New Delhi: The food and beverages market globally is estimated at $3.2 trillion. But India’s share in this gargantuan business opportunity is less than .03%. So is there any way that the food processing industry in the country can do better?
The answer seems to be yes.
A recent meet conducted by Confederation of Indian Industry and the Ministry of Commerce and Industry suggests reasons for hope that include changes in food habits abroad and the growing appetite of India’s indigenous industry.
A background paper on the industry released at the conference, says that in the last 10 years tastes have internationalized. Consumers association with various foods and their places of origin is weakening. People are willing to experiment with different cuisines from different sources for taste, variety and cost considerations.
With higher disposable incomes, many are willing to spend more on processed convenience food.
Large retailers are also driving changes in food processing through increasing choice to the end consumer. They are resorting more and more to sourcing globally of both traditional and new products. India, with its easy availability of raw materials and low cost of production is strategically poised to capitalize on this market.
Piruz Khambatta, CMD, Rasna International said,“ Thanks to government initiatives and industry investing, all this infrastructure bottlenecks are decreasing, warehousing is increasing, logistics is increasing.”
India currently produces 50 million tonnes of fruits, which is about 9% of the world’s production. The share ranges from 4% of citrus plants to 50% in the case of mangoes. India also produces 90 million tonnes of vegetables, which accounts for 11% of the world’s vegetable production. We are also the largest consumer and exporter of spices. We have 53% of the world’s buffaloes producing 90 million tonnes of milk.
Already India’s diverse communities provide varied cuisine widely accepted in the world. Dosas, idlis, biryani or curries are foodie choices across the globe.
India’s per unit cost of production is amongst the lowest in the world. This coupled with indigenous smart packaging and competitive logistic costs make Indian food amply viable for export. Present at the occasion, MK Jalan, CMD, Keventer Group said “A developing country’s economy depends on processed food export. Today Thailand’s economy depends 70% on the export of processed food. Philippines is 80%.”
And most importantly, regulatory norms of safety, quality and hygiene are getting in place in the country. These are now on par with international standards.
Indian exports primarily comprise of food and vegetables in the raw form and primary processed products, with low price realizations. India’s agriculture base is strong, but the processing level is very low. We process around 2% of fruits and vegetables, 26% of marine goods, 6% of poultry amd 20% of buffalo meat as against 60-70% in developed countries.
The CII background paper says the supply side capacity for value added exports is at least $5 billion per annum even in the short-term. For that, the industry suggests creating a Brand India for Food, which demonstrates India’s advantages and capabilities to become the Food Factory to the World.