The Indian Food Industry 2012

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Ejvind Vgg Own Man In India

The Indian Food Industry

DIBD OMII

Own Man In India

May 2012


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Introduction to the Indian Food Industry

Current market situation

Segments

Food consumption data & forecasts

Public and Private Investments

Danish case Carlsberg in India

SWOT


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Current market situation

The Indian food & beverage industry(referred to as the Indian food industry)is witnessing a strong growth.

India is the second largest producer offood next to China, and is expected tobecome the biggest because of thegreat potential it has within food andagriculture.

Today the industry is ranked as the fifthlargest industry nationally and accountsfor 7% of the countrys GDP

The Indian food processing industry hasbeen growing at over 13 percent and isestimated to be worth US$182 bn


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Current market situation Even though India is one of the

largest food producers in the world itonly accounts for 1.5% of totalworldwide food trade however, thisindicates vast scope for bothinvestors and exporters.

The Indian food industry is expectedto have a growth rate of about 7.5%and is expected to reach US$ 300 bnby 2015. Thus, there is muchinvestment potential to tap into the

coming years.

The sector is vital for the nation and isthe principal source of livelihood formore than 60 per cent of thepopulation.


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Main sectors within the Indian food industry India's food processing sector covers:

Fruit and vegetables

Meat and poultry

Milk and diary products

Alcoholic beverages Fisheries

Plantation

Grain processing

Confectionerylike chocolates and cocoa products

Soya-based products Mineral water

High protein foods etc.


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The food industrys ranking and production

Food

Category

Indias rank in

the world

Milk No. 1

Livestock No. 1

Tea No. 1

Rice No. 1

Sugarcane No. 1

India was the second largestproducer of fruits in the world.

India is the second largest producerof vegetables and is a leader in theproduction of peas and okra.India produces 200 million tonnesfood grain, which is the third largestin the world.

India has around 500 million poultryand produces 45.200 million eggs.

The numbers have all beenincreasing, indicating a rapidlygrowing industry that only becomesbigger by the day.


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Growth potential As mentioned the Indian food industry is increasing rapidly with a 7.5%

growth rate the coming years.

The growth in the industry is supported by several of factors:

Socio-economic changes: A growing middleclass of about 300 million comparatively the

US. has a total population of approx. 300 million.

Growing urbanization, more than 40 cities have a population ofmore than a million.

Households are growing and the domestic income increases. Changing lifestyles and patterns more women work now.

Westernization of the Indian retail market the demand forinternational goods increases.


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Key players in the Indian food industryCompany name Segment Products Manufactured Major brands Manufacturing

locations

Total group

turnover in

USD

Hindustan UnileverLimited

Food Jams, Soups Kwality Walls, Kissan, Annapurna Mumbai,Pondicherry, Silvassa

3.9 billion

ITC Limited Food Chips, Ready to eat, snacks Bingo, Sunfeast, Candy,

Annapurna

Hyderabad

Bangalore , Kolkata,etc

7 billion

Britannia Foods Food Biscuits Britannia Mumbai, Kolkata,Chennai, Delhi,Uttarakhand

931 million

Cadbury Confectionary Chocolates Dairy milk, Perk, Five star, Gems Mumbai 342 million

Nestle Confectionary Chocolates, Snacks Nestle, Maggi, Nescafe Moga (Punjab),Nanjangud(Karnataka),Samalkha (Haryana),Goa, etc

1 billion

Parle Products Confectionary Chocolates, Biscuits, Parle-G, Krackjack, Monaco, Hideand Seek,

Mumbai, Chennai,Hyderabad

150 million

Venkys Limited Meat & Poultry Chicken Venkys 852 million

Alkabeer Meat & Poultry Chicken, Mutton Alkabeer Hyderabad 100 million


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Key players in the Indian beverage industryCompany name Segment Products Manufactured Major brands Manufacturing

locations

Total group

turnover in

USD

KMF Dairy Milk, Ghee, Ice cream KMF Bangalore,Hassan,Dharwad -Karnataka

200 million

Amul Dairy Milk, Ice Cream Amul Anand, 2.1 billion

Pepsico Drinks Soft drinks Pepsi Punjab,Maharashtra,West Bengal

1.1 billion

Coca-Cola Drinks Soft drinks Coca-Cola Vijayawada,Thane

1.2 billion

United Brewaries Alcohol Alcoholic drinks Kingfisher Mumbai,Bangalore,Hyderabad,

Kolkata

661 million

Mohan Meakin Alcohol Rum, Old Munk Mohan Mekins Solan 97 million

TATA Tea Beverages Tea, Coffee TATA Mumbai,Kolkata, etc

1 billion

Hindustan UnileverLimited (HUL)

Beverages Tea, Coffee Brooke Bond, RedLabel, Brooke BondTaaza, Taj Mahal,Bru, Lipton

Mumbai,Pondicherry,Silvasa, Westbengal,etc

3.5 billion


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Privateinvestments in the Indian food

industryFollowing are some of the major investments in theIndian food industry

Starbucks has plans to open around 50 coffeeshops in India by end-2012 through its jointventure with Tata.

TheIndian Farmers Fertilizers CooperativeLimited (IFFCO) is planning to enter the dairybusiness, and is planning to set up a new venturein India with an investment of about US $224million

PepsiCo India will be investing US $500 million toimprove their infrastructure and plant capacity.

Reliance Industries Ltd, who is a big Indianconglomerate mainly within the energy sector,hasinvested US $1.25 billion in a dairy project.

Indian food subsidiary Nestl India intends tobuild its eighth production plant in India, during2012, investing US$ 94.5million.


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Government initiatives in the Indian food

industryFollowing are some of the government

initiatives in theIndian food industry:

TheIndian government will be setting up 10Mega Food Parks (MFPs) with an investment ofUS $514 million

Thefood processing industries are prioritizedhighly in terms of getting credit and lendingmoney in the bank, because they grow fast andthus indicate a stable business.

The fruit and vegetable processing companiesdo not have to pay any taxes on these products

to the Indian government, thus making thebusiness easier to acesss.

The excise duty tax on ready-to-eat packagedfoods and instant food mixes has been broughtdown to 8% from 16% making this industryhighly attractive and competitive.


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Carlsberg a Danish case in India

There are many obstacles in relation to selling beers in India:

28 states with different alcohol legislation

Religious barriers

Beer has lower brand value compared to e.g. wine

Beer is often of low quality

Slower effect than hard liquor

High diuretic effect

Nevertheless, Carlsberg has still managed to overcome many of these obstacles bylaunching a beer that turns to the upper and growing middleclass. Playing on more

sophisticated parameters than their competitors. Carlsberg has been positively welcomed by the middle- and upper class as a good alternative

to especially wine. The brand is in India compared to good quality, modernity and Europeanchicness.

Together with Tuborg, Carlsberg is today growing rapidly in India, and is determined tobecome a market leader in India across all segments in the beer market.


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Danish contact in India If you are interested to hear more about India and the rising food

industrys possibilities do not hesitate to contact:

Ejvind Vgg director of the DI office in India:

E-mail: [email protected] Phone: +91 9930 562729/ +45 2728 0486
mailto:[email protected]:[email protected]

The Indian Food Industry 2012

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