Feeding on convenience

Globally, convenience has become important for consumers today. Busy, time crunched lifestyle demands for lesser food preparation timing, which has led to the growth in the frozen processed food. The frozen processed food category is majorly comprised of frozen processed red meat, processed poultry, processed fish or seafood, processed vegetables, meat substitutes, processed potatoes, bakery products, desserts, ready meals, pizza, soup, noodles and other frozen foods. All packaged products, including branded and private labels, as well as generic products are included in this category. 

The frozen food market in India is still at a nascent stage with a few products, a comparatively low consumer awareness levels, not so efficient frozen food distribution network, and lack of freezer space at the retail end. Research shows that consumers do have misconceptions about frozen food, particularly they are not aware of the benefits that freezing as a method of preservation offers. That freezing is a natural method of food preservation without the use of any preservatives or chemicals and it locks freshness and maintains the nutritive value of food is not known to most consumers.

 Marketing strategy  

As per the recent report by Euromonitor, the consumer base for frozen food in India is still very low. For the Indian consumers, frozen food is a new category altogether and they are still getting familiar with it. “McCain’s local ranges of frozen food offerings are growing well and products with local tastes are registering good acceptance. Aloo Tikki, the most popular of McCain’s local product, introduced in 2008, is gaining good acceptance in the retail and foodservice channel and it also won the coveted “SIAL d’OR Country Award 2010” for the best ethnic adaptation,” says KS Narayanan, Managing Director, McCain Foods India Pvt Ltd. Adding further, he says, “The evolving market demands made us introduce McCain 3-minute Idli, which marked our foray into non potato based frozen products in India.”

The frozen foods category in  the Indian market is gradually evolving and is very crucial. Localisation and customisation of products and services help brands in creating a larger consumer base. Also, continuously expanding distribution network will improve the availability of the product in the market. “While on one hand we are strengthening the distribution to tap uncovered areas and segments in large cities, on the other hand, we are also continuously exploring newer markets as long as we have a cold chain network to support it,” says Narayanan.

GS Bhalla, Founder & CEO, Cocoberry India, one of the leading players in the frozen dessert category, says, “As frozen food is a low penetrated category, it requires continuous efforts and engagement with consumers. Organising large scale sampling, consumer research and consumer contact programmes to educate customers will help in break barriers towards adoption of frozen foods in India.”

Price positioning

Price positioning depends on a complex mix of types of ingredients, its usage, and price per unit of the ingredients. This determines the affordability of the customers that brands target. As per the report by Euromonitor, last year there was 8 per cent increase in frozen food products. “The rise in frozen food product is basically due to increase in prices of raw materials,” says Bhalla.

Providing an example of their price positioning strategy, Narayanan says, “In the case of our french fries which have more mass appeal and acceptance, we have a larger value pack of 750 gms as well as a 450 gms standard pack. However in the case of the other products, we have the normal standard 300 to 450 gms pack size.” Further, brands, while launching a new product, introduce trial packs in low priced packs to pull consumers into the new product portfolio.

		The key challenges for frozen food market •  A few players in the segment: First and foremost there are very few players in the frozen food segment in India and therefore frozen foods (excluding frozen vegetables) as a category has penetrated to only about 2 per cent of the consuming class. •  Low consumer awareness: There is low consumer awareness about frozen foods. •  Inadequate frozen food distribution network: Lack of good cold chain facilities is proving to be a disadvantage for companies to grow the market for frozen foods. •  Limited freezer space: In addition to the above, lack of freezer space at the retail end is also presenting a challenge to frozen food companies. •  Lack of high quality affordable products:  Availability of high quality affordable products  can help stimulate demand and address other issues like development of cold chain facilities.
	Back-end issues in frozen food category •  Limited or non-availability of core infrastructure like high-tech controlled production facilities, grading, packaging, warehousing, integrated processing units, poor transportation and erratic power supply are the major concerns for efficient supply of frozen foods in India. •  Because of poor quality of infrastructure and inadequate service, the cost of logistics in India is steep. As a result, manufacturers have to bear the cost which reduces their margins or the cost is sometimes passed on to consumers. •  The transportation, logistics, warehousing and packaging sectors in India is dominated by unorganised segment (small truck owning companies linked to intermediate brokers or transport companies, small warehouse operators, custom brokers, freight forwarders, etc.). As a result, the service is not integrated, which further results in losses. •  In addition to the above, lack of good cold chain facilities and freezer space is also posing a considerable challenge for the frozen food segment in India. Presently, there are also a very few specialised distribution companies, providing refrigerated transport and warehousing for perishable produce/ processed food products.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Packaging

Packaging also plays a very crucial role in protecting the integrity of frozen foods, right from the handling of the products to its transportation and distribution to the consumers. In fact, the right packaging can also go a long way in safeguarding the frozen foods from freezer burns (greyish-white patches that appear on the product – a sure sign that the food has dried out and is now less tender). Frozen foods should be tightly and carefully wrapped in moisture or vapour-proof containers or materials, ensuring that no air enters the package and that no moisture is allowed to escape or evaporate.

“At McCain, we adhere to the highest standards as far as packaging is concerned. We not only give great consideration to the safety aspect in packaging our products, but also ensure that our consumers are well informed on correct product usage and applications through the instructions on our product packaging,” informed Narayanan. Adding further, he said, “We also use advanced high speed equipment that ensures the products are immediately sealed in an aseptic environment, thereby leaving no scope for contamination.”

 

Storage needs and challenges

Proper storage is the first step to draw maximum benefits of pre-prepared frozen foods. Thus, pre-prepared frozen foods should be stored at a temperature of -18°C or lower. Frozen foods that have just been purchased from the market will still be of low quality for consumers and will serve little or no purpose as far as nutrition is concerned  if the right temperature is not maintained. In fact, studies have shown that foods change their nutritive value, colour, flavour and texture when it is stored above -18°C. The restricted facility for cold chains and absence of assured power supply today further aggravates the challenge. Lack of freezer space at the retail end and low consumer awareness on the storage and usage of frozen foods have also been posing a challenge for frozen food industry in India as a whole.

Future growth drivers 

Though frozen food is a new category in India, in the last few years, the Indian consumers have gone through a dramatic transformation in lifestyle by moving from traditional spending on food and groceries to lifestyle and convenience food products, thus leading to growth in home consumption of frozen foods. This demand for ‘convenience food’ has also supported good growth in frozen foods, with consumers appreciating the convenience of stocking up and keeping easily-prepared food at hand. This is also evident by the rise in the number of frozen food products being offered in the Indian market today.

The perception barriers associated with adopting frozen foods will gradually change with trial and experience of frozen foods. Therefore, it is also important that the frozen food companies take initiatives on their part to increase the awareness amongst the consumers. Apart from convenience in cooking at home, quick service restaurants are equally contributing to the growth of frozen foods. “The increase in out of home consumption is also helping frozen foods industry to strengthen its hold in the market,” says Bhalla. Moreover, increasing penetration of organised retail chains will shape the future demand and growth for frozen food product category in India.

Globally, convenience has become important for consumers today. Busy, time crunched lifestyle demands for lesser food preparation timing, which has led to the growth in the frozen processed food. The frozen processed food category is majorly comprised of frozen processed red meat, processed poultry, processed fish or seafood, processed vegetables, meat substitutes, processed potatoes, bakery products, desserts, ready meals, pizza, soup, noodles and other frozen foods. All packaged products, including branded and private labels, as well as generic products are included in this category. 

The frozen food market in India is still at a nascent stage with a few products, a comparatively low consumer awareness levels, not so efficient frozen food distribution network, and lack of freezer space at the retail end. Research shows that consumers do have misconceptions about frozen food, particularly they are not aware of the benefits that freezing as a method of preservation offers. That freezing is a natural method of food preservation without the use of any preservatives or chemicals and it locks freshness and maintains the nutritive value of food is not known to most consumers.

 Marketing strategy  

As per the recent report by Euromonitor, the consumer base for frozen food in India is still very low. For the Indian consumers, frozen food is a new category altogether and they are still getting familiar with it. “McCain’s local ranges of frozen food offerings are growing well and products with local tastes are registering good acceptance. Aloo Tikki, the most popular of McCain’s local product, introduced in 2008, is gaining good acceptance in the retail and foodservice channel and it also won the coveted “SIAL d’OR Country Award 2010” for the best ethnic adaptation,” says KS Narayanan, Managing Director, McCain Foods India Pvt Ltd. Adding further, he says, “The evolving market demands made us introduce McCain 3-minute Idli, which marked our foray into non potato based frozen products in India.”

The frozen foods category in  the Indian market is gradually evolving and is very crucial. Localisation and customisation of products and services help brands in creating a larger consumer base. Also, continuously expanding distribution network will improve the availability of the product in the market. “While on one hand we are strengthening the distribution to tap uncovered areas and segments in large cities, on the other hand, we are also continuously exploring newer markets as long as we have a cold chain network to support it,” says Narayanan.

GS Bhalla, Founder & CEO, Cocoberry India, one of the leading players in the frozen dessert category, says, “As frozen food is a low penetrated category, it requires continuous efforts and engagement with consumers. Organising large scale sampling, consumer research and consumer contact programmes to educate customers will help in break barriers towards adoption of frozen foods in India.”

Price positioning

Price positioning depends on a complex mix of types of ingredients, its usage, and price per unit of the ingredients. This determines the affordability of the customers that brands target. As per the report by Euromonitor, last year there was 8 per cent increase in frozen food products. “The rise in frozen food product is basically due to increase in prices of raw materials,” says Bhalla.

Providing an example of their price positioning strategy, Narayanan says, “In the case of our french fries which have more mass appeal and acceptance, we have a larger value pack of 750 gms as well as a 450 gms standard pack. However in the case of the other products, we have the normal standard 300 to 450 gms pack size.” Further, brands, while launching a new product, introduce trial packs in low priced packs to pull consumers into the new product portfolio.

		The key challenges for frozen food market •  A few players in the segment: First and foremost there are very few players in the frozen food segment in India and therefore frozen foods (excluding frozen vegetables) as a category has penetrated to only about 2 per cent of the consuming class. •  Low consumer awareness: There is low consumer awareness about frozen foods. •  Inadequate frozen food distribution network: Lack of good cold chain facilities is proving to be a disadvantage for companies to grow the market for frozen foods. •  Limited freezer space: In addition to the above, lack of freezer space at the retail end is also presenting a challenge to frozen food companies. •  Lack of high quality affordable products:  Availability of high quality affordable products  can help stimulate demand and address other issues like development of cold chain facilities.
	Back-end issues in frozen food category •  Limited or non-availability of core infrastructure like high-tech controlled production facilities, grading, packaging, warehousing, integrated processing units, poor transportation and erratic power supply are the major concerns for efficient supply of frozen foods in India. •  Because of poor quality of infrastructure and inadequate service, the cost of logistics in India is steep. As a result, manufacturers have to bear the cost which reduces their margins or the cost is sometimes passed on to consumers. •  The transportation, logistics, warehousing and packaging sectors in India is dominated by unorganised segment (small truck owning companies linked to intermediate brokers or transport companies, small warehouse operators, custom brokers, freight forwarders, etc.). As a result, the service is not integrated, which further results in losses. •  In addition to the above, lack of good cold chain facilities and freezer space is also posing a considerable challenge for the frozen food segment in India. Presently, there are also a very few specialised distribution companies, providing refrigerated transport and warehousing for perishable produce/ processed food products.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Packaging

Packaging also plays a very crucial role in protecting the integrity of frozen foods, right from the handling of the products to its transportation and distribution to the consumers. In fact, the right packaging can also go a long way in safeguarding the frozen foods from freezer burns (greyish-white patches that appear on the product – a sure sign that the food has dried out and is now less tender). Frozen foods should be tightly and carefully wrapped in moisture or vapour-proof containers or materials, ensuring that no air enters the package and that no moisture is allowed to escape or evaporate.

“At McCain, we adhere to the highest standards as far as packaging is concerned. We not only give great consideration to the safety aspect in packaging our products, but also ensure that our consumers are well informed on correct product usage and applications through the instructions on our product packaging,” informed Narayanan. Adding further, he said, “We also use advanced high speed equipment that ensures the products are immediately sealed in an aseptic environment, thereby leaving no scope for contamination.”

 

Storage needs and challenges

Proper storage is the first step to draw maximum benefits of pre-prepared frozen foods. Thus, pre-prepared frozen foods should be stored at a temperature of -18°C or lower. Frozen foods that have just been purchased from the market will still be of low quality for consumers and will serve little or no purpose as far as nutrition is concerned  if the right temperature is not maintained. In fact, studies have shown that foods change their nutritive value, colour, flavour and texture when it is stored above -18°C. The restricted facility for cold chains and absence of assured power supply today further aggravates the challenge. Lack of freezer space at the retail end and low consumer awareness on the storage and usage of frozen foods have also been posing a challenge for frozen food industry in India as a whole.

Future growth drivers 

Though frozen food is a new category in India, in the last few years, the Indian consumers have gone through a dramatic transformation in lifestyle by moving from traditional spending on food and groceries to lifestyle and convenience food products, thus leading to growth in home consumption of frozen foods. This demand for ‘convenience food’ has also supported good growth in frozen foods, with consumers appreciating the convenience of stocking up and keeping easily-prepared food at hand. This is also evident by the rise in the number of frozen food products being offered in the Indian market today.

The perception barriers associated with adopting frozen foods will gradually change with trial and experience of frozen foods. Therefore, it is also important that the frozen food companies take initiatives on their part to increase the awareness amongst the consumers. Apart from convenience in cooking at home, quick service restaurants are equally contributing to the growth of frozen foods. “The increase in out of home consumption is also helping frozen foods industry to strengthen its hold in the market,” says Bhalla. Moreover, increasing penetration of organised retail chains will shape the future demand and growth for frozen food product category in India.