Indian Spice Industry

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R E E A P

A D V I S O R S

FMCG
Special Insight –‘ Food Processing Industry’

THE LOREM IPSUMS

FALL 2012

Contents
Industry Snapshot Industry size & Segmentation FMCG Sector Growth Growth Drivers Food Processing Industry 3 3 4 5 6

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THE LOREM IPSUMS

FALL 2012

Industry Snapshot
• India's FMCG sector is the fourth largest sector in the economy It is also one of the largest employment sectors in the country





Its principal constituents are Household Care, Personal Care and Food & Beverages. Total FMCG market is in excess of INR 85,000 Crores It is characterized by a o Well established distribution network, o Low penetration levels, o Low operating cost, o Lower per capita consumption o Intense competition between the organized and unorganized segments. FMCG sector has registered a growth rate of 14.5 per cent for the year 2007-08. According to CRISIL anticipation, FMCG sector could touch around INR 140,000 Crores by 2015.









Industry Size & Segmentation
• The Indian FMCG sector is estimated at US$ 25 billion1 (Rs. 120,000 crores). Sector is fragmented and a substantial part of the market comprises of unbranded and unpackaged products. Industry expected to grow at a CAGR of 12% over next few years to reach a size of US$43 billion by 2013 & US$74 billion by 2018.

Market Segmentation

2% 15% 20% 10% 53% Food & beverages Personal Care Tobacco Household Care Lighting





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FMCG Sector Growth
• In the last 2-3 years, it has overcome a slow growth slump to grow between12% - 15%.

FMCG Contribution
Economical

The FMCG sector in India has played a vital role in the growth & development of the country, from making efforts to reach out to maximum consumers through distribution of smaller pack sizes, innovations like single use sachets, to developing innovative products to cater to regional or local tastes and the needs of the niche consumers.

Third-party Logistics

Fiscal

Ancillary Industries

FMCG Contribution

Social

Tourism Industry Media Industry

Packaging Industry

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Growth Drivers
• • • Expanding purchase basket resulting in higher penetration of products Increased consumption with higher disposable household income More consumers entering the market place.

Demand

Supply

Systemic Drivers

For these developments to catalyze faster there are two sides of the equation come together- demand & Supply along with other systemic factors

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India’s Food Processing Industry

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Overview
• • • • • India is one of the key food producers in the world Second largest arable land area Largest producer of milk, pulses, sugarcane and tea in the world Second largest producer of wheat, rice, fruits and vegetables. India’s Food Processing industry ranked fifth in terms of production, consumption, export and expected growth. • • It is estimated to be worth over US$ 200 billion and is expected to grow to US$ 310 billion by 2015. India is one of the world’s major food producers but accounts for only 1.7 per cent (valued at US$ 7.5 billion) of world trade in this sector – this share is slated to increase to 3 per cent (US$ 20 billion) by 2015.

Structure
• The Indian food processing industry has limited private sector participation and has few plants with scale economies • Some co-operatives, such as the Gujarat Co-operative Milk Marketing Federation in milk with its Amul brand of dairy products, have transformed certain sub-sectors. • Major international companies such as Nestle, Cargill, Kellogs, Unilever, Danone, General Mills, PepsiCo and Cadbury are already present in India

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Structure of Food Processing Industry

Structure of Indian Food Processing Industry

33%

42%

Unorganised Organised Small Scale Industries

25%

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