Leading SMEs of India 2023

Leading SMEs of India 2023 | 67 [ INDIAN SME SECTOR OVERVIEW ] FOOD & BEVERAGE SECTOR Food and beverages (F&B) segment form an important link between farm production and food retailing. It accounts for ~3% of India’s GDP and almost two-thirds of Indian retail market. The market size is estimated at INR 4.5 lakh crore, with 65% of the market attributed to the unorganised sector providing employment to 7.5 million people. The industry is widely diversified wi th products ranging f rom packaged foods to fresh, prepared foods, productsmanufactured from meat, milk, fish & seafood as well as fruit-based drinks, alcoholic & non- alcoholic beverages. It comprises of dine-in restaurants, quick service restaurants, cafes, cafeterias, fast food joints, catering businesses, and food transportat ion and delivery services. In case of F&B sector, MSMEs mainly dominate the sector. The government has allowed100% FDI under the automatic route for food processing industries. The cumulative FDI equity inflow during April 2000 – March 2023 for food processing industry stood at USD 11.9 bn, which is ~2% of total FDI equity inflows during the similar period. GOVERNMENT INITIATIVES The Government has been at the forefront in promoting growth of the sector through various initiatives • Production Linked Incentive (PLI) scheme for foodprocessing sector is being implemented to support creation of global food manufacturing champions. This scheme will also create new employment opportunities and help boost exports. The Union Budget FY24 has allocated INR 1,530 crore as against INR 801 crore in FY23 for PLI scheme. • PM-FormalizationofMicroFood ProcessingEnterprises (PMFME) Scheme is implemented under ‘Aatmanirbhar Bharat Abhiyaan’ f o r p r ov i d i ng f i nan c i a l , technical, and business support for setting up/upgradation of 2 lakh micro food processing enterprises across the country. Approximately 15 thousand loans aggregating INR 1,402 crore were sanctioned as of December 31st, 2022. • A special food processing fund of INR 2,000 crore was set up wi th Nat ional Bank for Agr icul ture and Rural Development (NABARD) to provide affordable credit for investments in setting upMega Food Parks (MFP) as well as processing units in the MFPs. INDUSTRY TRENDS Ri se of gourmet brands : Increasing disposable incomes, u r b a n i z a t i o n , c h a ng i ng consumption patterns, rise in nuclear families has led to increased demand for high nutr i t ional food products, sophist icated palates, and premium F&B products. The food consumpt ion habi t s of Indian consumers have been gradually shifting from traditional food flavors to global food like exotic sauces, olives, spreads, cereals. Also, there is rise in demand for ready to cook, ready to eat, processed and frozen food Eme r g e n c e o f h e a l t h y a l terna t i ves : Peop l e a re becoming more conscious about their health and the nutritional value of the food they eat. Indian consumers are now more inclined towards eating healthy food, leading to increased demand for consumption of fruit juices, food prepared from millets, cereals and pulses. Also, there has been increased demand for immunity boosting food products and specialtyproducts like low calorie, sugar-free, fat- free products Dun & Bra street