The packaged food market is in India is valued at USD 10 bn in 2010 and expected to double and reach USD 20 bn by 2014. Share of packaged food in overall food market will increase from 4% currently to 5% in 2014. Cereals (including pulses, spices), milk products and meat (including fish and poultry) are the top three segments in packaged food market in India.
Key drivers for packaged food market in India are:
- Changing demographics: Young India is driving the consumption of the packaged food such as ready meals, packaged soups, etc.
- Increase in income: Rise in disposable income has increased the affordability of buying packaged food
- Urbanization: Urbanization has led to increase in nuclear families and also led to more and more women moving out for work
- Growth in organized retail: The penetration of organized retail is expected to 12% by 2014, more than double that of 2008-9 levels.
- Improvement in packaging: Advancement and development of variety of packaging has led to increase in shelf life and also satisfying various needs of customers.
- Increase in freezer facilities: Cold storage / freezer space plays an important part in growth of packaged food. Freezer space in India is expected to grow at a CAGR of 14% during 2008-14 which is expected to plan an important part in growth of packaged food storage.
Key players in packaged food market
- Hindustan Uniliver — Beverages, Staples, Dairy, Snacks
- ITC — Staples and Snacks
- Nestle — Dairy, Beverages and Snacks
- PepsiCo — Beverages and Snacks
- Dabur — Beverages and Culinary Products
- Cadbury — Confectionery
- Haldiram — Snacks
- Britannia — Bakery Products
- Godrej — Beverages and Staples
- Parle Agro — Beverages, Bottled Water and Snacks
Opportunities in packaged food market
- Focus on health: Focus on health is everywhere in packaged food. Variants of noodles (wheat based, nutrients etc.), sugar free juices, low fat biscuits, energy providing snacks, etc. are introduced by the players to attract customers on nutrition grounds.
- Ready to eat segment will increase: Driven by increase in freezer space, urban lifestyle and variety of products launched by the players, this segment is expected to witness significant rise
- Private labels: Eyeing the opportunity in the packaged food, private labels especially retail chains (reliance retail, More, Big Bazar, etc.) have entered in the business of packaged food and their market share is increasing as their costs are generally lower than other branded products.
- Customized products: Players are coming up with customized products catering to small customer segments, for example variety of flavors available in soups cater to customers with different tastes, biscuits are available in many varieties (price points, ingredients, packaging size, etc.). One popular example was introduction of 4 biscuit pack by Parle at just 2/- .
- Non-vegetarian packaged food: Packaged food market is dominated by vegetarian products, but there is a significant unmet demand of quality non-veg packaged food. Increased penetration of organized retail and freezer space will help in development of this product category.