Packaged Foods

The size of the packaged food market in India is estimated at $10 billion and is expected to reach $20 billion by 2014, while the share of packaged food in the food and grocery market is expected to touch 5 per cent by the same time. Factors that have fuelled this industrys growth are the arrival of food multinationals, rising popularity of quick-service restaurants, modern retail trade, technological advancement, changing urban lifestyles and so on. The main categories of packaged food are bakery products, canned/dried processed food, frozen processed food, meal replacement products and condiments. Some emerging new categories in this segment are processed dairy products, frozen ready-to-eat foods, diet snacks, processed meat, probiotic drinks and so on. Some key players in this industry are Hindustan Unilever (tea, instant coffee, biscuits, pulses, and instant beverages), Nestle (instant coffee, milk and milk products, ready-to-eat foods), PepsiCo (aerated drinks, fruit juices, cereals, snacks) and Haldirams (sweets, namkeens, syrups, crushes, snacks).

Strengths: Maggi: Market leader in their segment Strong brand loyal consumer base Wide range of distribution channel Product according to the need of Indian consumer Innovative product Abundant availability of raw material Priority sector status for agro-processing given by the central Government Vast network of manufacturing facilities all over the country Vast domestic market

Indian Dairy industry: Demand profile: Absolutely optimistic.

Margins: Quite reasonable, even on packed liquid milk. Flexibility of product mix: Tremendous. With balancing equipment, you can keep on adding to your product line. Availability of raw material: Abundant. Presently, more than 80 per cent of milk produced is flowing into the unorganized sector, which requires proper channelization. Technical manpower: Professionally-trained, technical human resource pool, built over last 30 years.

FMCG : Low operational costs Presence of established distribution networks in both urban and rural areas Presence of well-known brands in FMCG sector Fruits and vegetable sector: Large area under fruit-and-vegetable cultivation Long growing-season and diverse agro-climatic zones (favourable for cultivating vast variety of fruits and vegetables) Cheap supply of labour Large consumption market in the country ample demand for fruits and vegetables (fresh and processed) Good R&D support through numerous agriculture universities

Weakness: Low availability of adequate infrastructural facilities Lack of adequate quality control Testing methods as per International methods High requirement of working capital Seasonability of raw materials

Opportunities: Large crop and material base offering a vast potential for agro processing activities Setting of SEZ/AEZ and food parks for providing added incentive to develop greenfield projects Rising income levels and changing consumption patterns Favourable demographic profile and changing lifestyles

 Maggi:

Integration of development in contemporary technologies such as electronics, material science, bio-technology etc. offer vast scope for rapid improvement and progress Opening of global markets

Increaing number of working youth Product has been acceptable in youth category Shift to rural market Changing preference of consumer towards Chinese food and fast food

Indian Dairy Industry: Value addition: There is a phenomenal scope for innovations in product development, packaging and presentation. Given below are potential areas of value addition: Steps should be taken to introduce value-added products like shrikhand, ice creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater presence and flexibility in the market place along with opportunities in the field of brand building. Addition of cultured products like yoghurt and cheese lend further strength - both in terms of utilization of resources and presence in the market place. A lateral view opens up opportunities in milk proteins through casein, caseinates and other dietary proteins, further opening up export opportunities. Yet another aspect can be the addition of infant foods, geriatric foods and nutritionals. Export potential: Efforts to exploit export potential are already on. Amul is exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT treaty, opportunities will increase tremendously for the export of agri-products in general and dairy products in particular.

FMGC: Untapped rural market Rising income levels, i.e. increase in purchasing power of consumers Large domestic market- a population of over one billion. Export potential High consumer goods spending

Fruits and vegetables sector:

Amendment in the Cold Storage Act no license needed for setting-upcold storages for horticulture. Growing middle-class in the economy increasing demand for horticulture produce (fresh and processed). Active government support for fruit and vegetable processing units and export units. Agriculture Export\ Zones (AEZs) are being established to encourage horticulture exports. Income from cultivation of horticulture crops (fruits and vegetables) is tax-exempted. Low level of present per capita consumption possibilities of increasing consumption manifolds Indian grapes, mangoes and lychees have good export markets

Threats: Affordability and cultural preferences of fresh foods High inventory carrying cost High taxation High packaging costs Contamination of food supply Competitors High raw material costs

Export capabilities of packaged foods to developed world:

In the present state of the world economy, there is a rising demand of packaged foods to the developed countries. Different countries specializes in production of different goods and they export there products to the countries in demand for that product. So, packaged foods play a vital role for its export .Packaged foods come under the segment of consumer goods. Packaged goods are also known as convenience foods the food processing sector is highly fragmented industry. It comprises of: Fruits and vegetables Milk and Milk products Beer and alcoholic beverages Meat and poultry Marine product Grain processing Unorganized sector accounts for 70% of the output and 50% of the value. Organized sector is small in comparison to the unorganized but is growing faster. There are millions of bakeries, pasta food units and

traditional food units engaged in the business of exporting their packaged products to developed countries. Bread and biscuits constitute the largest segment of consumer foods with an annual production of around 4.00 million tonnes. Bread manufacturing is reserved for the small-scale sector. Out of the total production of bread, 40% is produced in the organized sector and remaining 60% in the unorganised sector, production of biscuits has a huge share of unorganized sector .Cocoa products like chocolates, drinking chocolate, cocoa butter substitutes, cocoa based malted milk foods are highly in demand these days, 20 production units are engaged in their manufacture with an annual production of about 34,000 tonnes. After packed tea and packed biscuits the soft drink segment is considered to be the 3rd largest in the packaged foods industry. Over 100 plants are engaged in aerated soft drinks industry and provide huge employment. It has obviously attracted one of the highest FDI in the country. Strong forward and backward linkages with glass, plastic, refrigeration, sugar and the transportation industry further strengthen the position of the industry.

Sources: www.Indiandairy.com http://mofpi.nic.in http://www.ghallabhansali.com/admin/file/FMCG.pdf http://www.idfresearch.org/pdf/Policyen.pdf Marketingteacher.com/swot

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