Total Pageviews

Saturday, December 24, 2011

Yummy! Ready-to-eat foods eye centre of thali

My colleague Shailaja Sharma is the lead writer of this story which first appeared in DNA Money edition on Wednesday, December 21, 2011.

Ready-to-eat (RTE) foods are no longer a no-no. Packaged French fries, cheese nuggets, parathas, samosas, aloo tikkis... all are tickling the Indian tastebuds.

The RTE segment is growing at 25-30% annually, say analysts. “It was crawling a few years ago. Now, it has started to walk. The segment will run in a few years,” says Sushil Sawant, vice-president, Godrej Tyson Foods.

Analysts think urbanisation, rise in the number of working women, higher disposable incomes and evolving consumer habits are all making processed foods popular, promising rapid growth for the segment.

Vadilal was among the early movers. In 2000, it began export of ready-to-eat curries, parathas and snacks to 20 countries. Rajesh Gandhi, managing director, says organised retail has expanded with the entry of new players in the last two years. “Indian consumers are ready to try these products.”

Vadilal now sells frozen products like plain and stuffed parathas, samosas, kachoris and springrolls in India under its brand Quick Treat. Given brisk sales, it expects to notch up Rs15 crore from new launches alone this year.

Other players are optimistic, too. Come February 2012, Signature International Foods will launch a range of Indian naans, kulchas and parathas as well as international items like tortilla wraps and pizza bases. Its massive Nashik unit boasts a daily capacity of 1 million chapatis and 5 lakh naans.

Given the Indian consumer’s penchant for good deals, Signature will offer a pack of four naans weighing 80 grams for Rs65, says Gaurang Bhasin, head, sales and marketing.

McCain Foods swears by similar strategy. The Toronto-based firm recently introduced smaller trial packs of its frozen French fries, Super Wedges and Smiles, priced Rs25, after winning customers for its Aloo Tikki, Crunchy Potato Bites, Tandoori Vege Nuggets and Vege Burger.

Other players such as Venky’s India, Temptation Foods and Al Kabeer are keen to garner market-share. Godrej believes frozen foods sales will touch $700 million in four years. “Snacking has always been an integral part of our culture. The snacks industry is getting organised. The opportunity is huge,” says Sawant.

Yet, frozen foods have not reached the centre of the thali (platter) at Indian households. But firms like Godrej and Vadilal, with their strong distribution networks, are seeking to make convenience foods part of Indian lifestyle.

They are confident the task won’t prove daunting , given that over 40% of the household spend is on food. The share of packaged foods may be small, but with a 30% growth, anything is possible.
Industry estimates suggest consumer spend on food in India will grow from $330 billion now to $900 billion by 2020. Processed foods account for $40 billion already, with packaged food market estimated at $10 billion (and likely to reach $20 billion by 2014).

Such heady facts and figures are encouraging processed food firms to bet big on India. For instance, West Coast Fine Foods, a distributor of frozen foods in India and owner of frozen seafood brand Cambay Tiger, is launching Malaysian frozen paratha brand Kawan in India this month.

Rahul Kulkarni, director, marketing, says the time-starved working Indian consumer “is spending less time in the kitchen and is adopting the branded ready-to-heat-and-eat option to suit her lifestyle”.

What does all this signify? “The sign is unmistakable: the urban Indian household is undergoing a quiet revolution. The trend is accelerating because of both socio-economic factors and lifestyle reasons,” says Kulkarni.

No comments:

Post a Comment