No Delight for RIL's non-veg buyers - Times of India

The author has posted comments on this articlePiyush Pandey, TNN | Dec 16, 2013, 04.35AM IST

MUMBAI: RIL move to exit the non-vegetarian food business is in deference to the wishes of a large section of consumers, shareholders and investors who had requested Mukesh Ambani to get out of the meat segment as it hurt their religious sentiments. The non-vegetarian foods business, said to be growing at a CAGR of 25-30%, is estimated to comprise 10% of the company's total retail business and is also a profit-making venture.

Given that Ambani himself is a strict vegetarian, it is a clear sign that business decisions cannot be separated from an individual's dietary and lifestyle choices.

RIL had earlier picked up a 45% equity stake in Two Sisters Foods India (TSFI), whic h belongs to 2 Sisters Food Group (2SFG). 2SFG, the third largest food company in the UK, supplies poultry, red meat, fish, and bakery and chilled/frozen products to the retail, food service and food manufacturing sectors. RIL was also planning to set up quick service restaurants (QSRs) named 'Chicken came First'.

RIL sources pointed out that RIL has annulled the joint venture with 2SFG and even decided to forgo investments to the tune of Rs 50 crore made in Delight stores and potential future profits from it. RIL shares on BSE closed down marginally at Rs 863 in a volatile Mumbai market on Friday.

Delight, a chain for non-vegetarian products with presence in 11 states and 25 cities with over 100 stores, was introduced as an independent network of stores for non-vegetarian offerings in select geographies. A completely dedicated and fully segregated supply chain was maintained for Delight in order to cater to the distinct preferences and ideologies of different customers. The company initially had plans to scale up Delight stores to over 1,000 as non-veg products deliver a margin of over 20-25% compared to 10-15% margins in food and grocery retailing.

"Despite this sensitive balance of availability and convenience, it was felt that certain sections of customers were still hesita nt to shop at our other stores. Reliance Retail has therefore decided to focus on vegetarian offerings only, within its retail portfolio," said the source quoted earlier adding that the company believes that this decision will help them to fully leverage their core competencies and remain relevant with a wider section of consumers.

Investment advisor S P Tulsian, who closely watches the conglomerate, said fear dominates greed in many cases for business families. "Tradition, culture and ethos of Mukesh Ambani prevailed over economic, finance and commercial considerations," he said.

via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFqCC4pXy_ixjUGvYsNui4xxBcfaQ&url=http://timesofindia.indiatimes.com/business/india-business/No-Delight-for-RILs-non-veg-buyers/articleshow/27443212.cms

Put the internet to work for you.

via Personal Recipe 2910127