Major demographic and socio-economic changes in last two decades, such as increasing population, increasing disposable incomes, rural to urban migrations, increase in rural per capita productivity has resulted in major shifts in food consumption trends and production patterns in India as reported by many researchers. There has been an accelerating shift from food security to nutritional security and convenience foods in the recent past. It is also observed that total expenditure on food has increased across all classes.
The increasing presence of drive-through windows, take-away meals, microwave dinners, home delivery for groceries and online shopping also influences the sale of convenience foods due to both increased availability and affordability. Rising urbanisation leading to changing lifestyles and less time to prepare food at home, willingness to experiment different and new products, changing tastes and preferences and exploration of new tastes by consumers are the key drivers of the recent growth of the convenience food sector in India.
Category of food
Convenience food, commercially designed to optimise ease of consumption, makes it possible to cater to several delivery and dine-out requests in today’s fast paced lifestyle. Such food is usually ready-to-eat without further preparation, easily portable, have a long shelf life. Convenience food category of food includes prepared foods such as ready-to-eat foods, frozen foods, shelf-stable products and prepared mixes such as cake mix. Convenience food is available in a variety of forms which may include products like pre-cut vegetables, bottled and canned products, frozen meat and snacks, ready-to-cook (RTC) or ready-to-serve (RTS) foods and many more. The RTE and RTC market is undergoing continuous evolution caused by changes in consumer behaviour and food technology.
Many leading food companies are augmenting their infrastructure and developing new categories of convenience foods such as soup powders, readymade gravies, cereal based breakfast options, and various kinds of dessert mixes.
The growing population of working women is one of the drivers for growth in demand for convenience / packaged food. Even the Indian household has undergone a major transformation, wherein the joint families have been shifted to nuclear families. It’s no surprise that cooking is one of the most time-consuming and labour-intensive chores in many households.
Interesting trend of business ideas
However, in the last few years, we have noticed an interesting trend of business ideas that’s revolutionising the way we cook, and how much time we spend in the kitchen. These changes mean less time for food buying and preparation, which suggests a move that can be seen towards convenience foods such as ready meals. These women are interested in convenient options that will make the cooking process easier and faster.
Indian households today welcome food with convenience in cooking and purchase. Convenience food industry is getting adapted to Indian type of requirements and is growing leaps and bounds in India. Convenience food is gaining acceptance primarily from Indian youth and younger generations.
Greater individualism, wherein consumers are making decisions based on their individual preferences within families, this means variety of products on the table rather than single meal for everyone. Convenience food reduces the preparation time and to some extent even cooking time required. Hence, significant time can be saved where preparation from scratch for any meal can be avoided.
Fresh home-made meals
Majority of the Indian consumers prefer fresh home-made meals. As the products offered in the market promise the use of high quality ingredients, the busy Indian consumers are adopting ready meals to avoid elaborate cooking, i.e., buying the ingredients, understanding the recipes, having necessary infra to make meals, fewer leftovers and easy cleaning up. They are becoming extremely popular especially among the working class people, teenage children, people living in hostels, bachelors, and so on. They are usually cost-effective (some healthy choices are expensive), tasty and but frequently less healthy.
Portability and single-serve packing is on the rise to meet the consumers need. Convenience coupled with the increase in health-consciousness could be major drivers for growth in certain food categories such as packed fruits juices and mineral water.
The number of Indians travelling within India has increased since 2000. Foreign tourist arrivals have nearly doubled over the past decade. The number of Indians travelling abroad has also increased. Indians carry and consume ready-to-eat foods or prepared meals when they are travelling abroad for the Indian taste in overseas countries at a reasonable price. Further, rise in foreign travel results in Indian consumers experiencing international cuisines (e.g., Thai, Chinese, Mexican and Italian) and products. Therefore, as and when the products that are similar to the taste experienced overseas are available in India, the consumers are likely to purchase them.
India has a variety of festivals spread across the whole year that bring families and friends together to celebrate. Further, special occasions are not restricted to festivals alone but also to birthdays, anniversaries and marriages. Therefore, consumer spending during festivals, occasions, and so on on confectionaries, bakery products, snacks and beverages increases significantly.
Unhealthy amounts of calories
Sometimes, convenience foods may take increased time for thawing or baking than the normal cooking period. They contain unhealthy amounts of calories, saturated fat, sugar, salt, additives-preservatives, colouring and trans-fats and also lack freshness like in case of fruits and vegetables. Eating too much salt, sugar and unhealthy fat may lead to several health problems such as diabetes, heart disease and cancer. One of the major challenges faced by the market is the lack of proper storage, cold-chain, processing, and precise packaging, which is a threat to frozen and chilled foods. Regulatory compliances are getting more dynamic and stricter.
Growth trajectory
The market for convenience food products in India is on a growth trajectory and will remain an interesting business opportunity.
Some of the common strategies that companies have adopted in recent times are portion controlled packaging, in-store promotions, mergers & acquisitions and health claims in labels. People want food products that reduce the time, effort and stress of cooking. So marketers should focus on food products that provide convenience and value within local regulatory guidelines.
There is a growing trend towards healthy convenience foods that are rich in proteins, functional fibres, vitamins, probiotics and omega-3 fatty acid. Availability of customised food ingredients has become a boon for convenience food manufacturers as they can provide large varieties in each category.
However, providing products that match local consumer taste is of utmost importance. Pricing is another important factor for convenience foods, however nowadays; consumers are ready to pay a premium price if they get to buy quality convenience foods with health benefits.
(The author is founder & principal consultant, JRMC Global, Mumbai. He can be reached at jrmcglobal@gmail.com)