DEPARTMENT OF AGRICULTURAL MARKETING,

CO-OPERATION AND BUSINESS MANAGEMENT

TOPIC : FOOD PROCESSING INDUSTRY

SUBJECT: ABM 502
COURSE TEACHER : Dr. G N NAGARAJA

PRESENTED BY
ASHIS DAS
MBAL-4004
Jr. MBA (ABM)
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FOOD PROCESSING
INDUSTRIES

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CONTENTS
Defination of food Processing
Introduction
Scope and Importance
Food Processing in India
New concept in FP
Location of food processing industries
Consumption
Status of food Industry
Processing, value addition
Research and Development
Exports
Government initiatives
SWOT Analysis
Case Study
Conclusion
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WHAT IS FOOD PROCESSING?

Food processing is the set of methods and techniques
used to transform raw ingredients into food or to
transform food into other forms for consumption by
humans or animals either in the home or by the food
processing industry.
Food processing typically takes clean, harvested crops
or butchered animal products and uses these to
produce attractive, marketable and often long shelf-life
food products. Similar processes are used to produce
animal feed.
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Introduction
The Indian food industry is poised for huge growth,
increasing its contribution in world food trade every year.
In India, food has become a high-profit industry by reason
of the scope it offers for value addition, particularly with
the food processing industry getting recognised as a highpriority area in this liberalised era.
Accounting for about 32 per cent of the country's total
food market, the food processing industry is one of the
largest industries in India and is ranked fifth in terms of
production, consumption, export and expected growth

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Continued
The total food production in India is likely to double in the
next 10 years with the country's domestic food market
estimated to reach US$ 258 billion by 2015.

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Scope and Importance

Indias position as a major food producer
Resource advantage of India
Increasing employment
Curbing Migration
The demand potential
Future driver of Indian growth

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FOOD PROCESSING IN
INDIA
The ministry of food processing industries, set
up in 1988,is the nodal agency in India
responsible for developing the food processing
industry. For the government of India ,the food
processing industry is a priority sector thus
ensuring that policies support investment and
attract more F.D.I.

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NEW CONCEPT
MEGA FOOD PARK-17 NEW MEGA
FOOD PARK IN INDIA DATED ON 24TH
MARCH 2015.

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Fig no.-01- Mega food Park

Fig no.- 02- Supply chain FP

Industries

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Table No.01- GDP CONTRIBUTE TO FOOD

PROCESSING INDUSTRY

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SOURCE- NATIONAL ACCOUNTS

STATISTICS (2014)

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Fig No.03- GDP IN FOOD INDUSTRY

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The Indian Food Sector :

Introduction
The food processing industry is one of the sunrise industries in India
whose potential has been well reorganized, but not satisfactorily
realized . India is one of the major food producers in the world,
The food sector contributes to about 28 % of Indias GDP
In terms of world ranking India stands :
1st in the production of Cereals, Milk & Livestock population
2nd in producing Fruits & Vegetables
Ranks amongst the top 5 in producing Rice, Wheat, Groundnuts,
Tea, Coffee, Tobacco, Spices, Sugar & Oilseeds
Total market for food products -Rs. 2,500 Bn.
Of this, processed food -Rs. 1,400 Bn.
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Location of food processing industries

India has more than 35000 registered

units. Butmajorities of the food processing
factories are concentrated in the coastal
states (one reason being, accessibility to
marine food processing).
Major coastal states includes: A.P.,
Maharashtra, Karnataka, Kerala, Gujarat
and WB.
Non-coastal states include UP, Punjab etc.
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Source:- http://www.mofpi.nic.in

FIG NO.04- EMPLOYMENT IN FP

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Consumption of
Processed foods
It includes packaged foods, soft drinks,
alcoholic beverages etc.
This segment consists of bakery foods,
chips, meat, fish, namkeens and other
processed foods growing at 5.7 per cent
annum

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16

Ready-to-eat foods
Ready-to-eat food are foods you don't
need to cook food that has already been
cooked. You store these on your pantry
shelf, or in the refrigerator or freezer, until
you are ready to use them.

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17

Other products; 24%

Meat, fish, fruiit, vegetables and oil; 40%

Dairy products; 5%
Grain mill products; 11%
Beverages; 20%

FIG NO.05- Share of food processing segments in 2014

source: www.apeda.in
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Leading Food Processing

Companies in India
Nestle
Rasna International
Ankur Chemfoods Products (GUJ) Ltd
Cadbury India
Haldirams
Ruchi Soya Industries
MTR Foods
Parle Products Limited
Priya Foods
Unilever
Pepsico
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LEVEL OF PROCESSING, VALUE ADDITION

Fruits & Vegetables Sector at 2%,
Poultry 6%,
Milk 35% (only 13% in modern dairies),
Marine products 8%,
Buffalo meat 21%.
Wastage Rs. 58,000 crore

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VALUE ADDITION
BREAD PRODUCTION:
Bread is an important ready to eat food
product which is becoming increasingly
popular amongst the Indian population. It is
intermediate moisture food, work as a
energy food and used as breakfast food

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CONVECTIONAL FOODS
CHIKKI / NUTRA CHIKKI
Chikki is a ready to eat traditional sweet
snack consumed by all sections of
population in India. It provides protein,
carbohydrates and fats. Currently, the
demand for functional foods is increasing at
fast pace.

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BEVERAGE PRODUCTS
Lime/lemon flavour blend for soft drink
manufacture
Cola flavour concentrate
Fruit squashes and syrups

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FOOD PACKAGING TECHNOLOGY

Design and development of functional and
economical unit packaging for marketing of
processed food products.
Shelf life evaluation of packaged food products
under simulated storage conditions.
Testing of packaging materials for barrier and
strength properties and food products for shelf
stability.

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Fruits & Vegetables Processing Introduction

India is the worlds 2nd largest producer of fruits & vegetables (next
only to China)

Total cultivated area of fruits & vegetables is around 12 Mn. Hectare

(i.e. 7% of total cultivation area).

Main fruits produced in India are Mango, Banana, Citrus, Guava &
Apple ; these account for almost 75 80% of total fruit production

The country produces around 140 Mn. tones of fruits & vegetables
p.a. & accounts for about 10 % of the global production in fruits &
about 13.7 % of global production in vegetables

India produces over 60 % of worlds mangoes & 12 % of worlds

bananas .

30 % of fruits & vegetables go waste due to lack of proper processing

& packaging.

Only 2 - 3 % of the produce is processed in India as against Malaysia

at - 83%, Thailand - 72 % & Brazil - 70 %

No. of fruits & vegetables processing units : 5200

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TABLE NO.02-Fruits &

Vegetables Processing :
Processing Pattern - Global
Country

% Processed*

Malaysia 83
South Africa 80
Philippines 78
Thailand 72
Brazil 70
USA 65
India 2 - 3

* percentage processed out of total production of

fruits & vegetables
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TABLE NO.03-Sea Food

Processing Units in India
State
Kerala
Gujarat
Andhra Pradesh
Tamil Nadu
Maharashtra
West Bengal
Orissa

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No. of Units
124
56
55
48
41
36
21

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Poultry Meat : Market

Size

The poultry meat processing industry is still in its nascent stage.

Around 97 % of poultry meat in India is consumed in the fresh form.

Only 3 % or about 23,000 tones is processed at present.

Western Hatcheries (part of the Venkateswara Group) were the first

to set up a poultry processing unit in India (1986)

Top 10 major players contribute for 95 % of total processed poultry

meat market.

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Britannia is the market leader in value terms; however, Parle

has higher share in terms of volume

FIG NO.06- MAJOR BISCUITS PLAYERS & MARKET

SHARE
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Research and Development

CFTRI
The role of CFTRI has always been on a high
pedestal in the areas of human resource
development and R&D partnerships cherished
through the international linkages with institutions
such as the Institute of Food Technologists (USA),
UN University (Tokyo), European Economic
Commission
(Belgium),
National
Science
Foundation (USA) and many more. CFTRI is an ISO
9001:2008 and ISO 14001:2004 organization and
NABL accredited for chemical and biological
testing of samples.
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Research Departments of
CFTRI
Meat and marine sciences
Fruits and vegetables processing
Food packaging
Food engineering
Food microbiology
Protein chemistry and technology
Fermentation technology etc,

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TABLE NO.04- Exports of

processed foods
Sl.
No

Products

Value in Rs.
Crore
In 2011

Value in Rs.
Crore
In 2012

Fruits & Vegetables

4436.77

4748.91

Processed F & V

3062.12

3429.38

Animal foods

12,286.12

16,137.71

Other Processed foods

18,313.75

35,475.91

Cereals

23,637.19

41,075.25

Source:-www.mofpi.nic.in
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FIG NO.07- EXPORT OF PROCESSED FOOD

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TABLE NO.05- EXPORTS OF

MAJOR
PROCESSED
FOOD

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TABLE NO.06- FDI IN FOOD

PROCESSING

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Government Initiatives
The government has allocated Rs 180 crore (US$ 29.24 million) to
various States/Union Territories (UTs) during FY15 for the schemes of
National Mission on Food Processing (NMFP) including that of scheme
of Technology upgradation/Establishment/Modernisation of food
processing industries.
The General Council for National Food Security Mission (NSFM) has
approved Rs 2,100 crore (US$ 341.24 million) for the scheme in FY15,
which will focus to improve the production of oilseeds and pulses.
The MoFPI is exploring the potential and possibility of developing agro
processing clusters in smaller areas of 25-30 acres. A national
consultation was organised by the Ministry on 'Development of Agro
Processing Clusters' in Delhi on August 8, 2014.
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Continued

Government has proposed to establish two more

institutions of excellence in Assam and Jharkhand at par
with Indian Council of Agricultural Research (ICAR)
Centre at PUSA, New Delhi. For this purpose, an initial
sum of Rs 100 crore (US$ 16.24 million) has been
provided in the Union Budget 2014-15.

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NATIONAL MISSION ON FOOD

PROCESSING

The national mission on food processing was approved by the

Government of India with an outlay of 1600 crore during the period
2012-17.
The share of the central and the state government was 1250 crore
and 350 crore respectively. The schemes taken up under the mission
included:
Scheme for technology up gradation/ establishment/ modernization of
food processing industries
Scheme for cold chain, value addition and preservation infrastructure for
non horticulture products
Setting up/ modernization/ expansion of abattoirs
Scheme for promotional activities
Creating primary processing centres/ collection centres in rural areas
Modernization of meat shops
Reefer vehicles
Old Food parks

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SWOT ANALYSIS
STRENTH
WEAKNESS
Abundant availability of raw
material
Priority sector status for agroprocessing given by the central
Government
Vast network of manufacturing
facilities all over the country
Vast domestic market

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Low availability of adequate

infrastructural facilities
Lack of adequate quality control & testing
methods as per international standards
Inefficient supply chain due to a large
number of intermediaries
High requirement of working capital.
Seasonality of raw material

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OPPURTUNITIES
Large crop and material base
offering a vast potential for
agro processing activities
Setting of SEZ/AEZ and food
parks for providing added
incentive to develop
greenfield projects
Rising income levels and
changing consumption
patterns
Favourable demographic
profile and changing lifestyles

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THRETS
Affordability and cultural
preferences of fresh food
High inventory carrying
cost
High taxation
High packaging cost

40

CASE STUDY

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About Nestl
Nestl isthe world's leading Nutrition, Health and
Wellness company. Missionof "Good Food, Good
Life"is to provide consumers with the best
tasting, most nutritious choices in a wide range of
food and beverages
TheCompanywas founded in1866 by Henri
Nestl in Vevey, Switzerland, where headquarters
are still located today. Employ around 2,80,000
people

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MISSION AND VISION

Mission Statement
Nestl is the world's leading nutrition,
health and wellness company. Our
mission of "Good Food, Good Life" is
to provide consumers with the best
tasting, most nutritious choices in a
wide range of food and beverage
categories and eating occasions, from
morning to night.
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VISION STATEMENT
To be a leading, competitive,
Nutrition, Health and Wellness
Company delivering improved
shareholder value by being a
preferred corporate citizen, preferred
employer, preferred supplier selling
preferred products.

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HEAD OFFICE

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45

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Nestls Presence In
India

Nestl India has

presence across
India
with eight manufacturing
facilities and four
branch offices.

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Nestls Presence In
India
Nestl India set up its first manufacturing
facility at Moga (Punjab) in 1961 followed
by
its
manufacturing
facilities
at
Choladi(Tamil Nadu), in 1967; Nanjangud
(Karnataka), in 1989; Samalkha (Haryana),
in 1993; Ponda and Bicholim (Goa), in 1995
and 1997, respectively; and Panthnagar
(Uttarakhand),in 2006. In 2012, Nestle
India set up its 8th manufacturing facility
at Tahliwal (Himachal Pradesh).
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48

Brands of Nestl

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Research and Development

Research and Development (R&D) in
India is part of Nestl S.A.s global R&D
network and supports all markets
worldwide
with
new
product
development
and
manufacturing
excellence for Noodles. It is also a
Centre of expertise for local Indian
cuisine within the Nestl R&D network
and offers assistance to Culinary,
Confectionery, Nutrition and Dairy
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Marketing Strategy
As the function driving brandbuilding efforts, Marketing is right at
the heart of what Nestle do. Indeed,
Brand Building the Nestl Way is a
distinctive process that sets
marketing function apart in the
industry from both a commercial
and a career point of view.
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Turnover of Nestl
Sales ofCHF92.2 billion, +2.7%
4.6% organic growth, 3.1% real internal growth
Trading operating profit margin up 20 basis
points to 15.2%, up 40 basis points in constant
currencies
Underlying earnings per share up 11.0% in
constant currencies
Strong operating cash flow atCHF15.0 billion
Proposed dividend increased toCHF2.15 per
share
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Corporate social
Responsibility
Health and Nutrition
Education and Manpower development
Community development
Environmental protection and Preservation
Rural development in Philippines

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SWOT ANALYSIS
Strengths
Unmatched product
and brand portfolio
R&D capabilities
Distribution channels
and geographic
presence
Competency in mergers
and acquisitions
Brand reputation
valued at $7 billion
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Weaknesses
Inability to provide
consistent quality
in food products
Weak
implementation of
CSR
54

Opportunities
Increasing demand
for healthier food
products
Acquiring startups
specializing in
producing wellbeing products
Establishing new
joint ventures

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Threats
Food
contamination
Trend towards
healthy eating
Growth of private
labels
Rising raw food
prices
55

CONCLUSION
I recognize that there are a number of
constraints both in the forward and
backward linkages in the sector. But if
we can get our act together, as we
must, India can emerge as a leader in
the global food processing industry.
(Dr. Manmohan Singh, Former Prime
Minister)
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56

REFERENCE

www.ediindia.in
www.apeda.in
http://www.cifti.org
http://www.mofpi.nic.in
http://www.nestle.in

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