The food equipment market is expected to grow at a CAGR of 5% from 2019 to 2027, becoming worth 80 bn $, as per insights by Transparency Market Research.The accelerated growth of the market is driven by the availability of processing equipment in different designs, sizes, configurations; evolving demands of ever increasing population; increasing health consciousness among people; increasing consumption of processed and ready to eat food etc.
Further, the bakery processing equipment market, a significant part of the food equipment market is expected to grow at a CAGR of 5% during 2020-2025, reaching the value of approximately USD 11.4 billion by 2025, as per a research report published by MarketsandMarkets. The significant growth is a result of the increasing consumption of bakery products across the globe. The report also predicted that the sheeters & moulders segment will probably grow at the highest CAGR during the forecast period.
Challenges Facing Food Equipment Manufacturing Industry
With increasing consumer awareness about healthy food products, there has been an increase in demand for nutritive food items. Today, people are more concerned than ever about their food intake, which is a major challenge for food equipment manufacturers as well as food producers. Furthermore, preference for low carb diet which is good for metabolic health is another emerging trend among consumers.
In India, various government measures like 100% FDI under automatic route, food parks, government subsidies, tax breaks, modern retail structure, and strengthening supply-chain infrastructure have given a thrust to the industry's growth. However, irrespective of the growing demand for food equipment and other favourable measures, there are some stumbling blocks in the industry. Few of these challenges include transportation issues, storage constraints, lack of technologically updated equipment, and traditional production processes. The industry is also facing the challenge of increasing the production of or automating ethnic Indian snack items for a consistent, hygienic and high volume production without compromising the taste of the product.
Food Processing Equipment Industry in India
The Indian food processing equipment market is growing at a steady rate. For example, the Indian snacks market alone is expected to be worth more than INR 1 billion by the end of 2024, according to the Research and Markets report (2018-24).
The market is driven by the growing need to achieve food safety and fulfil the demand of its ever increasing population. According to Technova's quarterly update about the performance of food processing equipment industry, the food processing industry is growing consistently and is expected to grow further on account of increasing acceptance of processed food in the Indian market. The gross value of plant and machinery deployed in the food processing sector will likely reach USD 51.19 bn by 2024-25.
Measures for the Growth of the Food Equipment Industry
Currently, the food machinery segment is not covered within the ambit of MOFPI (Ministry of Food Processing Industry) and thus, there is no recognition accorded to this segment. Consequentially, it cannot avail the benefits of various policies of the government for food processing industry and without this the industry won’t be able to grow. Hence, it’s imperative that the government makes food processing an integral part of MOFPI for its due growth.
Moreover, the government must actively facilitate the Indian machinery industry comprising the food machinery in the global market. Efforts are also required for making technical collaborations and joint ventures for developed countries to enhance the availability of proven technology in India which is locally made, thus rendering the Capex more friendly. Additionally, an accelerated Depreciation Policy should be announced for food processors and equipment manufacturers which will in turn give a major boost to local food machinery industry. Also, the Indian food machinery industry must be heavily incentivised to help it grow and expand.
Globalization of the food industry, evolving eating patterns and lifestyle changes have been the main reasons behind the increased production and distribution of food products globally. With the bourgeoning urban as well as young population, demand for ready to eat, processed food and convenience foods are set to increase in the coming years. Therefore, the food equipment manufacturers need to gear up by investing in the necessary infrastructure.