Food Processing Business In Odisha: A Paradigm Shift

Odisha can have an explosive growth if properly networked towards the development of food processing sector through path-breaking technology and innovations across the processed food value chain and ecosystem. Dr. Kalpana Rayaguru, an IITian and a researcher, has drawn the roadmap for the young entrepreneurs with her teaching and field experiences.

The Indian food industry has emerged as a high-growth and high-profit sector due to its immense potential for value addition.There is an increased awareness and concern for health and nutraceutical food. With increasing desire for branded food as well as increased spending power, shifting in attitudes and lifestyles, the present day consumers choose to experiment with different food products.Major industries constituting the food processing sector are grain milling, sugar, edible oils, beverages, fruits and vegetables processing and dairy products. Odisha is India’s leading producer of cereals (rice, maize); pulses (arhar, moong, black gram); oil seeds (groundnut, sesame, mustard and sun flower); fibers (cotton, jute and coconut) andspices (turmeric, ginger, chilly and garlic). Odisha has also significant production of vegetables like sweet potato, potato, onions and tomato and fruits like mango, pineapple, papaya, jackfruit and tamarind. However, the food processing industry in Odisha is yet to exploit full potential of all these agro-horticultural produce. But the total produce processed currently is meagre. Government of Odisha plans to augment the growth of food processing to 10% by 2020 and 25% by 2025 opening up large scale investment opportunities.

Opportunities in food sector

• There is vast untapped potential for food processing industry in Odishaas it is one of the leading Vegetables, plantation crops and rice producing States of the country.It is also amongst top three producers of cashew,2^ndlargest producer of fruits and leading producer of Mango, Banana, Guava and Pomegranate in the country.Milk production in the State has been doubled during thelast decade.
• Exports of food items have been rising steadily andorganic farming is recognised as a priority sector as organic products fetch high premium. Odisha has a history of having organic cultivation since ages. This provides immense scope to convert Odisha into a favoured destination for organic food processing.
• Food processing industry is one of the major employment intensive segments contributing substantial share of employment generated in all registered factory sector.100% FDI is allowed through government approval route for trading, through e-commerce in respect of food products manufactured or produced in India.Huge exemption in service tax, income tax, GST on Food Products and Food Processing Machinery is an added bonus to the system.
• The ready-to-eat segment is growing faster as technology is improving and so is the lifestyle of the people. The online food ordering business in Odisha is in its nascent stage, but witnessing exponential growth. The online food delivery industry grew at 150 per cent year-on-year.
• As per a study, Odisha’s food processing sector has a potential to grow at a Compound Annual Growth Rate (CAGR) of 11%. A dedicated policy for Food Processing Sector provides a wide range of incentives such as capital grant for mega food parks, interest subsidy, power subsidy etc.

Potential product range

The organised food business in Odisha has a huge potential and a promising future. The immediate projections are establishment of commodity based food processing industry at production catchment area, primary processing (cleaning, grading and drying) units, modern mango pulp/tomato puree/pine apple juice canning units at production catchment area, minimal processing units, spice park (turmeric and ginger powder and dehydrated ginger slices) and cashew nut processing units. However, in the long run there can be a large range of products to be taken up in synergy.

• Fruits and vegetables: preserved, candied, glazed and crystallised fruits and vegetables, juices, jams, jellies, purees, soups, powders, dehydrated vegetables, flakes, shreds and fruit-based beverages.
• Dairy: liquid milk, curd, flavoured yoghurt, processed cheese, cottage cheese, Swiss cheese, blue cheese, ice cream, milk-based sweets.
• Confectionery and bakery: cookies and crackers, biscuits, breads, cakes and nutraceuticals
• Meat and poultry: eggs, egg powder, cut meats, sausages and other value added products.
• Fish, seafood and fish processing – processing and freezing units.
• Canned, frozen food and packaged drinking water.
• Spice powder and pastes; value added cashew and other plantation products.

Constraints

Today, Odisha’s food processing industry needs to targettwo markets – the fast emerging domestic market and the steady-growing export market.The lack of quality raw materials, especially processable varieties; non-availability of skilled and trained man power; unsteady supply of high quality water and power; unorganised local market; an inactive retail chain; non-existence of successful players are the Odisha’s disadvantages ensuring a captive market abroad. Added to these, frequent changes in climate and weather bring down the morale of producers which leads to increased unwillingness to take up challenges in emerging fields of food processing.

Marketing of horticultural crops is quite complex and risky due to the perishable nature of the produce, seasonal production and bulkiness. The spectrum of prices from producer to consumer is dependent on transactions between various intermediaries at different levels in the marketing system.

Infrastructure facilities so far developed in this sector are the 3 food parks and few functional storage systems. Lack of adequate storage facilities, non-existence of demonstration and skill development units, incubation Centres, certification agencies and food testing and Quality Control Laboratories are the major limiting factors for sustainable growth.The state lacks an efficient supply chain for the distribution of the fruits and vegetables which plays an integral role in keeping storage loss minimum and profitability as high as possible.Absence of extensive network of food processing training, academic and research institutes is acting as addendum to these limitations.

Road Ahead for Beginners

Before venturing into a new avenue, thestart-up clients make sure to undertake a self-analysis using the true “SWOT” paradigm of strengths, weaknesses, opportunities and threats which can really help to achieve success.Start-upbusiness is all about experimentation and the hypothesis needs to be formulated in an intelligent manner. Although our retail presence is very small currently but the continued adoption of e-commerce and modern retail one will be able to reach many consumers directly in the near future.

The establishment of supply chain infrastructure like cold storage, abattoirs and food parks is the unique opportunity for entrepreneurs, including the investors to enter into the food processing sector.Most of the food-based start-ups are concentrating on the delivery end. The present challenge in supply chain management is to maintain all three flows in an efficient manner, resulting in optimal results for farmers, growers, wholesalers and customers.

Aspiring entrepreneurs are required to explore the sea of opportunities available to them. Start-ups and exclusive ventures by first-generation entrepreneurs need to be extended a lot of support by the government, technical hand-holding to willing persons. The beginners should be subjected to technical sessions on various aspects of food processing sector, service sector, financial assistance and market avenues.There is a need to make the industryself-sustainableand not be dependent only on subsidies.

It is time tostress upon the importance of innovation and quality in establishing a credible and successful business venture.Going forward, the adoption of food safety and quality assurance mechanisms such as FSSAI, Total Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP) by the food processing industry offers several benefits. It would enable adherence to stringent quality and hygiene norms and thereby protect consumer health, enhance product acceptance even by overseas buyers.

 Conclusions

The true potential of the food processing industry is slowly being realised. This is reflected in the fact that the government has classified food processing industry as a thrust area.While minimal and traditional processing technologies present considerable opportunities for innovation and vertical diversification, relatively few small and medium enterprises (SMEs) are able to tap into and benefit from these opportunities. Many SMEs lack the knowledge whichleads to inability to comply with international standards for processed products.

Creation of proper fruit and vegetable supply chain system can be made efficient by reducing the length of the chain bylinking together farmers, vegetable vendors, farmer’s self-help groups and women vegetable/fruits vendors ensuring the availability of quality produce at competitive price to consumers at a convenient time and place.

However, there are many challenges being faced by the food processing sector and to combat these challenges, the government, the entrepreneurs and the researchers need to join hands. Odisha can have an explosive growth if properly networked towards the development of food processing sector through path-breaking technology and innovations across the processed food value chain and ecosystem.