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Sial 17 10 08

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Information about Sial 17 10 08

Published on December 7, 2008

Author: sanjaysethi

Source: slideshare.net

Description

This presentation was delivered at SIAL Food Show, Paris on 21st October, 2008. The presentation lets you get an insight on Indian Food Industries, key segments and entry strategy
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The Indian Food Industry Opportunities Abound Sanjay Sethi, Technopak Flavors of Incredible India 21 st Oc t, 2008 Ministry of Food Processing Industries Federation of Indian Chambers of Commerce and Industry Knowledge Partner

Contents INDIAN FOOD INDUSTRY KEY GROWTH DRIVERS MAJOR CHALLENGES GROWTH OPPORTUNITIES OUR SUGGESTIONS

INDIAN FOOD INDUSTRY

KEY GROWTH DRIVERS

MAJOR CHALLENGES

GROWTH OPPORTUNITIES

OUR SUGGESTIONS

Indian Food Industry Indian Agriculture sector contributes 17% to the GDP and provides 60% of employment World leaders in various food items like cereals, fruits & vegetables and dairy products Diverse agro-climatic conditions - production of a wide range of crops Large consumer class – a population of 1.13 billion with rapidly increasing middle class (~ 20 million) Shifting food habits from basic food items towards high value crops and processed food items

Indian Agriculture sector contributes 17% to the GDP and provides 60% of employment

World leaders in various food items like cereals, fruits & vegetables and dairy products

Diverse agro-climatic conditions - production of a wide range of crops

Large consumer class – a population of 1.13 billion with rapidly increasing middle class (~ 20 million)

Shifting food habits from basic food items towards high value crops and processed food items

Indian Food Industry (conti…) Source: Ministry of Food Processing Industries, Technopak Analysis, * Projections Indian Food Industry stands at $ 200 bn in ‘06-07, of which Food Processing industry contributes a share of 43% ($ 85 bn) Directly employs about 2 mn people Highly fragmented and dominated by the unorganized sector INDIAN FOOD INDUSTRY: KEY STATISTICS 2002-03 2006-07 2010-11* 2014-15* Food Industry Size ($ billion) 175 200 250 300 Food Processing Industry Size ($ billion) 70 85 110 150 % Food Processing Industry in total Food Industry 40 % 43 % 44 % 50 % Size of organized sector in Food Processing Industry ($ billion) 13 23 37 60 % organized sector in Food Processing Industry 19 % 27 % 36 % 40 %

Indian Food Industry stands at $ 200 bn in ‘06-07, of which Food Processing industry contributes a share of 43% ($ 85 bn)

Directly employs about 2 mn people

Highly fragmented and dominated by the unorganized sector

Indian Food Processing Industry Major contributors are staple and other foods (like food grains, sugar, edible oils, pulses, tea, spices ) Dairy and F&V contributes 23% each Packaged Foods segment is the fastest growing across sectors

Major contributors are staple and other foods (like food grains, sugar, edible oils, pulses, tea, spices )

Dairy and F&V contributes 23% each

Packaged Foods segment is the fastest growing across sectors

Processing levels in India Processing level in India is about 43%, which is much lower than most of the developed and developing countries Level of processing in India (% volume) F&V - 2% Milk - 35% Meat - 21% Poultry – 6% Marine – 26%

Processing level in India is about 43%, which is much lower than most of the developed and developing countries

Level of processing in India (% volume)

F&V - 2%

Milk - 35%

Meat - 21%

Poultry – 6%

Marine – 26%

Sectoral Overview Processing through the organized sector is at about $1.2 billion The export value was $ 0.9 billion in ‘06-07, and import was $ 0.4 billion Commercialization of reefer containers has supported the exports Export demand - mangoes, lemons, bananas, gherkins, mushrooms Mainly exported to U.K., Europe, Middle East, Singapore, Hong Kong, Australia Fruits and Vegetables (F&V)

Processing through the organized sector is at about $1.2 billion

The export value was $ 0.9 billion in ‘06-07, and import was $ 0.4 billion

Commercialization of reefer containers has supported the exports

Export demand - mangoes, lemons, bananas, gherkins, mushrooms

Mainly exported to U.K., Europe, Middle East, Singapore, Hong Kong, Australia

Sectoral Overview (contd…) The processing of total poultry production is about 12% Processing of buffalo and poultry products is growing at a CAGR of 18% Buffalo meat market size is $ 2.2 bn Higher export potential in value added poultry products in years to come Buffalo meat has major share in the total export of $ 0.8bn Prime export destinations are UAE, Australia, South America, Philippines, Malaysia, Europe (total of 55 countries) Buffalo Meat and Poultry

The processing of total poultry production is about 12%

Processing of buffalo and poultry products is growing at a CAGR of 18%

Buffalo meat market size is $ 2.2 bn

Higher export potential in value added poultry products in years to come

Buffalo meat has major share in the total export of $ 0.8bn

Prime export destinations are UAE, Australia, South America, Philippines, Malaysia, Europe (total of 55 countries)

Sectoral Overview (contd…) The processing of fish and marine foods is at about 13% of the total production 24% of this processed quantity is being exported India exports maximum quantity of tuna and shrimps Prime exporters are USA, Canada, Japan and the Middle east Fish and Marine Food

The processing of fish and marine foods is at about 13% of the total production

24% of this processed quantity is being exported

India exports maximum quantity of tuna and shrimps

Prime exporters are USA, Canada, Japan and the Middle east

Sectoral Overview (contd…) Leading milk producer Total processed industry size is $ 33 bn, where organized sector contributes only 24% High demand- processed dairy products, cheese, packaged liquid milk and packaged paneer Export potential- cheese, skimmed milk powder and casein Import value of lifestyle cheeses is ~ $18 million and is growing at about 9% annually Dairy

Leading milk producer

Total processed industry size is $ 33 bn, where organized sector contributes only 24%

High demand- processed dairy products, cheese, packaged liquid milk and packaged paneer

Export potential- cheese, skimmed milk powder and casein

Import value of lifestyle cheeses is ~ $18 million and is growing at about 9% annually

Sectoral Overview (contd…) One of the fastest growing sector India is net importer of wine Wine consumption is growing at 30%, while beer at 7% Wine production is increasing at a rate of nearly 22% India’s annual production of wine stands at 5 million litres >2,00,000 cases imported in ‘08 Beer and Wine

One of the fastest growing sector

India is net importer of wine

Wine consumption is growing at 30%, while beer at 7%

Wine production is increasing at a rate of nearly 22%

India’s annual production of wine stands at 5 million litres

>2,00,000 cases imported in ‘08

Sectoral Overview (contd…) Packaged Foods One of the fastest growing sector Witnessing a growth rate of > 30 % Current market size is ~ $ 2.6 bn Expected to grow 10 times in the coming decade Huge export potential for RTE products

One of the fastest growing sector

Witnessing a growth rate of > 30 %

Current market size is ~ $ 2.6 bn

Expected to grow 10 times in the coming decade

Huge export potential for RTE products

Sectoral Overview (contd…) Others Bakery and Biscuit Annual turnover is $ 900 mn Branded bakery & biscuit market is growing fast at 15-16% Staples and Other Foods Increased grain milling Rise in branded products like atta and refined oil Functional Food Revenue of > $ 0.27 bn in ‘07-08 and will reach $ 3.2 bn in 2015 with an estimated growth rate of 43% Non-Alcoholic Beverages Fruit beverages is the fastest growing segment Rising inclination towards health drinks and functional drinks

Bakery and Biscuit

Annual turnover is $ 900 mn

Branded bakery & biscuit market is growing fast at 15-16%

Staples and Other Foods

Increased grain milling

Rise in branded products like atta and refined oil

Functional Food

Revenue of > $ 0.27 bn in ‘07-08 and will reach $ 3.2 bn in 2015 with an estimated growth rate of 43%

Non-Alcoholic Beverages

Fruit beverages is the fastest growing segment

Rising inclination towards health drinks and functional drinks

Key Growth Drivers technopak Huge Production Base Changing Consumers Organized Retail and Food Retail Export Opportunities Government Support

Huge Production Base

Changing Consumers

Organized Retail and Food Retail

Export Opportunities

Government Support

Key Growth Drivers – 1. huge production base Food Grains 217 mT Fruits & Vegetables 150 mT Milk 100 mT Fish & Marine 6 mT Poultry 2.28 mT Livestock 2.4 mT Bakery & Biscuit 3.0 mT Wine 5 mL

2. Changing Consumers Consistent rise in middle class income Per Capita Income has crossed $ 1000 Rising Income Levels Eating Out Behavior Change in Food Habits Experimentation Need for Convenience

Consistent rise in middle class income

Per Capita Income has crossed $ 1000

2. Changing Consumers (contd…) Health consciousness, balance diet Risen demand for safe food Rising Income Levels Eating Out Behavior Change in Food Habits Experimentation Need for Convenience

Health consciousness, balance diet

Risen demand for safe food

2. Changing Consumers (contd…)   Changing consumers and mature service providers Affluence levels and facilities available Percolating demand to the smaller cities and towns, other than metros and larger cities Rising Income Levels Eating Out Behavior Change in Food Habits Experimentation Need for Convenience

 

Changing consumers and mature service providers

Affluence levels and facilities available

Percolating demand to the smaller cities and towns, other than metros and larger cities

2. Changing Consumers (contd…) Tastes and preferences are getting diffused across geographies A select group of consumers – the younger generation is more experimenting Results in increasing cosmopolitan consumers Rising Income Levels Eating Out Behavior Change in Food Habits Experimentation Need for Convenience

Tastes and preferences are getting diffused across geographies

A select group of consumers – the younger generation is more experimenting

Results in increasing cosmopolitan consumers

2. Changing Consumers (contd…) Driving forces are increased income levels, urbanization and greater proportion of urban working women Increased demand for processed & convenience foods like in ready-to-eat Rising Income Levels Eating Out Behavior Change in Food Habits Experimentation Need for Convenience

Driving forces are increased income levels, urbanization and greater proportion of urban working women

Increased demand for processed & convenience foods like in ready-to-eat

3. Organized Retail and Food Retail Indian organized retail accounts for ~ 4% of the overall retail (CAGR 30%) The organized form of food retail is <1% of food consumed Food retailing has grown 25% p.a. for last two years and expects to grow higher

Indian organized retail accounts for ~ 4% of the overall retail (CAGR 30%)

The organized form of food retail is <1% of food consumed

Food retailing has grown 25% p.a. for last two years and expects to grow higher

4. Export Opportunities Rising production with increased marketable surplus Export potential areas – Fresh & processed F&V - grapes, mangoes, gherkins, broccoli and coloured capsicum, pulp and puree Dairy products - processed cheese, butter, yoghurt, skimmed milk powder Meat, poultry and marine products Grain based products Confectionary and sugar Fruit juices, tea and coffee Wine Health and organic foods

Rising production with increased marketable surplus

Export potential areas –

Fresh & processed F&V - grapes, mangoes, gherkins, broccoli and coloured capsicum, pulp and puree

Dairy products - processed cheese, butter, yoghurt, skimmed milk powder

Meat, poultry and marine products

Grain based products

Confectionary and sugar

Fruit juices, tea and coffee

Wine

Health and organic foods

5. Government Support Ministries MOA MOFPI MOC

Key Challenges Meeting Global Standards of Quality Inadequate Infrastructure and Supply Chain Technological Knowhow and Support Food Regulations Lack of Processable Produce & Irregular Supply

Growth Opportunities Areas Opportunities Production Farm mechanization and modernization Contract farming Capacity building & process upgradation GAP, HACCAP, CODEX Education and skill development Agri-Infrastructure Development Supply chain management Food parks, terminal markets & distribution centers Cold Chains Pre-cooling facilities, refrigerated vehicles, cold stores/ CA stores, warehouses Pack house and traceability systems Food Processing Value addition through processing Machines and technology transfer Food Retailing Modern food retail Food services

Farm mechanization and modernization

Contract farming

GAP, HACCAP, CODEX

Education and skill development

Supply chain management

Food parks, terminal markets & distribution centers

Pre-cooling facilities, refrigerated vehicles, cold stores/ CA stores, warehouses

Pack house and traceability systems

Value addition through processing

Machines and technology transfer

Modern food retail

Food services

Our Suggestions Create agri-infrastructure Technology upgradation Capital infusion - private sector participation, FDI Developing entrepreneurship Risk management by providing services and information in time Enabling regulations

Create agri-infrastructure

Technology upgradation

Capital infusion - private sector participation, FDI

Developing entrepreneurship

Risk management by providing services and information in time

Enabling regulations

Thank You! [email_address] +91-9810308309

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