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Food Processing Industry - India
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Food processing industry in India is valued at USD 70 bn and is growing at a 14% annual rate Diary products, fruits & vegetables and meat processing are the most attractive segments Government of India is leading from the front to ensure multi-fold growth in this segment Exports in food processing are expected to grow further in the near future Drivers: – Increasing consumer spend on processed foods – Competitive edge in food processing – Government support – Growth in food processing exports – Adoption of contract farming – Increasing food retailing in India – Growth in terminal markets Challenges: – Lack of integrated supply chain and scale of operations – Limited use of technology in food processing – Low level of penetration in domestic market – High taxes on branded agricultural products
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Drivers & Challenges
The sector is highly competitive with many foreign players and large unorganized segment
Major Domestic Players Major Foreign Players •Agro Tech Foods •Unilever •PepsiCo •Nestle
•Dabur Foods •Gits Food Products
•Haldirams •MTR Foods
FOOD PROCESSING INDUSTRY – INDIA.PPT
•Market Overview •Drivers & Challenges •Government Initiatives •Competition •Key Developments
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FOOD PROCESSING INDUSTRY – INDIA.PPT
Beverages Carbonated drinks. ghee. wheat.Food processing is a large sector that covers many activities like agriculture. Fruits & Vegetables Meat & Poultry Cattle. pulps. pigs and poultry Food Processing Fisheries Marine fisheries. vermicelli. soups etc. ISI Emerging Markets.11. jam . ice cream etc.113. fruit-based drinks and hot beverages Staples Sugar. frozen and minced fish products Packaged Foods Noodles.PPT 4 .11. juices and pickles ISIEmergingMarketsPDF in-iimbemis from 115.239 at 2011-03-31 00:22:01 EDT. Diary Sector Processed milk products like butter. cheese. animal husbandry etc.239 on 2011-03-31 00:22:01 EDT. sheep.113. canned fruits. Downloaded by in-iimbemis from 115. horticulture. Unauthorized Distribution Prohibited. Raw fruits and vegetables. buffaloes. flour and salt FOOD PROCESSING INDUSTRY – INDIA. DownloadPDF. tomato ketchup. bread.
Food processing industry in India has huge untapped potential and offers scope for large investments ISIEmergingMarketsPDF in-iimbemis from 115. Uttar Pradesh and Madhya Pradesh are highly attractive for food processing industry •Huge foreign direct investments have been made in 2007-08 totalling ~USD 143 mn Market Size & Growth USD bn +14% 91 70 80 104 120 100 80 60 40 20 0 2009 2010e 2011e 2012e Market Penetration of Segments Diary Sector 10% 6% 10% 12% 3% Range 6 – 10% 37% Fruits & Vegetables Meat & Poultry Fisheries Packaged Foods 5 .11.239 on 2011-03-31 00:22:01 EDT. Unauthorized Distribution Prohibited.113.PPT Downloaded by in-iimbemis from 115.113.239 at 2011-03-31 00:22:01 EDT. ISI Emerging Markets. sugarcane and tea in the world •Government has taken major initiatives towards ensuring multi-fold growth in this sector that has an investment opportunity of about USD 24 bn by 2015 •Mega Food Parks are coming up in India to integrate the supply chain and promote food processing •States like Andhra Pradesh. pulses.11. Market Overview •Industry is valued at USD 70 bn and is growing at 14% annually •India is one of the top producers of milk. DownloadPDF. Source: Ministry of Food Processing Industries. IBEF articles & KPMG Research FOOD PROCESSING INDUSTRY – INDIA.
113.239 on 2011-03-31 00:22:01 EDT.PPT Downloaded by in-iimbemis from 115.11. ISI Emerging Markets.11. India is second and third largest producer of vegetables (100 mn tonnes) and fruits (50 mn tonnes) respectively India accounts for 8. Source: Press articles. Ministry of Food Processing website.59 mn hectares • Less than 2% of total vegetables produced are processed commercially in India • Share of organized sector in fruits processing is ~48%. Dairy Products • India is the leading producer of milk in the world. ~20% of processed F&V are exported Mango and its other products alone constitute 50% of the total F&V exports Growth Rate +20% 6 .1% penetration across country Ice cream market is valued at USD 199 mn in India and is growing at 20% annual rate Growth Rate +15% • Other emerging segments include are Ultra Heated Treatment (UHT) and flavored milk UHT milk is gaining popularity and the market is estimated at USD 33.239 at 2011-03-31 00:22:01 EDT. IBEF & KPMG research report “Food Processing.Diary products and fruits & vegetables are the most attractive segments for investments ISIEmergingMarketsPDF in-iimbemis from 115.8 mn hectares and that of vegetables is 7.4 mn Fruits and Vegetables (F&V) • Globally.4% of the world’s F&V production • Area under fruit cultivation is about 4.market & opportunities”. Unauthorized Distribution Prohibited.113. about 108 mn tonnes in 2007 • ~37% of the produced milk is processed and ~676 diary plants are registered with the government • Growing segments Branded butter market is valued at USD 133 mn and is estimated to grow at 8-10% per annum Cheese market is valued at USD 110 mn and is growing rapidly in urban areas at about 15% Ghee is growing at a rate of 8% annual rate with 24. DownloadPDF. Apr 2008 FOOD PROCESSING INDUSTRY – INDIA.
1973 Registered under MFPO are 3. Apr 2008 FOOD PROCESSING INDUSTRY – INDIA.5 kg • Majority of animals in India are not bred for meat.11. Goat (38%) • The annual poultry production in India is 450 mn broilers and 33 bn eggs growing at 20% and 16% Major poultry exports are to Maldives.113. Malaysia. the processing percentage for meat is as follows – Buffaloes (11%).62% of exports in terms of volume and 63.Meat processing is less penetrated in India and fisheries are majorly export oriented ISIEmergingMarketsPDF in-iimbemis from 115.226 tonnes and 499 frozen storage units with a capacity of 134.PPT Downloaded by in-iimbemis from 115. Indonesia and Singapore Fisheries Growth Rate +10% • Fisheries sector is classified in to marine. Ministry of Food Processing website. Meat & Poultry • India has the largest livestock population (470 mn) globally (50% of buffaloes and 16% of goats) • Processing of meat in India is licensed under MFPO (Meat Food Products Order) act. Cattle (6%).11. Japan.113. Sheep (33%).market & opportunities”.600 slaughter houses.5% in value Growth Rate +20% • India has about 369 freezing units with daily processing capacity of 10.767 tonnes 7 .239 at 2011-03-31 00:22:01 EDT. DownloadPDF. Oman .239 on 2011-03-31 00:22:01 EDT. Unauthorized Distribution Prohibited. it also ranks second in in-land fish production • About 60% production comes from marine resources and fish processing in to canned and frozen forms and is primarily targeted for export markets Frozen shrimp contributes to 34. ISI Emerging Markets. IBEF & KPMG research report “Food Processing.5 kg in India against world average of 35. Source: Press articles. in-land and aquaculture and India ranks third in fish production in the world. 9 modern abattoirs and 171 meat processing units • About 5 mn tonnes of meat is produced per year in India Per head consumption of fresh and processed meat is as low as 1.
11.000 traditional food units • Growing segments Noodles growing at over 15% annually and branded noodles is estimated to be 230 mn servings/yr Soups market is at a nascent stage and is valued at USD 14 mn Confectionaries market pegged at USD 484.4 mn and is growing at 7.PPT Downloaded by in-iimbemis from 115. namkeen.000 pulse mills with 14 mn tonnes milling capacity per annum Growth Rate +85% 8 . characterized by high volumes and low margins ISIEmergingMarketsPDF in-iimbemis from 115.7% & 7.239 at 2011-03-31 00:22:01 EDT. Ministry of Food Processing website. DownloadPDF. beverages and staples are restricted to urban areas.113. fruit juices and hot beverages • 100 plants across India under aerated soft drinks segment and exports in soft drinks are valued at USD 156 mn per annum. attracted highest foreign direct investments valued at more than USD 1 bn • India is the largest tea producer in the world accounting for 28% of global production and 5th largest coffee producer accounting for 4% of total production in the world Beverages Growth Rate +27% • Second largest wheat producer globally with an output of 70 mn tonnes valued at USD 195 mn • Bread production is growing at 7. Apr 2008 FOOD PROCESSING INDUSTRY – INDIA.5% Biscuit market is estimated to be USD 373.market & opportunities”. IBEF & KPMG research report “Food Processing. 20.3 mn while biscuit market at USD 373. Packaged Foods • Packaged foods primarily includes ready-to-eat snacks.000 bakeries. bakery products etc.5% and organized market accounts for ~55% of the market • 10.239 on 2011-03-31 00:22:01 EDT. Unauthorized Distribution Prohibited.113. chips. ISI Emerging Markets.Packaged foods. India has around 60. Source: Press articles. also tomato ketchups and jams at 20% per annum Beverages Growth Rate +8% • Primarily comprises non-alcoholic beverages like aerated soft drinks.4 mn growing at 5.11.5% Culinary products is growing at 18-20% per annum.
Downloaded by in-iimbemis from 115.PPT 9 . ISI Emerging Markets.239 on 2011-03-31 00:22:01 EDT.11. FOOD PROCESSING INDUSTRY – INDIA. Unauthorized Distribution Prohibited.113. DownloadPDF.•Market Overview •Drivers & Challenges •Government Initiatives •Competition •Key Developments ISIEmergingMarketsPDF in-iimbemis from 115.113.239 at 2011-03-31 00:22:01 EDT.11.
11. FOOD PROCESSING INDUSTRY – INDIA.239 at 2011-03-31 00:22:01 EDT.239 on 2011-03-31 00:22:01 EDT. DownloadPDF.113. Challenges Lack of integrated supply chain and scale of operations Limited use of technology in food processing Low level of penetration in domestic market High taxes on branded agricultural products 10 .11. ISI Emerging Markets.Drivers & Challenges Drivers Increasing consumer spend on processed foods Competitive edge in food processing Government support Growth in food processing exports Adoption of contract farming Increasing food retailing in India Growth in terminal markets Downloaded by in-iimbemis from 115. Unauthorized Distribution Prohibited.113.PPT ISIEmergingMarketsPDF in-iimbemis from 115.
DownloadPDF. meat & marine products 30% Others 34% 70% Agri-products 66% Primary & secondary processed foods 11 .113. Source: FICCI .113. fruits & vegetables is the largest consumption category accounting for 50% of the total consumption Expenditure on Food by Indian Consumers Milk & milk products.11.Rising disposable income and increasing spend on food will boost the processed food market in India ISIEmergingMarketsPDF in-iimbemis from 115.11. ISI Emerging Markets. Increasing consumer spend on processed foods Impact • In the last 5 years an increase in per capita disposable income of 8% has led to an increase in per capita consumption expenditure on food by over 20% • Consumption of primary and secondary processed foods has grown rapidly over the past few years owing to the following factors: Four-fold growth in size of households in middle to very rich segment Increase in the youth (age group 15 – 25) in the country Growing migration of population from rural to urban India • In agro-products.PPT Downloaded by in-iimbemis from 115.E&Y study “‘Flavours of Incredible India – Opportunities in the Food Industry’.239 at 2011-03-31 00:22:01 EDT.239 on 2011-03-31 00:22:01 EDT. Unauthorized Distribution Prohibited. Oct 2009 FOOD PROCESSING INDUSTRY – INDIA.
5% to 5% • Custom duty on packaging machinery is reduced from 15% to 5% and on reefer vans from 20% to 10% • Diary machineries are completely exempted from central excise duty 12 . ISI Emerging Markets. tea and pulses and is one of the leading countries in the production of fruits and vegetables • India is a favorable market to set-up large low cost production base with effective utilization of available cheap workforce • Cost of production in India is 40% lower than many of the locations in Europe and about 10-15% lower to that of United Kingdom Government support Impact • The government of India has taken several initiatives to promote investments in this sector • 100% FDI as well as technology transfer is allowed in this sector and grants are given by the government for setting up common facilities in Agro Food Park • Institutional and credit support is provided for new industries in fruits & vegetables and income tax rebate is allowed for 100% of profits for first 5 years and 25% for next 5 years • Central excise duty on meat.PPT Downloaded by in-iimbemis from 115.239 at 2011-03-31 00:22:01 EDT. favourable conditions and government support gives India a competitive edge ISIEmergingMarketsPDF in-iimbemis from 115.11. Source: Ministry of Food Processing Industries.Low cost of production.113. poultry and fish is reduced to 8%. Competitive edge in food processing Impact • India has a competitive edge in food processing as it has the largest irrigated land and livestock population in the world • India is also the largest producer of milk. customs duty on packaging machines has also fallen • Custom duty on food processing machinery and its parts is reduced from 7.11. DownloadPDF.239 on 2011-03-31 00:22:01 EDT. Unauthorized Distribution Prohibited.113. Indian Brand Equity Foundation report 2008 FOOD PROCESSING INDUSTRY – INDIA. India.
22 1.93 Fruits & Vegetables Diary.113. Source: APEDA (Agricultural and Processed Food Products Export Development Authority) India report. to the processor.26 2.11.239 on 2011-03-31 00:22:01 EDT. Financial express “Contract farming did no good to farmers. ISI Emerging Markets.48 1.08 1.30 2004-05 3. says IIM-A study” FOOD PROCESSING INDUSTRY – INDIA.67 3.00 1.26 2006-07 2. Growth in food processing exports Impact • Exports from India in food processing sector is growing every year at a significant rate • Processed foods contribute to about 5% of the total exports from India • Targets set by the government are will be a major driving force for the market Food Processing Exports Growth in Volume mn metric tonne 4 2 0 +15% 1.113.Exports of processed food and the adoption of contract farming will drive the market ISIEmergingMarketsPDF in-iimbemis from 115.74 2005-06 3. DownloadPDF. which is crucial in this business • This model minimizes risks for processors and producers and is expected to lead to a larger demand for processed food due to the enhancement of quality of the food processed 13 . Unauthorized Distribution Prohibited.239 at 2011-03-31 00:22:01 EDT.72 1.PPT Downloaded by in-iimbemis from 115.11.29 2003-04 0.97 1. Poultry & Meat Products 2007-08 Adoption of contract farming • In contract farming Impact Food processors gets into an agreement with the farmer who is contracted for planting a particular crop and produce an agreed yield of certain quality at a pre-agreed price The food processor provides the required support in terms of technology and training to the farmer so as to get the agreed results • This eliminates the supply shocks for farmer and generates steady source of income and assures good quality farm inputs.65 1.79 0.
239 at 2011-03-31 00:22:01 EDT.Growing food retail formats and outlets in India is a major driving force for processed food products ISIEmergingMarketsPDF in-iimbemis from 115. thereby providing huge scope for food processing players to reach end-users • Government of India is also promoting this business by allowing 51% FDI by single brand companies and in future plans to increase this limit in order to promote food processing industry • There is also a growing trend of franchising food retail outlets in India especially the quick serve joints like KFC. • The food retail business in India is growing at a 30% annual rate. Nilgiris etc. McDonald’s. Pizza Hut. Business Line “Food retailing needs to perfect franchise recipe “. Source: Chilli Breeze article “Food Retail in India – Growth. Increasing food retailing in India Impact • The Indian consumers have various outlets in the neighbourhood to purchase food products • Food retailing formats are growing in India ranging from neighbourhood stores.11. Apr 2009 FOOD PROCESSING INDUSTRY – INDIA. hypermarkets to cash and carry stores • All these outlets contribute to the growth in food trade and hence many corporate houses are moving to food retail • HUL.PPT Downloaded by in-iimbemis from 115. ITC and Dabur has already forayed in to this space and are planning to increase their outlets and have a pan-India coverage • Established players are planning to tap the backward linkages and expand their geographies Players include Reliance Fresh. which enables deep penetration in less time 14 . Food Bazaar. Subhiksha. Nirula’s etc. ISI Emerging Markets. Spencer’s Daily. Unauthorized Distribution Prohibited.113. supermarkets.11. More. Growth and More Growth”. DownloadPDF. Food World.239 on 2011-03-31 00:22:01 EDT.113.
Nashik. Patna. Source: Maharashtra State Agricultural Marketing Board “Projects: Terminal Markets”.239 at 2011-03-31 00:22:01 EDT. Unauthorized Distribution Prohibited. ISI Emerging Markets.113. Growth in terminal markets Impact • Terminal market is an assembly and trading place for agricultural commodities The produce is either sold to end consumer or food processor. IBEF and other press articles FOOD PROCESSING INDUSTRY – INDIA. Chandigarh. processing units and other allied infrastructures like banks.113.239 on 2011-03-31 00:22:01 EDT. cold storage. Nagpur. packaged for export or stored in a cold storage for future disposal The infrastructure of terminal markets include electronic auctioning facility. Bhopal and Kolkata • This will allow the market to develop due to stronger integration between food producers and processors Terminal Markets Mumbai Nashik Nagpur Project Cost (USD mn) 43-54 13 12 Handling Capacity (Metric Tonne) 3000 1000 750 Area Required (Acres) 125 100 100 15 .PPT Downloaded by in-iimbemis from 115. DownloadPDF. Rai. grading packaging facilities.11.11. pre-cooling. post office etc These terminal markets operate on a hub and spoke model with market being the hub and collection centers which are located close to the production areas act as spokes • In order to integrate the domestic produce with retail chains the government of India is promoting terminal markets It plans to set-up 8 terminal markets with an investment of USD 131 mn 21 more terminal markets are proposed for future – Cities under consideration are Mumbai.Development of terminal markets creating linkages with aggregators and logistics providers ISIEmergingMarketsPDF in-iimbemis from 115. ripening chambers.
Source: IBEF report 2008.Small scale of operations and limited use of technology are the major challenges for this sector Lack of integrated supply chain and scale of operations • Due to lack of proper value chain for food processing in India. Impact Limited use of technology in food processing Impact • Food processing in India is majorly a manual process with limited use of technology like precooling facilities for vegetables • Technology plays a major role for storing fruits & vegetables for a long period in order to enable further processing • There are about 3600 licensed slaughter-houses in India but due to lack of technology. this also applies to land holdings • A proper integrated supply chain is needed along with scale of operations to improve efficiency in this sector ISIEmergingMarketsPDF in-iimbemis from 115. Unauthorized Distribution Prohibited. DownloadPDF. poor quality of seeds and planting material is one of the reasons for this.239 on 2011-03-31 00:22:01 EDT. produce worth USD 10 bn is wasted every year in India • Nearly 20-25% of the fruits & vegetables production in India is lost in spoilage at various stages of harvesting • Lack of technology. ISI Emerging Markets.113. meat processing is low in India considering the large animal population available in the country • India has to bring in modern technology for food processing in order to improve process efficiency and quality of end product 16 .PPT Downloaded by in-iimbemis from 115.239 at 2011-03-31 00:22:01 EDT. igovernment article “India to set up 30 food parks”. scale of operations is also a key factor • About 90% of the units are small scale and hence does not reap the benefits of economies of scale.113.11. May 2008 FOOD PROCESSING INDUSTRY – INDIA.11.
branded processed products are subject to a 2% central sale tax and also attract local entry tax and octroi up to 4% • On the other hand.113. igovernment article “India to set up 30 food parks”. penetration of culinary products is 13.239 at 2011-03-31 00:22:01 EDT. unbranded products are in many cases exempted from tax or often taxed at a 4% confessional rate. May 2008.3% with major emphasis is given to sales in cities • Packaged biscuits consumption is as low as 0. Low level of penetration in domestic market Impact • The penetration levels in the domestic market are low in India because majority of processing units are export oriented • Share of ghee in branded milk products is still as low as 2%.48% in India while it is about 4% in the US • India has large untapped domestic potential Processing % of Food Produced Across Countries % 80 60 40 20 0 80% 78% 70% 40% 30% 5% India Malaysia Philippines Brazil China Thailand High taxes on branded agricultural products Impact • Besides 220.127.116.11% of value-added tax. Source: Economic Times “Food processing can create more jobs”.PPT Downloaded by in-iimbemis from 115. this is adversely affecting the competitiveness of the sector 17 . Jul 2009. ISI Emerging Markets. Unauthorized Distribution Prohibited.239 on 2011-03-31 00:22:01 EDT. DownloadPDF. Yahoo news “High taxes hitting food processing sector: Assocham” Nov 2009 FOOD PROCESSING INDUSTRY – INDIA.Low penetration levels in domestic market and high taxes on branded products affects this industry ISIEmergingMarketsPDF in-iimbemis from 115.113.
11. Unauthorized Distribution Prohibited. FOOD PROCESSING INDUSTRY – INDIA.113. ISI Emerging Markets.239 at 2011-03-31 00:22:01 EDT.113.PPT 18 . Downloaded by in-iimbemis from 115.239 on 2011-03-31 00:22:01 EDT.•Market Overview •Drivers & Challenges •Government Initiatives •Competition •Key Developments ISIEmergingMarketsPDF in-iimbemis from 115. DownloadPDF.11.
11.Financial Support Mega Food Parks Scheme ISIEmergingMarketsPDF in-iimbemis from 115. Unauthorized Distribution Prohibited.113.113. Manpower Training Tax Benefits FOOD PROCESSING INDUSTRY – INDIA.11. Key Initiatives Downloaded by in-iimbemis from 115.PPT Vision 2015 Trends 19 .239 at 2011-03-31 00:22:01 EDT.239 on 2011-03-31 00:22:01 EDT. ISI Emerging Markets. DownloadPDF.
DownloadPDF. other banks and the private sector is expected • Plans to approach RBI to include food processing under the priority sector lending 20 .239 at 2011-03-31 00:22:01 EDT. Jul 2009. IDBI. Unauthorized Distribution Prohibited. SIDBI. to help farmers move up the value chain • • • • Tripling the size of industry from the current USD 70 bn to nearly 210 bn Raising the level of processing of perishables from 6% to 20% Increasing value addition from 20% to 35% Enhancing India’s share in the global food trade from 1. ISI Emerging Markets. Source: Ministry of Food Processing India.113.11.200-crore VC fund” Sep 2009 FOOD PROCESSING INDUSTRY – INDIA.Government expects a 100 fold growth in food processing in line with the high growth experienced by service sector ISIEmergingMarketsPDF in-iimbemis from 115. Government Initiatives • The main priorities for the government in this sector is to encourage and increase food processing activities • It expects to create 10 mn jobs by 2015 in the food processing sector in India • It plans to promote partnership between agricultural and industrial sectors.5% to 3% Vision 2015 • Provides an investment opportunity of USD 24 bn • Plans to set up a dedicated venture capital fund to support the investment requirements Financial Support The venture capital fund would be set up with a corpus of about USD 250 mn by Apr 2010 Fund could be either a government initiative or under public-private-partnership model • Participation from NABARD.11.239 on 2011-03-31 00:22:01 EDT. Economic Times Interview with Food-processing minister “Food processing can create more jobs”. The Financial Express “Food processing min plans Rs 1.PPT Downloaded by in-iimbemis from 115.113.
239 at 2011-03-31 00:22:01 EDT. ISI Emerging Markets.11. Jul 2009 FOOD PROCESSING INDUSTRY – INDIA. Source: Ministry of Food Processing India.113.11. Labour ministry and institutions • Plans to collaborate with aid agencies like World Bank and Asian Development Bank to raise funds for running large-scale skill development programmes • Prepare a blueprint for Skill Development Mission and collaborate with Industrial Training Institutes (ITI) to focus on training the workers at various levels of food processing 21 . Economic Times Interview with Food-processing minister “Food processing can create more jobs”. DownloadPDF.113.239 on 2011-03-31 00:22:01 EDT. • Government is supporting these parks by providing a portion of total capital investment subject to a maximum of USD 11 bn • It also plans to extend special economic zone benefits to food parks Tax Benefits • Government is planning to declare a tax holiday for all food processing units • It also plans to extend 100% depreciation benefit for infrastructure projects in the sector from first year onwards • Plan for rationalization of duties for the industry Manpower Training • Government plans to design a curriculum for skill development programmes in consultation with HRD ministry.PPT Downloaded by in-iimbemis from 115.India to emerge as regional hub for food processing through the Mega Food Parks Scheme by the government • Government plans on establishing 30 mega food parks in all states enabling integration of the fruit and vegetable sector from farm gate to the retail outlet Mega Food Parks Scheme (MFPS) Operations towards developing 10 parks has begun All parks are expected to be established by 2015 ISIEmergingMarketsPDF in-iimbemis from 115. Unauthorized Distribution Prohibited.
Downloaded by in-iimbemis from 115.113. FOOD PROCESSING INDUSTRY – INDIA. ISI Emerging Markets.11.239 on 2011-03-31 00:22:01 EDT. DownloadPDF. Unauthorized Distribution Prohibited.•Market Overview •Drivers & Challenges •Government Initiatives •Competition •Key Developments ISIEmergingMarketsPDF in-iimbemis from 115.239 at 2011-03-31 00:22:01 EDT.113.11.PPT 22 .
aggressive advertising campaigns and efficient packaging are the strategies used by firms to gain market share Segments Share Other products 24% Diary Products 5% 11% Staples 20% Beverages Meat.113.Food Processing”. ISI Emerging Markets. Note: Based on latest available data from the Ministry Source: D&B articles “Emerging SMEs of India. 40% Oil • More players are planning to tap the mass market in basic foods like fruits & vegetables. Fish.239 on 2011-03-31 00:22:01 EDT.11.239 at 2011-03-31 00:22:01 EDT. Press articles FOOD PROCESSING INDUSTRY – INDIA.market & opportunities”.296 Segment-wise Organized Share Packaged Foods Beverages Staple Foods 50% 48% 15% 5% 80% 77% Fruits & Vegetables Diary Sector Meat & Poultry 23 . Apr 2008. Unauthorized Distribution Prohibited. Vegetables.PPT Downloaded by in-iimbemis from 115.113. Competition • A highly competitive market with many domestic players and their MNC counterparts fighting for market share Competitive pricing.11.Indian food processing sector is highly competitive with many foreign players in the market ISIEmergingMarketsPDF in-iimbemis from 115. meat & poultry and fisheries Food Processing Units in Organized Sector Flour Mills Fish Processing Food and Vegetable Meat Processing Sweetened and Aerated Water Milk Products Sugar Mills Solvent Extract Rice Mills + Modernized Rice Mills 516 568 5293 171 656 266 429 725 174. DownloadPDF. Fruits. expansions. IBEF report “Food Processing.
lemon drink . Dabur Foods Note: This list is not exhaustive 24 .5% promoter holding equally in Britannia • Leading player in organized biscuit market with about 30% market share • Plans to strengthen its position by launching new products and improving volumes and introducing variants of the existing products Financials: • Annual sales turnover of USD 565.113.9 mn ISIEmergingMarketsPDF in-iimbemis from 115.PPT Downloaded by in-iimbemis from 115. restaurants and caterers Financials: • Turnover of Dabur Foods in 2005 was USD 27. Started in 1997 with the launch of packaged fruit juices • The company caters to beverages and culinary segment with products including fruit juices. Unauthorized Distribution Prohibited. • In addition to the retail sales.2 mn in 2008 • Dabur foods is a 100% subsidiary of Dabur India.11. Dabur Foods is looking at increasing institutional sales to hotels. coconut milk. LEMONEEZ. Britannia • Nusli Wadia group and Groupe Danone.113. CAPSICO etc.239 on 2011-03-31 00:22:01 EDT.Major Domestic Players (1/6) Company Business Description Source: Company Websites and Articles FOOD PROCESSING INDUSTRY – INDIA. cooking pastes.239 at 2011-03-31 00:22:01 EDT. DownloadPDF.11. a French food company. HOMMADE. activ. • Major brands include Real. corn flour etc. tomato ketchup. BuRRst. ISI Emerging Markets. share 48.
KokoNaka. • Acquired India’s leading confectionery player Nutrine Confectionary Company Private Limited in June 2006 • Product portfolio includes Confectionery: Brands like Mahalacto.Major Domestic Players (2/6) Company Business Description Source: Company Websites and Articles FOOD PROCESSING INDUSTRY – INDIA. desserts.113.11.239 on 2011-03-31 00:22:01 EDT. namkeen.5 mn in 2005 (including other income) • Established in 2006 when Godrej Tea Ltd. Canada.11. Gits Food Products • Founded in 1963 as a small family enterprise and caters to snack food and diary segment • Products include snack mixes.113. papads. biscuits and cookies. Godrej Hershey Foods & Beverages Limited • It is targeting sales revenue of INR 10 bn by 2010 through organic as well as inorganic growth Note: This list is not exhaustive 25 . Superstar. Asia. acquired foods division of Godrej Industries Ltd. and diary products • It has two factories in Pune District of Maharashtra • Exports about 45% of its products to USA. the Middle East and Europe • The company is strategically broadening and growing its export market and it launched a new international style of export packaging Financials: • Sales turnover of USD 6.PPT Downloaded by in-iimbemis from 115. Australia. Nutrine Eclairs. ready-to-eat meals. UK. Xs (Juice & nectar) and Sofit (Soymilk) SmartCook Tomate Puree in the Cooking Aids Category and Godrej Cooklite. Godrej Oil and Godrej Vanaspati in the Edible Oil segment and Godrej Tea in the Packet Tea category ISIEmergingMarketsPDF in-iimbemis from 115. ISI Emerging Markets.239 at 2011-03-31 00:22:01 EDT. Unauthorized Distribution Prohibited. DownloadPDF. dessert mixes. Aasai & HoneyFab Non Carbonated Beverage: Includes Jumpin (Fruit drink).
Singapore and UAE • Follows competitive pricing strategy and caters to Indian palette with labour intensive products ISIEmergingMarketsPDF in-iimbemis from 115. Unauthorized Distribution Prohibited. sweets. ice-creams and confectionary • Exports its products to USA. chips and papads • Major presence in North India and especially New Delhi • Also exports its products to countries like US.PPT Downloaded by in-iimbemis from 115.11.5 bn in 2008-09 • Started in 1936. DownloadPDF. as a shop in Bikaneer. syrup.Major Domestic Players (3/6) Company Business Description Source: Company Websites and Articles FOOD PROCESSING INDUSTRY – INDIA. ghee. crushes. Haldirams Note: This list is not exhaustive 26 .000 by 2010.113.000 to 10.11. UHT milk. sweetened condensed milk. curd products. Canada. expanded to Delhi in 1982 and to USA in 1993 • It caters to snack food products like namkeen. Gulf Countries and Singapore • It plans on expanding its outlets “Amul Parlour” from 4. ISI Emerging Markets. UK.113. Gujarat Cooperative Milk Marketing Federation (Amul) • Established in 1946 • It is is India's largest food products marketing organisation • The company has a range of products in various segments namely Cheese. milk powders.239 at 2011-03-31 00:22:01 EDT.239 on 2011-03-31 00:22:01 EDT. Financials: • Annual sales turnover of USD 1. Australia.
Singapore and other European countries. 100 super distributors and 600 stockists • Exports its products to USA.PPT Downloaded by in-iimbemis from 115. ITC Ltd. Kohinoor Foods Ltd 27 . ready to eat Indian curries. Mauritius and Germany Financials • Gross turnover was INR 231 bn in 2008-09 • Established in 1989 • Product portfolio includes staples.239 on 2011-03-31 00:22:01 EDT. Dubai. Switzerland. Unauthorized Distribution Prohibited. UK.Major Domestic Players (4/6) Company Business Description Source: Company Websites and Articles FOOD PROCESSING INDUSTRY – INDIA.11. mint-o. cook-in sauces. Canada. Sunfeast.4 bn Note: This list is not exhaustive ISIEmergingMarketsPDF in-iimbemis from 115. • Entered the branded & packaged foods business in 2001with its Kitchens of India brand • Expanded to other brands namely Aashirvaad.239 at 2011-03-31 00:22:01 EDT.113. Japan. Candyman and Bingo! • Its product portfolio includes staples. snack foods and packet food in the ready-to-eat format • It has presence in USA. ISI Emerging Markets. seasoning and frozen food • Marketing their products by tying up with the major retail chains not just in the domestic market but in the international markets • Presently boasts of a distribution network of more than 200 thousand retail outlets. DownloadPDF.11. Canada. Financial • Net in FY ’08 stood at INR 6. cooking paste to spices. Australia. biscuit. confectionary.113.
cheese and butter. DownloadPDF.6 mn in 2008 Note: This list is not exhaustive ISIEmergingMarketsPDF in-iimbemis from 115. spices.113. MTR is an ISO 9002 and a HACCP certified company • Recently MTR is acquired by Orkla. Mother Dairy • Set up in 1974 under the Operation Flood Programme and is now a wholly owned company of the National Dairy Development Board • Product portfolio includes liquid milk. pickles etc.11.PPT Downloaded by in-iimbemis from 115. • About 10% of the total sales comes from export market • MTR which is established in south is developing its brand in the west and north India markets • It also plans to expand its product line rapidly Financials: • Annual turnover of USD 40.239 on 2011-03-31 00:22:01 EDT. frozen foods. frozen vegetables and fruit juices at a national • Recently developed a state-of-the-art fruit processing plant at Bangalore with fruit handling capacity of around 250 MT per day • Top five processed food companies in India.Major Domestic Players (5/6) Company Business Description Source: Company Websites and Articles FOOD PROCESSING INDUSTRY – INDIA. MTR Foods 28 .11.113. Dhara range of edible oils and the Safal range of fresh fruits & vegetables. a Norway-based company for USD 80 mn • It caters to snack foods and ice cream products including ready-to-eat curries and rice.239 at 2011-03-31 00:22:01 EDT. readyto-cook gravies. ice creams. Unauthorized Distribution Prohibited. instant snack and dessert mixes. ice creams. ISI Emerging Markets. dahi.
Parle Agro • Major brands include Frooti. Appy Classic in fruit-based drinks. DownloadPDF.6 mn to USD 761.113.239 on 2011-03-31 00:22:01 EDT. ISI Emerging Markets. Mintrox and ButterCup in confectionaries • Parle Agro’s flagship product Mango Frooti has 75% market share in fruit based drinks • Parle Agro has entered snack market recently with the launch of its brand Hippo • It started Hippo with 5 flavours and plans a bigger portfolio in snacks segment • Broad strategy is backward integration and aggressive media campaign during product launches Financials: • Plans to increase its revenues from USD 206. Venkys’ India Ltd.11. Bailley in packaged drinking water.2 bn for FY ‘08 ISIEmergingMarketsPDF in-iimbemis from 115. Note: This list is not exhaustive 29 .3 by 2011 • Established in 1971 • Major market presence in the meat and poultry segment Financials • Net sales pegged at INR 5. Unauthorized Distribution Prohibited.113.239 at 2011-03-31 00:22:01 EDT.11.Major Domestic Players (6/6) Company Business Description Source: Company Websites and Articles FOOD PROCESSING INDUSTRY – INDIA.PPT Downloaded by in-iimbemis from 115.
Kissan jam. ISI Emerging Markets. Unauthorized Distribution Prohibited. Knorr soup and Annapurna salt and wheat flour • Foods segment contributes to 20% of the total HUL sales • HUL divested its non-core businesses and focussed on its food business for driving growth Financials: • Annual sales turnover of USD 940 mn for HUL Foods segment in FY 2008-09 Note: This list is not exhaustive ISIEmergingMarketsPDF in-iimbemis from 115. wheat flour.PPT Downloaded by in-iimbemis from 115.239 on 2011-03-31 00:22:01 EDT.55% stake holding from parent company Unilever • Caters to Food and Beverages segment with products like jam.239 at 2011-03-31 00:22:01 EDT.1 mn in 2007 • HUL is India’s largest FMCG firm with 51. Bru in coffee. vanaspati. Kwality Wall’s in ice cream. popcorn. soup.113. Hindustan Unilever Limited 30 . through CAG Tech Holdings • A major player in edible oil and branded foods in India.3% in Agro Tech Foods Ltd. USA which is a major foods company in the world • ConAgra Foods along with Tiger Brands of South Africa holds a majority stake of 52. DownloadPDF. salt.11.11. tea.113. french fries and green peas • Plans to diversify its product portfolio and enter new markets with focus on product and brand differentiation Financials: • Annual sales turnover of branded foods segment was USD 117. it has a flagship brand Sundrop • Product portfolio includes edible oil.Major Foreign Players (1/2) Company Business Description Source: Company Websites and Articles FOOD PROCESSING INDUSTRY – INDIA. coffee and ice creams • Major brands include Broke Bond and Lipton in Tea. Agro Tech Foods • Affiliated to ConAgra Foods Inc. atta.
11. PepsiCo • PepsiCo started its operations in India in the year 1989 • Caters to beverages and snack foods including soft drinks. fruit juice and chips • It has 43 bottling plants in India. and it’s Frito Lay foods division has 3 plants • PepsiCo is planning to invest USD 200 mn to set-up four new plants out of which 3 would be for beverages and one for foods • Major focus is on high volume scales.PPT Downloaded by in-iimbemis from 115. chocolates and confectionaries • Nestle India is planning to launch new products in all its product segments Financials: • Annual sales turnover of USD 965.239 on 2011-03-31 00:22:01 EDT. ISI Emerging Markets. DownloadPDF. Unauthorized Distribution Prohibited. it is planning to set-up new greenfield plants and is looking for new franchisee bottlers • Started in 1959 as Food Specialities by Nestle SA which has 51% stake holding • It caters to diary products. diary whitener.11.Major Foreign Players (2/2) Company Business Description Source: Company Websites and Articles FOOD PROCESSING INDUSTRY – INDIA. infant food.239 at 2011-03-31 00:22:01 EDT. condensed milk. beverages and snack foods with products including instant coffee.113. Nestle India Note: This list is not exhaustive 31 .113.5 mn in 2008 ISIEmergingMarketsPDF in-iimbemis from 115.
•Market Overview •Drivers & Challenges •Government Initiatives •Competition •Key Developments ISIEmergingMarketsPDF in-iimbemis from 115. ISI Emerging Markets.113.11. FOOD PROCESSING INDUSTRY – INDIA.PPT 32 . DownloadPDF. Unauthorized Distribution Prohibited.113.239 at 2011-03-31 00:22:01 EDT. Downloaded by in-iimbemis from 115.11.239 on 2011-03-31 00:22:01 EDT.
ISI Emerging Markets. Uttarakhand state.PPT Downloaded by in-iimbemis from 115. An Indo-French joint working group (JWG) on agriculture is set-up to promote co-operation and France is ready to help Indian food processing sector with latest technology. ISIEmergingMarketsPDF in-iimbemis from 115. Government to provide food processing training to 500. 33 . PepsiCo to invest USD 200 mn to set-up 4 new greenfield projects and expect them to be operational by 2012. Indian Farmers Fertiliser Cooperative Limited (IFFCO) to set-up a farm-based food processing SEZ with an investment of USD 512.Key Developments Date Nov 2009 Oct 2009 Sep 2009 Aug 2009 Apr 2009 Feb 2009 Development Source: Press articles FOOD PROCESSING INDUSTRY – INDIA. It is called Patanjali Food and Herbal Park and will have 32 processing units for fruits & vegetable products. India’s largest sea food processing plant with a daily capacity of 40 ton has come up at Jankia.239 at 2011-03-31 00:22:01 EDT.11. The unit has a cold storage capacity of 1800 ton per day.113.000 women in collaboration with industrial training institutes (ITI) as part of its efforts to create 10 mn jobs by 2015. DownloadPDF. Andhra Pradesh. One of the 4 would be for making food products while other 3 would be for making beverages.113. Unauthorized Distribution Prohibited.7 mn at Nellore.239 on 2011-03-31 00:22:01 EDT.11. World’s largest food park to come up in Haridwar. 50kms from Bhubaneswar.
India report is a part of Research on India’s Food and Beverage Industry series. Netscribes (India) Pvt. business & corporate intelligence. FOOD PROCESSING INDUSTRY – INDIA.11. The company’s expertise spans areas of investment & business research.239 at 2011-03-31 00:22:01 EDT.PPT 34 . This document is the sole property of Netscribes (India) Pvt.com Phone: E-Mail: +91 98364 71499 gagan.com ISIEmergingMarketsPDF in-iimbemis from 115.uppal@netscribes. or “Netscribes” is not responsible for any loss or damage arising from use of this document.113. CFA Gagan Uppal Phone: E-Mail: +65 8448 0449 natasha. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. For more detailed information or customized research requirements please contact: Natasha Mehta. Ltd. and knowledge-software services. ISI Emerging Markets.113. Ltd. Research on India. Unauthorized Distribution Prohibited. Research on India is a product of Netscribes (India) Pvt.239 on 2011-03-31 00:22:01 EDT.mehta@netscribes. content-management services. DownloadPDF. Research on India is dedicated to disseminating information and providing quick insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. Although high standards have been used the preparation. At its core lies a true value proposition that draws upon a vast knowledge base.Thank you for the attention The Food Processing . and prior permission is required for guidelines on reproduction.11. Disclaimer: This report is published for general information only. Ltd. Downloaded by in-iimbemis from 115.