Fostering Friendships - Enhancing Social Bonds in the Classroom
Imported food market India
1. DESINGED BY
Sunil Kumar
Research Scholar/ Food Production Faculty
Institute of Hotel and Tourism Management,
MAHARSHI DAYANAND UNIVERSITY,
ROHTAK
Haryana- 124001 INDIA Ph. No. 09996000499
email: skihm86@yahoo.com , balhara86@gmail.com
linkedin:- in.linkedin.com/in/ihmsunilkumar
facebook: www.facebook.com/ihmsunilkumar
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2. INDEX
1. Overview
2. Retail in India
3. Indian Food Industry
4. Distribution Channel
5. Pricing
6. Labeling Norms
7. Food Laws
8. Documentation
9. Data Interpretation
10. Government Initiatives
11. Conclusion
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4. India’s Economic Segment
• Steady increase in GDP – 8.4 % in 2007 (forecast).
• Across India ,the middle class (annual income of more
than US $ 1300) has grown to 200 – 250 million in 2007.
• India’s Foreign Exchange reserves 222 Billion USD as
on 31st July ,2007.
• Inflation Rate – 4.36 % (as on July ,2007)
• Population below poverty line 25 %
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5. Drivers & Opportunities
•
Stability of Government.
•
Growth in the Indian Economy.
•
Product life cycles just beginning in a new market.
•
Growth in the Middle Class population due to advent of IT , Biotechnology
and the Service sector.
•
Increasing middle class ability to afford higher value imported products.
•
Desire of Middle class to shop in organized retail outlets and purchase high
quality , diverse and foreign branded products.
•
Existing effective distribution chain for shelf stable retail products.
•
Growth in the Organized Retail Industry.
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7. Overview of Retail
•
•
•
•
•
The total retail trade in India is estimated at around USD 210 billion.
97% of this is accounted for by the 12mn traditional outlets (the unorganized sector)
spread across the country.
One of the highest retail densities in the world at 6% (12 mn outlets for 209 million
households)
Lowest per capita space in the world- 2ft per person.
Retail industry accounts for 35% of India’s GDP and employs 21 million people
(which is 7% of entire workforce).
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11. What’s Cooking
• As per AT Kearney’s India ranks as the number
one retail destination.
• The Indian retail market is poised to grow at
30% compounded over the next five years.
• Organized retail will account for 15 - 20% of this
market as opposed to 3% today.
• The number of malls from a current base of 70
operational malls is expected to swell to 500-600
by 2010.
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13. Current Scenario
•
The Indian Food & Beverages industry is today valued at about USD 135
billion (65 % of total retail sales).
•
Most of this is sold through the 7.5 million outlets spread through the
country.
•
Organized retail accounts for only 0.4% of the total F & B sales which is
approximately USD 670 million.
•
Of this roughly 2.9% (USD 20 million) is imported F & B.
•
Food & Grocery accounts for 63% of the personal consumption expenditure
of the average Indian.
•
Urban Indian spend up to 43% of their income on food with food
consumption growing at an annual rate of 10%.
•
Supermarket culture is spreading at a very fast rate.
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15. Product Mix
• Processed Foods & Beverages
• Shelf Stable
• Shelf Life- 6 months to 1 year
• Price Stability
• Attractive Packaging
• Preferably smaller SKUs
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16. Status and Trends in the Imported Food Sector
•
Pasta products:
Increased awareness for Italian cuisine – pastas popular amongst vegetarians –current market
size for imported pasta is 5200 tonnes with growth rate of 26%per annum – 10 pasta brands are
available in the market - 2 largest selling pasta brands San Remo (125 Mt), Barilla (250-300 Mt)
Opportunity: Wheat pasta (good health alternative)
•
Sauces & dressings:
Sauces and dressings occupy considerable shelf space among imported food product line –
mayonnaise, dressings, sauces, olives, jams, honey Mayonnaise: Kraft (Philippines) & Remia
(Holland) are leading imported brands.
Salad dressings: Good presence in both normal and health food categories
Sauce: Tomato sauce most popular. Other sauces gaining popularity – chilli,soya, garlic, pasta,
chinese. Remia (Holland), Barilla (Australia), Prego (US),Tabasco (US) are some of the imported
brands
Honey: Market for imported honey growing at 150 % per annum. Wescobee honey (WA),
Airborne honey (NZ) are popular imported brands.
Opportunity: Kraft & Remia lead the market in most sub-segments. Remia is competing
with Kraft due to attractive pricing. Honey is an excellent opportunity
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17. Status and Trends in the Imported Food Sector
•
Dairy products:
Yoghurt: Pascuals (Spain) entered the Indian market 3 years ago and enjoys
amonopoly. 2 local brands – Nestle & Viva – yet to establish themselves. 12-14 (40’
FCL) are imported annually.
Opportunity: 3-4 other yoghurt brands – in different flavors
(mango,peach,strawberry, pineapple, passion fruit, thick and creamy flavors)
and fat free varieties
Cheese: Currently, imported cheese has 5% market share in the overall cheese
market in India, which is dominated by local brands – Amul & Le Bon. HappyCow
(Austria), Laughing cow (France) and Kraft (Australia) are prominent selling imported
brands.
Opportunity: Low fat cheese for health food category; Soft cheese
•
Olive Oil:
Olive oil is a luxury product when you compare it to other edible oils. In India, people
know about olive oil as a medicine and a cosmetic; so they know about the good
aspects of olive oil. But they don’t know too much about using it as a food ingredient.
Opportunity: International Olive Oil Council (IOOC) estimate to see sales rise by
at least 60 percent a year over the next few years from the current 200 tonnes.
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19. Distribution Channel for Imported Food Items
Imported food ingredient suppliers can access the Indian market in three
ways:
(a) supply directly to local food processors;
(b) supply through local agents/distributors to local food processors; or
(c) start production/distribution centers in India.
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23. Labeling Norms
• In the case of imported packaged food, all
declarations may be :
1) Printed on a label securely affixed to the package or
2) Made on an additional wrapper containing the imported package or
3) Printed on the package itself or
4) Made on a card or tape affixed firmly to the package or container and
bearing the required information. Labels must be printed in English or
Hindi (Devnagari script). The responsibility for labeling lies with the importer,
and should be done before products are presented for custom clearance.
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24. Labeling Norms
All packaged commodities imported into India should carry the
following declarations:
•
Name and address of the importer.
•
Generic or common name of the commodity packed.
•
Net quantity using standard units of weights and measures. If the net
quantity of the imported package is given in any other unit, its equivalent
terms of standard units shall be declared by the importer.
•
Month and year of packaging in which the commodity was manufactured
packed, or imported.
•
The MRP at which the commodity in packaged form may be sold to the
ultimate consumer. This price shall include all taxes, local or otherwise,
freight, transport charges, commission payable to dealers, and all charges
towards advertising, delivery, packing, forwarding
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25. Labeling Norms
•
PACKAGING AND CONTAINER REQUIREMENTS
All weights or measures are to be reported in metric units. Certain
commodities can only be packed in specified quantities (weight, measure, or
number). These include baby food, weaning food, biscuits, bread, butter,
coffee, tea, vegetable oils, milk powder, and wheat and rice flour. The use of
materials such as Polyvinyl Chloride (PVC) is not allowed for packaging in
most cities.
•
Requirements Specific to Nutritional Labeling
Implied nutritional and health claims are allowed on food products, and there
are no statutory nutritional requirements. Manufactured and imported food
claiming to be enriched with nutrients such as minerals, proteins, or
vitamins, should indicate quantities of such added nutrients on the label.
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27. Food Laws
•
Prevention of Food Adulteration Act (PFA) 1954 and the PFA Rules of 1955 :
The law to protect India against impure, unsafe, and fraudulently-labeled foods is the
Prevention of Food Adulteration Act (PFA) of 1954 with the PFA Rules of 1955, as
amended from time to time. PFA standards and regulations apply equally to domestic
and imported products. The PFA covers various aspects of food processing and
distribution, such as food color, preservatives, pesticide residues, packaging and
labeling, and regulation of sales. The PFA Act and Rules, and recent notifications are
available at :http://mohfw.nic.in/pfa.htm.
•
The Standards of Weights and Measures Act, 1976, and the Standards of Weights
and Measures (Packaged Commodities) Rule, 1977:
These legislative measures are designed to establish fair trade practices with respect to
packaged commodities. The rules aim to ensure that the basic rights of consumers
regarding vital information about the nature of the commodity, the name and address of
the manufacturer, the net quantity, date of manufacture, and maximum sale price are
provided on the label .
The entire text of the Standards of Weights and Measures Act, 1976, and the Standards of Weights
and Measures (Packaged Commodities) Rule, 1977, and related notifications, can be accessed
from: http://fcamin.nic.in/wm_ind.htm. Importers of packaged food products must adhere to
these acts, including labeling the product. The name and address of the importer, the net quantity,
date of manufacture, best-before date, and maximum sales price must be included on the label.
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28. Food Laws
•
Meat Food Products Order, 1992
This order administers the permissible quantity of heavy metals, preservatives, and
insecticide residues for meat products. The Directorate of Marketing and Inspection,
Ministry of Agriculture, is the regulatory authority. This order is equally applicable to
domestic processors and importers of meat products. However, its implementation is
weak, due to unorganized production in the domestic market and few subject imports.
For details, see: http://agma rknet.nic.in/mfpo1973.htm
•
Livestock Importation Act, 1898
Under the Livestock Importation Act, 1898, the government established procedures for
the importation of livestock and related products to India, which are implemented by the
Department of Animal Husbandry and Dairying, Ministry of Agriculture. These
proceduresare available at: http://dahd.nic.in/order/livestockimport.doc
•
Milk and Milk Products Order, 1992
This order regulates the production, distribution, and supply of milk products;
establishes sanitary requirements for dairies, machinery, and premises; and sets
quality control standards for milk and milk products. Standards specified in the order
also apply to imported products. The Department of Animal Husbandry and Dairying,
Ministry of Agriculture, is the regulatory authority. For details see:
ttp://dahd.nic.in/order/mmpo.doc
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30. Import Documentation
•
Importers must furnish an import declaration in the prescribed Bill of Entry
format, disclosing the value of the imported goods. This must be
accompanied by any import licenses and phytosanitary certificates (in
case of agricultural commodities), along with documentation such as sales
invoices and freight and insurance certificates. All consignments are
required to be inspected prior to clearance. In the current Customs setup,
appointing a clearing agent avoids delays.
•
The clearance of imported food products at the port of entry requires a
certification from the port health authority that the product conforms to the
standards and regulations of the PFA.However, certification is based mostly
on visual inspection and records of past imports, as most ports have very
limited testing facilities. Consequently, importers of new products can
sometimes face undue delays in clearing their products. The custom
clearance period may last between one day and one month, depending on
the product and experience of the importer. In case of a dispute or rejection
of the consignment, the importer can file an appeal at the Customs office at
the port of entry.
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32. Pasta Imports in India
• Pasta imports reached US $ 5.5 m in 2005-06
Pasta Imports(Eurostat Figures)
70.00
60.00
60.272
52.28
50.00
40.00
30.00
27.244
Total No.Of Containers
20.00
10.00
0.00
Jan - Dec ,2005 Jan - Dec ,2006 Jan - Apr,2007
•
According to official data Pasta imports is mainly from European countries
mainly Italy.The above graph indicates the total import of Pasta from Europe
(Source – Eurostat)
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33. Pasta Imports in India
•
Many variants of Pasta are being imported into India .Based on this premise the
details pertaining to the HS Code and Product types are given below:
Product Code
Type
Sub Type
19021100
Uncooked Pasta
Not Stuffed or otherwise prepared containing Eggs
19021110
Uncooked Pasta containing Eggs
Nether stuffed or otherwise prepared
19021190
Uncooked Pasta containing Eggs
(UNPREPARED) (EXCL. 1902.11-10)
19021900
Uncooked Pasta
Not stuffed ,not prepared ,not containing eggs
19021910
Uncooked Pasta
Neither stuffed nor otherwise prepared(Excluding Common Wheat Meal , Flour and Eggs)
19021911
Uncooked Pasta
Unprepared Containing only Durum Wheat ,Flour or Meal
19021919
Uncooked Pasta
Common wheat flour or meal containing eggs
19021990
Uncooked Pasta
Neither stuffed nor otherwise prepared containing Common Wheat meal or flour(Excluding
eggs)
19023010
Dried
Prepared Pasta(Excluding Stuffed)
19023090
Cooked Pasta
Cooked or Otherwise prepared (Excluding stuffed or dried pasta)
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34. Pasta Imports in India
40
35
30
25
20
15
10
5
0
Pasta Category wise Imports Jan - Dec ,2005
36.496
Containers
10.696
4.756
0.336
19021100 19021910
19021990
19023090
Pasta Types
Pasta Category wise Imports Jan - Dec 2006
60
48.128
50
40
30
Containers
20
10
As can be seen from the historical
data , 19021910 ( Uncooked
Pasta, Neither Stuffed nor
otherwise prepared excluding
wheat meal, flour and eggs) is
most preferred variety of Pasta for
Indian importers.
It is closely followed by 19021990
(Uncooked Pasta ,Neither
stuffed nor otherwise prepared
containing Common Wheat Meal
or Flour but excluding eggs.
9.904
1.316
0.76
0.164
19023010
19023090
0
19021100
19021910
19021990
Pasta Types
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35. Pasta Imports in India
•
•
As seen in the earlier graphs Uncooked Pasta excluding common wheat meal ,flour
and eggs is the most imported variant. The graph below shows the imports of this
variant in India.
In Jan- Dec,2005 the value of total importation of Uncooked Pasta excluding common
wheat meal ,flour and eggs is Euro 602278 while in Jan – Dec ,2006 it is Euro
796000.
Uncooked Pasta excluding Wheat , Flour & Eggs
(Eurostat Figures)
60.00
48.128
50.00
40.00
36.50
Total No.Of
Containers
30.00
17.832
20.00
10.00
0.00
Jan - Dec ,2005
Jan - Dec ,2006
Jan - Apr ,2007
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36. Olive Oil Imports
•
•
According to official data from Akshay Exim Info , Olive oil is being mainly imported
from Spain and Italy.
Major Hurdles:
The first is the high customs fee of around 50 percent. This does not make any
sense because India is not protecting any local producers.
The second is the quantities involved. When you import small quantities, the price
is obviously higher. The more you import, the better and better the prices get.
Thus, while the average price for the best quality of refined olive oil in Europe
is 3.5 euros a kilo, it is double or triple of that in India.
The current market of details pertaining to the HS code and product sub types
which are being imported are as follows:
Product Code
Type
15099010
FIGARO OLIVE OIL(EDIBLE) 48 X 200 ML TINS,
15091000
12X1/4LTR EXTRA VIRGIN OLIVE OIL
FIGARO OLIVE OIL(EDIBLE) 6 X 500 ML EXTRA VIRGIN BOTTLES,
FIGARO OLIVE OIL(EDIBLE) 12 X 250 ML EXTRA VIRGIN BOTTLES,
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37. Olive Oil Imports
Olive Oil Import Jun 2006 to June 2007
45
40
35
30
25
20
15
10
5
0
40
Container
7
15099010
15091000
Oilve Oil Variants
As can be seen from the above graph, 15091000 (Figaro Olive Oil
500ml and 250 ml is the product variant which is being imported in
large quantities.
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38. Olive Oil Imports
•
India is focus of 1-mn euro campaign to promote olive oil, A Madridbased inter-governmental organization is to spend a million euros
(Rs.58 million) in a three-year campaign to ramp up olive oil sales in
India by pointing to its culinary and health benefits.
•
Of this, 500,000 euros will be spent between May and December on
a series of events involving the media, the hospitality industry and
schools, with the International Olive Oil Council (IOOC) hoping to
see sales rise by at least 60 percent a year over the next few years
from the current figures.
•
The Madrid based organization is going to conduct a lot of food
festivals and also start an awareness campaign targeting the health
benefits of Olive Oil.
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39. Baked Beans Import
•
There are different variants of Baked Beans coming into India , the details
pertaining to the HS code and product sub types is as follows:
Product Code
Product Type
7102200
BAKED BEANS 24X415GM,
7102900
WR BAKED BEANS IN TOMATO SAUCE
7119090
WR BAKED BEANS IN TOMATO SAUCE 19062 420G
18069010
HEINZ BAKED BEANS (1X24X425GM) UK,
20049000
BAKED BEANS 24*415G
20051000
HEINZ BAKED BEANS IN TOMATO SAUCE (12PCS X 420GMS),
20055100
BAKED BEANS AYAM BAKED BEANS,LIGHT 48/230G
21039020
BAKED BEANS (1X24X430G) UK,
21039030
BAKED BEANS (1X12X450G) UAE,
21069099
HIEZ BAKED BEAN (24X415 GM) (FOOD ITEM)
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40. Baked Beans Import
Total Imports of Baked Beans June 2006 - July 2007
3
2.65
2.5
2.11
2
1.5
1
0.69
0.5
0.291
9
9
2
1
0
6
9
0
3
0
2
0
0
3
9
0
2
1
0
3
9
0
0
0
2
1
0
5
5
1
0
0
2
0
0
5
1
0
0
0
2
0
0
4
9
0
1
0
2
0
0
6
9
0
9
0
1
8
1
1
9
0
0
0
0
7
1
0
2
9
0
0
0.01 0.007
0
7
0
7
0.4
0.3
0.24
1
0
2
2
0
Containers
0.88
Baked Bean Types
In India for the period June 2006 to July 2007 the total importation of Baked Beans is 8 containers.
From the graph it can be clearly seen that 20055100 (HEINZ BAKED BEANS 24 x 415 g) and
20051000 (HEINZ BAKED BEANS IN TOMATO SAUCE 12 X 420 g) are the most imported Baked
Bean variant. 20051000 (HEINZ BAKED BEANS IN TOMATO SAUCE 12 X 420 g) is being imported
from South Africa . 20055100 (HEINZ BAKED BEANS 24 x 415 g) is being imported from UK as well
as Singapore.
If we take the total imports figure it can be seen that bulk of the stocks are coming from South
Africa,UK and Singapore. But at the same time, UAE is also a major source at periodic intervals.
AYAM BAKED BEANS 24x425 g is also being imported from USA.
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41. Sweet Corn Import
•
The HS Code and product sub types of Sweet corn are as follows:
Product Code
Product Type
7104000
24/150Z SWEET CORN KERNELS IN BRINE "CANZ" BRAND,
GOLDEN SWEET KERNAL CORN (425 GMS*24 PCS/CTN)
7114000
"SONG'E" BRAND -CANNED SWEET KERNEL CORN (12 OZ,X 24 TINS)
20058000
"KANGAROO" BRAND SWEET CORN KERNEL 24X425 GMS FLIP OPEN CA
CANNED SWEET KERNEL CORN 24TIN X 340GR.
6/A10 CANNED SWEET KERNEL CORN IN BRINE(1CTN X 17.,7KGS)
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42. Sweet Corn Import
•
As can be seen in the Diagram, the total import of Sweet corn is around 12
containers .
•
Most of the Indian players are importing Sweet Corn from Thailand.
Some quantities of Sweet corn are also coming from USA and Australia.
•
07104000 (Sweet Corn Kernel in Brine) is the highest in terms of demand.
Sw eet Corn Category w ise Imports June 2006 to June 2007
6
5
5
4
4
3
Containers
2
1
1
0.21
0
07104000
07114000
20058000
20083090
Swee t Corn Variants
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44. Government Initiatives for Imported Food Market
•
Food Parks:
In a bid to boost the food sector, the Government is working on agrizones and the
concept of mega food parks. Twenty such mega parks will come up across the
country in various cities to attract Foreign Direct Investment (FDI) in the food
processing sector. The Government approved 105 proposals between January 2002
and May 2005 from foreign industrialists to set up food processing industries in India
involving 107 million euros. The ministry has released a total assistance of 17 million
euros to implement the Food Parks Scheme. It has so far approved 50 food parks for
assistance across the country. The Centre also plans 16 million euros subsidy for
mega food processing parks.
•
Food Law:
The Government is also moving towards introducing an integrated food law, which is
expected to help meet the requirements of international trade and make the Indian
food industry competitive in the global market. To harness the value-creating potential
of agro processing, superior market mechanism and infrastructure are required to be
created. State governments have already begun to actively encourage the creation of
aggregators by encouraging companies to engage in agriculture marketing. It is
believed that this may provide the basis to jumpstart private investment into cold
chain and other supply chain infrastructure.
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46. Conclusion
•
The report is mainly highlighting the historical figures of Imported food Items. But if we take in
consideration the pace with which the Indian Retail industry is booming, the current rise in the
income levels then definitely the market size is much bigger and constantly growing The most
important factor which has to be noted is that in this booming market needs a importer who can
supply good quality products CONSISTENTLY. This is a major cause of worry for retailers who
want to tap the demand for Imported food items.
•
If we compare the Eurostat figures with the figures provided to us by local agencies, we observed
a lot of discrepancies. This surely highlights the possibility of under invoicing etc., hence a
thorough study of the market estimates has to be done in an more in-depth manner.
•
Of course ,there is a demand which is now dormant because of non availability and inconsistent
supply of good quality Brands across food categories. Also ,one thing which is very much lacking
is the awareness level among customers about food items like Pasta , Olive Oil etc.
•
We as a company can really reap benefits in this growing imported food item market as we have
the experience and know how of this business model , which is very much dependant upon the
SOURCE from where we buy the food category across the world.
•
As it can be seen from the inferences in the report that Pasta is mainly coming from Italy,
Olive oil from Spain and Italy and Sweet corn from Thailand .We as a company already have
strong base in this region.
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