Excerpts from INDIA FOOD REPORT 2016:
Among the seven broad components that make up the food basket, in 2014-15, one third of the total food market was occupied by protein food, followed by cereals that cover 19 per cent. On the other hand, edible oil is the smallest segment with a share of 7 per cent. While the overall food share in the consumption pie has decreased over the years, there have been clear structural shifts in the food consumption pattern of Indian households.
Indians are steadily moving their diet away from staple grains like rice and wheat, and towards dairy products and processed food. For instance, while the share of protein food in the entire consumption basket has increased from 13.5 per cent to 14.4 per cent, that of beverages and processed food went up from 5 per cent to 6.8 per cent during the last decade.
India’s protein food market is estimated to be around Rs 2,17,400 crore in 2014- 15 at 2004-05 prices, with 60 per cent contribution by rural India. This market is growing at a rate of 6.6 per cent per annum in real terms and is expected grow little faster in the coming decade.
Beverages and processed food as a combined category registered the fastest growth between 2004-05 and 2014-15. The pace of growth in this category has in fact doubled during last decade than that a decade earlier.
The next category in terms of pace of growth is protein food that grew at 7 per cent per annum during this period.
Going ahead, the share of processed food in the overall food market is predicted to increase to 40–45 per cent by 2025–30, compared to a little above 30 per cent currently. This change in consumption pattern is purely ‘demand-led’ and processed food companies will do well to prepare for this opportunity. With food habits changing, a proportional increase is seen in the consumption of both fresh dairy products as well as protein foods.
Another category witnessing a significant rise in consumption is the health and wellness foods market in India, which is worth Rs 33,000 crore currently with a growth rate of 6 per cent over the last year.
Today, the health and wellness trend is playing across segments of the food basket like snacks, packaged grocery, beverages, sugar substitutes and refined/ non-refined oils. This encouraging value growth rate seen in health and wellness foods is spread across different strata of society.
Rural India is no stranger to this trend. In fact, it is a frontrunner in the health and wellness food growth story.