THE CONFERENCE PROCEEDINGS - IFEAT

Growth Projection of F&F MarketOver the next decade, the Indian F&Fmarket will grow at a base rate of at least10-11% annually to become an US$ 980million industry by 2020. Additionally, ifsome of the factors play out favourablywithin an environment of enabling policyand easing of supply constraints, 17%growth may be expected over the nextdecade, leading to an overall F&F marketsize of US$ 1.5 billion by 2020.The Indian industry is thus on a cusp ofmetamorphosis. The upbeat mood of theeconomy, the youthful exuberance of thepopulation and its increasing integrationwith globalized lifestyles and consumptionpatterns will drive the growth.Growth Projection of F&F Market!"#$%&'("#)*+,#-.'/0/'12"3*%'45-'65775#-'89:;'17%10-11%However, to assume that the Indian industry will become an exact replica of the global industry is thebiggest fallacy companies can make. While the Indian consumers’ appetite for value and branddominatedgoods and services is increasing, the cultural and regional framework characterising them isintact.The Indian F&F Horizon: Maximizing TargetsThe global trends gaining momentum in India and the accelerating production costs, catapultconsolidation of customers through Mergers and Acquisitions are moves essentially to establish astrong hold in India.But the corporate collaborations both at the customer and industry levels pose challenges for themanufacturers. In addition to hedging against domestic competition, some companies have graduallysucceeded in widening their product portfolio by entering into global markets.The outlook for demand growth in F&F is positive, and expected to grow at 1.5 times the GDP growthrate, driven primarily by three factors:• Growth in demand for end-use products: driven by rising disposable incomes, leading toincreased consumption of processed foods and non-food FMCG including personal care andhome care.• Changing lifestyles: demand for ‘premium” functional products that will push manufacturersto formulate far more sophisticated and expensive fragrances. The urban lifestyle fuelled byincreased incomes and resulting fast pace, will encourages customers to switch to packagedand canned foods.36