The food processing sector presents a great investment opportunity as India’s domestic food market is one of the largest and yet a rapidly growing one. It is one of the largest industries in India, ranked 5th in terms of production, consumption, export and expected growth. The Indian food industry is currently valued at US$ 39.71 billion and is expected to grow at a Compounded Annual Growth Rate (CAGR) of 11 per cent.
Coupled with key policy measures including, automatic approvals for FDI, tax exemptions for exports, processing and technology transfer, India is emerging as a preferred destination for global investments in the food processing space. This can be backed with the fact that foreign direct investment (FDI) in the sector grew by 24 per cent in 2017-18 to USD 904.9 million.
Smt. Harsimrat Kaur Badal, Union Minister, Ministry of Food processing Industries during her inaugural address at the Confederation of Indian Industry’s ‘National Food Processing Conclave 2018’ organised in partnership with Ministry of Food Processing industries, mentioned that as a result of various schemes operationalised by her Ministry, there has been 351% increase in food processing and preservation capacities, 720% increase in cold chain and cold storage capacities, 5 lakh jobs have been created and infrastructure has been created to process 1 lakh crore of agro produce. However, it was stressed that for further propelling the sector, the key lies in direct linkage of processors with farmers. The challenge lies in procuring in bulk, and the way forward is through creation of farmer aggregation bases.
The Conclave had eminent speakers from prominent food companies speaking on global trends such as mindful eating habits determining food product innovations, Snackification trends redefining traditional mealtimes, packaging technologies assisting processing and consumption by enhancing food shelf life; and the shifting trend in advertising determining consumer preference.
Mr. Suresh Narayanan, Chairman, CII National Committee on Food Processing & Chairman and Managing Director, Nestle India Limited, mentioned that, “In the era of globalization and proliferating lifestyle diseases, quality conscious consumers across the world are seeking comfort, respite and health benefits in their food”.
At present there are different segments of the food processing industries operating in the food industry space in the country. There are food companies engaged in traditional food products along with others who have evolved and become organised through value addition, progressing with all components of the supply chain. While some large players are developing their franchisee chain enabling them to access wider domestic and global markets; there are also new generation companies who through their innovative technologies and business models are emerging as strong competitors to established players.
Along with focusing on established large players and the range of issues ranging from policy to packaging faced by them, the Conclave also focused on new-age food companies that are ‘Breaking the Clutter’ both in terms of innovative products as well as innovative business models.
In the segment of new generation companies, the Conclave heard from speakers representing Soulful (Kottaram Agro Foods Pvt Ltd), a breakfast cereal brand focused on millet based products; Sattviko (Rays Culinary Delights Pvt. Limited), an brand which markets light, nutritious snacks in various flavours of Indian Origin, Good Dot Enterprises Pvt Ltd, a protein based rich packaged food brand, Doodhwala (Banger Tech Pvt. Ltd), a company that has digitised last mile connectivity for delivery of dairy and grocery products, and a women-led Millet Farmer Producer Organisation, Virudhai Millet Farmer Producer Organisation.
Mr Arun Maira, Former Member, Planning Commission of India, & Former India Chairman, Boston Consulting Group mentioned that to fast track the roadmap for Indian Food Processing to its version 2.0, what is needed is to accelerate impact on the ground. For this to happen the suggestions were to have more cooperatives and cooperation on the ground, cooperation amongst many agencies working on the ground and private sector should be part of this cooperation and cooperation amongst the policy makers.