Opportunities For The Food Processing Industry in India
Opportunities For The Food Processing Industry in India
Opportunities For The Food Processing Industry in India
India
Narendra Shah, CTARA* & K V Venkatesh, Department of
Chemical Engineering
In India agricultural and dairy sectors have achieved remarkable
successes over the last three and a half decades. Besides being
one of the world's largest producers of food-grains, India ranks
second in the world in the production of fruits and vegetables,
and first in milk production?providing much needed food
security to the nation.
The accomplishments of the green and white revolutions
have, however, not been matched by concurrent developments
in supply chain management, and in new technologies for better
processing, preservation, and storage of food. Pockets of
shortages and near starvation, substantial wastages due to
spoilage, quality deficiencies, and inadequate returns to the
farmer are still very much in evidence.
Increased urbanization, improved standards of living, and the convenience needs of dual income
families point to major market potentialities in the food processing and marketing sectors. This is also
evident from the presence of several global foods giants and leading Indian industrial enterprises in
the country's food processing sector, such as: Nestle India Ltd, Cadbury's India Ltd, Kelloggs India,
Hindustan Lever Ltd, ITC-Agro, Godrej Foods and MTR Foods Ltd Besides, in the current globalized
milieu, our surplus food production, as well as the increasing preference for Indian foods (in several
regions of the world) need to be leveraged to achieve economic, and strategic objectives through
exports. The Food and Agriculture Integrated Development Action (FAIDA) report (1997) prepared by
McKinsey has estimated that, driven by changing consumer preferences, the annual consumption of
'value-added' foods alone would grow to Rs.225, 000 crores by 2007?larger than the entire
manufacturing sector! A more recent report has stated an absolute revenue increase of Rs. 900 billion
in food manufacturing between 1993 and 2000. This is in contrast with Rs. 150 billion and Rs. 300
billion in the pharmaceutical and IT industries, respectively. Overall, the value of the Indian food
industry has increased from Rs. 3.09 trillion in 1993-94 to Rs. 3.99 trillion in 2000-01. The segments
with the largest growth potential have been identified as dairy, wheat, fruits and vegetables, and
poultry. This report has also identified some of the major challenges for the emerging food industry in
India (see box).