After a relatively slow start, the ready-to-eat sector is now tasting success. Although the home delivery and take-away services provided by restaurants remain a threat, the sector continues to grow through its innovative strategies.
According to Vaishnavi Raichur, a research analyst at market and business research firm ValueNotes, based in Pune, Maharashtra, “The heat and eat food category has a tremendous growth opportunity in the near future due to a growing youth population and working woman segment.” She further adds, “Increasing work and study commitments, declining culinary skills, the rising need for convenience, and surging disposable incomes, along with clever marketing will all lead to a higher demand for heat and eat products.”
In 2013, according to research agency Netscribes, the ready to eat market was estimated to be nearly INR 2,250 million and it is expected to grow at a rate of 25 – 30 pc in the following years. Recent report by research-based global management consulting firm TechSci Research titled ‘India Readyto- eat Food Market Forecast and Opportunities, 2019’, states that the country’s ready-to-eat (RTE) food market is projected to grow at a compound annual growth rate (CAGR) of around 22 per cent between 2014 and 2019.
Key Players, marketing strategies and challenges
Major players of the Ready-to-Eat sector are MTR, ITC, Haldirams, Kohinoor and Gits among others. The top most players are ITC and MTR holding 49 pc of the market share, while Kohinoor Foods, Gits and Tasty Bite Eatables constitute 35% of the total production of ready to eat products. Other players are mostly regional players with lesser market share.The range of products include dessert mixes such as gulabjamun mix and kheermix; snack mixes such as rava idly mix, dhokla mix and puttu mix and curry making enablers such as gravy mix and masala mix. On the basis of availability, RTE products can be classified as dinner/breakfast table items and desserts/snacks items. According to a survey by Netscribes, the demand for desserts/snacks items is higher than the demand for dinner/breakfast table items. On the basis of packaging, RTE products can be classified as frozen products and shelf stable products. Netscribe’s survey revealed that the demand for shelf stable products is higher than the demand for frozen products.
Fast-paced urban lifestyle, rising disposable income, youngsters moving away from homes for work or education, overseas travellers and increase in the number of working women with an experimentative palate has powered the RTE market in India. While workingwomen look at effectively utilisingtheir time and find RTE asintermediate solutions that let them cook faster while reinforcing their role of the nurturer of her family; the large base of young consumers forming majority of the country’s workforce hardly find time for traditional cooking due to their busy lifestyles. Marketers, therefore, are trying innovative ways to appeal to the customers interested in convenience cooking. MTR, one of the key players, has consistently tried to bring in new flavours to match the customer’s need. It understands the regional differences in tastes in India. Operating in almost seven food categories, MTR Foods has different marketing strategies for each category. VikranSabherwal, VP-Marketing, MTR Foods says, “All the products that we sell are not available throughout India and we ensure that each category is marketed differently. For instance, some of our masalas that are only available in the three southern states of Karnataka, Tamil Nadu and Andhra Pradesh are customised according to that region’s tastes. Breakfast Mix is a standard product that is distributed throughout the country and hence does not require any tailor-made marketing strategy.”
G K Suresh, Marketing Head, Foods Business, from another established player ITC says, “Today, the homemaker is taking on multiple responsibilities in and out of home. The role of the RTE category is to help her in ensuring that she does not miss out on the joys of cooking and serving her family delightful food. Our products are therefore designed to supplement her culinary expertise while taking the drudgery out of cooking.” According to Suresh, there is a need for offers that can help whip up everydayfavourite dishes as there is for occasional specialities. He says, “Two factors are critical to driving adoption of this category. One is the ability to customise products to the local palate and regional preferences, which ITC is able to do successfully since our products are created by the Master Chefs of ITC Hotels who specialise in diverse cuisine types. The second factor relates to the need to proactively allay any apprehensions that the homemaker may have about the wholesomeness of RTE products. Our marketing communication is, therefore, also tailored to make consumers aware of the fact that all our RTE products do not include any added preservatives.”
Research is also on to develop recipes that taste right and have long shelf-life. A little-known fact is that it is not preservatives but retort packaging technology that helps keep the food fresh. In retort packaging, food is undercooked, packed in metalplastic pouches and heated at 116-121 degrees Centigrade. This kills existing microorganisms, and the sealing prevents the entry of new microbes, thereby extending the shelf-life of most foods to as long as 18 months. Today, even freezing technology is catching up. Haldiram’s has introduced frozen meals, which taste better and last longer. Freezing slows food decomposition as any residual moisture turns into ice, which inhibits bacterial growth. The can is refrigerated at minus 15 degrees Centigrade, says AK Tyagi, vice-president, FMCG business, at Haldiram’s group. Other technologies used by the ready to eat food manufacturers to increase the shelf life of the products, to gain confidence of their consumers and to sustain in the market are non-thermal technology, vacuum cooling technology, visual appraisal method and computer vision. Players are also trying to make ready-to-eat products that can be cooked in a pressure cooker to solve the problem of lack of microwave ovens in middle class households.
Another factor contributing towards the success of RTE players is increasing consumer awareness through advertising. They are also offering trial packages at low prices for the consumers to increase their brand exposure. MTR spends 80 per cent on television, 10 per cent on radio, five per cent on print and five per cent on digital of its advertising money. Although the players spend more on TV advertising, a significant amount is expended on niche magazines such as Aval Kitchen, a food magazine by Chennai based Vikatan Group, where the share of ad spends from this category has been constantly growing.
Retail chains are also crucial in increasing the awareness about readyto- eat products among consumers. The presence of retail players such as Big Bazaar and Easyday is contributing towards increasing the demand for ready-to-eat food products in the country. “Such chains are, however, not vastly present in the semi-urban and rural areas of India”, according to Karan Chechi, research director at TechSci Research. “Nevertheless, the expansion plans of major retailers across rural and semi-urban areas in the coming years is expected to increase consumer awareness and availability of ready-to-eat products in coming years, thereby driving the country’s ready-toeat food market”, he further told a daily newspaper.
The convenience of ordering food from restaurants has always posed a threat on this industry. “Players are focusing on the lower middle income groups by providing quality products at low prices”, says Roy. She further adds,” Major players are focusing on the price and the quality of their products to compete with the home delivery services provided by the restaurants. They are trying to provide quality ready to eat food packages at a price lower than the price charged by the local restaurants.” “If you look at cooking a meal from scratch as against eating out or opening a packet, the pricing can make a lot of difference. If pricing is higher than what the market can bear, then they will become niche products with limited consumption.”
Devangshu Dutta, chief executive at consultancy firm Third Eyesight, was quoted as saying. As things stand, RTE food manufacturers are trying to keep a tight leash on costs. A 300-gm packet of MTR palakpaneer is priced INR 75 while alumethi comes for INR 65. While this pricing may find takers in metros, the rest of India may baulk at it.
Exporting Indian palates
For Indian RTE food companies, the overseas market is the money-spinner. While the aroma of fresh idlis, upma and stuffed parathas still rule Indian households, MTR ravadosa and Gits dal makhni are rockstars in kitchens outside the country. Gits has been selling its instant ready to cook (RTC) mixes for over four decades in 40 countries outside India. In 2000, it launched RTE foods as well. Today, a majority of the buyers for its Parsi dhansak, Gujarati undhiu, Punjabi kadhi, Mumbai pavbhaji and moong dal halwa are in the US, UK, Australia and West Asia.“
When we entered the RTE meals segment, we used the same distribution channels we were using for our RTC items. RTE helped us enter international chain stores abroad, which were reluctant to stock the RTC products,” says Gilani. Around 80 per cent of the revenues for Gits RTE meals come from exports and that is growing at about 50 per cent every year. The numbers are doubling, in fact, in some countries, says Gilani.
“RTE products are very popular in the global market, as many Indians who live abroad do not have access to authentic Indian food and can enjoy the taste by purchasing these products. Moreover the price of Indian food available in the restaurants abroad is costlier than the ready to eat packages. In terms of export, cereal based RTE products ranks first, followed by vegetable-based and meat-based products”, says research analyst Sumi Roy from Netscribes.
Convenience v/s health
Rita Bhargava, chief diet consultant at Care Hospital, Nagpur in the southwestern state of Maharashtra, observes that,” Ready to eat food items are increasingly becoming a part of urban setup as there are lifestyle pressures, need for dual income to sustain and benefits of ready to eat foods meet these requirements as both the partners are working.” RTE is most often the choice of young adults in age group of 20-40 years with busy schedules. “I have observed that most of the children belonging to affluent class bring RTE food packets to schools for short breaks which may result into childhood obesity and earlier onset of lifestyle diseases”, she says.
“Processed and RTE foods should not form the major part of meal everyday as they are unhealthy interns of calorie density leading to obesity. they are high in salt/sugar and fats especially trans fats that may alarmingly increase the probability of non communicable diseases like diabetes, hypertension, metabolic syndrome , cancer, dyslipidemia and cardiovascular diseases. Nutrients like vitamin C and B-complex that are water soluble and heat labile are lost while processing”, says Bhargava. Other concerns are addition of food additives like monosodium glutamate that adds up to sodium intake.
According to her, RTE foods also have food colours that are carcinogenic and harmful to body and may also cause hyperactivity and lower the concentration in school children. Food additives consumed beyond permissible limits may have adverse effects in longer run on health. Microbial contamination such as clostridium botulinium can be fatal, proper storage and handling is important factor.
“It is, therefore, necessary to ensure that nutritionally balanced diet are not compromised with unwise intake of convenience food. As they are no match to nutrient rich meals with fresh vegetables and fruits. Preference should be given to traditional home made foods”, suggests Bhargava.
The packaging, however, contains food labels, content of nutrients and its shelf life. Information about food additives used and their implications are also valuable. The consumers are, therefore, are left with informed and judicious use of RTE foods.
The following rules and regulations, under Food Safety and Standards Authority of India (FSSAI), manages the food safety of ready to eat products –
1. Food Safety and Standards Act 2006 2. Food Safety and Standards (Licensing And Registration Of Food Businesses) Regulations 2011
3. Food Safety And Standards (Contaminants, Toxins And Residues) Regulations, 2011
4. Food Safety And Standards (Packaging and Labelling) Regulations, 2011 |
5. Food Safety And Standards (Food Products Standards And Food Additives) Regulations, 2011
These rules safeguard the consumers by ensuring specific composition and hygienic production, and thus, the manufacturers are required to strictly adhere to these guidelines in order to avoid legal actions against them.