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
GOURMETFOODS
FOODS

SPECIALTY/ETHNIC
SPECIALTY/ETHNICFOODS
FOODS

INTERNATIONAL
INTERNATIONALPACKAGED
PACKAGEDFOODS
FOODS

RTE/PREPARED/CONVINIENCE
RTE/PREPARED/CONVINIENCEFOODS
FOODS

HEALTH
HEALTH&&ORGANIC
ORGANICFOOD
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
• Accelerated growth in the Indian HRI •
(Hotels, Restaurants and Institutional)
sector fueled by the increasing
purchasing power of consumers
• Expanding young population fueling •
growth of fast food chains and quick
service restaurants
• Growing popularity of western culture •
and foods.
• Upper and middle class Indians are •
eating out more frequently, and are
willing to try non-ethnic cuisines.
• Imported products have a “quality •
image” among consumers.
Challenges
High tariffs and increasing non-tariff
barriers. Currently the import duty on
all seafood categories is 36.136 per
cent.
Complicated and non-science based
food laws & difficult custom clearance
system.
Poor infrastructure (cold storage,
roads, etc.) and a long, fragmented
supply chain.
Increasing competition from local
players, including multinational food
companies.
Competition from countries with
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
Retail Sector
• Spices & Seasonings
• Condiments
• Bakery & Baking Products
• Beverages
• Canned Foods
• Dairy Products
• Fresh & Frozen Seafood
• Fresh Fruits & Vegetables
• Frozen Potatoes
• Beef & Poultry Meat
• Jam, Jellies & Spreads
• Wine
Thailand
Food Service Sector
• Seafood - Live & Frozen
• Baking Products
• Canned Foods
• Dairy Products
• Fresh Fruits & Vegetables
• Pie Fillings
• Beef & Beef Products
• Turkey
• Wine
• Whiskey
Food Processing Sector
• Dried Fruit & Nuts
• Wheat
• Maize
• Dehydrated Potato
• Soybean
• Food Additives
• Flavourings
• Whey, Skim Milk Products
• Dried Fruit & Nuts
• Juice Concentrates
• Baking Ingredients
 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 -