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Future is Food Global Grain and Feed Forum 19 th June 2015 - Rajnikant Rai

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Changing Demography: Increasing Middle Class Matches the current Chinese population A growing population and more than 1.4 Billion Indians to feed by 2025 Growth coming in Urban areas with the rise of the Middle Class By 2025, Urban share of population will increase to 37% (523 Mln) from (31.16% (377 Mln) as per 2011 census) Today, 43% of private spending is from Urban areas - expected to reach 60-62% of Indias total consumption expenditure by 2025 Source: McKinsey, NCAER

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Changing Demography: Increasing Middle Class Deprived Segment will drop from 32% to 22% by 2025 Average real household disposable income expected to grow 3 times from Rs. 1.10 Lakh currently to about Rs. 3.2 Lakh by 2025 The country's middle class (Rs 2-10 lakh income per annum) will grow from 16% to 46% by 2025. India will become the Worlds 5 th Largest Consumer Market by 2025 Aggregate consumption in India will grow in real terms from Rs. 34 Lakh Crore to Rs. 70 Lakh Crore by 2025 Source: McKinsey

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A change from Pyramid to Sparkling Diamond During next decade, over 870 million of Indias population will have household income between Rs. 1.5 to Rs. 8.5 lakh per annum Between 2010 and 2020 the expense on Food consumption will increase by 2.7 times from Rs. 16,20,000 Crore to Rs. 43,74,000 Crore Euromonitor BCG India Consumer Survey 2010 Globals Strivers Seekers Aspirers Deprived 1% 2% 12% 45% 40% 2010 4% 12% 34% 33% 18% 2025 Households by Income Category No. of households - in Million 2 4 25 98 87 Source- National Council for Applied Economic Research (NCAER)

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What are the likely growth drivers? 1 2 3

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1. Changing Consumer Trends

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THE INDIAN FOOD JOURNEY The 60s-70s: The humble ROTI signified the Basic Survival Level Need For the ROTI (survival) heroes were driven to crime, mothers turned into make do saints, spunky modern girls entered the kitchen to be schooled in gender roles by lower class men The meanings of food have undergone a sea change in India the past two decades Food was earlier a symbol of basic survival ROTI KAPDA MAKAAN India was striving for Food Self- Sufficiency - Green Revolution It was considered enough to have the basics, small treats occasionally, from the Halwai or Pakoda Wala Street food could signify - mischief, childhood, innocent fun, adventure

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THE INDIAN FOOD JOURNEY The 80s : A new popular culture of food emerged Images of the good life from the world over flooded into India through the media for two decades Travel and the ability to sample other cultures and foods, became a symbol of affluent Indians growing global power The affluent section got the opportunity to have exposure to the FAST FOOD CULTURE of West allowing the crafting of a new cosmopolitan

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THE INDIAN FOOD JOURNEY End of 20 th Century: Hectic work schedules and an accelerated pace of life meant that food was often consumed for stress-busting, comfort, convenience, energy With rising incomes, shift towards protein-rich diet and dairy products was visible Emergence of supermarkets and fast-food chains started in India since mid-1990s Healthy eating started becoming a new aspirational space co-existing with guilty pleasures and indulgence

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THE INDIAN FOOD JOURNEY The 21 st Century Food Trends Changing lifestyles and hectic work schedules further spawned a large market for processed, packaged convenience foods and Quick Service Restaturants- McD, KFC, Pizza chains Eating Out in groups A trend Group eating Experiencing new food sensations Sharing experiences on social media Online food ordering Growing category of informed buyers shifting towards healthier lifestyles and food habits Emerging Food Segments- Health, Convenience, Taste/ New Experience and Indulgence

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To sum up - 4 broad Consumer trends emergingfuelling growth in this segment! Health & Wellness Convenience seeking Seeking newer experiences Indulgence Rising fast paced lifestyle forcing consumers to seek convenience Ready meals volume grew by 36% (in 2014). Growing globalization leading to consumers aspiring to try the new! Rising Incidence of Lifestyle Diseases Driving Consumers To Healthier Foods - CAGR of 17% in food categories like Dairy, Oils and fats, Ready meals, Snacks, Break-fast foods Consumers willing to spend on indulgence! Impulse and indulgence products current value sales increased by- 18% in 2014 to reach Rs. 607 billion *Industry estimates from Euromonitor, 2014

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Also there are a lot of evident sub trends which are getting capitalized upon! Convenience plus Guilt free indulgence

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2. Conversion led growth (Unbranded to Branded)

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With growing environmental factors and quality consciousness towards foods there is a trend of movement towards Branded products There is a huge headroom for growth in the various categories largely through the benefits routes provided in these spaces Unbranded segment in the foods space is huge CategoryBranded to Unbranded Ratio Atta34% Edible Oils55% Ghee41% Pulses