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Packaged food sales in India are forecast to soar by more than two-thirds over the next four years, according to research from industry analysts BMI.


Rising disposable incomes and the on-going urbanisation of India's population are set to drive the packaged food market in India, BMI said.

The analysts forecast that, by 2012, packaged food sales will climb over 67 per cent to US$21.7bn, figures that add further weight to the perception of India as a key emerging market for multinational food manufacturers.
The young, urban, rich are also starting to demand more ‘premium' food and beverages, BMI said, a trend that looks set to propel per capita spending on packaged food.

"Although non-essential consumer goods are barely established at the mass-market level, premiumisation is already becoming a viable growth option, particularly among younger consumers in major urban centres," BMI said in its report.

With India's economy forecast to grow at 7.9 per cent a year between now and 2012, multinational interest in the market is ‘massive', BMI said. However, local conglomerates are investing more in the country's food sector, the analysts added.

The likes of Reliance Industries and RPG have broken into India's burgeoning organised retail sector, while the likes of cigarette giants ITC and Godfrey have made moves into packaged food.

Food specialists, like dairy group Amul, are also looking to become ‘food generalists', BMI said.

"A dynamic industry should fuel competition, which will in turn heighten marketing and promotional spending, as well as drive down the price of non-essential, added-value items," BMI added. "Such a trend would fuel consumption and drive down food spending in value terms, with higher volume sales able to offset slightly lower per-unit sales prices."

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