New Delhi: LT Foods Ltd, makers of Daawat and Royal brands of basmati rice, on Monday announced the launch of Kari Kari, a premium rice-based health snack, in joint venture with Japanese rice cracker maker Kameda Seika.

Kari Kari will be initially be available in four flavours across Delhi and the National Capital region, Mumbai and Bengaluru. It will cost Rs50 for a 70g packet and Rs99 for a 150g packet.

“Rice-based backed snack is a new category that we are trying to create," said Ashwani Arora, managing director and chief executive officer, LT Foods. “This is a new brand that we have jointly created with our Japanese partner for the Indian market. The products are developed as per consumer preferences in terms of flavours and tastes. We have been looking at this market for the past three years," Arora told Mint.

LT Foods will hold 51% stake in the joint venture Daawat Kameda India (Pvt.) Ltd while Kameda Seika will hold the rest. The company will invest around $5 million in the first phase.

“We’ll spread across all big cities over the next few years through modern retail and standalone stores," Arora said.

The entry into the premium snacks market is part of the company’s plan to cross the $1billion mark by 2022, through diversification into ready-to-make, ready-to-eat and organic staples across 65 countries where the company has presence, from Rs3,287 crore reported in the year ended 31 March 2017.

LT Foods which markets branded household staples apart from its flagship basmati rice brands, gets about 55% of revenue from markets outside India. US alone contributes about a third of its total sales.

“The branded rice business accounts for about Rs2,700 crore. By 2022, our target is to get about Rs4,500 crore from the core rice business, and the remaining would come from new business categories, like organic staples, two-minute rice food (for US market), rice-based snacks and other value added products. Kari Kari alone is estimated to have sales of Rs100 crore by 2022," Arora said.

LT Foods’ Japanese partner Kameda Seika is known for its rice crackers, and has reported net sales at 98.2 billion Japanese Yen ($871 million) in the year to 31 March 2017. Kameda Seika has presence in Japan, Thailand, Vietnam, China and US.

Kameda Seika may launch Kari Kari in other countries at a later stage.

In the past few years, Japanese companies have increased investments in India. According to data compiled by the Indian embassy in Tokyo, foreign direct investment (FDI) from Japan to India in 2016-17 rose 80% to $4.7 billion from a year earlier.

According to a report by market research firm Euromonitor International, the savory snack food market in India is projected to grow at a compounded annual growth rate of 12% between 2016 and 2021 to reach Rs445 billion.

Shares of LT Foods rose 4.24% to Rs66.45 at BSE on Monday while benchmark Sensex closed 0.1% higher at 31,846.89 points.

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