While India is one of the largest food producers of the world with the organised sector accounting for food output worth $34827 million, only a small percentage of its farm produce is processed into value-added products.
For instance even though the country is the second largest producer of fruits and vegetables, hardly two per cent of the production is processed. This underlines the enormous scope for investing in the processed food sector in the areas of infrastructure, packaging and machinery. India, in fact, needs $28 billion of investment to raise its food processing levels by 8-10 per cent.
The potential for investment in this sector is further accentuated by the following factors:
**A huge and exponentially growing demand represented by a market of one billion people spending on an average about 50 per cent of household expenditures on food coupled by a scenario of rapid urbanization and changing lifestyles.
**A 30 million upper and middle class segment of the total population consume processed and packaged food with another 200 million people projected to shift to this group by 2010 thanks largely to rapid urbanization and changing lifestyles.
**Well-developed infrastructure and distribution network.
**Increase in per capita income and purchasing power.
**Large pool of scientific, technical and skilled manpower.
**Introduction of series of investment friendly initiatives by the Government including strengthening and augmenting of road and rail network, modernization of ports, prioritization of infrastructure for post harvest management, logistics (including cold chain),
markets, retailing, food processing.
**Introduction of a number of liberal policy initiatives by the Government to boost food processing activities.
**53 food parks approved to enable small and medium food and beverage units to set up and to use capital intensive common facilities such as cold storage, warehouse, quality control labs, effluent treatment plant, etc.
Areas for Investment A number of areas having great potential have been identified for attracting investment in the processed foods sector. These are:
** Mega Food Parks
**Agri Infrastructure, supply chain aggregation
**Logistics and Cold Chain Infrastructure
**Fruit and Vegetable Products
**Animal Products, Meat & Dairy
**Fisheries and Seafood
**Cereals, Consumer Foods/ Ready to eat foods
**Wine & Beer
**Machinery/Packaging
The overall potential embodied by the food processing sector, coupled with the policy initiatives of the Indian government, has facilitated the entry of leading global players with sizeable investments into this sector.
Among them are Nestle, Pepsi, Coke, Kelloggs, Conagra, Unilever, Perfetti, Glaxo Smithkline, Heinz, Wyeth, Ajinomoto, Nissin Met and Walmart. Likewise, the leading Indian name in the business include ITC, Dabur, Britannia, Parle, Amul, Haldiram and Godrej to name a few.
The entry of such major players is essentially a pointer to the opportunities and spin-offs offered by the sector for investments.
