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Around US$30 billion (NZ$41.2 billion) worth of investment is needed to “revolutionise” India’s food processing sector to boost the volume of processed products to 10% of overall output by 2015, according to a report found on

The report, citing a study by the Associated Chambers of Commerce and Industry of India Assocham) says the multi-billion dollar cash injection would also see the country’s processed food exports leap 70% to reach $25 billion a year within five years. But the group cautioned that despite the country’s huge food output, its own imports of foodstuffs would climb to $13 billion annually by 2015.

Changing demographics, such as a 650% increase in the number of middle class consumers of processed foods over the next two years and burgeoning demand for health and functional foods will also drive growth.

The snack food sector is also expected to see strong expansion, according to the group’s report “Emerging Opportunities and Strategic Thrust Areas for Food Processing”.

At present, India processes just over a third of its milk, 26% of its fisheries output, a fifth of all its buffalo meat, 6 % of poultry, and just 2.2% of fruit and vegetables.

Given the necessary investment, Assocham forecasts this figures could rise to about 40% for fisheries, close to 15% for poultry, 60% for milk and 40% for buffalo meat.

Processing levels for these sectors in fully developed industries such as the United States typically reach between 60-75%, the report says.

Sustained economic growth and fast-paced urbanisation are two major trends set to fuel growth of the country’s food processing sector.

Rising consumption from the 15-59 age group who make up 80% of the population will also contribute to the processed food industry’s growth.

A growing middle class with higher disposable income will also fuel processed food growth. Middle and upper class consumers of packaged foods is set to explode over the next two years – rising almost seven-fold from 30 million to 200 million by 2012.

The report says the market for processed health, nutritional and functional foods will be a further driver to expansion.

Consumers are becoming more health conscious and are beginning to reject foods with too high levels in salt, oil and preservatives.

Companies are already targeting the functional and nutritional foods segment with numerous product launches, the report says.

Ready-to-eat canned foods also appeal to nuclear families, students and single employees, the report adds.


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