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insight into

SECRETS TO SUCCEED

Agriculture & Food Industry

Agriculture and Food Industry has been playing a crucial role in the Indian economy. But only a few

have unearthed the magic formula for success in this giant of an industry.

2012-13

Even after six decades of independence, Agriculture happens to be the mainstay of the Indian population. The rapid industrialization and growth of other industries haven’t dismissed the dominance of Agriculture in the Indian economy. In spite of being the second largest food producer after China, the contribution to global food trade by India is negligible. With cumulative wastes amounting to nearly 7 billion USD and

The organizations involved in Agricultural products need to understand that they need a system wide strategy across the value chain so that they can maximize the pro�ts from Farmer’s Markets to Terminal Markets. Of course, horticulture and other allied industries are on a rise and they have been increasing by leaps and bounds. The following is the growth story of fruits and vegetables in India:

growth being slow as compared to other industries, Agriculture does not look like a very attractive segment. But the picture is not all grey. The growth in the sectors peripheral to Agriculture has been tremendous and there are ample opportunities to explore provided one employs the right tactics and strategy. A bird’s eye view of how the margins are shifted in agriculture is as follows:

Total mark-up in the chain

Export of fruits and vegetables from India Growth story through the years

Total Margin - 60% to 75%

Margin from farmers to wholesaler 30% 35%

Small /Marginal

Consolidator atVillage level

Market levelcommission

Wholesaler

Sub-Wholesaler

Retailer

Consumer

< 25%

< 6%

< 10%

< 8%

< 10%

2.10

2008 - 09

Source: Ministry of commerce and industry

* In million hectors

2009 - 10 2010 - 11

(in million tonnes)

2.081.65

0.460.460.41

Vegetables1991-922001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-12***2012-13****

Year Area* Production*

127.7165.9162.7192.0184.4187.7193.8202.0206.6208.7218.2NANA

96.5147.7147.7153.3166.9182.8191.8211.7214.7223.0240.5250.0260.0

Fruits

** In million tones

***Estimated production ****Targeted production

Source: Ministry of agriculture

The Food processing Industry is booming and the growth rate is also noteworthy. But there are a few hindrances which has been a�ecting the growth:

• The small players who are unorganized are about 70% and accounts for about 50% of the value.

• India’s share in global scenario is about 2% which is insigni�cant.

• No Indian brands have global presence.

• Most of the exports are in bulk and lack branding.

• Mostly units are involved in primary value addition .The secondary and tertiary value addition units are minimal resulting low value addition.

• Lots of wastage due to post harvest losses.

Sector/Industry Size of the industry (Billion US$) Growth Rate (%)

Food processing 176.41 13.07

Cold Storage & Cold Supply Chain 4.06 26.21

Agricultural Equipment and Machinery 9.8 5.2

Food Packaging 22.47 15.1

Poultry & Livestock 10.3 13.75

Herbal & Medicinal Plants 1.84 16.2

Fertilizers 57.08 7.2

Organic Food products 2.47 38.3

Breakfast Cereal 148.3 12.7

Crop Protection Chemicals 12.6 3.4

Some of the other allied sectors growth story is tabulated below:

In Food and Agriculture domains, the success hugely depends on how well the products are marketed across the channels. The Retail channels play a huge role in the success of the products. The food and beverage retail market is primarily made up of small and independent family owned stores, which hold over 65 percent of market share. With the advent of Supermarkets and Hypermarkets, the market-share of the stores have somewhat reduced. But still they are quintessential for the success of the brands as they in�uence the retail consumer’s buying decision. Besides the Channels, Packaging and Pricing are very essential to woo customers. The right price with the right package can do wonders for the business.

Samvid Global with its dedicated and intelligent in-house Market Research & Consulting team can help you

identify trends, forecast growth and help you in taking your business decisions. With the help of our Marketing

& Sales Outsourcing Service, you can decide on the geographies which would bring you maximum pro�t and

make your product an instant hit. We can also help you in terms of your pricing policies and your promotional

activities. It is often argued that the product’s quality is not good enough to bring in customers; it is also

necessary that the customers know that a quality product exists for them. Our Promotional and Marketing

Campaigns will ensure that the target audience hears about the product. Samvid Global comes with a host of

Marketing & Sales Solutions which you can avail of to make your business blossom.

The Samvid Approach

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