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Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
Market Research India - Pasta Import Market in India 2009
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Market Research India - Pasta Import Market in India 2009

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  • 1. Pasta Import ‐Pasta Import IndiaDecember 2008
  • 2. Executive Summary  Estimated worth USD 8.5 mn in 2008  Unorganized sector has a monopoly over domestic production  Market  Largest exporter is Nepal   Barilla and San Remo are the most popular brands Barilla and San Remo are the most popular brands  Drivers: Consumers developing tastes for international cuisines, strong growth in organized retail,  Drivers &  and government policy towards boosting the industry Challenges  Challenges: Lack of widespread consumer awareness duty and tax structure inconsistent Challenges: Lack of widespread consumer awareness, duty and tax structure, inconsistent  supplies, and competition from unorganized sector  Two possible approaches – Importing though agents Importing though agentsEntry Route – Setting up local operations  Importing through agents is the preferred route for foreign brands  Developing manufacturing unit locally is economically unjustified   Pasta imports attract specific import duties and local taxes Rules and   Food safety norms set by the government need to be followed gRegulations  The law requires specific information to be displayed on the packaged good The law requires specific information to be displayed on the packaged good PASTA IMPORT – INDIA.PPT 2
  • 3. •Market Overview•Drivers & Challenges Drivers & Challenges•Entry Route•Rules and Regulations•Rules and Regulations PASTA IMPORT – INDIA.PPT 3
  • 4. Italian is a popular cuisine in India and is driving growth in pasta importsOverview Size and Growth•Food imports are increasing by 15% p.a.  USD mn ‘000 kg Volume•Italian food and especially pasta is one of the  p yp 10 Value V l +17% 1,200 most popular foreign cuisines, predominantly  8 1,000 in urban areas 6 800•Domestic production exists with unorganized  600 4 sector accounting for 97% of the market sector accounting for 97% of the market 400 2 200•However, there is a healthy demand for  0 0 imported pasta, which has grown:  2004 2005 2006 2007 2008  17% p.a. by value  21% 21% p.a. by volume b l Largest Exporting Countries (2003‐2008) Largest Exporting Countries (2003 2008)  Uncooked pasta accounts for the bulk of imports  Others although other types (except uncooked or stuffed)  category is growing extremely fast 10%•Barilla and San Remo are two popular •Barilla and San Remo are two popular Italy 19% imported brands 71% Nepal PASTA IMPORT – INDIA.PPT 4
  • 5. •Market Overview•Drivers & Challenges Drivers & Challenges•Entry Route•Rules and Regulations•Rules and Regulations PASTA IMPORT – INDIA.PPT 5
  • 6. Drivers & Challenges Challenges Creating Awareness Government rules and regulations Government rules and regulations Inconsistent supplies Drivers Demand generated due to changing  Competition from unorganized sector tastes and attitude Growth in organized retail industry Government Initiatives PASTA IMPORT – INDIA.PPT 6
  • 7. The strong demand that has been generated via changing preferences is the major driverDemand generated due to changing tastes and attitude Impact• In urban areas, frequent travel and greater global awareness is a major influence in broadening  the Indian consumers’ taste for foreign cuisine• Italian food is gaining universal popularity has become one of the most popular foreign cuisines  in India• Further, pasta as an ingredient is very adaptable thereby making it a popular choice for  vegetarians, which exist in large numbers in India since 30‐40% of Hindus are vegetarians•HHowever, it is largely restricted to the urban elite and upper middle class sections of society,  it i l l t i t d t th b lit d iddl l ti f i t which yet account for a large numbers as well as high levels of disposable incomePer household  Total No. of Household  Aggregate Annual Disposable annual income (INR) Core target  (millions) Income (INR trillion) consumer  281 90 groups 3% Globals >1000 244 12% Strivers 500‐1000 2% 1% 24% 207 Seekers 200‐500 23% 5% 1% 1% 34% Aspirers 90‐200 23% Deprived <200 44% 44 43% 15% 9% 33% 34% 24 9% 34% 49% 13% 7% 30% 49% 33% 15% 18% 23% 9% 3% 2005 2015 2025 2005 2015 2025 PASTA IMPORT – INDIA.PPT 7
  • 8. The growth in the retail sector and minor government initiatives is expected to create further demand Growth in organized retail industry Impact• Imported foods receive maximum mileage through organized retail outlets since they provide  higher visibility and promote the “touch and feel” concept • Retail market is expected to grow at 13% p.a. over the next five years with organized retail  expected to account for a larger share of around 40% compared to less than 5% currently• Growth in organized retail, which is the best channel to target the core consumer group of  affluent urban individuals, will act as a growth driver for imported foods including pastaGovernment Initiatives• Realizing the growth of imported pasta, the government has been proactive towards making it  more affordable  2006‐2007 budget exempted all such products from central excise duty• Introduction of an integrated food law which is expected to:  Create a superior market mechanism  Growth in supply chain infrastructure PASTA IMPORT – INDIA.PPT 8
  • 9. The major challenge is in increasing awareness in the target consumer demographic and inconsistent supplies in the marketCreate more awareness Impact• Manufacturers or importers need to create further awareness in order to grow the market• Within the target demographic too, consumption is largely at restaurants and not cooking pasta  at home. Increasing awareness through marketing could help consumers get accustomed to  cooking pasta at home and grow the retail channel.Government rules and regulations• Prices are artificially inflated due to taxes and import duties which if reduced further can Prices are artificially inflated due to taxes and import duties, which if reduced further can  increase consumption• Tax and import duty revisions could be explored to determine if it benefits the marketInconsistent supplies• Many importers move quickly from product to product, which leads to inconsistent supplies• Small importers are unwilling to develop a market by investing time and effort unlike larger  importers such as specialist retailer Godrej Agrovet or importer R.R. OomerbhoyCompetition from domestic manufacturersCompetition from domestic manufacturers• Apart from a few domestic major manufacturers, there is a large unorganized sector producing  pasta products• These are often priced far lower than foreign products due to import duties and lower quality PASTA IMPORT – INDIA.PPT 9
  • 10. •Market Overview•Drivers & Challenges Drivers & Challenges•Entry Route•Rules and Regulations•Rules and Regulations PASTA IMPORT – INDIA.PPT 10
  • 11. Entry options include importing through agents or setting up local operations• Option 1: Importer agents and distributors supply to retailers and food services Preferred route  1 of entry for  f t f Importer Distributor/ foreign brands Agent Wholesaler Foreign  Retail Outlets/  Consumer manufacturer/exporter Food Services Market size does  Market size does Local manufacturing & distribution operations not justify  2 required  investment• Option 2: Set up own manufacturing unit and distribution operations to cater to the local market p p g p Import agents and local distributors are the preferred route for most foreign brands Import agents and local distributors are the preferred route for most foreign brands PASTA IMPORT – INDIA.PPT 11
  • 12. •Market Overview•Drivers & Challenges Drivers & Challenges•Entry Route•Rules and Regulations•Rules and Regulations PASTA IMPORT – INDIA.PPT 12
  • 13. Import of pasta is subject to duties and taxes, food safety rules and mandatory packaging informationRules and regulations Duties, taxes and estimated margins•Duties and taxes: Import Duty  Basic import duty, additional duty, education cess,  Basic Import Duty Basic Import Duty 30% Octroi, central sales tax, and VAT Additional Duty 0%•Various food safety rules also need to be  Spl. Additional Duty 4% adhered to such as Prevention Of Food  Excise cess 0% Adulteration Act Custom cess Custom cess 3%•Packaging must display the following: Education cess 2% of total duty  Name of company and address of manufacturer Domestic Taxes  Green or red sticker indicating vegetarian or non‐ VAT (state level) 4% vegetarian product vegetarian product Central Sales Tax (inter‐state sales) 4%  Name and contact details of importer Octroi (variable; municipality/district level) 6% (Mumbai)  MRP, Month of import,  Shelf life  Ingredients used as per PFA Estimated Margins Importer (% of landed cost) p ( ) 18% Distributor (% of Distributor Cost Price) 10% Retailer (% of retailer cost) 25% Notes: Landed cost = CIF + Import Duty + Clearance Charges + Domestic Freight Distributor Cost Price = Landed Cost + Octroi + Importer Margin + CST p g Retailer Cost Price = Distributor Cost Price + VAT + Distributor Margin PASTA IMPORT – INDIA.PPT 13
  • 14. Thank you for your timeFor an updated report or any customized research requirements, please contact:Gaurav KumarE‐Mail: gaurav.kumar@netscribes.com; sales@netscribes.comPhone: +91 33 4064 6214; +91 983 030 9715Netscribes’ Services:RESEARCH & ANALYTICSRESEARCH & ANALYTICS MARKET INTELLIGENCE MARKET INTELLIGENCE CONTENT SOLUTIONS CONTENT SOLUTIONSInvestment Research Market Monitoring & Competitive  Social Media MarketingEnterprise Market Research Intelligence Marcom Support ServicesPatent Research Sales & Prospect Intelligence Content Management ServicesSyndicated Market ResearchS di t d M k t R h Listening & Media Monitoring Li t i & M di M it i Book Packaging Services B kP k i S i Brand SurveillanceFor further details, visit us at: www.netscribes.comAbout NetscribesNetscribes supports the organic and inorganic growth objectives of global corporations through a combination of Enterprise Market, Investment & Patent Research, Market & Sales Intelligence, Social Media Monitoring & Management and Custom Publishing solution.Disclaimer: This report is published for general information only. High standards have been used for preparing this market research report; Disclaimer: This report is published for general information only High standards have been used for preparing this market research report;however, Netscribes, Inc. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction. PASTA IMPORT – INDIA.PPT 14

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