Mega Food parks can be key linkage between farm and market

Malarkodi Mahendran Future Market Insights India

Malarkodi Mahendran comes with a vast experience in food & beverage market research, with a special focus on emerging trends in the ingredients sector. A well-known figure in the global F&B sector, Malarkodi has helped both large- and small-scale food & beverage companies develop business strategies through her research and consulting expertise. She has a strong belief in small scale industries and claims by the scope in development that these sectors have if given proper support.
The present Indian organic & functional food market is at a nascent stage said Malarkodi in and e-mail interview with Nuffoods Spectrum. Her presentation at the ‘Agrochemical Business Strategies and Opportunities’ at Berlin (2014) was widely appreciated, serving as a strong foundation for further discussion on emerging trends in agrochemical sector. Malarkodi will be speaking at Vitafoods Asia 2016, event which is dedicated to the nutraceutical, functional food and beverages, and dietary supplement industries in Asia. 

1-    What strength you see in small scale food & beverage companies in India?


Small scale food & beverage companies in India are spread out across the country and they have a presence in remote locations. They are largely concentrated in the unorganised sector. A key strength of small enterprises is that they have strong support from government bodies. Even though consumer preference is tilted towards demand products manufactured by large enterprises, demand for traditional products manufactured by the small enterprises is growing. For instance, along with products from global behemoths, traditional snacks manufactured by small scale food and beverage manufacturers enjoy high popularity among consumers.


The government has been very encouraging and supportive of the small scale food and beverage sector and has offered assistance through various policies for upgrading infrastructure and technology. The government has also offered financial support by providing loans, and created a reservation policy for products that can be exclusively manufactured only by small scale enterprises. They also help the small enterprises in various other aspects like marketing, technical guidance, and employee training.


2-    How do you see Indian consumers responding towards new range of food products containing low fat, low sugar and non-synthetic food additives?

Health attributes strongly influence food consumers buy, but not all attributes have the same impact. For instance, a large section of consumers in India usually relate low sugar/sugar-free products with diabetics and do not necessarily equate them with being a part of a healthy, balanced diet. Similarly, there is a general perception among consumers that low-fat products are the territory of people who are working out or those looking to lose weight quickly. Unlike in the west, where sugar-free and low-fat products are becoming an integral part of preventive lifestyle, Indian consumers are yet to fully incorporate these products in their daily diets.

However, this is not to say that the status quo is not changing. Consumers in urban areas, are taking an active interest in maintaining health and well-being, specifically on dietary intake. Many consumers in Tier I and Tier II cities are moving towards natural ingredients and natural products which is driving the market non-synthetic food additives. Products with natural additives are being positively received by consumers and the slow but the steady transition from synthetic to natural additives is currently underway in India. High cost for natural additives remains a key challenge for widespread adoption.

3-    What are the crucial points in your view for the revenue growth in Indian food activities market?


The food activities market is influenced by a number of factors. Some of the crucial points that are driving growth include,

  • Encouraging foreign investment to route in marketing of food products which are produced and manufactured in India
  • Product innovation that’s focused on satisfying the tastes and preference of domestic consumers as a key to expansion.
  • Increasing exports- improving product quality in terms of nutrition, packaging etc. so that it can be easily exported to other countries where the products meet the regulation and other requirements.
  • Identification of suitable partners for collaboration — Collaboration with suitable partners is a useful strategy for market entry. Many companies that made a successful foray in the international market devoted significant resources to this aspect of their overall strategy. Those companies that have invested time and effort to find the “perfect fit” often found out that they have saved the task of finding an additional partner in the longer run.
  • Ministry of Food Processing Industries in India has started investing and opening mega food parks to provide modern infrastructure facilities for food processing along the value chain — from the farm to the market.

4-    What hurdles do you see for production & distribution of organic & functional foods in respect to the demand in India?

The present Indian organic & functional food market is at a nascent stage, suffering from the uncertainty about the potential market and lack of proper consumer awareness. The unique selling proposition of these products and conventional products are not clearly defined by the manufacturers, leading to low awareness among consumers. Price sensitivity remains a major impediment to higher demand; to influence buying behaviour, manufacturers will have to aggressively communicate the benefits of choosing organic over inorganic or natural over synthetic.

Even though the production and distribution are in line with the demand in India, consumer awareness, price management, and high labour costs for organic farming are key challenges that need to be addressed for the organic and functional food market to witness unhindered growth in India.


5-    What is the progress in agrochemical sector discussions after your remarkable presentation in Berlin (2014)?

Thanks for the appreciation! Well, the Asia-Pacific crop protection chemicals Industry is steadily trying to move towards biochemical, but it is in a pre-growth phase. The efficacy of biochemical is yet to be established properly. Introducing advanced and environment-friendly agrochemicals has become the need of the day. Increasing consumer awareness about health & environmental hazards related to crop protection chemicals in Asia-Pacific region is creating opportunities for the growth of the bio pesticides market.

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