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Package food industry

The Indian food industry is increasing its contribution to world food trade by every passing year, and thereby, is set for a huge evolution. The food sector has emerged as a high-growth and high-profit sector due to its immense potential for value addition, particularly within the food processing industry.

India’s farms are surely observing a silent revolution. Horticulture produce has been outpacing grain output and global food companies are beginning to evaluate the potential of the Indian market entry strategy. The local markets are also leveraging to beat the stringent import quality norms set by West Asian and European countries.

What opportunities lie in store for you?

  • Food packaging plays a vital role in preserving food throughout the distribution chain
  • The increase in consumption of convenience foods is driving the food packaging market
  • India witnesses a current turnover of USD 24.6 billion and a growth rate of 13%-15% annually
  • The Indian packaging industry is expected to reach USD 32 billion by 2020
  • The Indian Packaging Industry is presently ranked 11th in the world
  • Within the packaging industry, packaged processed food holds the maximum share of 48%, followed by personal care packaging (27%) and pharma packaging (6%)
  • Visual appeal and convenience are the two main growth drivers of the food packaging market
  • Further, the development of food processing has created the demand for the innovation of food packaging technology

Government Initiatives:

  • The government has sanctioned 42 Mega Food Parks (MFPs) to be set up in the country under the Mega Food Park Scheme, of which, 12 Mega Food Parks have already become functional
  • 100% FDI is permitted under the automatic route in Food processing industries
  • 100% FDI is allowed through government approval route for trading, including through e-commerce in respect of food products manufactured or produced in India
  • By 2030, management consulting firms in India have predicted the Indian annual household consumption to treble, making India 5th largest consumer

Scope and Opportunities:

  • It will take more working women and smaller families to drive consumption of packaged food in India
  • The immediate push is coming from improving cold storage due to better power supply, affordability and investments
  • As per a report by Credit Suisse, the market is expected to grow five fold to $200 billion over the next decade
  • The most profitable opportunities lie in baby food, chocolates, biscuits, baked products and juices
  • There is increased focus on healthier snacks, and beverages which are largely driven by consumption amid rising temperatures
  • Enhanced power supply has improved refrigeration at retail stores, while modern retail outlets can now be found in smaller cities and towns
  • Mergers and acquisitions consulting firms in India have cited affordability as a key factor with lower GST rates, lesser wastage in the packaging cycle and larger manufacturing efficiencies keep costs under check
  • Representatives are putting in efforts to grow their categories, in order to attract greater investments

India has witnessed some major investments in this sector in the recent past:

  • Global e-commerce giant, Amazon is planning to enter the Indian food retailing sector by investing US$ 515 million in the next five years
  • After a thumping success of the original Mango Frooti, Parle Agro Pvt Ltd launched Frooti Fizz which will be retailed across 1.2 million outlets in the country as it targets increasing its annual revenue from Rs. 2800 crore (US$ 0.42 billion) to Rs. 5000 crore (US$ 0.75 billion)
  • US-based food company Cargill Inc, aims to double its branded consumer business in India by 2020, by doubling its retail reach to about 800,000 outlets
  • Danone SA plans to focus on nutrition business in India, its fastest growing market in South Asia, with an aim to double its revenue in India by 2020

Uber Technologies Inc plans to launch Uber Eats, its food delivery service to India, with investments made across multiple cities and regions. The brand has recently launched it’s first commercial campaign by positioning Uber Eats beyond delivering food from the restaurant, driving a transactional exchange of a strong memorable relationship

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