Food Retail Ppt

Presentation on

Indian Food RetailTrends & Tasks

by

Anand KumarJU07019

NSB School of BusinessNew Delhi

2India Food Retail: Trends & Tasks

We will talk about…

• Retailing in India – Indian economic snapshot– Retailing– Food retailing

• Trends– Evolving consumer preferences– Consumption shift– Drivers

• Tasks– Hurdles– Tasks for suppliers

• Reliance Industries Snapshot


Happening times !

• Indian GDP growth at 9.4 % for 2006-07 is the highest in 18 years

• Analysts across the globe find Indian growth sustainable

• Economic outlook for India is positive

• Indian working population is confident

Source: Indian Express


India is growing !

• India will be the third largest economy by 2040• India will be the 5th largest consumer market by 2025

Source: Economist


Most attractive retail market !

India’s retail market has grown by 10% on average for past 5 years…steadily rising to top position in GRDI

Source: AT Kearney Global Retail Development Index (GRDI)


Organized retail is still in its infancy !

• With just 2 % organized retail …….India is a big opportunity

Source: JM Morgan Stanley


With robust economy, sustained GDP growth and booming stock exchange, there are several emerging sectors in India waiting to be tapped . . .

…Organized Retail is at the forefront of these opportunities

Organized Retailing is big opportunity !


Growth in Organized Retail

• India is in 2nd phase of retail growth• Increasing Range, Portfolio and Format options• Food retailing leads the growth in Indian organized retail

Source: Ernst & Young


Food is the largest segment in Retail !

• At 77 % Food & Grocery is the largest segment in Retail sales

Source: Ernst & Young

Source: KPMG


Food Retail Sales in India

• Total food sales to cross US$ 250 billion by 2008


Modern formats in Food Retailing is low !

• Lowest among major retail markets...…But growing due to evolving consumer preferences


Indian consumers are evolving…• From traditional to…

… modernized traditional• From globalize to…

… Indianise

• From functional to…

… lifestyle

Evolving consumer preferences !


Indian consumers are evolving…• From value for money to…

… value for time and convenience• From cautious to…

… experimentation• From over-the-counter to…

… touch-and-feel

Evolving consumer preferences !


Consumption shift !

• Beverages Rise in coffee drinkers More fruit drinks and bottled water Wines and Liquor sales on rise

• Processed food consumption Increasing ready to eat food Growing premium foods Increasing private label From “packaged as stale” to “packaged is hygienic and high quality” Increased tendency towards disposability Shift from price consideration to design and quality


Consumption shift !

• Lifestyle Frequent eating out Growing health and dietary supplements Growing organic produce Greater focus on looking and feeling good

Source: AT Kearney


Drivers of this shift !

• Demographic advantage : Young population



• Increasing discretionary income



• Increasing retail space

• Credit availability is also fuelling this shift


Still there are hurdles !

Local and Global players’ concerns

• ‘Unorganized’ sector

• Nascent Supply Chain

• Low Technology Penetration

• Infrastructure

• Bureaucracy

…work with these profitably by focusing

on following tasks…


Tasks for suppliers !

Most important task

Understand consumers

• 29 States + 6 Union Territories Even within each state,

tremendous diversity in customs, traditions, attitudes

• 22 official languages and 1600 minor languages and dialects

• 70% Rural population – India lives in its 600,000 + villages ( < 20,000 population) However, accounts for more than

half of sales of many FMCG and Consumer Durable products

• 35% still illiterate, not accessible by mainstream media

• India is a not a homogenous market


Tasks for suppliers ! Innovate & invest

• Products– Not just customize but Indianize

» McDonalds and Pizza Hut

– Processing» Nestle

• Marketing– Market research– Advertising

» Coca Cola and Pepsi

– Encourage experiments» Kellogg’s

• Distribution – Packaging

» Sachets & Smaller pack sizes

– Channels / Network» Frito Lays and Anheuser-Busch



New agriculture supply chain is emerging India removing non-value adding intermediaries

Partnership with value adding intermediaries of the supply chain

• Technology transfer• Streamline processes• Maintain Quality



Participate in Agri Infrastructure: Logistics



Participate in agri related activities



Focus on emerging markets (Tier 3 and 2 cities)



Tap the rural retail market

• Rural India consists of 720 Million consumers across 627,000 villages

– 17% of these villages account for 50% of the rural population and 60% of the rural wealth

– Extensive reach is required as to cover 50% market 100,000 villages must be catered

– Immense opportunity amounting to US$ 125 billion

• Rural Retail is growing @ 7% p.a.• Rural consumption is also shifting from basic

food grains to fruits, vegetables, dairy and poultry products, as well as beverages

• Demand for better quality food leading to huge demand for basic foods



All these can be done only if you …

Establish franchisee Forge joint ventures Licensing agreement Strategic partnerships Explore other avenues

… Act & Join !


• Revenues US$ 19.9 billion• Cash Profit US$ 2.9 billion• Net Profit US$ 2 billion• Total Assets of US$ 20.8 billion

India and Reliance• Revenues equivalent to 2.8% of India’s GDP• 8.2% of India’s total exports• Contributing 8% India’s indirect taxes• 4.7% of the total market capitalization• 11.5% weightage in Bombay Stock Exchange Sensex

• 9.3% weightage in National Stock Exchange Sensex

US$ 20 billion enterprise created in 30 years

Reliance: Contribution to Indian Economy


Global Rank

Net Sales 342Net Profit 194

Net Worth 226Assets 351

Amongst the fastest 25 growing companies in Fortune 500

India’s only private sector company to list in fortune global 500 list

111906

75

Reliance: Global Ranks


Reliance: Recent Major Initiatives

Exploration & Production

Refinery – Jamnagar

Special Economic Zones

Reliance Retail


To be the most admired and successful organized retail company in India that materially enhances the quality of life of every Indian

By Providing unprecedented affordability, quality and choice Being the partner of choice in creating prosperity for Indian farmers

and other vendor partners Unleashing the power of the Indian workforce through the

generation of new & attractive employment opportunities

Reliance: Retail Vision

Thank you !

Documents

Food Retail Ppt