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Opportunities for the Food Processing Industry in India
Narendra Shah, CTARA* & K V Venkatesh, Department of Chemical Engineering

In India agricultural and dairy sectors have achieved remarkable successes over the last three and a half decades. Besides being one of the world's largest producers of food-grains, India ranks second in the world in the production of fruits and vegetables, and first in milk production–providing much needed food security to the nation.

The accomplishments of the green and white revolutions have, however, not been matched by concurrent developments in supply chain management, and in new technologies for better processing, preservation, and storage of food. Pockets of shortages and near starvation, substantial wastages due to spoilage, quality deficiencies, and inadequate returns to the farmer are still very much in evidence.

Increased urbanization, improved standards of living, and the convenience needs of dual income families point to major market potentialities in the food processing and marketing sectors. This is also evident from the presence of several global foods giants and leading Indian industrial enterprises in the country's food processing sector, such as: Nestle India Ltd, Cadbury's India Ltd, Kelloggs India, Hindustan Lever Ltd, ITC-Agro, Godrej Foods and MTR Foods Ltd Besides, in the current globalized milieu, our surplus food production, as well as the increasing preference for Indian foods (in several regions of the world) need to be leveraged to achieve economic, and strategic objectives through exports. The Food and Agriculture Integrated Development Action (FAIDA) report (1997) prepared by McKinsey has estimated that, driven by changing consumer preferences, the annual consumption of 'value-added' foods alone would grow to Rs.225, 000 crores by 2007–larger than the entire manufacturing sector! A more recent report has stated an absolute revenue increase of Rs. 900 billion in food manufacturing between 1993 and 2000. This is in contrast with Rs. 150 billion and Rs. 300 billion in the pharmaceutical and IT industries, respectively. Overall, the value of the Indian food industry has increased from Rs. 3.09 trillion in 1993-94 to Rs. 3.99 trillion in 2000-01. The segments with the largest growth potential have been identified as dairy, wheat, fruits and vegetables, and poultry. This report has also identified some of the major challenges for the emerging food industry in India (see box).

 Major Challenges for the Indian Food Industry

  • Consumer education that processed foods can be more nutritious

  • Low price-elasticity for processed food products

  • Need for distribution network and cold chain

  • Backward-forward integration from farm to consumers

  • Development of marketing channels

  • Development of linkages between industry, government and institutions

  • Taxation in line with other nations

  • Streamlining of food laws

Challenges in Food Processing
Unprocessed foods are susceptible to spoilage by biochemical processes, microbial attack and infestation. The right post harvest practices such as good processing techniques, and proper packaging, transportation and storage (of even processed foods) can play a significant role in reducing spoilage and extending shelf life. The challenges in processing lie in retaining the nutritional value, flavour, aroma, and texture of foods, and presenting them in near natural form with added conveniences. However, such qualities cannot be readily quantified and correlated with physico-chemical parameters, sensory evaluations providing the only means of benchmarking. Besides, processed foods need to be offered to the consumer in hygienic and attractive packaging, and at low incremental costs.

The challenges for the food preservation, distribution and processing sectors are diverse and demanding, and need to be addressed on several fronts to derive maximum market benefits. Presently, the organizations addressing the educational and R & D requirements are too few, and there is a pressing need for supplementing their efforts. In the emerging scenario, the Food Engineering professional needs to develop sufficient awareness and appreciation of the relevant principles of life sciences, and physical sciences, as well as of a wide variety of other topics including: nutrition, preservation and storage techniques, processing unit operations, bio-processing, waste management, distribution and supply chain management, food laws and regulations and so on. Besides, the professional needs to develop an appreciation of R&D and innovation in critical technology areas such as: newer or novel process development in preservation and storage techniques, rheology, colloids and dispersal systems, packaging-polymers and composites, sensors for detection and process control, bioprocess engineering, and so on. .....more on next page

 

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