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Land of Opportunities: Indian Food Industry IFE 09, London 15 th  March, 2009 Sanjay Sethi, Vice President, Technopak Advi...
Table of Contents <ul><li>Indian Food Industry: An Overview </li></ul><ul><li>Indian Consumer </li></ul><ul><li>Business O...
Indian Food Industry: An Overview I.
An Overview  <ul><li>Indian Agriculture sector contributes 17% to the GDP and provides 60% of employment. </li></ul><ul><l...
Indian Food Industry Huge Production Base Large Consumer Market <ul><li>Rising income </li></ul><ul><li>Change in food hab...
<ul><li>Size of Indian Food Industry is £117 billion. </li></ul><ul><li>Food Processing Industry contributes a major share...
Potential for International Players <ul><li>Low level of food processing. </li></ul><ul><li>Only 1.6% share in world food ...
Indian Consumer II.
A Huge Consumer Class 5-7 million Super Rich 70 – 80 million Afford Cars, Private Healthcare &  Foreign travel 250 - 300 m...
Changing Consumer <ul><li>Changing demographics </li></ul><ul><li>Younger earning population -  60% below 24 years </li></...
New Trends of Food Sector
Consumer Spending <ul><li>More than 60% share in consumer spending in Food & Grocery </li></ul>Source: Technopak Analysis
Consumption Pattern  Source: Food & Grocery Shopping Trends 2008 – Technopak Publication
Business Opportunities: Unlimited III.
Business Opportunities
Business Opportunities  (Contd…)
Business Opportunities  (Contd…) Market for the imported food products and fresh fruits currently stands at £660 million p...
Business Opportunities: Dairy Industry  <ul><li>Yoghurt </li></ul><ul><ul><li>Pascuals (Spain) entered the Indian market 3...
Business Opportunity: Dairy Industry  Domestic Brands Nestle India Ltd., Amul, Godrej, Mother Dairy, Nandani, Britannia, T...
Business Opportunity: Pasta Products  <ul><li>Consumption of pasta doubled in past couple of years, more popular amongst v...
Business Opportunity: Sauces & Dressings <ul><li>Opportunities for flavors like chilli,  soya, garlic, pasta, chinese sauc...
Business Opportunity: Confectionery <ul><li>Chocolate imports have been increasing steadily ( about £ 6.35 million) </li><...
Business Opportunity: Wine Industry  <ul><li>India's wine market at £ 4.25 million, makes up less than 1% of India's £1.06...
Routes to Market  <ul><li>India is amongst the least saturated of all major global markets in terms of penetration of mode...
Distribution Channel – Imported Products  Food Supplies  Indian Food Processing Industry Import Agent Distributor/Wholesal...
Food & Grocery (F&G)  t e c h n o p a k <ul><li>F&G enjoys the largest ‘share-of-wallet’ across retail categories accounti...
Food Services <ul><li>More than 200 food chains </li></ul><ul><li>McDonald’s remains the leading consumer food service pla...
Major Players offering Food Services *Still counting Major  Players No. of Outlets*  Major  Players No. of Outlets*  Pizza...
Key Growth Drivers III.
Key Growth Drivers
Food Regulations IV.
Regulatory Mechanism for Food Trade in India <ul><li>Regulations to be considered before importing a packaged food product...
Key Challenges VI.
Key Challenges Meeting Global Standards of Quality  Inadequate Infrastructure and Supply Chain  Skill Gap Food Regulations...
Thank You! [email_address] +91-9004389012
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IFE Food Show, London, 5th March 2009

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  • you can find any restaurant near your place like that by using smart search engines of restaurants:
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Transcript of "IFE Food Show, London, 5th March 2009"

  1. 1. Land of Opportunities: Indian Food Industry IFE 09, London 15 th March, 2009 Sanjay Sethi, Vice President, Technopak Advisors
  2. 2. Table of Contents <ul><li>Indian Food Industry: An Overview </li></ul><ul><li>Indian Consumer </li></ul><ul><li>Business Opportunities </li></ul><ul><li>Key Growth Drivers </li></ul><ul><li>Government Regulations </li></ul><ul><li>Challenges </li></ul>
  3. 3. Indian Food Industry: An Overview I.
  4. 4. An Overview <ul><li>Indian Agriculture sector contributes 17% to the GDP and provides 60% of employment. </li></ul><ul><li>World leaders in various food items like cereals, fruits & vegetables and dairy products. </li></ul><ul><li>Diverse agro-climatic conditions - production of a wide range of crops. </li></ul><ul><ul><li>Value addition to agricultural products is < 7% and low processing levels of F&V i.e. < 2%. </li></ul></ul><ul><li>Shifting food habits from basic food items towards high value crops and processed food items. </li></ul><ul><li>Lower investment / capital formation. </li></ul>
  5. 5. Indian Food Industry Huge Production Base Large Consumer Market <ul><li>Rising income </li></ul><ul><li>Change in food habits with experimentation on cuisines </li></ul><ul><li>Need for convenience </li></ul><ul><li>Huge population of 1.13 Billion </li></ul><ul><li>Increased spending on food </li></ul><ul><li>219 mn tons (2007-08) </li></ul><ul><li>Growth of 4% over previous year </li></ul><ul><li>World leader of F&V, milk and cereals etc. </li></ul>Changing Consumer Food Industry is slated to rise by about £176 billion by 2015 The organized food processing sector is slated to increase to 40% by 2015 from current level of 27%.
  6. 6. <ul><li>Size of Indian Food Industry is £117 billion. </li></ul><ul><li>Food Processing Industry contributes a major share of about 43%(£ 50 billion). </li></ul><ul><li>Main Segments - </li></ul><ul><ul><li>Staples </li></ul></ul><ul><ul><li>Dairy </li></ul></ul><ul><ul><li>Fruits & Vegetables </li></ul></ul><ul><ul><li>Meat and Poultry </li></ul></ul><ul><ul><li>Fish and Marine </li></ul></ul><ul><ul><li>Beverages </li></ul></ul><ul><ul><li>Packaged Foods </li></ul></ul><ul><ul><li>Other foods (like sugar, edible oils, pulses, spices) </li></ul></ul>Indian Food Industry (contd…) Source: Technopak Analysis, * Projections Share of processing is slated to increase from 43% to 50% by 2015.
  7. 7. Potential for International Players <ul><li>Low level of food processing. </li></ul><ul><li>Only 1.6% share in world food trade. </li></ul><ul><li>India is an agrarian economy, provides opportunities to explore options as: </li></ul><ul><ul><ul><li>Sourcing Hub </li></ul></ul></ul><ul><ul><ul><ul><li>Strong footing in agriculture provides a large and varied raw material base for food processing </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Leading food supplier to the world </li></ul></ul></ul></ul><ul><ul><ul><li>Consumption Centre </li></ul></ul></ul><ul><ul><ul><ul><li>1 billion+ consumers, increasing incomes </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Increase in awareness and spending on processed food items </li></ul></ul></ul></ul><ul><li>Demand for value added food products is rising at 13% p.a. </li></ul>Growth Rate % across Key Sectors
  8. 8. Indian Consumer II.
  9. 9. A Huge Consumer Class 5-7 million Super Rich 70 – 80 million Afford Cars, Private Healthcare & Foreign travel 250 - 300 million Afford goods like Refrigerators , Scooters & Colour TVs 600-700 million ( Generally Rural ) Afford simple industrial products e.g. bicycles , radios , textiles Poverty Line = income less than £0.7- £ 1/day <ul><li>A population of 1.13 billion(1/6th of total world population) with rapidly increasing middle class (~ 350 million). </li></ul><ul><li>60 % of India’s population are under 24 years. </li></ul>
  10. 10. Changing Consumer <ul><li>Changing demographics </li></ul><ul><li>Younger earning population - 60% below 24 years </li></ul><ul><li>81% population below 45 years </li></ul><ul><li>Brand conscious </li></ul><ul><li>More acceptance of new concepts </li></ul><ul><li>Changing aspirations </li></ul><ul><li>More nuclear families with dual income </li></ul><ul><li>75 million households, called ‘consuming classes’ with annual income between £ 650 to £ 60,000 </li></ul><ul><li>Convenience overriding price consideration </li></ul><ul><li>Higher disposable income and easier financing options </li></ul><ul><li>1 mn households in creamy layer with income at par with International </li></ul><ul><li>Lifestyle values </li></ul><ul><li>Awareness of global lifestyle: media exposure and overseas travel </li></ul><ul><li>Look at me (LAM) the most important criteria </li></ul>
  11. 11. New Trends of Food Sector
  12. 12. Consumer Spending <ul><li>More than 60% share in consumer spending in Food & Grocery </li></ul>Source: Technopak Analysis
  13. 13. Consumption Pattern Source: Food & Grocery Shopping Trends 2008 – Technopak Publication
  14. 14. Business Opportunities: Unlimited III.
  15. 15. Business Opportunities
  16. 16. Business Opportunities (Contd…)
  17. 17. Business Opportunities (Contd…) Market for the imported food products and fresh fruits currently stands at £660 million p.a. and is growing steadily Retailers associated with imported food Retailer No. of Outlets Locations % of shelf space to imported food Foodworld 55 Majorly in south India Bangalore, Mysore 10% Nilgiris 27 South India 12 % Vitan 9 Chennai and Bangalore (South India) 5% ABG -More 26 Bangalore 4% Nuts n Spices 5 Chennai (South India ) 40% Food Bazaar 19 Across India 3% D-Mart 2 Mumbai 7% Crossroads 4 NCR- Delhi 25%
  18. 18. Business Opportunities: Dairy Industry <ul><li>Yoghurt </li></ul><ul><ul><li>Pascuals (Spain) entered the Indian market 3 years ago and enjoys a monopoly. </li></ul></ul><ul><ul><li>Opportunity: 3-4 other yoghurt brands – in fat free variants & different flavors (mango, peach, strawberry, pineapple, passion fruit flavors). </li></ul></ul><ul><li>Cheese </li></ul><ul><ul><li>Currently, imported cheese has 5% market share in the overall cheese market. </li></ul></ul><ul><ul><li>Happy Cow (Austria), Laughing cow (France) and Kraft (Australia) are prominent selling imported brands. </li></ul></ul><ul><ul><li>Opportunity: Low fat cheese for healthy food category. </li></ul></ul><ul><ul><li>Soft cheese incorporating fruits and herbs. </li></ul></ul><ul><ul><li>Popular flavors: Pepper, Paprika, creamy, cheddar. </li></ul></ul><ul><li>Butter: </li></ul><ul><ul><li>Dominated by local brands: Amul, Britannia. </li></ul></ul><ul><ul><li>Imported Brands: Lebon, Meadow Lee. </li></ul></ul><ul><ul><li>Opportunity: Low cholesterol, reduced salt / fat butter for healthy food category. </li></ul></ul>
  19. 19. Business Opportunity: Dairy Industry Domestic Brands Nestle India Ltd., Amul, Godrej, Mother Dairy, Nandani, Britannia, Thackers Imported Brands Charlie’s, Happy cow, Pascual, Elle & vire, Swan Blue, Pilgrims Choice, Arla Major Importers Siganporia Bros, Max Foods Pvt Ltd., Rai and Sons Pvt. Ltd., Fortune Gourmet Specialities Pvt. Ltd., Shirin Foods Limited, Suresh Kumar & Co. (Impex) Pvt. Ltd., Epicure Frozen Foods & beverages Pvt. Ltd., L Comps, Taurus International, India Hut Pvt. Ltd.
  20. 20. Business Opportunity: Pasta Products <ul><li>Consumption of pasta doubled in past couple of years, more popular amongst vegetarians </li></ul><ul><li>Pasta imports crossed £3.3million </li></ul><ul><li>Current market size for imported pasta is 5200 tons with growth rate of 26% p.a. </li></ul><ul><li>Top two largest selling pasta brands are Australian (125 Mt) and Barilla (250-300 Mt) </li></ul><ul><li>Total 10 pasta brands are available in the market </li></ul><ul><ul><li>Domestic: ITC – Sunfeast </li></ul></ul><ul><ul><li>Imported: Loyd Grosssman, San Remo, Barilla, Agnesi and Voiello </li></ul></ul><ul><li>Opportunity: Wheat pasta (good health alternative) </li></ul><ul><li>Major Importers: Labh Group of Companies, Prayag Food International, Arun International, Prakya Group, Shiva International and Sangeeta foods </li></ul>
  21. 21. Business Opportunity: Sauces & Dressings <ul><li>Opportunities for flavors like chilli, soya, garlic, pasta, chinese sauces </li></ul><ul><li>Market for imported honey growing at 150% p.a. </li></ul><ul><ul><li>Wescobee honey (WA), Airborne honey (NZ) are popular imported brands </li></ul></ul><ul><li>Imported brands: Remia (Holland), Kraft (Philippines), Barilla (Australia), Prego (US), Tabasco (US), Heinz </li></ul><ul><li>Domestic Brands: Hindustan Unilever Ltd(HUL), The Global Green Company, Nestlé India Ltd., Fun Foods, Shelf mate, Kilban Foods, Wimm – Prem Foods </li></ul><ul><li>Major Importers: J. D. Corporation, ABC International, Evergreen Exports, Home Made Foods, Paramount Nourishments Pvt. Ltd., Tipsy-Topsy Exports, Hart Foods, Sangeeta Foods </li></ul>
  22. 22. Business Opportunity: Confectionery <ul><li>Chocolate imports have been increasing steadily ( about £ 6.35 million) </li></ul><ul><li>Market is flooded with locally manufactured MNC brands such as Cadbury & Nestle </li></ul><ul><li>Alpenliebe is the single largest selling sugar confectionery brand in India </li></ul><ul><li>Domestic brands: Cadbury, Perfetti, Hindustan Unilever Ltd(HUL), ITC Ltd., Nestlé India Ltd., Candico , Ravalgaon Sugar Farm </li></ul><ul><li>Imported brands: Kraft Foods, Lotte, Ferrero, Mars, Lindt , Toblerone , Dagoba </li></ul><ul><li>Major Importers: Siganporia Bros., Prakhya Group, Rai & Sons Pvt. Ltd., Woodland products, L Comps, S.K. Enterprises, Shell Overseas, Pranav Corporation </li></ul><ul><li>Opportunity: Fruit based / flavored confectionery – Jelly, puddings, fruit gummies & candies </li></ul>
  23. 23. Business Opportunity: Wine Industry <ul><li>India's wine market at £ 4.25 million, makes up less than 1% of India's £1.06 billion alcohol beverages market. </li></ul><ul><li>Wine consumption growing @30% p.a. and expected to grow @40%. </li></ul><ul><li>India consumes ~8 mn bottles of wine annually. </li></ul><ul><li>Out of which, 1.2 mn are imported. </li></ul><ul><li>Target market is expected to grow to 100 million people in next 5 yrs. </li></ul><ul><li>Domestic Brands: Chateau Indulge, CreeGrovers Vineyards, Sula Selections, Chateau D’ori, Nine hills, Big Banyan, Zinzi - UB group. </li></ul><ul><li>Imported Brands: Jasons Creek, Gato Negro, Mateaus Rosea, Bodega Nortan, Rupert & Rothschild, Heidsieck Monopole, Moet & Chandon. </li></ul>
  24. 24. Routes to Market <ul><li>India is amongst the least saturated of all major global markets in terms of penetration of modern retailing formats. </li></ul><ul><li>Many strong regional and national players emerging across formats and product categories. </li></ul><ul><li>Players are now gearing up to expand rapidly after having gone through their respective learning curves. </li></ul><ul><li>The Shopping Mall formats are fast evolving. </li></ul><ul><li>Partnering among Brands, retailers, franchisees, investors and malls. </li></ul>
  25. 25. Distribution Channel – Imported Products Food Supplies Indian Food Processing Industry Import Agent Distributor/Wholesaler Retail Outlet/ Food Services
  26. 26. Food & Grocery (F&G) t e c h n o p a k <ul><li>F&G enjoys the largest ‘share-of-wallet’ across retail categories accounting for 62% of urban consumer spending. </li></ul><ul><li>Valued at £14,000, making it the 6 th largest grocery market in the world. </li></ul><ul><li>Significant potential for organized formats to increase penetration levels to cater to the consumer spending. </li></ul><ul><li>Opportunities: wet groceries (fruits, vegetables, meat products, etc.) where organized retailers have not yet capitalized on the large consumer spend. </li></ul>
  27. 27. Food Services <ul><li>More than 200 food chains </li></ul><ul><li>McDonald’s remains the leading consumer food service player with a 13% share of total chained consumer foodservices </li></ul><ul><li>Expected revenues from Indian Hotel and Restaurant industry is > £ 80 million, an increase of nearly 22% over the previous year </li></ul><ul><li>Fast food units grew by >20 % in 2006 which is the highest across Asia </li></ul><ul><li>Growing @ CAGR of 8% </li></ul>
  28. 28. Major Players offering Food Services *Still counting Major Players No. of Outlets* Major Players No. of Outlets* Pizza hut 137 Mocha – coffees 20 Mc donalds 200 Jumboking foods pvt. 80 KFC 30 Minimelts icecream 45 Barista coffee 206 Pizza corner india 36 Café coffee day 520 Haldiram Marketing 27 Baskin31robbins 300 Yo China 25 Chawla’s 80 Domino's Pizza 220 Monginis 400 Nirula's 60 Subway restaurants 540 Nathus 18 Donut king 180 Costa coffee 45 Corn Club 5 Star one fast food 17
  29. 29. Key Growth Drivers III.
  30. 30. Key Growth Drivers
  31. 31. Food Regulations IV.
  32. 32. Regulatory Mechanism for Food Trade in India <ul><li>Regulations to be considered before importing a packaged food product to India: </li></ul><ul><ul><li>Customs Act </li></ul></ul><ul><ul><ul><li>Customs duty and import formality </li></ul></ul></ul><ul><ul><li>Prevention of Food Adulteration Act & Rules (PFA) </li></ul></ul><ul><ul><ul><li>Specifies standards & quality levels for food articles </li></ul></ul></ul><ul><ul><ul><li>Prohibits imports of adulterated, misbranded food products </li></ul></ul></ul><ul><ul><li>Fruits Products Order (FPO) </li></ul></ul><ul><ul><ul><li>Sanitary and hygiene conditions of manufacturing, product standards </li></ul></ul></ul><ul><ul><ul><li>Maximum limits on preservatives, additives and contaminants </li></ul></ul></ul><ul><ul><li>Labeling & Regulatory Act </li></ul></ul><ul><ul><ul><li>Information on the label of food products </li></ul></ul></ul>
  33. 33. Key Challenges VI.
  34. 34. Key Challenges Meeting Global Standards of Quality Inadequate Infrastructure and Supply Chain Skill Gap Food Regulations Research & Development Market Linkage
  35. 35. Thank You! [email_address] +91-9004389012
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