Food Processing Sector in India

–Challenges & Opportunities

Naman Jain
BEFT Department
M.Tech Final Year

1
INDEX

2
Food sector in India
Introduction

3
Contd……

4
Why India????

5
 Food processing sector in india
Huge wastagae across the supply chain leads to lower level of
processing and results low value addition .

Field Losses Other

Segment India
(Pest, Diseases, Rodents etc) Countries
Pre-Processing US A (65 %),
(inefficient harvesting,, milling) Fruits and Philippines
2.2% (78%)
Transport Vegetables
(e.g. spillage, leakage) China (23)%;
Storage Marine 26%
(e.g. technical deficiencies) 60-70% in
Poultry 6%
developed
Processing & Packaging
Buffalo
(e.g. excessive peeling, washing) 20% countries
Meat
Marketing 60-75% in
(e.g. spoilage, rotting in stores) Milk 35% developed
countries
Wastage by ConsumerBritt-Louise Andersson, SIWI
F wastage)
(e.g. overeating, food
6
 Present level of production of different types
of food commodities and estimates of their
post- harvest losses.

Present level of production Post-harvest losses

Food commodity Quantity Average Value Quantity Monetary
(million price (Crore Rs.) % (million
tonnes) (Rs/tonne) tonnes) value
(crore Rs.)

Durables
(Cereals,pulses,oil 230 10,000 2,30,0000 10 23.0 23,000
seeds ,etc)
Semi-perishables
(potato,onion,sweet
potato etc.) 40 3000 1,20,000 15 6 18,000
Perishables
(fruits,vegetables,mil 7
k,meat,fish,eggs,etc. 210 15,000 31,50,000 20 42 63,000
)

*On aTotal (avg)

Conservative scale480 11,604 55,70000 14.8 71.0 1,04,000
 Supply Chain- Comparison with a developed country.

retailer consumer
Commission Traders wholesaler
India
Consolidator agent
Farmer
High Wastage and
Low Margins
Consumer
Retailer
Wholesaler
Developed countries

Farmer
Low Wastage
better Margins

8
9
 Growth Rate and Market Value of Indian Processed food

Food commodity Growth rate/year,% Food commodity Market value(Rs.)

Chocolate industry 11 Processed food 1248 billion

Ice cream industry 15 Beverages and alcohalic drinks 139.2 billion

Production of soft drinks 15

Bakery & culinary products 77 billion

Instant snack production 20 Dairy Products 50 billion

Beverage industry 22 Export 24 billion

Processing of F/V’s 22 Chewin gum & bubble Gum 300 croes

Production of concentarted fruit juic 30 Toffees & Candies 600 crores

Sale of processed food products 150 Ice –Cream 650 crore

10
 Status of Processed food consumer past ,today and Future

The
modern &
other
traditionalist

The conservative
Traditionals.

PAST

FUTURE

11
PRESENT
 Industry Growth Drivers-Policy
Policy to boost the quantity and quality of the output as well
the significant employment in the food sector.

Mega Food Parks Grant of 25%of the cost Financial assistance Setting up a Network
of plant and machinery to set up training of Laboratories.
(max. of 50 lakhs) centres.
Integrated Cold Chain Grant of 33% of the Establishment of Establishment of
cost of plant and NIFTEM (Haryana). Research Institutes.
machinery (max of Rs
75 lakhs in difficult
areas).

12
 MAJOR CHALLENGES IN INDIAN
FOOD INDUSTRY

Seasonal production

Weak & ineffective

supply chain

Low level of value

addition & high ge b/w
postharvest losses Weeaak linka nment
tryy, gover
industr
ution
& inssttiittu
Infrastructure-
y for
power, irrigation still Prriiccee elasticit
developing food product ct

t
Taste variability Waste managemen

13
 CHALLENGES IN THE SECTOR
Productivity Issue:

Urbanization & Deforestation

Degradation due to heavy rain fall
Non-availability of electricity
High population growth
Poor yield
Several soil erosion
High uses of insecticide & pesticides
14
 VISION 2015

 Making the food processing sector attractive for domestioc and foreign
investor .
 Enhancing and stabalizing the income level of farmers.

 Providing choice to consumer in terms of variety and take.

 Promoting a dynamic food processing industries.

 Development of strong infrasructural base for production of value added

products.

 Development of pacakaging technologies for individual products .

 Establishment of cold chain, low cost pre cooling facilities near farms.

15
 Contd……………

Uses the application of biotechnology,energy saving technology and

technologies for enviornmental protection.

Development of area specific Agro Food Parks.

The following specific targets would to be increased..

The level of processing of perishable foods from 6 to 20%.

 Value addition from 20 to 35% .

 Share in global food trade from 1.5 to 3% by by the year 2015.

NOTE- An estimated ainvestment ofr Rs. 1,00,000 croes is required to achieve the the discussed vision,of which
Rs.45,000 crores is expectaed to come from the private sector,Rs.45,000 crores from financial institutions and Rs.10,000
crores from government.
16
 Recommendations
Recommendations for the Food Processing industry in India

Increased
processing
Promote Nutrition
Foods Level

Processed variety
Consumer Education
of crops
FOOD
PROCESSING

INDUSTRY
Increase in
promotional activities

Waste management

Promote distribution

channel and cold Technology

chain upgradation

17 17
 Industry Growth Driver -Demand

Factors:-

 Increasing Urbanization-Lifestyle & aspirations

 Increasing spends on health foods.

 Increasing Nuclear Families and working Women.

 Demands for functional food.

 Increased Population

18
 Population of Processing Industry and level of
Processing(Perishable Products)

Population of Processing Industries Level of Processing

(Perishable Products)

Fruits /Vegetables Processing 5198 Organized Unorganized Total

Units
Fish Processing, Preservation 372 Fruits/Veget 1.3% 0.8% 2.2%
and Freezing Plants ables
Slaughter Houses 3600 Milk/Milk 13% 22% 35%
Products
Egg processing Plants 06
Buffalo 21% - 21%
Fish Processing Units 409 meat
Traditional Food Industries 20000 Poultry 6% - 6%

Bakery’s 60000 Marine 8% 15% 21%

Products

19
 Food Consumption in India

250
229.7

210.3
198
200 191.4
184.4
180.1
168.6
157.7
151.7
150

100

50

0
2005 2006 2007 2008e 2009f 2010f 2011f 2012f 2013f

20
 Challenges in the Sector
Human Resource Development

NOTE- The industry is in dire need of highly skilled /trained manpower across the different level to
handle various operations.

21
22
 Dairy Industry
 India is highest livestock population in the world ie:it5 accounts
50% of the buffalo and 20 % of the world cattle population.

 Milch animals (45% indigenous cattle, 55 % buffaloes, and 10%

cross bred cows) & Value of output amounted to Rs. 1179
billion

 The total milk production in India is 100 million tonnes with work
capital availability 229 g/day.

 The total milk processing in india is 35% which accounts 13%

of the organized sector and remaining is consumed as
unorganized channels. 23
 Dairy Infrastructure in India.
Dairy Plants Operating in India
Institutions & No./Capacity of
Handling handling Dairy Capacity(
State Coop 22 Plants Number ‘000L/D’)
Federation Cooperati 212 28394
District Milk 180 ve
Union
Private 403 32415
Dairy Cooperative 84289
Others 63 12170
Rural milk 15780t/d
Procurment Total 678 72979
Milk Marketting 9534t/d

Processing 27084t/d
Capacity (Liquid) - -

Source: Dairy Industry Conference, New Delhi

24
 Bakery and Confectionery
 The Indian Bakery Industry is dominated by small-scale sector
with an estimated 60,000 small and medium size producers.
 Biscuits and bread are considered as the major bakery product
and they account for 82% of all bakery production.
 The Total Turnover of Bread and Biscuit are 1800 crore and
3000 crore.
 The total contribution of the confectionary market in the
organized sector is approx. Rs.20 billion and the unorganized
sector is 50 billion.
 Leading companies of bakery and confectionary are Britania,
Parley, Lancer Foods, Priya Foods and Perfetti India,
Nestle(Polo mints),Cadbury India( Googly, Gollum).

25
Value of output amounted to Rs. 1179 billion (in 2004-05)
(Approximately equals combined output of paddy and wheat!!)
Milch animals (45% indigenous cattle, 55 % buffaloes, and
10% cross bred cows)

http://business.mapsofindia.com/mi
lk-co-operatives/

26
Demand, Market Structure and Product Variation of Biscuits

Demand Past & Future

Year Thousand
Metric tonne
2000-01 1110
2001-02 1188
2002-03 1307
2003-04 1444
2004-05 1523
2005-06 1607
2006-07 1696
2007-08 1804
2008-09 1920
2009-10 2043
2014-15 2758
27
28
29
30
31
 32
Ref: http://www.matrixscience.com/cgi/search_form.pl?FORMVER=2&SEARCH=MIS
33
34