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ANALYSIS

Frozen food market in India projected to grow at CAGR of 3% until 2022
Friday, 03 March, 2017, 08 : 00 AM [IST]
Our Bureau, Mumbai
Frozen foods have become quite popular as healthy foods among the consumers, with frozen fruits and vegetables forming the large segment share globally. However, the consumption percentage of frozen to total foods is quite low.

The consumption concentration for frozen foods is comparatively higher in the western region, including North America and Europe, compared to the eastern region, which includes Asia-Pacific.

The increasing demand for convenience foods, advancements in freezing technology and cold chain logistics have overall supported the Indian frozen food sales.

Change in consumption patterns, inclusion of various international recipes in India has resulted in higher demand for frozen foods.

In India, the demand for healthy convenience foods has increased in the recent years as it requires minimum time for washing, peeling and cutting.

The increase in the working population, specifically women, has resulted in an increase in the consumption of frozen foods in India.

Furthermore, the rising disposable incomes have increased the purchasing power of the consumers towards frozen foods.

Also, improved distribution and the slow gain of market share of organised retail are supporting the frozen foods market.

The Indian frozen food market is estimated to be around $110 million, and is projected to grow at a compounded annual growth rate (CAGR)of three per cent during the forecastperiod (i.e. until 2022).

India, being a tropical country, witnesses a huge amount of post-harvest losses, especially in terms of fruits and vegetables. Cities that experience a shortage of fresh fruits and vegetables, mostly prefer frozen and packed fruits.

Freezing preserves food, so no unwanted additives are required in bags of frozen goodies. Basically, frozen foods are wasted due to their natural deterioration process, and low-grade storage process. Frozen foods can be preserved for a long period of time due to the increase in their shelflife.

Due to the geographical advantage, India has various agro-climatic zones and soil types, providing an opportunity for cultivation of various types of agricultural and horticultural crops.

With the rise in population, there has been a rise in demand for food, which has triggered the food production quantity, and has also encouraged the development of cold chain facilities to avoid post-harvest losses and, at the same time, attain supply availability throughout the year.

Since, cold chain logistics has been introduced in India, there has been a reduction in spoilage, coupled with an enhancement in the shelf life of food products.

The Indian frozen food market is in its infancy and ruled by the unorganised players in the market. It holds huge potential for private investments.

Furthermore, growing export opportunities, trade liberalisation and improved government support is further supporting the frozen food market in India.

Also, India, being the largest producer of various food items, including cereals, fruits, vegetables, dairy products, seafood, meat and poultry, provides attractive export opportunities.

Value addition to the products will attract global attention and help in gaining a competitive edge in the food industry.

Under the ministry of food processing industries’ (MoFPI)scheme for cold chain, they include provision of infrastructure facilities, along with financial assistance for cold chain infrastructure development.

More than 60 per cent of the Indian population lives in villages. This has limited potential for expansion of frozen foods in the villages, due to the lack of organized transport and supply chain.

An improved transport network and inclusion of co-operatives will support the backward integration in the frozen food market in India, hence assuring higher benefits to the farmers.

According to secondary data analysis, the current cold chain capacity in India is less than 15 per cent of the annual horticulture production.

Growing prospects for convenience, processed and packaged foods, agriculture and retail are encouraging cold chain logistics in India, and it is expected that the same trend will continue over the forecast period.

Advancements in freezing technologies, packaging technologies, adoption of environmental measures and further customised options will offer its consumers a wide range of services in the frozen food market.

Adoption of food safety, quality checks and right use of technology to maintain the shelf life of the frozen foods is additionally beneficial.

Need for convenience, nutrition and taste will continue to sustain growth in the frozen food market in India with the support of researchers, local and global food companies and the government.
 
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