Demand factors: a) Price b) Demography c) Seasonal change d) Taste and preference e) Income of people f) Price of other related good g) Advertisement expenditure h) Population size i) Trends Supply Factors: a) Price b) Climate c) Technology d) Transport Condition/Storage e) Government Policies f) Factor Prices and Availability g) Prices of Related Goods

1. Factors Affecting Demand and Supply of
Food Industry in India
By Manikant Jaiswal

2. Demand
Demand is the quantity of a good that
consumers are willing and able to purchase
at various
prices during a given period of time.

3. Factors Affecting Demand of Food
Industry
a) Price b) Demography
c) Seasonal change d) Taste and preference
e) Income of people f) Price of other related good
g) Advertisement expenditure h) Population size
i) Trends

4. Price
Law of Demand
Everything else remaining same, as the price of a product
increases, the demand for it in the market decreases and
vice-versa.
For example,

5. Demography
• Age: Age is an important factor that determines what kind of food an
individual is more likely to consume.
• Gender: Studies have shown that women tend to eat more organic
and natural food which are free of pesticides as compared to men.
• Availability and access: Transport and geographic location of store.
• Culture and family: Social and cultural influence on an individual tend
to influence his/her food preference which in turn creates demand for
certain foods.

6. Seasonal Change
Each season has an effect on the foods we make and eat.
Weather also affects our mood and how we feel, hence
determining what we want to eat.
For example,
In Summers, demand for cold beverages increases.
In Winters, demand for soup and warmer foods
increases.

7. Tastes and Preferences
Taste and preferences of consumers affects demand for
food products.
A product for which consumers’ tastes and preferences
are greater, its demand would be large and its demand
curve will therefore lie at a higher level.
For example, MC Donald's & KFC

8. Income of People
People opt for different types of food depending upon
what they earn or their income level.
For example,
A person belonging to higher income strata will prefer
India Gate Basmati Rice over Loose Rice

9. Price of other related goods
Demand for a food product also depends on price of
related goods that is substitute goods and
complementary goods.
For example,
Substitute goods such as Domino’s and Pizza Hut
Complementary goods such as Pizza & Coke

10. Advertisement Expenditure
Most companies spend a huge amount of money on
advertising their product as it increases demand for their
product tremendously.
For example,
Cadbury spent £7.5 mil. on advertisement of their
product “Dairy Milk Ritz & Lu”

11. Population Size
India's population is increasing at an alarming rate. This
is resulting in increase in demand of food products in the
market. As the population size grow, the need for food
products grows with it.
For example,
The demand for wheat 30 years ago was way less than its
current demand.

12. Trends
Trends for food products is changing day by day.
Introduction of organic food and vegan lifestyle plays a
very important role in demand of food products these
days.
Food bloggers and social-media influencers also affect
the demand of food industry.

13. Supply
Supply is the amount of a resource that firms,
producers, laborers, providers of financial assets,
or other economic agents are willing and able to
provide to the marketplace or directly to another
agent in the marketplace.

14. Factors Affecting Supply of Food
Industry:
a) Price b) Climate
c) Technology d) Transport Condition/Storage
e) Government Policies f) Factor Prices and Availability
g) Prices of Related Goods

15. Price
Sellers are generally willing to sell a larger quantity when
a higher price is offered. They will try to increase the
production and supply of food.
For example-

16. Climate
Certain crops can grow in particular climatic conditions &
thus climate has an impact on the supply of food.
For example,
Watermelon in summers and carrot in winters

17. Technology
When a firm discovers a new technology that allows it to
produce at a lower cost, the supply curve will shift to the
right as well.
For example,
In the 1960’s, Green Revolution focused on breeding
improved seeds for basic crops like wheat and rice. By
the early 1990’s, the harvest was twice as high per acre.

18. Transport Condition/Storage
Better transport and storage facility leads to the increase
in supply of food and food products
For example,
When fuel price increases price of basic food stuff
increases

19. Government Policies
Different policies of government such as fiscal policy and
industrial policy has a great impact on the supply of food
product.
For example,
Increase in excise duties would decrease the supply of
product

20. Factor Prices
Labor & Physical Capital like raw material, equipment and machines
are a major determinant of supply.
For example,

21. Prices Of Related Goods
The prices of substitute and complementary goods also
affect the supply of products
For example,
If price of wheat increases then farmers would tend to
grow more wheat than rice this would decrease supply
of rice in the market

22. Thank You.