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Submitted to: - Submitted by:-

Prof. Arun Bhattacharya Saurabh Sinha (PGSF0847)






I would like to thank Prof. Arun Bhattacharya for giving me the opportunity to work on this
emerging market of ready to eat in India. By doing so I have learnt about the major issues related
to this market in context with the FMCG industry. I also learnt and gather information about the
trend and the behavior of the Indian population for this market. Another aspect on which my
research has shown is the issues and problems faced by the FMCG companies. This has brought
to me at the conclusion that this market will emerged as one of the most profitable and growing
industries in India.

I would also like to thank the companies and people for lending me full support for completion
of my successful project.

Saurabh Sinha
PGDM (Services)
Batch: - 2008-10
Jaipuria Institute of Management



1. Introduction

2. Agriculture Industry

3. FMCG in India

4. Players in FMCG

5. Indian Food Processing Industry

6. Ready to Eat Market

7. Objectives of Study

8. Data Analysis

9. Conclusion and Suggestions





4 .

As there are wide disparities between cities of the developing world. reference to an "average" urban consumer is misleading and the identification of consumer groups having different 5 . New approaches focusing on urban consumers need to be developed. The urban/rural dichotomy has to give way to strategies integrating both sectors.As more and more people in developing countries live in cities. urban food and nutrition issues are becoming increasingly relevant and pressing.

quality. efforts in processing. Understanding consumer motivations and knowing the relative importance of various criteria for different consumer groups are essential to the development and promotion of local products. They are proliferating at a tremendous rate in a number of cities. convenience. oriented and represented. "Street foods" are a dynamic sector of the informal economy. Eating meals prepared outside the home is a typical feature of urban lifestyles. in which form. as they satisfy needs that are not met by the formal sector. Consumers have specific needs and rights with regard to their food. the food systems are becoming increasingly complex and very large volumes of food move through the systems. the foods and diets of the various strata of urban populations deserve more attention than they have been given so far. With intensive urbanization. as well as greater convenience and often competitive prices. 6 . marketing and distribution need to be given adequate emphasis. often conditioned by long travel times to work. but also for determining remedial actions and preventive measures. For middle class consumers. cultural value. they are an important social phenomenon. such analysis underscores serious gaps in our knowledge and understanding of which foods are consumed by which consumer groups. in addition to aspects of production. lifestyles and consequently. where and why. is preferred. This magnifies the health and economic risks to which urban consumers are exposed. socio-economic status. Others include taste. appeal. not only for their implications on food and agriculture planning.cultural backgrounds. limited cooking facilities and other resources for food preparation in the home. They have to be protected. as these may be of lower nutritional quality than the unrefined or traditionally processed foods that they displace. and so forth. Another nutritional aspect of urban foods is the growing supply of highly processed foods and drinks (locally processed or imported). price is only one of the factors that motivate food choice. Thus. different consumer behaviors and needs. prestige. Although general trends in food consumption patterns have been documented. Consequently.

dal makhni. chicken madras. The urban environment entails important changes in lifestyles. exposure to marketing and reference group influences. Now the time is to provide better food processing & its marketing infrastructure for Indian industries to serve good quality & safest processed food like ready to eat food. distribution to the centers and have become very popular after the Year 2002. economic activities. mutter mushroom. palak paneer. These foods meet the specific needs of convenience.Consumer needs and wants are determined by a number of internal and external factors. potato-peas. 7 . chicken curry. depending upon the requirement of the users and the weather conditions. etc. mutton curry. mutter paneer. shelf stability. fish curry. The retort processed foods do not require rehydration or cooking and can be consumed straight from the pouch with or without pre-warming. rajma masala. nutritional adequacy. mutton pulav. chicken kurma. It is opening a new window in world scenario as far as taste & acceptance is concerned. upma. storage. Some of the mouth-watering dishes in retort pouches include sooji halwa.

During the recent years agriculture sector has witnessed spectacular advances in the production and productivity of food grains. fruits. About 65% of Indian population depends directly on agriculture and it accounts for around 22% of GDP. 8 .Agriculture is the backbone of Indian Economy. food grains. commercial crops. Agriculture derives its importance from the fact that it has vital supply and demand links with the manufacturing sector. vegetables. oilseeds.

poultry and dairy. The share of medium to large farms (above 4 hectares) is very small at just over 7% of all holdings. India is the highest producer of milk in the world. productivity in unirrigated areas has remained either stagnant or experienced very small growth and most of the farmers in such areas produce for subsistence purpose. India has emerged as the second largest producer of fruits and vegetables in the world in addition to being the largest overseas exporter of cashews and spices. There is hardly any direct government intervention in the production and investment decisions of the farmers but the government does influence the legal. Irrigated areas have experienced sharp increase in productivity level and large part of output at such farms is for market. a bulk of which comprise tiny land holdings with preponderance of owner cultivation. Further. agricultural growth remained confined to a few well endowed pockets which have created regional disparities. Agriculture in India is in the hands of millions of peasant households.e. with low investment and little productivity growth. Apart from that. but these farms account for around 40% of the land. On the other hand. India’s agricultural area is vast with total arable and permanent cropland of 170 million hectares. Though tremendous progress has been made to exploit irrigation potential in the country still two third of area under cultivation is unirrigated and there is thus heavy dependence of production on vagaries of nature i. The implication is that many of the very small farms are subsistence holdings. material and economic environment in which farmers operate. agricultural growth remained slow (below 3 percent) in the country. Out of India’s 116 million farmers. 9 . The average size of holding in the late nineties was about 1. OECD in it’s 2007 agricultural policy monitoring report notes that Indian agriculture is dominated by a large number of small scale holdings that are predominantly owner occupied.4 hectares and continues to decline. rainfall. At overall level. around 60% have less than 1 hectare and together they farm 17% of the land. as farms are usually divided on inheritance. It has the second largest arable area in the world after the United States.

improved varieties of oilseeds and course cereals have provided some opportunities for productivity growth in dry land areas. All these 10 . Throughout the country. Initially there were strong apprehensions about the impact of trade liberalization on Indian agriculture which later on turned out to be real threat for several commodities produced in the country. the dry land areas have not seen benefit of technological breakthrough as witnessed through green revolution technology. the sector was affected indirectly by devaluation of exchange rate. Government initiated process of economic reforms in 1991. reduced government participation in economic activities.RECENT TRENDS IN INDIAN AGRICULTURE: Though green revolution has been widely diffused in irrigated areas. which involved deregulation. Of late. and liberalization. came new international trade accord and WTO. A new phase was started in India’s economic policy in 1991 that marked significant departure from the past. Then. liberalization of external trade and disprotection to industry. Though much of the reforms were not initiated to directly affect agriculture sector. requiring opening up of domestic market.

last two decades had witnessed mainly price intervention that had a very limited coverage. Besides. 11 .changes raised new challenges and provided new opportunities that required appropriate policy response. and there was a sort of policy vacuum.

This model act enables establishment of private markets/yards. Regulation and promotion of contract farming arrangement has also been made a part of this legislation. fruits. 12 . It has been initiated by Imperial Tobacco Company (ITC) who is quite active in agricultural sector in India. This e-chaupal business platform consists of three layers each of different level of geographic aggregation. direct purchase centers. A provision has also been made for constitution of State Agricultural Produce Standard Bureau for promotion of grading. and quality certification of agricultural produce. consumers/farmers markets for direct sale. So far. They are forced to sell their products to these middlemen at the farm gate at throwaway prices. E-Chaupal: E-Chaupal is a business platform consisting of a set of organizational Subsystems and interfaces connecting farmers to global markets. 15 States and 5 Union Territories have amended their Agricultural Produce Marketing Committee (APMC) Act to derive the benefits of market reforms. It also provides for exclusive markets for onion. standardization.Marketing of Agricultural Products: Form of Markets exists in India: Agricultural markets in India are dominated by the existence of unorganized and unregulated agricultural mandies with the presence of a large number of middlemen and widespread prevalence of malpractices. and flowers. vegetables. Agricultural Market Reforms in India: Ministry of Agriculture had formulated a model law on agricultural marketing in consultation with State/Union territory Governments to bring about marketing reforms in line with emerging trends. Absence of proper warehousing facilities in the villages. lack of proper transportation facilities and infrastructure such as rails and good quality all weather roads and ignorance about the market prices of their products are some of the important factors for exploitation of farmers from middle men. and promotion of public-private partnership (PPP) in the management and development of agricultural markets in the country.

2. which is beneficial for producers and consumers both. a large section of Indian agriculture uses more or less organic method of farming using minimum level of chemical inputs. These exchanges are majorly dealing in agricultural commodities. The first layer consists of the village level kiosks with internet access (e-chaupals). The entity (person or organization) orchestrating the transactions. 13 . They are. Each cluster of five villages gets an e-chaupal. which is justified by sparse population in rural India. two commodity exchanges have been introduced in 2003 for future trading. managed by an ITC trained local farmer and within walking distance (1-5 kilometers) of each target farmer. The infrastructure (physical or organizational) through which transaction takes place. Organic farming is an important pillar of sustainable agriculture. Promotion of organic farming in India could prove beneficial to increase share of Indian agricultural export in the world export. there is an increasing demand of organic foods in the developed world. The geographical coverage of the layer. and 3. The second layer consists of a brick and mortar infrastructure called hubs managed by the traditional intermediary who has local knowledge/skills called a Samayojak and within tractorable distance (25-30 kilometer) of then target farmer. In fact. In the recent decades.Each of the three layers is characterized by three key elements: 1. India has a great potential for organic farming using traditional wisdoms prevailing in the villages of India. Agricultural Commodities Exchanges: To introduce future trading in agricultural commodities in India. National Commodity & Derivatives Exchange Limited (NCDEX) and Multi Commodity Exchange of India Limited (MCX). They are involved in forward trading to mitigate price risks of the farmers.

14 .

pharmaceuticals. gifts. Common FMCG products Some common FMCG product categories include food and dairy products. FMCG industry economy FMCG industry provides a wide range of consumables and accordingly the amount of money circulated against FMCG products is also very high. The competition among FMCG manufacturers is also growing and as a result of this. 15 . watches. consumer electronics. The industry also engaged in operations. alternatively called as CPG (Consumer packaged goods) industry primarily deals with the production. Penetration level as well as per capita consumption in most product categories like jams. production and general management. soaps etc. The FMCG market is set to treble from US$ 11.1 billion. intense competition between the organised and unorganised segments and low operational cost. distribution and marketing of consumer packaged goods. purchasing.1 billion. glassware. specifically in India. investment in FMCG industry is also increasing. which made this industry as a potential one are low operational cost. The Fast Moving Consumer Goods (FMCG) are those consumables which are normally consumed by the consumers at a regular interval. and some of the examples of FMCG products are coffee. hair wash etc in India is low indicating the untapped market potential. tea. Burgeoning Indian population. presence of renowned FMCG companies. marketing. photography. drinks etc. printing and stationery. strong distribution networks. paper products. financing. dry cells. toothpaste. Availability of key raw materials. packaged food products. Some of the prime activities of FMCG industry are selling. tobacco and cigarettes. detergents. Market potentiality of FMCG industry Some of the merits of FMCG industry.6 billion in 2003 to US$ 33. FMCG Sector in India is estimated to grow 60% by 2010. etc.FMCG industry. where FMCG industry is regarded as the fourth largest sector with total market size of US$13. supply chain. skin care. household products. Population growth is another factor which is responsible behind the success of this industry.It has a strong MNC presence and is characterised by a wellestablished distribution network. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.4 billion in 2015. cheaper labour costs and presence across the entire value chain gives India a competitive advantage. plastic goods. greeting cards.

16 . presents an opportunity to makers of branded products to convert consumers to branded products. India needs around US$ 28 billion of investment in the food-processing industry. Growth is also likely to come from consumer 'upgrading' in the matured product categories. With 200 million people expected to shift to processed and packaged food by 2010.particularly the middle class and the rural segments.


Hindustan Unilever Limited also called Hindustan Lever Limited (HLL) was established in 1933
as Lever Brothers India Limited. Hindustan Lever Limited (HLL) is India's largest Fast Moving
Consumer Goods Company, with a customer base of 2 out of every 3 Indian in the category of
Home & Personal Care Products and Foods & Beverages. The company has combined volumes
of about 4 million tonnes and sales of Rs.10, 000 crores. HLL is also one of the country's largest
exporters; the Government of India has recognized HLL as a Golden Super Star Trading

Type Public

Headquarters Mumbai , India

Mr.Harish Manwani ,
Key people
Chairman Douglas Baillie, CEO

Industry FMCG

Products Tea, soap, detergents

Employees 41,000

Parent Unilever


Some of HLL brands are:


• Kwality Walls Ice Cream
• Hamam
• Lifebuoy
• Rexona
• Lux
• Liril
• Moti Soaps
• Breeze
• Lipton Tea
• Brooke Bond Tea
• Bru Coffee
• Pepsodent
• Close Up
• Surf
• Rin
• Wheel Laundry Detergent
• Kissan
• Annapurna
• Pond's
• Vaseline
• Fair & Lovely
• Lakmé
• Clinic Plus
• Clinic All Clear
• Sunsilk and Lux Shampoos
• Vim
• Ala Bleach
• Domex
• Pureit Water Purifier

The Hindustan Lever Research Center (HLRC) was established in 1958, and now has facilities in
Mumbai & Bangalore. HLRC has 200 highly qualified scientists and technologists, many of
them with post-doctoral experience. HLL also runs various ambitious programmes like Shakti.
Shakti's aim is to create opportunities for rural women thereby improving their livelihood and
standard of living in rural sector. Shakti also includes health and hygiene education through the
Shakti Vani Programme. The programme covers about 50,000 villages in 12 states. HLL's
motive is to take this programme to 100,000 villages influencing the lives of over a 100 million
rural Indians. HLL is also involved in running a rural health programme - Lifebuoy Swasthya
Chetana. The programme aims to inculcate the hygienic practices among rural Indians to bring
down the figure of diarrhea patients. It has already covered 70 million people in approximately
15000 villages of 8 states.


Personal Care. Paperboards. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. ITC is widely perceived to be dedicatedly nation-oriented. Hotels. Agri-Business. the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. 20 . ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part. is expected to progressively create for ITC a huge rural distribution infrastructure. Information Technology. it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery. Stationery.Imperial Tobacco Company(ITC) is one of India's foremost private sector companies with a market capitalization of nearly US $ 19 billion and a turnover of over US $ 5 billion. superior brand-building capabilities. ITC is one of the country's biggest foreign exchange earners (US $ 3. While ITC is an outstanding market leader in its traditional businesses of Cigarettes. ITC's Agri-Business is one of India's largest exporters of agricultural products.” ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach. ITC is rated among the World's Best Big Companies. As one of India's most valuable and respected corporations. In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. Safety Matches and other FMCG products. significantly enhancing the Company's marketing reach. Packaged Foods & Confectionery. Paperboards & Specialty Papers. Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine. ITC has a diversified presence in Cigarettes. ITC ranks among India's `10 Most Valuable (Company) Brands'. Branded Apparel. Hotels. Branded Apparel. effective supply chain management and acknowledged service skills in hotels. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". in a study conducted by Brand Finance and published by the Economic Times. Personal Care and Stationery.2 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. among India's Most Respected Companies by BusinessWorld and among India's Most Valuable Companies by Business Today. which has already become the subject matter of a case study at Harvard Business School. Packaging. Packaging and Agri-Exports. This transformational strategy. Over time.

The culture of innovation and renovation within the Company and access to the Nestlé Group's proprietary technology/Brands expertise and the extensive centralized Research and Development facilities gives it a distinct advantage in these efforts. For more on Nestlé Agricultural Services. of Switzerland. to irrigation. This has earned it the trust and respect of every strata of society that it comes in contact with and is acknowledged amongst India's 'Most Respected Companies' and amongst the 'Top Wealth Creators of India'. It helps the Company to create value that can be sustained over the long term by offering consumers a wide variety of high quality. Nestlé responded to India’s aspirations by forming a company in India and set up its first factory in 1961 at Moga. Progress in Moga required the introduction of Nestlé’s Agricultural Services to educate. but a thriving hub of industrial activity. After India’s independence in 1947. suppliers of packaging materials. integrity and fairness in all aspects of its business and expects the same in its relationships. as well. Punjab. safe food products at affordable prices. when it began trading as The Nestlé Anglo-Swiss Condensed Milk Company (Export) Limited. importing and selling finished products in the Indian market.A. From increasing the milk yield of their cows through improved dairy farming methods. Progress involved the creation of prosperity on an on-going and sustainable basis that has resulted in not just the transformation of Moga into a prosperous and vibrant milk district today. but also instil amongst the community. Nestlé set up milk collection centres that would not only ensure prompt collection and pay fair prices. The Company insists on honesty.Nestlé India is a subsidiary of Nestlé S. The Company continuously focuses its efforts to better understand the changing lifestyles of India and anticipate consumer needs in order to provide Taste. services and other goods. 21 . Health and Wellness through its product offerings. Nestlé has been a partner in India's growth for over nine decades now and has built a very special relationship of trust and commitment with the people of India. a confidence in the dairy business. With seven factories and a large number of co-packers. Nestlé India is a vibrant Company that provides consumers in India with products of global standards and is committed to long-term sustainable growth and shareholder satisfaction. Nestlé’s relationship with India dates back to 1912. where the Government wanted Nestlé to develop the milk economy. the economic policies of the Indian Government emphazised the need for local production. Nutrition. scientific crop management practices and helping with the procurement of bank loans. advise and help the farmer in a variety of aspects. The Company's activities in India have facilitated direct and indirect employment and provides livelihood to about one million people including farmers.

MILKMAID and NESTEA and in recent years the Company has also introduced products of daily consumption and use such as NESTLÉ Milk. Nestlé India is a responsible organization and facilitates initiatives that help to improve the quality of life in the communities where it operates 22 . MILKYBAR. NESTLÉ Fresh 'n' Natural Dahi and NESTLÉ Jeera Raita. KIT KAT. MAGGI. NESTLÉ SLIM Milk.Nestlé India manufactures products of truly international quality under internationally famous brand names such as NESCAFÉ. BAR-ONE. MILO.

. Australia. Dr Verghese Kurien. will naturally wonder what combination of influences and incentives is needed to multiply such a model a thousand times over in developing regions everywhere. On 10 Aug 2006 Parthi Bhatol." was suggested by a quality control expert in Anand. Bangladesh. India." from the Sanskrit "Amoolya. Besides India. China. Currently Unions making up GCMMF have 2. especially the highly successful one known as AMUL. Amul has entered overseas marketssuch as Mauritius. USA. Other potential markets being considered include Sri Lanka. It is also the world's biggest vegetarian cheese brand . Amul is the largest food brand in India and world's Largest Pouched Milk Brand with an annual turnover of US $1050 million (2006-07). Singapore.).8 million producer members with milk collection average of 10. Amul has spurred the White Revolution of India.8 million milk producers in Gujarat.16 million litres per day. 23 . which has made India the largest producer of milk and milk products in the world. UAE. It is one of the best examples of co-operative achievement in the developing economy. former chairman of the GCMMF. Its bid to enter Japanese market in 1994 did not succeeded. It is abrand name managed by an apex cooperative organisation. chairman of the Banaskantha Union.Amul (AMUL means "priceless" in Sanskrit. "Anyone who has seen . Hong Kong and a few South African countries. which today is jointly owned by some 2.. the dairy cooperatives in the state of Gujarat. was elected chairman of GCMMF. (GCMMF). is a dairy cooperative in India. but now it has fresh plans entering the Japanese markets. The brand name "Amul. Gujarat and has been an example of a co-operative organization's success in the long term. Gujarat Co-operative Milk Marketing Federation Ltd. is recognised as a key person behind the success of Amul." The Amul Pattern has established itself as a uniquely appropriate model for rural development. formed in 1946. AMUL is based in Anand..

24 . Oral Care. Europe and Russia.Dabur India Ltd is one of India’s leading FMCG Companies with Revenues of about US$600 Million (over Rs 2834 Crore) & Market Capitalisation of over US$2. Dabur India Ltd has come a long way today to become one of the biggest Indian-owned consumer goods companies with the largest herbal and natural product portfolio in the world. accounting for about 20% of the total turnover. Skin Care. Building on a legacy of quality and experience for over 125 years. Dabur is today India’s most trusted name and the world’s largest Ayurvedic and Natural Health Care Company. SAARC countries. Dabur has successfully transformed itself from being a family-run business to become a professionally managed enterprise.2 Billion (close to Rs 10. Africa. Overall. Réal for fruit juices and beverages and Fem for fairness bleaches and skin care products. Dabur's products also have a huge presence in the overseas markets and are today available in over 60 countries across the globe. The company has a wide distribution network.Hajmola for digestives. Home Care and Foods. From its humble beginnings in the bylanes of Calcutta. Health Care. Vatika for premium personal care. Dabur's FMCG portfolio today includes five flagship brands with distinct brand identities -. Dabur's overseas revenues stands at over Rs 500 Crore in the 2008-09 fiscal. covering over 2. What sets Dabur apart from the crowd is its ability to change ahead of others and to always set new standards in corporate governance & innovation.8 million retail outlets with a high penetration in both urban and rural markets. US. had started operations in 1884 as an Ayurvedic medicines company. promoted by the Burman family. Dabur India is also a world leader in Ayurveda with a portfolio of over 250 Herbal/Ayurvedic products. Dabur today operates in key consumer products categories like Hair Care. The 125-year-old company.Dabur as the master brand for natural healthcare products.000 Crore). Its brands are highly popular in the Middle East.

Its Cocoa team visits farmers and advises them on the cultivation aspects from planting to harvesting. The Company recently entered the gums category with the launch of our worldwide dominant bubble gum brand Bubbaloo. For over two decades.000 people and have direct operations in over 60 countries. it is poised in their leap towards quantum growth. Mumbai. Chocolate Confectionery. It employs around 50. Since 1965 Cadbury has also pioneered the development of cocoa cultivation in India. Perk. Cadbury enjoys a value market share of over 70% - the highest Cadbury brand share in the world! Its flagship brand Cadbury Dairy Milk is considered the "gold standard" for chocolates in India. Similarly in the medicated candy category Halls is the undisputed leader. Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi. Cadbury began its operations in 1948 by importing chocolates.Cadbury is a leading global confectionery company with an outstanding portfolio of chocolate. world's leading Confectionery Company. Milk Food Drinks. Induri (Pune) and Malanpur (Gwalior). In India. It collaborates and works as teams to convert products into brands. Their efforts have increased cocoa productivity and touched the lives of thousands of farmers. hybrids that improve the cocoa yield. 25 . 5 Star. it spreads happiness! Currently Cadbury India operates in four categories viz. It is a part of the Cadbury PLC. In the Chocolate Confectionery business. gum and candy brands. The corporate office is in Mumbai. The pure taste of CDM defines the chocolate taste for the Indian consumer. Simply put. it has worked with the Kerala Agriculture University to undertake cocoa research and released clones. selling our products in almost every country around the world. They also conduct farmers meetings & seminars to educate them on Cocoa cultivation aspects. In the Milk Food drinks segment our main product is Bournvita . Cadbury has maintained its undisputed leadership over the years. After 60 years of existence. Éclairs and Celebrations. Bubbaloo is sold in 25 countries worldwide.the leading Malted Food Drink (MFD) in the country. Candy and Gum category. Kolkota and Chennai). Hardly surprising then that the Cocoa tree is called the Cadbury tree! Today. it today has five company-owned manufacturing facilities at Thane. Some of the key brands are Cadbury Dairy Milk. Its core purpose "creating brands people love" captures the spirit of what it is trying to achieve as a business.

Britannia's business was flourishing. As time moved on. In the subsequent public issue of 1978.and made its first foray into the dairy products market. In 1997. with the advent of electricity. Once upon a time. Britannia was acquiring a reputation for quality and value. during the tragic World War II. 295. 100 crores revenue mark. firmly establishing the Indianness of the firm. Indian shareholding crossed 60%. the Britannia Biscuit Company took over the distribution of biscuits from Parry's who till now distributed Britannia biscuits in India.The story of one of India's favourite brands reads almost like a fairy tale. in 1892 to be precise. it became the first company east of the Suez Canal to use imported gas ovens. more importantly. and in 1921. The company we all know as Britannia today."Eat Healthy. As a result. Britannia Biscuit Company was re-christened Britannia Industries Limited (BIL). Four years later in 1983. and Britannia New Zealand Foods Pvt. In 1999. It was equally recognised for its innovative approach to products and marketing: the Lagaan Match was voted India's most successful promotional activity of the year 2001 while the delicious Britannia 50-50 Maska-Chaska became India's most successful product launch. World Cup Jao" promotion further fortified the affinity consumers had with 'Brand Britannia'. In 2002. In 1992. Ltd. The beginnings might have been humble-the dreams were anything but. it celebrated its Platinum Jubilee. On the operations front. By 1910. the company was making equally dynamic strides. the company unveiled its new corporate identity . the world's second largest Dairy Company. In recognition of its vision and accelerating graph. a biscuit company was started in a nondescript house in Calcutta (now kolkata) with an initial investment of Rs. was born. Britannia's New Business Division formed a joint venture with Fonterra. Forbes Global rated Britannia 'One amongst the 26 . The following year. Think Better" . the biscuit market continued to grow… and Britannia grew along with it. the Government reposed its trust in Britannia by contracting it to supply large quantities of "service biscuits" to the armed forces. it crossed the Rs. Britannia mechanised its operations. the "Britannia Khao. Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent food brand of the country. But. In 1975.

more than a century after those tentative first steps.Top 200 Small Companies of the World'. And millions of consumers will savour the results. Having succeeded in garnering the trust of almost one-third of India's one billion population and a strong management at the helm means Britannia will continue to dream big on its path of innovation and quality. Britannia's fairy tale is not only going strong but blazing new standards. 27 . The company's offerings are spread across the spectrum with products ranging from the healthy and economical Tiger biscuits to the more lifestyle-oriented Milkman Cheese. happily ever after. and that miniscule initial investment has grown by leaps and bounds to crores of rupees in wealth for Britannia's shareholders. and The Economic Times pegged Britannia India's 2nd Most Trusted Brand. Today.

Australia. ready-to-cook gravies. UAE. consumers across the globe count on them to bring them all-natural. spices and a variety of accompaniments like pickles and papads. instant snack and dessert mixes. ice cream. Their deep understanding of culinary expectations and needs has resulted in many new and innovative products. Malaysia. They manufacture. UK. market and export a wide range of packaged foods to global markets that include USA. 28 . India’s silicon valley. Starting with the legendary MTR restaurant in Bangalore. Today. they now offer ''complete meal solutions'. frozen foods. Their investments in infrastructure and technology ensure that they can scale rapidly and bring these to market. Singapore. Japan and Oman. Their wide range of products include ready-to-eat curries and rice. wholesome and delicious food that is also convenient and no-fuss. New Zealand.MTR Foods Private Limited is amongst the top five processed food manufacturers in India.

29 .

plantation. consumption.5 billion) of world trade in this sector – this share is slated to increase to 3 per cent (US$ 20 billion) by 2015. Out of the country’s total agriculture and food produce.293 fruit and vegetable processing units. vegetable and spice processing units in unorganised sector. animal husbandry and fisheries. flour mills.6 million workers directly. The industry employs 1. several thousands of bakeries. 30 . horticulture.3 per cent to India’s GDP in 2003 and had a share of 6 per cent in the total industrial production. While the industry is large in terms of size.) constitutes around 60 per cent of processed foods. The highest share of processed food is in the Dairy sector. In comparison. it is still at a nascent stage in terms of development. It also includes other industries that use agriculture inputs for manufacturing of edible products. milled flour and rice. The Ministry of Food Processing. India is one of the world’s major food producers but accounts for only 1. It contributed 6. 171 meat processing units and numerous dairy processing units at state and district levels. the organised sector is relatively small. beverages and packaged drinking water. fruits & vegetable processing • Grain processing • Meat & poultry processing • Fisheries • Consumer foods including packaged foods. pulse mills and oil-seed mills. where 37 per cent of the total produce is processed.7 per cent (valued at US$ 7. Food processing is a large sector that covers activities such as agriculture. The Indian food processing industry is estimated at US$ 70 billion. spices. of which 15 per cent is processed by the organised sector.India’s Food Processing industry is one of the largest industries in the country . milk. etc. tea. Primary food processing (packaged fruit and vegetables. export and expected growth. Government of India has defined the following segments within the Food Processing industry: • Dairy. 5. It has a highly fragmented structure that includes thousands of rice- mills and hullers. 568 fish processing is ranked fifth in terms of production. The Indian food industry is estimated to be worth over US$ 200 billion and is expected to grow to US$ 310 billion by 2015. traditional food units and fruits. with around 516 flour mills. only 2 per cent is processed.

The organised sector processes an estimated 15 per cent of the total milk output in India. Its market size is estimated at US$ 450 million. which come under the organised sector.Segment -wise Analysis Dairy Sector India stands first in the world in terms of milk production . with the organized market at US$ 158. growing at a compounded annual growth rate of 4 per cent.49 million for (54000 tonnes in volume terms). • The cheese market is estimated at US$ 2. It is estimated to be growing at a rate of 8 per cent per annum • The dairy whitener market comprises of sweetened milk powders. growing at a rate of nearly 10 per cent per annum.4 per cent (in urban areas) and is currently valued at US$ 16 billion.1 per cent.2 billion. The market for dairy products is expected to grow at 15-20 per cent over the next three years. condensed milk and creamers. This is currently growing at 20 per cent 31 . Consumption of milk has registered a growth of nearly 8. There are 676 dairy plants registered with Government of India. The dairy sector ranks first in terms of processed foods with 37 per cent of the produce being processed. Traditional dairy products account for about 50 per cent of the total milk produced. The organized cheese market is dominated by processed cheese which accounts for 74 per cent market share • The ice-cream market in India is estimated at US$ 226 million. • Ghee is the most widely marketed and branded product with a nation-wide penetration of 24.The output is expected to be about 108 million tonnes (estimate for 2007). Milk and milk products contribute to a significant 17 per cent of the country’s total expenditure on food.

barley and millets like jowar. Grain Processing India produced nearly 209. Major products exported include fruit pulps.Fruits and Vegetables India produces the widest range of fruits and vegetables in the world. as compared to nearly 70 per cent in Brazil and 65 per cent in USA.18 million hectares. India’s production covers all major grains – rice. It ranks third in the production of grains in the world. The total area under fruit cultivation is estimated at 4. maize. There are about 516 large flour mills in the country. wheat. as well as about 10. However less than 2 per cent of the total vegetables produced in the country are commercially processed. Total rice milling capacity in the country is 186 million tonnes. The share of organised sector in fruit processing is estimated to be nearly 48 per cent. Meat exports stood 32 . Meat production grew at a CAGR of 34 per cent during the period 1999-2004 and stood at US$ 12. from 1.4 per cent of the world’s food and vegetable production. It is the second largest vegetable and third largest fruit producer accounting for 8. Mango and mango based products alone constitute 50 per cent of the exports.59 million hectares.000 pulse mills. concentrated pulps and juices and vegetables. Fruit production in India registered a growth of 3. grain processing is the biggest component of food sector. Primary processing constitutes 96 per cent with the remaining accounted for by the secondary and tertiary sectors.9 per cent during the period whereas the fruit processing sector grew several times faster at 20 per cent over the same period. With a share of 40 per cent. About 20 per cent of processed fruits and vegetables are exported. pickles.44 million in 2005-06. India’s installed capacity for fruits and vegetable processing nearly doubled during the . canned foods. Fruit exports have registered a growth of 16 per cent in volume and 25 per cent in value terms. Meat and Poultry Processing India has the largest number of livestock population in the world accounting for 50 per cent of buffaloes and 16 per cent of the goat population.32 million tonnes of grains.1 million tonnes in to 2.33 million tonnes . The total area under vegetable cultivation is estimated at 7. bajra and ragi. chutneys.

The fisheries sector contributes 1.03 billion in 2005. Beverages and Packaged Drinking Water Packaged Foods Packaged foods segment in India registered a growth of 8 per cent in 2005-06. The Soups market 33 . sheep. individual quick frozen products and minced fish products like fish sausage. pigs and poultry. 33 per cent of the sheep and 38 per cent of the goat population is culled for meat.5 per cent of the total exports.104 million in 2005-06. pastes etc.9 million tons) came from marine resources.4 million tons in 2004-05.5 kg compared with world average of 35. about 60 per cent (3.767 tonnes. Only 11 per cent of the buffalo population. 6 per cent of the cattle.CAGR of more than 10 per cent a year since 1998. Processed fish product exports include conventional block frozen products. There are over 369 freezing units with a daily processing capacity of 10. buffaloes. Frozen shrimp is the largest item in terms of value contributing to 63.5 kg.1 per cent to the country’s GDP. inland and aquaculture. The Fisheries sector in India has been classified into marine. Consumption per head of both fresh and processed meat is very low at 1. and frozen fish is the largest in terms of volume contributing to 34. Indian broiler industry has seen a rapid growth in the last few years . cakes. Fisheries India is the third largest fish producer in the world and second in in-land fish production. Consumer Foods Including Packaged foods. Most of the animals in India are not bred for meat. Currently fish processing is mostly targeted for export markets. Export of marine fish products touched of US$ 1. cutlets. The market for branded noodles is estimated at 230 million servings per year. Animals generally used for production of meat are cattle. Indian poultry meat market was approximately US$ 2. Exports showed an increase of 11. Of this. India’s fish production stood at a level of 6. Noodles/Vermicelli is the fastest growing category in this segment with a CAGR at 15 per US$ 0. partially or in subsidiary activities pertaining to the sector.48 billion during 2004-05.1 per cent in value realisation. This segment also provides employment to 11 million people engaged fully.266 tonnes and 499 frozen storage units with a capacity of 134.62 per cent.97 per cent in volume and 11.

at 857 million kgs. In the past decade the carbonated drinks market registered a healthy growth rate of 20 per cent.000 and estimated to grow at 18 to 20 per cent per annum.2 million in 2005-06. have a penetration of just 3 per cent in still small and nascent in India and is approximately US$ 14 million in value. Staples – Bread. 34 . India is the second largest producer of wheat in the world with an output of more than 70 million tonnes. The total size of this market is estimated at US$ 333 million by value and 85. Products like Tomato Ketchup and Jams currently have low penetration levels. Nearly 75 per cent of India’s production is exported and coffee exports stood at US$ 5. Salt and Sugar Bread is slowly coming to be a staple product consumed by people of all economic classes in India. non-carbonated drinks and hot beverages. growing at 7.7 million tons. Ketchups. Tea production in India has been growing at 1. This segment is estimated at US$ 155 million out of which fruit juices and fruit-based drinks account for US$ 60 million. driven by the positive changes in India’s consumer profile. The market for culinary products is estimated at US$ 475.5 per cent.000 tonnes by volume. Total bread production in the country in 2004-05 was estimated at 2. but are growing rapidly. White beverages account for 65 per cent of the market and brown beverages constitute the remaining 35 per cent India is the largest producer of tea in the world accounting for 28 per cent of the total global production. Wheat Flour. for example. About 55 per cent of bread production comes from the organised sector. India is also the fifth largest producer of coffee accounting for 4 per cent of the total production in the world. Hot beverages include health drinks such as white beverages (‘Horlicks’ etc) and brown beverages such as tea/coffee as well as branded drinks (Eg: ‘Boost’). Beverages The beverages market primarily consists of non-alcoholic beverages which can be broadly classified into carbonated drinks. however this category is estimated to be growing at 20 per cent per annum. The market size of organised carbonated drinks is estimated at US$ 119 million.2 per cent per annum and India is the fourth largest exporter of tea in the world with estimated exports of US$ 5 million in 2002-03. Branded ‘atta’ (wheat flour) is an important item in this segment with an estimated market of US$ 195 million.

There have been increasing investments not only by domestic firms and Indian government. India has a large number of research institutions like Central Food Technological Research Institute. it has a wide-ranging and large raw material base suitable for food processing industries. India has access to significant investments to facilitate food processing industry. It is also world’s largest producer of milk. Due to its diverse agro-climatic conditions. tea and pulses. 28. but also foreign direct investment Related and Supporting Industries The Indian food processing industry has significant support from the well developed R&D and technical capabilities of Indian firms. 35 . India also possesses the largest livestock population in the world with 50 per cent of world’s buffaloes and 20 per cent of cattle. Cost of production in India is lower by about 40 per cent over a comparable location in EU and 10-15 per cent over a location in UK. National Research and Development Centre etc.041 km coastline. Along with these factor conditions. National Dairy Research Institute.000 km of rivers and millions of hectares of reservoirs and brackish water. India has large marine product and processing potential with varied fish resources along the 8. to support the technology and development in the food processing sector in India. Central Institute of Fisheries Technology.India’s Strengths in Food Processing Favourable Factor Conditions India has access to several natural resources that provides it a competitive advantage in the food processing sector. India has the largest irrigated land in the world. India’s comparatively cheaper workforce can be effectively utilised to set up large low cost production bases for domestic and export markets. The semi-processed and ready to eat packaged food segment is relatively new and evolving. Presently a very small percentage of these are processed into value added products.

It is considering investing US$ 22. and also technology transfer • Zero duty import of capital goods and raw material for 100 per cent export-oriented units. In order to promote investment in the food processing sector. except in few cases. 100 per cent export oriented units • Government grants given for setting up common facilities in Agro Food Park. 36 . The national policy aims to increase the level of food processing from 2 per cent to 10 per cent in 2010 and to 25 per cent in 2025. The government has been developing agri-zones and the concept of mega food parks to promote food processing industry in India.41 billion during 2003-04 to about US$ 23.Government Regulations and Support The Government of India has taken several iniatives to develop the food processing industry in India.76 billion in 2005-06 • Allowing full repatriation of profits and capital • Automatic approvals for foreign investment up to 100 per cent. poultry and fish reduced to 8 per cent • Income tax rebate allowed (100 per cent of profits for 5 years and 25 per cent of profits for the next 5 years) for new industries in fruits and vegetables besides institutional and credit support • Allowing sales up to 50 per cent in domestic tariff area for agro-based. One indication of the importance that the sector receives is the hiking of the present outlay for the sector from US$ 19. Some of the initiatives include: • The level of institutional credit to be provided by banks and FIs has been increased from US$ 17.35 million the next year. Central excise duty on meat. several policy initiatives have been taken during recent years.97 million in at least 10 mega food parks in the country besides working towards offering 100 per cent foreign direct investment and income tax benefits in the sector. Customs duty on packaging machines reduced. more than twice the earlier amount.5 million in 2004-05 to US$ 41.

The following areas of investment have been identified by the Ministry of Food Processing: • Mega food parks • Agri-infrastructure and supply chain integration • Logistics and cold chain infrastructure • Fruit and vegetable products • Animal products. consumer foods and ready-to-eat foods • Wine and beer • Machinery and packaging 37 . The liberalised overall policy regime. provides a very conducive environment for investments and exports in the sector.• Full duty exemption on all imports for units in export processing zones. Investments Required in the Food Processing Sector India requires an investment of US$ 28 billion to bring the level of processing to 10-12 per cent by 2012. with specific incentives for high priority food processing sector. meat and dairy • Fisheries and sea food • Cereals.

the level of technology used in most of them is limited. planting material and lack of technology in improving yield. and a limited number of pork-processing units. This technology is important for extended storage of fruits and vegetables in making them conducive for further processing.These include addressing the current gaps in the value chain as well as leveraging on the various advantages the country provides. The country has only 3600 slaughterhouses. Nearly 90 per cent of the food processing units are small in scale and hence are unable to exploit the advantages of economies of scale. it requires certain competencies and success factors to fructify this potential. resulting in low exploitation of animal population. nearly 20 to 25 per cent of this production is lost in spoilage in various stages of harvesting. Hence there is a need to establish backward linkages with the farmers with the help of arrangements such as contract farming to improve the quality of the produce.Critical Success Factors for Manufacturers in this Sector The Indian food processing industry’s growth potential cannot be disputed. and the potential for growth offered by the sector. There is limited use of technology like pre- cooling facilities for vegetables. This is also true with land holdings. Investors in the sector need to be aware of these factors and build the required capabilities in their business to ensure success. Scale is a key factor in the processing industry. despite the presence of over 3600 licensed slaughter-houses in India. The key issues are poor quality of seeds. Ensuring good quality produce entails investments in technology and ability to sustain a long gestation period for the harvest. however. Some of the key success factors are discussed below. 9 modern abattoirs and 171 meat processing units. This is one of the reasons penetration of processed meat is extremely poor at 1 per cent in India. controlled atmospheric storage and irradiation facilities. These figures indicate both the need for scale. In the case of meat processing. Integrated Supply Chain and Scale of Operations While India ranks second in production of fruits & vegetables. Processing Technology Most of the processing in India is currently manual. Bringing in modern technology is an area that existing as 38 . Good quality production also results in better quality of processed fruits.

Nearly 90 per cent of the food processing units are small in scale and hence are unable to exploit the advantages of economies of scale. Ensuring good quality produce entails investments in technology and ability to sustain a long gestation period for the harvest. planting material and lack of technology in improving yield. Some of the key success factors are discussed below. Investors in the sector need to be aware of these factors and build the required capabilities in their business to ensure success. • Penetration of processed fruits and vegetables overall is at 10 per cent • The relative share of branded milk products especially ghee is still low at 2 per cent • Penetration of culinary products is still 13. However. Scale is a key factor in the processing industry. For example. Good quality production also results in better quality of processed fruits. These include addressing the current gaps in the value chain as well as leveraging on the various advantages the country provides.48 per cent while that for Americans is 4 per cent. this will make a clear difference in both process efficiencies as well as quality of the end product. The Indian food processing industry’s growth potential cannot be disputed. and a limited number of pork-processing units. This is one of the 39 . The key issues are poor quality of seeds. The country has only 3600 slaughterhouses. Hence there is a need to establish backward linkages with the farmers with the help of arrangements such as contract farming to improve the quality of the produce. however.3 per cent and is largely tilted towards metros • Consumption of packaged biscuits for Indian consumers is still low at 0. This is also true with land holdings.well as new investors in the sector can focus on. Increasing Penetration in Domestic Market Most of the processing units are export oriented and hence their penetration levels in the domestic market are low. there is increasing acceptance of these products amongst the urban population. 9 modern abattoirs and 171 meat processing units. nearly 20 to 25 per cent of this production is lost in spoilage in various stages of harvesting. India has a large untapped customer base and even a small footprint in the domestic market would enable the player to gain significant volumes. it requires certain competencies and success factors to fructify this potential. Integrated Supply Chain and Scale of Operations While India ranks second in production of fruits & vegetables.

This technology is important for extended storage of fruits and vegetables in making them conducive for further processing. These figures indicate both the need for scale. India has a large untapped customer base and even a small footprint in the domestic market would enable the player to gain significant volumes.48 per cent while that for Americans is 4 per cent However. Segment-wise Attractiveness of Processed Foods India presents several potential growth areas in the food processing sector. In the case of meat processing. 40 . Processing Technology Most of the processing in India is currently manual. despite the presence of over 3600 licensed slaughter-houses in India. and the potential for growth offered by the sector. there is increasing acceptance of these products amongst the urban population. controlled atmospheric storage and irradiation facilities. Bringing in modern technology is an area that existing as well as new investors in the sector can focus on. this will make a clear difference in both process efficiencies as well as quality of the end product. For example. three key segments have been identified that indicate high attractiveness. Increasing Penetration in Domestic Market Most of the processing units are export oriented and hence their penetration levels in the domestic market are low. • Penetration of processed fruits and vegetables overall is at 10 per cent • The relative share of branded milk products especially ghee is still low at 2 per cent • Penetration of culinary products is still 13.3 per cent and is largely tilted towards metros • Consumption of packaged biscuits for Indian consumers is still low at 0.reasons penetration of processed meat is extremely poor at 1 per cent in India. Based on our assessment of the potential growth opportunities and the enabling environment in terms of policy support. There is limited use of technology like pre- cooling facilities for vegetables. the level of technology used in most of them is limited. resulting in low exploitation of animal population.

offers plentiful availability of different types of fishes. In terms of raw material. accounting for 50 per cent of buffaloes and 16 per cent of the goat population. Initiatives like post-harvest management. India also ranks third in the world in production of fisheries. This is also highly unorganized at present. The Government has also taken up several initiatives to encourage investment and growth in this segment. Poultry. contributing to 10 per cent of global production. Meat and Fisheries Fruits and Vegetables Segment Several factors make the fruits and vegetables sector in India attractive from a market size and growth perspective. poultry and fisheries segment is another high potential area that has the advantage of several favorable factor conditions. 41 . These factors indicate the high growth potential in the sector. indicating the scope for organised players to make an impact. It is however nascent. India’s long coastline and network of inland waterways and lakes. Poultry and Fisheries Segment The meat. In the fisheries segment also.These are discussed below: Mass market basic foods – Fruits & Vegetables . with penetration level of about 10 per cent. The fruits and vegetables sector is growing rapidly at a healthy rate of 20 per cent per annum. India has the best supply of livestock in the world. Fishery resources in India are seriously under-utilised. As mentioned. the bulk of the livestock is not bred for slaughter. with the unorganised sector at 48 per cent share. There is a large potential for setting up modern slaughter facilities and development of cold chains in meat and poultry processing sector. Some of the key initiatives include: • Foreign equity participation up to 51 per cent allowed. logistics given priority in attracting FDI • Complete exemption from excise duty • Income tax rebate of nearly 100 per cent of profits for new industries in fruits and vegetables sector • Many fruits and vegetables processing industries eligible for automatic approval of technology upgradation Meat. India is a significant producer of fruits in the world. As mentioned earlier. Several policy measures have been undertaken by the Government to create the right stimulus for growth in this sector.

Ready-to-Make Foods. exports of some milk based products are freely allowed provided these units comply with the compulsory inspection requirements of concerned agencies like the National Dairy Development Board. Both these segments. this segment could 42 .These include: • Foreign Equity participation allowed in the fisheries sector subject to approval.5 per cent. Niche Market Foods . Bakery products is a related segment that has also been growing strongly. at about 7. have also been focus areas for policy support by the government. The segment is still highly fragmented. At the same time the share of organised players is still small. indicating the potential for growth for organised players. Export Inspection Council. freezing plants • Excise duty on meat poultry and fisheries reduced from 16 per cent to 8 per cent Mass Market Value-Added Products.Dairy. Foreign investment proposals on nearly US$ 210 million have been approved in the sector • Financial assistance given for setting up of processing infrastructure like IQF plants.Snack Foods. refrigerating transport equipment. • Foreign equity participation permitted to the extent of 51 per cent in dairy processing sector • De-reservation of many segments like ice-cream and ghee from small-scale industries • Excise duty of 16 per cent on dairy processing machinery fully waived for promotion of dairy processing • Subsequent to decanalisation. is amongst the highest in the food processing industry. with product acceptance largely restricted to the urban population. etc. The segment offers a high potential for value add – the level of processing value add. at 15 per cent. while indicating attractive growth potential. Packaged Foods This business is characterised by high volumes and low margins. Demand for dairy products is expected to grow at a healthy rate of 15 to 20 per cent over the next five years. Bakery India is the world’s largest milk producer and dairy is the one of the most promising segments of food processing. though organised players have nearly 55 per cent share of output. Penetration levels are yet quite low in this segment. Product innovation and branding play a key role in success of these products. As such. at 37 per cent.

whereby the farmer is contracted to plant the contractor’s crop on his land. He also agrees to harvest and deliver to the contractor a quantum of produce. The Government of India has been actively encouraging contract farming endeavours. The National Agricultural Policy envisages that ‘private sector participation will be Inputs Contract Farming The farmer is contracted to farm on his land and the produce of an agreed yield and quality is bought by the processor at an agreed price Terminal Markets Jointly participate through investments in a one-stop modern market offering grading. to enter and get established in India. Recently. to improve the yield and quality of the produce. Backward Integration – Emerging Business Model The generic value chain of the food processing industry from raw materials to retail to the an attractive option for multinational companies with established brands and strengths in innovation. based upon anticipated yield and contracted acreage at a pre-agreed price. is shown below. The Government has been supporting this segment through policy initiatives such as: • Automatic approval of foreign equity participation up to 51 per cent • Income tax rebate of 100 per cent of profit for five years and 25 per cent of profits for the next year for packaging of foods. Such integration is being driven by the manufacturers. different players across the value chain played the different roles and worked more or less independently. to garner mutual benefits. cold storage and banking facilities. the trend has been towards increasing integration and collaboration across players in the value chain. These links have led to two new models emerging in the sector – Contract Farming and Terminal Markets. who are looking to integrate backward and establish linkages with both raw material producers (farmers) and aggregators/logistics providers. and the farmer. The food processor provides inputs in terms of technology and training to the farmer. Contract Farming Contract Farming is an agreement between the food processor (contractor). electronic auctioning. Traditionally. 43 . sorting. This results in a win-win situation that generates a steady source of income for the farmer and eliminates supply shocks and assures good quality farm inputs which are crucial for the processor. quality testing. who is typically a large organized player. These are further discussed below.

Nagpur. There are plans to set up such markets in eight cities across five states. The cities being considered are Mumbai. are depicted in the figure below: The Government of India is looking to promote terminal markets. Nashik. as a means of integrating domestic produce with retail chains. often in a metropolitan area. Chandigarh. or packed for export. at a cost of US$ 131 million. Through transfer of technology and providing good quality seeds and inputs to farmers. or to the processor. which went a long way in getting the farmers’ buy-in and ensuring success of the venture.FOOD Processing Encouraged through contract farming and land leasing arrangements to allow accelerated technology transfer. It thus offers different options to farmers under a single roof. Here there are different options for disposing off the produce. and are linked to different collection centres (spokes) that are located close to the production centres. so as to meet the demands of its plant. as well as the key activities and corresponding infrastructure requirements at each level. Bhopal and Kolkata. 44 . terminal markets operate on a hub and spoke model where the markets form the hubs. Rai. The typical value chain structure for a terminal market.Patna. or even stored for disposal at a future date. A key aspect of Pepsi’s approach was its partnership with local bodies such as the Punjab Agricultural University and Punjab Agro Industries Corporation Limited. Typically. Pepsi was able to substantially increase both quality and quantity of tomato production in the area. It can either be sold to the end consumer. that serves as an assembly and trading place for agricultural commodities. capital inflow and assured market for crop production’ Successful Contract Farming in India A good example in this area has been Pepsi Foods’ experience with contract farming for its tomato processing plant at Hoshiarpur in Punjab. Terminal Markets A Terminal market is a central site.

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etc. • The advertisements like. chicken madras. Excise duty is now ZERO % on RTE and 100 % tax deduction for the first 10 years for new units. upma. mutter paneer. Indian Government is providing more infrastructure for this sector. potato-peas. Today. nutritional adequacy. well packed in cardboard printed boxes of small book size and carry about 300 grams of 46 . Now the time is to provide better food processing & its marketing infrastructure for Indian industries to serve good quality & safest processed food like ready to eat food. on the shelf and at room temperature. the second largest producer of wheat. mutter mushroom.India has made lot of progress in agriculture & food sectors since independence in terms of growth in output. "Hungry Kyaa" are adding zest to the market by popularizing such food items which are pre-cooked and free from any preservative. palak paneer. Therefore. shelf stability. cashew nuts. mutton curry. and yet have a long shelf life of over 12-months. • Such ready to eat meals have been especially given to soldiers in army of many countries who require carrying their rations while on war front or while located far away from their main unit. These food items are normally selling in pouches. and mutton pulav. the food item pouch is either put in microwave oven to warm it or keep in heated water for a few minutes and then serve to eat. fish curry. sugar and fish and the third largest producer of tobacco and rice. fruits. These foods meet the specific needs of convenience. distribution to the centers and have become very popular after the year 2002. chicken kurma. The pioneer introduction of retorting technology has made the sale of ‘Ready-to-Eat’ food products commercially viable with great taste. • The retorting or sterilization process ensures the stability of the Ready-to-Eat foods in retort pouches. The application of sterilization technology completely destroys all potentially harmful micro-organisms. a white revolution. yields and processing. dal makhnil. thereby making sure that the food product has a very long shelf life of over 12 months and needed no refrigeration. This allows manufactures to bring down their prices & spreads its flavors to the world. rajma masala. It is opening a new window in world scenario as far as taste & acceptance is concerned. storage. chicken curry. depending upon the requirement of the users and the weather conditions. vegetable pulav chicken pulav. a yellow revolution and a blue revolution. • When customer needs to eat. The retort processed foods do not require rehydration or cooking and can be consumed straight from the pouch with or without pre-warming. Some of the mouth-watering dishes in retort pouches include sooji halwa. CONCEPT • Ready to Eat Meals like already cooked or prepared lunch & dinner are relatively new products which came in market only a few years back and are now sold through retail general stores in especially made sealed aluminum laminates. vegetables. India is the largest producer of milk. It has gone through a green revolution. coconuts and tea in the world.

cooked food at a price of about Rs. 40 to 200 in foreign market depending upon the type of dish packed. Compressed air or additional steam is introduced during the processing cycle 47 . • Main motivation for these ready to eat foods is fast growing foreign market. • Women wanting to spend more time out of the kitchen. • Cost effective in comparison to the Indian cuisine served by the restaurants in foreign countries. • Shelf. WHY READY TO EAT FOOD • Globalization of Indian food and its culture are the core factors for popularization of ready to eat foods. • More working bachelors staying away from homes. The retorts use water or steam/air combination as processing medium to heat the container/packages. • Quality. One packet of vegetable dish is normally sufficient for one meal for three persons and therefore falls in economic zone of consumer’s preferences. TYPES OF READY TO EAT FOOD Veg Food Non Veg Food Alloo Matar Chicken Curry Palak paneer Butter Chicken Sarso Ka Saag Karahi Chicken Chana Masala Mughalai Chicken Kadi Pakora Mutton Masala Cheese Tomato Mutton Korma Dal Makhani Karahi Mutton Rajma Masala Mutton Biryani Deserts Gajar Ka Haluaa / Sugi Ka Haluaa / Milk Kheer PLAYERS IN READY TO EAT FOOD • MTR • Kohinoor Foods • ITC • Haldiram • Tasty Bites RETORT & ITS PACKAGING The water RETORT is an equipment or vessel or sterilization module through which steam (at 130 degree centigrade for 25 minutes) is applied on food products packed in retort pouches. • Retail outlet culture is now growing rapidly in India. Taste and Flavor of these foods remains as good as fresh up to the expiry of these foods are at least 12-18 months.

taste etc. money in terms of quality and variety. easy to open. 3990 billion or 91. MARKET & ITS GROWTH • The popularity of ready to eat packed food now is no longer marks a special occasion. • It requires less disposal & storage space. light weight. Retort pouches is a flexible packaging material that basically consist of laminates or bounded layers of different packaging films of Polyster-Nylon-Aluminium-polypropylene that can withstand high process temperature & pressure. • Ready to eat packaged food industry is over Rs. Gulf & South Asian Countries with the growth rate of over 150 % per annum. Export & Expected growth. it is important that food has good shelf life so that it can be made available at far off places too and then can be conveniently consumed also. • Euromonitor International. • Low oxygen & moisture permeability. That is the kind of ambient temperature prevalent in the thermal sterilization of provide the overpressure (any pressure supplied to the retort in excess of that which can be normally achieved under steam at any given retort temperature). 1280 billion or 29. Peoples want value for time. Overpressure is important in preventing package damage or loss of seal integrity (like bursting). There is lesser time to spend in cooking food themselves and so ready to eat foods are preferred. • Shelf stable for longer time & requires no refrigeration. • Processed food market in India accounts for 32% that is Rs. Canada. 48 .66 US $. • It requires less energy for sterilization. 4000 crore or 1 billion US $ and it is growing at the rate of 20 % per annum. texture & less nutrients loss. • The food processing industry is one of the largest industries in India and it is the ranked fifth in terms of Production. ADVANTAGES OF RETORT PACKAGING • Pouch laminates permits less chance to overcook during the retorting thus products having better color. • Ready to eat food market is developing specifically in UK. Their most important feature is that they are made of heat-resistant plastics unlike the usual flexible pouches. • Sun light barrier. during the heating process. This makes the retort pouches unique which are suitable for the processing of food contents at temperatures around 120 degrees Celsius. To get the food of different cultures.4 billion US $ in a total estimated market of Rs. a market research company says that amount of money Indian spend on ready to eat snacks & food is 5 billion US $ in a year while on abroad Indian or Indian subcontinents spend 30 billion US $ in a year. Consumption. USA.

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East Delhi. Gurgaon. Areas which I covered for my research work are South Delhi. West Delhi. The research was done mainly through questionnaire and the population size was taken about 200. Outlets which I visited were: • Big Baazar • More • Spencer • Vishal Mega Mart • Big Apple • Reliance Fresh Malls: • EDM • CSM • Great India Place • Pacific • Ansal Plaza • Shopprix • Shipra Mall • City Square 50 . Noida and Ghaziabad.For my research the area covered by me was Delhi/NCR and the target group was mainly people from 25 to 50 years of age.

51 .000-80.000 are more frequent buyer of ready to eat food.• Ambience • V3s INCOME-CONSUMPTION GRAPH IN READY TO EAT SECTOR Here I found that the people whose income ranges from 40.

WEEKLY CONSUMPTION ON AGE BASIS People of age group 25-35 buy more frequently than any other. 52 . SALES PATTERN OF READY TO EAT FOOD IN VARIOUS FORMATS The sales of Ready to Eat food is more in Malls than any other formats.

soybeans etc. After my research I found that the taste and trends of areas in NCR are quite different. They don’t mind going for these packaged foods rather than cooking three to four times a week.The main reason why people buy Ready To Eat Food is due to its time saving factor. The taste and trends also varies from age group to age group and from profession to profession. So I found that even in the kirana shops which are not of organized retail type have also stated keeping these kinds of stuffs. When I talked with these kirana shops owner they also told that the demand of these types of food products are increasing and people asks for different varieties of package and frozen foods. ITC and some foreign brands like Kraft foods and 53 . The main brands I saw in these stores were MTR. Reliance Fresh etc. When I communicated with them I found that there eating habits are changing as they have less time to cook food or they have surplus money so their spending habits for these packaged foods is changing. When I went to the organized retail types like Big Bazaar. cutlets. I found that they have many racks of these foods as well as different sections for frozen foods also which included frozen meats. The people in south and west delhi are basically somewhat in higher income group and they don’t mind going in for packaged foods instead of cooking the food at their home. fried fishes.

The fmcg companies here enjoy high volume of sales. 54 . The income of people are not that high so they prefer to cook the food at home and not spending much on these costly food items. The people here are mainly middle class or students. When I visited east delhi the trend here was quiet different from which I saw in western and southern delhi. So I can say that the FMCG companies are not finding it much difficult in selling these food products. The salary package offered by the MNCs are also high so they don’t mind paying much for their convenience.Campbell. So my conclusion for this area is that the FMCG companies have a potential market and a dissent customer base for expansion of these kinds of food items. But in Malls I found that organized retail shops are keeping these food products. But there sale is low. So my conclusion for this area is that this market area does not have much potential for these food products and FMCG companies still has a long way to go ahead. During my visit to Gurgaon I found that the people are mainly working class and BPO culture flourishing there. There I saw many small eating outlets supplying foods to these students at much cheaper rate to these students. The students also are basically from management and engineering colleges and are of higher spending capacity than that of east delhi. Leaving behind certain sectors of Noida and Ghaziabad rest all areas this packaged food is a big hit and shops and kirana stores and organized retail outlets are keeping every variety and brand of these food items. Talking about the kirana stores and orgainsed retail of this area I found that they are having a higher sales volumes as compared to Delhi region because the people here buy these items due to there needs not for there delight. The other half of the population was also preferring to cook the food at their home. In BPOs also the timings of Husband and Wife don’t mach so they alone prefer to buy these foods instead of going for cooking. business man and higher and middle income people both. Now coming on to the Noida and Ghaziabad region here I saw a mix bunch of people students. Being in a city where the trend of double income has developed and both husband and wife are working and busy throughout the day in the office so they are going in for these packaged foods. When I talked to them I got an idea that around fifty percent were not aware what is ready to eat foods. professionals. But the people are keen in buying Indian brands. When I went to the kirana stores of these areas there also I found that there is low demand of these products.

55 .

The awareness level to these foods also is very low.From my research I found that the main reason for purchase of Ready To Eat food is their time saving factor. The taste and the nutritional value is not so up to the mark. Also the availability is limited mainly to the retail outlets in Malls or Big shops. Increase the variety of the products in Chinese section. since most of the people were not aware of ready to eat foods. Suggestions for FMCG companies: 1. 2. 3. Organize sum awareness programs so that mass could know about these products. Also since this sector is heavily dependent upon the agriculture industry so the continuous availability of raw materials is also a major challenge. 56 . Increase the visibility of these products in organized retail outlets.

Company may also increase the advertisements. 10. Name: 2. Organize some workshops in schools so that children also get to know about these products. More than 50.000 c. Occupation: 3.000 4.4. May also launch a new product range for price conscious customers. 6.000 – 50. 7. Address: 57 . Should try to increase these products so that it can reach every locality and could be consumed by the masses.000 b. less than 10. 5.000 – 25. 25. Questionnaire 1. Monthly Income: a.000 d.

Others 11. No 10. Time saving factor b. Yes b.5. Nutrition Value d. Taste c. If yes what made you buy these packaged foods? a. Once in a week b. More than three times a week d. Others 9. If You are not cooking at home what do you prefer? a. Buying Ready to Eat Food c. Have you ever had ready to eat foods? a. How many times you go for foods not made at home? a. others 7. What do you see before buying the food items? a. Taste b. Phone no.: 6. Price c. No 58 . Yes b. Nutirition value d. None 8. One to three times a week c. Would you want to repeat your buying? a. Going To Restaurant b. Eating at roadside vendor d.

No 13. No 59 . c. Can’t Say 12. Are these foods easily available in your locality? a. Doyou find it fully safe for your children? a. No 14. Yes b. Yes b. Yes b. Areyou price sensitive buyer? a.

60 .