?Retail food growth set to double by 2020?

The food retail business in India is expected to double at $482 billion by 2020 as against $236 billion in 2006.

Increasing aspirations, high disposable income and growing exposure to global lifestyle and factors such as health consciousness, convenience seem to characterise the changing consuming patterns of modern Indian consumers.

Over 80-million-odd Indian consumers who have an annual income of over $5,000 will be the primary drivers of the food retail business, said industry experts in Chennai at a CII seminar ?Foodpro 2007?.

According to managing director of Rabo India Finance, Rajesh Srivastava, ?Following the US, China and Japan, India is the fourth largest economy in terms of purchasing power parity. The consumer base is growing with the households of annual income of over $5,000 expected to increase from the current 81 million to 147 million by 2015.?

He said there were 9 million people in India with an annual income of over $ 25,000, which would increase to 20 million by 2014-15. The size of the ?consuming? category?people with the annual income anywhere between $5,200 and $25,000?will increase from 95 million in 2006-07 to 127 million by 2014-15.

He said the processed food consumption is set to treble to $300 billion by 2015 and the value of processed fruits & vegetables will increase to 10% in 2009-10 and 15% in 2014-15. Currently, there are over 700 malls coming up in the country and organised retail sector is growing at 45-50%.

?Food habits of Indian consumers do remain culturally bound. The core food values are unchanged with the preferences continue to remain in favour of strong flavours and multiple textures. The composition of the main meal is still sacrosanct. People think that food should be eaten hot, needs to be freshly prepared. Home-made has more positive values,? said Preeti Reddy, vice-president of Technopak Advisory Services.

She said the overall organised retail sector itself would grow by 27% from $336 billion in 2007 to $1,011 billion in the next 10 years, while the value of organised food retail was poised to increase to 46% during the same period.

According to CEO (supermarkets) of Aditya Birla Retail, Andrew Denby, ?Of the 200 million-odd consumers who represent the segment A, B and C of the consumer category, 50% have seen 10% income increase and 30% have seen 20% income increase in past 12 months.

?The consumers are optimistic about the future with over 60% of them expecting their disposable income to increase by 10% in next 12 months. Over 80% think that they are better-off now than 10 years ago and believe they will experience improvement in living standards over next 5 years,? he noted.