Packaged Food in India

Abstract

Euromonitor International' s Packaged Food in India market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.

Why buy this report

• Get insight into trends in market performance
• Pinpoint growth sectors and identify factors driving change
• Identify market and brand leaders and understand the competitive environment

Product coverage

Baby food; Bakery products; Canned/preserved food; Chilled processed food; Confectionery; Dairy products; Dried processed food; Frozen processed food; Ice cream; Impulse snack products; Meal replacement products; Meal solutions; Noodles; Nutrition/staples; Oils and fats; Pasta; Ready meals; Sauces; dressings and condiments; Snack bars; Soup; Spreads; Sweet and savoury snacks

Executive summary

Strong double-digit growth for packaged food value sales

Packaged food retail value sales growth of 15% in 2007 was the fastest India had witnessed over a nine-year period. India ranked second behind Indonesia as the fastest growing packaged food market in Asia Pacific in 2007 as Indian consumers earned more and also spent more on packaged food products in this year. The strong retail volume growth that accompanied the value sales increase for most packaged food products was a reflection of growing consumer confidence underpinned by a booming economy and a growing desire for convenience.

Price increases but no complaints from consumers

In addition to robust retail volume sales of almost all packaged food products, retail value growth was aided by increased average unit prices particularly of milk which had a ripple effect across most other packaged food products. There was, however, considerable variation in price increases, with staples such as fresh milk increasing by almost 17% in 2007 while average prices of bakery products increased by just 2%. Rising affluence and increasing affordability amongst Indian consumers meant that most manufacturers felt that the time was right to pass on the price increase to consumers rather than to absorb it. Fortunately for manufacturers there was no major consumer backlash following the price increase.

GCMMF leads and improves market share

Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) extended its market leadership in packaged food in 2006. Thanks mainly to geographical expansion particularly of sales of fresh milk over the 2002-2006 period, GCMMF saw its retail value sales more than double over the five-year period. Among the top 10 packaged food manufacturers in India, 2006 was an especially good year for dairy producers such as GCMMF, Mother Dairy Fruit & Vegetable Ltd, Nestlé India Ltd, Karnataka Cooperative Milk Producers Federation Ltd and Tamil Nadu Cooperative Milk Producers Federation Ltd all of which witnessed strong double-digit value sales growth.

Independent grocers lose out as consumers turn to modern retail formats

The acceleration of retail expansion by players such as Pantaloon Retail India Ltd and the entry of new players such as Reliance Industries Ltd are resulting in changes in the way packaged food products are sold in India. Independent grocers have been slowly losing share of packaged food sales as modern retail formats such as supermarkets/hypermarkets and convenience stores have been gaining at their expense. This has led to most packaged food players having to revamp their distribution strategies with some players setting up dedicated distribution operations to specifically serve the new channels. That said, with close to nine million independent grocers in India in 2007, this remains the largest and most important channel for packaged food sales.

Opportunities galore as forecast growth to remain robust

With India having the lowest per capita expenditure on packaged food in Asia Pacific, at just over US$11 in 2007, there remain plenty of opportunities for the market to grow and expand over the 2007-2012 forecast period. Packaged food sales in India are expected to grow at a CAGR of just over 8% over the forecast period. Most product sectors are forecast to enjoy robust growth, with ice cream leading the way with a forecast CAGR of almost 18% in retail volume terms. Although more multinationals are expected to enter the country, domestic players, given their strengths in sourcing and regional distribution, are expected to continue to provide strong competition to multinationals over the forecast period. That said, low per capita consumption combined with growing affluence and affordability mean that there should be plenty of opportunities for all players to grow.