Now peanuts for your favourite Mars bars will come from India's Saurashtra

What may perhaps be India's contribution to what's considered the best-selling chocolate bar in the world? Peanuts! The crunchy taste in Snickers will soon be Indian as Mars Incorporated, which makes the $2-billion chocolate bar brand, plans to source peanuts from Saurashtra for markets right from India and Middle East to South East Asia and China.

"From a quality perspective, it is very critical to gpeanuts of a particular variety. We are developing it with a couple of vendors based out of Saurashtra," Mars International India general manager MV Natarajan said. "India can even be the largest sourcing hub for peanuts," he said.

Mars currently does a bulk of peanut sourcing for Snickers bars - which come stuffed with peanuts - from Argentina.

For companies, low level of aflatoxins, a type of toxin produced by molds that grow on peanuts and corn among others, is the deciding factor. While Mars follows a strict benchmark of 4 parts of aflatoxins per billion (ppb), the Indian benchmark of aflatoxin is around 30 ppb, while it is 10 ppb in the US.

Despite India being the world's second-largest producer of peanuts with nearly six-million tonnes annually, its share in the global market is restricted to raw peanuts, with negligible contribution in value-added products like peanut butter.

Mars has teamed up with Gujarat-based Khedut Feeds to help farmers in Saurashtra produce high-quality peanuts with global expertise and best practices.

"Over the last few years, we have started an initiative - Project Saurashtra - by partnering nearly 40,000 farmers to educate them on growing high quality nuts and have better crop yield," said Tushar Patel, director at Khedut Feeds. Last month, Mars Inc - which also owns M&M's, Twix, Milky Way and Bounty brands - announced it will invest $160 million to open its first chocolate plant in India.

A year ago, AgroTech Foods Limited, an affiliate of Conagra Foods Inc, announced the opening of its manufacturing unit near Bharuch in Gujarat to start local production of its Sundrop peanut butter for the first time in India. But not many companies are interested, say experts.

"Farmers in India hardly use latest infrastructure or technology that helps produce export quality peanuts," said Sanjay Bajaj, MD of Ahmedabad-based Bajaj Food Products, one of the first peanut butter manufacturer and exporter in the country. "Unless global companies partner them and bring best global practices, it is difficult to match other countries despite low prices in India," he said.

There are other issues, too. Peanuts production is highly vulnerable to rainfall deviations and display huge fluctuation between years. Also, the domestic consumption is huge for peanut oil, and just 5-7 per cent of peanuts get exported to other markets.