Market Reports

Food and Beverage Industry in India

1	Overview: India’s Food and Beverage Industry
2	Quick Facts: Food and Beverage Industry of India
3	India: Food Processing Sector Outlook
4	Classification: Non-Alcoholic Beverage
5	Classification: Alcoholic Beverage
6	Megatrends: Impacting India’s Food & Beverage Industry
7	Prominent Investments in Food & Beverage Industry

Overview: India’s Food and Beverage Industry

Robust Demand

• Indian consumers are increasingly opting for healthier, more convenient, and more diverse food options, which is driving the demand for organic food with an annual growth rate of 20%.
• The FDI inflows into the food processing sector reached INR 850 billion between April 2000 and December 2023, indicating strong investor interest

Attractive Opportunities

• India’s growing middle-class population and urbanization open opportunities for companies to introduce innovative, value-added ready-to-eat products catering to changing consumer preferences
• Increasing health consciousness presents opportunities for companies to innovate and develop products that cater to these preferences, such as fortified foods, gluten-free products, and beverages with added health benefits.

Policy Support

• National Food Processing Policy (NFPP) aims to increase the level of food processing from the current 10% to 20% by 2025, thereby enhancing value addition, and creating employment opportunities.
• Various export promotion schemes, such as Merchandise Exports from India Scheme (MEIS) and Agricultural and Processed Food Products Export Development Authority (APEDA) schemes provide incentives, and promotional support to F&B exporters.

Competitive Advantage

• India has diverse agro-climatic zones, which support the cultivation of a wide variety of crops and spices. This diversity allows for the production of high-quality ingredients such as basmati rice, spices like cardamom and turmeric, and tropical fruits like mangoes
• India enjoys relatively lower production costs compared to many developed countries, making it an attractive destination for food processing and manufacturing

Quick Facts: Food and Beverage Industry of India

•  The Indian food and beverage industry is one of the largest in the world, contributing 3% to the country’s GDP.
• It is projected to grow at 8.7% CAGR from 2024 to 2030.
• India is the second-largest producer of food globally.
• The country ranks first globally in the production of milk, pulses, and spices.
• The food processing industry in India contributes less than 10% to the total food output.
• In FY 2023, India exported 111 LMT (lakh metric tons) of non-basmati rice and 52 LMT of basmati rice.
• India’s food processing industry generated 12.2% of the employment generated in all Registered Factory sector during FY 2023.
• Horticulture production in 2023 stood at 3,555 LMT, which is an increase of about 2.3% as compared to the previous year.
• India ranks first globally in milk production.
• In 2022-2023, total egg production around the country was 138.4 billion.
• Fish production was recorded as 175.4 LMT between 2022-2023.
• Total meat production in the country stood at 97.7 LMT for the year 2022–2023.
• India is among the top five markets for alcoholic beverages globally, with whiskeys and beer being the most consumed alcoholic beverage.
• The alcohol and beverage industry contributes around 15 lakh jobs in India.
• 12 joint venture companies with an annual licensed capacity of 33,919 kiloliters produce grain-based alcoholic beverages.
• Around 56 units are manufacturing beer under license from the Government of India.
• Maharashtra has emerged as an important state for the manufacture of wines. There are 46 wineries in India, out of which 43 are in Maharashtra.
• In India, around 80% of the non-alcoholic beverage sector is non-corporate.
• The non-alcoholic beverage industry saw growth of 30% over 2021.
• The government’s per capita revenue generated by the non-alcoholic beverages sector, per person was only Rs. 960 in 2022–2023.
• The per capita consumption of non-alcoholic beverages in India was only 21.4 liters.
• The country has exported 2.2 LMT of alcoholic products to the world for the worth of Rs. 2,546.4 crore during the year 2022-23 

India: Food Processing Sector Outlook

Food Processing Market Size, 2023

• According to ICFA (Indian Chamber of Food and Agriculture), India’s Food Processing sector is identified as a sunrise sector with a projected size of INR 45,000 billion by 2025-2026.
• India’s food ecosystem presents huge opportunities for investments with stimulating growth in the food retail sector, attractive fiscal incentives, and favourable economic policies.
• The sector, however, needs technologies, investments, and global partnerships to unlock its full potential.
• Indian food processing industry is one of the largest industries in India, accounting for 32% of the country’s total food market and ranking fifth in terms of production, consumption, and expected growth.
• India’s food processing sector also holds significant export potential. The country’s diverse agricultural base allows for a wide range of processed food products that can cater to international markets.
• It contributes around 8.8% and 8.4% of Gross Value Added (GVA) in Manufacturing and agriculture, respectively, 13% of India’s exports and 6% of total industrial investment.

Classification: Non-Alcoholic Beverage

Non-Alcoholic Beverages

India's Non-Alcoholic Beverage Industry

• The non-alcoholic beverage industry in India is a substantial segment of the food and beverage sector, catering to a diverse consumer base.
• The industry encompasses various segments such as carbonated soft drinks (CSDs), fruit juices, bottled water, energy drinks, ready-to-drink (RTD) tea and coffee, and functional beverages.
• Carbonated soft drinks (CSDs) remain a dominant segment within the non-alcoholic beverage industry, led by brands like Coca-Cola, PepsiCo, and local players.
• Non-alcoholic beverages are distributed through various channels, including supermarkets, convenience stores, online platforms, and vending machines.
• Companies like PepsiCo, Dabur, Parle Agro, and Coca-Cola are prominent players in the fruit juice category.
• The non-alcoholic beverage market in India is highly competitive, with both domestic and international players competing for market share.

Classification: Alcoholic Beverage

India's Alcoholic Beverage Industry

• Contributes over Rs. 3 lakh crore in taxes every year.
• Supports the livelihood of 50 lakh farmers directly.
• Employs 20 lakh people in manufacturing and supply chain.
• Supports hundreds of ancillary industries in glass, tin, plastic, and paper with a turnover of ₹ 6,000–7,000 crores.
• India is one of the largest consumers of whiskey globally, with a significant preference for whisky brands.
• Southern states like Karnataka, Kerala, and Tamil Nadu are major consumers of alcohol compared to states in the north-east.
• Major players included in the beer segment are United Breweries (Kingfisher), Anheuser-Busch InBev (Budweiser), and Carlsberg.
• Alcohol policies and regulations vary across states, with some implementing prohibition or strict regulations on sales and distribution.
• The legal drinking age ranges from 18 to 25 years across different states.
• States like Gujarat and Bihar have implemented prohibition laws, banning the sale and consumption of alcohol altogether.

Megatrends: Impacting India Food & Beverage Industry Industry

Changing Consumer Preferences

• Increasing consumer awareness about health and wellness.
• Driving demand for ready-to-eat meals, packaged foods, and on-the-go beverages.

Technology and Digital Transformation

• The rapid growth of e-commerce platforms has expanded market reach and accessibility for food and beverage products.
• Targeted advertising and personalized recommendations are influencing consumer choices and brand loyalty.

Urbanization and Demographic Shifts

• Urbanization is creating a larger market for convenience foods and dining-out experiences.
• Shifts in demographics, including more young professionals and dual-income families, are influencing product offerings and marketing strategies.

Sustainability and Environmental Concerns

• Consumers favouring brands that adopt sustainable sourcing, packaging, and waste reduction measures.
• Increasing regulations and consumer activism are pushing companies towards eco-friendly practices.

Regulatory Changes and Policy Impact

• Policies promoting food safety, nutritional labelling, and support for agriculture are influencing industry practices.
• Changes in tax structures and import duties can affect pricing and market competitiveness.

Prominent Investments in Food & Beverage Industry

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