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Food and beverage in India

India is one of the largest countries in the world, with a growing population of 1.2 billion people. There has been a discernible increase in purchasing power in many parts of the country and rising affluence in many urban pockets.

Market overview

Changes such as economic growth, globalisation, urbanisation, the relaxation of import policies, the growth of organised retailing, the impact of visual media, along with changing lifestyles and food habits have opened the doors for imported food products from across the globe. With rising incomes, Indian urban consumers now have the willingness and means to try new products.

However, the income distribution in India remains uneven between a wealthy urban population and a low income rural population. Almost a quarter of the population is living on less than US$1 per day, even though GDP per capita is US$3,787.

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The income split essentially means that India has two separate consumer segments, which are further split by strong regional differences. Throughout India there are 20 official languages, 3 main religions and 14 main cuisine styles.

India is one of the world’s largest food producers and has a large agriculture industry. This, combined with a cultural preference for fresh food, means that India supplies the majority of its own food for consumption. However, India is a growing market for processed food imports which are becoming more popular with the younger population, especially in urban areas.

Market drivers

The following trends are driving growth in the Indian food and beverage industry:
Rising Incomes
Urbanisation
Diet Diversification
‘Glocalization’
Meal Portions & Timings
Health Consciousness

Market entry

While India is a growing market and is open to most new products, it is essential to recognise that achieving high sales volumes and brand recognition can take at least a year. Allocating more funds to advertising, marketing, promotions and sales will help achieve targets.

It is worthwhile spending time to find the right importers and distributors initially, as they have good knowledge of the local customs and import regulations and it can be difficult dealing with the bureaucracy and red tape.

An experienced partner will also have a national network. It is important to note that logistics in India are at a nascent stage and cold storage facilities and transportation are lacking.