Estimation of Demand supply gap in

Patanjali for agro processed products

Presented by: Vikalp Sharma
DEPARTMENT OF AGRICULTURAL ECONOMICS
EXTENSION EDUCATION & RURAL SOCIOLOGY

Introduction

Agro processing could be defined as set of techno economic activities carried out for
conservation and handling of agricultural produce and to make it usable as food, feed,
fibre, fuel or industrial raw material. Hence, the scope of the agro-processing industry
encompasses all operations from the stage of harvest till the material reaches the end
users in the desired form, packaging, quantity, quality and price. Ancient Indian scriptures
contain vivid account of the post harvest and processing practices for preservation and
processing of agricultural produce for food and medicinal uses. Inadequate attention to
the agro-processing sector in the past put both the producer and the consumer at a
disadvantage and it also hurt the economy of the Country.

Agro-processing is now regarded as the sunrise sector of the Indian economy in view of
its large potential for growth and likely socio economic impact specifically on employment
and income generation. Some estimates suggest that in developed countries, up to 14
per cent of the total work force is engaged in agro-processing sector directly or indirectly.
However, in India, only about 3 per cent of the work force finds employment in this sector
revealing its underdeveloped state and vast untapped potential for employment. Properly
developed, agro-processing sector can make India a major player at the global level for
marketing and supply of processed food, feed and a wide range of other plant and
animal products.

India ranks second only to China in the world in terms of food production and fifth in areas of
output, consumption, export and predicted growth. It explains why the countrys food
processing industry is one of the major industries. According to an estimate of the
Confederation of Indian Industry (CII), the sector may generate employment of nine million
people-days and may attract US$33 billion investment in the next 10 years. Food processing
includes the processing of fruits and vegetables, dairy, meat and poultry, food grains, fisheries
and consumer foods (beverages, packaged food and water).The sector is fragmented into
unorganised, which includes innumerable flour mills, rice mills, pulse mills, hullers, oil-seed
mills, traditional food units, bakeries, processing units of spices, fruits and vegetables; and the
relatively smaller organised sector of flour mills and processing units of fruits and vegetables,
fish, meat, poultry and dairy. The on-going transformation and industrial scenario offers
opportunities for the growth and investment of the organised players.

The food processing industry has grown substantially in the last few decades. The increase in
the incomes of the working class has led to rise in the disposable income to be spent on
processed foods. The increase in the number of working women who get less time to do
kitchen chores also is another factor for increased preference for processed foods. The
change in the food habits of the working class which prefers readily available convenient
foods is another factor. India is one of the top producers of fruits and vegetables and other
food stuff. Hence availability of raw material makes it conducive for the growth of this
sector. There are more than 30 companies listed in BSE/NSE in this sector. However, the
major players are Dabur India, Gits, Godrej Industries, Haldirams, MTR Foods, Parle Agro,
HUL, Britannia Industries, ITC, Nestle, PepsiCo and Cadbury India. There is still a lot of scope
for products related to meat, poultry, fisheries, milk products, beverages, grain processing.

Credit deployment in Food Processing Sector during last three years

Apr.19, 2013
Food Processing Sector
All Industry
(%) share

Apr.18, 2014

1,211.00

1,687.00

1,487.00

22,246.00
5.44

Apr.17, 2015

24,987.00
5.95

26,582.00
6.35

Source: RBI website

The Indian food and grocery market is the worlds sixth largest, with retail contributing 70 per cent of
the sales. It is projected to grow at the rate of 104 per cent, touching US$ 482 billion by 2020.The
Indian food processing industry accounts for 32 per cent of the countrys total food market, 14 per
cent of manufacturing GDP, 13 per cent of Indias exports and six per cent of total industrial
investment. Indian food service industry is expected to reach US$ 78 billion by 2018.The Indian
gourmet food market is currently valued at US$ 1.3 billion and is growing at a CAGR of 20 per cent. It
is expected to cross US$ 2.8 billion by 2015.
The online food ordering business in India is in its nascent stage. Share of online food ordering would
be in single digits of the overall food ordering business which in 2014 was estimated to be around Rs
5,000-6,000 crore (US$ 800.19-960.12 million). We are growing at 20-30 per cent month-on-month.
The poultry sector of India is expected to register double-digit growth in 2015 on the back of stable
feed prices and encouraging rural demand.

OBJECTIVES
1.Study

the different sectors of food processing

industries in India,

2.Overview

of Patanjali agro and food processed

products,
3.Estimation

of demand supply gap in Patanjali

agro and food processed products.

METHODOLOGY
Study Area:
present study is conducted in the palampur city of Himachal Pradesh.
Data:
The present study is primarily based on primary data collected from
patanjali outlets which is situated in the palampur .
Analytical Framework-

Collection of data

Patanjali outlets in Palampur:

DIFFERENT SECTORS OF FOOD

PROCESSING INDUSTRIES
Food processing is a large sector that covers activities such as agriculture,
horticulture, plantation, animal husbandry and fisheries. It also includes
other industries that use agriculture inputs for manufacturing of edible
products. The Ministry of Food Processing, Government of India indicates
the following segments within the Food Processing industry:
Dairy, fruits & vegetable processing
Grain processing
Meat & poultry processing
Fisheries
Consumer foods including packaged foods, beverages and packaged
drinking water.

Segment Market

Opportunities

Structure

Key Players

Fruits and Vegetables

India is the worlds 2nd largest

producer of fruits and vegetables
Presently 10% of the products in this
segment are processed. It is expected
that the processing will grow to 25%
by 2025
Highly export oriented segment as
the domestic penetration is low.
Domestic demand is expected to grow

An almost equal division of the

Mostly SMEs are operating in both
market between organized and
organized and unorganized segments.
unorganized players
Some brands include Mothers Recipe,
Organized players mostly produce
Tops etc.
juices and pulp products; while
unorganized players have a foothold
in traditional areas like pickles,
sauces and splashes Pickles hold the
major share in this segment

Fisheries

Third largest producer of fish

Small scale organized sector rules
Second largest inland fish producer this segment
An entirely export oriented segment

The units are largely small scale

proprietary/ partnership firms, or
fishermen cooperatives

Meat and Poultry

Largest producer of buffalo meat The unorganized sector dominates

Second largest producer of goat meat this segment
Only 1-2% of the raw meat is
converted into value added products,
remaining purchased in raw form for
domestic consumption
The processed food is mainly
exported to Maldives and Oman.
Eggs and Broilers are leading the
growth in this segment with a growth
rate of 16% and 20% respectively

Brands such as Venkys and Godrejs

Real Chicken are popular in India

Milk & Dairy

Largest Producer of Milk and Milk

Products
India shelters the maximum
number of cows and buffaloes
across the world

This segment is controlled by the Mostly cooperatives such as AMUL

unorganized market Organized
Nestle and Britannia have shifted
market holds less than 15% of the their focus on this segment
share
Estimated size of market is ` 100
crore

Grains and Cereals

India is a self-sufficient country in

terms of grain production Largest
producer of rice in the world, but
most of it is consumed domestically
Rice, wheat and pulses milling is
the most important food processing
activity in this segment

Approx. 80% of the market is

controlled by the unorganized sector
This sector also lacks the
technological up gradations resulting
in higher wastages

Consumer Foods

The fastest growing segment in

India, which includes: - Packaged
Food - Aerated Soft Drinks Packaged Drinking Water - Alcoholic
Beverages
The packaged food consists of
snacks, chips, namkeens and bakery
foods
The segment is growing at approx.
6-7% annually
The largest component of the
segment is tea followed by packed
biscuits and then by aerated drinks
India is the third largest market of
alcoholic beverages

A highly organized segment

Pepsi, Coca Cola, Nestle, Britannia,
World market leaders operate in
Dabur, ITC
the aerated soft drinks segment and
alcoholic beverages segment

Most of the milling happens in the

SME segment and is unorganized
Some of the big players in this
industry are R S Rice Mill, LT Foods
Limited etc.

PATANJALI
PATANJALI AYURVED Ltd is a company that functions like all other companies
under the regulations of the company law affairs, yet is constantly striving for
nation building more than the profit accumulation.

Patanjali Yogpeeth
Divya Yog Mandir (Trust) Patanjali Yogpeeth in Haridwar, Uttarakhand is one of
the largest Yoga institutes in India and named after the ancient Yog Guru
Patanjali. The institute is flagship project of Swami Ramdevji Maharaj and
Acharya Balkrishnaji Maharaj and has been set up not only for treatment,
research and development in Yoga and Ayurveda, but also for the manufacturing
of ayurvedic medicines. It is located on the Haridwar Delhi highway at Kankhal,
Haridwar. Patanjali Yogpeeth is an institution for scientific research and
treatment which offers treatments for all. The ambiance of Patanjali Yogpeeth is
world class. It has been constructed in almost 100 acres and designed to have
buildings, car parks, and a landscape to rival the best of Delhi's housing projects.
A team of over 200 qualified doctors have been trained and are already attending
to over 2500 patients daily. Free consultation is being done for all patients as
well as medicines are made available to economically weaker persons at
concessional rates.

 Patanjali aims at promoting indigenous entrepreneurship among the people of the

country and to reduce the dependence on the west. Patanjali Food and Herbal Park
is established to bring about agricultural revolution in the country which gives
farmers best price for their produce. Various self-help groups are also constituted to
promote indigenous entrepreneurship. All these activities combined leads to
Spiritual entrepreneurship.
Sharbat/ Squash

Juice

- Amla, Bel, Brahmi, Gulab, Keshar Badam,

Orange,
Nimbu, Mango
AloeVera, Anar, Amla, orange

Jam

Apple, Pineapple and Mix Fruit

Salt

Saindha Namak

Flour

Arogya Aata Aashirwad

Candy

Amla, Anardana

Supply Chain Management (SCM)

Patanjali follows a very smooth Supply chain management. The three parts of
supply chain are product flow, cash flow and information flow. In supply chain of
Patanjali all these are maintained very smoothly. Supply Chain of Patanjali can
be well understood with the help of some examples. First we will take the
example of sale of Patanjali products. They sell their products only through their
own outlets opened in almost every district/city of India. Each outlet sends its
demand to central office at Haridwar. Then based on demand, different products
are gathered from various units of Patanjali viz. Divya Pharmacy, Patanjali
Ayurveda, Patanjali Foods etc. Then the items are delivered to the respective
outlets mainly through Patanjali transport. This shows a good example of Supply
chain management.

Sales and Distribution Patanjali follows various modes of distribution for their
productsThey provide sale of products through their website with online payment facility.
These products can be procured through post also by sending the required
amount through demand draft etc.
- Patanjali has opened Patanjali Chikitsalayas and Patanjali Arogya Kendra in
almost all the cities of the country from where all the Patanjali products can be
procured easily. A Patanjali trained Ayurvedic doctor also sits in every Patanjali
Chikitsalaya from whom consultation can be obtained regarding various
medicines.
- Patanjali herbal products are also available at Post offices across the country.
- A shop is established for sale of products wherever a yoga camp is organized.
- Patanjali has prepared disease specific CDs which they sell through their
various outlets.