Indian fruit and vegetable extracts market is set to touch $690.5 million in 2017 from $400.5 million in 2011, according to an analysis by Frost & Sullivan.
Consumers’ health consciousness and inclination towards health foods would drive the growth, the analysis pointed out.
During the past four years, the food and vegetable extracts market has witnessed robust growth and product types have changed rapidly based on consumer preferences. Several companies, which were selling aerated beverages, have been compelled to shift to fruit juice based products, or are selling the both simultaneously, according to the analysis by Frost & Sullivan.
Early this month, Del Monte that sells fruit extracts has told Business Standard that it is planning to expand product offerings, and would launch health snack products in India.
Companies selling fruit-based products need to innovate and expand range of offering with a focus on health foods, according to an analysis by Frost & Sullivan.
“Further, manufacturers are conducting trials to derive fruit pulp, purées, and juices from seasonal fruits and store them for future use,” a Frost & Sullivan Research analyst said in a statement. “They are striving to make seasonal fruit products available throughout the year,” the analyst added.
The report also pointed out that the booming retail sector has benefited the food processing industry, including the fruit and vegetable extract market, in India.
However, the market will not see “explosive growth in the next five years”, though manufacturers have been innovating. Lack of variety and insufficient infrastructure for managing agricultural waste would hit growth rate, the analysis pointed out. Raw-material storage system in India is inadequate for the projected growth in production.
The study also indicated that post harvest loss of fruit and vegetable produce would certainly affect availability and pricing. Limited availability of varieties suitable for processing would hit volume and hike processing costs, it added.
However, backward integration process will help mitigate the issues of inconsistent raw material quality and product availability, according to the analysis.
The market will get a boost from favourable trade policies and the government's focus on the agro-based sectors. The government has already said that it would set up 30 mega food parks towards the end of 2012. Fruit and vegetable processing units are exempt from taxes, and the industry has been identified as a priority sector.
“The government plans to generate world-class infrastructure for growth through food parks, integrated cold chain, and modernization in the next five years,” noted the analyst.