According to a survey by ASSOCHAM, the packaged food industry is set to rise to USD 50 billion by 2017
The size of packaged food in India is set to witness a quantum jump to USD 50 billion by 2017 from the present level of USD 32 billion growing by a CAGR of 35 per cent on the back of increasing popularity and demand for ready to eat food, snacks as such food is convenient and gaining consumer confidence, according to an ASSOCHAM survey.
Average rate of annual spending on packaged food by Indian households has increased by 32.5 per cent during the years 2010 to 2015 while the growth is expected to touch around 35 per cent in the coming years, it said.
The survey highlighted that 76 per cent of parents, mostly both working, with children under five year in the big cities are serving these easy-to-prepare meals at least 10-12 times per month in some form or the other.
DS Rawat, Secretary General ASSOCHAM said, the consumption of packaged food is much higher in the urban areas, especially metros, where life is fast-paced, attracting lot more companies to launch new types of products and variants.
The paper also points out that there is a large divide between urban, semi-urban and rural consumers. The urban demand accounts for 80 per cent of all packaged food.
About 76 per cent of the nuclear family feels that they have less less time to spend in the kitchen. It is in this background that home delivery business model for cooked food has grown multi-fold.
Nearly 79 per cent of unmarried people prefer the convenience food. The main categories of packaged food are bakery products, canned/dried processed food, frozen processed food, ready-to-eat meals, dairy products, diet snacks, processed meat and health products and drinks
Food manufacturers have also started concentrating on manufacturing new innovative food products and ready to eat processed food so that it can keep up with the speed of ever changing taste of the consumers.
There has been a major shift in food habits in the metropolitan cities, about 79 per cent of households prefer to have instant food due to steep rise in dual income level and standard of living and convenience.
Findings of the survey
The majority of people prefer to purchase:
Canned foods, classified as:
· Fruits (56 per cent).
· Vegetables (46 per cent).
· Other canned products (71 per cent).
Instant products: These are again classified as:
· Instant mixes (75 per cent).
· Instant powders (69 per cent).
· Table relishes: mayonnaise, ketchups, sauces, jams, jellies, marmalades (88 per cent).
· Dairy products: milk powders, dairy products like curd, cheese, cream, dairy desserts, (89 per cent).
· Frozen foods: These are of three types:
Chilled foods (dairy products, eggs, meat) (92 per cent).
Frozen dried foods (coffee, meals for explorers) (85 per cent).
· Baked products: biscuits, cookies cakes, breads and various other baked items (75 per cent).
· Snack foods: classified as (65 per cent)
Cereal based.
Fried items.
Beverages: These are divided into (88 per cent)
· Alcoholic drinks (wine, beer).
· Non-alcoholic which include soft drinks and health drinks (fruit based and non-fruit based).
Pasta foods: vermicelli, noodles, macaroni, et al. (82 per cent).
Weaning foods: Farex, Cerelac, lactogen (86 per cent).
Key drivers for packaged food market in India are:
Changing demographics: Youth is driving the consumption of the packaged food such as ready meals, packaged soups, et al.
Increase in income: Rise in disposable income has increased the affordability of buying packaged food.
Urbanisation: Urbanisation has led to increase in nuclear families and also led to more and more women moving out for work.
Growth in organised retail: The penetration of organised retail is expected to 15 per cent by 2016.
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 16 per cent during 2008-14 which is expected to plan an important part in growth of packaged food storage.