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Budget 2020 New opportunities for food processing
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Saturday, 22 February, 2020, 16 : 00 PM [IST]
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Trupti Bhat
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India is ranked second globally in food production, ranked first in spice and milk production in the world and there is a strong domestic demand due to changing lifestyles which cannot be ignored. There lies the opportunity for the food processing industry.
The food processing industry is basic to Indias development. The industry too is centred around giving sufficient impulse to the area. The food processing sector will help encourage expansion and produce business openings. The working of current processing systems for food will result in the enhanced time span of the agricultural produce and offer more opportunities of income to farmers and value-added benefits to the consumer.
The industry can develop significantly, taking India to another situation of strength and success in the worldwide economy, with the right management of strategy and support. For the food processing ministry, the government has increased allocation to Rs 1,232.94 crore for the next fiscal from the revised estimate of Rs 1,042.79 crore.
In a major initiative to improve the health and nutrition profile of children and adults in the country, the government announced Rs 35,600 crore provision for nutrition-related programmes for the fiscal year 2020-21 the jump of over 22 per cent in allocation for nutrition-related programmes. Its a very welcome move!
Key Announcements in the Union Budget 2020 include
Promoting Fisheries
By 22-23 Fish production to reach 200 lakh tonne 3,477 sagar mitras and 500 fish farmer producer organisation to involve youth
Doubled Milk Production
Proposed to double the milk production capacity from 53.5 MMT to 108 MMT by 2025
Warehousing capacity
India has an estimated capacity of 162 MMT of agri warehousing, cold storage and reefer van facilities. NABARD to map and geo tag such facilities
Kisan Rail
To build a national seemless cold supply chain for perishables like meat milk and fish
Jaivik Kheti Portal
Online organic product markets to be strengthened
Industry Scenario
The processed food market is expected to grow to $543 bn by 2020
Food processing has an important role to play in linking Indian farmers to consumers in the domestic and international markets. The industry engages approximately 1.85 mn people in around 39,748 registered units with fixed capital of $32.75 bn and aggregate output of around $158.69 bn. Major industries constituting the food processing industry are grains, sugar, edible oils, beverages and dairy products. The key sub-segments of the food processing industry in India are Dairy, Fruits & Vegetables, Poultry & Meat Processing, Fisheries, Food Retail.
The opportunities
Milk sector - Introduce value-added dairy products viz. Cheese, smoothies, flavoured milk, custard, yoghurt and other ethnic Indian products
Fisheries sector - Most marine exports are currently in the frozen form and there is immense potential for exporting value-added products. Value addition and product development for items such as ready-to-cook, ready-to-eat, canned and frozen goods, etc. Why just focus on exports, the need for proteins and the domestic consumer demand for fish delicacies is at already always rising stage. Cleaned, portioned, deveined, marinated ready to cook chilled fish varieties are a domestic consumers favourite. With increased focus on health centred convenience foods this is certainly an opportunity for the food processing industry to present an innovative platter in this sector. The health-conscious consumer looks out for preferences in fish products over other meats.
Meat and poultry sector - New technology in meat and poultry processing, Egg powder plants, Hatcheries include a few opportunities whereas New products - value-added products such as frozen, chilled goods, RTC or RTE ethnic products or snacks in convenience package are domestic consumers all time favourite and therefore opportunities for the processing industry as well.
Fruits and vegetables sector - India is the worlds largest producer of bananas, papaya, mangoes and guavas, and the second-largest producer of potatoes, green peas, cabbages and cauliflowers.
New technology to reduce wastage levels - Adequate infrastructure (cold chain, processing infrastructure, R&D for processed food, packaging and innovative farm preservation systems) - Packaging technology for convenience foods - Processed fruit-based ingredients for ice cream, yoghurt, beverages. Other than processed fruits and vegetables, even frozen and chilled products are an urban consumers most sought choice. Organic products are also in demand amongst the health-conscious consumers.
Due to evolving economic demographics and economic growth, India is likely to drive the global food service industry. Some key aspects that drive the demand in this segment are:
Improving demand metrics of ready-to-eat products with more healthy varieties of choices
Impact of technology on the entire food service industry, from sourcing of raw materials to reservations and on-demand delivery - Online aggregators and third-party logistics service providers can take up the vast opportunity. Key formats behind the markets growth are Quick Service Restaurants (QSRs), Casual Dining Restaurants (CDR), Cafes, Frozen Dessert Parlours, Lounges, Fine-Dining Restaurants, etc.
The growth of the food grocery market is mainly driven by the dry food grocery segment since the products involved are not only consumed in a raw form, but also serve as raw material for food processing. Other growing segments are spices, perishables, fresh produce, other processed food and beverages. As it deals with items of everyday consumption, the market can never face a shortage of demand, thus resulting in constant growth.
The annual value of harvest and post-harvest losses of major agricultural produce at the national level is estimated to be Rs 92,651 crore (US$14 Bn). Hence, the need for feasible cold chain solutions is critical. Currently, about 60% of Indias cold chain storage capacity is held by the states of Uttar Pradesh and West Bengal, where the majority of cold storages are used for a single commodity: potato! There lies the opportunity for the food processing industry across the states to focus on other nutritionally rich and valuable products that are produced. With the budget allocation on the positive side, the food processing industry certainly has opportunity to try its innovative potential to have a hand on and deliver to the domestic consumers demand for nutritionally rich processed food.
(The author is national resource person, professional trainer and consultant in food safety and nutrition. She can be contacted at truptione@gmail.com)
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