46 APRIL 2018
FEEDING THE FASTEST
GROWING ECONOMY
IN THE WORLD
most feasible channel to market - whether
it’s through local agents/distributors, setting
up an overseas office, establishing a joint
venture or contract manufacturing/ packaging.
Under the current Government’s Make
in India programme, there is a strong push
for foreign investment into food processing
and packaging in India. At the same time,
in the 2018 Union budget, import duties
were increased across a basket of imported
food products including refined oils. As a
result, consumer-ready imported products
sold through traditional direct-to-distributor
channels may end up too expensive, after
duties and other costs are paid. This is where
channels like contract manufacturing and
exporting in bulk for repackaging in India can
help lower the price.
Thanks to an increase in international tourists,
the growth of affluent consumers in India and
the rising number of 5-star and luxury hotels
and restaurants, the food service sector in
India topped US $60 billion in 2016. However,
it’s not enough to get your product onto hotel
and restaurant menus - you also need to build
appreciation and educate consumers, as well
as the trade. For example, wine companies
Currently dominated by 20 million
small, independent street vendors
and wet markets, India’s retail food
market is changing fast, with supermarkets
a growing phenomenon. Modern
supermarkets like Foodhall and Godrej
Nature’s Basket - heaving with imports - are
responding to demand for high-quality indulgence
products like chocolates and honey,
as well as imported oils and exotic fruit such
as kiwifruit and avocados. The growth in the
health, wellness and nutraceutical category is
also on par with other developed countries.
New Zealand products in this group - like
Manuka honey, herbal teas, organic energy
bars, oat milk and flour, as well as protein
and whey powders - would do well, and exporters
would benefit from early entry with
the expected growth. One company that
is successfully maximising the demand for
healthy premium products is Zespri. They’ve
benefited from setting up a physical presence
in India and using the right channels to reach
the right consumers. By trading on quality
and health, a clever marketing strategy, and
a stable supply chain, sales of Zespri kiwifruit
have flourished.
Fuelled by a rapid increase in Internet penetration
and nearly half a billion people online
(plus 200 million mobile internet users),
e-commerce in India has grown from 20 million
users in 2013 to 140 million users today.
While food accounts for a relatively small
part of a US$40 billion e-commerce market,
e-commerce is a channel to watch, especially
for Kiwi food and beverage, wellness and
nutraceutical businesses.
While India’s a market of scale, it’s also complex,
characterised by high import duties and
heavy regulation, and it can take longer to
establish critical mass than in other markets.
Companies should carefully consider the
THE LAST WORD
As trade opportunities go, they don’t get much bigger than India. With
26 million sophisticated consumers with changing food habits, lifestyles
and an increasing appetite for premium international goods, there’s a
tantalising market for quality New Zealand products, says NZTE trade
commissioner to New Delhi Jane Cunliffe.
IMMERSION
INDIA
Held in Mumbai
and Delhi, NZTE’s
Immersion India
programme offers a
deep-dive experience
of India for exporters
considering moving
into the market. As
well as introductions
to industry experts,
meetings with
local buyers and
distributors, and
comprehensive
insights, participants
visit Indian homes
to see how people
consume products.
Find out more by
emailing neera.
arora@nzte.govt.nz
would benefit from working closely with sommeliers
and chefs on wine and Indian food
pairings, and educating food service staff
about correct serving and storing of wine.
One business that has successfully done this
is Quality New Zealand, a supplier of top-end
Kiwi products. After starting out promoting
the reputation of our grass-fed lamb to highend
hotels and restaurants, they have now
expanded with other premium food products.
Is India right for my company?
The Indian consumer is hungry for premium
products and New Zealand has the right mix
to address the market. However, India cannot
be taken lightly. In fact, with 29 states with
different tastes, languages and cultures, it’s
not one market, but many. Based on the
scale and innate intricacies of India, in NZTE’s
experience, doing business here requires
a five-to-seven year upfront commitment
before you will see commercial success. But
if you choose the right partner and support
them well, do your research to understand
the market and tailor your product to local
tastes and habits, the possibilities are there
for those willing to embrace the challenge.
Hyderabad is fifth largest contributor city to India's GDP with US $74 billion.
link
