Perishables -The Value Chain in India

In this webinar, we understand the impact of rapid urbanization and incremental growth in food consumption on the perishable food sector's capacity, infrastructure, and wastage.

Overview of the food processing industry in India

India's food consumption is expected to grow three times in the next five years, worth USD 1.5 trillion. This growth is attributed to changing nutritional needs, demographics, income, and other global influences, thus resulting in the industrial development of this sector:

• India to become the fifth-largest consumer market in the world.
• The Indian food processing industry is expected to grow at 15.5 CAGR with a market cap worth USD 540 billion by 2025.
• FDI via automatic route is allowed for the food processing sector, wherein investments worth USD 10 billion have been made since April 2000.
• The Italian government has set up a mega food park in Gujarat worth USD 300 million.
• Food imports increased and remained unimpacted during the pandemic.
• Developing economies like India remain to leverage secondary and tertiary food processing sectors, where raw food processing still makes up to a 50% share.

Perishable market in India

The perishable market comprises four major sub-sectors - dairy, fruits and vegetables, animal and poultry products, and marine products. Here's how India stands in the Perishable sector:

• Expected to grow up to USD 400 billion with a CAGR of 14.8% by 2025.
• India ranks first in dairy, second in fruits and vegetables, has the largest livestock population, is a leading exporter of buffalo meat, ranks third in egg production and is the second largest in fisheries and aquaculture in the world.
• The level of processing across each of these sectors ranges from as low as 5% to 35%.

Potential growth areas in the perishable market in India

India has a strong production across these sub-sectors, but processing is where the scope of improvement and opportunities lie. One of the effects and causes of these lower processing levels is high wastages across these segments. Hence, this opens up several avenues and opportunities for businesses across:

• Farm to fork supply chain space
• Alternative dairy
• Developing dehydrated or sprayed products with a longer shelf life
• Innovative packaging solutions like aseptic packaging
• Ready to eat products
• Frozen and canned products

Major challenges for perishable market in India

• Small farm sizes
• Lack of farming mechanization
• Limited usage of high yielding production techniques
• Growing table grade products
• Post-harvest losses are at 30% - 40%
• Limited cold chain integration
• Limited adoption of processing infrastructure

Efforts by the Indian Government to solve these challenges include:

• PMKSY (Pradhan Mantri Krishi Sinchai Yojana) to incentivize cold chain infrastructure and safeguard farmers' interests.
• Production linked incentive scheme to promote the consumption of value-added processed foods worth USD 1.5 billion.
• Agri-finance and agri-insurance scheme.

The government needs to continue to provide the necessary financial support to farmers and undertake a long-term view to develop post-harvest infrastructure. A focus on cold chain infrastructure via investments also needs to be prioritized.