FOOD AND BEVERAGE INDUSTRY

Submitted by -Sakshi Taneja

B.S.SC 5th semester137115

• The Indian food and beverage (F&B) sector, which is currently growing at 23 to 24 per cent annually, is likely to touch Rs 3.80 lakh crore by 2017.Food and beverage processing in India has been a rising star in recent years.

• The Indian food processing industry stands at $135 billion and is estimated to grow with a CAGR of 10 per cent to reach $200 billion by 2015. The food processing industry contributed 7 per cent to India’s GDP. The industry employs 13 million workers directly. Value addition of food products is expected to increase from the current 8 per cent to 35 per cent by the end of 2025.

AN INTRODUCTION TO THE SECTOR

INDUSTRY OVERVIEW India is the world’s second largest producer of food next to

China.The food processing industry is one of the largest industries

in India-it is ranked fifth in terms of production, consumption, export and expected growth.

The online food ordering business in India is in its nascent stage, but witnessing exponential growth. The organised food business in India is worth US$ 48 billion, of which food delivery is valued at US$ 15 billion. With online food delivery players like FoodPanda , Zomato,  TinyOwl.

FOOD INDUSTRY:The size of the Indian Food Industry is estimated at

Rs 8,80,000 crores (US $ 200 billion) in 2006-07 and is slated to reach Rs 1,320,000 crores (US $ 300 billion) by 2015 with the increasing share of processed food (in value terms) from 43 percent to 50 percent.

Food is the biggest expense for an urban Indian household. About 38.6% of the total consumption expenditure of households was spent on food in 2011-12.

The total household expenditure on the purchase of food items in 2012-13 was INR 11 Trillion. An average household in India spent INR 41,856 on food.

The new wave in the food industry is not only about foreign companies arriving here attracted by the prospective size of the market While US brands such as McDonald's, Pizza Hut and Kentucky Fried Chicken have become household names, more are on their way.

. It is also about the migration of the Made in India tag on food products traveling abroad. Indian food brands and fast moving consumer goods (FMCGs) are now increasingly finding prime shelf-space in the retail chains of the US and Europe. These include Cobra Beer, Bikanervala Foods, MTR Foods' ready-to-eat food stuff, ITC's Kitchen of India

Favourable economic and cultural transformation and a shift in attitudes and lifestyles have consumers experimenting with different cuisine, tastes and new brands. There is an awareness and concern for wellness and health, for high protein, low-fat, wholegrain, organic food.

BEER

Meat

Dairy

Fruits & Vegetables

Marine and Fish

Packages goods

Poultry

Wine

0% 5% 10% 15% 20% 25% 30% 35%

Growth rate of Key sectors.

Percenatge

The Ministry of Food Processing, Government of India indicates the following segments within the

Food Processing industry:

Dairy – milk, milk powder, ice cream, butter, cheese and ghee Fruits & Vegetables – Slices, Pulps, Juices, Concentrates,

Beverages, Potato wafers/ chips etc Grains & Cereals – Flour, Bakery products, Corn flakes, Starch,

Glucose, Malted foods, Vermicelli, Beer and malt extracts Fisheries – Frozen and canned foods mainly in fresh form Meat & Poultry – Frozen and packed foods mainly in fresh form Consumer goods, which includes snack food, biscuits, ready-to-

eat foods, alcoholic and non-alcoholic

Some of the major investments in this sector in the recent past are:

Foodpanda acquires food ordering portals TastyKhana and Just Eat India to strengthen its presence in India.

Gujarat Cooperative Milk Marketing Federation (GCMMF), popularly known as 'Amul', plans to invest Rs 5,000 crore (US$ 753.16 million) to establish ten new processing plants as well as expand the current capacity to touch 32 million litres per day (MLPD) capacity by 2020.

Restaurant search service Zomato raised US$ 110 million from existing investors including Info Edge, Vy Capital and Temasek. Zomato is now present in 22 countries and over 500 cities around the globe.

Earlier this year , Zomato acquired Urbanspoon, for an undisclosed amount, in an all-cash deal marking its entry into the US.

Papa John’s India acquired the Pizza Corner from Global Franchise Architects for an undisclosed sum. It is now the third-largest pizza chain in India, after Domino's and Pizza Hut.

ITC Limited plans to invest Rs 800 crore (US$ 120.51 million) to set up a world-class food processing facility in Medak, a district located in Telangana. The company has also formulated plans to enter the dairy market.

Some of the major initiatives taken by the Government of India to improve the food processing sector in India are as follows:

• Ms Harsimrat Kaur Badal, Union Minister for Food Processing Industries, Government of India inaugurated the first of its kind Rs 136 crore (US$ 20.49 million) mega international food park at Dabwala Kalan, Punjab.

• The Ministry of Food Processing Industries announced a scheme for human resource development (HRD) in the food processing sector. The HRD scheme is being implemented through State Governments under the National Mission on Food Processing. The scheme has the following four components:

– Creation of infrastructure facilities for degree/diploma courses in food processing sector

– Entrepreneurship Development Programme (EDP)– Food Processing Training Centres (FPTC)– Training at recognised institutions at State/National level

• The Food Safety and Standards Authority of India (FSSAI) under the Ministry of Health and Family Welfare has issued the Food Safety and Standards (Food Product Standards and Food Additives) Regulations, 2011 and the Food Safety and Standards (Contaminants, Toxins and Residues) Regulations, 2011 which prescribe the quality and safety standards, respectively for food products.

• The Ministry of Food Processing Industries has taken some new initiatives to develop the food processing sector which will also help to enhance the incomes of farmers and export of agro and processed foods among others.

• The Government of India has approved the setting up of five numbers of Mega Food Parks in the states of Bihar, Maharashtra, Himachal Pradesh and Chhattisgarh. The Government plans to set up 42 such mega food parks across the country in next three to four years.

•  In the Budget 2015-16, a corpus of Rs. 2,000 crore (US$ 301.27 million) was created under National Bank for Agriculture and Rural Development (NABARD) to provide cheaper credit to food processing industry. Excise duty on plant and machinery for packaging and processing has been brought down to six per cent from 10 per cent.

• The Government of India has planned to set up 42 mega food parks across the country in next three to four years.

BEVARAGE -• The beverage industry in India constitutes of around USD 230

million among the USD 65 billion food processing industry. The major sectors in beverage industry in India are tea and coffee which are not only sold heavily in the domestic market but are also exported to a range of leading overseas markets.. Among the hot beverages manufactured in India, tea is the most dominant beverage that is ruling both the domestic and international market even today.

• Coca cola, Pepsi, and Nestle are the leading beverage brands that have been ruling the Indian beverage market since past few decades. Among all the beverages, tea and coffee are manufactured as well as exported

heavily in the international markets succumbing to the individual demands around the world. -

FDI100% FDI is permitted in the automatic route for

most food products except for items reserved for micro and small enterprises.

100% FDI is permitted for alcoholic beverages, with the requirement of an industrial license.

For pickles, mustard oil, groundnut oil and bread – items reserved for the micro small and medium sector, 24% foreign direct investment is allowed under the automatic route, with the requirement of prior approval from the Foreign Investment Promotion Board for FDI amounting to more than 24%.

FOREIGN INVESTORS -

Kraft (USA) Mars (USA) Nestle (Switzerland) McCain (Canada) Danone (France) Ferrero (Italy) Del Monte (USA) Kagome (Japan) Kelloggs (USA) Pepsi (USA) Unilever (Anglo Dutch) Perfetti (Italy) Cargill (USA) Coca Cola (USA) Hershey (USA)

CHALLENGES FACED BY THE INDIAN INDUSTRY. The most crucial challenge today that the Indian food

processing industry is facing is the lack of suitable infrastructure in the shape of cold chain, packaging centre’s, value added centre, modernized abattoirs etc. Improvement in general infrastructure is also a must requirement for the industry to progress. Some other important initiatives that are needed are:

Promotion of appropriate crossbreeds while conserving indigenous breeds of livestock

Establishment of livestock marketing system Promotion of rural backyard poultry in a cooperative

marketing setup Development of cooperative dairy firms Enhancing livestock extension services Encouraging private veterinary clinic

Agencies -Ministry of Food Processing IndustriesFood Safety and Standards Authority of IndiaAgriculture and Processed Foods Export Dev

elopment AuthorityNational Insitute

for Food Technology and Entrepreneurship Management

All India Food Processors AssociationCommodity Boards under the Ministry of Co

mmerce and the Ministry of Agriculture/Ministry of Food Processing: coffee, tea, spice, meat and grapes. 

Indian Grape Processing Board

REFERENCES-MINISTRY OF food processing industrywww.ibef.org/industry/indian-food-industry.as

pxarticles.economictimes.indiatimes.com/2015-

05-26/news/62672051_1_fb-sector-lakh-crore-unorganised-sector

ECONOMIC SURVEY (food an beverage industry)

Food processing / MAKE IN INDIA

THANKYOU.

The Scheme of Mega Food Park aims at providing a mechanism to link agricultural production to the market by bringing together farmers, processors and retailers so as to ensure maximizing value addition, minimizing wastages, increasing farmers’ income and creating employment opportunities  particularly in rural sector. The Mega Food Park Scheme is based on “Cluster” approach and envisages a well-defined agri/ horticultural-processing zone containing state-of-the art processing facilities with support infrastructure and well-established supply chain.