The global food and beverages expenditure increased dramatically after the economic slowdown in 2000 and 2001, and was primarily buoyed by the North American as well as western and eastern European countries. The growth in Asia was moderate due to the sluggish economic conditions; while in Latin America, it was negative. India is the second largest producer of food and beverages in the world, after China. The transition from an era of food scarcity to surplus is testimony to the tremendous progress made by India. The rise in population, income levels, standard of living, and health awareness have resulted in higher production of food and beverages.
The infrastructure and labor factors also play a critical role in the development of this industry. General social and labor policies greatly impact this demand-driven industry and industry-specific policies, wherever effectively enforced, provide added impetus.
With some of the world's fastest growing economies such as China and India belonging to this region, Asia Pacific is expected to exhibit accelerated growth in demand for the chemicals and materials as well as food and beverages industries. In India, the infrastructure investment as a percent of gross domestic product (GDP) touched a 33-year low at 3.3 percent in 2003; however, it increased to 3.5 percent in 2005.
The dependence on raw materials is the most critical constraint faced by the domestic industry, which is beyond the control of the government and chemicals materials companies. The industry requires a significant amount of natural gas and crude oil as raw materials for the production of organic chemicals, petrochemicals, and fertilizers. Lack of infrastructure is another factor, which adversely affects the adequate supply of raw materials to the production sites, especially the food and beverage industry. This scarcity affects grading, packing, and pre-cooling, while the lack of chilling infrastructure for milk and modern abattoirs for the meat-processing sector further compounds the issue.
