BIGrowtec
BIGROWTEC
CONSULTING PVT LTD
" 'Idea to IPO' MSME scaling experts"
Food processing
Background
India's food processing sector is one of the largest in the world and its output is expected to reach $535 bn by 2025-26. The Food Processing sector in India has a quintessential role in linking Indian farmers to consumers in the domestic and international markets.
India has a huge potential in the food processing sector that needs to be tapped, an industry report said on Friday. According to the report on India’s food processing industry released by the Confederation of Indian Industries (CII) at FoodPro, a food processing technology exhibition, the industry saw an 11% growth between Financial Years 2015 and 2020.
“It (India) has performed better than Brazil, US and China as of 2021 in terms of growth. But there is immense potential to unlock. India processes only 30% of its total meat production compared to Brazil (50% -60%) and the US (almost 90%). In fruits, India processes 5% of its production, compared to Brazil (35-40%) and the US (about 20%),” the report reads.
Quality inconsistency, fragmented agriculture production, demand-supply mismatch, low penetration of technology, and supply chain issues like the availability of cold storage and warehousing facilities are the major barriers to the growth of the industry.
The presence of pesticide residues and lack of awareness on policy requirements for global markets impact food processing exports, the report finds.
The need for Food processing in the present World
These include toxin removal, preservation, easing marketing and distribution tasks, and increasing food consistency
In addition, it increases yearly 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
The extremely varied modern diet is only truly possible, on a wide scale because of food processing. Transportation of more exotic foods, as well as the elimination of much hard labour gives the modern eater easy access to a wide variety of food unimaginable to their ancestors
Mass production of food is much cheaper overall than individual production of meals from raw ingredients
Processed food freed people from the large amount of time involved in preparing and cooking “natural” unprocessed foods. The increase in free time allows people much more choice in life style than previously allowed
Market Size
The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales.
The Indian food processing industry accounts for 32% of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth.
It contributes around 8.80 and 8.39% of Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 13% of India’s exports and 6% of total industrial investment.
The Indian gourmet food market is currently valued at US$ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20 per cent.
The food processing Industry is significant in India, for the following reasons:
Enhance farmer’s income by better utilization and value addition of agricultural produce
Minimize wastage at all stages in the food processing chain by the development of infrastructure for storage, transportation and processing of agro-food produce
Introduce of modern technology into the food processing industries from both domestic and external sources;
Encouraging R&D in food processing for product and process development and improved packaging
Provide policy support, and support for creation of Infrastructure, capacity expansion/ Upgradation and other supportive measures form the growth of this sectors
Promote export of processed food products
Generate Employment : It provides direct and indirect employment opportunities, because it acts as a bridge between Agriculture and Manufacturing
Reduce malnutrition: Processed foods when fortified with vitamins and minerals can reduce the nutritional gap in the population
Crop-diversification: Food processing will require different types of inputs thus creating an incentive for the farmer to grow and diversify crops.
Food processing industry in India can be segmented as follows
Cereal/ pulse milling
Fruit & vegetable processing
Milk & milk products
Beverages like coffee, tea & cocoa
Fish, poultry, eggs & products
Meat & meat products
Aerated waters/soft drinks 8. Beer/alcoholic beverages
Bread, biscuits & other bakery products
Edible oil/fats.
Confectioneries
Breakfast cereals, malt protein, weaning, extruded food products
The Problem
Key challenges faced by the food processing sector are gaps in supply chain infrastructure which means inadequate primary processing, storage and distribution facilities; the insufficient connection between production and processing; seasonality of operations and low capacity utilisations; institutional gaps in the supply chain, for instance, there is dependence on APMC markets; lack of focus on quality and safety standards; and not having enough of product development and innovation. Demand from retail, demand for items immediately available to eat or cook and safe processed food, and discontinuation of overdependence on cereals are some big opportunities for this sector.
Since processed food has immense export potential together with domestic demand, encouragement to it with proper marketing, latest technology and steady flow of raw materials from the farmers meeting specific quality standards at stable prices leads to greater development of the agriculture sector. Linking agricultural production to the market by bringing together the farmers, processors and retailers would substantially increase farmers’ income.
Our Solutions
The deployment of green business practices – right from the production to the packaging and supply chain management is a crucial solution to tackling the current issues in the food industry.
Comprehensive technology and financing solutions for the Food & Beverage industry
Consumer tastes and preferences are constantly evolving and becoming more individualized. As a Food & Beverage manufacturer, you have to consider various factors ranging from a consistently high level of product quality, plant availability, optimum resource efficiency, decarbonization goals, financial liquidity, and an increased need to maintain flexibility in production to meet individual customer requirements. In order to do so and create a lasting competitive edge, a holistic approach is necessary. Our integrated solutions for electrification, automation, digitalization, and financing empower you to #TurnTheTables on your pressing challenges.
suggestions
Storage capacities and infrastructure should be increased.
Develop the agricultural facility with good agricultural practice which leads to the transition from staple food crops to diversification of crops.
Backward linkages to farmers need to be made more robust. Contract farming can be promoted. According to the Model Contract Farming Act, 2018, the contract will specify the quantity, quality and price of produce being supplied. This would shield farmers from price volatility, subject to quality commitments.
Skilling is required at two levels. First at the farm gate in promoting agricultural best practices and in processing activities.
Public investment and connectivity should be increased.
Slaughter animal rules should be framed in a comprehensive policy framework.
Farm pattern diversification which leads to a production of variety of crops other than constant set of crops which creates lot of job opportunities.
Second Green Revolution should be updated with the diversified technologies.
We have to encourage the domestic startups and industry than the international companies.
There should be a Centre of Excellence between centre and state.
Should have more training institutes for upcoming entrepreneurs and it should be in all states. Scholarship should be given to the upcoming entrepreneurs.
New technology should be updated in the training institutes and skill development should be given the top most priority.