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The vision ahead for India

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The noon session of Food Forum India, 2010 focused on developments in the food processing and retailing industry. Moderating the ‘Market of the future-the world vs India’ discussion was Vikram Bakshi JV Partner and MD, Mc Donald’s (North & East India) which followed Ireena Vittal’s presentation on ‘The facts on food security’ who is Principal from McKinsey & Co.

While Vittal presented the facts on primary threats that cut across the fresh food categories, Bakshi made the session enticing by his witty remarks.

Vittal remarked that 19 per cent of India’s GDP is earned through agricultural and food processing industry. However, the health hazards caused by residual chemicals in fresh foods are a major concern across the food markets. The key threats pointed by her apart from hazardous chemicals were food contamination while transportation of foods and veterinary diseases that gets passed on to humans.

According to UNESCO statistics till Oct 2008 India has only 28 per cent availability of basic water supply and sanitation as compared to 59 per cent in China and 72 per cent in Philippines. The percentage of cold chain infrastructure is only 34 per cent when compared with China that has a moderate 56% and 45% in Philippines. Vittal also stated that according to McKinsey research 81 per cent of the Indians don’t trust the retailers while this percentage is miniscule 16 per cent in China.

Growth in the food processing sector is directly linked to retail sector with 14% of the growth coming from the increased demand in this sector.

Taking the discussion forward, Ashok Sinha, Secretary, Minister of food processing Industries, Govt. of India stated, “People would trust a brand if they get a guarantee for the same. They will not pay for emotional benefits but only for the functional benefits”. He mentioned that the ministry has invited Rs Rs 45000 cr each from the private and the banking sector for investment in this sector. Also, government’s outlay for the 10th financial plan in agri sector has been increased to Rs 4000 crore from Rs 600 crore earlier. He also stated that government has planned the launch of 3 mega food parks this year.

Commenting on the growth in retail business, Rakesh Biyani, CEO, Future Group stated,”We don’t plan to work on lower margins but will work on the cost front”.

The panelists Ashwini Arora,Jt. MD, LT Overseas(Daawat), Biyani, Rajiv Jaisinghani, MD, Darshan Foods(Meatzza) and Vinod Menon, Head,Dairy Business, Britannia echoed a similar view that quality of products and varieties available to consumer would govern the future of retail business in India.

— Pragya Gupta

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