opportunities in the indian food processing sectormissp.ch/docs/1590652684overview and opportunities...
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Opportunities in the Indian Food Processing Sector
May 2020
MILKGlobal rank: #1176.35 million
metric tons Processed: 35%
PHL: Up to 0.92%
MEATGlobal rank: #17.7 million tons
annuallyProcessed: 21%
PHL: Up to 2.71%
POULTRYGlobal rank: #3
4.2 million tons & 95.2 billion eggs annually
Processed: 6%PHL: Up to 6.74%
MARINEGlobal rank: #2
12.6 million metrictons
Processed: 23%PHL: Up to 10.52%
Source: MoFPI data, CII (Indian Food Processing Sector –
Trends & Opportunities 2019)
CEREALSGlobal rank: #2284.95 million
tons Processed: NA
PHL: Up to 5.99%
FRUITS & VEGETABLESGlobal rank: #2
311.7 million tons Processed: 2%
PHL: Up to 15.99%
WHY INDIA? OVERVIEW
USD 51 billionGross value of
plant and machinery by
2024-2025
USD 535 billionFood processing
output by 2025-2026
Valued at USD 258 billion in 2018.
Contributes to 14% of manufacturing GDP
of India. 36
30 31
36 35
FY 2015 FY 2016 FY 2017 FY 2018 FY2019
TREND of FOOD PROCESSING EXPORTS
(USD billion)
Source: Ministry of Food Processing Industry, GoI, 2018-2019
516 506727
905628
FY 2015 FY 2016 FY 2017 FY 2018 FY2019
TREND of FDI INFLOW in FOOD PROCESSING SECTOR (USD
Million)
Source: Department for Promotion of Industry and Internal Trade
USD 35.3 billionIndia’s food export
USD 19.56 billion
India’s food import
Processed Food Categories Export Value (USD million)
Cereals 8,162
Fish and related products 6,257
Meat and related products 3,723
Coffee, tea, and spices 3.200
Residues and waste from the food industries
1,918
Processed Food Categories Import Value (USD million)
Animal and vegetable fat 9,994
Edible fruits 3,628
Edible vegetables 1,189
Beverages, spirits 787
Residual and waste from the food industries
644
TOP 5 PRODUCTS EXPORTED FROM INDIA
TOP 5 PRODUCTS IMPORTED INTO INDIA
USD 64 billionCapital Investment
in 2018-2019
Source: Ministry of Food Processing Industry, GoI, 2018-2019
INDIAN FOOD PROCESSING: MARKET OVERVIEW
0
5
10
15
20
25
0
0.5
1
1.5
2
2.5
2013-14 2014-15 2015-16 2016-17 2017-18
Food Manufacturing GVA (in billion USD)
Manufacturing Sector GVA Growth (%)
Food Manufacturing GVA Growth (%)
GVA
(Val
ue in
USD
GVA
Gro
wth
Rat
e in
%
ANDHRA PRADESH
TAMIL NADU
MAHARASHTRA
KARNATAKA
GUJARAT
PUNJAB
UTTAR PRADESH
TELANGANA
>5000 registered units2000-5000 registered units
>USD 1 billion GVA(Gross Value Added)
Index
MAJOR MANUFACTURING HUBS (BY REGISTERED UNITS AND VALUE)
Source: ASI 2016-2017
FOOD MANUFACTURING INDUSTRY –CONTRIBUTION TO ECONOMY
Source: Ministry of Statistics and Programme Implementation
INDIAN FOOD PROCESSING: MANUFACTURING OVERVIEW
NATIONAL FOOD POLICY
NATIONAL FOODPOLICY
Increasing value addition
Reducing wastage
Guarantying fair price to farmers
Ensuring quality produce to end consumer
WHA
T?HO
W?
Installing a single-window clearance system
Promoting mega food parks and food parks
Encouraging fruit processing clusters
Strengthening agriculture marketing infrastructure
Facilitating land allotment
Supporting development of logistic infrastructure
Ensuring compliance with food safety regulatory requirements
Supporting business units having established backward integration
PRADHAN MANTRI KISAN SAMPADA
Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters
WHA
T? H
OW
?
Mega Food Parks
Integrated cold chain and value addition infrastructure
Creation/expansion of food processing and preservation capacities
Infrastructure of agro-processing clusters
Creation of forward and backward linkages
Food safety and quality assurance infrastructure
Human Resources and institutions
INDIAN FOOD PROCESSING: GOVERNMENT INITIATIVES
THREATS
Financing
USD 285 millionSpecial fund set up in
National Bank for Agriculture and Rural
Development (NABARD)
Customs Duty
5% Concessional basic duty under Project Import for cold storage (including pre-cooling unit, pack houses, sorting and grading lines and ripening chambers)
5% Customs duty reduced from 10% for refrigerated containers
0% For import of raw material/intermediate food items against the export of finished products under Advance Authorization Scheme
Source: Department for Promotion of Industry & Internal Trade and CII (Indian Food
Processing Sector – Trends & Opportunities 2019)
5% Uniform assessment for all goods imported as part of Project Import irrespective of tariff classification
Goods and
Services Taxes
INDIAN FOOD PROCESSING: FISCAL INCENTIVES
37Mega Food Parks under SAMPADA
14 operational
4completed
19 Under
implementation
PUNJAB: 7.31%2’906 units
MAHARSHTRA: 7.06%2’808 units
TELANGANA: 9.99%3’969 units
Geographic Distribution of Mega Food Parks under SAMPADA
ANDHRA PRADESH: 14.75%5’861 units
TAMIL NADU: 12.77%5’077 units
INDIAN FOOD PROCESSING: MEGA FOOD PARKS
Fortified health food, Traditional Indian food Convenience food
Processed organic food especially baby food Confectionery and bakery items,
Packaged local/ traditional Indian drinks
New Product Development
01 02 03 04 05
Food and Vegetable Processing Current processing levels in the segment are less than 2%
Need of new technology in processing Opportunity to develop extensive product line
Food Manufacturing and Infrastructure
Packaging technology for enhanced shelf life Energy efficient technologies
R&D infrastructure Food testing labs
Grain and Dairy Segments Upgradation of milling technology
Fortification of products Automation and integration of
supply chain for Grain and Milk Product segments
Meat and Marine Products Opportunities in cold chain,
export, packaging innovations Growing market for processed,
cleaned and frozen meat and poultry products
INDIAN FOOD PROCESSING: OPPORTUNITIES
Premium Foods Segment
Source: Ministry of Food Processing Industry report: High-Growth Segments of Indian F&B Industry, CII report: Indian Food Processing Sector
PRODUCTS SEGMENTS
33.59%
19.23%
18.57%
12.36%
10.98%
10%
8.80%
7.92%
SavourySnacks
BreakfastCereals
Confection-ery
Ready Meals
Bakery
OrganicFood
Dairy Food
Ingredients
The bakery segment is evolving with the introduction
of premium variants such as croissants and filled muffins.
Premium confectionery products such as chocolates saw an increase in demand
whilst the availability was low.
Savoury snacks such as nuts, especially almonds, fresh
fruits are among the fastest growing segment.
Olive oil, rapeseed oil, palm oil are the most preferred
premium edible oil consumed in the Indian market.
Expected CAGR of high growth segments in
premium food, 2016-2021
USAUSD 420 million
AustraliaUSD 67 million
CanadaUSD 361 million
ItalyUSD 86 million
FranceUSD 64 million
UKUSD 144 million
UAEUSD 92 million
TOP COUNTRIES EXPORTING TO INDIA
PREMIUM FOODS: OVERVIEW
Premium food products
Per KG price in Foodhall (USD)
Per KG price on e-commerce (USD)
Red Quinoa 16 8
White Quinoa 13 4
Black Quinoa 16 7
Tricolour Quinoa 15 7
Avocado 16 4
COST OF PREMIUM FOOD IN E-COMMERCE AND FOODHALL STORE
Source: Bloomberg Quint, Flipkart
Segments
Manager
Institutional Buyers
Restaurants
Food processors
Hotel chains
Retail BuyersE-commerce
Modern retail chains
Mom and pop stores
Supermarkets/stores
Cash and carry stores
MODERN RETAIL/ONLINE CHAINS
PREMIUM FOODS: DISTRIBUTION CHANNELS
Industry Scenario• Walmart has increased its stake from 77% to 81.3% in Flipkart. It invested USD 16 billion in
the Indian e-commerce giant to explore online retail space in food & grocery.
• Amazon launched its grocery service “Pantry” in 30 cities and has already expanded to 110cities. The firm is looking to invest USD 500 million in food retail in years to follow.
• BigBasket raised another USD 50M from Alibaba after it has raised USD 300 million fromSoftBank & Alibaba to battle with Amazon and Walmart.
Total retail: USD 800 billion
Food and grocery retail: USD 500 billion
Food and grocery retail growth rate: 30%
E-grocery expected growth rate: 60%
Imported food share in organized retail: 18%
Share of vegetable, fruits and nuts in food imports: 80%
0 5 10 15
Delhi NCR
Bangalore
Hyderabad
Mumbai
Online grocery monthly GMV in top 4 cities in millionDaily essentials and
express delivery driving the growth
Private label growth has remained constant around
30%
Big Basket driving growth through FMCG and
Groefers through staples
1.22.1
3
8.7
0
2
4
6
8
10
USD
bill
ion
Calendar Year
E-grocery Y-O-Y
CY18 CY19 CY20 CY23E
2019 (USD Bn)
2020-E (USD Bn)
Growth rate
33.5 35.5 6%
Expected growth of online grocery in 2020
76%
Online grocery segment is driving growth of e-commerce in 2020.
Source: Forrester, Redseer, Economic times
INDIAN ONLINE FOOD & GROCERY: OVERVIEW
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