The Imported food segment is growing and becoming more popular not only in the metros but also in smaller towns and cities. Traditional and Modern Trade are playing an important role in the growth of the category.
The recently concluded Food & Grocery Forum India held the session, “FSSAI & FIFI Synergy – Partners in Progress : Collaborative Growth of Imported Food Retail & Serving the Best to Indian Consumers,” where FIFI members and modern trade heads and traditional retailers discussed ways to chart a new way forward to tap the potential in the imported food category. Other key points of the discussion were how to overcome hurdles and challenges, devise synergies and partnerships to develop this category, create consumer awareness of these foods, run promotional activities so that more and more people develop a taste for this category and ultimately increase consumption.
Moderator Sumit Saran, Director, SCS Group, welcomed the panel which represented some of the best minds in the imported food business in India. He said: “Indian consumers are becoming younger, and they really represent a young country as 70 percent of India’s one billion population is under the age of 35. The food manufacturing industry needs to act on the changing demands and aspirations.”
The session’s co-moderator, Amit Lohani, Max Foods & Convenor FIFI, spoke about the journey of FIFI in the last five years and the synergy it is creating among the three pillars of food business viz Mom & Pop stores, Modern Trade and Importers. Ajay Parashar of Arjit Foods, which deals in imported meat products, commented that most growth is happening in smaller cities.
Laxmichand Gada of Society stores, stated, “First of all, we need to educate the staff. Many a times customer buys a product X but is not sure what is needed to use the product X properly; the educated staff comes handy here.”
Jehanghir Lawyer of Fortune Gourmet said that he sees basic movement happening from “necessity to lifestyle”. In his opinion, defining a city as tier 1, 2 or 3 is a hard thing to do as even a bigger city will have slums. He stressed on the need for creating availability, cold chain infrastructure to ensure food quality, and educating retailers on how to store products the right way.
Sanjay Bajoria of Bajoria Foods said that Indian tastebuds are ready for international foods even in tier 2 cities, which was not the case a couple of years back. He cited examples of some of tier-2 cities where significant growth is happening.
Amit Lohani cited examples of evolving consumer’s appetite for imported foods. Consumers in cities like Anand, Pokhran, etc, are consuming imported foods. Thus the concept of imported foods market being restricted to only mega and Tier1 cities is no longer valid. Kirit Maganlal of Magsons also emphasised the fallacy of treating tier1 and tier2 markets as not-yet ready for imported foods.
Prakash Sanghavi from Delta Nutritive Foods said that ‘reach’ is the responsibility of importers and retailers. If products can be made available to customers in smaller cities, they will start consuming those products.
Puroshattam Narang of The Gourmet Store said that he has built a strong customer base by simply responding to customer requirements. From a 400 sqft store, Gourmet Store sells milk at Rs 275 per liter. This demonstrates that customers want quality and premium products and retailers have to find innovative ways to plug the demand-supply gap.
The discussion shifted to the role of supply chain. Saran raised questions like “Who is responsible for the supply chain aspects of the business? Should retailers also play a big role? Perhaps this presents an exciting opportunity for 3PL players to invest in supply chain infrastructure and earn a proportion of revenue coming from the value chain.
The session concluded with an evaluation of the risk of foreign brands whose products were imported before, with local production and distribution subsequently being established, following their success. The panel agreed that because of price point pressures, foreign brands are not able to maintain the same quality as they offer in other markets, and hence the relevance of imported products to customers would always exist.