10/23/2018 Food and Beverage industry in India and abroad - Careerizma

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Overview, market size, growth trends, news resources

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A famous foodie once said that the only thing that he loved better than talking about
Take charge of your
food is eating. Here, we just have to take the second choice. So let’s chew on facts and
professional life. Find
figures from the world of food and drink.
out what's holding you
The larger picture, first. The global food and beverages industry is made up of many back and what you
segments, including groceries, oils and fats, food additives, functional foods and can do about it. Sign
beverages, packaged foods, health and natural foods, canned food, baked food, baby up for our
food, animal food, soft drinks, alcoholic drinks, energy drinks, and packaging. personalised Career
Counselling
The industry is driven by consumer demand for more nutritious food and better
packaging, which also spurs technology advances in the field. Today, pasteurisation,
high-pressure processing, UV treatment, and nanotechnology are influencing the
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industry. A concern for the environment has led to the use of more recycled material for
packaging. Resources

The growth of the food and beverages industry is propelled mainly by developing
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countries such as India, China, and Brazil, as the economies of these nations improve
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and more people are lifted into the middle class.
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The global food, beverage, and grocery industry was estimated to be worth $7.8 trillion Assessment
in 2015, or about 10 percent of the world GDP, according to Plunkett Research. The
global packaged-food industry was worth $2.5 trillion. In 2013, global food exports
added up to $1.43 trillion.

History
The history of food and beverage is, of course, as old as humans themselves. However,
there were no major developments until the 19th century, when Nicholas Appert

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10/23/2018 Food and Beverage industry in India and abroad - Careerizma

invented canning and Louis Pasteur developed pasteurisation. These processes made
food a product that could be preserved and packaged for later use.

World War II prepared a fertile ground for innovations in the food industry. As food was
rationed and prices were regulated, better preservatives and flavouring agents were
developed. This paved the way for instant foods.

Improvements in distribution are a major part of the development of the food industry.
Before the Industrial Revolution, people consumed food and drinks mainly from local
markets. Today, thanks to transportation and cold storage facilities, food can be taken to
stores anywhere.

Quick facts and statistics

By market size, the top ten countries for the overall food and beverages (grocery)
industry are the US (about $1.7 trillion, according to approximations from various
sources), China ($700 billion), Japan ($600 billion), India ($400 billion), Russia ($350
billion), Brazil ($250 billion), Germany ($225 billion), France ($200 billion), UK ($180
billion), and Indonesia ($175 billion).

The biggest exporters were Germany ($58 billion), US ($56 billion), and France ($48
billion), and the biggest importers the US ($82 billion), Germany ($53 billion), and
Japan ($45 billion), as per online sources.

The top ten global F&B companies (December 2013 or March 2014 figures) were Nestlé
($77 billion in food sales), PepsiCo ($66 billion), Coca Cola ($46 billion), JBS ($44
billion), Archer Daniels Midland Company and Anheuser Busch InBev (both $43
billion), Mondelez ($35 billion), Sab Miller and Tyson Foods (both $34 billion), and
Cargill ($33 billion). The other biggies were Mars (11th rank, $33 billion), Unilever (12th
rank, $31 billion)), Kraft (19th rank, $18 billion), and ConAgra Foods (24th rank, $15
billion).

Among the top companies in India are Amul, Godrej, Dabur, PepsiCo, Coca Cola, Nestlé,
Britannia, ITC, Parle, Cadbury India, Hindustan Lever, and MTR Foods.

F&B industry in India

India is expected to become the fifth largest consumer market in the world by 2025,
according to a paper prepared by the Confederation of Indian Industry (CII) and Grant
Thornton.

Food and beverages is the biggest of the consumption categories. The F&B sector is
supported by the vast agriculture sector: India is the biggest producer of pulses, and the
second biggest producer of rice, wheat, sugarcane, and fruits and vegetables.
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10/23/2018 Food and Beverage industry in India and abroad - Careerizma

It is also the biggest producer of milk and buffalo meat and ranks fifth in poultry
production. The other helpful factors: large extents of arable lands, favourable climate,
long coastline, and low wages.

The liberalisation of the economy in the early 1990s minimised business barriers. The
sector has found more avenues to the market with the development of modern retail
systems such as supermarkets. Meanwhile, transportation and storage logistics have
improved.

The huge population (1.27 billion in 2015) and the burgeoning middle class are the other
advantages for the industry. About half the population is under 30 years of age, and
many of them start to earn early and strive to lead a better quality of life.

The higher income levels of consumers give them higher disposal incomes. Lifestyles
have changed, and more families are eating out and trying out different cuisines.
Working couples are increasingly purchasing convenience foods.

Consumers have become more discerning and those in urban areas particularly trust
branded foods for their promise of quality.

A section of consumers have become extremely health conscious. This segment is

moving towards protein-rich foods and fruits and vegetables from carbohydrate-rich or
fat-laden items. Quality-conscious customers have taken the bottled water market to
$50 million.

The beverage industry, excluding alcoholic beverages, is worth about $16 billion. Tea
and coffee are the most popular beverages, followed by soft drinks (carbonated drinks
and juices), health drinks, milk-based drinks, flavoured drinks, and energy drinks.

Half of the tea and coffee consumed in the country is sold unpacked. The alcohol
beverages market is estimated to be worth about $35 billion, with whiskey, beer, and
wine as the most popular drinks.

The F&B industry would do well to adopt global standards of quality and safety to earn
more consumer trust. The need of the hour is the introduction of Total Quality
Management principles.

Food processing
Of the nearly $400 billion overall Indian food and beverages industry, the food
processing sector accounts for about $130 billion. It makes up 10 percent of the
agriculture GDP and 12 percent of the manufacturing GDP.

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The unorganised segment has a share of over 40 percent of the output. Food processing
makes up 10 percent of the country’s total exports. The key export markets are the US,
Vietnam, Iran, the UAE, and Saudi Arabia. Rice and wheat are the main items for
exports.

The food processing sector has various sectors including consumer foods (snacks,
beverages, etc.), dairy, meat and poultry, fish, grains and cereals, and fruits and
vegetables. Fruits and vegetables and meat and poultry take the lion’s share of about 40
percent of the total household consumption.

Technology, mainly IT, has helped the industry evolve from just preserving and
packaging food to manufacturing foodstuff according to consumer demand. However, it
is yet to take full advantage of technology to reduce wastage. The other main problems
are lack of credit; lack of clarity in government policies and in food safety laws; and
shortage of employable manpower.

Other sectors in the F&B industry

Food retail
Not only in cities, modern food retail has grown in small towns, too. However, nearly 70
percent of the business is in the unorganised sector.

The Food Safety and Standards Act, 2006, has given the organised retailers a shot in the
arm as they can conform to the regulations better. Increasing urbanisation is helping the
sector grow.

However, high real-estate prices are a worry along with the lack of cold storage and
problems in supply chain management.

Online grocery supply

Although grocery supply online is still in its early days, the convenience and price factors
are making it more popular in urban areas.

Online stores are able to offer attractive discounts and larger variety. Increase in the
number of Internet users is expected to boost prospects.

The main challenges are customers’ desire to actually see the products they are buying,
especially perishables, and dependable computer systems.

Food service
According to the National Restaurant Association of India, food service will be worth
nearly $68 billion by 2018.

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The number of fine dining, casual dining, and quick service restaurants is growing in
cities. Younger professionals are their biggest customers. Home delivery and takeaways
are also gaining popularity.

The challenges are real-estate prices; lack of availability of personnel with knowledge of
basic service etiquette; electricity and water supply; sourcing of raw foodstuff; and the
number of licences needed.

Dairy
The Indian dairy sector was estimated to be worth $70 billion in mid-2015. The growth
is mainly owing to the White Revolution. India will likely produce 180 million tonnes of
milk worth $135 billion by 2020. Technology has come to the aid of the dairy sector,
with ultra-high-temperature processing, aseptic packaging, and membrane processing.
The main challenges for the sector are rising prices of fodder and lower milk yield of
Indian cows and buffaloes.

Cold storage
India has a cold storage capacity of 30 million tonnes in 6,000 units, 90 percent of them
owned by private companies. The demand is expected to increase to over 45 million
tonnes. Lack of skilled manpower to handle food according to the norms is a major
challenge.

Investments
The Indian Brand Equity Foundation (IBEF) quotes figures from the Department of
Industrial Policies and Promotion to say that the food processing sector received foreign
investments of $6.4 billion from April 2000 to June 2015. The CII believes that the food
sector has the potential to receive investments worth $33 billion before 2025.

Among the recent major investments likely in the sector is Amul’s plan to invest $753
million to set up ten milk-processing plants and improve existing plants to scale up milk
production to 32 million litres per day by 2020 and ITC’s decision to invest $120 million
to set up a food processing unit in Telangana.

Government’s initiatives
The government has prepared a Vision Document 2015 to promote food processing
industries. It has set up a $20 million international food park in Punjab and is planning
42 “mega food parks.”

More degree courses in food processing and an entrepreneurship programme are to be

started and training centres set up.

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10/23/2018 Food and Beverage industry in India and abroad - Careerizma

The Union Budget for 2015-16 unveiled a corpus fund of 2,000 crore to provide
cheaper credit. The excise duty on plant and machinery has been reduced to 6 percent
from 10 percent.

Most importantly, for consumers, the Food Safety and Standards Authority of India has
issued regulations quality and safety standards for food products.

Global trends in F&B

Taxes and regulations
With consumer awareness growing, more governments are cracking down on unhealthy
foods. Regulators in some countries have imposed taxes on some items in order to
increase their prices and thereby bring down consumption.
Consumers: Consumers are persuading the food industry to try to tempt them with
nutrition rather than taste. No wonder then that the global health food market is
estimated to touch $1 trillion in 2017 and the health drinks market $400 billion in 2016.

Internet
Customers are now more discerning and have ample data on the Internet to make good
choices. This and the convenience factor are persuading more people to buy food online.

Sustainability
Companies are turning to recyclable packaging material and sustainable processes for
the sake of the environment. They are trying to minimise the use of electricity and water
and reduce wastage of food.

Jobs in the F&B industry

Positions in the food sector range from chef and food scientist to quality assurance and
supply chain management professional at hotels and restaurant chains and
supermarkets and retail stores.

Although many jobs do not require special qualification, a degree or diploma in food
sciences does improve the candidate’s CV.

Various courses, including BSc in food technology, nutrition, and food service
management, and specialisations in bakery, beverages, etc., are available in colleges.
However, the job aspirant should realise that the food industry is a hard taskmaster.

Online resources and news for the F&B industry

1. Financial Times
2. FnBnews.com

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10/23/2018 Food and Beverage industry in India and abroad - Careerizma

3. Food Processing
4. Beverage Industry
5. CNBC
6. FoodDIVE

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