By Krutika Kshirsagar
These movements have presented a base for this largely agrarian country to exploit its resources to their full potential and become the fourth largest economy in the consumer goods segment. When the Chief Minister of Maharashtra invited Gujarat based Amul Dairy to open up new plants in the underdeveloped regions of Vidarbha and Konkan, he was probably referring to utilizing this potential the consumer foods industry in India holds for garnering employment as well as fulfilling the expectations of demand. Food sector is one of the largest sectors in India in terms of production, growth, consumption, and export. Indian food industry currently stands at Rs 247,680 crore (US$ 39.71 billion) and is expected to touch Rs 408,040 crore (US$ 65.41 billion) by 2018, according to a report titled ‘India Food Service Report 2013’ by National Restaurant Association of India (NRAI).
The rupee might be depreciating but we still eat quite well. Let us take the example of the fast food chains. With unhurried growth in markets like US and Europe, and China being acceptably penetrated by international chains, India offers the next big opportunity. Foreign brands have grabbed a substantial portion of this small pie of organized food sector. A major portion of this sector remains unorganized. Theres a lot of territory yet to be conquered. This sector has attracted immense Foreign Direct Investment in the country and the government does expect an expansion in this by 2015. Although FDI is prohibited in multi-brand retailing, global enterprises like Walmart have already forged relationships with Indian players to establish their cash and carry business. Local players too are growing quickly with few like Jumbo vadapav aiming to expand its 43 outlets to 200 by 2015. As Indias economic slowdown has dampened consumer sentiment, companies need to bear the burden and keep prices low to woo the customers. It thus becomes imperative for companies to innovate, share resources and introduce robust logistics system.
Dominos shall explain better why and how global models need to be revamped to cater to the local tastes. McDonalds customized its menus for the vegetarian punter and those who prefer a fiery palette. Support infrastructure must also be developed to achieve growth in this industry. Modern retail shall contribute effectively to provide consumer access as well as contribute to change the taste of the Indian consumer. The current level of penetration of organized retailing in food and grocery is as low as 1%. India is highly underdeveloped as a market, logistics facilities are at a nascent stage as also gripped by various inefficiencies and uncertainties over demand projections and supply; thus resulting in delays in shipments and increasing wastages. The governments efforts to help eliminate warehousing difficulties are welcome. It has invited private players to build logistics parks and free trade warehousing zones (FTWZ) to provide services pertaining to domestic and international trade and multi-model connectivity.
All these changes present innumerable opportunities to the players in this sector. All this calls for innovation and cashing in on the fortuity. Focusing on new and emerging consumer markets beyond the brims of the metro cities and introducing value-added products in the processed product segment is necessary to make it convenient and healthy for the consumers. Increase in per capita consumption is a good opportunity; making new products available at important access points and educating the consumer is critical. It has been observed that there is an increase in the high-value products like milk and milk products and marine and meat products. Investing in consumer education and diverse retail conditions are both opportunities as well as challenges.
George Bernard Shaw remarked that there is no sincerer love than the love of food! And this land definitely provides a million opportunities to shower abounding amounts of it
After completing B.Tech from Institute of Chemical Technology (UDCT), Im currently pursuing MBA in Energy and Infrastructure from School of Petroleum Management, PDPU. I have been working as a co-ordinator of CII-Young Indian for the last one year. My strengths are good analytical ability, proficiency in public speaking, good writing, oratory and communication skills, zest and determination to explore new ideas and working in unison with various groups as a group member as well as a leader.