1. Promising food industries for rural setup

2. Dr. Kalpana Kulshrestha Professor & Head, Deptt. of Foods and Nutrition College of Home Science G.B.P.U.A.&T., Pantnagar

3. 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)

4. The Indian Agricultural Scenario Total villages627000 Rural population72% Depending directly on indirectly on agriculture 72 % Total agriculture production 600 million tonnes Share in India’s GDP25 %

5. Government’s 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.

6. 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 India’s 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).

7. 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

8. Large scale level Medium scale level Small scale level Cottage / tiny scale level Food products can be processed at

9. 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. Why focus on small/cottage industry in rural set up ?

10. EXISTING MODEL Farmer Near By market Semi wholesaler Contractor Industries at cities Finished product Wholesaler Retailer Consumer Low benefit margin

11. 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.

12. 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

13. 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

14. 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. Cottage/ small scale industries

15. 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.

16. Sl No SectorProducts 1.MilkMilk powder, Butter, Ghee, Cheese, Ice cream 2.Fruits and vegetables Sauce, Jam, Juice, Pickle, Squash 3. Cereals and grainsVermicelli, Noodles, Bread, Papad, Energy Drinks, Packaged Flours and Dals etc. 4.Snacks and beverages Potato chips, Namkeen, Chocolates, Ready –to- eat, aerated drinks, Baby Foods & extruded products Processed food products in demand

17. Milling Industry Rice milling Wheat-flour milling Pulse milling Promising Industries

18. 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%. Milling industries

19. 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

20. 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. BAKERY INDUSTRY

21. 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

22. 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. SEMI-PROCESSED/ COOKED/ READY TO EAT

23.  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. CULINARY PRODUCTS & SNACK FOOD

24.  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. FRUIT JUICES / PULP & CONCENTRATES/ SAUCES/ KETCH UPS

25.  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 Street vendors are still popular

26. Confectionary Industries Hard Boiled Candies Toffees Eclairs Chewing gums Bubble gum Mints Lozenges  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.

27.  India is the largest milk producing country with production of more than 92 million tonnes. The traditional dairy products are India’s 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. MILK AND DAIRY PRODUCTS / HEALTH BEVERAGES

28.  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 INDUSTRY

29. 29 Tea Sector Automated material handling systems Direct Oil-fired Heater for Withering and Drying of Tea Energy Efficient Motors Withering Green Leaf Roll Breaking Screening Fermenting Drying Grading/ Packaging Rolling Shredding CTC Cuts (Orthodox) Rolling (CTC) Made Tea Tea manufacturing process

30.  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. Edible Oil

31.  India’s 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 industry’s 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. Indian Sugar Industry

32. 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

33. 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

34. Women Entrepreneurship in India Earlier there were 3Ks Kitchen, kids & knitting Then came Powder pappad and pickles At present there are 5 E’s Education, Electricity, Energy, Electronics & Engineering

35. Supportive measures for women’s activities and Entrepreneurship Direct and indirect financial support Yojna schemes and programmes Technological training and awards Federations and associations Self Help Groups

36. 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

37. Yojna schemes and programmes Nehru Rojgar Yojna Jawahar Rojgar Yojna TRYSEM DWACRA

38. Federations and associations National Alliance of Young Entrepreneurs (NAYE) Indian council of women entrepreneur Self employed women’s association(SEWA) Association of womens entrepreneurs of Karnataka (AWEK) Stree Shakti package by SBI Mahila griha Udyog – 7 ladies started in 1959, Lizzat pappad

39. 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 Advertise new products by offering small promotional units with other products as gift offer.

40. 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

41. 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

42. Thank you Any Questions and Comments …… Comments ……