The nuts and dry fruits industry in India is a very old one. However, in terms of demand, consumption has taken off only in recent years. From being a ‘luxury’ product, it has shifted to a ‘necessity’ category over the last few years. At $2.5 billion, consumption in India is just 3 per cent of global demand, though India has 15 per cent of the world’s population.
Consumption of nuts and dried fruits is steadily increasing, and is being driven by changing lifestyles and rising health consciousness, which is reflected in growing focus on preventive healthcare against the backdrop of rising healthcare expenditures.
The per capita consumption of nuts in India is very low at 150 gm per annum; this includes direct consumption on health grounds and as snacks; as ingredients in cakes, desserts, namkeen, etc; and during Diwali and other festivals. In fact, Diwali consumption alone accounts for almost 40 per cent of the annual consumption. This is mostly due to gifting, which leads to more of ‘forced’ consumption.Keeping aside the demand during festivals, per capita consumption is only 100 gm per person, per year. Compared to this, in USA, per capita consumption of nuts is 1.8 kg.
According to ‘Dried Fruit and Edible Nuts: A Global Strategic Business Report’, by Global Industry Analysts Inc, peanuts represent the largest segment in the global edible nuts market, while tree nuts are projected to spearhead growth.Dry fruits and nuts such as prunes, almonds, Brazil nut, raisins, pine nuts, walnuts, hazelnuts, dried figs, apricots, pecans and peanuts, are consumed regularly.
Ease of storage, long shelf-life, easy portability, minimal seasonality issues, and natural resistance to spoilage are making nuts and dried fruits a popular snacking option. Removal of water content during the drying process makes dried fruits less perishable, easier-to-handle, and cheaper to transport. Moreover, these naturally sweet and flavoured foods can either be consumed directly or used in cooking without any loss in texture or form. This makes dried fruits and nuts an ideal food ingredient, and they are increasingly being used in production of processed foods such as mithais, chocolates, energy bars, etc.
With studies indicating that a vast majority of the population eats much less than the recommended amount of fresh fruits, dried fruit is increasingly being considered as a natural means to increase consumption of fruit to reduce the gap between actual and recommended fruit intake. Inclusion of nuts and dried fruits in addition to other ingredients, helps build the healthy image of food products, besides meeting the taste and nutrition needs of consumers.
Rising consumer awareness over the benefits offered has been instrumental in boosting demand. Presently, nuts and dried fruit are serving as marketing strategies to enhance the appeal of food products to highly-focused consumer segments. That is, food companies are increasingly using nuts and dried foods as key ingredients in their premium food ranges.
Consumption of Nuts and Dry Fruits in India is dominated by Cashews – about 1,60,000 tons against 56,000 tons of Almonds, 16,000 tons of Walnuts, and 22,000 tons of Pistachios. In comparison, USA consumes 2,70,000 tons of Almonds, 50,000 tons of Cashews, 50,000 tons of Pistachios, and 56,000 tons of Walnuts. China consumes 1,20,000 tons of Pistachios and 16 lakh tons of Walnuts. Among dry fruits, production of raisins globally is almost 10 million tons, whereas India produces and consumes only about 90,000 tons. Demand for Prunes globally is 2,00,000 tons, of which, India consumes only 200 tons per year. Other dried fruits are Apricots, Cranberries, Blueberries, Blackcurrants, etc.
In India, nuts and dry fruits have just started making a place for themselves on the health plate. There is an increasing awareness about the benefits of Walnuts as a source of Omega-3 fatty acids, the anti-oxidants in Pistachios, and health benefits of Prunes, Apricots and Berries.
However, the consumer is still not aware of all the varieties and grades of nuts and their price, variety, grade relationships, etc. For example, Cashew nuts at the retail level, are still sold as Cashews and one has to make out the different sizes, visually. But the fact is that the Cashew industry clearly differentiates between a WW180, WW240, WW320, etc, which denote the size of the Cashew kernels (number of kernels per pound) and the color, while also mentioning the origin as Kollam, Mangalore, Goa, etc, which further differentiate quality and color.
Walnuts are classified as extra light, light, light-amber, amber in color and halves, quarters, broken in size, while Almonds are of different varieties such as as nonpareil, Carmel, sanora, etc, besides having origins such as California, Australia, etc. Pistachios are either Californian or Iranian having a different color, texture and taste. All these varieties and grades have a different price range. The average consumers have just started becoming aware of all these varieties and thereby there is greater transparency and trust, which is encouraging them to buy more, once they know what they want.
Today, there is a larger effort on the part of manufacturers to develop national brands for nuts and dry fruits, similar to what happened to Basmati Rice 20 years ago. Hence, more and more products that are coming into the market are better packaged, have consistent quality, and come with a longer shelf life. With the advent of modern retail, especially in urban markets, it has become relatively easier to communicate their range, variety, price, and origin to consumers.
Supermarkets and grocery stores are also innovating with attracting displays and placement of their Nuts & Dried Fruit products on shelves. The category is also being positioned as a healthy snack option, and is being placed in the snacks aisle. The fact that these products are now coming in attractive reusable jars and tins, also lure customers.
A combination of factors such as increasing awareness of health needs, increasing disposable income levels, better availability, right packaging, consistent quality, adequate product communication (labeling), newer products such as Hazelnuts, Pecan Nuts, etc, are leading to a healthy growth of more than 10 per cent year on year for the Nuts and Dry Fruits industry in volume terms. This is much ahead of the CAGR growth rate of 5.3 per cent for the dry fruit market and 6.5 per cent for the nuts market in the Asia-Pacific.
The Indian industry size is currently pegged at Rs 15,000 crore (4,50,000 tons approx). By 2020, this is likely to reach almost a million tons in volume, leading to an industry size exceeding Rs 30,000 crore. So importers, processors and marketers of the nuts and dry fruits category in India need to be better prepared for the huge growth anticipated in the coming years.
The contributors to this article represent International Fruits & Nuts Organization, a non-profit think tank for nuts and dry fruits industry in India, based at Delhi (www.ifno.in).