Crafting a Sustainable Secure Future through Strengthening the Food Processing Sector

Importance of Agriculture in India's economy is evident since Independence. It is the source of livelihood and sustenance for more than half of India's population especially for people living in the rural areas. But unfortunately, the growth rate in this sector and the level of development is far from its true potential. The domestic food market in India is supposed to reach ~ USD 260 by the year 2015 based on the current trends according to various reports. During the period, the share of processed food in terms of value is expected to increase from ~ 40 per cent to 50 – 53 per cent.

Globalization has brought some distinct thrust for the food processing sector –

a)         Indians migrating abroad still look for Indian food products and especially spices apart from existence of exotic Indian restaurants have appealed to the foreigner's eating preferences

b)         Resident Indians are also seriously embracing foreign cuisine in their regular diet thus creating ample commercial opportunities for both domestic and foreign enterprises in the food processing segment. Foray of retail giants are further adding to the demand thrust.

c)         Outsourced businesses in India have changed the working hours of many people here. It is also forcing Indian companies to work longer hours. Women are also seriously pursuing their career options owing to greater opportunities with the opening of the economy. Family structure is also tending towards nuclear system. This is impacting our eating habits. People are steadily looking for simpler and off the shelf food solutions which are also nutritious.

Hence, there is a clear and strong demand for processed food of all kinds. But not just any processed food. People are slowly learning to become quality conscious and to read the labels and not just the price tag. This however is a serious matter especially in the developed countries where apart from pharmaceuticals processed food has to have a certain level of quality and pass certain mandatory tests to achieve consumer acceptance.

Owing to our tropical weather and vast geographic spread, India has huge potential and variety in the food processing segment and is ranked fifth in terms of production, consumption, export and expected growth. The export potential for India especially is huge and varied thus beating any slowdown due to seasonality.

However, we are unable to attain our potential mainly due to disintegrated players, lack of technology and know-how, awareness of applicable laws and regulations to compete in the global market.

Published in SMEWORLD Mar 2012 Issue. Click here

MSMEs in 2012 and Beyond - The Sectors That Hold Promise

The initial pseudo-turnaround gave way and the dark clouds of inflation and recession are looming in the background. But unlike my case where I was unprepared, businesses have seen how bad things can go as recently as 2008 – 2009. Most had learnt their lesson and have become frugal and cautious. The economic trend at the end of this year is quite similar and there are lots of uncertainties around. In these days of slowdown, sky-rocketing costs and low investor confidence, some sectors are still resilient and are promising enough to remain focused on or to invest in. These sectors are not gravity-defying areas but highly grounded, essential and reasonably contemporary businesses with tremendous growth potential and market size to fit many. In this article, I will focus briefly on few such sectors which hold fair promises as sustainable investment options for entrepreneurs in the coming years.   
Published in January 2012 issue of SMEWORLD. To read the complete article, click here.