Food Processing Industry in India 2009

Food Processing Industry - India
December 2009
Executive Summary
Food processing industry in India is valued at USD 70 bn and is growing at a 14% annual rate
Dairy products, fruits & vegetables and meat processing are the most attractive segments
Market Government of India is leading from the front to ensure multi-fold growth in this segment
Exports in food processing are expected to grow further in the near future
Drivers: Challenges:
– Increasing consumer spend on – Lack of integrated supply chain and scale
processed foods of operations
– Competitive edge in food – Limited use of technology in food
Drivers & processing processing
Challenges – Government support – Low level of penetration in domestic
– Growth in food processing exports market
– Adoption of contract farming – High taxes on branded agricultural
– Increasing food retailing in India products
– Growth in terminal markets
The sector is highly competitive with many foreign players and large unorganized segment
Major Domestic Players Major Foreign Players
Competition •Dabur Foods •Haldirams •Agro Tech Foods •PepsiCo
•Gits Food Products •MTR Foods •Unilever •Nestle
FOOD PROCESSING INDUSTRY – INDIA.PPT 2

•Market Overview
•Drivers & Challenges
•Government Initiatives
•Competition
•Key Developments

Food processing is a large sector that covers many activities
like agriculture, horticulture, animal husbandry etc.
Processed milk products like butter, cheese, ghee, ice
Dairy Sector cream etc.
Raw fruits and vegetables, pulps, canned fruits, juices and

Fruits & Vegetables
pickles
Meat & Poultry Cattle, buffaloes, sheep, pigs and poultry
Food Processing
Fisheries Marine fisheries, frozen and minced fish products
Packaged Foods Noodles, vermicelli, tomato ketchup, jam , soups etc.
Beverages Carbonated drinks, fruit-based drinks and hot beverages
Staples Sugar, wheat, bread, flour and salt

Food processing industry in India has huge untapped
potential and offers scope for large investments
Market Overview Market Size & Growth
•Industry is valued at USD 70 bn and is growing USD bn
at 14% annually 120 +14% 104
•India is one of the top producers of milk, 100 91
80
pulses, sugarcane and tea in the world 80 70
60
•Government has taken major initiatives
40
towards ensuring multi-fold growth in this
20
sector that has an investment opportunity of
0
about USD 24 bn by 2015 2009 2010e 2011e 2012e
•Mega Food Parks are coming up in India to Market Penetration of Segments
integrate the supply chain and promote food
processing
Dairy Sector 37%
•States like Andhra Pradesh, Uttar Pradesh and
Madhya Pradesh are highly attractive for food Fruits & Vegetables 10%
processing industry
Meat & Poultry 6% 10% Range 6 – 10%
•Huge foreign direct investments have been
made in 2007-08 totalling ~USD 143 mn Fisheries 12%
Packaged Foods 3%
Source: Ministry of Food Processing Industries, IBEF articles & KPMG Research

Dairy products and fruits & vegetables are the most
attractive segments for investments
Dairy Products
• India is the leading producer of milk in the world, about 108 mn tonnes in 2007
• ~37% of the produced milk is processed and ~676 dairy plants are registered with the government
• Growing segments
Branded butter market is valued at USD 133 mn and is estimated to grow at 8-10% per annum Growth
Cheese market is valued at USD 110 mn and is growing rapidly in urban areas at about 15% Rate
+15%
Ghee is growing at a rate of 8% annual rate with 24.1% penetration across country
Ice cream market is valued at USD 199 mn in India and is growing at 20% annual rate
• Other emerging segments include are Ultra Heated Treatment (UHT) and flavored milk
UHT milk is gaining popularity and the market is estimated at USD 33.4 mn
Fruits and Vegetables (F&V)
• Globally, India is second and third largest producer of vegetables (100 mn tonnes) and fruits (50 mn
tonnes) respectively
India accounts for 8.4% of the world’s F&V production
Growth
• Area under fruit cultivation is about 4.8 mn hectares and that of vegetables is 7.59 mn hectares Rate
+20%
• Less than 2% of total vegetables produced are processed commercially in India
• Share of organized sector in fruits processing is ~48%; ~20% of processed F&V are exported
Mango and its other products alone constitute 50% of the total F&V exports
Source: Press articles; Ministry of Food Processing website; IBEF & KPMG research report “Food Processing- market & opportunities”, Apr 2008

Meat processing is less penetrated in India and fisheries are
majorly export oriented
Meat & Poultry
• India has the largest livestock population (470 mn) globally (50% of buffaloes and 16% of goats)
• Processing of meat in India is licensed under MFPO (Meat Food Products Order) act, 1973
Registered under MFPO are 3,600 slaughter houses, 9 modern abattoirs and 171 meat processing units
• About 5 mn tonnes of meat is produced per year in India Growth
Per head consumption of fresh and processed meat is as low as 1.5 kg in India against world average of 35.5 kg Rate
+10%
• Majority of animals in India are not bred for meat, the processing percentage for meat is as follows
– Buffaloes (11%), Cattle (6%), Sheep (33%), Goat (38%)
• The annual poultry production in India is 450 mn broilers and 33 bn eggs growing at 20% and 16%
Major poultry exports are to Maldives, Oman , Japan, Malaysia, Indonesia and Singapore
Fisheries
• Fisheries sector is classified in to marine, in-land and aquaculture and India ranks third in fish
production in the world, it also ranks second in in-land fish production
• About 60% production comes from marine resources and fish processing in to canned and frozen Growth
forms and is primarily targeted for export markets Rate
Frozen shrimp contributes to 34.62% of exports in terms of volume and 63.5% in value +20%
• India has about 369 freezing units with daily processing capacity of 10,226 tonnes and 499 frozen
storage units with a capacity of 134,767 tonnes

Packaged foods, beverages and staples are restricted to
urban areas, characterized by high volumes and low margins
Packaged Foods
• Packaged foods primarily includes ready-to-eat snacks, chips, namkeen, bakery products etc.
India has around 60,000 bakeries; 20,000 traditional food units
• Growing segments
Growth
Noodles growing at over 15% annually and branded noodles is estimated to be 230 mn servings/yr Rate
Soups market is at a nascent stage and is valued at USD 14 mn +8%
Confectionaries market pegged at USD 484.3 mn while biscuit market at USD 373.4 mn growing at 5.7% & 7.5%
Biscuit market is estimated to be USD 373.4 mn and is growing at 7.5%
Culinary products is growing at 18-20% per annum, also tomato ketchups and jams at 20% per annum
Beverages
• Primarily comprises non-alcoholic beverages like aerated soft drinks, fruit juices and hot beverages
• 100 plants across India under aerated soft drinks segment and exports in soft drinks are valued at Growth
USD 156 mn per annum; attracted highest foreign direct investments valued at more than USD 1 bn Rate
+27%
• India is the largest tea producer in the world accounting for 28% of global production and 5th
largest coffee producer accounting for 4% of total production in the world
Staples
• Second largest wheat producer globally with an output of 70 mn tonnes valued at USD 195 mn Growth
• Bread production is growing at 7.5% and organized market accounts for ~55% of the market Rate
+85%
• 10,000 pulse mills with 14 mn tonnes milling capacity per annum

•Market Overview
•Competition
•Key Developments

Drivers & Challenges
Drivers
Increasing consumer spend on
processed foods
Challenges
Competitive edge in food processing Lack of integrated supply chain and
scale of operations
Government support Limited use of technology in food
processing
Growth in food processing exports Low level of penetration in domestic
market
Adoption of contract farming High taxes on branded agricultural
products
Increasing food retailing in India
Growth in terminal markets

Rising disposable income and increasing spend on food will
boost the processed food market in India
Increasing consumer spend on processed foods Impact
• In the last 5 years an increase in per capita disposable income of 8% has led to an increase in
per capita consumption expenditure on food by over 20%
• Consumption of primary and secondary processed foods has grown rapidly over the past few
years owing to the following factors:
Four-fold growth in size of households in middle to very rich segment
Increase in the youth (age group 15 – 25) in the country
Growing migration of population from rural to urban India
• In agro-products, fruits & vegetables is the largest consumption category accounting for 50% of
the total consumption
Expenditure on Food by Indian Consumers
Milk & milk products,

meat & marine products
30%
Others
34%
70%
66%
Agri-products Primary & secondary
processed foods
Source: FICCI - E&Y study “‘Flavours of Incredible India – Opportunities in the Food Industry’, Oct 2009

Low cost of production, favourable conditions and
government support gives India a competitive edge
Competitive edge in food processing Impact
• India has a competitive edge in food processing as it has the largest irrigated land and livestock
population in the world
• India is also the largest producer of milk, tea and pulses and is one of the leading countries in
the production of fruits and vegetables
• India is a favorable market to set-up large low cost production base with effective utilization of
available cheap workforce
• Cost of production in India is 40% lower than many of the locations in Europe and about 10-15%
lower to that of United Kingdom
Government support Impact
• The government of India has taken several initiatives to promote investments in this sector
• 100% FDI as well as technology transfer is allowed in this sector and grants are given by the
government for setting up common facilities in Agro Food Park
• Institutional and credit support is provided for new industries in fruits & vegetables and income
tax rebate is allowed for 100% of profits for first 5 years and 25% for next 5 years
• Central excise duty on meat, poultry and fish is reduced to 8%, customs duty on packaging
machines has also fallen
• Custom duty on food processing machinery and its parts is reduced from 7.5% to 5%
• Custom duty on packaging machinery is reduced from 15% to 5% and on reefer vans from 20%
to 10%
• Dairy machineries are completely exempted from central excise duty
Source: Ministry of Food Processing Industries, India; Indian Brand Equity Foundation report 2008

Exports of processed food and the adoption of contract
farming will drive the market
Growth in food processing exports Impact
• Exports from India in food processing sector is growing every year at a significant rate
• Processed foods contribute to about 5% of the total exports from India
• Targets set by the government are will be a major driving force for the market
Food Processing Exports Growth in Volume
mn metric
+15%
tonne Fruits & Vegetables
4 3.22 3.26 3.65
2.08 1.97 1.72 Dairy, Poultry &
2 1.48 2.00
1.29 0.79 1.30 0.67 1.74 1.93 Meat Products
0 1.26
2003-04 2004-05 2005-06 2006-07 2007-08
Adoption of contract farming Impact
• In contract farming
Food processors gets into an agreement with the farmer who is contracted for planting a particular crop and
produce an agreed yield of certain quality at a pre-agreed price
The food processor provides the required support in terms of technology and training to the farmer so as to
get the agreed results
• This eliminates the supply shocks for farmer and generates steady source of income and assures
good quality farm inputs, to the processor, which is crucial in this business
• This model minimizes risks for processors and producers and is expected to lead to a larger
demand for processed food due to the enhancement of quality of the food processed
Source: APEDA (Agricultural and Processed Food Products Export Development Authority) India report; Financial express “Contract farming did no good to farmers, says
IIM-A study”

Growing food retail formats and outlets in India is a major
driving force for processed food products
Increasing food retailing in India Impact
• The Indian consumers have various outlets in the neighbourhood to purchase food products
• Food retailing formats are growing in India ranging from neighbourhood stores, supermarkets,
hypermarkets to cash and carry stores
• All these outlets contribute to the growth in food trade and hence many corporate houses are
moving to food retail
• HUL, ITC and Dabur has already forayed in to this space and are planning to increase their
outlets and have a pan-India coverage
• Established players are planning to tap the backward linkages and expand their geographies
Players include Reliance Fresh, More, Spencer’s Daily, Food Bazaar, Subhiksha, Food World, Nilgiris etc.
• The food retail business in India is growing at a 30% annual rate, thereby providing huge scope
for food processing players to reach end-users
• Government of India is also promoting this business by allowing 51% FDI by single brand
companies and in future plans to increase this limit in order to promote food processing
industry
• There is also a growing trend of franchising food retail outlets in India especially the quick serve
joints like KFC, McDonald’s, Pizza Hut, Nirula’s etc. which enables deep penetration in less time
Source: Chilli Breeze article “Food Retail in India – Growth, Growth and More Growth”; Business Line “Food retailing needs to perfect franchise recipe “, Apr 2009

Development of terminal markets creating linkages with
aggregators and logistics providers
Growth in terminal markets Impact
• Terminal market is an assembly and trading place for agricultural commodities
The produce is either sold to end consumer or food processor, packaged for export or stored in a cold
storage for future disposal
The infrastructure of terminal markets include electronic auctioning facility, pre-cooling, cold storage,
ripening chambers, grading packaging facilities, processing units and other allied infrastructures like banks,
post office etc
These terminal markets operate on a hub and spoke model with market being the hub and collection centers
which are located close to the production areas act as spokes
• In order to integrate the domestic produce with retail chains the government of India is
promoting terminal markets
It plans to set-up 8 terminal markets with an investment of USD 131 mn
– Cities under consideration are Mumbai, Nashik, Nagpur, Chandigarh, Rai, Patna, Bhopal and Kolkata
21 more terminal markets are proposed for future
• This will allow the market to develop due to stronger integration between food producers and
processors
Handling Capacity
Terminal Markets Project Cost (USD mn) Area Required (Acres)
(Metric Tonne)
Mumbai 43-54 3000 125
Nashik 13 1000 100
Nagpur 12 750 100
Source: Maharashtra State Agricultural Marketing Board “Projects: Terminal Markets”, IBEF and other press articles

Small scale of operations and limited use of technology are
the major challenges for this sector
Lack of integrated supply chain and scale of operations Impact
• Due to lack of proper value chain for food processing in India, produce worth USD 10 bn is
wasted every year in India
• Nearly 20-25% of the fruits & vegetables production in India is lost in spoilage at various stages
of harvesting
• Lack of technology, poor quality of seeds and planting material is one of the reasons for this,
scale of operations is also a key factor
• About 90% of the units are small scale and hence does not reap the benefits of economies of
scale, this also applies to land holdings
• A proper integrated supply chain is needed along with scale of operations to improve efficiency
in this sector
Limited use of technology in food processing Impact

• Food processing in India is majorly a manual process with limited use of technology like pre-
cooling facilities for vegetables
• Technology plays a major role for storing fruits & vegetables for a long period in order to enable
further processing
• There are about 3600 licensed slaughter-houses in India but due to lack of technology, meat
processing is low in India considering the large animal population available in the country
• India has to bring in modern technology for food processing in order to improve process
efficiency and quality of end product
Source: IBEF report 2008; igovernment article “India to set up 30 food parks”, May 2008

Low penetration levels in domestic market and high taxes
on branded products affects this industry
Low level of penetration in domestic market Impact
• The penetration levels in the domestic market are low in India because majority of processing
units are export oriented
• Share of ghee in branded milk products is still as low as 2%, penetration of culinary products is
13.3% with major emphasis is given to sales in cities
• Packaged biscuits consumption is as low as 0.48% in India while it is about 4% in the US
• India has large untapped domestic potential
Processing % of Food Produced Across Countries
%
80% 78%
80 70%
60 40%
40 30%
20 5%
0
Malaysia Philippines Brazil China Thailand India
High taxes on branded agricultural products Impact

• Besides 12.5% of value-added tax, branded processed products are subject to a 2% central sale
tax and also attract local entry tax and octroi up to 4%
• On the other hand, unbranded products are in many cases exempted from tax or often taxed at
a 4% confessional rate, this is adversely affecting the competitiveness of the sector
Source: Economic Times “Food processing can create more jobs”, Jul 2009; igovernment article “India to set up 30 food parks”, May 2008; Yahoo news “High taxes hitting
food processing sector: Assocham” Nov 2009

•Market Overview
•Competition
•Key Developments

Key Initiatives
Vision 2015
Manpower Training Financial Support
Trends
Tax Benefits Mega Food Parks Scheme

Government expects a 100 fold growth in food processing in
line with the high growth experienced by service sector
Government Initiatives
• The main priorities for the government in this sector is to encourage and increase food processing activities
• It expects to create 10 mn jobs by 2015 in the food processing sector in India
• It plans to promote partnership between agricultural and industrial sectors, to help farmers move up the
value chain
• Tripling the size of industry from the current USD 70 bn to nearly 210 bn
• Raising the level of processing of perishables from 6% to 20%
Vision 2015
• Increasing value addition from 20% to 35%
• Enhancing India’s share in the global food trade from 1.5% to 3%
• Provides an investment opportunity of USD 24 bn

• Plans to set up a dedicated venture capital fund to support the investment
requirements
The venture capital fund would be set up with a corpus of about USD 250 mn by Apr 2010
Financial
Fund could be either a government initiative or under public-private-partnership model
Support
• Participation from NABARD, IDBI, SIDBI, other banks and the private sector is
expected
• Plans to approach RBI to include food processing under the priority sector
lending
Source: Ministry of Food Processing India; Economic Times Interview with Food-processing minister “Food processing can create more jobs”, Jul 2009; The Financial
Express “Food processing min plans Rs 1,200-crore VC fund” Sep 2009

India to emerge as regional hub for food processing through
the Mega Food Parks Scheme by the government
• Government plans on establishing 30 mega food parks in all states enabling
integration of the fruit and vegetable sector from farm gate to the retail outlet
Mega Food Operations towards developing 10 parks has begun
Parks Scheme All parks are expected to be established by 2015
(MFPS) • Government is supporting these parks by providing a portion of total capital
investment subject to a maximum of USD 11 bn
• It also plans to extend special economic zone benefits to food parks
• Government is planning to declare a tax holiday for all food processing units
• It also plans to extend 100% depreciation benefit for infrastructure projects in
Tax Benefits
the sector from first year onwards
• Plan for rationalization of duties for the industry
• Government plans to design a curriculum for skill development programmes in

consultation with HRD ministry, Labour ministry and institutions
• Plans to collaborate with aid agencies like World Bank and Asian Development
Manpower
Bank to raise funds for running large-scale skill development programmes
Training
• Prepare a blueprint for Skill Development Mission and collaborate with
Industrial Training Institutes (ITI) to focus on training the workers at various
levels of food processing
Source: Ministry of Food Processing India; Economic Times Interview with Food-processing minister “Food processing can create more jobs”, Jul 2009

•Market Overview
•Competition
•Key Developments

Indian food processing sector is highly competitive with
many foreign players in the market
Competition Segments Share
• A highly competitive market with many domestic
Other products Meat, Fish,
players and their MNC counterparts fighting for
24% Fruits,
market share Vegetables,
Competitive pricing, expansions, aggressive advertising 40%
Oil
campaigns and efficient packaging are the strategies used Dairy Products 5%
by firms to gain market share
11%
• More players are planning to tap the mass market in Staples
20%
basic foods like fruits & vegetables, meat & poultry
Beverages
and fisheries
Food Processing Units in Organized Sector Segment-wise Organized Share
Flour Mills 516
Packaged Foods 80%
Fish Processing 568
Food and Vegetable 5293 Beverages 77%
Meat Processing 171 Staple Foods 50%
Sweetened and Aerated Water 656
Fruits & Vegetables 48%
Milk Products 266
Sugar Mills 429 Dairy Sector 15%
Solvent Extract 725
Meat & Poultry 5%
Rice Mills + Modernized Rice Mills 174,296
Note: Based on latest available data from the Ministry
Source: D&B articles “Emerging SMEs of India- Food Processing”; IBEF report “Food Processing- market & opportunities”, Apr 2008; Press articles

Major Domestic Players (1/6)
Company Business Description

• Nusli Wadia group and Groupe Danone, a French food company, share 48.5% promoter
holding equally in Britannia
Britannia
• Leading player in organized biscuit market with about 30% market share
• Plans to strengthen its position by launching new products and improving volumes and
introducing variants of the existing products
Financials:
• Annual sales turnover of USD 565.2 mn in 2008
• Dabur foods is a 100% subsidiary of Dabur India. Started in 1997 with the launch of packaged
fruit juices
Dabur Foods
• The company caters to beverages and culinary segment with products including fruit juices,
lemon drink , cooking pastes, coconut milk, tomato ketchup, corn flour etc.
• Major brands include Real, activ, BuRRst, HOMMADE, LEMONEEZ, CAPSICO etc.
• In addition to the retail sales, Dabur Foods is looking at increasing institutional sales to
hotels, restaurants and caterers
Financials:
• Turnover of Dabur Foods in 2005 was USD 27.9 mn
Source: Company Websites and Articles Note: This list is not exhaustive


• Founded in 1963 as a small family enterprise and caters to snack food and dairy segment
Gits Food Products • Products include snack mixes, dessert mixes, papads, namkeen, ready-to-eat meals, desserts,
biscuits and cookies, and dairy products
• It has two factories in Pune District of Maharashtra
• Exports about 45% of its products to USA, Canada, UK, Australia, Asia, the Middle East and
Europe
• The company is strategically broadening and growing its export market and it launched a
new international style of export packaging
Financials:
• Sales turnover of USD 6.5 mn in 2005 (including other income)
• Established in 2006 when Godrej Tea Ltd. acquired foods division of Godrej Industries Ltd.
Godrej Hershey • Acquired India’s leading confectionery player Nutrine Confectionary Company Private
Limited in June 2006
Foods & Beverages
Limited • Product portfolio includes
Confectionery: Brands like Mahalacto, KokoNaka, Nutrine Eclairs, Superstar, Aasai & HoneyFab
Non Carbonated Beverage: Includes Jumpin (Fruit drink), Xs (Juice & nectar) and Sofit (Soymilk)
SmartCook Tomate Puree in the Cooking Aids Category and Godrej Cooklite, Godrej Oil and Godrej
Vanaspati in the Edible Oil segment and Godrej Tea in the Packet Tea category
• It is targeting sales revenue of INR 10 bn by 2010 through organic as well as inorganic growth


• Established in 1946
Gujarat • It is is India's largest food products marketing organisation
Cooperative Milk • The company has a range of products in various segments namely Cheese, UHT milk, ghee,
Marketing milk powders, sweetened condensed milk, curd products, ice-creams and confectionary
Federation (Amul) • Exports its products to USA, Gulf Countries and Singapore
• It plans on expanding its outlets “Amul Parlour” from 4,000 to 10,000 by 2010.
Financials:
• Annual sales turnover of USD 1.5 bn in 2008-09
• Started in 1936, as a shop in Bikaneer, expanded to Delhi in 1982 and to USA in 1993
Haldirams • It caters to snack food products like namkeen, syrup, sweets, crushes, chips and papads
• Major presence in North India and especially New Delhi
• Also exports its products to countries like US, UK, Canada, Australia, Singapore and UAE
• Follows competitive pricing strategy and caters to Indian palette with labour intensive
products


• Entered the branded & packaged foods business in 2001with its Kitchens of India brand
ITC Ltd. • Expanded to other brands namely Aashirvaad, Sunfeast, mint-o, Candyman and Bingo!
• Its product portfolio includes staples, biscuit, confectionary, snack foods and packet food in
the ready-to-eat format
• It has presence in USA, Canada, Switzerland, Mauritius and Germany
Financials
• Gross turnover was INR 231 bn in 2008-09
• Established in 1989
Kohinoor Foods Ltd • Product portfolio includes staples, ready to eat Indian curries, cook-in sauces, cooking paste
to spices, seasoning and frozen food
• Marketing their products by tying up with the major retail chains not just in the domestic
market but in the international markets
• Presently boasts of a distribution network of more than 200 thousand retail outlets, 100
super distributors and 600 stockists
• Exports its products to USA, UK, Dubai, Canada, Japan, Australia, Singapore and other
European countries.
Financial
• Net in FY ’08 stood at INR 6.4 bn

Mother Dairy • Set up in 1974 under the Operation Flood Programme and is now a wholly owned company
of the National Dairy Development Board
• Product portfolio includes liquid milk, dahi, ice creams, cheese and butter, Dhara range of
edible oils and the Safal range of fresh fruits & vegetables, frozen vegetables and fruit juices
at a national
• Recently developed a state-of-the-art fruit processing plant at Bangalore with fruit handling
capacity of around 250 MT per day
• Top five processed food companies in India, MTR is an ISO 9002 and a HACCP certified
company
MTR Foods
• Recently MTR is acquired by Orkla, a Norway-based company for USD 80 mn
• It caters to snack foods and ice cream products including ready-to-eat curries and rice, ready-
to-cook gravies, frozen foods, ice creams, instant snack and dessert mixes, spices, pickles etc.
• About 10% of the total sales comes from export market
• MTR which is established in south is developing its brand in the west and north India markets
• It also plans to expand its product line rapidly
Financials:
• Annual turnover of USD 40.6 mn in 2008

Parle Agro • Major brands include Frooti, Appy Classic in fruit-based drinks; Bailley in packaged drinking
water; Mintrox and ButterCup in confectionaries
• Parle Agro’s flagship product Mango Frooti has 75% market share in fruit based drinks
• Parle Agro has entered snack market recently with the launch of its brand Hippo
• It started Hippo with 5 flavours and plans a bigger portfolio in snacks segment
• Broad strategy is backward integration and aggressive media campaign during product
launches
Financials:
• Plans to increase its revenues from USD 206.6 mn to USD 761.3 by 2011
Venkys’ India Ltd. • Established in 1971

• Major market presence in the meat and poultry segment
Financials
• Net sales pegged at INR 5.2 bn for FY ‘08

Major Foreign Players (1/2)

• Affiliated to ConAgra Foods Inc, USA which is a major foods company in the world
• ConAgra Foods along with Tiger Brands of South Africa holds a majority stake of 52.3% in
Agro Tech Foods Ltd, through CAG Tech Holdings
Agro Tech Foods
• A major player in edible oil and branded foods in India, it has a flagship brand Sundrop
• Product portfolio includes edible oil, vanaspati, atta, popcorn, french fries and green peas
• Plans to diversify its product portfolio and enter new markets with focus on product and
brand differentiation
Financials:
• Annual sales turnover of branded foods segment was USD 117.1 mn in 2007
• HUL is India’s largest FMCG firm with 51.55% stake holding from parent company Unilever
Hindustan Unilever • Caters to Food and Beverages segment with products like jam, salt, wheat flour, soup, tea,
coffee and ice creams
Limited
• Major brands include Broke Bond and Lipton in Tea, Bru in coffee, Kwality Wall’s in ice
cream, Kissan jam, Knorr soup and Annapurna salt and wheat flour
• Foods segment contributes to 20% of the total HUL sales
• HUL divested its non-core businesses and focussed on its food business for driving growth
Financials:
• Annual sales turnover of USD 940 mn for HUL Foods segment in FY 2008-09

Major Foreign Players (2/2)

• PepsiCo started its operations in India in the year 1989
PepsiCo • Caters to beverages and snack foods including soft drinks, fruit juice and chips
• It has 43 bottling plants in India, and it’s Frito Lay foods division has 3 plants
• PepsiCo is planning to invest USD 200 mn to set-up four new plants out of which 3 would be
for beverages and one for foods
• Major focus is on high volume scales, it is planning to set-up new greenfield plants and is
looking for new franchisee bottlers
• Started in 1959 as Food Specialities by Nestle SA which has 51% stake holding
Nestle India • It caters to dairy products, beverages and snack foods with products including instant coffee,
condensed milk, dairy whitener, infant food, chocolates and confectionaries
• Nestle India is planning to launch new products in all its product segments
Financials:
• Annual sales turnover of USD 965.5 mn in 2008

•Market Overview
•Competition
•Key Developments

Key Developments
Date Development
Nov 2009 PepsiCo to invest USD 200 mn to set-up 4 new greenfield projects and expect them to be operational by
2012. One of the 4 would be for making food products while other 3 would be for making beverages.
Oct 2009 An Indo-French joint working group (JWG) on agriculture is set-up to promote co-operation and France is
ready to help Indian food processing sector with latest technology.
Sep 2009 India’s largest sea food processing plant with a daily capacity of 40 ton has come up at Jankia, 50kms from
Bhubaneswar. The unit has a cold storage capacity of 1800 ton per day.
Aug 2009 Government to provide food processing training to 500,000 women in collaboration with industrial training
institutes (ITI) as part of its efforts to create 10 mn jobs by 2015.
Apr 2009 World’s largest food park to come up in Haridwar, Uttarakhand state. It is called Patanjali Food and Herbal
Park and will have 32 processing units for fruits & vegetable products.
Feb 2009 Indian Farmers Fertiliser Cooperative Limited (IFFCO) to set-up a farm-based food processing SEZ with an
investment of USD 512.7 mn at Nellore, Andhra Pradesh.
Source: Press articles

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Food Processing Industry in India 2009

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Food Processing Industry - India

FOOD PROCESSING INDUSTRY – INDIA.PPT 2

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Raw fruits and vegetables, pulps, canned fruits, juices and

Meat & Poultry Cattle, buffaloes, sheep, pigs and poultry

Packaged Foods Noodles, vermicelli, tomato ketchup, jam , soups etc.

Beverages Carbonated drinks, fruit-based drinks and hot beverages

Staples Sugar, wheat, bread, flour and salt

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Fruits and Vegetables (F&V)

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Growth in terminal markets

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Milk & milk products,

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Limited use of technology in food processing Impact

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High taxes on branded agricultural products Impact

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Manpower Training Financial Support

Tax Benefits Mega Food Parks Scheme

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• Provides an investment opportunity of USD 24 bn

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• Government plans to design a curriculum for skill development programmes in

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Company Business Description

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Company Business Description

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Company Business Description

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Company Business Description

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Company Business Description

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Company Business Description

Venkys’ India Ltd. • Established in 1971

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Company Business Description

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Company Business Description

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Source: Press articles

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