Rising dual income families, diminishing culinary skills and numerous food delivery apps have triggered a transition from Ready to Cook to the Ready to Eat segment
An FMCG product touches every aspect of human life, with FMCG companies dominating the Indian retail market. The Indian food and grocery market is the world’s sixth-largest, with. India’s contribution to global consumption is expected to double to 5.8 percent by 2020. Similarly, the packaging is the first thing a consumer notices when he purchases a product. Hence Food and Health ingredients and processing and packaging industries offer many opportunities to retailers.
Catching up with the trends in the sector, today, consumers, especially millennials want food that makes their diet healthier, a minimal amount of processing, gluten-free, and organic. Food retailers such as grocery stores and wholesalers are now offering products that are both health-conscious, as well as value-driven, to fit this need. This is also due to the substantial growth in the disposable income of consumers and their willingness to spend more money for quality food that is packaged well.
Ready to eat Segment on the rise
Rising dual income families, diminishing culinary skills and numerous food delivery apps have triggered a transition from Ready to Cook to the Ready to Eat segment. These trends can be seen in our own homes when opting for delivery of food becomes convenient. This change has majorly contributed towards creating a dynamic market environment in India and has opened up opportunities for the organized e-retail players.
Food tech startups leading the change
Infact, the online food delivery industry is growing at 16 percent annually to touch $17.02 billion by 2023. With players like Zomato, TinyOwl and Swiggy building scale through partnerships, the organized food business has huge potential and a promising future. Similarly buying groceries online is a common experience. Several e-commerce players like BigBasket, Zopper, Swiggy are catering to this segment as well.
Need for healthy and safe packaging
Along with this, there is an increasing number of health-conscious consumers, with a preference for processed foods that is fueling the global specialty food ingredients market as well. This makes it one of the largest industries in India. The Indian gourmet market which is currently valued at $1.3 billion is growing at a CAGR of 20 percent. However, the consumer is aware of the use of food additives that strip the product of its nutrients. This has paved the way for consumers demanding a safe, quality product having a long shelf life.
With this background, packaging is taking on a key role in the preservation of food. Going forward, enhanced packaging techniques need to be developed that not only boost the shelf life of the product but also sustain the nutritive value of the processed food.
Private public partnership to strengthen the sector
Another key issue, we face is in supply chain sustainability, as we lack infrastructure, cold storage facilities and that affects the imports and exports of processed foods. To address this the Govt of India has launched and implemented specific schemes to different segments of the FPI such as establishment and modernisation of Food Parks, Grading and Packaging Centre’s, integrated Cold Chain Facility and Modernized Abattoir.
However, the high growth rate of the FMCG industry in India goes beyond growth drivers such as income growth and urbanisation. The consumption habits of India’s new age consumers have resulted in an attitudinal shift in the market. In addition, if the government works to improve the infrastructure of the sector it will be a welcome move and help boost the growth of the FMCG sector and allied industries.Author is Managing Director for Informa Markets in India
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