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INTERVIEW

“ProV garnered over Rs 210 crore in sales”
Monday, 18 September, 2023, 08 : 00 AM [IST]
Demand for nuts and seeds as protein sources has been on a rapid upward trajectory. This is driven by the consumers choice to opt for convenient and nutritious snacking options, said Shalin Khanna, co-founder and CMO, ProV Foods, in an email interview with Nandita Vijay. Excerpts:

How do you view the current scene for dry fruits, nuts, seeds, berries, and healthy snacking products in India and globally ?
The current landscape for dry fruits, nuts, seeds, berries, and healthy snacking products in India and globally exhibit several noteworthy trends and dynamics.

Nuts, seeds, berries, and dried fruits have been rapidly integrated into the arsenal of healthy snacking companies worldwide. These items, whether consumed in their natural form or used as additives in products such as bars and nut butters, have transcended niche markets to become mainstream dietary choices.

The global market for these products is relatively mature, with a growing consumer base seeking healthier and plant-based options, aligning with the increasing popularity of vegan and plant-based diets. The demand for nuts and seeds as protein sources has been on a rapid upward trajectory.

These ingredients are versatile, serving as not only standalone snacks but also as essential components in protein bars and vegan protein formulations. The adaptability of these ingredients contributes to their sustained popularity.

In developed markets, such as the United States and Europe, the consumption of nuts and dried fruits is well-established, with a wide range of product offerings, including premium and organic choices. As consumers become more health-conscious, they are willing to pay a premium for quality and natural ingredients.

In contrast, the Indian market for these products is still undergoing a significant transformation, characterised by shifts from unorganised to organised retail and changing consumer preferences.

Traditionally, much of these products were sourced from unorganised, wholesale-style vendors. However, Indian consumers are increasingly favouring branded products due to factors like trust, quality assurance, and consistency.

Augmented products, such as flavoured trail mixes and energy bars, are still in their early stages of development in India but show remarkable growth potential as consumers seek convenient and nutritious snacking options.

The Indian market holds promising prospects, with expectations of surpassing the global market in total consumption within the next five years. Several key factors are driving this:

As urbanisation continues, consumers are shifting towards on-the-go, convenient, and healthier snacking alternatives. Increasing per capita income allows consumers to explore premium and healthier snacking choices.  There is a discernible trend towards healthier food and calorie-conscious choices, driven by awareness of wellness and nutrition.

According to a report by Grand View Research, the global nuts and seeds market was valued at approximately US$128.3 billion in 2020, with an anticipated CAGR of 3.1% from 2021 to 2028.

In India, the market for dry fruits and nuts was valued at around Rs 22,000 crore in 2020, according to the Federation of Indian Chambers of Commerce and Industry (FICCI).

What are the visible trends you sight in this space?
India's dry fruits, nuts, and seeds market presents a unique scenario marked by a somewhat contradictory growth pattern. Historically, these items were associated with affluence and were often reserved for gifting occasions, with the price being a significant factor in consumption. However, as rapid urbanisation and rising per capita income take hold, these products are transitioning into mainstream snacking choices.

Nonetheless, a paradox emerges as the market simultaneously shifts from unorganised to organised. Consumers need incentives to embrace branded products, which often require more economical options or scalability strategies to establish brand preference. This is particularly challenging given the historical perception of these items as premium and relatively expensive on a per-kilogram basis in the snacking sector. Brands are compelled to balance this by offering premium options to sustain the gifting tradition. Therefore, it is evident that both premiumisation and affordability are coexisting in the overall consumption landscape.

How has the company fared so far?
In 2022-2023, ProV garnered over Rs 210 crore in sales for ProV-branded products. Our product range has expanded significantly, offering customers a diverse selection of over 100 SKUs. This range spans from sachet offerings priced at just Rs 30  to an entire line of daily pantry essentials with recipes curated by Chef Sanjeev Kapoor, our brand growth ambassador, with whom we have just recently partnered to infuse more trust in the brand.

In addition to our existing offerings, we recently introduced the affordable gifting packs and an innovative fusion line of trail mixes. Looking ahead, our company has set an ambitious target of reaching Rs 500 crore  in branded sales over the next three years.

To support this growth trajectory, we have invested substantially in enhancing our production capabilities. Our new factory has the capacity to produce up to 1 lakh units a day, and we are actively implementing automation to streamline our operations and ensure scalability.

Furthermore, as a farm-to-table brand, we are continually expanding our product portfolio with direct-sourced items. Our latest additions include cranberries and dried figs, further demonstrating our commitment to providing high-quality, diverse, and innovative products to our valued customers.

Which are the fastest moving products from you range?
ProV Select, designed for affordable daily pantry use, and  ProV Minis for convenient on-the-go snacking, have been exceptionally popular and have quickly gained traction in the market. Almonds, pistachios, raisins, walnuts, and cashews have emerged as the driving force behind our growth, spanning across our six distinct sub-brands.

Moving forward, our aim is to replicate this success in our trail mixes and flavoured product ranges. As the consumer market matures, we are committed to extending our growth and expanding our presence in these segments. Our competitive edge stems from diverse product offering: farm-to-table quality assurance, celebrity and strategic partnership and physical presence first.

Between ProV Minis and Jumbo sized category which of these are most sought after?
Our product range is known for its diversity, catering to distinct categories of consumers. It  thrives in the online space and at point-of-sale locations, attracting individuals who are inclined to make impulsive purchases of the affordable packs to sample the product before transitioning to convenient on-the-go snacking.

On the other hand, our Regal products enjoy substantial success during special gifting occasions like Diwali. The elegant packaging and generous proportions of these premium items make them an ideal choice for thoughtful gifts.

Meanwhile, our Select versions maintain popularity across all channels throughout the year. With larger pack sizes, these products become essential additions to your daily or weekly grocery shopping, constituting a significant portion of our sales due to their practicality and versatility.

Could you provide more details on the 35,000 sq. ft. FSSC 22000-compliant processing plant, when was it set up and what is unique about this?
Our facility is in Navi Mumbai. We recently relocated to a new plant, effectively doubling our available square footage. This integrated facility encompasses primary processing for   deshelling almonds and walnuts, as well as fumigation when necessary. Our machinery is capable of deshelling over 40 metric tonne of inshell almonds daily.

The  secondary processing allows the first level of sorting and, where required, flavouring or roasting. We have two roasting machines to flavour 4 metric tonne per day.

Packaging houses multiple automated and manual lines. The former packs 50,000 pouches a day. There are five manual lines with a similar daily capacity.

Given that our products are sourced globally, it  tracks each lot as it progresses through our plant. The data is managed through an integrated in-house system, which monitors each batch of produce right up to the point-of-sale.

How is ProV positioning itself to garner the growth and footprint in India and abroad? Which countries are showing interest?
We are convinced that the domestic market offers unparalleled potential. For the next three years, we have no plans to export. Given that a substantial portion of nuts is imported into India, exports have no lucrative opportunities. Our strategy for local market growth is to adopt an omni-channel approach.

What are the challenges in this space for entrepreneurs?
The primary challenge lies in fostering innovation. Consumers, even in the realm of grocery and snacking products, are continually seeking the next best thing. This dynamic nature of consumer preferences underscores the importance of staying attuned to market trends and responding swiftly to evolving consumer needs. In a fast-paced, competitive marketplace, maintaining a proactive approach is key to meeting these demands and remaining relevant to the target audience.

How receptive are private equity (PE) and venture capitalist (VC) to fund this sector?
There is a significant surge of interest among  PEs and VCs. Notably, many leading players have recently secured funding. Even established snacking brands with existing funds have the impetus to enter the nuts segment. This marks an exciting period as the influx of funds into this sector promises to foster collective market growth, accompanied by robust competition.

Adding to this dynamic landscape, our parent company, Proventus Agrocom has recently achieved a listing on the NSE Emerge Exchange. The capital raised through this listing is earmarked for the expansion and advancement of the brand.
 
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