India is a resource-rich country, with the 6th largest food and grocery market and the 5th largest retail market globally. With a population of ~1.2 billion individuals, this is one sector that will inevitably be growing in India. Processed food accounts for ~32% of the total food market in India. Due to the presence of vast arable land and several homegrown industries, a lot of the processed food is manufactured in India. Further, a growing middle-class population and increasing number of working women have provided a major stimulus for growth in demand of processed food within India.
With the advent of supermarkets and online delivery portals, the demand in this sector has increased rapidly, allowing for introduction of imported items as well as development and growth of the premium segment food products in the Indian market. The government’s pursuit to ramp up the industry and provide for enough support in terms of storage and logistics have been bearing fruit which can be noticed due to the increase in the number of foreign investments in this segment in India and reduction in food wastage during transit. Through the “Make in India” campaign, the Indian government has streamlined policies that have provided impetus for both Indian and foreign players in the segment to set up manufacturing facilities in India.
- Rising consumerism and modern lifestyle have led to an increase in the demand for safe and hygienically packaged consumer goods.
- Growth in the purchasing power of individuals and the organized retail segment.
- Government is actively taking steps to promote this segment in the Indian market. It recently sanctioned 42 mega food parks, 228 cold chain facilities in India and 10 food labs for testing.
- Introduction of Online grocery portals and hyper local delivery services has led to an increase in the demand of processed food.
- AgroTech Foods
- Dabur India Ltd.
- Godrej Industries
- ITC Ltd.
- The market for food machinery is expected to reach ~USD 51 billion by 2024-25.
- Total consumption of the food and beverage segment domestically is expected to reach to ~USD 1.2 trillion by 2025.
- Processed food accounts for ~13% of India’s exports.
- The food processing sector of India received around USD 7.54 billion worth of FDI. The sector is expected to receive investments of upto USD 33 billion and generate employment of up to 9 million within the next 10 years.