The Hindu Business Line : US food industry targeting India

INDIA has a nascent but rapidly transforming retail food industry that creates business opportunities not only for domestic producers but also for overseas exporters.

International attention is now increasingly focused on the rapidly growing Indian food retail market. With the removal of quantitative restrictions on imports, Indian consumers can have access to food from around the world.

The largely export-oriented US food industry is now targeting India for sales.

When combined with key demographic trends of a fast-expanding and wealthier middle class; changing food consumption patterns; a realistic prospect of continued robust economic growth over the medium term; and an increasing emphasis on infrastructure investment, it bodes well for aggressive US suppliers interested in entering one of the world's potentially largest untapped markets for consumer-ready food products, the US embassy in New Delhi has said in a report.

Quoting industry experts, the report, intended essentially to inform prospective American suppliers business opportunities offered by India, has placed the market sales of food and beverage retailing in the country at $ 135 billion and growing at about 4-5 per cent per annum.

Retailing is not yet a structurally organised industry in India, probably as a result of poverty, regional diversity (ethnicity, income levels, marketing system, purchasing behaviour etc), fragmented small agricultural production system, domestic policies that limit inter-State commerce and inadequate infrastructure, the report pointed out.

Food products are sold by an estimated 6.5 million at small grocery stores, while organised food retailing is limited to urban areas.

Large discount hypermarkets are emerging in most major metropolitan cities offering increased value to price-conscious consumers.

Market analysts believe that hypermarkets will determine the future of organised food retailing over the short-to-medium term, the report pointed out adding that traditional grocers are also gradually redefining themselves by increasing floor space, and introducing self-service format and value-added services such as credit and home delivery.

What is the entry strategy for US exporters? According to the US Embassy, it is critical to survey existing and potential markets for the product before initiating sales.

Success in introducing the product in the Indian market depends on good local representation and effective pricing strategy. The local representative should preferably be the importer and distributor.

The key to success for (US) exporters is to focus on `reasonable' entry pricing for the product, which is specifically targeted at the desired consumer base, the report advised.

The products present in the market that have a good sales potential include almonds, apples, grapes, pistachios, prunes, sauces, spreads, salad dressing and condiments, chocolates, chocolate syrups and other cocoa products, biscuits, wafers, jams, jellies and fruit juices as also potato products and other snack foods.

More Stories on : Foods & Food Processing

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Kerala fishermen go on indefinite strike

Kerala: Minister sympathetic but `helpless'

Higher global supplies, not imports, behind rubber price slump: Study

Rubber upholds steady trend

`Hike rubber exports' subsidy'

Tummapala sugar factory to resume crushing

US food industry targeting India

New agencies to certify metallic scrap imports

AP House panel to probe charges against dairies

Vegoil imports slow down

Carotenoid norms on crude palm oil imports may go

Panel set up to review Price Stabilisation Fund