Convenience Food Sector in India

Posted By Team MCG On

Convenience food sector in India has been growing at a fast pace in the recent years. Affordability, willingness to experiment different and new products, changing tastes and preferences are the key drivers of this growth. Advancements in the food processing techniques and packaging technology resulting in extended shelf life are large contributors to the growth in this sector. Apart from increasing the product life, these technologies also aim at preserving the food values and minimizing health hazards. Improvement in the cold storage facilities have also paved way for the increased penetration of large variety of packaged convenience food.

Convenience food, which was initially introduced by multinational companies through a variety of ready to eat and ready to cook options, has been well received in India particularly in the urban areas. Recently, many domestic players have joined the fray and introduced many traditional Indian dishes in convenience food formats.

Convenience Food Market: Break-up by Product Type, 2012-13

ConvenienceFood Market

The convenience food sector can be broadly classified into shelf stable food and frozen foods. It is a highly organised sector with large players supported by the investments required in the state-of-art packaging technology, to ensure shelf stable food products as well as equipments for Individual Quick Freezing (IQF) and cold chain for frozen foods. The convenience food sector in India has now emerged as one of the fast growing segments of the processed food industry, with metropolitan and Tier 1 cities being the primary market. However, convenience food products have strong acceptance levels in South India for traditional recipes in convenience formats but low acceptance in eastern and north eastern regions due to high cost.

While a wide range of convenience food products are imported, several products from India are also finding significant shelf space in the retail outlets outside India. The distribution channels vary based on the product type that is imported into India. Some of the key players in this sector are MTR (ready to eat market), Mother Dairy’s Safal brand (frozen vegetable) category, Nestle, ITC, Glaxo SmithKline, and HUL. Some players in this sector commenced operations to cater to the demands in the export market but given the increasing domestic demand, these companies are altering product mix to meet the demands of the Indian customers. Buoyed by the introduction of new variants which appeal to the tastes of the domestic customers, the convenience food sector is expected to witness strong growth in the future.