The Indian food industry is a collective of businesses that supply food energy consumed by the world population. The Indian grocery and food market is the world’s sixth-largest, with retail contributing 70 percent of the sales. India’s food sector has emerged as a high-profit and high-growth sector due to its potential for value and particularly within the food processing industry.
In today’s time, India’s culinary tradition has been evolving constantly and with urbanization, a proliferation of fast food outlets, more working women, and rising incomes, the acceptance of ready-to-eat or processed food is increasing especially amongst the urban middle class. For
about 32 percent of the country’s total food market, our Indian food processing industry has accounted, one of the largest industries in India and is ranked fifth in terms of production, consumption, export, and expected growth.
The demand for processed or packaged or ready-to-eat items has increased. The Indian gourmet food market is currently valued at US$ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20 percent. As the matter of fact, the total food production in India is likely to double in the next few years. Whereas, there’s an opportunity for large investments in food processing, especially sectors such as dairy processing, packaging, frozen food, and thermal processing. The food industry has witnessed fast growth in most of the segments.
According to the data by the Department of Industrial Policies and Promotion (DIPP), the food processing sector in India has received around US$ 7.54 billion worth of Foreign Direct Investment (FDI) in the duration of April 2000 to March 2017. Over the next ten years, the food processing sectors have the potential to attract US$ 33 billion of investment and generate employment of nine million person-days, says the Confederation of Indian Industry (CII).
Specific to the meat processing sector, in India,
poultry meat is the fastest-growing animal protein. The government through the Ministry of Food Processing Industries (MoFPI) is making all efforts to encourage investments in the business. And India produces around 5.3 million metric tons of meat and 75 billion eggs annually. On average, India is the largest producer of buffalo meat and the second-largest producer of goat meat. Currently, the processing level of poultry is 6% while it stands at 21% for meat. In urban and metros areas the upcoming demands for convenience and easy items such as ready-to-eat, semi-cooked, ready-to-cook meat food products have increased.
To improve the food processing sector in India, the Government of India aims to boost the growth in the food processing sector by leveraging various incentives at the central and
state government level along with a focus on supply chain infrastructure. In specific to the Global e-commerce giant, Amazon is planning to enter the Indian food retailing sector by
investing US$ 515 million in the next five years, as per Mr. Harsimrat Kaur Badal, Minister of Food Processing Industries, Government of India. Amazon has excelled in every sector and by entering the business of Indian food retailing, the rise in demand and supply will surely rise.
Talking about the relaxation in terms of the Food industry, the Government of India has relaxed
foreign direct investment (FDI) norms for the sector while allowing up to 100 percent in food product e-commerce through an automatic route. On the other hand, Parle Agro Pvt Ltd is
launching Frooti Fizz, a succession of the original Mango Frooti, which will be retailed across 1.2 million outlets in the country as it targets increasing its annual revenue from Rs 2800 crore (US$ 0.42 billion) to Rs 5000 crore (US$ 0.75 billion) by 2018. And of course, who can say ‘NO’ to Frooti, right?
India's market size for food is expected to reach USD 544 billion by 2020-21 whereas the food industry output is expected to reach the US $ 535 billion in 2025-26
Overall, the consumer preference trends show an incline towards nutritious food, as there has been an introduction of variants in cereals such as muesli and granola that have impacted the traditional breakfast. Considerably, among all commodities, cereals undergo the highest level of
processing. For instance, EPA for paddy in the organized sector is estimated at 34.7%, for Wheat 18.4%; for Maize 43%; for Seed Oil and Coffee 100%; but for it’s quite low when it comes fruits
and vegetables it is just 2.65%.
India's market size for food is expected to reach USD 544 billion by 2020-21 whereas the food industry output is expected to reach the US $ 535 billion in 2025-26. To achieve a target, the companies within the sector must be prepared to take a structured approach when it comes to targeting the Food Industry with processed or ready-to-eat food.