Monday, March 12, 2012: 10:37:08 PM

Food Processing Case Study

Study of the ready-to-eat foods market - MoFPI

An analysis of the ready-to-eat food market in India, the drawbacks and the reasons for popularity

According to the report of Euromonitor International, a market research company, the amount of money Indians spend on meals outside the home has more than doubled in the past decade, to about US$5 billion a year and is likely to double again in about half that time. The industry is projected to grow at 9-12%, on the basis of an estimated GDP growth rate of 6-8%, during the Tenth Five-Year Plan period. Value addition of food products is expected to surge from the current 8% to 35% by the end of 2025. Fruit and vegetable processing, which is currently around 2% of total production, is expected to increase to 10% by 2010 and to 25% by 2025.

 
International influence and impact
 
With the growth of 150% in sales, the popularity of food and agro products is not surprising. With such promise in the sector, a number of overseas companies have joined the competition. While US brands such as McDonald's, Pizza Hut and KFC have become household names, more are on their way.
 
The new wave in the food industry is not only about foreign companies arriving in India, attracted by the prospective size of the market. It is also about the migration of the ‘Made in India’ tag on food products travelling abroad. Indian food brands and fast moving consumer goods (FMCGs) are now increasingly finding prime shelf-space in the retail chains of the US and Europe. These include Cobra Beer, Bikanervala Foods, MTR Foods' ready-to-eat (RTE) foodstuff, ITC's Kitchen of India and Satnam Overseas' Basmati rice, among many others.
 
Major social, economic and demographic changes in recent times have had great influence on the food we eat, and on where, when and how we do so. As a result, the convenience food sector has expanded by 70% over the past decade, thereby creating a huge market. Convenience foods are foods that are designed to save consumers time in the kitchen and cut down costs due to spoilage. These foods need minimum preparation, typically just heating, and are packaged for a long shelf life with little loss of flavour and nutrients over time.
 
However, these products tend to be criticised because:-
 
·               They typically are high in fat and calorie contents
·               The reduced time cost and nutritional content associated with these foods is specifically blamed for obesity
·               Sometimes Genetically Modified (GM) Foods are used
·               Sometimes an irradiation process is used
·               If heat processing is used the vitamins are lost
·               Preservatives are always used
 
These products tend to be used because of:
 
·               Cost is not very high
·               Time costs: Convenience foods cut down on the time it takes to prepare dinners significantly.
·               Variety: Due to packaging techniques such as canning and freezing, foods are available all through the year.
·               Food safety: Packaging and processing techniques, such as canning, freezing and irradiation, reduce spoilage and the presence of bacteria in the consumed products.
 
RTE food products are also an integral part of the consumer food industry.
 
This case study has been done by the Ministry of Food Processing Industries (MoFPI)
 

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