Our culture is depicted by the way we consume food and the way we cook it. Our cuisine is deeply rooted from our tradition, lifestyle, religion, climate and agriculture conditions. Food is one of the essentials to survive on this planet. Therefore, more than half of our population is involved in the agriculture sector which contributes to 19.9% in the GDP in 2020-21. With the growing population in our country, the spending on food also increased by up to 75%. It is expected that eventually the share of wallet for food of an average Indian household will rise to 35.4% in 2025 against 33.2% % in 2005. The food system will face problems due to other factors such as climate changes, recent pandemic due to COVID-19 and other reasons. The recent report by Deloitte thus, brings to light the changing trends that will drive the future of the food industry in India.
A recent report by Deloitte report identifies the six consumption trends that is going to change the ‘future of food’ in India. This report traces our journey with food and how it has
evolved owing to the pandemic.
Anand Ramanathan, Partner, Deloitte Touche Tohmatsu India LLP (Deloitte India), “India is at the cusp of a new food revolution. Health-conscious, evolved consumers prefer to have something on their plates that will have a lower environmental footprint.
⦁ Mindful diet
Eating habits of Indians have undergone significant changes. In terms of calorie intake, the mix of calorie intake has also changed. Indian diets are transitioning from staple foods, such as coarse cereals, to vegetable and animal-based proteins and are projected to further diversify nutritionally and now include healthy fats, fibers, and antioxidants.
Although it’s still below the world average, India’s average per capita daily protein consumption has risen considerably, from 55.3 grams during 2000-02 to 63 grams during 2015-17.
The major reason behind this decline is that our country has been a carb-loving country, and the transition towards protein has gradually been increasing. With the increase in disposable income and awareness around nutrition, the demand for animal products such as meat, eggs, milk and milk products has increased drastically. After the pandemic, people are more concerned about their nutrition diet and shifting to diets that are rich in protein. In the post-pandemic world, protein is the most talked-about nutrient and of utmost importance for its properties to build immunity, fight the disease, and support the post-recovery phase. The Government of India is also working to fulfill the demand for protein majorly in children and pregnant women to deliver nutritious-rich food.
The demand of plant meat or mock meat industry is growing big for the vegetarians or vegans. Again people are turning towards the smart protein sector that includes plant-based, cultivated, and fermentation-derived meat, eggs, and dairy. According to certain estimates, the smart protein industry in India at present is pegged to be between INR 1-1.5 billion, and expanding fast with the potential to touch INR 10 billion over the next few years.
- Fruits and vegetables (F&V)
F&V should be a part of our balanced diet, as it is important to have vitamins, fiber, and minerals in our body. Consuming F&V is important for phytonutrients intake, as it is useful chemical for body and only found in F&V. There is an indirect proportion between F&V intake and lowered risk of cancer, cardiovascular disease, and all-cause mortality. The average consumption of fruits and vegetables has only increased in the last 10 years.
The consumption of exotic fruits and vegetables have become a common thing on Indian plate leading to a thriving market for Avocado, Kiwi fruit, etc. Relying mostly on imports, some in-roads have also been made in exploiting existing agriculture infrastructure to grow these crops/varieties in India.
Food consumption is no longer confined to meet the basic energy/nutritional requirements of the body but is also looked at as a source to enhance health attributes naturally. Thus, superfoods such as berries, seeds, oats, kale, and quinoa gained popularity among Indian customers as it offers maximum nutritional benefits such as being high in vitamins, minerals, and antioxidants.
Wider acceptance for superfoods including mushrooms, green tea, and olive oil across the Indian palette. Basil, Flax, Chia, Pumpkin seeds are some of the superfoods that have gained popularity amongst Indian consumers.
- Nutri-cereals: Nutri-cereals, commonly called millets are humble grains extensively grown as well as consumed in India. The category saw a gradual decline with the green revolution as the focus was on food security and on high-yielding varieties of wheat and rice. But millets are once again back in popular demand. In addition to being rich in dietary fibre, highly nutritious, gluten-free and non-allergenic, millets are a climate-smart crop as well.
Rice and wheat are rapidly being substituted by millets as regular cereal by diabetic and health-conscious consumers. There is also an increased demand for millet-based snacks and breakfast options, such as millet flakes, biscuits, and porridge for diet-conscious consumers, who are looking for healthier product variants. With the spiking demand of millets, the government of India has launched various schemes to create an enabling environment to facilitate the production and marketing of millets.
- Fortified food: In India, various food commodities, including edible oil, salt, wheat, and milk have been introduced in their fortified formats from time to time. Via rice fortification under Poshan Abhiyan, there is a renewed focus on fortification by the Government of India. It is estimated that rice fortification (rice fortified with vitamin B12, iron, and folic acid) is an INR 1,700 crore market in India.
- Mindful sourcing
The customers have evolved over time and now they are informed and inquisitive about the food they’re eating. Consumers are not just mindful about the hygiene of food but also need to know the necessary details of how it is produced, packed, processed and delivered. The quest has seen an incline in organically grown foods due to their health benefits and a better taste. Also, various organizations are providing various user-friendly traceability techniques to deepen consumers’ trust in their products. There is an influence in the trends and saw a huge demand for clean labels in India.
Organic food: Organic food consumption has seen a sudden spike in the Indian market, as one of the major reasons for this spike is that organic food causes less damage than conventionally grown food can cause to the body. The online availability of organic food and shifting consumer trends towards organic foods are the major factors to boost the demand for organic food in India.
- Clean labels: Clean-label products are amongst the top food trends in the organic food sector. It goes beyond the transparency of food ingredients and includes ethical and ecological factors that go into producing food. In India, though the clean label market is quite a niche, it is growing with budding consumer demand for clean, simple, and safe products. “All-natural,” “organic,” “free-from additives/preservatives,” are some clean label claims to gain popularity in the Indian food market.
- Mindful presence
Indian food is one of the diverse cuisines, with every state the food comes with a new and different flavour, the type of cooking style gets changed along with ingredients. The preference of local dishes have catered to a rise in the launch of regional brands. Big food and beverage companies are also increasingly adding ethnic flavors and indigenous ingredients to their packed snacks and beverages to suit local tastes.
To meet the customers’ demand, the national brands are also launching their variants to suit the local taste preferences. The brands are following a traditional way of developing a local product that matches with the localized preferences of the customers according to the pan-India level, geographical-zone level, or even state level, will need to evolve to consider localized preferences to improve customer acceptance and increase chances of success.
- Mindful purchase
The customers are getting aware about the in-take of their food, and now they are looking to upgrade by making a shift of purchasing from the unorganized sector to the organized sector. Due to this, the increased participation of packaged food players has seen a sudden spike in the food industry, while also leading to the growth of private retail business in the food world.
- Branding of commodities: Earlier, only some of the food items such as ghee and tea were available in the branded form, due to which the concerts of food adulteration were increasing in the market. Then, the branding of the salt, sugar, sugar, and cereals took place. The customers were moving towards packaged food items as it was safe and unadulterated.
- Private Labels: The growth of the e-commerce sector and modern retail has met the demand for quality products for customers at an affordable price. Major online marketplaces such as Amazon, Flipkart, Reliance and others launched their own brands or private labels to fulfill the demand of the customers in the food and grocery business. According to industry estimates, private labels in the food and beverage segment in India are expected to grow at a CAGR of 30% over the next 5 years.
- Mindful convenience
With our busy lifestyle, urban consumers are looking for something which can be made in limited time and energy. The Urban consumers are looking for easier, smarter, non-fussy meal options which saw an increase in the demand of the convenience food which is ready-to-eat, ready to cook, ready to serve and frozen foods
With most restaurants being closed during the pandemic, and a sizable number of people working from home, the ready-to-eat market in India has registered an accelerated growth.
- Intermediary products
The Indian consumers don’t have much time to cook the food but love the traditional way of cooking the meal. Leveraging on this need brands are offering various value-added, semi-finished, or intermediary product offerings that intend to save time on cumbersome cooking steps such as cutting, grating, boiling, and grinding.
- Food delivery
The rise in the urbanization of the working class adopted the internet for various purposes. People are tending towards ordering food with just a click by food-tech startups like Zomato and Swiggy and due to this space has grown by 35 times during 2015-20. In addition to fixed menu offerings by food delivery apps (aggregators and kitchen services), meal subscription services and DIY meals that offer customization, with respect to diet requirements are also being offered directly to consumers.
The adoption of online grocery delivery has increased tremendously during the pandemic. Due to increased focus on health aspects and reliance on in-home cooking; with the growth skewed more towards fresh food items. The Gross Merchandise Value (GMV) of fresh food has grown by 144% during the first half of 2020, while staples and FMCG have grown by 85% and 62%, respectively. The online grocery delivery market is expected to grow more than eight times over the next five years.
The emerging trends around the consumption of the food pyramids saw an increase in the uptake of proteins, growing awareness of food safety, the need for traceability, and the localization opportunities for the food brands. The brands and retailers in this segment need to focus on the consumers’ nutritional requirements by creating an infrastructure for food fortification by adding essential nutrients. The food preference in India is highly localized and companies need to have offerings targeting local palettes and also need to make an omnichannel presence to enhance the customer experience.