The Indian food processing industry is a significant sector with an estimated worth of USD 67 billion, employing 13 million people directly. It is projected to grow to USD 482 billion by 2020, driven by changing consumer behaviors and increased investments in infrastructure. The industry offers various opportunities, including contract farming and integrated cold chains, supported by favorable foreign investment policies.

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Food Processing Industry
&
Make In India

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Food Processing Industry In India

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Introduction
• One of the largest industry in terms of production, consumption, export and
growth prospects
• Widely recognised as ‘sunrise industry’ with an estimated net worth of USD 67
billion and employing 13 million people directly and 35 million people indirectly.
• Two nodal agencies oversee exports:
• Agricultural & Processed food products Exports Development Authority
(APEDA)
• Marine Exports Development Authority (MPEDA)

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Market size
• Indian food and grocery market is 6th largest in the world leading to 70% sales
from retail
• Expected to touch USD 482 billion by 2020
• Indian food processing industry constitutes 32% of country’s food market - 14%
of manufacturing GDP, 13% of total exports and 6% of total industrial investment
• Food service industry expected to reach USD 78 billion by 2018

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Advantage India

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• One of the largest food producers in the world
• Diverse agro-climatic conditions
• Scope of investment in infrastructure, packaging and marketing
• 50% expenditure by households on food items
• Strategic geographical location (proximity to big markets)
Salient Features

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Key Growth Drivers of Food Processing Sector in
India

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• Increased spending on health & nutritional food
• Changing lifestyles
• Increasing number of nuclear families and working women
• Functional foods, fresh or processed foods
• Organised retail and private label penetration
• Changing demographics and rising disposable income
Drivers of the Industry

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Opportunities of the Industry

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Key Opportunities
• Processable varieties of food
• Contract farming
• Mega food parks
• Integrated cold chain
• Food safety management systems

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Key Segments

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Fruits & Vegetables Processing
• One of the fastest growing sub-sectors of food processing industry.
• Large growth seen in production of ready-to-serve beverages, fruit juices, pulps etc.

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Dairy Processing
• Number 1 milk producing country in the world.
• Estimated milk production is 105 million tonnes.

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Meat Processing
• Estimated meat processing was 6.5 million during 20017-08.
• India exports more than 500,000 million tonnes of meat with buffalo meat with a
major share.

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Fisheries Sector
• Export of marine have grown to USD 1849.08 million in 2008-09.
• Marine products constitute approximately 1.1% of total exports.

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Grain Processing Sector
• Export of oil meals, oilseeds and minor oils reported to at USD 62.6 lakh tonnes
valued at USD 2.32 billion.

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Consumer Food Industries
• Bread and biscuits are largest constituents of this segment with India being second
largest biscuit producer.
• The turnover of biscuit industry is estimated to be around USD 0.64 billion.

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Route of Foreign Investment

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FDI and Investors
• 100% FDI allowed under automatic route in this industry.
• Total inflow of FDI from FY 2004- 2009 was USD 409.41 million.

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Foreign Investors
• Kraft (USA)
• Nestle (Switzerland)
• Danone (France)
• Del Monte (USA)
• Kellogs (USA)
• Unilever (Anglo Dutch)
• Cargill (USA)
• Hershey (USA)
• McCain (Canada)
• Ferrero (Italy)
• Kagome (Japan)
• Pepsi (USA)
• Perfetti (Italy)
• Coca Cola (USA)
• Mars (USA)

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What Make In India Has For The Industry

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Investment Opportunities
• Food preservatives by fermentation: alcohol, yeast preparation, vinegar
• Dairy and Beverages such as milk, cheese and fruit-based beverages
• Food additives and nutraceuticals Confectionary and bakery
• Meat, poultry, fish and seafood
• Grain processing
• Food preservation, packaging and processing equipment
• Spice pastes
• Supply chain infrastructure- Government is laying huge emphasis on cold storage,
abattoirs and food parks
• Establishment of food parks- opportunities for entrepreneurs and foreign investors to
enter this industry

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Conclusion

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The Final Word
The Indian Food Processing Industry has been garnering attention since last few years
and can take full advantage of the ‘Make in India’ campaign. It is time for the industry
to mature and become a global player.

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2015
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