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From Competition to Cooperation: Imported foods pave the way for growth in India’s food processing sector

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Indians are traveling all over the world and are coming back with palates tickled and tempted by the vibrant flavors and delicious foods found throughout the international marketplace. In addition to changing food preferences based on what other countries are serving, evolving food habits, dual-income households, increasing health awareness, more dining-out options, and rising aspirations are all converging to bring a tectonic shift to the Indian plate, especially in urban households. This exploration of food outside of the traditional repertoire is not only leading to an increased demand for some imported food items, but is also prompting forward-looking farmers to begin producing some of these same products locally.

From Competition to Cooperation: Imported foods pave the way for growth in India's food processing sector
The imported food industry in India, growing at 22-23 percent, is being closely followed by domesticated international foods having a growth of 14-16 percent, while traditional products like bhakarwadi, farsan, bhujiya, and others are growing between 9-12 percent

Case, in fact, the imported quinoa served on the designer plates of Michelin-starred chefs was, within no time, being grown by innovative Indian farmers in progressive states like Andhra Pradesh and Gujarat. The health story of millets and amaranth from India has been absorbed and recreated all across the global F&B arena. The imported food industry in India, growing at 22-23 percent, is being closely followed by domesticated international foods having a growth of 14-16 percent, while traditional products like bhakarwadi, farsan, bhujiya, and others are growing between 9-12 percent.

Forum of Indian Food Importers’ (’s) director stated recently at a knowledge session, “imported food products like breakfast cereals, savory processed snacks, seasonings, dressings & sauces, ready-to-eat meals, and confectionary products are expected to see a compound annual growth rate (CAGR) of 19.2, 33.6, 7.9, 12.4, and 16.6 percent, respectively, during the period of 2016-20. None of the referenced categories were ‘traditionally’ consumed in India as recently as ten years ago, but now they are transforming the kitchens of aspirational Indians who will eventually start looking for those same products to be produced locally.”

In fact, many international products have created a passage for India’s domestic food industry to benchmark high-value propositions that meet international standards through the “Make in India” campaign. For example, Iconic Indian brands like Amul are parlaying their understanding of the versatile Indian palate and it’s savoring of international flavors by using Indian cow milk to create Dutch cheese like Gouda. Ranked fifth in terms of production, consumption, exports, and expected growth, India’s food processing industry is one of the largest industries in India. The food processing sector in India has received around US$ 7.54 billion worth of Foreign Direct Investment (FDI) during the period April 2000-March 2017, and is estimated to attract as much as US$ 33 billion of investment over the next 10 years, This investment by international companies like IKEA, Ferrero, Kraft Oreos, Mondolez, Doritos, Kinder Joy, and others bring in infrastructural advancements, vertical integration, supply chain management, cold chain, and manufacturing.

Domestic food processors are also capitalizing on the un-tapped segment of aspiring Indians who frequent Quick Service Restaurants (QSRs). While value conscious, these consumers don’t want to miss out on alluring foods full of international flavors but, are happy with the products manufactured in India by Indian or international brands and offer value for money. Earlier products like mayonnaise, tartar sauce, sour cream, and others were limited to chains like Mc Donald, KFC and now with domestic production have influenced the purchase patterns of Indian households increasing consumption points.

In a recent interview, Managing Director for noted “We as a society are changing a lot. Indians are now travelling all over the globe and experiencing different cuisines. At Veeba, we like to keep ourselves abreast with these changing trends and give consumers something their palate would love. I like to read up a lot on the changing food trends; I also thoroughly enjoy going out and experimenting with different foods and ingredients. It is this passion for food that drives our innovation. E.g. Our chipotle southwest dressing is made from imported chipotle pepper to deliver to customers the authentic Mexican flavour; our American mustard sauce is made from imported American mustard seeds, thus giving our audience a genuine American experience.”

Veeba Food, and other trendsetters in India’s food processing industry will continue to excel as they identify and incorporate international ingredients into “Make in India” products that please the palates of the country’s cosmopolitan consumers. However, innovative advancements do not provide a monopolistic advantage for long, so whether a food business is import-focused or dedicated to domestic production, India’s food industry is capitalizing on these discoveries as quickly, as possible, and before others can match them. Happily, in this kind of international competition, everyone wins: local producers and processors, merchants, and, most of all consumers.