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Feature
Healthy snacks sector poised for a healthy 22% growth
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Wednesday, 07 March, 2012, 08 : 00 AM [IST]
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Anurag More, Mumbai
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Healthy snacks are those which can be taken between two meals and provide you the required energy to do your work. Healthy snacks include nutritional biscuits, breakfast cereals and savoury snacks.
However, healthy snacks which are part of health and wellness foods (H&W), are yet to find a good hold in the Indian market, despite companies like Parle launching products such as Monaco Smart Chips.
Rajiv Subramanian, principal, consumer and retail, Tata Strategic Management Group, said, “The H&W food and beverage sector in India was estimated to be nearly Rs 16,000 crore in the fiscal year 2011 and was expected to grow at nearly 22 per cent reaching Rs 36,000 crore by the fiscal year 2015.”
While Anuradha Narasimhan, category director, health and wellness, Britannia Industries Ltd, said: “It is a diverse sector that spans different formats from health biscuits, diet and healthy snacks, milk food additives, value-added dairy products and commodities like atta and salt at one end to nutrition supplements and OTC products on the other. The sector is today roughly estimated at anywhere between Rs 7,000 and 8,000 crore annually for products targeted at grown-ups and another Rs 10,000 crore approximately for products targeted at kids.”
A Nielsen survey of Indians living in metros, conducted in 2009 indicated that more than half the population consumes four unhealthy snacks between meals with the highest proportion being before dinner. And, a significantly large proportion was fried snacks, such as samosas, wadas, pakodas, pizzas, chaat or chips.
Towards growth
According to a study conducted by the Tata Strategic Management Group that was published in 2010, the growth of the health and wellness foods market in India could be significantly accentuated and enabled by the following:
Product development:
The industry needs to focus on - o Relevant technological breakthroughs in fortification; o Introduction of new to India ingredients; and o Increasing penetration of existing products.
Regulatory support
Government mandated fortification of mass consumption products such as flour, rice, edible oil, salt and biscuits
Food Safety & Standards Act, 2006, (FSSA) would need to be strengthened to ensure that claims were backed by scientific proof and ensure improved enforcement mechanism. This will help to protect consumer interest and ensure genuine competition.
Good’n’bad snacking
“The habit of snacking is deeply entrenched among Indian consumers. There is 'good snacking' and there is 'bad snacking.' 'Good snacking' refers to nutritious food intake at regular intervals in small portions and, in fact, ensures great energy levels through the day. 'Bad snacking' means empty calories and succumbing to junk food out of temptation or for the lack of right choices. As Indian lifestyles become more erratic and meals become more diffused, snacking has become an inseparable part of everyday. Today, snacks also add different shades to everyday lives of people: light fillers, mood changers, social binders, for intimate moments, tongue ticklers and the list goes on. Everyone has a favourite snack which they swear by – a bag snack, a vada pav, a samosa, a plate of bhel puri, a plate of pani puri, etc. The biggest challenge or downside, of course, is the tremendous increase in unhealthy snacking tendency that is leading to development of long-term health problems like diabetes, obesity, cholesterol increase, etc. at an early age,” adds Narasimhan.
Subramanian said, “It would not be wrong to say that typical eating habits prevalent in urban India are unhealthy. The typical second half of an average urban Indian would include junk food as snacks during the evenings, and then, late heavy dinners. Having said that, we also observe the slow and steady trend of people becoming aware of lifestyle diseases. We see more and more colleagues bringing a fruit to office as a healthy snacking option. This is sure to catch on in the coming times.”
While speaking on healthy snacks that did not do well in Indian markets (like Smart Chips), he added that it might be too early to say that healthy snacks did not do too well. We need to understand that H&W as a segment is still niche and receives a response from the upper end of the market spectrum. Now to attract this segment of the consumer base, the entire value proposition needs to be speaking to them in terms of the product, its price, its packaging, its benefits, etc. Fundamentally even if a food product is positioned, it needs to taste great. Many products that have been developed on the "health" platform do not meet this requirement. Next, the premium pricing should not alienate a large section of the market. We still believe that with the right mix, this is potentially a huge opportunity.
Narasimhan said, “I cannot talk about Smart Chips or any other brand with certainty. However, what I can confidently tell you is perhaps what is needed to make a 'healthy snack' work. I believe that Indian consumers are smart and are valuing foods that do not just take out the negatives, but also add healthy ingredients and positive nutrition. Equally, no consumer is ever going to compromise on the taste of the product. If someone picks a pack for snacking, he or she desires both, great health and great taste. Communication and advertising also have a huge role to play. At Britannia, we believe that the consumer is more likely to pay attention to what one is saying, if the message and the tonality are anchored in 'strong consumer insights' and 'ability to relate.' Our attempt with NutriChoice Multigrain Thins and NutriChoice Multigrain Roasty is the same and we are confident that our products are both relevant and differentiated in this context.”
Claimed ‘healthy’
Apart from the branded players, there are a lot of 'claimed healthy' snacks available in the market. Either these products are manufactured in the unorganised sector or they are imported. Cereal bars, flavoured yoghurts and frozen yoghurts are examples. NutriChoice Multigrain Thins and NutriChoice Multigrain Roasty are the newest additions to the NutriChoice 'healthy snacking' portfolio and offer a distinctive, savoury snacking alternative to consumers. Roasted snacks are becoming popular in local catchments in cities like Mumbai.
Tata's study on health and wellness foods found that "better for you" variants in snacks, i.e variants that talk about the reduction of harmful effects of the base category, are likely to be more successful. The degree of success would depend on the seriousness of the health concerns and the avoidability or substitutability of the category. It also mentions most snacking products lie in the indulgence category.
In fact, the snacks segment is extremely fragmented, with all regions, towns and localities having their brands or halwais who cater to the local tastes. Bhujia, moong dal, bhakarwadi, etc. are included in this category. Haldiram’s is a branded player with a large presence in the Indian snacks segment. Kurkure and Garden are the other significant players in this segment. In the branded space for chips, you have the offerings from Lays, Bingo, Parle, Perfetti and some regional players like Balaji.
“There are two clear barriers which, if overcome, can make healthy snacking more favourable for consumers to include in their everyday lives. The first is the taste and the second is the pricing. After all, any food that is enjoyable makes adoption and regular usage easy, and secondly, snacking is an every
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