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New US food products make inroads in India

March 16, 2004 10:59 IST

Prunes, pistachios and cherries that are sold in the United States supermarkets are gradually making inroads into the Indian market, and American companies are trying to make it more affordable for the common man.

In the ongoing annual food festival Aahar 2004 at Pragati Maidan in New Delhi, 12 American companies and agricultural associations are exhibiting their products. It is the largest-ever American participation in a food festival here.

Some of the new products exhibited this year are prunes, cherries and table grapes. The company representatives believe these products have good prospects in India due to the emerging middle class.

The United States Ambassador in India David C Mulford inaugurated the US pavilion last week, and asked the Indian government to remove the ban on foreign direct investment in retail sector for the promotion of these products here.

Keith Sunderlal, representative of the SCS Group, said: "India is a huge market and we see a great future here. Gradually we are creating a niche for ourselves."

SCS Group is an agribusiness consultancy service for the California-based association of six food exporting companies.

"It's a matter of time. Some of the American food products are already in the market in almost all metropolitan cities. It will take some more time to establish these products. And after that, there is a wonderful future," he said.

In agriculture, India had $857 million trade surplus with the US, while the US export to India was at $309 million in 2003, according to the US embassy here.

Observers say, India has a market of one billion people out of which the middle class is estimated to be around 300 million.

It is also estimated that three million new consumers between the age group 21-24 will join this consumer class each year during the next decade. And here is where the US business groups are looking at.

Take the example of California Prune Board (CPB), an association of prune growers in California.

Sumit Saran, spokesman of the board, said: "Last year we exported 100 tonnes of prunes to India. When we had started in 2002, it was just 20 tonnes. And I see that in the next three years, it will reach up to 5,000 tonnes a year."

Common people in India do not use products like prunes and pistachios in a regular basis. Elite consumers were generally buyers of such products. But the companies are now trying to capture the huge middle class market by reducing the cost.

Saran said earlier his products were packaged in Dubai and then exported to India. Now the companies are doing all the processing and packaging in California and exporting it directly to India. This reduces the cost by about 30 percent.

Sunderlal added: "Till last year these products were seen only in INA and Khan markets (two upscale markets in Delhi). But now you can see them in average kind of shops. The prices are going to decrease further as we are expecting a bumper harvest in September."

"It is going to be a trickle down effect. The products will now reach a cross section of consumers and not just the elite."

Currently, a packet of 250 grams of prunes cost Rs 100. Five different packs are now available in some major Indian cities.

The companies are tying up with local businessmen here. There are also provision of bulk import and then the products could be packaged locally under different brand names. This will further reduce the prices.

Almond is another important product that has a huge market in India.

Julie G Adams, representative of Almond Board of California, said about 50 million pounds of almond was exported to India from America last year. There is an annual growth of 8-10 per cent. Adam's board is participating in the exhibition here for the first time.

Since almonds are not grown in India, the board is facing small competition from Afghanistan and Iran.

Other products at the exhibition are pears, apples, fruit juices, raisins, dry fruits and table grapes.

Sunderlal said apples sold in the southern part of India are mostly transported from the north that increases the price manifold.

"Apples in south India are sold at Rs 70 to Rs 80 per kg. So if we provide them world-class apples from America at Rs 100 per kg then the market is ours. We are trying to explore these areas," he added.

Ehtasham Khan in New Delhi