FNB News - “We are focusing on domestic market as opportunity is immense”

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INTERVIEW

“We are focusing on domestic market as opportunity is immense”

Monday, 24 July, 2023, 08 : 00 AM [IST]

ProV Foods prides itself on having the freshest, tastiest and healthiest nuts, dry fruits, berries, trail mixes and more. Their farm-to-table approach, brings consumers the finest quality food products, as the brand is involved in every step of the process - from sourcing the ingredients to packaging and delivering them to you.

K S Narayanan, growth & innovation advisor at ProV Foods, shares his views on the food and beverage industry, healthy food products, sustainability, and more, in an email interview with Kimberley Almeida. Excerpts:

How has the competitive landscape of the food and beverage industry changed during the past few years?
The competitive landscape of the food and beverage industry in India has witnessed significant changes over the past few years. According to a report by the India Brand Equity Foundation (IBEF), the market has become highly competitive, with a large number of players entering the industry. The report states that the number of food processing units in India has grown at a CAGR of 9% from 2011 to 2019, indicating a substantial increase in competition.

The entry of international brands has also intensified the competition in the market. Companies such as Nestle, Coca-Cola, and PepsiCo have expanded their presence in India, leveraging their global brand recognition, innovation capabilities and financial resources. This has created a challenging environment for domestic players and has spurred innovation and diversification in the industry. A large number of startups have also sprung up which is further spurring innovation in products & services.

The rise of online food delivery platforms has further transformed the competitive landscape. According to Statista, the online food delivery market in India was valued at approximately $7.7 billion in 2020. The emergence of newer formats like cloud kitchens and food delivery aggregators like Swiggy and Zomato has provided consumers with a wide range of food options, increasing competition for traditional brick-and-mortar establishments.

Add to this the grocery push done by the e-comm giants like Flipkart and Amazon have further given a lot many more options to the consumers. A lot of advertising bucks are being diverted to grab screen space on these online platforms which allow brands to reach Tier 2 cities at the click of a button. Online sales have further democratised distribution and made products and services available which were hitherto not available earlier.

What are the different types of products offered by you and which are most popular among consumers?
We offer a range of products in the category of nuts, seeds, berries and dry fruits that cater to different consumer preferences and budgets. We offer over 100+ SKU across 6 sub-brands in these segments – and they continue to innovate. We offer products from their economical on-the-go mini pack of just Rs 30 up to ultra-premium jumbo sized regal packs perfect for gifting occasions – a large consumer base in itself.

The company's focus on quality, taste, and nutritional value has resonated well with consumers, contributing to their popularity and also its availability across both online & offline channels has multiplied significantly.

With chef Sanjeev Kapoor as a brand and growth ambassador, the brand is able to create a unique product portfolio that caters to a wide range of consumer segments, ranging from home makers in need for products for their daily recipe needs to parents looking for healthy snacks for their children’s tiffin boxes and further to ProV being an ideal gifting option. I am also working closely with the team to introduce a number of game changing products for the Indian consumer in the near future.

Are consumers inclined towards healthier product choices given the rise in conscious eating habits?
Consumer inclination towards healthier product choices has witnessed a notable rise in India particularly post-Covid. According to a survey conducted by the Indian Council for Research on International Economic Relations (ICRIER), approximately 74% of Indian consumers have demonstrated a growing preference for healthier food options. This shift in consumer behaviour is attributed to increased awareness about nutrition, fitness, and overall well-being.

The rise in conscious eating habits is further evident in the increased demand for better for me, clean label, organic, plant-based, low-sugar, reduced fat and gluten-free products. According to a report by Nielsen, the food market in India is projected to grow at a CAGR of 23% between 2021 and 2026 across a wide range of categories. This indicates a strong consumer inclination towards healthier and more sustainable food choices.

From a practical industry perspective, this preference shift is evident from the large number of ‘clean label’ snack brands gaining significant traction in both consumers and investors' minds. Many products such as protein bites, bars have come into the mainstream market while they were almost non-existent a few years ago in the Indian F&B arena.

Give us your thoughts on green packaging alternatives, keeping in mind environmental concerns?
Green packaging alternatives have become crucial in addressing environmental concerns in India's food and beverage industry. With a growing emphasis on sustainability, companies are actively exploring eco-friendly packaging options. According to a report by TechSci Research, the green packaging market in India is projected to grow at a CAGR of around 14% during 2021-2026.

Unfortunately not many solutions in end-consumer packaging have arrived in the Indian F&B arena that are practical, economical, shelf- stable and executable at a large scale. To mitigate environmental impact, we source bulk of our products directly from farmers cooperatives across the world, use of recyclable packaging material and also are constantly evaluating opportunities to improve the environment impact.

What are the key driving factors and challenges in the dry fruits, nuts, seeds and berries segment?
The dry fruits, nuts, seeds, and berries segment in India is influenced by several key driving factors. One of the primary driving factors is the growing awareness about the health benefits associated with these products. Nuts & seeds are seen as a powerhouse of nutrition. According to a study by Research and Markets, the market for dry fruits and nuts in India is expected to grow at a CAGR of around 11% between 2021 and 2026.

Increasing disposable income, urbanisation, and changing consumer lifestyles have also contributed to the segment's growth. As per the Indian Brand Equity Foundation (IBEF), the rising urban population and higher per capita income have led to increased consumption of healthy snacks, including dry fruits, nuts, seeds, and berries.

However, the segment does face challenges. A large part of the volumes are dependent on imports, thereby price fluctuations due to crop variability and availability can impact the market dynamics. Additionally, maintaining product quality, especially in terms of freshness and taste, poses a challenge.

Ensuring affordability for a wider consumer base can also be a hurdle, as premium quality dry fruits, nuts, seeds, and berries can be relatively expensive. Apart from the health benefits, India with its rich culinary heritage has usage of nuts, seeds & berries across a wide variety of dishes, sweets & savouries on a daily basis in the household kitchens.

Tell us about the challenge and opportunities in the unorganised and organised sectors with regards to nuts, seeds, dry fruits and berries.
The nuts, seeds, dry fruits, and berries segment in India comprises both organised and unorganised sectors, each with its own challenges and opportunities. The unorganised sector faces challenges related to quality control, standardisation, and limited market access. The lack of proper packaging and storage facilities can impact product quality and shelf life.

However, the unorganised sector does play a significant role in meeting local and regional demand, especially in many geographies.

On the other hand, the organised sector has opportunities for growth through brand building, offering consistent product quality, product diversification, and adoption of modern technologies in all the areas of operations. The organised sector can leverage its advantages in terms of quality assurance, marketing strategies, and efficient supply chain management to tap into the growing demand for nuts, seeds, dry fruits, and berries and make it available for the consumers. This segment can benefit from investments in packaging, marketing, and distribution networks to reach a wider consumer base.

What type of R&D goes into the products? Who is the target audience?
We invest significant resources in research and development (R&D) and also work with a number of trusted partners in our entire supply chain to ensure the creation of innovative and high-quality products on a consistent basis. Our R&D efforts focus on enhancing taste, nutritional value, food safety standards and creating new innovative products. By conducting consumer research and market analysis, we identify emerging trends and preferences to develop products that meet the evolving needs of target audience.

The target audience for our products varies across different categories. For select economical products, the target audience includes homemakers and households with daily consumption patterns. In the snacks and ready-to-eat category, target audience comprises busy individuals across all age groups seeking convenient and healthy options as part of their daily routines. We aim to provide products that cater to a wide range of demographic segments and consumer preferences.

What is the company’s long-term goal for sustainability?
We have a long-term goal for sustainability, aiming to minimise our environmental impact and contribute positively to society. We have set specific targets to achieve our sustainability objectives from sourcing to manufacturing to distribution. As we focus on procuring goods directly from growers for large consumption items, we work closely with growers that meet set sustainability standards of farming, harvesting & storage.

We also prioritise social responsibility by supporting local communities and engaging in fair trade practices. By promoting responsible sourcing of ingredients and investing in employee well-being, we strive to create a positive social and environmental impact throughout our operations.

Are you planning on launching any new products?
The company continually explores and introduces new products that align with changing consumer preferences and market trends. They are investing significantly in R&D to identify emerging opportunities and develop innovative offerings. Our commitment to meeting consumer demand and staying competitive in the market suggests a proactive approach towards new product development. We have recently launched a line-up of value products with recipes curated by chef Sanjeev Kapoor for the homemaker TG, we further launched 30 mini packs to target local kirana and POS clientele. In addition a wide variety of gifting options targeting corporates and individuals have also been introduced.

Although I cannot spell out clearly the upcoming launches in detail, we are continually working on introducing products via means of form-change to create more value-added products or even to target specific consumer convenience needs in the snacking segment.

Any plans for collaboration with foreign markets?
There is a large vacuum in the “healthy snacking” space in India especially in the nuts and dry fruits category. There is a shift in consumer preference from unbranded / loose produce to branded products all the way down to Tier 2 city kirana stores. As consumer preference gravitates towards better quality branded produce, they are looking for a trustworthy brand offering innovative products from natural to flavour augmented healthy snacks – this is where we are positioned with our range of healthy snacks in the nuts and dry fruits category. With pan-India distribution and easy availability, we aim to be the brand consumers think of whenever they want to buy nuts or dry fruits in India.

In other words - Think Nuts and Dry Fruits – Think ProV. Therefore, we are currently focusing on the domestic market as the opportunity is immense. We see immense opportunity to expand our presence further and penetrate deeper in the domestic market.