food industry-swot

FOOD INDUSTRY

FOOD INDUSTRY

NUPUR TEWARI 39117ARPITA SINGH 39116

INTRODUCTION• India’s Food Processing industry ranked 5th in terms of production, consumption, export & expected growth.• It is the largest producer of milk, pulses, sugarcane and tea in the world and big producer of wheat, rice, f & v.• The Indian food industry is estimated to be worth over US$ 200 billion and is expected to grow to US$ 310 billion by 2015.

Continued..

• India is one of the world’s major food

producers but accounts for only 1.7 per cent (valued at US$ 7.5

billion) of world trade in this sector – this share is slated to

increase to 3 per cent (US$ 20 billion) by

2015.•

• The Indian food processing industry is

estimated at US$ 70 billion. It

contributed 6.3 per cent to

India’s GDP in 2003 and had a share of 6 per

cent in the total industrial

production.

RECENT DEVELOPMENTS• Strategic interventions under 11th

five – year plan : Food Parks, Abattoirs, Cold chains,

Street Food, Wine Policy-liberalized, leveraging the agri/horticultural surpluses, Testing & certification labs- both public and private.

• Union budget 2010 has decreased the prices of processed foods.

PRESENT STATUS

SOURCE: MOFPI

FOOD PROCESSING UNITS IN ORGANISED SECTOR

(NUMBERS)

SOURCE: MOFPI

PARAMETERS OF COMPETITION

Indian food processors may be divided into the following main categories:

• Large Indian companies that have their production base in India or neighboring countries (for tax-saving purposes)• Multinational and joint-venture companies that have their production base in India• Medium/small domestic food-processing companies with a local presence• Small local players in the unorganized sector

DAIRY INDUSTRY

• India has emerged as the largest milk producing country in the world with present level of annual milk production of 94.5 MT.• Annual growth of 4% during the period 1993-2005.• Dairy Cooperatives account for 60% share of processed liquid milk marketed in the India.

Continued…

• The lead players in processed milk products in the market are as follows:Amul, Britannia, and others include Vijaya, Verka and Vadilal.

• In the category of cheese: Amul, Britannia Dabur (Le Bon) are the leading players including others like Verka, Nandini, Vijaya and Vadilal.

MEAT INDUSTRY

• The industry is growing at almost 10%. • India ranks first in world buffalo population.• India produces an estimated 1.5 million tonnes of buffalo meat annually, of which 24% is exported.• Only about 1% of the total meat is converted into value added products like sausages, ham, bacon, kababs etc.• Meat exports have been growing at close to 30% per annum in terms of quantity.

Continued…

• The growing number of fast food outlets in the country has had a significant impact on the meat processing industry.• Industry demands some immediate measures like financial assistance for up gradation of export oriented abattoirs/processing plant.

CONFECTIONERY INDUSTRY

• The size of the Indian confectionary market is estimated at Rs.26.0 billion ($600 million).• The confectionary market has been growing at over 6% annually over the last 5 years.• The confectionary market is highly fragmented with several local players such as Parle’s, Nutrine & Ravalgaon.• Key foreign companies are Nestle, Cadbury’s, Perfetti, Lotte, Wrigley, Candico, and Joyco.

BEVERAGE INDUSTRY

•This industry is divided into Non-alcoholic and alcoholic beverages.•non-alcoholic beverages are classified into carbonated drinks, non-carbonated drinks and hot beverages. •This segment is estimated at US$ 155 million out of which fruit juices and fruit-based drinks account for US$ 60 million.•India is the largest producer of tea in the world.

POULTRY INDUSTRY

• Indian Poultry Industry is 5,000 years old.• India is the 5th largest producer of egg and 9th largest producer of poultry meat.• The organised sector of poultry industry is contributing 70% of the total output and rest 30% is the unorganized sector.• The broiler industry is well dominated in southern states with nearly 60-70% total output.• Presently about 800 hatcheries are operating in India.

Continued…• Leading broiler integrators in India are as follows: Venkateswara Group (Pune), Suguna Poultry Farms Ltd (Coimbatore), Pioneer Poultry Group (Coimbatore), Godrej Agrovet Ltd (Mumbai), Sky Lark group (N.India).• It contributes about Rs 26,000 cr to the national income.

F & V INDUSTRY• The installed capacity of f & v processing industry has increased from 1.1 MT in Jan 1993 to 2.1 MT in 2006.• The processing of f & v is estimated to be around 2.2% of the total production in the country.• This industry is highly decentralized.• Consumption of value added fruits and vegetables are low.• India’s National Agriculture Policy envisages the participation of the pvt sector through contract farming.

Continued…

• Contract farming in wheat practiced in MP by HUL and by Pepsi Foods Ltd in Punjab for tomatoes, food grains, spices and oilseeds are some successful examples.

• The five-year 100% tax exemption was announced by the Government in the finance year 2005.

Segment Dairy F&V Meat andPoultryProcessing

Fisheries Packaged foods

Beverages Staple foods

Growth rate of the market

15 20 10 20 8 27 85

Key segment

Value addedmilk productslike Butter,Cheese andGhee

Raw F&V, FruitPulps, CannedFruits andPickles

Cattle, Buffaloand Poultry

Marine Fisheries,Frozen Productsand Minced Fishproducts

Noodles/Vermicelli

Fruit-basedDrinks andCarbonatedDrinks

Sugar, WheatFlour and Salt

Extent of processing

37 2 1 12 - - -

Share of organised sector

15 48 5 - 80 77 50

MAJOR INDIAN PLAYERS

COMPANY NAME PRODUCTS

GODREJ FOODS Ltd. Vegetable oils, fruit juices, tomato paste, soy beverages

DABUR INDIA Ltd. Fruit juices, cooking paste, honey

MOTHER DAIRY DHARA Dairy products, ice cream, canned vegetables, fruit juices, cooking oils

AMUL Dairy products, ice cream, chocolate

ITC Branded wheat flour, biscuits, ready to-eat food, confectionary

PARLE PRODUCTS Biscuits, candies, toffees

NUTRINE CONFECTIONERY COMPANY

Confectionary, chewing gum

WEIKFIELD PRODUCTS COMPANY

Custard powder, baking powder, jelly crystals, drinking chocolate, sauces,soups

RASNA (PIOMA INDUSTRIES)

Instant drink, health drink, soft drink concentrates, flavors

HALDIRAMS Snack foods

HUL Ice cream, branded wheat flour, bread, sauces, jams, jellies

VH GROUP Poultry products

BRITANNIA INDUSTRIES Biscuits, bread, packaged food

UB GROUP Beer, alcoholic beverages

MARICO INDUSTRIES Vegetable oils, jams

MTR FOODS Ready-to-eat foods, soups, spices, ice cream mixes, pickles

PUNJAB MARKFED Canned food, rice,vegetable oils

VISTA PROCESSED FOODS Frozen chicken and vegetables

DYNAMIX DAIRY INDUSTRIES

Cheese, whey, other dairy products

MULTINATIONAL/JOINT VENTURE COMPANIES

Company Name Products

PEPSI Soft drinks, potato chips, snack food,fruit juices

CARGILL Vegetable oils

HEINZ Ketchup, health drinks

KELLOGG`S Breakfast cereals, biscuits

BUNGE Vegetable oil, margarine

NESTLE Coffee, chocolates, confectionary,instant noodles, milk products,beverages, health drinks

CADBURY Chocolates, health drinks

COCA COLA Soft Drinks, beverages

AGRO TECH FOODS (CONAGRA`S)

Branded vegetable oils, branded wheatflour, snack food, popcorn

PILLSBURY Wheat flour, cake mixes

GLAXOSMITH KLINE Health drinks

PERFETTI Chewing gum, candy

WRIGLEY Chewing gum

LOTTE INDIACORPORATION LTD.(PARRY`S)

Confectionary

SWOT ANALYSIS

STRENGTHS• Cost of production in India is lower by about 40 percent.• Large number of research institutions such as CFTRI, CIFT, NDRI, and NRDC.• Infrastructure development (30 Mega Food Parks)• Income tax rebate for setting up of new agro-processing industries• Cumulative inflow of FDI into the food processing sector• Growing number of fast food chains.• The GOI is in the process of enacting a Food Safety and Standards Bill

Continued…• A slow but steady transformation of the retail food sector in cities.• India has the second largest arable land in the world. It has diverse agro-climatic zones.• Competitive pricing also enables penetration in the rural markets.

OPPORTUNITIES

• GOI, in line with its Vision 2015 for the food processing sector, in its 11th Five Year Plan proposes to give greater thrust on infrastructure development.• GOI envisages an investment of Rs. 1 trillion in the industry over the next five years, mostly from private sector and financial institution.• Rising disposable income levels.• Increasing urbanization and exposure to Western culture.

Continued…

•Growing health consciousness among the middle class.•Growing consumerism.•Changing age profile.•Increasing availability of cheap consumer credit.•India is in the middle of two big markets – the Middle East and the Far East – and we can help French companies reach out to these markets.

WEAKNESSES

• Poor infrastructure still pose a serious challenge to FDI.• Heavily bureaucratic investment processes, government inefficiency, and corruption have also discouraged foreign investors.• India is still not holding its laws high for protecting copyright issues.• Divergent food habits.

Continued…• High tariffs, dated food laws, and unscientific sanitary and phytosanitary restrictions.• Lack of grading and standards, poor distribution channels, and onerous government policies.• Low penetration of processed food in domestic markets.• Out of the entire agricultural produce of India only 1% is converted into value added products.• Lacks economies of scale, skilled manpower.

THREATS

• FDI and other routes of investments by MNC’s pose a potential threat to a large number of Indian players in the coming years. • Gradual decrease in no. of farmers practicing agriculture.• Religious sentiments for different foods.

THANK YOU !!

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