Strategies for the 90's highly competitive sectors of the food processing industry

Abstract

The food processing industry is one of the most important industries in the country. This is in terms of is massive employment potential, potential for boosting exports and contributing to rural development. What makes it so exciting from our point of view, is the fact that the overall potential for this industry is still very much below what it should be. Food processing could make the biggest contribution to the country’s growth in the coming years. We analyzed four industries namely the chocolate, the potato snacks, the biscuits and the fruit juice industries. Each industry has a unique competitive situation. In chocolates the fight is between three large manufacturers, biscuits are characterized by a fight between the organized and the unorganized sectors, in potato chips the situation is the same though there is greater competition with in the organized sector while in fruit juice the problem is in expanding the market potential. The strategies we broadly looked into were in backward link ages which are particularly important in chocolates and fruit juices where efficient backward linkages are particularly important in cutting coats. We also looked at packaging which is a neglected area in some of the industries we boost sales and exports and pose an entry barrier to competition. Export today are a critical factor in any industry particularly food processing. We looked at export related issues in each of the industries particularly fruit juices. We looked at these issues because these are more critical to success than the 4 ‘p’s alone. Marketing issues specific to each industry were discussed. In chocolates it was distribution and promotion, in biscuits product mix and promotion, in potato chips pricing and packaging and in fruit juice international marketing, purchase and packaging.