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International Marketing Plan For Export of Spices

Submitted to: Submitted by:

Prof Ramakrishnan Mr Ankur Kr Srivastava

(2010-2012)

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Introduction to spices 

India is known as the 'The home of spices'. There is no other country in the world that produces

as many kinds of spices as India. The climate of the country is suitable for almost all spices. In

India, spices are the important commercial crop from the point of view of domestic consumption

and export.

Spices constitute an important group of agricultural commodities  which are virtually

indispensable in the culinary art. In India, spices are important commercial crops from the point

of view of both domestic consumption and export. Besides, huge quantities of spices are also

being consumed within the country for flavouring foods and are also used in medicine,

pharmaceutical, perfumery, cosmetics and several other industries. 

According to the International Organization For Standardization (ISO); The term 'spices

and condiments' applies to such natural plant or vegetable products or mixtures thereof, in whole

or ground form, as are used for imparting flavour, aroma and piquancy to and for seasoning of 

foods". There are over 80 spices grown in different parts of the world and around 50 spices are grown in

India. The spices that India can offer in abundant quantities are pepper, ginger, turmeric,

chilli, cardamom, celery, fenugreek, fennel, cumin, dill, coriander, cinnamon, ajowan (bishop'sweed), cassia, clove, nutmeg and mace. Major spices of export are pepper, cumin, cardamom, ginger, turmeric and chillies. Other minor

spices include ajowan, aniseed, celery seed, caraway, fennel, fenugreek, coriander, garlic, onion,

saffron, vanilla etc. Among the spices exported, pepper has the leading position in terms of both

quantity and value realised. The 'Alleppey Green' Cardamom is considered the best grade

available in the world.

Among the spices exported pepper has the leading position in term of both quantity and value

realized. The alleppey green cardamom is considered the best grade available in the world.

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Major Spices grown in India 

Asafoeti

A popular spice in foods and medicines

Cardamom

The Queen of all spices ChilliGrown throughout the country and is used in almost all dishes. CinnamonIt is the dried bark of an evergreen busy tree. Cumin It has a particular value in the blending of Indian curry powder.  Fennel The dried ripe fruit of a perennial aromatic herbaceous plant. Ginger A major crop cultivated in India marketed as fresh and dried spice.  Mustard It is used for its appetising flavour and preservative value Parsley One of the best known and used in culinary spices Pomegranate It is endowed with excellent medicinal properties. Turmeric The spice is quite popular in foreign countries. Bishops WeedA native Indian plant is an aromatic spice. Cassia The dried husk of a small, bushy evergreen tree Clove One of the oldest spices in the world. Coriander The fragrant spice has its own medicinal properties. Fenugreek  The ripe, dried fruit of an annual leguminous herb. Garlic It has an attractive flavour and acknowledged medicinal value. 

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  Mint Mint is the erec plant with dark green leaves with pleasant flavour Onion One of the oldest spices known to human race. Pepper The king of all spices and best known in the world RosemaryThe spice is quite popular in foreign countries. Vanilla Vanilla is a seed pod of a tropical climbing orchid. 

India's share in world trade of spices 2010 

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Board's initiatives for export development

Spices exports have registered substantial growth during the last five years, registering an annualaverage growth rate of 21% in value and 8% in volume. During the year 2010-11, spices exportfrom India has registered an all time high both in terms of quantity and value. In 2010-11 theexport of spices from India has been 525,750 tonnes valued Rs.6840.71 crores (US $ 1502.85Million) as against 502,750 tonnes valued Rs.5560.50 crores (US $ 1173.75 Million) in 2009-10,registering an increase of 28% in dollar terms of value and 5% in volume. India commands aformidable position in the World Spice Trade with 48% share in Volume and 44% in Value.

Trend In India's Spice Exports

Board has formulated and implemented a three tier quality certification programme conformingto HACCP. Award of Spice House Certificate for good manufacturing practices, award of Logofor quality of the product and accreditation under ISO 9000 for international acceptance are thethree certification systems adopted by the Board. Yet another area of activity centered upon bythe Board is Value Addition. India can now boast as the monopoly supplier of spice oils and

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Quantity in '0 MT Value in crore

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oleoresins the world over. In the case of curry powders, spice powders, spice mixtures and spicesin consumer packs, India is in a formidable position. The consistent effort of the Board duringthe last one-decade has improved the share of the value added products in the export basket tomore than 55%.

SWOT ANALYSIS Strength 

1. Favorable climatic condition. 2. Having large area for production. 3. Emerging markets like Europe and other developed countries. 4. Large numbers of exporters are involved in export of spices 

Weakness 1. Quality is not as per the international standards.

2. Use of more chemical Example: UK denied importing chilli powder from India few years

3. Lack of skilled entrepreneurs.

Opportunities

1. India can be the largest exporter in the world as this time it captures the major international

Market share. 2. As the increase of its consumption in developed country there can be export at a large

quantity. 

Threat

1. Due to not having the standard quality of spices India may lose its grip in International

Market. 2. The major competitors like Sri Lanka, Bangladesh, and Pakistan etc are also growing at good

pace. 3. Other countries having good technical aspect for its production. 

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COMPARATIVE TRADE ANALYSIS Comparative trade analysis 

The year 2007 saw spices board turning out yet another peak performance when the spices

exports attained all time high export revenue of US$ 940.47 million. The export value in dollar terms reached US$940 million against the target of 377000 tones the

achievement was registered an increase of 28%. Similarly in value terms the achievement was

nine percent more than the target.  

Export of spices from India

The export performance during the year was better in respect of pepper, cardamom (small),

cardamom (large), turmeric, garlic, nutmeg and mace, vanilla, curry powder/paste, mint

products, spice oils and oleoresins. 

The improvement was spectacular in the case of garlic when the country exported 29250 tonnes

of garlic during the year as compared to 2250 tonnes during the previous year. Though there was decline of 17.9% in quantity of exports, chilli continued to be the largest

exported item during 2006-07 with an export of 113250 tonnes. The average unit value

realization of the spices export as a whole during the year has increased to Rs. 71.61 per kg from

Rs. 65.58 per kg in 2005-06. 

One of the positive aspects of the exports during the year was increased in export of cardamom

during 2007-08. 

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Producing Countries of Selected Spices

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Promotional Brochures

Spices Board India Spices Board (Ministry of Commerce, Government of India) is the flagshiporganization for the development and worldwide promotion of Indian spices. The Board is aninternational link between the Indian exporters and the importers abroad. The Board has been

spearheading activities for excellence of Indian spices, involving every segment of the industry.The Board has made quality and hygiene the corner stones for its development and promotionalstrategies. Multi faceted activities

  Promotion of exports of spices and spice products

  Maintenance and monitoring of quality of exports

  Development and implementation of better production methods, through scientific,technological and economic research.

  Guidance to farmers on getting higher and better quality yields through scientific

agricultural practices.

  Provision of financial and material support to growers.

  Encouraging organic production and export of spices.

  Facilitating infrastructure for processing and value addition

  Registration and licensing of all spice exporters.

  Assistance for studies and research on better processing practices, foolproof qualitymanagement systems, improved grading methods and effective packaging techniques.

   Production of promotional and educative materials in a variety of media for the benefit

of exporters and importers  Package of services for importers

  Helps importers and exporters in establishing mutual contact.

  Identifies competent supply sources for specific requirements of importers

  Processes and forwards foreign trade enquiries to reliable exporters.

  Organises a common platform for interaction between Indian exporters and internationalbuyers through the World Spice Congress.

  Examines each complaint from importers for corrective and preventive action

  Spearheads the quality improvement programme for Indian spices.

  Manages a comprehensive and up-to-date data bank for exporters and importers.

  Brings together international bodies, exporters and policy makers through contact groupprogrammes.

  Makes India’s presence felt in major international food fairs; conducts food festivals and

cooking demonstrations.

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To assist exporters in penetrating the developed markets through launching/promoting own brands orbuying out existing brands. The scheme aims to promote Indian Spice Brands in new, sophisticated andaffluent segments in foreign markets, targeted beyond the ethnic Indian population in these countries andin the Middle East. There are two activities assisted under the scheme viz.,

[1] Product and Packaging Development and Bar Coding

[2] Brand Promotion.

1. Product and Packaging Development and Bar Coding:Effective brand promotion programmes for identified products and its packing, which involves high costof development, are supported. U nder this activity the assistance will be given for developing appropriate

product, packaging and compliance with other statutory requirements in force in the target marketincluding traceability details and Bar Coding. Similarly the Board provides assistance to exporters todevelop products to promote different values/applications of spices. Board will also provide assistance tothe exporters to buy out existing foreign brand to capture that market and expand the range of Indianproducts through this brand.

2. Brand Promotion:

Under this component, positioning of specified brands in the identified outlets in selected cities as well as

necessary promotional measures for brand building such as Media promotion, Promotional trips abroadparticipation in international fairs etc., are considered for financial assistance. The Board will undertakethe required market studies and marketing strategy development for promoting branded products and itwill be disseminated to the exporters for market penetration.

There are four components under the programme of ‘Infrastructure Improvement’ viz., 

(1)  Adoption of Hi-Tech in Spice Processing

(2)  Technology and process upgradation

(3) Setting-up/up-gradation of in-house quality control laboratory

(4) Quality certification, validation of check samples, training of lab personnel for export development of spices and spice products. Providing assistance for these components are necessary to empower theindustry to adopt such methods of processing the produce by which the country may acquire a distinctimage as the source of quality/safe products, consistency in meeting quality requirements and obtainrecognition for the country as the ‘international processing hub’. 

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(1) Adoption of Hi-Tech in Spice Processing In order to encourage higher end value addition in spices processing through the most modern andscientific facilities for ensuring food safety and quality in the international market for increased valuerealization, the Board provides financial assistance to the exporters to adopt hi-tech processing facilitysuch as Cryo-grinding, sterilization, steam washing, super critical fluid extraction, gas flushed MVPpackaging and/or any other advanced systems in processing, testing, packaging etc. Cost of high-tech

plant & machinery, packing system, electrical installations and consultancy charges will be supportedunder the component.

(2) Technology and Process Upgradation The scheme proposes to provide financial assistance to the exporters to upgrade their existingprocessing/packaging facilities to produce better products of high quality standards to match therequirements of foreign buyers. Cost of plant & machinery, packing system, electrical installations andconsultancy charges will be supported under this component.

(3) Setting-up/up-gradation of in-house quality control laboratory 

To promote quality, financial assistance for establishing of facilities to undertake analysis of variousparameters on quality of the products including detection of pesticide residues, aflatoxin, physical,chemical and microbial contaminants are provided to exporters. Cost of laboratoryequipments/instruments, glassware, laboratory furnitures and other accessories including electricalinstallations and consultancy charges will be supported under this component.

(4) Quality certification, validation of check samples and training of 

laboratory personnel.

The following activities will be eligible for financial assistance under this component:

a) Accreditation/Certification of processing units for ISO, HACCP, SQF2000, GMP traceability, FDA Registration etc.

b) Validation and standardization of check samples sent abroad.

c) Imparting training for laboratory personnel.

Under this component, cost of accreditation/certification of processing units (including renewal), cost of analytical charges for validation/standardization in laboratories abroad and charges/expenses forupgrading technical knowledge of laboratory personnel of the exporters in reputed internationallaboratories preferably approved by USFDA, EU etc.

There are three components under the programme of “Trade Promotion” viz.,

(1)  Sending Business Samples Abroad(2)  Printing Promotional Literatures/Brochures(3)  Packaging Development and Bar Coding Registration

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Are supported for promoting spices and spice products.

Providing assistance for these components are essential for developing export business, securing orders,better presentation of capabilities to the buyers and to promote modern/scientific packaging for retailmarket by which the country may build up better image, increased shelf life for the products and highervalue realization.

(1) Sending Business Samples Abroad:For finalizing the transactions on the basis of samples and to provide more clarity in dealings and also toeliminate the possibility for trade disputes on quality aspects, the Board is providing assistance forsending business samples of spices and spice products abroad. Under this component, the Boardsupports the exporters by reimbursing the cost of courier charges.

(2) Printing Promotional Literatures/Brochures:

Printing of promotional literatures/brochures, video films/CDs, other electronic modes to projectcompetence and capabilities of the products and services offered to the prospective buyers abroad issupported by the Board. Under this component, the Board offers financial assistance to qualified exportersof spices/spice products to bring out good promotional literatures/ brochures/video films/CDs and otherelectronic modes.

(3) Packaging Development and Bar Coding for promoting spices and

spice products:For improving the existing packaging and develop modern packaging for increased shelf life, reducestorage space, establishing traceability and better presentation of Indian spices in markets abroad,financial assistance is provided by the Board. Cost of Bar Coding registration for all types of packing

and traceability systems are also proposed for financial assistance under this component.

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There are two components under the programme viz.,

(1)  Participation in International fairs/exhibitions

(2)  Participation in International

meetings/seminars are assisted for market expansion. Assistance under these components is provided toinduce exporters for exhibiting spices and spice products, building up business relationships and collectinformation on the changing market requirements for taking appropriate action.

(1)  Participation in International fairs/exhibitions:

For introducing spices and spice products, establish business relationship with buyers abroad and toshowcase the recent developments of the spice industry, the Board provides assistance to the exporters forparticipation in international trade fairs and exhibitions abroad. During the participation, details on the

recent developments of the spice industry/new products / process introduced are also collected by theexporters for market development. In addition to the financial support provided by the Board for trade fairparticipation, as directed by the Government, assistance to all registered exporters for participating indifferent food fairs are also provided as per MDA guidelines.

(2)  Participation in International meetings/seminars is assisted for market expansion.

India is a member of American Spice Trade Association (ASTA), European Spice Association (ESA),International Organization of Spice Trade Association (IOSTA), CODEX Committees and InternationalPepper Community (IPC) and regularly participating in the annual conventions/meetings of the aboveassociations. For participation/deliberation in international meetings/ seminars/delegation and suggestfuture course of action to be taken for export promotion, the Board is providing assistance to meet thecost of participation by the exporters associations / forums, if they are representing the industry inany of the above meetings as desired by the Spices Board.