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[\/vc_column_text][vc_column_text]<\/p>\nThe food and beverage industry is among the fastest-growing sectors in India. It accounts for about 3 % of India\u2019s GDP and around 2\/3rd of the total retail market. It also employs more than 7.3 million people.<\/p>\n
It is the fourth largest F&B market in the world (after the US, China and Japan), with an annual consumption of USD 403 billion in 2019. However, the organized F&B market in India is worth only USD 54 billion, accounting for only 13% of the country\u2019s total F&B market. The organized F&B market in India is projected to grow by 250% over the next few years, to reach USD 135 billion in 2025.<\/p>\n
India\u2019s food processing sector is one of the largest in the world and its output is expected to reach USD 535 billion. by 2025-26. During the last five years ending 2019-20, Food Processing Industries (FPI) sector has been growing at an average annual growth rate of around 11.18 per cent. The sector constituted as much as 9.87 per cent of GVA in manufacturing in 2019-20 at 2011-12 prices. The shares of FPI in manufacturing and the growth in the GVA of FPI (GVA-FPI) may be seen below.<\/p>\n
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Indian F&B market can largely be classified as follows:
\n1. \u2018In-the-kitchen\u2019: This segment mainly comprises staples, spices & condiments and dairy products, and accounts
\nfor ~70% of the Indian F&B market.
\n2. \u2018On-the-table\u2019: Mainly include spreads and sauces, and account for 20% of the market.
\n3. \u2018On-the-go\u2019: Primarily include snacks and ready-to-eat products, and account for the remaining 10% market.<\/p>\n
The industry consists of 6 major sub-segments. Packaged foods followed by Cereals, Grains & Oilseeds are the highest contributors to the overall Gross Value Added (GVA) of the industry.<\/p>\n
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Consumer spending in India will return to growth in 2022 post the pandemic-led contraction, expanding by as much as 7 %. Total consumption is estimated to have grown by 7.0 per cent in 2021-22.<\/p>\n
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<\/p>\n
As per the Annual Survey Industries(2017-18) among the industry, the highest numbers of registered factories are located in ‘Andhra Pradesh’, which accounts for about 14.41%of the total registered factories in FPI sector industries followed by ‘Tamil Nadu’ (12.33%) and ‘Telangana’ (9.83%), Punjab (7.39%) and Maharashtra (6.87%).<\/p>\n
India holds the second-largest agricultural land in the world. It is the world’s largest producer of pulses and the second-largest producer of rice, wheat, sugarcane, and fruits and vegetables. It is also the world’s largest producer of milk and buffalo meat and the fifth-largest producer of poultry, all of which contribute to the growth of the food and beverage sector.
\nOther factors include the availability of low-wage workers, favourable climate conditions, and well-connected transportation. Most importantly, India\u2019s population, which accounts for 1.39 billion people, and the growing middle class.
\nAround half of India’s population is under the age of 30. Family lifestyles have changed, and more people are eating out and experimenting with different foods. Working couples are increasingly consuming convenience foods. Consumers are becoming more sophisticated, and those who reside in the city place a larger value on branded items because they provide consistency.<\/p>\n
The Government of India is focused on improving competitiveness and reducing wastage in the Indian F&B sector, by attracting foreign investments and collaborations through various policy reforms and liberalizations, including the introduction of Goods and Services Tax (GST). The foreign direct investment (FDI) liberalization, whereby 100% FDI is now permitted for retail trading (including e-commerce) for food products manufactured and\/or produced within the
\ncountry, is expected to be the turning point in the Indian F&B story going forward<\/p>\n
a) 100 % FDI permitted for food processing
\nb) 100 % FDI under government approval route for trading, including the same through e-commerce, with respect to food products manufactured and\/or produced in India.<\/p>\n
F&B products are generally categorized under the fast-moving consumer goods (FMCG) sector. The Government of India has taken major initiatives to promote the FMCG sector in India.<\/p>\n
Under PMKSY, The government has sanctioned 41 Mega Food Parks, 348 Cold Chain projects, 68 Agro-Processing Clusters,281proposals under Creation\/Expansion of Food Processing & Preservation Capacities (CEFPPC), 61 Creation of Backward and forward Linkages Projects & 06 Operation Green projects across the country have been approved.<\/p>\n
The sector has witnessed an FDI equity inflow of USD 4.99 billion during the period from April 2014 to September 2021. The FDI equity inflow in the FPI sector from April to September 2021 was
\nUSD 410.62 million in comparison to USD 220.42 million in the corresponding period last year. FDI Inflows in Food Processing Sector (in USD million).<\/p>\n
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Some of the largest F&B companies in the world and retail chains have invested in the Indian F&B sector. Listed below are the key investors, based on their regions of origin:
\nFrom North America: Amazon, Cargill, Coca-Cola, Del Monte, Hershey, Kellogg\u2019s, Kraft, Mars, McCain (Canada), Pepsi, and Walmart
\nFrom Europe: Danone (France), Ferrero (Italy), Metro Cash & Carry (Germany), Nestle (Switzerland), Perfetti (Italy),and Unilever (United Kingdom)
\nFrom Japan: Kagom and Yakult<\/p>\n
Among the top companies in India are Amul, Godrej, Dabur, PepsiCo, Coca-Cola, Nestl\u00e9, Britannia, ITC, Parle, Cadbury India, Hindustan Unilever, and MTR Foods.<\/p>\n
The Government of India, through the Ministry of Food Processing Industries (MoFPI), is taking all necessary steps to promote investment in the Indian food processing industry. After the pandemic, people became more health conscious, and with it their preferences in terms of what they ate. Demand for ingredients and fragrances is increasing. There is an increasing demand for ready-made and ready-to-eat products. Organic products have become popular among people, and
\nthe impact of social media on our lives has made people make innovative food choices.
\nGovernments have become aggressive in making packaging labelling and information more intuitive for consumers. The government has also banned plastic, forcing fast-moving consumer goods companies to think differently about packaging solutions, resulting in eco-friendly packaging for food.<\/p>\n
Organic Food:<\/strong><\/p>\n The organic food market is one of the fastest-growing markets in India. As health awareness grows, consumers are rapidly turning to healthier alternatives. Indian organic food market is estimated to reach from USD 753 million (2020) to USD 2285 million by 2026 with a CAGR of 21% (2021-2026).<\/p>\n Private Label:<\/strong><\/p>\n Modern retail and e-commerce growth coupled with consumer demand for quality products at affordable prices. It has led brands like Reliance, Amazon and Flipkart to launch \u201cprivate label\u201d or \u201cprivate label\u201d not only in apparel and durables but also in food and groceries.<\/p>\n COVID-19isdriving growth in the private label food category due to demand for safely packaged food options and restrained household spending on food.<\/p>\n Industry estimates show that the Indian food and Beverage segment of Private Brands will grow at a CAGR of 30% over the next 5 years.<\/p>\n Ready-T0-Eat:<\/strong><\/p>\n With busy lifestyles and high income at disposing of in middle and high-class income groups, a sizeable number of people working from home, the ready-to-eat market is estimated to grow from USD 402 million (2019) to USD 1,180million (2025) with a CAGR of 20% (2020-2025).<\/p>\n Frozen food:<\/strong><\/p>\n The Indian frozen food market includes frozen meat products, snack foods, fruits, vegetables, fish, and other seafood. The growing e-commerce sector improved cold chain, and improved lifestyle is the main factors behind the phenomenal growth of this market. Frozen vegetables and snack foods account for 85% of this market. The frozen food market is estimated to grow from USD 1,243 million (2020) to USD 2,824 million (2025) at a CAGR of 18% (2021-25).<\/p>\n Food delivery and E-commerce<\/strong><\/p>\n Growing urbanization, growing population of the working class, internet, and smartphone usage, and lucrative offers and discounts by various food tech players such as Swiggy, Zomato, and Grofers have made the food-tech space grow by 35 times (in volume) during 2015- 20. Food Retail<\/strong> There is tremendous growth in F&B warehousing. Experts predict it will grow by more than USD 210 billion through 2025, progressing at a CAGR of approximately 15%during the forecast period. Five challenges faced by the F&B warehousing industry are :-<\/p>\n The Indian cold chain logistics market is expected to grow at a CAGR of over 14% during the forecast period 2020-2025. The demand for cold chains is driven by growth in sectors such as selling organizations. Retail, processed foods, pharmaceuticals, the growing shift to farming, and so on. Some of the market challenges are uneven distribution of cold storage capacity, lack of proper logistical support, and high capital investment needs. The Government of India is providing a lot of technological and financial support to promote the development of a cold chain for the horticultural and agricultural sectors. Way Forward<\/strong> (a) Domestic demand<\/strong> E-commerce and direct-to-consumer (D2C) are replacing traditional retail as manufacturers redistribute supply chains after COVID-19 and reach consumers at their doorsteps. (b)Exports<\/strong> (c) Processing capacity and quality infrastructure<\/strong> The Production Linked scheme (PLI) has the potential to encourage businesses in the agricultural sector to build processing capacity and meet demand in the face of growing challenges. The Food processing industry is gearing up for the challenge and is likely to see enhanced investment in product expansion and geographical expansion. There is huge potential for complementary industries such as food ingredients, food processing equipment, food logistics, and food packaging. To enhance competitiveness and meet hygiene needs at a scale, stakeholders, especially MSMEs, will need high-quality testing and certification infrastructure.<\/p>\n (d)Technology<\/strong> The food processing equipment market is generally dominated by imports, which is expected to increase demand. With the right interventions, this could translate into an opportunity for domestic industry to match India’s mandate for Atmanirbharta or self-sufficiency. Digitized supply chains, smart warehousing, and Industry 4.0 logistics can help India reduce waste during storage and transportation. Smart supply chain management systems can help reduce the waste of perishables.<\/p>\n (e) Institutional structure<\/strong> (f) Driving growth through innovation<\/strong> A thriving ecosystem for food processing start-ups is key to driving food innovation and driving industry growth. Innovative products focusing on health care, health, and nutrition will have great opportunities in the domestic market.<\/p>\n During and after the pandemic, many companies have innovated and launched new products that cater to traditional and new cuisines that cater to regional tastes. Some of the areas where start-ups can play a role in driving innovative solutions include product innovation, shelf life improvement solutions, smart supply chains, logistics, and warehousing. To succeed, startups will need industry support to generate enough demand for building scalable solutions.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=”1\/2″][vc_single_image image=”4024″ img_size=”400*400″ alignment=”right”][vc_single_image image=”4025″ img_size=”400*400″ alignment=”right”][\/vc_column][vc_column width=”1\/2″][vc_column_text]BDB India Private Limited is a business strategy consulting and market research company. Since 1989, BDB has been providing clients with solutions to expand their businesses in the Indian Customized Primary <\/strong>Research<\/strong> Vast Industry Experience<\/strong> 70%+ Repeat Business<\/strong> Massive Panel of experts & networking<\/strong> Every report for us is an actionable<\/strong> Our techno commercial, technical outlook, understanding of Industry dynamics and networking with industry and association had been primary reasons for large multinational companies to hire us to carry\u00a0 out market research in countries like Africa, Middle East, South East Asia, Far East BDB India Private Limited<\/strong><\/p>\n 104, Pentagon 1, Magarpatta City, Hadapsar, Pune 411 013, Maharashtra Phone number<\/strong><\/p>\n +91-20-68680700<\/p>\n info@bdbipl.com The food and beverage industry is among the fastest-growing sectors in India. It accounts for about 3 % of India\u2019s GDP and around 2\/3rd of the total retail market. It also employs more than 7.3 million people. It is the fourth largest F&B market in the world (after the US, China and Japan), with an […]<\/p>\n","protected":false},"author":1,"featured_media":4046,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4014","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"\nOther sectors in the F&B industry<\/h3>\n
\nThe adoption of online grocery delivery has increased tremendously during the pandemic due to increased focus on health aspects and reliance on in-home cooking; geared more towards fresh food products. In addition to fixed menus served by food delivery apps (aggregators and kitchen services), consumers are also offered meal subscriptions and DIY meals that can be customized to meet their dietary requirements.
\nOnline grocery delivery has soared during the pandemic, as health issues and reliance on home-cooked meals have received increasing attention. Growth is more focused on fresh produce. Gross merchandise value (GMV) for fresh produce increased by 144% in the first half of 2020, while staple foods and FMCG increased by 85% and 62%, respectively. The online grocery delivery market is expected to grow more than 8 times over the next five years.
\nThe revenue in the food tech market is projected to grow with a 39% CAGR (2021-2025).In online grocery, the revenue is growing from USD 1,557 million (2020) to USD 12,919 million (2025) and online delivery grow from USD 3,176 million (2020) to USD 10,534 million (2025).<\/p>\n
\nFood and groceries are the largest segments of India’s retail sector, having an opportunity worth USD 570 billion and accounting for 66% of the country\u2019s total retail spend. The organized grocery and food retail market will reach $60 billion by 2025. The market is expected to grow at a CAGR of 8%, supported by macroeconomic factors.
\nOther sectors in the F&B industry\u00a0\u00a9 BDB India Private Limited Conventional categories such as staples and fresh produce combined account for about 80%of total food retail spending, but the emerging snack, confectionery, and packaged beverage categories are proliferating at a compound rate of 15%. Growing health and wellness awareness is expected to shape consumer preferences
\nacross all categories increasingly.
\nOnline grocery retail in India has seen a CAGR of over 50% and is projected to grow from USD 10 billion to USD 12 billion by 2025.<\/p>\nF&B Warehousing Industry<\/h3>\n
\nDespite this growth, productivity in the warehousing and shortage industry dropped by 7.6 % in 2021.<\/p>\n![\"\"](\"https:\/\/bdbipl.com\/wp-content\/uploads\/2022\/12\/image9.png\")
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[\/vc_column_text][vc_column_text]<\/p>\nIndia’s Cold Chain logistics market<\/h3>\n
\nAccording to industry sources, the capital market is already fragmented with the presence of many smaller companies. Of all product categories, the dairy industry has the most developed cold chain in India. In terms of volume, more than half of the processing volume of traditional cold storage is for potatoes. Currently, there is a clear shift towards general-purpose hosting and value-added services that meet end-to-end needs. Under PMKSY, the government has sanctioned 348 Cold Chain projects.<\/p>\n
\nThe Indian food processing industry holds tremendous growth potential and has gained further traction due to the pandemic. Going forward, India needs to recalibrate its strategy taking into account the opportunities created in both, domestic and export markets.<\/p>\n
\nThe COVID-19 pandemic has led to an increased acceptance of processed foods. Rural areas and Tier 2\/3 cities are expected to continue to drive demand for processed foods. The healthy food, snacks, and RTE segments are likely to drive demand. The Hotel\/Restaurant\/Cafe (HoReCa) segment will play an important role as it recovers from the aftermath of COVID-19.<\/p>\n
\nThe industry should move towards an organized structure. The PM FME program was launched to formalize unorganized micro-agents in the agri-food industry. This will accelerate the planned transition from an unorganized to an organized structure. Regional companies and national manufacturers offering products that cater for regional tastes have enjoyed greater success.
\nPlayers with a national footprint and offering a wider range of products are likely to be more sustainable while competing with the local and unorganized segment.<\/p>\n
\nIndia’s exports of processed food products remain low and continue to be dominated by low- value-added products. Furthermore, industry experts say that Indian products are not competitive in terms of price and quality in the export market. In the post-Covid19 era, India can become the food hub of the world and increase its share of exports. There is considerable potential to improve India’s exports to the world’s top 10 food markets, especially given its limited presence. Key segments with export potential include meat and seafood and dairy products. The need to develop the ability to export large-scale, quality and profitable requires global certification to keep the industry competitive.
\nThe Government of India can assist exporters by negotiating Free Trade Agreements (FTAs), lowering Non-Tariff Barriers (NTBs), and accelerating the implementation of the Duty-Free Scheme for Export Products (RoDTEP).<\/p>\n
\nThe opportunities in national and international markets in the post-Covid19 era require significant improvement in the processing capacity of the agri-food sector at all levels of the value chain. The government of India has launched several programs to encourage processing capacity in the meat & seafood, dairy, and F&V segments.<\/p>\n
\nTechnology applications across the entire value chain can help reduce waste, maintain quality and improve the shelf life of food products. In a price-sensitive market dominated by small and unorganized players, technology has taken a back seat. There is a direct need to increase cold storage capacity without the scalability of perishable products can be challenging.<\/p>\n
\nA coordinated approach is the need of the hour for the development of all segments of the food processing industry taking into account opportunities in regional preference, exports, quality management systems and measures to enhance the competitiveness of Indian products.
\nInter-Ministerial Body led by MOFPI and participation from APEDA, MPEDA, and FSSAI supported by a Food Processing Council (consisting of Industry representatives) can prove to be a catalyst in the future industry development at the segment\/ product level, tapping value-added exports and addressing issues and challenges\u2013 infrastructure bottlenecks, quality bottlenecks etc.<\/p>\n
\nFood and food tech start-ups have achieved a CAGR of over 35% since 2014. Most of the startups are either in the agri-tech domain or food retail & service domain with very few in the middle layer of processing.<\/p>\n
\nand international marketplace. Our services include comprehensive consulting & market research engagements to facilitate business expansion, new market entry, export \/ import, business diversification, direct marketing, facilitating business partnerships and partner identification.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”ABOUT BDB” font_container=”tag:h3|text_align:center” use_theme_fonts=”yes”][\/vc_column][\/vc_row][vc_row][vc_column width=”1\/2″][vc_column_text]30+ Years Experience<\/strong>
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\ndocument for our clients to act upon therefore it would attempt to answer all questions on market size, addressable market, need gaps, product gaps and pain areas.[\/vc_column_text][\/vc_column][vc_column width=”1\/2″][vc_column_text]BDB ensures that every technical parameter driving selection and its related impact on overall market is well addressed by carrying out in-depth interactions with consultants, end users, suppliers and channel intermediaries.<\/p>\n
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