India Among the Leaders in the Food Sector

India is the world's 2nd largest producer of food next to China, and has the potential of being the biggest with the food and agricultural sector. With India's food production likely to double in the next decade, there is an opportunity for large investments in food and food processing technologies, skills and equipment, especially in areas of Canning, Dairy and Food Processing, Specialty Processing, Packaging, Frozen Food/Refrigeration and Thermo Processing. Fruits & Vegetables, Fisheries, Milk & Milk Products, Meat & Poultry, Packaged/Convenience Foods, Alcoholic Beverages & Soft Drinks and Grains are important sub-sectors of the food processing industry. Health food and health food supplements are other rapidly rising segments of this industry.

India is the 2nd largest vegetable and 3rd largest fruit producer in the world

India will register the highest increase in rice production in the world over the next 10 years, as per the US Department of Agriculture. India's annual rice production would increase by 16.3 million tonnes (mt) by 2016, from 91 mt now.

India ranks second only to Japan in inland sector fish production. India produces about 6.57 million metric tonne fish every year.

Spices exports will cross US$ 1 billion in the current financial year and touch US$ 10 billion by 2017, according to V J Kurien, chairman, Spices Board. Of the world's total annual spice trade of 850,000 tonnes, India accounts for 44 per cent in quantity and 36 per cent in value

India aims at doubling marine exports including that of tuna fish to US$ 4 billion by 2012; 53 per cent of the marine exports comprise of shrimps.

Food Processing

The growth of food processing sector has nearly doubled to 13.7 per cent during the last four years, according to the Minister of State for Food Processing Industries Subodh Kant Sahai, who added that India has set a target of growing at 20 per cent by 2015.

A dominant segment of the food industry, food processing is estimated to be worth US$ 70 billion with a 32 per cent share. It comprises agriculture, horticulture, animal husbandries, and plantation. Experts estimate the industry GDP at 6-8 per cent with value addition of food products to increase from 8 per cent to 35 per cent by the end of 2025.

According to the 'India Food Report 2008', investments to the tune of US$ 23.5 billion are in the pipeline to be made in the food processing industry over the next three years. The opportunity for growth is huge when seen against the fact that while a mere 1.3 per cent of food is processed in India, nearly 80 per cent of food is processed in the developed world.

Significantly, processed food exports have increased from US$ 6.98 billion in 2002-03 to US$ 20.51 billion in 2006-07, recording a whopping 193.83 per cent growth rate. To realise India's potential in this industry, the Government has set an investment target of US$ 25.07 billion by 2015 to double India's share in global food trade from 1.6 per cent to 3 per cent, increase processing of perishable food from 6 per cent to 20 per cent and value addition from 20 per cent to 35 per cent.

Food Retail

The domestic food retailing market is estimated to be worth US$ 6 billion with large sections of the retail industry getting organized. Changing lifetsyles, increased spending powers, disposable incomes and changing consumer tastes are soon expected to change the face of the food retail market in India.

Interestingly, happy Indians are buying chocolates like never before - chocolate sales grew 15 per cent, to US$ 300.82 million (36,000 tonnes) in 2007.

Dairy sector

According Dairy India 2007 estimates, the current size of the Indian dairy sector is US$ 62.67 billion and has been growing at a rate of 5 per cent a year.

With the domestic dairy sector slated to cross US$ 125.34 billion in revenues by 2011, FMCG majors are now trying to develop niche categories to milk in the money. Significantly, Coca-Cola and PepsiCo have already announced plans to enter the milk-based beverage segment in India. Probiotic dairy products maker Yakult Danone India, having invested US$ 34.09 million in setting up a dairy product manufacturing facility in Haryana, will pump in an additional US$ 25.05 million over the next 3-4 years to expand its presence and market its product 'Yakult'.

Fruit juices and drinks

The US$ 1.80 billion carbonated drinks category are expected to face the heat of the rising competition this summer from categories falling under the health umbrella. At present, these categories are juice and juice-based drinks, energy and sports drinks, malted beverages, probiotic drinks and bottled water.

The fruit drinks segment is ripe for plucking. At US$ 300.67 million, the juice and juice drink category is among the fastest growing segments of the approximately US$ 2.38 billion packaged beverages category. While fruit drinks as a category is growing at 18-20 per cent, carbonated soft drinks are growing at 6-8 per cent.

Wine and Beer

All eyes are on the Indian wine market which is on the threshold of its first major milestone - crossing the one million cases mark in 2008. In the next 50 years, India's growing wine industry is likely to challenge the supremacy of traditional wine-making countries, according to a report on the state of the industry titled "The Future of Wine". The market for wine in India is growing at over 25 per cent per year. Most global wine majors have already set up shops in India:

couraged in these parks. The first five such parks would be set up in Punjab, Maharashtra, Andhra Pradesh, Jharkhand and the North-East region in the first phases.

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David Parks is a well known author and has written articles on SME News India, B2B Portal, Trade Leads, suppliers, Manufactures and many other subjects.