According to a report published by market research firm RNCOS in April 2010, titled ‘Indian Food and Drinks Market: Emerging Opportunities’ the Indian food and beverages market is expanding rapidly and is projected to grow at a compound annual growth rate (CAGR) of about 7.5 per cent during 2009-13 and would touch US$ 330 billion by 2013.
The food retail industry, currently at US$ 70 billion is predicted to grow more than double to US$ 150 billion by 2025, according to KPMG, a global audit and advisory firm. India’s food retail industry is poised for exponential growth. With the evolution of innovative food processing capacity and the emergence of organized retail, change in consumption patterns along with fast changing demographics and habits is fuelling the next growth trajectory for the food industry in India.
The Indian fast food market is growing at an annual rate of 25-30 per cent, according to a report published by market research firm RNCOS in September 2010, titled ‘Indian Fast Food Market Analysis’. Foreign fast food chains are aggressively increasing their presence in the country. For instance, Domino’s has planned to open 60-65 outlets every year for the next three years (2010-2012) while Yum Brands Inc is also preparing for massive expansion across the country with plans to open 1000 fast food outlets by 2015.
Exports of agricultural products from India are expected to cross around US$ 22 billion mark by 2014 and account for 5 per cent of the world’s agriculture exports, according to the Agricultural and Processed Food Products Export Development Authority (APEDA).
Exports of floriculture, fresh fruits and vegetables, processed fruits and vegetables, animal products, other processed foods and cereals stood at US$ 7,347.07 million in 2009-10, according to DGCIS annual data published by APEDA.
Moreover, India exported schedule products, floriculture and seeds, fruits and vegetables, processed fruits and vegetables, livestock products, other processed foods and cereals worth US$ 1.77 billion between April-June 2009-2010, according to APEDA.
The export of spices and spice-based value added products during April-August 2010 increased 13 per cent in volume and 19 per cent in value terms. The increase in dollar terms was 25 per cent. According to the latest estimates of the Spices Board, a total of 239,850 tonnes, valued at US$ 564.85 million, was exported as against 211,950 tonnes valued at US$ 450.50 million in April-August 2009.
The Indian Fisheries occupies third position in global scenario in terms of production of fish which is 4.4 per cent of global fish production. The contribution of fisheries sector is 1.10 per cent to the total GDP and 5.3 per cent to the agricultural GDP. Fishery sector has emerged as the largest group in agricultural export of India with quantity of 5.20 lakh tonnes and value of US$ 1.78 billion, respectively. The sector employs 14.0 million of the population.
In order to further grow the food processing industry, the Ministry of Food Processing Industries (MOFPI) has formulated a Vision 2015 action plan under which specific targets have been set. This includes trebling the size of the food processing industry, raising the level of processing of perishables from 6 per cent to 20 per cent, increasing value addition from 20 per cent to 35 per cent, and enhancing India’s share in global food trade from 1.5 per cent to 3 per cent.
According to Mr Subodh Kant Sahai, Union Minister for Food Processing Industries, the Central Government is envisaging an investment of US$ 21.9 billion in the food processing industry over the next five years, a major chunk of which it plans to attract from the private sector and financial institutions.
Moreover, the food processing sector has grown from 6 per cent a year ago to 14.9 per cent in 2010, according to Mr Sahai. The Minister further said that at present the country was processing 10 per cent of the total food produce and aimed to enhance it to 20 per cent by 2015. Exports are also targetted to increase from 1.5 per cent to 3 per cent.
Furthermore according to Mr Sahai, foreign direct investment (FDI) in food processing is likely to rise 27 per cent to US$ 264.6 million in 2010-11. "This year, FDI is expected to cross Rs 1,000 crore and touch Rs 1,200 crore," Sahai said on the sidelines of the second national conference of the National Meat and Poultry Processing Board (NMPPB) in New Delhi in May 2010.
The cumulative FDI received by the food processing industry from April 2000-September 2010 stood at US$ 1,102.03 million, according to data released by the Department of Industrial Policy and Promotion (DIPP).
According to a report published by market research firm RNCOS in August 2009, titled "Indian Non-Alcoholic Drinks Forecast to 2012", the Indian non-alcoholic drinks market was estimated at around US$ 4.43 billion in 2008 and is expected to grow at a CAGR of around 15 per cent during 2009-2012.
As per the report, the fruit/vegetable juice market will grow at a CAGR of around 30 per cent in value terms during 2009-2012, followed by the energy drinks segment which will grow at a CAGR of around 29 per cent during the same period.