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India’s Food Processing Industry Bets on Front-of-Pack Labelling as the Gold Card to Boost Growth and Gain Global Markets

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Adopting a global best-practice Front-of-Pack Labelling (FOPL) on all packaged foods can act as a major boost for ramping up exports of packaged food products, especially those produced by MSME units. This was the distilled message to come out of a recent industry event organized by Consumer VOICE, a leading consumer organization in India, working under “Jago Grahak Jago” program of Ministry of Consumer Affairs, besides other ministries and consumer advocacy groups.

The event, attended by food companies and related industry associations from six states — Uttar Pradesh, Madhya Pradesh, Gujarat, Punjab, Assam and West Bengal — expressed concern at the soaring consumption of ultra-processed packaged foods to unprecedented levels in the country. “India clocks one of the highest growth rates for ultra-processed food and beverages – items high in added sugar, salt and additives.”

According to Euromonitor sales data from 2006-2019, the retail value of packaged junk food and soft drinks in India grew 42X in just 13 years. The food processing industry, which the Govt. of India views as a major sector for employment generation, is currently worth $200 billion and expected to grow to $500 billion. 

Speakers at the event drew attention to how the ‘processing industry,’ contributes 32% of the Indian food market with the MSME sector contributing majorly in the manufacturing of popular desi snacks and confectionaries, and acting as a key driver of India’s processed foods’ growth. 

Recognizing this potential, the government is incentivizing food parks for the processing industry with an eye on enhancing the export of processed foods. The Production Linked Incentive Scheme for Food Processing Industries (PLISFPI) with a fiscal outlay of Rs. 10,900 crore encourages global standard food manufacturing companies in India and supports Indian food brands for export in the international market. 

But to deliver on the huge potential of India’s food processing sector, and MSMEs in particular, there is a need to fully recognize and embrace measures like the adoption of science-backed Front FOPL, to make Indian food on a par with food in the global market. 

“A big goal for the Indian food MSMEs is to embrace healthier versions of traditional food, and global standards, which can be a big boost for exports. India can benefit greatly from tapping into this massive potential by aligning with global standards for food labeling and setting thresholds for salt sugar and fat – opening up a huge global market for Indian traditional snacks,” said Manish Agarwal, Vice President ASSOCHAM, Uttar Pradesh.

Vinod Vyas, Managing Director, Rajkot District Cooperative Milk Producer Union, Gujarat, said, “World over, the food industry is taking steps to ensure that their products are safe and healthy for the consumers. We are eager to put Indian food products on the global stage by adopting labels that are in line with the best practices from around the world. India can become a trend setter if it goes ahead and adopts ‘high in’ style warning labels.” 

India is witnessing an alarming rise of diet-related diseases such as diabetes, obesity among adults, as well as a sharp increase in childhood obesity. According to the estimates drawn up by Consumer VOICE based on various reports, Indian consumers will spend $ 6 trillion by 2030 on processed and branded food products. With ultra-processed food taking over the dietary preferences and buying decisions of consumers, the food industry is taking cognizance of the critical role that powerful and simple-to-understand warnings on food packets can play. 

Expressing the industry’s readiness to support the early implementation of FOPL, Kaushik Nag, Company Secretary, Pran Beverages India Limited in West Bengal, said, “We welcome the idea of a strong FOPL that will help consumers to quickly understand and identify healthy foods. Studies have shown that reformulation to make foods healthier increases profit in the long run. If we make our food and beverages healthier, it will change consumer preferences in the domestic market as well.”

To the credit of the government, India is looking to prioritize the roll-out of FOPL on all packaged foods at the earliest. Food Regulator FSSAI is in active consultations with the stakeholders to strike a consensus and introduce a statutory regulation to this effect. At the regulator’s last meeting on this issue, held in Februrary this year, a recommendation for voluntary implementation of FOPL from 2023 onwards was made by some stakeholders, which included members from industry associations, consumer organizations, Scientific Panel on Labelling and Claims/Advertisements and the WHO. 

While FSSAI has expressed a preference for ‘health stars rating’ which experts say would be misleading for consumers, doctors and scientific communities say that India should adopt ‘warning labels’ – the global best standard, not just for its staggering disease burden, but also to ensure its exponentially growing food market is ready for a healthier future.

Ashim Sanyal, COO, Consumer VOICE and erstwhile member of Central Advisory Committee, FSSAI, said, “It is heartening to note that the food industry who are the main stakeholders, are ready to adopt a label that is best for the country.”  

Echoing similar sentiments, Gurjit Singh Kamboj, Director, Pamco Food Pvt Ltd, Punjab, said, “We want to increase our bottom line in a manner that is not detrimental to consumer health. Industries like myself are willing to reformulate and adopt a consumer friendly label that can help families make healthier choices while we increase profits and jobs in our industry.”

According to a recent study done by researchers from the All India Institute of Medical Sciences (AIIMS) and the University of North Carolina at Chapel Hill (UNC), which analysed 10,500 products that had provided complete nutrition information in the nutrition facts panel, as much as 68 per cent of food and beverage products currently available in the Indian food market have excess amounts of at least one ingredient of concern, namely salt, sugar, and saturated fats. The study found that only 32 per cent of food products are within the scientific thresholds recommended by the World Health Organization’s regional standards.

In light of these facts, it makes eminent sense to heed to the concerns voiced by leading industry representative and food manufacturers on why the front-of-the-pack food label can go a long way to inform consumers on whether a product contains excessive sugar, sodium, and saturated fat, helping them make a healthier choice and also act as a major boost for increasing exports of packaged food products in the global market, especially those produced by Indian MSME units. The FSSAI which is deliberating on the much-awaited FOPL regulation for India should act fast to allay the nation’s concerns on food safety, nutrition and health.