Food & Beverages Sector

An Introduction to the Sector
India is fervently poised for the Food Revolution This will ensure agricultural diversification and large investments in food processing. The concept of food security has two dimensions – availability of food and access to food. 30% of the food produced in the country is wasted. There is a need to increase the range of foods available to improve overall nutrition. Special foods for patients suffering from hypertension, diabetes gives health benefits. Packaging of food products has become important to ensure safety and hygiene.

The food processing industry is witnessing a 20% annual growth rate.000 crore ($69. Nutritional research and improved cost-effective vaccine programmes . Post-Green Revolution. and molecular biology. it is essential that agricultural research reoriented to address new challenges. Application of biotechnology. RNA use.4 billion) Value-added food products comprise Rs 80.000 crore ($22.50.2 billion).A comprehensive view The Indian food market is approximately Rs 2.

India’s middle class segment continues to hold the key to success of the processed food market in India. .Target Segment Profile Higher growth during 2005-06 in almost all the products belonging to Food and Beverage segment The overall industry has achieved a growth rate of about 8 % in terms of value during 2004-05 Government’s high priority for development of food processing industry to encourage commercialization and value addition to agricultural produce. Agro based l00 percent export oriented units allowed sale up to 50 per cent in Domestic tariff area.

Branded products are preferred in the Edible oil segment as the urban consumers are increasingly becoming health conscious and looking out for low cholesterol cooking medium. Marico. HLL. Pillsbury.. Hindustan Lever. Pakistan. Nestle and Amul. . e. Both public and private players operate in the market.Continue… Indian food and beverage companies are making a beeline for regional overseas markets like Bangladesh. NAFED. Pepsi. Dabur. Middle East The market is seeing players like Heinz. ITC. Mars. Nestle and NDDB. Britannia. Cadbury.g. Nepal. The price stability throughout the year has contributed to the increase in domestic liquor sales.

Absence of a strong and dependable cold chain system which is very vital There is a need for a review of the Agricultural Produce and Marketing Act to ensure freedom to farmers Some commodities in one segment are used as inputs in another segment of the food processing industry Excise Duty on all Value Added food products like Nutritional and health foods Ice –creams and Non-alcoholic beverages dispensed by vending machines are exempt from excise duty .Basic Issues & Constraints Lack of adequate infrastructure.

edible oil and all these add to cost of production. The higher railway freight has pushed up cost of raw materials and inputs such as sugar.. Packaging material for match sticks is exempted from excise duty.Continue. FICCI has highlighted some areas of concern impacting the overall Food and Beverage Industry .

Indian food processing industry is poised for further growth in view of the liberal policy measures and government’s commitment for reforms and development of food and agroprocessing industries.The Industry survey India is among the world's major producer of food and produces over 600 million tonnes of food products every year India’s food consumption market is expanding rapidly to attract global food and drink giants India is the second largest producer of rice and wheat and the largest producer of pulses. .

health food supplements. small players account for more than 75% of the industry output in volume terms and 50% in value terms Since liberalization in 1991 till January 2004 proposals for projects of over Rs. The Government has provided many liberal incentives to encourage the Food Processing industry. Convenient Food and Branded Food are rapidly gaining vast popularity with the changing life styles of the consumers. The unorganized. ..87715 crores have been proposed in various segments of the food and agro-processing industry.continue Health food..

Segment-wise Analysis BRANDED FLOUR (ATTA) The grain-processing sector is largely un-organized. although there are a few large players in the market. BAKERY INDUSTRY The annual production of bakery products was 50 lakh tones in 2004-05 with estimated value of Rs 69 billion. which had been growing with excellent rate of 4050% till 2000 grown by 12% in 2004-05. Brands like "Captain Cook". like Hindustan Lever (with its Annapurna brand) and Godrej Pillsbury (Pillsbury). some large players. Nature Fresh and ITC (Aashirvaad) re players of the market Increased competitive activity is spurring market growth The segment. . Agro Tech (Healthy World).

Bread Industry: The large organized sector players who are prominent in the highand medium-price segments include Britannia.. Modern Industries Ltd. Parle.52 kg as compared to more than 12 kg in developed countries . Local manufacturers with numerous local brands cater to populous segment and contribute considerably in the bread segment. Bakeman. Biscuit Industry: The major brands of biscuits are – Britannia.continue The organized sector has a market share of 45 per cent and the balance 55 per cent is with the unorganized sector in the baked products.. Priya Gold etc The per capita consumption of biscuits in our country is about 1.

9 billion in 2004-05. CULINARY PRODUCTS & SNACK FOOD The total production of culinary products and snack food was around Rs 1750 crore in 2004-05 and is growing at a moderate rate of 8 per cent The culinary products including mainly wheat based products comprising of noodles. HLL has entered the ready to eat segment through Indus Valley rice meals in seven flavours ITC ‘s more than 50 packaged branded food products under Kitchens of India and Aashirvaad brands with different varieties of ready to eat/ cooked food is gaining popularity in the market. macaroni and spaghetti is gaining popularity . vermicelli.Semi processed/ Cooked/ Ready to Eat The market for semi-processed/cooked and ready to eat foods was around Rs 82.

.. Pepsico’s Snack Food Division having snack foods plants in Channa (Punjab) and Pune (Maharashtra) . Frito Lay's India..continue HLL (Kissan and Knorr range) and Nestle (Maggi) dominate this segment. FRUIT JUICES / PULP & CONCENTRATES/ SAUCES/ KETCH UPS India is the second largest producer of both fruits and vegetables in the world. and going for another in (Sakrail) West Bengal with investment of Rs 75 Crores. The market has immense potentialities provided some infrastructural facilities for efficient transportation and marketing of fruits and vegetables are created. Heinz and Top Ramen are also strong players.

Indian sugar industry uses sugar cane as the only input The sugar industries have sprung up in states like Uttar Pradesh. decides the quantity Inadequate sugar cane availability. West Bengal. Thiru Arooran Sugars Ltd and. Andhra Sugars Ltd. The Government controls sugar capacity additions through industrial licensing. The leading players in Indian sugar industry are Balrampur Chini Mills Ltd. . Andhra Pradesh. determines the price of the major input sugarcane. Punjab. Gujarat. Maharashtra.Sugar Industry The largest agro-processing industries of the country with an annual turnover of Rs 200 billion. Bajaj Hindustan Ltd. Dhampur Sugar Ltd. uneconomical size. bad condition of plant and machinery are responsible for closure of many mills in the country.

.. . which includes sugar price in Public distribution system and the free sale sugar price.continue Central Government has also provided inland transport subsidy for sugar export. Dual Pricing System is adopted in the Indian sugar industry.

Marico Industries (Mumbai). Ahmed Mills. NDDB has emerged as a major player in the sector with its "Dhara" brand of edible oil. . Even small growers and co-operatives having crushing units or solvent extraction units have started branding their products.Edible oil The growth of the Rs. In Edible oils. The main issues in the edible oil segment is the rising cost of raw materials. ITC Agro-Tech (Secunderabad) . (Mumbai) are the major players. 250 billion edible oil industry in India has been somewhat stagnant at around 5% per annum. Raw material cost account for 70 per cent of sale price. National Dairy Development Board (Anand).

Several Indian brands have made inroads into the foreign markets including British market. has witnessed robust 30% growth over the past few years. MC Dowell & Co Ltd (part of the UB Group) Radico Khaitan.Alcoholic Beverages The alcoholic beverages industry in India is generally divided into two main categories-Industrial Alcohol and Potable Alcohol. United Breweries Ltd. Seagram India Ltd are among the familiar names in the alcoholic beverage industry in the country. . Shaw Wallace. The price stability throughout the year has contributed to the increase in domestic liquor sales. estimated at 5 lakh cases annually. The Indian wine market.

'Complan' and 'Viva'. Malted beverages with nutritional attributes control around 70% of the total market and energy drinks (brown beverages) account for the rest.brown and white. 14. The malted food drink industry is dominated by few players. 'Milo' and 'Maltova' on the other hand are classified as brown drink. 'Boost'.Malted Food & Health Beverages The Rs. The consumption pattern of malted beverages differs according to usage patterns across geographic zones . 'Bournvita'.4 billion malted foods market is composed of two segments . These include brands such as ' Horlicks. which are mainly known as white beverages.

The National Dairy Development Board (NDDB) is a major player in the market with its major brand. Amul. Efficient production and marketing can bring about more than 200 per cent value addition in the Indian dairy segment. Mother Dairy and Britannia are in the race to tap the growing market. Nestle. Leading brands like Amul.MILK AND DAIRY PRODUCTS India is the largest milk producing country with production of about 92 million tonnes. . The milk and dairy products segment is set for up gradation of cold-storage chains for expansion.

Rising standards of living and popularity of convenience foods.…continue Mother Dairy brand through retail outlets across the country in addition to its own 300 outlets with provision of cold storage and cold chains. . the industry is expected to witness strong long-term demand growth potential.

namely Hard Boiled Candies (HBC).Confectionary Industry The entire market can be divided into 7 major categories. Eclairs. The private dairies have raised the prices including the prices of Skimmed Milk Powder (SMP). The perishable nature of the product and the fact that India lacks a cold chain distribution network are among the major problems that inhibit market expansion. which together account for about 90% of the total chocolate market. mints and Lozenges. It is dominated by 2 major players. the essential ingredient for manufacturing milk chocolates and ice cream mixes in addition to biscuits and confectionery products. Chewing gums. Cadbury India Ltd and Nestle India Ltd. Bubble gum. Toffees. .

Tea trading in the domestic market is done in two ways-auction and private selling .5 million Kg in 2004 with a growth of about 7 percent. from the third century onwards. India has a vast domestic market. Tea plantations in India are concentrated in the North-East (Upper Assam. Chinese first drank it for its medicinal value. and later. West Bengal) and the South (Kerala. Tamil Nadu).Study on TEA Industry Tea has brought cheer to people across the world for over 4500 years. as a refreshing beverage. The Industry has achieved a production of 878 million kg in 2005 from 820.

Lower availability of tea in the domestic market may continue in short run. . but also employs more than 10 percent of the state’s work force or around 12 lakh people. as tea production falls in January seasonally Assam produces around 53 percent of the country's total production.…continue Tea imports surged from a mere 7 million kg in 2003 to whopping 30 million kg in 2004.

Tea Cultivation and Production Process Rainfall: More than the total amount. In general. Temperature and RH: Temperature affects tea yield by influencing rate of photosynthesis and controlling growth and dormancy.5 to 5.5 and more than 2% organic matter . the distribution of rainfall matters a lot for sustained high yield of tea throughout the season. the ambient temperature within 13°C and 28-32°C is conducive for growth of tea Day length: Day length influences growth and dormancy in tea bushes. acidic pH in the range 4. Soil: Tea grows well on high land well drained soils having a good depth.

Development of rural infrastructure. Edible/Vegetable oil (20%). rural extension services.OPPORTUNITIES AND PROJECTION The Food and Beverage Industry is projected to have overall growth between 8% -8. . The process of setting up of Food Parks in various key locations of the country with the involvement of the various state governments and other allied institutions is on. agro-based and food processing industries have been given high priority. Ice-Cream(20%).5 % The sectors which are projected to achieve excellent growth of 20% and above are –Semi Processed/Cooked Ready to eat (22%).Wine(22%) .

Thanks for your attention Presented by: Soumya Srivastava Sudhir Ghosh Surbhi Dubey Nitin Pareek Cryste Jan Soumik Guha .