Food Processing India

Food Processing
AUGUST
2012
For updated information, please visit www.ibef.org
Food Processing
Contents
Advantage India
AUGUST
2012
Market overview and trends
Growth drivers
Success stories: Operation Flood, Amul Opportunities
Useful information
Food Processing
Advantage India
AUGUST
2012
Strong demand growth
Food processing hub
2020E
Domestic food spending: USD318 billion
Demand growth for processed food has been rising with growing disposable income, urbanisation, a young population and nuclear families Household consumption is set to double by 2020
India benefits from a large agriculture sector, abundant livestock, and cost competitiveness Investment opportunities will arise in agriculture, food infrastructure, and contract farming
Advantage India
Increasing investments
Policy support
Government expects USD21.9 billion of investments in food processing infrastructure by 2015 Investments, including FDI, will rise with strengthening demand and supply fundamentals
Sops to private sector participation; 100 per cent FDI under automatic route Agri Export Zones have been set up; under the governments Vision 2015 plan, mega food parks to be established
2009
Domestic food spending: USD181 billion
Notes: 2020E Estimate for 2020; estimates are from Flavours of Incredible India (Ernst & Young, 2009) FDI Foreign Direct Investment
ADVANTAGE INDIA
Food Processing
Contents
Advantage India
AUGUST
2012
Growth drivers
Useful information
Food Processing
AUGUST
2012
The food processing sector comprises six major segments

Fruits and vegetables
India is the worlds second largest producer of fruits and vegetables
Milk and milk products
India is the largest producer of milk in the world India was the largest producer of buffalo meat (1.4 MT) and the second largest producer of goat meat (0.5 MT) in FY10 India is the third largest producer of fish in the world India is estimated to have produced about 250 million tonnes of food grains in FY12 Among the fastest growing segments in India; it includes
Meat and poultry Food processing Marine products
Grain processing
Consumer food
Source: Indiabusiness.nic.in, Ministry of Agriculture, Meat &

Poultry Processing Board, FAOSTAT Note: FY Indian financial year (April March) MT: Million Tonnes
Packaged food
Aerated soft drinks
Packaged drinking water
Alcoholic beverages
MARKET OVERVIEW AND TRENDS
Food Processing
AUGUST
2012
Total output of food products and beverages totalled USD93.1 billion in FY10
Processed food output
100 90 80 70 60 50 40 30 20 10 0 FY05 FY06 FY07 FY08 FY09 FY10 Processed food output (USD billion) 30% 25% 20% 15% 10% 5% 0% Growth - right axis
The food processing industry has emerged as a key component of Indian manufacturing; while the sectors total output stood at USD93.1 billion in FY10, it accounted for nearly 7.5% of aggregate gross value added of major industries during that year The size of the sector has been growing fast; output expanded at a CAGR of 16.9 per cent over FY05-10
Source: Ministry of Food Processing Industries ( MOFPI), Annual
Survey of Industries 2009-10 Aranca Research Notes: CAGR Compound Annual Growth Rate
Source: Annual Survey of Industries (ASI) 2009-10,

Aranca Research
Food Processing
AUGUST
2012
Strong growth in the sector also evident from trends in IIP
Although figures for output of food products and beverages from ASI are not available post FY10, data from the Index of Industrial Production (IIP) suggest strengthening growth momentum in food products and beverages in FY1 1-12 Growth for food products and beverages shot up to 14.8 per cent in FY12 from 8.9% in FY1 1; the sector was the second-fastest growing sub-segment within manufacturing in FY12 and its growth far outpaced that of the overall manufacturing sector in the fiscal year
Source: Ministry of Statistics and Programme Implementation
(MOSPI), Aranca Research Notes: ASI Annual Survey of Industries IIP Index of Industrial Production
Annual growth of food products and beverages from IIP (%)

20 15 10
5 0 FY06 -5 -10 Annual growth of Food products & beverages as per IIP Annual growth of overall manufacturing sector as per IIP FY07 FY08 FY09 FY10 FY11 FY12
Food Processing
AUGUST
2012
Exports of processed food and related products has also been rising steadily
Exports of processed food and related products* stood at USD19.7 billion in FY1 1, thereby recording an average annual growth of 14.7% since FY09
Exports of processed food and related items (USD billion)

25 20 15 10 5 8.3 7.4 8.2
Main export destinations for food products have been the Middle East and South East Asia
* includes APEDA products (processed fruits and vegetables, animal products, cereals, and other processed food items) and Non-APEDA products (oil meals, marine products, spices, sugar and molasses, tea, coffee, etc.)
11.5
6.7
0 FY09 Export of APEDA products
6.2 FY10
FY11
Export of Non APEDA products
Source: Agriculture & Processed food products Export Development Authority (APEDA,) Aranca Research;
Food Processing
AUGUST
2012
Shares in exports of processed food and related products (FY11)
In FY1 1, APEDA products had 41.6 per cent share in total exports; non-APEDA products made up the rest Within APEDA products, cereals had the highest share (37 per cent) while for non-APEDA products marine products dominated with a share of about 21 per cent
Shares in APEDA exports (FY11) Shares in non -APEDA exports (FY11)
Marine Products Cereals 29% 37% Animal products Processed Fruits & Vegetables 9% 25% Other processed foods 11% 14% 21% Sugar & Mollasses Oil Meals Spices 14% 20% Tea & Coffee
20%
Others
Source: APEDA, Aranca Research
Food Processing
Large presence of the unorganised sector (1/2)
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2012
The unorganised sector accounts for 42 per cent of Indias food processing industry The sizeable presence of small scale industries points to the sectors role in employment generation
Unorganised sector has the largest share in the sector *
33%
Unorganised sector 25% Organised sector Small scale industries 42%
Source: Ministry of Food Processing Industries, Aranca Research

* The figures have been taken from MOFPIs annual report for FY10 where FY indicates Indian financial year (April March)
10
Food Processing
Large presence of the unorganised sector (2/2)
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2012
Rice mills account for the largest share of processing units in the organised sector The governments focus on infrastructure is likely to see a sharp rise in the number of cold storage units in the years ahead
Shares in production by value and volume (FY11)
30% 50%
70% 50%
By Volume Unorganised sector
By Value Organised sector
Source: Ministry of Food Processing Industries, Aranca Research
11
Food Processing
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2012
Food processing is a key contributor to employment generation in India
In FY09, the sector employed 48 million people Policymakers have identified the food processing sector as a key one in encouraging labour movement from agriculture to manufacturing
Notes: FY Indian financial year (April March)
Healthy contribution to employment generation (FY09)
Direct employment (13 million) Food processing industry Indirect employment (35 million)
Source: Ministry of Food Processing Industries,

Aranca Research
12
Food Processing
Notable trends in the Indian food processing sector
AUGUST
2012
Wide array of products, coupled with increasing global connectivity has led to a
Changing consumer tastes
change in the tastes and preference of domestic consumers

This trend has been bolstered by rising incomes, increasing urbanisation, a
young population, and the emergence of nuclear families

Liberalisation and growth of organised retail have made the Indian market
Entry of international companies
more attractive for global players

With a large agriculture sector, abundant livestock, and cost competitiveness
India is fast emerging as a sourcing hub of processed food
Companies have been moving up the value chain; for example, cooperatives are
Rising business and product innovation
transitioning from being pure producers of milk to offering a wide range of dairy products
Firms, both domestic and global, have been focussing on product innovation to
cater to domestic tastes, while also introducing international flavours
13
Food Processing
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2012
Cooperatives dominate dairy sector; private players lead others

Fruits, vegetables, processed grain
Milk and milk products
Cooperative societies: Gujarat (GCMMF), Andhra Pradesh (APDDCF), Karnataka (KMF), Maharashtra (Mahasangh), Punjab (MILKFED), Tamil Nadu (TCMPF), Delhi (NDDB)
Meat, poultry and marine products
Alcoholic beverages
Consumer food
Aerated soft drinks and packaged drinking water
Packaged food
14
Food Processing
Contents
Advantage India
AUGUST
2012
Growth drivers
Useful information
15
Food Processing
AUGUST
2012
Strong fundamentals and policy support aiding growth
Strong domestic demand Growing demand
Rising export Strong opportunities government support Indias greater integration with the global economy
Supply-side advantages
Policy support
Rising disposable incomes
Favourable climate for agriculture; wide variety of crops
Vision 2015 plan targets trebling of food processing sector Mega food parks, Agri Export Zones to attract FDI and aid infrastructure
Growing middle class, urbanisation, a young population
Proximity to key export destinations Large domestic Expected market spike in global demand as emerging markets grow at a fast pace
Large livestock base aids dairy and meat processing sector
Changing lifestyles and food habits
Inland water bodies, long coastline help marine products
End goal is to make India a global food processing hub
GROWTH DRIVERS
16
Food Processing
AUGUST
2012
Income growth is a key driver of growing domestic demand for processed food
Rising per-capita income in India
2500 30% 25% 20% 1500 1000 500 0
2001 2003 2005 2007 2009 2011E 2013F 2015F 2017F
Rising disposable incomes

Strong growth in per-capita income has resulted in greater demand for food items There has also been a shift in demand
From carbohydrates to meat products (in line with the
2000
15% 10% 5% 0% -5% Per capita income, USD, LHS Annual growth rate, RHS
various phases of economic growth)

To convenience foods, organic and diet foods
Source: IMF WEO (April 2012), Aranca Research

Note: E- estimate
GROWTH DRIVERS
17
Food Processing
AUGUST
2012
A growing middle class and urbanisation has also aided growth in the sector
Changing wealth dynamics of Indias population
70 million households Aspirers: annual income INR90,000200,000 Deprived annual income <INR90,000 Seekers: annual income INR200,000500,000 Strivers: annual income INR500,0001,000,000 Globals: annual income >INR1,000,000
Growing middle class, urbanisation
Strong economic growth since the 1990s has led to

Rapid urbanisation and a growing middle class Nuclear families and dual income households
60
50 40 30 20 10 0
Coupled with a young population and increasing media penetration, this has led to a surge in demand for packaged food, alcoholic and non-alcoholic beverages, snacks, savouries, etc
2005
Strivers
2010
Seekers
2015
Deprived
2020
Aspirers
2025
Globals
Source: McKinsey Quarterly, Aranca Research
GROWTH DRIVERS
18
Food Processing
AUGUST
2012
Exporters gaining from rising global demand and location advantages (1/2)
Growth in key regions of the global economy
16
Rising demand from rest of the world

% Share of exports in total output of processed food stood at 21.2 per cent in FY11 This has primarily resulted from
Greater exports to advanced economies More demand from emerging/ developing economies as
12 8 4 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -4
Emerging & Developing economies Developing Asia Middle East & North Africa Central & Eastern Europe Latin America & the Caribbean
they experience strong growth
Source: IMF WEO (April 2012), Aranca Research
GROWTH DRIVERS
19
Food Processing
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2012
Exporters gaining from rising global demand and location advantages (2/2)
Top ten destination countries of Indias exports of processed food and agriculture related products (in USD million)
1200 1000 800 600 400 200 0 Malaysia Indonesia Kuwait United States Saudi Arabia Bangladesh Pakistan Vietnam UAE Iran 338 298 401 591 650 672 967
Supply-side advantages
Growth in food product exports has been aided by

Significant improvements in product and packaging
1,079
quality
Greater private sector participation
India has a location advantage it is geographically close to key export destinations (Middle East, South East Asia) United Arab Emirates was the top export destination of processed food and agriculture related products, followed by Saudi Arabia and the United States
464
502
Source: Ministry of Food Processing Industries,

Aranca Research
GROWTH DRIVERS
20
Food Processing
India has a distinct competitive advantage over peers
AUGUST
2012
Indias comparative advantage lies in its favourable climate, large agriculture sector and livestock base, long coastline, and inland water resources India also has an edge in cost of production compared to its competitors in Asia and the developed world Units Arable land (million hectares) Area under Irrigation (million hectares) Coast line ('000 kilometers) Cattle (million)
157.9 63.1 7 210.2 Milk (Cow & Buffalo) Pulses (nes) Fruits (fresh, nes) Bananas Tea Rice (Paddy) Sugarcane 1** Vegetables (fresh, nes)
Production (million tonnes) 107.2 7 9.6 31.9 0.9 120.6 277.8 34.8
Global rank (2010) 1 1 1 1 2 2 2 2
Global rank
2* 1* 18#
Source: World bank, FAOSTAT, CIA World Fact book, Aranca Research
Notes: * - for the year 2009; # - for the year 2011; ** - for the year 2010
Wheat
Potatoes
80.7
36.6
2
2
GROWTH DRIVERS
21
Food Processing
Strong policy support gives food processing sector a boost (1/2)
Encouragement to private sector
AUGUST
2012
100 per cent export-oriented units are allowed to sell up to 50 per cent of their
produce in the domestic market

Export earnings are exempted from corporate taxes
Import duty scrapped on capital goods and raw materials for 100 per cent
Tax incentives and other sops
export-oriented units
100 per cent tax exemption for 5 years followed by 25 per cent tax exemption
for the next 5 years for new agro-processing industries
100 per cent FDI under automatic route (except for alcohol, beer, and sectors
Relaxed FDI norms
reserved for small scale industries)

Repatriation of capital and profits permitted
Notes: FDI Foreign Direct Investment
GROWTH DRIVERS
22
Food Processing
Strong policy support gives food processing sector a boost (2/2)
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2012
Assigned priority sector for bank credit 60 Agri Export Zones (AEZ) have been set up across the country
Focus on infrastructure
Setting up of 10 mega food parks with investments worth USD23 million
Government announced setting up of 15 Mega Food Parks in its FY12 Budget, as
part of the third phase of Mega Food Park Scheme
Incentives for development of storage facilities
Investment-linked tax incentive of 100 per cent deduction of capital expenditure
for setting up and operating cold chain facilities (for specified products), and for setting up and operating warehousing facilities (for storage of agricultural produce)
GROWTH DRIVERS
23
Food Processing
Agri Export Zones in India
Jammu & Kashmir: Apples, walnuts Himachal Pradesh: Apples Punjab: Basmati rice, vegetables
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2012
Uttaranchal: Basmati rice, aromatic and medicinal plants Uttar Pradesh: Basmati rice, potatoes, mangoes, vegetables
Assam: Ginger
Rajasthan: Coriander, cumin
Gujarat: Mangoes, vegetables, sesame seeds
West Bengal: Pineapple, litchi, Darjeeling tea, vegetables Madhya Pradesh: Onions, garlic, seed spices, lentils Maharashtra: Grapes, grape wine, mangoes, flowers, onion Andhra Pradesh: vegetables, mango pulp, grapes, gherkins Karnataka: Gherkins, rose, onions, flowers, vanilla Tamil Nadu: Flowers, mangoes, cashew nuts
Maharashtra 4 4 West Bengal
4
4 5 5 6 8
20
Andhra Pradesh Madhya Pradesh Karnataka
Uttaranchal
Uttar Pradesh Tamil Nadu Other States
GROWTH DRIVERS
24
Food Processing
AUGUST
2012
Foreign investments flowing in; rise in plan expenditure (1/2)

Cumulative FDI inflows (Apr 2000Feb 2012) into the food and agriculture sector
1600
FDI inflows into agriculture and food processing between Apr 2000 and Feb 2012 stood at USD4.5 billion
1.0% 0.8% 0.6% 0.4% 0.2% 0.0% Agri services Food processing Agri machinery Tea and coffee
Demand growth, supply advantages, and policy support have been instrumental in attracting FDI
Notes: FDI Foreign Direct Investment,
1400 1200 1000 800 600 400 200 0
Cumulative FDI inflow (USD million) Share of total FDI inflow (%) - right axis
Source: Department of Industrial Policy & Promotion,

Aranca Research
Fermentation
Vegetable oil
GROWTH DRIVERS
Sugar
25
Food Processing
AUGUST
2012
Foreign investments flowing in; rise in plan expenditure (2/2)
GOI expects USD21.9 billion of investments in foodrelated infrastructure from the private sector The governments main focus is on supply-chain related infrastructure like cold storage, abattoirs and food parks
Notes: GOI Government of India
11th Five Year Plan (2007-12) outlay shares: food processing

Infrastructure development Technology upgradation Setting up/ upgradation of quality control Human resource development
2% 6% 15%
4% 8%
65%
Strengthening of institutions Quality enhancement of street food
Plan allocation to the food processing sector: USD0.8 billion
Source: Ministry of Food Processing Industries (2009-10 Annual Report),

Aranca Research
GROWTH DRIVERS
26
Food Processing
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2012
Rising Private Equity (PE) funding; M&A activity stable (1/2)

PE investments in the food and agriculture totaled USD650 million during 2008-11
Company
Nuziveedu Seeds
Investor
Blackstone Group Sequoia Capital Darby Asia Investors Standard Chartered Pvt Eq Ltd Carlyle Group Motilal Oswal Private Equity Advisors Verlinvest SA Motilal Oswal Private Equity Advisors IL&FS Investment Managers Coffee
Type of business
Floriculture Snacks
Deal value (USD million)

80.0 30.0 25.0 25.0 22.0 15.0 15.0 14.1 13.5
GROWTH DRIVERS
PE deals Jan 2010 Apr 2012
Prakash Snacks Pvt Ltd Amalgamated Beans Coffee Trading Co Bush Foods Overseas Pvt Ltd Tirumala Milk Products The CREMICA Group Nashik Vinters Parag Milk & Milk Products Godrej Tea
Non-citrous fruit farming

Rice milling Milk production
General food products

Wine and liquor Dairy products Coffee and tea
27
Food Processing
AUGUST
2012
Rising Private Equity (PE) funding; M&A activity stable (2/2)

M&A activity was steady in 2011; NSL Sugar Ltds 100% acquisition of Jay Mahesh Sugar Industries Ltd was one of the highest by value Target company
GMR Industries Ltd
Acquirer company
EID Parry NSL Sugars Ltd McCormick & Co Summit Partners Bajaj Hindusthan Globus Spirits Keventer Agro
Type of business
Sugar Sugar Seasonings, sauces Agricultural seeds Sugar, ethanol Liquor Candy items
Deal value (USD million)

114.8 51.99 35.0 30.0 14.1 14.0 11.2
M&A deals Jan 2010 Apr 2012
Jay Mahesh Sugar Industries Eastern Condiments Krishidhan Seeds Bajaj Hindustan Sugar & Ind Associated Distilleries Candico India
Source: Thompson One Banker, Aranca Research

Notes : M&A Mergers and Acquisitions
GROWTH DRIVERS
28
Food Processing
AUGUST
2012
Sector has been attracting foreign JV partners for a long time
Players like McCormick had identified India as a strategic market way back in the 1990s Global players like Hershey are now keen on entering the increasingly attractive Indian market Established players like Nestle and Coke are extending their global JVs to India
Foreign Players
Dan Cake McCormick McCormick Nestle, Coca Cola Hershey McCormick
Indian Partner
Phadnis Group Kohinoor Foods Ltd Eastern Condiments -Godrej AVT
Type of business
Cake and biscuits Basmati and food products Seasonings Beverage Chocolates Spices
Stake ratio
66:34 85:15 26:74 50:50 51:49 50:50
Year
2011 2011 2010 2010 2007 1994
Source: Thompson ONE Banker, Aranca Research

Note: JV Joint Venture
GROWTH DRIVERS
29
Food Processing
Contents
Advantage India
AUGUST
2012
Growth drivers
Useful information
30
Food Processing
AUGUST
2012
Operation Flood: India gains self sufficiency in milk production (1/2)
Operation Flood was initiated in 1970 by the National Dairy Development Board to achieve national self sufficiency in milk production by creating nationwide milk grids; under Operation Flood
Indias milk production rose to 88.1 million metric tonnes (mmt) in FY04 from 21.2 mmt in FY1969
India retained its position as the worlds largest milk producer in 2010-1 1 with an annual production of 121.8 million tonnes. Dairy cooperatives offer employment opportunities to about 12 million farm families
Source: National Dairy Development Board, GCMMF

(www.amul.com), Aranca Research
SUCCESS STORIES: OPERATION FLOOD, AMUL
31
Food Processing
AUGUST
2012
Operation Flood: India gains self sufficiency in milk production (2/2)

PHASE I (Jul-1970 to Mar-1981) Dairy cooperative societies (000) Members (million) Milk procurement (million kg/ day) Liquid milk marketing (million litres/ day) Milk drying capacity (million tonnes/ day) 13.3 PHASE II (Oct-1979 to Mar-1985) 34.5 PHASE III (Jul-1985 to Mar-1996) 72.5
1.8
3.6
9.3
2.6
5.8
11.0
2.9
5.0
10.0
261
507.5
842
Source: GCMMF (www.amul.com), Aranca Research
32
Food Processing
The Amul saga: a cooperative movement leads the way (1/2)
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2012
GCMMF (Amul) sales (USD billion)
Gujarat Cooperative Milk Marketing Federation (GCMMF) is the largest food products marketing organisation in India Set up in 1967, it is Indias largest exporter of dairy products and has been accorded trading house status
3.0 2.5 2.4
2.0
1.5
CAGR 17.4 %
1.7 1.4 1.1 0.9
2.0
1.0 0.5 0.0 0.6 0.6 0.5 0.6
0.8
FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12

Notes: CAGR Compound Annual Growth Rate FY Indian financial year (April March)
33
Food Processing
The Amul saga: a cooperative movement leads the way (2/2)
AUGUST
2012
Main brand: Amul Products: milk (including flavoured), butter, margarine, cheese, curd, desserts, infant food
Facts and Features Producer members (million) Village societies Milk handling capacity (million litres/ day) Total milk collection (FY11, billion litres) Daily milk collection (FY11, million litres) Milk drying capacity (million tonnes/ day)
3.03 15,712 13.67 3.45 9.2 647
NOTABLE AWARDS Excellent performance in dairy product exports for 11 consecutive years
Authority
APEDA
CIO International IT Excellence Award (2003) for positive business performance through resourceful IT management and best practices
International Dairy Federation Marketing Award (2007) for Amuls pro-biotic ice cream launch
IDGs CIO Magazine (USA)
International Dairy Federation
34
Food Processing
Contents
Advantage India
AUGUST
2012
Growth drivers
Useful information
35
Food Processing
Opportunities
AUGUST
2012
Untapped market with strong growth potential
Potential global outsourcing hub
Supply chain infrastructure and contract farming
Fragmented market leads
Global supermarket
Both firms and the
to lower processing levels and value addition

The government plans to
majors are looking at India as a major outsourcing hub

India enjoys favourable
government are eager to boost efficiency and access to markets

Investment potential of
raise value addition to 35 per cent by 2015 (from 20 per cent in 2005)
PPP modules ideal for the
supply-side fundamentals (abundant raw materials supply, cost advantages)

The government has
USD22 billion in food processing infrastructure; 100 per cent FDI in this area
Firms increasingly taking
private sector
Strong demand growth
household consumption set to double by 2020
helped by investing in AEZs, mega food parks, easier credit
recourse to contract farming in order to secure supply
Notes: PPP Public Private Partnership, AEZ Agri Export Zones FDI Foreign Direct Investment
OPPORTUNITIES
36
Food Processing
Contents
Advantage India
AUGUST
2012
Growth drivers
Useful information
37
Food Processing
Industry Associations
AUGUST
2012
Agricultural and Processed Food Products Export Development Authority (APEDA) NCUI Building 3, Siri Institutional Area, August Kranti Marg, New Delhi 1 10 016 Phone: 91 1 1 26513204, 26514572, 26534186 Fax: 91 1 1 26526187 E-mail: headq@apeda.com Marine Products Export Development Authority (MPEDA) MPEDA House, Panampilly Avenue PB No 4272, Cochin-682 036 Phone: 91 484 231 1979/231 1803 Fax: 91 484 2313361 e-mail: mpeda@vsnl.com, mpeda@mpeda.nic.in
USEFUL INFORMATION
38
Food Processing
Glossary

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2012
AEZ: Agri Exports Zones MFP: Mega Food Parks CAGR: Compound Annual Growth Rate FDI: Foreign Direct Investment MT: Million Tonnes IIP: Index of Industrial Production FY: Indian Financial Year (April to March)
So FY12 implies April 201 1 to March 2012
GOI: Government of India INR: Indian Rupee PPP: It could denote two things (mentioned in the presentation accordingly)

Purchasing Power Parity (used in calculating per-capita GDP) Public Private Partnership (a type of joint venture between the public and private sectors)
PE: Private Equity APEDA: Agriculture & Processed food products Export Development Authority
GCMMF: Gujarat Cooperative Milk Marketing Federation

USD: US Dollar
Conversion rate used: USD1= INR48
Wherever applicable, numbers have been rounded off to the nearest whole number
USEFUL INFORMATION
39
Food Processing
Disclaimer
AUGUST
2012
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this
presentation to ensure that the information is accurate to the best of Aranca and IBEFs knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.
DISCLAIMER
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Food Processing

For updated information, please visit www.ibef.org

Market overview and trends

For updated information, please visit www.ibef.org

Strong demand growth

Food processing hub

For updated information, please visit www.ibef.org

Market overview and trends

For updated information, please visit www.ibef.org

The food processing sector comprises six major segments

India is the worlds second largest producer of fruits and vegetables

Milk and milk products

Meat and poultry Food processing Marine products

Source: Indiabusiness.nic.in, Ministry of Agriculture, Meat &

Aerated soft drinks

Packaged drinking water

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Source: Annual Survey of Industries (ASI) 2009-10,

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Strong growth in the sector also evident from trends in IIP

Annual growth of food products and beverages from IIP (%)

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Exports of processed food and related items (USD billion)

Export of Non APEDA products

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Shares in exports of processed food and related products (FY11)

Source: APEDA, Aranca Research

Source: APEDA, Aranca Research

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Unorganised sector has the largest share in the sector *

Source: Ministry of Food Processing Industries, Aranca Research

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Shares in production by value and volume (FY11)

By Volume Unorganised sector

By Value Organised sector

Source: Ministry of Food Processing Industries, Aranca Research

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Food processing is a key contributor to employment generation in India

Healthy contribution to employment generation (FY09)

Source: Ministry of Food Processing Industries,

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Changing consumer tastes

change in the tastes and preference of domestic consumers

young population, and the emergence of nuclear families

Entry of international companies

more attractive for global players

India is fast emerging as a sourcing hub of processed food

Rising business and product innovation

cater to domestic tastes, while also introducing international flavours

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Cooperatives dominate dairy sector; private players lead others

Milk and milk products

Meat, poultry and marine products

Aerated soft drinks and packaged drinking water

For updated information, please visit www.ibef.org