Business Analysis

Topics: Milk, Food, Dairy Pages: 14 (4442 words) Published: January 24, 2013
India is the world 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 industries in India-it is ranked fifth in terms of production, consumption, export and expected growth. Increasing incomes are always accompanied by a change in the food basket. The proportionate expenditure on cereals, pulses, edible oil, sugar, salt and spices declines as households climb the expenditure classes in urban India while the opposite happens in the case of milk and milk products, meat, egg and fish, fruits and beverages.

The figure above shows the consumption of food in India in USD billion over the years. The CAGR of food consumption over the years is 5.32%. INDUSTRY GROWTH
The Confederation of Indian Industry (CII) has estimated that the foods processing sectors has the potential of attracting US$ 33 billion of investment in 10 years and generate employment of 9 million person-days. The Indian food processing industry stands at $135 billion and is estimated to grow with a CAGR of 10 per cent to reach $200 billion by 2015. The food processing industry contributed 7 per cent to GDP. The industry employs 13 million workers directly. Value addition of food products is expected to increase from the current 8 per cent to 35 per cent by the end of 2025. Fruit & vegetable processing, which is currently around 2 per cent of total production will increase to 25 per cent by 2025. The highest share of processed food is in the dairy sector, where 37 per cent of the total produce is processed, of this only 15 per cent is processed by the organized sector. The food processing industry in the country is on track to ensure profitability in the coming decades. The sector is expected to attract phenomenal investments of about Rs 1,400 billion in the next decade. Processed Food Industry Growth Drivers:

Increased spending on healthy foods.
Increasing nuclear families and working women.
Demand for functional Foods.
Changing Demographics – Rise in disposal income.
Increased Urbanization – Lifestyle and Aspiration.
Food Industry Opportunities In India:
India has 52% of cultivable lands as compared to 11% world average. ⦁All 15 major climates in the world exist in India.
46 out of 60 soil types present in India.
Sunshine hours and day length are ideally suited for round the year cultivation. ⦁Largest livestock population.
Food Industry Achievements:
Largest Producer of milk.
Largest producer of cereals.
Second largest producer of fruits and vegetables.
India is among the top five producers worldwide of rice, wheat, groundnut, tea, coffee, tobacco, spices, sugar and oilseeds. PEST ANALYSIS OF INDUSTRY
Social Environment:
Food Industry is one of the biggest emerging markets, with over 1 billion population and a 250 million strong middle class. ⦁Rapid urbanisation, increased literacy and rising per capita income, have all caused rapid growth and changes in demand patterns, leading to tremendous new opportunities for exploiting the large latent market. An average Indian spends about 50 per cent of household expenditure on food items. ⦁Demand for processed/convenience food is constantly on the rise. ⦁India's comparatively cheaper workforce can be effectively utilized to setup large low cost production bases for domestic and export marketsSince India’s population is predominantly vegetarian; milk serves as an important part of daily diet. ECONOMIC ANALYSIS OF INDIA.

Despite new risks, the global economic recovery is gaining strength. While growth in emerging economies remain strong, that in the US and European region is slowly gaining momentum. After the announcement by US Government to help Euro zone by providing USD 40bn per month the scenario started changing. After the announcement of 51% FDI in Multi brand Retail and other policy reforms like FDI in Aviation and cut in subsidy...
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