Indian packaged food industry is estimated to scale $ 30 billion by 2015 as it is growing at a compound annual growth rate of 15-20 percent annually, according the the leading industry body in the country, Associated Chambers of Commerce and Industry. 'Indian packaged food industry is likely to touch $ 30 billion by 2015 from the current level of $ 15 billion including snacks food, ready-to-eat food, healthy and functional food', ASSOCHAM pointed out.
A slew of factors that have fuelled this industry’s growth and they include the advent of food multinationals, rising popularity of quick-service restaurants, modern retail trade, technological advancement, changing urban lifestyles and so on says ASSOCHAM.
The main categories of packaged food include bakery products, canned and dried processed food, frozen processed food, meal replacement products and condiments. Some emerging new categories in this segment are processed dairy products, frozen ready-to-eat foods, diet snacks, processed meat and probiotic drinks. Some key players in this industry include Hindustan Unilever (tea, instant coffee, biscuits, pulses, instant beverages), Nestle (instant coffee, milk and milk products, ready-to-eat foods), PepsiCo (aerated drinks, fruit juices, cereals, snacks) and Haldirams (sweets, namkeens, syrups and crushes.
The growth in the economy, coupled with a strong desire among consumers to maintain a healthy lifestyle and the growing awareness of functional ingredients such as herbs, minerals, vitamins, omega fatty acids and probiotics is driving the functional foods and beverages market, highlight the paper, an ASSOCHAM statement said..
DS Rawat, Secretary General, ASSOCHAM said: "The food ingredients market is also increasing with a rapid growth rate, as consumers increasingly demand bigger, bolder tastes, foods that are healthy, and ingredients that are natural or sustainable. Consumers are becoming more sophisticated and want more upscale flavours and ingredients. The Indian food processing market is one of the largest in terms of production, consumption, and export and import prospects".
The paper also points out that there is a large divide between urban and rural consumers in India. Urban residents consumed 78 percent of all packaged food in 2011, while rural residents consumed just over 22 percent.
If one sees the sales of packaged food by region, in 2011 northern region stood first with 38 percent, folllowed by western region with 36 percent, with south contributing 28 percent and east and north east adding another 21 percent.
In a recent survey by ASSOCHAM on 'Craze for Ready to Eat Food among young Indian' is based on responses from 2,000 representative households with children or without children, nuclear family and bachelors mainly because many consumers in metros lead time-pressured lifestyles and have less time available for formal meals, as a result of which demand remains high for products which can be eaten on the go. Over 82% percent of workforce prefers packaged food rather eating outside or roadside dhabhas in metropolitan cities like Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad.
In a survey, ASSOCHAM claims that Indian food processing market will show fast paced growth in the next five years. It is also estimated that this food processing industry will show the annual growth of 40-60 percent in next five years. This all will be encouraged by changed trade rules and increased demand among the people. In excess of 88 percent parents said that convenience foods are preferred mainly by nuclear families where both husband and wife are working or by bachelors who wish to avoid hotel food or people who do not have time, patience or the expertise to prepare in a traditional method.
According to survey, metropolitans are the largest consumers of processed food and are going to be the biggest consumers of processed food because of their ever increasing per capita income and lifestyle which is also changing very rapidly. Major metropolitan cities in which respondents were interviewed by ASDF include Delhi, Mumbai, Ahemdabad, Cochin, Bangalore, Hyderabad, Indore, Patna, Pune, Chandigarh and Dehradun and it was observed that there has been a surprising rise in the demand of packaged food in the Indian market all this is because the lifestyle of people there has changed drastically and also the factor that consumer’s opinion regarding their eating habits has changed in a significant manner.
The majority of the working class also mentioned that it is a boon to save time, energy and money by using these foods. Various foods helped to prevent the age-old traditional method of long preparation of grinding, cooking or fermenting for hours and hence making the work faster. Even the manufacturers prepared the instant foods according to the taste of the consumers.
Majority of bachelors prefer the convenience food because of less cost, time and energy saving, convenience in preparation and consumption in the busy and hectic life. The very term 'instant' means simple, fast ,convenient and affordable food which is easy and fast to prepare besides being hygienic, free from microbial contamination and also convenient to eat, say the bachelors .
Changing demographics - Youth is driving the consumption of the packaged food such as ready meals, packaged soups, etc.
Increase in income - Rise in disposable income has increased the affordability of buying packaged food
Urbanization - Urbanisation has led to increase in nuclear families and also led to more and more women moving out for work
Growth in organised retail - The penetration of organized retail is expected to 15 percent by 2016.
Improvement in packaging - Advancement and development of variety of packaging has led to increase in shelf life and also satisfying various needs of customers.
Increase in freeser facilities - Cold storage or freezer space plays an important part in growth of packaged food. Freezer space in India is expected to grow at a CAGR of 16 percent during 2008-14 which is expected to plan an important part in growth of packaged food storage.