At Kanchan Metals, Mr. Pankaj Singh is responsible for expanding the business reach across the country and eyeing on export markets. Having close to 14 years of experience majorly in the food processing industry. His core expertise falls under various food processing sectors mainly offering packaged foods, while working his ultimate objective is always to offer a solution to a manufacturer by understanding their product process requirements and associated challenges.
According to a report by Transparency Market Research, the food processing equipment market will be worth 80 bn $ by 2027, growing at a CAGR of 5% from 2019 to 2027. The food processing equipment driving the growth of the market include fermenters, cleaning systems, sorters & graders, homogenizers, mixers & blenders, cooling & heating systems, size reduction equipment, size enlargement equipment etc.
Indian Snack Manufacturing and Food Processing Industry
Invest India cites that India’s food processing sector is one of the largest in the world. Its output will likely reach $ 535 bn by 2025-26. Various government initiatives like Make in India, infrastructure spends to boost the rural economy etc. have put the food processing segment on a high growth trajectory. It is a result of these actions that India’s food sector attracted $ 4.18 Bn in FDI between April 2014-March 2020. Let’s get a detailed overview of why the food processing sector in India is growing rapidly.
The Key Growth Driver of the Sector in India
The Indian snacks market is expected to be worth more than INR 1 billion by 2024, as per the Research and Markets report (2018-24). The rising urbanisation, ever-increasing number of working professionals, lifestyle changes, affordability, and local availability of snacks have all together contributed to the demand for Indian snacks which has ultimately resulted in the significantly high demand for food processing equipment.
With abundant raw material, India is a large sourcing hub for agriculture products and also has a huge domestic market. The increasing size of the food processing market can be attributed to changes in the gender composition of the workforce, rising disposable income, changing consumption patterns due to urbanization, and growing consumption rates. Additionally, over two-thirds of India’s population is young with rising income levels which also creates a huge market for snacks.
With fast-paced lifestyles and an increase in urban working culture, people have limited time in hand for cooking and meal preparation. Thus, convenience foods such as snacks have gained tremendous popularity, particularly in urban areas. Owing to the emerging demand, there is an increasing number of organized food retail outlets that offer a wide range of snacks to consumers, usually with attractive discounts.
Following are the major factors playing a role in the growth of the food processing sector in developing economies like India:
- Developing economies have supply side advantages, for example, in India, there is a high level of agricultural production – a wide variety of crops, inland water bodies, a large livestock base, and a long coastline that contributes to increased marine production.
- There is a strong domestic demand due to fast evolving lifestyle and food habits.
- The majority of developing economies have proactive government policies and constant support.
- Greater integration with the global economy and proximity to key export destinations open up numerous export opportunities for the developing economies which ultimately results in increased demand for food processing equipment.
Technology Leading the Transformation of Equipment Manufacturing Industry
As the world of technology keeps on advancing and innovating, equipment manufacturers are leveraging exciting new opportunities that allow them to redefine their operations and processes. From advanced robotics to big data analytics and computer vision in warehouses, manufacturing technologies are huge in number and bringing unprecedented transformation. The vast choice often makes it difficult for manufacturers to decide which types of technologies are worth investing in and which can wait. Some of the sophisticated technologies being leveraged by equipment manufacturers include 3D printing, Internet of Things (IoT), Artificial Intelligence etc. to reduce human intervention, improve operations’ speed and minimise errors.
For example, in industrial environments, IoT is being increasingly used for applications in automotive plants, industrial factories, pharmaceutical plants, electronics, F&B supply chains as well as in oil refineries. Some of the possibilities being created by IoT in the manufacturing industry are optimization of processes, greater flexibility of production processes, increasing degree of automation, more accurate predictions of machine condition and more efficient maintenance etc.
Technological advancements have had various transformative effects on businesses. Some of these are compiling massive amounts of data for intelligent machine learning, usage of the internet by various objects to communicate etc. Such advancements have improved manufacturing efficiencies and are well-received in the sector. As we keep advancing into a new phase of industrial developments, we need to remember that the emerging industry is all about connecting humans and machines. The ongoing pandemic only accelerates the fusion.
Growing consumer demand for snacks, processed food products and clean label due to rising health concerns is offering great opportunities for food processing equipment manufacturers to expand their product portfolio, and generate revenue. As a result, the food processing industry in developing economies is opening itself up to social and technological reinvention. The future undoubtedly looks promising for the growth of the industry.