This report surveys India’s food and beverage sector, elaborating on market trends through H2 2013 and providing projections for the sector's outlook in 2014. It also profiles leading players in the sector, among them Britannia Industries Limited, Nestle India Limited, and Jubilant Foodworks Limited.

India’s food and beverage sector consists of diverse segments and each segment contains a large number of product categories. The sector lacks a single central regulatory authority in the country. However, the Ministry of Food Processing Industries (MOFPI), under the central government, is responsible for formulating policies, sponsoring and supporting programs, and coordinating activities related to food processing in the country. The sector has recorded double-digit growth in the last few years. The purchasing power of young Indian consumers has created a fast-food revolution in the country. This phenomenon is attracting major global food chains like McDonalds, Yum! Brands, Domino’s Pizza, and Subway. Many others like Burger King are planning to enter the Indian market soon.

The Indian economy experienced an economic slowdown with high inflation in FY13 as well as FY14. As a result, India’s food and beverage players faced margin pressure owing to a rise in raw material costs. However, the outlook for India’s F&B sector is positive because of growing sales, reforms in the organized retail sector, and rapid urbanization. The ever-increasing middle class will further drive growth in the F&B sector.

Key Points:

• This report includes financial indicators and a summary of the market position for firms including Britannia Industries Limited (BIL), Nestle India Limited (NIL), and Jubilant Foodworks Limited (JFL).

• Current regulations and policies allow 100% foreign direct investments under the automatic route in the food-processing sector. As of March 2013, the sector accounted for around 1.8% of total FDI inflows in India.

• Out of the various industries covered by the index of industrial production (IIP), food and beverage was the fifth-largest in terms of weight (7.3%).

• The food and beverage sector was the largest employer among the employment-intensive industries in 2011, according to the Annual Survey of Industries (ASI).

• The index of industrial production (IIP) recorded a growth of 1% in FY13. The food products and beverage manufacturing index saw a growth of 3% during the same period.