"The food processing market in India has been developing over the years and is estimated to continue to grow strongly. The growing middle-class and rising disposable income coupled with major government initiatives is expected to lead to further growth. Domestic and international players have been constantly expanding operations in line with the strong opportunities in this market. The report begins with an overview of the food processing market including figures for the market size, growth and the market penetration of various segments. Each segment in the industry has been discussed. Information regarding the current scenario as well as the future growth prospects for each segment has been provided. The drivers and challenges explain the factors influencing growth of the industry including the increasing consumer spend on processed foods, competitive edge in food processing, government support, growth in food processing exports, adoption of contract farming, increasing food retailing in India and the growth in terminal markets. The key challenges identified encompass the lack of integrated supply chain and scale of operations, limited use of technology in food processing, low level of penetration in domestic market and high taxes on branded agricultural products. Key government regulations have been highlighted which will lead to further growth. Competition section provides a summary of the competitive scenario including the segmented market share. It also includes a brief profile of the major players in the market. "

1. Food Processing Industry - India
December 2009

2. Executive Summary
Food processing industry in India is valued at USD XX bn and is growing at a a% annual rate
Diary products, fruits & vegetables and meat processing are the most attractive segments
Market Government of India is leading from the front to ensure multi-fold growth in this segment
Exports in food processing are expected to grow further in the near future
Drivers:
PLE
– Increasing consumer spend on
Challenges:
– Lack of integrated supply chain and scale
Drivers &
Challenges S
processing
AM
processed foods
– Competitive edge in food
– Government support
of operations
– Limited use of technology in food
processing
– Low level of penetration in domestic
– Growth in food processing exports market
– Adoption of contract farming – High taxes on branded agricultural
– Increasing food retailing in India products
– Growth in terminal markets
The sector is highly competitive with many foreign players and large unorganized segment
Major Domestic Players Major Foreign Players
Competition •Company 1 •Company 3 •Company 5 •Company 7
•Company 2 •Company 4 •Company 6 •Company 8
FOOD PROCESSING INDUSTRY - INDIA 2

3. •Market Overview
•Drivers & Challenges
•Government Initiatives
•Competition
•Key Developments
FOOD PROCESSING INDUSTRY - INDIA 3

4. Food processing is a large sector that covers many activities
like agriculture, horticulture, animal husbandry etc.
Processed milk products like butter, cheese, ghee, ice
Diary Sector cream etc.
LE
Raw fruits and vegetables, pulps, canned fruits, juices and
Fruits & Vegetables
pickles
MP
Meat & Poultry Cattle, buffaloes, sheep, pigs and poultry
Food Processing
SA Fisheries Marine fisheries, frozen and minced fish products
Packaged Foods Noodles, vermicelli, tomato ketchup, jam , soups etc.
Beverages Carbonated drinks, fruit-based drinks and hot beverages
Staples Sugar, wheat, bread, flour and salt
FOOD PROCESSING INDUSTRY - INDIA 4

5. Food processing industry in India has huge untapped
potential and offers scope for large investments
Market Overview Market Size & Growth
•Industry is valued at USD U bn and is growing USD bn
at a% annually 120
a% X
100 W
LE
•India is one of the top producers of milk, V
pulses, sugarcane and tea in the world 80 U
MP
•Government has taken major initiatives
towards ensuring multi-fold growth in this
60
40
20
about USD L bn by 20--
A
sector that has an investment opportunity of
S
•T are coming up in India to integrate the
supply chain and promote food processing
0
2009 2010e
Market Penetration of Segments
2011e 2012e
•States like State 1, State 2, State 3 and State 4 Segment 1 b%
are highly attractive for food processing
industry Segment 2 c%
•Huge foreign direct investments have been Segment 3 d% e% Range p – q%
made in 20-- - -- totalling ~USD M mn
Segment 4 f%
Segment 5 g%
Source:
FOOD PROCESSING INDUSTRY - INDIA 5

6. Drivers & Challenges
Drivers
Increasing consumer spend on
processed foods
Challenges
Competitive edge in food processing Lack of integrated supply chain and
scale of operations
Government support Limited use of technology in food
processing
Growth in food processing exports Low level of penetration in domestic
market
Adoption of contract farming High taxes on branded agricultural
products
Increasing food retailing in India
Growth in terminal markets
FOOD PROCESSING INDUSTRY - INDIA 6

7. Key Initiatives
Vision 2015
Manpower Training Financial Support
Trends
Tax Benefits Mega Food Parks Scheme
FOOD PROCESSING INDUSTRY - INDIA 7

8. Indian food processing sector is highly competitive with
many foreign players in the market
Competition Segments Share
• A highly competitive market with many domestic
Other products
players and their MNC counterparts fighting for
e%
market share
LE
Segment 1
Competitive pricing, expansions, aggressive advertising a%
P
campaigns and efficient packaging are the strategies used Segment 4 d%
by firms to gain market share
c%
AM
• More players are planning to tap the mass market in
basic foods like fruits & vegetables, meat & poultry
and fisheries
Food Processing Units in Organized Sector S
Segment 3
Segment-wise Organized Share
b%
Segment 2
Flour Mills D1
Fish Processing D2 Segment A f%
Food and Vegetable D3
Segment B g%
Meat Processing D4
Sweetened and Aerated Water D5 Segment C h%
Milk Products D6
Segment D i%
Sugar Mills D6
Solvent Extract D7 Segment E j%
Rice Mills + Modernized Rice Mills D8
Segment F k%
Source:
FOOD PROCESSING INDUSTRY - INDIA 8

9. Thank you for the attention
The Food Processing Industry - India report is part of Research on India’s Food and Beverage
Industry series.
For more detailed information or customized research requirements please contact:
Gagan Uppal Gaurav Kumar
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FOOD PROCESSING INDUSTRY - INDIA 9