Sial 17 10 08


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This presentation was delivered at SIAL Food Show, Paris on 21st October, 2008. The presentation lets you get an insight on Indian Food Industries, key segments and entry strategy

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Sial 17 10 08

  1. 1. The Indian Food Industry Opportunities Abound Sanjay Sethi, Technopak Flavors of Incredible India 21 st Oc t, 2008 Ministry of Food Processing Industries Federation of Indian Chambers of Commerce and Industry Knowledge Partner
  2. 2. Contents <ul><li>INDIAN FOOD INDUSTRY </li></ul><ul><li>KEY GROWTH DRIVERS </li></ul><ul><li>MAJOR CHALLENGES </li></ul><ul><li>GROWTH OPPORTUNITIES </li></ul><ul><li>OUR SUGGESTIONS </li></ul>
  3. 3. Indian Food Industry <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><li>Large consumer class – a population of 1.13 billion with rapidly increasing middle class (~ 20 million) </li></ul><ul><li>Shifting food habits from basic food items towards high value crops and processed food items </li></ul>
  4. 4. Indian Food Industry (conti…) Source: Ministry of Food Processing Industries, Technopak Analysis, * Projections <ul><li>Indian Food Industry stands at $ 200 bn in ‘06-07, of which Food Processing industry contributes a share of 43% ($ 85 bn) </li></ul><ul><li>Directly employs about 2 mn people </li></ul><ul><li>Highly fragmented and dominated by the unorganized sector </li></ul>INDIAN FOOD INDUSTRY: KEY STATISTICS 2002-03 2006-07 2010-11* 2014-15* Food Industry Size ($ billion) 175 200 250 300 Food Processing Industry Size ($ billion) 70 85 110 150 % Food Processing Industry in total Food Industry 40 % 43 % 44 % 50 % Size of organized sector in Food Processing Industry ($ billion) 13 23 37 60 % organized sector in Food Processing Industry 19 % 27 % 36 % 40 %
  5. 5. Indian Food Processing Industry <ul><li>Major contributors are staple and other foods (like food grains, sugar, edible oils, pulses, tea, spices ) </li></ul><ul><li>Dairy and F&V contributes 23% each </li></ul><ul><li>Packaged Foods segment is the fastest growing across sectors </li></ul>
  6. 6. Processing levels in India <ul><li>Processing level in India is about 43%, which is much lower than most of the developed and developing countries </li></ul><ul><li>Level of processing in India (% volume) </li></ul><ul><ul><li>F&V - 2% </li></ul></ul><ul><ul><li>Milk - 35% </li></ul></ul><ul><ul><li>Meat - 21% </li></ul></ul><ul><ul><li>Poultry – 6% </li></ul></ul><ul><ul><li>Marine – 26% </li></ul></ul>
  7. 7. Sectoral Overview <ul><li>Processing through the organized sector is at about $1.2 billion </li></ul><ul><li>The export value was $ 0.9 billion in ‘06-07, and import was $ 0.4 billion </li></ul><ul><li>Commercialization of reefer containers has supported the exports </li></ul><ul><li>Export demand - mangoes, lemons, bananas, gherkins, mushrooms </li></ul><ul><li>Mainly exported to U.K., Europe, Middle East, Singapore, Hong Kong, Australia </li></ul>Fruits and Vegetables (F&V)
  8. 8. Sectoral Overview (contd…) <ul><li>The processing of total poultry production is about 12% </li></ul><ul><li>Processing of buffalo and poultry products is growing at a CAGR of 18% </li></ul><ul><li>Buffalo meat market size is $ 2.2 bn </li></ul><ul><li>Higher export potential in value added poultry products in years to come </li></ul><ul><li>Buffalo meat has major share in the total export of $ 0.8bn </li></ul><ul><li>Prime export destinations are UAE, Australia, South America, Philippines, Malaysia, Europe (total of 55 countries) </li></ul>Buffalo Meat and Poultry
  9. 9. Sectoral Overview (contd…) <ul><li>The processing of fish and marine foods is at about 13% of the total production </li></ul><ul><li>24% of this processed quantity is being exported </li></ul><ul><li>India exports maximum quantity of tuna and shrimps </li></ul><ul><li>Prime exporters are USA, Canada, Japan and the Middle east </li></ul>Fish and Marine Food
  10. 10. Sectoral Overview (contd…) <ul><li>Leading milk producer </li></ul><ul><li>Total processed industry size is $ 33 bn, where organized sector contributes only 24% </li></ul><ul><li>High demand- processed dairy products, cheese, packaged liquid milk and packaged paneer </li></ul><ul><li>Export potential- cheese, skimmed milk powder and casein </li></ul><ul><li>Import value of lifestyle cheeses is ~ $18 million and is growing at about 9% annually </li></ul>Dairy
  11. 11. Sectoral Overview (contd…) <ul><li>One of the fastest growing sector </li></ul><ul><li>India is net importer of wine </li></ul><ul><li>Wine consumption is growing at 30%, while beer at 7% </li></ul><ul><li>Wine production is increasing at a rate of nearly 22% </li></ul><ul><li>India’s annual production of wine stands at 5 million litres </li></ul><ul><li>>2,00,000 cases imported in ‘08 </li></ul>Beer and Wine
  12. 12. Sectoral Overview (contd…) Packaged Foods <ul><li>One of the fastest growing sector </li></ul><ul><li>Witnessing a growth rate of > 30 % </li></ul><ul><li>Current market size is ~ $ 2.6 bn </li></ul><ul><li>Expected to grow 10 times in the coming decade </li></ul><ul><li>Huge export potential for RTE products </li></ul>
  13. 13. Sectoral Overview (contd…) Others <ul><li>Bakery and Biscuit </li></ul><ul><ul><li>Annual turnover is $ 900 mn </li></ul></ul><ul><ul><li>Branded bakery & biscuit market is growing fast at 15-16% </li></ul></ul><ul><li>Staples and Other Foods </li></ul><ul><ul><li>Increased grain milling </li></ul></ul><ul><ul><li>Rise in branded products like atta and refined oil </li></ul></ul><ul><li>Functional Food </li></ul><ul><ul><li>Revenue of > $ 0.27 bn in ‘07-08 and will reach $ 3.2 bn in 2015 with an estimated growth rate of 43% </li></ul></ul><ul><li>Non-Alcoholic Beverages </li></ul><ul><ul><li>Fruit beverages is the fastest growing segment </li></ul></ul><ul><ul><li>Rising inclination towards health drinks and functional drinks </li></ul></ul>
  14. 14. Key Growth Drivers technopak <ul><li>Huge Production Base </li></ul><ul><li>Changing Consumers </li></ul><ul><li>Organized Retail and Food Retail </li></ul><ul><li>Export Opportunities </li></ul><ul><li>Government Support </li></ul>
  15. 15. Key Growth Drivers – 1. huge production base Food Grains 217 mT Fruits & Vegetables 150 mT Milk 100 mT Fish & Marine 6 mT Poultry 2.28 mT Livestock 2.4 mT Bakery & Biscuit 3.0 mT Wine 5 mL
  16. 16. 2. Changing Consumers <ul><li>Consistent rise in middle class income </li></ul><ul><li>Per Capita Income has crossed $ 1000 </li></ul>Rising Income Levels Eating Out Behavior Change in Food Habits Experimentation Need for Convenience
  17. 17. 2. Changing Consumers (contd…) <ul><ul><li>Health consciousness, balance diet </li></ul></ul><ul><ul><li>Risen demand for safe food </li></ul></ul>Rising Income Levels Eating Out Behavior Change in Food Habits Experimentation Need for Convenience
  18. 18. 2. Changing Consumers (contd…) <ul><li>  </li></ul><ul><ul><ul><li>Changing consumers and mature service providers </li></ul></ul></ul><ul><li>Affluence levels and facilities available </li></ul><ul><ul><li>Percolating demand to the smaller cities and towns, other than metros and larger cities </li></ul></ul>Rising Income Levels Eating Out Behavior Change in Food Habits Experimentation Need for Convenience
  19. 19. 2. Changing Consumers (contd…) <ul><li>Tastes and preferences are getting diffused across geographies </li></ul><ul><li>A select group of consumers – the younger generation is more experimenting </li></ul><ul><li>Results in increasing cosmopolitan consumers </li></ul>Rising Income Levels Eating Out Behavior Change in Food Habits Experimentation Need for Convenience
  20. 20. 2. Changing Consumers (contd…) <ul><li>Driving forces are increased income levels, urbanization and greater proportion of urban working women </li></ul><ul><li>Increased demand for processed & convenience foods like in ready-to-eat </li></ul>Rising Income Levels Eating Out Behavior Change in Food Habits Experimentation Need for Convenience
  21. 21. 3. Organized Retail and Food Retail <ul><li>Indian organized retail accounts for ~ 4% of the overall retail (CAGR 30%) </li></ul><ul><li>The organized form of food retail is <1% of food consumed </li></ul><ul><li>Food retailing has grown 25% p.a. for last two years and expects to grow higher </li></ul>
  22. 22. 4. Export Opportunities <ul><li>Rising production with increased marketable surplus </li></ul><ul><li>Export potential areas – </li></ul><ul><ul><li>Fresh & processed F&V - grapes, mangoes, gherkins, broccoli and coloured capsicum, pulp and puree </li></ul></ul><ul><ul><li>Dairy products - processed cheese, butter, yoghurt, skimmed milk powder </li></ul></ul><ul><ul><li>Meat, poultry and marine products </li></ul></ul><ul><ul><li>Grain based products </li></ul></ul><ul><ul><li>Confectionary and sugar </li></ul></ul><ul><ul><li>Fruit juices, tea and coffee </li></ul></ul><ul><ul><li>Wine </li></ul></ul><ul><ul><li>Health and organic foods </li></ul></ul>
  23. 23. 5. Government Support Ministries MOA MOFPI MOC
  24. 24. Key Challenges Meeting Global Standards of Quality Inadequate Infrastructure and Supply Chain Technological Knowhow and Support Food Regulations Lack of Processable Produce & Irregular Supply
  25. 25. Growth Opportunities Areas Opportunities Production <ul><ul><li>Farm mechanization and modernization </li></ul></ul><ul><ul><li>Contract farming </li></ul></ul>Capacity building & process upgradation <ul><ul><li>GAP, HACCAP, CODEX </li></ul></ul><ul><ul><li>Education and skill development </li></ul></ul>Agri-Infrastructure Development <ul><ul><li>Supply chain management </li></ul></ul><ul><ul><li>Food parks, terminal markets & distribution centers </li></ul></ul>Cold Chains <ul><ul><li>Pre-cooling facilities, refrigerated vehicles, cold stores/ CA stores, warehouses </li></ul></ul><ul><ul><li>Pack house and traceability systems </li></ul></ul>Food Processing <ul><ul><li>Value addition through processing </li></ul></ul><ul><ul><li>Machines and technology transfer </li></ul></ul>Food Retailing <ul><ul><li>Modern food retail </li></ul></ul><ul><ul><li>Food services </li></ul></ul>
  26. 26. Our Suggestions <ul><li>Create agri-infrastructure </li></ul><ul><li>Technology upgradation </li></ul><ul><li>Capital infusion - private sector participation, FDI </li></ul><ul><li>Developing entrepreneurship </li></ul><ul><li>Risk management by providing services and information in time </li></ul><ul><li>Enabling regulations </li></ul>
  27. 27. Thank You! [email_address] +91-9810308309