Hey folks!

Do you count the number of biscuits in a packet when you buy it? If not, then you should. Because when Dillibabu, a consumer from Chennai recently discovered one biscuit less in his pack of Sun Feast Marie Light biscuits, he took its maker ITC to court.

And guess what?

The court ordered ITC to pay him ₹1 lakh as compensation!

Quite an expensive mistake eh?

Now, ITC obviously tried to defend itself by saying that it sells biscuits by weight and not by count. But ITC was found guilty there too. It was selling biscuits worth 74 g against the advertised weight of 76 g. So either way there was no escaping this. ITC had to give in and pay up.

But hey! The fine wasn’t so big if you consider how much money ITC made from this erroneous batch of biscuits. Dillibabu even crunched the numbers and said that each biscuit costs ₹0.75 and ITC makes 50 lakh packets every day. So that means, ITC is cheating customers out of ₹37.5 lakhs each day by removing that one biscuit, no?

So yeah, don’t take your Marie lightly even if the pack reads Marie Light.

Here’s a soundtrack to put you in the mood 🎵

Samjho Na by Aditya Rikhari

Thanks for this monsoon vibe recommendation Mayank Sekhani!

A couple of things caught our eye this week 👀

Beetles getting high on fuel?

In FY23 India’s oil import dependency was at a record high. But ethanol-blended fuel can ease that up a little.

India currently uses petrol blended with 12% ethanol. And the aim is to get to 20% by 2025. It not only releases the pressure off our import bill but also cuts back on polluting emissions from petrol. After all, it’s made from fermented sugar or grain. But this biofuel may have run into some trouble recently. Beetles.

Yup! Last year a bunch of cars in Kerala caught fire. And when the authorities tried to find out why, they realised that in some cases a certain kind of beetle was pricking holes into the rubber fuel pump. Fuel leaking from here resulted in the cars catching fire. Now, the Kerala Forest Research Institute (KFRI) has initiated an investigation to look into it. But here’s a possible story leading to the beetle problem.

You see, studies have shown that ethanol attracts a species of insects called the Ambrosia beetles. Because dead or decaying trees that emit ethanol form a perfect environment for them to feed on and reproduce. Now, these insects could be mistaking fuel pumps for dead trees and jumping right in. Only for them to drown in the fuel and die.

But how are these beetles even roaming about cars moving on the streets?

Well, there’s a peculiar reason behind that too. Climate change. More and more natural calamities because of urbanisation and other things can displace these beetle populations. So they tend to find other habitats to survive in. Deforestation could also encourage a beetle population explosion. In 2022, natural calamities displaced 2.5 million people living in India. So imagine the effect it would’ve had on the animal, bird and insect species. That explains why beetle numbers may be on the rise. There’s also speculation that these insects may be entering the country through infested timber imports.

Could these insects wreak havoc on India’s cleaner fuel ambitions? Apparently, there’s very little evidence to prove it. Maybe we’ll have to wait for the KFRI to tell us what’s really going on.

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Tata loves namkeen

Shares of Tata Consumer Products jumped by a good 4% on Wednesday. And the reason was quite valid too. Tata supposedly had its eyes on buying a big chunk of Haldiram’s.

Now, this market excitement was shortlived because Tata said it was just a rumour. And Haldiram’s denied that it was even considering a sale. But what if this hadn’t been market hearsay?

Well, Tata would’ve unlocked a savoury-sweet jackpot!

Because here’s the thing. Tata wants to go beyond salt, tea, coffee and staples. It wants to up its food portfolio and is trying hard to innovate. Between FY20 and FY23, it tripled its distribution network. And it’s now looking to enter new categories. Probably new acquisitions in those categories too. It simply wants to become a full-fledged FMCG company!

And guess what needs a boost in its portfolio?

Ready to eat Indian snacks. Because here’s an article in the Hindu Businessline (Nov ’22) that hammers home this point.

“We broadly define snacks as mini-meals, breakfast cereals and ready-to-eat products. We are very clear that whatever segment we get into within snacks …should be a space that is growing fast, has strong margins, where we have the right to succeed and create value. We need to crack the code in snacks and see how we can make a differentiated play. We have stated our ambition and we are in the process of finalising our future strategy,” said Sunil D’Souza, MD & CEO, Tata Consumer Products.

And who’s better in the game than our very own Haldiram’s? It’s over a century-old business with humble beginnings from a small bhujia shop in Bikaner, Rajasthan. And as of 2021, it controlled nearly 18% of the ₹41,000 crore organised domestic snack market. This includes Indian savouries like namkeen and bhujia as well as Western ones like chips. It has over 400 products in its kitty, with markets spanning the UK, the US, Canada, Australia and the Middle East.

So this deal could have actually given Tata access to a huge product line and consumer base. But on the other hand, last year, there was even news that Haldiram’s is also planning to launch its IPO.

So is it going to be an IPO? Or an acquisition by a big player like Tata?

A little extra ➕

On Friday, we wrote about the Pradhan Mantri Jan Dhan Yojana (PMJDY) which is a scheme to get every Indian into the banking system and improve financial inclusion. It now has 50 crore bank accounts in its umbrella — offering debit cards, insurance, and social security schemes.

So, we raised the question about whether a bank account alone is a sufficient marker for inclusion. And we used the RBI’s very own Financial Inclusion Index to highlight this conundrum.

Now this was quite a polarising story since many people claimed we’re belittling India’s efforts. But if you read the story carefully, you’ll see that the objective with this, like with every other story of ours, is to lay down context and provide an alternative way of thinking about something in an unbiased manner.

Anyway, we did get one interesting comment amidst all this — So, it appears that right now, the only data that’s being tracked is how many accounts were opened. It doesn’t actually capture how many people might have opened accounts but have migrated into full-fledged accounts at a later point due to improving economic conditions. Now that might be interesting to see.

Infographic 📊

Money tips 💰

Can coffee can investing go rogue?

A wise man once said “Invest for the long haul. Don’t get too greedy and don’t get too scared.” Well that was American philanthropist Shelby Davis. It just means that the market requires you to have patience and think long term.

And that’s pretty much what coffee can investing is about. You invest and forget.

Now this interesting term was coined by Robert Kirby a portfolio manager in the US in 1984s. In a note, he says that he’d recommended a client to purchase a bunch of stocks for $5,000 each. But unlike Kirby who regularly bought and sold stocks, the client didn’t do that. Or rather, the client’s husband didn’t do that. He simply bought and held these stocks. And a decade later, it led to enormous wealth being created. Especially from the Xerox stock which had ballooned to over $800,000.

And Kirby called this the coffee can approach in reference to a time before banks when people stored money in a coffee can.

Over the past few years, this approach has been made uber popular in India too. After portfolio manager Saurabh Mukherjea launched an investment product for the rich with this very name.

But what if this decision to keep your money invested isn’t the best thing to do?

Because here’s the thing. While a fill it and shut it approach sounds brilliant, what if you stocks you picked up turn into duds? You’d rather have exited that lazy investment and make it work for you again. That’s not to say that you should time the market. Just invest and try not to forget too much. Keep a watchful eye.

Especially when you consider that even Saurabh Mukherjea has sold stocks in his ‘Coffee Can’ portfolio over the years. He doesn’t seem to be following a ‘fill it and forget it’ approach to the T. So you have to wonder if it’s really the right thing for you.

Readers Recommend 🗒️

Dream With Your Eyes Open by Ronnie Screwvala

This week our reader Janaki Pragna recommends an interesting read from a man who’s many things. Ronnie Screwvala is a film producer and entrepreneur who co-founded companies like UTV and UpGrad. This book is a memoir of his experiences building multiple successful and some not-so-successful businesses. It not just glorifies success, but also demystifies failure.

Seems like a great book for aspiring entrepreneurs. Thanks for this encouraging recommendation Janaki!

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And it’s a wrap, folks! Enjoy the rest of your day. We’ll be back next Sunday.

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