Sausages Market Forecast in India
The relevance of research
Sausage products are products made from minced meat, fat, offal with the addition of salt, spices, subjected to heat treatment until ready for use.
Purpose of the study
Analyzing the state of the sausage market in India, assessing the market size, analyzing competitors, as well as determining the factors affecting the sausage market
Content
Chapter 1. Key components of the sausage market
1.1. Market size
1.2. Growth rates of the market of sausage products
1.3. The ratio of imported and domestic products in the market
1.4. Volume and dynamics of sausage production
1.5. Import of sausages. Volume and dynamics
1.6. Export of sausages. Volume and dynamics
1.7. Share of exports in production
Chapter 2. Economic characteristics of the market
2.1. Sausage 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. Stage of the life cycle of the sausage 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 sausage 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 sausage market
5.4. Prospects and growth drivers for the sausage market
5.5. Forecast for the development of the sausage 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 sausage market
1.1. Market size
The market for meat and meat products in general is one of the largest food markets in India. It has a very strong tradition and its fortune has a significant impact on other food markets. The system of production and distribution of meat and meat products has been formed for many years. The meat industry has always been one of the most important and socially significant, the indicators of its development have been the subject of close interest on the part of the state. At the same time, the situation in the meat industry is almost always closely connected with the situation in agriculture.
The production of meat and meat products requires a comprehensive rational use of raw materials, an important factor of which is the preservation of the original quality of products during processing.
Meat products are agri-food products of animal origin. The importance of meat and meat products for the usual consumer diet is very high due to the historically formed traditions and consumer preferences of the majority of the Indian population. It is known that for the normal functioning of the human body, its diet must contain sets of essential amino acids, most of which are supplied by meat products.
Over the past few decades, there has been a systematic increase in the pace of human life, the lack of time makes consumers save it on everything, including cooking. Sausage products are an alternative component of a snack, used in the preparation of salads, traditionally present on the festive table, etc.
Sausage products are products made from minced meat, fat, offal with the addition of salt, spices, subjected to heat treatment until ready for use.
Sausage products are divided into: according to the type of raw materials - meat, offal, blood; by type of shell - natural, artificial, without shell; by type of products - boiled sausages, sausages, sausages, meat loaves, etc .; according to the method of heat treatment - boiled, semi-smoked, smoked; according to the type (pattern) of minced meat on the section - structureless (minced meat is homogeneous), structural (with pieces of bacon, tongue, a pattern is formed on the section).
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1.2. Growth rates of the market of sausage products
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Diagram 1. Dynamics of the volume of the sausage products market, 2013 - 2020, thousand tons
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An important role here is played by the import substitution program, as well as the state policy in the field of ensuring the country's food security and supporting the agricultural and processing industries.
1.3. The ratio of imported and domestic products in the market
The share of imports in the market of sausage products is minimal. During the entire period, the share of imports in the market of sausages did not exceed ...% (the maximum was observed in 2013), the volume of import operations with sausages does not affect the market in India.
The Indian sausage market is dominated by domestic products, which is explained by the higher profitability of production, for which the sources of raw materials and the consumption market lie within the same geographical area, which is important for products with special requirements for conditions and terms of storage and transportation.
1.4. Volume and dynamics of sausage production
The dynamics and volume of the market almost completely duplicate the dynamics and volume of production of sausages, which is due to the low shares of imports in the market and exports in production.
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1.5. Import of sausages. Volume and dynamics
Diagram 4. Volume and dynamics of imports of sausages, 2013–2020, thousand tons
The dynamics of imports of sausages to India in physical terms is undulating, however, in general, a downward trend can be noted over the period.
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1.6. Export of sausages. Volume and dynamics
In general, sausage exports from India stagnated until 2019 ...
1.7. Share of exports in production
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In the future, one should not expect a serious increase in export volumes. The reasons are: the difficulty of matching veterinary legislation, the difficult political situation in relation to a number of promising European markets, the lack of well-developed logistics schemes. It is difficult for a country that has been actively importing meat for a long time to reorganize and start actively exporting meat products in the shortest possible time.
Chapter 2. Economic characteristics of the market
2.1. Sausage market trends
According to the analysis in the market of sausage products, the following main trends and features are determined:
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2.2. The main problems of the industry
The main problems of the industry currently include:
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2.3. Estimation of the number of buyers and their financial capabilities
During 2010-2018, there was an increase in the population.
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2.4. Estimated consumption per capita
The consumption of sausage products per capita is determined by GidMarket based on the ratio of market size to the population of India.
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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 and liquidity.
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Consider the dynamics of profitability before tax.
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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.
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The table shows the dynamics of this coefficient.
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Thus, the indicators of profitability and liquidity in the industry of sausage products are below the average Indian levels and (or) do not meet the standards, i.e. generally characterized negatively.
2.6. Compact location of industry companies in certain regions
To determine the compactness of the location of companies in the industry, let us consider the volumes of sausage production in the union territories and their shares in total production.
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However, it is worth noting that despite the fact that production is concentrated in the most populated and solvent districts and, at the same time, closest to the raw material base, in general, according to Rosstat, there are sausage manufacturers in 82 states of India (out of 85).
The distribution and dynamics of the shares of federal districts can be explained by several factors: the population size, the concentration of enterprises producing meat products, the proximity and size of the raw material base for this industry.
Diagram 13. Compactness of location of companies in the industry in certain regions in 2015-2019, %
2.7. Stage of the life cycle of the sausage market
The sausage market in India is at the stage of maturity (saturation) of the product life cycle:
– The volume of demand is maximum, stable or slightly declining;
- The market at this stage is highly segmented, enterprises are trying to satisfy all possible needs;
- The pace of sales is slowing down due to the fact that the product has already achieved acceptance by the majority of potential buyers. Profits stabilize or decline due to rising costs of protecting the product from competitors;
- The goods are produced in large quantities according to proven technology with good quality;
– The competition in the field of prices becomes sharper, original developments of competitors appear.
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It is at this stage that the likelihood of repeated technological improvement or modification of the product is most effective. 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 moment, various marketing activities, mass and intensive advertising, price offers will be effective.
Market stability is due to the following factors:
The interest of the population in the purchase of sausages for quick snacks, salads or a festive table.
The restriction of meat imports has led to the development of India's own meat production. Now there is a growing interest of meat producers in the further deepening of its processing in order to increase the profitability of the industry. Manufacturers are working on new technologies for processing products, developing original recipes and packaging, expanding the range, and considering storage and transportation issues.
Chapter 3
Macroeconomic factors influence the dynamics of all sectors of the Indian economy, including the sausage market. The main groups of factors are: economic, political, social and technological.
3.1. Economic components
GDP (gross domestic product) is used to determine the rate of economic development of any state. GDP is a macroeconomic indicator that reflects the total value of goods, works and services that were produced and provided in the country in a year. Gross domestic product is the main indicator on the basis of which the level and pace of the country's economic development are determined.
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Let's consider some experts' estimates of India's GDP dynamics forecast.
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Table 3. Forecasts of various sources for real GDP in India in 2021-2023 (data for June-September 2021), %
Thus, experts disagree on the forecast for the medium term:
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Industrial Production Index
This is an indicator of the dynamics of the volume of industrial production, its rise or fall, is defined as the ratio of the current volume of production in monetary terms to the volume of industrial production in the previous or other base year. This index characterizes the change in GDP due to the fundamental sectors of the economy: mining, manufacturing, production and distribution of electricity, gas and water.
3.2. Social Components
In addition to the two previously mentioned factors that negatively affect the market, the dynamics of the population and real incomes of the population, the following social factors can be noted:
Sausage is a traditional product in India.
At the same time, meat consumption is, in principle, a historically fixed culinary tradition and an integral part of the national cuisine of all peoples of India. The invention of sausages is an important event, since with the help of them it became possible to quickly and tasty set the table for any holiday, arrange quick snacks, and it was possible to extend the storage of meat products many times over (compared to chilled meat). The positive influence of the factor.
The fashion for a healthy lifestyle and the consumption of fresh natural products has a negative impact on the sausage market, stimulating adherents of a healthy lifestyle to replace sausages and smoked meats with freshly prepared dishes, including dietary parts of red meat and poultry.
Despite the presence of useful products in the assortment of sausages (for example, children's sausages, doctor's sausage), in general, sausages are not considered useful due to the large proportion of lard, meat-free components, etc.
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Modern trends in the development of large cities and changes in human lifestyle.
Today, we can note an increase in the temporary load of a working person associated with his work activity and personal life. At the same time, in recent years there have been strong changes in the social sphere, which in turn change the attitude towards food consumption. These include factors such as a decrease in the number of people in one family, an increase in the number of single people, an imbalance of time towards the working day, increasing labor mobility, a lack of culinary skills and a desire to acquire them.
3.3. Technological components
The development and diversity of substitute products is a factor that negatively affects the sausage market.
Import dependence of equipment for the production of sausages can be a factor that negatively affects the market.
The widespread problem of India is the backwardness of the material and technical base of production.
Until recently, most types of equipment were purchased abroad, and today the price for it has increased greatly. Equipment that meets the requirements of modern meat processing production is mainly purchased for foreign currency, which is not available today for some manufacturers.
In connection with the moral and physical depreciation of equipment (especially characteristic of small regional producers), the profitability of production is reduced. But the advantage of the industry is that the technological process does not require expensive and difficult-to-manage equipment and the material and technical base is not rare, unique, expensive and complex.
The country continues, although not as intensively, to develop new ways of packaging, transporting and storing meat products.
Raw materials and technology for the production of meat products are a key, but not the only factor that determines the quality and freshness (shelf life and readiness to eat) of the product on the table of the end consumer. The production of quality sausage packaging as a process also requires a balanced approach to raw materials and the process of preparing them for direct use. Materials must be environmentally friendly, protecting meat products during the current shelf life of the product from environmental influences and external damage.
Dynamics of raw industries.
3.4. Political Components
The tense political situation in interstate relations has a negative impact on all spheres of the Indian economy. The main activities of the state and the strategic tasks at present are the development of new models of cooperation with the US and the EU and the approval of India in the world monetary system. Anti-India sanctions and the generally sharp deterioration in relations between Western countries and India largely determine India's foreign policy.
Credit policy.
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State regulation is a factor that generally has a significant impact on the current market situation. It is a set of centralized administrative influence on the activities of a sector of the economy through the formation of a regulatory and legislative framework.
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Thus, state regulation is a very significant factor for this industry; its influence can generally be considered positive, supporting the development of domestic production of sausages.
The Government of India is developing and implementing various programs and measures aimed at supporting the domestic agricultural producer.
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3.5. STEP analysis of the sausage market
Consider together the main factors affecting the market and, accordingly, demand.
Table 5. STEP analysis of factors influencing the sausage market
All groups of factors have a significant impact on the sausage market.
All groups of factors have a multidirectional influence on the development of the market.
Chapter 4. Assessment of the degree of competition
4.1. Scale of competition (local, regional, national, global)
Consider the world statistics on exports and imports of sausages in 2020.
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Diagram 22. Leading countries in the export of sausages in 2020,%, thousand tons
The largest volume of sausage products is exported: ...
Thus, in comparison with other countries (global competition), India exports and imports insignificant volumes of sausages.
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Thus, national and regional types of competition are most pronounced in the sausage market.
4.2. Number of competitors and relative market shares of the largest competitors
According to IS Fira, “production of sausages” (OKVED2 10.13.2) is the main activity for 160 companies, of which only 2020 have positive revenue in 113. This small number is explained by the fact that most market companies indicate the main activity of more than general - 10.13 ""Manufacture of products from meat of slaughter animals and poultry meat"". There are already almost 2200 such companies, of which there are about 2020 with positive revenue in 1500. The market is highly competitive.
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The assessment of the share of the largest competitors in the sausage market in India was carried out by GidMarket using data on their total revenue, estimated data on product output in physical terms, data from companies in terms of output, and expert estimates.
Estimation of market shares is complicated by the existing error, which is associated with the impossibility of dividing the share of producers between the sale of sausages and other categories of their products.
4.3. Competition from substitute products
The main competition for sausage products is made by products from the general group OKVED 2: (10.13) Manufacture of products from meat of slaughter animals and poultry meat: processed meat (salted, smoked, etc.), semi-finished meat products, canned food, culinary meat products. For example, stew (canned) is traditionally included in the diet of Indians, it simplifies the preparation of a number of dishes and the organization of snacks.
The fastest growing market in recent years is the market of meat and meat-containing semi-finished products. Meat and meat-containing semi-finished products create serious competition for sausages and canned meat. It is this trend that is noted by market operators and official statistics.
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The market for semi-finished meat products in India is at the stage of renewed growth: despite the culinary traditions of the country's population, formed on the basis of a large proportion of the use of meat products, the use of semi-finished products until recently was not widespread, their range was limited and represented mainly by frozen products with stable small amounts of consumption.
Today, this market has entered a new stage of growth, caused by a change in consumer behavior and habits of citizens, their orientation towards reducing the time for cooking without losing the biological value and usefulness of the finished dish.
At the same time, a number of sausage products also have a reputation as a healthy product - for example, children's sausages, doctor's sausage, etc.
But on the other hand, in open sources (the Internet, the press) today there are a number of articles about the dangers of sausages due to the large proportion of bacon and meat-free components in their composition, about reducing their biological value due to the adjustment of the recipe by manufacturers. There are also disputes about the production and usefulness of canned meat.
At the moment, the threat to the sausage market from substitute products is quite high:
- The main competitors - semi-finished products, canned and processed meat (salted, boiled, baked) are not inferior in nutritional value to sausages;
- But at the same time, preparation for eating sausages is much easier and faster than preparing dishes from semi-finished meat 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)
In the first half of 2020, many markets felt the impact of the pandemic and the onset of the economic crisis.
Let us analyze data on the impact of recent crises on the sausage market (the global crisis of 2008 and the currency crisis in India in 2014).
Diagram 24. Dynamics and volume of the sausage market in 2007-2020, thousand tons, %
5.2. Analysis of the impact on the state aid industry at the current date
Forecasting the development of the sausage 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.
At the end of March 2020, the government identified 22 industries that will be the first to receive state support in the context of the economic crisis and the coronavirus pandemic: the government commission on improving the sustainability of the Indian economy, chaired by First Deputy Prime Minister Andrey Belousov, approved a list of sectors of the economy most affected by the deteriorating situation in in connection with the spread of a new coronavirus infection, to provide priority targeted support.
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Agricultural enterprises and enterprises processing agricultural products are not included in the list of so-called affected organizations that suffered financial and material losses from the introduction of the self-isolation regime.
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5.3. Assessment of the degree of impact of the crisis due to covid-19 on the analyzed market. Barriers existing in the sausage market
Among the main barriers in the sausage market are:
- Consumer demand for sausage products, as a product that does not belong to the category of essential products, is the main factor determining market performance, and primarily depends on the level of income and spending structure of the population (especially in times of crisis), taking into account the price of the product . Accordingly, with rising prices for products, consumer demand for sausages may undergo structural changes (consumers will switch to cheaper products).
- Prices and production volumes depend on the prices of raw materials, which have shown significant growth in recent years.
- Promotion of proper nutrition and healthy lifestyle in recent years, which is why many consumers are interested in meat and more natural processed products.
- The factors hindering the growth of the market also include the formation of a negative public opinion:
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Expert opinions on the impact of the pandemic and quarantine on the sausage market vary:
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The participants of the study noted that against the background of falling real disposable incomes of the population and rising unemployment, consumer preferences have changed. They consider poultry products, boiled sausages and sausages to be the least affected and have the potential for growth. Fairly stable demand was shown by chilled semi-finished products, frozen foods and canned food.
Demand for more expensive products - smoked sausages, delicacies, hams - stagnated or fell.
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“If real incomes rise, then consumers will increase their spending on high value-added products, which include sausages.”
5.4. Prospects and growth drivers for the sausage market
Let's present the forecast data of the Ministry of Economic Development of India for the medium term.
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An updated full version of the macro forecast will be published in September 2021.
The main drivers of the sausage market in the coming years may be:
- Positive dynamics of real disposable incomes of the population;
- Maintaining traditions and habits in the daily menu of the population;
- Restoration and increase in the pace of life of the population;
- State support for agriculture and meat processing industries;
- Development of packaging methods, including the positive dynamics of sales of various types of cuts.
5.5. Forecast for the development of the sausage market in the context of the current economic crisis due to covid-19
Thus, a sharp improvement in the economic environment, according to MED estimates, is not expected, although longer-term forecasts suggest a generally positive trend.
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GidMarket analysts predict that in 2021 the growth of the Indian sausage market as a whole will be ...
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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
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 sausage products market, 2013 - 2020, thousand tons
Diagram 2. The ratio of imported and domestic products in the sausage market, 2013–2020, %
Diagram 3. Dynamics of sausage production volumes in India, 2013–2020, thousand tons
Diagram 4. Volume and dynamics of imports of sausages, 2013–2020, thousand tons
Diagram 5. The volume and dynamics of exports of sausages, 2013–2020, thousand tons
Chart 6. Share of exports in production, 2013–2020, %
Diagram 7. Population dynamics in India as of January 1, 2010-2021, million people, %
Diagram 8. Population forecast in India for the period 2021-2024, million people
Diagram 9. Dynamics of real incomes of the population of India, 2011 - 2020, 2021 (Q1 and Q2), % to the previous year
Diagram 10. Volume of consumption in the sausage market per capita, 2013–2020, kg/person
Diagram 11. Profitability before tax (profit of the reporting period) in the sausage industry in comparison with all sectors of the Indian economy, 2015-2020, %
Diagram 12. Current liquidity (total coverage) for the sausage industry in 2015–2020, times
Diagram 13. Compactness of location of companies in the industry in certain regions in 2015-2019, %
Figure 14. Stage of the life cycle of the sausage market
Diagram 15. Dynamics of India's GDP, 2007-2020, % to the previous year
Chart 16. Monthly dynamics of the US dollar against the rupee, 2015-2021 (Jan-Aug.), Rs. for 1 US dollar
Diagram 17. Dynamics of India's IPP in 2014 - 2021 (Jan-July), % to the previous year
Diagram 18. Dynamics of retail trade turnover, 2013 - 2021 (Jan-July), % to the previous year
Diagram 19. Index of agricultural production for all categories of farms in India, 2013-2020, % to the previous year, in comparable prices
Chart 20. Dynamics of the average interest rate on loans, 2015-2021 (Jan-Jun), % 33
Chart 21. Leading import countries of sausages in 2020, %, thousand tons
Diagram 22. Leading countries in the export of sausages in 2020,%, thousand tons
Diagram 23. Shares of the largest competitors in the sausage market in 2020, %
Diagram 24. Dynamics and volume of the sausage market in 2007-2020, thousand tons, %
Diagram 25. Forecast of the volume of the sausage market in 2021–2025, thousand tons
Tables
Table 1. Gross margin of the sausage industry in comparison with all sectors of the Indian economy, 2015-2020, %
Table 2. Absolute liquidity of the sausage industry in comparison with all sectors of the Indian economy, 2015-2020, times
Table 3. Forecasts of various sources for real GDP in India in 2021-2023 (data for June-September 2021), %
Table 4. Weighted average interest rates of credit institutions on credit operations in rupees, excluding PJSC Sberbank (% per annum), 2015-2021 (Jan-Jun)
Table 5. STEP analysis of factors influencing the sausage market
Table 6. Main companies participating in the sausage market in 2020
Table 7. Production of meat semi-finished products, sausages and canned meat in 2017-2020, units rev.
Table 8. Assessment of the impact of recent crises on the industry
Table 9. Analysis of the impact on the industry of the state aid proposed to date
Table 10. Forecast indicators of the development of the Indian economy in 2021-2024, %
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