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(i) The market size of the Food Processing Industry ($ Bn)
2008-09 Market Size 70
Basic Facts (Contd.)
(ii) Production (Million Tones)
2006-07 Fruits Vegetables 59.56 114.96 2007-08 65.58 128.45 2008-09 68.47 129.08 2010-11 66.9 131.1
) (iii) The present rate of growth of the Food Processing sector is 15% annually. an increase from the growth rate of 6% annually.6 million workers comprising 19 % of India’s industrial force. the sector creates the maximum number of jobs estimated at 120 direct and indirect jobs for every $ 25000 of investment into the sector .Basic Facts (Contd. (iv) The Industry employs 1.
Basic Facts (Contd.) (v) India is the second largest vegetable and fruit producer accounting for 8 % of the world's production (vi) Foreign Direct Investment (FDI) in the Food Processing Sector ($ Mn): 2007-08 140 2008-09 103 2009-10 210 .
Basic Facts (Contd.) (vii) Export of Processed Foods ($ Bn) 2006-07 20.50 2007-08 25 2008-09 30 .
Market overview During this period. 80 15% 70 62 60 US$ billion 50 40 7% 43 46 9% 8% 57 68 75 16% 14% 12% 53 10% 10% 10% 8% Y-o-y growth 30 20 10 0 2001 2002 2003 2004 2005 2006 y-o-y growth 2007 Output of processed food 6% 4% 2% 0% . the number of registered The size ofunits the food processing industry in India has increased from US$ 57 billion (INR operating increased from 24.600) in 2007. in 2004 to US$ 75 billion (INR 3.000 to 2.725 units.736 billion) 25.
Market overview (contd.) .
sugar and cotton .India accounts for 1/5th of the world milk production. . . by 2011 wheat. peninsular coastline drives the growth Indiamilk is expected to grow by 11perInfrastructure cent Development products second largest producer of rice.98.7 million buffaloes Large Consumer Base of several exotic food and flower . . Key Producer of Agricultural Products in addition to food parks. is expected to attract foreign investment. of -the marine industry.largest producer of milk and several fruits and vegetables.India Advantage Vision 2015 -Size of the upper class will increase by 300 percent between 2005 and 2015 Live Stock Base -largest livestock population Favorable Climate & Location .176 million cows -India is the largest producer of crops.tropical climate favours the cultivation .youth population (age group 15 – 25) in .The establishment of 60 fully equipped AgriExport Zones (AEZs).
Food Processing AgriProducts Milk and Milk Products Meat. Poultry and Marine Products Fruits and Vegetables Dairy Products Meat and Poultry Beverages Fisheries .
Cauliflower Contributes more than 30 % to the Agricultural GDP Fruit based drinks would replace Carbonated drinks . Grapes.5 billion About 72 % of the Fruit and Vegetable production of the country goes waste Major vegetables grown are Potato. Tomato. Trends & Opportunities Potato based snack India's Snack market is estimated to be worth $3. Onion. Apple.Food & Food Processing Basic Facts India is the second largest producer of Fruits & Vegetables Major fruits grown in India are Mangos. Banana etc. Orange.
buffalo (10%). sheep (30%) and goat (40%) Goat and lamb meat are small segments Trends & Opportunities Emergence of organized retail Indigenous meat products There is a change in the consumer mindset Processing capacity in India is over 1 million tons per annum . pigs (99%).Meat & Poultry Basic Facts Growth rate of 10% per annum Slaughter houses have poor hygiene and sanitation facilities Cattle (6%).
POULTRY PROCESSING Basic Facts 4th largest poultry meat producer 5th largest egg producer Growth rate of the sector is 12-15% per annum Trends & Opportunities Government is gradually banning cutting of live birds Sheep and Goat meat has no religious taboos Organized retail growth would also increase Poultry consumption .
FISHERIES (MARINE) Basic Facts The processing capacity is only 2.5 million tonnes/annum Trends & Opportunities from Raw Packs to Ready – to – Eat packs Less than 10% of the products are processed Demand of processing machinery is greater than the supply Growth rate is 5 – 7 % per annum More IQF) facilities would be in demand if this trend continues .
44 billion Bulk of Indian milk is utilized for drinking Rest for making sweets or other traditional products Per capita availability of milk in India is 245 Milli litres/day Trends & Opportunities Production of Milk is growing at only 3 – 5 % Whereas consumption is growing at 6% Per capita availability of milk will increase by only about 1.5 % per annum Processed Items will be in demand in near future .MILK PROCESSING Basic Facts Estimated Market value in 2011 $14.
• “Vision 2015” Development of food parks • assistance of USD 23 million t • Approved 50 food parks for assistance across the country .Opportunities • Potential to become an outsourcing hub for the world by 2012 Potential global outsourcing hub • Ministry of FPI has announced various incentives and schemes to support new venture.
. Establishment of production bases • Presence of a skilled workforce and low labour costs are key factors. • The Central Government envisages an investment of US$ 21.89 billion by the private sector in FPI by 2015.Opportunities (Cont. Investment in infrastructure through public-private partnerships • India’s marketable surplus will increase to 870 million tonnes per annum.) • Abundant resources in terms of raw material.
) Investment in supply chain infrastructure • Use of sophisticated techniques and applications • Expansion of storage facilities is expected Processed food • Investments worth US$ 30 billion will boost the overall output by 10 percent by 2015.Opportunities (Cont. • GOI initiatives .
(more a popular snack nuclear item families). in India. not only byare big driving firms but also by the demand cottage for industries ready-to-eat and home-grown foods. as are well manufactured as evolving on a large consumer scale. Agri-based Products . players. preferences.Domestic demand Ready-to-eat Potato chips meals • Societal • Potato changes chips in(or India wafers).
especially among the urban population.Domestic demand (contd. Popular flavours include cardamom. With consumer tastes evolving. Milk and Milk Products . saffron and chocolate.) Flavoured milk • Milk features prominently in the Indian diet. medium and large-scale cooperatives and private companies dominate the manufacture of milk. flavoured milk is gaining popularity. Currently.
small.and medium-sized firms undertake poultry processing.Domestic demand (contd. Currently. the consumption of chicken is increasing more rapidly than any other category of meat.) In India. with the presence of a few organised players Meat and Marine Products .
Food Safety and Standard Act. 2006 FSSA will be headed by Scientific Panels and a central advisory committee to lay down standards of food safety The law will be enforced through State Commissioners of Food Safety and local level officials Everyone in the food sector is required to get a license or a registration which would be issued by local authorities Every distributor is required to be able to identify any food article to its manufacturer. and every seller to its distributor .
economic changes in India’s population base • Evolving lifestyle trends 200 0 2005 2008 2015E 2020E .Growth Drivers Household consumption is expected to double by 2020 • By 2015. the Indian Food 1400 industry is estimated to 1200 grow by around 40% over 2007 1000 • Two key factors are expected to drive this growth: 800 600 400 384 Growth In Household Consumption 1235 920 592 • Socio.
flowers gherkins and chillies and vanilla Horticulture products and medicinal plants . mangoes. Grapes and grape wine. flowers. wheat.Industry Infrastructure Apples and walnuts Vegetables. banana and Mango pulp and fresh oranges vegetables. and grams and oranges dehydrated onions and Ginger and turmeric mangoes including Kesar sesame seeds mango. onions. pomegranate. grapes. Litchi onions and garlic. lentil Mangoes and vegetables. Gherkins. potatoes and basmati rice Coriander and cumin Fresh and processed ginger Potatoes. Apples seed spices. rose onions.
million) 2010 Agricultural services 1. by McCormick & Co Inc. Ltd. for US$ 35.25 Outbound 7 Vegetable oils and vanaspati Domestic Tea and coffee Sugar Total 17 1.12 .74 3.18 Deal type No of deals Deal value Food processing industries 1.65 85.086.8 185.883.0 million. 2009 to November 1.0 million Cumulative FDI inflow Period: April 2000 to August 2010 M&A scenario — detail Sector Amount of FDI inflow (US$ Period : January 1.72 Inbound 5 43 Agricultural machinery 150.538.Investments Acquisition of the Eastern Condiments Pvt.402. Shree Renuka Sugars Ltd acquired Equipav S.1 94.160.57 41.01 (US$ million) Fermentation industries 786.A Açúcar e Á lcool for US$ 1.
2010 1. IND USA Domestic ACQ IND Outbound ACQ Feb 22. 2010 11. 2010 Nov 11.2010 24. 2010 N/A Tirumala Milk IND Products Pvt. Ltd Group BK Birla Group Mar 22. 2010 Sep 14.Deal Deal type Date Announced value (US$ million) Target name Target country Acquirer name Acquirer country Domestic Domestic Inbound ACQ ACQ ACQ Oct 12.A Açúcar e Á lcool Agro Dutch Industries Ltd Vale Do Ivaí SA Açúcar e Á lco BRZ Shree Renuka Sugars Ltd Penta Homes Pvt Ltd Shree Renuka Sugars Ltd IND Domestic Outbound ACQ ACQ Jan 21.160 Equipav S.2010 Jun 29.2 42.4 240 IND BRZ IND IND .2009 85.6 35 Candico India Ltd Millennium Beer Indst Ltd Eastern Condiments Pvt Ltd IND IND IND Keventer Agro Ltd United Breweries Ltd McCormick & Co Inc IND IND USA Inbound PE INVESTMENTS (CONTINUED)The Carlyle Jun 7.7 MP Chini Indst.
restricted/prohibited.Policy & Regulatory Framework FDI in the Indian food processing industry is allowed under the automatic route* in food products except the following (broadly): • repatriation of profits and capital is permitted. • importfalling duty on capital goods and raw material 100that per are cent export • No Proposals outside notified sectoral policy orfor those generally oriented units. * Note: The entry of foreign/large players is restricted for a few food items . approvals for FDI and technology transfer in most cases. in 2005. • that are 100 per cent export -oriented are allowed sell • Agricultural Proposals inproducts which the foreign collaborator has a previous venture or tieto -up in up to 50 per cent the domestic market. • The Proposals that require an industrial licence and cases where foreign investment exceeds 24 per cent equity in units that manufacture items reserved for the •small-scale Automatic industries. as on January 12. • Earnings from export activities are exempt from corporate taxes.
food and beverages together represented $232 B in retail sales or 74% of the total Indian retail market.5 Billion and $ 25 billion respectively).BEVERAGE INDUSTRY IN INDIA In 2006. particularly in the carbonated drinks and juice or juice based categories (estimated to be currently worth $1. Approximately 120 billion litres of non-alcoholic beverages are consumed by Indians every year. There is a large untapped market opportunity for store-bought non alcoholic beverages. The non-alcoholic beverage market however is much smaller. .
GROWTH DRIVERS Growth in the non-alcoholic beverage market is driven primarily by the following factors --: Rapid economic growth leading to an increase in disposable income Indians under the age of 35 which represents the largest consumer group for non-alcoholic beverages. Two thirds of the population is below the age of 35 This segment is expected to grow by over 100 million between 2006 and 2010 Infrastructure development for distribution and penetration of retail especially in rural regions Increasingly westernized dietary preferences .
Product Categories Carbonated Drinks Pepsi Coke Thumbs Up Miranda Fruit Drinks/Juices Frooti Maaza Slice Real Energy/Sports Drink Red Bull Gatorade Burn Alcoholic. Beer and other sprits Beer Wines Spirits Sprite Fanta Limca 7up Tropicana Minute Maid Jumpin Safal Cloud 9 Monster .
Opening of global markets Favourable demographic profile Setting of SEZ/AEZ and food parks High inventory carrying cost High taxation High packaging cost .Raw material Cheap Labor Vast network of manufacturing facilities Vast domestic market Inadequate infrastructural facilities Outdated Quality control and testing methods High requirement of working capital.
youtube.Is India Food Industry moving towards the same trend? http://www.com/watch?v=5eKYyD14 d_0 .
Thank you Ahsan Ahmad Anupam Sabat Deepak Raj Divesh Anand Farhaan Siddiqui Nishan Chhatwal Sach Sehgal Suhail Utsav Anand .
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