The Hindu Business Line : ‘Retail chains will bring more investments in food sector’

Mumbai, Sept. 13 In India’s growing retail appetite, the food sector stands out to be the most promising one, says Mr Brian J. Smith, Food Technology Consultant of the UK-based Booth Smith Food Technology.

He has been tracking India’s food sector developments for over 20 years and has set up a number of food factories in Asia and elsewhere.

In an interview to Business Line, Mr Smith shared his views on the potential the rapidly expanding retail segment has opened up for consumer goods and the opportunities it would unfold to processed food products in the country.

Why is the food processing business buzzing in India of late?

Indian economy is growing at a stupendous pace. Rising incomes usually result in higher household spending on a variety of goods and services. Consumers are spending as never before, especially on food. Urbanisation and nuclear families too force consumers to seek convenience foods like ready-to-cook or ready-to-eat foods.

As demand for quality food expands, large corporates have begun to make investments in retail chains. Food supplies to retail chains are required to be processed and packaged as also delivered at a reasonable cost. More big time investments in food processing will happen once retail chains expand. Investments will also flow into warehousing to reduce wastage of perishable goods.

What assistance can Booth Smith Food Technology offer to Indian companies to set up food processing units?

Food consultancy is a business of competence, trust and track-record. Ours is an international food technology consultancy. Since 1962, we have been providing independent and comprehensive technical, management, design and advisory services of high technical standards to national and international companies and investors in the food industry.

Our company helps start-up businesses and multinational companies to plan greenfield projects and refurbish plants. We also develop exciting food products and design processes to attain the best quality and safety. We provide a fully integrated service of high professional standards. In India, there are a number of start-ups as also established companies wanting to scale up.

On the Governments’ role to encourage investments?

For the food processing industry to flourish, the Government should ensure uninterrupted quality power supply and encourage private investment to develop a domestic market for the food articles. It is very important for Indian companies to establish their brands in the domestic market before looking at exports. Globally, everyone is looking at India; there may be no need for Indian food producers to look elsewhere. Governments can look into ways and means of reducing farmers’ production costs by providing them with inputs such as quality seeds.

What value-addition can technology bring to agri commodities?

Value-addition to primary agro commodities is done through processes such as drying, freezing, steaming, grading and sorting as also packaging conforming to international standards.

Your views on the prospects of Indian food processing segment?

India has the potential to join the premium league of world’s food processing industry. It has a large raw material base and varied agro-climatic conditions. Incomes are rising and food habits are changing. There is tremendous scope in terms of variety of products that can be put on the shelf. Possibilities of exports are aplenty too as the country is a low-cost production centre. Any industry can flourish if it has a strong local production and consumption base, as it would help withstand ‘interruptions’ in the international market.

How are Indian brands gaining ground in the international market?

Unfortunately, Indian brands are not currently making any dent in the global market. Take fruits and vegetables. Although India is the world’s second largest producer, it has not featured successfully in the export market. One of the principal factors inhibiting these exports is the structure of farming and land ownership. Adoption of pre- and post-harvest technologies can help reduce wastage and save costs. Fragmented processing capacities deny scale economies.

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