Food is one of the most significant components of retail consumption. It accounts for more than 30 percent of the overall consumer expenditure. The changing market dynamics have had an impact on consumer behavior. Becoming specific, it has emerged as a segment with massive opportunities. Food buying behavior was changing; however, the emergence of COVID-19 altered its track rapidly.
Some of the trends visible in food buying behavior are:
Impact of Technology on Food Buying Behavior: Buying food from the supermarket can be challenging. Finding your favorite product from the hundreds of products stacked in different rows can test patience. Established practices are changing to facilitate ease of transaction for the consumer, from traditional stores to stores where we do not need to stand in the queue or fish out our wallets is becoming possible. Organized retail now accounts for around 30 percent of sales in FMCG products. Further, the term 'going shopping' may soon become obsolete since technology can help the buyer access things at the click of a button.
Traditional Stores vs E-commerce: E-commerce websites have continued to penetrate the food market for quite some time. The market has a myriad of options. Some applications and websites promise delivery of food and grocery items within two hours. However, they are still far from replacing the age-old brick-and-mortar stores. The traditional stores continue to dominate the food sales market. The primary reason behind the continued dominance is the consumer mentality of examining the food items through their sensory mediums. They continue to harp on the need to smell and touch the food items to ensure their freshness which of all other possibilities is impossible on the digital platform. Furthermore, visiting a brick-and-mortar store provides the customer with a shopping experience that cannot happen through electronic mediums.
The Local Food Retailer: Kiranas or the local food retailers have been supplying essential food items to the people in the vicinity for ages. While the national and internal players continued to find ways and means to penetrate the market, the local player swiftly adapted to the changing needs of the time. Kirana stores are leaving no stones unturned in providing the best shopping experience to their customers. They are adopting practices that can keep them in the race. Quick and accurate digital bills, seasons/ festival discounts, free home delivery are among a slew of initiatives that help Kiranas remain the first preference of buyers. Some prominent retail players have developed applications centered on Kirana stores to propel their growth.
The Experimentative Nature: Food buying behavior is guided maximum by the choices of the customer. The consumer has become increasingly experimentative. Fond of exquisite cuisines and international brands, they do not mind paying extra for a premium or healthy organic food item. The result is that all supermarkets and the larger Kirana stores of the region offer new food items like quinoa and apple cedar vinegar. Salad dressings and syrups that were rare to find have tumbled down to the local stores.
Increasing Health Consciousness: Over the last few years, there has been a significant change in the food consumption pattern. The urban consumer, in particular, is opting for traditional food that had lost its way to the kitchen. Food items like flax seeds and foxnuts are considered wonder food; aware consumers are increasingly opting for these food items. The dominant wheat flour was subtly replaced by the multi-grain aata, the white rice found competition from brown rice and the polished shiny pulses gave way to non-lustrous packaged daals. Fruit juices, health drinks, and healthy breakfast options like corn flakes or muesli are preferred options of the Indian consumer.
Over and above all, the global pandemic has had an irreversible effect on food buying behavior. COVID-19 has also proved to be a boon in disguise for all the e-commerce players. Consumers are opting for no-contact delivery of food items. While the smaller Kirana stores are struggling to serve their customers, the e-retail suppliers have benefitted from the situation by catering to this demand. Surveys indicate that more than 40 percent of buyers believe that they would continue to abstain from physical stores even when the pandemic ceases. Further, the stress of opting for healthy food items has soared beyond all previous records. Consumers are opting for food items that can help them improve immunity and stay protected against the disease.
In 2017, The Organic World (TOW), sprouted as the green heart of Nimida Group in Bengaluru, sowing the seeds of sustainability to cultivate positive change in our way of life. Founded by Gaurav Manchanda, Director, The Organic World, this unique brand strives to offer a holistic range of organic and natural products. From pesticide-free fruits and vegetables to chemical-free homecare products, TOW provides consumers with over 3000 choices to embrace a healthier, cleaner, and more sustainable lifestyle.
Gaurav, during his return to India from the United States in 2016, identified a gap in the market for healthy and organic food options. Motivated by a personal quest for such products and a desire to offer the same to a wider audience, The Organic World was born in 2017. Starting with the launch of its first store in JP Nagar, Bengaluru, TOW quickly expanded. Today it has 15 stores across Bengaluru, and is exploring the franchise model and the plan is to steadily expand TOW’s footprint across South India.
“Our journey is only getting started. We plan to expand up to 100 stores over the next 18 months, and exploring cities like Chennai, Pune, and more,” he says.
TOW positions itself as a multi-brand retailer, hosting products that are not only organic but also differentiated, providing better value to customers as they journey towards a healthier lifestyle. The stores boasts a comprehensive product range, including fruits, vegetables, dairy, staples, personal care items, and home care products. The presentation of these stores is world-class, ensuring a unique and engaging shopping experience.
Gaurav sheds light on TOW's commitment to responsible retailing, focusing on three core pillars: authenticity, accessibility, and affordability. The company enforces a rigorous vetting process for products, maintaining transparency by publicly listing 25 blacklisted ingredients and chemicals not allowed on their shelves. This disruptive approach challenges the industry to prioritize healthier and sustainable products. TOW has created a strict ‘Not In Our Aisle’ list – a list of chemicals and harmful ingredients that do not find a spot on its store shelves, despite their industry popularity. This includes ingredients like high fructose corn syrup, a sweetener, found in soda, juice, candy, breakfast cereals and packaged snacks; artificial flavorings/colors found in most packaged foods; Tertiary Butylhydroquinine (TBHQ), an antioxidant found in biscuits, microwave popcorn, butter substitutes and chicken nuggets; parabens, sulfates and phthalates found in personal and beauty care products; and a range of acids and toxins found in home cleaning essentials, to name some.
“When you step into our store, it's an interesting and world-class experience. We strive to be a full basket retailer, so you can complete your shopping journey within our stores. Now we have about 3000 SKUs on our shelves, and we continue to introduce interesting categories and products,” explains Gaurav.
The brand’s commitment to sustainability extends beyond its product offerings. It has introduced a zero-waste section in select stores, encouraging customers to bring their own containers for grains and nuts. The company is conscious of consumer preferences, with a dedicated vegan category accounting for a significant portion of sales. TOW's initiatives have not only resonated with environmentally conscious consumers but also positively impacted its revenue.
The Organic World has embraced a tech-driven approach to bridge the online and offline shopping experience seamlessly. Initially partnering with tech enablers, TOW later developed its in-house tech stack, comprising apps, websites, and delivery mechanisms. This move provides the company with more control over data, enabling better insights into consumer behavior.
Acknowledging the challenges in the grocery and organic sector, Gaurav emphasizes the importance of trust in the brand and scale to stay competitive. The company strives to deliver within a two to four-hour time slot, and in a bid to make its last-mile delivery sustainable, TOW is exploring the use of electric vehicles.
In a market flooded with products labeled as organic, The Organic World sets itself apart through a combination of the 3As. The brand's strong category play, especially in emerging trends like veganism, further distinguishes it from competitors. The company's commitment to scale, transparent pricing, and a variety of unique products solidifies its position as a leading player in the organic and healthy foods sector.
“We work closely with farmers and a network of farmers under the brand Happy Harvest Farms. They are certified and organic. Additionally, we do our own checks internally, and based on these checks we believe that we are able to provide an authentic experience to the discerning consumer,” Gaurav asserts.
He is optimistic about the future, fueled by the growing awareness of health-conscious consumers. With plans to expand its store network and franchise model, TOW aims to be a dominant player in the Indian organic market. The brand envisions not only leading in the organic sector but also influencing responsible retailing practices across the broader retail industry.
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