Kerala gears up to tap potential in food processing sector: KSIDC study
Report moots Food Processing Board; global food fests and expos
Kochi / August 31, 2024
Kochi, Aug 31: With its abundant agricultural resources, skilled labour and cultural allure, Kerala is fast emerging as an ideal ecosystem for the food processing and foodtech segment, attracting investments in the sunrise sector and building domestic and global collaborations, backed by the government support.
The state government has identified food processing and technology as a priority sector with immense scope for value addition, adoption of technology, export of an assortment of high-quality products and employment generation, says a strategic paper drawn up by the Kerala State Industrial Development Corporation (KSIDC).
“Kerala offers a compelling value proposition for companies seeking a strategic foothold in India's and the world's food industry. By embracing innovation, technology, value addition and adopting sustainable practices, industries can unlock tremendous opportunities for long-term growth and prosperity,” the study says.
It has mooted a set of upfront initiatives to impart further momentum to the sector including formation of a Food Processing Development Board; and a dedicated online portal for food processing as a one-stop resource for information, market trends, and networking opportunities.
Further, to increase market linkages and branding, Kerala should organize food festivals and expos, both domestically and internationally, to showcase its unique products.
Noting that India’s food processing market is projected to reach an impressive $535 billion by 2025 at CAGR of 15.2 per cent, it says Kerala must leverage its potential to become a significant contributor to this growth trajectory.
Observing that the global food processing and technology landscape has witnessed significant transformation due to changing consumer preference for convenient, ready-to-eat and ready-to-cook products, organic and nutritious foods, it says Kerala is well-positioned to capitalize on these trends.
The state draws its strength for its food processing industry from a diverse range of crops. It is first in the country in cardamom, vanilla, and nutmeg production, second largest producer of jackfruit, tapioca, cocoa, coconut, black pepper, and coffee, fourth largest producer of tea, and a leading producer of seafood and coir products. In addition, it has more than 20 GI tags for agriculture and food produce, including non-basmati rice. Known for its famous ‘Nendran’ variety of banana, it is also home for 75 per cent of India’s EU-certified seafood units.
“This abundance of raw materials provides a strong foundation for the food processing industry, offering numerous opportunities for product diversification and value addition,” the document says, listing grading and packing centres, reefer vans, and cold storage for perishable cargo as key areas of investment.
Further, Kerala's traditional culinary heritage and status as a popular tourist destination presents an exciting opportunity for the food processing industry, with a niche market for premium, artisanal products. It can also develop new innovative products such as neera, vacuum fried chips, aseptic packaged juices, and extruded snacks, from its crops.
Industries Minister Shri P Rajeeve says the government recognizes food processing as a priority sector for economic growth and employment generation. It can contribute significantly to the growth of agriculture and allied sectors, including horticulture, animal husbandry, and fisheries.
“We are providing supportive policies, incentives, tax breaks and subsidies to encourage investment in the food processing industry. Licensing and approval processes to facilitate ease of doing business have been streamlined through Single Window Clearance, reducing bureaucratic hurdles for setting up food processing units. There is also an imperative need to infuse cutting-edge technologies like Internet of Things (IoT), artificial intelligence, and additive manufacturing, which can revolutionize this industry by improving efficiency, quality, safety, traceability, and sustainability,” he points out.
The report notes that Kerala’s two mega food parks and a spices park provide facilities and infrastructure for food processing industries. Some upcoming projects are Spices Park in Idukki; Coconut Processing Cluster in Kozhikode, Pineapple Processing Cluster in Ernakulam, and Cashew Processing Cluster in Kollam.
The state is also making targeted interventions for the sector's growth. These include strengthening supply chain infrastructure such as cold storage facilities, finetuning produce procurement, stepping up capacity utilization, addressing land and labour issues, deepening marketing linkages and a greater focus on technology adoption, quality control and safety standards.
The study also called for promotion of value addition, product diversification by establishing specialized R&D centres, low-interest loans for entrepreneurs and farmers and creation of a dedicated fund to encourage investment in the sector. To enhance food processing infrastructure, Kerala should collaborate with private sector companies and foreign investors to establish modern food parks that can act as incubation centres for startups and SMEs looking to venture into the food processing sector.
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