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Published by: parmar on Feb 07, 2008
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A FICCI survey of Food and Beverages Industry has shown positive growth trendsduring April-March 2004-05.The Survey also confirms higher growth during 2005-06 in almost all the productsbelonging to Food and Beverage segment over the corresponding previous period.The improvement has been reflected both in volume terms and in terms of valuefor most of the products. The overall industry has achieved a growth rate of about 8% in terms of value during 2004-05.The survey confirms that the Rs 3584 bn Indian Food and Beverages industry haveshown buoyancy due to some positive factors :
Government’s high priority for development of food processing industry
toencourage commercialization and value addition to agricultural produce.
Liberal reform measures and various tax benefits
Policy Initiatives taken by the Government in the Food Processing Sectorwhich include :
Food processing industry declared a priority area.
Entire sector is de-licensed.
Automatic approvals for foreign investment up to 100 percent, except someproducts like alcoholic beverages and also technology transfer.
Zero duty import of capital goods and raw material for100 percent export orientedunits.
Agro based l00 percent export oriented units allowed sale up to 50 per cent in
domestic tariff area.
Export earnings are exempted from corporate tax
All processed fruits and vegetables products exempted from Central Excise Duty.
Government grant given for setting up of common facilities in Agro Food Park.
Full duty exemption on all imports for units in Export Processing Zones.
Use of foreign brand name is freely permitted
 The Federation of Indian Chambers of Commerce and Industry (FICCI) hasrecently conducted the survey of industries in the Food and Beverages sector
throughextensive interactions with representatives of industry, allied industry organizations,associations, government and public sector undertakings.
With the changing life styles of the consumers and rising disposable income of the growing middle-income group,
Branded Food , Health food and
Convenient Food are rapidly rising segments of this industry which aregaining vast popularity
. The market for
branded foods is growing at a healthy10%-15%.
next sunrise industry for India is going to be food.
In terms
of totaloutput addition, food has surpassed IT and pharma
India’s middle class segment will continue to hold the key to success of theprocessed food market in India. The profile of the middle class is changingsteadily
as hired domestic help is becoming costlier. This is
conducive to anexpansion in demand for ready to eat Indian-style foods.
Indian food and beverage companies are making a beeline for regionaloverseas markets
like Bangladesh, Pakistan, Nepal, Middle East and CIScountries because of similar lifestyles and consumption habits . GodrejConsumer, Marico, Dabur are among the companies
Some companies have
achieved growth in the key processed food segment byreaching lower price points
to make the products more affordable
to a biggerconsumer class
Unorganized, small players
account for
more than 70 per cent
of theindustry output in volume terms and
50 per cent in value terms.
Lower overheads due to limited local area
, family management, focusedproduct lines and less expenditure on marketing
help the unorganized sector togrow.
The Food and beverages sector is
witnessing recently large-scaletransformation, huge advertisement spending, ,awareness campaign aboutthe products and brands,
distribution of free samples with the focus onimproving the distribution network to make strong presence in the Indian market.
Key factors to success are distribution (in rural markets) and advertising (inurban markets Innovation and launching of new brands
are being adopted bythe companies to grab the market.
Big companies have started sourcing their products from localmanufacturers as cost saving measures and to enter the mass consumersegment..
The market is seeing players like Heinz, Mars, Marico, Conagra, Pepsi, ITC,Dabur, Britannia, Cadbury, HLL, Pillsbery, Nestle and Amul, SmithklineBeecham, The Surya Food and Agro Private Ltd etc and a host of localmanufacturers offering competition with their established brands on nationallevel. Every player is busy in the race by expanding their product range.

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