indian processed food industry

8/3/2019 Indian Processed Food Industry

1/22

INDIAN PROCESSED FOOD INDUSTRY

The size of global processed food industry is estimated to be valued around US $3.6 trillion and

accounts for three-fourth of the global food sales. Despite its large size, only 6% of processed

foods are traded across borders compared to 16% of major bulk agricultural commodities. Indian

food-processing industry is miniscule in comparison and is estimated to be US $40 billion and is

likely to grow at over 10%, on the basis of an expected GDP growth rate of 8-8.5% p.a. With

enormous scope for value addition, increase in the consumption of processed food products in

India and many fiscal incentives being planned by the government, this sector is poised to

maintain the growth momentum in the future. Moreover, the advent of the WTO regime and the

possibility of reduced subsidies in developed countries can add to Indias strengths in food

production and processing industry.

India accounts for less than 1.5% of international food trade despite being one of the worlds

major food producers, which indicates huge potential for both investors and exporters. With

rapid increase in the per capita income and purchasing power along with increased urbanization,

improved standards of living, there lies a large untapped opportunity to cater to 1000 million

domestic consumers. It is estimated that 300 million upper and middle class consume processed

food. With the convenience needs of dual income families, 200 million more consumers are

expected to move to processed food by 2010. The market size for the processed foods is thus

bound to increase from US $102 billion currently to US $330 billion by 2014-15 assuming a

growth of 10%. The share of the value added products in processed foods would almost double

from US $44 billion currently to US $88 billion during the same period, growing at the rate of

15%. This presents enormous opportunities for investment in processed food sector.

The size of global processed food industry is estimated to be valued around US $3.6 trillion and

accounts for three-fourth of the global food sales. Despite its large size, only 6% of processedfoods are traded across borders compared to 16% of major bulk agricultural commodities. Indian

food-processing industry is miniscule in comparison and is estimated to be US $40 billion and is

likely to grow at over 10%, on the basis of an expected GDP growth rate of 8-8.5% p.a. With

enormous scope for value addition, increase in the consumption of processed food products in


2/22

India and many fiscal incentives being planned by the government, this sector is poised to

maintain the growth momentum in the future. Moreover, the advent of the WTO regime and the

possibility of reduced subsidies in developed countries can add to Indias strengths in food

production and processing industry.

India accounts for less than 1.5% of international food trade despite being one of the worlds

major food producers, which indicates huge potential for both investors and exporters. With

rapid increase in the per capita income and purchasing power along with increased urbanization,

improved standards of living, there lies a large untapped opportunity to cater to 1000 million

domestic consumers. It is estimated that 300 million upper and middle class consume processed

food. With the convenience needs of dual income families, 200 million more consumers are

expected to move to processed food by 2010. The market size for the processed foods is thus bound to increase from US $102 billion currently to US $330 billion by 2014-15 assuming a

growth of 10%. The share of the value added products in processed foods would almost double

from US $44 billion currently to US $88 billion during the same period, growing at the rate of

15%. This presents enormous opportunities for investment in processed food sector.

Introduction

India is the second largest producer of food and holds the potential to be the biggest on globalfood and agriculture canvas, according to a Corporate Catalyst India (CCI) survey. The food

industry in India comprises the food production industry and the food processing industry. The

food processing industry is one of the largest in India it is ranked fifth in terms of production,

consumption, export and expected growth.

Growth Drivers of Indias food Industry

The growth of the food industry is driven by:

Higher disposable incomes Change in spending pattern Increasing organised food retailing Increasing export opportunities


3/22

Favourable regulatory environment and Government support and investment inflows

Market Size of Indian food Industry

The Indian food industry is projected to grow by US$ 100 billion to US$ 300 billion by 2015,according to a report by a leading industry body and Technopak. The industry, estimated at US$

200 billion in 2006-07, is projected to reach US$ 300 billion by 2015. During the period, the

share of processed food in value terms is expected to increase from 43 per cent to 50 per cent.

Exports

Exports of organic food products are expected to grow five-fold by 2015, according to the

Agriculture and Processed Food Products Export Development Authority (APEDA). TheGovernment agency expects exports to touch US$ 1.43 billion by 2014-15 against US$ 280

million in 2010-11.

Exports of floriculture, fresh fruits and vegetables, processed fruits and vegetables, animal

products, other processed foods and cereals stood at US$ 5.45 billion as on November 2010-

2011, according to DGCIS annual data published by APEDA.

Spice Board has revealed that the export of spices from India during 2010-11 has registered an-all-time-high both in quantity and value. During the year, a total of 5, 25,750 tonnes of spices

and spice products valued at US$ 1,502.85 million were exported, as against 5, 02,750 tonnes

valued at US$ 1,173.75 million in 2009-10. This is an increase of 5 per cent in volume and 28

per cent in dollar terms of value.

Food Processing Industry

Food processing Industry is one of the largest industries operating in India, and is highlyfragmented.

Segments

The Food Processing Industry operates across various segments that include:


4/22

Fruits & vegetables Meat & poultry Dairy Marine products, grains and consumer foods (that includes packaged food, beverages and

packaged drinking water).

Value addition of food products is expected to increase from 8 per cent to 35 per cent by the end

of 2025. Fruit & vegetable processing is also expected to increase to 25 per cent of total

production in 2025 from the current level of 2 per cent, states the CCI report. Dairy sector that

holds highest share in processed food market holds large potential to be exploited. The report

reveals that 37 per cent of the total dairy produce is processed of which only 15 per cent is done

by the organised sector. Hence, there still lies a lot of scope for investment and development.

The sector has attracted foreign direct investment (FDI) worth US$ 1,253.79 million from April

2000 to April 2011, according to the data provided by Department of Industrial Policy and

Promotion (DIPP).

The amount of FDI inflow for Food Processing Sector in India during the financial year 2010-11

up to November 2010 (8 months) is US$ 129.2 million.

Beverages

The Indian non-alcoholic drinks market was estimated at around US$ 4.43 billion in 2008 and is

expected to grow at a CAGR of around 15 per cent during 2009-2012, according to a report

published by market research firm RNCOS, titled "Indian Non-Alcoholic Drinks Forecast to

2012".

As per the report, the fruit/vegetable juice market will grow at a CAGR of around 30 per cent in

value terms during 2009-2012, followed by the energy drinks segment which will grow at a

CAGR of around 29 per cent during the same period.

Investment Trends


5/22


6/22

The Union budget 2011-12 has also allocated US$ 135 million to the Food Processing Ministry

from the previous US$ 90 million. As a measure to boost investment in agriculture the minister

extended the Viability Gap Funding Scheme (VGFS) for public private partnerships (PPP) for

setting up modern storage capacity besides giving infrastructure status to cold chains.

Road Ahead

The food industry in India has taken off significantly well and will continue to grow rapidly

given the unexplored potential in the sector. The growth in this sector is not only indicative of

changing development patterns of the country, similar to the developed nations, but also the

promise it holds in propelling growth of a certain section of society that has remained

constrained for a long time.

The government of India had also announced Vision 2015, which lays focus on enhancing the

competitiveness of food processing industry in both domestic as well as international markets

along with ensuring stable income levels to farmers. The Vision 2015 provides for enhancing the

level of processing of perishable to 20 per cent, enhancing value addition to 35 per cent and

increasing the share in global food trade from 1.5 per cent to 3 per cent, by 2015.

References: Corporate Catalyst India (CCI) Survey Report, Press Releases, KPMG Report on Food Processing

and Agri Business, Agriculture and Processed Food Products Export Development Authority (APEDA) articles,

Ministry of Food Processing Industries articles, RNCOS Research Report, Department of Industrial Policy and

Promotion (DIPP)

http://www.ibef.org/industry/foodindustry.aspx

Last Updated : 15 July 2008 at 11:50 IST

India can become global food processing hub Second largest molybdenum reserves

discovered in China

Gold heads for weekly drop as Europe debt crisis eases

MCX copper may see upside pressure on Friday
http://www.ibef.org/industry/foodindustry.aspxhttp://www.commodityonline.com/news/Second-largest-molybdenum-reserves-discovered-in-China-40963-3-1.htmlhttp://www.commodityonline.com/news/Second-largest-molybdenum-reserves-discovered-in-China-40963-3-1.htmlhttp://www.commodityonline.com/news/Gold-heads-for-weekly-drop-as-Europe-debt-crisis-eases-40960-3-1.htmlhttp://www.commodityonline.com/news/MCX-copper-may-see-upside-pressure-on-Friday-40958-3-1.htmlhttp://www.ibef.org/industry/foodindustry.aspxhttp://www.commodityonline.com/news/Second-largest-molybdenum-reserves-discovered-in-China-40963-3-1.htmlhttp://www.commodityonline.com/news/Second-largest-molybdenum-reserves-discovered-in-China-40963-3-1.htmlhttp://www.commodityonline.com/news/Gold-heads-for-weekly-drop-as-Europe-debt-crisis-eases-40960-3-1.htmlhttp://www.commodityonline.com/news/MCX-copper-may-see-upside-pressure-on-Friday-40958-3-1.html


7/22

Commodity Online

NEW DELHI: The processed food industry in India has the immense potential to be the Next big

Made in India story for the nation.

In order to explore & harness this untapped potential Confederation of Indian Industry (CII) is

organizing Processed Foods Outsourcing Summit cum Buyers-Sellers meet, Processed Food -

Advantage India 2008 in Delhi on Thursday 17th July 2008.

The two day summit assumes greater significance in light of the fact that for the first time over

30 Global buyers are converging from all across the world to explore the massive opportunity of

India as an expanding global trade in outsourcing the processed food.

The two day Summit is supported by the Ministry of Commerce & Industry and the Ministry of

Food Processing Industries. The summit will be inaugurated by Hon'ble Minister for Food

Processing Industries Shri Subodh Kant Sahai.

Food Advantage India 2008 will see participation from international buyers like Auchan

International; Gate Gourmet Singapore; Hang Fong Trading Enterprise; Western

Gourmet;Tesco; Metro; Sysco; Spinneys; Xongdur Thai Organics food; to name a few.

The summit will also see participation from over 120 Indian companies who will have an

opportunity to meet, network and establish profitable business linkages with leading

multinational retailers, manufacturers, consolidators and importers.

Some of the participating companies from India are Britannia Industries Ltd.; Kaventer; Rasna

International; MTR Foods; Tasty Bite; Safal, Priyagold; Tea Board of India.

According to Mr. Piruz Khambatta, Chairman, CII National committee on Food Processing and

CMD, Rasna International ltd. "The processed food sector, which presently is a muscular dwarf

has capacity & capability to do for rural India what IT & ITeS has done for the urban India. The

international market has massive volume as well higher margin which will actually give a


8/22

groundswell and economic boost to the Farm end by enhancing the productivity and higher

yield.

Global manufacturers and retailers are offering greater variety to consumer by adding their own

private labels by varying flavors and spices providing special formulations for the health

conscious and illness affected Alternate sourcing (reduced logistic costs is making viable

movement of mid price to even low priced products across geographies).

India has a significant supply capacity for value added products and processed food, but to

harness that potential, the sector needs to gear up to align itself to real-time demand pull, which

is the increasing international taste for Indian foods. Internationalizing tastes and a strong

emergence of 'Brand India' has increasingly led to the wide acceptance of Indian cuisine all over the world."

"At present, India's share of global trade in the value added processed food sector is less than .

03%, which is abysmal considering that globally the sector is estimated at a whopping US $ 3.2

trillion. This clearly defines the scope for export led growth for the Indian food processing

sector. India, with its easy availability of raw materials and low cost of production is strategically

poised to capitalize on this market." , further added Mr Khambatta.

The country has 1/10th of the world's arable land at around 160 million hectares, which is higher

than China. India currently produces about 50 million tonnes of fruit (about 9% of the world's

production) and about 90 million tonnes of vegetables (11% of the world's production).

The country produces over 500 million tonnes of agricultural, horticultural and dairy produce

annually, thus making it one of the world's largest food producers. This apart, India is a treasure

house for aromatic and medicinal spices, for which the country is well known. India's diverse

communities have given birth to a plethora of lip-smacking cuisine that is fast gaining popularity

across the world.

India also enjoys the advantage of the lowest cost of production in the world, which if


9/22


10/22

India is one of the largest producers of food grains besides being second in the world in the

production of fruits and vegetables, and first in milk production and livestock population, which

makes this sector further attractive. India is said to have 52 per cent cultivable land as against the

world average of 11 per cent. It has 15 major climates of the world and has 46 out of 60 types of

soil, making it the number one contender for becoming a global sourcing hub.

Currently of the total production, only 2.2 per cent of fruits and vegetables (F&V), 26 per cent of

marine, 6 per cent of poultry, 20 per cent of buffalo meat and 35 per cent of milk is processed.

This is quite low in comparison to the food processed in developed countries.

While, some part of the produce is consumed raw and unprocessed, a large part rots in the

warehouses in absence of proper transporting system, terminal markets, distribution channels,

etc. As much as 30-40 per cent of the total F&V production is wasted every year. The way out

is food processing. Increased food processing can lead to minimal wastage, says K L

Radhakrishnan, chief editor, Association of Indian Food Processing Entrepreneurs (AIFPA).

Where we stand

India's position in the global export of agricultural food was a distant 21st for the year 2007, with

a share of 1.6 per cent. But the figures are transforming substantially as the export of processed

food and beverages is growing steadfastly. The Ministry of Food Processing Industries (MoFPI)

aims to increase Indias share in the global processed food trade to 3 per cent in the next eight

years.


11/22

As per estimates, the Food Processing Industry (FPI) ranks fifth in size in the country,

representing over six percent of GDP. It accounts for around 13 percent of the countrys exports,

6 percent of total industrial investment and approximately 12-15 percent of manufacturing GDP.

Currently, the Indian Processed Food market isestimated to be USD 121 billion. And with the

market growing at 10 per cent per annum, it is

expected to reach USD 194 billion by 2015.

Opportunity in FP The sheer magnitude of the

figures indicates the vast opportunity that lies ahead

for entrepreneurs in this space. Especially for SME

entrepreneurs as organized players remain at the

fringe of this market accounting for close to only a

third of the countrys total agri-processed products. A

large part of the market is dominated by unorganised and small scale sectors.

The opportunities are ample in sectors like bakery, convenience food, snack, etc. Rohit Bhattiani,

Principal Consultant at TechnoPak Advisors says, The sector provides a number of

opportunities for Indian entrepreneurs that include areas like bakery, convenience foods, snacks

and savories etc.

Growth Drivers of the Sector

- Increasing Urbanisation

- Increasing Nuclear Families and

Working Women

- Increased disposable incomes

- Organised Retail and Private Label

Penetration

- Demand for Functional Food

- Increased spend on health food


12/22

Of the two segments of the Indian food processing industry commodity-based processing and

value-added processing, the former contributes to two thirds of the processed food market. And

although the latter comprises a smaller segment of the market, it is experiencing a radical

growth. In fact, India is moving towards convenience-foods that evolve through value added

processing.

Value-added Processing, the new future

Currently, the demand and consumption of commodity-based processed products is higher.

However, this trend is expected to change significantly on account of changing life-styles and

increasing income levels. The change will soon become more prominent in urban India with an

increased demand for value-added products, particularly in dairy, poultry, F&V, etc.

As far as the industry prediction goes, the value-added processing segment is expected to grow

with a CAGR of 12 per cent. And as projected, the

top sectors with a high percentage growth will be

RTE/RTC, F&V, non-vegetarian foods etc.

Government Initiatives

The Government of India is constantly trying to

promote this industry as it promises significant

employment and trade potential. The MoFPI has

introduced several supportive policies and

schemes to lure entrepreneurs into entering the

areas of processing, supply chain management,

financing, cold-storages, retailing and exports. It

allows rebates and subsidies for infrastructuredevelopment, technology upgradation, quality

control and human resource and institutional

development in this sector.

The estimated

growth figures of

the FPI look

positive. It is the

best time to enter

the industry and

take India to

newer heights in

the processing

sector.

- Shri Subodh

Kant Sahai

Minister of Food

Processing

Industries


13/22

The Ministry extends financial assistance in the form of grant-in-aid at 25 per cent of the cost of

plant and machinery and technical civil works subject to a maximum of Rs 50 lakhs in general

areas or 33.33 per cent subject to a maximum of Rs 75 lakhs in difficult areas under the scheme

of setting up/ modernization/ expansion of food processing industries.

Take the Leap

As the figures indicate, there could never be a better time to take the leap but now. The industry

promises exponential growth in the years to come.

The Minister of Food Processing Industries Shri Subodh Kant Sahai says The estimated growth

figures of the FPI look positive. It is the best time to enter the industry and take India to newer

heights in the processing sector.

Food Processing IndustryPosted: Apr 21, 2011 |Comments: 0 |

Share

ABSTRACT

INTRODUCTION Processing is the treatment of food substances in such a manner as to change itsproperties with a view to preserving it, improving its quality or making it functionally moreuseful. Food processing is the set of methods and techniques used to transform raw ingredients intofood or to transform food into other forms for consumption by humans or animals either in the homeor by the food processing industry. Food processing typically takes clean, harvested crops orslaughtered and butchered animal products and uses these to produce attractive, marketable andoften long shelf-life food products. Similar processes are used to produce animal feed. Extremeexamples of food processing include the delicate preparation of deadly fugu fish or preparing spacefood for consumption under zero gravity. The MINISTRY OF FOODPROCESSING INDUSTRIES set up inJuly 1988, is the main central agency of the Government responsible for developing a strong andvibrant food processing sector; with a view to create increased job opportunities in rural areas, enablethe farmers to reap benefit from modern technology, create surplus for exports and stimulating

demand for processed food. The industry of food processing is as follows; Fruits andvegetable processing industry, Food grain milling industry, Dairy products,Processing of poultry andeggs, meat and meat products, Fish processing, Bread, oilseeds, meals (edible), breakfast foods,biscuits, confectionery (including cocoa processing and chocolate), malt extract, protein isolate, highprotein food, weaning food and extrude/other ready to eat food products, Beer, including non-alcoholicbeer, Alcoholic drinks from non-molasses base, Aerated waters / soft drinks and other processedfoods, Specialized packaging for food processing industries.INTRODUCTION
http://www.articlesbase.com/business-opportunities-articles/food-processing-industry-4648790.html#commentshttp://www.articlesbase.com/business-opportunities-articles/food-processing-industry-4648790.html#comments


14/22

The word retail' is derived from a French word meaning to cut into small pieces'. As mentionedearlier, retail is predominantly unorganized in the case of India. Organized Retailing refers totrading activities undertaken by licensed retailers, that is, those who are registered for sales tax,income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also theprivately owned large retail businesses. Unorganized Retailing , on the other hand, refers to the

traditional formats of low-cost retailing, for example, the local kirana shops, owner manned generalstores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc.Processing is the treatment of food substances in such a manner as to change its properties with aview to preserving it, improving its quality or making it functionally more useful.Food processing is the set of methods and techniques used to transform raw ingredients into food orto transform food into other forms for consumption by humans or animals either in the home or by thefood processing industry. Food processingtypically takes clean, harvested crops or slaughtered andbutchered animal products and uses these to produce attractive, marketable and often long shelf-lifefood products. Similar processes are used to produce animal feed. Extreme examples of food processing include the delicate preparation of deadly fugu fish or preparing space food forconsumption under zero gravity.PAST INFORMATIONFood processing dates back to the prehistoric ages when crude processing incorporated slaughtering,fermenting, sun drying, preserving with salt, and various types of cooking (such as roasting, smoking,steaming, and oven baking). Salt-preservation was especially common for foods that constitutedwarrior and sailors' diets, up until the introduction of canning methods. Evidence for the existence of these methods exists in the writings of the ancient Greek, Chaldean, Egyptian and Roman civilizationsas well as archaeological evidence from Europe, North and South America and Asia. These tried andtestedprocessing techniques remained essentially the same until the advent of the industrialrevolution. Examples of ready-meals also exist from pre industrial revolution times such as theCornish pasty and the Haggis.

Modern food processing technology in the 19th and 20th century was largely developed to serve

military needs. In 1809 Nicolas Appert invented a vacuum bottling technique that would supply foodfor French troops, and this contributed to the development of tinning and then canning by PeterDurand in 1810. Although initially expensive and somewhat hazardous due to the lead used in cans,canned goods would later become a staple around the world. Pasteurization, discovered by LouisPasteur in 1862, was a significant advance in ensuring the micro-biological safety of food.

BENEFITS

Mass production of food is much cheaper overall than individual production of meals from rawingredients. Therefore, a large profit potential exists for the manufacturers and suppliers of

processed food products. More and more people live in the cities far away from where food is grown and produced. Inmany families the adults are working away from home and therefore there is little time for thepreparation of food based on fresh ingredients. The food industry offers products that fulfill manydifferent needs. Benefits of food processing include toxin removal, preservation, easing marketing anddistribution tasks, and increasing food consistency. In addition, it increases seasonal availability of


15/22

many foods, enables transportation of delicate perishable foods across long distances, and makesmany kinds of foods safe to eat by de-activating spoilage and pathogenic micro-organisms. Modern food processing also improves the quality of l ife for people with allergies, diabetics,and other people who cannot consume some common food elements. Food processing can also addextra nutrients such as vitamins.

DRAWBACKS

In general, fresh food that has not been processed other than by washing and simple kitchenpreparation, may be expected to contain a higher proportion of naturally-occurring vitamins, fiberand minerals than an equivalent product processed by the food industry. Food processing can lower the nutritional value of foods, and introduce hazards notencountered with naturally-occurring products. Processed foods often include food additives, such asflavorings and texture-enhancing agents, which may have little or no nutritive value, or beunhealthy. Preservatives added or created during processing to extend the 'shelf-life' of commercially-available products, such as nitrites or sulphites, may cause adverse health effects. Processed foods often have a higher ratio of calories to other essential nutrients thanunprocessed foods, a phenomenon referred to as "empty calories". So-called junk food, produced tosatisfy consumer demand for convenience and low cost, are most often mass-produced processedfood products. The additions of these many chemicals for preservation and flavor have been known to causehuman and animal cells to grow rapidly, without going into Apoptosis.

PERFORMANCE PARAMETERS FOR FOOD PROCESSING

When designing processes for the food industry the following performance parameters may be takeninto account:

Hygiene, e.g. measured by number of micro-organisms per ml of finished product Energy consumption, measured e.g. by "ton of steam per ton of sugar produced" Minimization of waste, measured e.g. by "percentage of peeling loss during the peeling of potatoes' Labour used, measured e.g. by "number of working hours per ton of finished product" Minimization of cleaning stops measured e.g. by "number of hours between cleaning stops"

TRENDS IN MODERN FOOD PROCESSING

Cost reduction

Profit Incentive drives most of the factors behind any industry; the food industry not least of all.Health concerns are generally subservient to profit potential, leading the food processing industry tooften ignore major health concerns raised by the use of

industrially-produced ingredients (partially-hydrogenated vegetable oils, for example, a well-knownand well-researched cause of heart disease that is still commonly used in processed food to increaseprofit margin).


16/22

HEALTH

Reduction of fat content in final product e.g. by using baking instead of deep-frying in theproduction of potato chips, another processed food Maintaining the natural taste of the product e.g. by using less artificial sweetener than theyused before.

HYGIENE

The rigorous application of industry and government endorsed standards to minimize possible risk andhazards. In the USA the standard adopted is HACCP. Lims solutions help industry to manage thosequality standards.

EFFICIENCY

Rising energy costs lead to increasing usage of energy-saving technologies, e.g. frequencyconverters on electrical drives, heat insulation of factory buildings and heated vessels, energyrecovery systems, keeping a single fish frozen all the way from China to Switzerland. Factory automation systems (often Distributed control systems) reduce personnel costs and

may lead to more stable production results. Excellent efficiency and quality is the world of food processing

MINISTRY OF FOODPROCESSING & INDUSTRIESThe Ministry of Food Processing Industries, set up in July 1988, is the main central agency of theGovernment responsible for developing a strong and vibrant food processing sector; with a view tocreate increased job opportunities in rural areas, enable the farmers to reap benefit from moderntechnology, create surplus for exports and stimulating demand for processed food. The industry of food processing is as follows;

Fruits and vegetable processing industry Food grain milling industry Dairy products Processing of poultry and eggs, meat and meat products Fish processing Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery (including cocoaprocessing and chocolate), malt extract, protein isolate, high protein food, weaning food andextrude/other ready to eat food products. Beer, including non-alcoholic beer Alcoholic drinks from non-molasses base Aerated waters / soft drinks and other processed foods Specialized packaging for food processing industries

FRUITS & VEGETABLES

The installed capacity of fruits and vegetables processing industry has increased from 1.1 million tonesin January 1993 to 2.1 million tones in 2006. The processing of fruits and vegetables is estimated tobe around 2.2% of the total production in the country. The major processed items in the fruit andvegetable segment are fruit pulps and juices, fruit based ready-to-serve beverages, canned fruits andvegetables, jams, squashes, pickles, chutneys and dehydrated vegetables. Some recent productsintroduced in this segment include vegetable curries in reportable pouches, canned mushroom andmushroom products, dried fruits and vegetables and fruit juice concentrates.


17/22

DAIRY INDUSTRY IN INDIA

India has the highest livestock population in the world with 50% of the buffaloes and 20% of theworld's cattle population, most of which are milch cows and milch buffaloes. India's dairy industry isconsidered as one of the most successful development programmes in the post-Independence period.In the year 2006-07the total milk production in the country was over 94.6 million tones with a percapita availability of 229 gms per day. The industry had been recording an annual growth of 4%during the period 1993-2005, which is almost 3 times the average growth rate of the dairy industry inthe world. Milk processing in India is around 35%, of which the organized dairy industry account for13% of the milk produced, while the rest of the milk is either consumed at farm level, or sold as fresh,non-pasteurized milk through unorganized channels.

POULTRY INDUSTRY

It is believed that the Indian Poultry Industry is 5,000 years old, since last 4 decades it began towitness remarkable growth from backyard to poultry industry. The organized sector of poultryindustry is contributing nearly 70% of the total output and the rest 30% in the unorganized sector.The broiler industry is well dominated in southern states in our country with nearly 60-70% totaloutput coming from these states. The layer industry once again is represented more in southern statesespecially, Andhra Pradesh, Tamil Nadu and Maharashtra producing nearly 70% of the country's eggproduction. India's 75% of egg produce is consumed by the 25% population living in urban and semi-

urban areas. Presently about 800 hatcheries are operating in the country.

MEAT AND MEAT PRODUCTS

India ranks top in animal and cattle population. The meat and meat processing industry is still to comeup. Some top players in the meat processing industry like Venkateswara Hatcheries, Godrej Agrovet,Vista Processed Food, Al Kabeer, Allanasons etc., with modern state-of-the-art slaughter andprocessing plants, have changed the entire scenario, making the industry grow at almost 10%. Thereis a huge scope for expanding exports, especially in buffalo and poultry meat, eggs and dairy products

CONCLUSION

At last I concluded my presentation; Increasing incomes are always accompanied by a change in thefood habits. Over the last three decades in India a shift in food habits have been observed. The reportobserves that the proportionate expenditure on cereals, pulses, edible oil, sugar, salt and spicesdeclines as households climb the expenditure classes in urban India while the opposite happens in thecase of milk and milk products, meat, egg and fish, fruits and beverages.


18/22

(ArticlesBase SC #4648790)

Read more: http://www.articlesbase.com/business-opportunities-articles/food-processing-industry-

4648790.html#ixzz1SuBrsvgn

Under Creative Commons License: Attribution No Derivatives

Food Processing

Vision 2015: Food processing sector eyes the world market

Vijaylaxmi Kasotia discusses the various government initiatives which can help Indiaexploit the emerging global opportunities in this sector

The agriculture sector has come a long way sinceindependence. With the advent of the green revolution,India has transformed itself from a country of shortages toa land of surpluses. With the rapid growth of the economy,a shift is also being seen in the consumption pattern, fromcereals to more varied and nutritious diet of fruit andvegetables, milk, fish, meat and poultry products. This hasresulted in the development of a sunrise industry namelythe Food Processing Industry.

The food processing sector in the country with its vast potential has emerged as one of themajor driver of economic growth. It is encouraging to note that while the country's GDP

growth rate had increase from 3.5 per cent in 2002-03 to 9 per cent in 2006-07, the foodprocessing sector has grown from 7 per cent to 13.1 per cent during the same period.

India is a country of over 1.10 billion consumers, there is a large untapped domestic marketof 1,000 million consumers in the food processing sector and 200 million more consumersare expected to shift to processed food by 2010. It is the second largest producer of fruitsand vegetables in the world. There is a huge wastage of perishable food items in thecountry due to lack of proper food processing facilities and the level of processing is onlyabout 2.2 per cent. However, India has tremendous potential to unleash large scale processbased farm activities to exploit the emerging global business opportunities.

Incredible opportunities

India's homogeneous market size endowed with growing incomes and changing life styleshas created incredible market opportunities for food producers, machinery makers, foodtechnology and service providers. The food processing industry has great export andemployment potential. The policies are investor-friendly and more importantly technologicaland human resources are available aplenty in the country.

The competitive edge enjoyed in terms of raw material and labour offers lucrativeopportunities. However poor perception of quality and the indifferent image of Indian
http://www.articlesbase.com/business-opportunities-articles/food-processing-industry-4648790.html#ixzz1SuBrsvgnhttp://www.articlesbase.com/business-opportunities-articles/food-processing-industry-4648790.html#ixzz1SuBrsvgnhttp://creativecommons.org/licenses/by-nd/3.0http://www.articlesbase.com/business-opportunities-articles/food-processing-industry-4648790.html#ixzz1SuBrsvgnhttp://www.articlesbase.com/business-opportunities-articles/food-processing-industry-4648790.html#ixzz1SuBrsvgnhttp://creativecommons.org/licenses/by-nd/3.0


19/22

products is preventing Indian food products to penetrate global markets in a big way. Whiledeveloping countries like Thailand have exploited the global markets in a big way by fine-tuning quality management aspects of their food processing industry, India are yet to makea headway on this front.

Production of high quality processed foods meeting international quality standards &

regulations may very well open new frontiers for Indian food products. This will not onlycreate a dynamic and competitive domestic food processing industry but will also enableIndia to become a major player in the global food market. An attitudinal change towardsquality is essential.

Several thousand crore worth of farm produce is lost every year due to inefficient post-harvest practices for storage and processing. On one hand is the growing demand for foodproducts, which are difficult to meet due to limited resources and on the other, there existsabnormally high wastage in the farm sector due to inefficient technology in storage,processing and handling. It is, therefore, imperative to introduce state-of-the-art technologyin the food-processing sector to minimise post-harvest losses. It also calls for a concertedattention to a few selected food products where India has or can develop a competitive edge

over other countries.

FDI

The sector has been attracting substantial FDI also and isamong the top ten sectors getting FDI equity. FDI up to100 per cent equity is permitted under the automatic routein food and infrastructure like food parks and cold chains.There are many areas for investment in this sector whichinclude mega food parks, agri-infrastructure, supply chainaggregation, logistics and cold chain infrastructure, fruitand vegetable products, animal products, meat and dairy,fisheries and seafood cereals, consumer foods/ready to eatfoods, wine and beer, machinery/packaging.

Productivity and progress

It is essential to understand the dynamic relationship that exists between productivity andprogress. The basic fact is that until both the farmers as well as the processors areconvinced of benefits that accrue through productivity, the productivity campaigns willremain ineffective. So the main challenge is to introduce the concepts of productivity andmake it work under a variety of constraints for the sustainable growth of the industry.

In the process of globalisation, the Indian food processing industry will be facing increasedcompetition, particularly in domestic markets in addition to the uncertainties prevailing inthe international markets. It is in this context that emphasis must be given to improveproductivity and quality. Undoubtedly, better performing firms will have a competitive edgeover others. In order to maintain the tempo of productivity and quality, the NationalProductivity Awards have thus assumed much greater significance.

The ministry of food processing industries on its part, is leaving no stone unturned toachieve the multiple objectives of stepping up the growth, higher farmer income, reductionin wastage, providing nutritious and safe food and enhancing employment opportunities. Ithas initiated measures to deal with the major constraints being faced by the industry such


20/22


21/22

Abattoirs : Hygienic and scientific slaughtering as well as optimum utilisation of by-productsare issues of grave concern of the Indian meat industry. It results in tremendous waste,contamination and avoidable cruelty to animals. The ministry is launching a comprehensivescheme for modernisation of existing abattoirs/establishment of modern abattoirs at 100locations across the country on a PPP mode.

Capacity building : The ministry has also taken up quality assurance, R&D, HACCP, HumanResource Development and establishment of laboratories to support the Food Safety andStandards Act.

The ministry of food processing industries has taken many steps to give impetus to thissector which include virtual delicensing of the sector, inclusion in the priority sector forlending, allowing 100 per cent FDI except in alcoholic beverages and retail, several duty andtax reliefs, financial assistance for infrastructure building, setting up of food processing unitsetc. In case of export-oriented units, foreign investment is permitted even in case of itemsreserved for small scale sector. In addition, the export oriented units are given a number of incentives and concessions under the export-import policy, such as, duty free import of capital goods, raw materials and intermediates, export income being exempt from corporate

tax etc. FDI inflow in food processing is becoming stronger.The author is Media & Communications Officer, PIB, New Delhi

Opportunities for the Food Processing Industry in IndiaNarendra Shah, CTARA* & K V Venkatesh, Department of Chemical Engineering

In India agricultural and dairy sectors have achieved remarkable successes over the last three and a half decades. Besides being one of the world's largest producers of food-grains, India ranks second in theworld in the production of fruits and vegetables, and first in milk production providing much needed foodsecurity to the nation.

The accomplishments of the green and white revolutions have, however, not been matched byconcurrent developments in supply chain management, and in new technologies for better processing,preservation, and storage of food. Pockets of shortages and near starvation, substantial wastages due to

spoilage, quality deficiencies, and inadequate returns to the farmer are still very much in evidence.Increased urbanization, improved standards of living, and the convenience needs of dual income

families point to major market potentialities in the food processing and marketing sectors. This is alsoevident from the presence of several global foods giants and leading Indian industrial enterprises in thecountry's food processing sector, such as: Nestle India Ltd, Cadbury's India Ltd, Kelloggs India,Hindustan Lever Ltd, ITC-Agro, Godrej Foods and MTR Foods Ltd Besides, in the current globalizedmilieu, our surplus food production, as well as the increasing preference for Indian foods (in severalregions of the world) need to be leveraged to achieve economic, and strategic objectives throughexports. The Food and Agriculture Integrated Development Action (FAIDA) report (1997) prepared byMcKinsey has estimated that, driven by changing consumer preferences, the annual consumption of 'value-added' foods alone would grow to Rs.225, 000 crores by 2007 larger than the entiremanufacturing sector! A more recent report has stated an absolute revenue increase of Rs. 900 billion infood manufacturing between 1993 and 2000. This is in contrast with Rs. 150 billion and Rs. 300 billion inthe pharmaceutical and IT industries, respectively. Overall, the value of the Indian food industry hasincreased from Rs. 3.09 trillion in 1993-94 to Rs. 3.99 trillion in 2000-01. The segments with the largestgrowth potential have been identified as dairy, wheat, fruits and vegetables, and poultry. This report hasalso identified some of the major challenges for the emerging food industry in India (see box).

Major Challenges for the Indian Food Industry

Consumer education that processed foods can be more nutritiousLow price-elasticity for processed food productsNeed for distribution network and cold chain


22/22

Backward-forward integration from farm to consumersDevelopment of marketing channelsDevelopment of linkages between industry, government and institutionsTaxation in line with other nations

Streamlining of food laws

Challenges in Food ProcessingUnprocessed foods are susceptible to spoilage by biochemical processes, microbial attack andinfestation. The right post harvest practices such as good processing techniques, and proper packaging,transportation and storage (of even processed foods) can play a significant role in reducing spoilage andextending shelf life. The challenges in processing lie in retaining the nutritional value, flavour, aroma, andtexture of foods, and presenting them in near natural form with added conveniences. However, suchqualities cannot be readily quantified and correlated with physico-chemical parameters, sensoryevaluations providing the only means of benchmarking. Besides, processed foods need to be offered tothe consumer in hygienic and attractive packaging, and at low incremental costs.

The challenges for the food preservation, distribution and processing sectors are diverse anddemanding, and need to be addressed on several fronts to derive maximum market benefits. Presently,the organizations addressing the educational and R & D requirements are too few, and there is apressing need for supplementing their efforts. In the emerging scenario, the Food Engineering

professional needs to develop sufficient awareness and appreciation of the relevant principles of lifesciences, and physical sciences, as well as of a wide variety of other topics including: nutrition,preservation and storage techniques, processing unit operations, bio-processing, waste management,distribution and supply chain management, food laws and regulations and so on. Besides, theprofessional needs to develop an appreciation of R&D and innovation in critical technology areas suchas: newer or novel process development in preservation and storage techniques, rheology, colloids anddispersal systems, packaging-polymers and composites, sensors for detection and process control,bioprocess engineering, and so on. .... .more on next page

Home | Top | Next Page
http://www.ircc.iitb.ac.in/~webadm/update/archives/Issue1_2004/focus1.htmlhttp://www.ircc.iitb.ac.in/~webadm/update/archives/Issue1_2004/focus1.htmlhttp://www.ircc.iitb.ac.in/~webadm/update/archives/Issue1_2004/index.htmhttp://www.ircc.iitb.ac.in/~webadm/update/archives/Issue1_2004/index.htmhttp://www.ircc.iitb.ac.in/~webadm/update/archives/Issue1_2004/focus.htmlhttp://www.ircc.iitb.ac.in/~webadm/update/archives/Issue1_2004/focus.htmlhttp://www.ircc.iitb.ac.in/~webadm/update/archives/Issue1_2004/focus1.htmlhttp://www.ircc.iitb.ac.in/~webadm/update/archives/Issue1_2004/focus1.htmlhttp://www.ircc.iitb.ac.in/~webadm/update/archives/Issue1_2004/index.htmhttp://www.ircc.iitb.ac.in/~webadm/update/archives/Issue1_2004/focus.htmlhttp://www.ircc.iitb.ac.in/~webadm/update/archives/Issue1_2004/focus1.html

indian processed food industry

Documents