With the rising disposable income and changing lifestyle and family structure in India, food habits as well as buying behavior of the consumers are changing. There is an emergence of modern new-format food and grocery stores and chains, where consumers can procure the right quality in a pleasant ambience. These new-format stores are expected to grow across the cities and towns in India.
Subsequent to the green and white revolution, India developed into a world-class food producer. With two-thirds of its population dependent on agriculture, directly or indirectly, enhanced agricultural productivity, value addition of agricultural produce through processing and packaging and efficiency in marketing the product helped raise overall farm productivity, and, consequently, the farmers' income. Enhanced purchasing power of this large section of the population stimulated the overall demand for other goods and services, thereby strengthening the overall economy. While significant advances and innovations had been witnessed in the field of farm practices, advances in food processing, storing and organized distribution and retailing of agricultural products had fallen short of expectations. Food processing was the route to reduction in wastage and value addition to farm produce. Direct procurement from the farm and extending shelf-life through appropriate processing would also help in establishing effective linkages between farm production and retail chains. Of the rupees four and a half lakh crore (Rs. 4500 bn) worth food and grocery industry, a small portion constitutes the processed-food industry. Extended shelf-life brought about by processing would help in the efficient marketing of these products through organized retailing.
In terms of production, India ranked among the top nations in the world in various food categories. In the milk and dairy segment, India was the largest and one of the low cost milk producers in the world. However, the sanitary conditions of production, handling and marketing were very poor. Likewise, in horticulture, enhanced per capita income had given rise to a large domestic demand. The unorganized nature of the horticulture supply chain resulted in multiple intermediaries and considerable wastage. In the poultry segment, though India was the eighth-largest producer of broiler, unorganized slaughtering and inefficient supply chain plagued the industry. There was a distinct need for an organized supply chain leading to outlets, where consumers could procure their requirement in a congenial ambience. Most of the food items reached the consumers through the traditional marketing channels, which include the public distribution system as well as the traditional urban and rural markets, and the unorganized vendors and small grocery stores at large. The increase in disposable income and the changing lifestyle, lately, have enthused entrepreneurs as well as the corporate sector to create modern, organized outlets for food products through the retail revolution that has started to sweep across a number of product categories. |
