India begins to deliver on vast potential
15 July 2006 14:08
John Hey
“India is a land of huge potential... and always will be.” So a delegate once told me at a conference in Kolkata focused on the opportunity for Indian horticulture in world markets. He was referring to the snail-like progress of the country’s fruit and vegetable industry in addressing fundamental issues such as lack of infrastructure, fragmented production and poor quality standards. But recent developments in India’s fresh produce sector and food retail industry are enough to persuade even long-term sceptics that the worm has turned.
Most notably, Indian business conglomerate Reliance has unveiled plans for a US$5.6bn foray into the retail sector (see p10). Its move serves as an example of the kind of money that is being invested by domestic companies into retailing and agribusiness – sums that are unprecedented and more usually associated with global retail giants. Reliance has several major issues to overcome to live up to its media billing as the ‘Indian Wal-Mart’, but if it can pull off its plans, it will improve the country’s entire retail and horticulture sectors. For Reliance’s project calls for the creation of a whole new supply chain, including coldstorage facilities and contract farming. And it is not alone, with other local retailers such as Big Bazaar, Subikhsha, Hypercity, Spencer’s and FoodWorld seeking to form similar systems. While the debate rumbles on as to if and when the government will open its market to multi-brand global retail groups like Wal-Mart and Tesco, local chains are already transforming India’s chaotic retail industry.
Meanwhile, big-hitters in the global fresh produce trade are now taking the opportunity to capitalise on India’s vast procurement potential. Capespan and Fyffes recently set up joint ventures for grapes and ‘high-altitude fruits’ respectively, while Field Fresh, the alliance between Bharti Enterprises and European equity firm Rothschild, is also ploughing substantial investment into the horticulture sector.
India’s own market for high quality fruit and vegetables is also growing strongly as its middle-class expands. Moreover, this growth is not confined to the top four or five mega-cities. Rather, India’s burgeoning middle-class, unlike China’s, spans the length and breadth of the country, with studies showing that the smaller cities actually boast the largest increase in millionaire households. Such ‘B’ cities are driving demand for imported fruits, and while suppliers must deal with a restrictive import system and bottlenecks in distribution to reach their market, things are improving as the import trade has consolidated and the government’s threat perceptions over foreign fruits have diminished.
In short, India is beginning to deliver on its huge potential, and the time is ripe for an international conference that enables the fresh produce trade to build on this progress. Fresh Produce India 2007, which will take place in Hyderabad on 22-24 February 2007, provides that very opportunity.
For more information on Fresh Produce India 2007, email: info@freshproduceindia.com
“India is a land of huge potential... and always will be.” So a delegate once told me at a conference in Kolkata focused on the opportunity for Indian horticulture in world markets. He was referring to the snail-like progress of the country’s fruit and vegetable industry in addressing fundamental issues such as lack of infrastructure, fragmented production and poor quality standards. But recent developments in India’s fresh produce sector and food retail industry are enough to persuade even long-term sceptics that the worm has turned.
Most notably, Indian business conglomerate Reliance has unveiled plans for a US$5.6bn foray into the retail sector (see p10). Its move serves as an example of the kind of money that is being invested by domestic companies into retailing and agribusiness – sums that are unprecedented and more usually associated with global retail giants. Reliance has several major issues to overcome to live up to its media billing as the ‘Indian Wal-Mart’, but if it can pull off its plans, it will improve the country’s entire retail and horticulture sectors. For Reliance’s project calls for the creation of a whole new supply chain, including coldstorage facilities and contract farming. And it is not alone, with other local retailers such as Big Bazaar, Subikhsha, Hypercity, Spencer’s and FoodWorld seeking to form similar systems. While the debate rumbles on as to if and when the government will open its market to multi-brand global retail groups like Wal-Mart and Tesco, local chains are already transforming India’s chaotic retail industry.
Meanwhile, big-hitters in the global fresh produce trade are now taking the opportunity to capitalise on India’s vast procurement potential. Capespan and Fyffes recently set up joint ventures for grapes and ‘high-altitude fruits’ respectively, while Field Fresh, the alliance between Bharti Enterprises and European equity firm Rothschild, is also ploughing substantial investment into the horticulture sector.
India’s own market for high quality fruit and vegetables is also growing strongly as its middle-class expands. Moreover, this growth is not confined to the top four or five mega-cities. Rather, India’s burgeoning middle-class, unlike China’s, spans the length and breadth of the country, with studies showing that the smaller cities actually boast the largest increase in millionaire households. Such ‘B’ cities are driving demand for imported fruits, and while suppliers must deal with a restrictive import system and bottlenecks in distribution to reach their market, things are improving as the import trade has consolidated and the government’s threat perceptions over foreign fruits have diminished.
In short, India is beginning to deliver on its huge potential, and the time is ripe for an international conference that enables the fresh produce trade to build on this progress. Fresh Produce India 2007, which will take place in Hyderabad on 22-24 February 2007, provides that very opportunity.
For more information on Fresh Produce India 2007, email: info@freshproduceindia.com
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