1. Food & Beverages Sector

2. Contents* Food Industry in India : An Overview Processed Food Industry : Indian Scenario Processed Food Industry : Major Sectors –Fruits & Vegetables –Fish, Meat & Poultry –Milk & Dairy Products –Bakery Products –Chocolates & Confectionery –Packaged / Convenience Foods Alcoholic Beverages, Soft Drinks & Branded Water Profiles of Major Players Government Initiatives & Recent Developments

3. The Indian Food Sector : Introduction India is one of the major food producers in the world The food sector contributes to about 28 % of India’s GDP In terms of world ranking India stands : –1st in the production of Cereals, Milk & Livestock population 2nd in producing Fruits & Vegetables –Ranks amongst the top 5 in producing Rice, Wheat, Groundnuts, Tea, Coffee, Tobacco, Spices, Sugar & Oilseeds Total market for food productsRs. 2,500 Bn. Of this, processed food Rs. 1,400 Bn.

4. Poultry Meat : Market Size The poultry meat processing industry is still in its nascent stage Around 97 % of poultry meat in India is consumed in the fresh form Only 3 % or about 23,000 tonnes is processed at present Western Hatcheries (part of the Venkateswara Group) were the first to set up a poultry processing unit in India (1986) Top 10 major players contribute for 95 % of total processed poultry meat market

5. Milk & Dairy Products : Industry Structure State co-operatives & privately owned Indian companies dominate the liquid milk sector India has around 70,000 village dairy co-operatives, 22 co-operative dairy federations at state level & 170 milk producer unions at district level Infant Milk Food, Milk Powder, Whitener, Condensed Milk, Malted Milk Food, Butter, Cheese, Ice Cream and Ghee are the major value added products from the Indian dairy sector Gujarat Cooperative Milk Marketing Federation Ltd. (Amul) and Nestle are the leading players in the value-added segment

6. The Market for Beverage Alcohol These regulatory hurdles constitute an entry barrier to the industry Regulatory environment : The Indian market is highly regulated, highly restricted and highly taxed. Licensing requirement exists for Raw material procurement, Stocking of raw material, Production, Inter-state movement, Retailing and Distribution. Controls also exist on Brand entry, Advertising, Distribution & Pricing.

7. The Indian Market The UB Group enjoys a unique advantage as the Leader in both Spirits and Beer Segments Re-distribution structure – Government market (65%) –State government is the sole distributor Auction market (16%) – State government auctions geographical territories which has led to monopolies / cartels Free market (19%) – Through trade licenses Bargaining power in the distribution network is commanded by players with premium brands, large volume base and product range UB Group (India)

8. The Indian Market Spirits Market - India is a 112 million cases market, growing at around 9-10% p.a Armed Forces – another 12.5 million cases Whisky dominates – 62% Low Spirits consumption – Per capita < 2.1 liters p.a Changing lifestyle, exposure to global trends fueling growth MNC’s entered 10 years ago, but yet to emerge strongly Industry has seen some shakeout consequent to marginalization of smaller players UB has aggressively consolidated its leadership position by - Acquiring brands (Gilbeys Whisky) & Companies (SWC) - Investing heavily in brand building UB Group (India)

9. Malted Food & Health Beverages The Rs. 14.4 billion malted foods market is composed of two segments - brown and white. Malted beverages with nutritional attributes control around 70% of the total market and energy drinks (brown beverages) account for the rest. The malted food drink industry is dominated by few players. These include brands such as ' Horlicks, 'Complan' and 'Viva', which are mainly known as white beverages. 'Boost', 'Bournvita', 'Milo' and 'Maltova' on the other hand are classified as brown drink. The consumption pattern of malted beverages differs according to usage patterns across geographic zones

10. Beer : An Overview Market value of Beer industry is estimated at Rs. 22 Bn. (2002-03) Annual consumption of beer 80 Mn. Cases Growth rate8 - 10 % p.a. United Breweries (UB) is the market leader of Indian brewery industry with around 40 % market share Based on the content, beer is further classified as : –Mild / Diet Beer ( 5 - 8 % alcohol) –Lager Beer( 8 - 13 % alcohol) –Strong Beer( 13 - 14 % alcohol) –Draught Beer ( fresh keg beer)

11. Fruit Drink Market : Major Players & Brands CompanyBrand Products Parle Agro Frooti, Appy Mango, Apple, Lime, Guava, Pineapple Godrej FoodsJumpin, Real Mango, Apple, Lime, Guava, Pineapple HindustanGrapy Red Grapes, Foods, Litchi etc. HP AgriHPMC Apple Mohan MeakinsGold Coin Apple juice Modern FoodsRasikaMango, Guava Pepsi FoodSlice Mango NAFEEDNafed Apple, Mango, Guava, pineapple, Orange MIDCL *NOGAPineapple Agro Coca-ColaMazaaMango