Industry Overview

Food is culture but food is also commerce

If there is an industry without which a society cannot exist is the Food and Beverage Industry. People can’t live without it. The Indian Food industry is estimated to be at Rs. 4,000 billion and is growing every year at minimum 6.5%. The growth is expected to be accelerated in the coming years with increased disposable income and changing life style of the people. Processed food market is expected to grow at a minimum rate of 15% in the coming years.

The food industry is the linkage between the agriculture and manufacturing. There are many segments in the food processing industry. However, the industry can be broadly classified as ready-to-eat segment and process-to-eat segment. Agriculture-Based Projects, Snack Food, Frozen Food, Agro Processing Technology, Instant Food, Food Industry, Food Preservation, Canned Food, Packed Food, Ready to Eat Food, Cereal Food, Pickle, Grain Milling, Bakery, etc are the examples of food processing segments. The ready-to-eat segment is the fast-growing segment of the industry. This is mainly attributable to the overall GDP growth of the country, because of which middle-class population is increasing year-on-year. The rapid growth of the ready-to-eat segment is fuelled by the changing lifestyle and food habits of the middle class. The lower income class also try to imitate this lifestyle to keep their society status.

The true potential of the food processing industry is slowly being realised. This is reflected in the fact that the government has classified the food processing industry as a thrust area.

The industry’s gains have been confined mainly to the urban consumers in the domestic market. Of the total production of fruits and vegetables, a mere 2.2% is processed, which is far too low seen from the perspective of what has been achieved by other countries as varied as Thailand (30%), Philippines (78%), Malaysia (80%) and Brazil (70%). Nearly a third of the produce is estimated to be wasted for want of scientifically managed post-harvest care and procedures.

Although relatively significant, the level of processing in other sectors, as well, is also low by developed country standards: marine products, 26%; poultry 6%; beef 20%. The average level of processing in the developed countries ranges between 60 and 70%.

The government has drawn elaborate targets under its national policy aiming at increasing annually the level of food processing at 10% by 2020 and to 25% by 2025.


India is the second largest food producer in the world after China.

There are huge opportunities across the entire food value chain and the industry in India is stall at its very nascent stage. This is a sector having ‘huge business appetite’ and has the potential for generating employment for the huge young population and women of India, the President Ram Nath Kovind said, while speaking at the World Food India 2017. He further said that by putting focus on food processing will not only help in cutting down ‘unacceptable level’ of wastage of food in the country but also help in doubling the income of farmers. The fact that the country has not utilized the potential of food processing gives a very good opportunity to the prospective investors. There are enormous opportunities in the field of such as logistics, post-harvest facilities, manufacturing, and cold chains, to attract foreign and domestic investments. The fate of this industry can be drastically changed with a focused approach on modern food processing. Both investment and technological solutions are needed to cut wastage of food which is at a regrettable level at present.
There is a huge opportunity for the entrepreneurs in food processing sector who can innovate in consumer-oriented food products, rather than duplicating the products already available in the market. While innovating the products due care needs to be given to preserving the taste, maintaining hygienic and health aspects of the products. These days consumers are becoming more and more hygienic and health conscious.
Overall Opportunities of the industry can be summarised in the following table:


These are only direct opportunities linked to the food. Indirect opportunities such as farm tourism, cold chain, logistics, packaging, standards & certifications, etc. are not mentioned in the above table.

Challenges (the potential opportunities)

Supply chain: A good supply chain is important for success of any industry. India’s agriculture market has a long and fragmented supply chain that results in high wastage and high costs.

Infrastructure: The export related infrastructure for agri-produce is grossly inadequate, especially at sea ports and airports. Nearly one-third of the produce from the fields gets spoilt due to poor post harvesting facilities and lack of adequate storage infrastructure.

Skilled manpower: The agricultural workforce is inadequately skilled across different levels of food processing. A focused educational system can turn our inactive youths to money making machines.
Quality standards: India lacks basic standardization and certification infrastructure. Given the size of the food processing industry, there is a huge gap in the availability of laboratories, trained manpower, and certification agencies.

The need of the hour is to adopt an integrated approach to address the above-mentioned tailbacks with a clear-cut focus on improving the quality and value of the output, reducing the cost of raw material for the processors, while improving the farmers’ income levels.

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