The food processing sector has various sectors including consumer foods (snacks, beverages, etc.), dairy, meat and poultry, fish, grains and cereals, and fruits and vegetables. Fruits and vegetables and meat and poultry take the lion’s share of about 40 percent of the total household consumption. The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year. In India, the food sector has emerged as a high-growth and high-profit sector due to its immense potential for value addition, particularly within the food processing industry.
The Indian food processing industry accounts for 32 per cent of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. It contributes around 14 per cent of manufacturing Gross Domestic Product (GDP), 13 per cent of India’s exports and six per cent of total industrial investment.
India is well-known for its food and beverages service industry. It is one among the most vibrant industries which demonstrated unprecedented growth in the recent past. The industries is continues to expand rapidly. This growth can be attributed on account of changing demographics, growing disposable income, urbanization and growth of retail industry.
Indian food service industry is expected to reach US$ 78 billion by 2018.The Indian gourmet food market is currently valued at US$ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20 per cent. India's organic food market is expected to increase by three times by 2020##.
Investment prospects for food processing in India
India’s vast agricultural resources alone creates huge potential for investments in its food processing and equipment industry. Major areas holding scope for value added processing are in the canning, packaging, dairy and food processing, frozen food, and thermo-processing industries.
Currently, food processing accounts for almost one-third of the total food market in India. The food processing industry is valued at US$258 billion, and is the fifth largest industry domestically in terms of production, consumption, export, and expected growth in the country. The country’s food processing industry is expected to reach US$482 billion by 2020, driven by growth in organized retail, changing consumer behaviour, and increasing consumerism in tier II and tier III cities.