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SNACKS & CONFECTIONERY

Brands launching traditional meals to ready-to-eat packaged food amid pandemic
Tuesday, 15 September, 2020, 13 : 00 PM [IST]
Karan Chechi
Nowadays, companies are launching more varieties of ready-to-eat food items owing to rising consumer demand.  Major reason boosting demand has been lockdown and stay at home order due to Covid-19, which led to closure of restaurants, excessive hygiene measures by the people, longer shelf life of ready-to-eat products, stockpiling by consumers, closure of schools, colleges and offices and so on. In the month of April and May 2020, demand for ready-to-eat products such as dessert, cookies, biscuits and chips, witnessed a steep increase.

 Looking at the increasing demand, major manufacturing companies are strengthening their supply chain to fulfil surging demand. For instance, Haldiram’s earlier sold its ready-to-eat products through Flipkart, Amazon, and the company’s website, and now, they are also selling products through Zomato and Swiggy. As much as the consumer’s demandingly enhanced convenience, cooking brands are also widening their ready-to-eat offerings and adding more traditional Indian meals. Haldiram’s launched traditional Indian meals in ready-to-eat section such as Dal Tadka, Dal Makhani, Dum Biryani, Paneer Makhani, Punjabi Chole and Pav Bhaji to attract consumers. Besides, MTR Foods is also offering traditional Indian meals such as ready-to-eat products including Shahi Paneer, Tomato Rice, Vegetable Pulao and Palak Paneer.  

India ready-to-eat food market was estimated at US$348.67 million in 2019 and is further expected to grow at a CAGR of 18 per cent till 2024. Ready-to-eat food market is driven by increasing population of millennials, college students, working professionals, nuclear families, and working mothers, coupled with rising urbanisation, increasing disposable income of middle-class population, changing taste preferences, and better product availability from the manufacturers. In addition, growing number of retail chain outlets, supermarkets, hypermarkets and convenience stores are positively influencing ready-to-eat food market in India and are becoming major points of sale for ready-to-eat products due to wide product varieties being offered. Furthermore, online channels are offering a broad variety of ready-to-eat products at the comfort of home along with fast delivery options and heavy discounts, which is attracting consumers to buy ready-to-eat products. Also, these days, consumers are willing to pay more for better product quality, especially in the semi-urban and urban areas.

Frozen ready-to-eat and shelf-stable ready-to-eat food
Ready-to-eat food market is further segmented into frozen ready-to-eat food products and shelf-stable ready-to-eat food products. Online grocery websites such as BigBasket and Grofers are also providing huge discounts on private label ready-to-eat products through the online delivery. Online grocery delivery service platform such as Grofers reported sales increase of 170 per cent in the ready-to-eat product category, where the increase of 31 per cent in the ready-to-eat meals and mixes category and 41 per cent in the frozen food category items in first few months of this year. Products such as Pasta and Maggie have shown 5-fold jump in sales.

In addition, there is an increasing trend of regional ready-to-eat products such as Gujarati and South Indian delicacies. Also, websites such as Spencer’s are also providing imported ready-to-eat food products, which are attracting a section of consumers. Furthermore, a rising number of consumers who are health-conscious are looking for healthy ready-to-eat food products such as gluten-free biscuits and cookies.
 
Rising demand for ready-to-eat food products is creating growth opportunities, which is encouraging more and more manufacturers to foray in this market.  In addition, latest innovations in terms of packaging, multiple serving options in ready-to-eat food products, consumer dedicated marketing and promotion techniques, are expected to further propel the growth of ready-to-eat products market in India over the next five years.  The food processing industry is expected to reach US$25 billion market in India by the end of 2020 and accounts for around 32 per cent of the country’s overall food market.

As per Assocham (Associated Chamber of Commerce and Industry of India) survey, about 79 per cent people in Indian households prefer ready-to-eat or instant products, majorly due to the time constraint.

It is also found that about 76 per cent parents from the metro cities, especially both working, are serving ready-to-eat meals to children around 10 to 12 times per month.  The major companies operating in India in ready-to-eat food products market includes McCain Foods India Private Limited, MTR Foods Private Limited, ITC Limited, Darshan Foods Private Limited, Haldiram Snacks Private Limited, ITC Limited, Bikanervala Foods Private Limited, Godrej Tyson Foods Limited, Vadilal Industries Limited and Venky's India Private Limited. Most of these leading players are increasing their focus on new varieties of ready-to-eat products. Earlier, the ready-to-eat products were limited to chips, snacks and so on, however now, the companies are widening their scope as increasing demand is being witnessed for a wide range of product categories.  

With all the favorable factors, there are certain prevailing challenges as well. One of the major challenges in the country’s ready-to-eat food market is packaging of the product. It is one of the major concerns of food manufacturers as they want to ensure that product looks the same as it appears in adverts. Manufacturers also need to ensure that there is no compromise with freshness of the products, plus even if the product is preserved, it does not lose its natural qualities.

In addition, due to high prices of few ready-to-eat products, consumers tend to avoid them due to small servings, especially in case of big families in India. In addition, in the rural areas, ready-to-eat food products still do not constitute a large market except for few already popular products such as Maggie and namkeens. A large section of people also does not prefer to buy packaged food products due to health concerns. Also, there is an increasing number of private and local players, which directly trade their products with local grocery stores, thereby providing a competition to the organised ready-to-eat food market players. Nevertheless, with increasing urbanisation, growing working class population, changing consumer taste, and leading players offering a wide range of products, India ready-to-eat food market is anticipated to grow at a robust pace in the coming years.

(The author is research director for TechSci. He can be reached at sales@techsciresearch.com)
 
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