The packaged food segment is likely to grow 9 per cent annually to become a Rs 6 lakh crore industry by 2030, dominated by milk, sweet and savoury snacks and processed poultry, among other products, says a new report.
The CII-McKinsey report on “India as an agriculture and high value food powerhouse by 2030” says the emphasis on branding could further enhance realisations of packaged foods by up to 30 per cent, besides driving the growth of the country’s processed food sector.
Packaged milk, as a category, is projected to grow from $7.76 billion to $32.9 billion by 2030, registering an annual growth of 8 per cent. About 73 per cent of the milk sold by 2030 would be branded, against 31 per cent at present. Sweets and savoury snacks will be second largest category at an estimated $16.39 billion by 2030 from $1.28 billion in 2010, clocking a 13 per cent growth annually.
Processed poultry products will clock the fastest growth of 17 per cent per a year to $8.34 billion by 2030, against $398 million in 2010. Similarly, biscuits will see an 8 per cent growth to touch $13.14 billion in 2030, followed by fruit beverages at $12.20 billion and vegetable and edible oils at $10.33 billion. Packaged atta (wheat flour) is expected to grow 13 per cent to $8.15 billion from $574 million in 2010.
branding
“Branding could drive the next growth wave in the country’s food processing sector,” said Adil Zainulbhai, Chairman, McKinsey & Company in India. The food processing sector is plagued by issues such as lack of appropriate infrastructure, safety standards and integrated policy and vision among others, he added.
“Scaling up the front-end retail will drive investments in infrastructure and there comes the branding opportunity,” Zainulbhai said. Branding as a concept can be extended to fresh food as well, he said, citing the example of Mahagrapes – a branding initiative undertaken by the Maharashtra Government in collaboration with the grape growers co-operative in the State.
Indians are now spending more on high-value foods and consumption was shifting from plant-based to animal-based protein, thanks to the rising disposable incomes. “We are in the early phase of this shift and the demand for high-value produce – including fruits and vegetables – is expected to go up significantly over the next 20 years,” he said.
The report – which has studied the potential for five crops – soyabean, mango, banana, potato and poultry in States such as Tamil Nadu, Gujarat, Maharashtra, Bihar and Punjab, suggested 12 interventions that could transform and accelerate growth in the country’s food and agriculture sector to support consumption demand changes over the next 20 years.
Agri tech mission
These include creation of a National Agricultural Technology Mission, a National Farm Gate to Market Infrastructure Authority, on the lines of National Highways Authority of India, for developing pan-India agri-infrastructure to attract private investments in cold chain and storage among others.
“Driven by the changing consumption pattern, the future of agriculture and food sectors will lie in crop diversification to high-value crops and higher value addition. Revisiting some of the current legislations and taking focussed policy initiatives could make India a food hub in Asia,” said Rakesh Bharti Mittal, Chairman, CII National Council on Agriculture.