Industry 4.0 In Food Industry India Food Report
Industry 4.0 in Food IndustryIndia Food ReportJanuary 2018For Private circulation only
Brochure / report title goes here Section title goes here Industry 4.0 in Food Industry India Food ReportContents02Introduction4Food Ecosystem in India6Key Trends in the Indian Market10A sustainable supply chain20Impact of Technology26Conclusion3203
Industry 4.0 in Food Industry India Food ReportIntroductionIndustry 4.0 in Food Industry India Food ReportFood is considered to be an inherentfactor and a strong backbone ofeconomic growth for any country. InIndia, the food industry is estimated tobe USD 448 Bn in FY 16. This industry isgrowing at 10% and contributes to 9-10%of manufacturing GDP in FY171.The diversity in Indian culture andchanging needs of customers createfurther complexity in the food productionand distribution system in the country.A number of changes are shaping theIndian food landscape with disruptions inbusiness models of companies, in termsof their interaction with consumers andresponsiveness to their needs. Whilepackaged food is the fastest growingsegment posting a double digit growthyoy, currently only 10% of agri-produceis being processed in India2.is expected to witness a radical shift.The complete ecosystem is expectedto evolve from being a linear model toa more complex dynamic chain withmultiple inter-linkages enabled bytechnology interventions.Government of India’s drive to augmentprocessing levels through Make in Indiacampaign; and Industry 4.0 playing amajor role in elevating the manufacturingas well as supply chain landscape byusage of technologies including Internetof Things (IoT), Blockchain, PredictiveAnalytics, the food industry in IndiaFor the purpose of this article, we havefocused on 3 key trends that are shapingup the food industry in India:01. Consumption Trends02. Supply Trends03. Regulatory DevelopmentsFoodServiceCurrent State of Food tributorCustomerFood RetailCommunicationProduct and Service FlowCultivationFuture State of Food EcosystemFoodServiceAgrilogisticsIoTCloud ComputingFoodRetailNews articles, Industry Reports, Deloitte Analysis2Ministry of Food Processing Industries Annual Report 2015-16104FoodProcessingDistributor05
Industry 4.0 in Food Industry India Food ReportFood Ecosystemin IndiaIndustry 4.0 in Food Industry India Food ReportIndia is the 7th largest country3 with anarea of 31.7 Mn square kms, the 2nd mostpopulous country and the 2nd largestproducer of food in the world3. The task ofensuring that the food produced reaches1.2 Bn Indians is complex and involves anumber of stakeholders. About 210 Mnfarmers and agriculture labourers4cultivate various crops which they harvestand sell in Agriculture Produce MarketCommittee (APMC) markets or ‘mandis’.There are 2,477 APMCs and 4,843 submarket yards5 regulated by the respectivestates in India. Multiple levels of valueaddition activites are undertaken on theagri-produce in a food processing plant,which in turn produces the packaged andprocessed food products. There were38,608 registered food processing units6in FY 15. Distribution in India involvesserving a large fragmented base of kiranashops. There are 14,000 organized retailoutlets concentrated largely in urbanareas. Unorganized retail consists of 12-14Mn7 stores spread over 5,000 towns and600,000 villages across India. The diversityin Indian culture and changing needs ofcustomers creates further complexityin the food production and distributionsystem in the country.Farm to Fork in singCommunicationDistributorCustomerFood RetailProduct and Service FlowWorldAtlas.comEMIS – India Agriculture Sector echapvol1-08.pdf6EMIS Insights, research reports, Deloitte analysis7News articles340607
Industry 4.0 in Food Industry India Food ReportIndustry 4.0 in Food Industry India Food ReportKey Segments in the Food Value ChainMajor Food Segments in India – FY 17 Agriculture, Forestry and Fishing is estimated to be USD 350 Bn in FY 17 , contributing to 17%to India’s GDP8Cultivation India has the 2nd largest arable land in the world with 46 soil types and 20 agri climaticregions9Beverages, 12Other Packaged Food, 17ItemUSDBNCAGR 2020Savoury snacks530%Biscuits420% Warehousing market is estimated to be USD 1.5 Bn10 and growing at 9% CAGRConfectionaries*318% 85% of warehouses are used for food grains; Food Corporation of India is the biggest userdriven by public distribution of foodBaked Goods210% Loss of agri-produce grew at 20% CAGR between FY 12 to FY 17; 6% of food grains and 5-12% ofvegetables are lost due to inadequate post-harvest management, transportation and storageinfrastructurePasta. Noodles &Soup19%Others218% However, current productivity levels are low mainly due to–– Small farm holding: 67% of land holdings are less than 1 Ha in size9–– Rainfall dependence: 50% of the agricultural land is entirely rain fed9AgrilogisticsSegments in 2016 (USD BN) Food and Beverage market is estimated to be USD 448 Bn11 in FY 16 growing at 9.5%Edible Oil,18Pulses,44DistributorFood retail Employment of 1.7 Mn people in 2012-13 Packaged food is the fastest growing food segment with double digit growthVegetables,68Sugar, Salt and Spices, 27Tea2.54%Bottled Water2.216%Juices &Concentrates210%Coffee110%ItemUSD BNCAGR 2020Liquid Milk4415%Ghee2214%Others2914%ItemUSD BNCAGR 2020Rice422.40% India’s large geographical spread combined with 68%14 rural population and past tax laws led toa requirement for a multi-layer distribution network to reach ients220%ItemUSDBNCAGR 20209%Fish and 2%Others214%Beef and Veal710%Eggs513%Pork315% FMCG companies, both regional and national, have developed distribution networkscomprising superstockists and distributors. Parle, a biscuits major, has one of the largestdistribution network in India and reaches 4.5 Mn outlets India is the 6th largest grocery market in the world and is expected to reach USD 900 Bn by202013Pasta. Noodles &Soup1 Online grocery retail penetration is currently low and estimated to be USD 1 Bn. However, themarket is growing at 40%Others2 Organized segment accounts for 33% and consists of standalone restaurants, chains andrestaurants in hotels18%Cereals, 85Animal Protein, 56Source: News Articles, EMIS,Dun&Bradstreet, Industry Reports, Deloitte Analysis Unorganized segment consists of dhabas, roadside eateries including street stalls, hawkers,trolleys, and stand-alone sweet shops Cereals and pulses account for 24% of average household spend11 Growth in per capita income at 7% between FY 07-FY 16Ministry of Statistics and Program Implementation, GoI, Central Statistics officeWorld Bank data10CRISIL research11EMIS Insights, research reports, Deloitte analysis12Indian food service report, NRAI13Ministry of Food Processing Industries Annua Report hics profile.html088% Only 10% of agri-produce is being processed in India 31% of income spend is on food, much higher than US (9%), China (25%) and Brazil (17%)1194.3CAGR 2020 India has a young population with 65% of the population born after 19808CarbonatesUSDBN Indian Food Service Industry is estimated to be USD 47 Bn in FY 17 and has grown at 8% fromFY 13-1612CustomerCAGR 2020Item While the overall penetration of modern retail is 10%, the penetration remains low in groceryretail with current levels ranging from 2-3%. This is expected to increase to 8-9% by 202513FoodserviceUSD BNDairy, 95 Contributed 9-10% of manufacturing GDP in India in FY 1713FoodprocessingItemDairy and cereals constitute 40% ofthe food consumed in India. However,changing consumption pattern andhealth consciousness is driving growthin consumption of protein overcarbohydrates in the country. Healthconsciousness has also moderated growthof carbonates in India with people shiftingtowards natural juices and low sugarbeverages. Increasing influence of globalcuisine and culture has led to emergenceof niche segments like cold press juice,vitamin infused water, condiments likeoregano etc. in the country.09
Industry 4.0 in Food Industry India Food ReportKey Trends in theIndian MarketIndustry 4.0 in Food Industry India Food ReportA number of changes are shaping the Indian Food landscape affecting how companiesfunction, how companies interact with consumers, and what consumers are seeking.Trends in consumptionTrends in supplyRegulatory trends Health in food Make in India to support supply GST Convenience Regional to National brands SAMPADA Digitally active consumers Unorganized to Organized FSSAI regulations Product to services Sustainable supply chainTrends in consumptionHealth in FoodChanging demographics, fast pacedlifestyle, low work-life balance andchaging consumption pattern has ledto growth of lifestyle diseases in India.Close to two thirds of the diseaseburden in India is due to lifestylediseases with National Health Policy2017 for the first time recognizing theshift in epidemilogy of diseases. With30 Mn diabetes patients15, India isknown as the diabetes capital of theworld. India has 61 Mn patients15suffering from cardio-vasculardiseases and recording an increasein number of people sufferingfrom thyroid problems, obesity,hypertension etc.Increase in awareness has led topeople looking for prevention ofthese disease. People are increasinglylooking for healthier alternatives infood to incorporate health in dailyconsumption.25%11%7%Occurrence ofhypertension inurban areasOccurrence ofcoronary heart diseasein urban areasCHD patientsin IndiaHealth Conscious Food PatternLow sugardessertsPremium coldpress juiceMulti-grain,high fibre attaThe consumer health market isestimated to be USD 4.8 Bn growingat 5%.Low carb highprotein diet1011
Industry 4.0 in Food Industry India Food ReportIndustry 4.0 in Food Industry India Food ReportKey Categories in the Consumer Health MarketNote : All Figures in USD MnSaffola’s Healthy Heart Foundation Saffola launched several campaigns to spread the awareness on role on importance of low cholesterol food for heart health.It has brought together stakeholders (doctors, hospitals, citizen groups, etc.) to create partnerships4817 The company leveraged digital media through online health questionnaires like ‘Heart Age Finder’ and videos like ‘Fit Foodie’etc in turn promoting its productrs like low cooking oil and oatsConsumer Health 5%310Traditional IndianMedicine1561Supplements 3%1444OTC7%208AyurvedaBased The campaign was estimated to Reach over 100,000 people spurring them to make healthy choices on oil and oats purchases,enhancing Safola salesCHFood & sedHot BeveragesCough ash1%AnalgesicsBabyFood14%3%5%290155152Vitamins &MineralsGI2%SportsEnergy 2%7%12870ProbioticDairy basedDermaConsumer Healthmarket as definedby Deloitte 1%100Probiotics20%618Revenue (USD Mn)CAGR (2013-16) (%age)OthersOTC21%ConvenienceOf the total population of India, 443 Mnpeople are Millenials and 393 Mn peopleare Generation Z16. A larger percentageof young population and growth in dualincome households and nuclear familieshas led to changes in consumption patternin the country. Long and stressful workhours, increasing travel time, need tosocialize and high disposable incomehas created a need for convenientfood options. Convenient FormatPeople are increasingly looking atpackaging to provide convenience.Eastern Spices recently launched idlydosa mix in a package which can beeasily carried, used and stored inrefrigerator without additional hasslesof transferring into containers. Paperboat’s packaging is known to increaseshelf life and also gives the feeling ofsqueezing pulp from a fruitHealth Conscious Food PatternConvenientFormatOut of homeconsumptionOn-the goconsumptionConvenient toprepare/ order On-the go consumptionMintel research states over half ofIndian consumers who snack on dairydrinks do so for convenience. This needfor on-the-go consumption has changedpack preferences:–– Sachets over bottlesEx: Rooh Afza–– Ready to drink formats overpowdersEx: Nityam Churan, PudinHara–– Food delivered in disposableplates–Ex: Freshmenu5%Source: Deloitte Analysis, Euromonitor Consumer Health report, 2016 Nicholas Hall DB, Mintel India OTC reports15Euromonitor Report, News articles, Deloitte Analysis1216India Consumer Close-up Report dated 1-June-1713
Industry 4.0 in Food Industry India Food Report Convenient to Prepare/ OrderAmong all food categories the Ready ToCook/Ready To Eat and packaged foodhas grown at the fastest rate (CAGR of18-20%)17. The need for conveniencehas led led to growth of e-grocery andfood delivery in India. Further, somecompanies have started providing foodkits and semi-prepared food which isgaining popularity with urban women. Out of home consumptionThe food service segment is estimatedto be USD 48 Bn growing at 10%19.Less time to prepare food at home,increasingly affordability anddisposable income has led to growthof Quick Service Restaurants (QSR) andcasual dining at CAGR of 22% between2013 and 2016.18Digitally ActiveToday’s dinner table looks quite differentthan it did 10 years ago- there is likely asmartphone next to the fork and a laptopor tablet on the dining table. Technologyand its awareness among the consumershas changed how people buy, prepare,order, perceive and consume food. Online grocery and packaged foodshoppingA significant change that we have seenin favour of online food shopping is thatconsumers are increasingly overcomingtheir biases against purchasing itemswithout inspection and safety of onlinetransactions. The e-FMCG market wasestimated to be USD 600 Mn in 2016and is set to grow at 60% YoY to reachUSD 960 Mn by the end of 201720.Many online giants like Amazon andFlipkart, have launched online grocerybusinesses in 2017.Euromonitor report, The Hindu- Business LineEconomic times news article dated 9-June-201719The Hindu Business line news article dated 22-Sept-1620Financial Express news article dated 7-April-2017Industry 4.0 in Food Industry India Food ReportBengalore-based Idly and Dosa batter company The founder of the company, identified the need for a branded product in theIdly and Dosa batter industry and established the company in 2005 It provides hygienic and healthy Idly and Dosa batter at competetive prices Recognizing the potential of such prodct segments, Azim Premji Led PremjiInvest pumped USD 25 Mn into iD fresh foods in January 2017Revenue (In INR Cr)1000100201625015020172018 (P)2020 (P)Source: News articlesIndian consumer are becoming digitally awareMobileusersInternetusersSmart phoneusers20151,000 Mn300 Mn240 Mn20201,200 Mn650 Mn520 MnSource: Industry reports Online food ordering and deliveryChanging consumer lifestyle, youngpopulation and increasing disposableincome have led to a demand for onlinefood delivery players. These fooddelivery apps provide convenienceof scanning menus, prices and peerreviews across the restaurant. Apartfrom the restaurants, many aggregatorslike Food Panda, Swiggy, Zomato, etc.and standalone kitchens like HolaChef,Frehmenu etc have ventured into onlinefood delivery. Recognizing potentialin this space, many global giants likeGoogle and Uber have entered thisspace with Google Areo and UberEATSrespectively. Online paymentsPayment mechanisms like digitalwallets and credit and debit cards havereduced the need of carrying cash.Increased confidence of consumersin security of these mechanisms havelargely benifited online transactionsof food items. Many apps like paytm,mobikwick, etc. have started givingoffers and discounts on payments toselected restaurants. Social media, blogging, research anddiscussion forumsOver 168 Mn social media users in Indiadiscuss and share ideas for multipletopics including reviews, suggestions,ratings, etc. on social media platforms.Social media websites and apps likeFacebook, Twitter, Instagram, Snapchat,Pinterest, etc. are used to read andwrite reviews, find new places, find newbrands of foods and experiment with newcuisines. An industry study suggested thatalmost 45% of restaurant-goers below theage of 28 years seek at least some reviewof the restaurant before visiting. More andmore consumers are connecting with eachother on apps like Zomato, Yelp, etc.Online food delivery market (In USD Mn)300 150%12020152016Source: Industry reportsZomato's monthly visitors (In Mn)90 185%3511201320142016Source: Financial ExpressNestle-Snapdeal exclusive deal21 Nestle entered into an exclusive deal with e-commerce player Snapdeal Conducted a flash sale to re-introduce Maggi Noodles into the market in 2015 Sold 70,000 packets in 5 minutes due to the buzz created by advertising andsocial media Partnered with Snapdeal to launch Maggi Hot Heads and Sunrise Insta filter onthe websiteSource: News articles17181421Industry Reports15
Industry 4.0 in Food Industry India Food ReportSupply TrendsMake in India InitiativeGovernment has given priority sectorstatus to food processing industry underthe new manufacturing policy 2011 withthe aim to improve processing levels from10% to 25% by 202521. Several initiativeshave been undertaken to support the agriand food sector in India: Loans to food and agro basedprocessing units and cold chains havebeen classified as priority sectorlending 100% FDI has been allowed in allprocessed food segment underautomatic route leading to growth inFDI investments in food at 13% betweenFY 13 to FY 1722 In Union Budget FY 18, governmentcreated a fund of USD 1.5 Bn forsetting up Dairy processing units overthree years Animal husbandry andslaughterhouses: Ministry of FoodProcessing Industries runs a schemefor modernisation of slaughterhousesunder the Public Private Partnershipmode involving local bodies throughBuild operate transger (BOT), buildown-operate (BOO) or joint venture (JV)mode. 32 slaughterhouses have beenapproved under this scheme whichaim to:–– Set- up new facilities and modernisethe existing ones–– Improve productivity and utilisationof bones, skins etc–– Promote scientific and hygenicslaughtering along with effectivewaste management–– Facilitate better Chilling facility andretail cold chain management Farmer Produce Organisations(FPOs): Rising farmer distress andincreased farmer debt has led to anincrease in FPOs. FPOs are helpingmobilize farmer groups at the village2223The Economic Times article dated 28-July-2017Ministry of Food Processing Industries Report16Industry 4.0 in Food Industry India Food ReportGrowth for Indian players in packaged food Revenue in INR Crlevel to help strengthen farmer capacityand increase productivity. FPOsenable access to fair and remunerativemarkets by linking producer groupsto marketing opportunities throughmarket aggregators. FPOs also reducesupply chain complexity for processingcompanies as they don’t need to dealwith large number of traders but oneFPO. At present, there are about 350registered FPOs in India. Further,about 400 FPOs are under registrationprocess and are expected to be activeby 2019. A market study suggestedincrease in per hectare productionof up to 10% in 2 years as a result ofincrease in laji wafersSource: The HinduRise of regional brandsThere are several distinct culinary regionsin India with tastes and spices preferencesvarying greatly between states and withinstates also. Packaged food brands haverealised this varied taste and introducedproducts catering to these different tastes.Regional brands have exhibited agility inexperimenting with new products andlaunching products to capture theseregional palate preferences.Prataap snacks2015Examples of growing regional br
focused on 3 key trends that are shaping up the food industry in India:-01. Conums ioenpnrdTt s 02. SuenrdsT yppl 03. D oyraRteevelogupl menst Introduction 1 News articles, Industry Reports, Deloitte Analysis 2 Ministry of Food Processing Industries Annual Report 2015-16 Current State of Food Ecosystem Future State of Food Ecosystem Cultivation .
Types of food environments Community food environment Geographic food access, which refers to the location and accessibility of food outlets Consumer food environment Food availability, food affordability, food quality, and other aspects influencing food choices in retail outlets Organizational food environment Access to food in settings
Food Fraud and "Economically Motivated Adulteration" of Food and Food Ingredients Congressional Research Service 1 Background Food fraud, or the act of defrauding buyers of food and food ingredients for economic gain— whether they be consumers or food manufacturers, retailers, and importers—has vexed the food industry throughout history.
Apr 07, 2020 · Food Webs and Food Chains Worksheet 1 Look at this food chain. lettuce greenfly ladybird thrush cat a What does the arrow mean in a food chain? b Name the producer in the food chain c Name the third trophic level in the food chain. d Name the tertiary consumer in the food chain. e What is the ultimate source of energy that drives the food chain?
6.2.5 Impact of food aid on food availability 153 6.2.6 Impact of food aid on food accessibility 153 6.2.7 Impact of food aid on food utilisation 154 6.2.8 Impact of food aid on vulnerability 154 6.2.9 Impact of food aid on local markets in Ngabu 154 6.3 RECOMMENDATIONS 154
food technology disciplines supporting a multibillion-dollar food industry. Food Microbiology not only assures the quality and shelf life of different food products but also ensures that food products are safe for the consumer. The production of food under food safety parameters and regulations is beyond the simple memorization of knowledge.
Food & Beverage Industry Highlights, Litigation trends for 2016, Regulatory issues, Demo of Tracker Keywords "Craft" food labels, "Handcrafted" food labels, "Handmade" food labels, "Just" food labels, "Pure" food labels, "Pure" food labels, ACC v. OEHHA, American Chemistry Council, Antioxidants, Ascertainability, Blanket .
It is possible and desirable for the food service industry to reduce food waste in order to optimize cost reduction and sustainability. The issue of food waste has garnered considerable attention in recent years in the industry, as a variety of sources have highlighted the amount of usable food businesses in the industry throw
2 CHAPTER1. INTRODUCTION 1.1.3 Differences between financial ac-countancy and management ac-counting Management accounting information differs from
