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Food for tomorrow: The growth areas for brands

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Health and wellness foods are the emerging trends in Indian food sector. The phenomenal growth achieved by Patanjali and Sri Sri Products is a testimony to this. However, much more needs to be done to expand this market through multichannel business models.

Food for tomorrow: The growth areas for brands
While health and wellness has transitioned from a niche to a mainstream concept and there is immense scope for growth, the health foods market is still at a nascent stage in India

The Indian retail sector has now come of age, constituting 26 per cent of the national GDP. In recent years, the food retail sector has registered significant growth. Apart from the impressive growth rates, it is one of the fastest evolving sectors in the country because of the rapidly changing food consumption habits and preferences. It is therefore important for the players from India’s food and grocery retail and foodservice industry to understand the fresh set of emerging consumer demands, the shifting consumption trends, how fast the industry can grow and what challenges need to be overcome.

With improved standards of living, changing lifestyles, increasing spending power, constraints of time, health consciousness and a higher need for convenience and simplicity in food preparation, there has been a perceptible change in consumer preferences. Some key trends to emerge out of these developments are:
• A growing preference for health and wellness foods
• A preference for ready-to-cook food
• A willingness to experiment and food adventurism
• A preference for organic food products and authentic ingredients
• A preference for all things indigenous and local sourcing

“At a time when more and more consumers are shifting to ready-to-eat food items, we need to tap the sector to ensure they get health food,” says CEO, Aditya Birla Retail, .

According to Co- Founder, , , “The dependency of the urban population between the ages of 25 and 35 to cooked food that is delivered at home has increased drastically. Also, consumers are experimenting with newer cuisines. Overall, the country’s palate is evolving and people are willing to discover different food with health as the main criteria”.

“People want to lead a cleaner and better quality of life and it is reflecting in the changing outlook toward food, with the focus shifting to healthy foods. Consumers are beginning to demand information about the purity and authenticity of ingredients and are demanding greater transparency in food labelling. At the same time, the current generation has more sense of pride in being Indian and they see a lot of merit in ancient Indian food traditions and practices. Apart from giving rise to a sense of pride in Indian food, the authenticity of ingredients has suddenly become the core issue,” opines MD, , .

Trustee, , Arvind Varchaswi believes that Indian food consumers are relying a lot on traditional knowledge to see how they can change their lifestyle and that’s where Ayurveda has a lot of solutions. “The challenge is to make healthy foods taste good. If we can get that balance right then it’s a recipe for the health food sector to grow even faster. Also purchasing food has now become an experience and not a mere activity. Consumers are highly educated and they know exactly what they want and choose accordingly. Food retailers should create more avenues for giving the customers the control to personalize their experiences, based on their needs and wants.”

“Consumers today recognize the consequences that certain food choices have on their health and are choosing their foods accordingly. The urban Indian consumer is looking at a holistic combination of good food habits and healthy lifestyle habits as a way to balance their hectic schedules. Food products that are more natural, free of additives, are fresh and have authentic ingredients in them are bringing back that balance in their lives. The growth that Patanjali, Sri Sri and Ayurveda are seeing today is more about getting that authenticity back in their processed lives,” said Group President, Food and FMCG Brands, and CEO, , .

Mohit Kampani pointed out that the recent revelations regarding packaged food that were in the public domain has created a huge trust deficit among consumers, when it comes to packaged food. The upsurge of nationalistic sentiments and the strong consumer connect that exists with traditional products and services, including Ayurveda and the goodness of natural and herbal products and ingredients will see local sourcing getting stronger. “There is more trust in ‘organic’ or ‘locally produced’, and consumers perceive these products to have higher production standards and a greater sense of integrity and it is going to dramatically change how we source our products. So I see a good opportunity for Indian manufacturers, particularly in MSME formats to make more food in the health formats locally,” he said.

While health and wellness has transitioned from a niche to a mainstream concept and there is immense scope for growth, the health foods market is still at a nascent stage in India. Also, health is not the only filter on food choices and there are many reasons as to why health food constitutes a relatively smaller base in the Indian food basket though its realisable potential is much higher.

Challenges to the growth of health foods:
• Prohibitive pricing
• Low market penetration

“India is too diverse a country to make a prediction for emerging food trends, but there is an increased propensity to experiment among the consumers. Though Ayurveda and healthy foods are catching on, health foods are still unaffordable to a majority of urban consumers. Consumers are willing to experiment with health food but the high pricing is the biggest hurdle and we need to overcome to develop this segment,” says President and Chief Executive Officer, , .

According to Jamshed Daboo, “While there is a growing clamour for health foods, their presence is very limited in the food space. Affordability is an important factor and until the affordability equation is resolved, it will hinder the growth potential. Secondly, there is no wider availability and because of the lower volumes, the price points are not holding and newer players are not coming into the market.”

But despite the constraints, food remains fundamental to consumers’ definitions of health and wellness. And at a time when consumers’ are redefining the value of food from the standpoints of price, taste and convenience to health, wellness, and safety, it will be important how the product is marketed, particularly on the shelves.

“Manufacturers should focus more on how they can communicate the quantifiable health benefits of health foods through proper labelling with easily understood nutrition and ingredient information and by innovating on shelving strategies,” points out Mohit Kampani.