INDIA MARKET OVERVIEW FOOD EXPORT MARKETING FORUM 2009

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					INDIA MARKET OVERVIEW

FOOD EXPORT MARKETING FORUM 2009
     PRESENTATION OUTLINE
•   About Us
•   Knowing India – Demographics
•   Major Trends – Indian Economy
•   India – Food Market
•   India – Food Imports from US
•   Best Product Prospects
•   Opportunity for US Food Ingredients
•   Opportunity for US Seafood
•   Where & How to Sell
•   How can we help you sell
  Knowing India - Demographics
             India At a Glance
Population             1.14 Billion
                       Around 1/3rd size
Area Comparative
                       of US

Consuming Class        250 – 300 Million

                       7.3%
GDP Growth Rate
                       (2008 Est.)
GDP Per Capita
                       US $ 2900 (2008)
(PPP)
                       Vibrant
Polity
                       Democracy

                       US $287.5 Billion
Imports
                       (2008 Est.)
    Major Trends – Indian Economy
                                                               Median Age of the Population
•   2nd fastest growing economy after
    China.                                                 Median Age in 2000    Median Age in 2025

•   4th largest economy by PPP                            45

•   2nd most populous country in the                      40
                                                          35
    world with 53% of the population




                                         Age (in years)
                                                          30
    below 25 years
                                                          25
•   A growing middle class of 200-250                     20
    million spread across the country.                    15
                                                          10
•   Country’s per capita income grew                      5
    at 7.4 per annum for past four                        0
    years.                                                     India   USA      China Russia
                                                                             Countries
                                                                                                UK
           India Food Retail Market
                                                                      Growth of Indian Retail


•   Food & Grocery sector worth US$
    182 billion                                               800


•   Expected to grow to US$ 340 billion                       700

    by 2025                                                   600




                                          Value (in US$ Bn)
•   Domestic market comprising > 1000                         500

    million consumers.                                        400

•   India’s processed food market                             300

    estimated at US$ 90 billion                               200

•   Food & Grocery forms the largest                          100
    retail segment with 59.5% share                            0
                                                                    2007            2012             2017
                                                                                    Year


                                                                     Size of Indian Retail (in US$ Bn)
 Scope for Imported Foods in India
• Market for the imported food products and fresh fruit
  stands at more than US$1.1 billion per annum and is
  growing steadily
• India’s growing middle class – best indication for future
  imports growth opportunity
• Growth of organized retail, food service industry
• Major high value imported food items: Dry Fruits, Fruit
  Juices, Ketchup, Chocolates, Sauces, Specialty Cheese,
  Potato Chips, Canned Fruits & Vegetables, Cookies, Cake
  Mixes
Opportunities in Indian Food &
      Grocery Offering
             GOURMET FOODS
             GOURMET FOODS


         SPECIALTY/ETHNIC FOODS
         SPECIALTY/ETHNIC FOODS


      INTERNATIONAL PACKAGED FOODS
       INTERNATIONAL PACKAGED FOODS


     RTE/PREPARED/CONVINIENCE FOODS
     RTE/PREPARED/CONVINIENCE FOODS


         HEALTH & ORGANIC FOOD
         HEALTH & ORGANIC FOOD
                                     US Food Exports to India
                                                 India Import trend in '000 USD



                     300000


                     250000



                     200000
Values (in '000 $)




                     150000


                     100000



                      50000



                            0
                                          2005        2006                    2007                    2008
                                                                   Years


                     Food Products                 Soybeans                              Oilseeds, food oils
                     Corn                          Fruits, frozen juices                 Nuts
                     Bakery products               Other foods                           Wine and related products
                     Fish and shellfish            Alcoholic beverages, excluding wine
Best High-Value Product Prospects
                                      Imports
                                                    Annual Import Growth
          Product Category            2007-08
                                                            Rate
                                    (US$ Million)
Chocolate & Chocolate Products          12.3               47.5%
Mayonnaise & Salad Dressings            0.37                81%
Cocoa & cocoa products                   47                 57%
Almonds (Fresh or Dried In-shell)      172.3              11.36%
Pistachios (Fresh or Dried)            50.55               25.6%
Fruit Juices                            16.8                10%
Pasta                                    8.5               200%
Sauces, spreads, salad dressings,
                                        11.4               105%
condiments
Apples Fresh                            52.9               62.8%
Grapes Fresh                            5.07               125%
Pears Fresh                             5.66              132.25%
      Opportunities & Constraints
             Opportunities                              Challenges
Large and growing middle class            Divergent food habits
Increasing exposure to Western            Preference for fresh products and
products and lifestyle                    traditional foods

A slow but steady transformation of the   Difficulties in accessing vast untapped
retail food sector in cities              rural markets

Growing number of fast food chains        Poor infrastructure

Increasing urbanization and growing       Diverse agro-industrial base offering
number of working women                   many products at competitive prices

A growing food processing industry        High tariffs, dated food laws, and
looking for imported food ingredients     unscientific sanitary and phyto-sanitary
                                          restrictions

Improved Indo-U.S. relations              Competition from countries with better
                                          geographic proximity
Opportunity for Imported Food
        Ingredients
Scope for US Food Ingredients

                        Strong Growth
                           potential
      Opportunity for Imported Seafood
               Strengths                                 Challenges
•   Accelerated growth in the Indian HRI •    High tariffs and increasing non-tariff
    (Hotels, Restaurants and Institutional)   barriers. Currently the import duty on
    sector fueled by the increasing           all seafood categories is 36.136 per
    purchasing power of consumers             cent.
•   Expanding young population fueling •      Complicated and non-science based
    growth of fast food chains and quick      food laws & difficult custom clearance
    service restaurants                       system.
•   Growing popularity of western culture •   Poor infrastructure (cold storage,
    and foods.                                roads, etc.) and a long, fragmented
                                              supply chain.
•   Upper and middle class Indians are •      Increasing competition from local
    eating out more frequently, and are       players, including multinational food
    willing to try non-ethnic cuisines.       companies.
•   Imported products have a “quality •       Competition from countries       with
    image” among consumers.                   closer geographical proximity.
Scope for US Seafood


                High Potential


                Medium Potential




                 Low Potential
                  Where to Sell?
• No one point formula for selling in India

• Identification of target “Niche Markets” is critical
• Niche Markets will include:
   – Posh locales in metropolitan cities with identifiable target
     consumer base
   – Organized retail chains like Hypercity, Shoprite, Spencer’s,
     Reliance, Aditya Birla Group, Big Bazaar

• Due diligence of buyers - strongly recommended
• Sales backed with effective promotional campaigns
  result in SUCCESS.
                      How to Sell?
• Always: Survey existing and potential markets for
  products before initiating export sales to India

• Understand: Local food laws, business ethics and
  INDIAN CONSUMER

•   Market Entry Strategies can include:
    –   Establishing a base in India
    –   Appointing Distribution Agents
    –   Entering Franchise Agreements
    –   Direct Marketing
    –   Establishing JV/Tie-Ups with reputed partners
       How can we help you?
• Assist in market research through Market Builder
  Activities
• Assist in conducting buyer-seller meetings
  through Rep Finder, Buyer Missions, Trade
  Missions
• Help you promote your products through In-store
  Promotion Campaigns, Food and Hospitality
  Shows
• For more details please visit:
      www.foodexportalliance.org
      Export
  Opportunities to
  South East Asia -
         An Update
   Opportunities and Rewards




Malaysia Philippines   Singapore   Thailand



  Lieu Marketing Associates Pte Ltd
             28 April 2009
Key Material Changes Since 2008


   • Global Financial Crisis
   • Crisis = Opportunity
   • Melamine-tainted Dairy Products
   ASEAN Market Indicators
                           4 Selected Countries

                                                                      Forecast
                                                   GDP Per    GDP
                             Urban      Middle                          GDP
 Country      Population                            Capita   Growth
                           Population   Class                          Growth
                                                     US$      2008
                                                                        2009


Malaysia       27.7 mil     17.6 mil    17.0 mil    7,400     4.6%    -1% to 1%


Philippines     98 mil      63.6 mil    8.62 mil    3,300     4.6%     3.1% to
                                                                        4.1%

Singapore      4.8 mil        NA          NA       34,079    -1.2%    -9% to -6%


Thailand        66 mil      19.8 mil    5.09 mil    3,179     3.6%    4.5% to 5%
ASEAN Market Overview

• Total population 570 million
• Steady discretionary income and
 purchasing power of upper income groups
• Stable / strong ASEAN currencies
• Continued tourism growth
• Government economic stimuli
 to spur domestic consumption
Market Trends - Retail


• High regard/demand for imported food
• Frozen vs Fresh – to contain inflation
• Shopping behaviour towards modern
 supermarkets/hypermarkets
• Demand for “safe” origin food
Market Trends - Retail


• Higher propensity for snacking
• Growing demand for smaller
  serving size packs
• Organic and natural products
Market Trends - Food Service


      • Growing demand for imported
       food ingredients
      • Higher incidence of eating out
      • Increasing wine and
       cheese consumption
      Market Trends -
      Food Processing


• Governments encouraging export of
 processed foods to earn forex
• Increased requirements for halal
 food exports
        Key Issues

• Minimum shelf life requirements
  (6 – 10 months)
• Import product registration
• Halal certification
• Order-Receipt lead time
  (shipping/consolidation)
• Labelling requirements
      Best Product Prospects
                                     Malaysia

Retail Sector                    Food Service Sector        Food Processing Sector
• Poultry , mainly frozen        • Frozen Potato Products   • Juices
• Breakfast Cereals              • Seafood, Live & Frozen   • Juice Concentrates
• Snacks - Potato & Cereal       • Wine                     • Wheat
   Based                         • Sauces & Seasonings      • Whey
• Infant Food, including         • Dairy - Milk & Cheese    • Soybean
   Dairy                         • Frozen Vegetables        • Dehydrated Potato
• Fruit Juices                   • Gourmet Foods            • Baking Ingredients
• Fresh Fruit & Vegetables,
   Temperate Frozen Vegetables
• Dried Fruits / Canned Fruits
• Wine
• Pet Foods
• Seafood
                                 Malaysia
                       Top 6 Suppliers for Consumer-Oriented Foods


 RANK             COUNTRY        2005    % of total   2006    % of total   2007    % of total

   1                CHINA         309      14%        369       16%        471       16%

   2           NEW ZEALAND        237      11%        223       10%        342       12%

   3                INDIA         238      11%        264       11%        335       11%

   4             AUSTRALIA        272      13%        254       11%        308       11%

   5          UNITED STATES       167       8%        190        8%        274        9%

   6              THAILAND        241      11%        250       11%        269        9%

                   OTHERS         690      32%        765       33%        959       32%

                   TOTAL         2,157     100%       2,319     100%       2,960     100%

(US$ Million)
Source: Gain Report - MY8032
      Best Product Prospects
                                     Philippines
Retail Sector                      Food Service Sector          Food Processing Sector
• Tree Fruits                      • Frozen Potatoes            • Wheat
• Pet Foods                        • Frozen Vegetables          • Dairy - Milk & Cheese
• Fresh Produce / Beef / Poultry   • Baking Products            • Whey
  Products                         • Poultry                    • Dried Fruit & Nuts
• Tree Nuts                        • Sauces & Condiments        • Beef & Beef Products
• Juices                           • Fresh Fruit & Vegetables   • Processed Egg
• Natural & Health Food            • Processed Fruit            • Dehydrated Potato
• Seafood                          • Wine                       • Baking Ingredients
• Wine                             • Food Ingredients           • Food Processing Ingredients
• Cheese
• Dried Fruits
• Popcorn
                                Philippines
                       Top 10 Suppliers for Consumer-Oriented Foods


 RANK              COUNTRY         2006    % of total   2007    % of total   2008    % of total
    1           NEW ZEALAND        221       17%        306       19%        352       18%
    2           UNITED STATES      177       14%        249       15%        317       16%
    3              THAILAND        113        9%        134        8%        172        8%
    4             AUSTRALIA        119        9%        119        7%        147        8%
    5                 INDIA         81        6%         92        6%        147        8%
    6                CHINA          90        7%        107        7%        138        7%
    7               IRELAND         48        4%         95        6%        117        6%
    8              MALAYSIA         41        4%         52        3%         68        3%
    9           NETHERLANDS         34        3%         56        3%         58        3%
   10             SINGAPORE         66        5%         44        3%         50        3%
                     OTHER         280       22%        365       23%        391       20%
                     TOTAL         1,270     100%       1,619     100%       1,957     100%


(US$ Million)
Source: Global Trade Atlas
      Best Product Prospects
                                   Singapore
Retail Sector                   Food Service Sector        Food Processing Sector
• Snack Foods                   • Frozen Potatoes          • Juices
• Poultry Meats                 • Pasta                    • Juice Concentrates
• Gourmet / Premium Meats /     • Frozen Processed Food    • Milk / Dairy Products
  Deli / Cheeses                • Chilled Processed Food   • Corn
• Dairy Products                • Wine                     • Soybean
• Fresh Fruit / Fruit Juices    • Sauces & Condiments      • Dried Fruit & Nuts
• Tree Nuts                     • Dairy
• Fruit & Vegetables            • Bakery Ingredients
• Pet Foods                     • Gourmet Foods
• Seafood                       • Live Seafood
• Wine
• Prepared Meals
• Frozen Fish, Meats, Poultry
                                  Singapore
                         Top 10 Suppliers for Consumer-Oriented Foods

 RANK               COUNTRY         2005    % of total   2006    % of total   2007     % of total
    1               MALAYSIA        555        7%        584        7%         670        6%
    2              AUSTRALIA        376        6%        424        5%         505        5%
    3               FRANCE          304        4%        305        4%         392        4%
    4                 CHINA         280        3%        314        4%         363        3%
    5           UNITED STATES       288        3%        287        3%         333        3%
    6                BRAZIL         194        2%        216        2%         282        3%
    7            NEW ZEALAND        174        2%        181        2%         258        2%
    8               THAILAND        144        2%        285        3%         198        2%
    9              INDONESIA        158        2%        160        2%         184        1%
   10            NETHERLANDS        908       10%        794        9%         989        9%
                    OTHERS          4,911     59%        5,151     59%        6,775      62%
                     TOTAL          8,292     100%       8,701     100%       10,949     100%

(US$ Million)
Source: Gain Report - SN8009
     Best Product Prospects
                                   Thailand
Retail Sector                 Food Service Sector           Food Processing Sector
• Spices & Seasonings         • Seafood - Live & Frozen     • Dried Fruit & Nuts
• Condiments                  • Baking Products             • Wheat
• Bakery & Baking Products    • Canned Foods                • Maize
• Beverages                   • Dairy Products              • Dehydrated Potato
• Canned Foods                • Fresh Fruits & Vegetables   • Soybean
• Dairy Products              • Pie Fillings                • Food Additives
• Fresh & Frozen Seafood      • Beef & Beef Products        • Flavourings
• Fresh Fruits & Vegetables   • Turkey                      • Whey, Skim Milk Products
• Frozen Potatoes             • Wine                        • Dried Fruit & Nuts
• Beef & Poultry Meat         • Whiskey                     • Juice Concentrates
• Jam, Jellies & Spreads                                    • Baking Ingredients
• Wine
                                  Thailand
                       Top 10 Suppliers for Consumer-Oriented Foods


 RANK             COUNTRY         2005   % of total   2006    % of total   2007    % of total
   1                CHINA         188      15%        244       17%        356       18%
   2           NEW ZEALAND        159      13%        191       13%        272       14%
   3           UNITED STATES      171      13%        201       14%        271       14%
   4             AUSTRALIA        127      10%        143       10%        146        7%
   5              MALAYSIA         62       5%         86        6%        135        7%
   6           NETHERLANDS         87       7%         71        5%         89        5%
   7             SINGAPORE         54       4%         72        5%         86        4%
   8              GERMANY          26       2%         37        3%         69        4%
   9               FRANCE          40       3%         48        3%         69        4%
   10            INDONESIA         52       4%         57        4%         64        3%
                   OTHER          313      24%        290       20%        403       20%
                    TOTAL        1,279     100%       1,440     100%       1,960     100%

(US$ Million)
Source: Gain Report - TH8213
         Rewards



• Brand equity development
• Increased market share
• Sustainable volume/profit growth
  Past
Activities
Food Hotel Asia 2008
  Best of America
Food Service Activity
  Best of America
Food Service Activity
Food & Hotel Thailand 2008
Summary - Key Take-Outs


• Meaningful ASEAN market size
• Trends in ASEAN are favourable to
 USA imported food
• Abundant opportunities, few issues
• In-market resources available
“If we want to see things we
      have never seen,
 We must do things we have
       never done.
           Or else,
We will continue to see things
      we always see.”
        - Ed Silvoso -