Japan’s Mitsui in talks for Future food supply venture with Kishore Biyani

Industry:    November, 2019

Mitsui & Co is in talks with Kishore Biyani’s Future Group to invest in a company that will supply fresh food to upcoming 7-Eleven stores, the group’s food and grocery retailing verticals as well as retailers and restaurants owned by other companies, according to two people aware of the matter.

“Mitsui is exploring possibilities of investing into a venture with Future Group either though an existing company or in a separate venture,” one person said.

The Japanese conglomerate’s wholesale food company, Mitsui Foods Co, is a supplier of packaged foods, dairy products, livestock items, rice and cereals, ice-cream, instant foods and beverages, among other products.

“They are working on a similar business of fresh food supplies for 7-Eleven, FoodHall, Big Bazaar as well as other quick service restaurants,” the person said.

Mitsui and Future Group did not respond to ET’s emailed questionnaires till press time.

Tokyo-based Mitsui, which has businesses including iron and steel, infrastructure, IT and communications and food and retail, operates 7-Eleven stores in the Chinese city of Chongqing in a consortium along with 7-Eleven and a Chinese agribusiness company.

Biyani has started a company called Galaxy Cloud Kitchen, which will deliver meals to customers’ doorsteps for Rs 40. Cloud kitchen is a backend concept that involves preparing and delivering food to various locations without any dine-in facilities.

Mitsui could look at investing in Galaxy Cloud Kitchen or in a separate venture with Biyani, the person said.

The cloud kitchen will supply food items to upcoming 7-Eleven outlets in India, including meals for breakfast, lunch and dinner.

Biyani’s group is expected to roll out 7-Eleven-branded convenience stores in Mumbai early next year and the Future-Mitsui company plans to provide sandwiches, pizzas, bakery items, salads, cut-fruits and a raft of beverages including ice teas, coffee and juices to them, they said.

Organised retailers account for $25 billion of India’s annual $580 billion food and grocery market and the segment is expected to grow to $69 billion by 2024, when modern retailers take their total market share in the food and grocery market to 7% from 4% at present, according to Axis Capital.

Future Group, one of the largest retail enterprises in India with 1,400 outlets, signed a master-franchisee agreement earlier this year with 7-Eleven to open its eponymous convenience stores in India. Future plans to convert some of its stores, including Easyday shops, into 7-Eleven outlets.

7-Eleven is Japanese-owned and based in Texas. It is the world’s largest chain of convenience stores and operates 69,000 outlets in 17 countries, with about 11,800 of them in North America.