Promising food industries

for rural setup

Dr. Kalpana Kulshrestha
Professor & Head,
Deptt. of Foods and Nutrition
College of Home Science
G.B.P.U.A.&T., Pantnagar
India a land of rich Biodiversity encompassing
various agro climatic zones (tropical and sub
tropical) and hence giving rise to production of
several produce of different commodities

Cereals & pulses

Fruits and vegetables
Spices condiments and herbs
Nuts and oil seeds
Animal resources (birds, bovine and
marine)
The Indian Agricultural Scenario

Total villages 627000

Rural population 72%
Depending directly on 72 %
indirectly on
agriculture
Total agriculture 600 million tonnes
production
Share in Indias GDP 25 %
Governments high priority for development
of food processing industry
Policy Initiatives taken by the Government in the Food Processing Sector
which include :
Food processing industry declared a priority area.
Entire sector is de-licensed.
Automatic approvals for foreign investment up to 100 percent, except
some
products like alcoholic beverages and also technology transfer.
Zero duty import of capital goods and raw material for100 percent export
oriented units.
Agro based l00 percent export oriented units allowed sale up to 50 per
cent in domestic tariff area.
Export earnings are exempted from corporate tax
All processed fruits and vegetables products exempted from Central
Excise Duty.
Government grant given for setting up of common facilities in Agro Food
Park.
Full duty exemption on all imports for units in Export Processing Zones.
Use of foreign brand name is freely permitted.
 Rural Consumer Profile
With the changing life styles of the consumers and rising
disposable income of the growing middle-income group,
Branded Food , Health food and convenient Food are
rapidly gaining vast popularity.
Rapid urbanization, increased literacy ,changing lifestyle
in Rural India have increased the demand for processed
food.
Rural India has a large consuming class with 41% of
Indias middle class and 58 % of the total disposable
income for food
The number of households owning Television sets has
increased from 40.5 % to 66.6 % (61 st NSSO report).
 Television & impact on rural mass on
food habits
Change in eating habits

Interest towards snacking, as profile of the middle class

is rapidly changing
Rapid demand for fast foods especially among children

Demand for ready to eat Indian-style foods

Food products can be processed at
 Why focus on small/cottage
industry in rural set up ?

Tremendous growth potential for food companies

Domestic players have made an aggressive entry in the
sector
Small scale and cottage industries to make an impact
Large scale industries somehow survive by virtue of
their money power
Medium scale and small scale industries reap the wrath
of the stringent economic constraints.
Focus should be more on the cottage scale and tiny
scale processing sector which provides a large scale
employment to our unemployed youth and artisans
Another biggest advantage with cottage scale
processing is its low overheads as contrast to large
scale and medium scale processing industries.
 Farmer

Near By market

Semi wholesaler
EXISTING MODEL
Contractor Low
benefit
margin
Industries at cities

Finished product

Wholesaler

Retailer
Consumer
 Traditional foods
Every region (or state) in our country is a rich

treasure house of knowledge , which is

encapsulated in the form of traditional foods
of that region
The traditional foods have been developed
over ages taking into consideration the
nutritional needs of the local people based on
locally available raw materials .
They have a good scope for processing and

marketing .
Various small scale food
processing technologies

Pickles and chutneys

Energy food , weaning foods
Papads
Puffed and parched rice
Low cost cereal & pulse milling
Minimally processed fruits and vegetables
Non vegetarian pickles
Gravy mixes for veg and non veg curries
Spice powders and masala powders
Bakery and biscuits\
Oil seed cake preparations
Factors for the popularity of
local brands
Low cost

Physical accessibility

Local brand or home made products in pickle, papad,

bread, vermicelli, ghee and milk powder are popular

because they cater to local taste and needs.
Important points : Availability, Affordability,

Acceptability & Awareness

 Cottage/ small scale industries
Provides large scale employment to our
unemployed rural youth and artisans
Advantage: low over heads as contrast to large
scale and medium scale processing industries
Disadvantage: unit operations are carried out
manually which is a possible source of
contamination effecting quality and hygiene
Manual operations are labour extensive and hence
maintenance of consistent quality is always at
stake
Certain amount of mechanization or automation is
possible solution to it.
Importance of quality and hygiene in
food processing

The only drawback with the cottage

scale processing is the quality and

hygiene of food products which are

of paramount importance in food

processing.
 Processed food products in demand

Sl Sector Products
No
1. Milk Milk powder, Butter , Ghee,
Cheese, Ice cream
2. Fruits and Sauce , Jam, Juice, Pickle,
vegetables Squash
3. Cereals and grains Vermicelli, Noodles, Bread,
Papad, Energy Drinks,
Packaged Flours and Dals
etc.
4. Snacks and Potato chips, Namkeen ,
beverages Chocolates , Ready to- eat,
aerated drinks , Baby Foods
& extruded products
Promising Industries
 Milling industries
PACKAGED FLOUR (ATTA)
It includes a wide range of products, from basic ground
wheat (atta) to flakes of wheat, rice or corn.
Over the years, there has been a steady process of
technology upgradation and modernization in the
traditional milling industry.
The grain-processing sector is largely un-organized,
although there are a few large players in the market.
Fibre rich incorporated Ata is in demand and traditional
atta chakies should be encouraged .
Increased competitive activity is spurring market growth.
The segment which had been growing with excellent rate
of nearly 70%.
 BAKERY INDUSTRY
Bread
Biscuits
Pastries
Cakes
Buns
Rusk

The organized sector has a market

share of 45 per cent and the balance
55 per cent is with the unorganized
sector in the baked products.
 BAKERY INDUSTRY
The large organized sector players who are prominent in the

high- and medium-price segments include Britannia, Modern

Industries Ltd. Brands like Modem and Britannia are major
players in the bread market and together they account for 90%
of the organized bread market.
Local manufacturers with numerous local brands cater to

populous segment and contribute considerably in the bread

segment.
According to All India Bread Manufacturers Association, bread

should be included as a food item in the Mid-Day Meals Scheme

and thus making a very nutritious and hygienic food available
to the children and the poorer sections of the community.
 BISCUIT INDUSTRY
Biscuits should be recognized as a mass consumption item. The
large organized sector players who are prominent in the high- and
medium-price segments include Britannia, Parle and Bakeman. The
major brands of biscuits are Britannia, Parle, Bakeman, Priya Gold,
Elite, Cremica, Dukes, Anupam, Horlicks.
Within the sector, Britannia has become aggressive with its Tiger
brand with variants to compete with Parle's Parle-G in the glucose
biscuits category. Britannia and Parle dominate in branded biscuit
segment.
Local bakeries in different cities are making variety of biscuits,
cakes, rusks and pastries which are popular even in urban areas.
Therefore small scale biscuit manufacturing units have promising
future
 SEMI-PROCESSED/ COOKED/
READY TO EAT
The market for semi-processed/cooked and ready to
eat foods is estimated to be of around Rs 82.9 billion
in 2004-05 and is rising rapidly with a growth rate of
20 per cent.
With the changing life styles of the Indian middle
class even in rural areas and the busy schedules of
both the husband and wife in the family the demand
for semi-processed cooked/ready to eat food will rise
steadily as hired domestic help is also becoming
costlier.
HLL has entered the ready to eat segment through
Indus Valley rice meals in seven flavours. MTR Foods
has also launched a whole range of cereals meals .
 CULINARY PRODUCTS &
SNACK FOOD
The culinary products including mainly wheat based products
comprising of noodles, vermicelli, macaroni and
spaghetti is gaining popularity. HLL (Kissan and Knorr
range) and Nestle (Maggi) dominate this segment, as both
have large product portfolios. Heinz and Top Ramen are also
knocking at the door.
Potato chips are by far the largest product category within
snacks, with 85% of the total market share. At present,
popcorn has yet to break into the Indian market.
Note: Setting up Extruders would prove to be quite
beneficial , where large scale production can be done
on the basis of individual demand.
 FRUIT JUICES / PULP & CONCENTRATES/
SAUCES/ KETCH UPS
India is the second largest producer of both fruits and vegetables in
the world.
Different Agro- climatic conditions ensure availability of a wide
range of fruits and vegetables in large quantities throughout the
year. The potential of the sector has, however, not been fully tapped
(processed fruits and vegetables, fruit juices, pulp and
concentrates)
Some infrastructural facilities should be provided for efficient
transportation and marketing of fruits and vegetables
Provision should be made for creation of an efficient cold chain
system.
About 89% of the processing units are in the small and medium
sectors.
Pepsi with its brand Tropicana and Dabur Foods through Real brand
compete in the market. Coca Cola India its only juice brand Maaza
is further is talking to multi packaging to attract customers.
Mother dairy is also in the line to access the market effectively
through Safal brand. Dabur Foods not only leads with innovation in
its product offerings but also has now taken the lead in redefining
traditional marketing dynamics in the segment.
 Street vendors are still popular

Fruit juices in the unorganized segment are considered cheaper

and fresher by the consumers, even though they are often
unhygienic.
The Awareness about health and more sophisticated cocktail
culture has driven growth in packaged fruit juice segment.
Local growers/farmers producing fruits and vegetables may set
up their own units or have linkages with producers to fetch
better price of their produce
 Confectionary Industries

Hard Boiled Candies Chewing gums

Bubble gum
Toffees

Eclairs Lozenges

Mints

The Indian confectionary market can be segmented into

sugar boiled confectionary, chocolates, mints and chewing
gums.

Rural areas can try out candy making with appropriate

packaging techniques.
 MILK AND DAIRY PRODUCTS / HEALTH
BEVERAGES

India is the largest milk producing country with production of more

than 92 million tonnes. The traditional dairy products are Indias largest
selling and profitable segment and accounts for more than 50 per cent
of milk and dairy products.
With increased production of liquid milk, there has been a simultaneous
growth in the production of processed milk products, including milk
powder, infant milk food, condensed milk, butter, cheese, ice-cream,
ghee, curd and khoa and khoa based sweets.
The dairy industry is dominated by the co-operative sector.(Anchal
dairy, Uttarakhand )
Rural areas can be used as a platform for promoting production of milk
and milk products .Small scale set ups producing curds, butter, khoa
and khoa based sweets, ice creams have a bright future if adequate
food sanitary measures are taken care of .
 TEA INDUSTRY
Tea has managed to remain on top despite repeated onslaughts by
other beverage segments largely because of its price advantages.
India has a vast domestic market. About 88 per cent of tea grown in
India belongs to CTC variety. India generally produces black tea.
Tea plantations in India are concentrated in the North-East (Upper
Assam, West Bengal) and the South (Kerala, Tamil Nadu). The
North-Eastern region with 82% of area accounts for 76% of total
tea production. In the North East, the yield is lower but quality of
tea is superior.
Tea trading in the domestic market is done in two ways - auction
and private selling. Bulk trading is done by auction.
Uttarakhand has also started producing tea leaves as green tea is
in demand because of health benefits . The producers can properly
pack and sell it at local level at lower price as otherwise it has high
cost (branded).
 Tea Sector
Green Leaf

Withering

(Orthodox (CTC)
) Rolling

Rolling Shredding

CTC Cuts

Automated material Direct Oil-fired

handling systems Heater for
Roll Withering and
Breaking
Drying of Tea
Screening

Fermenting

Drying

Grading/
Packaging Energy Efficient
Motors

Made Tea

Tea manufacturing
29 process
 Edible Oil
Nine major oilseeds contribute three-fourths of the total
oil availability in the country, including those for
industrial use.
In Edible oils, National Dairy Development Board
(Anand), ITC Agro-Tech (Secunderabad) , Marico
Industries (Mumbai), Ahmed Mills, (Mumbai) are the
major Players. In vanaspati, Hindustan Lever (Mumbai),
Wipro (Bangalore) ,Rasoi (Calcutta), Avi Industries
(Mumbai are the major players. The major oil brands are
Sundrop, Dhara, Saffola, Sweekar and Postman. The
major
vanaspati brands are Dalda, Rath.
The main issues in the edible oil segment is the rising cost
of raw materials.
 Indian Sugar Industry
Indias sugar industry is amongst the largest agro-processing
industries of the country with an annual turnover of Rs 200
billion.
The farmers co-operatives own and operate the bulk of sugar
industrys total capacity. Of the total 450 mills operating in the
country, about 252 are in the cooperative sector.
The leading players in Indian sugar industry are Balrampur Chini
Mills Ltd, Bajaj Hindustan Ltd, Andhra Sugars Ltd, Thiru Arooran
Sugars Ltd and, Dhampur Sugar Ltd.
The players are consolidating their position to increase their
market share either by acquiring smaller mills or by going for
green field capacity additions. Besides the Indian urban market is
slowly moving towards branded sugar.
Rural setup has scope for jaggery and Khandasari products.
Basic issues and constraints in
rural areas

Lack of adequate infrastructure

Absence of strong and dependable cold chain system for
perishable products like milk , fruits, vegetables, poultry, fisheries
Farm produce of about 30% is being wasted every year because
there is no adequate storage , transportation, cold chain facilities
Need to review the Agricultural produce and marketing act to
ensure freedom to farmers to sell agricultural produce to sellers
of his choice at remunerative prices
Multiplicity of taxes , local taxes and levies on different food and
beverage commodities
Facilities needed for promising food
industries for rural set up
Utilities like steam, water line, High wattage electric supply etc.
Process equipment like steam heated jacketed vessels, mixing
units
Grinding , size separation and mixing equipment
Heat exchangers , vacuum evaporator
Dehydration/drying units (use of solar energy )
Use of bio- gas ( using gobar gas)
Canning/ facilities like exhausting , autoclaving etc
Mechanical operations like centrifugation, filtration etc.
Packaging facilities like form filling , pilfer proofing , vacuum
filling / nitrogen filling , crown corking
Quality control facilities
Women Entrepreneurship in India
Earlier there were 3Ks
Kitchen, kids & knitting

Then came
Powder pappad and pickles

At present there are 5 Es

Education, Electricity, Energy, Electronics &
Engineering
Supportive measures for womens
activities and Entrepreneurship

Direct and indirect financial support

Yojna schemes and programmes

Technological training and awards

Federations and associations

Self Help Groups

Direct and indirect financial support
Nationalized banks

State finance corporation

Differential rate schemes

Mahila Udhyog Needhi Scheme

Small industries Development Bank of

India (SIDBI)
State small Industrial Development

corporations
Yojna schemes and programmes

Nehru Rojgar Yojna

Jawahar Rojgar Yojna

TRYSEM

DWACRA
Federations and associations
National Alliance of Young Entrepreneurs

(NAYE)
Indian council of women entrepreneur

Self employed womens association(SEWA)

Association of womens entrepreneurs of

Karnataka (AWEK)
Stree Shakti package by SBI
Mahila griha Udyog 7 ladies started
in 1959 , Lizzat pappad
Way Ahead
Local and geographic specific rural market
models
Small unit packages and selling at lower price
points
Increase volumes of advertisements in state
owned channels and Doordarshan preferably in
local languages
Advertisenew products by offering small
promotional units with other products as gift
offer.
Concept of PMFPC
(Pilot model food processing centers) CFTRI,
Mysore

The concept of PMFPC stems from the idea of flour

milling (Chakki mill)

Just as for grinding a few Kg of wheat to make

flour atta, one need not own a chakki mill.

One need not own a food processing unit for

processing a few hundreds of Kgs of ones produce

 SWOT Analysis
Strength
Strong domestic demand pull
Government support for availability of land & labour
Weakness
Inconsistency in out put quality
Poor Technology transfer
Inadequate Market linkages
Small and scattered production
Thin Margin

Opportunities
Generates rural employment
Governments aids for food processing units
Threats
Quality and food safety needs to be assured
Thank you

Any Questions and

Comments