India is a resource-rich country. It is the 6th largest food and grocery market and the 5th largest retail market globally. With a population of 1.3 billion individuals, the food processing sector will inevitably be growing in India. Processed food sector currently accounts for 32% of the total food market in India. Due to the presence of vast arable land and several homegrown industries, a significant proportion of 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 for processed food within India.
With the advent of supermarkets and online delivery portals, the demand in this sector has increased rapidly, allowing for the introduction of imported items as well as the development and growth of the premium segment food products. 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 and reduction in food wastage during transit. Through the “Make in India” campaign, the Indian government has streamlined policies that have provided impetus to 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 taking steps to promote this segment in the Indian market. It recently sanctioned 42 mega food parks, 228 cold chain facilities, and 10 food labs for testing in India.
- Introduction of online grocery portals and hyper-local delivery services have led to an increase in the demand for 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 is expected to reach ~USD 1.2 trillion by 2025.
- Processed food accounts for ~13% of India’s exports.
- The Indian food processing sector received around USD 7.54 billion worth of FDI. The sector is expected to receive investments of up to USD 33 billion and generate employment of up to 9 million within the next 10 years.