The Hindu Business Line : FICCI projects 10% growth for food and beverages industry

THE domestic food and beverage industry is projected to grow by 10 per cent in 2004, as per a survey by the Federation of Indian Chambers of Commerce and Industry. Last fiscal, the sector grew 8.7 per cent in value terms, while volume growth was 10 per cent.

The chamber has attributed the buoyancy in this sector to several factors, including the Government's high priority for its development and policy initiatives taken from time to time. The policy measures, the FICCI statement mentioned, include de-licensing of the entire food and beverage sector; automatic approval for foreign investment up to 100 per cent, excepting products such as alcoholic beverages and technology transfer; excise and import duty exemptions; and permission to use foreign brand names.

The survey found that branded, health and convenience foods were among the fast growing segments within the industry, with the market for branded foods growing at 10-15 per cent. Also, it pointed out that several Indian food and beverage companies are making a beeline for regional overseas markets like Bangladesh, Nepal and West Asia.

Some companies achieved growth by reaching lower price points and the unorganised sector still accounts for more than 70 per cent of the industry output in volume terms. The key factors for the success of the food and beverage industry include distribution in rural markets, advertising in urban markets, innovations and new brand launches. The survey rates milk and milk products as one of the most promising sectors within this industry.

Sectors that have recorded double-digit growth in both volume and value terms include fruit pulp and concentrates (20 per cent), followed by biscuits (about 15 per cent) and branded atta (12 per cent).

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