The market size of the Indian food processing industry is expected to be around $330 billion by 2014-15, according to a study by the Italian Trade Commission. This growth in the Indian food processing industry is spiralling the demand for more sophisticated machinery and equipment.
From vegetable and fruits to meat and poultry sectors, processing machinery and equipment are needed in every phase involved in the processing of food from farm to fork, as the total domestic spending on food in India will be around $318 billion by 2020 (source: Indian Brand Equity Foundation - IBEF study on Food Processing March 2013).
The trend and growth of processing machinery and equipment industry will be influenced by the growth in the food processing industry and the recent trends show that this is going to be strong. Government of India expects investments of $21.9 billion by 2015 in food processing infrastructure (source: IBEF).
Categories
The categories in which the equipment and machinery are more required may differ given the demand by the consumers of the processed food but certainly with the government becoming strict in recent times regarding health and hygiene practices, food processors are updating themselves with the latest in the market.
The growth in the main sub-categories in the processing industry could be described under fruit and vegetable processing (20%), milk and dairy (15%), vegetable oil and oil seed processing, grains (wheat, rice, corn, lintels), meat and poultry (10%), alcoholic beverage, non-alcoholic beverages and ready-to-eat.
And the industry is growing at an average of 16%, even passing 30% for fruit and juice segment.
Driven by growth
The demand is driven by the rapid economic growth this region attained in last one decade alone with countries like India having one of the highest numbers of young consumers liking the quick food. Also, the varieties now available with the companies experimenting by making the food a blend of international look and ethnic taste is helping them sail through.
And with so much intense competition, pricing, capabilities, quality, flexibility, automation features, and after-sales service and support will decide the future of the players manufacturing food processing machinery and equipment.
Small, marginal players
In India, however, the market of food processing industries lies with the small and marginal players. Experts say that 85% of the market share is with small players while 8-9% is with medium and only 5% is with big players.
PL Kaul, MD, Mariental India Pvt. Ltd, a consulting firm on processing technology and engineering, stated that while the medium and big players mostly have imported critical component required by the processing industry, the small players due to their inability to pay huge bills prefer locally fabricated machines and equipment.
“Our food processing industry is still in infancy. A lot of hard work is to be done. Nobody is denying the fact that there is a huge opportunity lying but a focussed approach is needed to tap it,” he added.
According to him, the processing equipment manufacturing technology is not developed in India in accordance with the food processing retailing opportunities. “Still a large number of specialised equipments are being imported. We don’t have any specialised manufacture in India unlike in Western countries, where they do a lot of research on each of the machinery and equipment,” he added.
Requirement possibilities
And India is expected to witness growth in packaged food, aerated soft drink, packaged drinking water and alcoholic beverage. So there would be a lot of requirement of equipments and machinery, according to an expert.
In FY2010, the total output of processed food and beverage was $93.1billion while the sector growth was at 14% in FY12. Also the export figures were encouraging with an average growth of around 14% per annum.
Kaul, however, said that the processing equipment manufacturers of India like L&T, Alfa Laval and SSP, were largely focussing upon milk and dairy, breweries and distilleries not in basic processed food. And state-of-the-art technology for other processing purpose is being provided by the foreign industries like Bohler providing critical technology for rice mills, potato mills heat and controlling system. Other companies like Bosch are providing the packaging solutions.
He suggested that there was a need of big Indian corporate making a foray into the business of food processing technology because the technology being imported currently was not cost-effective and that Indians developing critical technologies would help the industry grow immensely and qualitatively.
Factors driving the industry
India is expected to raise its current percentage of perishable food processing to 20% from currently of 10% while its share of global trade is expected to be around 3%.
India’s urban population is estimated to increase from 450 million in the year 2009-10 to 590 million in 2030, which likes spending on ready-to-eat food.
The spending on food is around 50% of the household expenditure in India.
The food retail companies are expanding rapidly in India while more are queuing up.
