Author: K. Yamini Reddy, Student at DSNLU, Vishakhapatnam
INTRODUCTION
The food business encompasses a diverse array of worldwide enterprises that collectively provide a significant portion of the dietary energy consumed by the global population. The food processing industry holds considerable economic importance in India. In relation to production, consumption, export, and projected growth, India occupies the sixth position in the overall ranking.
India, now ranked as the second-largest food producer globally, with significant potential for progress in its pursuit of being the foremost food producer worldwide.The culinary heritage of India is always evolving and expanding in various directions. The increasing prevalence of pre-packaged and readily consumable food items is seeing a notable surge, primarily within the urban middle class demographic. This trend may be attributed to factors such as urbanisation, escalating incomes, a rise in the employment rate of women, and the proliferation of fast food establishments. There has been a growing demand for specialised and high-value processed or packaged food products, as well as convenient options such as ready-to-eat/ready-to-cook or reconstituted meals.
Based on a survey conducted in the United States, it is projected that the food market in India will experience a growth rate exceeding 100% by the year 2025. This anticipated expansion can be attributed to the country’s burgeoning economy and the evolving lifestyles of its populace. Based on an estimation, it is projected that the food consumption sector in India will witness a compound annual growth rate of 4.1 percent, resulting in an increase from USD 155 billion in 2005 to USD 344 billion by the year 2025.
The snack food industry exhibits considerable untapped potential within this particular sector. Based on the findings of the survey, it can be observed that individuals residing in the western areas of India exhibit the highest levels of consumption when it comes to commercial savoury snacks. Subsequently, individuals residing in the northern region of India demonstrate a relatively lower but still notable level of consumption in comparison. The urban population of India exhibits a significantly higher consumption rate of commercial savoury snacks compared to their rural counterparts, with a ratio of ten to one. India offers a diverse range of approximately 1,000 distinct snack varieties and 300 distinct types of savoury foods of processed packed food items.
The dominant product category within the processed packed food items i.e., snack industry, comprising over 85 percent of the market, consists of potato chips and other potato-based items. Within the well-structured potato chip market, notable participants encompass Pepsi and Haldiram’s. The current estimation suggests that the processed snack market in India is valued at approximately USD 3 billion.
The organised processed packed food sector holds a significant portion of the market, constituting 50% of the overall market share. Furthermore, this segment is experiencing a steady growth rate of 15-20% on an annual basis. According to estimates, the food and beverage packaging market in India had a value of USD 33.22 billion in 2020. It is projected to exhibit a compound annual growth rate (CAGR) of 29.88 percent during the forecast period, with an expected value of USD 156.25 billion by 2026.
In India, it has been observed that consumers are increasingly opting for snacks as a substitute for light meals. Furthermore, they are willing to pay a higher price for both value-added private label and branded products. This trend presents a significant opportunity for producers and merchants operating in the market. The previous sentence alludes to the potential benefits that the food processing industry could experience through the implementation of digital technologies, specifically in relation to demographic dividends and economic factors.
Presently, the e-commerce sector in India boasts a substantial consumer base of more than 440 million individuals. Projections indicate that this figure is expected to experience a near twofold increase within the forthcoming 3-5 years. The current global internet user population, estimated to be around 700-750 million individuals, is projected to expand and reach the milestone of one billion users.
The potential consequences of the economic cycle, demographic cycle, digital cycle, and aspiration in both rural and urban regions of India are anticipated to contribute to a promising trajectory in terms of consumer goods.
The Food & Beverage packaging industry in India exhibits a moderate level of competitiveness due to the presence of numerous players vying to expand their market share. The utilisation of design, technology, and application innovation has the potential to yield a sustained competitive advantage over an extended period of time. Companies are strategically broadening their business operations across diverse end-user markets in order to enhance their market penetration. So the present study covers various aspects on how packaged processed industry is important for country’s development and important factor of GDP.
Let us understand this concept in different facets.
