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Snacks processing industry - Future & growth prospects
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Wednesday, 28 October, 2020, 13 : 00 PM [IST]
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Kajal Dalvi
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Introduction
Humans consume energy outside of traditional meals which are breakfast, lunch and dinner. As there is no congruence term for snack, it is indecisive whether those extra eating occasions constitute supplementary meals or snacks. The demeanour in which an eating occasion is labelled (i.e., a snack or a meal) might impact an individual on the same day and satiety after consumption.
Food in India grips desirability beyond a bare survival necessity. Food holds the stronghold of sentiments, culture, heritage, innovation and lifestyle for millions of Indians. Subsequently, India has migrated miles to come to the current state of food and consumption patterns witnessed today. As a witness to this, from freshly-made snacks, we now see solid suction for packed, instant and ready-to-eat/ ready-to-cook snacking food items.
Snacking has been on the rise for the past few years, but the trends seen and thought will continue to grow are around health. Not only healthy snacks but the trend is moving towards functional and health promoting snacks (like chocolate quinoa bars, healthy cookies, nutrient-rich granolas and probiotic cheese, ice creams blended with vegetables.). The future of snacking is not simply a quest for ‘healthier’ foods, but also plant-forward, delicious and convenient products.
Nutrition-rich as well as healthy food products
The food industry has now perceived that consumers desire nutrition-rich as well as healthy food products and now each and every raw material/ ingredient is being closely explored for its health-giving or wholesomeness. Snacking as a business or snack processing industry is certainly progressing. More people are substituting meals with their snacks. Hence, we can say that whichever snacks they are choosing have to be more healthy or nutritious. The drift in the snack processing industry is moving towards more refined, dietary focussed products.
Growth & future of the industry
The Indian snack processing industry is an encouraging as well as a thriving arm of the FMCG category. The consumer consumption pattern is emerging day by day. The alteration in demographics is sustaining changes, as the fixed “three meals a day” model seems to no longer be significant. As there is an upswing in the lifestyles (with respect to busy lifestyle), millennials and Gen Zs have taken up snacking attitudes and are making contrasting snack choices based on their health, convenience, brand and trust. Consumers are deliberately searching for snacks to nourish in, to assuage a craving or to hold themselves up until their next meal. The consumption frequency has risen and as a tribute to this, the market for snack food is increased.
According to CAGR 2019-2023, the revenue in the snack food processing industry amounts to over $5,000 million in 2019 and the market is expected to grow annually by 7.5%. Brands are capitalising on this opportunity through their product offerings, bringing the goodness of healthy food items to Indian consumers in different formats suited to their lifestyle, taste and convenience. The global snack food market is expected to grow from $210.4 billion in 2019 to $215.9 billion in 2020 at a compound annual growth rate of 2.7% as per CAGR reports. The shallow growth is mainly due to economic or financial slackening across countries owing to the Covid-19 pandemic outbreak and the measures to contain it.
The snack processing industry is expected to retrieve and grow. In the global snack food processing industry, Asia Pacific was the largest region computing for 56% of the market in 2019, North America was the second-largest region accounting for 25% and Africa was the smallest region in the global snack food processing industry. Abundant manufacturers and snack food processing industries are increasingly utilising natural ingredients or organic ingredients and have also shortened the use of artificial colours and artificial flavours by substituting them with natural colours and nature identical flavouring substances. Health concerns of the consumers are expanding the demand and purchase of the food products with natural ingredients, natural additives and natural colouring agents.
For example, in the US stores of Pizza Hut, prohibition to use of artificial flavours and artificial colours is restricted (since 2015). Processed snacks are generally designed to be more compatible and less perishable than prepared foods. This type of snacks usually encompass tempting ingredients, for example: special flavours, peanuts, and chocolates in addition to preservatives, edible oil and sweeteners which empower them to consume during any time throughout the day and get trim over prepared foods. Product launches, mergers and acquisitions, joint ventures and geographical expansions are key strategies adopted by players in the processed snacks market.
Natural ingredients or raw materials
Food and beverage manufacturers or processors must look to boost a stronger ledge in the increasingly popular healthy and nutritious food products segments, either by incorporating food products with natural additives and natural colouring agents or by achieving smaller firms that produce or process products with natural ingredients or raw materials.
The snacks processing industry subsists of sales of snack foods by entities (organisations, sole traders and partnership) that produce/ process/ manufacture snack food products. The companies in the snack processing industry are chiefly hooked in salting, roasting, baking, drying, cooking or canning nuts (and their byproducts); processing grains or seeds into snacks; manufacturing peanut butter, or manufacturing potato chips, corn chips, popped popcorn, hard pretzels, pork rinds, breakfast cereal granola and similar snacks.
Supply chain/ distribution channels
The snack processing industry manufactures/ processes, packages and distributes its products through various supply chain/ distribution channels to both individual customer as well as to commercial establishment or organisations. The regional and country breakdowns section gives an analysis of the market in each geography and the size of the market by geography and compares their historic and forecast growth. It covers the impact and recovery trajectory of Covid- 19 for all regions, key developed countries and major emerging markets.
The latest research report titled, “Indian Snacks Market Forecast to 2023” portrays current and future scenario of the Indian snack industry in the region. The report covers the Indian snack market in the terms of value and volume. The Indian snack industry is expected to witness stellar growth with the changes in lifestyle and food habits in the country and the rising middle-class population. This report provides the fundamental analysis and study and market estimation of the snack processing industry segment such as namkeen, extruded snacks and chips.
With a flourishing health-conscious population, the Indian snack processing industry is heading towards healthy snacking practices. Consumers are now searching for health and nutrition as a part of their snacking experience. Therefore, this has led to many healthy snack products being introduced in the Indian snack market. The future of India snacks market can be judged from the fact that this industry is expected to grow with double-digit CAGR for the time-frame of 2020 to 2024.
(The author is executive - quality control and food safety, and team leader at Soch Foods LLP, Goregaon, Mumbai. She can be contacted at kajaldalvi.95@gmail.com)
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