Insight into Indian Food and Agriculture Market

Even after six decades of independence, Agriculture happens to be the mainstay of the Indian population. The rapid industrialization and growth of other industries haven’t dismissed the dominance of Agriculture in the Indian economy. In spite of being the second largest food producer after China, the contribution to global food trade by India is negligible. With cumulative wastes amounting to nearly 7 billion USD and growth being slow as compared to other industries, Agriculture does not look like a very attractive segment. But the picture is not all grey. The growth in the sectors peripheral to Agriculture has been tremendous and there are ample opportunities to explore provided one employs the right tactics and strategy. A bird’s eye view of how the margins are shifted in agriculture are as follows 

The organizations involved in Agricultural products need to understand that they need a system wide strategy across the value chain so that they can maximize the profits from Farmer’s Markets to Terminal Markets. Of course, horticulture and other allied industries are on a rise and they have been increasing by leaps and bounds. The following is the growth story of fruits and vegetables in India:

Fruit&Vegetable-Production-India

Some of the other allied sectors growth story is tabulated below:

Sector/Industry	Size of the industry  (Billion US$)	Growth Rate (%)
Food processing	176.41	13.07
Cold Storage & Cold Supply Chain	4.06	26.21
Agricultural Equipments and Machinery	9.8	5.2
Food Packaging	22.47	15.1
Poultry & Livestock	10.3	13.75
Herbal & Medicinal Plants	1.84	16.2
Fertilizers	57.08	7.2
Organic Food products	2.47	38.3
Breakfast Cereal	148.3	12.7
Crop Protection Chemicals	12.6	3.4

The Food processing and Agriculture Industry is booming and the growth rate is also noteworthy. But there are a few hindrances which has been affecting the growth:

•         The small players who are unorganized are about 70% and accounts for about 50% of the value.

•         India’s share in global scenario is about 2% which is insignificant.

•         No Indian brands have global presence.

•         Most of the exports are in bulk and lack branding.

•         Mostly units are involved in primary value addition .The secondary and tertiary value addition units are minimal resulting low value addition.

•         Lots of wastage due to post harvest losses. 

In Food and Agriculture domains, the success hugely depends on how well the products are marketed across the channels. The Retail channels play a huge role in the success of the products. The food and beverage retail market is primarily made up of small and independent family owned stores, which hold over 65 percent of market share. With the advent of Supermarkets and Hypermarkets, the market-share of the stores have somewhat reduced. But still they are quintessential for the success of the brands as they influence the retail consumer’s buying decision. Besides the Channels, Packaging and Pricing are very essential to woo customers. The right price with the right package can do wonders for the Agriculture-based-businesses in India.