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Food & Grocery Forum & Indian Food Service Forum 2014 – A Report

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The 7th Food and Grocery Forum India (FGFI) and the concurrent India Food Service Forum (IFSF) are being held on 23rd and 24th of January, 2014 at The Bombay Exhibition Center, Goregaon, Mumbai. The theme this year, will be ‘Growth of Modern Food Retail to be accelerated by building the appetite for Food Consumption in India’. Industry Captains from India and abroad will meet and chalk out the Future of Food & FMCG Retail in India.

“FGFI and IFSF endeavor to engage policy makers and the entire food support fraternity and facilitate closer interaction with the industry to revolutionize food business and deliver Indian consumers the best offerings, ambiance and price. The Forums bring a fantastic opportunity to share experience and learning, delve deeper into the challenges and discuss growth strategies that will profit all stake holders and consumers alike,” says Amitabh Taneja, Chief Convenor, FGFI and IFSF, Chairman & MD, Images Group

Mission, Vision and Opportunities in the Food & Grocery Sector

FGFI – The Foremost Knowledge-based Platform

FGFI is the Food & Grocery industry’s think tank, where industry captains, experts and professionals congregate to share ideas and strategies that will shape the future of food and grocery retail in India. The event facilitates and drives collaborations across all sectors of the F&G industry, forges connections, and creates opportunities for sharing best practice solutions.
It is the only event in India which provides an opportunity for progressive grocers, food service operators and all industry stakeholders from across the country to identify new trends, share new ideas, witness the latest innovations, a wide range of new products, and together drive consumption. The forum also enables exchange of global best practices, knowledge and thought leadership with modern grocers.

While the long term mission of the Food and Grocery Forum India is to accelerate food retailing by creating ideas, knowledge, network and opportunities for Modern Trade; the theme of FGFI 2014 this year will be accelerating growth of Modern Food Retail by building appetite for food consumption in India.

At the FGFI’14, company CEOs, policy-makers, consultants and experts in food production, distribution, retailing and consumption, will debate and discuss ways to serve the country’s one billion consumers.
Although food and grocery constitute about 7/10th of India’s total (unorganised plus organised) retail market, the share of the category in the country’s organised retail market is very small, according to a recent study. Hence, a huge opportunity lies ahead as this sector is poised for significant growth in the years to come. Stakeholders can tap the huge potential provided they can deal with all the bottlenecks and roadblocks, and take into account learnings in this industry in the last decade and move ahead. Fresh ideas and innovations by industry players can grow the overall pie of modern trade.

Fresh insights on current and projected status, many structural changes in the offing, new store formats being conceptualised by large retail chains, government policies that will favourably impact retail, new product categories that are emerging as consumers become more discerning, quality control and testing standards being followed in internationally certified labs, why brands are finding opportunities in tier 2 and 3 towns and cities, how regional retailers are growing from strength to strength, why the kirananwala cannot be dislodged from the consumer’s shopping itinerary, and the changing dynamics of the fast evolving food and grocery sector; and much more will be discussed in detail.

Food & Grocery Market Set to Expand from ~ Rs 17,12,000 crore to Rs ~ 27,41,961 in 2015

According to India Retail Report 2013, the food and grocery (F&G) market is the biggest retail segment in India, touching ~ Rs 17,12,000 crore, and set to expand to Rs 27,41,961 in 2015. However, Modern Trade in this segment is less than 2 % and is likely to stay just as small by 2015. At the overall level, F&G accounts for 60 % of the total retail market, but only 10 % in Modern Trade. So there is a vast opportunity in F&G modern retail segment.

The report further states that with growth in large format stores and with more malls coming up food retail that currently accounts for less than 2 % would garner increased share in the next 10 years. This will be propelled by demand for ready-to-eat, refrigerated convenience food, TV dinners, and international cuisine choices like pasta and sauces. Rapid urbanisation, increased literacy, changing and more aspirational lifestyles, more women in the workforce, and rising per capita income are leading to rapid growth and new opportunities in the food and beverages sector. Indians spend about 50% of household expenditure on food item. Trends indicate demand for fresh/home-made and value consciousness, but the convenience segment will continue to grow.

The luxury food segment will also grow as consumers will look for varied cuisine choices (and hence international food products, flavourings and ingredients). Given the convenience and price differentials offered through big modern outlets, consumers would be willing to travel considerable distance to visit such F&G retail outlets. Private labels and the organic segment will grow as it will offer benefits of price and local grown tags, as will the healthy food segment.

FGFI – An Innovative Format that Brings Knowledge, Ideas, Product and Recognition through Conference, Exhibition and Awards

FGFI is supported by the Ministry of Food Processing Industries, and leading trade bodies of India. The 2014 event will see participation by leading International and National Brands. Over 500 brands from 50 countries will be present under the FIFI banner. Entrepreneurs can look forward to over 100 business opportunities from participating countries such as Canada, Dubai, Ecuador, USA, Singapore , Spain, and Colombia. Strongly positioned as the Only B2B platform in India focused on Food Retail, it offers thought leadership through conferences and educative sessions monitored by industry experts. It is by far the right place to network with Industry leaders, witness the latest industry trends, and see new products and launches.

Some highlights of the 7th FGFI:

Drinks Theatre ~ learn the art of mixology and spirits/wine tasting
Live Kitchen with India’s most awarded Chefs
Conference where leaders and decision makers will deliberate, discuss, and create a vision for the future of this sunshine industry
Coca Cola Golden Spoon Awards ~ The Awards which will be held at the end of day one, will honour achievers for excellence in food retailing and recognise the innovative spirit of leaders in the dynamic India Food Industry. It appreciates new food retailing and food service retailing concepts, formats and innovations that have led to a revolution in the food experience.

Why FGFI is the Most Recommended Business Platform by Leaders of Modern F&G Trade?

Some Quotes from Leaders:

“Food & Grocery Forum India is ‘the’ leading knowledge and business platform which, over its past editions, has created immense goodwill in the marketplace. It’s one of the only shows that provides an effective channel for dialogue and relevant solutions in the Food & Grocery Retail space.” recommends Mr. Mohit Khattar, MD, Godrej Nature’s Basket

Mr. Mark Ashman, CEO, Retail says, “We are at a critical juncture for both vendors and organised retailers in India. And there is significant value that needs to be realised by further innovation and collaboration. Food and Grocery Forum India with its in-depth understanding of the challenges at both ends will prove to be the catalyst for this change.”

“India’s biggest food & grocery show which adds value across the value chain from retailers to food brands to supply chain companies. FGFI imparts knowledge and provides business opportunities for small, medium and large companies.” claims Mr. Devendra Chawla, CEO, Food Bazaar, Future Group.

IFSF 2014

Concurrent event Indian Food Service Forum (IFSF) takes FGFI Several Notches Higher

Market Size of India’s Food Service Industry

The total food service market is worth ~Rs 1,34,058 crore and expected to grow to Rs ~2,62,000 crore by 2015. Of this the organised business is worth ~Rs 16,000 crore and expected to touch ~Rs 35,000 crore by 2015. What we see today is a plethora of cuisines, product offerings, services and formats from fine dine and QSRs to home delivery and catering, etc. The consumer is ready to experience various cuisines, be it regional or global. An interesting trend is to get localised in terms of offerings, menu, products and even pricing. Many international entrants owe their success to customising their offerings to satisfy local demands of the consumers.

IFSF – India’s Premium Food Service Forum

IFSF is a unique platform where HoReCa businesses interact and forge ties with people from the food, beverage and equipment industry. This forum is a class apart because it is credible and has access to any and everyone connected to the food service industry in India and abroad. This year, IFSF will span the vast array of business segments such as food retail, food design, food technology and processing, logistics and supply, and information technology. With participation by key stakeholders comprising major food brands, kitchen equipment suppliers, retailers, shopping centre developers, supply chain, logistics, and IT, IFSF presents an unparalleled opportunity for learning from the masters and networking with the best in the business.

The Indian food and beverage industry has never been more exciting. From fine and casual dining to QSRs, everyone wants to be a part of the food service bandwagon. The growth experienced by this industry has been exponential. The massive numbers confirm the expansion and change in people’s preferences. International players have upped their stake and domestic brands aren’t far behind as they have realized that quality of service is of paramount importance.

Why IFSF is the Most Recommended Business Platform for the Food Service Sector

Some quotes from Leaders:

“The evolution of Food Service Forum India can be seen from the way it has grown in the last few years. This is one of the most popular shows catering to all the segments of food industry in India. The forum aims to provide an appropriate platform for all stakeholders to come together and discuss solutions to challenges while sharing best practices,” says Mr. Samir Kuckreja, President, NRAI.

Mr. Sanjay Coutinho, CEO, Baskin Robbins, comments, “Food Service Forum is a leading show in its segment. Eating out habits are changing, consumers are becoming more discerning, new cuisines and concepts are being introduced and the sector is witnessing PE funding that has never happened before. With so much happening and so much still to happen, it is once of the best forum to be a part of and gain insights on the growing business”.

Besides global and large Indian food brands and retailers, there has been an overwhelming response from independent grocers and retailers and regional chains in both food and restaurants from across India – all of whom are keen to get together to explore expansion or revamping in their respective business models.

FSSAI and FIFI – Partners in Progress

FSSAI and FIFI have been collaborating growth of imported food retail in India, and bringing the best to consumer’s table. FIFI has played a pivotal role in increasing awareness on compliance on various Food Safety norms and regulations. Over the years, FGFI has emphasised on bridging the gap between FSSAI and Food and grocery trade by conducting various interactions, seminars and consultations on rationalising the law. “No other show in India is able to provide the right mix of knowledge and trade for the exhibitors, ” comments Mr. Amit Lohani, Convenor, Forum of Indian Food Importers (FIFI).

Participation & Support

Over 800 international brands from 50 countries to be on display under the FIFI pavilion. Plus leading national brands like , Pepsi, Catch, Dawat, Dalda, Mother Dairy, India Gate, Sahara Q Shop, Madhu Jayanti, Suguna, etc, to be on show.

21 Trade Bodies & Associations participating including from ones from Mumbai, Navi Mumbai, Pune, Gujarat, Madhya Pradesh and Delhi, Bombay Grain Dealers’ Association, Public Charitable Trust, Retail Grain Dealers Co-operative Society, Indian Biscuits Manufactures’ Association; RMCA: Retail Merchant Chamber Association (Pune); AIFPA: All Indian Food Processors’ Association; AIREA: All India Rice Exporters’ Association; AIWPA: All India Wine Producers Association; Maharashtra Traders Association; Mumbai Traders Association;Tulleho Beverages Education & Training, etc.

International trade bodies participating include Dubai Export Promotion Board, Canada Export Promotion Agency, Singapore International Trade Agency, USDA, Equador Trade Promotion Board, Spain Export Promotion Agency, and more.

The following leading National hotel & culinary associations are also supporting the 7th FGFI:- HRAWI: The Hotel and Restaurant Association, Western India (HRAWI): HOTREMAI: Hotel and Restaurant Equipment Manufacturers Association of India; HPMF: Hotel Purchase Managers’ Forum; India Culinary Forum: India’s Association of Professional chefs; WICA: West India Culinary Association, etc.

Massive footfalls assured. Engaging debates, path-breaking insights guaranteed.

Together, the two events – FGFI and IFSI will Partner and Drive Growth

The two forums are set to make this a most compelling opportunity for suppliers products and services related to the food and food service sectors, bringing to it Indian retailers, food manufacturers and processors, grocers, distributors, dealers and agents, caterers, food court operators, kitchen and other equipment suppliers, importers and distributors of imported food products, packaging companies, IT companies, supply chain and logistics, and mall developers.

Images Group

For over 20 years now, the Images Group has been acting as a catalyst for retailers in India to share and gain from each other’s experiences and insights. It is behind the creation of several outstanding business magazines, events, conferences and awards and forums. FGFI and IFSF are supported by Images Group’s publications Progressive Grocer and Food Service (India).

7th edition of Food and Grocery Forum India (FGFI- 2014) – FEW CORE FOCUS AREAS

Emerging Consumption Hubs

The early 2000s witnessed development in a lot of tier 2 cities. Rapidly growing economic activity in these cities led to increased urbanisation, higher disposable income, and increased aspirational levels of the consumers. In view of these factors, brands see these cities and their huge untapped markets as a lucrative opportunity. These new consumption hubs are emerging with economic growth percolating to smaller cities. By 2020 there will be around 200 cities in India with a population of more than 0.5 million. Some of these so called ‘small towns’are buzzing with action and displaying signs of growing consumerism. At FGFI’14, food brands, retailers and experts will reveal ways of leveraging market knowledge, experience and learnings to tap the huge opportunity that lies in these towns.

Emerging Foods

The growing organised retailing is also altering food consumption patterns, promoting imported foods, branded foods, processed foods, and offering a wider assortment of international, local and regional brands. There is a marked increase in consumption of both Indian and international foods. Food chains and restaurants offering novel delivery formats of food retail are another fast growing sector. Food processors and manufacturers are complying by offering a slew of ready-to-eat/cook/heat/serve packaged foods, functional foods, value-added (healthier) variants, energy enhancing beverages like sports/energy drinks, and even vitamin-enriched water, flavoured milk, wines, and fruit juices. The onus lies with the suppliers for product innovations, offering value for money, and designing customised products to suit the varied needs of Indian consumers across the country, while modern retail serves as the key driving factor for introducing the new categories through in-store promotional and marketing activities, and drive sales.

Health and Wellness (H&W)

There is a growing focus on the health and wellness category, with consumers seeking fortified foods and beverages. The category is growing at a healthy CAGR of 23 % and could reach about Rs 36,000 crore by 2015, or even Rs 55,000 crore ( $10 billion) if further advances were made in product development and government mandated fortification. The %age of organic foods over regular grocery has increased to almost 50%, and a wide range of products are coming into what is becoming a quality-conscious market. Healthy breakfast options, healthier snacks, healthier grains, organically produced food and personal products, value-added, vitamin-enriched products are finding more and more takers. According to Nielsen, 33 % of consumers were willing to switch to a healthy product even if it was pricier.

H&W foods industry in India currently is still at a nascent stage compared to developed markets. But demand is expected to increase due to increasing awareness of healthy food options. Exposure to H&W products available through modern retail channel, and effective, lucid communication and marketing initiatives by the suppliers well propel this segment. Big retail chains including Godrej Nature’s Basket, Hyper City, Food Bazaar, More, Nilgiris, Spencers, etc now stock organic products. The market for this segment is expected to grow largely in urban centres over the next 5 to 10 years where H&W food products would see more traction and be more accessible through modern and traditional retail channels. According to industry analysts, the H&W market could reach US$ 7.5 to 10 Bn. by 2015 growing at 25 to 30 %, and could account for ~15 % of the packaged food market in 2015. Improved availability of products that are palatable to the Indian taste, and affordable prices, could create opportunities for food players, ingredient suppliers, packaging suppliers, technology and equipment providers.

Packaged, Convenient Food

Demand for packaged ready-to-eat (RTE) meals has captured a large chunk of the food retail market in India, and there is enough latent market potential waiting to be exploited through developmental efforts. The market for packaged food (shelf stable and frozen) has grown from Rs 4,005 crore (US $ 0.9 bn) in 2002-03 to Rs 11,440 cr (US $ 2.6 bn) in 2006-07, and expected to grow ten times its current size in the coming decade.

Globalisation has been the primary catalyst for the growth of the Indian food which is set to witness many more changes with newer offerings being available. The international markets have shown a positive response to Indian cuisine with NRIs and foreigners expecting to grow this market in the years to come. But consumers want RTE foods that are offered in hygienic, nutritional and attractive packaging, and at an affordable cost.

They are also looking for innovative flavours and new tastes, which is a big challenge for the food industry. Growth of packaged foods has also been aided by phenomenal growth of organized retail (35 to 40% CAGR) over the past 5 years. Organized retail formats have provided enhanced visibility coupled with higher availability of shorter shelf-life and chilled products. The share of organised retail in overall food and grocery market in India has moved from less than 0.5% in 2003 to around 3% in 2008 and is expected to reach 11 to 12 % by 2015. Access to advanced packaging technologies like retort packaging, tetrapaks, smart fresh etc. has enabled longer shelf lives, and better product distribution, is providing a further thrust to packaged foods consumption in India.

Functional Foods and Drinks

A strong desire among consumers to maintain a healthy lifestyle, and growing awareness of functional ingredients such as herbs, minerals, vitamins, omega fatty acids, and probiotics is driving the functional foods market, which is expected to gain popularity. With an estimated growth rate of 43%, it will reach Rs 14,080 cr (US $ 3.2 bn) in 2014-15. The Indian market for functional beverages is expected to reach a value of Rs 1,518 crores (US $ 0.35 billion) by 2014. In this segment, enhanced fruit beverages would remain the fastest growing and the prime revenue earner during 2008-2014. Right now, India accounts for approximately 10 % of global beverage consumption and the third largest consumer in the world, after US and China. Given the country’s size and potential consumption of these drinks, the Indian market offers huge investment opportunities in beverage plants, equipment, and packaging.

Growing Focus on Private Labels

Private labels will continue to be an important constituent of a retailer’s business. Some products are doing much better than national brands, making PLs very lucrative in the long-term. While India’s retail industry continues to scale new heights each year, the private-label arena has also shown incredible consistency and potential. Nielsen estimates the spend on private labels in the country to grow five times to reach $500 mn, or about Rs 3,000 crore, by 2015. Private brands already account for close to 5% of Modern Trade FMCG sales in India. The food category alone accounts for 76% of the total sales in private label, and within this, some areas are making bigger waves than others. Packaged grocery, for example, has a particularly dominant position, as it pulls in a whopping 53% of total sales.

Wine – A Dynamic Industry

The Indian wine industry is growing at 25-30% per annum. The estimated CAGR is 25% in the premium wine segment for the next five years. By 2017 the market size is estimated to stand at 10 million cases, of which imported wines will account for 2 million. The domestic wine market for quality wines is 435,000 cases annually, while the imported wine market is 175,000 cases. The remaining nearly 590,000 cases comprise of cheap entry-level domestic wines. The main wine consuming markets are Mumbai, Delhi, Bangalore and Goa. Kolkata, Pune and Hyderabad are also catching up. Nearly 2 million people in India consume wine, with about 10% opting for wine as their preferred choice.

The industry is very competitive and dynamic. While India is a net importer of wine, many foreign players are eyeing India. At the same time many Indian wine producers are looking at exporting their brands. Local wine production is on the increase. While glass and PET bottles are used for packing wines, some players are experimenting with Tetra pack which is being touted for its convenience of carrying, storage and trendy image.

High-end brands are promoting their wines through premium packaging and limited-editions. The basic customs duty/tariff is set at 150% of the assessment value (CIF value and + 1% assessment charge). There is also a 4% Special Additional Duty and an Education Cess of 3%. This is at the central level.Individual states in India also levy their own taxes and duties above this, as alcohol is a state subject. Inspite of high import tariffs on wine, India is one of the world’s fastest growing wine markets, and consumption is set to increase significantly. Organised retailers, specifically hypermarkets and supermarkets, offer the best potential for wine sale due to better infrastructure and distribution. As organised retail expands, distribution opportunities will grow.

Growing the Gourmet Space

The rising graph of imported foods (8.42 MT during 2012-13) shows the growing taste of foreign food amongst Indians. But it constitutes a small pie of the overall graph. Awareness can be increased by partnering with foreign trade bodies to promote imported foods at the retail end, and devise synergies and partnerships to develop this category. The imported food segment is growing not only in the metros but also becoming popular in smaller towns and cities. Modern Trade plays an important role in the growth of this food category. A growing young working population, and their willingness to experiment with new cuisines, and to pay more for higher quality ingredients, will drive growth. This offers plenty of room for new entrants, and new categories in the imported food space. The Forum of Indian Food Importers (FIFI) has been charting the way, and finding ways to overcome import hurdles and challenges by initiating discussions with government agencies such as FSSAI, and by collaborating with international trade bodies.

Enhancing in-store Efficiencies with Technology

Having a robust IT backbone infrastructure and the ability to rapidly absorb and deploy technology improves a grocer’s business by enabling error free and smooth functioning. High-end touch screen POS systems for faster check-outs, WMS with hand-held terminals for improving workflow with accuracy, web technology for collaborating with top vendors and improving fill-rate, etc, are some examples of what technology can achieve. Retailers keen to upgrade and deploy the latest systems should seek expert guidance from technology enablers, solution providers and technical experts, who can simplify the high tech jargon and bring greater clarity in understanding the processes, and provide information on the technologies available, and calculate estimated ROI.