Growing at a compound annual growth rate of about 15 to 20 percent annually, the Indian packaged food industry is likely to touch $30 billion by 2015, rising from the current level of $15 billion. This category includes snack foods, ready-to-eat foods, and healthy and functional foods, according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Factors that have fueled this industry’s growth include the arrival of food multinationals, rising popularity of quick-service restaurants, modern retail trade, technological advancement and changing urban lifestyles, says an industry-specific ASSOCHAM analysis.
The main categories of packaged food are bakery products, canned/dried processed food, frozen processed food, meal replacement products and condiments. Some emerging new categories in this segment are processed dairy products, frozen ready-to-eat foods, diet snacks, processed meat and probiotic drinks.
Some key players in this industry are Hindustan Unilever (tea, instant coffee, biscuits, pulses, instant beverages), Nestle (instant coffee, milk and milk products, ready-to-eat foods), PepsiCo (aerated drinks, fruit juices, cereals, snacks) and Haldirams (sweets, namkeens, syrups, crushes, etc.)
The growth in the economy, coupled with a strong desire among consumers to maintain a healthy lifestyle and the growing awareness of functional ingredients such as herbs, minerals, vitamins, omega fatty acids and probiotics, is driving the functional foods and beverages market.
DS Rawat, secretary general of ASSOCHAM, said that the food ingredients market is also increasing with a rapid growth rate, as consumers increasingly demand bigger, bolder tastes, foods that are healthy and ingredients that are natural or sustainable.
Rawat further said that consumers are becoming more sophisticated and want more upscale flavors and ingredients. The Indian food processing market is one of the largest in terms of production, consumption, and export and import prospects.
The paper also points out that there is a large divide between urban and rural consumers in India. Urban residents consumed 78 percent of all packaged food in 2011, while rural residents consumed just over 22 percent.