India is “the most challenging and exciting market in the global fresh produce business”, according to New Delhi-based Keith Sunderlal, of consultancy The SCS Group.
Addressing the Southern Hemisphere Congress, primarily on the opportunities that India provides as a destination for fruit, he nevertheless urged a degree of caution, and advised suppliers to the market to “enter, establish a presence, but above all persevere”.
Sunderlal said that wide-eyed exporters targeting the 1.08 billion Indian population should first consider the make-up of that consumer base. “Do not be swayed by the numbers, but target specific consumers and markets. Have a well-defined entry strategy based on research and a long-term outlook. Sporadic efforts in India are doomed to failure,” he added.
The ability of the Indian consumer to buy imported produce remains limited, although the middle class bracket is expanding, but they have the same desires as the rest of the world. The biggest challenge of all, he added, was to convince the consumer that they can afford to pay more money for fruit and vegetables.
Distribution remains complicated, with the largest supermarket chain in the country reporting a turnover of just $110,000 last year. “It is difficult to find the right partner, admittedly,” he said, “but we are just five years into the business. Unless you find the right people to work with life will be very difficult in India. And it is important to understand the consumer and the market. India is in fact three different markets, and the south, north and west of the country are all developing in distinct ways.”
The only high volume breakthrough to date in the Indian import business has come in the apple category, and although Sunderlal described it as “the first mass-market imported item, only 40,000 tonnes were brought into the country. Although the 50 per cent tariff imposed on imported apples is unlikely to change “and time soon”, he predicted that the import sector will more than double in the next three to five years.
India, he said, cannot be treated as a dumping ground by any supplier that wants to make money. “There is a fair volume of grapes coming in, but do we really get “good” grapes coming into the Indian marketplace,” he said, in a clear reference to the quality of some of the Chilean product that found its way to India last season. “Consumers will not pay the expected price differential for poor quality grapes, while the apple sector has showed that consumer attitudes can be changed.”
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