India is a country of enormous ethnic, linguistic, and cultural diversity. Its landmass is roughly one-third the size of the United States, it has a population of over 1.1 billion, and it comprises 29 states and six Union Territories (under federal government rule). The states differ vastly in resources, culture, food habits, living standards, and languages. While vast disparities in income levels exist, particularly among the rural and urban populations, an estimated 250 to 300 million consumers are considered middle class and capable of purchasing imported products such as Washington apples.
In the years following independence from the British, India followed a socialist-protectionist policy of import substitution and outright banning of consumer goods considered "nonessential." However in the 1990s, economic reform opened up the market, and in 1999, the first shipments of Washington apples entered the country. From that first season’s –shipments of 20,000 boxes, the market has grown to over 1.4 million in 2006-2007 and shows no signs of peaking.
Several reasons account for the huge potential of the Indian market. India produces 50 to 70 million boxes of apples per year, primarily in the northern highlands. As the domestic supply is at its peak in the fall (September to December), until recently it was thought that Washington’s window was after the Indian crop finished. However, as the market for Washington apples has developed, increasingly importers are bringing in Washington apples as a high-quality alternative to domestic apples. Although the greatest volumes will continue to be shipped after the bulk of the Indian apple season has finished, there is now increased opportunity at the start of the season.
India is a predominantly vegetarian country. Although there are regional differences in the strictness and number of vegetarians, the levels are higher in states like Maharashtra and Gujarat, which are important target markets for Washington apples. Also, vegetarianism tends to be more common among higher income groups. With such a high dependence on non—animal sources of energy, consumption of fresh fruits and vegetables accounts for a large proportion of the Indian diet.
The Indian economy (growing continuously at over 8 percent annually), overall improvement in the nation’s infrastructure, and the massive domestic and foreign investment in retail make India one of the most exciting markets for Washington apples. Washington Apple Commission activities are concentrated on the middle-class segment, with its rising incomes, more working women, a desire to adopt western lifestyles, and a willingness to spend more on foods that are good and nutritious.
The pace of change in the Indian retail landscape is so fast that it will be most definitely a part of contemporary economic history. There has already been a visible transformation in food retailing in urban areas with several new hypermarkets, supermarkets, and convenience stores springing up. With more and more consumers demanding an international shopping experience, there has been a gradual shift from traditional small shop or wholesale market shopping to an organized, supermarket format.
Industry sources estimate that investment in retail and the supply chain could reach $22 billion in the next five years. More than 600 retail malls are being planned to span the country by 2010. Currently, most food is sold through small shops, street vendors, and other small "unorganized" distribution channels, but the share of the "organized" food retail sector is expected to reach 9 to 10 percent of the total food and grocery retail –market by 2010. This has opened up new opportunities for Washington apples.
The growth for Washington apples in India is helped by increased consumption of apples in medium and smaller cities. Availability of Washington apples has even extended to small roadside retailers in a number of cities. The volume between May and August represented the biggest growth curve for Washington apples, directly battling competition from the Southern Hemisphere. This shows that major traders are establishing long-term relationships with suppliers from Washington and are gradually moving away from spot-opportunity trade practices.
India, a predominantly Red Delicious market, is increasing imports of other varieties like Gala, Golden Delicious, and Granny Smith from Washington. Some organic varieties of Washington apples were also imported last season, a trend which is also likely to grow.
With so much opportunity in India, the Washington Apple Commission is organizing an industry trade mission to visit four key markets from March 15-26, 2008. The trip will start in Chennai (Madras), the major port for southern India and location of many of the major importers. From Chennai, the group will travel to Coimbatore, a medium-sized city of 2 million inhabitants and the second largest city of Tamil Nadu State. Coimbatore is a center of textile and industrial development and has a high per-capita income base. The next stop is Mumbai (Bombay), the commercial and entertainment capital of India. With an estimated population of 13 million, it is one of the world’s largest cities and has one of India’s highest living standards. The final stop will be the Indian capital of Delhi. The group will visit wholesale markets and retail stores, see cold-storage facilities, meet with trade members, and observe the booming growth firsthand. Participants will be responsible for covering their own costs, estimated at roughly $3,800 plus airfare.
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