Indian food industry poised for huge growth: FICCI
(7 months ago)
New Delhi Nov. 14 : The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year, a FICCI - Technopak report 'Indian Food Services Industry: Engine for Economic Growth and Employment - A Roadmap for Unlocking Growth' highlighted.
In India, the food sector has emerged as a high-growth and high-profit sector due to its immense potential for value addition, particularly within the food processing industry.
The food services sector is expected to have generated direct employment for 5.5 - 6 million people in the financial year 2016, which is expected to increase to 8.5 - 9 million by the year financial year 2021.
Indirect employment has seen a growth at CAGR of four per cent from 2013-2016 and expected to grow six per cent till 2021.
The Indian food services market in India (organized and unorganized) is estimated at Rs. 3,37,500 crore in 2017 and is projected to grow at a CAGR of 10 percent over the next five years to reach Rs. 5,52,000 crore by 2022.
High percentage of young and working population which is well travelled have double incomes and is experimental along with being tech savvy, is eating out more than their predecessors, driving the growth of the food services market.
The impact of the market as a whole on the entire ecosystem, right from real estate to agriculture, kitchen equipment to supply chain and employment is significant.
However, certain challenges such as availability of quality manpower, high attrition rate, high real estate cost, fragmented supply chain, over-licensing etc. act as headwind for growth of the industry.
"India's overall retail opportunity is substantial, and coupled with a demographic dividend (young population, rising standards of living and upwardly mobile middle class) and rising internet penetration; strong growth in retail and e-Commerce is expected. The Indian government's ambitious Make in India, Digital India, and Start up India project is indeed giving a great stimulus to the Food Services retail sector," said Secretary General, FICCI, Dr. Sanjaya Baru.
Availability of organized retail space is helping in consistent growth of Indian and International brands across different formats.
The Indian food services market space is attracting significant interest from domestic as well as international private equity and venture capital funds.
Some key trends are gaining traction in the food services space like 'Virtual Kitchens' and 'Ready to Cook players'.
Ordering-in has become an integral part of the eating experience and several logistics players are providing last mile delivery for restaurants.
Thus, food services is emerging as a key contributor for the Indian economy, including employment generation, skill development, growth in the allied industries, entrepreneurship, and tourism and creating experiences for the Indian consumer, the report noted.
"Hopefully, the various state and the central governments will provide the requisite policy and fiscal support to enable it (the food services sector) to grow steadily and thereby make an even bigger positive impact by way of creating more employment and by way of meeting the changing consumer needs more efficiently," said President, Technopak Advisors, Saloni Nangia.
Food services sector has still not got an industry status from the government which further makes it difficult to attract the desired levels of investments.
For the rapid growth of the sector, government should grant industry recognition to the food services sector and facilitate easy availability of working capital loan to the players through policy formulation.
Food services industry in India, the industry feels that policy formulation by government should have more active involvement of industry bodies (for example NRAI, National Restaurant Association of India).
By actively involving stakeholders in policy making, transparency in decision making can be achieved and a realistic and effective policy can be formulated.