Food_processing_Industry_in_India

Food Processing Industry of India – An Insight

Food Processing Industry of India– Insight into Nourishment Industry

Food processing term refers to transformation of raw agricultural produce, by means of processing, into products that can be used as food. Food processing sector can be considered as ligature between agriculture and industry.

After China, India ranks 2nd in agricultural output provider which is facilitated by wide climatic variation with 20 agro-climatic regions. India enjoys all 15 major climates that exist worldwide. Processing of agricultural produce provides lucrative prices for produce benefiting Indian economy. Government realises the high domestic demand and consumption as well as huge foreign market for processed foods.

India offers the largest diversified production base, giving upper hand to channelize its raw material in Food & Beverage Industry.

  • Largest producer of milk– India is the largest producer of milk and second largest producer of fruits, vegetables, cereal pulses.
  • Largest livestock population– India has the largest livestock population of around 512 million, globally comprising of 119 million milch animals, 80.06 million goats and 44.56 million sheep, contributing about 25 per cent to the country’s farm GDP
  • Consumer awareness and preference– Due to awareness and health consciousness people are seeking for organic foods and are willing to pay for nutritional foods.
  • Open export market– International market has shown great demand in Indian processed food. Reason for this hike in demand is also due to many Indians living in foreign countries.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) stated in one of its report in 2017 that food processing industry is expected to reach US$482 billion by 2020. However, in 2019 itself the revenue in food & beverage segments amounts to US$570m. Some of the big names in this sector are PepsiCo, Glaxo-SmithKline (GSK), Mapro Foods, Dabur, Parle, Nestlé, Frito-Lay, and Haldiram, etc.

Why Lacking Behind!

Despite of having such significant backbone of agricultural production, we are able to process less than 10 % of the total produce, making significant loss in the economy, which is quite less when compared to other developing countries which are able to process around 30-50 % of their overall produce.

  1. Weak supply chain– Due to high variety in products and some are highly perishable product. They pass through long food chain which increases the percentage of loss.
  2. Inadequate infrastructure– No Proper Facilities such as packaging facilities, storage, transportation, cold chain for proper storage and transportation of raw material.
  3. No stringent rule on following standards– Low quality processing standard are followed and lenient punishments even if caught make it even worse.
  4. Post-Harvest Losses– Ministry of Food Processing Industry (MoFPI), shared report stating annual loss of US $1.5 billion (Rs 92,000 crores) in respect to post harvest losses showing where we are lacking the most.

Sector & it’s Revenue 

  1. Fruits and vegetables – India is the world’s 2nd largest producer of fruits and vegetables. 25 per cent growth in the sector is expected in total production by 2025.
  2. Milk– India is the largest producer of milk in the world, with the production estimation of 146.3 million tonnes in 2015.
  3. Meat and poultry – India is the largest producer of buffalo meat (1.4 MT in 2015) and the second largest producer of goat meat (0.91 MT in 2015). India is also the second largest egg producer (78.4 billion) and third largest producer of broiler meat (4.2 million tonnes in 2016), globally.
  4. Marine products– Total fish production in India was estimated to be 13.0 MT during 2015-16. Andhra Pradesh was the largest producer of fish with production of 741.3 thousand tonnes during 2015-2016 (up to June 2015).
  5. Grain processing– India is a producer of more than 200 million tonnes of different food grains every year. Total food grains production reached 270.10 MT in FY-16 (As per Ministry of Agriculture).
  6. Consumer food– Among the fastest growing segments in India, it includes – packaged food, aerated soft drinks, packaged drinking water, alcoholic beverages

Future Opportunities

Agriculture will keep on playing a vital role in the Indian economy and food processing will go a long way for providing opportunities for sustainable and profitable agriculture in time to come. The rise in food processing sector can be marked if post-harvest losses can be curbed for which government has sanctioned and launched various schemes like Mega Food Parks, integrated cold chain etc. in food processing sector is great opportunity for private players. There is special need to follow food safety and quality assurance mechanism for achieving several benefits. Stringent quality & Hygienic norms will enable the food processing market to keep up with global competition.

Situational Leadership

1. The slow and steady wins the race.

Yes, we all know and understand this quote like it’s common sense. But wait, actions create value, not words, not knowledge. Did we ever take a moment off to introspect whether we are really enacting this principle? Do we consciously allocate tasks, in our multi-tasking life, in “slow and steady” deserving category and rest? Or are we just steadily slow in all the work we do, and paradoxically regard our inefficiency as a core competency. Of course, we don’t have the time to think and answer these “unproductive questions”, and “results” are what matter in the end. We don’t want to be the slow turtles, we want to be fiery tigers, don’t we?

Results matter, but when logic and systematic thinking is betrayed, chaos is the dead end. Like a Ponzi scheme, the ride up is extremely cheerful. Unless we understand WHY we are doing it, knowing WHAT and HOW we are doing it, is like boating with the stream with no oars. Once the stream turns turbulent, we are helpless. Devoid of options and logic, we blame the waters, we rue the spent years it took to build the boat, and we pray that we don’t end up in a waterfall. And therefore, being Slow and Steady means being in command, with long term objective in sight, aligned short term objectives, and actions to back all of it. Being slow and steady means knowing 20% tasks which matter the most, and concentrating 80% of our energy and efforts on those.

Sometimes we wonder this quote is to idealistic, probably applicable up to the Utopian world of high school and college, and much too distant in the real world chaos. Early space travel had a probability of one failure every nine attempts. Before the successful Apollo 11, out of a total of 71 recognized attempts made, 70% failed in their missions. Had the scientist not followed a logical & systematic approach, out of the 41 missions after Apollo 11, 31 would not have been successful.

Facebook, Twitter, Youtube, WhatsApp, and similar are called disruptive technologies; they disrupted the existing game and the playing field. Therefore, to achieve success we must first identify our game and our playing field, and then selectively take up only those activities which positively disrupt our chances of success, rest all are distractions.

2. Fast and consistent will always beat the slow and steady.

It is good to be slow and steady, but it is better to be fast and consistent. Being fast and consistent allows for immensely greater value creation from the same set of resources, compared to being slow and steady. It demands greater focus, unrelenting attitude, and efficient diligence while managing and minimizing the risks. A well executed fast and consistent approach leads to definite differential gains, unlike say stock markets, where again we are boating with no oars.

Fortunately, the 21st century is intrinsically fast. Technology has made every task faster, except may be sleeping – one still needs a good sustainable eight hour sleep. 90% of tasks are automatically and repetitively done by machines, we only need plan, organize resources, and ensure the whole system is up and running. However, a consequence of majority of tasks getting automated is that, we end up with a very minor scope for making mistakes. And therefore, unfortunately, the learning curve to becoming consistent has turned quite steep, and the path of consistency has very low margin for error.

A gradual and sustainable path to becoming consistent is, putting our 100% efforts in the job or not doing the job at all. When we give our best, we end up understanding our weaknesses and improvement areas. When we give our best, we never regret our actions, whether we end up with success or failure. Absence of regret & negativity alchemises into positive and confident attitude, with sharper, insightful and pro-active instincts. And finally we end up with the secret elements of becoming consistent; by being insightful and pro-active in our thoughts and actions.

3. First identify your core competency and then change the playing field to suit your core competency.

In the early days of Google Docs, Microsoft was (and still is) the world leader in Document Editing Software (DES) business. Microsoft had the most advanced suite of software (Word, Excel, Powerpoint, Project, Note, etc.) built over expertise and experience of more than 15 years. Clearly capturing the market segment and creating a revenue stream by developing a new DES, superior and better than Microsoft Suite, was an unrealistic task. DES was undoubtedly Microsoft’s core competency and not Google’s.

So Google identified their own core competency, i.e. Gmail User Base. They developed a simple document editing interface, integrated it with their existing email-portal, and offered it free of cost to its entire user base, wherein Microsoft was charging $100 per user per year. They literally changed the game: revenue from advertising, not from software, and the playing field: their own huge user base, not Microsoft’s. Today, Google has Google Docs user base of 120 million, and substantial market share of cloud services as well.

What we can learn from this anecdote is, despite the individual brilliance we may possess, instead of trying to do everything, identifying one’s core competency and building upon it is the sure-shot ladder to success, as no one else can match it or do it better. Being jack of all trades is great in early part of one’s career, but to climb higher places we must become master of some.

4. It’s good to be individually brilliant and to have strong core competencies, but unless you are able to work in a team and harness each other’s core competencies, you will always perform below par because there will always be situations at which you will do poorly and someone else does well.

Being good or better at something/ multiple things spins off, more often than not, into an illogical conclusion that we can do everything, as good as others if not better. This becomes extremely counter-productive in a team environment when we stop acknowledging the competencies of individuals. On one hand, the disillusioned super-competitive individual gets loaded with far more work than he can manage, eventually damaging his performance in his core-competency field as well. On the other hand, the apparently competency-less individual labors on, without motivation or desire to perform, and ends up with inferior results.

The very contrasting nature of 20th and 21st century compared to earlier times has been, One-Man-Shows/ One-Man-Army concepts don’t work now; scope and complexity of work has gone beyond capacity of a single individual. Even artists need outsourced expertise of sales, marketing, IT support, etc. to make a living. Nevertheless, to turn a blind eye to a blatant fact is another unique human capacity. The hierarchical nature of organizations, categorizing people into managers, executives, officers, etc. worsens the whole problem even further. However, we are now also seeing various start-ups and large companies working with a flat structure and avoiding the kingly-times hierarchical setup, wherein justifiably discipline was foremost requirement.

Situational leadership is the leadership style that produces results most effectively and efficiently in today’s world. It encompasses knowing the strengths, weakness, and potential of the team members, and timely empowering the most suitable person to take lead, basis need of the hour. Even though the internet age and education industry has made information and human resources abundant and cheap, managing stakeholders, scope/ time/ cost/ quality constraints, and extracting the right results via a finite set of people is more challenging than ever. Adopting Situational Leadership is the need of the hour.