INDIAN PROCESSED FOOD INDUSTRY

The size of global processed food industry is estimated to be valued around US $3.6 trillion and accounts for three-fourth of the global food sales. Despite its large size, only 6% of processed foods are traded across borders compared to 16% of major bulk agricultural commodities. Indian food-processing industry is miniscule in comparison and is estimated to be US $40 billion and is likely to grow at over 10%, on the basis of an expected GDP growth rate of 8-8.5% p.a. With enormous scope for value addition, increase in the consumption of processed food products in India and many fiscal incentives being planned by the government, this sector is poised to maintain the growth momentum in the future. Moreover, the advent of the WTO regime and the possibility of reduced subsidies in developed countries can add to Indias strengths in food production and processing industry. India accounts for less than 1.5% of international food trade despite being one of the worlds major food producers, which indicates huge potential for both investors and exporters. With rapid increase in the per capita income and purchasing power along with increased urbanization, improved standards of living, there lies a large untapped opportunity to cater to 1000 million domestic consumers. It is estimated that 300 million upper and middle class consume processed food. With the convenience needs of dual income families, 200 million more consumers are expected to move to processed food by 2010. The market size for the processed foods is thus bound to increase from US $102 billion currently to US $330 billion by 2014-15 assuming a growth of 10%. The share of the value added products in processed foods would almost double from US $44 billion currently to US $88 billion during the same period, growing at the rate of 15%. This presents enormous opportunities for investment in processed food sector. The size of global processed food industry is estimated to be valued around US $3.6 trillion and accounts for three-fourth of the global food sales. Despite its large size, only 6% of processed foods are traded across borders compared to 16% of major bulk agricultural commodities. Indian food-processing industry is miniscule in comparison and is estimated to be US $40 billion and is likely to grow at over 10%, on the basis of an expected GDP growth rate of 8-8.5% p.a. With enormous scope for value addition, increase in the consumption of processed food products in

India and many fiscal incentives being planned by the government, this sector is poised to maintain the growth momentum in the future. Moreover, the advent of the WTO regime and the possibility of reduced subsidies in developed countries can add to Indias strengths in food production and processing industry. India accounts for less than 1.5% of international food trade despite being one of the worlds major food producers, which indicates huge potential for both investors and exporters. With rapid increase in the per capita income and purchasing power along with increased urbanization, improved standards of living, there lies a large untapped opportunity to cater to 1000 million domestic consumers. It is estimated that 300 million upper and middle class consume processed food. With the convenience needs of dual income families, 200 million more consumers are expected to move to processed food by 2010. The market size for the processed foods is thus bound to increase from US $102 billion currently to US $330 billion by 2014-15 assuming a growth of 10%. The share of the value added products in processed foods would almost double from US $44 billion currently to US $88 billion during the same period, growing at the rate of 15%. This presents enormous opportunities for investment in processed food sector. Introduction India is the second largest producer of food and holds the potential to be the biggest on global food and agriculture canvas, according to a Corporate Catalyst India (CCI) survey. The food industry in India comprises the food production industry and the food processing industry. The food processing industry is one of the largest in India it is ranked fifth in terms of production, consumption, export and expected growth. Growth Drivers of Indias food Industry The growth of the food industry is driven by:

Higher disposable incomes Change in spending pattern Increasing organised food retailing Increasing export opportunities

Favourable regulatory environment and Government support and investment inflows

Market Size of Indian food Industry The Indian food industry is projected to grow by US$ 100 billion to US$ 300 billion by 2015, according to a report by a leading industry body and Technopak. The industry, estimated at US$ 200 billion in 2006-07, is projected to reach US$ 300 billion by 2015. During the period, the share of processed food in value terms is expected to increase from 43 per cent to 50 per cent. Exports Exports of organic food products are expected to grow five-fold by 2015, according to the Agriculture and Processed Food Products Export Development Authority (APEDA). The Government agency expects exports to touch US$ 1.43 billion by 2014-15 against US$ 280 million in 2010-11. Exports of floriculture, fresh fruits and vegetables, processed fruits and vegetables, animal products, other processed foods and cereals stood at US$ 5.45 billion as on November 20102011, according to DGCIS annual data published by APEDA. Spice Board has revealed that the export of spices from India during 2010-11 has registered anall-time-high both in quantity and value. During the year, a total of 5, 25,750 tonnes of spices and spice products valued at US$ 1,502.85 million were exported, as against 5, 02,750 tonnes valued at US$ 1,173.75 million in 2009-10. This is an increase of 5 per cent in volume and 28 per cent in dollar terms of value. Food Processing Industry Food processing Industry is one of the largest industries operating in India, and is highly fragmented. Segments The Food Processing Industry operates across various segments that include:

Fruits & vegetables Meat & poultry Dairy Marine products, grains and consumer foods (that includes packaged food, beverages and packaged drinking water).

Value addition of food products is expected to increase from 8 per cent to 35 per cent by the end of 2025. Fruit & vegetable processing is also expected to increase to 25 per cent of total production in 2025 from the current level of 2 per cent, states the CCI report. Dairy sector that holds highest share in processed food market holds large potential to be exploited. The report reveals that 37 per cent of the total dairy produce is processed of which only 15 per cent is done by the organised sector. Hence, there still lies a lot of scope for investment and development. The sector has attracted foreign direct investment (FDI) worth US$ 1,253.79 million from April 2000 to April 2011, according to the data provided by Department of Industrial Policy and Promotion (DIPP). The amount of FDI inflow for Food Processing Sector in India during the financial year 2010-11 up to November 2010 (8 months) is US$ 129.2 million. Beverages The Indian non-alcoholic drinks market was estimated at around US$ 4.43 billion in 2008 and is expected to grow at a CAGR of around 15 per cent during 2009-2012, according to a report published by market research firm RNCOS, titled "Indian Non-Alcoholic Drinks Forecast to 2012". As per the report, the fruit/vegetable juice market will grow at a CAGR of around 30 per cent in value terms during 2009-2012, followed by the energy drinks segment which will grow at a CAGR of around 29 per cent during the same period. Investment Trends

Dan Cake, Portugal, one of the leading names in the world of bakery and confectionery industry and one of the largest butter cookies producers worldwide is set to enter the Indian market. For this, the company has formed a 66:34 joint venture with Pune-based Phadnis Group.

US based McCormick & Co, a leading spice maker, will invest close to US$ 115 million in a joint venture it will form with Kohinoor Foods Ltd, a leading marketer of branded Basmati rice and other food products. McCormick's investment, through a Singaporebased subsidiary, will include picking up an 85 per cent stake in the new joint venture Kohinoor Speciality Foods India Pvt Ltd. Kohinoor will hold the balance 15 per cent.

Quick food service restaurant chain Subway will set up 45 outlets across the country by 2011-12 entailing investment of almost US$ 9 million. The company has now 205 outlets in India and plans to take its count to 250 by the end of this fiscal.

French dairy firm Danone is chalking out a measured expansion plan in India. The corporation has been in India for a little over a year and has introduced yogurt, dahi (curd) and smoothie product range in Pune and Mumbai. It is now focusing on Hyderabad.

Players & Strategies Presence of numerous segments across the food industry has generated scope for the players to foray into diversified portfolios and avenues. For instance, domestic player Dabur India ltd. deals in beverages and culinary products and foreign company HUL offers beverages, staples, dairy and snack foods. Where on one hand overseas firms like ITC, HUL, Britannia and Pepsi offer wide product range and quality, Indian players like Haldirams, MTR and Parle leverage their position on competitive pricing and mass reach. Government Initiatives The Indian government has approved funds for establishing 15 mega food parks across the country, Food Processing Secretary Ashok Sinha said. In the wake of social responsibility, the Food Ministry is considering a new law restricting the amount of food wasted at Indian weddings.

The Union budget 2011-12 has also allocated US$ 135 million to the Food Processing Ministry from the previous US$ 90 million. As a measure to boost investment in agriculture the minister extended the Viability Gap Funding Scheme (VGFS) for public private partnerships (PPP) for setting up modern storage capacity besides giving infrastructure status to cold chains. Road Ahead The food industry in India has taken off significantly well and will continue to grow rapidly given the unexplored potential in the sector. The growth in this sector is not only indicative of changing development patterns of the country, similar to the developed nations, but also the promise it holds in propelling growth of a certain section of society that has remained constrained for a long time. The government of India had also announced Vision 2015, which lays focus on enhancing the competitiveness of food processing industry in both domestic as well as international markets along with ensuring stable income levels to farmers. The Vision 2015 provides for enhancing the level of processing of perishable to 20 per cent, enhancing value addition to 35 per cent and increasing the share in global food trade from 1.5 per cent to 3 per cent, by 2015.
References: Corporate Catalyst India (CCI) Survey Report, Press Releases, KPMG Report on Food Processing and Agri Business, Agriculture and Processed Food Products Export Development Authority (APEDA) articles, Ministry of Food Processing Industries articles, RNCOS Research Report, Department of Industrial Policy and Promotion (DIPP)

http://www.ibef.org/industry/foodindustry.aspx Last Updated : 15 July 2008 at 11:50 IST India can become global food processing hub Second largest molybdenum reserves discovered in China Gold heads for weekly drop as Europe debt crisis eases MCX copper may see upside pressure on Friday

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NEW DELHI: The processed food industry in India has the immense potential to be the Next big

In order to explore & harness this untapped potential Confederation of Indian Industry (CII) is organizing Processed Foods Outsourcing Summit cum Buyers-Sellers meet, Processed Food Advantage India 2008 in Delhi on Thursday 17th July 2008.

The two day summit assumes greater significance in light of the fact that for the first time over 30 Global buyers are converging from all across the world to explore the massive opportunity of India as an expanding global trade in outsourcing the processed food.

The two day Summit is supported by the Ministry of Commerce & Industry and the Ministry of Food Processing Industries. The summit will be inaugurated by Hon'ble Minister for Food Processing Industries Shri Subodh Kant Sahai.

Food Advantage India 2008 will see participation from international buyers like Auchan International; Gate Gourmet Singapore; Hang Fong Trading Enterprise; Western Gourmet;Tesco; Metro; Sysco; Spinneys; Xongdur Thai Organics food; to name a few. The summit will also see participation from over 120 Indian companies who will have an opportunity to meet, network and establish profitable business linkages with leading multinational retailers, manufacturers, consolidators and importers.

Some of the participating companies from India are Britannia Industries Ltd.; Kaventer; Rasna International; MTR Foods; Tasty Bite; Safal, Priyagold; Tea Board of India.

According to Mr. Piruz Khambatta, Chairman, CII National committee on Food Processing and CMD, Rasna International ltd. "The processed food sector, which presently is a muscular dwarf has capacity & capability to do for rural India what IT & ITeS has done for the urban India. The international market has massive volume as well higher margin which will actually give a

groundswell and economic boost to the Farm end by enhancing the productivity and higher yield. Global manufacturers and retailers are offering greater variety to consumer by adding their own private labels by varying flavors and spices providing special formulations for the health conscious and illness affected Alternate sourcing (reduced logistic costs is making viable movement of mid price to even low priced products across geographies).

India has a significant supply capacity for value added products and processed food, but to harness that potential, the sector needs to gear up to align itself to real-time demand pull, which is the increasing international taste for Indian foods. Internationalizing tastes and a strong emergence of 'Brand India' has increasingly led to the wide acceptance of Indian cuisine all over the world."

"At present, India's share of global trade in the value added processed food sector is less than . 03%, which is abysmal considering that globally the sector is estimated at a whopping US $ 3.2 trillion. This clearly defines the scope for export led growth for the Indian food processing sector. India, with its easy availability of raw materials and low cost of production is strategically poised to capitalize on this market." , further added Mr Khambatta.

The country has 1/10th of the world's arable land at around 160 million hectares, which is higher than China. India currently produces about 50 million tonnes of fruit (about 9% of the world's production) and about 90 million tonnes of vegetables (11% of the world's production). The country produces over 500 million tonnes of agricultural, horticultural and dairy produce annually, thus making it one of the world's largest food producers. This apart, India is a treasure house for aromatic and medicinal spices, for which the country is well known. India's diverse communities have given birth to a plethora of lip-smacking cuisine that is fast gaining popularity across the world.

India also enjoys the advantage of the lowest cost of production in the world, which if

ingeniously applied can give us an unbeatable competitive edge in the global market place. Lastly, a number of Indian business houses are already playing in the food business and have the financial capacity and backing to take the industry global. All in all, our world famous Alphonso Mangoes, cumins, cardamom, and Corianderand a range of vegetables and curries will soon find a place on international shelves.

This is therefore the right time for Indian producers to venture internationally. The need of the hour is to learn from countries like Thailand and Malaysia and devise a strong market development programme, to aggressively develop 'Brand India for Foods' and to speed up on the processing levels for agricultural produce in the country.

Since, it takes time to move into newer markets and to establish oneself firmly, early movers among the 4,00,000 units producing processed food and over 2000 registered processed food exporters, will emerge as significant players tomorrow.

Food Processing, the next biggest industry MONDAY, 31 JANUARY 2011 00:00 SHINJINI GANGULI OPPORTUNITIES -AGRICULTURE & RURAL The sunshine industry, as food processing industry is popularly known as, is witnessing newer heights. It holds immense potential for small-scale entrepreneurs much more than it does for large corporate With the shift in consumer needs, a rapid evolution in the global food landscape can be witnessed. Hectic schedules have made ready-to-cook (RTC) and ready-to-eat (RTE) food a new favourite among the younger generation. There is an increasing demand for processed and convenience food. However, the supply side has failed to keep up with the demand. The imparity between the current demand and supply offers immense scope for the manufacturers, retailers and suppliers of processed food. Abounding India

India is one of the largest producers of food grains besides being second in the world in the production of fruits and vegetables, and first in milk production and livestock population, which makes this sector further attractive. India is said to have 52 per cent cultivable land as against the world average of 11 per cent. It has 15 major climates of the world and has 46 out of 60 types of soil, making it the number one contender for becoming a global sourcing hub. Currently of the total production, only 2.2 per cent of fruits and vegetables (F&V), 26 per cent of marine, 6 per cent of poultry, 20 per cent of buffalo meat and 35 per cent of milk is processed. This is quite low in comparison to the food processed in developed countries. While, some part of the produce is consumed raw and unprocessed, a large part rots in the warehouses in absence of proper transporting system, terminal markets, distribution channels, etc. As much as 30-40 per cent of the total F&V production is wasted every year. The way out is food processing. Increased food processing can lead to minimal wastage, says K L Radhakrishnan, chief editor, Association of Indian Food Processing Entrepreneurs (AIFPA).

Where we stand India's position in the global export of agricultural food was a distant 21st for the year 2007, with a share of 1.6 per cent. But the figures are transforming substantially as the export of processed food and beverages is growing steadfastly. The Ministry of Food Processing Industries (MoFPI) aims to increase Indias share in the global processed food trade to 3 per cent in the next eight years.

As per estimates, the Food Processing Industry (FPI) ranks fifth in size in the country, representing over six percent of GDP. It accounts for around 13 percent of the countrys exports, 6 percent of total industrial investment and approximately 12-15 percent of manufacturing GDP. Currently, the Indian Processed Food market is Growth Drivers of the Sector estimated to be USD 121 billion. And with the market growing at 10 per cent per annum, it is expected to reach USD 194 billion by 2015. Working disposable Increasing Nuclear Urbanisation Families and Women incomes

- Increasing

Opportunity in FP The sheer magnitude of the - Increased for entrepreneurs in this space. Especially for SME Penetration entrepreneurs as organized players remain at the - Demand third of the countrys total agri-processed products. A

figures indicates the vast opportunity that lies ahead - Organised Retail and Private Label for Functional Food

fringe of this market accounting for close to only a - Increased spend on health food large part of the market is dominated by unorganised and small scale sectors. The opportunities are ample in sectors like bakery, convenience food, snack, etc. Rohit Bhattiani, Principal Consultant at TechnoPak Advisors says, The sector provides a number of opportunities for Indian entrepreneurs that include areas like bakery, convenience foods, snacks and savories etc.

Of the two segments of the Indian food processing industry commodity-based processing and value-added processing, the former contributes to two thirds of the processed food market. And although the latter comprises a smaller segment of the market, it is experiencing a radical growth. In fact, India is moving towards convenience-foods that evolve through value added processing. Value-added Processing, the new future Currently, the demand and consumption of commodity-based processed products is higher. However, this trend is expected to change significantly on account of changing life-styles and increasing income levels. The change will soon become more prominent in urban India with an increased demand for value-added products, particularly in dairy, poultry, F&V, etc. As far as the industry prediction goes, the value-added processing segment is expected to grow with a CAGR of 12 per cent. And as projected, the top sectors with a high percentage growth will be RTE/RTC, F&V, non-vegetarian foods etc. Government The estimated

growth figures of

FPI look Initiatives the The Government of India is constantly trying to positive. It is the promote this industry as it promises significant best time to enter employment and trade potential. The MoFPI has the industry and India to introduced several supportive policies and take schemes to lure entrepreneurs into entering the newer heights in processing areas of processing, supply chain management, the financing, cold-storages, retailing and exports. It sector. allows rebates and subsidies for infrastructure development, technology upgradation, quality control and human resource and institutional development in this sector. Shri Subodh Sahai

Kant Processing Industries

Minister of Food

The Ministry extends financial assistance in the form of grant-in-aid at 25 per cent of the cost of plant and machinery and technical civil works subject to a maximum of Rs 50 lakhs in general areas or 33.33 per cent subject to a maximum of Rs 75 lakhs in difficult areas under the scheme of setting up/ modernization/ expansion of food processing industries. Take the Leap

As the figures indicate, there could never be a better time to take the leap but now. The industry promises exponential growth in the years to come. The Minister of Food Processing Industries Shri Subodh Kant Sahai says The estimated growth figures of the FPI look positive. It is the best time to enter the industry and take India to newer heights in the processing sector.

Food Processing Industry Posted: Apr 21, 2011 |Comments: 0 |

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ABSTRACT INTRODUCTION Processing is the treatment of food substances in such a manner as to change its properties with a view to preserving it, improving its quality or making it functionally more useful. Food processing is the set of methods and techniques used to transform raw ingredients into food or to transform food into other forms for consumption by humans or animals either in the home or by the food processing industry. Food processing typically takes clean, harvested crops or slaughtered and butchered animal products and uses these to produce attractive, marketable and often long shelf-life food products. Similar processes are used to produce animal feed. Extreme examples of food processing include the delicate preparation of deadly fugu fish or preparing space food for consumption under zero gravity. The MINISTRY OF FOODPROCESSING INDUSTRIES set up in July 1988, is the main central agency of the Government responsible for developing a strong and vibrant food processing sector; with a view to create increased job opportunities in rural areas, enable the farmers to reap benefit from modern technology, create surplus for exports and stimulating demand for processed food. The industry of food processing is as follows; Fruits and vegetable processing industry, Food grain milling industry, Dairy products,Processing of poultry and eggs, meat and meat products, Fish processing, Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery (including cocoa processing and chocolate), malt extract, protein isolate, high protein food, weaning food and extrude/other ready to eat food products, Beer, including non-alcoholic beer, Alcoholic drinks from non-molasses base, Aerated waters / soft drinks and other processed foods, Specialized packaging for food processing industries. INTRODUCTION

The word retail' is derived from a French word meaning to cut into small pieces'. As mentioned earlier, retail is predominantly unorganized in the case of India. Organized Retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganized Retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc. Processing is the treatment of food substances in such a manner as to change its properties with a view to preserving it, improving its quality or making it functionally more useful. Food processing is the set of methods and techniques used to transform raw ingredients into food or to transform food into other forms for consumption by humans or animals either in the home or by the food processing industry. Food processingtypically takes clean, harvested crops or slaughtered and butchered animal products and uses these to produce attractive, marketable and often long shelf-life food products. Similar processes are used to produce animal feed. Extreme examples of food processing include the delicate preparation of deadly fugu fish or preparing space food for consumption under zero gravity. PAST INFORMATION Food processing dates back to the prehistoric ages when crude processing incorporated slaughtering, fermenting, sun drying, preserving with salt, and various types of cooking (such as roasting, smoking, steaming, and oven baking). Salt-preservation was especially common for foods that constituted warrior and sailors' diets, up until the introduction of canning methods. Evidence for the existence of these methods exists in the writings of the ancient Greek, Chaldean, Egyptian and Roman civilizations as well as archaeological evidence from Europe, North and South America and Asia. These tried and testedprocessing techniques remained essentially the same until the advent of the industrial revolution. Examples of ready-meals also exist from pre industrial revolution times such as the Cornish pasty and the Haggis. Modern food processing technology in the 19th and 20th century was largely developed to serve military needs. In 1809 Nicolas Appert invented a vacuum bottling technique that would supply food for French troops, and this contributed to the development of tinning and then canning by Peter Durand in 1810. Although initially expensive and somewhat hazardous due to the lead used in cans, canned goods would later become a staple around the world. Pasteurization, discovered by Louis Pasteur in 1862, was a significant advance in ensuring the micro-biological safety of food. BENEFITS

Mass production of food is much cheaper overall than individual production of meals from raw

ingredients. Therefore, a large profit potential exists for the manufacturers and suppliers of processed food products. More and more people live in the cities far away from where food is grown and produced. In many families the adults are working away from home and therefore there is little time for the preparation of food based on fresh ingredients. The food industry offers products that fulfill many different needs. Benefits of food processing include toxin removal, preservation, easing marketing and distribution tasks, and increasing food consistency. In addition, it increases seasonal availability of

many foods, enables transportation of delicate perishable foods across long distances, and makes many kinds of foods safe to eat by de-activating spoilage and pathogenic micro-organisms. Modern food processing also improves the quality of life for people with allergies, diabetics, and other people who cannot consume some common food elements. Food processing can also add extra nutrients such as vitamins. DRAWBACKS

In general, fresh food that has not been processed other than by washing and simple kitchen

preparation, may be expected to contain a higher proportion of naturally-occurring vitamins, fiber and minerals than an equivalent product processed by the food industry. Food processing can lower the nutritional value of foods, and introduce hazards not encountered with naturally-occurring products. Processed foods often include food additives, such as flavorings and texture-enhancing agents, which may have little or no nutritive value, or be unhealthy. Preservatives added or created during processing to extend the 'shelf-life' of commercially-available products, such as nitrites or sulphites, may cause adverse health effects. Processed foods often have a higher ratio of calories to other essential nutrients than unprocessed foods, a phenomenon referred to as "empty calories". So-called junk food, produced to satisfy consumer demand for convenience and low cost, are most often mass-produced processed food products. The additions of these many chemicals for preservation and flavor have been known to cause human and animal cells to grow rapidly, without going into Apoptosis. PERFORMANCE PARAMETERS FOR FOOD PROCESSING

When designing processes for the food industry the following performance parameters may be taken into account:

Hygiene, e.g. measured by number of micro-organisms per ml of finished product Energy consumption, measured e.g. by "ton of steam per ton of sugar produced" Minimization of waste, measured e.g. by "percentage of peeling loss during the peeling of

potatoes' Labour used, measured e.g. by "number of working hours per ton of finished product" Minimization of cleaning stops measured e.g. by "number of hours between cleaning stops" TRENDS IN MODERN FOOD PROCESSING

Cost reduction
Profit Incentive drives most of the factors behind any industry; the food industry not least of all. Health concerns are generally subservient to profit potential, leading the food processing industry to often ignore major health concerns raised by the use of industrially-produced ingredients (partially-hydrogenated vegetable oils, for example, a well-known and well-researched cause of heart disease that is still commonly used in processed food to increase profit margin).

HEALTH

Reduction of fat content in final product e.g. by using baking instead of deep-frying in the production of potato chips, another processed food Maintaining the natural taste of the product e.g. by using less artificial sweetener than they used before.

HYGIENE
The rigorous application of industry and government endorsed standards to minimize possible risk and hazards. In the USA the standard adopted is HACCP. Lims solutions help industry to manage those quality standards.

EFFICIENCY

Rising energy costs lead to increasing usage of energy-saving technologies, e.g. frequency converters on electrical drives, heat insulation of factory buildings and heated vessels, energy recovery systems, keeping a single fish frozen all the way from China to Switzerland. Factory automation systems (often Distributed control systems) reduce personnel costs and may lead to more stable production results. Excellent efficiency and quality is the world of food processing MINISTRY OF FOODPROCESSING & INDUSTRIES The Ministry of Food Processing Industries, set up in July 1988, is the main central agency of the Government responsible for developing a strong and vibrant food processing sector; with a view to create increased job opportunities in rural areas, enable the farmers to reap benefit from modern technology, create surplus for exports and stimulating demand for processed food. The industry of food processing is as follows;

Fruits and vegetable processing industry Food grain milling industry Dairy products Processing of poultry and eggs, meat and meat products Fish processing Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery (including cocoa

processing and chocolate), malt extract, protein isolate, high protein food, weaning food and extrude/other ready to eat food products. Beer, including non-alcoholic beer Alcoholic drinks from non-molasses base Aerated waters / soft drinks and other processed foods Specialized packaging for food processing industries FRUITS & VEGETABLES

The installed capacity of fruits and vegetables processing industry has increased from 1.1 million tones in January 1993 to 2.1 million tones in 2006. The processing of fruits and vegetables is estimated to be around 2.2% of the total production in the country. The major processed items in the fruit and vegetable segment are fruit pulps and juices, fruit based ready-to-serve beverages, canned fruits and vegetables, jams, squashes, pickles, chutneys and dehydrated vegetables. Some recent products introduced in this segment include vegetable curries in reportable pouches, canned mushroom and mushroom products, dried fruits and vegetables and fruit juice concentrates.

DAIRY INDUSTRY IN INDIA India has the highest livestock population in the world with 50% of the buffaloes and 20% of the world's cattle population, most of which are milch cows and milch buffaloes. India's dairy industry is considered as one of the most successful development programmes in the post-Independence period. In the year 2006-07the total milk production in the country was over 94.6 million tones with a per capita availability of 229 gms per day. The industry had been recording an annual growth of 4% during the period 1993-2005, which is almost 3 times the average growth rate of the dairy industry in the world. Milk processing in India is around 35%, of which the organized dairy industry account for 13% of the milk produced, while the rest of the milk is either consumed at farm level, or sold as fresh, non-pasteurized milk through unorganized channels. POULTRY INDUSTRY

It is believed that the Indian Poultry Industry is 5,000 years old, since last 4 decades it began to witness remarkable growth from backyard to poultry industry. The organized sector of poultry industry is contributing nearly 70% of the total output and the rest 30% in the unorganized sector. The broiler industry is well dominated in southern states in our country with nearly 60-70% total output coming from these states. The layer industry once again is represented more in southern states especially, Andhra Pradesh, Tamil Nadu and Maharashtra producing nearly 70% of the country's egg production. India's 75% of egg produce is consumed by the 25% population living in urban and semiurban areas. Presently about 800 hatcheries are operating in the country.

MEAT AND MEAT PRODUCTS India ranks top in animal and cattle population. The meat and meat processing industry is still to come up. Some top players in the meat processing industry like Venkateswara Hatcheries, Godrej Agrovet, Vista Processed Food, Al Kabeer, Allanasons etc., with modern state-of-the-art slaughter and processing plants, have changed the entire scenario, making the industry grow at almost 10%. There is a huge scope for expanding exports, especially in buffalo and poultry meat, eggs and dairy products CONCLUSION At last I concluded my presentation; Increasing incomes are always accompanied by a change in the food habits. Over the last three decades in India a shift in food habits have been observed. The report observes that the proportionate expenditure on cereals, pulses, edible oil, sugar, salt and spices declines as households climb the expenditure classes in urban India while the opposite happens in the case of milk and milk products, meat, egg and fish, fruits and beverages.

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Food Processing

Vision 2015: Food processing sector eyes the world market

Vijaylaxmi Kasotia discusses the various government initiatives which can help India exploit the emerging global opportunities in this sector The agriculture sector has come a long way since independence. With the advent of the green revolution, India has transformed itself from a country of shortages to a land of surpluses. With the rapid growth of the economy, a shift is also being seen in the consumption pattern, from cereals to more varied and nutritious diet of fruit and vegetables, milk, fish, meat and poultry products. This has resulted in the development of a sunrise industry namely the Food Processing Industry. The food processing sector in the country with its vast potential has emerged as one of the major driver of economic growth. It is encouraging to note that while the country's GDP growth rate had increase from 3.5 per cent in 2002-03 to 9 per cent in 2006-07, the food processing sector has grown from 7 per cent to 13.1 per cent during the same period. India is a country of over 1.10 billion consumers, there is a large untapped domestic market of 1,000 million consumers in the food processing sector and 200 million more consumers are expected to shift to processed food by 2010. It is the second largest producer of fruits and vegetables in the world. There is a huge wastage of perishable food items in the country due to lack of proper food processing facilities and the level of processing is only about 2.2 per cent. However, India has tremendous potential to unleash large scale process based farm activities to exploit the emerging global business opportunities. Incredible opportunities India's homogeneous market size endowed with growing incomes and changing life styles has created incredible market opportunities for food producers, machinery makers, food technology and service providers. The food processing industry has great export and employment potential. The policies are investor-friendly and more importantly technological and human resources are available aplenty in the country. The competitive edge enjoyed in terms of raw material and labour offers lucrative opportunities. However poor perception of quality and the indifferent image of Indian

products is preventing Indian food products to penetrate global markets in a big way. While developing countries like Thailand have exploited the global markets in a big way by finetuning quality management aspects of their food processing industry, India are yet to make a headway on this front. Production of high quality processed foods meeting international quality standards & regulations may very well open new frontiers for Indian food products. This will not only create a dynamic and competitive domestic food processing industry but will also enable India to become a major player in the global food market. An attitudinal change towards quality is essential. Several thousand crore worth of farm produce is lost every year due to inefficient postharvest practices for storage and processing. On one hand is the growing demand for food products, which are difficult to meet due to limited resources and on the other, there exists abnormally high wastage in the farm sector due to inefficient technology in storage, processing and handling. It is, therefore, imperative to introduce state-of-the-art technology in the food-processing sector to minimise post-harvest losses. It also calls for a concerted attention to a few selected food products where India has or can develop a competitive edge over other countries. FDI The sector has been attracting substantial FDI also and is among the top ten sectors getting FDI equity. FDI up to 100 per cent equity is permitted under the automatic route in food and infrastructure like food parks and cold chains. There are many areas for investment in this sector which include mega food parks, agri-infrastructure, supply chain aggregation, logistics and cold chain infrastructure, fruit and vegetable products, animal products, meat and dairy, fisheries and seafood cereals, consumer foods/ready to eat foods, wine and beer, machinery/packaging. Productivity and progress It is essential to understand the dynamic relationship that exists between productivity progress. The basic fact is that until both the farmers as well as the processors convinced of benefits that accrue through productivity, the productivity campaigns remain ineffective. So the main challenge is to introduce the concepts of productivity make it work under a variety of constraints for the sustainable growth of the industry. and are will and

In the process of globalisation, the Indian food processing industry will be facing increased competition, particularly in domestic markets in addition to the uncertainties prevailing in the international markets. It is in this context that emphasis must be given to improve productivity and quality. Undoubtedly, better performing firms will have a competitive edge over others. In order to maintain the tempo of productivity and quality, the National Productivity Awards have thus assumed much greater significance. The ministry of food processing industries on its part, is leaving no stone unturned to achieve the multiple objectives of stepping up the growth, higher farmer income, reduction in wastage, providing nutritious and safe food and enhancing employment opportunities. It has initiated measures to deal with the major constraints being faced by the industry such

as affordability and cost of processed foods, linking of farmers and processors, supply chain and post harvest technology, infrastructure, finance, food safety, hygiene and taxes. With the active support and cooperation of all the stakeholders the ministry is confident of providing the necessary momentum for the rapid growth of the food processing sector and usher in a new era in the Indian economy. Vision 2015 Given the strengths and opportunities of the food processing sector, a Vision 2015 has been developed by the ministry of food processing industries, together with an appropriate strategy and implementable action plan so as to enhance farmer income, generate employment opportunities, provide choice to consumers at affordable price and contribute to overall national growth by increasing: the level of processing of perishables from six per cent to 20 per cent, value addition from 20 per cent to 35 per cent and share in global food trade from 1.5 per cent to three per cent. Vision 2015 aims at enhancing and stabilising the income level of the farmers by assuring wider and better choice by enhancing dynamism, competitiveness, by ensuring safety and quality of food by introducing a transparent and scientific system of standards. To achieve these aims a transparent and industry friendly regulatory regime is proposed to be established: Making the sector attractive for both domestic and foreign investors. Achieving integration of the food processing infrastructure from farm to market. Having a transparent and industry friendly regulatory regime. Putting in place a transparent system of standards based on science.

To achieve the stated Vision, the ministry has prepared an Action Plan for energising the food processing sector during the 11th Plan. Main initiatives Cold chain: To address the situation and with a view to create a modern cold chain for preservation and value addition of perishables, during the 11th Plan, the ministry is launching a revamped comprehensive Cold Chain Infrastructure Scheme for creating integrated cold chain infrastructure at different levels - farm level primary processing center-cum-cold chain, collection/aggregation centres and Strategic Distribution Centres (SDC). The SDCs will have integrated infrastructure facilities like material handling equipment, refrigeration, IQF/Blast freezing facility, Frozen/CA/MA Storage, modern packaging facilities, ancillary equipment like X-ray, weigh bridge etc. The SDCs will be linked to retail supermarkets. Mega food parks: A new scheme of Mega Food Parks in the country is proposed which is envisaged to be a well defined agri/horticultural processing zone containing state-of-the-art processing facilities with support infrastructure and well established supply chain. The proposed scheme aims to provide a mechanism to bring together farmers, processors and retailers and link agricultural production to the market so as to ensure maximisation of value addition, minimise wastages and improve farmers' income. The Mega Food Park is designed ultimately to link the farmers with the retail markets with minimising of the intermediaries. These food parks will function as sourcing hubs for the retail outlets.

Abattoirs: Hygienic and scientific slaughtering as well as optimum utilisation of by-products are issues of grave concern of the Indian meat industry. It results in tremendous waste, contamination and avoidable cruelty to animals. The ministry is launching a comprehensive scheme for modernisation of existing abattoirs/establishment of modern abattoirs at 100 locations across the country on a PPP mode. Capacity building: The ministry has also taken up quality assurance, R&D, HACCP, Human Resource Development and establishment of laboratories to support the Food Safety and Standards Act. The ministry of food processing industries has taken many steps to give impetus to this sector which include virtual delicensing of the sector, inclusion in the priority sector for lending, allowing 100 per cent FDI except in alcoholic beverages and retail, several duty and tax reliefs, financial assistance for infrastructure building, setting up of food processing units etc. In case of export-oriented units, foreign investment is permitted even in case of items reserved for small scale sector. In addition, the export oriented units are given a number of incentives and concessions under the export-import policy, such as, duty free import of capital goods, raw materials and intermediates, export income being exempt from corporate tax etc. FDI inflow in food processing is becoming stronger.
The author is Media & Communications Officer, PIB, New Delhi

Opportunities for the Food Processing Industry in India

Narendra Shah, CTARA* & K V Venkatesh, Department of Chemical Engineering In India agricultural and dairy sectors have achieved remarkable successes over the last three and a half decades. Besides being one of the world's largest producers of food-grains, India ranks second in the world in the production of fruits and vegetables, and first in milk productionproviding much needed food security to the nation. The accomplishments of the green and white revolutions have, however, not been matched by concurrent developments in supply chain management, and in new technologies for better processing, preservation, and storage of food. Pockets of shortages and near starvation, substantial wastages due to spoilage, quality deficiencies, and inadequate returns to the farmer are still very much in evidence. Increased urbanization, improved standards of living, and the convenience needs of dual income families point to major market potentialities in the food processing and marketing sectors. This is also evident from the presence of several global foods giants and leading Indian industrial enterprises in the country's food processing sector, such as: Nestle India Ltd, Cadbury's India Ltd, Kelloggs India, Hindustan Lever Ltd, ITC-Agro, Godrej Foods and MTR Foods Ltd Besides, in the current globalized milieu, our surplus food production, as well as the increasing preference for Indian foods (in several regions of the world) need to be leveraged to achieve economic, and strategic objectives through exports. The Food and Agriculture Integrated Development Action (FAIDA) report (1997) prepared by McKinsey has estimated that, driven by changing consumer preferences, the annual consumption of 'value-added' foods alone would grow to Rs.225, 000 crores by 2007larger than the entire manufacturing sector! A more recent report has stated an absolute revenue increase of Rs. 900 billion in food manufacturing between 1993 and 2000. This is in contrast with Rs. 150 billion and Rs. 300 billion in the pharmaceutical and IT industries, respectively. Overall, the value of the Indian food industry has increased from Rs. 3.09 trillion in 1993-94 to Rs. 3.99 trillion in 2000-01. The segments with the largest growth potential have been identified as dairy, wheat, fruits and vegetables, and poultry. This report has also identified some of the major challenges for the emerging food industry in India (see box). Major Challenges for the Indian Food Industry

Consumer education that processed foods can be more nutritious Low price-elasticity for processed food products Need for distribution network and cold chain

Backward-forward integration from farm to consumers Development of marketing channels Development of linkages between industry, government and institutions Taxation in line with other nations Streamlining of food laws

Challenges in Food Processing Unprocessed foods are susceptible to spoilage by biochemical processes, microbial attack and infestation. The right post harvest practices such as good processing techniques, and proper packaging, transportation and storage (of even processed foods) can play a significant role in reducing spoilage and extending shelf life. The challenges in processing lie in retaining the nutritional value, flavour, aroma, and texture of foods, and presenting them in near natural form with added conveniences. However, such qualities cannot be readily quantified and correlated with physico-chemical parameters, sensory evaluations providing the only means of benchmarking. Besides, processed foods need to be offered to the consumer in hygienic and attractive packaging, and at low incremental costs. The challenges for the food preservation, distribution and processing sectors are diverse and demanding, and need to be addressed on several fronts to derive maximum market benefits. Presently, the organizations addressing the educational and R & D requirements are too few, and there is a pressing need for supplementing their efforts. In the emerging scenario, the Food Engineering professional needs to develop sufficient awareness and appreciation of the relevant principles of life sciences, and physical sciences, as well as of a wide variety of other topics including: nutrition, preservation and storage techniques, processing unit operations, bio-processing, waste management, distribution and supply chain management, food laws and regulations and so on. Besides, the professional needs to develop an appreciation of R&D and innovation in critical technology areas such as: newer or novel process development in preservation and storage techniques, rheology, colloids and dispersal systems, packaging-polymers and composites, sensors for detection and process control, bioprocess engineering, and so on. .....more on next page Home | Top | Next Page