Food Industry Challenges and opportunity

India is the world’s second largest producer of food products next to China and has the potential of being the biggest with the food and agricultural sector. The food processing industry is ranked fifth in terms of production, consumption, export and expected growth. The food industry is on a high as Indians continue to have a feast. Fuelled by what can be termed as a perfect ingredient for any industry -large disposable incomes – the food sector has been witnessing a marked change in consumption patterns, especially in terms of food. Increasing incomes are always accompanied by a change in the food basket. The current Indian food Industry is expected to grow by 30% – 33% and it will take double fold growth in next 3 years by considering today’s increasing pattern of demand.

The Indian food Industry is fragmented in three major roots i.e.

  • Organized: 25%,
  • Unorganized: 42%
  • Small scale industries: 33%

Growth Areas

  • Packaged food Industry
  • Food Processing Industry
  • Organized Retailing
  • Food Ingredient Process Industry
  • Export

Challenges

  • The challenge for rise of food industry are production, procurement of quality raw materials, use of inefficient traditional (obsolete) technologies, huge operational cost, poor economies of scale
  • Inadequate knowledge about GMP (Good Manufacturing Practices) HACCP, ISO, FPO, Hygiene, Sanitation, 3A, FSSAI, FDA
  • Inadequate knowledge about Backward, forward, vertical and horizontal integration.
  • Inadequate mecha-structural support
  • Inadequate knowledge about food value chain, sales and marketing.
  • Changing customer taste
  • Entry of international companies
  • Rise in Competition due to FDI
  • Rising business and product innovation
  • Less Shelf life of produce and finished product

Growth Drivers

  • 2ndlargest arable land in the world
  • 20 agro climatic region
  • Largest producer of pulses, milk, tea, cashew, meat, spices, wheat, sugar cane, rice, vegetables and fruits.
  • Largest livestock population
  • Rising in consumption expenditure
  • Favorable government assistance
  • Increasing capital investments

The Government has formulated and implemented several Plan Schemes to provide financial assistance for setting up and modernizing food processing units, creation of infrastructure support for research and development and human resource development in addition to other promotional measures to encourage the growth of the processed food sector. Food processing is a large sector that covers activities such as agriculture, horticulture, plantation, animal husbandry and fisheries. It also includes other industries that use agriculture inputs for manufacturing of edible products. The Ministry of Food Processing, Government of India indicates the above-mentioned segments within the Food Processing industry.

 

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