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Annual spending on packaged food up by 22.5%; likely to touch 32% by 2017
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Saturday, 06 June, 2015, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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fiogf49gjkf0d Average rate of annual spending on packaged food has increased by 22.5% during the years 2010 to 2015 due to rise in income level, standard of living, greater confidence in packaged food, convenience and influence of Western world. Further, the growth is expected to touch around 32% by 2017, according to a paper recently released by ASSOCHAM.
The survey highlighted that 76% of parents, mostly both working, with children under five years in big cities are serving these easy-to-prepare meals at least 10-12 times per month due to increased pressures at work and actively looking for ways to simplify and save time.
Releasing the survey, D S Rawat, secretary-general, ASSOCHAM, said, “Consumption of packaged food is much higher in the urban areas, especially metros, where life is fast-paced and stressful.” The survey was conducted by ASSOCHAM Health Committee Council on “Steep rise in packaged food consumption in India” based on responses from 2,200 representative households with or without children, nuclear families and bachelors.
But there is a word of caution from the medical fraternity. Dr B K Rao, chairman, ASSOCHAM Health Committee Council, said, “Packaged food usually contains high level of salt, thus leading to rise in blood pressure. Such items are also high on trans-fats, which are worse than saturated fats as they increase bad cholesterol and reduce good cholesterol.”
Major metropolitan cities in which respondents were interviewed include Mumbai, Cochin, Chennai, Hyderabad, Indore, Patna, Pune, Delhi, Chandigarh and Dehradun and it was observed that there has been a surprising rise in the demand of packaged food in the Indian market. This was attributed to changing lifestyle and eating habits.
Majority of the working class also mentioned that its a boon to save time, energy and money by using these foods. Even the manufacturers prepared instant foods according to the taste of the consumers. About 89.5% of nuclear families feel that they have less free time and have less time to spend in the kitchen. It is in this background that the home delivery business model for cooked food has grown multifold.
Nearly 72.6% of bachelors prefer convenience food because of lesser cost, saving of time and energy, and convenience in preparation and consumption in the busy and hectic life. The very term 'instant” means simple, fast, convenient and affordable food which is easy and fast to prepare besides being hygienic, free from microbial contamination and also convenient to eat, say the bachelors.
The main categories of packaged food are bakery products, canned/dried processed food, frozen processed food, ready-to-eat meals, dairy products, diet snacks, processed meat and health products and drinks, according to the survey. Food manufacturers have also started concentrating on manufacturing new innovative food products and ready-to-eat processed food so that it can keep up with the speed of ever-changing taste of the consumers.
There has been a major shift in food habits in the metropolitan cities, about 79% of households prefer to have instant food due to steep rise in dual income level and standard of living and convenience, as per the survey.
The current size of Indian packaged food industry is about $30 billion and likely to touch $50 billion by 2017, growing at a compound annual growth rate (CAGR) of about 30% including snacks food, ready-to-eat food, healthy and functional food, according to ASSOCHAM.
The paper also points out that there is a large divide among urban, semi-urban and rural consumers in India. The share of urban residents is about 80% of all packaged food, while semi-urban and rural residents consumed just over 40% and 22% respectively.
Findings of the survey Sale of packaged food in 2015 - East and Northeast - 21%; North - 28%; South - 21%; West - 30%
Majority of people like to purchase 1) Canned foods classified as: ? Canned fruits (56%) ? Canned vegetables (46%) ? Other canned products (71%) 2) Instant products: These are again classified as: ? Instant mixes (75%) ? Instant powders (69%) 3) Table relishes: e.g. Mayonnaise, ketchups, sauces, jams, jellies, marmalades (88%) 4) Dairy products: Milk powders, dairy products like curd, cheese, cream, dairy desserts, (89%) 5) Frozen foods: These are of three types: ? Chilled foods (dairy products, eggs, meat) (92%) ? Frozen foods (highly perishable foods) (95%) ? Freeze dried foods (Coffee, meals for explorers) (85%) 6) Baked products: Biscuits, cookies, cakes, breads and various other bakery items (75%) 7) Snack foods: They are classified as: (65%) ? Cereal based ? Fried items 8) Beverages: These are divided into – (88%) ? Alcoholic drinks (wine, beer) ? Non-alcoholic which include soft drinks and health drinks (fruit-based and non-fruit based) 9) Pasta foods: Vermicelli, noodles, macaroni, etc. (82%) 10) Weaning foods: Farex, Cerelac, Lactogen (86%)
Key drivers for packaged food market in India Changing demographics: Youth driving the consumption of packaged foods such as ready meals, packaged soups Increase in income: Rise in disposable income has increased the affordability of buying packaged food Urbanisation: It has led to increase in nuclear families and also led to more and more women moving out for work Growth in organised retail: The penetration of organised retail is expected to be 15% by 2016 Improvement in packaging: Advancement and development of variety of packaging has led to increase in shelf life and also satisfying various needs of customers Increase in freezer facilities: Cold storage / freezer space plays an important part in growth of packaged food. Freezer space in India is expected to grow at a CAGR of 16% during 2008-14 which is expected to plan an important part in growth of packaged food storage.
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