The beginning of a visible resonance in the food and processing industry was experienced today, when the country’s first two-day food exhibition, Food Forum India (FFI), commenced at the Renaissance in Mumbai. Over 1,000 captains of the food businesses are participating at the magnum opus of the Indian food industry.
The inaugural session ‘India Food Vision 2020’, anchored by Dr Ashok Gulati (director, Asia, International Food Policy Research Institute, USA), revolved around the food industry preparing itself for a radical shift. The expert panel comprising Kishore Biyani (founder & CEO, Future Group), Martin Dlouhy (MD, Metro India), Dr Rajiv Kumar (director & CE, ICRIER), and S Dave (director, Agricultural and Processed Food Products Export Development Authority [APEDA]) discussed the future prospects and presented some of the astounding possibilities in the business of food.
The panel debated on the global prices being higher than the local/domestic prices. The whole story of pricing lies in the supply chain, which acts as an intermediary between the producers (i.e., farmers) and the end-users. The current scenario of food retailing is not a demand-led story, but a supply-led one. A surprising trend is the westernisation of diet taking place in the current Indian food market.
Speaking on the government’s role in the food retailing development, S Dave said, “The retail stores need to empower their stakeholders and deliver what the consumer wants. The vision for 2020 should be appropriate extension network, implementation of appropriate practice at farmers’ level, and infrastructure in the country.” He also pointed out the shift in consumer behaviour in the past five years, adding that the implementation of policies should be done by the private sector and that they have to take the role of handholding the farmers.
Kishore Biyani emphasised the important role of the government in implementing all its policies in totality, so that the retailers can help in making circles and facilitating a win-win situation for all. He further added that the entry of international retailers will not affect Indian retailers; in fact, they will learn from Indian retailers and implement the learnings in their own country.
Biyani added, “Today, food retailing has been glamourised. The margins are lower than what was expected. The Indian market is segregated into three types: India I, which includes people who aspire for or desire something; Indian II includes the serving class; and India III constituted by the surviving class.”
Earlier, Ireena Vittal, principal, McKinsey & Co., had provided significant numbers for the industry: “At $175 billion today, the food industry is likely to grow to $ 400 billion by 2025. The percentage of income spent in households will drive growth in the food market. Indian consumers are happy with store goods as compared to branded goods, and are very conservative on packaged goods. There are 10 million street vendors in India, of whom 6 million sell food. Currently, the food retail sector is $70 billion and is expected to rise to $150 billion by 2025. Food has the largest consumption in the Indian economy and will remain the single largest category.”
Vittal added, “India is likely to become the second largest dairy producer next to the United States in the years to come. Food prices in India are the lowest in the world. India has the highest per-capita consumption of sugar in the world, and it is still growing. The agriculture sector has moved into higher value crops in the last 10-15 years. There is no direct link between demand and supply, and production happens by accident. Food prices in India will increase in the long run, while the prices in most other sectors will decrease. If the food industry understands the consumers’ requirements, then it would not be difficult to deal with them. It has been done in other sectors and it is time for the food sector now.”
The first day of Food Forum India witnessed the launch of India Retail Directory 2008, which included a chapter on the India Food Report 2008 to be released later this month. As per the report, in the overall retail pie, food and grocery is the dominant category with 59.5 per cent share, valued at Rs 792,000 crore (USD 198.2 billion), followed by clothing and accessories with a 9.9 per cent share at Rs 131,300 crore (USD 32.9 billion). In the organised retail segment, the picture is different altogether. Clothing and fashion accessories is the largest category with 38.1 per cent of the market share, valued at Rs 29,800 crore (USD 7.5 billion), followed by food and grocery accounting for 11.5 per cent at Rs 9,000 crore (USD 2.3 billion).
Supported by MOFPI, government of India, and leading global trade bodies and academia including GlobalGAP, NRAI, Michigan State University, EHI, and VICS, FFI saw world food visionaries, brands and retailers, restaurants and catering service companies, and the food processing and support fraternity converging on the first day itself. FFI is also hosting Food Vision Conclave in addition to leadership sessions, and exhibits of futuristic concepts in food businesses (farm to plate).