FICCI Foodworld India in review: trends and opportunities

The two-day forum – Foodworld India 2021 Global Convention for Food Business and Industry – transpired into a highly knowledgeable session shedding light on the food processing industry in India. Industry behemoths and government officials examined the future of the food processing industry and analysed how brands are driving consumption. The conference also drew roughly 1,500 visitors.

The food processing market in India was valued at Rs 25,691.30 billion in FY 2018 and is expected to reach Rs 53,435.52 billion by FY 2024, expanding at a CAGR of 12.09% during the FY 2020-FY 2024 period. The industry has largely remained unaffected by the pandemic and the organised players have seen growth, whereas a lot of conversion from unbranded to branded food products was seed during this duration.

Industry experts believe that the MSME could have suffered, but no data is available. The food processing industry also saw several new product launches – 3,500, to be precise, as per a Nielsen report – over the past 12 months.

The deployment of new safety standards such as package information and colour coding and EPR goals took a backseat, only discussions are taking place and further discussion is still to happen.

During the course of discussions, it came to light that the GOI delegates want to push the industry towards health and nutrition and they spoke about scaling the category so that prices of nutritional alternatives become affordable. Right now, processed food is more expensive than fresh produce and this business model has to change if the industry has to grow.

The food processing market in India was valued at Rs 25,691.30 billion in FY 2018

Digital commerce has doubled during the pandemic. And so, today it has become a must-have rather than a good-to-have. The digital access in "vernacular" will further accelerate this.

Digital penetration was witnessed in operations, back-end supply chain and manufacturing for remote management and automation. Further, Capex could be expected in this area in the coming times, signifying good prospects for packaging.

Another growing trend was related to health, wellness and immunity, which brought about a renewed interest in traditional Indian cuisines. Furthermore, convenience has become an important tool in enabling consumption. Indian consumers are eager to spend less time in the kitchen but don't want to substitute it entirely. They are looking for DIY.

Additionally, the industry has been facing significant challenges in exports such as trade barriers, consistency in quality, hygiene and safety, high production costs, fragmentation and more.

It must also be mentioned that India can't compete on a commodity level due to high unit costs, so it has to identify niches and focus its efforts in selling branded products in those areas. For example, mozzarella cheese (0% in the global market), niche variety of wheat used in certain preparations, to name a few.

Indian food exports mainly cater to the Indian diaspora population around the world and customising offerings to cater to the local ethnic groups is required in order to grow in international markets.

Partner farming is the only way to get quality consistency in a fragmented system like India and it can offer several intangible benefits such as provenance, traceability, and give unique stories to products.

This and much more was discussed during the two-day FICCI Foodworld virtual show.