Food and Beverage Industry Report

 Bargaining Power of Buyers

The bargaining power of the food and beverage industry is moderate. Exclusivity in
taste in the food and beverage industry in India is always in high demand, making
buyers’ bargaining power relatively low.

 Bargaining Power of Suppliers

The food and beverage industry is hugely dependent on agricultural products for its
raw materials. Agricultural produce for the needs of the country is just sufficient.
Milk production in the country is highest but is least exported as the demand is very
high in the country. Moreover, the companies have fewer options as imported
products increase the end product’s price. But the suppliers are sometimes
exploited on price by middlemen or companies. Hence suppliers have
moderate bargaining power.

 Rivalry among existing competitors

There is a high concentration in the industry. There are a lot of players in the
industry for every product category. Though there is a power struggle between 2-3
large players in every category, there is very little scope for price appreciation.
Hence there is a high rivalry amongst existing competitors.

 Threat of substitute products

The threat of substitute products is less in the food and beverage industry. Dairy
products like milk, eggs, curd, etc cannot be replaced in the day-to-day lives of
people with some other substitutes. There is also very limited research and
discoveries about substitutes in the food and beverage industry.

 Threat of new entrants

The government provides a lot of subsidies for food processing and hence establishing
a shop is quite easy. Economies of scale are also very low. But the barriers from the
government side are quite high. Hence the threat of new entrants is very high.