Industry Overview – cooking fuel
The
cooking fuel market which comprises of Hexamine
tablets, Alcohol Gel, Propane and mini-LPG
cylinders remains extremely fragmented and
highly regionalised. Distributors play a key
role in the eco-system and dictate channel
margins and credit terms. Most of the
manufacturing companies (in this segment) are
sole proprietorship firms (SMEs) employing less
than 20 people. The Hotel & Catering Industry
accounts for approx. 90%, of the industry
volumes followed by shipping at 4%, with
‘others‘ accounting for the remaining 6%.
Alcohol gel dominates the cooking fuel market
and accounts for over 90% of the market volumes,
predominantly driven by the institutional
channel (Catering, Hotels, Clubs & schools) -
due to its burn time and cost. A typical can of
gel (225 gms) burns for over 60 minutes and
costs less than £.30 making this ideal for large
caterings/ outdoor events. Most SME who were
either manufacturing or distributing Hexamine
tablets have shifted to alcohol gel cans.
Manufacturers of alcohol gel are located in
select regions in the South and West of India
and have a well established network of
distributors and re-sellers.
India
outdoor industry overview
Adventure tourism accounts for < 2% of the
Tourism market - growing at 14% (Y-O-Y).
There
are 1,256 registered ‘Hiking & Trekking’
operators in India - the top 10 operators (and
associates) account for ~ 30% of the entire
industry volumes.
More
than 80% of all Hiking & Trekking is
concentrated in North India – Himachal Pradesh,
Ladakh and Uttrakhand.
US$
600 mn was spent on outdoor equipment
(rucksacks, sleeping bags, stoves, boots, water
bottles, rafts, accessories and tents) in 2012.
Tour
operators play a key role in ‘kitting’ trekkers
– with either direct sales or through tie-ups
with specialty stores, or small ‘mom & pop
stores at various transit camps.
Industry Overview – cooking fuel
Hexamine tablets and Propane/ Butane cylinders
are predominantly used by outdoor/ trekking
agencies, mountaineering clubs/ societies and
adventure seekers. Small retailers located along
Trekking/ Hiking routes retail large quantities
of Hexamine tablets for trekkers. Price of a
packet (12 tablets) costs Rs. 180 – Rs. 400 (£
1.80 - £ 4.00) At altitudes of 12,000 - 20,000
ft. and above tour operators/ trekkers prefer to
use Hexamine tablets due to its limited impact
to the environment and is easy to carry. Due to
cost of transportation, erratic supply and
quality, Propane & Butane cylinders and are the
least preferred option.
Industry Overview - Defence & Security
The Indian armed forces use a range of cooking
fuels to meet its field requirements (Hexamine
tablets, Alcohol Gel, Propane and LPG) - no
brand preference.
At
forward posts (~ 6 km from IB), soldiers on
‘area domination’ duty prefer using Hexamine
tablets as they are lightweight, easy to carry
and use & leave no trace/ residue.
Altitudes of 18,000 ft. and above soldiers use a
mix of LPG cylinders, propane cans and Hexamine
tablets. LPG and propane cans are used for
cooking/ re-heating food, while Hexamine is used
to heat tea, light small fires or RTE meals.
Supplies to the armed forces are based on
tenders (L1), with budgets typically taken from
Army Commanders Funds (ACSFP).
No
limit to the number of tenders in a year, but
average value of tender is ~ £ 1,600 (based on
13 tenders for RTE meals including hexamine
tablets.
Master
General Ordinance (MGO) route is not being used
by any cooking fuel manufacturer due to its
lengthy gestation, but holds key to long term
revenue generation.
Extremely low margins with standard credit terms
of 60 - 90 days (and above).
Institutional – Wedding, Hotels & Clubs
The Channel has moved away from Hexamine tablets
and now use Alcohol gel or LPG for most of their
cooking/ heating needs.
Large
users include – Hotels, Caterers, Wedding
organisers, Schools and the Shipping industry
Market dominated by local manufacturers who have
built their own distribution/ supply chain.
Most
large manufacturers have their units in South
and West of India, with an extensive
distribution and re-distribution network.
Alcohol Gel is sold in specialised markets and
localities only with strict standards for
storage.
India has also become an export market for
alcohol gel to the MEA and South Asia.
Extremely high volume business with low margins
A
typical gel fuel casing served in hotels has 72
pieces of 200/225 gm units in 63 mm/15 gm
Aluminum tins
