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In India, snacks market size is Rs 44000 cr
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Friday, 06 October, 2023, 14 : 00 PM [IST]
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Venkatesh Ganapathy
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Growing population, rising income levels and evolving consumer needs have led to increased demand for snacks in the Indian market. Convenience and eating habits have been the primary drivers for packaged snack foods. Stringent regulatory norms by the Food Safety and Standards Authority of India (FSSAI) are supporting the growth of the sector. The Indian Government has made it mandatory for every snack manufacturer or supplier of processed foods to get their recipes /processes registered with FSSAI (Food Safety & Standards Authority of India).
The snacks industry has been driving innovations and regional brands are now entering the pan-Indian market space. The massive growth of e-commerce in India is enhancing the distribution capabilities of manufacturers. Omni channel F&B retailers are vying with pure play retailers to offer the tastiest snacks to consumers.
Between 2011 and 2014, the snacks food market in India had a CAGR of 14%. The market is characterised by players like well-known FMCG companies as well as local/ regional players. The Indian snacks market size was Rs 38,603 crore in 2022. The market is expected to reach Rs 70,731 crore by 2028. The revenue in this market is estimated to reach US$66.9 billion by 2023. Snack food market is expected to show a volume growth of 6.6% by 2024. Between 2023 and 2028, the CAGR is expected to reach 9.01%. In India, the snacks market size is Rs 44,000 crore.
Hyper competition among snacks companies
Interestingly, the growth in snacks industry has led to hyper competition among snacks companies with innovative products, price promotions and a plethora of distribution channels proving to be table stakes for the business. Large restaurant chains have also begun entering the market for manufacturing and selling snacks.
Based on the product type, the India snacks market has been divided into chips, salted peanuts, fryums, and popcorns. Among these, chips currently exhibit a clear dominance in the market. Based on the pack type, the India snacks market can be categorised into pouch and others. Currently, pouch accounts for the majority of the total market share. Based on the pack size, the India snacks market has been segregated into less than 50 gm, 50-100 gm, and more than 100 gm, where less than 50 gm currently holds the largest market share.
On a regional level, the market has been classified into Maharashtra, Uttar Pradesh, Delhi, Gujarat, Karnataka, Andhra Pradesh, Telangana, Goa, and others, where Maharashtra currently dominates the India snacks market. About 1/3rd of manufacturing units for snacks are in Maharashtra. Most snack food processing plants are located in towns like Nasik, Aurangabad, Malegaon and Jalna.
Demand for snacks is high in North India, followed by West India. These regions are the primary consumers of namkeen, especially in Rajasthan and Gujarat, where namkeen forms an integral part of food habits. Hence, the majority of the namkeen varieties originate from these regions.
Long shelf-life, satisfying taste and easy storage
Snacks are usually consumed as an appetiser or side dish. They are either fried or baked and are prepared from various ingredients, such as potatoes, grains, corn, nuts, oil and vegetables. Snacks are mainly obtainable in spicy, sweet, salty, and sour tastes. They are preferred by the masses on account of their long shelf-life, satisfying taste and easy storage. The increased shelf life of snack items holds major appeal for consumers.
Snacks consist of various dry consumable items, such as cakes, biscuits, cookies, chips, popcorn, pretzels, chicken nuggets, nut mixes, multigrain chips, granola bars, dry fruits, cheese sticks, and salted peanuts. They also contain preservatives, such as potassium nitrate, sulfur dioxide, and sodium benzoate, to retain their taste and quality for an extended time period. They are widely available in sweet, salty, sour, and spicy flavours and include various ingredients, such as corn, potatoes, grains, seeds, legumes, pulses and flour.
Snack variants with ethnic tastes like murukku, papad, banana chips and samosas based on the diverse food cultures across India is transforming the Indian market. Introduction of value-added product variants with organic, natural, vegan, low-calorie, and gluten-free ingredients are redefining the market landscape for snack food market in India.
Healthy snacks that also taste good
Following the Covid-19 pandemic, consumers have become more health-conscious and are now demanding healthy snacks that also taste good. For example, baked snack items from corn, potatoes, grains, nuts, oil and vegetables are gaining greater consumer acceptance. Low fat, low sugar and low salt, snacks are being offered by manufacturers due to rising concerns about lifestyle diseases. However, consumers are discerning about taste. So, the challenge is to offer healthy snack items without compromising on the taste.
India is a land of unity in diversity. Diversified food culture of our country is fuelling the growth of the Indian snacks market. Snack food manufacturers must closely monitor micro trends within the target customer group as well as macro trends that affect the sector as a whole. Lower cost alternatives of existing products are being attempted by a few manufacturers. Biscuits with low-cost vanilla fillings are being made due to high cocoa prices. Contract farming for direct sourcing of raw materials can lead to assured supply and better prices.
On-the-go snacking is becoming extremely popular, especially among working-class people, teenage children, people living in hostels, and bachelors due to their hectic lifestyles. Snack bars (for example – granola bars) are becoming popular. Traditional Indian snacks with exotic flavours are being offered by snacks manufacturers.
In recent years, the Indian snacks market has witnessed a remarkable surge in innovation. Traditional favourites like samosas and bhel puri are being reinvented with a modern twist, offering consumers a fusion of flavours and textures. Health-conscious choices are also gaining ground, with a plethora of nutritious snacks such as roasted chickpeas and quinoa puffs hitting the shelves. Moreover, the advent of technology has enabled convenient online snack shopping, further revolutionising the way Indians snack. With an increasing emphasis on quality, variety, and convenience, innovations in the Indian snacks market are catering to a diverse and evolving consumer palate.
(The author is associate professor at
Presidency Business School, Bengaluru.)
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