12:33 am - Friday December 15, 2017

Indian Food Industry

India is the world’s second largest producer of food next to China, and has the potential of being the biggest with the food and agricultural sector. The total food production in India is likely to double in the next ten years and there is an opportunity for large investments in food and food processing technologies, skills and equipment, especially in areas of Canning, Dairy and Food Processing,Specialty Processing, Packaging, Frozen Food/Refrigeration and Thermo Processing. Fruits & Vegetables, Fisheries, Milk & Milk Products, Meat & Poultry, Packaged/Convenience Foods, Alcoholic Beverages & Soft Drinks and Grains are important sub-sectors of the food processing industry. Health food and health food supplements is another rapidly rising segment of this industry which is gaining vast popularity amongst the health conscious.

The important sub-sectors of Indian food industry are fruits, vegetables, fisheries, milk and milk products, meat and poultry, packaged foods, grain processing, alcoholic beverages and soft drinks and grains. Health food and health food supplements are rapidly improving segment of this industry, which is gaining vast popularity amongst the health conscious. Inspite of being one of the worlds major food producers, India accounts for less than 1.5 per cent of international food trade. This indicates vast scope for both investors and exporters. Food exports in 1998 stood at US $5.8 billion whereas the world total was US $438 billion. The Indian food industries sales turnover is Rs 140,000 crore (1 crore = 10 million) annually as at the start of year 2000. The Indian food industry has the highest number of plants approved by the US Food and Drug Administration (FDA) outside the USA.

The consumer product groups like confectionery, chocolates and cocoa products, Soya-based products, mineral water, high protein foods are also on a high rise lately. The most promising sub-sectors of Indian food industry include -Soft-drink bottling, Confectionery manufacture, Fishing, aquaculture, Grain-milling and grain-based products, Meat and poultry processing, Alcoholic beverages, Milk processing, Tomato paste, Fast-food, Ready-to-eat breakfast cereals, Food additives, flavors and others.

According to a study by McKinsey & Company, the Indian food market is poised to grow two- fold by 2025. Citing the McKinsey study, a report by the US Department of Agriculture says that the size of the Indian food consumption market is expected to grow from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual growth rate of 4.1 per cent. The steady growth of the Indian economy and the improving lifestyle of Indians have been instrumental in this growth.

The growth of the food industry in India stems from the consistently increasing agricultural output. With the second largest arable-land area in the world, India is one of the key food producing countries in the world, second only to China.

  • Currently, India ranks second in fruit production and third in vegetable production in the world.

  • In 2007-08, foodgrain production in India had registered a 4.6 per cent growth with 227.32 million tonnes as against 217.28 million tonnes in 2006-07, according to estimates by the agriculture ministry.

  • The output of coarse cereals in 2007-08 was 39.67 million tonnes, 17 per cent higher than the 33.92 million tonnes in the previous fiscal.

  • The total output of oilseeds is estimated to have risen to a record 28.2 million tonnes, about 16 per cent higher than the 24.29 million tonnes in 2006-07.

  • The production of pulses has risen to 15.19 million tonnes, registering a year-on-year growth of 7 per cent, and touching a new high.

According to estimates by the agri-trade promotion body, The Agricultural and Processed Food Products Export Development Authority (APEDA), India’s exports of agricultural and processed food products in 2007-08, has grown by 38 per cent, which, in absolute value terms, is US$ 6.59 billion, against US$ 4.79 billion in 2006-07.

Amul

Anand Milk Union Limited or better known as Amul is regarded as a dairy cooperative movement in the Indian subcontinent. Formed in the year 1946, Amul initiated the dairy cooperative movement in India. The chairman of the GCMMF, Dr Varghese Kurien, is recognized as the man behind the success of Amul. In fact Amul was formally was registered on 14th December 1946. It also formed an apex cooperative organization called the Gujarat Cooperative Milk Marketing Federation. In the recent times this popular movement is being replicated in 70,000 villages in over 200 districts of India. The movement grew so popular that it was channeled towards economic prosperity. It is credited whole-heartedly or transforming the life of the Indian villagers. Not only this much, it has also made the nation the largest
milk producer in the globe today. Further its achievements lies in being one of the largest food brands in the Indian subcontinent with an annual turnover of $500 million. The products of this brand include milk, butter, ghee, chocolates, cheese, pizzas and ice creams. Amul also has plans to launch the first sports drink of the Indian subcontinent Stamina that will throw a tough competition to Coca Cola’s Powerade and PepsiCo’s Gatorade. The business of Amul is not only restricted to India. Amul has also entered the overseas markets including UAE, Mauritius, Australia, Bangladesh, Singapore, China, Hong Kong and a few South African countries. Overcoming the failure to enter the Japanese markets in 1994, it has fresh plans of entering the Japanese market soon.

The GCMMF, which is a state level apex body of milk cooperatives in the state of Gujarat and aims to provide remunerative returns to the farmers and also serve the interest of the consumers by providing quality products, has grown to be the largest organization of
food products marketing in the recent times. The entry of Amul in the production of ice-cream was also regarded successful as it was capable of capturing a large market share within a very short span. Then its entry into the pizza business also proved to be a major success by making the base and the recipes available to the customers in as less a tag of 30.

The Information Technology has played a major and crucial role in the development of the Amul brand. The logistics behind the processing and producing of milk products is carried out with military-like precision. The installation of more than 3000 Automatic Milk Collection System Units (AMCUS) at village societies to capture milk fat content, member information, amount payable to each other and volume collected has proved extremely beneficial in ensuring fairness and transparency throughout the entire organization. The success of Amul in leveraging the IT to its maximum advantage lies in the simple fact that the esteemed organization had a very clear vision. Amul embraced it with much more gusto after a top-level domain cooperative was made available.

The advertising techniques of Amul have also been very eye-catching with the Amul baby commenting jovially on the latest news or the current events and the pun in her words make her even more popular. In fact the advertisements of Amul are one of the longest running ads based on a theme. They have also been vying for the Guinness records for being the longest running ad campaign ever. To sum up from catchy billboards to being an e-commerce success story, Amul is indeed rural India’s flag bearer in the IT revolution.

Britannia Industries

The story of one of India’s favourite brands reads almost like a fairy tale. Once upon a time, in 1892 to be precise, a biscuit company was started in a nondescript house in Calcutta (now Kolkata) with an initial investment of Rs. 295. The company we all know as Britannia today.

The beginnings might have been humble-the dreams were anything but. By 1910, with the advent of electricity, Britannia mechanised its
operations, and in 1921, it became the first company east of the Suez Canal to use imported gas ovens. Britannia’s business was flourishing. But, more importantly, Britannia was acquiring a reputation for quality and value. As a result, during the tragic World War II, the Government reposed its trust in Britannia by contracting it to supply large quantities of “service biscuits” to the armed forces.

As time moved on, the biscuit market continued to grow and Britannia grew along with it. In 1975, the Britannia Biscuit Company took over the distribution of biscuits from Parry’s who till now distributed Britannia biscuits in India. In the subsequent public issue of 1978, Indian shareholding crossed 60%, firmly establishing the Indianness of the firm. The following year, Britannia Biscuit Company was re-christened Britannia Industries Limited (BIL). Four years later in 1983, it crossed the Rs. 100 crores revenue mark.

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