Food Processing: Industry Report, March 2013

Food Processing
MARCH
2013
For updated information, please visit www.ibef.org
Food Processing
Contents
Advantage India
MARCH
2013
Market overview and trends Growth drivers Success stories: Operation Flood, Amul Opportunities Useful information
Food Processing
Advantage India
MARCH
2013
2020E
Strong demand growth
Food processing hub
Demand growth for processed food has been rising with growing disposable income, urbanisation, a young population and nuclear families Household consumption is set to double by 2020
India benefits from a large agriculture sector, abundant livestock, and cost competitiveness Investment opportunities will arise in agriculture, food infrastructure, and contract farming
Domestic food spending: USD318 billion
Advantage India
Increasing investments
Policy support

Government expects USD21.9 billion of investments in food processing infrastructure by 2015
2009
Domestic food spending: USD181 billion
Investments, including FDI, will rise with strengthening demand and supply fundamentals
Sops to private sector participation; 100 per cent FDI under automatic route Agri Export Zones have been set up; under the governments Vision 2015 plan, mega food parks to be established Approval of National Mission on Food Processing
Notes: 2020E - Estimate for 2020; estimates are from Flavours of Incredible India (Ernst & Young, 2009) FDI - Foreign Direct Investment
ADVANTAGE INDIA
Food Processing
Contents
Advantage India
MARCH
2013
Food Processing
MARCH
2013
The food processing sector comprises six major segments

Fruits and vegetables India is the worlds second largest producer of fruits and vegetables
Milk and milk products
India is the largest producer of milk in the world India was the largest producer of buffalo meat (1.4 MT) and the second largest producer of goat meat (0.5 MT) in FY10 India is the third largest producer of fish in the world India is estimated to have produced about 250 million tonnes of food grains in FY12
Meat and poultry Food processing
Marine products
Grain processing
Consumer food
Among the fastest growing segments in India; it includes -
Source: Indiabusiness.nic.in, Ministry of Agriculture, Meat & Poultry

Processing Board, FAOSTAT Note: FY - Indian financial year (April - March) MT - Million Tonnes
Packaged food
Aerated soft drinks
Packaged drinking water
Alcoholic beverages 5
MARKET OVERVIEW AND TRENDS
Food Processing
MARCH
2013
Total output of food products and beverages totalled USD93.1 billion in FY10
The food processing industry has emerged as a key component of Indian manufacturing; while the sectors total output stood at USD93.1 billion in FY10, it accounted for nearly 7.5 per cent of aggregate gross value added of major industries during that year The size of the sector has been growing fast; output expanded at a CAGR of 16.9 per cent over FY05-10
Processed food output

100 80 60 40 20 30% 25% 20% 15% 10% 5% 0% FY05 FY06 FY07 FY08 FY09 FY10
Source: Ministry of Food Processing Industries ( MOFPI),

Annual Survey of Industries 2009-10, Aranca Research Notes: CAGR - Compound Annual Growth Rate, 0
Processed food output (USD billion)
Growth - right axis
Source: Annual Survey of Industries (ASI) 2009-10,

Aranca Research
Food Processing
MARCH
2013
Strong growth in the sector also evident from trends in IIP
Although figures for output of food products and beverages from ASI are not available post FY10, data from the Index of Industrial Production (IIP) suggest strengthening growth momentum in food products and beverages in FY11-12 Growth for food products and beverages shot up to 14.8 per cent in FY12 from 8.9 per cent in FY11; the sector was the second-fastest growing sub-segment within manufacturing in FY12 and its growth far outpaced that of the overall manufacturing sector in the fiscal year
Annual growth of food products and beverages from IIP (%)

20 15 10 5 0 -5 -10 Annual growth of Food products & beverages as per IIP FY06 FY07 FY08 FY09 FY10 FY11 FY12
Source: Ministry of Statistics and Programme Implementation

(MOSPI), Aranca Research Notes: ASI - Annual Survey of Industries IIP - Index of Industrial Production
Annual growth of overall manufacturing sector as per IIP
Food Processing
Exports of processed food and related products has also been rising steadily
MARCH
2013
Exports of processed food and related products* stood at USD19.7 billion in FY11, thereby recording an average annual growth of 14.7 per cent since FY09 Exports of APEDA products have grown to USD17.9 billion in FY12 as compared to USD11.5 bllion in FY11 Main export destinations for food products have been the Middle East and South East Asia
Exports of processed food and related items (USD billion)
11.5 8.3 7.4 8.2
* includes APEDA products (processed fruits and vegetables, animal products, cereals, and other processed food items) and Non - APEDA products (oil meals, marine products, spices, sugar and molasses, tea, coffee, etc.)
6.7 FY09 Export of APEDA products
6.2 FY10
FY11
Export of Non APEDA products
Source: Agriculture & Processed food products Export

Development Authority (APEDA,) Aranca Research;
Food Processing
MARCH
2013
Shares in exports of processed food and related products
In FY11, APEDA products had 41.6 per cent share in total exports; non-APEDA products made up the rest Within APEDA products, cereals had the highest share (36 per cent) while for non-APEDA products marine products dominated with a share of about 21 per cent
Shares in APEDA exports (FY12)

1% 6% Animal products 36% 35% Cereals
Shares in non-APEDA exports (FY11)
Marine Products 14% 21% Sugar & Mollasses Oil Meals Spices Tea & Coffee 20% Others
Processed Fruits & Vegetables

Other processed foods Fresh Fruits & Vegetables Floriculture & Seeds
11%
14%
20%
5%
17%
Source: APEDA, Aranca Research
Food Processing
MARCH
2013
Large presence of the unorganised sector (1/2)
The unorganised sector accounts for 42 per cent of Indias food processing industry The sizeable presence of small scale industries points to the sectors role in employment generation
Unorganised sector has the largest share in the sector *
33% Unorganised sector 25% Organised sector Small scale industries 42%
Source: Ministry of Food Processing Industries, Aranca Research * The figures have been taken from MOFPIs annual report for FY10 where FY indicates Indian financial year (April - March)
10
Food Processing
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2013
Large presence of the unorganised sector (2/2)
Rice mills account for the largest share of processing units in the organised sector The governments focus on infrastructure is likely to see a sharp rise in the number of cold storage units in the years ahead
Shares in production by value and volume (FY11)
30% 50%
70% 50%
By Volume Unorganised sector
By Value Organised sector
Source: Ministry of Food Processing Industries,

Aranca Research
11
Food Processing
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2013
Food processing is a key contributor to employment generation in India
In FY09, the sector employed 48 million people Policymakers have identified the food processing sector as a key one in encouraging labour movement from agriculture to manufacturing
Healthy contribution to employment generation (FY09)
Direct employment (13 million) Food processing industry Indirect employment (35 million)
Notes: FY - Indian financial year (April - March)

Aranca Research
12
Food Processing
MARCH
2013
Notable trends in the Indian food processing sector

Wide array of products, coupled with increasing global connectivity has led to a change
Changing consumer tastes
in the tastes and preference of domestic consumers

This trend has been bolstered by rising incomes, increasing urbanisation, a young
population, and the emergence of nuclear families
Liberalisation and growth of organised retail have made the Indian market more
Entry of international companies
attractive for global players

With a large agriculture sector, abundant livestock, and cost competitiveness India is
fast emerging as a sourcing hub of processed food
Companies have been moving up the value chain; for example, cooperatives are
Rising business and product innovation
transitioning from being pure producers of milk to offering a wide range of dairy products
Firms, both domestic and global, have been focussing on product innovation to cater to
domestic tastes, while also introducing international flavours
13
Food Processing
MARCH
2013
Cooperatives dominate dairy sector; private players lead others

Fruits, vegetables, processed grain
Milk and milk products
Cooperative societies: Gujarat (GCMMF), Andhra Pradesh (APDDCF), Karnataka (KMF), Maharashtra (Mahasangh), Punjab (MILKFED), Tamil Nadu (TCMPF), Delhi (NDDB)
Meat, poultry and marine products
Alcoholic beverages
Consumer food
Aerated soft drinks and packaged drinking water
Packaged food
14
Food Processing
Contents
Advantage India
MARCH
2013
15
Food Processing
MARCH
2013
Strong fundamentals and policy support aiding growth
Strong domestic demand Growing demand
Rising export opportunities Strong government support Indias greater integration with the global economy
Supply-side advantages
Policy support
Rising disposable incomes
Favourable climate for agriculture; wide variety of crops
Vision 2015 plan targets trebling of food processing sector Mega food parks, Agri Export Zones to attract FDI and aid infrastructure
Growing middle class, urbanisation, a young population
Proximity to key export destinations
Large livestock base aids dairy and meat processing sector
Changing lifestyles and food habits
Expected spike in global demand as emerging markets grow at a fast pace
Inland water bodies, long coastline help marine products
Approval of National Mission on Food Processing
GROWTH DRIVERS
16
Food Processing
MARCH
2013
Income growth is a key driver of growing domestic demand for processed food
Rising disposable incomes

Strong growth in per-capita income has resulted in greater demand 3,000 2,500 2,000 1,500 1,000
Rising per-capita income in India

30% 25% 20% 15% 10% 5% 0% -5% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012F 2013F 2014F 2015F 2016F 2017F Per capita income, USD, LHS Annual growth rate, RHS
for food items

Per capita income is expected to expand at a CAGR of 8.5 per
cent over 2010-2017 to USD2,428

There has also been a shift in demand From carbohydrates to meat products (in line with the
various phases of economic growth)

To convenience foods, organic and diet foods
500
0
Source:, Aranca Research Note: E - estimate, F - forecast
GROWTH DRIVERS
17
Food Processing
MARCH
2013
A growing middle class and urbanisation has also aided growth in the sector
Growing middle class, urbanisation
70 60 50 40 30 20 10
Changing wealth dynamics of Indias population

Seekers: annual income INR200,000 500,000 Strivers: annual income INR500,000 1,000,000 Globals: annual income >INR1,000,000
Strong economic growth since the 1990s has led to Rapid urbanisation and a growing middle class Nuclear families and dual income households Coupled with a young population and increasing media
surge in demand for packaged food, alcoholic and non-alcoholic savouries, etc
million households Aspirers: annual income INR90,000 200,000 Deprived annual income <INR90,000
0
2005 Strivers 2010 Seekers 2015 Deprived 2020 Aspirers 2025 Globals
Source: McKinsey Quarterly, Aranca Research
GROWTH DRIVERS
18
Food Processing
MARCH
2013
Exporters gaining from rising global demand and location advantages (1/2)
Rising demand from rest of the word
16 Share of exports in total output of processed food stood at 21.2 per This has primarily resulted from Greater exports to advanced economies More demand from emerging/ developing economies as 12 8
Growth in key regions of the global economy %
strong growth
4
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
-4
Emerging & developing economies Developing Asia Middle East & North Africa Central & Eastern Europe Latin America & the Caribbean
Source: IMF WEO (April 2012), Aranca Research
GROWTH DRIVERS
19
Food Processing
MARCH
2013
Exporters gaining from rising global demand and location advantages (2/2)
Supply-side advantages
Growth in food product exports has been aided by Significant improvements in product and packaging Greater private sector participation India has a location advantage - it is geographically close to key 967 591 298 338 401 464 502 650 672 1,079
Top ten destination countries of Indias exports of processed food and agriculture related products (in USD million)
(Middle East, South East Asia)

United Arab Emirates was the top export destination of processed
related products, followed by Saudi Arabia and the United States
Malaysia
Indonesia
Kuwait

Aranca Research
United States
Saudi Arabia
Bangladesh
Pakistan
Vietnam
UAE
Iran
GROWTH DRIVERS
20
Food Processing
MARCH
2013
India has a distinct competitive advantage over peers
Indias comparative advantage lies in its favourable climate, large agriculture sector and livestock base, long coastline, and inland water resources India also has an edge in cost of production compared to its competitors in Asia and the developed world
Milk (Cow & Buffalo) Pulses (nes) Fruits (fresh, nes)
Production (million tonnes) 107.2 7 7.6 29.6 0.96 155.7 342.3 27.5 86.8 42.3
Global rank (2011) 1 1 1 1 2 2 2 2 2 2
Units Arable land (million hectares) Area under Irrigation (million hectares) Coast line ('000 kilometers) Cattle (million)
157.9 63.1 7 210.2
Global rank
2* 1* 18# 1**
Bananas Tea Rice (Paddy) Sugarcane Vegetables (fresh, nes) Wheat Potatoes
Aranca Research Notes: * - for the year 2009; # - for the year 2011, ** - for the year 2010
Source: World bank, FAOSTAT, CIA World Fact book,
GROWTH DRIVERS
21
Food Processing
MARCH
2013
Strong policy support gives food processing sector a boost (1/2)
Encouragement to private sector
100 per cent export-oriented units are allowed to sell up to 50 per cent of their produce in the domestic market Export earnings are exempted from corporate taxes
Import duty scrapped on capital goods and raw materials for 100 per cent export - oriented units
Tax incentives and other sops
100 per cent tax exemption for 5 years followed by 25 per cent tax exemption for the next 5 years for new agro-
processing industries
Full excise duty exemption for goods that are used in installation of cold storage facilities
Relaxed FDI norms
100 per cent FDI under automatic route (except for alcohol, beer, and sectors reserved for small scale industries) Repatriation of capital and profits permitted
Notes: FDI - Foreign Direct Investment
GROWTH DRIVERS
22
Food Processing
MARCH
2013
Strong policy support gives food processing sector a boost (2/2)
Assigned priority sector for bank credit 60 Agri Export Zones (AEZ) have been set up across the country According to Vision 2015, formulated by MoFPI, the government plans to establish 30 mega food parks in public-
Focus on infrastructure
private partnership mode across the country; out of these 10 have already been approved in the first phase Mega Food Park Scheme
Government has also announced setting up of 15 Mega Food Parks in its FY12 Budget, as part of the third phase of
Incentives for development of storage facilities
Investment-linked tax incentive of 100 per cent deduction of capital expenditure for setting up and operating cold
chain facilities (for specified products), and for setting up and operating warehousing facilities (for storage of agricultural produce)
Notes: MoFPI - Ministry of food processing industry
GROWTH DRIVERS
23
Food Processing
Agri Export Zones in India
Jammu & Kashmir: Apples, walnuts
Himachal Pradesh: Apples Punjab: Basmati rice, vegetables
MARCH
2013
Uttaranchal: Basmati rice, aromatic and medicinal plants

Uttar Pradesh: Basmati rice, potatoes, mangoes, vegetables
Assam: Ginger
Rajasthan: Coriander, cumin
Gujarat: Mangoes, vegetables, sesame seeds
West Bengal: Pineapple, litchi, Darjeeling tea, vegetables Madhya Pradesh: Onions, garlic, seed spices, lentils Maharashtra: Grapes, grape wine, mangoes, flowers, onion Andhra Pradesh: vegetables, mango pulp, grapes, gherkins Karnataka: Gherkins, rose, onions, flowers, vanilla Tamil Nadu: Flowers, mangoes, cashew nuts
Maharashtra 4 4 4 4 5 5 6 8 20 West Bengal Andhra Pradesh Madhya Pradesh Karnataka Uttaranchal
Uttar Pradesh
Tamil Nadu Other States
GROWTH DRIVERS
24
Food Processing
MARCH
2013
Foreign investments flowing in; rise in plan expenditure (1/2)
FDI inflows into agriculture and food processing between April 2000 and August 2012 stood at USD4.7 billion
1,600
Cumulative FDI inflows (Apr 2000 - Aug 2012) into the food and agriculture sector
40% 30% 1,400 1,200 1,000
Demand growth, supply advantages, and policy support have been instrumental in attracting FDI
Notes: FDI - Foreign Direct Investment,
800
600 400 200 0 Vegetable oil Agri services Food processing Agri machinery Tea and Coffee Fermentation Sugar
20%
10% 0%
Cumulative FDI inflow (USD million) Share of total FDI inflow (%) - right axis
Source: Department of Industrial Policy & Promotion, Aranca Research
GROWTH DRIVERS
25
Food Processing
MARCH
2013
Foreign investments flowing in; rise in plan expenditure (2/2)
The governments main focus is on supply-chain related infrastructure like cold storage, abattoirs and food parks
12th Five Year Plan (2012-17) outlay shares: food processing

1.3% Infrastructure development National Mission on Food Processing Strengthening of institutions Food Safety, R&D and Promotional Activities Innovation Fund Scheme
Plan allocation to the food processing sector: USD2.9 billion
Notes: GOI - Government of India 11.5%
5.5% 36.3%
45.4%
Source: Ministry of Food Processing Industries (2009-10

Annual Report), Aranca Research
GROWTH DRIVERS
26
Food Processing
MARCH
2013
Rising Private Equity (PE) funding; M&A activity stable (1/2)

PE investments in the food and agriculture totaled USD650 million during 2008-11 Company
Nuziveedu Seeds Blackstone Group
Investor
Type of business
Floriculture
Deal value (USD million)

80.0
Prakash Snacks Pvt Ltd

Amalgamated Beans Coffee Trading Co
Sequoia Capital
Darby Asia Investors Standard Chartered Pvt Eq Ltd
Snacks
Non-citrous fruit farming Rice milling
30.0
25.0 25.0
PE deals Jan 2010 - Nov 2012
Bush Foods Overseas Pvt Ltd
Tirumala Milk Products

The CREMICA Group Nashik Vinters
Carlyle Group
Motilal Oswal Private Equity Advisors Verlinvest SA
Milk production
General food products Wine and liquor
22.0
15.0 15.0
Parag Milk & Milk Products

Godrej Tea Bakers Circle India Pvt. Ltd
Motilal Oswal Private Equity Advisors

IL&FS Investment Managers Coffee GEM India Advisors Ltd
Dairy products
Coffee and tea Frozen doughs and desserts
14.1
13.5 2.82
GROWTH DRIVERS
27
Food Processing
MARCH
2013
Rising Private Equity (PE) funding; M&A activity stable (2/2)

M&A activity was steady in 2011 Target company
United Spirits Ltd GMR Industries Ltd
Acquirer company
Relay BV EID Parry NSL Sugars Ltd McCormick & Co Summit Partners Bajaj Hindusthan Globus Spirits Keventer Agro
Type of business
Liquor Sugar Sugar Seasonings, sauces Agricultural seeds Sugar, ethanol Liquor Candy items
Deal value million)

2,045 114.8 51.99 35.0 30.0 14.1 14.0 11.2
M&A deals Jan 2010 - Nov 2012
Jay Mahesh Sugar Industries Eastern Condiments Krishidhan Seeds Bajaj Hindustan Sugar & Ind Associated Distilleries Candico India
Source: Thompson One Banker, Aranca Research

Notes: M&A - Mergers and Acquisitions
GROWTH DRIVERS
28
Food Processing
Sector has been attracting foreign JV partners for a long time
MARCH
2013
Players like McCormick had identified India as a strategic market way back in the 1990s Global players like Hershey are now keen on entering the increasingly attractive Indian market Established players like Nestle and Coke are extending their global JVs to India
Foreign Players
Dan Cake McCormick
Indian Partner
Phadnis Group Kohinoor Foods Ltd Eastern Condiments
Type of business
Cake and biscuits Basmati and food products Seasonings
Stake ratio
66:34 85:15 26:74
Year
2011 2011 2010
McCormick
Nestle, Coca Cola Hershey McCormick
-Godrej AVT
Beverage
Chocolates Spices
50:50
51:49 50:50
2010
2007 1994
Note: JV - Joint Venture
Source: Thompson ONE Banker, Aranca Research
GROWTH DRIVERS
29
Food Processing
Contents
Advantage India
MARCH
2013
30
Food Processing
MARCH
2013
Operation Flood: India gains self sufficiency in milk production (1/2)
Operation Flood was initiated in 1970 by the National Dairy Development Board to achieve national self sufficiency in milk production by creating nationwide milk grids; under Operation Flood
Indias milk production rose to 127.3 million metric tonnes (mmt) in FY12 from 21.2 mmt in FY1969
India retained its position as the worlds largest milk producer in 2011-12 with an annual production of 127.3 million metric tonnes Dairy cooperatives offer employment opportunities to about 12 million farm families
Source: National Dairy Development Board, GCMMF (www.amul.com), Aranca
Research
SUCCESS STORIES: OPERATION FLOOD, AMUL
31
Food Processing
MARCH
2013
Operation Flood: India gains self sufficiency in milk production (2/2)

PHASE I PHASE II PHASE III
(Jul-1970 to
Mar-1981) Dairy cooperative societies (000) 13.3
(Oct-1979 to
Mar-1985) 34.5
(Jul-1985 to
Mar-1996) 72.5
Members (million) Milk procurement (million kg/ day) Liquid milk marketing (million litres/ day) Milk drying capacity (million tonnes/ day)
1.8
3.6
9.3
2.6
5.8
11.0
2.9
5.0
10.0
261
507.5
842
Source: GCMMF (www.amul.com), Aranca Research
32
Food Processing
MARCH
2013
The Amul saga: a cooperative movement leads the way (1/2)
Gujarat Cooperative Milk Marketing Federation (GCMMF) is the largest food products marketing organisation in India Set up in 1967, it is Indias largest exporter of dairy products and has been accorded trading house status
GCMMF (Amul) sales (USD billion)

3.0 2.5 2.0 2.0 1.5 1.1 1.0 0.5 0.0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 0.5 0.6 0.6 0.6 0.8 0.9 1.4 1.7 2.4
Notes: CAGR - Compound Annual Growth Rate FY - Indian financial year (April - March)
33
Food Processing
MARCH
2013
The Amul saga: a cooperative movement leads the way (2/2)
Main brand: Amul Products: milk (including flavoured), butter, margarine, cheese, curd, desserts, infant food
Facts and Features

Producer members (million) Village societies Milk handling capacity (million litres/day) Total milk collection (FY12, billion litres) Daily milk collection (FY12, million litres) Milk drying capacity (million tonnes/day) 3.18 16,117 13.67 3.88 10.6 647
Notable Awards
Excellent performance in dairy product exports for 11 consecutive years
Authority
APEDA
CIO International IT Excellence Award (2003) for positive business IDGs CIO Magazine performance through resourceful IT management and best practices (USA)
International Dairy Federation Marketing Award (2007) for Amuls pro-biotic ice cream launch
International Dairy Federation
34
Food Processing
Contents
Advantage India
MARCH
2013
35
Food Processing
Opportunities
MARCH
2013
Untapped market with strong growth potential

Fragmented market leads to lower
Potential global outsourcing hub
Supply chain infrastructure and contract farming

Both firms and the government are eager
processing levels and value addition addition to 35 per cent by 2015 (from 20 per cent in 2005)
Global supermarket majors are looking
at India as a major outsourcing hub
to boost efficiency and access to markets food processing infrastructure; 100 per cent FDI in this area contract farming in order to secure supply
The government plans to raise value
India enjoys favourable supply-side
fundamentals (abundant raw materials supply, cost advantages) in AEZs, mega food parks, easier credit
Investment potential of USD22 billion in
PPP modules ideal for the private sector Strong demand growth - household
The government has helped by investing
Firms increasingly taking recourse to
consumption set to double by 2020
Notes: PPP - Public Private Partnership, AEZ - Agri Export Zones FDI - Foreign Direct Investment
OPPORTUNITIES
36
Food Processing
Contents
Advantage India
MARCH
2013
37
Food Processing
Industry Associations
MARCH
2013
Agricultural and Processed Food Products Export Development Authority (APEDA) NCUI Building 3, Siri Institutional Area, August Kranti Marg, New Delhi - 110 016 Phone: 91-11-26513204, 26514572, 26534186 Fax: 91-1126526187 E-mail: headq@apeda.com Marine Products Export Development Authority (MPEDA) MPEDA House, Panampilly Avenue PB No 4272, Cochin - 682 036 Phone: 91-484 2311979/2311803 Fax: 91-484-2313361 e-mail: mpeda@vsnl.com, mpeda@mpeda.nic.in
USEFUL INFORMATION
38
Food Processing
Glossary

MARCH
2013
AEZ: Agri Exports Zones MFP: Mega Food Parks CAGR: Compound Annual Growth Rate FDI: Foreign Direct Investment MT: Million Tonnes IIP: Index of Industrial Production FY: Indian Financial Year (April to March)
So FY12 implies April 2011 to March 2012
GOI: Government of India INR: Indian Rupee PPP: It could denote two things (mentioned in the presentation accordingly)
Purchasing Power Parity (used in calculating per-capita GDP) Public Private Partnership (a type of joint venture between the public and private sectors)
PE: Private Equity

APEDA: Agriculture & Processed food products Export Development Authority GCMMF: Gujarat Cooperative Milk Marketing Federation USD: US Dollar
Conversion rate used: USD1= INR48 39
Wherever applicable, numbers have been rounded off to the nearest whole number
USEFUL INFORMATION
Food Processing
Disclaimer
MARCH
2013
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this
presentation to ensure that the information is accurate to the best of Aranca and IBEFs knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.
DISCLAIMER
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Food Processing

For updated information, please visit www.ibef.org

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Strong demand growth

Food processing hub

Domestic food spending: USD318 billion

Government expects USD21.9 billion of investments in food processing infrastructure by 2015

For updated information, please visit www.ibef.org

For updated information, please visit www.ibef.org

The food processing sector comprises six major segments

Milk and milk products

Meat and poultry Food processing

Among the fastest growing segments in India; it includes -

Source: Indiabusiness.nic.in, Ministry of Agriculture, Meat & Poultry

Aerated soft drinks

Packaged drinking water

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Processed food output

Source: Ministry of Food Processing Industries ( MOFPI),

Processed food output (USD billion)

Growth - right axis

Source: Annual Survey of Industries (ASI) 2009-10,

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Strong growth in the sector also evident from trends in IIP

Annual growth of food products and beverages from IIP (%)

Source: Ministry of Statistics and Programme Implementation

Annual growth of overall manufacturing sector as per IIP

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Exports of processed food and related items (USD billion)

11.5 8.3 7.4 8.2

6.7 FY09 Export of APEDA products

Export of Non APEDA products

Source: Agriculture & Processed food products Export

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Shares in exports of processed food and related products

Shares in APEDA exports (FY12)

Shares in non-APEDA exports (FY11)

Processed Fruits & Vegetables

Source: APEDA, Aranca Research

Source: APEDA, Aranca Research

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Large presence of the unorganised sector (1/2)

Unorganised sector has the largest share in the sector *

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Large presence of the unorganised sector (2/2)

Shares in production by value and volume (FY11)

By Volume Unorganised sector

By Value Organised sector

Source: Ministry of Food Processing Industries,

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Food processing is a key contributor to employment generation in India

Healthy contribution to employment generation (FY09)

Notes: FY - Indian financial year (April - March)

Source: Ministry of Food Processing Industries,

For updated information, please visit www.ibef.org