Introduction
India is set to witness the next revolution in the food processing industry, as per Mr Subodh Kant Sahai, the Union Minister for Food Processing Industries. The Centre has set an investment target of Rs 100, 000 crore (US$ 18.90 billion) by 2015 in the sector. The sector is expected to grow by 20 per cent and value addition to increase by 35 per cent by 2015.
India is the second largest producer of food and holds the potential to be the biggest on global food and agriculture canvas, according to a Corporate Catalyst India (CCI) survey. The Indian food industry comprises of food production and the food processing industry. The food processing industry is one of the largest in India – it is ranked fifth in terms of production, consumption, export and expected growth.
Market Size of Indian Food Industry
The Indian fast moving consumer goods (FMCG) market is estimated to grow to US$ 100 billion by 2025 from US$ 12 billion in 2011, according to market research firm Nielsen's report titled Consumer 360. The report has identified four key trends that will drive consumption: premiumisation, consumers switching from commodity to brands, from indulgence to regular consumption, and acceptability.
Food Processing Industry
The Union Ministry of Food Processing plans to give emphasis on improving supply chain, by creating large primary collection and distribution centres throughout the country involving private sector, in the 12th Five Year Plan (2012-17) period.
Food processing industry is of enormous significance for India's development because it has linked up economy, industry and agriculture in India, efficiently and effectively. The three pillars being together have synergised the development process and promoted the growth of the nation to a great extent.
There are 25, 367 registered food processing units in the country whose total invested capital is Rs 84,094 crore (US$ 15.90 billion), as per a competitiveness report of the National Manufacturing Competitiveness Council. This information was provided in a written reply to the Lok Sabha, by Dr Charan Das Mahant, the Minister of State for Food Processing Industries.
Food processing industry is one of the largest industries operating in India and is divided into several segments.
Segments
The Food Processing Industry operates across various segments that include:
- Fruits & vegetables
- Meat & poultry
- Dairy
- Marine products, grains and consumer foods (that includes packaged food, beverages and packaged drinking water)
Value addition of food products is expected to increase from 8 per cent to 35 per cent by 2025. Fruit & vegetable processing is also expected to increase from the current level of 2 per cent to 25 per cent of total production by 2025, as per the CCI report. Dairy sector – that holds highest share in processed food market – holds large potential to be exploited. The report reveals that 37 per cent of the total dairy produce is processed, of which only 15 per cent is done by the organised sector. Hence, there lies a plethora of opportunity for investment and development.
The Vision Document 2015 envisages increasing the value addition to 35 per cent by 2015. The food processing sector is presently growing at an average rate of 13.5 per cent per annum. Food processing industry is a potential source for driving the rural economy and is of great importance to an agrarian economy like India.
Beverages
The Indian market for non-alcoholic drinks, is expected to grow at a compound aggregate growth rate (CAGR) of around 15 per cent during 2009-2012, according to a report published by market research firm RNCOS, titled "Indian Non-Alcoholic Drinks Forecast to 2012".
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