The Indian Food Ingredients Market: Trends, Opportunities, and Forecasts

 Indian Food Ingredients 

Increasing localisation of food products, increasing development of mega food parks, surging prevalence of the processed food, wide cultural and regional diversities, growing urban middle class population, surging demand for RTE and RTC products have been propelling the growth in the Indian food Ingredients market, and have marked the growth of the Indian food market. The market was estimated to be $764.52 million in 2016 and is anticipated to witness a moderate growth over the next few years.

The study of the market trend is to define, segment and project the size of the ingredient market based on application, region, providing detailed information about the crucial factors, influencing the market dynamics.

The Food ingredients market in India which was about $700 mn in 2016 is seeing a rapid expansion amidst increasing consumption of processed foods and rising preferences. For example, the global pulse flours market accounted for a value of $9.78 billion in 2016 and is projected to grow at a CAGR of a 12.2S percent to reach $18.97 billion by 2022 in terms of value.

The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 percent of the sales. The Indian food processing industry accounts for 32 percent of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. It contributes around 8.80 and 8.39 percent of Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 13 percent of India’s exports and six percent of the total industrial investment.

The market is dominated by food flavours, botanical extracts, and taste enhancers which make up for a considerable share. Among the segments, sweeteners have the highest growth rate while the south is the region which holds the largest share amongst all the regions on the account of the high number of food processing industries. The flavour enhancer’s market value is projected to reach around $8.18 billion by 2022, at a CAGR of 5.6 percent from 2017 to 2022. The market is dominated by players such as Cargill, Tate & Lyle PLC, and many more. The global botanical extracts market is estimated to be valued at $3.92 billion in 2017, and projected to reach $6.03 billion by 2022, at a CAGR of 9.0 percent from 2017.

The market for industrial sugar is projected to reach SPACE $52.91 billion by 2022, growing at a CAGR of 6.01 SPACE percent from 2016 to 2022. The stevia market is projected to grow at a CAGR of 9.5 SPACE PERCENT from 2017 to reach a projected value of $771.5 Million by 2022. Market growth is driven by the growth in customer demand for natural sugar alternatives, zero calorie beverages, and healthier foods incorporating natural sugar substitutes. The Indian gourmet food market is currently valued at $1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20 percent. India’s organic food market is expected to increase by three times by 2020.

The baking ingredients market is projected to grow at a CAGR of 5.4 from 2017 to reach a projected value of $16.91 billion by 2022. Market growth is driven by growing customer demand for healthier foods, such as gluten-free, starch, enzymes, emulsifiers, convenience foods, functional baked goods, etc.

It shows that the industry is modernising and showing the capacity utilisation of factor inputs mainly of raw material, capital, and energy. Raw material constitutes 85 percent of production cost; proper methods of sourcing quality raw material for food production should be adopted to shorten the supply chain in the food processing industry. The ingredient market strengthens backward linkage, with a provision of direct procurement.

(Based on the data analogy report of Markets And Markets, and Fi India & Hi)