Table of Contents
India Macro-economic Overview
Food Habits in India
Processed Food Industry in India
Processed Food Distribution Formats in India
Processed Food Industry Overview
Competition Analysis
Developments in Processed Food Industry
Regulatory and Custom Duties Analysis
Presence of Italy in Indian Food Industry
Food Processing Machinery
Industry Overview
Major Target Industries for Machinery Manufacturers
Customer Concentration
Cold Storage Overview
Packaging Machinery Overview
Conclusion and Recommendation
The Indian Dimension
Indian Geographical Classification
The Story so Far…
Indian Demographics
Metros of India
Major Cities in India
Income group classification
Aspirers and Middle Class groups are expected to rise
Rate of Inflation
Food Habits in Each Region Vary with Climate, Topography, Culture & Heritage
India is a culturally rich & diverse nation having varied lifestyles, religions, art, culture, attire & food.
Weather & topography vary widely with region:
North: Closest to the Himalayan range, hilly regions with extreme weather conditions; high fertility area with high wheat production
West: Arid areas of Rajasthan and Gujarat – which are dry and hot through most of the year. In some coastal areas of Maharashtra, fish is the staple diet
South: Temperate climatic condition all through the year; high rice production & consumption area
East: Hilly regions with varying weather conditions; East is the poorest regions of the country
Indians take food very passionately
Mealtimes are considered as occasions and time for families to get together and spend quality time.
Fresh cooking is essential in most Indian homes, with limited preference for stocked food
Most meals comprise of several dishes ranging from staples like rice and breads, to meat or vegetables, rounded off with a dessert
North Region – Madhya Pradesh, Uttar Pradesh, Haryana, Punjab, Himachal Pradesh, and Jammu and Kashmir
Wheat-breads are the staple diet which accompany all meals
Largely meat-based diet characterized by tandoori-style cooking methods
Fair amount of cooking is done using deep frying in oil
High consumption of milk and milk-based products
High consumption of fresh fruits such as apples, cherries, plums and strawberries which are unique to this region due to its cooler climate.
Increasing number of households are shifting toward replacing traditionally made food items such as curd and cottage cheese with packaged items (packaged curd or cottage cheese)
Southern India – Andhra Pradesh, Karnataka, Goa, Tamil Nadu, and Kerala
Primarily vegetarian population barring coastal areas where fish is a staple diet
Rice is abundant & appears in almost every dish during a meal & are eaten in multiple forms
Tamarind and coconut form the base for most preparations, with most curries based in coconut gravy
Hot spicy foods are cooked, with chettinad cuisine being one of the most fiery
Food is often eaten on banana leaves
Major shift is seen in people moving towards ready-to-use packaged food items for idlis and dosas, rather than going through the relatively longer process of preparing the batter in-house
Western India – Rajasthan, Gujarat, and Maharashtra
High demand of dairy products, including yoghurt, buttermilk, cow’s milk, and goat’s milk
Rice is the staple food grain
Goan cuisine is dominated by rice, coconut, fish and seafood
Gujarati cuisine is largely vegetarian, with a hint of sugar or jaggery in every preparation
Peanuts and coconut are widely used
Other popular cereals include gram flour, bajra and corn
Eastern India – Orissa, Bihar, West Bengal, Assam, Meghalaya, Tripura, Mizoram, Manipur Nagaland, and Arunachal Pradesh
Relatively more simplistic and less elaborate food
Characterized by a variety of different types of rice
Predominantly fish eating population in coastal areas
Common practice to eat steamed food, e.g.: momos
Curries include lot of poppy, mustard and cumin seeds, cumin seeds
World famous for sweets
Changing Trends in Consumer Preferences for Food
Growing middle class population and household incomes are driving people to spend more on food
Increasing cases of lifestyle diseases have resulted in shift towards healthier food options such as fruit juices, pro-biotics, cereals and oats
Shift in consumption preferences & increasing demand is driving the food companies to introduce innovative products such as digestive biscuits, fortified dairy products, etc.
Increased demand for processed & packaged products with high shelf-life
Willingness to pay a premium for value-added products such as cheese, butter, flavoured milk
Overall change in palate and preference for newer varieties of food due to western influence
Key Markets and Product Preferences (1/2)
Key Markets and Product Preferences (2/2)
Distribution Formats for Food Products in India
Modern Trade Formats in India (1/2)
Modern Trade Formats in India (2/2)
Traditional Trade Formats in India
Key Institutional Segments in India
Varied agro climatic zones
2nd largest arable land (161 M ha) in the world
Largest irrigated land (55 M ha) in the world
Largest producer of Wheat, Pulses & Milk
Largest producer and exporter of Spices
Second largest producer of Tea, Rice, Fruits & Vegetables
Second largest producer of Sugarcane
Largest exporter of the world’s best rice (Basmati)
Third largest producer of Coarse grains and Edible Oilseeds
Food Industry – Market Size
The Indian Food and Food Processing industry (FPI) primarily comprises of the following segments
Fruits & Vegetables (F&V)
Dairy
Meat, Poultry and Marine
Grains and Seeds
Packaged Foods (including Beverages)
Food Processing Industry – Market Size
Processing Levels for Key Segments in the FPI
Processing Stages for Various Products
Export from FPI sector
In 2012-13, total exports from FPI sectors reached US$36 billion, growing at a CAGR of 21.9% since 2008-09
India – Total Food Imports
India – Total Food Exports
Food Processing Demand Drivers
SWOT analysis of Food and Food Processing Industry in India
Huge domestic consumption market
Large production base of raw material
Breadth in crop base offering scope for varied processing activities
Inadequate infrastructure facilities
High upfront capital investments
Lack of adequate quality control & testing protocols
Large number of intermediaries resulting in inefficient supply chain and increase in prices
Seasonal variability of crops
Low packaging aesthetics
SWOT analysis of Food and Food Processing Industry in India
Government incentives (priority sector, tax relief, R&D support, etc)
Increasing western influence on Indian palate (cheese, pasta, sauces, cereals, aerated drinks, juices, yoghurt, etc) which is driving the demand for processed foods
Increase in nuclear families and working women who prefer ready-to-use food items
Traditional preference for freshly cooked food especially in rural areas
Affordability (e.g., processed fruits are significantly higher than fresh fruits)
High supply chain costs
Distribution System in Food Processing Industry
Competition in Dairy Processing
Dairy market is largely dominated by regional cooperatives in Gujarat, Karnataka, Maharashtra, Tamil Nadu, Rajasthan and Punjab; Amul (Gujarat Cooperative) has ~26% pan-India market share in liquid milk; Nandini (Karnataka Cooperative) has significant presence in South India
Amul captures nearly 85% of the butter market and ~70% of the cheese market, while other players such as Nestle manage rest of the market; Unilever has strong presence in ice cream segment
Competition in Fruits & Vegetables Processing
Processed forms of fruits & vegetables in India include jams, juices, pickles, chutney, and fruit concentrates
While the fresh fruits & vegetables market in highly unorganized with local farmers, wholesalers, and intermediaries selling directly to customers, the processed F&V market is somewhat organized with presence of national and international players
Competition in Meat, Poultry and Marine Processing
Highly fragmented industry with only a handful of large players
Uttar Pradesh, Andhra Pradesh, Maharashtra, Delhi are the key areas of processed meat and poultry production
Within this industry, poultry is the fastest growing segment owing to strong domestic consumption
Competition in Grains & Seeds processing
Grain processing includes milling of rice, wheat and pulses; seed processing include extraction of oil for edible and industrial purposes
A highly fragmented industry with thousands of rice hullers, flour and pulse mills, and ghanis and oil refineries operating in every part of the country; competition in the organized segment is intense
Though primary processing is the most important activity in this segment, secondary and tertiary processing is limited to few large players
Competition in Consumer Foods Processing
Consumer foods is a highly competitive industry in India with presence of large national and international companies
Britannia, Parle and ITC capture ~90% share of biscuit industry, while Perfetti has over 70% market share in confectionery market; Nestle, with its Maggie brand, is a market leader in noodles segment, while Coca Cola and Pepsi has over 90% market share in aerated beverages segment
Key Players – Profiles
Infrastructure Development in FPI (1/3)
Vision-2015 plan of MoFPI aims to double the size of food processing industry to US$ 200B, increase processing of perishables to 20%, increase value addition to 35% (from 20%), and enhance India’s share in global food trade to 3% (from 1.5%)
Scheme for Infrastructure Development, implemented by MoFPI, during 11th Five Year plan (2007-12) include—
Mega food parks
Cold chain, value addition and preservation infrastructure
Setting up / modernization of abattoirs
Infrastructure Development in FPI (2/3)
Mega Food Parks (MFPs)
It aims to bring together farmers, processors, and retailers to link agricultural produce to the market place and to ensure maximum value addition, minimum wastage, increase farmers’ income and create employment in rural sector
These parks will have state-of-the-art processing facilities and well-established supply chain
Under the scheme, a total of 30 MFPs will be established in a phased manner (10 parks in phase I, 5 in phase II, and 15 in phase III)*
Infrastructure Development in FPI (3/3)
Cold chain, value addition, and preservation infrastructure
The infrastructure scheme will provide financial assistance in setting up integrated and complete cold chain facilities, preservation infrastructure facilities, value addition facilities, and irradiation facilities
Financial assistance of up to 75% of the total project cost is provided by the government
Total of 49 projects have been planned across the country, of which 10 are in progress
These projects are expected to add 232,628 MT of cold chain to the existing infrastructure
Setting up / modernization of abattoirs
Lack of basic infrastructure facilities such as water, electricity, and carcass handling mechanism result in tremendous wastage and contamination / deterioration of meat
The FPI infrastructure scheme plans to set up 10 new abattoirs and modernize several existing facilities in the coming years
An amount of US$6.8 million have been disbursed to set up the 10 new facilities
So far, 2 abattoirs have been completed at Dimapur, Nagaland and Ahmednagar, Maharastra
Government Incentives for FPI Sector (1/2)
Government Incentives for FPI Sector (2/2)
Foreign Direct Investment Policy
FDI is permissible for all the processed food products under 100% automatic route, except for items reserved for micro, small and medium enterprises where FDI is permissible under automatic route up to 24%
FDI under automatic route is approved at Reserve Bank of India (RBI) level and does not require approval of Foreign Investment Promotion Board (FIPB)
Import Regulations Related to Food Products (1/2)
Import Regulations Related to Food Products (2/2)
Food Safety and Standards Authority of India (FSSAI)
The Food Safety and Standards Authority of India (FSSAI) has been established under Food Safety and Standards Act, 2006 (FSS Act) which consolidates various acts & orders that have hitherto handled food related issues in various Ministries and Departments
It is responsible for
Laying down science based standards for articles of food
Regulating the manufacture, storage, distribution, sale and import of food to ensure availability of safe and wholesome food for human consumption
Introduction of the FSS Act repealed a number of individual regulatory acts such as Edible Oils Packaging Order and Milk and Milk Products Order
The Act aims to establish a single reference point for all matters relating to food safety and standards
FSSAI also collects and collates data regarding food consumption, incidence and prevalence of biological risk, contaminants in food, residues of various, contaminants in foods products, identification of emerging risks and introduction of rapid alert system
Impact of Changes in Labelling Laws
Over 200 MT of imported gourmet chocolates from around the world, including brands such as Godiva, Guylian, Lindt and Mars, are stuck at various Indian ports due to non-compliance with new Indian labelling laws
Several other food categories such as French artisinal cheese, American crisps, Thai condiments, and Italian pasta sauces have also been held up for non-compliance
FSSAI is especially wary of labelling violations on chocolate products as tests reveal that many of them contain very high level of vegetable fat, which is not permissible under the Indian law
Small-scale importers who primarily depend on a single food category have been badly affected with many of them already closing the business
Indian packaging and labelling regulations have been in place since 2011 and ample grace period was given to importers to align themselves with new regulations
Since November 2013, FSSAI has stopped allowing imported products that do not comply with the new laws
Labelling Requirements
Packaging Requirements
Duties Applicable on Imported Products
Benefit of Local Sourcing
Italian Presence in India
Italian Companies in Indian Food Industry
Italian Companies in Indian Food Industry
Italian Companies in Indian Food Industry
Italian Companies in Indian Food Industry: Olive Oil
Italian Companies in Indian Food Industry: Wine
Italian Companies in Indian Food Industry: Pasta
Entry into India: Importer-Distributor Model
Entry into India: Greenfield Setup
Food Processing Machinery – Market Size
Market Dynamics and Trends
Food Machinery Imports and Exports
Food Processing Triangles
Machinery Distribution System
Recent Investments by Players
International Companies in Machinery Industry in India
Key Machinery Supplier Countries
Meat Processing – Customer Concentration
Packaged Food – Customer Concentration
Packaging Industry in India
Packaging Industry – Key Product Categories
Packaging Industry – Key Players
List of Mega Food Parks Implemented in Phase I and II

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