How healthy 'Snacking' items are changing retail shelves?
The market for savoury snacks in India holds tremendous growth potential, though there always remain few challenges that still need to be addressed on the way forward.BY Tanya Krishna | Oct 06, 2018 | comments ( 0 ) |
It’s well said that “good health and good sense are two of life’s greatest blessings” and Indians today have increasingly become health conscious which reflects in the choices consumers make and the shift in dietary patterns, for example, choosing cholesterol free or low fat products over deep fried savouries. While Indians are known for their taste buds and there are ample options for snacking for Indians, ranging fromconfectioneries, biscuits and chocolates to bakery items, western snacks and the traditional home made savouries, but today, mellennials have realized the importance of adopting a preventive lifestyle over a curative one. In this mill run, the ultimate beneficiary is the food and drink market. Pallavi Gupta, Founder & CEO, NuttyYogi, asserts, “The consumers are now conscious and aware about the importance of healthy eating. Recent reports have also indicated that the organic packaged food market is slated to grow by 25 percent within the next 3-4 years. Currently, the urban consumer has not only adopted to healthier options when it comes to snacking but are also looking for gourmet or organic items to replace junk food from the palate.”
Today’s hectic lifestyles leave no space for elaborate meals, thus paving the way for highly convenient, tasty and healthy snack food options that serve as both appetizers as well as complete meal solutions. Also, changed perception about packaged foods in the consumer mind has led to proliferation of healthy snacks market in the country. Arun Prakash, Co-Founder, Snackexperts, affirms, “Snacking is on the rise. Increasing disposable incomes, a need for convenience from fast-paced lifestyles and a cultural tradition of snacking between meals have fuelled explosive growth in this sector. Consumers’ changing dietary habits and willingness to try new things are pushing these numbers even higher.”
Consumers are more aware of the various options available and are easily bored leading to increased experimentation. Various startups too are bringing back the age old grandma’s recipes and tweaking them to cater to the demands of the millennials. According to IKON’s estimates, the savoury snacks market in India (branded packaged and unbranded packaged or loose) is ready to hit the Rs.1,000 billion mark by the end of the current decade, growing at a healthy double digit CAGR. Also, it has been observed that for the past few years the market is gradually starting to shift towards the organized segment, which holds almost 60 percent of the market and the remaining is shared by the unorganized market segment. However, Pranav Sharma, Founder & CEO, Poshtick, maintains, “The healthy savoury market, though evolving, still is in its nascent stage.Right now, it has a defined line where there are lot of new players and companies coming up and lot of existing players like Britannia and ITC who are making a shift from their normal categories and introducingthe healthy variant of their products. That really speaks about this evolving space.”
Factors Driving Growth
The increased emphasis on healthy lifestyle including healthy eating is already a new trend especially in North and West India. So, what exactly is leading to the growth in demand and also to an increase in the number of players in the segment? Jasmine Kaur, CEO, The Green Snack Co., informs, “The factors leading to these changes include customer demand for healthier packaged food options that taste good, premiumizationas a trend not just in snacking but across various packaged food categories, and snackificationof meals (60 percent of our food consumption is in the form of snacks or mini-meals today).” Snacking has always been inevitable tendency of an average human being, whether its while working, while at home or on the go. This has not changed since decades now; what has changed is the lifestyle of people which have given a heads-up to the healthy munchies instead of deep fried, fatty savouries.Pallavi Gupta says, “More and more people are leaning towards holistic wellness in their lifestyle. It is a great opportunity for brands to bring special procured, processed and packaged items, consumable in small portions to cater to this need.”
Potential in tier-II and tier-III markets
With internet and mobile penetration in tier-II, tier-III and beyond areas, people have become more aware and conscious about health and fitness and “there are also reports which suggest that health and fitness is taken more seriously by people from tier-II and tier-III towns in comparison to the urban cities”. Also, due to very few players in the segment of healthy food and snacks, there is a huge potential in the sector.
Neha Thakker and Mahima Anand, Partners, Happy Belly, asserts, “Healthy snacking is definitely the new in-thing. Starting in a tier-II city like Pune, we realized that even though people aren't as aware or ready to invest in buying better snacks, it is at a place where it is getting there, so this is probably the best time to be promoting ourselves in a still growing, getting ready to explode market.”
Challenges &Road Ahead
The market for savoury snacks in India holds tremendous growth potential, though there always remain few challenges that still need to be addressed on the way forward. “Since, it’s the healthy snacks we are dealing in, we shy off using preservatives, etc., which makes the shelf life of the product really short. Also, we need to keep the product healthy as well as tasty. In order to sustain, it is important for products in this market to be balanced, wholesome, of good quality without compromising on the taste of snacks. Fads will come and go, but nutrition and taste will always go a long way,” maintains NehaThakker and Mahima Anand.
The snacks food industry in India is highly competitive and evolving. Consumers are always tempted to shift their choices and preferences whenever new products are launched or various marketing and pricing campaigns of different brands are introduced. Arun Prakash says, “India’s snack food market is growing at 25 percent CAGR, according to industry sources. While presently, unorganized market is dominating this segment, this scenario is expected to change during the forecast period of 2018-2024.”