Industry & Company

Analysis
Business Communication
Section H
 Food Processing Industry
Food processing is the transformation of agricultural products into food, or of one form of food into other forms. Food
processing includes many forms of processing foods viz:
 Grading
 Sorting
 Packaging of these things in a systematic manner.
 Food processing dates back to the prehistoric ages when crude processing incorporated fermenting, sun drying,
preserving with salt, and various types of cooking
 Modern food processing technology developed in the 19th and 20th centuries was developed in a large part to serve
military needs.
 In the late 20th century, products such as dried instant soups, reconstituted fruits and juices, and self cooking meals
such as MRE food ration were developed
 By the 20th century, automatic appliances like microwave oven, blender, and rotimatic paved way for convenience
cooking
 Products under food processing
industry
India's food processing sector covers: Other consumer product groups under
Food processing industry:
 fruit and vegetables
 confectionery
 Spices
 chocolates and cocoa products
 meat and poultry
 soya-based products
 milk and milk products
 mineral water
 alcoholic beverages
 high protein foods etc.
 fisheries, plantation,
 grain processing
Revenue

 Valued at US$258 billion

 Is the fifth largest industry domestically in terms of production, consumption, export,
and expected growth in the country
 Contributes to 14 percent of manufacturing Gross Domestic Product (GDP)
 Contributes 13 percent of India's total food exports.
 The Future Projections
 The entire Indian agriculture value chain is set to change drastically and food
processing is going to be one of the main industries of the country in the future, the
then Finance Minister Mr. Arun Jaitley had said at WFI meet in 2017
 In terms of market size, the Indian food market was worth $193 billion in 2016 and is
expected to cross $540 billion in 2020, officials said here. The sector has been growing
at the rate of 12 per cent annually.
 "There is a silent revolution ongoing in India. There is an expanding middle class and
below that there is a growing aspirational class, which is building up reasonable
purchasing power
 Only about 10 per cent of agricultural produce is processed in the country, leading to a
lot of wastage. The industry enjoys many fiscal incentives, including preferential credit
under priority sector lending
 There is 100 per cent FDI (foreign direct investment) allowed into the sector through
the automatic route
  It started in 1866 with the foundation of Anglo-Swiss Condensed
Milk Company.
 In 1867,Henri Nestle came up with infant food.
 This later merged with the Anglo-Swiss to form “Nestle Group”.

About Nestle:  The first company to apply WHO Code on Breast milk Substitutes.
 Nestle has ties with India since 1912 for trade.
 The first Indian Plant was set up at Moga, Punjab in 1961.
 Tagline : Good Food Good Life.
  Started with the manufacture and supply of condensed milk product
and infant food.
 Slowly launches Nescafe , Chocolates , Health drinks, Maggie
Soups and noodles.
 Received criticism for advertising infant milk substitues.

Nestle So Far:  Tackled and overcame the by signing the Regulation of Production,
Supply and Distribution Act in 1992 and Amendment Act in 2003.
 Nestle shifted to the dermatology segment by becoming a minority
stakeholder in the global cosmetic giant Lo’real in 1974.
 Facilitates direct and indirect employment to farmers suppliers of
packaging materials and services of other goods.
 Runs a Sustainable Agricultural Initiative to promote collaboration
with local farmers.
 The company has moved from a technology led company to a
science driven focusing on nutrition, health and wellness.
 The volume led strategy followed shifts to Aggressive growth
strategy by maintaining a pace of advertising.
 Currently present in 191 countries with over 2000 brands.
 Nest Plus, Purina Petcare, etc. amongst a few new products
launched.
 To help the society to make healthy choices further, Nestle
launches Ask Nestle.com
 Nestle Global CEO : Mr . Ulf Mark Schneider.
 Indian CEO: Mr. Suresh Narayanan
PORTERS FIVE FORCES ANALYSIS
PORTERS FIVE FORCES ANALYSIS
 PORTERS FIVE FORCES ANALYSIS

• COMPETITIVE RIVALRY WITHIN THE INDUSTRY- Rivalry is high because the

competition is not just for price , but also for product vareity, creativity ,promotional offers,
and so on. All the players in the industry have to strive to retain their market share.
 Strengths- Opportunities-
SWOT • World Renowned brand • Healthy breakfast
ANALYSIS • Extensive distribution system • Expanding market
• Broad Product portfolio • Increasing Income levels
• Large workforce • Strategic Alliances
• R & D centres • Focusing more on R & D to
• Brand equity handle ethical issues

Weaknesses- Threats-
• Maggi Controversy • Competition in the market
• Brand structure • Price of commodities
• Legal & consumer issues • Buyers power
 PESTEL
Political Economic Social Technologic
al
 Environment Legal
al

• Changing nature of regulation

• Environmental • Need to adhere to global
concerns(packaging & recycling) regulations and changes in
• Corporate Social responsibility
international market
 India is Nestle's fastest-growing key market, says Suresh Narayanan
India is India unit CMD Suresh Narayanan says business is growing despite rural

Nestle's fastest- distress and inflationary pressure

Nestlé India, the local unit of Nestlé SA, has emerged as the fastest growing
growing key key market for the Swiss food and beverages major in 2018, said Suresh

market, says Narayanan, chairman and managing director of the company's India unit. The
Gurugram-based firm had posted a 10.8 per cent top line growth rate during
Suresh the year.
In 2018, its revenue grew to Rs 11,292.30 crore from Rs 10,192.20 crore
Narayanan year-on-year. The India unit, which is now among the top 15 markets for
Nestlé, is also expected to improve its ranking in the coming years
  On an Average there are 400 or more people talking about nestle on
the Facebook over the last 15 days, P&G had more numbers than
Nestle during this period
 78% percent of nestle’s tweets were retweeted by it followers on
Key Social twitter, second only to P&G
 Nestle had 17K followers on twitter, P&G had 201K followers
Media  But the most visibility online and on social media platforms was
Statistics from GSK where on an average 1500 people talked about it
everyday on facebook
 50% of GSK’s tweets were retweeted everyday by followers. GSK
had posted at least 0.4 posts everyday, so like 1 post every 2or 3
days

Source-retail.et
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