The Hindu Business Line : ‘Indian food biz will be driven by over 80 m consumers’

India has no choice — it has to grow, said McKinsey in one of its reports. The session on ‘Consumers & Retail’, organised here by the Confederation of Indian Industry, as part of Foodpro 2007, seems to have validated the point again.

Indulgence

With increasing disposable income, and exposure to media on global lifestyle, factors such as health consciousness, convenience and ‘guilt-free’ indulgence seem to characterise the changing consuming patterns of modern Indian consumers. Over 80 million-odd Indian consumers who have an annual income of over $5,000 will be the primary drivers of the food retail business in India, said food industry experts.

“India has enormous growth potential and we can become the world’s number one food producer if we explore our resources fully,” said the Tamil Nadu Governor, Mr Surjit Singh Barnala, at the valedictory session of the event.

Food processing plants

“We have the highest number of food processing plants. The Indian food industry is estimated to be worth over $200 billion and is expected to grow to $310 billion by 2015. We have abundant supply of food. A thorough research and study on exploring resources through novel methods in production and processing should be formulated,” he said.

Consumer base

Mr Rajesh Srivastava, Managing Director, Rabo India Finance, said that following the US, China and Japan, India is the fourth largest economy in terms of purchase power parity.

The consumer base is growing with the households of annual income of over $5,000 expected to increase from the current 81 million to 147 million by 2015.

He said that there are nine million people in India with an annual income of over $25,000 — the population of this high earning group will increase to 20 million by 2014-15.

The size of the ‘consuming’ category — people with the annual income anywhere between $52,00 and $25,000, will increase from 95 million in 2006-07 to 127 million by 2014-15.

Culture specific

In her address, Ms Preeti Reddy, Vice-President, Technopak Advisory Services, said that the food habits of Indian consumers do remain culturally bound.

“The core food values are unchanged with the preferences continue to remain in favour of strong flavours and multiple textures.

The composition of the main meal is still sacrosanct. People think that food should be eaten hot, needs to be freshly prepared. Home-made has more positive values,” she pointed out.

Ms Reddy said that the packaged and processed foods are viewed with suspicion. “Many think that processed foods are full of preservatives and chemicals, and are potentially addictive and fattening,” she said. However, Ms Reddy said the mindsets are changing with growing individualism, westernisation in metros and nuclearisation of families.

Rise in income

Mr Andrew Denby, CEO (Supermarkets), Aditya Birla Retail Ltd, in his address pointed to the ever-increasing aspirations of Indian public. The consumers are optimistic about the future with over 60 per cent of them expecting their disposable income to increase by 10 per cent in next 12 months.

Over 80 per cent think that they are better-off now than 10 years ago and believe they will experience improvement in living standards over next five years, he observed.

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‘Indian food biz will be driven by over 80 m consumers’