PART – 1

Industry Study
 Growth and Evolution of Industry in India

Introduction

The Indian food industry is poised for huge growth, increasing its contribution to world
food trade every year. In India, the food sector has emerged as a high-growth and high-
profit sector due to its immense potential for value addition, particularly within the food
processing industry.

India is the world’s second largest producer of food next to china, and has the potential
of being the biggest with the food and agricultural sector. The food processing industry
is one of the largest industry in India it’s fifth ranked in terms of production,
consumption, export and expected growth. The food industry is on a high as Indians
continue to have a feast. Fuelled by what can be termed as a perfect ingredient for any
industry – large disposable incomes – the food sector has been witnessing a marked
change in consumption patterns, especially in terms of food. Increasing incomes are
always accompanied

The government has formulated and implemented several Plan Schemes to provide
financial assistance for setting up and modernizing food processing units, certain of
infrastructure, support for research and development and human resource development
in addition to other promotional measures to encourage the growth of the processed
food sector.

The market for namkeen and snacks in India is of about INR one lakh crore. Being a
most vibrant industry, it has seen an unprecedented growth in recent past and
continues to expand rapidly. India consumer seem to have recovered their taste for
traditional snacks such as sev, bhujia and namkeen/ mixtures, which are contributing to
the impressive growth rate of the firms.
About 30% coverage of this market is In the hands of organized trade players
dominated by Haldiram’s, pepsico, Balaji(wafers & namkeens), ITC (Bingo), Prataap
snacks (yellow Diamond), Bikanervala (bikano), DFM Foods(CRAX), among others.

The branded segment is expanding at the rate of approx. 15% per annum whereas the
entire market is growing at the rate of 7-8 percent.

Fast-moving consumer goods (FMCG) sector is the 4th largest sector in the Indian
economy with Household and Personal care accounting for 50 percent of FMCG sales
in India. Growing awareness, easier access and changing lifestyle have been the key
growth drivers for the sector. The urban segment is the largest contributor to the overall
revenue generated by the FMCG sector in India However, in the last few years, the
FMCG market has grown at a faster pace in rural India compared with urban India.
Semi-urban and rural segments are growing at a rapid pace and FMCG product account
for 50 percent of total rural spending.
 Industry analysis(brief history)

The prospect of food industry are very bright both in India and abroad. The change in
consumer behavior is a big boost to the food industry. A country like India has strong
potentials for food industry. Every corner of the country is different in terms of culture
and consumption pattern which has to be explored and enjoyed. To covers all these
aspects, a user friendly platform is required so that people can get their dreams. Which
cannot possible without such kind of platforms.

On the other side the changing environment such as life style of people, culture, trends
and traditions, seasonality, festivals and changing habits of people has opened the new
door of business which required good health products/services, satisfaction relationship
and commitments by the food industry.

The food processing industry has been identified as a thrust area for development. The
growth potential of this sector is enormous and it is expected that the food production
will double in the next 10 years and the consumption of value added food products will
grow at a fast pace. This growth of the food processing industry will bring immense
benefits to the economy, rising agricultural yields, meeting productivity, creating
employment and raising the standard of very large number of people throughout the
country, specially, in the rural area.
 PRODUCT PROFILE

Top wafers & namkeen brands in India

Wafers and namkeen is widely used as one type of fast food by the people. There are
many types of namkeen like as ratlami sev, mix chavana, bhakarwadi, moog dal, singh
bhajiya etc. are widely used in festival, birthday party, and many more occassion. There
are many people likes to eat diet namkeen and wafers which are good for health and
prefer to eat that type of namkeens and wafers which are good source of iron, protin,
fiber etc. There are many wafers and namkeen brands names as produce top quality
namkeen and wafers with reasonable price. So the below list about the same top
namkeen and wafers brands in India and their products are available in the retail
market.

There are many wafers and namkeen brand which is not only famous in India but their
products are also famous in other countries of the world. It is the difficult to say that
which brand is the top wafers and namkeen brands in India because some brand
famous and selling the products in some state but their products comes with best quality
and reasonable price so these type of brand also top wafers and namkeen brand
because their products are best in quality and prices.
1) Bingo chips

It is one of the famous brand of potato

chips and also its other product like as
tedhe medhe, masala potato chips
ans many more products also best in
quality and test. It produces high quality
and tasty chips.

2) Lay’s

Lay’s comes with high quality tasty potato chips. It’s products available in the retail
market.

3) Haldiram’s Namkeen
It comes with many products like as gathia, lahsun sev, dal aloo bhujia tasty nuts, bhujia
sev etc. products. It is also manufactures of other product like as papad, sweets, snacks
etc. it’s own stores in some major city in India.

4) Balaji Wafers

It comes with variety products farali wafers, potato chips, masala ring, tomato ring,
banana wafers, sing bhujia, sev mamra, channa dal, moong dal etc. many more
products.

5) Gopal namkeen
It is leading manufacturer of farsan and namkeen in Gujarat state. It is one of the oldest
brand in Gujarat and India also. It produce snacks pellets, papad, gathiya, garlic sev
mamra, farali chevdo, tikhi sev, aloo sev etc.

6) Bansiram namkeen

It is manufacturing sev, wafers, farali namkeen, mari kela wafers, naylon gathiya, chana
garam, bundi mutter masala, rosted crunch jeera lahsun sev etc.
7) Bikano namkeen

Is the famous for its top quality and for the best in taste. It’s products like as moongdal,
aloo bhujia, bhujia sev, sahi mixture sahi namkeen, mini samosa and many more other.

8) patanjali namkeen

It comes with product like aaloo bhujia, moong dal soyavita, chaana dal, peanuts.
9) Real namkeen

It can produces like as gathiya, channa dal, masala sev mamra, salted and peanuts,
moong dal, tasty singh bhujia, aaloo sev, ratalami sev and many more other products.
 Demand determination of industry

An industry should properly understand the relationship between the demand and its
each determinant to analyze and estimate the individual and market demand of a
product. The demand for a product is influenced by various factors, such as price,
consumer’s income, and growth of population.

An industry, while analyzing the effect of one particular determinant on demand, needs
to assume other determinants to be constant. This is due to the fact that if all the
determinants are allowed to differ simultaneously, then it would be difficult to estimate
the extent of change in demand.

Demand of wafers and namkeen industry

India the demand of wafers and namkeen is growing day by day. To accomplish the
demand of all test lovers more wafers and namkeen factories are required. Indore,
Ujjain, Ratlam districts are known of its namkeen. Thousands of namkeen and wafers
factories are producing variety of wafers and namkeen around India.

Each manufacturer has its own test. He works hard to maintain the quality and test.
Once the tongue likes the test, people remember you and the product becomes brand.
It seems very easy, but practically it need lot of affords. The factory owner has to work
on production and marketing at the same time. If he missed any part, his product fails.

Demand of wafers and namkeen depending on the consumer, consumer income, test of
wafers and namkeen, growth of population. Demand determination is play important
role in all the industry.
 Key players in the wafers and namkeen industry

The manufacturing of wafers and namkeen is largely divided into small scale industries
across India. There are many of key players in the wafers and namkeen industry:

 Bingo Chips
 Lay’s
 Haldiram’s Namkeen
 Balaji Wafers
 Gopal snacks and namkeen
 Bansiram Namkeen
 Bikano Namkeen
 Ptanjali Namkeen
 Real Namkeen
 Atop namkeen
 Evita Namkeen
 Distribution channel in the Industry

A distribution channel is a chain of businesses or intermediaries through which a good

or services passes until it reaches the final buyers or the end consumers. Distribution
channels can includes wholesalers, retailers, distributors, and even the internet.

Selection of the specific distribution channel significantly affects the costs, sales figures
and the other elements of marketing mix. This is very important in distribution of
construction materials due to the high share of transportation cost in final price and
limitations based on geographical position of the producer.

Generally, if there are more intermediaries involved in the distribution channel, the price
for a good may increase. Conversely, a direct or short channel may mean lower costs
for consumer because they are buying directly from the manufacturer.

The choice of appropriate distribution channel for each product is a very complex
process. Final decision on the selection of distribution channels combines ideal and
available distribution channels and is related to the objectives set for particular market
by the company.
The different distribution channels are:
 Key issues in the industry

1) High competition

Indian food industry like wafers and namkeen is divided into small industries there is a
large amount of competition. There are huge price cuts for bricks and better quality
products get compromised.

2) Technological Changes

Technology has a greater impact in any industry. Better technology increases the
capital costs but reduces the variable costs. Changes in the technology increases the
production and can reduce costs with better quality products.
3) Government policies

Government is the body that enforces and controls the state by framing and
implementing the laws. New policies of government directly affect the industry like
environment protection policies. GST, demonetization, make in India, etc. The firms
always bear a risk for the changing government policies.
4) Transportation Issues

Food items must be shipped with proper packaging to avoid breakages and damages
during transportation. Also, timely delivery is important to avoid spoilage certain food
items do not last long even if stored in climate controlled facilities.

5) Storage Constraints

This is a major challenge faced by the Indian small-scale food processing industry. The
absence and inadequacy of infrastructure facilities to store raw materials lowers the
quality and availability of the end product. There are two ways for proper storage
warehousing and cold storage.
 PESTEL Analysis

A PESTEL analysis is a framework which is used in the industry and its objective is to
find out how the external environment affects the industry. The external environment
affects industries but there is not much that can be done to change the external
environment whereas the internal environment can be changed to certain extent. The
pestle technique is a management technique which can be used successfully and
effectively in external risk identification process.

PESTEL stands for:

 P - Political
 E - Economic
 S - Social
 T - Technological
 E - Environmental
 L – Legal
1) Political factors

These factors determine the extent to which a government may influence the economy
or a certain industry. For example, a government may impose a new tax or duty due to
which entire revenue generating structures of organization might change. Political
factors include tax policies, fiscal policy, trade tariffs etc. that a government may levy
around the business environment

2) Economic factors

These factors are determinants of an economy’s performance that directly impacts a

company have resonating long term effects. For example, arise in the inflation rate of
any economy would affect the way companies’ price their products and services.
Economy factors include inflation rate, interest rate, foreign exchange rates, economy
growth patterns etc.

3) Social factors

These factors scrutinize the social environment of the market , and gauge determinants
like cultural trends, demographics, population analytics etc. An example for this can be
buying trends for western countries like the US where there is high demand during the
Holiday se season.

4) Technological factors

These factors pertain to innovations technology that may affect the operation of the
industry and the market favorably or unfavorably. this refers to automation, research
and development and the amount of technological awareness that a market possesses.
5) Legal factors

These factors have both external and internal sides There are certain laws that affect
the business environment in a certain country while there are certain policies that
companies maintain for themselves. Legal analysis takes into account both of these
angles and then charts out the strategies in light of these legislations. Safety standards,
labor laws etc.

6) Environmental factors

These factors include all those that influencer or are determined by the surrounding
environment. This aspect of the PESTLE is crucial for certain industries particularly for
example tourism, farming, agriculture etc. Factors of a business environmental analysis
include but are not limited to climate, weather, geographical location, global changes in
climate, environmental offsets etc.
 Porter’s five force model

Porter’s five forces framework is a tool for analyzing competition of a business. It draws
from industrial organization economics to derive five forces that determine the
competitive intensity and, therefore, the attractiveness of an industry in terms of its
profitability. This framework was first originated by Michael E. porter of Harvard
university in 1979.

The five forces are:

a) Threat of new entrants

Potential entrant is the major source of competition in the industry. The product range,
quality, capacity, etc. brought by them, increases competition. The size of the new
entrant plays a major role here, i.e. the bigger the entrant, the more intense is the
competition. Moreover, the prices are slashed, and the overall profitability of existing
players is also affected, by the new entry.

b) Bargaining power of suppliers

Suppliers, also exert substantial bargaining power over the firms, by threatening to
increase prices or degrade quality. They are likely to exercise power if:
 The no. of suppliers in the industry is limited in number.
 They offer the specialized product.
 The supplier’s product is an important input, to the buyer’s product.
 The product has a few substitutes.

c) Bargaining power of customers

The ability that customers have to drives prices lower or their level of power is one of
the five forces. It is affected by how many buyers or customers a company has, how
significant each customer is, and how much it would cost a company a find new
customers or markets for its output.

d) Competition in the industry

It refers to the number of competitors and their ability to undercut a company. The larger
the number of equivalent products and services they offer, the lesser the power of the
company.
e) Threat of substitute products

The last of the five forces focuses on substitutes. Substitute goods or services that can
be used in place of company’s products or services pose a threat. Companies that
produce good for which there are no close substitute will have more power to increase
prices and lock in favorable terms.
 Future outlook

 The major business is divided in small scale industries so there is less

competition nationally and there is no standard quality for the product.

 The production must be done in a way that it reduce the pollution of the
environment.

 New technologies must be used and which raises the production and reduces the
cost of production.

 Branding can be done and large scale industries can be set up.