FOOD TECHNOLOGY-1

Module 1. Status of food processing industry

Lesson 1
INTRODUCTION TO FOOD PROCESSING IN INDIA

1.1 Introduction

India has emerged a leading producer of certain food products such as buffalo meat, black tea, milk, and fruit and vegetables. The country is in possession of premium food products such as Basmati rice, Darjeeling tea and Alphonso managoes to offer to the world.

1.2 Factors Influencing The Consumers to Seek Processed Foods

Some of the factors which have led to the growth of processed foods in India are:

a) Emerging urban and rural middle class population with requisite purchasing power.

b) Socio-cultural changes, strongly influenced by the communication media.

c) Changing demographic pattern.

d) Increase in working women population.

e) Consumer competitiveness with alternate and substitute products, and

f) Entry of modern and self-service market outlets.

1.3 Constraints in Food Processing Sector

Despite being one of the largest producers of food items, only 2.0% of the total produce is processed as against an average of 40.0% in many developing and 70.0% in most developed countries. Moreover, because of the bottlenecks present in the supply chain, about 30.0% of the harvested produce is spoilt during distribution to the consumers.

The factors that have impeded the growth are summarized below:

a) Non-availability of the right quality of processable raw materials.

b) Seasonal excesses and scarcities of raw material causing wide fluctuations in the prices.

c) High taxation.

d) Complicated administrative and legislative processes.

e) Streamlining of food laws.

f) Lack of interface between research institutions and the farmers and also between research institutions and the processors.

g) Indifference about the quality systems in the food processing sector.

h) Lack of awareness of intellectual property rights, and

i) Unpreparedness of the industry to meet the challenges posed by WTO agreement.

1.4 Status of Food Processing Industry in India

The food industry has a turnover of Rs. 2,50,000 crores and accounts for 26.0% of GDP and provides 61% of employment. The processing of fruits and vegetables is as low as 2.0%, ~ 35.0% in milk, 21.0% in meat and 6.0% in poultry products. By international comparison, these levels are very low i.e. the processing of agriculture produce is ~ 40.0% in China, 30.0% in Thailand, 70.0% in Brazil, 78.0% in Philippines and 80.0% in Malaysia. The value addition to food production is only 20.0% in India as against 23.0% in China, 40.0% in Phillippines and nearly 200% in UK. The annual wastage is estimated to be valued at ~ US $ 13 billion. A study by the Confederation of Indian Industries and Mc Kinsey and Co. has predicted that the consumption of items preferred by the lower and middle classes such as packaged attas, milk and bakery products and poultry items will grow by over 15.0% a year. The current status of food processing industry is depicted in Table 1.

Table 1.1 Status of food production in India

Food item	Year	Quantity produced per annum	Growth rate (%)	Ranking in world
Fruits	2009-10	63.50 million tonnes	10.0 %	3rd
Mango	2010-11	16.18 million tonnes		1st
Banana	2007-08	10.4 million tonnes		1st
Vegetables	2009-10	126.0 million tonnes	13.28%	2nd
Food grains	2010-11	235.0 million tonnes	6.2%	3rd
Rice	2010	94.5 million tonnes		2nd
Wheat	2010	84.0 million tonnes		2nd
Coarse cereals	2007-08	40.73 million tonnes
Pulses	2009-10	14.59 million tonnes
Oilseeds	2009-10	24.90 million tonnes
Maize	2010	30.00 million tonnes
Sugar cane	2010	340.00 million tonnes
Bakery products	1999	30 lakh tonnes	8.0%	Biscuit – 2nd
Chocolate products	2000	22,000 tonnes	10-12%
Milk	2011	120 million tonnes		1st
Black tea	2010	1.07 million tonnes	2.51%	1st
Breweries	1996	5.0 million hectolitres
Spices	2000	2.7 million tonnes		1st
Cashew	2010	6.3 lakh tonnes		1st
Mushroom	2000	1.0 lakh tonnes
Fish	2008-09	7.6 million tonnes		3rd
Eggs	2006-07	50.7 billion numbers
Broilers	2005-06	450 million
Chicken meat	2006-07	2.0 million metric tonnes
Meat and meat products	2008-09	6.50 million tonnes	4.0%

1.4.1 Fruit and vegetable processing

Mango, banana, citrus, guava and apple account for 75.0-80.0% of fruit production. The installed capacity of fruit and vegetable processing industry is about 2.1 million tonnes in 2006. The processing of fruit and vegetables is about 2.2% of total production in India. The fruit and vegetable processing industry has registered an average annual growth rate of 30.0% in 2008-09. India’s share in the world production is about 10.0% in fruits and about 13.28% in vegetables. Some recent products introduced include vegetable curries in retortable pouches, canned mushroom and mushroom products, dried fruit and vegetables and fruit juice concentrates.

Contract farming in wheat is practiced in Madhya Pradesh by HLL and by Pepsi Foods Ltd. in Punjab for tomatoes, potatoes, food grains, spices and oilseeds are examples of contract farming in India that has promoted cultivation of processable variety of farm produce.

1.4.2 Plantation

Tea, coffee, cashew, cocoa, etc. are major plantation crops in the country. India’s principal plantation crops accounted for about 5.0-6.0% of India’s aggregate export earnings. India is the world’s leading producer and exporter of cashew kernels and accounts for ~ 31.0% of the world production of raw cashew and nearly 48% of the world’s export of cashew kernels in the year 2007-08.

1.4.3 Food grains

Grain processing is the biggest component in the food sector, sharing over 40.0% of the total value. There is predominance of primary processing sector, sharing 96.0% of the total value; with secondary and tertiary sector contributing about 4.0% of the total value addition.

In 1999-2000, there were 91,000 rice hullers, and 2,60,000 small flour mills engaged in primary milling. There were ~ 43,000 modernized rice mills/huller-cum-shellers. An estimated 820 large flour mills in the country converts ~ 10.5 million tonnes of wheat into wheat products. There are over 10,000 pulse mills, milling about 75.0% of pulse production of 14 million tonnes in the country.

Indian Basmati rice commands a premium in the international market. There is some headway in preparing value added foods viz., breakfast cereals and rice analogue from broken rice.

1.4.4 Spices

India is known as the ‘Home of Spices’. India is the largest producer of spices accounting for 61.0% of the world production and 39.0% of world export. About 63 spices are grown in the country. Among the various spices cultivated in India, pepper the ‘King of spices’ earns the major export share.

1.4.5 Milk and dairy products

India has one of the highest livestock population in the world, accounting for 50.0% of the buffaloes and 20.0% of the world’s cattle population. The cooperative movement has played a significant role in improving the milk production through ‘Technology Mission’ and ‘Operation Flood’ programmes. Consumption of liquid milk accounts for ~ 46.0% of the total milk produced; remaining 54.0% is utilized for conversion to milk products. Of this, the share of the organized sector is about 10.0%.

Dairy products are worth US $ 10.5 billion, and the segment is growing at 6.5% during 2007. Milk is the most lucrative product, with annual production of about 108 million tonnes in 2009. The per capita milk consumption in 2005-06 was 229 g /day. The organized sector produces ghee, butter, cheese, ice cream, milk powder, malted milk food, condensed milk, infant foods, etc. Today, the industry has also introduced a number of new products such as sodium-caseinate, lactose, dairy whiteners, cheeses such as Mozzarella, Swiss, Gouda, etc. Other products include Table Margarine, Low-fat spread, long-life milk, etc. The cheese slices segment has grown sharply in recent years. The cheese market is expected to sustain a 15.0% annual rate of growth in the next few years. Some new entrants in the Indian market include Kook Koko Chocolate milk, Prolife Probiotic Wellness Ice cream, Sugar-free Probiotic Diabetic Delight, etc. launched by Amul.

The ice cream market is estimated to be worth Rs. 500 crores. Competing in the ice cream market at present are an estimated 150 players in the organized sector (60.0% market share) and over 2000 units in the non-organized sector (40.0% share). The ice cream segment is growing at the rate of about 10.0% annually.

Indian probiotic dairy market stands at US $ 25.2 million. The exports of dairy products have been growing at the rate of 25.0% per annum in quantity terms and 28.0% in value terms since 2001.

1.4.6 Meat and poultry

The processing level of buffalo meat is estimated at about 21.0%. Only about 1.0% of total meat is converted into value-added products like sausages, ham, bacon, kababs, meat balls, etc. The processing of meat is licenced under Meat Food Products Order, 1973. The slaughter rate for cattle as a whole is 20.0%, for buffalo it is 41.0%, pigs 99.0%, sheep 30.0% and goats 40.0%. The country has 3600 slaughter houses, 9 modern abattoirs and 171 meta processing units. The growth rate of meat is estimated to be about 10.0%.

India ranked fifth in world egg production in 2009 and produced 30,000 million every year. Egg production has shown an average annual growth rate of 16.0% while that of broilers is at the rate of 27.0% per annum. There are eight modern integrated poultry processing plants functioning in the country. Such egg products plants are producing whole egg yolk and /or albumen powders.

1.4.7 Marine products

The fish production in 2005-06 was 3.01 and 3.50 million tonnes for marine and Inland fishes, totaling 6.50 million tonnes per annum. Processing of marine products into canned and frozen forms is carried out for export market. There are 372 freezing units and 504 frozen storage facilities. Besides this, there are 11 surimi units, 473 pre-processing centres and 236 other storages. Export products include conventional block frozen products, IQF products, minced fish products such as fish sausage, cakes, cutlets, pastes, surimi, texturized products, dry fish, etc.

Domestic per capita consumption of fish is only 5 kg/annum vis-à-vis a world average of 12 kg/annum. Sixty per cent of the production of fish in India is from marine source. There are 23 canning units with a capacity of 84.5 tonnes and 24 fish meal units with a capacity of 419 tonnes. Processing of produce into canned and frozen forms is carried out almost entirely for the export market.

1.4.8 Bakery products

The two major bakery industries, namely bread and biscuits account for ~ 82.0% of the total bakery products. There are about 60,000 bakeries. Bread and biscuit production per annum is about 4.0 million tonnes. Out of total bread production, 40.0% is produced by organized sector; remaining 60.0% in unorganized sector. For biscuits, the share of unorganized sector is about 80.0%.

1.4.9 Mushrooms

Currently, in India very few companies are engaged in the processing of mushrooms and that too are limited to the pickling and canning processes. In recent years, the gourmet appeal of mushrooms is gaining popularity and the consumer’s demand for varieties has led to the processing of mushrooms to chutneys, pickles, soups, flavour, etc. Mushrooms are now available in fresh, frozen, canned and dried forms. The mushrooms processed include white button (85.0% of total), oyster and paddy straw ones.

1.4.10 Consumer industries

The product groups included in this category include confectionery, chocolates and cocoa products, soya-based products, ready-to-eat (RTE) foods, mineral water, high protein foods, etc.

1.4.10.1 Soft drinks

Indian soft drink market is worth US $ 480 million a year, guzzling 4 billion bottles. Currently, it is estimated that 85.0% of consumers prefer the non-carbonated drinks. India is witnessing a shift in the consumer trend from synthetic drinks to fruit-based products in some segment of the people. The aerated soft drinks industry comprises of over 100 plants. It has attracted one of the highest foreign direct investment in the country.

1.4.10.2 Chocolate products

India’s per capita consumption is extremely low at just 200 g. Major chunk of Indian chocolate market is ruled by Cadbury capturing > 70.0% of market share. Nestle, the Swiss leaders in packaged foods has share of 25.0% which is the only other major competitor for Cadbury. There are 20 units engaged in the manufacture of cocoa products like chocolates, drinking chocolate, cocoa butter substitutes, cocoa based malted milk foods with an annual production of approximately 34,000 tonnes in 2008.

1.4.10.3 Confectionery products

These products grew at the compound rate of 6.0-7.0% in recent years.

1.4.10.4 Soybean processing

The soybean processing and utilization centre at Bhopal has developed 15 soy products matching with Indian food recipes and habits. There are 19 soybean processing equipment and pilot scale production facilities for full-fat and partially defatted soyflours, soymilk, Tofu and soy-fortified biscuits. About 5.0% of total soybean production goes for direct food and feed uses, 10.0% for seed and 85.0% is processed for oil and protein.

1.4.10.5 Mineral water

The market for mineral water is growing at the rate of 25.0-30.0% per annum. The Bailey’s mineral water, launched in 1993, has registered a growth of 100.0% in 1999.

1.4.11 Alcoholic beverages

The liquor made in India is categorized as beer, country liquor and Indian made foreign liquor (IMFL). The Indian beer market is growing at the rate of 15.0% per annum. India is the third largest market for alcoholic beverages in the world. The wine market is estimated to be growing at ~ 25.0% annually.

1.4.12 Fast growing delicacies

The growth of the instant food industry in India is like the pace of its target group – ‘fast’. In RTE products sector, the total installed capacity in the organized sector is 33,400 tonnes for manufacture of pasta products like noodles, macaroni, vermicelli, etc. Besides, there are 10 units for cornflakes, oat flakes and pearl barley.

1.5 Steps Taken by Government for Upliftment of Food Processing Industry

The Government of India has set up a separate Ministry of Food Processing Industry (MFPI) for better control, growth and upfilment fo the indian food industry. Financial outlay has been made for setting up infrastructural facilities including cold chain facilities for the food processing sector. MFPI has set up Joint Sector Food Parks. A Food Park in Orissa, mainly concentrates on processed fish, a coconut complex in Andaman and Nicobar Islands and a general Food park in Goa. Exclusive commodity boards have been established for the promotion of milk, tea, coffee, cashew and spices. The Govt. of India has planned to build over 60 Value Added Centres (VAC) for perishables, spread over the whole subcontinent of India. The VAC will reduce post-harvest losses with 10-25% and will cut expenses in the supply chain.

Agricultural and Processed Food Products’ Export Development Authority (APEDA) is setting up cold chains at about 62 centers in different states. It aims to promote and nurture the agro-processing industry to enhance the export of processed foods.

1.6 Exports

India’s major exports are fruit pulps, pickles, chutneys, canned fruits and vegetables, concentrated pulps and juices, dehydrated vegetables and frozen fruit and vegetables. The share of export in processed fruit and vegetables increased to 14.0% vis-à-vis for fresh fruit and vegetables, whose share remained at 10.0%.

1.7 Smart Packaging

It is possible to extend the storage and shelf life of post-harvest fruits by 200-400% by use of appropriate plastic packaging. The market for packaged soups is growing at a phenomenal rate of 20.0% per annum. Packaged Atta industry grew to Rs. 15,000 crores by 2005.

1.8 Quality Approach

Since international market has become demanding in terms of quality, safety and delivery, installation of quality systems in food industry would provide a competitive edge to food supplies in the international market.

Four systems viz., ISO 9000, ISO 14000, ISO22000, and ‘Hazard Analysis Critical Control Point’ (HACCP) are vital for management of quality and safety of food to assure customers around the world. The concept of ‘Good Manufacturing Practices’ (GMP) and ‘Good Hygienic Practices” (GHP) also needs to be inculcated in the minds of the processing units.