Food Sector - Fruits & Vegetables - Macfrut
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Food Sector – Fruits & Vegetables – Sector overview and Industry Structure – Trade Statistics – Market Size – Top companies present in the market – Key players – Distribution Channels – Regulatory Framework – Manufacturing & Consumption Clusters – Growth drivers – SWOT Analysis – Future Projections – Business Opportunities and Way forward
Overall Fruits & Vegetables(F&V)
Market
Total F&V market by Value (€ Bn) Total F&V market by Volume (‘Mn MT)
280
70 66 270
58 260
60
‘Mn MT
53
50 250
240
40
230
30 220
20 2012-13 2013-14 2014-15
Exports 3,5 3,6 3,1
10
Imports 4,6 3,8 4,8
0
Domestic 243 252 265
2012-13 2013-14 2014-15
The Indian F&V market valued at € 66 Bn (2015) is growing at 12%. The F&V market is highly fragmented and
unorganized up to 96%. The domestic production of F&V has risen to 265 Million MT in 2015, growing at 5% CAGR.
The Indian imports of F&V increased to 4,791,000 MT in 2015. India imported around 10,200 MT of F&V from Italy
mainly Apples and Kiwi Fruit and also exported around 5,000 MT of F&V to Italy
The F&V exports from India dropped to € 1.47 Bn in 2015 from € 1.66 Bn in the previous year. India mainly exports
F&V like Bananas, Mangoes, Papayas, Onions, Green peas majorly to middle eastern countries like UAE, Saudi,
Qatar and other countries like UK & USA
Source: Director General of Foreign Trade, Tecnova research & analysis
2 2India’s Fruits & Vegetable Trade with
Italy
F&V Imports (Thousand MT) F&V Exports (Thousand MT)
All Countries Italy All Countries Italy
6000 4000 3600
3500
4800 3500 3100
5000 4600
3000
4000 3800
2500
3000 2000
1500
2000
1000
1000
500
4,1 3,4 10,2 5,6 6,7 5,3
0 0
2013 2014 2015 2013 2014 2015
F&V imports from Italy comprise less than 1% of India exports of Fruits and Vegetables across the
the total F&V Imports by India. world, especially USA and African countries.
In 2014-15, India imported 10200 MT of F&V from Indian exports of Fruits & Vegetables to Italy were
Italy, primarily comprising of Kiwi Fruit and Fresh less than 1% and weighed 5300 MT. The major
products included Cashews and Cucumbers.
Apples.
Source: Director General Foreign Trade, Tecnova Analysis
3 3F&V – Market Overview & Industry
Structure
Indian F&V Market size (2015) Indian F&V Industry Structure
Indian F&V Market
Fruits
35%
International
€ 66 Bn Players
Indian Players (Organized)
Vegetables
65%
Import Own/Contract Import Exotic Sourcing from
Distribution Farming fruits Local Farmers
India is the second largest producer of F&V Almost all of the International companies supply the
followed by China and also one of the major F&V through the 200 odd importers present in India
who then distribute them to the retailers through
consumer market
wholesalers
The Indian F&V market is majorly dominated by
Indian companies have own/contract farming, they
Vegetables with 65% market share followed by also source from Local farmers, Import exotic fruits
Fruits and sell it through their own retail shops
Source: Industry Publications, Industry Experts, Tecnova research & analysis
4 4Fruits Market
Fruits market in India Fruits market volume (Mn MT)
2015
Value (€ Bn) Volume ('Mn MT)
100
94
90
80 82
60 Imports Domestic
1% 94 Mn
MT Productio
40 n
99%
20 19,7 22,4
17,7
0
2012-13 2013-14 2014-15
Fruits segmentation – Type
Guava
Banana holds the major share in the Fruits market followed by 4% Others
23%
Mango and Citrus. India is the largest producer of Banana, papaya
6%
Mango, Papaya in the world
Citrus
Imports account for 1% of total Fruits market in terms of 13% Banana
33%
volume and in terms of pricing the imported fruits are
Mango
generally three times expensive than domestic produced 21%
Source: Director General of Foreign Trade, Tecnova research & analysis
5 5Vegetables Market
Vegetables market in India Vegetables market volume
(Mn MT) 2015
Value (€ Bn) Volume ('Mn MT)
200
175
164 166
150
Imports Domestic
100 269 Mn
2% Productio
MT n
98%
50
37,3 42,4
34
0
2012-13 2013-14 2014-15
Vegetables segmentation – Type
Potato holds the major share in Vegetables market followed Tapioca Others
5% 27%
by Onions, Tomato and Brinjal
These vegetables are consumed on a daily basis as a part of Cauliflow
er
meals in India and hence creating a huge demand 5% Potato
Cabbage 26%
6%
Imports account for 2% of the market as vegetables are
imported by neighboring countries like Srilanka, Pakistan, etc. Brinjal Tomato Onion
8% 11% 12%
Source: Director General of Foreign Trade, Tecnova research & analysis
6 6Major Companies present in the
market
S.N Name of Stores Parent Company Nature of Business Mode of presence Sourcing Details
1 Reliance Fresh Reliance Group Retailer Own Subsidiary Contract farming
Sourced from
2 Safal Mother Dairy Retailer Own Subsidiary
Mandis/Farmers
Sourced from
3 More Aditya Birla Group Retailer Own Subsidiary Mandis/Farmers/Imports
exotic fruits
Sourced from
4 Heritage Fresh - Retailer Own Subsidiary
Farmers/Contract Farming
5 Big Bazaar Future Group Retailer Own Subsidiary Sourced from Farmers
Sourced from
6 Nature’s Basket Godrej Group Retailer Own Subsidiary Farmers/Imports exotic
fruits
7 Saboro Mahindra Group Producer/Exporter Own Subsidiary Own Farming
Field Fresh JV between Del
8 - Exporter Sourced from Farmers
Foods Monte & Bharti
Source: Industry Experts, Retail visit, Tecnova research & analysis
7 7Major Companies present in the
market
S.N Brand Parent Company Nature of Business Mode of presence Sourcing Details
9 Desai F&V - Exporter Own Subsidiary Contract Farming
Champion
10 - Importer/Retailer Own Subsidiary Contract Farming
Agro Fresh
Namdhari’ s Sourced from
11 - Retailer Own Subsidiary
Fresh Mandis/Farmers
12 Gokul Fresh Importer/Retailer Own Subsidiary Own Farming
Sahyadri Farmers Own/Contract
13 Farm2Kitchen Producer/Retailer Own Subsidiary
Producer Company Ltd Farming
Sourced from
14 Spencers - Retailer Own Subsidiary
Farmers
Kovai
Sourced from
15 Palamudhir - Retailer Own Subsidiary
Farmers
Nilayam
Source: Industry Experts, Retail visit, Tecnova research & analysis
8 8Key Players and Revenue
Year of Revenue Number of
S.N Brand Mode of presence HQ/ Mfg
Entry (2015) Stores
Reliance
1 Indian Company – Contract Farming Mumbai 1999 € 760 Mn* 700+
Fresh
2 Safal Indian Company – Sourcing from Farmers Delhi 2000 € 80 Mn 350+
Nature’s Indian Company – Imports and Sourcing
3 Mumbai 2005 € 27 Mn 36
Basket from Farmers
Heritage Indian Company – Sourcing from farmers
4 Hyderabad 1992 € 65 Mn 90
Fresh and Contract Farming
5 Big Bazaar Indian Company – Sourcing from farmers Mumbai 2001 € 48 Mn 185
Reliance Fresh is the one of the largest organized retailers in India followed by Safal and Big Bazaar with
considerable market share in the Organized F&V market in India
Nature’s Basket is another leading player which sells premium F&V which are mostly imported
Most of the fruits which are imported through importers/own channels in India are Apples (Washington/Fuji),
Dragon Fruit(Thailand), Kiwis (Italy), Berries, etc. which are sold through the above players through their own
retail shops
These companies have also initiated online grocery shopping through own portals or through third party
portals like Big Basket
Source: Industry Publication, Ministry of Corporate Affairs, Tecnova research & analysis
9 9Distribution Structure
International Players Un-Organized Players Organized Players
Parent Company Farmers Indian Company
India Importer Agents/Aggregators Sourcing from
Contract Farming
Aggregators/Farmers
(e.g. Reliance Fresh)
(e.g. Safal)
Sub Distributors Collection Hubs/Mandis
Own Retail Shops
Wholesalers Wholesalers
The exotic
fruits/imported fruits
are directly imported or
Retailers Retailers bought through
Importers
Modern Trade Chains /
Vegetable cart vendors India Importer
Stores
Source: Industry Experts, Tecnova research and analysis
10 10Key Production & Consumption
clusters
Fruit/Vegetable Major Producing States ID
Apples Jammu & Kashmir, Himachal Pradesh
Delhi NCR Citrus Fruits Punjab, Maharashtra, Andhra Pradesh
Mango Uttar Pradesh, Andhra Pradesh
Gujarat, Maharashtra, Karnataka,
Banana
Tamil Nadu, Bihar
Ahmedabad
Kolkata Potato Uttar Pradesh, Bihar, West Bengal
Mumbai
Pune
Onion Gujarat, Maharashtra, Karnataka
Hyderabad
Bangalore Top Metros Tomato Karnataka, Orissa
Consumption Cluster:
• The major consumption centers of F&V are Metro cities
where the population is high with much organized retail
Chennai channels
• The Tier-1/2 cities are also emerging as consumption clusters
due to rapid urbanization
Source: Industry Publications, Tecnova research and analysis
11 11Key Growth drivers
Growth in Indian organized retail
• Increasing number of Modern trade formats and the entry of e-commerce channels throughout the country.
• Higher penetration and better infrastructure for organized retail in metro cities.
Increase in population and rapid urbanization
• India is said to become the most populous country in the world surpassing China by the year 2022 and also the
youngest country in the world
• The rapid urbanization and young population with more disposable income is a key growth driver for F&V
demand in India
Changing consumer preferences
• Indian consumers are willing to try new exotic/imported F&V due to increased awareness due to exposure to
media and globalization
• F&V like Broccoli, Imported Apples, Kiwis are consumed on a daily basis nowadays by an average consumer
which was not the case before 10 odd years
Source: Industry Experts, Industry Publications, Tecnova research and analysis
12 12Regulatory
The Food Safety and Standards Authority of India (FSSAI) has been established under Food Safety and
Standards Act, 2006 (FSS Act) to regulate the Indian manufacture, storage, distribution, sale and import of
food to ensure availability of safe and wholesome food for human consumption
Players importing F&V have taken proprietary food license (product approval) to retail their products in
India. Product Approval is a process by which a product gets approved by FSSAI in which the ingredient(s)
and /or additive(s) are not as per prescribed standards in act and regulation
Key Parameters defined for Dehydrated/Frozen/Dry F&V
Frozen Fruit/Vegetables should attain Thermal stabilization below -18oC
Moisture Not more than 5% - 7%
Sulphur Dioxide not more than 2000 ppm
Total ash Not more than 5 per cent on dry basis
Ash insoluble in dilute HCl (on dry basis). Not more than 0.5 percent
Plates count not more than 40,000 per gram
Source : Interaction with FSSAI, Industry expert
13 13Import Duties & Calculation
HS Code Description Basic Duty CVD ACD Cess Total (%) Kiwi Fruit (HS Code – 0810 50 00)
(%) (%) (%) (%) CIF Value 100
Assessable Value 1.00% 101
0701 - Edible 30 0 0-4 3 30.9 –
Basic Customs Duty 30.00% 30.3
0714 Vegetables 36.136
Sub-Total for Calculating CVD 131.3
0801 - Edible Fruit 25 – 100 0 0-4 0-3 25 – CVD* 0.00% 0
0814 111.12 Sub-total for calculating
31.3
Education Cess
Duties Definitions Education Cess on Customs &
3.00% 0.94
CVD
Basic Duty Duty levied on imported goods at prescribed standard rates
Sub-total for ACD 132.24
As the name suggests, CVD is equivalent to Central excise duty ACD 0.00% 0
levied on a like article manufactured in India; some of the Landed Cost 132.24
CVD
packaged consumer goods are charged this duty based on their Company Margin 25.00%
MRP (Maximum Retail price) Price to Distributor/
165.3
Wholesaler
Education Education Cess of 2%+1% is charged on the total customs duty
Distributor Margin 10.00%
Cess (except special CVD)
Price to Retailer 181.83
The special CVD or additional customs duty (ACD) is applicable to Retailer Margin 25.00%
all imports (except for few exemptions), this duty is not included MRP before VAT 227.3
ACD in the accessible value for levy of educational CESS on imported VAT (Value Added Tax) 12.50%
goods. Also, manufacturers can take credit for payment of excise MRP (Maximum Retail Price) 255.7
duty on their finished products.
Margins across pricing assumed based in industry
Source : Interaction with FSSAI, Industry expert standard
14 14SWOT Analysis – F&V
Established market of € 66 Bn, Highly Unorganized market with 96%
growing at 12% CAGR. share
Increasing organized retail chains Lack of Cold chain infrastructure to
Consumer preference towards get the products to towns/villages
exotic/imported F&V Stringent FSSAI regulations make
importers reluctant to introduce new
F&V products
SWOT
ANALYSIS
Increase in youth population and Indian companies trying to grow
rapid urbanization foreign F&V in India
Increase in the disposable income Increase in import duties in order to
Increasing awareness of new F&V protect local farmers
products due to exposure through
media and globalization
Source: Industry Experts, Industry Publications, Tecnova research and analysis
15 15Market Forecast
F&V market India Forecast (€ Bn)
100 93
90 83
80 74
70 66
58
60 53
50
40
30
20
10
0
2012-13 2013-14 2014-15 2015-16* 2016-17* 2017-18*
The demand for F&V in India is expected to grow at a CAGR of 12% due to increase in the population and
also due to development in the Cold chain infrastructure to preserve the F&V which increases the
availability of F&V irrespective of seasonality
The increase in the organized retail is another driver to increase the demand for F&V as more consumers
are preferring to try exotic/imported F&V due to increased awareness and disposable income
Source: Industry Experts, Industry Publications, Tecnova research and analysis
16 16Way forward for Italian Companies
Although, the Indian F&V market is
highly unorganized and scattered Established market of € 66 Billion, expected to reach € 93 Billion
by 2018 growing at 12% CAGR
There is a growth in organized retail
space and preference towards new
imported and exotic F&V.
Increasing preference towards imported and exotic F&V
Entering now with long term vision
shall help companies gain leverage and
brand equity during the coming years.
Increasing organized retail structure
Entry Options including Importer, Own
subsidiary or JV are available for
Italian companies. Starting with import
Availability of Importers and Distributors in India
distribution model is proven as a
successful model by other companies
Source: Tecnova research and analysis
17 17You can also read
