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January 01 , 2016
Thanks to a large population base and culturally-diverse food habits of people, India has been one of the major markets for food and beverages in the world. India is the second-largest producer of food next to China, and has the potential of being the biggest with the food and agricultural sector.

Major factors driving the market include rising urban middle-class population, improving living standard of consumers, growing working opportunities and increasing women workforce. Rising consumer preference for premium food products such as luxury chocolates and biscuits and the shift towards all-natural ingredients in food products is also expected to contribute to market growth over the coming years.

The food processing industry is one of the largest industries in India. It is ranked fifth in terms of production, consumption, export and expected growth. The Year-End Review of food processing sector, released recently by the government, points out that the sector had emerged as an important segment of the Indian economy in terms of its contribution to GDP, employment and investment.

The ministry of food processing industries (MoFPI) is implementing various schemes for providing impetus to the development of the sector.

Over the last decade, the country witnessed significant expansion in its workforce, which boosted the demand for packaged food and ready meals. This, in turn has created significant space for food additives to capture the Indian market.

According to "India Food Additives Market Forecast & Opportunities, 2020," the food additives market in India is expected to register a CAGR of over 12 per cent during 2015-2020. Increasing consumption of processed and packaged meals, beverages and snacks among consumers of all age groups is expected to be the key market driver through the forecast period.

Rising exports of packaged and frozen meat products to international markets such as Thailand and Vietnam are also contributing to the increase in demand for food additives in the country. Besides snacks and packaged food, use of additive is likely to grow boisterously within the meat & poultry sector over the next five years.

One more major driver in the food additives market is the growing supply chain complexities/inefficiencies in the food and beverage industry - transportation costs, last mile reach for food products, storage facilities, as a part of companies expansion strategies are growing, which is increasing the complexities in the farm to fork value chain. This has laid emphasis on the use of food additives to reduce the spoilage and wastage costs.

Indian food additives market is also pushed by the flavour segment due to their regular use in beverages, savoury items and cereals. Acceptance of convenience and packaged foods in India is seeing more demand for food and beverage additives thus, making India the fastest-growing food additives market.

The growing demand for ready-to-eat food products coupled with rising preference for natural or organic food ingredients will fuel a growth rate of 12 per cent and drive the food additives market in India over the next five years, according to TechSci Research.

Indian food additives market is dominated by the flavours segment due to their substantial use in beverages, savoury items and cereals. With rising incidences of health problems like diabetes, consumers are also shifting towards all-natural, low calorie sweeteners such as Stevia. As a result, sweeteners are most likely to witness faster growth over the next five years and emerge as the leading segment in India food additives market through 2020, the report adds.

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