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Processing takes off with strong infra and agri produce
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Saturday, 01 March, 2025, 12 : 00 PM [IST]
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Nandita Vijayasimha, Bengaluru
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Food processing is gaining momentum due to the combination of strong infrastructure and a diverse range of agricultural produce. Factors contributing to the sector's rapid growth are improved storage facilities reducing post-harvest losses with advanced cold storage and warehousing facilities. Companies like ITC, Britannia, Parle, MTR, Gits, iDFresh, PepsiCo India, KRBL, LT Foods, Mondelez India, Venky’s, Suguna and Nestle are good examples in this regard.
Other than the ready-to-eat, ready-to-serve and ready-to-cook brands, there are scores of processing activities with spice, dairy, frozen foods, bakery, confectionery, poultry and meat processing happening in the country. Leading players in the sector are Shakti Masala, MDH, Everest and Catch to name a few.
Food parks create modern infrastructure facilities for food processing along the value chain from farm to market with strong forward and backward linkages through a cluster-based approach. With technology and automation, advanced processing techniques increase production efficiency and product shelf life.
Market size of food processing
The market size of food processing sector in India is estimated to reach US$1,274 billion in 2027 from US$866 billion in 2022, backed by changing lifestyle and food habits due to rising disposable income and urbanisation, stated an IBEF report.
India was a global leader in milk production contributing ~25% to global milk production, in 2022-23. The country ranked second in vegetables and fruits and egg production and fifth in meat production, respectively, in 2022-23.
Additionally, India is the largest producer of spices in the world, with 11.26 million tonnes of major spices produced in 2022-23, as per the third advanced estimate by Spices Board of India. The food processing industry in India is still in its early stages, contributing less than 10% to the total food output. According to a Deloitte study on Level of Food Processing in India, processing levels were at 2.7% for vegetables, 4.5% for fruits, 15.4% for fishery, 21.1% for milk, and 34.2% for meat in 2020-21.
A strong food processing industry is essential for our nation to tackle food and nutritional security issues. Processed food offers convenience, extended shelf life, easy transport to remote areas, and improved accessibility, serving as a valuable source of nourishment. Additionally, it offers our farmers increased opportunities for better price realisation and expanded selling prospects.
Availability of grains, fruits, vegetables, dairy, meat, and seafood supports a broad range of processed food products and gives India an edge in food processing. India is the largest producer of milk and spices and one of the leading producers of fruits and vegetables, poultry, and meat. The country is ranked second in fruits and vegetables cultivation. Further the growing demand for organic and health-focused foods fuels industry expansion.
Prashant Peres, managing director, Kellanova South Asia, said, “The Indian food processing industry is on a remarkable growth trajectory and an important segment of the Indian economy in terms of its contribution to GDP, employment and exports. It plays a vital role in the complete supply chain, including enhancement of farmer incomes, improving nutrition for consumer, and generating employment for people. By transforming raw agricultural products into market-ready goods, the sector is becoming more efficient and sustainable with the integration of cutting-edge technologies like AI and blockchain, ensuring traceability and food quality and safety from farm to fork. These technologies help monitor the entire supply chain, reducing waste and ensuring food safety.”
However, a big challenge facing the industry is misinformation spread amongst consumers which threatens progress for the industry. “At Kellanova, we remain committed to providing consumers with safe, nutritious, and high-quality food products and launching science-backed innovations. We have led the way with transparent communication of our ingredients on our packs, including printing the ‘first nutrition labels’ as far back as 1930’s, well before it was made mandatory,” added Peres.
“We look forward to continue to partner with the full ecosystem of the sector, including farmers, government and other players to continue to support the growth of India’s food processing industry,” pointed out Peres.
Extensive government & policy support
From tax breaks, subsidies, and grants for food processing ventures, the Central and State Governments have brought in ease of doing business with simplified regulations encouraging investments.
There is also support for export promotion where assistance to processed food is extended to companies for international reach.
The food processing growth in India is attributed to consumer demand, urbanisation and lifestyle changes. People prefer ready-to-eat, packaged, and convenience foods as they are strapped for time. Although there is a change in perspective for ready to eat foods over home prepared meals, post-Covid, the visible interest to splurge prevails. This is especially seen in the GenX population. Also, global appetite for processed foods is expanding.
There is a huge trend towards health and wellness. The demand for nutritious, fortified, and organic food products is rising.
With a strong foundation of infrastructure and abundant raw materials, the food processing industry is poised for significant growth. “Strategic investments in technology, supply chain, and export policies will further boost its expansion,” said Chetan Hanchate, food consultant and CEO, Centre for Processed Foods, Bengaluru.
Positioning agro food processing as a critical industry because it is one of the fastest growing in the country, Hanchate noted that the sector is becoming a promising sector because of the growth prospects. Currently there is a rush of first generation young entrepreneurs entering the fray with novel solutions across processing, packaging among others.
Held against the background of innovation, this year’s Aahar Expo is seen to increasingly focus extensively on medium-cum-small scale agro food operations. This platform allows them to promote many a potential product to the market, said Hanchate.
Charging to the bourses
Indian online meat and seafood retailer Licious backed by the Singapore-based investment firm Temasek Holdings Pte, is all set to go public in 2026. For this, Delightful Gourmet Pvt Ltd which operates Licious, is opening more and more brick-and-mortar stores and speeding up deliveries to try taking on quick commerce rivals, according to a Bloomberg report.
As India’s largest D2C brand, since its inception in 2015, the Bengaluru-based Licious has adopted 100% traceable and sustainable sourcing practices, creating quality benchmarks for the industry. It is also the largest D2C brand from India to be certified with FSSC22000. It is also the first company in the segment to take a pledge towards achieving complete ESG compliance and is present across 27 Indian cities delivering over 2 million orders every month.
Expansions on the anvil
In October 2024, Britannia Bel Foods, a leading cheese player in India, opened its cheese factory in India, dedicated to the local production of Britannia’s The Laughing Cow products.
Maharashtra is a leading state in India for milk production, making it the ideal choice for the cheese factory location within Britannia’s dairy food park in Ranjangaon. The plant is fully integrated with a robust milk procurement programme, sourcing 4 lakh litres of 100% cow’s milk daily from over 3,000 farmers in Pune and surrounding areas. Britannia has scaled up the milk procurement programme within a few years to 70 Village-Level Bulk Milk Coolers installed within a 100 km radius from the factory, spanning 10 tehsils in Pune and nearby districts. The farmer programme is integrated with Britannia’s village development and malnourishment programmes under the efforts of Sir Ness Wadia Foundation and Britannia Nutrition Foundation.
With an investment of nearly Rs 220 crore (around €23.9 million) from the joint venture including the Britannia Dairy facilities being leveraged, the new greenfield factory is located in one of Maharashtra’s largest food parks. It is integrated within Britannia’s state-of-the-art dairy production facility, which produces a comprehensive range of Britannia dairy products including now Britannia’s The Laughing Cow Cheese with a full range of products - slices, blocks, spread, diced and cubes.
Another company Tenali Double Horse Group, the house of premium quality culinary essentials; as part of its initiative forayed abroad with an aggressive global expansion plan to the Middle East.
Karnataka produces a wide variety of crops, including coffee, ragi, safflower, sunflower, maize, and more. It's also a major producer of horticulture crops like mangoes, grapes, pomegranates, and more. The state has a well-developed food processing sector with cold chains and food parks. There are many food manufacturing companies in Karnataka. The state has a surplus of milk, which is used to make cheese, butter, ghee, and yogurt. Also, Karnataka has more than 150 cold storage units. The state has a well-established cold chain infrastructure.
According to CSIR- CFTRI, food processing reduces wastage, promotes crop diversification, and increases export earnings. The institute also said that the way forward would be partnerships. It is here McDonald's India (West & South), operated by Westlife Foodworld partnered with the CFTRI, under the Central Ministry of Science & Technology, to launch multi-millet bun. This exclusive, first-ever collaboration marks a new era in food innovation, combining CSIR-CFTRI's expertise with the brand’s commitment to developing nutritious food options.
Recently BioNEST incubation centre at CSIR-Central Food Technological Research Institute (CFTRI) and Siddaganga Incubation Foundation through a Food Hackathon are providing an opportunity for students passionate about entrepreneurship and innovation in food and agriculture.
The Food Karnataka Limited (FKL) is a special purpose vehicle to provide state-of-art infrastructure to food parks, under the administrative control of Karnataka State Agricultural Produce Processing and Export Corporation Limited (KAPPEC). The main objective is to implement and monitor the food parks. As a home to food parks, the States’ 110-acre Mega Food Park in Tumkur, which houses small entrepreneurs, also provides employment opportunities. Others include Jewargi Agro Food Park, Jewargi, Kalaburagi District, Green Food Park, Bagalkote, Bagalkote District, Akshaya Food Park, Hiriyur, Chitradurga and Innova Agri Bio Park, Malur, Kolar District. Karnataka has an industry-friendly policy environment for food processing. The State also has a scheme for food processing enterprises.
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