Forecast for the development of the honey market in India
The relevance of research
Honey is a sweet, viscous product produced by bees and related insects. Bee honey is a nectar partially digested in the crop of a honey bee or sugary secretions of some plants or some insects that feed on the juices of plants. Natural honey consists of 70-80% carbohydrates - glucose, fructose, sucrose. In addition, it contains vitamins A, E, C, B vitamins, iodine, iron, essential amino acids and other useful substances.
Purpose of the study
Analysis of the state of the honey market, assessment of the market volume, analysis of competitors, as well as identification of factors affecting the honey market
Content
Chapter 1. Key components of the honey market
1.1. Market size
1.2. Growth rates of the honey market
1.3. The ratio of imported and domestic products in the market
1.4. Volume and dynamics of honey production
1.5. Import of honey. Volume and dynamics
1.6. Export of honey. Volume and dynamics
1.7. Share of exports in production
Chapter 2. Economic characteristics of the market
2.1. Honey Market Trends
2.2. The main problems of the industry
2.3. Estimation of the number of buyers and their financial capabilities
2.4. Estimated consumption per capita
2.5. Analysis of sectoral indicators of financial and economic activity
2.6. Compact location of industry companies in certain regions
2.7. Life cycle stage of the honey market
Chapter 3
3.1. Economic components
3.2. Social Components
3.3. Technological components
3.4. Political Components
3.5. STEP-analysis of the honey market
Chapter 4. Assessment of the degree of competition
4.1. Scale of competition (local, regional, national, global)
4.2. Number of competitors and relative market shares of the largest competitors
4.3. Competition from substitute products
Chapter 5 Industry Forecasts
5.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
5.2. Analysis of the impact on the state aid industry at the current date
5.3. Assessment of the degree of impact of the crisis due to covid-19 on the analyzed market. Barriers existing in the honey market
5.4. Prospects and growth drivers for the honey market
5.5. Forecast for the development of the honey market in the context of the current economic crisis due to covid-19
Chapter 6 Forecasting Methodology
6.1. Methods for forecasting key industry indicators
6.2. Sources of information for forecasting
6.3. Timing of forecasting
Research excerpt
Chapter 1. Key components of the honey market
1.1. Market size
Honey is a sweet, viscous product produced by bees and related insects. Bee honey is a nectar partially digested in the crop of a honey bee or sugary secretions of some plants or some insects that feed on the juices of plants.
Natural honey consists of 70-80% carbohydrates - glucose, fructose, sucrose. In addition, it contains vitamins A, E, C, B vitamins, iodine, iron, essential amino acids and other useful substances. At the same time, honey and other bee products are allergens. First of all, an allergy to it manifests itself in people who are allergic to the pollen of certain plant species.
One of the main properties of honey is crystallization. Some time after the honey is pumped out of the hives, the product thickens, large grains are formed - crystals. The term of sugaring usually depends on the type of honey, or rather, on the amount of glucose in the product and the storage temperature. In a cold place, crystals form faster. Some varieties of honey, such as acacia, practically do not crystallize.
The history of the origin of honey, recorded in written sources, begins 5 thousand years ago. We are talking about the ancient Egyptian papyri, which tells about the nomadic beekeeping of local residents.
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The honey market in India is dominated by domestic products. Production in India is concentrated mainly in private households and peasant (farmer) farms, the share of honey produced in them is ...% of the total volume of 2020.
1.2. Growth rates of the honey market
Consider the dynamics of the volume of the honey market in India in physical terms for the period 2013-2020.
Diagram 1. Dynamics of the volume of the honey market, 2013-2020, tons
1.3. The ratio of imported and domestic products in the market
The honey market in India is represented mainly by domestic products - its share fluctuates ...
1.4. Volume and dynamics of honey production
Consider the dynamics of honey production in India.
The dynamics of the volume of honey production in India is unstable - the indicator decreased and increased over the entire period under review.
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1.5. Import of honey. Volume and dynamics
Consider the indicators of foreign trade operations with honey in India.
From 2014 to 2018, there has been a significant decrease in the volume of import deliveries of honey in physical terms ...
The dynamics of imports in value terms is generally similar to the change in the indicator in physical terms: ...
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1.6. Export of honey. Volume and dynamics
Diagram 6. Volume and dynamics of honey exports, 2013-2021 (Jan.-Aug.), tons
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1.7. Share of exports in production
During the period shown in the diagram, the share of exports in production remains insignificant
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Chapter 2. Economic characteristics of the market
2.1. Honey Market Trends
Consider the trends in the main components of the volume of the honey market in India.
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Imports occupy a small share in the volume of honey consumption in India - an average of 0,3%, but tend to increase (in 2019-2020).
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The structure of Indian honey supplies to foreign markets is highly concentrated.
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In total, the TOP-10 countries receiving Indian honey accounted for ...% of exports in 2020.
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Development of organic beekeeping
In modern conditions, the consumption of organic products is a trend in the development of the food market in many countries of the world.
Organic beekeeping is the process of raising bees without the use of pesticides, herbicides and other unnatural or harmful substances.
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2.2. The main problems of the industry
The main issues in the industry include:
Market dependence on weather conditions.
Lots of fakes.
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There are two main distribution channels in the sale of honey:
- sale directly to the consumer (at honey fairs and agricultural markets);
- sale through an intermediary.
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Decreased purchasing power of consumers.
The price factor, with other product characteristics being conditionally equal, is currently one of the most important for Indian buyers due to another decline in the level of real incomes of the population.
Competition from substitute goods (sugar, confectionery).
Competition is exacerbated by the long shelf life of honey (up to 1 year).
Low level of automation and mechanization of the industry (for example, according to the beekeeping development program in the Republic of Bashkortostan, more than 90% of beekeepers in the state use manual labor).
2.3. Estimation of the number of buyers and their financial capabilities
Regular consumers of honey in India are both men and women.
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Diagram 11. Dynamics of the population of India, as of January 1, 2012-2021, million people, %
The dynamics of honey consumption is also determined by:
- trends in the indicator of real incomes of the population;
- trends in the indicator of uneven distribution of incomes of the population by region and by strata of the population.
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2.4. Estimated consumption per capita
The consumption of honey per capita is determined by GidMarket based on the ratio of the volume of the honey market in physical terms to the population of India.
2.5. Analysis of sectoral indicators of financial and economic activity
Important data for analyzing the state of the industry is the dynamics of such indicators as profitability, liquidity, business activity, and financial stability. Industry indicators are calculated by GidMarket on the basis of financial ratios for the main market operators.
The table shows the dynamics of the gross profit margin (the ratio of gross profit to income). Gross profitability serves as an assessment of the economic efficiency of an enterprise, which reflects the rational use of labor, material, monetary and other resources.
Table 5. Gross profitability of the honey industry in comparison with all sectors of the Indian economy, 2015-2020, %
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Consider liquidity indicators in the honey industry. The indicator of current liquidity is a measure of the solvency of the organization, the ability to repay the current (up to a year) obligations of the organization.
The estimated indicator of the current liquidity of a normally operating solvent legal entity must be at least 1, i.e. it is necessary that the total value of current assets be greater than the amount of short-term liabilities.
If the current liquidity ratio is greater than 2, this indicates that the company has more current assets than short-term liabilities with double coverage. The company has a high ability in the short term to pay off its obligations (debts). The normative value of current liquidity equal to 2 was obtained in practice and is most often found in domestic regulations.
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Business activity is the ability of an enterprise, based on the results of its economic activity, to take a stable position in a competitive market, it is the performance of an enterprise in relation to the amount of resource consumption during the operating cycle. Indicators of business activity are related to the rate of turnover of funds: the faster the turnover, the less semi-fixed costs per turnover, which means the higher the financial efficiency of the enterprise and the industry as a whole as a combination of many enterprises.
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The stability of the financial position of the enterprise is impossible without effective management of working capital, based on the identification of significant factors and measures to provide the enterprise with its own working capital.
The equity ratio characterizes the availability of own working capital of the enterprise, necessary for its financial stability, it is calculated to assess the solvency of the enterprise. Lack of own working capital, i.e. the negative value of the coefficient indicates that all the current assets of the organization and, possibly, part of the non-current assets are formed from borrowed sources.
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The final working capital ratio for all sectors of the economy in India in 2016-2019 shows an upward trend.
Thus, the profitability indicators in the honey industry and the indicator of absolute liquidity do not exceed the Indian average. Current liquidity is in line with the standard, the average turnover of receivables shows a generally negative trend, financial stability is in line with the standard and exceeds the Indian average.
2.6. Compact location of industry companies in certain regions
To determine the compactness of the location of companies in the industry, we consider the volumes of honey production in the union territories and their shares in total production.
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2.7. Life cycle stage of the honey market
Based on the dynamics of the volume of the honey market, it can be concluded that the market is at the stage of maturity of the life cycle. There is a wide variety of honey varieties on the market, the market is characterized by a lack of novelty of the product (homogeneity of products), a high level of competition, established sales channels, and a sufficient level of consumer knowledge about the characteristics of the product.
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Buyers have the opportunity to choose between different brands, manufacturers offering honey for sale. At this stage, the role of price competition increases. The main task of the enterprise at this stage is to maintain and, if possible, expand its market share and achieve a sustainable advantage over direct competitors.
At the stage of maturity, the main task of marketing activities is to extend the life cycle of the product and involves:
improvement of the trade assortment due to product differentiation;
entering new segments (if there are any left);
encouraging existing customers to systematically and more frequently purchase goods;
search for new consumer groups and encourage them to make a purchase.
Chapter 3
Macroeconomic factors influence the dynamics of all sectors of the Indian economy, including the honey market. The main groups of factors are: economic, political, social and technological.
3.1. Economic components
GDP dynamics
Gross domestic product (GDP) is a macroeconomic indicator that reflects the market value of all final goods and services produced per year in all sectors of the economy in India for consumption, export and accumulation, regardless of the nationality of the factors of production used.
Gross domestic product is the main indicator on the basis of which the level and pace of economic development are determined.
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Market dependence on seasonal fluctuations and weather conditions
In the winter and autumn months, bees leave for wintering, while in different regions seasonal fluctuations affect this process in different ways. Strong dependence on seasonal fluctuations slows down the development of the honey market.
COVID-19 pandemic
In 2020, the spread of a new coronavirus infection, first in trading partner countries, and then in India, had an increasing negative impact on the Indian economy. The introduction of non-working days, as well as additional restrictions on the operation of certain industries, led to a significant decrease in economic activity.
The coronavirus pandemic and its associated restrictions have negatively affected beekeeping in India. Production and supply chains were disrupted, many beekeeping conferences, congresses and meetings were canceled, and communications between the Indian beekeeping community and foreign colleagues were limited. The decrease in the purchasing power of the population also had a negative impact on honey sales.
3.2. Social Components
Population
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Real income of the population
General trends in macroeconomic indicators can also be traced in such a value as real incomes of the population, which determine the level of effective demand.
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Consumer Behavior
In the modern world, more and more people are asking the question of a healthy lifestyle. Proper nutrition is an integral part of it, which entails reducing the consumption of sugar by the population in favor of fruits, dried fruits and honey. According to a survey conducted by VTsIOM in 2021, 10% of Indians consume honey, as it can be an alternative to sugar.
3.3. Technological components
The number of bee colonies
Diagram 24. The number of bee colonies in India in farms of all categories in 2013-2020, thousand pieces
According to experts from the Ministry of Agriculture of India, the mass death of bees in the regions may be associated with a violation of the requirements for the use of pesticides and other chemical crop treatments.
In addition, bees have no immunity to parasites and dangerous diseases that have appeared due to global warming, for which no cure has yet been found. Global warming affects the entire ecosystem.
According to the results of research by a group of scientists from Northwestern University in Evanston (USA), the elevated temperature inside the hive does not allow the bees to fall into a full-fledged hibernation, they quickly burn fat reserves and become very weak by spring.
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New technologies in the industry
Modern beekeeping includes several areas that progress affects in the first place:
increase in production volumes;
selection work on the breeding of working individuals and queen bees;
improvements regarding the design of beehives;
mechanization of manual labor;
beekeeping in modern nomadic apiaries;
research and development of new generation antibiotics;
research in the field of anti-swarm technologies;
integration of beekeeping with related branches of agriculture;
search for new areas of application of bee products;
use of the latest achievements of science.
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Internet technology development, e-commerce growth
E-Commerce or electronic commerce is an entrepreneurial activity that is associated with the distribution, advertising, promotion, sale of services or goods over the Internet. Information technology is in a state of constant improvement. Due to the high speed of development, the information industry is one of the most dynamic.
The development of online sales of honey has a positive effect on the market. It is also possible to purchase honey through marketplaces (Wildberries, Ozon, SberMarket, etc.). One of the main advantages of marketplaces is access to the widest possible consumer audience.
3.4. Political Components
Certification
Certification of honey is a necessary procedure that is designed to ensure the safety and naturalness of the product for consumers. The process of production and sale of bee products in the EAEU is regulated by several technical regulations:
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State regulation of the industry
Passage of the Indian Beekeeping Act
Federal Law No. 30.12.2020-FZ dated December 490, 22 “On beekeeping in India” was adopted by the State Duma on December 2020, 25 and approved by the Federation Council on December 2020, . The law is aimed at establishing the legal basis for the development of beekeeping as an agricultural activity, as well as activities aimed at the conservation of bees.
The federal law defines:
basic concepts in the field of beekeeping;
main tasks and directions of development of beekeeping, measures of state and municipal support;
features of the use of land and land plots for beekeeping, the creation and operation of beekeeping infrastructure;
the rights of beekeeping farms to form unions (associations);
the procedure for the implementation of beekeeping and technical regulation in this area;
the procedure for organizing the conservation of bees, breeding products of beekeeping, prevention of poisoning of bees with pesticides and agrochemicals.
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State support for the industry
State support for the industry is carried out within the framework of grants for beginning farmers, the provision of individual subsidies in various regions.
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Credit policy
Today it is quite difficult to imagine the progressive development of the economy without the active participation of the credit system. It should also be noted that the assessment of the availability of credit resources for both legal entities and individuals is a significant indicator that allows assessing not only the demand for credit funds, but can also serve as a reflection of the real economic situation both in the region and in the economy as a whole.
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3.5. STEP-analysis of the honey market
Let's present the results of the analysis of factors influencing the market in the form of a STEP-analysis table.
Table 9. STEP analysis of factors affecting the honey market
Thus, at the moment, the Indian honey market is generally negatively affected by environmental factors of medium strength.
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Chapter 4. Assessment of the degree of competition
4.1. Scale of competition (local, regional, national, global)
Consider the world statistics on honey exports and imports in 2020.
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Thus, compared to other countries, India exports and imports insignificant amounts of honey. In this regard, global competition in the market is not expressed.
At the national level, competition from other manufacturers is made up of several large companies that supply their products almost throughout India, cooperating with federal, regional and local retail chains and individual points of sale.
At the regional level, there are companies that supply honey mainly to the market of their own and neighboring states of India, less often they have the opportunity to deliver to remote regions. They compete with each other and with national scale companies.
Local small producers (owners of private small apiaries) do not produce the necessary volumes in order to compete with players from the two previously mentioned groups of companies. They have a significantly limited market.
4.2. Number of competitors and relative market shares of the largest competitors
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The assessment of the shares of the largest competitors in the honey market was carried out on the basis of production volumes in value terms of agricultural organizations, peasant farms and individual entrepreneurs, households, as well as the revenues of companies, taking into account the entire line of products.
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4.3. Competition from substitute products
The main substitute for honey is sugar. Sugar consumption per capita in India remains at the level of 39-40 kg per person per year (according to Rosstat), honey - 0,42-0,50 kg / person. This is due to several factors:
the cost of honey is 12 times higher than the cost of sugar (Diagram 28), while the average consumer price for honey for 2016-2020 tends to increase, for sugar, on the contrary, to decrease;
the use of honey in confectionery products is limited by its specific texture and taste, as well as possible individual intolerance;
the accelerated pace of life reduces the time for cooking at home, as a result, recipes with honey are less and less used by housewives.
Chart 28. Average consumer prices for honey and granulated sugar in India in 2016-2020, Rs./kg
Despite a significant per capita consumption of sugar (compared to that of honey), sugar is not a direct substitute for honey, as honey has a range of health benefits.
To a greater extent, honey is competitive with a wide variety of assortment of the modern confectionery industry: sweets, preserves and jams, desserts, cakes, etc. Bright packaging, a rich variety of tastes attract the choice of an ordinary consumer instead of natural products.
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Chapter 5 Industry Forecasts
5.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
Let's analyze the data on the impact of recent crises on the honey market (the global crisis of 2008 and the currency crisis in India in 2014).
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5.2. Analysis of the impact on the state aid industry at the current date
Forecasting the development of the honey market in India is impossible without understanding the economic situation in the country, as well as the impact of the spread of the covid-19 virus and the measures taken.
The vast majority of the support measures announced by the president and the government concern only the industries that the government has identified as the most affected. That is, benefits apply only to legal entities and individual entrepreneurs whose main activity code (OKVED) specified in the Unified State Register (EGRLE) is included in the government list of such industries.
5.3. Assessment of the degree of impact of the crisis due to covid-19 on the analyzed market. Barriers existing in the honey market
The COVID-19 pandemic has affected all areas of activity, including the honey market.
The trajectory of the development of the world economy in 2020 has changed significantly. As a result of the widespread introduction of restrictive measures to curb the spread of infection, most of the leading economies have entered a recession. Against the backdrop of a worsening external economic environment and the introduction of quarantine restrictions in the countries that are India's trading partners, economic activity in the Indian economy has slowed down significantly.
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5.4. Prospects and growth drivers for the honey market
Factors contributing to the growth and development of the market:
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5.5. Forecast for the development of the honey market in the context of the current economic crisis due to covid-19
In 2020, almost all sectors of the economy felt the effects of the pandemic.
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Chapter 6 Forecasting Methodology
6.1. Methods for forecasting key industry indicators
Modern statistical forecasting methods are used, taking into account the actual dynamics of the industry and the impact of the current and projected general economic situation in connection with the spread of the covid-19 virus.
In addition, when compiling the forecast, changes in real incomes of the population, trends in consumer preferences in a crisis, development forecasts and the degree of impact of other factors affecting the industry are taken into account.
6.2. Sources of information for forecasting
Industry volume over the past 8-9 years
Industry dynamics in 2008-2009, in 2013-2020*
Dynamics of macroeconomic indicators over the past 9-10 years
Current public assistance plans
Databases of the State Statistics Committee of India
Indian Revenue Service databases
India Customs databases
Open sources (websites, portals)
Issuer reporting
Company websites
Media Archives
Regional and federal media
Insider sources
Specialized analytical portals
* Until October 2021 financial indicators for the main market operators and industry coefficients for 2020 - GidMarket forecast based on the dynamics for 2016-2019, except for cases when the operator discloses data on the results of financial 2020 publicly.
6.3. Timing of forecasting
The forecast belongs to the medium-term category - 5 years (2021-2025)
Diagrams
Diagram 1. Dynamics of the volume of the honey market, 2013-2020, tons
Diagram 2. The ratio of imported and domestic products in the honey market, 2013-2020, %
Diagram 3. Dynamics of honey production in India, 2013-2020, tons
Diagram 4. Volume and dynamics of honey imports, 2013-2021 (Jan.-Aug.), tons
Diagram 5. Volume and dynamics of honey imports, 2013-2021 (January-Aug.), thousand dollars
Diagram 6. Volume and dynamics of honey exports, 2013-2021 (Jan.-Aug.), tons
Diagram 7. Volume and dynamics of honey exports, 2013-2021 (January-Aug.), thousand dollars
Diagram 8. The share of exports in production, 2013-2020, %
Diagram 9. Structure of honey production by categories of farms in 2020, %
Diagram 10. The structure of honey exports by countries in 2020 in physical terms,%
Diagram 11. Dynamics of the population of India, as of January 1, 2012-2021, million people, %
Chart 12. Dynamics of real incomes of the population of India, 2012-2021 (Q3), % to the previous year
Diagram 13. Volume of consumption in the honey market per capita, 2013-2020, kg/person
Diagram 14. Profitability of profit before tax (profit of the reporting period) in the honey industry in comparison with all sectors of the Indian economy, 2015-2020, %
Diagram 15. Current liquidity (total coverage) for the honey industry for 2015-2020, times
Diagram 16. Business activity (average term of receivables turnover) in the honey industry, for 2015-2020, days days
Diagram 17. Financial stability (security of own working capital) in the honey industry, for 2015-2020, %
Diagram 18. Compactness of location of companies in the industry in certain regions in 2016-2020, %
Diagram 19. Structure of honey production by states of India in 2020, %
Figure 20. Stage of the life cycle of the honey market
Chart 21. Dynamics of India's GDP, 2012-2020, Q2 2021, % to the previous year
Chart 22. Monthly dynamics of the US dollar against the rupee, 2016-2021 (Jan-Oct), Rs. for 1 US dollar
Diagram 23. Population forecast for India, for the period 2022-2025, million people
Diagram 24. The number of bee colonies in India in farms of all categories in 2013-2020, thousand pieces
Diagram 25. Leading honey import countries in 2020, mln USD
Chart 26. Leading honey export countries in 2020, mln USD
Diagram 27. Shares of the largest competitors in the honey market in 2020, %
Chart 28. Average consumer prices for honey and granulated sugar in India in 2016-2020, Rs./kg
Diagram 29. Dynamics and volume of the honey market in 2007-2020, thousand tons
Diagram 30. Forecast of the volume of the honey market in 2021-2025, tons
Tables
Table 1. Classification of honey
Table 2. Structure of honey imports by importing countries in 2020 in physical terms, units rev.
Table 3. Distribution of the population by average per capita income per month, %
Table 4. Average monthly nominal accrued wages of employees for a full range of organizations by state of India in January 2019-2020, Rs.
Table 5. Gross profitability of the honey industry in comparison with all sectors of the Indian economy, 2015-2020, %
Table 6. Absolute liquidity of the honey industry in comparison with all sectors of the Indian economy, 2015-2020, times
Table 7. Projections from various sources for real GDP in India in 2020-2023 (base scenario), %
Table 8. Average weighted interest rates of credit institutions on credit operations in rupees, excluding PJSC Sberbank (% per annum), 2016-2021 (Jan-Aug.)
Table 9. STEP analysis of factors affecting the honey market
Table 10. Main companies participating in the honey market in 2020
Table 11. Assessment of the impact of recent crises on the industry
Table 12. Analysis of the impact on the industry of the state aid proposed to date
Table 13. Forecast indicators of the development of the Indian economy in 2021-2024, %
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