FICCI - Technopak Report On Indian Food Industry

LAND OF OPPORTUNITIESThe Food Industry in India

This is acknowledged that this Knowledge Paper has been prepared by Technopak Advisors Pvt. Ltd. and valuable inputs were provided by Mr. Sameer Barde, Mr. Sudhir Zutshi and Mr. Dhiraj Gyani from FICCI.

Copyright 2008, Technopak Advisors Pvt. Ltd. and Federation of Indian Chambers of Commerce and Industries. All material printed in this publication is a joint property of Technopak Advisors Pvt. Ltd. and Federation of Indian Chambers of Commerce and Industries. No part of this report covered by the copyright hereon may be reproduced or used in any form by any means – graphic, electronic or mechanical including photocopying, recording, taping, or information storage without prior consent of, and acknowledgment of credit to Technopak Advisors Pvt. Ltd. and Federation of Indian Chambers of Commerce and Industries.

13 November, 2008

India is one of the fastest growing economies in the world. While we are moving towards

becoming a services-led economy, agriculture still contributes 17 percent to the total

GDP and employs 60 percent of population. The income enhancement of such a large

section of society is possible only through adding value and removing inefficiencies in

the food value chain. That is why the Food Industry has been accorded a high priority

status by the government which is facilitating its growth by providing policy frameworks

and initiatives at various levels.

In the year 2006-07, the size of the Food Industry in India was estimated at around Rs

8,80,000 crores or US $ 200 billion, of which the Food Processing Industry accounts for

about Rs 3,74,000 crores or US $ 85 billion. At present, Indian Food Processing Industry is

growing at the rate of 13 percent per annum and it has higher potential to explore

particularly in the sectors such as fruits and vegetables, packaged foods, beer and wine.

Therefore, it offers tremendous opportunities for all stakeholders in the areas of

production, processing, marketing, supply chain, infrastructure development,

technology up gradation and education.

The Indian Food Industry has not yet realized its potential and there is scope for further

value creation by modernizing this sector. This report provides an understanding of the

Indian Food Industry and focuses on the investment potential in the sector. We are

confident that this publication will go a long way in demonstrating tremendous

investment prospects and attractiveness of the Food Industry in India. FICCI and

Technopak are committed to all stakeholders in developing strategic business

partnerships to revolutionize the Food Industry.

Foreword

Executive Summary

The Indian Food Industry: Overview and Key Segments

Key Growth Drivers

Challenges & Potential Stumbling Blocks

Growth Opportunities for Companies

Recommendations for Key Stakeholders

1

2

3

4

Case Studies of Excellence5

6

Annexure: Indian Food Regulations

1

4

24

32

36

43

48

52

Table of Contents

This report “Land Of Opportunities: The Food Industry in India” is jointly produced by Technopak Advisors Pvt. Ltd. and Federation of Indian Chambers of Commerce and Industry (FICCI) to highlight potential in Indian Food Industry. The report focuses on the potential areas of investment, key growth drivers, key challenges and opportunities for companies. It also includes recommendations to the government as well as to stakeholders to enhance the efficacy and trade in the sector.

The diverse agro-climatic conditions in India offer huge potential for production of a wide variety of crops from cereals, pulses to fruits and vegetables all round the year. Apart from the huge production base, India has the advantage of the low cost of production, thus providing an unbeatable competitive edge in the global market place. With a growing population of 113 crores or 1.13 billion and increasing income levels, the

1demand for value added food products is rising at 13 percent per annum.

lThe size of the Indian Food Industry is estimated at Rs 8,80,000 crores (US $ 200 billion) in 2006-07 and is slated to reach Rs 1,320,000 crores (US $ 300 billion) by 2015 with the increasing share of processed food (in value terms) from 43 percent to 50 percent.

lThe Indian Food Industry is highly fragmented and is d o m i n a t e d b y t h e unorganized sector.

lThe Food Processing, being the major sector in the Indian Food Industry stands at Rs 3,74,000 crores (US $ 85 billion) and gives direct employment to about 20 lakhs or 2 million workers.

nnn Food Industry Overview

1Source: Ministry of Food Processing and Industries, Government of India

Executive Summary

Growth Rate of the key sectors

Beer 6%

Buffalo Meat 6%

Dairy 8%

Fruits and Vegetables 6%

Marine and Fish 4%

Packaged Foods 30%

Poultry 11%

Wine 30%

1Land Of Opportunities -

The Food Industry in India

lThe organized food retailing and food services are other emerging areas growing with the annual growth rate of 25 percent.

lFruits and vegetables, dairy products, marine and fish, meat and poultry, edible oils, staples, alcoholic and non alcoholic beverages, breads and bakery, confectionary and packaged foods are the key sectors in the industry, which offer tremendous growth potential and investment opportunities.

lWith changing needs and lifestyles of consumers, global as well as Indian food consumption patterns are rapidly evolving. Higher disposable incomes have resulted in greater spending and consumption among consumers.

lIncreased mobility, exposure, aspirations and availability of a substantially wider range and products have also contributed to shifts in spending orientation.

lIn addition, openness to experimenting with processed and convenience food and the increased phenomenon of organized food retailing have also led to reorientation of the entire food business.

lOther important drivers behind Industry growth are:

o Huge production base

o Increasing organized food retailing

o Increased export opportunities

o Favourable regulatory environment and government support

Augmented investment inflows

lThough the Indian Food Industry is growing fast yet the level of the food processing is still lower as compared to the other countries.

lThe key challenges faced by the sector are low level of research and development, industry academia gap, skill gap, technology gap, meeting global quality standards, higher number of small and unorganized players and regulatory bottlenecks.

lIn addition, lack of forward and backward linkages in the food value chain, inadequate agricultural and processing infrastructure and inefficient marketing system are adversely affecting the sector.

lThe integrated development of the entire food value chain offers many opportunities at every level. The report highlights the potential growth opportunities for the Indian as well as international companies entering into the Indian Food sector.

lKey segments with the largest growth potential for processing are dairy, fruits and vegetables, wine, confectionary and poultry.

lThe demand for segments like ready-to-eat, convenience foods, functional foods, health drinks, flavoured milk and fruit juices are growing very fast.

lDue to the rising need for quality and value added products; opportunity lies in research & development and quality testing laboratories.

n

n

n

n

n

n

n

n

n

Key Growth Drivers

Key Challenges

Growth Opportunities

o



strengthening the backend of the food supply chain by investing in modernization of agricultural technologies, farm machineries, training and capacity building, research & development and quality testing laboratories.

lTremendous potential for investment exists in setting up agricultural infrastructure – cold chain logistics, supply chain management, food parks and wholesale markets as well as up gradation of the existing market infrastructure.

lOrganized food retailing and food services are the other fastest emerging opportunities, organized food retail is expected to grow Rs. 2,33,200 crores (US $ 53 billion) by 2013.

lIndian farm produce offers a unique aroma, flavour and taste and if processed, packaged and marketed properly, will attract global consumers. Thus, promotion and branding is one of important areas where investment needs to be made.

lExport demand is increasing for the food products like pickles, chutneys, fruits and vegetables (canned, frozen and dehydrated), concentrated pulps and juices, packaged meat and marine products.

lTo realize the additional opportunity of Rs. 4,40,000 crores (US $ 100 billion) by 2014-2015, coordinated efforts among the government, industry and farmers are required. Promotion of Indian food items at international level by the government and the industry is essential.

lThis report recommends collaborative efforts by both the government and industry to create and upgrade the existing agricultural infrastructure, while developing greater linkages to national and international markets. Policy level efforts should be initiated by the government in consultation with farmer groups and the industry to minimize the prevailing gaps amongst various stakeholders.

lThere is an urgent need to create and augment strong at production infrastructure, processing infrastructure, distribution and market infrastructure, along with emphasis on augmenting support infrastructure at the same time. The increased investment needs to be seeking from the private sector for infrastructure development.

lThe amendment of the APMC should be implemented in the original spirit to reduce the malfunctioning of the Indian marketing system. Efficient price discovery mechanism should be evolved to safeguard the interest of different stakeholders for agricultural produce such as web based spot exchanges - Safal National Exchange, will help in fair price discovery.

lSystematic efforts should be made to brand Indian fresh and processed food products in the international market.

lSincere efforts should be made by the government to help the Indian players to meet the global quality standards.

lThe enabling regulatory environment through the initiatives like Food Safely and Standard Authority will continue to boost the pace of change in this sector. Though some initiatives have already been taken by the government, still there is urgent need to harmonize and standardize Indian quality standards to commonly accepted standards in the global markets. There is further scope in lifting restrictions on exports and imports, harmonization of the taxation system, smoothening tariff barriers and transparent merchandizing for price discovery of food products.

nnn Recommendations



The Indian Agriculture sector, which contributes 17 percent to the GDP and provides employment to 60 percent of the population, is going through a transformation phase. India has successfully managed to gain self-sufficiency in food with marginal surplus in production. India is among the leading global producers of cereals, fruits, vegetables and dairy products. The diverse agro-climatic conditions in the country are favorable for taking up production of a wide variety of crops from cereals and pulses to fruits and vegetables, rearing livestock all round the year.

Increased income levels, cheap credit facilities, higher disposable income have resulted in greater spending and consumption among consumers. Increased mobility, exposure, increased aspirations and availability of a wider range and products, have also contributed to shifts in spending orientation. In the affluent and middle class, the percentage share of food expenditure vis-à-vis other products/ categories has dropped, the total expenditure on foods has increased across all the classes. Initially food expenditure was concentrated around basic food items like food grains, vegetable oils, and sugar; there is now an inclusion of fruits & vegetables, eggs, meat, beverages and processed food in their repertoire – contributed both by increased availability and affordability. There is an increasing trend of a shift from food security to nutritional security and convenience shopping in the recent past.

The Indian Food Industry, which was estimated at Rs 8,80,000 crores (US $ 200 billion) in the year 2006 - 2007 is slated to reach Rs 13,20,000 crores (US $ 300 billion) by 2015 with share of processed food (in value terms) increasing from 43 percent to 50 percent. The Food Processing Industry comprises 43 percent (Rs 3,74,000 crores or US $ 85 billion) of the Indian Food Industry and gives direct employment to about 20 lakhs workers. It is highly fragmented and dominated by the unorganized sector with 75 percent units falling under it. The increasing contribution of food processing sector would largely come from the organized sector.

The Indian Food IndustryOverview & Key Segments

1



23%

45%

3%

23%

4%1%

1%

198

206

392

38 24110

Beer & Wine

Buffalo Meat & PoultryFish & Marine

Fruits & VegetablesDairy

Packaged Foods

Staples & Other Foods

Main sectors comprising of the Indian Food Processing Industry are fruits and vegetables, dairy products, marine and fish, meat and poultry, edible oils, staples, alcoholic and non alcoholic beverages, breads and bakery, confectionary and packaged foods, among others. In India, the food processing level under the organized & unorganized sector is at about 43 percent in value terms, which is much lower than most other countries. Contribution of main sectors to The Food Processing Industry is shown below:

Years 2002-03 2006-07 2010-11*

Food Industry Size 770 880 1,100

Food Processing Industry Size 308 374 484

% Share of Food Processing Industry in total Food Industry 40 43 44

Size of organized sector in Food Processing Industry 57 101 162

19 27 36

Source: Ministry of Food Processing Industries, Technopak Analysis, * Projections

(In Rs 000' crores)

% Share of organized sector in Food Processsing Industry

Indian Food Industry: Key Statistics

2014-15*

1,320

660

50

264

40

In addition to the contribution of staples and other foods (includes food grains, edible oils, pulses, tea, coffee, spices and condiments etc.) major contributors to the Indian Food Industry in value terms are fruits & vegetables and dairy products having share of 23 percent each. It is interesting to note that in the last five years the packaged food sector is growing at the highest pace across sectors, though with a small contribution in value terms.

Indian Food Market: Sectoral Break-up, 2006-2007 (In Rs 000' crores)

Source: Ministry of Food Processing Industries, Technopak Analysis



Some of the key subsectors of the Indian Food Industry are briefly discussed below:

The total market size of fruits and vegetables was Rs 2,05,920 crores (US $ 47 billion) in the year 2006-07 and is estimated to grow up to Rs 3,28,516 crores (US $ 75 billion) by 2015. Though fruits & vegetables constitute 23 percent of the overall food Industry, its contribution to the total Food Processing Industry is only 4 percent. The value contribution of processed fruits and vegetables in total fruits and vegetables market is about 7 percent (Rs 14,202 crores or US $ 3.2 billion). Of the total processed fruits and vegetables, 38 percent (Rs 5,374 crores or US $ 1.2 billion) is contributed by organized sector and rest of the processing is undertaken by the unorganized sector.

Value of fruits and vegetable exports from India in 2006-07 was Rs. 3,960 crores (US $ 0.9 billion), which is growing at Compound Annual Growth Rate (CAGR) of 13 percent whereas the imports for the stated period were to the tune of Rs. 1,760 crores (US $ 0.4 billion). Key statistics of fruits and vegetable sector is summarized as follows -

nnn 1. Fruits & Vegetables


Years

Market Size

Processed

Processed Organized

Non Processed

Processed Unorganized

2002-03

146

8

3

138

5

2006-07

206

14

5

192

9

2010-11*

260

58

24

202

34

2014-15*

329

115

47

213

68

Market Size and Composition of Fruits and Vegetables (value In Rs '000 crores)

Fruits & vegetables are being consumed in both fresh and processed form. The prominent processed forms of Fruits & Vegetables are dried, frozen, dehydrated and canned products. The main processed items are fruit pulp, juices, drinks, jams, squash, pickles and chutney.



Some of the major players are listed below:

Adani Agri Fresh

Bharti

Chordia Foods Product Ltd.

Desai brothers ltd

Flex Foods

Green Valley Food Corp.

HUL

Keventer Agro

MAHA Grapes

Mahindra Shubhlab Service

Mapro Foods Pvt.Ltd

Mother Dairy

Mrs. Bector Foods

Namdhari Seed Pvt Ltd

Nestle India

Priya Foods

Temptation Foods

The Global Green Company

Companies

Farm Pik

Field Fresh

Navin, Pravin, Toofan

Mother’s Recipe

Chef’s Choice

Kissan

Appy, Njoi, Frooti

MAHA Grapes

Cape Mahindra

Mapro

Safal

Cremica

Nestle

Priya

Everfresh, Karen Anand, Delika

Namdhari

Global Green, Tiffy

Key Brands

Fresh fruits

Fresh fruits & vegetables

Ketchups, pickles, sauces

Pickles, pastes

Frozen & dried fruits & vegetables, frozen mushroom & herbs

Frozen fruits and vegetables

Jams, squashes, ketchup, sauces, spreads

Fruit juices

Fresh packaged grapes

Fresh F&V

Jams, squash, syrup

Frozen processed F&V

Ketchup, sauces, dips

Fresh and packaged fruits andvegetables

Ketchup

Fruits and vegetables pickles, powder

Gherkins, pepper, corns, cherries

Frozen fruits and vegetables

Key Products

Source: Technopak Analysis



nnn 2. Dairy

Dairy, one of the main contributors to the Indian Food Processing Industry, is leading in terms of growth prospects among various sectors. The total market size of the dairy industry was Rs. 1,98,000 crores (US $ 45 billion) in the year 2006-07 and is estimated to grow up to Rs. 3,66,484 crores (US $ 83 billion) by 2015. The major value in dairy industry comes from the processed category, which is 73 percent (Rs. I,44,681 crores or US $ 33 billion) in value terms and 35 percent in volume terms. Of the processed category, the organized sector contributes only 24 percent (Rs. 34,556 crores or US $ 8 billion) and the major contribution comes from unorganized sector in the form of sweets, homemade ghee and yoghurt, among others. The organized sector of the Dairy industry is growing faster than the unorganized sector. Dairy industry particularly packed liquid milk is dominated by various co-operatives. Co-operatives continue to play a major role in evolution of the Indian dairy sector. The states of Gujarat, Tamil Nadu, Kerala, Karnataka, Punjab and Haryana have established many dairy co-operatives running successfully. Most of the packed liquid-milk segment is dominated by the co-operatives which contributes about 70 percent of the total revenues of the co-operatives.

In view of rising demand for processed dairy products which require huge investments and technology support in order to meet the processing and packaging requirements. Packaged liquid milk along with cheese, packaged paneer, khoya & other traditional dairy products are prospective areas of growth while skimmed milk powder & casein are potential export opportunities. The export of value added dairy products will rise if Indian dairy is able to meet global standards. Imports are small and are mostly for premium category products like parmesan cheese, soft cheese and other varieties of cheeses.


Years

Market Size

Processed

Processed Organized

Non Processed

Processed Unorganized

Market Size and Composition of Dairy Products (value in Rs '000 Cr)

2002-03

169

116

25

53

91

2006-07

198

144

34

53

110

2010-11*

269

190

56

79

134

2014-15*

366

255

92

112

163



At present, India seems to be self-sufficient in meeting its requirement for milk and milk products. However, given that demand is growing faster than supply, there could be serious issues with respect to self-sufficiency in the near future. Farm gate prices have increased by more than 50 percent in the last three years. The recent rise in milk product prices has forced the government to impose a ban on skimmed milk products & reduce incentives for exports. The demand for value added milk products, such as cheese, butter, dahi (Indian yoghurt) and probiotic drinks is increasing at a double digit rate. There is a huge potential for processing and value addition in the organized sector, particularly in liquid milk and ethnic Indian sweets, which are largely sold in unbranded form in the market. Milk beverages have witnessed a huge growth as a result of growing health consciousness among consumers. Exports of UHT (Ultra Heat Treatment) milk from India to South East Asian countries have grown at a rapid pace. The ice cream industry, though a lucrative business, is suffering from shortage of cold chain infrastructure and lack of interest amongst big players in India. The major players of the dairy industry are listed as follows :

Verka

Paras

Warana

Mother Dairy

MilkFed

NDDB

VRS Foods

Warana Dairy

Milk, ghee, butter, cheese, paneer, icecream

Milk, lassi, paneer, curd ghee, cheese butter, shrikhand

Flavored milk, packaged milk, ghee, dahi, paneer

Milk, cheese, ice cream, curd, butter, ghee, lassi, dairy whitener, flavored milk, probiotics

Companies

Gokul Dairy

Haryana Dairy DevelopmentCo-operative Federation

Dynamix Dairy Industries

Heritage Foods

Kwality Dairy (India) Ltd.

Mahaan Group

Milk Foods Ltd.

GCMMF

Key Brands

Amul

Gokul

Vita

Private label

Heritage

Indana, Kream, Kountry

Mahaan

Milk Food

Key Products

Milk, butter, cheese, Ice cream,skimmed and buttermilk, curd,flavoured milk, ghee, khoya

Milk, shrikhand, ghee, table butter,skimmed milk powder & white butter

Flavored double toned milk, lassi, butter, ghee, dahi, packaged milk

Milk, butter, cheese, flavoured milk, ghee, khoya, dairy whitener, infantfoods

Butter, ice cream, cream, lassi, paneer, ghee, curd, milk

Skimmed milk powder, dairy whitener, dairy mix, ice cream mix, ghee, lactose

Milk powder, milk fat, dairy whitener, ghee, coffee creamers

Milk powder, baby food, cheese & other milk products




nnn 3. Marine & Fish

The total market size of marine & fish industry was Rs 38,200 crores (US $ 9 billion) in the year 2006-07 growing at 4 percent per annum. It is estimated to grow up to Rs. 52,279 crores (US $ 12 billion) by 2015. The processed segment comprises of Rs. 5,348 crores (US $ 1.2 billion) which is 13 percent of the total marine and fish industry size. The huge coast line of India offers plenty of opportunities for the growth of the marine industry. About 25 percent of marine & fish production is exported. Processing provides an opportunity for marine products and exotic fish. Conventional cleaning and cooking fish is slowly giving way to convenient products. Spray dried products, fish protein concentrate, battered and breaded fish and fish-paste based products are being demanded by consumers. Investments in packaged marine processing plant would be an ideal investment option due to the vast untapped marine resource and export potential.

In view of over exploitation and mounting operational costs of the fishing industry in the country, the focus areas are future management and conservation of resources, diversification of fishing effort and economic utilization of fishing units. The players are required to obtain Hazard Analysis Critical Control Point (HACCP) certification for its plants and also update the processing technology and quality assurance in accordance with the requirements of international institutions formulating quality systems such as Codex Alimentarius Commission.

Source: The Marine Products Export Development Authority (MPEDA), Technopak Analysis, * Projections

Years

Market Size

Processed

Organized

Non Processed

Unorganized

Market size and composition of Fish & Marine products (value in Rs ‘000 crores)

2002-03

34

4

3

30

31

2006-07

38

5

3

33

35

2010-11*

45

7

5

38

40

2014-15*

52

9

7

43

45



Key Brands

Allanasons

Key Products

Pomfrets, seer fish, squids, prawns, and cuttle fish

ASF Seafoods

Bell Foods

Deep Sea Products

Gadre Marine

IFB

OKK Fresh

Sea Sparkle

Sumero

Seafood

Crab, cuttlefish, shrimps, squid, fish octopus

Marine products

Fish products, surimi crab claws, crab sticks,shrimps, surimi crab patti, marine products, lobsters

Pomfrets, crabs, prawns & sea food

Octopus, squid, , crabs& tuna

Promfrets, crabs, prawns & octopus

Pomfrets, crabs, prawns & sea food

Companies

Allanasons

Gadre Marine Exports

Bell foods marine division

OKK Fresh

Deep Sea Products

ASF Seafoods

Sumero

IFB Agro Pvt. Ltd.

Sea Sparkle

Some of the major players in the industry include the following:

nnn 4. Non-Alcoholic Beverages

Non-alcoholic beverages are broadly classified into carbonated drinks, non-carbonated drinks and hot beverages such as tea and coffee. The fruit juices and fruit-based drinks account for Rs. 5,000 crores (US $ 1.13 billion) with the annual growth rate of 35-40 percent and the market size of carbonated drinks is estimated at Rs. 6,000 crores (US $ 1.36 billion) with the annual growth rate of 10-12 percent.

India is the largest producer of tea in the world accounting for 28 percent of the total global production, at 956 million kgs. The total turnover of the tea industry itself is above Rs. 8,000 crores (US $ 1.8 billion). Tea production in India has been growing at 1.2 percent per annum. India is the fourth largest exporter of tea in the world. India is the fifth largest producer of coffee accounting for 4 percent of the total production in the world and nearly 75 percent of India’s production is exported.

Energy enhancing beverages are primarily classified into sports drinks and energy drinks. The Indian market for functional beverages is expected to reach a value of Rs. 1,518 crores (US $ 0.35 billion) in the year 2014. In this sector enhanced fruit beverages would remain the fastest growing segment and the prime revenue earner during the period 2008-2014.




Instant drink, milkshake mix,soft drink concentrate, energydrink, syrup

Companies

Coca Cola ltd

Dabur

Gatorade

Godrej

Hindustan Unilever

Nestle

Parle

Bisleri International

Pepsico International

Red Bull

Rasna International

Tata

Brands

Minute Maid Pulpy Oange, Coca Cola, Georgia, Thumsup,Kinley, Sprite, Limca, Fanta, Maaza, Kinley

Real, Real Active, Coolers, Lemoneez

Gatorade, Propel

Jumpin, XS

Brooke Bond, Lipton, Bru

Nescafe, Nestle Mild, Sunrise

Bailey, Frooti, Appy Classic, Appy Fizz

Bisleri

Tropicana, Tropicana Twister, Pepsi, Dew, Mirinda, 7-Up, Slice, Aquafina

Red Bull

Rasna, Go Fruit, Shake Up,Body Fuel

Tata café, Himalaya

Products

Juice, carbonated drinks, bottled water

Fruit juice, fruit drinks

Energy drink, fitness water

Fruit drinks, fruit juice

Tea, coffee

Tea, coffee, milk

Fruit drinks, bottled water

Mineral water

Juice, carbonated drinks, bottled water

Energy drink

Packet tea, bulk & instant tea, filter/ instant coffee

At the same time, the packaged water industry in India is at Rs 1,500 crores (US $ 0.34 billion) and is growing at 40 percent CAGR. The major players are “Aquafina”, “Kinley” and “Bisleri” and in the premium segment it is "Evian", “Himalaya” and “Qua”. Out if this flavored packaged water is worth Rs. 11 crores (US $ 0.24 million), which is dominated by the DS Group’s brand “Catch”.

India is a country that offers huge potential, even more so than China. Right now, India accounts for approximately 10 percent of global beverage consumption. That makes beverage consumption in India the third largest in the world, after the United States and China. When it comes to carbonated soft drinks, the market has not been properly tapped yet. The situation is similar in the case of bottled and packaged juices and water and PET packaging. Given its size, the Indian market is still in its infancy; therefore the investment opportunities in beverage plants and equipment are immense.

Some of the main players in this industry are:




nnn 5. Alcoholic Beverages

Beer and wine is an emerging sector in the Indian Food Industry. While the consumption of beer is growing at 7 percent per annum, wine consumption in India is witnessing high growth of 30 percent in last few years. The total market size of the beer and wine industry was Rs. 10,000 crores (US $ 2.3 billion) in 2006-07 and is expected to grow up to Rs. 23,955 crores (US $ 5.4 billion) by 2015. India is a net importer of wine though some wine export has been initiated.


Market Size and Composition of Beer and Wine ( )value in Rs ‘000 crores

Years

Market Size

2002-03

7

2006-07

10

2010-11*

15

2014-15*

24

The alcohol industry is witnessing the two way flux wherein many foreign players are targeting India, while their Indian counterparts are nurturing international ambitions. The industry is being fiercely competitive & dynamic, raising cost pressure on manufacturer & marketer. While price cut is being done to ensure the consumer loyalty by established brands, the imports are being replaced by setting up local production facility. Traditionally in bottles packing, the industry has started experimenting with alternate & attractive packaging. United Breweries has launched its four major brands in Tetra pack which is being leveraged on time, anywhere' benefit and infusing it with a young and trendy image. Liquor manufacturers are also bullish on promoting high-end brands through premium packaging or limited-edition gift packs.

Some major players in the alcoholic industry are as follows:

Companies

Cobra Beer

Grover Vineyards

Mohan Meakin Ltd

Radico Khaitan

SAB Miller

Sula Vineyards

United Breweries

Key Brands

Cobra Bite, King Cobra, Cobra Zero %, Cobra 5.0%premium

Cobra Light,

La reserve and Sauvignon Blanc

Vinballet, Hammer, Vino Sparkling, Riviera, Ivy, Figueira, Bellingham, Trio

Old Monk, Golden Eagle

Magic Moments, 8 PM

Key Products

Beer

Wines

Wines

Rum, brandy, whisky, beer

Whisky, rum, vodka, gin

Wines

Rum, beer, whisky, gin, vodka

Haywards 5000/2000/ Black, Knock Out, Royal Challenge, Castle Lager and Fosters

Bagpiper, McDowell's No.1,Director's Special, Kingfisher

Beer, whisky

Sula

Indage




nnn 6. Buffalo Meat and Poultry Products

The total market size of buffalo meat and poultry products was Rs. 24,382 crores or US $ 5.54 billion (Rs. 9,422 crores or US $ 2.2 billion for buffalo meat and Rs. 14,960 crores or US $ 3.4 billion for poultry products) and is expected to grow up to Rs. 49,860 crores or US $ 11.3 billion by 2015. Since buffalo meat is not consumed on a large scale in India, it is processed and targeted for exports. Total export in this category is Rs. 3,520 crores or US $ 0.8 billion, which mainly comprises of buffalo meat. Investment in buffalo meat processing industry is required primarily to tap export opportunities. There is a great scope for processing of poultry meat for domestic consumption as well as for export markets. For speedy realization of export potential, traceability standards need to be implemented. This will improve control and response time to frequent outbreaks of diseases like Avian Influenza that have adversely affected the poultry industry in the recent years. Similarly, Food and Mouth disease is very evident in cattle in India. Despite being hampered by the outbreak of Avian Influenza, the poultry industry is estimated to grow at healthy pace in view of the favorable conditions like falling prices, rising income, increasing domestic demand from young and urban population. Indian poultry sector has the potential to be a major player in the global market, given the competitive edge it has. But so far its participation has been negligible. On the price front, poultry prices were declining, they were still higher than those for pork, beef and buffalo meat. Modernization of abattoirs, cold chain facilities and efficient implementation of quality & hygiene standards will give further impetus to the industry.

The market size and composition of this sector is given as follows:


Years

Market Size

Processed

Non processed

Market Size and Composition of Buffalo Meat and Poultry Products ( )value in Rs ‘000 crores

2002-03

14

3

11

2006-07

24

5

19

2010-11*

35

11

24

2014-15*

50

21

29

Companies

Al Kabeer Exports Limited

Allanasons

Frigo Refico Allana

Key Brands

Al Kabeer

Allanasons

Allana

Key Products

Frozen mutton, beef, chicken

Frozen halal buffalo meat

Frozen buffalo and other meat

Godrej Agrovet Yummiez, Godrej Real Good Chicken

Animal feeds, branded chicken, innovative agricultural products & oil palm

Innovative Foods Ltd. Sumeru Frozen Foods Seafood

Suguna Poultry Farm Suguna Broiler chicken, value added eggs

VH Group Venky’s Processed chicken, poultry feed, egg powder




nnn 7. Packaged Foods

Packaged food products are penetrating the large potential presented by Indian population. The demand has been rising at a good pace and there is enough latent market potential waiting to be exploited through developmental efforts. This demand for ready-to-eat meals has captured a large amount of the food retail market in India. Major factors driving the change are changing lifestyle, eating and cooking habits, increasing young population. The market for packaged food has grown from Rs. 4,005 crores or US $ 0.9 billion in 2002-03 to Rs. 11,440 crores or US $ 2.6 billion in 2006-07. It is expected to grow ten times its current size in the coming decade.

Globalization has been the primary catalyst for the growth of the Indian food which is set to witness many more changes with newer offerings being available. The international markets have shown a positive response to Indian cuisine with Non-Resident Indian (NRI) communities and foreigners expecting to grow this market in the years to come. Another observation is that consumers are on the lookout for RTE foods that are offered to them in hygienic, nutritional and attractive packaging at an affordable cost. Great care is needed during their packing, so that they remain prevented from impurities. Among the emerging trends is that the consumer is looking for innovative flavors and new tastes, which is a big challenge for the food industry. The RTE foods industry has witnessed a growth in recent times with new combination of foods.

Going hand-in-hand with the RTE food and mix and eat products, there is a major presence of the small players who are engaged in preparation of ready to eat foods like chapattis, parottas, rice rotis, ragi rotis, appams to name a few. With lack of time and fast paced life in Indian metros, the ready to eat foods and mix and eat food segments will only hold potential for even new entrants. The Packaged food could be basically classified into two categories - shelf stable packaged food and Frozen packaged food.


Years

Market Size

Unorganized

Market Size and Composition of Packaged Foods (value in Rs ‘000 crores)

2002-03

4.0

0.9

Organized

2006-07

11.4

2.2

9.2

2010-11*

43.9

6.6

37.3

2014-15*

91.1

9.1

82.03.1




Key Brands Key ProductsCompanies

Dr Bindra’s

Chings’ Secret, Smith & Jones

Banana chips, mixtures & chivdas, snacks, bhel, dry fruits

Range of 'Ready to Eat' Dr. Bindra's curried veg and non veg dishes

Ready to eat, sauces, chinese ingredients

Savouries, meals, desserts, biscuits, cookies

Range of ready to eat, packagedchaats

American Dry Fruits

Gits

Haldiram’s, Taka Tak, Bolletos, Chips

Kitchens of India

Ready to eat curries, meals, cooking pastes, cook-in sauces, spices & seasonings, frozen Indian breads & snacks and basmati rice

Curries, gravies, rice, snacks, soups, spices, pickles

Potato chips, cheese snacks,tortilla chips

Ready to eat curries and dishes from south to north Indian, pastes, pickles, instant mix

Curried vegetables (ready-to-eat), ready-to-cook (frozen), canned and frozen vegetables, ice cream

Kohinoor

MTR Foods

Frito Lay’s , Cheeto’s, Dorrito’s

Priya

Vadilal Quick Treat

Bikanerwala, BikanoBikanerwala

Vadilal group

Priya Foods

Pepsico Ltd.

MTR

Kohinoor Food Ltd.

ITC

Haldiram’s

GITS Food Products

Capital Foods

Bindra Agro Industries Corp.

Range of ready-to-eat cuisines

Namkeens, Sweets, Papad,Syrups, Panipuri




nnn 8. Staples and Other Products

India is self sufficient in grain production with an annual production of about 2170 lakhs tons in 2006-07. The major food grains produced are paddy, wheat, maize, barley, jowar, bajra and ragi. India is the second largest producer of the wheat and rice in the world. Wheat and rice together constitute for the major staple diet of the entire population of the country. About 50 percent of the maize production is utilized for poultry feed purpose; the rest of production is either consumed as the staple food or for producing starch and starch based products. Therefore, the rice and wheat processing is the most important activity in food grains processing. More than 65 percent of the wheat is converted into wheat products such as atta, together by organized and unorganized sector. Rice is consumed primarily in the form of polished rice, parboiled rice, parched rice and flaked rice whereas the demand for branded rice (particularly basmati rice) is increasing in both the domestic as well as the export market.

India is the second largest producer of sugarcane with a production of 185 lakhs tons and has also ranked at no. 1 position for white crystal sugar. The sugar industry is one of the leading agro processing industries, with an annual turnover of Rs 14,960 crores or US $ 3.4 billion, with more than 450 sugar factories located throughout the country.

Being the second largest importer and third largest consumer of edible oil in the world, India is a leading player in this sector. The major consumption includes the palm oil and soybean oil followed mustard and ground nut oil. It includes the consumption of both branded and unbranded oil; the consumer demand for edible oil is growing at a CAGR of 7 percent, whereas the demand for branded edible oil is rising faster at 8 percent and estimated to increase in the years to come.



Thus, this segment offers tremendous growth potential and investment opportunities in marketing of branded food grains as well as grains processing.


HUL

Cooking oil, popcorn

Refined oil

Muesli , breakfast cereal

Flour, lentils, besan

Wheat flour

Wheat Floor

Snacks, crackers, cereals, frosted flakes, corn flakes

Rice

Refined oil & salt

Besan, pulses, maida, sooji

Wheat flour, rice, gram flour, corn flour, pulses, porridge

Indian rice, sugar, soybean meal,tea, wheat grains, salt ,corn/yellow maize , sesame seeds

Rice

Organic, flavored rice

Basmati rice

Agro Tech Foods Ltd.

NDDB-DOFCO

Baggry’s

Capital Foods

ITC

Kellog’s

Kohinoor Foods

Marico Limited

Rajdhani group

Shakti Bhog Foods Ltd.

Shri Lal Mahal

Surya Food & Agro Ltd

LT Overseas

Tilda

Sundrop, Act II, Sudham, Crystal

Dhara

Baggry’s

Agro Pure

Annapurna

Aashirvaad

Kellogg’s, Keebler, Pop-Tarts, Eggo, Cheez-It, Nutri-Grain, Rice Krispies, Famous Amos, Carr's, Ready Crust

Kohinoor

Saffola

Rajdhani

Shakti Bhog

Shri Lal Mahal

Surya

Daawat, Heritage, Orange

Tilda





nnn 9. Bakery & Biscuit Sector

The bakery in India is one of largest segment of the food processing industry in which the annual turnover in value terms is approximately Rs. 3,960 crores or US $ 0.9 billion. The total bakery production is estimated at 15 lakhs tons in bread and 11 lakhs tons in biscuit production, whereas the cake industry is estimated at 4 lakhs tons. The bread market is estimated to be growing at around 7 percent per annum in volume terms and the biscuit industry at around 8-10 percent per annum. In the biscuit category, cream and specialty biscuits are growing at faster pace at 20 percent per annum. Breakfast palates at households, constitute bakery products that mainly consist of bread which is a growing preference not only in metros but also in Tier II cities. The fastest growing products in the bakery segment include pizzas, burgers, and pastries such as mousse cakes, fresh cream pastries, croissants, flavored muffins and flavored breads which are catching the fancy of people. Going by the growth of the bakery industry, there is need for lots of flavor enhancers, gluten enhancers and binders which give out softer or more flavored versions of the products.

Higher disposable incomes and the willingness of consumers to try new brands have attracted a number of players to the bakery & biscuits industry, both at the national & local level and have generated intense activity in the marketplace. The market for branded biscuits grew around 15-16 percent last year.

The confectionery industry is segmented into sugar-boiled confectionery, chocolates, mints and chewing gums. The sugar boiled confectionery is consisting of hard-boiled candy, toffees, accounts for the largest segments. The confectionery industry has a current capacity of 85,000 tons and the growth rate per annum is 10 -15 percent.




Britannia Industries Pvt Ltd.

Tiger, Good Day, 50 -50,Treat, Milk Bikis, Marigold, Little Hearts, Pure Magic, Tiger

Biscuits, soft rolls, breads, cake, rusk

Biscuits, breads n bun, ice creams, spreads, dips, salad dressing, dessert topping, jams

Cremica Cremica

Biscuits, chocolates

Cream Magic, Marie Break, Sweet Glucose, See Saw, Salt Kiss,Waffy Wafers, Big Bite, Meltz, Coffee Drive, Jadoo

Sunfeast, Golden Bakery, Candyman, Mint-o

Monaco, Hide n Seek, Milk Shakti, Melody, Mango Bite,Kismi, Monaco Bites & Cheeslings, Parle- G, Krack Jack,Melody, Poppins,

Priya Gold, Treat

Alpenliebe, Happydent, Chlor-Mint, Center Fresh, Marbels, Mentos, Cofitos, Big Babol

Dairy Milk, 5 Star, Perk, Celebrations. temptations, Eclairs, Gems, Bubbaloo, Halls

Kitkat, Munch, Milkybar, Polo, Eclairs, Bar One, Tang

Lottegum, Scotch Candy, Gummy Jelly, Soft Candy, Ghana,Crunky, Sunfuns,

Dukes Foods

ITC Ltd.

Parle Products

Surya Foods & Agro

Perftti Vanmelle

Cadbury

Nestle

Lotte Confectionery

Biscuits, cookies, candy

Biscuit, snacks, cookies, drinks, toffee, candies

Biscuits

Candy, chewing gum, mouth freshener

Chocolate, chewing gum, candy

Chocolate, candy

Chewing gum, candy, chocolate

Some of the key players in the industry are mentioned below:




nnn 10. Functional Foods

India is at the threshold of a new phase in the functional food industry. Functional foods are foods designed to provide a specific and beneficial physiological effect on health, performance and well-being extending beyond the provision of simple nutrients. This industry is said to comprise of functional beverages and teas, fortified cereals and breads, soya foods, functional snacks foods like cholesterol lowering enriched foods. The growth in the economy, coupled with a strong desire among the consumers to maintain a healthy lifestyle and the growing awareness of functional ingredients such as herbs, minerals, vitamins, omega fatty acids, and probiotics is driving the functional foods market.

From today’s trends in food consumption it can be predicted that functional foods are likely to gain popularity and demand due to their specific health benefits. In India the functional food industry has earned revenues of more than Rs 1,166 crores or US $ 265 million in 2007-08 and with an estimated growth rate of 43 percent, it will reach Rs. 14,080 crores or US $ 3.2 billion in 2014-15 (Technopak Analysis).

Some of the major players in this industry are:

GlaxoSmithKline

Godrej

Nestle

Marico

Yakult

Boost, Horlicks

Sofit

Nestle, Milo

Saffola Functional Foods

Yakult

Energy drink

Soy milk

Milk maid, fun shakes

Roti mix, meal mix (sugar & cholesterol management)

Probiotic products – milk drink





nnn 11. Indian Food Ingredients

The various basic food ingredients used across all food and beverages are antioxidants, antimicrobial, color and flavor, enzymes, emulsifiers, stabilizers and probiotic, and sweeteners. This sector has witnessed a sharp growth over the past few years. To attract more players and investors towards this sector, the government should change its policies keeping in mind issues like safety, traceability and procedural hurdles for exports and imports.

Consumer trend shows that there is an inclination towards natural foods with high nutritional value. The lifestyle of most of the urban population, in India as well as abroad, has led to an increasing demand for convenience and health of foods, with improved longetivity, shelf life and stability. The growth rate of this industry is 9 percent. The food ingredients market is increasing with a rapid growth rate, as consumers increasingly demand bigger, bolder tastes, foods that are healthy and ingredients that are natural or sustainable. Consumers are becoming more sophisticated and want more upscale flavors and ingredients. Such ingredients include essential oils and oleoresins, herbs, natural colors and flavors, natural gums and resins, spices, vegetable saps and extracts. These are used in the production of a range of food and beverage products. Currently, going by the demand in the industry, emulsifiers, lactose and lactose syrup, molasses, seaweed extracts pectin and starches, tapioca, sago, arrowroot starch, rosin products, chickpeas and broad & horse beans, kidney beans, onions, tomatoes, garlic, carrots and olives, vegetable saps and extracts, are showing good growth.




Acidulants, baking aids and mixes, cocoa and chocolate, emulsifiers, texturants, stabilizers, flours, nutrition ingredients, oils and fats,protein products, sweeteners

Citrates, dry corn ingredients, flour products, food starch, lecithin, malt products, oils & shortenings, soy protein, sweeteners, emulsifiers, stabilizers

Cultures, functional blends, enzymes and test kits , natural food colors, food microbials (probiotic ingredients)

Antioxidants, betaine, colors, cultures, emulsifiers, enzymes, fermentation media, fibers, flavors & fragrance, food microbials

Feed additives , exclusive synthesis & catalysts

Flavors and fragrances

Ingredients & flavors

Oleoresins, essential oils, flavors, fragrances

Synthetic food colors

Antioxidants & antimicrobials, food colors

Enzymes

Sweeteners

CornSweet, NutriSoy, NovaLipid, Fibersol-2, Novasoy, NovaXan, Ambrosia, Merckens

Cargill

Chr Hansen

Danisco

IFF

Kerry

Sonarome

Natraco, Idacol, Idalacol

DSM

ADM

Cargill Foods

Chr Hansen

Danisco

Degussa

International Flavors and Fragrances Inc.

Kerry Group

Sonarome

ROHA Dyechem

DSM

Novozymes

Cadila Healthcare

Some of the key players in this industry are




With changing needs and lifestyles of consumers, global as well as Indian food consumption patterns are rapidly evolving. Change in consumer demand, influenced by increased awareness levels about national and international food categories, brands, cuisine and openness to experimenting with processed and convenience food has also led to reorientation of the entire food business. Apart from the demand aspect, the production capacities and government support are the other important drivers behind Industry growth. Some of the key growth drivers are identified as follows –

The diverse agro-climatic conditions offers huge potential for production of a wide variety of crops from cereals, pulses to fruits and vegetables all round the year. India is the producer of various agricultural crops and varieties like basmati rice, alphonso mango, cumin, cardamom, tea, coriander, cashew, a range of vegetables and curries, among others that are popular world over. In addition, India has the advantage of the low cost of production, which provides an unbeatable competitive edge in the global market place.

nnn Huge Production Potential

Key Growth Drivers 2

nnn Changing Consumers

lRising Income Levels – In India, the per capita income has crossed Rs. 44,000 or US $ 1000 per annum. The top 20 Indian cities, accounting for only 10 percent of the country’s population are generating as much as 60 percent of its surplus income and 31 percent of its disposable income. The consistent rise in the middle class income has resulted in a consuming class with change in ‘basic lifestyle’, increasing life aspiration and higher disposable income. The huge population size of approximately 113 crores or 1.13 billion people are an added advantage that provides a large consumer market.

24

Land Of Opportunities - The Food Industry in India

lChange in Food Habits – Rise in disposable incomes coupled with the boom in Internet, mass media and increased exposure to lifestyle in developed economies have significantly impacted consumer habits. With increasing inclination towards convenience shopping, increased awareness of balanced diet and health consciousness is resulting in a new generation of consumers with changing food habits. Indian consumers testify to the fact that they have become more sensitive to the health quotient of food consumed as compared to a couple of years ago. Moreover, consumers have started to demand safe food and abide by the maxim “No More Unsafe Food.”

lExperimenting on Cuisines – While the core is still rooted to their local cuisine and cooking styles, a select group of consumers – the younger generation - is experimenting with new tastes. Preferences and tastes are getting diffused across geographies. Hence, regional cuisines are preferred all over India. ‘Indian Chinese’ food is most popular and among other regional cuisines South Indian cuisine is hugely popular in all parts of India. Preference for multiple cuisine is reflected not only when people go to eat outside but also in the kitchen. Pan-Indian cuisines as well as cuisines from other countries have also found their way into people’s kitchen across the country.

lGrowing Need for Convenience – Increased income levels, urbanization and a greater proportion of urban working women in India is leading to increased convenience-seeking behaviour of Indian consumers. Due to busy schedules and unavailability of time on weekdays and recreational plans on weekends, the Indian society is looking for the convenient options to fulfil basic needs. This has generated increased demand for processed& convenience foods such as in ready-to-eat, ready-to-cook, ready-to-serve and ready-to heat categories.

lEating Out Behaviour – Traditionally, eating out has been a phenomenon more popular in metros, larger cities and towns. Lately, the demand for eating out options has been percolating down to smaller cities and towns as well. Service providers in non metros are now getting bold enough to venture into these unexplored markets. Cheaper real estate is a natural pull e.g. Chokhidhani in Jaipur. Higher disposable incomes of consumers and mature service providers, with a better feel of the consumer pulse entering Tier II and Tier III cities, will be contributors to increased incidence of eating out in the near future.



Change in Food Habits over the last couple of years

Become more health conscious now, regarding food consumed

Eat more junk food now

Eat less often at roadside eating joints or carts

Eat more food now

Eat out, at hotels more often now

Eat western cuisine more often now

%

51

15

15

14

5

5

Source: Technopak Research

nnn Organized Retail and Food Retail

India is marking a strong “footprint” on the world both as a producer and a consumer. The overall growth driver has been the strong GDP growth in the past few years, which has fuelled both the industry and consumption. Grocery sales are a close reflection of the food retail sales (refer to the graph below).

Shopping habits of Indian consumers, shopping priorities, decision-making approach and decision makers are changing. Riding on this phenomenon, consumers are shifting from traditional kirana stores (mom & pop stores) and street side vendors to malls, supermarkets and hypermarkets.

The organized form of food retail accounts for less than one percent of food consumed in India. Organised food retailing has grown 25 percent per annum for last two years and the momentum is likely to increase with the entry of large corporate and possible relaxation in the Foreign Direct

Share of grocery retail sales in total retail sales (value in net per captia)

Consumer spending Retail sales Grocery retail sales

Rs

in '0

00 c

rore

s

0

1000

2000

3000

4000

5000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Planet Retail and Technopak Analysis



Investment (FDI) policy. The proliferation of organized retailing in India is also altering food consumption patterns, promoting imported foods, branded foods, processed foods and a wider assortment. Indian organized retail accounts for around 4 percent of the overall retail. However, in the coming years organized retail is projected to grow at a CAGR of around 30 percent and is estimated to account for 13 percent to the total Indian Retail by 2012. Some of the major players in urban retailing are as follows

Companies

Aditya Birla

Express Retail Services Pvt. Ltd

Future Group

Reliance

RPG Group

Subhiksha Trading

Vishal Retail Ltd

Wadhawan Food Retail

Key Brands

More

Big Apple, Big Apple Fresh

Pantaloon Retail, Big Bazaar, Food Bazaar, Chamosa, Brew Bar

Reliance Mart, Reliance Super

Spencer’s Retail, Spencer’s Super, Spencer’s hyper, Spencer’s Fresh’ Spencer’s Express

Subhiksha

Foodmart

Spinach


Apart from this, food chains, restaurants, gourmets with novel delivery formats of food retails are also growing at a fast pace in the Industry.

nnn Export Opportunity

While global markets have started witnessing pressure in food supply, Indian production systems are not only witnessing continuous growth, but also increased marketable surplus. This surplus is here to stay, especially in high value sectors like fruits and vegetables, dairy products, fish and marine (processed). Increasing exposure of Indian exporters to the global market and frequent increasing interactions with global importers has increased the awareness and capability of Indian producers to produce quality food produce. Increasing willingness of Indian farmers and exporters to embrace global standards like CODEX and Global GAP, adoption of new technologies like irradiation, government focus through National Horticulture Mission, is further strengthening India’s case as processed food exporter. India has witnessed an increase in exports of fresh produce like grapes and mangoes and processed food - marine, buffalo meat and poultry products in the year 2006-07. Vegetables like gherkins, broccoli and coloured capsicum are cultivated exclusively for export value. As quality standard procedures and certification processes are observed with strict stringency, these products usually are accepted widely in foreign countries. Thus, it can be rightly said that the potential for producing and having the capacity to be able to obtain produce, process and export according to approved protocol and quality standards have changed the face of Indian exports.



nnn Favourable Regulatory Environment and Government Support

The Ministry of Food Processing Industries (MOFPI) is the nodal agency responsible for the development of the Food Processing sector, while the Agricultural and Processed Food Products Export Development Authority (APEDA) and Marine Products Export Development Authority (MPEDA) are responsible for facilitating the domestic and international trading of food and food products. The Government has declared food processing a priority sector introducing a number of policy incentives and progressive measures to set up and modernize food processing units, create infrastructure, enhance investments, support research and development and human resource development. The government is inviting private participants and also encouraging private public partnerships to promote the growth of the processing industry.

Government - Key Initiatives

National Horticultural Mission (NHM) to promote the production, post harvest management

of horticultural crops. It also focuses on promotion of processing of horticultural produce and

value addition by providing incentives for setting up of horticulture processing industries and

food parks in potential areas and provides linkages between the markets, the horticulture

producer/produce and the processing industry. e.g. Rs. 149.6 crores or US $ 34 million kept for

viability gap funding to private sector in setting up Modern Terminal Markets for Perishables

under the National Horticultural Mission (NHM)

Programs like National Horticulture Mission, Oilseed Mission, Food Security Mission etc. are

aimed at increasing the efficiency and quality in production, incentives for setting up

infrastructure like warehouses and cold chain

Mega Food Parks, Modern Terminal Markets for perishables, up-gradation of Quality control

labs have resulted in increasing investment and processing capacity creation. The

Government is also developing 30 mega food parks with the total investment of Rs 100-150

crores or US $ 22-35 million for each park in Public Private Partnership mode

Creating a favourable investment and regulatory atmosphere by controlling a single window

clearance system - Food Safety and Standards Authority (FSSA)

Amendment of the Agricultural Produce Marketing Committee (APMC) Act to facilitate

better marketing facilities

An additional central scheme i.e. Rashtriya Krishi Vikas Yojana (RKVY) has been announced in

the year 2007. It targets a total investment of about Rs 25,000 crores or US $ 5.68 billion for the

XI Five Year Plan to incentivize states to increase public investment in Agriculture and allied

sectors

Increased level of institutional crediting provided by banks and Financial Institutions

The government has decided to give a boost to research and development e.g. setting up the

National Institute for Food Technology and Management in collaboration with Cornell

University of the USA

l

l

l

l

l

l

l

l



2Policy Initiatives & Incentives

Apart from these initiatives, the government has taken several policy measures with regard to

regulation & control, fiscal policy, export & import and taxation to high priority industries. Some of

the important policy changes are as follows:

As per extant policy FDI up to 100 percent is permitted under the automatic route in the food

infrastructure (Food Park, Cold Chain/ warehousing)

In so far as food retail is concerned the FDI policy does not permit FDI into Retail sector except

Single Brand Product Retailing. This policy is uniform for all retailing activity

FDI policy for manufacture of items reserved for the SSI sector is uniform for all items so

reserved and a separate dispensation for items in the food processing sector is not

contemplated

FDI up to 100 percent is permitted for distillation of alcohol though the automatic route

subject to licensing by the appropriate authority

No industrial license is required for almost all of the food & agro processing industries except

for some items

Up to a maximum of 24 percent foreign equity is allowed in SSI sector

Use of foreign brand names are now freely permitted

MRTP (Monopolies & Restrictive Trade Practices Act) rules and FERA (Foreign Exchange

Regulation Act) regulations have been relaxed to encourage investment and expansion by

large corporate

Most of the items can be freely imported and exported except for items in the negative lists

for imports & exports. Capital goods are also freely importable, including second hand ones in

the food processing sector

Excise & Import duty rates have been reduced substantially. Many processed food items are

totally exempt from excise duty

Custom duty rates have been substantially reduced on plant & equipments, as well as on raw

materials and intermediates, especially for export production

Corporate taxes have been reduced and there is a shift towards market related interest rates.

There are tax incentives for new manufacturing units for certain years, except for industries

like beer, wine, aerated water using flavoring concentrates, confectionery & chocolates

Free trade zones (FTZ) and export processing zones (EPZ) have been set up with all

infrastructure. Also, setting up of 100 percent Export oriented units (EOU) is encouraged in

other areas. They may import free of duty all types of goods, including capital foods

Capital goods, including spares up to 20 percent of the CIF value of the Capital goods may be

imported at a concessional rate of Customs duty subject to certain export obligations under

the EPCG scheme. Export linked duty free imports are also allowed

Units in EPZ/FTZ and 100 percent Export oriented units can retain 50 percent of foreign

exchange receipts in foreign currency accounts

l

l

l

l

l

l

l

l

l

l

l

l

l

l

2 Source: Ministry of Food Processing Industries, Government of India

l



50 percent of the production of EPZ/FTZ and 100 percent EOU units is saleable in domestic

tariff area

All profits from export sales are completely free from corporate taxes. Profits from such

exports are also exempt from Minimum Alternate Tax (MAT)

l

l

nnn 3 Inflow of Foreign Direct Investment (FDI)

The Food Processing Industry in India is on an assured track of growth and profitability for the next five years. It is estimated that food-processing market in India will attract a phenomenal investment, in the form of capital, technology and finance of over Rs. 3,667 crores or US $ 83.34 million by 2014-15.This has increased from 2002-03 (Rs.177 crores or US $ 0.02 million) at a CAGR of 35 percent. In the past decade, the government of India has approved 27,273 foreign collaboration (technical & financial) proposals, with a corresponding Foreign Direct Investment of Rs 26,896 crores or US $ 6.1 billion. Out of this, the total number of approvals for Food Processing Industries have been of the order of 960 (3.52 percent of the total approvals) with an equity participation of Rs. 9,826 crores or US $ 2.1 billion.

Flow of FDI in INDIA - Food Sector on the Rise

Food Processing Industry

Drugs & Pharmaceuticals

Chemicals(other than fertilizers)

2002-03 2006-07 2010-11* 2014-15*0

500

1000

1500

2000

2500

3000

3500

4000

Source: Department of Industrial Policies and Promotion, GOI and Technopak Analysis

Given the policy thrust and conducive investment framework by the Indian Government in the last few years, it has resulted into an increased inflow in FDI, thus the sectoral growth with an achieved participation of various national and international companies entering into the sector.

The top investing companies in Indian Food Processing Industry are mentioned as follows:

3 Source: Department of Industrial Policies and Promotion, GOI and Technopak Analysis

Rs

in '0

00 c

rore

s



Kellogg India P. Ltd

Y.F. Asia Ltd.

USA

Mauritius

Indian companies in Food Processing Industry to have received FDI inflows are Cadbury India Ltd,

Metro Cash & Carry India Pvt., Balarampur Chini Mills Ltd, Nestle India Ltd, Kellogg's India P. Ltd,

Cargil Foods India Ltd, and Britannia New Zealand Food P. Ltd. Moreover, there are many

international companies which are in the process to get their steps in Indian Food Industry.

Name of the collaborator

Artal Foods

C.P. Aquaculture Business Group

Cerestar Holdings B.V.

Coca-Cola South Asia Holding Inc

Groupe Danone

Heinz Italia, SPA Milan

Hindustan Coca-Cola Holdings

Country

Belgium

Thailand

Netherlands

USA

France

Italy

USA



Growth potential of the Indian Food Processing Industry cannot be disputed; however, we need to overcome certain challenges in order to unleash this potential. These challenges include addressing current gaps in the value chain as well as leveraging on various advantages the country provides. Investors in the sector need to be aware of these factors and build required capabilities in their business to ensure success. Some key challenges are mentioned below –

nnn Research and Technological Development

l W e a k R e s e a r c h & Development (R&D) – Research and Development is required in Food Processing to enormous magnitudes - beginning from varietal improvement, to the technology & machinery and production process till the stage for packaging and labelling. Latest developments in food science and focus on innovations in food technologies, nanotechnology and biotechnology; novel food concepts like functional foods, health food, innovative packaging are all a product of exhaustive R&D.

Though, many government institutes like Indian Council of Agricultural research (ICAR), Central Food Technological Research Institute (CFTRI), Defence Food Research Laboratory

Challenges & Potential 3

Stumbling Blocks



(DFRL), various State Agricultural Universities (SAUs) and other government bodies are doing a considerable amount of research on varietal improvement, procedure and machinery for processing, scientific and chemical research for preserving, manufacturing processes and new product development, but still there is a huge gap in this area which needs to be addressed. Some of the main food companies that invest heavily on their R&D requirements are Marico, ITC, Nestle and Cadbury, among others.

l Lack of Processable Produce and Irregular Supply – Indian Agriculture is still dominated by the practice of production driven market supply instead of market driven production, which leads to inconsistency in quality of produce and supply. Varietal improvement is yet the prime area that needs to be given attention to reign supreme with relation to export markets. Varieties with preferred traits must be developed through the use of conventional techniques and by the aid of biotechnology to affect a larger and more diverse germ plasm in crops. There is a need to focus on processable variety of produce with the year round supply. Moreover due to non-grading of produce, the table purpose produce is mixed with one that is suitable for processing. This increases the price that processing sector has to pay. With the growth of processing sector a market for ‘B’ and ‘C’ grade fruits and vegetables will be created thus paving the way for grading that would fetch higher price for table purpose ‘A’ grade produce. This will also boost the varietal improvement programme which is more suitable for processing sector.

l Technology and Equipments - India has been practicing various methods of food processing such as sun drying, pickling & fermentation. The quest is on for newer methods, technology and machinery of food processing with least change in sensory qualities. Therefore, the technological progress in emerging processing sectors, development and diffusion of quality-enhancing as well as yield-increasing technologies remain the key challenge to be addressed.

nnn Meeting Global Standards of Quality

Though Indian growers and exporters have now been able to match up to global standards, meeting these standards with up-scaled production will be big challenge. The challenge becomes much bigger where there are differences in standards and consumer preferences across potential markets. The issues of traceability in fresh produce and poor hygiene generated infections in packaged foods need to be addressed.

nnn Skill Gap

At each level in the value chain, there are strong deficiencies in technical knowhow and support. In comparison to the amount of research carried out in this field, there is still a gap in the transference of this from the laboratory to the industry. In addition, knowledge flows from the academic circles or centers to the commercial centers of manufacture of primary or tertiary processed food. While at the farm level, farmers are not aware about the types and timing of crops to be taken, chemicals to be used, channel managers are not aware of managing storage conditions and handling of the ultimate produce at the customer end. This gap needs to be bridged by finding the right balance between applied research, capacity building, training and development of policy and regulatory



frameworks, ensuring a strong, public-private partnership, identifying additional resources to support the initiative and by making technologies more accessible to farmers, i.e. moving them out of the laboratory and onto the field.

nnn Inadequate Infrastructure and Supply Chain

Non-availability of core infrastructure like high tech controlled production facilities, grading, packaging, cold chains, logistics, warehousing; integrated processing units; inefficient supply chain; poor transportation and erratic power supply are the major concerns in the country across the food value chain. While India is the leading producer of many of the crops in the world, nearly 25-35 percent of this production is spoiled due to the lack of inadequate supply chain and poor infrastructure. Lack of specialized distribution companies for perishable produce/ processed food products is yet another problem that the sector urgently needs to address. Such specialized companies will provide refrigerated transport and warehouse facilities, along with timely distribution of products.

nnn 4 Food Regulations and Taxation Issues

The food sector in India is governed by a multiplicity of laws under different authorities. The following food laws prevails in the country -

i. Prevention of Food Adulteration Act 1954

ii. Essential Commodities Act, 1955

iii. Fruit Product Order, 1955

iv. Meat Food Products Order, 1973

v. Milk and Milk Products Order, 1992

vi. Agriculture Produce (Grading & Marking) Act

vii. Standards of Weights and Measures Act, 1976

viii. The Warehousing (Development and

Regulation) Bill, 2005

The Indian Food Industry and the processing industry are governed by multiple legislations. Dealing with an array of food laws & governing bodies is also a challenge. The government has realized the need for a single regulatory body and an integrated food law, by establishing a new authority - the Food Safety and Standards Act (FSSA), a new food law merging 8 separate acts and a new clarification of the relevant ministries’ responsibilities. The Food Safety & Standard Authority has already come into existence this year; the implementation of this progressive act remains a big challenge for the Government.

In India, there is no uniformity in the taxation system across the states. Though many initiatives have already taken by the government, there is still need and scope for harmonization of taxation norms and systems across the country.

4 For more details on food regulations refer Annexure



nnn Poor Market Linkages

The food value chain in India is highly fragmented and dominated by a large number of middlemen. This leads to increased inefficiencies in the marketing system, due to which production, processing and marketing of produce suffers from under investment. The poor forward integration has resulted into poor quality, lower price and increased wastage of produce at the farm level. Lack of adequate market place and market infrastructure such as weighting, auction platform, storage and packaging, among others have increased the complications of the problem. Improvement in the marketing infrastructure and also identification of new export markets for their produce are the two major issues faced by the government. Institutional mechanisms such as reforms in agricultural marketing and warehousing facilities coupled with increased participation from banks and extension agencies would go a long way in reducing the problems that a farmer faces in his business today.

nnn Growth of SMEs

Since Small and Medium Enterprises (SMEs) provide the essential link between the agriculture and industrial segments of the economy by enhancing the value of agricultural production, thereby ensuring better remuneration for farmers and larger employment opportunities. The main challenges faced by SMEs are increasing quality standards to be met from the export markets, shortage of technical grade manpower and lack of production and process knowledge. In addition, the SMEs are facing the survival challenge under the highly competitive market environment. Most of the SMEs are unable to deal with the need for product specific technology, availability of automated machinery & equipment and continuous availability of power in sub-urban & rural areas which have resulted into poor performance and non survival of these SMEs.

For the success of the food industry, it is imperative that the small scale industries and unorganized sector should be developed. To achieve this, special arrangements need to be made to provide these sectors with access to efficient technology, knowledge of market and soft credit. Measures should be taken to ensure remunerative prices for farm produce, infrastructure development with emphasis on post harvest management, processing, transportation, marketing and exports. Developing efficient technologies for small scale, tiny & unorganised sector remain the key challenge for the government.



The integrated development of the entire food value chain offers a plethora of opportunities at every level. The following areas have been identified as potential growth opportunities while developing the Food Industry in India:

Indian Food Processing Industry is growing faster and it has immense potential to explore particularly in the sectors like fruits & vegetables, packaged food sector and beer & wine. There are immense promises at each stage from procurement to export. There is an abundance of produce; in the form of raw material available for processing. The level of food processing is significantly low

5at 43 percent (both in the organized & unorganized sector as compared with other developing counties. There exists a whole gamut of opportunities for the food processing industry in India to explore and develop. Given the production potential and significant variations in food habits and culinary traditions across the country translate into immense processing opportunities for small to large players.

Moreover, the need for machinery, technology and infrastructure for processing the food, of any kind would be a good prospect. Organizations, offering facilities like packaging, labeling, transporting of bulk in processed and unprocessed forms, have immense scope. There is also scope for those who may not be involved with processing as such, but may play the role of distributors or wholesalers, exclusively.

nnn 1. Food Processing

Growth Opportunitiesfor Companies

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5 Source: Technopak Analysis



Key OpportunitiesSectors

Fruits and Vegetables

Packaged Foods

Beverages

Dairy

Poultry and Meat

Marine

Technology

• Canned fruits and vegetables• Frozen F&V products• Ready to cook vegetables• Dehydrated F&V products• Paste and powders• Jam, jellies, pulps and concentrates

• Post harvest and prevention technologies• Packaging technologies and material• Integrated abattoirs-cum-meat processing units • Cold storage facilities• Bulk storage and transportation

• Frozen and processed sea food• Packaged and processed products• Fish paste, fish oil• Ready-to-eat products

• Packaged, semi processed meat and poultry

• Processed ready-to-eat products

• Intermediate products – egg powder, albumin, protein, egg yolk powder

• Ethnic Indian products – clarified butter, khoya, paneer, curd, whey

• Western dairy products – cheese, yoghurt, packaged milk, flavored milk and frozen desserts

• Beer and wine – canned and non molasses based• Fruit juices, ready-to-drink• Health drinks and energy drinks• Flavored drinks• Ethnic drinks

• Ready to eat/ ready to serve• Energy foods• Snack foods

nnn 2. Organized Food Retailing and Food Services

Currently, the total retail industry is Rs. 18,04,000 crores or US $ 410 billion, which is expected to grow up to Rs. 27,06,000 crores or US $ 615 billion by 2013. Modern retail is estimated at Rs. 79,200 crores or US $ 18 billion; out of which Food & Grocery constitutes 17 percent i.e. Rs. 13,200 crores or US $ 3 billion and it is estimated to grow up to Rs. 2,33,200 crores or US $ 53 billion by 2013. Organized food retailing has grown at about 25 percent per annum for last two years and the momentum is likely to increase with the entry of large corporates. The proliferation of organized retailing in India is also altering food consumption patterns, promoting imported foods, branded foods, processed foods and a wider assortment. Apart from this, food chains, restaurants, gourmets with novel delivery formats of food retails are another fast growing sector in the Industry.



By 2020, India is expected to become the 4th-largest food retail market in the world. However, the industry is highly fragmented and dominated by traditional retailers operating small, single-outlet businesses. Partial liberalization of Foreign Direct Investment (FDI) in retail has led to increased participation by foreign players.

The Indian retail industry is gearing up for massive structural changes on both the urban and the rural front with participation of global players. The retailers in India are still in the experimentation phase and coming up with the different and innovative formats. For instance, the Reliance ranger farms which is a new format for sale/distribution of agricultural products, focuses catering small retailers (kirana stores), push cart sellers, bulk buyers and any other buyer in the catchment. Some of the major players in urban retailing are Aditya Birla (More), Wadhawan Food Retail (Spinach), Future Group (Food Bazaar), Express Retail (Big Apple), Subhiksha, Reliance and RPG Group (Spencer’s Retail), among others. Though, the rural retail industry is still in its formative years, many companies venturing into the rural market have significant agribusiness interests. Some of the prominent players in the rural retail sector are DCM Shriram, Tata Chemicals, Mahindra Subhlabh, Future Group (Aadhar Retailing), ITC, Triveni and Indian Oil Corporation, among others. However, it is important to note that multinational players like Wal-Mart and Tesco have already tied up with their strategic Indian partners or stakeholders.

There has been a significant increase in private label brands in the recent years in India. They are no longer saying “buy us because we are cheap”, instead today; they are saying “buy us because we are the best”. By offering high quality products, many private labels have started charging more than regular manufacturers. Some of the major examples of the private labels in India are Reliance’s ‘R-Select noodles, milk, paneer and ketchup, Food Bazar’s ‘Fresh & Pure’ mango drink and Vishal’s ‘Vfresh’.

Food services such as food chains, restaurants, gourmets are another fast growing sector in the Industry. India currently has more than 1000 fast food restaurants and coffee joints in year 2006, and is likely to see the addition of at least 2000 restaurants, fast food outlets and coffee joints in 2007-08. In the recent past, many food-services companies like Pizza Hut and McDonald’s have invested heavily in developing back-end operations in tandem with opening outlets. This is likely to stimulate change among modern food retailers as they, too, become competitive and reap the benefits of disintermediation.

Today, multinational companies are betting on India as a source to feed the world. Large investors and corporations, both Indian and international are capitalizing on the Indian agribusiness as an emerging market with twin opportunities – i) to cater to the growing Indian middle-class and ii) to export premium processed food. India with its strong agricultural production base, easy availability

nnn 3. Sourcing Hub



of raw materials and the growing food processing industry is strategically poised to capitalize on the global Food processing market.

An excellent example of this would be Pepsico, who has made India a sourcing hub for juices to other international markets such as the Middle East and Asia. They have planned to procure and process fruits and vegetables like oranges, tomatoes, melons and carrots, which would help in cutting down imports and also make India a sourcing hub. Similarly many other players are capitalizing Indian advantages of being hub of many activities form sourcing, manufacturing and marketing.

Despite being the world's second largest producer of food, India accounts for only 1.6 percent of international food trade. The Government has targeted increasing this share to 3 percent in the coming few years. As per the Ministry Of Food Processing, the sector is envisaged to attract an additional investment of Rs. 80,000 crores or US $ 18.1 billion in next 3 years. Fish products, cereals, spices and processed food have immense potential as the key contributors to India’s exports. Edible oils, pulses, tea, cereals & fruit and nuts are the potential India’s import items.

Marketing and branding is the one of the opportunity that would help India to differentiate its produce from the other countries given the favorable image with relation to the produce that it has established in the consumer’s mind over the years. Branding would help in identification of the produce from that of the other countries and hence would help in lower marketing costs and a better distribution mechanism as against the effort required to market several smaller brands to different areas.

Modernization of Agriculture, Agri-Technology, Farm Machinery – There are increased investment opportunities in the sector due to the rising need for quality and value added products. Indian Agriculture is in the process of upgrading its farm sector, and is seeking massive investments in production technology i.e. farm inputs, plant nutrients, cattle feed & feed supplements, farm machinery and equipments, among others. Hence, modernization of agricultural farms & practices, hi-tech technologies of production need to be adopted to increase the production and improve the quality of the produce in the limited land available.

India presents tremendous potential for agri-technology to include - advanced and computerized milking and feeding systems, cooling systems, milk processing equipment, new high-yielding disease resistant varieties of crops, advanced methods of production – protected cultivation, means and treatment for lengthening shelf life and advanced farm

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4. Marketing and Branding

5. Opportunities in Strengthening the Back End of Food Supply Chain

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Land Of Opportunities - The Food Industry in India

equipments and machineries. Foreign companies can also offer a lot to their counterparts in India with regard to latest farming methods, cropping patterns and equipments & technologies like b i o t e c h n o l o g y & g e n e t i c engineering and nanotechnology. Global and Indian Investors can also play a constructive role in the increased Indian corporate investment in agriculture and farm-to-market systems through strategic partnerships and joint ventures. For instance, FieldFresh (a joint venture between Bharti Enterprises and Del Monte Foods) is engaged in manufacturing and sales of processed fruits & vegetable products. Field Fresh has made significant investments towards introducing advanced farm technology and creating modern farm infrastructure such as protected cultivation and pack house in Punjab. It helps companies serve their customers better in domestic as well as international markets.

lContract Farming – Contract farming is rapidly gaining popularity and is being increasingly practiced across the country. Leading industrial houses are coming forward for integrating their supply chain of agriculture produce with processing functions, which have evinced significant interest in the contract farming model. With a well established agriculture practice, India presents vast opportunities in the domain of contract farming.

Seed multiplication, organic foods, processable varieties of vegetables & fruits, aromatic, herbal and medicinal plants, floriculture and exports specific crops are key opportunities that can be tapped under the sector. In India, contract farming is successfully practiced for the production of the crops such as potato, tomato, maize and gherkins, among others. Some of the examples of the companies, which are successfully practicing this practice in India, are Pepsico, McDonald, ITC, Cargill India, Ion Exchange EnviroFarms, The Global Green Company, Ken Agritech and HLL, among others.

lAgricultural Training and Capacity Building – Training and capacity building in the Agriculture sector continues to play a key role in rural development and sustainable agricultural production. The worldwide agricultural scenario is changing fast with improved and efficient technologies of production and processing. Knowledge remains the main growth driver behind the development of the Agricultural system in India. Key opportunities lies in the establishment of well equipped practical training centers for providing practical training to farmers as well as trainers, both from public and private sector. There exists tremendous scope for training in institutions as well as at corporate levels for capacity building in many key areas like modern farm production techniques, development of post harvest protocols to handle the produce from farm to retail shelf.

lCold Chain Logistics - Even though India is the second largest producer of food in the world, the facilities required for food storage and refrigerated transportation



infrastructure are grossly inadequate. Poor infrastructure leads to reduced shelf life and poor quality of produce. Tremendous potential for investment exists in the areas of procurement and delivery systems, pre-cooling facilities, refrigerated vehicles, cold stores/ CA stores, warehouses and traceability issues, among others.

The cold chain in India is poorly-existent with an isolated 21.7 million MT (only 15 percent of the total production of horticultural crops) cold storage facilities operational. Of the available cold chain facilities specially used for seasonal storage of potato, multipurpose cold chain facilities need to be installed. The size of the cold chain industry is estimated approximately Rs. 8,800 crores or US $ 2 billion with an annual growth rate of nearly 20 percent and the total investment in cold storage is likely to increase to Rs. 13,200 crores or US $ 3 billion in t h e n e x t t h r e e y e a r s . Fragmentation of cold chain has also discouraged the growth of cold chain logistics for perishable horticulture produce. However, the development of domestic retail market has demonstrated some successful utilization of captive end-to-end chains such as reefer transportation. The government envisages creating an additional of about 9-10 million MT of storage, pack house and ripening chamber facility by 2012, while also aiming at up gradation of existing potato cold storage.

Some of the key players in this sector are Snowman (integrated logistics), RK Foodland (integrated logistics), Fresh Express (storage and transportation), Chaitanya Cold Storage (storage and transportation), Kausar (transportation), Western (refrigeration equipments & storage services) and Frick India (refrigeration equipments & storage services).

lSupply Chain Management - For achieving growth targets in the sector, it is critical to have an efficient supply chain. The food supply chain in India is fragmented with the existence of numerous intermediaries. Almost 50 percent of the value is whisked away by intermediaries. While this is partly due to the way trade is organised in India - allowing intermediaries to make high commissions - it is also because of high logistics costs and wastage in the Indian food supply chain. This presents a great avenue for international companies as they can enter and capture great value by bringing in efficiencies, which are currently absent.

lFood Parks - In order to boost the food sector, the Government of India is working on agri zones with the concept of Food Parks. In India, 30 such mega parks are planned in different parts of country to attract Foreign Direct Investment (FDI) in the food processing sector. These food-parks will create an integrated value chain from the farm gate to the consumer and will envisage complete backward and forward linkages along with common

processing facilities.



processing facilities. The investment requirement for establishing each park is Rs. 100-150 crores or US $ 22-34 million. These food parks are being developed on the basis of public-private partnership or special purpose vehicle mode. The government will provide a grant of about Rs. 50 crores or US $ 11 million per project, while the rest will be contributed by the private partner. These food parks will have various facilities such as sorting, grading, processing, cold storage, packaging and quality control and R&D laboratories, among others. Five food parks have been already identified by the government in the states of Maharashtra, Andhra Pradesh, Punjab, Jharkhand and one in the North-East region.

lWholesale Markets - Agricultural Marketing in India is undergoing a significant metamorphosis in view of policy reforms and infrastructure development. In order to provide dynamism and efficiency into the marketing system, large investments are required for the development of post harvest and storage infrastructure near farmers’ field. There is a need for a modern innovative marketing system, which will reduce vested interests of a large intermediary chain, create competition, assure quality and modernize operations with IT applications in handling of food crops and could replace the existing system. The policy amendment facilitates private investment in setting up wholesale markets – Modern Terminal Markets - in the country along with encouraging procurement of agricultural commodities directly from farmers’ field and to establish effective linkage between farm production and processing industries and retail chain. These markets will have state-of-the-art infrastructure such as packing, sorting & grading, auction, ripening, cold storage and logistics support.



Some case studies of companies who are making success in the industry through innovation of technology, product, channel and process, are highlighted below:

This case study shows the successful leveraging of strengths of joint venture partner in processed food sector in India. ATFL has demonstrated how use of technology can be used to translate consumer needs into successful food brands.

In the year 1997, ConAgra Foods (US) with 34.3 percent and Tiger Brands (South Africa), with 17 per cent had acquired a 51.3 percent stake in ITC Agro-Tech, which was renamed as Agro Tech Foods Limited (ATFL) in July 2000. ITC Agro Tech was primarily into crushing and refining of edible sunflower oil. Post merger, it started diversifying its business into other value added products and processed products like popcorn and frozen peas. Some of the popular brands of the company are Sundrop, ACT II, Swiss Mess, Healthy World, Crystal, Rath and Sudham. The company has leveraged the emerging opportunities in Indian Food Processing industry and tapped the market potential through adopting appropriate business strategies in time. The foreign collaboration with Conagra was the added advantage to it that provides the superior technology and innovative value added food products. Moreover, its extensive market and product research provides ATFL a competitive edge over other players.

The joint venture appeared to be taking a turn for the better and reported a net profit in 2000-01 after reporting the net losses for three consecutive years. In 2006-07 the company reported profit after tax of Rs 16.06 crores or US $ 3.65 million which is 63 percent higher than previous year. It is continuously harnessing the potential of the food processing industry through Conagra’s expertise and its strong R&D facility that helps the company in understanding the needs of the Indian consumer and delivering preferred products and by constantly adding value to the existing range of the products through product, process or packaging innovations.

The Haldiram's Group (Haldiram's) had emerged as a household name for ready-to-eat snack foods in India. The group has presence not only in India but in several countries all over the world. Haldiram's had many 'firsts' to its credit. It was the first company in India to brand 'namkeen’. The group also pioneered new ways of packaging namkeens.

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1. Making Success through Leveraging Strengths of Joint Venture Partner and Strong R&D: Agro Tech Foods Ltd. (ATFL)

2. Right Product Mix for Developing a Brand: Haldiram’s

Case Studies of Excellence 5



Its packaging techniques increased the shelf life of namkeens from less than a week to more than six months. It was also one of the first food companies in India to open restaurants offering traditional Indian snack food items such as "panipuri," "chatpapri," and so on, which catered to the needs of hygiene conscious non-resident Indians and other foreign customers. The company faced tough competition not only from sweets and snack food vendors in the unorganized market but also from domestic and international competitors like SM Foods, Bakeman's Industries Ltd, Frito Lay India Ltd. (Frito Lay) and Britannia Industries Ltd. Products. However the company could beat the competition due to its efforts to launch wide range of product portfolio & then mixing it with right product mix. Haldiram's offered its products at competitive prices in order to penetrate the huge unorganized market of namkeens and sweets. The company's pricing strategy took into consideration the price conscious nature of consumers in India. It developed a strong distribution network to ensure the widest possible reach for its products in India as well as overseas. Its product promotion had been low key until competition intensified in the snack foods market. Consequently, attractive posters, brochures and mailers were designed to enhance the visibility of the Haldiram's brand. Haldiram’s annual turnover was Rs. 400 crores or US $ 90.9 million in 2004 and crossed the Rs 1000 crores or US $ 227 million turnover mark in 2005. Currently, about 75 percent of their manufactured produce is exported and they plan to foray into the biscuit segment.

SABMiller India is a wholly owned subsidiary of SABMiller plc, the second largest beer company in the world. SABMiller’s India sojourn began in 2000 and in just a few years, it has cornered nearly one third of the Indian beer market with brands such as Haywards 5000, Haywards 2000, Haywards Black, Knock Out, Royal Challenge, Castle Lager and Fosters. SABMiller has established ten world-class breweries strategically located across India. However in the early years it faced challenge with regard to supply of good quality barley from which beer is made. Realizing the need to improve the quality of the barley supply chain, SABMiller India envisioned & initiated, the "Progress through Partnership" (Saanjhi Unnati) program in the State of Rajasthan in 2005. It’s a unique initiative that involves working closely with farmers for providing certified seeds, agriculture input supply, agriculture infrastructure, good farming practices, technology & purchase of crop for higher yield and higher quality of Barley. The farmer also benefits in terms of better rate, accurate weight, proper grading and immediate payment when dealing with SABMiller Collection Centers. The program distributes government certified seeds at a subsidized rate and educating existing barley farmers on best practices to help them improve their quality and yields. The program has gained significant momentum and from a beginning at about 4000 acres during 2005-06, the program is extended to about 13,000 acres during 2007-08 under quality barley cultivation. Member farmer base has increased to 6020 across 5 districts. Awareness of certified seeds has spread across more than 70 villages through more than 3500 household surveys capturing social need felt at grass root level. Procurement of barley for the

nnn 3. Strengthening Supply Chain through Partnership: SAB Miller India



last fiscal was to the tune of 15,000 tonnes, which was about 18 per cent of SABMiller total requirement. The company intends to scale up the program in future so that the major portion of its total requirement would flow through this channel.

Launching its agro-business in India with special focus on exports of value-added processed foods, Pepsi Foods Ltd. (‘PepsiCo’ hereafter) entered India in 1989 by installing an Rs. 22 crores or US $ 5 million state-of-the-art tomato processing plant at Zahura in Hoshiarpur district of Punjab state. Though, initially, the company intended to produce aseptically packed pastes and purees for international market, the company recognized that investment in agro-processing plants would not be viable unless the yields and quality of agricultural produce to be processed were improved to international standards. PepsiCo followed the contract farming method, where the grower plants the company’s crops on his land, and the company provides selected inputs like seeds/saplings, agricultural practices, and regular inspection of the crop and advisory services on crop management. The PepsiCo model of contract farming, measured in terms of new options for farmers, productivity increases, and the introduction of modern technology, has been an unparalleled success.

PepsiCo has been successfully emulating the model in food grains (Basmati rice), spices (chilli) and oilseeds (groundnut) as well, apart from other vegetable crops like potato. Realizing the immense advantages of contract farming practice, leading industry players are keenly sizing the opportunity spectrum across various states in the country. Presently, leading corporate players such as Reliance, ITC, Godrej and Pepsi are leading the contract farming initiatives in the country.

The genesis of the retail venture goes back to 1997 when DCM Shriram (DSCL) initiated an agricultural extension program, Shriram Krishi Vikas Guides, in northern India where the guides were trained agronomists posted in rural areas to address needs of farmers and solve agricultural based problems such as seed quality, irrigation techniques, fertilizer usage and crop yields. At this point the company found that farmers were asking for a host of quality agriculturalproducts at reasonable prices. Today, there are 125 rural centers spread across the north, west and south of the country. Its one-stop shops provide farmers with a range of agri and non-agri products, latest farm technology, farm fuels, and output buyback of farmers' produce. These centers are also IT-enabled and provide farmers critical data relevant to them, inputs and access to weather forecast, market prices and other technical knowledge. Moving ahead, the company wants to experiment retail on the output and input side. On the output side, Hariyali is mulling on being an "instrumental link" in the retail value chain, to supply large urban retailers with fresh fruits, vegetables and grains procured directly from the farming community.

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4. Contract Farming, Engaging Farmers by Companies: Pepsi Foods Ltd.

5. Rural Retail Marketing Providing One Stop Solution: Hariyali Kisan Bazaar



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6. Customized Distribution & Logistics Services is Way Forward: Radhakrishna Foodland (RFPL)

7. Automation & Quality Up gradation leading to Competitive Edge: Gadre Marine Export Limited

8. Technological Breakthrough in Product: Hindustan Unilever Limited

Foodland provides Customized Distribution & Logistics services encompassing the entire supply chain, such as storage, handling and distribution solutions to various clients. The services are tailor made to suit each client’s requirements, which includes organizations such as McDonald's and Radhakrishna Hospitality Services (RKHS). RFPL is the only integrated provider of broad line food distribution solutions in India. The model combines dual business benefits of outsourcing with those of a single window approach. Known as the broad line food distribution model, this single window approach for sourcing all food, beverages and operating supplies is followed across the world as it helps in streamlining the entire supply chain and avoiding inefficiencies that exist therein. It helps manufacturers and suppliers route their products through a single distribution platform, which helps them get better penetration, thereby increasing sales, reducing logistics and distribution costs and ensuring integrity of the product. It is a win-win for all - the manufacturer/ supplier, the broad line distributor and the customer. Radhakrishna Foodland has its own state-of-the-art food distribution facility at Kalamboli, Navi Mumbai. This facility built over 33,000 sq. meters, has been designed by international experts and maintains international food safety USDA, HACCP and CODEX standards.

Gadre Marine Export Limited (GME) is a premier exporter of processed and frozen fish cakes. Hundred percent export-oriented unit (EOU) is a market leader in the segment and has earned an excellent reputation for its expertise, stability and strength. In fact, the company is considered a visionary in the industry. Traditionally, the seafood processing industry in India has used manual manufacturing processes. GME became a pioneer when it fully automated its processes. Its improved quality and hygiene standards won the company the coveted HACCP accreditation (Hazard Analysis & Critical Control Point; similar to ISO 9002 accreditation for the processed food industry). GME posted an audited turnover of approximately Rs. 66 crores or US $ 15 million in the last financial year.

Hindustan Lever Limited introduced a major technological breakthrough that prevents the loss of iodine from salt. HLL’s breakthrough technology has been patented in India as well as several other countries. This new technology encapsulates iodine in a manner that it not only prevents its loss during storage and transportation but also during Indian cooking. Loss of iodine from iodized salt is a major concern affecting all iodized salts in the country. One of the main problems in iodized salts is the loss of iodine under conditions of storage and cooking. Even government PFA regulations recognize that up to 50 percent of iodine may be lost in storage and transportation alone. In addition, there are losses arising in Indian cooking, which further reduces the actual intake of iodine. Iodine deficiency is a serious health issue in our country. Iodine deficiency not only leads to goiter but also has an impact on the mental development of growing children. HLL has incorporated this technology in its brand of salt names Annapurna, which makes it the only salt in the market that does not lose iodine. Annapurna salt was the first salt to be endorsed by ICCIDD. Annapurna is one of the leading brands of iodized salt in the market and is now further consolidating its leadership position with the launch of stable iodine salt.



nnn 9. Transformation of Business through ICT: ITC e-choupal

ITC is one of India’s leading companies in agri-business. Its International Business Division created in 1990 as an agricultural trading company; now generates Rs. 880 crores or US $ 20 million in revenues, annually. The company has initiated an e-choupal effort that places computers with Internet access in rural farming villages; the e-choupals serve as an e-commerce hub. What began as an effort to re-engineer the procurement process for soy, tobacco, wheat, shrimp, and other cropping systems in rural India has now grown to create a highly profitable distribution and product design channel for the company — an e-commerce platform that is also a low-cost fulfillment system focused on the needs of rural India. The e-choupal system has also catalyzed rural transformation that is helping alleviate rural isolation, create more transparency for farmers, and improve their productivity and income.

Farmers trained by ITC, can use the computer to access daily closing prices in local mandis, as well as to track global price trends or find information about new farming techniques. They also use the e-choupal to order seeds, fertilizers, and other products such as consumer goods from ITC or its partners, at prices lower than those available from village traders; the Sanchalak typically aggregates the village demand for these products and transmits the order to an ITC representative. During harvest season, ITC offers to buy the crop directly from any farmer at the previous day’s closing price; the farmer then transports his crop to an ITC processing center, where the crop is weighed electronically and assessed for quality. The farmer is then paid for the crop. In this way, the e-choupal system bypasses the government-mandated trading mandis. Farmers benefit from more accurate weighing, faster processing time, and prompt payment, and from access to a wide range of information, including accurate market price knowledge, and market trends, which help them decide when, where, and at what price to sell. Farmers selling directly to ITC through an e-choupal, typically, receive a higher price for their crops than they would receive through the mandi system, on average of about 2.5 percent higher (about Rs 264 per ton). In areas covered by e-choupals, the percentage of farmers planting soy has increased dramatically, from 50 to 90 percent in some regions, while the volume of soy marketed through mandis has dropped as much as half. At the same time, ITC benefits from net procurement costs that are about 2.5 percent lower (it saves the commission fee and part of the transport costs it would otherwise pay traders who serve as its buying agents at the mandi) and it has additional direct control over the quality of what it buys. The system also provides direct access to the farmer and to information about conditions on ground, improving planning and building relationships that increase its security of supply. The company reports that it recovered its equipment costs from an e-choupal in the first year of operation and that the venture as a whole is profitable.



Indian Food industry is poised for phenomenal growth in the years to come. One hand, India is continuously witnessing the increase in production in food grains, fruits and vegetables and fresh produce production, simultaneously increasing demand on the consumption front is ready to support the development of entire Food Value Chain. Serious efforts of stakeholders in the past have laid a strong foundation; following may be the recommendation to bring in required traction to bag the additional Rs. 440,000 crores or US $ 100 billion opportunities by year 2015.

There is urgent need to create and augment strong Infrastructure to wipe off wide spread inefficiencies in the food value chain. The core infrastructure required for Food Processing Industry is:

Production infrastructure – like g e r m p l a s m a n d s e e d m u l t i p l i c a t i o n f a c i l i t i e s , agricultural inputs (seeds, plant nutrients and plant protection c h e m i c a l s ) , i r r i g a t i o n , controlled production facilities, farm mechanization etc is required to increase production of processable produce at lower cost and to make it available in required quantity round the year.

Processing infrastructure – like farm level post harvest facilities – cool chambers, grading and sorting facilities, pack houses for the back end support; integrated industrial processing units for processing and value addition

Distribution infrastructure – There is a need to establish an integrated supply chain like warehousing, cold chain and transport from farm gate to the food plate for strong backward and forward integrations. Supply chains are to be created in such a way that they can be utilized round the year for multiple commodities to increase the efficiency of utilization.

nnn 1. Create New Infrastructure and Upgrade the ExistingInfrastructure

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Recommendations 6

for the Stakeholders



In addition to the above agricultural infrastructure directly required by Food Processing Industry, basic support Infrastructure like - road, rails, communications, power etc. is also to be strengthening at different places. Some quick milestones can be achieved by up gradation of existing infrastructure like APMCs, Quality Control Labs (QC labs), cold storages, processing plants etc, initiatives for which has already been taken by MoFPI and others.

There is an urgent need of successful implementation of FSSA in its original spirit, protecting the interest of all stakeholders. In addition, harmonized rules and transparent implementation mechanism needs to be placed. Appropriate infrastructure and capacities in terms of scientific resources, pool of scientists, analytical laboratories need to be created to support the scientifically conducted risk analysis implementation of FSSA.

Development of infrastructure duly supported by hi tech interventions requires huge investment from the private sector. Government needs to take all possible steps for the incentivisation of private sector to invite investment in creating the agricultural infrastructure possibly by viability gap funding through public private partnerships. This will not only ensure the optimal utilization of resources but will also utilize the advantages of new technologies and human skills of private sector. Public Private Partnerships should be encouraged in the sectors of joint infrastructure projects, R&D, capacity building, information sharing, international branding etc.

The Indian production system is still largely “supply driven”. A paradigm shift is required in the production system from “supply driven” toward “market demand driven production”. It would require collective endeavors of all the stakeholders’ right from the R&D organizations, extensions, market players and the govt machinery. Farmers will have to play active role in adoption of new technologies shared by the public and private extension system.

All possible efforts are required to be done by technology interventions, training of various stakeholders to produce the world class processed food products in India. The output should be able to meet the global standards like Global GAP, Codex Alimentarious, HACCP standards etc.

Looking at industry and users’ demands it would appear that steps need to be taken to further nurture high quality institutions in this field. An apex institutions could be established which would inter alia provide for world class graduates and research programs; carry out cutting edge research; provide for a framework for constantly updated curricula to sister institutions, assist and provide a linkage to regional institutions in their activities.

a. Capacity building on quality standards: The apex institute can also be created by upgradation of institutes State Agri Universities and various other central research institutes in closed tie up with private organizations and other world leaders in the similar sector.

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2. Successful Implementation of FSSA

3. Increase Public Private Partnership

4. Market Demand Driven Production

5. Meeting Global Standards of Quality

6. Technological Knowhow and Support



b. Technology transfer, capacity building and skill up gradation: Strong linkages are to build to transfer the technologies developed in isolations at different public and private research organization to their targeted beneficiaries. While the farmers are to be linked to the agri research companies and research organizations, the processors are to be linked to the post harvest research centers. The extension workers should not only be trained about increasing the production but should be educated about saving the post harvest losses through value addition.

The Indian consumer’s demands are still dominated by consumption of fresh. Packaged and processed foods are readily not accepted in the larger portion of consumers due to various reasons. Government and industry should run sustained campaigns to create awareness for increasing acceptance of processed food. It is equally for all the stakeholders in production and distribution to ensure availability of quality processed food at affordable prices. It is more important to handle the challenges of non homogeneous food habits of India and varied cultural diversities.

Branding of India as processed food basket to the world market is equally important to tap the opportunities in overseas markets. This will require holistic efforts from government, export promotion bodies, business chambers and associations on a long term basis.

Due to the low investment capacity of SMEs, sectors reserved for SMEs and SSI are to be empowered with suitable support in terms of skill up gradation, assistance for certification, capacity building and connecting them to the markets.

Focused studies on Indian customers and markets are required to design appropriate marketing strategies for processed food in Indian markets. The industry should share the responsibility of product innovations by offering “value for money proposition” and designing customized products to be readily accepted by the Indian household.

Policy level efforts need to be initiated by the government in consultation with farmer groups, cooperatives and entrepreneurs to promote Producer Group Companies and contract farming. Help from the NGO, private sector should be taken for the recognition and reward of innovative technologies and recipes. This will not only be a step towards farmer’s empowerment, but will also ensure supply of quality raw material to the industry.

Like developed countries, organized retail has come up as a key driving factor in the development of packaged and processed food through its innovative methods of marketing. Clarity on the policy front from the govt on FDI in retail, regulatory framework facilitating backward integration would further strengthen the development of food industry in India.

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7. Market Promotion and Branding

8. SME Support

9. Market Research Based Offerings

10. Promoting Entrepreneurship and Innovations

11. Organized Retail as a Key Driver



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12. Linking Farmers to the Markets

13. Single Window System

Linking farmers to the markets by allowing them to directly connect with retailers, processors, aggregators etc. The amendment of APMC should be implemented in the original spirit so as to increase buyer-producer interaction.

Various initiatives taken by central and state governments to incentivize the investors are not being properly communicated and do not reaches to the target beneficiaries due to complexity in roles and channels. There is urgent need to bring all the investor and industry incentive policies, regulatory policies under single window. This will not only remove the undesired confusions for the investors but will also increase efficiency in the execution.

This report has presented the potential, dynamics, market size and the opportunities of the Indian Food Industry. It has analyzed the growing segments like fruits and vegetables, dairy, marine products, meat and poultry, beer and wine and packaged foods. The fast paced growth of this industry is expected to generate additional Rs. 4,40,000 crores or US $ 100 billion opportunity by 2014. It has indicated the need for Rs. 2,20,000 crores or US $ 50 billion capital investment, a big part of which will go towards plant and machinery. Although Rs. 44,000 crores or US $ 10 billion will come from government support, the rest is industry’s opportunity.

The Indian domestic market has a great unmet demand which is one of the main drivers of this sector. While a majority of this market will be met through indigenous production, imports will also rise many fold. Imports of fresh produce, wine, packaged foods, cheeses etc. are just a few such examples of big opportunities. On the other hand, export of packaged foods, buffalo meat, marine products, fresh and processed fruits and vegetables, wine etc. are the export opportunities.

This industry, which has been waiting for the change of consumer preferences and buying habits for long, has suddenly undergone a major change. A preference for convenience and health foods, supported by increasing income is throwing up unprecedented opportunities. The enabling regulatory environment is further boosting the pace of change towards processing of food. In a nutshell, it can be said that the Indian Food Processing industry is on the cusp of a revolution, and there are definite first mover advantages for the early investors.



Conclusion

Annexure:Indian Food Regulations

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To evaluate and monitor the progress of implementation of the Act in the States/UTs by collecting periodical reports and spot visits

To liaise with National & International Food Quality Control Organizations

To ensure quality of food imported into India, under the provisions of the Act

To create Consumer Awareness and to augment the Food Testing Laboratories

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Prevention of Food Adulteration Act and Rules, 1955

Procedure of Standard Setting

The Prevention of Food Adulteration Act was enacted in 1954 to strengthen the system for preventing adulteration in articles of food. The Central Government framed rules known as the "Prevention of Food Adulteration Rules, 1955". Under sec.23 of the Act the responsibility of implementation of Prevention of Food Adulteration Act and Rules framed there under vests in the State Governments and Union Territories. Each State Government and Union Territory has created its own structure/organization for implementation of the Act.

To review the provisions of PFA Act, Rules and Standards in consultation with the Central Committee for Food Standards, a statutory Advisory Committee under the Act and its 12 technical Sub- Committees and groups were formed like Food Laws and Legal Advisory Sub-Committee, Nutrition, Foods for Special Dietary Uses Sub-Committee, Food Additives Sub-Committee etc. There are various roles of the committees as formed above, some of these encompasses:

To conduct examination for the Chemists for their appointment as Public Analysts

To organize training programs for various functionaries (viz. Senior level Officers, Chemists, Food Inspector and Consumer Organizations) under the Act

To approve the State PFA Rules

To examine and approve the labels of Infant Foods

Enforcement of the regulation is under the control of state ministries. Food inspectors in each district collect samples from manufacturer’s site as well as market to ascertain its safety and conformance to quality. These samples are analyzed at state food laboratories and Central Food Laboratories. Four Central Food Laboratories have been established under the Act, which work as appellate laboratories for the purpose of analysis of appeal samples of food articles lifted by the Food Inspectors of States/UTs and Local Bodies. The two Laboratories viz. (i) Food Research and Standardization Laboratory, Ghaziabad and (ii) Central Food Laboratory, Calcutta are under the Administrative control of the Directorate General of Health Services and the other two viz. (i) Central Food Laboratory, Pune and (ii) Central Food Laboratory, Mysore are under the Administrative control of Government of Maharashtra and Council of Scientific and Industrial Research, Government of India, respectively.

There are 72 State Food Laboratories under the administrative control of States/UTs Governments and Local Bodies.

nnn Standards of Weights and Measures Act and Rules

The Standards of Weights and Measures Act, 1956 was the first enactment by which the uniform

standards of weights and measures, based on the metric system were established. Salient features of

the Standards of Weights and Measures Act, 1976 are as follows:

Establishment of the weights and measure based on the SI units, as adopted by the CGPM and recognized by the OIM

Provides to prescribe specification of measuring instruments used in commercial transaction, industrial production a measurement involved in public Health and Human safety. The specifications are given in the Standard of weights and Measures (General) Rules 1987

Regulation of inter-state trade and commerce in weights and measures and commodities sold, distributed or supplied by weights or measures

Regulation of pre-packed commodities sold or intended to be sold in the course of inter-state and commerce

Approval (before manufacture) of models of weights and measuring instrument intended to be manufactured after the commencement of the proposed legislation

Control and regulation of export and import of weights and measures and commodities in packaged form

Establishment of an Indian Institute of Legal Metrology to provide training in legal metrology to inspectors and others

Surveys and collection of statistics for facilitating planning and enforcement of the proposed legislation

Inspection of weighing and measuring instruments during their use to prevent fraudulent practices

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Powers of inspectors to search, seize and forfeiture of non-standard weight or measure

Power to file case in the court for prosecution

Power to compound certain cases before or after the institution of the prosecution cases

Appeal provisions

Prescribe fee for various service rendered

Power to make rules for implementing the provisions of the Act

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nnn Standard Weights and Measures (Packaged Commodities) Rules, 1977

When commodities are sold or distributed in packaged form in the course of Inter-State trade or commerce, it is essential that every package must have:

Plain and conspicuous declaration thereon showing the identity of the commodity in the package

The net quantity in terms of the standard units of weights and measures and if in nos., the accurate number therein

The unit sale price of the commodity and the sale price of that particular package of that commodity

The names of the manufacturer, and also of the packer or distributor, should also be mentioned on the package

In this regard the Packaged Commodities Rules were framed in 1977. These Rules extend to the whole of India and apply to commodities in the packaged form which are, or are intended or likely to be sold, distributed or delivered or offered or displayed for sale, distribution or delivery or which are stored for sale, or for distribution or delivery in the course of inter-state trade and commerce.

Administration and Enforcement

The responsibility in relation to weights and measures is shared between the Centre and the States. Matters of national policy and other related functions such as, uniform laws on weights and measures, technical regulations, training, precision laboratory facilities and implementation of the International Recommendation are the concern of the Central Government. The State Governments and Union Territory Administration are responsible for the day to day enforcement of the laws.

The weights and Measures Unit in the D/o Consumer Affairs, being the central authority for dealing with the subject, is required to handle all the matters falling within the purview of the Central Government. In addition, it has to guide, co-ordinate and supervise the enforcement activities of the state enforcement machinery.

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nnn Fruit Products Order, 1955

Fruit and Vegetable processing sector is regulated by the Fruit Products Order, 1955 (FPO), which is administered by the Ministry of Food Processing Industries, Government of India. The order has undergone minimal amendment since its inception to incorporate new developments in the area. However, recently Ministry of Food Processing Industries has floated the document for comprehensive review and amendment. The document is open for comments from all stakeholders.

Also, with the implementation of Food Safety and Standards Act, the clauses under the FPO will be merged into the new set of rules to be drafted under the Act. The existing structure under FPO and manpower will also be rationalized and integrated into the FSSA structure.


Current clauses under FPO have the following main requirements:

No person shall carry on the business of a manufacturer except under and in accordance with the terms of an effective license granted to him under this Order in Form B and shall not use the License number on labels of non-fruit products.

A license shall be in force for such period as may be specified therein, usually for three/five or ten years. For the renewal of a license application shall be submitted at least one month before the expiry of the period of the license. The licensing Officer may by order refuse to grant a license to any applicant giving a brief statement of doing so. The manufacturer may appeal to the Central Government against such refusal within a period of thirty days of the receipt of the order and the decision of the Central Government shall be final.

Every manufacturer shall manufacture fruit products in conformity with the sanitary requirements and the appropriate standard of the quality and composition specified in the Second Schedule of this Order.

Every container in which any fruit product is packed shall bear the label as approved by the Licensing Officer

The bottle shall be so sealed that it cannot be opened without destroying the license number of the special identification mark of the manufacturer to be displayed on the top or neck of the bottle or in case of tin, barrel or other container the license number shall be exhibited prominently on the side label of such tin or be embossed thereon.

The label should not contain any statement, claim, design or device, which is false or misleading in any particular concerning the fruit products etc.

Every beverage should contain at least 25 percent of fruit juice in its composition otherwise it will be treated as synthetic and it shall immediately precede such name the name of the product and in case of artificial flavours the words 'Artificially Flavoured' shall also be added.

The licensing officer or any officer may with a view to securing a compliance with this Order can inspect the premises or any raw or final material or any account books, documents or other relevant evidence connected with manufacture of fruit products in respect of which he has reason to believe that a contravention of the Order has taken place, he can also seize or detain such things, on giving a proper receipt.

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According to clause 7 and 10 the place, where fruit products are manufactured, shall comply with the sanitary requirements, as laid down in the Factories Act 1934, of a fruit products manufacturing unit.

Other than these specifications the order also lays down specific requirements in regard to the following:

Containers and Labeling Requirements

Limits of Poisonous Metals in Fruit Products

List of Permissible Harmless Food Colours

Limits for Permitted Preservatives in Fruit Products

Other Permitted Additives

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nnn Milk and Milk Products Order, 1992

Milk & Milk Products Sector is regulated by the Milk & Milk Products Order, 1992 (MMPO), which is administered by the Department of Animal Husbandry & Dairying, under the Ministry of Agriculture, Government of India.


Every person engaged in the business of handling, processing or manufacturing milk or any milk product, shall, in regard to the items of milk or milk product manufactured and the packing, marking and labeling of containers shall comply with the following:

The product related to those items should be certified by the Officer authorized.

Where certificate is issued to any person in relation to any item, such person shall be authorized to place an emblem of certification on the packaged goods

The label on the packaged goods shall not contain any statement, claim, design or device which is false or misleading in any manner concerning the milk or milk product contained in the package or about the quality or the nutritive value or of the place of origin of the same

A holder of registration certificate shall not pack milk or any milk product other than those processed or manufactured by him or, those obtained from any other person holding a registration certificate.

According to Rule 5 of this order no person or manufacturer shall commence or expand the business without obtaining registration/permission from the Registering Authority. Registration can be obtained by making an application in the form specified in the first schedule of this order along with the prescribed fee. The terms and conditions of the registration under this Order shall cover sanitary, hygienic conditions, quality and food safety as specified in the Fifth Schedule of the order. No person shall undertake business in milk and milk products unless the dairy establishment has complied with the hygienic and sanitary requirements' specified under fifth schedule.

The order requires no permission for units handling less than 10,000 litres of milk per day or milk solids up to 500 tons per annum (TPA). Thus, the largest share of the market, the small-scale indigenous or unorganized sector, remains unregulated. This allows the continued free hand of that

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sector, enabling it to continue to build on the large role that it played during the growth period of the 1970s and 1980s, and to provide most of the market linkages while the formal sector grows in importance. The MMPO prescribes state registration to plants producing between 10,000 to 75,000 litres of milk per day or manufacturing milk products containing between 500 to 3,750 tons of milk solids per year. Plants producing over 75,000 litres of milk per day or more than 3,750 tons per year of milk solids have to be registered with the Central Government. The MMPO also specifies that the registering authority must enforce the sanitary and hygienic regulations to ensure the quality of the production process.

An annual inspection exercise (to be alternated between the two inspecting agencies) is to be carried out by each milk-producing unit registered under MMPO. Ministry of Agriculture has notified EIC (Export Inspection Council) and NPC (National productivity Council) to carry out the inspection. The inspecting authority carries out annual inspection of any premises, vehicle, any material, sample of milk etc. in which manufacture or process, or business in milk or any milk product is carried on, with a view to ensuring compliance with the provisions of this Order.

The stringent regulations, government controls and licensing requirements for new capacities have restricted large Indian and MNC players from making significant investments in this product category. Most of the private sector players have restricted themselves to manufacture of value added milk products like baby food, dairy whiteners, condensed milk etc.

All the milk products except malted foods are covered in the category of industries for which foreign equity participation up to 51 percent is automatically allowed. Ice cream, which was earlier reserved for manufacturing in the small-scale sector, has now been de-reserved. As such, no license is required for setting up of large-scale production facilities for manufacture of ice cream.

Subsequent to de-canalization, exports of some milk based products are freely allowed provided these units comply with the compulsory inspection requirements of concerned agencies like: National Dairy Development Board, Export Inspection Council etc. Bureau of Indian standards has prescribed the necessary standards for almost all milk-based products, which are to be adhered to by the industry.

Under the Milk and Milk Products Order (MMPO), the requirement for registration with the MMPO and the renewal of licenses every three years was a major problem. However, the requirement of renewal of registration after three years was abolished in August 2001, which was a positive step towards the liberalization of the India dairy sector.

thSince its inception the order has undergone 6 major amendments, the last being on 26 March 2002. Now with the enactment of Food Safety and Standards Act, the order will be resumed as Milk and Milk Products Regulations under section 99 of the FSSA.



nnn Meat Food Product Order, 1973

Processing of meat products are licensed under Meat Food Products Order (MFPO), 1973 which was hitherto being implemented by the Directorate of Marketing and Inspection (DMI) has been transferred to Ministry of Food Processing Industries with effect from March 2004.The order has undergone 11 amendments since its inception. The last amendment was done on 25th October 2005, the main amendments being:

Fish and fish products are included under the MFPO purview

Frozen meat covered

Chilled meat producers can procure MFPO license on voluntary basis

Currently, there are about 280- 300 licensees under MFPO. With the Food Safety and Standards Act, the order is due for integration into the central FSSA structure.

Administration and enforcement

Under Rule 4 no person shall carry on business as a manufacturer without the license under this order. Application for obtaining the license should be in Form "A" set out in the First Schedule accompanied by a treasury challan evidencing the payment of the fees as specified in sub-clause (3). A licensing authority may refuse to grant a license providing a brief statement of the reason for such refusal. For the purpose of this order, there shall be three categories of manufacturers as specified below paying the corresponding license fee payable by each category:

Category "A" - Manufacturer who makes meat food products exclusively from meat of animal (s) slaughtered and dressed in his factory- If the quantity of meat food products manufactured is more than 150 tons per annum then the license fee is Rs. 5,0001- per annum and if less than that than Rs. 2,5001- per annum.

Category "B"- Manufacturer who makes meat food products exclusively from meat of animal (s) slaughtered and dressed in a recognized slaughter house and whose factory is situated in close - If the quantity of meat food products manufactured is more than 150 tons per annum then the license fee is Rs. 2,5001- per annum and if less than that than Rs. 1,0001- per annum.

Category "C” Manufacturer who makes meat food products exclusively from poultry and/or pig meat at places where author/zed slaughter houses do not exist and the total quantity manufactured is less than 30 tons per annum - The licensee fee is Rs. 1,000.

The registration certificate issued under this Order shall be valid for a period of one year from the date of issue and should be renewed thereon. Every application for renewal of registration certificate shall be made to registering authority in the form 'A' given in First Schedule at least sixty days before the expiry of the period of the registration.

The licensee shall manufacture meat food products in conformity with the sanitary and other hygiene requirements specified in second and third schedule of the order. Every licensee shall comply with the requirements regarding packing, marking and labeling containers of food products and also any other additional requirements specified from time to time.

The licensee who slaughters animals for the purpose of manufacturing meat food product shall manufacture meat food product in conformity to the sanitary and other hygienic requirements

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specified in second and third schedule of the order. Every licensee shall comply with the requirements regarding packing, marking and labeling containers of food products specified in the fourth schedule and also any other additional requirements specified from time to time.

The registering authority or any other officer authorized by order, may carry out periodic inspection of any premises, vehicle, any material, sample of raw meat etc. in which manufacture or process, or business in meat or any meat product is carried on, with a view to ensuring compliance with the provisions of this Order. The Officer may seize or detain raw materials, documents, account books or other relevant evidence connected with the non-compliance of the Order.

Any person aggrieved by an order of the licensing authority may, within thirty days from the date of receipt of the copy of the statement of the reasons for the refusal to grant the license, appeal to the Central Government for its decision. Provided that before passing an order rejecting the appeal, the Central Government shall give a reasonable opportunity of being heard to the persons likely to be affected by such order.

nnn Export Inspection Council (EIC)

Export Inspection Council (EIC), the official certification body of India, was set up by the Government of India under Section (3) of the Export (Quality Control and Inspection) Act, 1963 for sound development of export trade of India through Quality Control and Inspection and for matters connected therewith. It is an advisory body to the Government of India on measures relating to quality control and inspection. It carries out the role of supervision of the activities of the established and designated Conformity Assessment Bodies (CAB), which provide services of inspection and certification for exports. It also carries out administrative and financial control over the Export Inspection Agencies (EIAs), located at Delhi, Mumbai, Kolkata, Chennai and Kochi with a network of 38 sub-offices including laboratories equipped with the required logistic support and testing facilities at major ports and industrial centres in India. EIC, either directly, through Export Inspection Agencies (EIAs), or its recognized CABs, renders services in the areas of:

Certification of quality of commodities (both notified and non-notified) for exports through consignment-wise inspection and installation of quality management & assurance systems (In-process Quality Control and Self-Certification) in the exporting unit.

Certification of quality, health and safety of food items for export through installation of Food Safety Management Systems in the food processing units

Issue of various types of Certificates such as Health, Authenticity, non-GMO to exporters under various schemes for export products.

Issue of Certificates of Origin to exporters under various preferential tariff schemes for export products.

Laboratory testing

Training to the industry in installation of Quality and Safety Management Systems based on principles of Hazard Analysis Critical Control Point (HACCP), ISO-9001: 2000, ISO: 17025 and other related areas.

All these functions of EIC facilitate worldwide access for Indian exports and instill confidence in importers as well as importing governments about quality and safety of Indian products.

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Notified Commodities

Nearly 1000 commodities have been notified under Export (Quality Control & Inspection) Act, 1963 and EIC/EIAs are mandated to carry out pre-shipment inspection of these.

With liberalization, compulsory pre-shipment inspection was waived off in 1991 for specified categories of exporters like Export Houses, Star Trading Houses and those having firm letter from overseas buyers that official pre-shipment inspection was not required. However, the Central Government once again introduced mandatory export certification, based on internationally accepted Food Safety Management Systems in six broad product categories including meat & meat products (1993), marine products (1995), egg products (1997), dairy products (2000), honey (2002) and poultry meat and meat products (2002) to address the concerns of India’s major trading partners like USA, Japan and EC who have installed import control system in the above areas. In other areas, certification continues to be carried out on voluntary basis on requests from exporter, importer or importing country based on their requirements. For example in the area of basmati rice, EC gives duty benefits only if certified by EIC, and in the case of black pepper, USFDA allows EIC certified products direct entry without mandatory detention.

International Recognitions - Under the provisions of WTO Agreements, especially the SPS & TBT Agreements, several of India’s trading partners have imposed import control systems based on international standards, particularly in the food sector. These Agreements provide for recognition of the export control systems of member trading partners provided these meet the requirements of their import control. As the official export certification body of India, EIC’s certification has been recognized by several of India’s trading partners, while with others, dialogue for seeking recognition is presently in process.

EIC’s certification is currently recognized by the following countries like EU, USA, Australia, Korea, Turkey, Sri Lanka, Singapore, Japan, Italy, China, Israel, Nepal, Saudi Arabia, Mauritius and SAARC countries.

nnn Food Safety and Standards Act

The food sector in India was governed by a multiplicity of laws under different ministries. A number of committees, including the Standing Committee of Parliament on Agriculture in its 12th Report submitted in April 2005, had emphasized the need for a single regulatory body and an integrated food law. The Food Safety and Standards Authority of India has being constituted and is starting to become functional.

The Food Safety and Standards Act aims to integrate the food safety laws in the country in order to systematically and scientifically develop the food processing industry and shift from a regulatory regime to self-compliance. As part of the process of consolidation, the Act proposes to repeal eight existing laws related to food safety.

The main objectives of the Act are:

To introduce a single statute relating to food, and

To provide for scientific development of the food processing industry

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Highlights of the Act:

The Food Safety and Standards Act, 2006 consolidates eight laws governing the food sector and establishes the Food Safety and Standards Authority (FSSA) to regulate the sector.

FSSA will be aided by several scientific panels and a central advisory committee to lay down standards for food safety. These standards will include specifications for ingredients, contaminants, pesticide residue, biological hazards, labels and others.

The law will be enforced through State Commissioners of Food Safety and local level officials.

Everyone in the food sector is required to get a license or a registration that would be issued by local authorities.

Food Recall procedures: Every distributor is required to be able to identify any food article to its manufacturer, and every seller to its distributor. Anyone in the sector should be able to initiate recall procedures if he finds that the food sold had violated specified standards.

Rules under the act are under preparation. The rules will further elaborate the standard setting process and the participation of various stakeholders in the activity.

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nnn The Bureau Of Indian Standards (BIS)

The National Standards Body of India is involved in the development of technical standards (popularly known as Indian Standards), product quality and management system certifications and consumer affairs. It resolves to be the leader in all matters concerning Standardization, Certification and Quality.

Objectives

Harmonious development of standardization, marking and quality certification.

To provide new thrust to standardization and quality control.

To evolve a national strategy for according recognition to standards and integrating them with growth and development of production and exports

Functions

l Formulation of Indian Standards for products and services by bringing together and coordinating various interest groups like manufacturers, consumers, technical experts, testing personnel and others interested. The standards so prepared are known as Indian Standards (IS) and are considered as legal documents. The standards are priced publications and are available from all the offices of the Bureau.

BIS is engaged in formulation of Indian Standards for the following sectors: Basic & Production Engineering, Chemicals, Civil Engineering, Electronics and Information Technology, Electrotechnical, Food and Agriculture, Mechanical Engineering, Management and Systems, Medical Equipment and Hospital Planning, Metallurgical Engineering, Petroleum Coal and Related Products, Transport Engineering, Textile and Water Resources.



VOLUNTARY DOMESTIC REGULATIONS

Each of these sectors has Division Council to oversee and supervise its work. BIS publishes detailed Work Programme for each of the 14 Division Councils once in a year on 1 April, giving scope of Division Council and Sectional Committees and committee wise position of standards published and draft standards (like preliminary, wide circulation and finalized draft standards) at different stages of preparation. Currently, under Food and Agriculture Council, 23 Sectional Committees are actively working. The copies of Work Programme (and also of wide circulation drafts for comments during the wide circulation period) can be obtained from the Director of the concerned Technical Divisions, Bureau of Indian Standards, New Delhi.

Apart from formulation, emphasis is laid also on regular review of the standards to keep them in line with modern technological developments, as also to harmonize them with international standards or their equivalents

l Certification Schemes

Product Certification Scheme is a scheme whereby manufacturers of products interested in producing their products as per relevant Indian Standards are permitted to use the Standard Mark of the Bureau (the popular ISI mark) on their products after obtaining a licence from the Bureau.

The pre-requisites for obtaining a licence are that the manufacturer has the necessary manufacturing and testing facility for the product and agrees to follow the quality assurance scheme of the Bureau in addition to payment of necessary fees as stipulated. The licence is initially granted for a period of one year which is renewable for subsequent periods based on satisfactory operation of the scheme. The scheme is voluntary in nature for most products. However, the government has insisted on ISI marking of about 136 products which affect the health and safety of consumers or are products of mass consumption like LPG Cylinders, Food Colours and Additives, Cement, Packaged Drinking Water, etc.

Certification for Indian Importers is a similar scheme operated for importers who are desirous of using the standard mark (ISI Mark) on imported products. The Government of India has also stipulated that some of the products be imported into the country only after approval of BIS is obtained.

Certification for Foreign Manufacturers is another scheme again operated on the same lines whereby manufacturers located in foreign countries are permitted to use the Standard (ISI) mark on their products.

ECO MARK BIS grants licences to environment friendly products under this special scheme. For obtaining the ECO Mark Certificate the products should conform to additional requirements specified in the Indian Standards.

IECEE & IECQ Certification BIS is a National Certifying Body (issuing and recognizing) under the International Electrotechnical Commission (IEC) System for Conformity Testing and Certification of Electrical Equipment (IECEE). The product categories for which BIS has IECEE acceptance are Cables and Chords, Capacitors as components, Low voltage high power switching equipment, Installation of protective equipment and Electronics entertainment. BIS is also the National Authorised Institution and the National Standards Organization under the IEC System of Quality Assessment of Electronic Components (IECQ).

l Management System Certifications

Under the Management System Certifications, the Bureau operates the following four Certification Schemes:

Quality Management System Certification (ISO 9001 Certification): The Bureau operates the



Quality Management System Certification for organizations based on the ISO 9001:2000 Standard published by the International Organization of Standardization (ISO). Being a member of ISO the standards of ISO can be adopted in-toto by the Bureau and can be published as IS/ISO standards. Accordingly, the ISO 9000 series of standards have been adopted and are published as the IS/ISO 9000 series of standards. The certification being operated by the Bureau is accredited by the Dutch Council of Accreditation - Raad voor Accreditatie (RvA), The HACCP (Hazard Analysis Critical Control Point) programme for the food industry can also be covered in QMS Certification Scheme if so desired by any organization.

Environment Management System Certification : The certification scheme is based on the ISO 14001 standard which as in the case of ISO 9000 standards has been adopted as IS/ISO 14001.

Information Security Management System Certification (ISMS based on ISO/IEC 27001).

Food Safety Management System Certification (FSMS based on ISO 22000)

nnn Agmark

Agricultural Produce (Grading & Marking) Act, 1937 provides for the grading and marking of agricultural and other produce. The Act empowers the Central Government to make Rules for :

(a) fixing grade designations to indicate quality of any scheduled article.

(b) defining the quality indicated by every grade designation, and

(c) specifying grade designation marks to represent particular grade designation.

As per provision in the Section 3 of the Act, General Grading and Marking Rules, 1988 are notified in which the detailed procedures for grant of Certificate of Authorisation, setting up of laboratories, issue of Certificate of Agmark Grading, action on irregularities, consumer protection measures, etc. are given. As on date, 105 specific Commodity Grading & Marking Rules are notified which provide information on commodity specific requirements relating to hygienic aspects, packaging, labeling and grade standards based on quality parameters.

Grade standards notified as per the provisions of the Act are popularly called AGMARK Standards. These standards differentiate between quality and 2-3 grades are prescribed for each commodity. Grades help farmers/traders to get prices for agricultural commodities commensurate with the quality produced by them. Consumers get the produce of the quality desired by them. Till date, grade standards for 195 agricultural commodities have been notified. These include cereals, pulses, oilseeds, fruits and vegetables, creamery butter & ghee, vegetable oils, spices, honey, wheat atta, besan, etc. Directorate of Marketing & Inspection (DMI) in the Department of Agriculture & Cooperation, Ministry of Agriculture, is implementing the provisions of the Act.

Revision of Grade Standards

Grade Standards notified under the provisions of the Act are frequently revised to keep pace with the development of new varieties of agricultural commodities and technological advancements. Due to globalization, there is need to harmonize the standards with international standards. Recently, grade standards of spices, fruits and vegetables and pulses have been harmonized with the Codex Alimentarius Commission, International Organization for Standardization (ISO), etc.



Certification for Domestic Market

The scheme for certification of agricultural commodities is voluntary except for blended edible vegetable oils and fat spread. Certification under AGMARK is mandatory for these commodities as per provisions in the Prevention of Food Adulteration Rules, 1955. The parties desirous of certifying an agricultural commodity under Agmark should have hygienic premises, necessary infrastructure to process and pack the commodity and have access to a well equipped laboratory for the estimation of prescribed parameters. They can either have their own laboratory or get attached with the State Grading Laboratory or Commercial Laboratory approved by the DMI for grading and marking of the commodities. The Chemist of the laboratory is trained in one of the Regional Agmark Laboratories (RALs) and is approved for carrying out grading and marking. Certificate of Authorization (C.A) is granted to such parties on their request after they submit the required documents and their capacity to process and pack the commodity is ascertained. The approved Chemist of the C.A. holder analyses the raw material and the processed commodity for determining the grade standard and gets it packed in his presence. Inspecting Officers of DMI frequently visit the authorized premises for carrying out inspections and draw check samples which are analyzed in the RALs for ascertaining their conformance with the prescribed standards.Check samples are also drawn from the market and analyzed in RALs.

There are more than six thousand Certificate of Authorization holders throughout the country. These Certificate of Authorization holders grade and mark the agricultural commodity through more than 1200 laboratories approved for the purpose.

Vegetable oils, ghee, honey, creamery butter, spices, wheat atta, suji, maida, besan, etc. popularly graded and certified under AGMARK for domestic trade. Agmark certified products are pre-tested as per the prescribed standards in the laboratories of the authorized packers.

Source: CIFTI- FICCI



ABOUT TECHNOPAK

A leading Management Consulting firm offering strategic advice, start up assistance, performance enhancement impetus, consumer insights and capital advisory, to leading Indian and International companies, operating in

sectors. Since our inception in 1991, as a Management Consulting firm across diverse industries, we have offered services to have far reaching impact on client businesses. Founded on the principle of “concept to commissioning”, we are strategic advisors to our clients during the ideation phase, implementation guides through start-up and a trusted advisor overall. Over 70 percent of our projects come from repeat clients.

Our team currently comprises 300+ skilled professionals from leading International and Indian engineering and management institutes. Most of our consultants have hands-on industry experience in their fields of specialization and represent a wide variety of functional backgrounds. This enormous knowledge and talent pool enables Technopak to create special customized teams for each project depending upon the client requirements. From offices in Gurgaon (National Capital Territory of Delhi), Thane (Mumbai) and Bangalore, we consult with clients across the world. In 2007, we worked with 90 Clients across 127 projects, in 20 countries besides India, across 5 continents.

With a team of established domain experts at work, Technopak builds and enhances business capabilities for leading Indian and international companies by offering end-to-end solutions that are unique due to our rich experience, strong industry relationships and a global footprint.

Technopak’s ‘Food & Agriculture’ practice provides advisory services and implementation support across the entire food value chain in the sector. The services include Strategic Planning and Diversification, Feasibility Study, Turnkey Solutions, Contract Research for Product Development, Troubleshooting in Food Processing & Biotechnology areas, High tech Information Services, Advanced training, Mergers & Acquisitions, Entry India’s Strategy and International Market Strategy, among others.

Retail, Consumer Products, Fashion (Textiles & Apparel), Healthcare, Hospitality, Education, Entertainment and Real Estate

Food & Agriculture,



ABOUT FICCI

FICCI the largest and oldest apex organization of Indian business and industry is the rallying point for free enterprises in India. It has empowered Indian businesses, in changing times, to shore up their competitiveness and enhance their global reach. With a nationwide membership of over 1500 corporates and over 500 chambers of commerce and business associations, FICCI espouses the shared vision of Indian businesses and speaks directly and indirectly for over 250,000 business units. It has an expanding direct membership of enterprises drawn from large, medium, small and tiny segments of manufacturing, distributive trade and services. FICCI maintains the lead as the proactive business solution provider through research, interactions at the highest political level and global networking.

FICCI-Food Processing Division not only provides institutional support to processed food industries manufacturing different types of food and allied products at the national level but also plays a pivotal role as a facilitator in partnering the Government in preparing the policy framework and the private sector in promoting the development of food processing in India. FICCI Food Processing Division focuses on macro issues that have a larger bearing on the sector like:

Some other services and activities of FICCI-CIFTI are as follows:

Interaction with various Ministries and Government Departments dealing with Food Processing industry and trade with the objective of assisting the Government in introducing investor friendly policies and formulating laws and regulations.

Conducts studies and undertakes projects for various organizations and also for its members.

Represents in all the Committees of the Ministry of Food Processing Industries, Ministry of Agriculture & Ministry of Health.

Represents in different committees of BIS, Shadow committees of CODEX etc.

Maintains liaison with other international organizations like CODEX Alimentarious Commission of FAO/WHO, FDA of USA and Ministry of Food and Agriculture and Fisheries in UK.

Disseminating information on economic policies, food laws as well as opportunities through constant publications on different aspects of Indian Food Industry.

Organizes regular workshops and programs on topical issues relevant to food Industry

Maintains close liaison with all foreign missions and counterpart Chambers of Commerce and Industry Associations within India as well as outside India providing the perfect platform for interaction on all food industry and trade related matters.

Supportive Infrastructure,Fiscal Reforms and Regulatory and Legal Affairs.

Federation of Indian Chambers ofCommerce and Industry

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Documents

FICCI - Technopak Report On Indian Food Industry