The India Food Drink Report Provides Independent Forecasts And Competitive Intelligence On India’s Food And Drink Industry
Research and Markets (http://www.researchandmarkets.com/reports/c85460) has announced the addition of “India Food & Drink Report Q1 2008″ to their offering.
India’s fledgling food processing industry continues to fascinate as investors, both local and multinational, begin ramping up their commitment to the sector in preparation for what is expected to be explosive growth. However, as the author examines in its newly-published Q108 India Food & Drink Report, such investment is still only targeting a minority of India’s immense population, and the effects of economic growth remain unfelt by the country’s vast rural majority.
The author believes that four key features of, or events within, the new report ably sum up this trend. Local dairy major and ice cream specialist Amul Dairy has announced plans to enter India’s US$500mn snack food market, via the addition of a savoury snack product to its predominantly dairy portfolio. Meanwhile, Italian confectionery company Ferrero SpA has unveiled plans to invest US$35mn in the construction of a mint manufacturing plant in Maharashtra state, a plant that will later look to target the growing premium chocolate confectionery sector. Both investments are astute. Amul plans to leverage its existing distribution strengths to gain a foothold in what is an increasingly competitive sector, while Ferrero wants to target a market whose small size bellies its potential. To 2012, the author is forecasting growth of 22% in value terms in India’s confectionery market, a forecast that could well be dramatically increased should more multinationals come forward in search of opportunities.
Both manufacturers, alongside the more obvious names of PepsiCo’s Frito-Lay and Britannia, are looking to secure a slice of India’s US$69bn processed food industry, an industry growing so quickly that the country’s Ministry of Food Processing and Industry announced in October 2007 that it could now boast a fairly dynamic export sector – between 2003 and 2007 the value of India’s processed food exports grew by around 194% to US$13.9bn, according to ministry figures. However, while this is certainly an industry sub-sector worth getting excited about – as these latest investments show – it is also worth considering the risks associated with investing in such an industry.
To 2012, the author is forecasting food consumption in dollar terms to increase by just 9.4% in India, a very modest rate when one considers the pace of the country’s economic expansion. In per capita terms this growth is even more telling, with food consumption expected to rise by just 4.3% to reach US$150.50 in 2012. These forecasts highlight the downside to India’s otherwise immense potential. India’s vast rural majority are yet to feel the benefits of economic growth and thus do not participate in consumer goods industries such as processed foods, snack foods and confectionery. This explains why India secures only a mid-table position in our new Food & Drink Business Environment Ratings – the country’s size being nowhere near reflected in the size of its consumer audience. Ultimately India’s sheer size means this downside will not affect its capacity to attract investment, but the amount of capital manufacturers will be willing to invest without the promise of immediate and plentiful rewards remains to be seen.
Companies Mentioned:
Coca-Cola India
Hindustan Unilever Limited (HUL)
Pantaloon Retail India.
RPG Retail
United Breweries Limited (UBL)
For more information, visit http://www.researchandmarkets.com/reports/c85460