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A comprehensive view
The Indian food market is approximately Rs 2,50,000 crore ($69.4
billion)
Value-added food products comprise Rs 80,000 crore ($22.2 billion).
The food processing industry is witnessing a 20% annual growth rate.
Post-Green Revolution, it is essential that agricultural research
reoriented to address new challenges. Application of
biotechnology, RNA use, and molecular biology.
Nutritional research and improved cost-effective vaccine
programmes
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Indian food and beverage companies are making a beeline for regional
overseas markets like Bangladesh, Pakistan, Nepal, Middle East
The market is seeing players like Heinz, Mars, Marico, Pepsi, ITC,
Dabur, Britannia, Cadbury, HLL, Pillsbury, Nestle and Amul.
Both public and private players operate in the market, e.g., Hindustan
Lever, Nestle and NDDB, NAFED.
The price stability throughout the year has contributed to the increase
in domestic liquor sales.
Branded products are preferred in the Edible oil segment as the urban
consumers are increasingly becoming health conscious and looking
out for low cholesterol cooking medium.
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Packaging material for match sticks is exempted from excise
duty.
The higher railway freight has pushed up cost of raw materials
and inputs such as sugar, edible oil and all these add to cost of
production.
FICCI has highlighted some areas of concern impacting the
overall Food and Beverage Industry
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Health food, health food supplements, Convenient Food and
Branded Food are rapidly gaining vast popularity with the
changing life styles of the consumers.
The unorganized, small players account for more than 75% of the
industry output in volume terms and 50% in value terms
Since liberalization in 1991 till January 2004 proposals for projects
of over Rs.87715 crores have been proposed in various
segments of the food and agro-processing industry.
The Government has provided many liberal incentives to
encourage the Food Processing industry.
Segment-wise Analysis
BRANDED FLOUR (ATTA)
The grain-processing sector is largely un-organized, although there
are a few large players in the market.
Brands like "Captain Cook", some large players, like Hindustan
Lever (with its Annapurna brand) and Godrej Pillsbury
(Pillsbury), Agro Tech (Healthy World), Nature Fresh and ITC
(Aashirvaad) re players of the market
Increased competitive activity is spurring market growth
The segment, which had been growing with excellent rate of 4050% till 2000 grown by 12% in 2004-05.
BAKERY INDUSTRY
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The organized sector has a market share of 45 per cent and the
balance 55 per cent is with the unorganized sector in the baked
products.
Bread Industry:
The large organized sector players who are prominent in the highand medium-price segments include Britannia, Modern
Industries Ltd.
Local manufacturers with numerous local brands cater to populous
segment and contribute considerably in the bread segment.
Biscuit Industry:
The major brands of biscuits are Britannia, Parle, Bakeman, Priya
Gold etc
The per capita consumption of biscuits in our country is about 1.52
kg as compared to more than 12 kg in developed countries
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HLL (Kissan and Knorr range) and Nestle
(Maggi) dominate this segment. Heinz and
Top Ramen are also strong players.
Frito Lay's India, Pepsicos Snack Food
Division having snack foods plants in
Channa (Punjab) and Pune (Maharashtra) ,
and going for another in (Sakrail) West
Bengal with investment of Rs 75 Crores.
FRUIT JUICES / PULP &
CONCENTRATES/ SAUCES/ KETCH
UPS
India is the second largest producer of both
fruits and vegetables in the world.
The market has immense potentialities
provided some infrastructural facilities for
efficient transportation and marketing of
fruits and vegetables are created.
Sugar Industry
The largest agro-processing industries of the country with an
annual turnover of Rs 200 billion.
Indian sugar industry uses sugar cane as the only input
The sugar industries have sprung up in states like Uttar Pradesh,
Maharashtra, Punjab, Gujarat, Andhra Pradesh, West Bengal.
The leading players in Indian sugar industry are Balrampur Chini
Mills Ltd, Bajaj Hindustan Ltd, Andhra Sugars Ltd, Thiru
Arooran Sugars Ltd and, Dhampur Sugar Ltd.
The Government controls sugar capacity additions through
industrial licensing, determines the price of the major input
sugarcane, decides the quantity
Inadequate sugar cane availability, uneconomical size, bad
condition of plant and machinery are responsible for closure of
many mills in the country.
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Central Government has also
provided inland transport
subsidy for sugar export.
Dual Pricing System is adopted in
the Indian sugar industry, which
includes sugar price in Public
distribution system and the free
sale sugar price.
Edible oil
The growth of the Rs. 250 billion edible oil industry in India has
been somewhat stagnant at around 5% per annum.
NDDB has emerged as a major player in the sector with its
"Dhara" brand of edible oil.
Even small growers and co-operatives having crushing units or
solvent extraction units have started branding their products.
In Edible oils, National Dairy Development Board (Anand), ITC
Agro-Tech (Secunderabad) , Marico Industries (Mumbai),
Ahmed Mills, (Mumbai) are the major players.
The main issues in the edible oil segment is the rising cost of raw
materials.
Raw material cost account for 70 per cent of sale price.
Alcoholic Beverages
The alcoholic beverages industry in India is generally divided into
two main categories-Industrial Alcohol and Potable Alcohol.
The price stability throughout the year has contributed to the
increase in domestic liquor sales.
United Breweries Ltd, Shaw Wallace, MC Dowell & Co Ltd (part
of the UB Group) Radico Khaitan, Seagram India Ltd are
among the familiar names in the alcoholic beverage industry in
the country.
The Indian wine market, estimated at 5 lakh cases annually, has
witnessed robust 30% growth over the past few years.
Several Indian brands have made inroads into the foreign markets
including British market.
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Mother Dairy brand through retail
outlets across the country in
addition to its own 300 outlets
with provision of cold storage
and cold chains.
Confectionary Industry
The entire market can be divided into 7 major categories, namely
Hard Boiled Candies (HBC), Toffees, Eclairs, Chewing gums,
Bubble gum, mints and Lozenges.
It is dominated by 2 major players, Cadbury India Ltd and Nestle
India Ltd, which together account for about 90% of the total
chocolate market.
The perishable nature of the product and the fact that India lacks a
cold chain distribution network are among the major problems
that inhibit market expansion.
The private dairies have raised the prices including the prices of
Skimmed Milk Powder (SMP), the essential ingredient for
manufacturing milk chocolates and ice cream mixes in addition
to biscuits and confectionery products.
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Tea imports surged from a mere 7
million kg in 2003 to
whopping 30 million kg in
2004.
Lower availability of tea in the
domestic market may continue
in short run, as tea production
falls in January seasonally
Assam produces around 53
percent of the country's total
production, but also employs
more than 10 percent of the
states work force or around 12
lakh people.