When Savita Gaikwad, a Sharjah-based teacher who has been in the UAE since 2001, goes shopping for grocery, her list invariably includes Lijjat urad papad, Priya lemon pickle, blended masalas, and her favourite, instant kheer. Gaikwad insists she is yet to find anything in the UAE that matches food from India. Her colleague from the Philippines, Arlette Rada, too has become a consumer of Indian food, especially frozen parathas. Rada loves the ease of cooking these and the time she saves.
Halima Jumani, Director of Operations at Kibsons International, reveals that sales of ready-to-eat products from India, such as dosa or idli batter, mixes and parathas are three times higher than original spices and flour. “This shows that customers are increasingly looking for convenience within the classic Indian processed food range,” she says, adding that local Indian customers are highly selective and loyal to unique brands they have come to trust.
Kamal Vachani, Group Director at Al Maya, agrees that the large Indian diaspora and its affinity for home-grown food has created a sizeable market for Indian products in the UAE. “Though, because of taste and appeal, these products are also liked by a wider consumer base, including Emiratis,” he says. Al Maya stocks popular Indian food brands, and Vachani reveals its outlets have seen a “quantum surge” in demand.
Choithrams too has seen an “exponential growth” in demand. Rajiv Warrier, its CEO, asserts that Indian cuisine is on the world map for its rich, unique flavours. “The UAE consumer base is diverse — from Emiratis and a large Indian population to residents from more than 200 countries. The amazing thing is that consumers, whether they have Indian roots or not, want to try these unique flavours coming out of India.” Categories benefiting the most are ready-to-eat meals, health-specific variants, vegan or vegetarian options, organic spices, ethnic and regional flavoured products, lentils, and tea. Warrier feels the trend is for newer, convenient and healthier options. This demand translates into sourcing of such products, which in turn fuels the food processing industry in India.
Still some way to go
According to the October 2019 Agriculture and Allied Industries report from India Brand Equity Foundation, total agricultural exports from India grew at a compound annual growth rate of 14.61 per cent over FY10-19, reaching $38.54 billion (Dh141.5 billion). However, India’s export of processed food accounted for only $4.45 billion in 2018-19. Dubai-based entrepreneur Hari Saraff, who has been in the shipping business since the 1970s, thinks the food processing industry in India is still “a sad affair” on the exports front. “India is the largest producer of milk and second-largest producer of fruits in the world, but almost all the brands available in the UAE and elsewhere are European, not Indian,” he says.
Saraff notes that India has a serious problem with an extraordinary proportion of food grown going waste. If India can fix its infrastructural woes and do a better job at marketing to the international audience, the country’s processed food industry could achieve a virtual monopoly in the Gulf. “Except for basmati rice, India has not been able to make global consumers think about India when they think about food products,” he says.
Deepa D’souza, Founder & CEO of Mumbai-based Coffee Blossoms Fine Food, observes that India’s food sector has seen recent setbacks. “The industry needs to focus on the quality of products that are being exported. More stringent processing conditions and mandatory regulations with certification will be favourable for India’s exports in the future,” she says.
Moreover, as a November 2019 report by the Indian Chamber of Food and Agriculture states, India has remained at the lower end of the global agri export value chain since majority of its exports are low-value, raw or semi-processed and marketed in bulk. The share of India’s high-value and value-added agri produce in its agri export basket is less than 15 per cent compared to 25 per cent in the US and 49 per cent in China. “India is unable to export its vast horticultural produce due to lack of uniformity in quality, standardisation and its inability to curtail losses across the value chain. India can further expand its horizons, ushering more products into the export category,” the report adds.
Food processing, a sunrise industry
Despite the rough edges, the Indian food processing industry has grown rapidly over the past few decades. “The exciting news is that there is tremendous potential to grow further at an accelerated pace,” says Hemant Malik, Divisional Chief Executive, Foods Business at ITC. Malik points out that as India moves rapidly towards prosperity, this brings huge growth opportunities for the sector. Currently, food processing is the fifth-largest industry in the country, accounts for 32 per cent of the total food market and contributes 13 per cent to total exports.
India is building the infrastructure to support growth of the food processing industry, and this includes 7,845 cold storage chains with capacity of 35.88 million tonnes and 42 mega food parks — the Indian government is investing more than $900 billion in these, along with activating various schemes to improve supply chains, storage facilities and to reduce waste. Further, the 2018 Agriculture Export Policy aims to double farmers’ income by boosting India’s agricultural exports to $60 billion by 2022. And to attract investments, the government has allowed 100 per cent foreign direct investment — the food processing industry has seen an inflow of about $10 billion, between April 2000 and March 2020. The Confederation of Indian Industries (CII) estimates it might bring in $33 billion in investments by 2024, while generating employment of nine million person-days.
A healthy future
Looking further ahead, Malik finds changing consumption patterns due to urbanisation, rising income levels, and low penetration levels in rural India offers large headroom for growth in the Indian food processing sector. “As manufacturers move up the value chain, Indian brands will begin to enter more and more household and appeal to consumers across nationalities,” says Malik.
Varun Berry, Managing Director at Britannia Industries, says that in current disruptive times, consumers tend to seek out food brands they believe in. “The ‘occasional’ brands repertoire is likely to shrink. Brand equity will prove to be a very strong asset and the consumer love for everything the brand stands for will help it sustain and grow, more so in these times than before.” Similarly, dining out has given way to dining in, and Berry states biscuits and other in-home consumption products have gained sharply from this trend.
CII, in its August 2019 report on the Indian food processing sector, notes that more than 400 million Indians are regularly consuming some form of processed food, with urban areas accounting for 75 per cent of sales. Two-thirds of India’s population is young and places greater emphasis on convenience, quality and health. “Going forward the demand for processed food in India is expected to be directed by consumer preference of nutritional value, brand-consciousness and awareness regarding sustainable production,” the report concludes.