Last Thursday the company announced it would set up a JV with Fine Organics called Fine Zeelandia, to sell dry and liquid baking ingredients to customers in India, as well as Sri Lanka, Bangladesh and Nepal.
The 50/50 venture with Fine Organics (Zeelandia’s distributor in India since 2001) will start trading using Zeelandia’s imported products, although the companies plan to produce the majority of ingredients locally.
Imports are expensive…so why not produce locally?
Imports are expensive – India imposes high import duties, while Zeelandia and other foreign producers also have to reckon with high sea freight costs and long lead times, all of which can be avoided by producing locally and using local raw materials whenever possible.
Thus, within the next year the JV partners plan to build a factory to produce bread and patisserie mixes, its branded Carlo release agents, Finagel cake gel and Paletta jellies.
Given that the market for bread in India is, for the most part, very localized, we asked Zeelandia what kind of traction does Zeelandia feel it can gain in the country. Also, will the company work to develop traditional Indian style breads?
“Traditional Indian bread are not our first priority,” Guido Janssen, Zeelandia Group's Chief Commercial Officer told BakeryAndSnacks.com. “The Indian market for Western types of bread and pastry is growing rapidly and we would like to gain market share in that segment.
“Having said that, we always take local preferences into account wherever we do business around the world. We respect local bread and pastry habits and traditions, and try and incorporate them into our assortment of bakery ingredients,” he added.
Western-style ingredients catch on in India
Turning to local market trends, Zeelandia International's commercial manager, Matthijs Spiering, told us which segments of the bread market in India are growing, and which Western-style bakery ingredients are catching on.
“The out-of-home or foodservice segment – e.g. chains of coffee corner shops, is growing,” she said. “In addition, we see that large industrial bakeries play an important role in producing bread and pastry products for supermarkets,” he said.
“Because Indian consumer have become more internationally influenced, a number of Western-style bakery ingredients have become popular among Indian, including multi-cereal bread mixes, muffin mixes, fondant and special fruit fillings and glazes,” Spiering added.
Zeelandia CEO Roelof Krist said the JV fits Zeelandia’s wider global business strategy of building local partnerships and local production, since the company has also established a local presence in China, Brazil, Russia, South Africa and Turkey.
Zeelandia targets the BRICS: ‘India is the logical next step’
“India is the logical next step. It’s a huge growth market, especially for confectionery but increasingly for bread as well,” Krist said.
Fine Organics already sells food additives and emulsifiers, and director Jayen Shah said the JV will help his company secure a share of India’s growing market for specialized bread, pastry ingredients and similar products.