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New perspectives needed for food and agricultural growth

These are thoughts shared in an emailed interview with the AgriBusiness and Food Industry magazine (published in the November 2014 issue.)

A Perspective on the Indian market:

Our first word of advice to companies that are looking at India as an evolving and large market, is to acknowledge the fact that that it has very diverse cuisines and food cultures.

Both Indian and international companies wishing to enter this market for the first time need to understand and acknowledge that one-size certainly does not fit everyone.

The variety of finished products needed requires food companies to address smaller quantities and to have flexible production.

Therefore, suppliers of capital equipment and technology also need to be able to think about how they can make their solutions more flexible to adapt to changing market needs, and also to price them appropriately for the Indian market. Simply extending solutions that work in large, developed markets such as Western Europe and North America is not the best approach.

I would use the example of one of our clients, a manufacturer of bakery automation equipment, who have approached the market with an open mind. After initial investigations they have gone back to the drawing board and created production lines that have smaller capacity, can produce multiple products including Indian specialities, and which are techno-commercially more feasible for an Indian customer to adopt.

There is no reason to think that India’s food industry should follow exactly the same development curve as the west. The population is much larger, with significantly lower income, and needs that are far more diverse and changing far more rapidly than in most other economies. The technical and technological models for India need to be strongly focussed on four major attributes:

  • Water efficiency
  • Energy efficiency
  • Flexibility
  • Cost efficiency

Agricultural, horticultural and animal husbandry practices and technologies, as well as those in the downstream sectors such as food processing, need to perhaps even look at setting new benchmarks for accessibility and long-term sustainability.

Food processing and the Indian consumer market:

Food processing has been part of human history since we learned to transform hunted, gathered and farmed raw products into new foods through curing, cooking, culturing etc. This processing has been driven by mainly two major factors: to make the raw material into a product that is more palatable and easily consumed (for example, from raw grains to bread), or to extend the storage life of the raw material (for example, in the form of cheese, pickles, or sweets, or using cooling and freezing).

However, during the last century, processing has been driven mostly by “convenience” by providing partly or fully cooked options, to reduce the time spent by individuals in cooking and to instead apply that time to activities outside home. Social structures in India are changing, as individuals are migrating out of their home-towns to other locations within the country. The number of households is increasing dramatically, while cooking time and cooking skills are both declining. With this, out-of-home consumption as well as partially or fully-cooked packaged foods are bound to rise, leading to greater need of food processing capacities.

Also, with increasing industrialisation of food manufacturing, standards have become important both for efficiency and for safety. We’re seeing signs of such development happening in recent years in India as well – expectations of both consumers as well as regulatory authorities are higher with each passing year. The industry needs to invest proactively in better technology and processes in all areas – cultivation, handling, processing, packaging, storage and transportation – to raise the standards of hygiene, safety, traceability etc.

Food productivity needs urgent attention:

India is among the largest producers of many agricultural products. However, our yields per head of workforce, per animal, per hectare, or per litre of water consumed can be improved significantly. Not only is the population growing, but per capita consumption of most products will rise as the economic situation of each family unit changes. Better practices, technologies and know-how need to be acquired and applied to dramatically improve Indian agricultural productivity.

An interesting model of development to look at is the “golden triangle” approach followed by the Netherlands – active and intensive cooperation between the government, academic institutions and the private sector.

So far, by and large, academic institutions in India have limited themselves to “teaching” and have stayed away from actively collaborating with industry. Academic institutions and the industry typically connect only for the occasional “lecture” by senior individual from industry, or during the time of recruitment of fresh talent. Government largely limits itself to creating macro-level policies. More effective communication and coordination between these three legs could help to dramatically improve the standards in the agricultural and food sector in India and make the nation not just self-sufficient but significantly more competitive in both cost and quality of the final products.

Similarly, active collaboration within the industry itself is important to achieve combined growth, which can only happen if companies step beyond the usual industry association framework.

Local production and service of food processing equipment is an important factor:

In cases where the market is large enough, local production of the equipment should certainly be investigated because it can help to bring down the initial capital cost for customers, and also provide a quicker service and support base.

A first step that a company takes is to create a local presence, either through a distributor or agent, or by directly opening a sales and service office of its own. However, most international companies need to gain a certain degree of confidence in the market, both in terms of sustained demand and in terms of operating conditions, before they would invest in manufacturing in India, since it takes a whole different level of management commitment as well as financial involvement.

With the announcement of the government’s “Make in India” initiative, hopefully more international companies will come forward to take advantage of the changing operating environment in the country.

Creating & Managing Lifestyle and Fashion Brands – Third Eyesight Knowledge Series© Workshop – 23 August 2008, New Delhi, India

The Third Eyesight Knowledge Series© comprises of workshops designed and developed to help functional heads, line managers and executives refresh and upgrade functional and product expertise.  

Third Eyesight’s next workshop in this series is focussed on Creating & Managing Lifestyle and Fashion Brands.

 

IS THIS FOR YOU?

This workshop will be useful to you, if you are 

  • a brand owner wanting to look at growing your scale
  • a manufacturer wanting to add value to your products and to gain additional margins
  • a retailer wanting to invest in your own brands / private label
  • a brand manager looking to expand the footprint of your brand over more products
  • an entrepreneur wanting to launch a new brand
  • an investor who wants to understand how brands create value 
  • an exporter or buying office professional wanting to understand your customers and markets better
  • a brand owner and believe that your business is undervalued
  • a designer wanting to scale the business beyond yourself
  • a marketing or sales professional looking to add value to your skill-base
  • a service provider working with the lifestyle and fashion sector
  • a teacher or researcher looking at understanding the process of brand development

THE WORKSHOP CONTENT

This workshop will help participants in understanding:

  • the basics of lifestyle brands and their positioning in the lifestyle consumer goods industry
  • the development of the brand ethos
  • how to translate the brand intangibles into reality,
  • how to attract and retain new customers in the competitive environment, and
  • how to sustain and nurture the brand value over a period of time

REGISTRATIONS

Click Here or Call +91 (124) 4293478 or 4030162

Textile Facts & Fabric Sourcing – Third Eyesight Knowledge Series© Workshop – 4-5 July 2008, New Delhi, India

The Third Eyesight Knowledge Series© comprises of workshops designed and developed to help functional heads, line managers and executives refresh and upgrade functional and product expertise.  

The Soft Goods Series is specially focused at the Clothing, Textile and the Fashion Industry. Within this, the Textile Facts & Fabric Sourcing module is aimed at developing a working knowledge of fabrics commonly used by the apparel industry; identifying the domestic and international source markets for these textiles; understanding the costing of textiles based on the value add and finishing processes;  and familiarizing participants with the common and varied end uses of these fabrics.

                 Dates:                4th & 5th July 2008

                 Duration:           10 a.m. to 5 p.m.

                 Venue:               PHD Chamber of Commerce
                                           August Kranti Marg, New Delhi.

                 Workshop Fee:   Rs. 5,500 per participant (plus service tax)

Other modules in the Series cover topics related to Product Development, Supply Chain Management, Merchandise Buying and Planning, Business Communication and Fashion Brand Management.  The workshops have been designed as an integrated series. However, each module is complete and self contained and participants have the flexibility to select independent modules based on their training requirement.

Participant profile: Production Managers and Coordinators, Merchandisers, Retail buyers and Product Developers, Buying House Merchandisers.

For further information please contact us at +91 (124) 4293478, 4030162.