IBEF: March 01, 2021
In the next 5-10 years, the Indian packaged food industry is forecasted to double and increase to US$ 70 billion, pushed by factors like economic growth, demographic dividends and rising e-commerce, Nestlé India Chairman and CEO Mr. Suresh Narayanan stated on Friday.
The company is also hoping for the government's food processing sector production-linked incentive (PLI) scheme, which would be a positive development for the industry with the combination of capital expenditure and job creation.
He added, “I am a strong believer in the development of consumption in this country.”
Surveys carried out by all major agencies estimate that the demand for packaged goods will double in the next five years.
Mr. Narayanan said, “Today, the market is estimated at US$ 35 billion and we anticipate it to cross US$ 70 billion.”
Factors such as ‘demographic dividends’ and ‘economic reasons’ , will facilitate the digital drive for the food processing industry.
He said, “As per the study, we are going to add nearly 140 million households to the aspiring and affluent class between 2018 and 2030.” This indicated that there will be rise in the consumption of packaged goods and branded goods.
Mr. Narayanan added, “Generation-Z, coming into the workforce, is going to be ~ 25-30% of the population.”
He stated that today, India has ~ 140 million customers in the e-commerce market, and in the next 5-10 years it is projected to be almost triple. The total number of people who access the internet, which is ~ 600-650 million, is estimated to be ~ 1 billion. In rural and urban India, the outcomes of the economic cycle, the demographic cycle, the digital cycle and expectations are likely to lead to a dynamic potential.
He further stated that the discussion on the PLI scheme for the food processing industry is in continuation and the announcement is likely to be soon. He added that it would be a great step for the food processing industry.
He added, “In food generation (companies), the generation of jobs multiplies and is among the strongest of all manufacturing sectors, and if we look at one economic and social task facing all Indians, it is the generation of employment and I hope that something good comes out of it.”
In October 2020, Nestle announced that it will continue to invest Rs. 2,600 crore (US$ 356.38 million) in India over the next 3-4 years to expand the existing market and new upcoming unit as Sanand, Gujarat.
In India, Nestle currently operates eight production units. Net sales for 2020 were registered at Rs. 13,290.16 crore (US$ 1.82 billion). Its net profit increased 5.79% to Rs. 2,082.43 crore (US$ 285.44 million).
In terms of contribution to Nestle's global sales in 2019, the Indian market was ranked 13th.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.