In fact, the Government of India has adopted a major policy decision for commercialising agriculture and developing food processing, preservation and packaging sectors, according to a 2010 report by TEDO (Technology Exports Development Organisation), a PPP initiative supporting Indian SMEs in technology exports.
The report also says that the technology available in India in the agro-food processing equipment sector is not much advanced when compared to developed countries. As the food processing sector is being identified as high priority industry in India, the equipment sector is also gaining importance.
"The food processing industry is dynamic and fast-paced. The food processing industry holds a unique position in the Indian economy. The changing food habits, ready-to-eat and so lifestyle have given new opportunities to food producers, machinery makers, technology and service providers. The food processing industry has taken a new direction and is growing steadily with almost 7% growth annually. Infrastructure development will take this industry to new heights in the near future with the help of adequate investments and exports," Vaibhav Verma, assistant professor, Banarsidas Chandiwala Institute of Hotel Management & Catering Technology.
V Gokul Das, MD, HRS Process Systems Ltd, feels, “Food industry in India is huge and there are traditional and medium equipment manufacturers, who have locally made equipment for food and beverage processing. The machines and equipment used by those are not of quality, whereas there are a few big companies who have high-end equipment machinery for food and beverage sector. As we go ahead, companies have to update technology and machinery, because there is huge demand for processed food products with changing lifestyle and consumer preferences. Currently, the potential for technology equipment in the food and beverage processing industry in India is around Rs 2,000 crore.”
Meanwhile, Verma of Banarsidas Chandiwala, states, “India is the second-largest producer of food in the world next only to China and has the potential for development of a very large food processing industry. The Indian food industry is estimated to be worth US$200 billion and expected to grow to US$310 billion by 2015. The processed food market is the most important segment of the food industry, making it very dependent on technology and new developments. The need for high volumes, high productivity and high quality has led to increasing demand for automation in the food industry, especially with the Indian food processing companies looking to export their products.”
However, Das of HRS is of the view: “Overall, we still need to go a long way. Very few players in India, have high-end machinery and equipment, whereas small players don't have the same kind of technology. In the US and Europe, things are much better and standards are defined. In India, we need lot of improvement and producers need to upgrade their equipment and machinery.”
Innovations, R&D
According to Verma of Banarsidas Chandiwala, the great demand for fresh and high quality food has caused extensive research to develop the technology that can sustain the natural taste and flavour of foods, albeit seasoning extra nutrients and vitamins, so non-thermal technology has drawn great attention. Because this method is combined with several preserving technologies such as irradiation, antimicrobials, filtration, ultrasound, and so on, it offers plenty of benefit for food preservation. Especially meat, poultry, and fish related products are more vulnerable to dangerous bacteria and lacking consistent quality, but advancement in technology like Visual Appraisal Method and invention of processing tools and equipment like conveyor belts, washdown houses, and mop handles have somewhat paved the way for meeting quality requirements. At present, the quality of meat is assessed through Visual Appraisal method such as marbling, muscle colour, and skeletal maturity. Such advancement in food technology resolved the credibility issue that boosted confidence among consumers, leading the industry to a great height.
Vacuum cooling technology has brought overwhelming changes in the food processing industry. It is a pretty effective method to cool down specific horticultural products such as vegetables and fruits to extend the storage life by dint of cutting down the deterioration of post-harvest yields.
While talking on innovations, Das of HRS said that one had to look at better conservation and better shelf life of the products, be it food or beverage. The challenge is how to process food and beverage products at lesser cost, low energy, and better capacity utilisation. New product development based on market demand is another area of focus. Lot of research and development is happening in ready-to-eat food and other food and beverage products. Manufacturers are launching new products for better processing of food and beverage. We have launched the HRS ParaDice which opens a whole new sector of processing opportunity for all kinds of fruits, vegetables and cooked food.
Challenges, Opportunities
Verma of Banarsidas Chandiwala said that shortage of skilled labour and food safety concerns were the key challenges for food processing industry and this was encouraging food processors to invest in automation. Many conventional processes for making Indian ethnic snacks are being converted to automated lines. Many companies, both Indian and foreign, are planning big investments in the food processing segment.
While speaking on challenges, Das of HRS said that manufacturers look at optimising cost, developing good processing, having skilled manpower. Market is growing as spending power of people has increased tremendously and so is demand for quality products. There are new colleges with specialised courses to focus on new developments in this sector.
New trends
According to Verma of Banarsidas Chandiwala, Computer Vision is another mechanism that has made a significant place in the food processing sector recently. This useful method is taken to inspecting the quality of food products painstakingly. Meeting tremendous challenge of production and quality was a tough nut to crack, but thanks to Computer Vision that made it possible because of its speed, accuracy, and efficiency.
The trends are more towards consumer goods like ready-to-eat food products, juices, quick consumption products, and health food and drinks. Companies were looking to launch such products in the market and technology suppliers were working on this too, said Das of HRS.
Factors driving growth
While demand drivers remain strong, supply side issues still pose many challenges. Inflation in food prices in recent months has brought out the fragility of India’s demand-supply balance. Increasing incomes will only fuel higher demand for processed food while further straining the supply. Additionally, processed food manufacturers often face problems in procuring quality produce. “Players need to proactively work alongside farmers to educate them on improved farming practices and encourage the use of high yield seeds,” feels Verma of Banarsidas Chandiwala.
Das of HRS adds that factors driving growth for the industry were rise in consumer demand for process food products, be it dairy, or meat. “People have disposable income and they look at reducing time for cooking, whereas they have become more health-conscious, the domestic market has to be substantial. Today, there are more ready-to-eat products available in the market compared to 10 years back,” he felt.
Future prospects
The Vision 2015 document outlines the Indian Government’s goal to treble the size of the processed food industry to Rs 1,350,000 crore by 2014-15 from Rs 460,000 crore in 2003-04 (2003-04 prices). “This translates into an overall growth target of 10% pa for the sector with primary-processed and value-added food products projected to grow at 7% and 15% pa respectively,” mentioned Verma of Banarsidas Chandiwala.
“Future prospects for the industry are pretty bright. It is a growing sector as there is mass movement from villages to cities and there are new products that are being launched for the food and beverage sector,” avers Das of HRS.
Regulatory aspects
The current taxation structure does not provide any leeway for a major tax led reduction in prices. However, the government can take steps to boost R&D-led innovation for both, processing and packaging of food products and increase access to affordable and effective automation machinery. “This will provide manufactures with the ability to compress prices and target lower income segments,” said Verma of Banarsidas Chandiwala.
“There is need for improvement with regard to regulatory aspects. There is lot of scope for improvement, which can be helpful to consumers, manufacturers and government bodies as well, concluded Das of HRS.
