Here are the excerpts from my report during my role as Vice President - Food and Agriculture at Technopak Advisors.
Full Report is here
The Indian food industry is in a unique position with both challenges and opportunities existing at the same time. Till the late 70s, India was a food deficit nation. Post-70s, the country moved to become a food surplus nation, thanks to efforts from eminent personalities like Dr. Swaminathan who led the “Green Revolution” drive. Today, India is the second largest producer of food, next only to China. Around 26% of GDP in India comes from food and agriculture. Food processing sector ranks fifth in terms of its contribution to GDP. There is tremendous untapped potential which is presently languishing in darkness. India has incredible opportunities in the field of food processing because of various factors.
India has the second largest arable land in the world. It has diverse agro-climatic zones: hot and humid in its long coastal line area, dry and cold in mountain ranges, hot and dry in plateau regions. This makes India unique for producing many kinds of horticultural and agro-products. Apart from this, India with a population of 1.08 billion, growing at 1.6% per annum, has a favorable demographic profile making it one of the largest consumption hubs.
The production potential and significant variations in food habits and culinary traditions across the country translate into immense processing opportunities for the companies. Also, there is an opportunity for key suppliers for machinery, technology and infrastructure for the industry.
Export Opportunities : Indian agribusiness industries provide opportunities not only to cater to the growing Indian middle-class but also for export market. India with its strong agricultural production base, easy availability of raw materials and the growing food processing industry, is strategically poised to capitalize on the global food processing market.
Building forward linkages : Leading product brands and retailers are integrating their agri supply chain with processing plant or retailing business. With a well established agriculture practice, India presents vast opportunities in the domain of contract farming. Already contract farming is successfully practiced for the production of the crops such as potato, tomato, maize and gherkins, among others.
Back End Services
Temperature controlled infrastructure: Even though India is the second largest producer of food in the world, the facilities required for food storage and infrastructure for refrigerated transportation are grossly inadequate. Tremendous potential for investment exists in the areas of procurement and delivery systems, pre-cooling facilities, refrigerated vehicles, cold stores/ controlled ambience stores, warehouses and traceability issues, among others.
Creation of Infrastructure
Production infrastructure : India needs modern facilities in germplasm and seed multiplication facilities, agricultural inputs (seeds, plant nutrients and plant protection chemicals), irrigation, controlled production facilities, farm mechanization etc to improve its agri produce infrastructure.
Processing infrastructure : Investment in farm level post-harvest facilities – cool chambers, grading and sorting facilities, pack houses for the back-end support; integrated industrial processing units for processing and value addition.
Distribution infrastructure : There is a need to establish an integrated supply chain like warehousing, cold chain and transport from farm gate to the food plate for strong backward and forward integration. Supply chains are to be created in such a way that they can be utilized round the year for multiple commodities to increase the efficiency of utilization.
First published : July 2008, Perspective, In House Journal of Technopak Advisors Pvt. Ltd.
Full Report is here