L’intervista alla Project Manager Iride Ciaccia comparsa sul numero di maggio 2016 di “The Dollar Business”, un’importante magazine indiano dedicato al commercio internazionale.
TDB: How does LC International support SMEs and large food processing firms in getting greater market access and attain operational excellence in domestic and overseas markets?
Iride Ciaccia (IC): LC International provides effective tools for entrepreneurs for developing projects aimed at internationalising SMEs, supporting their integration, expansion and consolidation, or even the creation of their holding structures in foreign markets such as India, Brazil, China and USA. Thanks to our offices in USA, China and Croatia, we can assist them in the export process,facilitate all their import operations and help them in product marketing. We also help Italian brands to get into their targeted markets. LC International is the perfect consultant for companies keen to invest in new markets or enhance existing activities in established ones.
TDB: Which countries are the largest producers and exporters of processed foods in the world? And what are the major reasons for the growth of the sector in these countries?
IC: LC International mostly deals with organic processed foods and wine and high-quality food made in Italy, which is part of the luxury-excellence of Italian food. Regarding the largest producers and exporters of processed foods, it depends on the type of food. For instance, in fruits and vegetables, North America and Europe are very big players. However, it’s China that is the leader in the export of these products followed by USA and Europe. Half of all processed fruit and vegetable products that are traded are sourced from Europe. For wine, France, Italy and Spain are in the top ten and Italy produces about one-third of the worldwide production of wine. These countries have a leading role in the export field too, especially for high quality wines. The major growth reasons in these countries are the quality of food and wine as the European produce is strictly controlled by EU laws, and they are synonymous with healthy eating. Regarding the Chinese food industry, that continues to grow. Many food manufacturers there have launched new strategies, including employing high-quality ingredients, introducing new technologies and diversifying product lines.
TDB: How is the current global market for the processed food sector? What impact has falling commodity prices had on the processed food trade?
IC: The current global market for processed food is huge, especially for food and agri-business that have massive economic, social, and environmental footprints. The $5-trillion industry represents 10% of global consumer spending, 40% of employment, and 30% of greenhouse-gas emissions. Developing countries exporting agricultural commodities have obviously been particularly concerned by recent low global price levels and, given the inelastic nature of demand for their commodities, the consequent decline in their export earnings. Overall, I think there are still good opportunities to enhance import-export earnings everywhere – it depends on your commercial strategies.
TDB: In terms of competitiveness, how would you rate the Indian processed foods industry?
IC: I think the Indian processed foods industry is growing significantly and the food and agri-business sector is one of the key areas where India could be globally competitive. However, there are some critical issues such as high duties on incoming products and the fragmentation of internal distribution. India needs a big push towards modernisation of infrastructure and significant reforms to allow foreign operators to access business opportunities in an easier way.
TDB: How different are the challenges faced by Indian SMEs as compared to SMEs in developed countries?
IC: The food industry is characterised by fragmentation. There are a few European multinational companies competing worldwide with a wide variety of products, but most of the enterprises in the food sector are small and medium sized enterprises (SMEs). Innovation and new product launches are key priorities for companies in the food processing industry in the developed countries, especially after the globalisation. With globalisation, there is an urgent need of a dynamic and self-sustaining culture of innovation all around the world. In India, given the nascent stage of the food processing industry, spend on internal research and development has been significantly low even for large companies in the organised sector. SME contribution to the Indian GDP is 8% and the sector has registered a growth rate of 10.8%. Despite this high growth rate, SMEs in India are facing a number of problems like sub-optimal scale of operations, technological obsolescence, supply chain inefficiencies, increasing domestic and global competition, fund shortages, change in manufacturing strategies and a turbulent and uncertain market scenario. Overall, I still think that India has great potential and it is a market that is currently developing very fast, in particular in the organic sector, which is our focus.
TDB: In the last decade, how has the global export market changed for processed foods? How easy or difficult is it to market India-made processed foods in the overseas market, particularly in developed countries?
IC: While in developed countries the food trade has increased only minimally, developing countries have generally fared much better. Geography, demographics and policy choices largely determine a country’s deficit or surplus position with respect to agricultural trade. In general, countries in Latin America, East Africa and South Asia tend to be net food exporters, while most of the remaining Asian and African countries are net food importers. Since 2008, many African as well as Asian economies have experienced an increasing reliance on imported food products. Developed countries, on the other hand, have maintained a much more neutral position. In developed countries it is not always easy to market India- made processed foods because there is a lack of trust in Indian processed foods, especially compared to the European ones. Talking about organic food in India, I have experienced a massive presence of counterfeit organic products. Conversely, I have also come across Indian organic products that are completely genetically modified and pesticides free but lack any certification recognised by an authority. India needs a broader organisational structure at the government level that can handle these issues, and a concrete certification system for organic processed foods that are aligned with the European standards. In this sector, India has to be more organised at every level with a governmental body which can control all the food ingredients both for import and export sector. With these in place, it would be easier for Indian producers to access global markets.
Interview by Sisir Kumar Pradhan