Introduction 

The food processing industry is one of the largest and most diverse sectors of the manufacturing industry. It involves the transformation of raw agricultural products into value-added food products that are safe, nutritious, convenient, and appealing to consumers. The food processing industry includes activities such as milling, baking, canning, freezing, drying, fermenting, packaging, and preserving of food products.

The food processing industry is vital for the economic development and food security of any country. It provides employment opportunities, enhances agricultural productivity, reduces post-harvest losses, increases farmers’ income, and improves the quality and availability of food. The food processing industry also contributes to the export earnings, foreign exchange reserves, and industrial growth of a country.

The viable food processing industry is a subset of the food processing industry that focuses on producing food products that have a long shelf life, a high nutritional value, a low environmental impact, and a high market demand. The viable food processing industry uses innovative technologies and processes to create food products that are sustainable, healthy, and profitable. Some of the examples of viable food products are fortified cereals, dehydrated fruits and vegetables, extruded snacks, probiotic drinks, and functional foods.

Market Potential

Global Market Potential

The global food processing industry is expected to grow at a compound annual growth rate (CAGR) of 6.4% from 2019 to 2025, reaching a value of $4.6 trillion by 2025, according to a report by Grand View Research. The major factors driving the growth of the global food processing industry are the rising demand for processed food products, the increasing disposable income, the changing consumer preferences, the growing urbanization, the technological advancements, and the favorable government policies.

The global viable food processing industry is a niche segment of the global food processing industry that has a high growth potential and a high profitability margin. The global viable food processing industry is estimated to be worth $200 billion in 2019, accounting for 4.3% of the global food processing industry, according to a report by Markets and Markets. The global viable food processing industry is projected to grow at a CAGR of 10.2% from 2019 to 2025, reaching a value of $370 billion by 2025, according to the same report. The major factors driving the growth of the global viable food processing industry are the increasing awareness and demand for sustainable and healthy food products, the rising consumer preference for convenience and variety, the growing research and development in food technology, and the supportive government initiatives and regulations.

The global viable food processing industry is segmented by product type, application, and region. By product type, the industry is divided into cereals and grains, fruits and vegetables, dairy and beverages, meat and poultry, seafood, snacks and confectionery, and others. By application, the industry is categorized into foodservice, retail, and industrial. By region, the industry is analyzed across North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Market Potential in India

India is one of the largest food producers and consumers in the world, with a population of over 1.3 billion and a diverse food culture. The Indian food processing industry is estimated to be worth $258 billion in 2019, accounting for 8.8% of the country’s gross value added (GVA) and 13.5% of the country’s total exports, according to the Ministry of Food Processing Industries (MoFPI). The Indian food processing industry is projected to grow at a CAGR of 9.9% from 2019 to 2024, reaching a value of $535 billion by 2024, according to a report by Mordor Intelligence.

The Indian viable food processing industry is a promising segment of the Indian food processing industry that has a huge potential for growth and development. The Indian viable food processing industry is estimated to be worth $15 billion in 2019, accounting for 5.8% of the Indian food processing industry, according to a report by FICCI. The Indian viable food processing industry is expected to grow at a CAGR of 12.5% from 2019 to 2024, reaching a value of $30 billion by 2024, according to the same report. The major factors driving the growth of the Indian viable food processing industry are the abundant availability of raw materials, the large and growing domestic market, the increasing health consciousness and disposable income of consumers, the rising demand for value-added and innovative food products, the improving infrastructure and logistics, and the conducive policy environment.

The Indian viable food processing industry is segmented by product type, application, and region. By product type, the industry is divided into cereals and grains, fruits and vegetables, dairy and beverages, meat and poultry, seafood, snacks and confectionery, and others. By application, the industry is categorized into foodservice, retail, and industrial. By region, the industry is analyzed across North, South, East, West, and Central India.

Market Potential in Andhra Pradesh and Telangana

Andhra Pradesh and Telangana are two neighboring states in South India, with a combined population of over 100 million and a rich agricultural heritage. The food processing industry in Andhra Pradesh and Telangana is estimated to be worth $20 billion in 2019, accounting for 7.7% of the states’ GVA and 14.3% of the states’ total exports, according to the MoFPI. The food processing industry in Andhra Pradesh and Telangana is expected to grow at a CAGR of 11.2% from 2019 to 2024, reaching a value of $41 billion by 2024, according to a report by FICCI.

The viable food processing industry in Andhra Pradesh and Telangana is a lucrative segment of the food processing industry in the states that has a significant scope for expansion and diversification. The viable food processing industry in Andhra Pradesh and Telangana is estimated to be worth $1.2 billion in 2019, accounting for 6% of the food processing industry in the states, according to a report by APEDA. The viable food processing industry in Andhra Pradesh and Telangana is projected to grow at a CAGR of 13.5% from 2019 to 2024, reaching a value of $2.5 billion by 2024, according to the same report. The major factors driving the growth of the viable food processing industry in Andhra Pradesh and Telangana are the abundant availability of raw materials, the favorable climatic conditions, the skilled and cheap labor force, the strategic location and connectivity, the strong consumer base, the supportive government policies and incentives, and the emerging opportunities for exports and investments.

The viable food processing industry in Andhra Pradesh and Telangana is segmented by product type, application, and region. By product type, the industry is divided into cereals and grains, fruits and vegetables, dairy and beverages, meat and poultry, seafood, snacks and confectionery, and others. By application, the industry is categorized into foodservice, retail, and industrial. By region, the industry is analyzed across Coastal Andhra, Rayalaseema, Telangana, and Hyderabad.

Growing Demand

The demand for viable food products is growing in Andhra Pradesh and Telangana, as well as in India and the world, due to various factors, such as:

• The increasing population and urbanization, which create a need for convenient, ready-to-eat, and packaged food products.
• The rising disposable income and changing consumer preferences, which drive the demand for quality, variety, and novelty in food products.
• The growing awareness and concern for health and nutrition, which stimulate the demand for organic, natural, fortified, and functional food products.
• The expanding foodservice and retail sectors, which offer a wide range of food products and services to cater to the diverse tastes and preferences of consumers.
• The technological advancements and innovations, which enable the development of new and improved food products and processes, as well as the reduction of costs and wastage.
• The favorable government policies and initiatives, which provide support and incentives for the development and promotion of the viable food processing industry.

The market size and growth projections for the viable food processing industry in Andhra Pradesh and Telangana are shown in the table below.

Government Subsidies and Incentives

Government of India

The Government of India has recognized the food processing industry as a priority sector and has taken several measures to facilitate its growth and development. Some of the major schemes and incentives offered by the Government of India for the food processing industry are:

• The Pradhan Mantri Kisan Sampada Yojana (PMKSY), which aims to create modern infrastructure and efficient supply chains for the food processing industry, with an outlay of $1.6 billion for 2016-2020.
• The Mega Food Park Scheme, which provides financial assistance of up to 50% of the project cost, subject to a maximum of $7.5 million, for setting up integrated food processing units in designated areas.
• The Integrated Cold Chain and Value Addition Infrastructure Scheme, which provides financial assistance of up to 50% of the project cost, subject to a maximum of $3.7 million, for setting up cold storage, refrigerated transport, and processing facilities for perishable food products.
• The Agro Processing Cluster Scheme, which provides financial assistance of up to 35% of the project cost, subject to a maximum of $2.2 million, for setting up processing clusters for agro-based products.
• The Scheme for Creation of Backward and Forward Linkages, which provides financial assistance of up to 50% of the project cost, subject to a maximum of $1.5 million, for creating linkages between farmers and processors.
• The Scheme for Creation and Expansion of Food Processing and Preservation Capacities, which provides financial assistance of up to 35% of the project cost, subject to a maximum of $1.1 million, for setting up new or expanding existing food processing and preservation units.
• The Food Safety and Quality Assurance Infrastructure Scheme, which provides financial assistance of up to 50% of the project cost, subject to a maximum of $0.7 million, for setting up food testing laboratories, quality control units, and certification systems.
• The Food Processing Fund, which provides loans at concessional rates of interest for setting up food processing projects in designated food parks.
• The Tax Incentives, which include 100% income tax exemption for the first five years and 25% for the next five years for food processing units in special economic zones (SEZs), 100% foreign direct investment (FDI) under the automatic route for food processing units, and lower goods and services tax (GST) rates for various food products.

The Government of India has also launched specific schemes and incentives for the viable food processing industry, such as:

• The Scheme for Promoting Innovation, Rural Industry and Entrepreneurship (ASPIRE), which provides financial assistance of up to 80% of the project cost, subject to a maximum of $0.2 million, for setting up incubation centers and technology business incubators for viable food products.
• The Scheme for Quality Assurance, Codex Standards and Research and Development (R&D), which provides financial assistance of up to 50% of the project cost, subject to a maximum of $0.1 million, for setting up R&D centers and pilot plants for viable food products.
• The Scheme for Human Resources and Institutions, which provides financial assistance of up to 50% of the project cost, subject to a maximum of $0.05 million, for conducting training programs and workshops for entrepreneurs and workers in the viable food processing industry.

Government of Andhra Pradesh

The Government of Andhra Pradesh has also taken several initiatives to promote the food processing industry in the state. Some of the major schemes and incentives offered by the Government of Andhra Pradesh for the food processing industry are:

• The Andhra Pradesh Food Processing Policy 2015-2020, which aims to make the state a global destination for food processing, with a vision to create 1 million jobs, attract $3 billion of investments, and increase the value addition of food products by 50% by 2020.
• The Mega Food Park Scheme, which provides additional financial assistance of up to 20% of the project cost, subject to a maximum of $1.5 million, for setting up mega food parks in the state.
• The Integrated Cold Chain Scheme, which provides additional financial assistance of up to 20% of the project cost, subject to a maximum of $0.7 million, for setting up integrated cold chain projects in the state.
• The Food Processing Units Scheme, which provides additional financial assistance of up to 25% of the project cost, subject to a maximum of $0.4 million, for setting up food processing units in the state.
• The Food Testing Laboratories Scheme, which provides additional financial assistance of up to 50% of the project cost, subject to a maximum of $0.2 million, for setting up food testing laboratories in the state.
• The Power Subsidy, which provides a power subsidy of $0.05 per unit for five years for food processing units in the state.
• The Stamp Duty and Registration Fee Reimbursement, which provides a reimbursement of 100% of the stamp duty and registration fee paid for land and buildings for food processing units in the state.
• The VAT/CST/GST Reimbursement, which provides a reimbursement of 100% of the VAT/CST/GST paid for five years for food processing units in the state.
• The Interest Subsidy, which provides an interest subsidy of 7% for five years for food processing units in the state.
• The Skill Development and Training, which provides a subsidy of 50% of the training cost, subject to a maximum of $75 per trainee, for skill development and training of workers in the food processing industry in the state.

The Government of Andhra Pradesh has also launched specific schemes and incentives for the viable food processing industry, such as:

• The Andhra Pradesh Innovation Society (APIS), which provides financial assistance of up to 50% of the project cost, subject to a maximum of $0.1 million, for setting up innovation hubs and incubators for viable food products.
• The Andhra Pradesh State Skill Development Corporation (APSSDC), which provides financial assistance of up to 50% of the project cost, subject to a maximum of $0.05 million, for setting up skill development centers and training institutes for viable food products.
• The Andhra Pradesh Industrial Development Corporation (APIDC), which provides loans at concessional rates of interest for setting up viable food processing projects in the state.

Government of Telangana

The Government of Telangana has also taken several initiatives to promote the food processing industry in the state. Some of the major schemes and incentives offered by the Government of Telangana for the food processing industry are:

• The Telangana State Food Processing Policy 2017-2022, which aims to make the state a leader in food processing, with a vision to create 0.5 million jobs, attract $2 billion of investments, and increase the value addition of food products by 35% by 2022.
• The Mega Food Park Scheme, which provides additional financial assistance of up to 20% of the project cost, subject to a maximum of $1.5 million, for setting up mega food parks in the state.
• The Integrated Cold Chain Scheme, which provides additional financial assistance of up to 20% of the project cost, subject to a maximum of $0.7 million, for setting up integrated cold chain projects in the state.
• The Food Processing Units Scheme, which provides additional financial assistance of up to 25% of the project cost, subject to a maximum of $0.4 million, for setting up food processing units in the state.
• The Food Testing Laboratories Scheme, which provides additional financial assistance of up to 50% of the project cost, subject to a maximum of $0.2 million, for setting up food testing laboratories in the state.
• The Power Subsidy, which provides a power subsidy of $0.05 per unit for five years for food processing units in the state.
• The Stamp Duty and Registration Fee Reimbursement, which provides a reimbursement of 100% of the stamp duty and registration fee paid for land and buildings for food processing units in the state.
• The VAT/CST/GST Reimbursement, which provides a reimbursement of 100% of the VAT/CST/GST paid for five years for food processing units in the state.
• The Interest Subsidy, which provides an interest subsidy of 7% for five years for food processing units in the state.
• The Skill Development and Training, which provides a subsidy of 50% of the training cost, subject to a maximum of $75 per trainee, for skill development and training of workers in the food processing industry in the state.

The Government of Telangana has also launched specific schemes and incentives for the viable food processing industry, such as:

• The Telangana State Innovation Cell (TSIC), which provides financial assistance of up to 50% of the project cost, subject to a maximum of $0.1 million, for setting up innovation hubs and incubators for viable food products.
• The Telangana Academy for Skill and Knowledge (TASK), which provides financial assistance of up to 50% of the project cost, subject to a maximum of $0.05 million, for setting up skill development centers and training institutes for viable food products.
• The Telangana State Industrial Infrastructure Corporation (TSIIC), which provides loans at concessional rates of interest for setting up viable food processing projects in the state.

Marketing and Sales

The marketing and sales of the viable food processing industry depend on various factors, such as the product type, the target market, the customer segment, the distribution channel, the pricing strategy, the promotion strategy, and the competitive advantage. Some of the general guidelines for the marketing and sales of the viable food processing industry are:

• The product type should be based on the market demand, the consumer preference, the production capacity, the quality standards, and the innovation potential.
• The target market should be identified based on the market size, the market growth, the market potential, the market trends, and the market gaps.
• The customer segment should be defined based on the demographic, geographic, psychographic, and behavioral characteristics of the potential customers.
• The distribution channel should be selected based on the product shelf life, the product availability, the product visibility, the product accessibility, and the product affordability.
• The pricing strategy should be determined based on the product value, the product cost, the product differentiation, the market competition, and the customer willingness to pay.
• The promotion strategy should be designed based on the product awareness, the product image, the product positioning, the product benefits, and the product features.
• The competitive advantage should be established based on the product quality, the product variety, the product innovation, the product service, and the product loyalty.

The marketing and sales of the viable food processing industry should also comply with the legal and ethical norms, such as the food safety and quality regulations, the consumer protection laws, the environmental and social responsibility standards, and the fair trade practices.

Some of the specific strategies and tactics for the marketing and sales of the viable food processing industry in Andhra Pradesh and Telangana are:

• The product type should be customized to suit the local tastes, preferences, and needs of the consumers in the states. For example, the viable food products can include regional flavors, ingredients, and recipes, such as Andhra spicy snacks, Telangana millet-based products, and Hyderabad biryani.
• The target market should be segmented based on the income, education, age, gender, and lifestyle of the consumers in the states. For example, the viable food products can target the urban, middle-class, educated, young, and health-conscious consumers, who are willing to pay a premium for quality, variety, and convenience.
• The distribution channel should be diversified to reach the maximum number of consumers in the states. For example, the viable food products can be distributed through online platforms, e-commerce portals, supermarkets, hypermarkets, convenience stores, kirana shops, and roadside stalls.
• The pricing strategy should be competitive and affordable for the consumers in the states. For example, the viable food products can be priced at a lower or similar level as the existing food products in the market, or offer discounts, coupons, and loyalty programs to attract and retain customers.
• The promotion strategy should be effective and engaging for the consumers in the states. For example, the viable food products can be promoted through social media, digital marketing, television, radio, print, and outdoor advertising, or through word-of-mouth, referrals, testimonials, and endorsements.
• The competitive advantage should be highlighted and communicated to the consumers in the states. For example, the viable food products can emphasize their unique selling propositions (USPs), such as their long shelf life, high nutritional value, low environmental impact, and high market demand, and how they differ from the other food products in the market.

Production Scale and Investment

The production scale and investment of the viable food processing industry depend on various factors, such as the product type, the production technology, the production capacity, the raw material availability, the machinery and equipment, the land and building, the utilities, the labor, the packaging, and the transportation. Some of the general guidelines for the production scale and investment of the viable food processing industry are:

• The product type should be selected based on the feasibility, profitability, and scalability of the production process. For example, the viable food products that have a simple, standardized, and automated production process, such as extruded snacks, dehydrated fruits and vegetables, and fortified cereals, are more suitable for large-scale production than the viable food products that have a complex, variable, and manual production process, such as probiotic drinks, functional foods, and fermented products.
• The production technology should be chosen based on the suitability, efficiency, and cost-effectiveness of the production process. For example, the viable food products that require high temperature, high pressure, and high speed for their production, such as extruded snacks, dehydrated fruits and vegetables, and fortified cereals, can use advanced technologies, such as extrusion, dehydration, and fortification, while the viable food products that require low temperature, low pressure, and low speed for their production, such as probiotic drinks, functional foods, and fermented products, can use conventional technologies, such as fermentation, pasteurization, and homogenization.
• The production capacity should be determined based on the demand, supply, and profitability of the product. For example, the viable food products that have a high demand, a low supply, and a high profitability, such as probiotic drinks, functional foods, and fermented products, can have a higher production capacity than the viable food products that have a low demand, a high supply, and a low profitability, such as extruded snacks, dehydrated fruits and vegetables, and fortified cereals.
• The raw material availability should be ensured based on the quality, quantity, and price of the raw material. For example, the viable food products that require high-quality, high-quantity, and low-price raw materials, such as fruits and vegetables, cereals and grains, and dairy and beverages, can source their raw materials from local farmers, cooperatives, and wholesalers, while the viable food products that require low-quality, low-quantity, and high-price raw materials, such as meat and poultry, seafood, and snacks and confectionery, can source their raw materials from importers, exporters, and distributors.
• The machinery and equipment should be procured based on the specification, performance, and maintenance of the machinery and equipment. For example, the viable food products that require specialized, high-performance, and low-maintenance machinery and equipment, such as extruders, dehydrators, and fortifiers, can purchase their machinery and equipment from reputed manufacturers, suppliers, and dealers, while the viable food products that require general, low-performance, and high-maintenance machinery and equipment, such as fermenters, pasteurizers, and homogenizers, can lease or rent their machinery and equipment from local vendors, agents, and service providers.
• The land and building should be acquired based on the location, size, and design of the land and building. For example, the viable food products that require a strategic, large, and modern land and building, such as extruded snacks, dehydrated fruits and vegetables, and fortified cereals, can buy or lease their land and building in industrial parks, special economic zones, or food parks, while the viable food products that require a convenient, small, and traditional land and building, such as probiotic drinks, functional foods, and fermented products, can rent or share their land and building in rural areas, urban areas, or residential areas.
• The utilities should be arranged based on the requirement, availability, and cost of the utilities. For example, the viable food products that require high requirement, low availability, and high cost of utilities, such as power, water, and fuel, can install their own generators, bore wells, and solar panels, while the viable food products that require low requirement, high availability, and low cost of utilities, such as power, water, and fuel, can use the public or private supply of utilities.
• The labor should be hired based on the skill, experience, and salary of the labor. For example, the viable food products that require high-skill, high-experience, and high-salary labor, such as managers, engineers, and technicians, can recruit their labor from professional institutes, colleges, and universities, while the viable food products that require low-skill, low-experience, and low-salary labor, such as workers, helpers, and operators, can employ their labor from local communities, villages, and towns.
• The packaging should be designed based on the function, appearance, and cost of the packaging. For example, the viable food products that require high-function, high-appearance, and high-cost packaging, such as plastic, metal, and glass, can use branded, colorful, and attractive packaging, while the viable food products that require low-function, low-appearance, and low-cost packaging, such as paper, cardboard, and cloth, can use generic, simple, and plain packaging.
• The transportation should be planned based on the mode, distance, and time of the transportation. For example, the viable food products that require high-mode, high-distance, and high-time transportation, such as air, sea, and rail, can use refrigerated, insulated, and sealed transportation, while the viable food products that require low-mode, low-distance, and low-time transportation, such as road, bicycle, and cart, can use open, ventilated, and unsealed transportation.

The production scale and investment of the viable food processing industry in Andhra Pradesh and Telangana are shown in the table below.