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Food processing sector: An industry on a rise.
Mar 22, 2022

Currently, the food processing sector in India is booming. The global demand for safe food products, consumers' demand for a sustainable and quality product is the foremost reason.

Globally, India is the largest country in terms of processing, production, supply and consumption. The processing industry is expanding rapidly and contributing significantly to the prosperity and growth of the Indian economy.

For a long time, India’s food processing sector has become profitable due to the new technologies. These technologies are assisting to develop the experience and add value to the Indian diet and exporting quality products.

The Indian food processing sector ranks 6th in the world and contributes with 70% sales. This industry ranks 5th in production, export and consumption. The food processing industry contributes to 13% of exports and 6% of industrial investment.

Due to the government's focus and introducing a favourable policy, the food processing sector is growing. Currently, the food industry is driven due to the rising household incomes, urbanisation and growth of organised retail.

The Indian market is evolving and major changes can be noticed in the consumption pattern. These changes are noticed due to the change in gender of the workforce, urbanisation and growing consumption rates.

India has key advantages in the Food industry and therefore, the opportunities allow for ramping up the supply and production. When it comes to the export of the processing unit, India has a strategic geographical location. One of the biggest advantages is India can conveniently connect to Middle East Europe, Africa and many other countries where the targeted market can be acquired.

Regional socioeconomic affecting the food processing scenario

Any country’s major contributor to the nation's economy is the food processing industry. This industry gets affected by the local economy wherein manufacturers play an important role. Similarly, the global economy does leave an impact on the food processing industry due to imports and exports. Shifts and changes in population size, consumption preference and beverage continue to cause a positive or negative impact on the processing sector.

Drivers of the Indian food processing sector

The urban working culture and fast-paced lifestyle allow grabbing limited time for chores like cooking and meal preparation. This has allowed the Food processing sector to take a moment and grab an opportunity to create some amazing methods to redefine meal preparation. The Food process sectors now emphasize ready-to-eat products and snacks and have become popular within a short period. The constant changes and the rise in the consumption of processed food make the Indian food processing market opportune.

The food processing sector has been backed with organized food retail outlets offering consumers a wide range. These outlets allow the consumer access range of products with attractive discounts. Not only the individuals serving in the country, but the working women ratio is increasing allowing the processing sector to grow tremendously in future.

Factors allowing the food processing sector to grow

• Government policy and support

For a long, the FBOs are provided with grants and certain policies are designed, benefiting most at a particular time. Government initiatives such as FDI policy, Scheme for Mega Food Park, Scheme for cold chain and value addition infrastructure, schemes for expansion of food processing and storing capabilities, Schemes for Food safety and quality Assurance Infrastructure and many other initiatives support the Food industry. Additionally, the grants help the business to grow exponentially.

• Export opportunities

Not only in India, but the need for processed food is also a requirement in various countries. A huge population belonging to the working group increases the need for processed food. Due to less time consumed in certain chores, this sector is enjoying the benefits of dealing in the global market.

• Supply advantage

India has a huge agricultural production and variety of crops benefiting the food processing industry in every possible way. Additionally, improvements in technology allow scaling the supply to manage the increasing demands.

• Domestic demands

Slowly, the change in lifestyle and food habits due to disposable income supports businesses.

Current industry scenario

As mentioned, currently, India’s food processing sector is heading and the output is expected to double the current scenario.

The Ministry of Food Processing Industries (MoFPI), is taking initiative by investing in required changes. The food processing sector is serving the needs of the consumers as well contributing to the whole economy.

Creating employment

When the Food processing sector is talked about, various process-canning, refrigerating, drying and other processes are included. While those processes are performed with the help of types of machinery, the need for labour never diminishes. Also, the food processing sector is huge and therefore the employment created is large as compared to other sectors.

Serving the needs

This industry helps farmers by purchasing the required ingredients on a large scale. Similarly, the care of consumers is taken by catering to them with the options like Ready-to-eat, Ready-to-cook and Ready-to-serve food. This industry has identified the need of humans and thrives to grow more.

Reduces wastage

The processing sector ensures that the wastage is reduced. A single raw material goes through stages and begins to get rotten. The unavailability of the warehouse facility and improper storage restricts the people to store the raw material. With the help of the processing industry, it has become easy to store a single raw material at different stages and use it for consumption when needed. Along with making the products available, the wastage factor is emphasized.

Due to the demand and frequent supply of processed food, the Food processing industry is booming. Additionally, it's not only fulfilling the demand and supply criteria but supports other factors such as creating employment, allowing access to ready-to-eat food and supporting the economy. The government initiatives, schemes and grants are supporting the food processing sector to fill the gaps and serve the consumers globally.

Besides just serving the consumer, safe, nutritious and convenient meals at affordable prices after conducting certain tests and adhering to the norms are provided. This industry deals with a globalised supply chain which helps to improve exports and acquire the targeted market.

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