India’s story is dominated by growth. Its economy is expected to be the third-largest in the world by the mid- 2020s, with a healthy 7.8% growth expected in the 2018/19 year.
Exports to India can be challenging – there are a wide range of import laws, restrictions and tariffs to navigate, and anyone wanting to do business there needs to be diligent and seek expert advice. But behind the obstacles, India’s food and beverage markets are showing some very interesting trends.
– India’s retail food and beverage market is worth a lot. About $380 million USD to be exact.
– And it is modernising. India’s food sector is dominated by traditional outlets – fresh food markets and small family shops. But that means that there is a lot of room for growth among modern outlet concepts like supermarkets – currently at a rate of about 15% per year.
– The consumers have youth on their side – over 50% of India’s consumers are aged under 30. That feeds into a consumer population that is comfortable with technology, interested in modern trends in food and health and has a brand conscious global outlook.
– Disposable incomes are rising. With many hotspots of urban populations and an increase in two-income families, the amount of money these younger Indian consumers have to spend on their food budget is going up.
– And so is the demand for food-based experiences. The foodservice sector in India is also growing with a demand for global food styles and convenient service.
– Health and wellness matter. As consumers become more educated and have more income to devote to food, so they become more interested in products that offer health and wellness benefits. That sector had a compound annual growth rate (CAGR) of 15% over the last four years, a rate of growth that is projected to continue.
– So does convenience. Most of India’s F&B categories are forecast to see CAGRs of well over 10% in the next 4 years. Packaged food as a whole is expected to grow by 16%, ready meals by 15%, and savoury snacks by a chunky 23%.
– India is a nett exporter – but not in all products. Having transitioned from an agricultural economy, India still has a thriving agri-food sector. That makes it a massive world exporter and means there is strong domestic performance in the F&B sector. However, that doesn’t mean that India doesn’t need imports, simply that demand tends to cluster in specific categories. Areas identified with good import prospects include fresh fruits, fruit juices, nuts, vitamins and supplements, and free-from products (eg gluten free, sugar free), all of which benefit from increased demand for healthy products. Also looking good for foreign exporters is the demand for cocoa and related products and many beverages.
Does India sound like an export environment you might want to check out? We will be running a market visit to India in February 2020; stay tuned for the details, or simply reach out to learn more.