K.P. Sudheer
K.P. Sudheer: (ICAR National Fellow) Professor & Head, Department of Agricultural Engineering Project Coordinator, Centre of Excellence in Post-harvest Technology, V. Indira: Former Professor & Head, Department of Home Science, College of Horticulture, Vellanikkara, Kerala Agricultural University, Thrissur, Kerala- 680 656

A publication of the sort “Entrepreneurship Development in Food Processing” covering various facets of entrepreneurial opportunities in processing sector. The editors have made an exhaustive effort to provide information on various entrepreneurial opportunities in food processing sector. This book clarifies most of the technical questions which arises on entrepreneurship ventures in food processing sector. Also, the book will be useful to prospective entrepreneurs, food engineers, agricultural engineers, food processors, food technologists, researchers and also to those who are working in the relevant fields

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   Preface

   Food processing is now regarded as the sunrise sector of the Indian economy in view of its large potential for growth and likely socio-economic impact specifically on employment and income generation. In total per cent of country GDP, fourteen per cent of our GDP is contributed by agro based sector. During and after the green revolution, India has witnessed a tremendous growth in its agricultural production. On one hand, India moved from the status of insufficiency to surplus in its food availability due to adoption of latest technologies in production systems and on the other huge quantities of our produce is lost due to poor post-harvest handling and management. It is imperative to process and preserve the available food in seasons of plenty not only to avoid wastage but also to confirm that it is available during off seasons and at reasonable price. Poverty and unemployment in rural areas continue to be the two most important challenges. Secondary agriculture and product diversification has been considered as a panacea for the present state of affairs in agriculture sector. New business ventures for processing sector must be established to avert this situation. The promotion of value addition technologies and agripreneurship offers the key for ensuring better income for the farming community and for the sustainability of farming to produce more food. This ensures nutritional security as well.

   Food processing is considered to be the most important sector which adds value to the products. However, it requires professional skills and resources in order to bring benefits to the smaller scale stakeholders in developing countries. Keeping this in mind, government has initiated Technology Business Incubation units to promote entrepreneurship and agro- industry which will open the vistas of incubation landscape to the micro segment of the vast rural economy. Agripreneurship based on latest developments in food processing sector has the potential to contribute to a range of social and economic development such as employment generation, income generation, poverty reduction and improvements in nutrition, health and overall food security in the national economy. The growth of this industry will bring immense benefits to the economy, raising agricultural yields, enhancing productivity, reducing post-harvest losses, creating employment and raising life-standards of a large number of people across the country, especially those in rural areas or production catchments. It is therefore imperative that post-harvest interventions of food crops are essential, without which the food processing industry cannot thrive. It is against this background that the present book is conceived.

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   Introduction to Entrepreneurship Development in Food Processing

   
   Sudheer K P, Sangeetha K Prathap
   1 - 16 (16 Pages)
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   Introduction

   World’s population is continuously on the rise, triggering the demand for food. The Food and Agriculture Organization of the United Nations (FAO, 2011) observed that 70% increase in food production will be needed to sustain the globe’s population by 2050. Though, increase in agricultural production and productivity is said to be the panacea to solve food security issues, the greatest challenge that need to be addressed is the inefficiencies in the supply chain; instigated by insufficient storage capacities and perishability of food products. Food preservation and processing is highlighted in this context, as it serves to conserve/improve the quality and reduce food loss due to wastage as well as add nutritional security.

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   Making of An Entrepreneur - Concepts and Functions

   
   Sangeetha K Prathap
   17 - 30 (14 Pages)
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   Introduction

   It is common that after a rocket start, entrepreneur’s lack the motivation to scale up business and eventually fails to succeed in the market. There are many factors that may lead to such failures or even success stories, the most important being the entrepreneurial skills and traits that enable business to sustain in the competitive world.

   What makes an entrepreneur competent in running a business? According to Fisher and Koch (2008), ‘Entrepreneurs are born; the advantage that they derive by birth being the natural advantage. However, we have changed our mindset now-a-days, that it is possible to nurture (make) an entrepreneur; the connotation points out that, right kind of education and training can inspire people with capacities to become motivated to be an entrepreneur.

   In this chapter, our focus will be on identifying the entrepreneurial capacities in oneself, after reviewing the essential characteristics and traits that an entrepreneur should possess. Also we try to put forward a framework for entrepreneurship, fitting into the canvas of a food based entrepreneur.

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   Role of ABI for Entrepreneurship Development in Value Addition Sector

   
   Manoj P Samuel, George Ninan, Ravishankar C N
   31 - 46 (16 Pages)
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   Introduction

   Compared to the previous decades, the scope and power of intellectual property rights (IPRs) in agriculture and biotechnology has grown substantially and their international reach has expanded. The IP regime has set up the stage for healthy competition among research centres and industries for developing and seeking novel technologies. However, compared to developed countries, once the technology is created, not much attention is paid in the developing nations on their commercial, policy, environmental, ethical and societal implications. Hence, better techniques are needed for their management, to create policy and educate professionals to commercialize and govern them. Due to the critical role of technology in a competitive environment, strategic technology management is important for farmers and agri-enterprises too. The translation of nascent technologies into new products/ services and their commercialization requires some amount of hand-holding, mentoring and incubation support.

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   Trends in Food Processing - An Opportunity to Entrepreneur

   
   Sudheer K P, Saranya S, Ranasalva N, Seema B R
   47 - 68 (22 Pages)
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   Introduction

   The food processing industry is a sunrise sector and contributes around 14% of Gross Domestic Product, 13% of India’s exports and 6% of total industrial investment. The Indian food retail market is expected to reach Rs 61 lakh crore by 2020 and the food processing industry accounts for 32% of the country’s total food market. This is considered as one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth.

   The drift towards urbanisation and busier way of life, pave path to tremendous bounce in the food market. Nowadays consumer’s approach to being fit is not about going to gym, but also consulting dietitians and adopting an adjusted eating routine. Consumer’s behaviour concerning food consumption has undergone significant changes as a result of the increased awareness about different value added food products, brands, and cuisines, and also their greater willingness to experiment and ability to pay. It leads to the concept of food security in to nutritional security. Companies are offering a wider range of products to the consumers as a result of their investments into product innovation, research and development. At present, various value added products with versatile colour, shape, ingredients etc are available in worldwide market. Among this, some food items like processed fruits and vegetables and dairy products have witnessed a momentous growth in export also. Recent surveys indicated that for companies manufacturing processed foods and beverages, rise in the obesity rate is a great challenge. Hence, efforts were made to develop commercially viable, new process protocols to design healthy products from underutilised food commodities.

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   Rice Milling Sector- A Prospective Avenue for Entrepreneurs

   
   Sudheer K P, Ravindra Naik
   69 - 96 (28 Pages)
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   Introduction

   Rice (Oryza sativa L.) is a staple food of over half the world’s people and is grown on approximately 146 million hectares, more than 10 per cent of total available land. Ninety seven per cent of the world’s rice is grown by less developed countries, mostly in Asia. Post harvest losses are considered to be contributed by storage alone, and not much attention was paid to losses occurring during harvesting, transport, threshing, drying, milling and pre-milling treatments. Quantitative loss of food grains was the main concern of the producers and the consumers. Qualitative losses at various stages were not fully recognized, but systematic studies by different organizations revealed that these losses are enormous and should be prevented. These losses cumulatively could be as high as 40 per cent and are normally accompanied by loss of quality also. Quality loss of products can take place at all stages but more particularly during drying or curing of harvested crops, storage, and milling and pre-milling treatments. Post-harvest attention is essential if the grains of higher production are to be fully exploited. Also the quality loss occurring in food grains can be extremely serious if the farming community is not aware of them.

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   Entrepreneurial Opportunities in Rice Processing

   
   Durgadevi M, Sinija V R, Hema V, Anandharamakrishnan C
   97 - 116 (20 Pages)
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   Introduction

   Rice is the major staple food for more than 70 percent of the Indian population. India cultivates more than 4,000 varieties and hybrids of rice to cater to varied consumer preferences. A portion of the total cultivated rice is also used for processed products like snacks, savouries and bakery items. India was the largest exporter of rice in 2015-16 followed by Thailand, Vietnam and Pakistan. Rice production forecast is higher at 105 MMT in 2016/17 compared to 2015/16 production of 103 MMT (India Grain and Feed Annual, 2016). Rice milling is the oldest and the leading agro processing industry of the country. Paddy grain is milled either in raw condition or after parboiling, mostly by single hullers of which over 82,000 are registered in the country. Further, over the years, there has been a steady growth of improved rice mills in the country. Most of these have capacities ranging from 2 tons /hr to 10 tons/ hour. At present, it has a turnover of more than 25,500 crore per annum. It processes about 85 million tons of paddy per year and provides staple food grain and other valuable products required by over 60% of the population. Though, rice milling is a wide spread business undertaken in India, commercializing value added products is now gaining customer attraction paving way to merge milling and value addition under a single roof. The desirability of the working population to get foods, particularly rice based products in RTE and RTC forms has thrown a positive approach to new and emerging entrepreneurs to take up a venture in commencing rice based food processing industry.

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   An Insight to Entrepreneurial Opportunities in Millet Processing

   
   Udaykumar Nidoni, Mouneshwari K, Ambrish G, Mathad P F, Shruthi V H, Anupama C
   119 - 140 (22 Pages)
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   Introduction

   21^st century challenges like climate change, water scarcity, increasing world population, rising food prices, and other socio-economic impacts are expected to generate a great threat to agriculture and food security worldwide, especially for the poorest people who live in arid and sub-arid regions. Millet is one of the oldest foods known to humans and possibly the first cereal grain to be used for domestic purposes. Millet has been used in Africa and India as a staple food for thousands of years. Typical grain texture and hard seed coat of millets increase their keeping quality but make them difficult to process as well as to cook in convenient form. Absence of appropriate primary processing technologies to prepare ready-to-use or ready-to-cook (RTC) products and also the secondary as well as tertiary processing technologies to prepare ready-to-eat value added products from millets are the major limiting factors for their diversified food uses.

   Millets have relatively poor digestibility and low bio-availability of minerals due to the presence of inherent anti-nutritional factors. The difficulties in millet grain processing present a challenge but nutritional as well as health benefits and consumer demand for health foods provide opportunities in processing, develop suitable technology for newer products and process mechanization. This change in technology and consumer food preference would help in increasing the area under millets, maintaining ecological balance, ensuring food security, prevent malnutrition and increase the scope for utilization of millet grains on industrial scale.

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   Entrepreneurship Developments in Pulse Processing

   
   Visvanathan R, Ravindra Naik, Vennila P & Borkar P A
   141 - 166 (26 Pages)
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   Introduction

   Pulses are major and cheap sources of protein in Indian vegetarian diet, providing most of the essential amino acids. Pulses are mainly consumed in the form of dehusked split pulses (Dal); and have 15-24% proteins. Various types of pulses grown are pigeon pea, chickpea, black gram, green gram, lentil, etc. Pulses are consumed because of body building properties due to the presence of various amino acids. By-products of pulses like leaves, pod coats and bran are fed to animals in the form of dry fodder. Some pulse crops like gram, lobia, urd bean & moong bean are fed to animals as green fodder.

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    Prospects in Value Addition of Soybean

    
    Ajesh Kumar V, Sumeda S Deshpande
    167 - 186 (20 Pages)
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    Introduction

    Soybean (Glycine max) is also known as the wonder bean or miracle bean or “golden grain” due to its diversified applicability. Soybean has an important place in world’s oilseed cultivation scenario, due to its high productivity, profitability and vital contribution towards maintaining soil fertility. The crop also has a prominent place as the world’s most important seed legume, which contributes 25% to the global vegetable oil production, about two thirds of the world’s protein concentrate for livestock feeding and is a valuable ingredient in formulated feeds for poultry and fish. The major soybean producing nations are United States, Brazil and Argentina. These three countries dominate in global production, accounting for 80% of the world’s soybean supply. Global production of soybean has grown at a CAGR of 2.78% from 215.69 million metric tons in 2004-05 to 283.79 million metric tons in 2013-14.

    India stands 5^th in global production of soybean. In India, soybean cultivation started in early 1970s, but it has emerged as number one among oilseed crops covering around 11 m ha area with total production of around 11.5 m tons. At present, the average productivity of soybean is about 1.3 tons/ha and it can be easily doubled in near future. Production of soybean in India is dominated by Maharashtra and Madhya Pradesh which contribute 89% of the total production. Rajasthan, Andhra Pradesh, Karnataka, Chhattisgarh and Gujarat contribute the remaining 11% production.

    About 85% of world’s soybeans are processed annually into soybean meal and oil. Approximately 98% of soybean meal is crushed and further processed into animal feed with the balance used to make soy flour and proteins. Of the oil fraction, 95% is consumed as edible oil; the rest is used for industrial products such as fatty acids, soaps and biodiesel.

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    Scope of Entrepreneurship Developments in Groundnut Processing

    
    Vishnu Vardhan S
    187 - 216 (30 Pages)
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    Introduction

    Groundnut (Arachis hypogaea L.) commonly called as Poor man’s cashew, is the 6^th most important oil seed crop in the world. It contains 48-50% oil, 26-28% protein and 11-27% carbohydrates. Groundnut is grown on 26.4 million hectare worldwide, with a total production of 37.1 million metric tons and an average productivity of 1.4 metric tons/ha. Developing countries constitute 97% of the global area and 94% of the global production of this crop (FAO, 2011). The production of groundnut is concentrated in Asia and Africa, where the crop is grown mostly by smallholder farmers under rain-fed conditions with limited inputs. Groundnuts (peanuts) are popularly used as seed oil in India. Since, they are obtained from the ground, they are called as groundnuts and also known as ‘Mungfali’ in Hindi, ‘Palleelu or Veru sanaga’ in Telugu, ‘Kadalai’ in Tamil, ‘Nilakkadala’ in Malayalam, ‘Kadale kaayi’ in Kannada, ‘Singdana’ in Gujarati and ‘Shengdaane’ in Marathi. Groundnuts are easily available round the year and almost everywhere in India. Groundnuts are also taken as snacks in many households especially in India. In reality, groundnuts are actually legumes. Since, they have all the properties of nuts like almonds, cashew nuts, etc., these are also included in the family of nuts.

    Groundnut is the major oil seed of India. It accounts for 25% of total oil produced in India. Annual production of groundnut is around 9690 thousand tones. As the crop is grown in rainfed conditions, production and productivity are highly vulnerable to rainfall and exhibit huge fluctuation between the years. In India, groundnuts are produced both during Kharif (75%) and Rabi seasons (25%). Major production catchments of groundnut are located in Gujarat holding a share of 50.77% of total groundnut production, Andhra Pradesh holding a second place (12.69%) followed by Tamil Nadu (9.91%). Following are the top groundnut producing states of India (Table 1).

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    Entrepreneurship Development in Jaggery Processing

    
    Jagannadha Rao P V K
    217 - 240 (24 Pages)
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    Introduction

    India is the largest consumer and second largest producer of sugar in the world next to Brazil. Among the sugar yielding crops like sugarcane, sugar beet, palms and sorghum, sugarcane is the second most important agro-industrial crop of the country. It is the only raw material for nearly 538 sugar mills (2014-15), producing about 28 million mt of sugar annually from a sugarcane production of 366 million tons in an area of 5.307 mh. Apart from this, it is the predominant source of potable alcohol, industrial alcohol and fuel-ethanol. In India, 35 million farmers are engaged in sugarcane cultivation and another 50 million depend on employment generated by these 538 sugar factories and other related industries using sugar. Sugarcane occupies a very prominent position in the agricultural crops of India covering large areas in UP, Punjab, Haryana and Bihar (sub tropical) and Maharashtra, Karnataka, Gujarat and Tamil Nadu (tropical). On an average, white sugar production accounts for 74% of total cane produced, 14-15% is utilized for jaggery and khandsari production and the rest is utilized for other purposes including seed.

    Jaggery and khandsari, the traditional Indian sweeteners are the natural mixture of sugar and molasses. If pure clarified sugarcane juice is boiled, what is left as solid is jaggery, which contains 65-85% sucrose. Khandsari sugar is a finely granulated and crystallized which contains 94 to 98% sucrose. In the early 1930’s, nearly 2/3rd of sugarcane production was utilized to manufacture these two alternate sweeteners. With the introduction of sugar mills and their multiple growth and better standard of living and higher per capita income, the demand for sweetener has shifted to white sugar which contains purely sucrose (99.7%).

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    Entrepreneurial Opportunities in Milk Processing

    
    Aswin S Warrier, Aparna Sudhakaran V
    241 - 268 (28 Pages)
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    Introduction

    Consumption of milk is deeply rooted in our traditions, and it is an inevitable part of the Indian diet and even has ritualistic and medicinal uses. Milk is the first and one among the most nutritious foods that every mammal consumes on earth. It supplies all the nutrients needed to ensure proper growth and development in the postnatal period. Dairy foods in general are commonly considered balanced and nutritive, being frequently included as important components of a healthy diet (Pereira, 2014). Four components of milk are dominant in quantitative terms: water, fat, protein and lactose; while the minor components are minerals, enzymes, vitamins, and dissolved gases (Guetouache et al., 2014). On an average, bovine milk is composed of 87% water, 4 to 5% lactose, 3% protein, 3 to 4% fat, 0.8% minerals, and 0.1% vitamins. Milk and milk products contribute not only nourishment to the consumers, but also livelihood opportunities to farmers, processors, shopkeepers and other stakeholders in the dairy value chain.

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    Entrepreneurship Ventures in Fish Processing

    
    George Ninan, Ravishankar C N
    269 - 292 (24 Pages)
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    Introduction

    Fish is a source of valuable animal protein and is considered a health food. This has resulted in increased consumer demand. Fish is now more expensive than meat and other animal foods. Being a highly perishable commodity, fish require immediate processing and various options are available for the value addition of fish. Fish processing, particularly seafood processing and marketing have become highly complex and competitive and exporters are trying to process more value added products to increase their profitability. Value can be added to fish and fishery products according to the requirements of different markets. These products range from live fish and shellfish to ready to serve convenience products. In general, value added food products are raw or pre-processed commodities whose value has been increased through the addition of ingredients or processes that make them more attractive to the buyer and/or more readily usable by the consumer.

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    Opportunities and Entrepreneurship Developments in Meat Processing

    
    Renuka Nayar, Vasudevan V N
    293 - 318 (26 Pages)
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    Introduction

    Meat is a highly nutritious animal product relished by majority of the population in India. India produced around 6.2 million MT of meat in 2013 (FAOSTAT, 2013), standing at fifth position in world meat production and accounts for only 3 per cent of total meat production in the world (APEDA, 2017). Contribution of livestock sector to national economy in terms of gross domestic product (GDP) was 4.1 per cent in 2012-13 (Islam et al., 2016). The percentage of meat subjected to processing in India is only 1-2 per cent compared to 70 per cent in developed countries (Sen et al., 2013). Relatively higher proportion of poultry (7-8%) is converted into further processed poultry products. Major proportion of the meat produced in the country is derived from old and unproductive animals. Availability of spent birds is also on the rise due to the rapid growth in poultry industry. Meat from such animals and poultry has less desirable palatability attributes, especially tenderness, which makes it more suitable for processing into value added products. This will provide consumers with more acceptable, convenient, healthy and versatile products while simultaneously increasing the economic returns to the processor. The profitability of meat industry is critically dependent in deriving extra value from lower-value meat cuts. To achieve this, value must be added in the eyes of the consumer across the wide chain of value added products.

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    Using the P’s of Marketing to Sell your Product

    
    Sangeetha K Prathap
    319 - 332 (14 Pages)
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    Introduction

    Successful marketing is important to every business. Marketing is a critical tool for establishing awareness, attracting new customers and building lasting relationships. It is the process of planning and executing conception, pricing, promotion and distribution of your ideas, goods or services to satisfy the needs of individual consumers or organisations. It is as important to put adequate efforts on marketing your product or service, no matter whatever time you have dedicated to development of part of it.

    We live in an electronic era, where the globe has shriveled into our fingertips. Customers are having lot of options to choose from. Information of what you need is reaching you within a click, that your decisions are often being guided by such information. Marketing uses communication and advertising tactics to persuade customers that your brand, including your products and services are exactly what they need. Marketing is thus crucial to your business which can have a bearing on the success rate and requires research, planning and appropriate budget allocations.

    One of the important concepts in marketing is that of marketing mix. The elements of this mix are: product, pricing, physical distribution and promotion. Marketing management is that which optimizes the elements in the marketing mix, so that organisation is able to achieve its objectives while gaining customer utility. This chapter throws light on various aspects of marketing mix that an entrepreneur needs to focus upon to ensure success.

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    How to Prepare Business Plans

    
    Sangeetha K Prathap, Sudheer K P
    333 - 346 (14 Pages)
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    Once you have embarked upon the idea of doing (any) business, your concentration should be focused on doing things that should be relevant to maximizing returns and minimizing risks. Looking upon why businesses fail, one can find that it is usually because entrepreneurs are ill equipped to identify real business opportunities and take advantage of them, or they don’t anticipate and adapt critical changes or they fail to recognize or minimize real threats to business. Successful entrepreneurs are found to intensively pursue the path of planning by preparing business plans, for having foresight of critical incidents that would affect business and possible ways of action.

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    Model Business Plan

    
    Sangeetha K Prathap, Sudheer K P
    347 - 362 (16 Pages)
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    Executive summary

    The enclosed project report envisages the setting up of a modern rice mill complex with attached parboiling facilities having an average processing capacity of 16 MT of paddy per day. The initial investment of the project is estimated to be Rs 480.17 lakhs. Sales Realization is assumed as constant for all the 7 years; amounted Rs 1129.2 lakhs. Pay Back Period for the project is estimated as somewhat more than 3 years. Internal Rate of Return for the project is 31%. Net Present Value is Rs.367.92 lakhs which is a positive value. It indicates that present value of cash inflows is greater than present value of cash outflows. Projected working results of the project throws light on its viability.

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    Appendix

    Appendix -1 (Chapter 1) - Government Schemes

    Prime Minister’s Employment Generation Programme (PMEGP)

    Prime Minister’s Employment Generation Programme (PMEGP) is a credit- linked subsidy programme launched by Ministry of MSME in 2008-09 for creation of employment in both rural and urban area of the country.

    The PMEGP assists entrepreneurs who are willing to start enterprises in the fields of agro based food processing industry, forest based industry, handmade paper and fibre industry, mineral based industry, polymer and chemical based enterprise, rural engineering and biotech industry and service and textile industry. A negative list also is available as some activities are being continued even after strict enforcement which is available in the website.