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Indian snacks market will be Rs 1 billion and more by the end of 2024
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Wednesday, 09 December, 2020, 14 : 00 PM [IST]
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Raghav Gupta
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The Indian snacks market will be worth more than Rs 1 billion by the end of 2024. The market is divided between organised players and unorganised market, according to Research and Markets report (2018-24). Additionally, in terms of market value share, namkeen ranks #1 compared to all other segments such as chips, extruded snacks and others.
The ever-increasing number of working professionals, rising urbanisation, lifestyle changes, local availability of snacks in small packages and affordability along with the growing popularity of convenience foods and increasing drive for hygiene, greater taste, and consistency are driving the market for Indian snacks. Further, factors such as increasing disposable income and rising population affect retail market dynamics significantly, while the industrial and catering channel is driven by the growing demand for snack food items from industrial food services.
The sector includes well-established coffee chains, in-store bakeries, cafes, and quick-service restaurants which are quickly leveraging the opportunity associated with snack food items – availability, greater convenience, and a wide range of variety in products. The varied number of snacks popular among Indian masses include moong dal, bhujia/sev,sabudana, corns, potato chips, extruded snacks, pellets, banana and tapioca chips etc.
The Rising Demand of Indian Snack Food
Over the past few years, there is an unprecedented rise in demand for Indian snack food not only in India but across the globe, owing to various factors cited above, which, is ultimately giving rise in demand for snack food equipment. These snacks come with a longer shelf life as compared to other food products and also, rarely involve the risk of any additives or preservatives.
Moreover, these products are often cheaper as compared to chilled or fresh food products. These factors all together contribute to the Indian snacks market growth. Additionally, these products reduce the buying and cooking time for the end users, which is much needed in today's busy lifestyle.
The changing needs of customers and diversity in Indian culture create further complexity in the food production and distribution system. A larger percentage of young population, long and stressful work hours, need to socialise and increasing travel time has created a need for convenient food options. As a result, people are increasingly looking at packaged food, ready to eat and snackable food options. Brands are launching dosa mix, healthy juice and smoothies etc., in packaging that is known to increase shelf life.
Further, fast paced and hectic lifestyles have positively influenced the growth of the global market. Easy thawing and baking, extended shelf life, provision of instant service along with retention of taste and freshness facilitate the demand for such products, thereby augmenting the sector growth. As a result, manufacturers are gaining profits by supplying these food items and commercial equipment.
Though there was a time when huge costs were associated with the vast supply chain of these products such as transportation cost, maintenance cost, infrastructure, and machinery which posed a challenge to its affordable pricing, the situation is no longer the same since the machinery and equipment are being developed indigenously. Furthermore, new companies are entering into this market to meet the increasing demand for food service providers as well as consumers.
Growth Opportunities in the Food Processing Sector in India
For the food processing industry, India presents one of the most potent ecosystems as it is rich in religion, culture, tastes, largely populated and youth capital of the world. The easy availability of raw material combined with a high demand provides food processing companies with many growth opportunities. According to Industrial Meeting, the snack food segment generated revenue of USD 5,254 million in 2019 and is expected to grow more.
Further, due to regional and cultural diversity, India presents manufacturers with the opportunity to produce a variety of snacks and innovate with special new products, some very specific to regions. The variety of Indian snacks is endless - alootikkis, bhujia or samosas. Besides, a variety of products can be processed and enriched in taste with a selection of great Indian spices.
Commercial Baking Equipment Market
According to the market research report published by Markets and Markets, the bakery processing equipment market is projected to reach a value of approximately USD 11.4 billion by 2025, growing at a CAGR of 5.0 per cent from 2020. The growth of the equipment market is attributed to the increasing trade of food processing equipment majorly in countries such as India, China, UAE, Mexico, Brazil and Argentina, as per the report. The significant growth is a result of increasing consumption of bakery products in these countries.
Make in India Initiative
The Government of India has undertaken several initiatives to support the agri and food sector in India. For example, it granted priority sector status to food processing industry under the new manufacturing policy 2011. Additionally, loans to cold chains and food and agro based processing units have been classified as priority sector lending and 100 per cent FDI has been permitted in food processing segment.
Summing Up
Growing consumer preference for on-the-go consumable items, healthy snacks, organic products and clean label due to evolving lifestyle, busy routine and growing middle class population, is offering great opportunities for the manufacturers to expand their product portfolio and generate revenue.
(The author is director of Kanchan Metals)
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