The potential for food processors and retailers in India is “a veritable commercial goldmine,” as these two sectors are set for significant expansion over the next decade, says a report.
The report on “Branded Foods in India – Forecasts to 2015,” by Just-Foods, dealing with food and grocery retail, noted that “on the back of both inward and domestic investment, economic growth, rising income and expansion of the middle class, has made India a “commercial gold mine.”
The country’s 1.1 billion population, eight per cent annual economic growth, an increasingly liberalised trade regime and an informal food supply chain which is ripe for development combine to make India one of the most exciting food markets in food retail and manufacturing, the report said.
On the back of increasing affluence and expansion of India’s middle class – about 300 million at the current count, and growing – larger commercial food chains are increasing their share of a traditionally fragmented retail environment dominated by smaller local grocery stores, the report noted.
In addition to the enhanced access to packaged foods, advertised extensively on TV, the large-format outlets set themselves apart by offering car parking and purchase by credit card. Retailers’ own labels are already featuring prominently, proving more popular in India than in some other prominent developing markets, the report said.
Though the entry of foreign retailers into the market could speed up retail development, the report adds the important caveat that there remains strong political resistance to the expansion of foreign groups in the country.