EMIS Insights - India Food and Beverage Sector Report 2018 - 2022 PDF

INDIA
FOOD & BEVERAGE

SECTOR 2018/2022
Including 5-Year Forecast
An EMIS Insights Industry Report
Any redistribution of this information is strictly prohibited.

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ABBREVIATIONS
APEDA Agricultural Products Export Development Authority
CSO Central Statistics Office
DAC Department of Agriculture and Cooperation
DAHD&F Department of Animal Husbandry, Dairying and Fisheries
DIPP Department of Industrial Policy and Promotion
ECA Essential Commodities Act
FAO Food and Agriculture Organisation of the United Nations
GST Goods and Services Tax
GVA Gross Value Added
IBEF India Brand Equity Foundation
IMFL Indian Made Foreign Liquor
ISMA India Sugar Mills Association
MCAFPD Ministry of Consumer Affairs, Food and Public Distribution
MCI Ministry of Commerce and Industry
MOFPI Ministry of Food Processing Industries
NFSA National Food Security Act
NITI Aayog National Institution for Transforming India
NMFP National Mission on Food Processing
PMKSY Pradhan Mantri Kisan SAMPADA Yojana
RBI Reserve Bank of India


CONTENTS FOREWORD
01 EXECUTIVE SUMMARY
Sector in Numbers
Sector Overview
p.5
p.6
Sector Snapshot
Driving Forces
Restraining Forces
02 SECTOR OUTLOOK p.13

Macroeconomic Outlook
Economic Sentiment
Sector Outlook
03 SECTOR IN FOCUS p.20

Main Economic Indicators
Main Sector Indicators
Gross Value Added
Production
Global Positioning
External Trade
Exports
Imports
Foreign Direct Investment
Employment and Wages
04 COMPETITIVE LANDSCAPE p.32

Timeline India Food & Beverage
Highlights
Top Companies
Top M&A Deals, Q2 2017 - Q3 2018
M&A Activity, 2015-2016
05 COMPANIES IN FOCUS p.39

United Spirits Ltd
United Breweries Ltd

CONTENTS Ruchi Soya Industries Ltd
Britannia Industries Ltd
Kwality Ltd
06 REGULATORY ENVIRONMENT p.50

Government Policy
Major Schemes
Banknote Demonetisation Reform
Goods and Services Tax
07 FOOD MANUFACTURING p.58

Highlights
Main Events
Oils and Fats Production
Meat
Focus Point – Meat Production by State
Fish
Focus Point – Fish Production by State
Dairy Products and Eggs
Focus Point – Milk Production by State
Food Grains and Milling Industry Products
Focus Point – Food Grains Production by State
Sugar and Sugar Products
Fruits and Vegetables
Focus Point – Fruit Production by State
Focus Point – Vegetable Production by State
08 BEVERAGE MANUFACTURING p.93

Highlights
Main Events
Alcoholic Beverages
Indian Made Foreign Liquor
Beer
Alcoholic Beverages External Trade
Non-Alcoholic Beverages
Non-Alcoholic Beverages External Trade

INDIA FOOD & BEVERAGE SECTOR 2018/2022
An EMIS Insights Industry Report
Foreword
India’s food and beverage processing sector is key
to the Indian economy in terms of its contribution
to the country’s GDP, employment and investment.
Compared to other industries, it has the largest
number of factories and engages the largest
number of employees. The sector is driven by
Julia Milojkova
Research Analyst strong domestic demand, rising exports, increasing
EMIS Insights
investment and government support.
India is the world’s second most populous country after China, with about 1.3bn residents at the end
of FY2018. Indians spend a high proportion of their disposable income on food. Half of India’s
population is below 25 years of age and 65% below the age of 35 years, which, combined with an
expanding middle class, changing culture and food habits, are key drivers for the sector’s rapid
growth.
The food and beverage processing sector receives strong support from India’s developed agricultural
base, which provides raw materials for the sector. India is the world‘s second-largest producer of food
after China. It is the world’s largest producer of milk, butter and some fruits and vegetables, such as
bananas, guavas, mangoes and papayas, as well as onions and ginger. The country is also one of the
world’s largest producers of meat, fish, cereals, sugarcane, nuts, tea and a number of fruits and
vegetables. Food and beverage processing connects agriculture with industry, which is why the sector
receives so much government attention and support.
Over the last few years, the Indian government has launched a number of initiatives to modernise
harvesting technologies, cold chain infrastructure and food processing facilities, aimed at reducing
the high level of food wastage and to increase the level of food processing.
As one of the largest global producers and consumers of food, India is expected to have a great
impact on world demand and supply of food products over the next few years. A number of foreign
companies have entered India’s food and beverage sector to tap the opportunities of its rapidly
growing market.
The sector is expected to attract more investment in the near future, following the approval of 100%
FDI in food trading, including through e-commerce, for food products manufactured in India. For
domestic enterprises, however, a top priority is to focus on product conformity with global standards
and good manufacturing practices.
Source: MOFPI

Copyright © 2018 EMIS, all rights reserved. 5
An EMIS Insights Industry Report CONTENTS
01
EXECUTIVE
SUMMARY

01 EXECUTIVE SUMMARY CONTENTS
Sector in Numbers
Largest Largest Largest

Milk and Butter Buffalo Meat Largest Edible Oils
Producer Producer and Fats Importer
INR 4.9%
2,123bn** 1.4%**
GVA of Food,
CAGR
GVA of Food, Beverage and Food and Beverage
Beverage and Tobacco, % of GDP Sector GVA,
Tobacco FY2014-2017
USD 9.3% -0.8%

905mn Food Industrial Beverage Industrial
Foreign Direct Production Index, % Production Index, %
Investment y/y change y/y change
Note: Unless otherwise stated, all figures refer to FY2018.

** Data for FY2017
Source: CSO, DIPP, CEIC, USDA
INDIA FOOD & BEVERAGE SECTOR 2018/2022 7

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Sector Overview
India is one of the global leaders in the food and beverage industry, with prominent positions in the
production of dairy, meat products, refined sugar and spirits. The gross value added (GVA) of the food
and beverage sector expanded at a CAGR of 4.9% between FY2014 and FY2017, driven by positive
demographic trends, rising household incomes, an expansion of modern retail formats and a shift in
consumer preferences towards healthy food. The food and beverage industry was the fifth-largest
sector in manufacturing, and the leader in terms of employment generation in FY2017. With the entry
of multinational companies expanding the market, India is rapidly becoming a production hub for
processed foods, which are exported to countries in South Asia, the Middle East and Africa.
Entry Modes
Under current legislation, FDI involving 100% foreign stakes is allowed under the automatic route in
almost all food and beverage processing segments. The only exceptions concern certain items where
processing is reserved for micro and small enterprises, and a foreign equity stake above 24% requires
government approval. In a move to further liberalise and promote sector development, in February
2016 the government made possible 100% FDI under the automatic route in processed food retailing,
provided the foods in question were produced or processed in India. On the other hand, the
requirement for an industrial license for the manufacture, storage and sale of spirits, beer and wine,
was preserved. Apart from these restrictions, there are no major entry barriers for new players, who
may opt for either greenfield investment or acquisition of local players.
Segment Opportunities
Deficiencies in production and supply chain infrastructure, which have made India the world’s largest
importer of oils and fats, offer high growth opportunities for new players in this segment. Low levels
of processing in the meat and horticultural segments, combined with government financing
programmes, boost domestic and foreign investment not only in the expansion and modernisation of
the production base, but also in related supply chain infrastructure.
Government Policy
Government policy in the food processing sector is viewed favourably, with several initiatives
designed to attract foreign investors, promote the production growth, and develop and modernise the
infrastructure of the supply chain. On the other hand, the alcoholic beverages industry faces a high
level of government intervention in terms of pricing, licensing, manufacturing, sales and advertising,
as well as an excessive tax burden and a number of restrictions on alcohol consumption.
Source: CSO, MOSPI, MOFPI, DAHD&F, DIPP, RBI, MCI

Sector Snapshot
India Food & Beverage
Sector
GVA OF FOOD, BEVERAGE

AND TOBACCO: INR 2,123bn
EXPORTS* IMPORTS*
USD 35.5bn USD 23.1bn
Export Value Import Value
Cereals: USD 8.2bn Animal or Vegetable Fats and Oils:
Fish and Crustaceans: USD 6.9bn PRODUCTION USD 11.7bn
Meat and Edible Meat Offal: USD 4.2bn Edible Fruits, Nuts and Peels: USD 3.4bn
Coffee, Tea, Mate and Spices: USD 3.3bn Edible Vegetables: USD 3bn
Edible Fruits, Nuts and Peels: USD 1.9bn
Milk: 165.4mn tonnes
Sugars and Sugar Confectionery: USD 1.1bn
Oil Seeds, Misc Grains, Medicinal Plants: Meat: 7.4mn tonnes** Coffee, Tea, Mate and Spices: USD 0.9bn
USD 1.6bn Fish: 12.6mn tonnes Beverages, Spirits and Vinegar: USD 0.7bn
Food Grain: 285mn tonnes
Vegetables: 179.7mn tonnes
Fruits: 97.1mn tonnes
Alcoholic Beverages: 2,491mn litres
OUTPUT VALUE
Food Manufacturing: INR 10,824.6bn
Beverage Manufacturing: INR 785.2bn
KEY PLAYERS BY OPERATING REVENUE

1. United Spirits Ltd: INR 265.6bn
2. United Breweries Ltd: INR 124.3bn
3. Ruchi Soya Industries Ltd: INR 120.3bn
4. Nestle India Ltd: INR 102.1bn
5. Britannia Industries Ltd: INR 99.9bn
Note: Data for FY2018

* HS codes: 02, 03, 04, 07 to 13, 15 to 23
** Data for FY2017
Source: CSO, MCI, DAC, CEIC, MOFPI, Dun & Bradstreet

Sector Snapshot:
India Food & Beverage Sector
The most recent data, published by India’s Central Statistics Office (CSO), shows that in FY2017 the
GVA of food, beverage and tobacco manufacturing rose by 3.4% y/y, falling below the growth rates of
the manufacturing industry (7.9%) and the country’s GDP (7.1%). Following unfavourable weather
conditions in 2014 and 2015, which caused a reduced supply of agriculture inputs, a good monsoon
season and increased levels of processing helped the sector achieve higher outputs in FY2018. The
industrial production index (IPI) improved in FY2018 with food IPI rising by 9.3% y/y, and beverage IPI
marking a slight decline of 0.8% y/y. In volume terms, the value of output of food manufacturing
totalled INR 10.8tn, up by 5.4% y/y, while the beverage manufacturing output value reached INR
785.2bn, marking an increase of some 1% y/y. The increase was attributable to a positive y/y growth of
0.9% in the output value of beverages produced by manufacturing corporations, while India’s
household-based manufacturing units reported a y/y decline of 1.5% in beverage output value. The
ban of alcohol sales on highways in India, imposed by the government in 2017, caused a y/y decline of
2.3% in the production volume of alcohol in FY2018. In this period India produced nearly 2.5bn litres of
alcohol. All major food categories reported y/y growth in output. Favourable weather conditions
during FY2018 resulted in higher yields of wheat, rice, sugar and other crops. According to data
provided by the Department of Agriculture and Cooperation (DAC), the production of food grains
increased by 3.6% y/y to 285mn tonnes in FY2018. Sugar production was estimated to have increased
by 46% y/y to 32.4mn tonnes in MY2018 (from October 2017 to September 2018), according to the
United States Department of Agriculture (USDA), as a result of higher than anticipated production in
the two major sugar producing states, Maharashtra and Karnataka. In FY2018, production of fruits and
vegetables also marked y/y growths of 4.5% and 0.9%, respectively, based on DAC statistics. The
production of milk rose by 4.6% y/y to 173mn tonnes, supported by an average monsoon and growing
domestic demand.
The food processing sector in India is mostly export oriented. In FY2018, the trade surplus in India’s
food and beverage manufacturing sector increased to USD 12.4bn, compared to USD 7bn in FY2017,
according to data from the Ministry of Commerce and Industry (MCI). This was due to falling imports
of food and beverages in this period, while exports reported stable growth. India’s growing
capabilities to meet global standards and demand for food products was the main driver for sector
exports. In FY2018 all top five major export categories – cereals; fish and crustaceans; meat and edible
meat offal; coffee, tea, mate and spices; and edible fruits, nuts and peels – witnessed stable growth in
exports. Cereals, which accounted for 23% of sector exports, saw an increase of 35.6% y/y in terms of
export volume, attributable to higher exports of non-basmati rice. In FY2018, the sector reported a
negative y/y growth in imports, mainly due to a decline in imports of vegetables and cereals, as a
result of increased domestic production. Due to insufficient domestic production and price-
competitive imports, animal and vegetable oils and fats marked stable growth in imports, reaching
INR 11.7bn, or 50.7% of the sector’s total imports.
Source: CSO, DIPP, DAC, CEIC, MOFPI, USDA, Dun & Bradstreet

Driving Forces
India’s food and beverage sector is driven by several external and internal factors that boost its
growth. External factors include positive demographic trends, ongoing urbanisation, an expanding
middle class, and a shift in consumer habits in favour of higher value-added and healthy products.
The introduction of the Goods and Services Tax (GST) – the first single national value-added tax – has
had a positive impact on the food and non-alcoholic beverage subsectors, while the alcoholic
beverage subsector has been seriously affected. Sector-specific driving forces include plentiful inputs
supplied by India’s developed agricultural sector, the entry of foreign investors, and the expansion
and modernisation of the production base and supply chain infrastructure.
External
Several demographic trends underpin the positive performance of the food and beverage sector –
steady population growth, a large base of young consumers (over 65% of the population is under 35
years old), rising rural-to-urban migration and a higher number of women entering the workforce.
Moreover, an expanding middle class – supported by a strong labour market, rising wages and easier
access to credit – coupled with changing consumer habits, is driving the demand for higher value-
added products. Additionally, the entry into force of the GST in July 2017 is benefiting food and
beverage producers, retailers and consumers. GST is set to eliminate “cascade taxation”, bring down
the prices of manufactured goods, reduce the overall tax burden, improve cash flows and boost the
profitability of manufacturing companies. Moreover, a number of government support programmes
for the development of food processing and supply chain facilities, which in 2017 were consolidated
under the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) Scheme, are having great impact on
improving cost reduction and production efficiency of Indian food processing enterprises. The
liberalisation of FDI policy in recent years has attracted a number of foreign investors in the food and
beverage sector, which have opted to invest not only in new production capacity, but also in the
entire supply chain infrastructure, thus helping raise the share of the organised sector.
Internal
The strong agricultural base of the country has made India one of the world’s largest producers of
cereals, fruits, vegetables, nuts, and sugarcane. The country is also home to the world's largest cattle
population and second-biggest goat and sheep population, which have helped it become a developed
production base for raw milk and fresh meat. As a result, the food and beverage sector benefits from
an abundant supply of inputs at competitive prices. At the same time, India is one of the world’s
largest exporters of a variety of food and beverage products, due to its proximity to key export
markets in the Middle East, Europe and Asia.
Source: IBEF, MOSPI, MOFPI, DAHD&F, DIPP, RBI, MCI, CSO, USDA

Restraining Forces
The main factor impeding the healthy growth of the sector is its high reliance on an adequate supply
of agricultural inputs, which in turn is dependent on favourable weather conditions. An additional
constraint, in particular for the alcoholic beverage industry, is the high degree of government
intervention in pricing, licensing, manufacturing, sales and advertising, coupled with rising
restrictions on alcohol consumption. On the other hand,, the food processing industry continues to
suffer from relatively low levels of processing of raw inputs, high wastage of agricultural produce,
prevalence of low value-added products in the production basket, and deficiencies in supply-chain
infrastructure that reduce its overall competitiveness.
External
India’s agriculture sector remains underdeveloped technologically, which explains its heavy
dependence on sufficient rainfall during the monsoon season. Two consecutive years of insufficient
monsoons in 2014 and 2015 caused a prolonged drought period in several Indian states, reducing the
supply of agriculture inputs for the food and beverage sector. The demonetisation reform of
November 2016 also caused temporary disruptions in the sector’s supply chains, largely dominated by
cash payments, and reduced household consumption of discretionary goods. In the medium-term
however, the reform is seen as positive, as it will reduce informal economic activity and increase the
share of the organised sector. India’s alcoholic beverages industry is restrained by a high level of
government intervention, an excessive tax burden, exclusion of alcoholic beverages from the new GST
regime, and mounting restrictions, such as a national ban on liquor sales along highways
implemented in April 2017, coupled with state-level bans on alcohol consumption.
Internal
Gaps in the supply-chain infrastructure – including inadequate post-harvest infrastructure facilities
and a lack of appropriate primary processing, cold storage and distribution facilities – coupled with
underdeveloped links between agriculture producers and processing companies, are the main
restraining factors for the food and beverage sector. They result in large-scale wastage of agriculture
produce, mainly of perishable commodities. In 2017, the Food and Agriculture Organisation of the
United Nations (FAO) reported that about 40% of the food produced in India is wasted, due to its low
levels of food processing. The oils and fats industry remains one of the segments most affected by
scarce production capacity, erratic input supply and inadequate storage infrastructure, thus creating
increasing supply deficits that are filled mostly through imports. Moreover, the food and beverage
sector continues to suffer from low levels of adoption of new technologies, the prevalence of low
value-added beverages and food products, and an insufficient focus on quality and safety.
Source: IBEF, MOSPI, MOFPI, CIPHET, DAHD&F, DIPP, RBI, MCI, CSO, USDA

02
SECTOR
OUTLOOK

02 SECTOR OUTLOOK CONTENTS
Macroeconomic Outlook
Consumption, Investment, and Public

Real GDP, y/y change Spending, y/y change
1090.0% 898.6%
7.4% 7.4% 1027.8%
7.3% 821.2% 859.9%
7.3% 769.1% 634.6%
7.2% 872.4% 717.6%
7.2% 811.7% 695.2%
763.0% 766.2% 736.6% 781.0%
770.4% 721.4% 707.8%
656.0% 795.8% 672.7%
6.7%
FY2017 FY2018f FY2019f FY2020f FY2021f FY2022f FY2023f FY2017 FY2018f FY2019f FY2020f FY2021f FY2022f FY2023f
Pr ivate Consumption Fixed Investment
Real GDP, y/y change, % Public Spending
Comments
India’s GDP has embarked on a recovery track in FY2018 in a trend likely to continue in the near future. GDP grew
at some 6.6% in FY2018, and is expected to rise by 7.3% in FY2019. This is in contrast to FY2016 and FY2017, when
the growth of the Indian economy recorded a distinct slow-down, largely as a result of two government
initiatives. One was the withdrawal of high-value banknotes in November 2016, known as the demonetisation or
DeMo. The other was the introduction of GST in July 2017. This replaced India’s complex taxation system and
created a single pan-Indian market for the first time since the country gained independence in 1947. The real GDP
growth is projected to stagnate respectably at around 7% in the years to FY2023, supported by ongoing structural
reforms, resilient private consumption, substantial public investment in infrastructure, and higher tax intake
resulting from the GST, following the initial disruption. India spent INR 60tn on infrastructure between FY2007 and
FY2017, and will invest an estimated INR 50tn over the five fiscal years starting on April 1, 2018. The upcoming
general elections in 2019 might pose risks for the reform agenda of prime minister Narendra Modi’s government,
but infrastructure remains a priority, supported by a wide political consensus that India needs better
infrastructure to sustain growth. The country’s upward growth trajectory enjoys support by the IMF. In October
2018, the Fund reaffirmed its May prognosis that India would be the fastest growing major economy in 2019, well
ahead of China, and with positive medium-term prospects.
Source: EMIS Insights, ET

Macroeconomic Outlook (cont’d)
Current Account
FY2017 FY2018f FY2019f FY2020f FY2021f FY2022f FY2023f

0 0%
-10
-1%
-20
-48.7
-30 -1%
-71.8 -70.9 -73.5 -73.8
-40 -77.0 -75.9
-2%
-50 -1.67%
-1.87% -1.91%
-60 -2%
-2.15%
-70 -2.26%
-2.44% -3%
-80 -2.63%
-90 -3%
Cur rent Account, USD bn Cur rent Account, % of GDP
Total Exports and Imports, y/y change
19.9%
15.5%
12.2%
10.0%
9.8% 9.0% 9.3% 9.6%
8.9%
8.4% 7.7%
6.1% 6.9%
5.1%
FY2017 FY2018f FY2019f FY2020f FY2021f FY2022f FY2023f

Exports Imports
Source: EMIS Insights

Economic Sentiment
Consumer Confidence Survey (Future Business Expectation Index

Expectations Index)
130 117
128 116
115
126
114
124
113
122
112
120 111
118 110
116 109
114 108
03/2015
06/2015
09/2015
12/2015
03/2016
06/2016
09/2016
12/2016
03/2017
06/2017
09/2017
12/2017
03/2018
06/2018
09/2018
12/2018
03/2015
06/2015
09/2015
12/2015
03/2016
06/2016
09/2016
12/2016
03/2017
06/2017
09/2017
12/2017
03/2018
06/2018
09/2018
Comments
The consumer confidence – as measured by the future expectations index of RBI’s consumer
confidence survey for the period between March 2015 and September 2018 – peaked at 129.7 in
December 2016 and fell thereafter. It started rising again after March 2018, but not quite to the same
levels. In March 2018, it fell to 118.6, its lowest level over the period. The dip was the result of
consumer worries about savings and household expenses, the ET daily commented in October 2018.
The business expectation index values were volatile over the period, falling to lows o 111.1 and 110.9 in
March 2017 and June 2016, respectively, an highs of 115.8 and 115.5 in March 118 and March 2015,
respectively. Generally, the discrepancy is rooted in the fact that the consumers are being hit harder
than businesses by government policy initiatives. In particular, companies were better placed to
handle the November 2016 demonetisation, which withdrew about 90% of India’s cash in circulation
(CIC) overnight. Businesses in capital-intensive sectors, such as the oil and gas and the construction,
are also supported by multi-year public spending programmes. In addition, the volatility in business
expectation does reflect a challenging business environment for domestic producers. The Indian rupee
declined substantially against the US dollar y/y in 2018, which helped increase India’s import bill and
put stress on export-oriented sectors.

Sector Outlook
Food Manufacturing Output Value Beverage Manufacturing Output Value
1.13%
2.7%
0.95%
2.2%
0.83%
1.9% 0.73%
1.7% 0.66%
1.5%
819
11,779
11,957
814
11,582
808
11,362
801
11,113
794
FY2018f FY2019f FY2020f FY2021f FY2022f FY2018f FY2019f FY2020f FY2021f FY2022f
Food Manufactur ing Output Value, INR bn Beverage Manufacturing Output Value, INR bn
y/y change, % y/y change, %
Comments
EMIS Insights estimates that the output value of India’s food manufacturing subsector will grow by an
average of 2% per year between FY2018 and FY2022, reaching almost INR 12tn, while the beverage
subsector is expected to expand at an average of 0.9% per year during this period. The food and
beverage sector will be driven by the improving economy, growing population, ongoing urbanisation,
rising disposable incomes, changing consumer preferences towards higher value-added and healthy
products, and government measures aimed at increasing processing capacity and expanding supply
chain infrastructure. In terms of beverages, the spirits market will continue to experience robust
growth, supported by the rising brand awareness and strong trend for premiumisation with growing
demand for luxury and premium products. In terms of food, the sector will benefit from improved
product quality and rising demand for branded food. The government’s proactive policy aimed at food
processing supply chain improvement will have a positive impact on the sector’s development over
the next few years. India’s strategic geographic location and proximity to food-importing countries, as
well as the increasing quality of food and beverage products will make it one of the most preferred
sourcing countries for processed food and beverages.
Source: EMIS Insights, Dun & Bradstreet, MOFPI

Sector Outlook (cont’d)
Production of Milk, Eggs, Meat and Fish Production of Food Grains, Vegetables
and Fruits, mn tonnes
8.0 8.2
7.7 7.9
7.6 13.7 97.1 100.3 103.6 106.9 110.2
12.8 13.2
11.9 12.3
179.7 182.4 184.9 187.3 189.3
184.0 190.3 196.5

171.6 177.8
255.6 257.1 258.5 259.8 261.0
FY2018f FY2019f FY2020f FY2021f FY2022f FY2018f FY2019f FY2020f FY2021f FY2022f
Milk Fish Meat Food Grain
Comments
According to EMIS Insights, between FY2018 and FY2022, India’s production volume of eggs, fish, milk
and meat will grow at an annual average growth rates of 4%, 3.7%, 3.5% and 2%, respectively. The
country’s output of fruits, vegetables, and food grains is expected to expand at an average of 3.5%,
1.2% and 0.5% per year, respectively. In order to keep pace with the demand of the rising population,
the government has launched a number of schemes to modernise food processing infrastructure and
improve the linkages between farmers, processors and markets. The food processing sector is an
important contributor to GDP, employment, investment and exports, which makes it one of the sectors
with the highest priority for the government. With the new markets of South East Asia, Far East and
North Africa opening up for Indian food and beverage products, exports are expected to continue to
rise. Considering the higher purchasing power, higher awareness and preference for healthy food and
beverages, there are large opportunities to expand this category of products in the coming years.
Source: EMIS Insights, MOFPI

Sector Outlook (cont’d)

Main Indicators Forecast
Key Indicators FY2018f FY2019f FY2020f FY2021f FY2022f
Food Manufacturing Output Value, INR bn 11,113 11,362 11,582 11,779 11,957
Beverage Manufacturing Output Value, INR bn 794 801 808 814 819
Fish Production, mn tonnes 11.9 12.3 12.8 13.2 13.7
Meat Production, mn tonnes 7.6 7.7 7.9 8.0 8.2
Milk Production, mn tonnes 171.6 177.8 184.0 190.3 196.5
Egg Production, bn units 91.9 95.7 99.6 103.4 107.2
Food Grain Production, mn tonnes 255.6 257.1 258.5 259.8 261.0
Vegetable Production, mn tonnes 179.7 182.4 184.9 187.3 189.5
Fruit Production, mn tonnes 97.1 100.3 103.6 106.9 110.2

03
SECTOR
IN FOCUS

03 SECTOR IN FOCUS CONTENTS
Main Economic Indicators

FY2014 FY2015 FY2016 FY2017 FY2018
Total Population, mn, year-end 1,251 1,267 1,283 1,299 1,316
GDP, current prices, INR bn 112,335 124,680 137,640 152,537 167,731
GDP, constant 2011-2012 prices, INR bn 98,014 105,277 113,861 121,960 130,108
GDP, y/y change, % 12.2% 7.4% 8.2% 7.1% 6.7%
GDP per Capita, USD 1,486 1,610 1,640 1,752 1,977
Gross Value Added (GVA), current prices, INR bn 103,632 115,043 125,666 138,416 151,824
GVA of Food Products, Beverages and Tobacco Manufacturing, current prices, INR bn 1,757 1,859 2,046 2,123 n/a
GVA of Food Products, Beverages and Tobacco Manufacturing, constant 2011-2012

1,536 1,576 1,689 1,746 n/a
prices, INR bn
GVA of Food Products, Beverages and Tobacco Manufacturing, y/y change, % -8.3% 2.7% 7.2% 3.4% n/a
GVA of Food Products, Beverages and Tobacco Manufacturing, % of total GVA, current
1.7% 1.6% 1.6% 1.5% n/a
prices
GVA of Food Products, Beverages and Tobacco Manufacturing, % of GDP, current prices 1.6% 1.5% 1.5% 1.4% n/a
Consumer Price Index (FY2012=100), y/y change, % 9.4% 5.9% 4.9% 4.5% 3.6%
Consumer Price Index (FY2012=100), Food and Beverages, y/y change, % 11.9% 6.5% 5.1% 4.4% 2.2%
Wholesale Price Index (2011-2012=100), y/y change, % 5.2% 1.3% -3.7% 1.7% 2.9%
Wholesale Price Index (2011-2012=100), Food, y/y change, % 9.6% 4.3% 1.2% 5.9% 1.9%
Wholesale Price Index (2011-2012=100), Food Manufacturing, y/y change, % 4.3% 2.3% -1.3% 8.3% 2.5%
Wholesale Price Index (2011-2012=100), Beverage Manufacturing, y/y change, % 4.8% 3.1% 0.7% 1.8% 2.4%
Official Exchange Rate, INR/USD, year-average 60.5 61.1 65.5 67.1 64.5
Official Exchange Rate, INR/EUR, year-average 81.2 77.5 72.3 73.6 75.4
Deposit Rate, One Year Maturity, %, year-end 8.00-9.25 8.00-8.75 7.00-7.50 6.50-7.00 6.25-6.75
Monetary Policy Rate: Repo Rate, %, year-end 8.00 7.50 6.75 6.25 6.00
Reverse Repo Rate, %, year-end 7.00 6.50 5.75 5.75 5.75
Food and Beverage Exports, USD mn 38,110 36,232 29,738 30,939 35,521
Food and Beverage Exports, % of total 12.1% 11.7% 11.3% 11.2% 11.7%
Food and Beverage Imports, USD mn 16,464 19,691 21,400 23,924 23,097
Food and Beverage Imports, % of total 3.7% 4.4% 5.6% 6.2% 5.0%
Total FDI Inflow, USD mn 24,301 30,930 40,001 43,477 44,857
FDI Inflow in Food and Beverage Sector, USD mn 2,765 517 506 727 905
FDI Inflow in Food and Beverage Sector, % of total 11.4% 1.7% 1.3% 1.7% 2.0%
Source: CSO, MOSPI, MOFPI, DAHD&F, DIPP, RBI, MCI, CEIC

Main Sector Indicators
FY2014 FY2015 FY2016 FY2017 FY2018
Industrial Production Index (2011-2012=100), Food Products, y/y change, % 1.3% 6.0% -5.6% -5.5% 9.3%
Industrial Production Index (2011-2012=100), Beverages, y/y change, % -1.8% 3.2% 1.4% -3.1% -0.8%
Food Manufacturing Output Value, INR bn 9,568 10,710 10,274 10,825 n/a
Beverage Manufacturing Total Output Value, INR bn 679 811 779 785 n/a
Meat Production, mn tonnes 6.2 6.7 7.0 7.4 n/a
Meat Production, y/y change, % 4.8% 7.3% 4.9% 5.2% n/a
Milk Production, mn tonnes 137.7 146.3 155.5 165.4 173.0
Milk Production, y/y change, % 4.0% 6.3% 6.3% 6.4% 4.6%
Egg Production, bn units 74.8 78.5 82.9 88.1 95.0
Egg Production, y/y change, % 7.2% 5.0% 5.7% 6.3% 7.8%
Fish Production, mn tonnes 9.6 10.2 10.8 11.4 12.6
Fish Production, y/y change, % 6.0% 6.1% 6.2% 5.7% 10.4%
Food Grain Production, mn tonnes 265.0 252.0 252.2 275.0 285.0
Food Grain Production, y/y change, % 3.1% -4.9% 0.1% 9.0% 3.6%
Vegetable Production, mn tonnes 160.3 166.6 169.1 178.2 179.7
Vegetable Production, y/y change, % 0.5% 3.9% 1.5% 5.4% 0.9%
Fruit Production, mn tonnes 91.6 89.5 90.2 92.9 97.1
Fruit Production, y/y change, % 9.1% -2.2% 0.7% 3.0% 4.5%
Alcoholic Beverage Production, mn litres 2,501.4 2,608.0 2,729.0 2,548.0 2,490.6
Alcoholic Beverage Production, y/y change, % n/a 4.3% 4.6% -6.6% -2.3%
Source: CSO, DAHD&F, DAC, CEIC, Dun & Bradstreet

Gross Value Added
Comments GVA of Food Products, Beverages and

Tobacco Manufacturing, current prices
The food processing sector is an important
segment of the Indian economy. Although the
share of food, beverages and tobacco 10.1%
manufacturing in the country’s GDP has declined
in the last few years, it continues to be the fifth-
largest manufacturing sector, with a share of 5.8%
9.1% of manufacturing GVA in FY2017 and 1.4% of 4.4% 1,859
2,046 2,123
1,682
the country’s GDP. In FY2017, the GVA of India’s 1,757 3.8%
food, beverages and tobacco manufacturing

sector rose by 3.4% y/y. According to MOFPI, the
0.4%
subsectors with the highest GVA in percentage
FY2013 FY2014 FY2015 FY2016 FY2017
terms are malt liquors and malt, soft drinks,
prepared meals and others, while vegetable and
animal oils and fats have the lowest GVA. GVA, INR mn y/y change, %
Food Products, Beverages and Tobacco GVA of Food Products, Beverages and
Manufacturing GVA Share, current prices Tobacco Manufacturing, constant prices,
y/y change
10.7% 12.8%
10.3% 9.9% 12.2%
9.7%
9.1%
8.2%
7.9% 7.9% 6.7%
7.2%
7.4% 7.1% 5.7%
5.0%
3.4%
2.7%
FY2014 FY2015 FY2016 FY2017 FY2018

1.7% 1.6% 1.5% 1.5% 1.4%
FY2013 FY2014 FY2015 FY2016 FY2017 -8.3%
GDP
GVA of Manufacturing
Share of Manufacturing GVA, % Share of GDP, % GVA of Food Products, Beverages and Tobacco Manufacturing
Source: CSO, CEIC, MOFPI

Production
Industrial Production Index, y/y change Food and Beverage Manufacturing

Output Value, INR bn
9.3% 11,521 11,610

11,053
10,246
6.0% 8,646
4.4% 4.6%
3.6% 3.8% 2.8%
3.2%
10,825
1.4%
10,710
1.3%
10,274
9,568
-0.8%
8,016
-1.8%
-3.1%
811
785
779
679
631
-5.6% -5.5%
FY2014 FY2015 FY2016 FY2017 FY2018 FY2013 FY2014 FY2015 FY2016 FY2017
Manufacturing Industry Food Manufactur ing

Food Manufactur ing Beverage Manufacturing Total
Beverages Manufacturing
Comments
In 2014 and 2015, prolonged drought and inadequate monsoons in ten out of India’s 29 states had a
negative effect on the supply of agricultural inputs for the food and beverage processing sector,
forcing several companies to discontinue operations temporarily. As a result, in FY2016 the sector
showed negative performance in terms of production volume. In FY2017 it was affected by the
banknote demonetisation reform adopted by the government in November 2016. This caused cash
shortages, temporary interruptions in supply chains and a further decrease in the output of the food
and beverage sector. In FY2017, industrial production indices of both food and beverage processing
subsectors dropped by 5.5% y/y and 3.1% y/y, respectively. According to the CSO, in FY2017 the output
value of India’s food manufacturing sector increased by 5.4% y/y to INR 10,824.6bn, of which INR
9,570.4tn was the output value of manufacturing corporations, while INR 1,254.2bn was derived from
household-based manufacturing units. The output value of the beverage manufacturing sector
reached INR 785.2bn, up by 0.8% y/y, including INR 745.3bn from manufacturing corporations and INR
39.9bn from household-based manufacturing units. In FY2018 the sector performed much better,
supported by a higher level of agriculture production and government support through initiatives
aimed at fostering sector growth.
Source: CSO, CEIC, Economic Times, Times of India, Business Standard

Global Positioning
Comments Top 10 Global Fisheries Producers by

Capture and Aquaculture, 2016*
India has the second-largest agricultural land in
the world after the US, and the largest cattle
China 39.1%
population in the world. The country boasts an Indonesia 6.7%
abundance of fruits and vegetable, crops and India 6.3%
food grain varieties, as well as milk and meat. Vietnam 3.7%
USA 3.1%
India has a vast coastline and ranks as the Russia 2.9%
world’s third-largest producer of fish. According Peru 2.3%
Bangladesh 2.3%
to the FAO, the country produced 10.8mn tonnes
Japan 2.3%
of fish in 2016. India is the world’s third-largest Nor way 2.0%
producer of beef and veal with 4.3mn tonnes
carcass weight equivalent produced in 2017, Top 10 Global Beef and Veal Producers**,
according to the USDA. The country is also the 2017
world’s second-largest exporter of beef and veal
Br azil 15.2%
after Brazil, with 1.8mn tonnes exported in 2017. EU 12.5%
Moreover, India ranks fourth in the world in the China 11.5%
India 6.8%
poultry meat segment, producing 4.6mn tonnes in Ar gentina 4.5%
2017. The country is the world’s second-largest Australia 3.4%
Mexico
producer after the EU, and the largest consumer 3.1%
Pakistan 2.8%
of cow’s milk. In 2017 it produced 72mn tonnes of Turkey 2.2%
cow’s milk, of which 90% was for domestic Russia 2.1%
consumption. India ranks first in butter
production with 5.4mn tonnes of butter output in Top 10 Global Chicken Meat Producers,
2017. The country also ranks as the second- and 2017
third-largest producer of rice and wheat,
producing 105.5mn tonnes of milled rice and Br azil 14.5%
EU 12.9%
98.5mn tonnes of wheat in 2017, according to the China 12.4%
USDA. India ranks first in the production of fruits India 4.9%
Russia
such as mangoes, guavas, bananas and lemons, 5.0%
Mexico 3.6%
and some vegetables like onions and ginger. It is Thailand 3.2%
also the second-largest producer of tomatoes, Turkey 2.3%
Ar gentina 2.3%
potatoes, green peas and cabbages. Colombia 1.7%
* Data for India and Bangladesh is for FY.

** Data for India includes meat of carabeef, or buffalo meat.
Source: FAO, USDA

Global Positioning (cont’d)
Top 10 Global Cow’s Milk Producers, 2017 Top 10 Global Butter Producers, 2017
EU 30.5% India 52.8%
India 14.3% EU 22.9%
China 7.1% Russia 5.1%
Russia 6.1% New Zealand 2.6%
Br azil 4.7% Mexico 2.2%
New Zealand 4.3% Canada 1.2%
Mexico 2.4% Belarus 1.2%
Ukraine 2.0% Ukraine 1.0%
Ar gentina 2.0% Australia 1.0%
Australia 1.9% Br azil 0.8%
Top 10 Global Milled Rice Producers, Top 10 Global Wheat Producers, 2017*
2017*
China 29.4% EU 20.0%
India 21.5% China 17.1%
Indonesia 7.2% India 13.0%
Bangladesh 7.0% Russia 11.2%
Vietnam 5.7% Canada 4.0%
Thailand 3.8% Ukraine 3.6%
Myanmar 2.6% Pakistan 3.5%
Philippines 2.4% Australia 2.8%
Br azil 1.7% Turkey 2.8%
Pakistan 1.4% Ar gentina 2.4%
* Data is for local marketing years.

Source: FAO, USDA

External Trade
Comments Food and Beverage Sector External

Trade, USD mn
India is a net food exporter with a positive
balance of trade in food and beverage products,
38,110
36,232
amounting to USD 12.4mn in FY2018. The largest
35,521
30,939
trade surpluses are recorded among the
29,738
categories of cereals, fish and crustaceans, edible
23,924
23,097
16,464
21,400
meat, coffee, tea, mate and spices. The country,
19,691
however, has a trade deficit in some products, 21,646
such as oils and fats, edible vegetables, fruits, 16,541
12,425
and nuts. In FY2018, trade surplus in food and
8,339
beverages recorded a significant y/y growth of 7,015
77.1% on the back of the increased exports mainly

of fish, bovine meat, fruits, nuts and vegetables, FY2014 FY2015 FY2016 FY2017 FY2018
where India has great potential to grow.

Exports Imports Trade Balance
Trade Balance by Product Category, USD mn, FY2018
7,717 Cer eals

6,760 Fish and Crustaceans
4,170 Meat and Edible Meat Offal
2,460 Cofee, Tea, Mate and Spices
1,290 Oil Seeds, Misc G rains, Medicinal Plants
908 Residues from Food Industries
773 Lac, Gums, Resins
-32 Sugar s and Sugar Confectionery
-375 Beverages, Spirits and Vinegar
-1,544 Edible Fruits, Nuts and Peels
-1,663 Edible Vegetables
-10,437 Animal or Vegetable Fats and Oils
Source: MCI, CEIC

Exports
Food and Beverage Exports Top Export Products, USD mn, FY2018
12.1% Cer eals 8,152

Fish and Crustaceans 6,851
Meat and Edible Meat Offal 4,175
11.7% 11.7%
Cofee, Tea, Mate and Spices 3,310
Edible Fruits, Nuts and Peels 1,857
11.3%
38,110 36,232 11.2% 35,521 Oil Seeds, Misc G rains, Medicinal Plants 1,647
29,738 30,939
Residues from Food Industries 1,460
Edible Vegetables 1,306
Animal or Vegetable Fats and Oils 1,264
FY2014 FY2015 FY2016 FY2017 FY2018 Lac, Gums, Resins 1,019
Sugar s and Sugar Confectionery 1,019
Food and Beverage Expor ts, USD mn
Beverages, Spirits and Vinegar 347
Share of Total Exports, %
Comments
Exports of processed food and beverages followed a downward trend between FY2014 and FY2016, due
to the depreciation of the local currency against the USD and lower export volumes of traditional
export products, such as cereals and food residues. Between FY2014 and FY2016, exports of cereals
declined by 41% y/y, while food residues – mainly comprising oil cake and solid residues from soybean
and rapeseed oil extraction – dropped by 74% y/y. An inadequate monsoon, which led to a decline in
cereal production, along with lower global demand, were the main reasons for the drop. In FY2017,
sector exports started to recover and in FY2018 achieved a significant y/y growth of 14.8% to USD
35.5mn. India’s top five export product categories – cereals, fish and crustaceans, meat and edible
meat offal, coffee, tea, mate and spices, as well as edible fruits, nuts and peels* – had a combined
share of 68.5% of food and beverages’ total exports in FY2018. In this period, all top five categories
reported y/y growth in exports, and cereals and fish and crustaceans witnessed double-digit growths
of 35.6% y/y and 24.5% y/y, respectively. India’s main food export destinations were the US, the Middle
East and Southeast Asia. In FY2018, the top five export countries for Indian food products were the US,
Vietnam, the UAE, Saudi Arabia and Malaysia, which accounted for 32.9% of the sector’s total exports
in value terms.
*Edible peels mostly denotes edible citrus peels used as condiments.
Source: MCI, CEIC, Dun & Bradstreet

Imports
Food and Beverage Imports Top 10 Imported Products, USD mn,

FY2018
6.2% Animal or Vegetable Fats and Oils 11,700

5.6% Edible Fruits, Nuts and Peels 3,401
5.0% Edible Vegetables 2,969
4.4%
Sugar s and Sugar Confectionery 1,050
3.7%
Cofee, Tea, Mate and Spices 850
23,924
21,400 23,097
19,691 Beverages, Spirits and Vinegar 722
16,464
Residues from Food Industries 552
Cer eals 434
Oil Seeds, Misc G rains, Medicinal Plants 357
FY2014 FY2015 FY2016 FY2017 FY2018 Lac, Gums, Resins 246
Fish and Crustaceans 91
Food and Beverage Imports, USD mn
Meat and Edible Meat Offal 5
Share of Total Imports, %
Comments
Food and beverage imports followed an overall upward trend over between FY2014 and FY2017, closely
following the evolution of imports of oils and fats, the sector’s major import product, with a share of
more than 50% of food and beverage imports in value terms. During this period, imports of oils and
fats – mainly consisting of palm oil and soybean oil – rose by 15.9% to almost USD 11bn in FY2017, due
to a combination of rising domestic demand and insufficient domestic supply and price competitive
imports from countries such as Indonesia and Malaysia. In FY2018, imports of oils and fats continued
to rise, reaching USD 11.7bn. The sector’s total imports, however, suffered a 3.5% y/y decline in FY2018,
falling to USD 23.1bn. The decline came as imports of edible vegetables – the sector’s third-largest
category in value terms – dropped by 30.8% y/y to USD 3bn. The category of sugars and sugar
confectionery, which had a share of 4.5% of the sector’s imports, suffered a 4.8% y/y decline in
imports, while the imports of cereals shrank by 67.7% y/y on the back of increased domestic supply. In
FY2018, India’s top five source countries for food and beverage product imports were Indonesia,
Malaysia, the US, Australia and Thailand, which together claimed a share of 43.3% of the sector’s total
import value.
Source: MCI, CEIC, Dun & Bradstreet

Foreign Direct Investment
FDI Inflow in Food and Beverage Sector FDI Inflow in Food and Beverage Sector
by Segment, USD mn
2,764.6
1,997.2
11.4%
829.6
760.3
904.9
727.2
562.4
434.9
516.7
505.9
343.4
173.1
145.4
2.0%
71.6
67.5
19.4
1.7% 1.3% 1.7%
7.1
0.2
3.5
3.7
FDI in Food and Beverage Sector, USD mn Food Products Other Products Marine Products
Share of Total FDI, %
Comments
The government allows 100% of foreign direct investment (FDI) under the automatic route in the food
and beverage sector, with the exception of segments reserved for micro- and small enterprises, where
FDI is allowed under the automatic route for up to 24% of capital. For investments exceeding this
threshold, an industrial licence is required. Over the FY2014-FY2018 period, the food and beverage
sector attracted FDI worth USD 5.4bn, or 3% of total FDI in the country. FY2014 reported a significant
increase in FDI due to huge investments announced by PepsiCo India Holdings Pvt Ltd, Cadbury India
Ltd (now Mondelez India Foods Pvt Ltd) and Nestle India Ltd. In 2016 the Indian government also
allowed 100% FDI in trade of food products manufactured in India, attracting investors such as
Amazon, Big Basket and Grofers, amongst others. Between FY2015 and FY2018, FDI in the sector
increased at a CAGR of 15%. India’s growing demand for food and beverage products, supply
advantages and policy support are of key importance for foreign investors. The government’s main
focus on the development of supply-chain related infrastructure, such as cold storage, abattoirs and
food parks, will continue to drive FDI in the sector in the next few years. In 2018, India significantly
improved its position in the World Bank's Ease of Doing Business ranking for 2019. It jumped to 77th
place from 100th in 2017 and 130th in 2016.
Source: DIPP, MOFPI, CEIC, Dun & Bradstreet, World Bank

Employment and Wages
Comments Number of Persons Engaged in Food and

Beverage Sector, year-end
The food processing sector has the largest
number of factories and engages the largest 1,776,643 1,689,175 1,741,034 1,773,939 1,765,139
number of workers among all manufacturing
industries in India. According to the latest
1,629,161
1,613,316
1,599,818
1,582,527
1,547,183
available data from the CSO, there were 39,318
165,321
160,623
158,507
147,482
141,992
registered food and beverage factories in India at
the end of FY2016, employing nearly 1.8mn
people. In addition, 5.1mn people worked in FY2012 FY2013 FY2014 FY2015 FY2016
unregistered units across the country, according Food Beverage Total

to the survey of the National Sample Survey
Office (NSSO) conducted between July 2015 and Number of Factories in Food and
June 2016. A total of 15,865 unincorporated food Beverage Sector, year-end
and beverage manufacturing enterprises have 38,607 39,318
36,881 37,175 37,449
been surveyed by the NSSO. According to IBEF,
India’s food processing sector will employ about
37,098
9mn people by 2024.
36,389
35,346
35,096
34,884
2,218
2,220
2,079
2,103
1,997
Considering the sector’s employment potential,

the government has launched a number of
FY2012 FY2013 FY2014 FY2015 FY2016
supportive initiatives. One of them is the Scheme
for Human Resources and Institutions, focusing Food Beverage Total
on the establishment of training centres and
facilities for degree courses in the food Average Annual Wage in Food and
Beverage Sector, INR
processing sector, as well as promotion of
training at institutions at the State and national 125,095
135,749
120,031
levels. In FY2018, the government allocated INR 97,482
90,603
300mn from its budget for scheme development.
During the year, budget estimates have been
revised to INR 715.3mn, of which INR 596.6mn was 14,136 15,793 17,441
10,963 11,788
actually spent. The government’s budget
FY2012 FY2013 FY2014 FY2015 FY2016
estimates for the scheme during FY2019 amount
to INR 330mn. Food Beverage
Source: CSO, CEIC, NSSO, IBEF, MOFPI

04
COMPETITIVE
LANDSCAPE

04 COMPETITIVE LANDSCAPE CONTENTS
1826
Timeline India
Market Players
United Spirits Ltd – India's largest spirits company –
Food & Beverage

is established.
1892 Market Players

1915 Market Players
Britannia Industries Ltd established as India's largest beer producer –

one of the first biscuit companies in India. United Breweries Ltd – is founded.
1964 Development Milestones

The Indian Government launches the Intensive Cattle
Development Programme (ICDP) to improve cattle quality. Green Revolution is launched in India to make the
country self-sufficient in food grains through
implementation of high-yielding varieties of seeds,
and the increased use of fertilisers and irrigation.
The National Dairy Development Board (NDDB) launches

White Revolution, known as Operation Flood (1970-1996), 1988 Development Milestones
to create national milk grid connecting producers with

The Ministry of Food Processing Industries
consumers.
(MOFPI) is established.

The government introduces the New Industrial
India becomes a member of the World Trade
Policy, liberalising the FDI regime.
Organisation, opening its food and beverage industry
to foreign markets.
2008
The MOFPI launches Scheme for Mega Food Parks and
Scheme for Cold Chain, Value Addition and Preservation 2009 Development Milestones
Infrastructure for Non-Horticultural Products.
MOFPI launches the Modernisation of Abattoirs Scheme.
Development Milestones

The government sets a target to increase the level
of food processing from 10% in 2010 to 25% in 100% FDI under government approval route
2025 under the National Food Processing Policy. is allowed in the trade of food products
manufactured in India.
The government releases its Three Year Action Agenda The national Goods and Services Tax (GST) is
(FY2018-FY2020), which contains key tasks related to introduced.
agricultural marketing reforms in India.
Source: MOFPI, FAO, US Library of Congress, Planning Commission, The Government of India, Company Data

Highlights
Overview
India’s food and beverage sector features a medium-to-high level of competition, with a total of
39,318 active factories at the end of FY2016, most of them small-scale industrial units. At around 60%
in FY2016, the share of the organised sector in food processing is relatively high, although there are
significant variations across segments, according to IBEF. Nevertheless, the unorganised sector still
has considerable influence, which intensifies competition. Liberalisation of the FDI rules for the sector
in recent years has attracted several large foreign investors willing to tap the growth potential of the
domestic market.
Market Structure
In segments where the unorganised sector has a predominant share – such as dairy products, meat,
fish and sugar – there is a relatively high level of competition. Several highly regulated and capital-
intensive segments remain dominated by a few large players, mainly of foreign origin. The spirits
market is dominated by the United Spirits, a subsidiary of the British company Diageo, with a market
share of 30.6% in 2017, according to MarketLine. A similar situation is observed in the brewery
industry – where the leader is United Breweries, with a market share of 46.1% in 2016 – and in the
carbonated soft drinks industry, where the US companies Coca-Cola and PepsiCo had 88% of the
market in 2017.
Main Players
The largest players in the sector are companies with operations in procurement, primary and
secondary processing, and retail. India’s domestic producers, such as Britannia Industries, Modern
Dairies, Kwality, REI Agro, Kohinoor Foods and others, are very active in the food processing sector.
The country’s fast development as a sourcing hub of processed food has also attracted a number of
foreign players, such as Pepsico, Coca-Cola, Danone, Nestle, Kraft Foods, Mondelez International,
Unilever, Heinz, and others.
Main Entries
The liberalisation of India’s FDI policy and the prospect of robust domestic demand has boosted
foreign investor interest in the local food and beverage sector. Despite the relatively high entry
barriers and growing state regulation in the alcoholic beverages industry, Dutch group Heineken has,
since 2015, gradually increased its stake in United Breweries Ltd, India’s biggest brewer, and plans to
acquire majority control. The most recent entrant in the sector is Greece-based snack and
confectionery producer Chipita SA, which struck a JV with Britannia Industries Ltd in 2017.
Source: CSO, CEIC, IBEF, Marketline, Dun & Bradstreet, Company Data, Business Standard

Top Companies
Top 10 Companies by Sales Revenue in India’s Food and Beverage Sector
Rank Company Name Sales Revenue, INR bn
1 United Spirits Ltd 265.6
2 Adani Wilmar Ltd 235.0*
3 Ruchi Soya Industries Ltd 120.3
4 Pernod Ricard India Pvt Ltd 129.2*
5 United Breweries Ltd 124.3
6 Indian Potash Ltd 121.9*
7 Nestle India Ltd 102.1
8 Britannia Industries Ltd 99.1
9 Hindustan Coca-Cola Beverages Pvt Ltd 95.5*
10 Kwality Ltd 73.2
Top 10 Listed Companies by Sales Revenue in India’s Food and Beverage Sector
Rank Company Name Sales Revenue, INR bn
1 United Spirits Ltd 265.6
2 United Breweries Ltd 124.3
3 Ruchi Soya Industries Ltd 120.3
5 Nestle India Ltd 102.1
5 Britannia Industries Ltd 99.9
6 Kwality Ltd 73.2
7 Tata Global Beverages Ltd 68.2
8 Radico Khaitan Ltd 62.7
9 Bajaj Hindustan Sugar Ltd 59.4
10 Gokul Agro Resources Ltd 50.7

* Data for FY2017. All other figures refer to FY2018.
Source: EMIS Company Database, Company Data

Top M&A Deals, Q2 2017 – Q3 2018
Country of Deal Value Stake

Date Target Company Deal Type Buyer
Buyer USD (mn) %
Open Market
12-Mar-18 Avanti Feeds Ltd Thai Union Asia Investment Holding Ltd Hong Kong 160.9 9
Purchase
23-Nov-17 Havmor Ice Cream Acquisition Lotte Corp South Korea 158.0 100
28-Jul-17 Shree Renuka Sugars Ltd Minority Stake Wilmar Sugar Holdings Pte Ltd; Wilmar International Ltd Singapore 122.0 34
SmallCap World Fund, Inc.; Goldman Sachs India Ltd; HDFC United States;
22-Sep-17 Prataap Snacks Ltd IPO Trustee Company Ltd; SBI FMCG Fund; DSP Blackrock Mauritius; 74.5 21
Mutual Fund ; BNP Paribas Arbitrage Fund India
29-Jul-17 Apricot Foods Pvt Ltd Acquisition Guiltfree Industries Ltd; RP-Sanjiv Goenka Group India 67.0 70
Open Market The Pabrai Investment Fund II LP; The Pabrai Investment
12-Feb-18 KRBL Ltd. United States 60.0 3
Purchase Fund IV LP; Pabrai Investment Funds; Unknown Buyer(s)
Open Market
22-Feb-18 Tata Global Beverages Ltd Unknown Buyer(s) n/a 50.7 2
Purchase
Societe Financiere de Transports et d'Entreprises

8-May-18 B9 Beverages Pvt Ltd Minority Stake Belgium; India 50.0 24
Industrielles (Sofina); Sequoia Capital India Pvt Ltd
3-May-17 Dodla Dairy Ltd Minority Stake TPG Capital LP United States 50.0 25
19-Oct-17 John Distilleries Pvt Ltd Minority Stake Sazerac Company United States 43.0 28
18-May-18 Bikaji Foods International Ltd Minority Stake IIFL Special Opportunities Fund; IIFL Asset Management Ltd India 36.8 n/a
Open Market
10-Nov-17 Hatsun Agro Products Ltd. Unknown Buyer(s); DSP Blackrock Mutual Fund India 35.0 2
Purchase
Open Market
24-Aug-17 Tata Global Beverages Ltd Unknown Buyer(s) n/a 34.6 2
Purchase
25-May-17 Ready Roti India Pvt Ltd Acquisition Grupo Bimbo SAB de CV Mexico 32.5 65
Nomura Trust and Banking Co Ltd; Nomura Funds Ireland

Open Market
1-Dec-17 McLeod Russel India Ltd Public LTD Nomura Funds Ireland India Equity; Nomura Japan; Ireland 31.9 9
Purchase
Asset Management
Open Market
5-Jan-18 Varun Beverages Ltd Unknown Buyer(s) n/a 27.0 1
Purchase
14-Sep-17 Keventer Agro Limited Minority Stake Mandala Capital International Pte Ltd Singapore 25.0 15
11-Jan-18 Southern Health Foods Pvt Ltd Minority Stake Morgan Stanley Private Equity Asia Ltd Hong Kong 23.8 n/a
Source: EMIS DealWatch

Top M&A Deals, Q2 2017 – Q3 2018 (cont’d)
Country of Deal Value Stake

Date Target Company Deal Type Buyer
Buyer USD (mn) %
HSBC India; HSBC Midcap Equity Fund; Invesco India

India; Hong
22-Aug-17 Apex Frozen Foods Ltd IPO Contra Fund; Reliance Capital Trustee Co Ltd; Retail 23.4 26
Kong
Investors; Non Institutional Investors
22-Aug-18 Avadh Snacks Pvt Ltd Acquisition Prataap Snacks Ltd India 21.2 80
India Agri Business Fund II; Rabo Equity Advisors Pvt
31-Aug-18 Nature Bio Foods Ltd Minority Stake India 20.0 n/a
Ltd
Intensive Softshare Pvt Ltd; Norwest Venture Partners United States;
24-Jul-18 Kishlay Foods Pvt Ltd Minority Stake 15.0 n/a
(NVP) India
Verlinvest SA; DSG Consumer Partners; InnoVen Belgium;
7-Jul-17 Drums Food International Pvt Ltd Minority Stake 14.0 n/a
Capital India Singapore; India
Open Market
3-Oct-17 Hatsun Agro Products Ltd. SBI Mutual Fund India 11.2 1
Purchase
26-Jan-18 Global Gourmet Private Limited Minority Stake India Agri Business Fund; Rabo Equity Advisors Pvt Ltd India 10.0 n/a
Verlinvest SA; DSG Consumer Partners; Saama Belgium;
10-Oct-17 Veeba Food Services Pvt Ltd Minority Stake 8.0 8
Capital India Advisors; Sixth Sense Ventures Singapore; India
24-Aug-17 B9 Beverages Pvt Ltd Minority Stake Sequoia Capital India Pvt Ltd India 8.0 26
Sequoia Capital; Saama Capital India Advisors; DSG United States;
24-Oct-17 Rakyan Beverages Pvt Ltd Minority Stake 6.0 n/a
Consumer Partners India; Singapore
Aavishkaar Bharat Fund; Aavishkaar Venture
22-Mar-18 Kottaram Agro Foods Private Limited Minority Stake India 5.4 n/a
Management Services
21-Aug-18 Rakyan Beverages Pvt Ltd Minority Stake Alteria Capital Advisors LLP India 5.0 n/a
021 Capital; Oikocredit Ecumenical Development Netherlands;
29-May-18 Y-Cook India Pvt Ltd Minority Stake 5.0 n/a
Cooperative Society UA; Omnivore Partners India
Singapore;
DSG Consumer Partners; Saraf Family-private investor;
India; United
27-Feb-18 Saraf Foods Ltd. Minority Stake PEDORIA Ltd; Investment Fund for Developing 4.6 n/a
Kingdom;
Countries (IFU)
Denmark
Open Market
21-Aug-17 Nestle India Ltd. Life Insurance Corporation of India (LIC) India 4.1 0
Purchase
Open Market
28-Aug-18 Ruchi Soya Industries Ltd Unknown Buyer(s) n/a 1.4 3
Purchase
6-Jul-18 White Owl Brewery Pvt Ltd Minority Stake IIFL Select Equity Fund; IIFL Asset Management Ltd India 1.4 n/a
Fireside Ventures; Singapore Angel Network; Mumbai
12-Dec-17 Vahdam Teas Pvt Ltd Minority Stake India; Singapore 1.4 n/a
Angels; Unknown Buyer(s)
19-Mar-18 Maverix Platforms Pvt Ltd Minority Stake Alteria Capital Advisors LLP India 1.3 n/a
Manufacturing Facility of Danone
19-Apr-18 Foods and Beverages in Sonipat, Acquisition Parag Milk Foods Ltd India n/a 100
Haryana
11-Nov-17 Vaman Milk Foods Pvt Ltd Acquisition Heritage Foods India Ltd India n/a 100

M&A Activity, Q2 2017 – Q3 2018
Number and Value of Deals in India’s Number of Deals by Deal Type

Food and Beverage Sector
9 9 9
Open Market
Purchase
25.6%
6
4
373 Acquisition
344
15.4%
2
83 92
37 64 Minority
Stake
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Purchase IPO 5.1%
53.8%
Value of Deals, USD mn Number of Deals
Number of Deals by Deal Value, USD Number of Deals by Region of Investor
Singapore
13.0%
Others
20.4%
US 11.1%
50.1-100mn
10.8%
0-50mn
81.1% Hong Kong
5.6%
100.1-
1,000mn
8.1%
Belgium
India 44.4% 5.6%

05
COMPANIES
IN FOCUS

05 COMPANIES IN FOCUS CONTENTS
United Spirits Ltd
Highlights Income Statement, Consolidated, INR mn

Founded in 1826, United Spirits Ltd (USL) is the
largest Indian spirits company, engaged in the 4.2%
manufacture, sale and distribution of alcoholic

beverages. Since 2014, the company has operated
as a subsidiary of UK alcoholic beverages group
Diageo Plc, which at end-March 2018 had a 54.8%
265,559
2.2%
257,568
239,209
equity stake in the company through its

subsidiary Relay BV. USL’s shares are listed on 1.4%
the Bombay Stock Exchange and on the National
11,041
6,519
5,234
3,513
1,434
Stock Exchange.
930
In FY2018, several regulatory challenges FY2016 FY2017 FY2018
impacting the sector, such as the ban on sale of
liquors on highways and alcohol exclusion in GST, Net Revenues EBITDA
Net Pr ofit EBITDA Margin
were the main reason the sales volume of USL
dropped to 78.5mn cases, compared to 90mn
cases in FY2017. Despite the challenges, company Balance Sheet, Consolidated, INR mn
sales revenues grew by 3.1% y/y to INR 265.6bn,
driven by extensive price increases in more than
half of India’s states, and a focus on 0.6
premiumisation, while its net profits marked a
triple-digit increase, reaching INR 6.5bn.
During FY2018, USL entered into agreements to

28,682
89,563
88,959
franchise its popular segment brands in eight

83,293
28,284
0.3
24,327
0.3
states, namely Chandigarh, Rajasthan, Madhya
21,594
17,831
Pradesh, Himachal Pradesh, Jammu and Kashmir,

16,347
Delhi, Sikkim and Uttar Pradesh. These additions

increased the total number of states where the
franchise model is in operation to 13 states. FY2016 FY2017 FY2018
Total Assets Shareholders Equity

Net Debt Net Debt / EBITDA
Source: Company Data

United Spirits Ltd

(cont’d)
Comments Sales in Value Terms by Segment, FY2018

USL produces and sells around 78mn cases per
year of Scotch whisky, Indian-made whisky, 63%
58%
brandy, rum, vodka, gin and wine. It has a total of 53%
140 brands, including 15 brands that sell more 47%
42%
than 1mn cases each year, of which two brands 37%
sell more than 10mn cases each annually. Its
major brands of spirits include McDowell's No.1,
Royal Challenge, Signature and Antiquity. USL
also imports, manufactures and sells Diageo’s
premium brands such as Haig Gold Label, Captain
Morgan, Johnnie Walker, J&B, Baileys, Lagavulin,
Talisker, VAT 69, Black & White, Smirnoff and FY2016 FY2017 FY2018
Ciroc in India.
Pr estige and Above Segment Popular Segment
USL operates 52 manufacturing facilities across
23 states and three union territories in India,
employing more than 4,000 people. The company Sales in Volume Terms by Segment,
has a strong distribution network and point of FY2018
sale coverage, and was represented in 85,000
outlets across India as of March 2018.
63%
59%
In FY2018, the Prestige and Above segment 53%
represented 47% of the company’s total sales 47%
41%
volume and 63% of its total net sales value, 37%
compared to 41% and 58% respectively in FY2017.
Sales growth in the segment was supported by a
continued focus on premiumisation and brand
renovation. In FY2018 USL launched Captain
Morgan “Original Rum”, expanding its rum
segment. The Popular segment represented 53% FY2016 FY2017 FY2018
of total volumes and 37% of total net sales in
FY2018, compared to 59% and 42%, respectively, Pr estige and Above Segment Popular Segment
in the previous year.


Founded in 1915, United Breweries Ltd (UBL) is the
largest beer manufacturer in India, with a market
8.1%
share of about 52% in volume terms in FY2018.
UBL’s shares are listed on the Bombay Stock
Exchange and on the National Stock Exchange.
7.4%
UBL operates as a joint venture between foreign
124,306
102,298
shareholders (43.88%) and Indian shareholders
96,414
6.8%
(29.46%), as of March 2018. Heineken acquired a
9,141
37.5% stake in UBL in 2008, and since then has
7,780
6,928
3,946
2,987
2,299
gradually increased its stake in the company to
tap the fast-growing beer market in the country. FY2016 FY2017 FY2018
At the end of March 2018, Heineken’s share of
UBL was 43.73%.
Net Revenues EBITDA
In FY2018, the company’s revenues grew by 21.5%
y/y to INR 124.3bn, as a result of higher sales
volumes, a favourable brand mix and price Balance Sheet, Consolidated, INR mn
increases in certain markets during the year. In
this period, UBL’s sales volume improved in key 0.3
profitable markets, with strong market share
gains in most large states, especially in
26,903
0.2
Telangana, Andhra Pradesh, Rajasthan, Orrisa,
23,342
Tamil Nadu, and Karnataka. The company’s net 0.2

21,471
47,234
profits rose by 71.6% y/y to INR 3.9bn, supported

44,787
43,659
by implementation of strict cost control and

higher capacity utilization, aiming to mitigate the
negative impact of GST.
2,546
1,897
1,714
The company reported that, during FY2018, it

added about 1.5% market share over the previous FY2016 FY2017 FY2018
year in sales volume terms, representing a 10%

y/y growth. This was the first double-digit volume
growth since FY2011.


(cont’d)
Comments Revenue by Segment, FY2018

Sales of products (beer and malt) is the major
activity of the company, contributing 97.3% to its
sales revenues in FY2018. In this period, the
company’s beer and malt sales rose by 21.6% y/y
to INR 121.6bn. Sales revenues from beer products
totalled INR 120.7bn, compared to INR 99.4bn in Sale of Beer
FY2017, thanks to higher sales volumes of and Malt Other
97.3% Operating
premium beer under the brands of Heineken, Revenue
Kingfisher Premium and Kingfisher Ultra. 2.0%
UBL operates 20 of its own breweries and 10

contract breweries across India, employing 2,837 Sale of
people as of end-March 2018. The company has Services
0.7%
licensed its brands for manufacture and supply of
beer at four international locations – the UK,
Australia, New Zealand and Nepal. UBL’s brands
are available in about 52 countries worldwide. Revenue by Region, FY2018
The portfolio of UBL includes its flagship brand
Kingfisher and other brands such as UB Export
Lager, London Pilsner, Bullet, Zingaro, Heineken
and others. Among them, Kingfisher Strong is the
single largest brand in the Indian beer market
with sales recording more than 100mn cases in
FY2018. Kingfisher Premium is preferred by mild Domestic
98.2%
beer consumers in India, while the super- Overseas
1.8%
premium brands Kingfisher Ultra, Kingfisher Ultra
Max and Heineken are the top three fastest
growing brands in the Indian market. In FY2018,
UBL launched a new beer brand, Kingfisher Storm,
which achieved sales of 1mn cases in its first
year. Along with this, UBL launched Dutch beer
brand Amstel to cater to the growing demand for
premium beer in India.

Ruchi Soya Industries

Ltd

Established in 1986, Ruchi Soya Industries Ltd 2.4%
(Ruchi Soya) is one of India’s leading
manufacturers of edible oils, vanaspati
(hydrogenated vegetable oil), bakery fats, and 0.5%
318,521
soya foods. The company’s shares are listed on
302,405
the Bombay Stock Exchange and on the National
191,729
Stock Exchange. The latest published financial
7,617
reports of Ruchi Soya state that in FY2017 the
1,388
-6,775
253
company’s revenues dropped by 36.6% y/y to INR

-3.5%
191.7bn, and it suffered a net loss of almost INR
-13,090
-13,951
14bn. In FY2018, Ruchi Soya reported a 37.4% y/y FY2015 FY2016 FY2017
decline in revenue to INR 120.6bn, according to
financial data from the company’s quarterly
Net Revenues EBITDA
reports. Its net loss increased from INR 14bn in Net Pr ofit EBITDA Margin
FY2017 to INR 57.5bn. In last few years, the
company’s performance was adversely affected
by continuous drought, along with global price Balance Sheet, Consolidated, INR mn
volatility in agricultural commodities, which led
to lower capacity utilisation and a drop in 34.9
exports.
In December 2017, Ruchi Soya entered into a

93,014
corporate insolvency resolution process after

37,530
the Standard Chartered Bank and other lenders

174,224
172,478
52,326
48,501
filed a bankruptcy case against it. Several

135,309
30,527
companies, such as Patanjali Ayurved Ltd, Adani 4.0

24,323
Wilmar Ltd, Godrej Agrovet Ltd, Emami Agrotech

Ltd and others, have competed to acquire Ruchi -7.7
Soya. In August 2018, the Competition FY2015 FY2016 FY2017
Commission of India approved the acquisition of
Ruchi Soya by Adani Wilmar, which submitted the
highest offer of about INR 60bn. Further details Net Debt Net Debt / EBITDA
related to the acquisition are yet to be revealed.
Source: Company Data, Economic Times, The Indian Express

Ruchi Soya Industries

Ltd (cont’d)
Comments Revenue by Product, FY2017

Ruchi Soya is India’s largest integrated oilseed
solvent extraction and edible oil refining
company. It is also among the country’s leading Others
exporters of soya meal and lecithin. As of March 12.2%
31, 2017, the company operated 13 edible oil

refining plants with a production capacity of
3.3mn tpa; ten oilseed extraction plants (3.7mn Extractions
6.7%
tpa); ten soya meal extraction plants (3.1mn tpa);
Oils
eight vanaspati and bakery fats producing plants Vanaspati
74.3%
(0.6mn tpa), and two palm fruit processing plants 3.9%
Food
(0.9mn tpa). As of end-March 2017, Ruchi Soya
Products
had 19 manufacturing locations across India, and 2.9%
118 company depots equipped with storage and
other logistical facilities, which served more than
5,800 distributors in India. The company’s
products reached more than 1.15mn retail outlets
across the country in FY2017. Revenue by Region, FY2017
The key brands of Ruchi Soya include its flagship

soya food brand Nutrela, and edible oils brands
Mahakosh, Sunrich, and Ruchi Gold. The share of
Nutrela in the premium soya chunks market in
India was about 70% in FY2017.
In terms of products, oils had the largest share of Domestic Overseas

92.5% 7.5%
the company’s revenues, accounting for 74.3% in
FY2017. Revenues from this segment fell from INR
226.3bn in FY2016 to INR 142.4bn in FY2017, which
had a negative impact on the company’s overall
financial performance.


Britannia Industries, founded in 1892, is one of
the largest food manufacturing companies in 16.6%
India, directly delivering products to 1,840,000
outlets in India. The company specialises in the
production, distribution, and sale of biscuits,
breads, dairy products, rusks, and cakes under the
99,901
brands of Good Day, Tiger, 50-50, Treat,
93,241
86,262
15.5%
NutriChoice, Milk Bikis, and Marie Gold. Britannia 15.3%
16,605
13,339
is the first zero trans-fat food manufacturing
14,233
10,040
8,846
8,246
company in India, with a core emphasis on

healthy and delicious food. About 50% of its
product portfolio is enriched with micro-nutrients. FY2016 FY2017 FY2018
In FY2018, the company’s revenues rose by 7.1% Net Revenues EBITDA

y/y to INR 99.9bn. In this period, Britannia
launched the Treat Vanilla, Treat Chocolate, 50-50
Jeera, Good Day Choco Almond, Milk Bikis Good Balance Sheet, Consolidated, INR mn
Morning and other new products. It also
introduced three premium cookies under a new
0.05
34,194
sub brand, Good Day Wonderfulls.

0.05
To minimise the impact of sluggish sector 0.04
growth, in FY2018 Britannia focused on

26,990
20,941
strengthening distribution by increasing the

51,879
number of its direct distribution outlets. The

41,088
34,939
company implemented various cost control

measures, which increased its net profits by
728
702
684
13.5% y/y.
FY2016 FY2017 FY2018
In March 2017, Britannia announced that it had
entered into a JV with Greece-based firm Chipita
SA for production and sales of croissants in Total Assets Shareholders Equity
India. Britannia holds a majority stake of 60% in Net Debt Net Debt / EBITDA
the JV.
Source: Company Data, Business Standard


(cont’d)
Comments Revenue Segmentation, FY2018

The main activity of Britannia is the manufacture
of biscuits, cakes and rusk, which accounted for Revenue
from Food
92% of the company’s total revenues in FY2018. Products
The company has six manufacturing plants in the 99.2%
states of West Bengal, Uttarakhand, Bihar, Orissa,

Gujarat, and Tamil Nadu, which employed 3,794
people at the end of FY2018. The company is
exporting its products to 79 countries, including
13 new markets added in FY2018.
Other
In May 2017, Britannia incorporated a wholly- Operating
owned subsidiary in Nepal called Britannia Nepal Revenue
0.8%
Pvt Ltd. A few months later it received permission
from Nepal’s government to invest INR 1.1bn to
establish a biscuit and bakery plant in Nepal’s
Simara, Bara district. Britannia plans to produce
14,000tpa of biscuits and bakery items in the new Revenue by Region, FY2018
plant, which will employ around 345 people.
In August 2017, Britannia announced its plan to

invest INR 10bn over a period of four to five years
to set up its largest plant at Ranjangaon in
Maharashtra. The plant is expected to become
operational by the end of 2018. In May 2018,
Britannia launched its first plant purely for Domestic
98.2%
exports, located in Mundra, Gujarat. It was set up Overseas
1.8%
with an investment of INR 1.6bn and has a
capacity of 28,000tpa. In July 2018, Britannia
opened its largest greenfield manufacturing
facility in Guwahati, Assam, with an investment
of INR 1.7bn and a production capacity of
60,000tpa. As well as the Northeastern Indian
market, the new plant will serve South-Asian and
South East Asian markets.
Source: Company Data, NepaliSansar, MyRepublica, Business Standard

Kwality Ltd

Kwality was founded in 1992 under the name of
7.3%
Kwality Dairy (India) Ltd, as a backward
integration unit of Indian ice cream producer
Kwality Ice Creams India Ltd. In 2002, the
company was acquired by the Dhingra family and 6.8%
adopted its current name. Kwality’s shares are
73,194
68,718
listed on the Bombay Stock Exchange and on the
63,481
6.6%
National Stock Exchange of India.
5,366
Kwality has a diversified product portfolio of
4,162
4,673
1,941
1,736
923
fresh milk, milk powders, curd, ghee and butter
under the Dairy Best brand, as well as value- FY2016 FY2017 FY2018
added products, such as UHT milk, flavoured milk,
and cream tetra packs. Net Revenues EBITDA
During FY2018, Kwality continued to shift its
business model from B2B to B2C, aiming to
become best-in-class consumer-led dairy Balance Sheet, Consolidated, INR mn
company in India, compliant with global
standards. It focused on new value-added dairy
3.4 3.4
products, moving away from the liquid milk
segment to new value-added products under the 2.8
brand KDIL's Kwality. As a result, in FY2018, the
15,885
company witnessed a 6.5% y/y growth in

14,898
14,187
34,812
12,566
11,173
revenues to INR 73.2bn. The revenue increase was

30,282
25,493
8,536
also driven by the company’s capacity expansion.

At the beginning of 2017, Kwality announced that
it had started commercial operations at its new
unit at Softa plant, Haryana. The plant has milk
FY2016 FY2017 FY2018
handling capacity of 0.9mn litres per day,
primarily for value-added products. In FY2018 the
net profit of the company was down by 52.4% y/y
on the back of rising expenses.
Source: Company Data, Business Standard

Kwality Ltd (cont’d)
Comments Net Profit by Subsidiary, FY2018

At present, Kwality is among the largest private
dairy companies in India, with a processing
capacity of 4.3mn litres of milk per day across six
milk processing units in the states of Haryana,
Uttar Pradesh and Rajasthan, as at end-March Kwality Dairy
2018. The company has a milk procurement Products
network covering 350,000 farmers in about 4,700 FZE 23.0%
villages and towns in these states. In FY2018,

Kwality Ltd
Kwality procured 3.5mn litres per day, of which 77.0%
26% was collected directly from farmers.
The company’s products are sold to institutional

and retail customers through a network of 60,000
points of sale in Northern India, at end-March
2018. The company had a total of 1,150 employees
at the end of FY2018. It exports its products to 28
countries in Asia, Europe, and the Middle East. Revenue by Region, FY2018
Kwality has one wholly-owned subsidiary, the
UAE-based Kwality Dairy Products FZE, engaged in
milk products trade. In FY2018, it achieved sales
turnover of INR 5.9bn, down by 18.4% y/y, and a Domestic
89.6%
net profit of INR 212.3mn, a decline of 28.9% y/y.
The main reason for the negative performance
was the slump in international prices of
agricultural commodities during FY2018, including
UAE 8.1%
milk. This had an adverse impact on the export
business of Kwality, which is the reason for the
Other
drop in its revenues from other countries. In Countries
FY2018 it fell to INR 1.6bn, compared to INR 4.2bn 2.3%
during the previous year.

06
REGULATORY
ENVIRONMENT

06 REGULATORY ENVIRONMENT CONTENTS
Government Policy
Main Regulatory Bodies

India has several regulatory bodies responsible for food and beverage manufacturing, distribution,
processing, and sale. The Ministry of Food Processing Industries (MOFPI) is in charge of formulating
and implementing laws and regulations related to food and beverage processing industries. MOFPI
also promotes production and investment through several developmental initiatives, such as the
Mega Food Parks Scheme and the Cold Chain, Value Addition and Preservation Infrastructure; and
Modernisation of Abattoirs initiatives. The Ministry of Consumer Affairs, Food and Public Distribution
(MCAFPD), through its two departments – the Department of Food and Public Distribution and the
Department of Consumer Affairs – aims to ensure both good sale prices for farmers and supply of
food grains to consumers at reasonable prices. The Department of Animal Husbandry, Dairying &
Fisheries (DAHD&F), under the jurisdiction of the Ministry of Agriculture, controls livestock production,
preservation and disease protection as well as the development of the dairy industry. DAHD&F also
looks after all matters pertaining to fishing and fisheries, both inland and marine. The Agricultural
Products Export Development Authority (APEDA) is responsible for export promotion and development
of several key food and beverage segments by providing financial and technical assistance, fixing
standards and specifications, and improving the marketing of national products outside India.
National Food Security Act (NFSA)

The National Food Security Act (NFSA) was signed into law on 12 September 2013 with its main target
to ensure access to adequate quantities of quality food at affordable prices to people in India. It
restructured and expanded the coverage of India’s Targeted Public Distribution System (TPDS), which
is responsible for procurement, allocation and transportation of food grains to food-insecure
households across the country. The NFSA was implemented in all states and union territories of India
to guarantee food security by providing certain minimum food grains at a subsidised rate of INR 1-3
per kg to about 75% of India’s rural population and 50% of its urban population. Under the NFSA,
eligible households are entitled to receive 5kg of food grains per person per month at subsidised
prices, while the Antyodaya Anna Yojana (AAY) households, which constitute the poorest of the poor,
are entitled to receive 35kg of food grains per household per month. Aside from TPDS, the NFSA also
has a special focus on nutritional support for women and children. Children up to 14 years of age,
pregnant women and lactating mothers are entitled to nutritious meals as per prescribed minimum
nutrition requirements.
Source: MOFPI, MCAFPD, DAHD&F, DFPD

Government Policy (cont’d)
Essential Commodities Act (ECA)

The Essential Commodities Act (ECA) was enacted in 1955 to ensure availability of essential
commodities to consumers at reasonable prices. Under the ECA, the Indian government has powers to
control production, supply and distribution of certain commodities by imposing stock limits and
licensing requirements. In 2001, restrictions on stock limits and stock movements were removed from
almost all agricultural commodities. Wheat, pulses and edible oils, edible oilseeds and rice are
exceptions, where the government has been permitted to impose temporary restrictions to prevent
price increases. The government is able to update the list from time to time to tackle the rising trend
of prices and to ensure availability of certain essential commodities. For example, in 2014 it brought
onions and potatoes under the ECA to curb price rises. Stock limits, however, curtail the operations of
food processors who need to maintain large stocks to run their operations smoothly. With such limits,
they are less willing to make large-scale investment in better storage infrastructure. In 2017, the
National Institution for Transforming India (NITI Aayog) called for a complete removal of agriculture
commodities from the ECA, and a shift towards organised trading, where large-scale traders with
enough capital will dominate the market.
FDI Policy
Under current legislation, 100% foreign direct investment (FDI) under the automatic route is allowed
in all food and beverage processing segments, except in items reserved for micro and small
enterprises (MSEs). These include pickles and chutneys; bread; pastry; hard-boiled sugar candy;
rapeseed, mustard, groundnut oils; sweetened cashew nut products; ground and processed spices
other than spice oil and oleoresin spices; tapioca; and flour. For these, FDI is permissible under the
automatic route for up to 24% of the capital. Foreign equity ownership above 24% is possible after
receiving an industrial licence under the Industries (Development & Regulation) Act, with a mandatory
export obligation of 50%. Export-oriented units are given a number of incentives and concessions
such as tax exemptions. In February 2016, the Indian government allowed 100% FDI under the
automatic route in trade in food products manufactured in India. This measure aimed to promote
diversification by farmers, reduce waste, and support the development of the local food processing
industry by encouraging foreign companies to produce in India rather than sell imported goods. At
present, no industrial licence is required for entry into the food processing industries, except for
spirits, beer, wine, and products reserved for the small-scale sector.
Source: Knight Frank, DNA India, MOFPI, DIPP, Times of India, The Hindu Business Line, The Economic Times

Government Policy (cont’d)
12th Five-Year Plan (FY2013–FY2017)

India’s 12th Five-Year Plan (FY2013-FY2017) emphasised the importance of decentralisation of the food
processing sector’s projects with more direct involvement of states. Greater focus has been put on
policy making and coordination, instead of project implementation. The existing focus on
infrastructure development expanded its scope to ensure sustainability of the value chain. To carry
forward the idea of decentralisation, in April 2012 the government launched its National Mission on
Food Processing (NMFP) – a centrally-sponsored scheme operating at national, state and district
levels. The schemes under the NMFP during the 12th Five-Year Plan included Scheme for Technology
Up-gradation / Establishment / Modernisation of Food Processing Industries, Scheme for Cold Chain,
Value Addition and Preservation Infrastructure for Non-Horticultural Products, Scheme for Human
Resource Development (HRD), Scheme for Promotional Activities, Scheme for Creating Primary
Processing Centres / Collection Centres in Rural Areas, Scheme for Modernisation of Meat Shops,
Scheme for Reefer Vehicles, and Scheme for Setting-up / Modernisation / Expansion of Abattoirs. The
decades-long practice of five-year plans in India ended on March 31, 2017, replaced by three plans,
covering short-term, middle-term and long-term periods – the Three Year Action Agenda (FY2018 to
FY2020), Seven Year Strategy (FY2018 to FY2024) and Fifteen Year Vision Document (FY2018 to FY2032).
Three-Year Action Agenda (FY2018 to FY2020)

On August 24, 2017, the NITI Aayog released its Three Year Action Agenda (FY2018-FY2020), which is a
part of the Seven Year Strategy and the Fifteen Year Vision documents, which are in progress. The
Action Agenda focuses on seven key areas, including revenue and expenditure, economic
transformation in major sectors, regional development, growth enablers, and reforms in governance,
social sectors, and sustainability. Part of the agricultural marketing reforms is to restructure the ECA
to remove the stock limits set for certain categories of players such as exporters, food processors,
multiple outlet retailers and large departmental retailers. This will enhance output and exports of
processed food products. The proposed marketing reforms also focus on improving storage, transport,
power and communications infrastructure in rural areas, increasing connectivity between farmers and
food processors, as well as farmers’ transition to high-value commodities to enhance productivity and
competitiveness on the global market. India’s food processing industry must implement food safety
and quality assurance mechanisms, such as Total Quality Management (TQM) including ISO 9000, ISO
22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP) and
Good Hygienic Practices (GHP). Compliance with these quality and hygiene norms will help expand
exports and adopt the world’s best practices.
Source: MOFPI, Planning Commission, Government of India, NITI Aayog, The Hindu Business Line

Major Schemes
SAMPADA Scheme
In May 2017, the Government of India approved a Scheme for Agro-Marine Processing and
Development of Agro-Processing Clusters, called Pradhan Mantri Kisan SAMPADA Yojana (PMKSY),
allocating it INR 60bn for the period from FY2016 to FY2020. The main targets of the scheme are
doubling farmer income, increasing employment opportunities, especially in rural areas, and reducing
wastage of agricultural produce. The PMKSY includes several ongoing schemes of the MOFPI along
with new schemes promoting sector growth, namely the Scheme for Mega Food Parks, Scheme for
Integrated Cold Chain and Value Addition Infrastructure, Creation / Expansion of Food Processing /
Preservation Capacities, Scheme for Infrastructure for Agro-processing Clusters, Scheme for Creation
of Backward and Forward Linkages, Scheme for Food Safety and Quality Assurance Infrastructure, and
Scheme for Human Resources and Institutions. A total of INR 314bn is expected to be invested in the
PMKSY for handling 33.4mn tonnes of agro-produce valued at INR 1tn, benefiting two million farmers
and generating 530,500 direct and indirect jobs in India by FY2020. Budget allocation for PMKSY has
doubled from INR 6.3bn in FY2018 to INR 13.1bn in FY2019. In FY2018, the actual expenditure for PMKSY
was nearly INR 6.1bn, according to MOFPI.
Scheme for Mega Food Parks

The Scheme for Mega Food Parks (MFPs) was first launched by MOFPI in FY2008 with the goal of
creating a modern food processing industry backed by an efficient supply chain infrastructure. The
main idea of the initiative is to bring together farmers, processors and retailers, and to link
agricultural production to the market, thus improving farmer incomes, and ensuring maximised value-
added and minimised waste. The scheme envisages a one-time capital grant of between 50% and 75%
of project cost (land cost excluded), depending on project location, with a maximum of INR 500mn per
project. The government approved the construction of 42 mega food parks across the country
operating as clusters comprising production facilities, processing plants, cold storage facilities, and
collection and transportation centres. The budget of the scheme was set at INR 2.2bn for the FY2009-
FY2012 period, and INR 17.1bn between FY2013 and FY2017. As of end-September 2018, out of the
sanctioned 42 MFPs, 39 projects received final approvals and three projects received in-principle
approvals. A total of ten MFPs were operational, while another four were completed. In FY2018, the
government allocated INR 3.9bn within the scheme, up from INR 3bn in FY2017.
Source: MOFPI

Major Schemes (cont’d)
Cold Chain, Value Addition and Preservation Infrastructure Scheme

In FY2008, the MOFPI launched the Scheme for Cold Chain, Value Addition and Preservation
Infrastructure for Non-Horticultural Products, with the aim of reducing post-harvest losses of
horticultural and non-horticultural produce by developing integrated cold chain and preservation
infrastructure facilities, without any break from farm gate to consumer. The main idea of the initiative
is to increase the processing levels of agriculture and livestock products from their current low levels
(the level of processing of fruit and vegetables stood at only 10% in FY2016). The scheme finances the
acquisition and construction of pre-cooling facilities at production sites, reefer vans, mobile cooling
units, value addition centres, and infrastructural facilities such as processing and collection centres
for horticultural products, organic produce, and marine, dairy, poultry and meat products. The
initiative provides a one-time capital grant of between 50% and 75% of the costs of plant, machinery
and technical civil works, depending on project location, with a maximum of INR 100mn per project.
The government plans to build up to 500 cold chain projects across the country. The budget of the
scheme was set at INR 1.6bn for the period FY2009-FY2012 and INR 7.9bn between FY2013 and FY2017.
As of end-September 2018, a total of 234 cold chain projects had been approved under the scheme, of
which 126 were already operational. In FY2018, the government allocated INR 4bn to the scheme, up
from INR 2bn in FY2017.
Modernisation of Abattoirs Scheme

In FY2009, the MOFPI launched the Modernisation of Abattoirs Scheme, with the aim of promoting the
construction and modernisation of abattoirs and related infrastructure. The main idea behind the
initiative is to promote the modernisation of municipal abattoirs – which generally lack modern
equipment, proper sanitation, and facilities for scientific slaughtering, waste management and
pollution control – thus improving the level of processing and the quality of locally produced meat
and meat products. The scheme finances between 50% and 75% of the costs of plant, machinery and
technical civil works involved in acquisition and construction, depending on project location, with a
maximum of INR 150mn per project. Over the FY2009-2012 period, the government financed the
construction of ten new abattoirs at a total cost to the federal budget of INR 409.3mn. In FY2013 and
FY2014, the government planned to finance the construction of 25 new abattoirs and the
modernisation of 25 existing abattoirs at a total cost to the federal budget of INR 3.3bn. In FY2017, the
government’s estimated expenditure on the scheme was revised from INR 450mn to INR 238.2mn;
however, actual spend was even lower at INR 217mn. In 2017, one project at Panaji (Goa) has been
operationalised under the scheme.
Source: MOFPI, The Economic Times, MOFPI, DIPP, Times of India

Banknote Demonetisation Reform
On November 8, 2016, India’s Prime Minister Narendra Modi announced that INR 500 and INR 1,000
banknotes – which between them accounted for about 86% of the cash in circulation in India – could
no longer be used for cash payments. Instead, during a 50-day transition period, the bills could be
deposited into bank accounts or swapped for new ones, but only against documents proving their
origin. This radical move aimed to curb the informal economy – estimated to account for about 20% of
India’s GDP – by taking out of circulation illicit and counterfeit cash, which the government claimed
was being used to fund illegal activities. The resulting cash shortage had a huge effect on India’s
population generally, but most of all on the lowest-income households and on those living outside
the big cities, where the infrastructure that underlies electronic payments is poorly developed and
cash transactions are the most common payment method. Moreover, according to UK broadcaster the
BBC, more than half of the population in India did not have a bank account as of December 2016,
while some 300mn people did not have government identification. Analysts warned that the cash
shortage was likely to affect consumer spending, mostly in rural areas, which would translate into a
slowdown in overall household consumption and lower GDP growth. In November 2016, several
investment banks, including Goldman Sachs, Credit Suisse and Bank of America Merrill Lynch, cut their
GDP growth forecasts for India for FY2017 to below 7%.
Banknote demonetisation had a direct effect on many sectors, since, according to the Financial Times,
about 90% of the transactions in the Indian economy are in cash. The food and beverage sector was
also hit hard by the government measure. For instance, in the days immediately following the
monetary reform, there were interruptions in the majority of supply chains, as producers, distributors
and wholesalers traditionally deal mostly in cash. In addition, several food processing companies
specialising in the manufacture of discretionary items cut production and postponed investment
plans, as consumers prioritised the purchase of essential goods. According to the estimates of Sagar
Kurade, president of the All India Food Processors' Association, the sector’s sales declined by some
15%-40% – depending on product category – in the first three months after the reform. However, in the
medium term, the reform is expected to have a positive impact on the food and beverage sector by
reducing the informal sector’s share in it and increasing that of the organised sector. Industry
representatives have pointed out that the measure will promote the sale of food and beverages in
modern retail outlets, thus increasing transparency and compliance. Moreover, the reform is likely to
support the sale of branded and packaged food products and to push out players susceptible to trade
in products that are counterfeit or of unreliable quality.
Source: BBC, The Financial Times, The Economist, Deutsche Bank, Deloitte, The Financial Express, LiveMint, Just-food

Goods and Services Tax
On July 1, 2017, India replaced its complex tax system with a national goods and services tax (GST),
paving the way to a single national market for the first time since India’s existence as an independent
nation. The shift became possible after India’s President Pranab Mukherjee ratified the Constitution
(101st Amendment) Act 2016 in September 2016. The bill introduced GST as a comprehensive indirect
tax levied on the manufacture, sale, and consumption of goods and services, to replace over ten
indirect taxes levied by India’s Central and State governments. GST is expected to boost GDP growth
by 1.5%-2% by eliminating India’s cascading tax system and improving the business environment
through the adoption of simplified compliance and uniform processes across the country. In addition,
GST is seen to ease and promote manufacturing and trade activity across states, as well as improve
tax collection and administration. GST is levied and collected at each stage of the sale or purchase of
goods or services, on the basis of the “input tax credit” method, allowing GST-registered companies to
claim tax credits. Exports have a GST rate of 0%, while the GST on imports is the same as that on
domestic goods and services. The tax has two components – a central GST, and a State GST. Due to the
elimination of cascade taxation, the measure is expected to reduce prices of manufactured goods,
reduce the overall tax burden, improve cash flows, and boost the profitability of both manufacturing
companies and retailers. From the consumer’s standpoint, the main advantage of the reform is the
lower prices of goods and services, due to an estimated 25%-30% reduction of the tax burden on
goods, and the creation of a common market in India by eliminating state tariffs that serve as a
barrier for the free movement of goods. The government set four “tax slabs” with GST rates of 5%,
12%, 18% and 28%. The lowest tax rate of 5% is levied on precious metals like gold and on essential
items, while the highest rate of 28% applies to luxury items. In January 2017, the government
postponed the entry into force of the GST regime to July 1, 2017, from the previous date of April 1, in
order to finalise the complementary laws, define the tax rates of the “slabs” and receive approval
from all legislative bodies. In May 2017, the GST Council, the government body in charge of the reform,
decided on rates for goods and services on an item-by-item basis, in accordance with the Harmonised
System of Nomenclature (HSN) and the Service Accounting Codes (SAC). Out of the food and beverage
categories, only alcoholic beverages have been excluded from the GST regime. The main reason for
this is the paramount role in State budgets of the alcoholic beverages industry, which contributes
between 25% and 40% of State revenues. Apart from preserving the current system of multiple State
and national taxes on alcoholic beverages, their exclusion from the GST regime will increase both
administrative burdens and production costs for alcoholic beverage companies, as they will not be
able to pass down the value chain the higher taxes on industry inputs, which will be included in the
GST regime.
Source: Confederation of All Indian Traders, Corporate Catalyst India, Legal India, IBEF, Tally Solutions, The Times of India,
Economic Times, Financial Express, Tax Management India
07
FOOD
MANUFACTURING

07 FOOD MANUFACTURING CONTENTS
Highlights
Overview
According to the latest available data from the CSO, the output of the food manufacturing subsector
expanded at a CAGR of 6.2% over the FY2013-FY2017 period, reaching INR 10.8tn in FY2017. The
subsector is driven by the abundant supply of primary agriculture and livestock products, rising
household incomes, and increasing spend on foods perceived as healthy and nutritious. The opening
of the industry to foreign investors and the gradual increase of the organised sector’s share have
made the industry attractive to multinational companies (e.g. Danone, Nestle, Kraft Foods, Mondelez,
Heinz and others), which have established production operations in the country. Nevertheless, India
remains a net importer of oils and fats, due to a lack of integrated processing equipment. On the
other hand, the country is a net exporter of cereals, meat, fish, coffee, tea, and spices.
Drivers and Inhibitors

Strong domestic demand – stemming from a growing population, an increasing urbanisation rate,
rising household income, higher consumer spending in the countryside, changing lifestyles, and
growing westernisation – has been the main driver of the domestic food processing industry in recent
years. On the other hand, the industry continues to suffer from relatively low levels of processing of
perishable products (about 10% compared to 80% in the US and Malaysia, 70% in France, 30% in
Thailand and 25% in Australia), high wastage of agricultural produce, the prevalence of low value-
added products in the production basket and deficiencies in supply chain infrastructure (cold storage,
abattoirs, transportation and logistics infrastructure). Moreover, some food manufacturing segments,
such as oils and fats, feature scarce production capacity, erratic input supplies and inadequate
storage infrastructure, creating increasing supply deficits that are filled mostly through imports.
Outlook
Realising its significance, the Government is encouraging investment in the food sector as higher
levels of processing help reduce food wastage, improve value addition, promote crop diversification,
ensure higher incomes for farmers, and export earnings. Thanks to the entry of international food
companies and the expansion of their positions in the sector, India is rapidly becoming a production
hub for processed foods such as refined sugar, dairy and bakery products, which are exported to
countries in South Asia, the Middle East and Africa. On the supply side, the improvement of
processing capacity and the development of supply chain infrastructure is expected to reduce costs,
increase production levels and improve the overall competitiveness of domestic food products.
Source: CSO, CEIC, MOFPI, IBEF, Dun & Bradstreet

Main Events
§ In March 2017, Britannia Industries Ltd announced that it had entered into a joint venture with
Greece’s confectionery company Chipita SA for production and sales of macro snacks, including
croissants, rolls and other dough products. According to the agreement, Britannia will hold 60% of
the JV company, registered as Britchip Foods Ltd. The JV is expected to launch production in 2019 in
Maharashtra. The first line will start producing cakes, followed by biscuits, croissants and dairy
products. Britannia expects INR 2bn revenue from the JV with Chipita in the next three years.
§ In November 2017, South Korea’s conglomerate Lotte Confectionery Co. Ltd agreed to acquire
India’s ice cream producer Havmor Ice Cream Ltd for USD 152mn. Lotte aims to expand its presence
in India, where it already sells gums, candies and snacks through its subsidiary Lotte India
Corporation Ltd. Lotte was one of the first South Korean food and beverage companies to enter the
Indian market in 2004. In 2016 it had a 90% share in the Indian choco pie market.
§ In December 2017, ITC Ltd – one of India’s largest fast-moving consumer goods (FMCG) companies –
opened its largest integrated food manufacturing and logistics facility in Punjab, with the first ever
“wheat mandi” unit to procure grain from farmers. ITC estimates that it will buy 130,000 tonnes of
wheat for biscuits and maida in Punjab, as well as onions for chips manufacturing. The company
also plans to produce milk-based ready-to-drink beverages, noodles, wafers, fruit juices and other
fruit-based beverages. The facility, built with an investment of INR 15bn, is part of the company's
plan to open 20 such food processing units across the country with a total investment of INR
100bn. ITC is focusing on its non-tobacco businesses and aims to increase its revenues from
packaged foods from INR 87bn in FY2018 to INR 650bn by FY2030.
§ In May 2018, Creamline Dairy Products Ltd – a subsidiary of India’s agribusiness company Godrej
Agrovet Ltd – announced plans to invest INR 4bn to set up three new plants in Karnataka, Tamil
Nadu and Maharashtra over the next three years. The expansion is expected to increase the
company’s milk processing daily capacity from 1.2mn litres to 1.5mn litres.
§ In June 2018, Singapore-based Wilmar Sugar Holdings (WSH) acquired an additional 19.77% stake in
India’s largest sugar refiner and ethanol producer Shree Renuka Sugars Ltd through an open offer.
According to the offer, WSH proposed to acquire up to an additional 26% in Shree Renuka Sugars at
a price of INR 16.29 per share, but actually it acquired a 19.77% stake. Prior to the stake purchase,
WSH had a 38.57% stake in Shree Renuka Sugars as of March 2018. After the completion of the
open offer, WSH's stake increased to 58.34%.
Source: The Economic Times, Business Standard, The Hindu Business Line, EMIS DealWatch, Company Data

Oils and Fats
Edible Vegetable Oils Consumption, thou tonnes
21,100 21,521
20,095
19,055
17,119
9,200
9,000
8,750
8,600
8,052
5,250
5,200
4,600
4,100
3,309
2,700
2,390
2,300
2,225
2,000
1,900
1,700
1,665
1,650
1,558
1,446
1,390
1,350
1,300
1,275
1,250
1,255
1,230
1,125
1,120
MY2014 MY2015 MY2016 MY2017 MY2018
Palm Oil Soybean Oil Sunflower Oil Rapeseed Oil Cottonseed Oil Other Oil Total
Comments
Between MY2014 and MY2018, the domestic consumption of edible vegetable oils is estimated to have
expanded at a CAGR of 3.5%, supported by a growing population, increasing household incomes and
strong demand from institutional buyers. Palm oil, soybean oil and sunflower oil are the major
products, with a combined share of 76.7% in domestic consumption in MY2018, according to the USDA.
The domestic production of edible oils is unable to meet market demand, which makes India
dependent on imports. Major constraints include outdated technology and equipment, lack of
integrated oil processing plants, as well as price uncompetitiveness. In FY2017, the country produced
1.4mn tonnes of soybean oil and 230,000 tonnes of palm oil, representing respective increases of
37.3% y/y and 5.5% y/y, against consumption volumes of 5.2mn tonnes and 9mn tonnes over the same
period. India is self-sufficient in peanut oil. It produced 1.3mn tonnes in FY2017, up by 36.8% y/y, and
consumed 1.2mn tonnes.
Source: USDA

Oils and Fats (cont’d)
Oils and Fats External Trade, USD mn
11,700
10,946
10,670
10,530
9,442
1,264
857
973
877
FY2014 FY2015 FY2016 893

FY2017 FY2018
-8,584
-9,697 -9,653 -10,054 -10,437
Comments
The robust growth of the domestic oils and fats market, combined with insufficient domestic
production, has created increasing supply deficits, filled mostly through imports. From FY2014 to
FY2018, the import value of vegetable and animal oils and fats grew at a CAGR of 4.4%. India is the
world’s largest importer of oils and fats, with imports valued at USD 11.7bn in FY2018, against USD
9.4bn in FY2014. In FY2018, palm oil and soybean oil remained the largest import categories with a
combined share of 62.8% of total sector imports. The major import source countries were Indonesia
and Malaysia, accounting for 56.6% of oil and fat imports during the year. In August 2017, the
government raised the import duty on crude palm oil from 7.5% to 15%, while import duty on RBD
Palmolein and palm oil was adjusted from 15% to 25%. The import duty on crude soybean oil rose
from 12.5% to 17.5%. Before these adjustments, importers preferred to stock refined palm oil due to its
minimal price difference with crude palm oil (CPO), which led to higher imports of refined oil and
fewer of CPO. In terms of exports, castor oil (non-edible) was the sector’s leading exporting product,
accounting for 76.5% of the oils and fats exports in FY2018. China, the Netherlands, the US and France
were the major export destinations, together accounting for 67% of total exports of oils and fats
during the year.
Source: MCI, CEIC, USDA, Reuters

Oils and Fats (cont’d)
Main Export Products, FY2018 Main Import Products, FY2018
Bleached
Soybean Oil
Deodorized
21.9%
Palmolein
16.5%
Castor Oil
Wax 5.9%
Castor Oil Sunflower Oil
(Non-Edible Fish Oil 15.6%
Grade)
(Sardine Oil)
76.5%
2.5%
Other
Rape Oil
Vegetable Oil Palm Oil 2.1%
and Fats of 40.9%
Coconut Edible Grade
Copra Oil 1.9%
1.7%
Main Export Destinations, FY2018 Main Import Source Countries, FY2018
China 34.9% Indonesia 42.9%

Netherland 12.8%
Malaysia 13.7%
USA 10.2%
Thailand 2.4%
France 9.0%
Japan 4.2% UAE 2.1%
Thailand 3.9% Philippines 0.2%

Italy 2.1%
Italy 0.1%
UK 1.7%
China 0.1%
UAE 1.6%
Belgium 1.5% USA 0.1%
Source: MCI, CEIC

Meat
Comments Meat Production

Home to the world’s largest cattle population,
India was also the biggest producer of buffalo 7.9%
7.3%
meat in 2017, ranking third in terms of beef and
veal, and fourth in terms of poultry meat output,
according to the USDA. Between FY2013 and 4.8% 4.9%
5.2%
FY2017, meat production in the country expanded 6,691 7,020 7,386

6,235
at a CAGR of 4.4%, supported by an expanding 5,948
livestock population, growing domestic demand,

and moderate expansion of exports, mainly of
fresh, unprocessed beef. In FY2017, meat
production increased by 5.2% y/y, as a result of FY2013 FY2014 FY2015 FY2016 FY2017
the 6% y/y increase in poultry output. Poultry is
the largest segment, accounting for 47% of total
Meat Production, thou tonnes y/y change, %
output.
Meat Production by Type, thou tonnes

8,000
338
329
7,000 334 469
388
333
327 464 556
6,000 486 486
453 529
943 1,041
5,000 432
441 914
970
941 1,611 1,451
4,000
1,404
1,104 1,164
3,000
2,000
3,264 3,464
2,682 2,850 3,045
1,000
0
FY2013 FY2014 FY2015 FY2016 FY2017
Poultry Buffalo Goat Sheep Pig Cattle
Source: DAHD&F, CEIC

FOCUS POINT
Meat Production by State, FY2017
3.4%
Punjab 4.4%
Bihar
9.6%
5.8% West Bengal
Haryana
18.2%
Uttar Pradesh
11.4%
Maharashtra 8.6%
Andhra Pradesh
2.8%
Karnataka
7.8%
6.3%
Tamil Nadu 21.7%
Kerala
Others

Meat (cont’d)
Beef and Veal Meet Domestic Poultry Meat Domestic Consumption

Consumption
9.2%
13.7% 7.9% 7.8%

7.2%
6.2% 4.7% 4,495

4,194
2,436 3,716 3,892
2,294 2,401 3,445
2,035
2,018
-0.8%
-1.4%
-2.2%
Beef and Veal Consumption, thou tonnes y/y change, % Poultry Meat Consumption, thou tonnes y/y change, %
Comments
Poultry is the most frequently consumed meat in India, mainly due to its low price compared to other
meats, and the fact that fewer religious prohibitions and cultural taboos govern its consumption.
Between 2013 and 2017, domestic consumption of poultry meat expanded at a CAGR of 5.5%, reaching
INR 4.5mn tonnes, according to the USDA, favoured by a growing population, rising household
incomes, and a shift in consumer habits in favour of a higher-protein diet. This segment has huge
growth potential in the domestic market. The USDA estimates that in 2018, domestic poultry
consumption will increase from 4.9mn tonnes to 5.1mn tonnes. Almost all domestic consumption is
met by local production, due to consumer preference for fresh meat and strict import certification
requirements for livestock products. Water buffalo (carabeef) was the second most popular meat
consumed in India, with per capita consumption of 2kg in FY2016, due to its affordability compared to
other red meats. Overall, the domestic consumption of beef and veal grew at a modest CAGR of 3.4%
between 2013 and 2017, mostly due to religious restrictions on their consumption and the bans on
cattle slaughter in force in various Indian states.
Source: USDA

Meat (cont’d)
Comments
Deficiencies in production and cold chain infrastructure in India mean that only a small portion of
domestic meat and fish production is processed and transformed into higher value-added products.
According to the most recent data released by the MOFPI in 2016, the proportion of processed poultry
stood at 6%, against 21% for other types of meat. In FY2016 and FY2017, India’s meat and edible offal
exports experienced a downward trend, falling to USD 4bn in FY2017 versus USD 4.5bn in FY2013.
Exports were seriously hit by the Uttar Pradesh State government’s decision to crack down on illegal
slaughterhouses. As a result, India was surpassed by Brazil as the world’s largest beef exporter in
2017, according to USDA statistics. In FY2018, the exports of meat showed signs of recovery, with
export value reaching USD 4.2bn, an increase of 3.4% y/y, as a result of growing demand coming from
the major beef importing countries. India’s primary beef export destination is Vietnam, to which in
FY2018 it exported USD 2.3bn worth of meat and edible meat offal, accounting for 56.8% of the total.
Other major partners are Malaysia, Egypt and Indonesia, which together accounted for a 17.9% share
in India’s exports of meat and edible meat offal. By contrast, India’s imports of meat and edible meat
offal is insignificant, worth just USD 4.7mn in FY2018. However, it has strong growth potential, if the
CAGR of 18.9% registered between FY2013 and FY2018 is any indication.
Meat and Edible Meat Offal External Trade, USD mn
4,926
4,474
4,208 4,170
4,034
4,929
4,476
4,210
4,175
4,038
3.2
3.1
4.7
2.0
2.0
FY2014 FY2015 FY2016 FY2017 FY2018
Source: CEIC, MCI, MPEDA

Meat (cont’d)
Other Edible
Other Meat
Offal Of Other Meat
Bovine Of Swine,
Of Swine,
Animals, Fresh Or
Frozen
Frozen 4.4% Chilled 7.1%
32.9%
Boneless Carcassess
Meat of And Half Hams,
Bovine Carcassess
Animals, Shoulder And
Of Sheep, Cut Of
Frozen Fresh Or
90.7% Swine,
Chilled 2.7% Frozen, With
Other Cuts Bone 6.5%
Boneless
Of Sheep Boneless
Meat of
Bovine With Bone, Meat Of
Frozen Sheep,
Other cuts of Animals,
Fresh or 38.3% Frozen 6.2%
sheep with
bone, frozen Chilled 1.3%
0.3%
Vietnam 56.8% Belgium 31.0%
Malaysia 9.2% New Zealand 24.9%
Egypt 6.3% Australia 12.5%
Indonesia 2.4% Thailand 7.3%
Saudi Arabia 3.6% Germany 7.3%
Source: CEIC, MCI

Fish
Fish Production Fish Production by Type, thou tonnes
12,000
10.4%
10,000
3,640
3,580
8,000 3,652
3,443
3,321
6.0% 6.1% 6.2%
5.7% 6,000
12.6
10.8 11.4
9.6 10.2
4,000 7,770
7,210
6,136 6,512
5,719
2,000
FY2014 FY2015 FY2016 FY2017 FY2018 0

FY2013 FY2014 FY2015 FY2016 FY2017
Fish Production, mn tonnes y/y change, %

Inland Marine
Comments
With a coastline of 8,118km and rich inland water resources, India was the world’s third-largest fish
producer in 2016, after China and Indonesia, according to the USDA. Over the period FY2014-2018, fish
production in the country expanded at a CAGR of 5.6%. The main growth contributor was inland fish
production, which rose at a CAGR of 6.3% from FY2013 to FY2017. It accounted for 68.1% of India’s total
fish production in FY2017. On the other hand, marine fish production rose at a modest CAGR of 1.9%
between FY2013 and 2017. The government actively supports the sector, by promoting initiatives for
the development of freshwater aquaculture, such as financial assistance, technical support and
training through a network of over 430 Fish Farmers Development Agencies (FFDA) across the country.
As a result, the share of freshwater aquaculture reached about 80% in the country’s inland fish
production. About 90% of the fish produced in India is consumed domestically in the form of fresh
fish, while the remaining 10% is exported in canned or frozen forms. In 2016 MOFPI estimated that
only about 23% of the fish and seafood produced in India was processed in that year, a figure that
underlines the need for expansion and modernisation of the production, storage and logistics
infrastructure, as well as for the development of higher value-added products, such as fish/shrimp
pickles, fish/shrimp curry, skewers and marinated fish with Indian spices.
Source: DAHD&F, MOFPI

FOCUS POINT
Fish Production by State, FY2017
5.4%
Uttar Pradesh 4.5%
Bihar
14.9%
West Bengal
7.1%
Gurajat
5.3%
Odisha
5.8%
Maharashtra 24.2%
Andhra Pradesh
4.9%
Karnataka
5.9%
5.3%
Tamil Nadu 21.7%
Kerala
Others

Fish (cont’d)
Fish and Crustaceans External Trade, USD mn
6,760
5,442
5,188
4,778
4,419
6,851
5,501
5,250
4,823
4,486
90.5
61.7
67.2
58.9
44.6
FY2014 FY2015 FY2016 FY2017 FY2018
Comments
From FY2014 to FY2018, exports of fish and crustaceans expanded at a strong CAGR of 7.3%, reaching
USD 6.9bn. In FY2018, major export destinations included the US, Vietnam and Japan, together
accounting for 48.1% of total exports in FY2018. India exports mainly shrimps and prawns, which
account for about 70% of the whole category’s exports in value terms, according to the statistics of
the Ministry of Commerce and Industry. By contrast, India’s imports of fish and crustaceans are
marginal – in FY2018, India imported about INR 90.5mn worth of fish and crustaceans, mainly from
Vietnam, the US and Bangladesh, which had a combined share of 42.7% of total imports of fish and
crustaceans in India in FY2018.
Source: MCI, MPEDA, CEIC

Fish (cont’d)
Shrimps And
Prawns
Other
15.3%
Ribbon Fish Excluding
3.8% Tilapia,Catfis
h,Carp,Eel
Other Fish 12.8%
Filet and Fish
Meat excl
Fresh or
Shrimps And
Chilled,
Prawns Frozen Fillets Other 16.3%
69.8%
3.5%
Hilsa 6.4%
Squids 2.9%
Mackerel Catfish
2.3% 17.9%
USA 28.4% Vietnam 27.0%
Vietnam 24.6% USA 22.5%
Japan 7.0% Bangladesh 16.2%
Spain 4.2% Myanmar 7.1%
Thailand 4.1% Oman 4.7%
Source: MCI, CEIC

Dairy Products and Eggs
Comments Milk Production

In FY2018, India maintained its position as the
world’s largest milk producer, with an output of 6.3% 6.3% 6.4%
173mn tonnes, up by 4.5% y/y. According to
DAH&F, about 49.2% of the total milk output in
FY2017 was contributed by buffaloes, followed
4.6%
by cattle (47.3%) and goats (3.5%). In FY2017, per
capita milk availability reached 352 grammes 4.0%
per day, well above the global average of about

173.0
300 grammes per day. In FY2018, India produced 155.5
165.4
146.3
95bn eggs, representing a stable y/y growth of 137.7
7.8% in this category. According to USDA

estimates, the production of butter in India will
rise by 3.7% y/y to 5.6mn tonnes in 2018, driven
by robust demand from the domestic market.
Small farmers and landless labourers accounted FY2014 FY2015 FY2016 FY2017 FY2018
for about 80% of the country’s milk output,
with only 20% produced by the organised
sector, which comprises government-supported
dairy cooperatives and private dairies. Milk Production, mn tonnes y/y change, %
Butter Production Egg Production
3.8% 7.8%
3.7% 7.2%
3.0% 3.3% 6.3%
3.0% 5.7%
5.0% 95.0
5.6 82.9 88.1
5.4 74.8
5.2 78.5
5.0
4.9
2014 2015 2016 2017 2018e FY2014 FY2015 FY2016 FY2017 FY2018
Butter Production, mn tonnes y/y change, % Egg Production, bn units Egg Production, y/y change, %
Source: DAHD&F, USDA

FOCUS POINT
Milk Production by State, FY2017
16.8%
Uttar Pradesh 5.3%
Bihar
6.8%
Punjab
5.4%
Haryana
12.6%
7.7%
Rajastan
Gurajat
8.1%
Madhya Pradesh
6.3%
Maharashtra
7.4%
Andhra Pradesh
4.6%
Tamil Nadu
19.0%
Others

Dairy Products and Eggs (cont’d)
Cow Milk Domestic Consumption Butter Domestic Consumption
3.8% 3.9%
4.8% 5.0%
4.8%
3.2% 3.3%
3.9% 3.0%
66.8
65.2 5.6
2.5% 5.4
62.8
5.2
59.8 5.0
57.0 4.9
2014 2015 2016 2017 2018e 2014 2015 2016 2017 2018e
Milk Consumption, mn tonnes y/y change, % Butter Consumption, mn tonnes y/y change, %
Comments
Over the 2014-2018 period, India’s consumption of cow milk and butter expanded strongly – at CAGRs
of 3.2% and 2.8%, respectively, according to USDA data. The USDA estimates that cow milk
consumption will increase by 2.5% y/y to 66.8mn tonnes in 2018, while butter consumption will rise by
3.9% y/y to 5.6mn tonnes. In 2018, the country preserved its position as the world’s largest consumer
of both cow milk and butter. The domestic market was boosted by India’s growing population, ongoing
urbanisation, rising household incomes and a growing consumer taste for packaged items and higher
value-added products such as dairy whitener, butter, ghee, flavoured milk, ice cream, cheese and
yoghurt. An additional positive factor is the relatively high percentage of vegetarians in India, who
treat milk and dairy products as their main sources of protein. The demand for ghee (clarified butter) –
the most consumed value-added dairy product – and butter remains strong. There is also a robust
demand for fermented dairy products such as yoghurt, cheese and ice cream, especially among the
urban middle- to high-end consumers. In response to growing demand for higher value-added
products, companies from the organised sector have opted to invest in expanding their dairy
processing capacity and distribution networks, encouraged by government policies designed to
promote the development of dairy cooperatives.
Source: USDA, IBEF

Comments
Almost all India’s milk and dairy product consumption is covered by local production. Imports of dairy
products and eggs are relatively small – in FY2018 they totalled USD 44.3mn – and are used to fill
temporary gaps between domestic production and consumption. Additional factors are strict import
certification requirements for milk and dairy products and tariff rate quotas applied to dairy products,
which mean that duties of between 20% and 60% are levied on imports above a certain threshold. In
FY2018, imports of dairy products consisted mostly of whey and cheese. The main supplier countries
were France, New Zealand and Denmark, accounting for a combined share of 40.8% of total imports.
On the other hand, exports of dairy products experienced a downward trend between FY2013 and
FY2016, due to strong growth in the domestic consumption of dairy products as well as a situation of
global oversupply and decreasing international prices. In FY2018, exports of dairy products and eggs
rose by 26.6% y/y to USD 265.3mn, driven by fresh eggs, ghee, butter and skimmed milk, which were
the major export product categories, with a combined share of 77.6% in total exports of dairy and
eggs. India’s largest export market for dairy products is the US with a share of 26.9% in FY2018,
followed by several milk-deficient countries in India’s vicinity, such as the UAE, Oman, Bangladesh and
Bhutan, which accounted for 37.7% of India’s total exports of dairy and eggs.
Dairy, Eggs and Edible Honey Products External Trade, USD mn
594
630
244
221
170 174
292
265
50.3
47.5
220
44.3
210
36.2
35.3
FY2013 FY2014 FY2015 FY2016 FY2017
Source: CEIC, MCI, USDA

Butter 14.3% Cheese

20.3%
Melted Butter
(Ghee) Skimmed Melted Butter
20.7% Milk 12.6% (Ghee) 5.5%
Butter 5.3%
Cheese 8.7%
Whey 51.9% Others

Fresh and (Curdled
Dried Eggs Milk, Cream,
30.0% Kephir Etc)
3.2%
USA 34.0% France 27.9%
UAE 17.2% New Zealand 13.7%
Oman 13.1% Denmark 9.7%
Bangladesh 9.6% Uganda 9.7%
Bhutan 7.8% Italy 7.1%
Source: MCI, CEIC

Food Grains and Milling Industry

Products
Comments Food Grains Production

India is the second-largest producer of rice and
9.0%
wheat in the world after China, with 112.9mn
tonnes of milled rice and 98.5mn tonnes of wheat 3.1% 3.6%
produced in MY2018 (from April 2017 to May 2018 0.1% 285.0
275.0
for wheat; from October 2017 to September 2018 265.0 -4.9%
for rice), according to USDA data. India also ranks 252.0 252.2
second in the world in terms of rice and wheat

FY2013 FY2014 FY2015 FY2016 FY2017
consumption, and first in terms of rice exports.
Food Grain Production, mn tonnes y/y change, %
From MY2014 to MY2018, India’s production of
milled rice rose at a CAGR of 1%, while the growth
Food Grains Production by Product,
in wheat production remained flat, according to FY2016
USDA data. Production is heavily dependent on
Wheat 34.0%
weather, which is the major inhibitor for the
category’s sustainable growth. A normal monsoon Coarse
in MY2018 resulted in higher production of rice Cereals
13.8%
and corn during MY2018. The USDA forecasts that
in MY2019 milled rice production will fall by 1.7%
Pulses 6.0%
y/y to 111mn tonnes, while production of wheat is
Rice 37.9%
expected to decline by 4.6% y/y to 94mn tonnes,
because of a decline in planted area.
According to the Department of Agriculture and Grain Mill Products and Animal Feeds
Cooperation (DAC), in FY2017 India produced Output Value
285mn tonnes of food grains, an increase of 3.6%
y/y. As well as rice and wheat, which are the 16.6% 15.5%
largest categories with a combined share of 72% 9.7%
2,802
in FY2016, food grains comprise coarse cereals 3,235 3,130 3,024
(corn, jowar and bajra), and pulses (gram, tur, 2,402
lentil). -3.2% -3.4%

FY2013 FY2014 FY2015 FY2016 FY2017
Output Value, INR bn y/y change, %
Source: CSO, DAC, CEIC

FOCUS POINT
Food Grains Production by State, FY2017
17.9%
Uttar Pradesh 5.7%
Bihar
10.2% 6.2%
Punjab
West Bengal
6.2%
Haryana
7.7%
Gurajat
12.0%
Madhya Pradesh
5.7%
Maharashtra
3.8%
Andhra Pradesh
7.0%
Rajastan
21.8%
Others
Source: DAC, CEIC


Products (cont’d)
Production by Product, thou tonnes

350,000
300,000
28,720
24,170 25,900 26,000
250,000
22,570 46,970
43,076 43,470 42,250
200,000 38,701
99,850 87,000 98,510 94,000

150,000 86,530
100,000
50,000 105,482 104,408 109,698 112,910 111,000
0
MY2015 MY2016 MY2017 MY2018 MY2019f
Milled Rice Wheat Coarse Grain Cor n
Consumption by Product, thou tonnes
300,000
250,000 24,900 26,700 27,500

22,350
23,550
40,474 42,625 44,925 44,225
200,000 40,201
150,000 93,102 97,120 95,834 98,000

88,551
100,000
50,000 98,244 93,568 95,776 98,660 99,000
0
MY2015 MY2016 MY2017 MY2018 MY2019f
Milled Rice Wheat Coarse Grain Cor n
Source: USDA


Products (cont’d)
Cereals External Trade, USD mn Milling Industry Products External Trade,

USD mn
10,541
9,529
247 244 243
7,717
6,083 170
10,563
158
306
299
299
9,551
4,670
8,152
247
77.1
218
1,343.3
6,272
61.4
60.0
6,013
56.9
51.7
434.1
188.6
22.1
22.2
Exports Imports Trade Balance Exports Imports Trade Balance
Comments
Local production covers almost all of India’s consumption of cereals. Since their output is reliant on
weather, cereal exports increase when there is surplus in domestic production, and decrease when
production is experiencing a downward trend. Between FY2013 and FY2018, cereal exports declined at
a CAGR of 5.1%, affected by the lower global prices of agricultural products, which started falling in
FY2015. As a result, the exports of cereals and milling industry products both suffered a decline in two
consecutive years, FY2015 and FY2016. During FY2018, however, the two categories witnessed positive
growth in exports, as well as increased domestic consumption.
Cereal imports have experienced a sizable growth over recent years, increasing at a CAGR of 81.4%
from FY2014 to FY2018, due to the fact that India started importing cereals at low international prices
to satisfy rising domestic demand. Imports of milling industry products also witnessed positive
performance during the last few years, growing at a CAGR of 8.3% between FY2014 and FY2018. In
FY2018, milling product imports rose by 28.5% y/y, driven by growing demand for high quality food. In
FY2018, imports of cereals dropped by 67.8% y/y, adversely affected by the government’s decision to
raise the import duty on wheat from 0% to 10% in March 2017, and further to 20% in November 2017 to
protect domestic production.
Source: MCI, CEIC


Products (cont’d)
Main Export Cereal Products, FY2018 Main Import Cereal Products, FY2018
Rice
Parboiled
22.2%
Other Rice Barley 10.4%

16.8%
Wheat 84.0% Corn 3.6%

Broken Rice
4.7%
Oats 1.4%
Basmati Rice
51.2% Corn 1.8%
Other Rice
0.4%
Main Export Destinations for Cereals, Main Import Source Countries for Cereals,
FY2017 FY2017
Saudi Arabia 12.3% Ukraine 46.1%
UAE 10.3% Australia 39.4%
Iran 9.5% Bulgaria 4.7%
Iraq 7.9% France 2.8%
Nepal 5.8% Russia 2.5%
Source: MCI, CEIC


Products (cont’d)
Main Export Milling Industry Products, Main Import Milling Industry Products,
FY2018 FY2018
Rolled Or
Corn Stratch
Flaked Oat
18.2% Corn Groats Grains
and Meal 14.9%
7.6% Wheat
Dried Gluten 20.2%
Leguminous Hulled,
Vegetable Pearled,
Flour and Sliced Or
Meal 6.9% Kibbled Oats
10.1%
Wheat or Others 6.6% Flour, Meal

Meslin Flour And Powder
Cassava Of Other
37.3%
Stratch Fruits nes
21.0% 7.5%
Main Export Destinations for Milling Main Import Source Countries for Milling
Industry Products, FY2017 Industry Products, FY2017
USA 18.1% China 25.3%
Malaysia 5.7% Sr i Lanka 8.6%
Saudi Arabia 4.6% UAE 8.4%
UK 4.5% France 6.0%
Source: MCI, CEIC

Sugar and Sugar Products
Comments Number of Sugar Mill Factories in

Operation
India is the world’s largest consumer of sugar
and, as a producer, is second only to Brazil. In
MY2017 (from October 2016 to September 2017),
the production of sugar was negatively affected 5.7%
by insufficient rainfall in major producing
states such as Uttar Pradesh, Maharashtra,
Karnataka, Tamil Nadu and Telangana, which
reduced both the sugarcane harvest and
average yields. In MY2018, however, a record- -0.6%
538
high sugar output was recorded in India, due to 526 526
increased harvested area and yields. The USDA -3.2%
-2.2%
estimates that in MY2018 sugar output in India 509
increased by 46.1% y/y to 32.4mn tonnes. In 493
-6.3%
MY2019, sugar production is forecast to reach
33.8mn tonnes due to favourable weather
FY2013 FY2014 FY2015 FY2016 FY2017
conditions. Consumption is also forecast to rise
due to a growing population and strong
demand from food processors. Number of Sugar Mill Factories y/y change, %
Centrifugal Sugar Production Centrifugal Sugar Consumption
46.1% 3.9%
30,460 1.8%
1.7% 26,500 1.1%
14.5%
32,445 26,800
26,605 27,385 26,500
-2.7% -10.1% 22,200 26,023
-18.9% 25,500
-4.9%
MY2014 MY2015 MY2016 MY2017 MY2018f MY2014 MY2015 MY2016 MY2017 MY2018f
Pr oduction, thou tonnes y/y change, % Consumption, thou tonnes y/y change, %
Source: USDA, ISMA

Sugar and Sugar Products (cont’d)
Comments
India imports raw cane sugar mainly to meet local needs in the case of temporary gaps between
domestic production and consumption. The weak and erratic 2014-2015 monsoon seasons, which had a
negative effect on sugarcane harvest, contributed to an increase in raw cane sugar imports. In FY2016,
imports of sugar and sugar products reached USD 693mn, up from USD 146mn in FY2012. In FY2016,
about 85% of imports consisted of raw cane sugar, with Brazil as the main supplier country. The
government of India frequently intervenes in the external trade in sugar and sugar products to
regulate import and export levels and control domestic prices. Under current legislation, sugar mills
operating in India may, against a future export commitment, import raw sugar duty-free (instead of
paying the standard import duty of 40%). In June 2016, the government imposed a 20% export duty on
raw and refined sugar to boost local supply, keep domestic sugar prices in check, and restrict exports
following a sharp rise in international sugar prices. Despite increased domestic production, India
turned from a net exporter into a net importer of sugar and sugar products in FY2018, due to
increased consumption and uncompetitiveness of Indian sugar on the global market after the import
duty imposition. On March 20, 2018, the government dropped the export duty on sugar from 20% to
0%, so exports are expected to rise in FY2019.
Sugars and Sugar Confectionery External Trade, USD mn

1,764
1,509
1,355
1,104
1,075
1,050
1,019
1,071
880
686
693
475
389 405
-32
FY2014 FY2015 FY2016 FY2017 FY2018
Source: MCI, CEIC, USDA, Economic Times

Sugar and Sugar Products (cont’d)
Lactose And
Lactose
Syrup 6.9%
Sugar
Confectionery
12.7% Sugar
Confectionery
Cane Sugar
Glucose, 2.0%
88.0%
Refined Dextrose,
Sugar 72.3% Lactose Edible
6.9% Molasses
1.0%
Edible Fructose And
Molasses Frctose
1.4% Syrup 0.6%
Myanmar 28.1% Br azil 92.0%
Somalia 12.4% Gernany 1.7%
Sudan 10.7% USA 1.4%
Djibouti 7.0% Netherlands 1.0%
UAE 4.5% New Zealand 0.6%
Source: MCI, CEIC

Comments Fruit and Vegetable Production, mn

tonnes
India is the second-largest producer of fruits and
vegetables in the world, after China. The country
179.7
178.2
169.1
is a leader in the production of fruits such as
166.6
bananas, lemons, mangoes and guavas, as well 160.3
as some vegetables, such as onions and ginger. In
addition, it is the second-largest producer of
97.1
92.9
91.6
90.2
89.5
potatoes, green peas and cabbage. Over the
period FY2014-FY2018, fruit production expanded
at a CAGR of 1.2% to 97.1mn tonnes in FY2018,
while vegetable production grew at a CAGR of
2.3%, reaching 179.7mn tonnes. Overall processing
FY2014 FY2015 FY2016 FY2017 FY2018
levels of fruits and vegetables is very low at
about 2%, MOFPI said in its report, released in
Vegetable Production Fruit Pr oduction
2016.
Major Fruits Production Major Vegetables Production
Tomato
10.8%
Mango Citrus 12.9%
21.9% Brinjal 7.1%
Onion 12.3%
Papaya 6.4% Cabbage

5.0%
Banana Guava 4.1% Potato 27.0% Cauliflower

32.0%
4.9%
Source: DAC, CEIC, USDA, MOFPI

FOCUS POINT
Fruit Production by State, FY2018
10.8%
Uttar Pradesh 4.4%
Bihar
4.0%
7.2%
West Bengal
Madhya Pradesh
9.3%
Gurajat
2.6%
11.2% Chhattisgarh
Maharashtra
14.3%
Andhra Pradesh
7.8%
Karnataka
5.3%
Tamil Nadu
23.1%
Others
Source: DAC, CEIC

FOCUS POINT
Vegetable Production by State, FY2018
15.7%
Uttar Pradesh 8.1%
Bihar
6.2%
West Bengal
4.4%
Haryana
7.4%
Gurajat
4.9%
Odisha
5.0%
Maharashtra
4.7%
Andhra Pradesh
4.8%
Karnataka
10.1%
Madhya Pradesh
20.5%
Others
Source: DAC, CEIC

Fruits and Vegetables (cont’d)
Comments Edible Fruits, Nuts and Peels, External

Trade, USD mn
India is a net importer of both fruits and
vegetables. In terms of value, the top products
3,051
3,401
3,042
that the country imports include various kinds of
2,672
peas and lentils, as well as cashew nuts,
2,063
1,857
1,731
1,623
1,611
1,585
almonds and fresh apples, while exports include
mainly cashew kernel, chickpeas, onions,
mangoes and fresh grapes. To increase its
competitiveness in the fruit and vegetable
market, India needs to solve its high wastage rate -440
-1,061
for fruits and vegetables. According to MOFPI, -1,466 -1,310
-1,544
about 35%-40% of the vegetables and fruits
produced in India go to waste due to a lack of a FY2014 FY2015 FY2016 FY2017 FY2018
well-developed cold storage chain and other

infrastructure facilities, which adds to the retail Exports Imports Trade Balance
price of these food products.
Edible Vegetables, External Trade, USD Preparations of Vegetables, Fruit, Nuts,

mn External Trade, USD mn
4,022
4,287
584.9
2,969
2,834
504.7
493.8
488.3
2,142
449.7
1,356
1,306
1,295
1,261
1,181
483
430 410 412
374
-786
102.3
-1,654 -1,663
81.9
78.5
76.1
75.1
-2,761 -2,993
Exports Imports Trade Balance Exports Imports Trade Balance
Source: MCI, CEIC


(cont’d)
Main Export Fruits, FY2018 Main Import Fruits, FY2018
Fresh
Grapes
16.4% Almonds
26.0%
Fresh Apples
Mango Pulp 7.4%
5.6%
Dry Dates
Fresh 7.1%
Pomegranate
s 4.6% Dry Figs
Cashew 2.9%
Fresh
Kernel 47.0% Cashew Nuts
Mangoes
3.2% 40.4% Raisins 2.6%
Main Export Destinations for Fruits, Main Import Source Countries for Fruits,
FY2017 FY2017
UAE 21.2% USA 21.7%
USA 10.7% Cote D'Ivoire 10.7%
Netherlands 9.4% Tanzania 9.6%
Saudi Arabia 9.1% Guinea Bissau 6.9%
UK 3.9% Afghanistan 5.5%
Source: MCI, CEIC


(cont’d)
Main Export Vegetables, FY2018 Main Import Vegetables, FY2018
Lentils
Chickpeas
(Mosul)
(Garbanzos) Mixed 16.0%
13.3% Vegetables Beans (Vigna
7.9% Chickpeas Mungo,
(Garbanzos) Hepper,
28.4% Vigna
Radiata,
Dried Onion Wilczek)
7.0% 9.6%
Preserved Pigeon Peas

Fresh or Cucumbers (Cajanus
Chilled Onion and Gherkins Peas (Pisum Cajan) 7.4%
39.2% 6.4% Sativum)
31.0%
Main Export Destinations for Vegetables, Main Import Source Countries for
FY2017 Vegetables, FY2017
Bangladesh 13.1% Canada 27.0%
Nepal 9.1% Myanmar 18.9%
Malaysia 7.4% Tanzania 5.2%
Pakistan 6.2% USA 4.3%
Source: MCI, CEIC

08
BEVERAGE
MANUFACTURING

08 BEVERAGE MANUFACTURING CONTENTS
Highlights
Overview
Beverage manufacturing has been one of the most dynamic sectors of the manufacturing industry in
India in recent years. According to CSO data, the output of the beverage industry expanded at a CAGR
of 4.5% between FY2013 and FY2017, reaching INR 785.2bn. The largest segment is alcoholic beverages
manufacturing, comprising Indian-made foreign liquor (IMFL), branded country liquor, wine and beer.
The soft drinks industry remains a relatively undeveloped market because of its limited product range,
sparse distribution network and poor modern retail penetration. The beverage industry features a
medium-to-high level of concentration, with a few large players controlled by foreign capitals having
dominant positions in various segments, notably spirits (United Spirits Ltd), beer (United Breweries
Ltd), and soft drinks (The Coca-Cola Company, PepsiCo Inc).
Drivers and Inhibitors

Strong domestic demand, stemming from the country’s young and increasing population, growing
disposable income, changes in consumer preferences and a rising premiumisation trend, has been the
main driver for the beverage manufacturing industry in recent years. On the other hand, the
development of the industry is constrained by strict regulation, rising production costs (mainly of
ethanol), underdeveloped retail infrastructure and growing health awareness among the population.
The alcoholic beverage industry in particular faces rigid regulation and government intervention in
terms of pricing, licensing, manufacturing processes, marketing, sales and advertising. The industry is
also constrained by a high tax burden (taxes account for about 50% of alcoholic beverages’ retail
price), bans on alcohol consumption in several Indian states and a national ban on liquor sales along
highways, which together have led to a proliferation of bootlegging and sales of counterfeit alcohol.
Outlook
The beverage subsector will be driven by the rising disposable incomes of India’s youth-dominated
population, ongoing urbanisation, a growing westernisation and premiumisation trend, and greater
social acceptance of alcohol. On the other hand, the industry will continue to suffer from a high level
of state intervention, an excessive tax burden and regional bans on alcohol consumption that disrupt
production chains and promote smuggling practices and the sale of illicit and counterfeit liquor. The
exclusion of alcoholic beverages from the scope of GST is seen as a restraining factor, as it will
maintain the current system of multiple state and national taxes on alcoholic beverages as well as
increasing both administrative burdens on the segment and production costs, since industry inputs
will fall under the GST regime.
Source: CSO, CEIC, Dun & Bradstreet

Main Events
§ In January 2017, Hindustan Coca-Cola Beverages Pvt Ltd (HCCBPL) announced that it will build a
new bottling plant at Hoshangabad in Madhya Pradesh. The company will invest INR 7.5bn in the
new factory, which will spread over 110 acres and will have bottling lines for carbonated beverages
such as Coca-Cola, Sprite, Fanta, Thums Up, Limca, juices and juice-based drinks such as Minute
Maid and Maaza, packaged water and Kinley soda.
§ In May 2017, United Breweries Ltd announced that it had shut production at the company’s brewery
located in Patna, Bihar State. The decision came following the imposition of total prohibition in
Bihar, effective from April 1, 2017.
§ In October 2017, US-based alcohol producer Sazerac Company Inc. acquired a 28% stake in India’s
leading liquor manufacturer John Distilleries Pvt Ltd for USD 43mn. Sazerac plans to buy an
additional 15% stake in John Distilleries over the next two years, while the chairman of John
Distilleries will continue to hold the remaining 57% stake. With sales of more than 13mn cases, the
portfolio of John Distilleries includes Original Choice Whisky, Bangalore Malt, Paul John Single Malt
(PJSM) and Big Banyan wines. The brands owned by Sazerac include Fireball, Southern Comfort,
Buffalo Trace Bourbon, Pappy Van Winkle Bourbon, and E H Taylor Bourbon.
§ In November 2018, the National Company Law Tribunal (NCLT) ordered the start of Corporate
Insolvency Resolution Process against liquor manufacturing company Empee Distilleries Ltd. The
petition was filed by Union Bank of India (UBI), which claimed a default of 100mn from the
company as of December 31, 2015. The financing was done through a multi-banking arrangement
with 60% from Andhra Bank and the rest by UBI. The financing was mainly used for the company's
alcohol plant expansion and product imports and exports.
Source: The Times of India, Indian Express, Hindustan Times

Alcoholic Beverages
Comments Alcoholic Beverage Production Volume

India is home to some 295 distilleries, with a
4.6%
combined capacity of 4.2bn litres per year. Most 4.3%
of the licensed capacity is concentrated in the 2,729

states of Uttar Pradesh, Maharashtra and Tamil
-2.3%
Nadu. India’s alcoholic beverages are classified 2,608
2,548
into four segments – Indian-made foreign liquor -6.6%
2,491
(IMFL), branded country liquor – also called Indian

FY2015 FY2016 FY2017 FY2018
made Indian liquor (IMIL), wine and beer. IMFL,
which refers to all types of hard liquor Pr oduction, mn litres y/y change, %
manufactured in the country with an alcohol
content of up to 42.8%, other than indigenous Market Share of Alcoholic Beverages by
alcoholic beverages, is the most popular alcoholic Volume, FY2018
beverage, holding about 68% of the domestic
IMFL 27.9%
market in FY2018 in value terms, according to Dun
& Bradstreet. In volume terms, beer occupies the
largest market share, estimated at 51.6% in Country
FY2018. Over the FY2013-FY2018 period, the Liquor 18.8%
alcoholic beverage market in India expanded at a

CAGR of 6.5%, reaching INR 2,765bn in FY2018. Beer 51.6%
Wine 1.7%
Since FY2014, growth has slowed, mainly due to
the increasing price of ethanol and rising excise
duties that have been passed on to consumers, Market Share of Alcoholic Beverages by
coupled with stringent government regulations Value, FY2018
and a growing trend of health consciousness.
With the introduction of GST in 2017, taxes on
Beer 21.0%
alcohol increased significantly, as alcoholic
beverages remained out of the GST purview, while
GST taxes applied to raw material inputs. This, Country
Liquor 9.0%
combined with the ban on alcohol sales at IMFL 68.0%
highways imposed in 2017, caused a decline in
Wine & RTD
alcohol sales and production volumes in FY2017 2.1%
and FY2018. In FY2018, India produced nearly
2.5bn litres of alcohol, down by 2.3% y/y.
Source: Dun & Bradstreet

Indian Made Foreign Liquor
Comments IMFL Production and Consumption, mn

litres
IMFL comprises brown spirits such as whiskey,
826
814
805
804
796
791
792
780
rum and brandy, as well as white spirits such as
695
685
gin, vodka and white rum. Among them, whisky is
the most popular, accounting for about 61% of
the IMFL market by volume, followed by brandy
(21.2%), rum (14%) and white sprits (3.8%) in
FY2018.
FY2014 FY2015 FY2016 FY2017 FY2018
Between FY2014 and FY2018, both production and
Pr oduction Consumption
consumption fell at a CAGR of 2.6% as a result of
several factors including an increase in prices (as
Market Share of IMFL by Value, FY2018
producers passed higher production costs and
excise duties on to consumers); alcohol bans in
various states; rising health awareness among Brandy
10.7%
the population; growing preferences for premium
foreign brands; and rising wine consumption,
Rum 9.5%
mainly in urban areas.
Whiskey
73.5%
In the last two years, IMFL consumption has
Vodka & Gin
suffered from the partial prohibition on alcohol 6.3%
sales in the State of Kerala, the total ban on
alcohol in Bihar State, and the ban on alcohol
sales on highways. Market Share of IMFL by Volume, FY2018
The sector benefited from the reduction of excise Brandy
duties in Uttar Pradesh, which resulted in lower 21.1%
selling prices of IMFL in this state. According to
Dun & Bradstreet, both production and
Rum 14.1%
consumption of IMFL will resume growth in
FY2019 with the gradual weakening of the Whiskey
adverse effect of the highway liquor ban. 61.0%
Vodka & Gin
3.8%

Beer
Beer Production and Consumption, mn Market Share of Beer by Volume, FY2018

litres
1,514
1,482
1,438
1,407
1,388
1,357
1,285
1,276
1,244
1,241
Light Beer
20.0%
Strong Beer
80.0%
FY2014 FY2015 FY2016 FY2017 FY2018
Pr oduction Consumption
Comments
Per capita beer consumption in India was 5.1 litres in FY2018, significantly lower than the Asian
average of 20.9 litres per capita. This can be attributed to licensing regulations, restrictions on the
sale of alcohol in several states, an excessive tax burden (beer is taxed at the same rate as IMFL) and
a preference for locally produced brown spirits. The beer segment suffered a major slump in FY2017,
when beer consumption dropped by 16.1% y/y. The main reasons were the restriction on alcohol
consumption in Bihar State, the highway ban on alcohol sales, the hike in excise duty in Maharashtra
State and an increase in minimum retail prices. In FY2018, beer consumption remained almost flat at
1,241mn litres. Between FY2014 and FY2018, domestic sales of beer declined at a CAGR of 1.8% in
volume terms, dragged down by the negative performance over the last two years. In value terms,
however, beer sales in India grew by a CAGR of 9% between FY2013 and FY2017, according to Dun &
Bradstreet, due to the rising prices and consumption of premium beers. About 80% of the market is
dominated by strong beer with an alcohol content of between 6% and 8%, while the remaining 20%
share is held by light beer. In FY2016, there were about 90,000 outlets serving beer in India, equivalent
to one beer outlet per 20,000 people, far fewer than in comparable countries like China (where the
rate is one outlet per 200 people).

Comments
India is a net importer of IMFL and wines, and a net exporter of beer. After strong growth rates over
the period FY2012-2014, exports of alcoholic beverages have followed a downward trend, falling to
USD 296.7mn in FY2017. This was mainly due to a decrease in exports of IMFL and other liquors
stemming from lower domestic production and weak demand in key export destinations in Africa and
the Middle East. On the other hand, beer exports have followed a steady upward trend, expanding at a
CAGR of 8.4% over the FY2014-FY2018 period, and reaching USD 47.5mn in FY2018, boosted by higher
demand from the Indian diaspora. In FY2018, the UAE, Singapore and Malaysia accounted for 82.1% of
total beer exports in value terms. The UAE was also a major destination for India’s exports of brown
spirits with a share of 24.9% in FY2018, while Ghana and Nigeria were the largest importers of ethyl
alcohol from India. In terms of imports, the government exercises strict control, imposing a minimum
import duty of 152% on ready-made wines and spirits. Nevertheless, imports of alcoholic beverages
expanded at a CAGR of 13% over FY2014-2018, driven by higher demand from the increasingly affluent
urban population and a growing premiumisation trend. India’s major sourcing countries for beer
imports are Belgium, Mexico and Vietnam, together accounting for 75.2% of the country’s total beer
imports in FY2018. Wine is imported mainly from France, which accounted for 40.3% of India’s total
wine imports in FY2018.
Alcoholic Beverages External Trade, USD mn

601.0
518.4
429.9
396.9
387.6
363.7
325.5
326.6
304.7
296.7
71.4
-24.0
-125.2
-221.6
-274.3
FY2014 FY2015 FY2016 FY2017 FY2018
Source: MCI, CEIC


(cont’d)
Ethyl Alcohol Whiskey,

30.1% Scotch,
Bourbon
28.2%
Beer 14.5%
Vodka & Gin Wine 4.2%

4.4% Vodka & Gin
3.0%
Whiskey, Ethyl Alcohol
Wine 2.9% Beer 1.4%
Scotch, 46.3%
Bourbon
34.4%
UAE 27.4% France 1.5%
Ghana 8.4% Belgium 0.8%
Singapore 6.3% Australia 0.5%
Netherland 5.7% UK 0.5%
Niger ia 5.5% Italy 0.4%
Source: MCI, CEIC

Comments Soft Drinks Market Value

According to MarketLine, India is the third-largest
market for soft drinks in Asia Pacific after China 17.5%
16.1% 16.8%
and Japan, accounting for 6.5% of the market in
2017. Over the 2013-2017 period, the soft drinks 849 7.1%
1,062 1,116
910
market in India expanded at a CAGR of 7.6% in 732
5.0%
volume terms, reaching 30.4bn litres in 2017. In
value terms, in 2017 the market expanded to INR
2013 2014 2015 2016 2017
1,116bn, compared to INR 732bn in 2013, indicating
the increasing readiness of Indians to spend on Market Value, INR bn y/y change, %
soft drinks. Despite this growth, the Indian soft
drinks market remains underdeveloped, with a Soft Drinks Market Volume
limited product range, a scanty distribution
network and poor modern retail penetration, due
16.3%
to the low quality of transportation infrastructure
13.0%
in the country. In terms of products, carbonates is 24,509
7.9%
8.4%
30,443
the largest segment of the soft drinks market in 26,447 28,664
21,078 6.2%
India, accounting for 52.7% of the market’s total
value in 2017, followed by packaged water with a
share of 18.1% of the soft drink market. Four 2013 2014 2015 2016 2017
players, namely the Coca-Cola Company, PepsiCo Market Volume, mn litr es y/y change, %
Inc., Parle Agro Pvt Ltd, and Bisleri International
Pvt Ltd, dominate India’s soft drinks market, Product Segmentation by Value, 2017
holding 64.8% of the total market in value terms
in 2017. The Coca-Cola Company is the leader in Packaged
Water 18.1%
the market, generating a 37.6% share in 2017,
Still Drinks
according to Marketline. The competition 16.6%
between the companies is moderate, due to the
Nectars 3.0%
strong growth of the market, which helps
decrease the intensity of rivalry. Fruit Powders
1.8%
Carbonates
Juice 1.8%
52.7%
Other 6.0%
Source: Marketline, Euromonitor International

External Trade
Comments Non-Alcoholic Beverages External Trade,

USD mn
Over the FY2014-FY2017 period, imports of non-
alcoholic beverages doubled, reaching USD150mn
150.0
147.4
in FY2017, supported by consumers’ increasing
124.6
preference for higher value-added products, such
98.7
as fruit pulp or fruit juice-based drinks and
sweetened waters, which accounted for 95.5% of
14.5
13.4
13.0
11.6
total import value in FY2017. On the other hand,

exports of non-alcoholic beverages remained
relatively stagnant over the period, reaching USD
-87
14.5mn in FY2017. During this period, the main -111
export products were beverages containing milk -134 -136
and fruit pulp or fruit juice-based drinks, which FY2014 FY2015 FY2016 FY2017
had a combined share of 72.1% of total exports.

Nepal 19.2% Nepal 73.4%
USA 18.8% Sr i Lanka 8.0%
UAE 10.8% Austria 7.0%
Bhutan 8.6% Bangladesh 6.2%
Singapore 7.1% Thailand 1.5%
Source: MCI, CEIC

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INDIA

FOOD & BEVERAGE

An EMIS Insights Industry Report

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CSO Central Statistics Office

DAC Department of Agriculture and Cooperation

DAHD&F Department of Animal Husbandry, Dairying and Fisheries

DIPP Department of Industrial Policy and Promotion

ECA Essential Commodities Act

FAO Food and Agriculture Organisation of the United Nations

GST Goods and Services Tax

GVA Gross Value Added

IBEF India Brand Equity Foundation

IMFL Indian Made Foreign Liquor

ISMA India Sugar Mills Association

MCAFPD Ministry of Consumer Affairs, Food and Public Distribution

MCI Ministry of Commerce and Industry

MOFPI Ministry of Food Processing Industries

NFSA National Food Security Act

NITI Aayog National Institution for Transforming India

NMFP National Mission on Food Processing

PMKSY Pradhan Mantri Kisan SAMPADA Yojana

RBI Reserve Bank of India

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02 SECTOR OUTLOOK p.13

03 SECTOR IN FOCUS p.20

04 COMPETITIVE LANDSCAPE p.32

05 COMPANIES IN FOCUS p.39

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06 REGULATORY ENVIRONMENT p.50

07 FOOD MANUFACTURING p.58

08 BEVERAGE MANUFACTURING p.93

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Largest Largest Largest

USD 9.3% -0.8%

Note: Unless otherwise stated, all figures refer to FY2018.

INDIA FOOD & BEVERAGE SECTOR 2018/2022 7

Source: CSO, MOSPI, MOFPI, DAHD&F, DIPP, RBI, MCI

INDIA FOOD & BEVERAGE SECTOR 2018/2022 8

GVA OF FOOD, BEVERAGE

KEY PLAYERS BY OPERATING REVENUE

Note: Data for FY2018

INDIA FOOD & BEVERAGE SECTOR 2018/2022 9

INDIA FOOD & BEVERAGE SECTOR 2018/2022 10

INDIA FOOD & BEVERAGE SECTOR 2018/2022 11

INDIA FOOD & BEVERAGE SECTOR 2018/2022 12

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Consumption, Investment, and Public

Source: EMIS Insights, ET

INDIA FOOD & BEVERAGE SECTOR 2018/2022 14

Macroeconomic Outlook (cont’d)

FY2017 FY2018f FY2019f FY2020f FY2021f FY2022f FY2023f

Total Exports and Imports, y/y change

FY2017 FY2018f FY2019f FY2020f FY2021f FY2022f FY2023f

Source: EMIS Insights

INDIA FOOD & BEVERAGE SECTOR 2018/2022 15

Consumer Confidence Survey (Future Business Expectation Index

Source: EMIS Insights

INDIA FOOD & BEVERAGE SECTOR 2018/2022 16