneries(India) Pvt Ltd. in shornur, Angamaly and 'Nila Bakers and Confectioneries(India) Pvt Ltd. in shornur, Angamaly and Ottappalam. With the support of 42 distributors Kansons's Bakery products like Ottappalam. With the support of 42 distributors Kansons's Bakery products like breads, Rusks, Cakes, Cookies, Savouries, etc. are now

breads, Rusks, Cakes, Cookies, Savouries, etc. are now available all over Kerala.available all over Kerala. In 2007 Kansons expanded it's Catering division to a private limited company ' In 2007 Kansons expanded it's Catering division to a private limited company ' Nila catering service

Nila catering service (India) Pvt.Ltd under (India) Pvt.Ltd under the leadership of the leadership of Mr. P.P Musthafa asMr. P.P Musthafa as its Managing Director, Mr Unnikrishnan as Chairman and K.Dilip kumar as vice its Managing Director, Mr Unnikrishnan as Chairman and K.Dilip kumar as vice Chairman. Executive Directors Mr. KK Shabab and Mr. C.H Noufal are incharge Chairman. Executive Directors Mr. KK Shabab and Mr. C.H Noufal are incharge

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of the south and north zone operations. Directors Mr. M Anoop and Mr. P P of the south and north zone operations. Directors Mr. M Anoop and Mr. P P Mujmal are incharge of Thrissur and Coimbatore regions.Director Mr. VP Sujith Mujmal are incharge of Thrissur and Coimbatore regions.Director Mr. VP Sujith is incharge of Kansons's new expansion Food fusion and Grill n Fry. Mr C P is incharge of Kansons's new expansion Food fusion and Grill n Fry. Mr C P Usman, Mr K N Shanmughan, Mr M sathyanarayanan and Mr. V P Surendran Usman, Mr K N Shanmughan, Mr M sathyanarayanan and Mr. V P Surendran are the other directors of Kansons.

are the other directors of Kansons.

Management

Their managing Director Mr P.P.Musthafa a man of vast experience in this field, Their managing Director Mr P.P.Musthafa a man of vast experience in this field, a tireless, ambitious, business man with a vision for the future and a strong board a tireless, ambitious, business man with a vision for the future and a strong board of directors to support him makes up the management of the company. A group of directors to support him makes up the management of the company. A group of well trained, dedicated managers and staff are the stronghold of Kansons of well trained, dedicated managers and staff are the stronghold of Kansons foods Pvt Ltd.

foods Pvt Ltd.

They have a marketing network of stockiest and distributors from one end of They have a marketing network of stockiest and distributors from one end of Kerala to the other and it is their goal to make Kansons foods Pvt Ltd the most Kerala to the other and it is their goal to make Kansons foods Pvt Ltd the most acceptable brand in Kerala by 2015

acceptable brand in Kerala by 2015

..

Business Objectives of Kansons Business Objectives of Kansons Kansons Aims and Objectives Kansons Aims and Objectives

Kansons aims are what they want to achieve in the long run, and objectives

are used to high light how those aims

are used to high light how those aims are going to be achieved. Objectivesare going to be achieved. Objectives

can be in a form of targets and challenges for the business to achieve the

aims.

Kansons aims are to:



 Maximise profitMaximise profit



 To maximise salesTo maximise sales



 To growTo grow



 To operate in a wide range of marketsTo operate in a wide range of markets



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

 To provide freedom for workers to express themselves and suggest ideasTo provide freedom for workers to express themselves and suggest ideas to help the business

to help the business



 Achieve best possible financial return on capitalAchieve best possible financial return on capital

Kansons use aims and objectives as they are the foundation for decision making

within the company. It provides long term thinking it's measurable and

controlling and it motivates and inspires workers and employees, its direct, it

focuses on efforts and unifies the company and most importantly it

communicates with shareholders and employers regarding the businesses future.

Kansons use the

Kansons use the S.M.A.R.TS.M.A.R.T objective method to set their short term objectives. objective method to set their short term objectives.

These objectives have to be set for the business, products or services.

Specific: The objectives should specify what Kansons want to achieve, for

example they may want to achieve a 3% market share in 1

example they may want to achieve a 3% market share in 12 months.2 months.

Measurable: The objectives should specify how you are going to measure

whether you are achieving the objective. For Example, a 3% market share over

12 months means that each month market share targets can

12 months means that each month market share targets can be measured.be measured.

Achievable: The Objective must be achievable and attainable. For example, Is

the 3% objective for the 12 months achievable? Does Kansons have the

resources, man power and finances to achieve it?

Realistic: Can the objectives realistically be achieved with the resources you

have? For example: Is the 3% objective over a 12-month period realistic or does

the company need longer? Does the company have the skills and resources to

achieve this over the time period set?

Timely: When do you want to achieve the set objectives? Without a timescale it

is difficult to set dates for the achievement of key tasks and milestones.

For Example: In our company have set themselves a period of 12 months to

achieve the 3% market share.

Marketing and sales Marketing and sales

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Marketing Hierarchy

General Manager

Area

Area Sales

Sales Manager

Manager Area

Area Sales

Sales Manager

Manager Area

Area Sales

Sales Manager

Manager

North

South

Central

Malabar-Kasaragod

Alappuzha-Trivandrum

Alappuzha-Trivandrum Palakkad-

Palakkad-Kottayam

Kottayam

Sales

Sales off off Sales Sales Off Off Sales Sales offSales offSales off off Sales Sales off off Sales Sales offoff

4SE

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Marketing is one of the majorly emphasized activities of any business. Marketing Marketing is one of the majorly emphasized activities of any business. Marketing company hierarchy incorporates the levels of administration in the marketing company hierarchy incorporates the levels of administration in the marketing departments. The marketing has become one of the primary capsule in the departments. The marketing has become one of the primary capsule in the functioning

functioning of the company. The KANSON’S have proved its dominance in theof the company. The KANSON’S have proved its dominance in the bakes

bakes industry. industry. The The marketing marketing hierarchy hierarchy has has evolved evolved since since its its inception.inception. Marketing hierarchy demonstrates levels that fittingly define the hierarchy. This Marketing hierarchy demonstrates levels that fittingly define the hierarchy. This hierarchy is explained starting from the highest career levels and descending hierarchy is explained starting from the highest career levels and descending towards the lower career levels. The marketing department have been the central towards the lower career levels. The marketing department have been the central element these days since every company today want to succeed in the immense element these days since every company today want to succeed in the immense competition.

competition. Marketing is the department that identifies the customers' needs byMarketing is the department that identifies the customers' needs by

carrying out marketing research alongside the research and development

department, they develop the right products and promotions that need to be

focused on within the needs and requirements of products requested by the

company's customers and this helps to increase profit and keep the sales teams

achieving their targets and objectives.

To achieve the company's objectives, the marketing team must get 4 main areas

right:

Products - they must identify what is suitable for the target market, what brings

total satisfaction to the customers, what customers would like them to produce,

what is selling the most or what could do with some extra support due to low

sales.

Price- They must investigate the going rates or other suppliers to assure they

don't overprice or under-price a product.

Place- To identify where and what areas are selling certain product this would

benefit the

benefit the production production team as team as they they could could work work a sa system out ystem out to to avoid waste avoid waste andand

additional losses.

Promotion-To identify where and when to promote a product, for example if a

Christmas limited addition product became available, it would be irrelevant to

advertise or promote this product in February.

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The above 4 areas help Kansons to achieve at least 2 of their objectives:

"to be the number one product in a given market""maximising profit"

Local Community Local Community

The local community can play a major part in Kansons business objectives as

they are stakeholders, who live in or work in the area where the factories are

producing

producing the the products, products, this this could could have have interests interests in in the the pollution pollution or or the the traffictraffic

that the factory is creating, leading to complaints. The owners could decide they

want to work all night and this could affect the residents who wish to sleep but

cannot due to the noise that the factory works are making. Yet on the other hand

Kansons could open up a new factory in a new area, and this could create jobs

and provide them people with an income lower the employability statistics in the

area of job seekers and improve their qualit

area of job seekers and improve their quality of life.y of life.

Government Government

The Government are also stakeholders and take interest in the laws and

legislation of Kansons, the government's decisions can have an impact on the

aims and objectives as the laws they enforce can actually shut the company

down, they have to ensure the factory is following the health and safety and that

the hygiene levels are met as they are producing a food product. The government

also have an interest to see Kansons achieve there aims and objectives as if the

company stops producing products, staff would then be made redundant and then

the employment rates will drop and no contributions will be made to the gross

national product. Another interest that the government would have is that the

company achieve their aims and objectives as they employ a lot of staff and each

staff member would have to pay tax that would then be used for healthcare and

education.