CHAPTER III - a reservoir of Indian theses @ INFLIBNETshodhganga.inflibnet.ac.in/bitstream/10603/51492/7/07_chapter3.pdfCHAPTER III READY TO EAT FOOD ... South Indian style of consuming

-- 61 --

CHAPTER III

READY TO EAT FOOD MARKET

INTRODUCTION

In India, majority of food consumption is still at home. Always, out of home food

consumption is increasing due to increase in urbanization, increasing Rural Income, Change

in Rural life style, breaking up of the traditional joint family system, desire for quality, time

which translates into an increased need for convenience, increasing number of working

women, rise in per capita income, and increasing level of affluence in the middle income

group had brought about changes in food habits. During conventional days man used to have

his food lavishly and slowly, but in modern era, trend changed the habits of foods, which are

simple and easy to digest. The western influence has changed the food habits in India and the

usage of ready-to-eat foods (RTE foods) are on the rise. Hence, RTE foods fulfilled all the

needs of modern human being. Canned foods, convenience foods, frozen foods, instant

products, dried foods, preserved foods, etc. all comes under the category of RTE foods.

3.1 READY-TO-EAT FOOD DEFINITION

Ready-to-eat food means that it is in a form of edible without additional preparation to

achieve food safety, as specified in following Sections 3-401.11(A), (B), Section 3-401.12,

section 3-402.11, 3-401.11(C) of Food Code 2009of U.S. It may receive additional

preparation for palatability or aesthetic, epicurean, gastronomic, or culinary purposes87

.

Fruits and vegetables that are cooked for hot holding, as specified under section 3-

401.13; all potentially Hazardous Foods (Time / temperature control for safety) that is cooked

to the temperature and time required for the specific food under Subpart 3-401 and cooled as

specified under sec. 3-501.14 of Food Code 2009of U.S. 88

A “ready-to-eat” food product may be defined as any food product which does not

require any elaborate processing procedures on the part of consumer before it is good enough

for eating. Most of the RTE foods packed in pouches for consumption. It is ready to eat as

87

FDA Food Code: Chapter 1 – Purpose and Definitions 88

www.indianfoodindustry.net

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

http://www.indianfoodindustry.net/

-- 62 --

soon as the pack is opened in a form, which is tasty and appetizing. The advancements in

food technology and packaging technology have made it possible to extend the shelf-life of

these products. Before deciding which packaging material is to be used, it is necessary to

know the packaging requirements of the product.

There is no specific period of origin authentically declared for RTE foods. But the

necessity of RTE food started after the World War II. In present day RTE food covers all

types of convenience foods including ready-to-eat meals. Hence Ready-to-eat-meal origin is

traced as follows.

TABLE 3.1

ORIGIN OF READY-TO-EAT(MEAL) FOOD

YEAR TYPE OF RTE INTRODUCTION

1963

The Department of Defense began developing the "Meal, Ready to Eat". Modern food

preparation and packaging technology introduced to create a lighter replacement for

the canned Meal, Combat and Individual ration.

1966 A dehydrated meal stored in a waterproof canvas pouch.

1975-

1981 Dehydrated meal stored in a plastic retort pouch work was on progress

1986 Standard issue by using a limited menu of 12 variety

1994 To make the RTE food packets more user-friendly commercial-like graphics were

added with spoons and napkins.

1996 The number of varieties expanded to 16 (including vegetarian options)

2006

"Beverage Bags" were introduced to the MRE, as service members have begun to

depend more on hydration packs than on canteens, thus denying them the use of the

metal canteen cups (shaped to fit in a canteen pouch with the canteen) for mixing

powdered beverages..

Source: www.google.com , "MRE info".

From the above it is concluded that the period of retort pouches ignites the origin of RTE

foods covered under this study.


http://en.wikipedia.org/wiki/Retort_pouch

http://en.wikipedia.org/wiki/Vegetarian

http://www.mreinfo.com/us/mre/mre-menus.html

-- 63 --

In the last two decades, the share of urban population89

has increased from 23.30 per

cent in 1981 to 27.80 per cent in 2001. During the same period the female work participation

rate had increased from 19.70 to 25.70 per cent. The per capita income increased from Rs.

7,328 in 1980-81 to Rs 10,306 in 2000-01. The change in food habits was evident from the

growth of food processing industries. RTE foods covered 9 % of total manufacturing of

processed food90

.

India is the world second largest producer of food next to China. Indian Food process

industry is ranked 5th

in terms of production, consumption and export and expected growth.

Food processed Industry is categorized as organized, unorganized, and small scale Industries.

These industries constitute a major part of RTE Foods.

3.2 RURAL CONSUMERS’ CONSUMPTION PATTERN OF RTE

FOODS

Generally, food is prepared depending on the habits, tastes, social status, economic

factor, availability, traditions, habitats, etc., of the people of that region. The most sought

after in the present age are the RTE foods. RTE food is the food offered or exposed for sale

without additional cooking or preparation, which is packaged on the premises where they are

being sold and are ready for consumption. Even though RTE foods don’t require additional

cooking or preparation, South Indian style of consuming foods are mainly hot-served. Hence

ready-to-cook foods markets are also considered wherever necessary.

With the income level rising, demand for milk, meat, fish, fruits and vegetables is also

increasing in India. With more urbanization, Indian families also consume more processed

foods, more RTE foods, etc. Asian Americans, now numbering over 10 million along with

the other 13 million persons of Indian origin spread all over the world create a huge potential

market for the RTE foods out of India. This creates a scope for the producers to come out

with a long range of dishes including the usual meals. India had been at the forefront for

variety of dishes both in domestic and global market. RTE foods are very popular in the

western region of the world. Even India is being influenced by these RTE foods.

Development of the metropolitan cities due to increase in population, emergence of

89

Census of India 2001. 90

Ministry of Food Processing, India, Report 2005-06


-- 64 --

industries, evolution of various new factors such as increase in the number of working class,

time factor, etc., created the need for RTE foods in the market. Due to industrialization, the

labour category is getting attracted to it because of better emoluments and hence there is

shortage of home maid-servants. Due to this, the housewives, in order to save time started

using RTE foods.

As the literacy rate is increasing among the women, a large number of them in our

country are taking up jobs to setup their own status in the society and to use the extra income

generated. These are creating the need for RTE foods. Earlier times, a single family consisted

of many people i.e., a group of several nuclear families were living in a single place. Hence,

larger quantities of the food were used to be prepared. But as these joint families started

disappearing due to various reasons, each single family started using these RTE foods. Due to

establishment of multinational companies in India, rural home makers also started working,

prepare food at home is minimized.. Hence, this created the need for using RTE foods like

Tamarind powder, Lemon rice powder, , Idly / dosa / chilly-chutney powder, Dal powder

Kulumbu paste, Tomoto curry, Dry fish curry, Garlic pepper curry like south Indian food.

3.3 RURAL CONSUMERS’ LIFE-STYLE AND RTE FOODS

The standard of living is also changing due to raise in income level, influence of

western countries, more global trade, traveling etc., hence, people are changing their taste to

RTE foods more. In the modern era, the media, particularly electronic and print media, are

playing an important role in creating awareness of the products manufactured and released in

the market. All these factors are responsible for the popularity of RTE foods products in

Indian market. The marketers should see to it that the RTE foods are available to the

consumers without any difficulty at competitive rates. The products should be provided to

consumers by keeping in mind as and when they need, where they want and the manner in

which they want. These methods help in increasing the sales of the product with good

feedback from the consumers and creating niche for RTE foods in the market.

Several firms had been engaging in production and marketing of RTE foods products.

Hence, the consumers had a greater option to choose from. In this context, a study on

consumer behaviour was seemed to be important to understand the buying behaviour and


-- 65 --

preferences of different consumers. Understanding the consumer behaviour would help the

firms in formulating strategies to cater to the needs of the consumer and thereby increase

their market share. Consumer’s taste and preference were found to change rapidly, especially

in a dynamic environment. The report of ZENITH International highlights packaged foods in

India have grown at about seven per cent a year between 2000 and 2005, with RTE foods

being the fastest-growing, at a CAGR of 73 per cent91

.

The Indian RTE foods market, canned/preserved segment is more popular,

contributing about 90 per cent of the market and growing at a Compound Annual Growth

Rate (CAGR) of 63 per cent between 2001 and 2006 while the chilled and dried ready meal

segments are nonexistent. There is a huge tapped market opportunity arising due to rapid

demographic shifts, raise in rural income, changing life style of Rural, proportion of rural

working women, and urbanization in India. The industry needs to concentrate on broadening

the market and increasing penetration amongst Indian consumers.

The analysis also pointed out that industry players would have to significantly

improve their price competitiveness with respect to other options such as domestic help,

eating out and ordering in, available to the Indian consumer. Besides price consideration, the

product range offered by industry players will have to be strengthened.

TABLE 3.2

MAJOR PLAYERS IN THE GLOBAL INDO ETHNIC RTE FOODS INDUSTRY

Brands Description

Amul

Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's

largest food products marketing organization. Apart from being

known for its dairy products, Amul has ventured into the ready-to-eat

industry and includes Processed Cheese, Pure Ghee, Shrikhand,

Nutramul and Mithaee Gulab Jamuns among its offerings.

Gits

Gits produces the selected range of popular ready to cook and instant

foods that cover a range of ethnic Indian cuisine-and where the

recipes have "Global palette acceptance".

91

ZENITH International Journal of Multidisciplinary Research Vol.2 Issue 6, June 2012, ISSN 2231 5780. www.zenithresearch.org.in 171


http://www.kanandairy.com/

http://www.gitsfood.com/

-- 66 --

Haldirams

The traditional Indian Sweet-Maker from a small set up has

transformed into a full fledged processing food industry and taking its

wares beyond the domestic frontiers to the Western World. Offers

packaged Bhel puri chats such as Sev Puri, Chana Masala, Samosa,

Pakoras, Alu Tikki, Pao Bhaji, Gol Gappa, Dhokla among others

House of Spices

The product line for House of Spices includes its own brand name,

Laxmi Brand. Under Laxmi Brand, House of Spices carries all types

of daals, beans, nuts, spices, edible oils, flours, pickles, pastes,

chutneys, frozen vegetables and frozen meals. Under Shamiana,

House of Spices other brand, they carry sweets, snacks as well as ice

cream.

Ethnic Kitchens

Offers packaged sweets,syrups,namkeens, cookies, pickles, aloo

Masala, Bhujia, Bhelpuri, Chana Dal, Kajui Ladoo and many more

items.

Kitchens Of India

ITC's Flagship brand 'Kitchens of India ' has begun to carry this

exotic taste of Indian cuisine beyond the shores of India.

Connoisseurs of Indian food in the US, UK, Switzerland, Bhutan,

Bangladesh, Hongkong, Tanzania, Canada and Australia now have

the opportunity to taste these delicious recipes.

ITC

Aashirvaad and Kitchens of India’ products from the ITC stable of

India include a wide assortment of ready to cook foods and dishes

ranging from Bukhara (Uzbek recepie) to Murgh Methi and other

exoctic cuisines and includes "regular" Biryanis, Curry Pastes and

dishes.

MTR

Amongst the top five processed food manufacturers in India, the

company claims to "market and export a wide range of packaged

foods to global markets" that include USA, UK, Australia, New

Zealand, Malaysia, Singapore, UAE and Oman. MTR foods currently

comprise twenty-two delicious and completely authentic Indian

curries, gravies and rice.


http://www.haldiramusa.com/

http://www.hosindia.com/

http://www.ethnickitchens.com/DProduct.aspx?CatId=4

http://www.kitchensofindia.com/

http://www.itclimited.com/sets/foods_frameset.htm

http://www.mtrfoods.com/readytoeat/index.htm

-- 67 --

Priyafoods

Priya has a range of popular traditional recipes starting from Dal

Makhani, Navaratan Kurma to Palak Paneer, Paneer Butter Masala,

Punjabi Chhole and Rajma Masala along with true southern delicacies

like Andhra Veg Pulav, Mango Dal, Gongura Dal. Priya's products

are available in USA, Canada, West Indies, UAE, Saudi Arabia,

Kuwait, Bahrain, Qatar, Oman, Singapore, Malaysia, Australia, U.K.,

New Zealand etc.

Rajbhog Foods Inc.

Specializing in Indian sweets and snacks in America, Rajbhog is

capitalizing on this niche by franchising its model across the US and

Canada, manufacturing and distributing sweets, snacks, savories,

frozen foods, ice cream and beverages.

RainbowFoodsIndia

Exporters, manufacturers & suppliers of all types of Indian Frozen

Vegetables, Meals & Snacks to USA and UK. They procure Frozen

Vegetables, Meals, Fruits, Parathas, Punjabi Veg Curries, vegetables,

fruits, pickles, pastes and Snacks.Reputed professionals from 5-star

hotels. Supply of Indian Frozen Vegetables, Meals & Snacks

foods. Products

Satnam Overseas Ltd

Kohinoor Heat & Eat Indian Curries are a range of ready - to - eat

Indian delicacies. Kohinoor claims that "Heat & Eat range of curries

use the well-established retort technology to offer extended shelf life

to the products through steam sterilization."

Shana

Shana Frozen Foods specializes in ready to cook Ethnic foods. Shana

is a popular brand in the frozen Asian Ethnic food segment in U.K.

and Canadian market. Includes new South Indian Range of frozen

Idlis, Vadas, Masala Dosas and Mini Uttapams.

Tasty Bite

Tasty Bite has a range of entrées and Ready Meals. They have

exceptional retort pouches which were developed for the Apollo

space program. Tested to withstand extreme temperatures and heights

from well below sea level to as high as the moon, this retort

packaging has made Tasty Bite a favorite with campers, mountain

climbers, sailing expeditions, desert safaris.


http://priyafoods.tradeindia.com/

http://www.rajbhog.com/

http://www.rainbowfoodsindia.com/

http://www.rainbowfoodsindia.com/rainbow/products/index.html






http://www.satnamoverseas.com/kohinoor_heat_&_eat.htm

http://www.shana.tv/engabout.asp

http://www.tastybite.com/

-- 68 --

Veekay Impex.com

Exporters of Fresh Fruit Juice, ready to eat food products; kairameen

Moliee(Pearl-spot fish), Motha Fish curry, see Fish Curry,Chilly

Chicken (boneless).

Ashoka Ready to Eat

Ashoka is a Brand owned and managed by ADF Foods Limited (a

BSE listed Company) in India. Ashoka is our Flagship Brand and the

leading Ethnic Indian food brand made in India. It is among the

widely distributed ethnic Indian brand. Its range includes ready-to-eat

curries (Heat & Eat), Frozen Foods (Indian Breads & Snacks),

pickles, condiment pastes, mango pulp/slices, chutneys, pappadums,

IQF (Individually Quick Frozen) ready-to-cook vegetables, and

Microwaveable rice.

Vimal Agro Products

Vimal Agro Products with state of the infrastructural set up has the

potential to manufacture more than 80 different food products ranging

from canned vegetables, Fruit pulp and slices, Pickles, Chutney,

papads and Ready to eat foods and supply products to the retail

sectors in Canada, United Kingdom, United states of America under

the brand name VIMAL and SWAD

Source: www. garamchai.com.

3.4 RTE FOOD CONSUMERS’ MARKET TREND

India provides an attractive opportunity for both Indian and international players with

a mix of demand and supply side changes. If consumer demands of affordability, availability

and enhancing acceptability are met, the RTE foods market has the potential market size of

2,900 crore by 2015 from its existing Rs. 128 crore92

.

India has made lot of progress in agriculture & food sectors since independence in

terms of growth in output, yields and processing. It has gone through a green revolution, a

white revolution, a yellow revolution and a blue revolution. Today, India is the largest

producer of milk, fruits, cashew nuts, coconuts and tea in the world, the second largest

producer of wheat, vegetables, sugar and fish and the third largest producer of tobacco and

rice. Now the time is to provide better food processing & its marketing infrastructure for

Indian industries to serve good quality & safest processed food like ready to eat food. It is

92

ZENITH International Journal of Multidisciplinary Research Vol.2 Issue 6, June 2012, ISSN 2231 5780ww.zwenithresearch.org.in 171.


http://www.ishopindian.com/shop/catalog/Readymade-Entrees-p-1-c-33.html

http://www.adf-foods.com/home/home.asp

http://vimalagro.tradeindia.com/

-- 69 --

opening a new window in world scenario as far as taste & acceptance is concerned.

Therefore, Indian Government is providing more infrastructures for this sector. Excise duty is

now zero % on RTE foods and 100 % tax deduction for the first 10 years for new units. This

allows manufactures to bring down their prices & spreads its flavors to the world93

.

The Indian consumer market, which is primarily dominated by young generation, is

becoming increasingly sophisticated and brand conscious. A typical upper middle class

young consumer is beginning to look beyond the utility aspect of a product to seek

intangibles like brand and lifestyle statement associated with the product. This modern

consumer wants his purchases to reflect his lifestyle or at least the one he aspires for. As a

result of this brand consciousness, the food and beverage segment of the FMCG sector is

already witnessing a significant shift in demand from loose to branded products.

The Indian affluent class has always had a penchant for premium branded goods. A

recent luxury brands survey conducted by The Nielsen Company, a global information and

media research company, has ranked India third after Greece and Hong Kong in the list of

most brand conscious countries in the world. Over 35% of Indian respondents said they spend

money on luxury brands94

.

Generally speaking consumer awareness of functional product is low. A recent survey

shows 80% of Indians agree that health considerations significantly influence their choice of

food and drinks. Approximately 48% of these respondents feel that functional food claims

play a significant role in their purchasing decisions for food and beverage products95

.

Products that reduce stress, prevent aging, help the heart and fight diabetes are all on a

positive growth curve in India.

3.5 RURAL AND URBAN CONSUMERS OF RTE FOODS There is a marked difference in consumption between urban and rural consumers.

Urban consumers represent 70% of the vitamin and dietary supplement market, versus 30%

attributed to rural consumers96

. Indian consumers are spending more on nutritional

supplements to combat the effects of stress. Protein supplements and items relating to muscle

93

Ministry of Food Industries rules, 1955FPO 94

www.nielsen.com/us/ 95

www.nielsen.com/us/fortified/functional products 96

Purchasing Process of Rural Consumers, http://WWW.ehow.com


-- 70 --

building are popular, due to the increasing fitness and bodybuilding activity among the urban

elite.

Dieting is more prevalent than walking or cycling for weight-loss. Rising obesity

levels and hypertension in India means that health will become an increasingly important

focus for consumers, who will therefore seek out products that aid weight loss. In comparison

to Western or European countries, sports do not play a dominant role in the Indian culture,

which is traditionally male dominated. However, young, rural and urban adults are

increasingly attracted to adventure sports, and this has led to growth in the popularity of

Kabadi, Jalli kattu (Controlling the Bull in southern Tamil nadu), Cricket, Shuttle cock and

mountaineering clubs. This trend may lead to more market interest in reasonably priced

sports nutrition products. RTE food Idiappam, Parotta, Pickles, Chappathi comprise a niche

category in Rural India, with consumption largely centered in rural and sub-urban areas.

Economical prices and packaging induces the average consumer for purchasing them.

3.6 RURAL CONSUMERS’ BUYING HABITS OF RTE FOODS

The buying habits of rural consumers are largely influenced not only by the selection

of products and retailers available, but by the demographics of the consumers themselves. In

a comparison of urban and rural consumer behaviors published in the "Journal of Consumer

Behavior," researchers found that rural consumers tend to be less educated and of lower

income than their urban counterparts; in addition, rural consumers tend to have higher

expectations for product durability and considerably different media habits, which means

they may not see or respond to the same advertisements as their urban cousins. These

differences between rural and urban consumers influence rural consumers' preferences in

products, styles and brands. Rural consumers may exhibit measurable loyalty to retailers that

are available to them, even when traveling into more urban areas. Loyalty is likely a product

of the consumer's familiarity with the retailer and comfort in doing business. The competition

builds a strong bond with the rural consumer. Few consumers may abandon their loyalties to

purchase products at lower prices from substitute- stores in nearby locality. Whereas

marketers concentrate on loyalty of consumers. Marketers value and seek brand loyalty.

Consequently, they have developed a variety of strategies to encourage both behavioral

(repeat purchase) and attitudinal (emotional) loyalty among consumers. Although marketers

give a variety of definitions for brand engagement, marketers value and seek brand loyalty.


-- 71 --

PICTURE 3.1

RURAL CONSUMERS’ BUYING STYLE

Source: Snap shot at Village in Tirunelveli, Tamil Nadu on 5th May 2012.

PICTURE 3.2

JUICE-CUM- RTE FOOD SHOP

Source: Snap shot at Village in Tirunelveli, Tamil Nadu on 5th May 2012.

Although marketers give a variety of definitions for brand engagement, the essential

concept is an emotional attachment to a brand as though the consumer has an emotional

Consumer Buying style, Tirunelveli Region

Rural RTE foods shop, Tirunelveli Region


-- 72 --

relationship with it perhaps because the brand acts as an important reflection of self-identity

or is an important symbol of something meaningful to the consumer97

Majority of Rural Indians still buy their daily needs from small independent Retail

stores near to their residential areas. Convenience of shopping at these outlets is a major

attraction for consumers. The range of products available is a lot greater than in smaller

establishments, and consumers can interact with products prior to purchase.

PICTURE 3.3

RURAL CONSUMER NEGOTIATION

Source: Snap shot at Village near by Madurai on 6

th May 2012

97

Ronald E. Goldsmith, Branding and Sustainable Competitive Advantage: Building Virtual Presence, Brand Engagement and Brand Loyalty, Florida State University, USA, 2011

Consumer Negotiation, Madurai Region


http://www.igi-global.com/book/branding-sustainable-competitive-advantage/52735

-- 73 --

PICTURE 3.4

RURAL RETAIL STORE

Source: Snap shot at Village near by Trichy on 6

th May 2012

Poised to see strong growth in future, domestic players, multinational players and

cooperatives are looking to expand their rural markets and set up outlets in new locations. In

normal practice, the RTE foods are consumed in a short span of time, but with the

advancement in packaging technology, it is now possible to produce these items

commercially and to extend the shelf-life up.

3.7 RTE PACKAGED FOODS

An increase in rural income RTE Packaged food is gradually growing in 2012

compared with the previous year. The changing life styles in rural make them for spending

more on products in RTE packaged food. Manufacturers also encouraged this by introducing

many new products in the second half of 2009 and during 2010. Several manufacturers also

ventured into new areas within packaged food as growth picked up. The competitive

environment in India is dominated by multinational and domestic companies, along with

government cooperatives. Some of the leading players in packaged food in India are

Hindustan Unilever, Gujarat Co-operative Milk Marketing Federation, Nestlé India Ltd,

Frito-Lay India, Glaxo SmithKline Consumer Healthcare Ltd, Britannia Industries Ltd, MTR

Foods and Karnataka Cooperative Milk Producers Federation Ltd. Thus, with the Indian

Rural retail shop display, Trichy Region


-- 74 --

market poised to see strong growth in future, domestic players, multinational players and

cooperatives are looking to expand their product portfolios and increase their shares. Foods

such as idlis, dosas, pav bhaji are sold across the counter and have a very short shelf-life,

hence the packaging requirements of these products are different from those of ready to eat

products like curry rice, upma, vegetable biryani , which are retort processed for longer shelf-

life. Products like idlis, dosas, and pizzas are packed in packaging materials having low water

vapour and oxygen permeability, odour and grease resistance, and good physical strength.

The packaging materials generally used are injection moulded plastic containers, plastic

film/bag pouches or paperboard cartons98

.

3.8 SEMI-PROCESSED/COOKED RTE FOODS

The market for semi-processed/cooked and ready to eat foods was around Rs 82.9

billion in 2004-05 and is rising rapidly with a growth rate of 20 per cent99

. Indian snack food

market has reached a value of Rs 1530 crore. It is one of the largest snack markets in the

world. Potato chips are by far the largest product category within snacks, with 85% of the

total market share. Snack nuts and savory snacks also add to the market. At present, popcorn

has yet to break into the Indian market. The world’s largest producer of French fries and

potato specialties Mc Chain Foods with Mc Chain Smiles and NP Foods have entered in

India’s potato snack industry in 2005. According to the report of Euro monitor International,

a market research company, the amount of money Indians spend on meals outside the home

has more than doubled in the past decade, to about US$ 5 billion a year and is expected to

double again in about half that time. The industry is estimated to grow at 9-12 per cent, on the

basis of an estimated GDP growth rate of 6-8 per cent, during the tenth five-year plan period.

Value addition of food products is expected to increase from the current 8 per cent to 35 per

cent by the end of 2025. Fruit and vegetable processing, which is currently around 2 per cent

of total production is estimated to increase to 10 per cent by 2010 and to 25 per cent by 2025.

Major social, economic and demographic changes over recent years have had great influence

on the food we eat, and on where, when and how we do so. As a result the convenience food

sector has grown by 70% over the past decade, creating a huge market.

98

www.indianfoodindustry.net 99

The Ministry of Food processing Industries, Ready to eat Foods,mofpi.nic.in


-- 75 --

3.9 CONVENIENCE FOODS AND RTE FOODS

Convenience food is a concept that is prevalent in the developed world since long,

while its inception into the Indian market has been recent. With the changing socio-economic

pattern of life and the increasing number of working couples, the concept is fast becoming

popular in Indian market100

. This type of food is becoming popular because it saves time and

labour. This food has extended shelf-life and is available off the market shelves.

Packaged/convenience food products sector has been slow in penetrating the large

potential presented by Indian 250 million strong middle class. But due to growing

urbanization and changing food habits, the demand has been rising at a good pace and there is

enough latent market potential waiting to be exploited through developmental efforts. The

convenience food could be basically classified into two categories:

Shelf – stable convenience food

Frozen convenience food

Shelf-stable convenience foods are further classified as:

Ready-to-Eat and Ready-To-Serve food – namely,. Idlis, dosas, pav bhaji,

meatproducts like pre-cooked sausages, ham, chicken products, curries, chapattis,

rice,vegetables like aloo chole, navratan kurma, channa masala.

Ready-to-Cook food namely, instant mixes like cake mixes, gulab-jamun mix,

falooda mix, ice cream, mix, jelly mix, pudding mix etc., and pasta products like

noodles, macaroni, and vermicelli.

Bakery products include bread, biscuits, pastries, cakes, buns, rusk etc.

This activity is mostly concentrated in the unorganized sector. Bread and biscuits

constitute the largest segment of consumer foods with an annual production is around 4.00

million tones. Bread manufacturing is reserved for the small-scale sector. Out of the total

production of bread, 40% is produced in the organized sector and the remaining 60% in the

unorganized sector. Similarly, in the production of biscuits, share of unorganized sector is

about 80%

The changing lifestyles and socioeconomic profile of Indians is fueling the growth of

RTE foods in the country. The concept of nuclear families and moving away from one’s

100

www.indianfoodindustry.net


-- 76 --

hometown is now commonplace in Indian society Blurred gender roles and responsibilities

have arisen from ongoing societal changes. An emerging generation of Indian women now

exists that have neither the necessary knowledge nor the time to prepare traditional Indian

meals on a regular basis Indians have become more experimental with respect to their food

and drink choices, as there is a need for variety in dietary intake Globalization of Indians and

Indian food is increasing the acceptance and demand for RTE foods.

3.10 RECENT TREND IN INDIAN RTE FOODS MARKET

According to the recent survey, the Indian food market is all set to be double by the

year 2025. The rapid economic development, innovative technology and food production,

growing consumerism and improved lifestyle are the main reasons behind this growth.

Today, Indian consumers are paying for branded and value added food products which have

led to the introduction of new segments in the manufacturing and retail market. Over the last

few years, the annual output of the food market in India has been around $155 billion which

is expected to reach around $344 billion by the year 2025101

.

The market share of the Indian snacks is around US$ 3 billion with a growth rate of

around 15-20 %. The unorganized snacks market is worth around US$ 1.56 billion with a 7-8

% growth rate. Today, there are around 1,000 types of snacks that are available in the market.

The most popular snacks are potato based items and chips. Some of the main companies in

the organized snacks market in India are Pepsi and Haldiram's.

The report by the US Department of Agriculture cites a study by McKinsey&Co. The

Indian food market is set to more than double by 2025 on the back of a growing economy and

changing lifestyles of people, says a US report. Indian consumers are willing to pay a

premium for both value-added private and branded products, creating immense opportunities

for manufacturers and retailers. There is a widespread recognition in the country that

consumers are likely to replace light meals with snacks.

The Indian retail market is the fifth largest retail destination all across the globe. It has

been ranked as the most attractive emerging market for investment in the retail sector in

101

http://business.mapsofindia.com/india-market/food.html


http://business.mapsofindia.com/india-market/food.html

-- 77 --

2009. In the entire Gross Domestic Product of India, the share of retail trade was between 8-

10% in 2007, where presently it has touched around 12%, and in all probability will touch

22% by the end of 2010. Consumerism is on the rise with the rising trend of middle class

segment in the country. The Indian consumer (retail) market, in all probability, will grow four

times by 2025. The value of India's retail market has touched US$ 511 billion in 2008. India

has escalated up to the 39th most preferred retail destination globally in 2009.

3.11 RTE FOODS MARKET IN TAMIL NADU AT A GLANCE

Consumer food industry mainly consists of RTE foods products such as chips, salted

snacks, pasta products, cocoa based products, bakery products, biscuits, soft drinks, etc. There

are around 60,000 bakeries, 20,000 traditional food units and several pasta food units. The bakery

industry is among the few processed food segments whose production has been increasing

steadily in the country in the last couple of years.

Urban and Rural life have mostly encouraged by the emergence of category of foods

called Ready-to- cook and ready-to-eat foods. RTE foods that fall under the expanding RTE

foods category such as Biscuts, Noodles, Suces, Jams, Cullinary pastes, Readymade masala,

Pickles, Readymade Chappathies, Readymade parotta available to consumers across the country

and some manufactures in Tamilnadu produces them in mass under packed form. The rising

demands for regional flavours in the RTE foods category can be gauged from the fact that now

there are numerous players that they specilaise according their administrative regions such as

Tirunelveli, Madurai and Trichy. Few suppliers/retailers of study area of RTE Foods are listed

below.

TABLE 3.3

LIST OF MANUFACTURERES AND SUPPLIERS OF RTE FOODS

IN THE SELECTED AREA OF STUDY

Organisation Location Ready to eat and cook foods

category

Topper Foods

36 APK Main Road, Villapuram,

Near PB Paint Store,

MADURAI.

Banana chips, Potato chilli,

Potato chips.

Madurai Meenakshi

spcies India Private

Limited

20-a, Micheal Moopanar Street,

Kamarajar,

MADURAI.

Appalam, pappadam, spices

powders.


-- 78 --

Alagu Exporters,

13/74 B Kamarajar Street,

Pallavan Nagar,,

MADURAI.

Deals in south indian snacks,

appalam, vatthals, spices.

Southern Commercial

Agencies,

220 South Masi Street,

MADURAI.

Deals in snacks, chilli powder,

masala powder, indian snacks,

spices powder.

Raaj Ganapat Impex,

Plot No 20, Jeevan Nagar,

Ponmeni Jai Nagar.,

MADURAI.

Deals in , fresh fruits, snacks,

papad, ghee.

Kapilan Exports 470 Mahilchi Nagar,

TIRUNELVELI.

Deals in chips, snacks,

munching items.

JJ Exim,

48.b. 7th Cross Street,

Maharajanagar, Palayamkottai,

TIRUNELVELI.

Deals in cos, indian snacks,

food items, biscuits.

ArthurExports

No.19, 6th Street,

Perumalpuram,

TIRUNELVELI.

Deals in peanuts, cashew nuts,

spices, banana snacks,.

JK Exports,

13/535 C Main Road,

Alangulam,,

TIRUNELVELI .

Deals in snacks, chilli powder,

masala powder, indian snacks,

spices powder.

Green Meenas Exports,

No. 80, S. I. D. C. O. Estate,

V. V. Kottai ,

TIRICHY.

Salted Murku, masala powder,

indian snacks

Mahi Foods and

Marketing

15, Mrg Complex, Chennai

Trunk Road,

Thiruvanaikoil ,

TIRICHY .

Bread, Rusk, Cookies, Snacks

Eat 2 Live No 15/5, Pirattiyur , TIRICHY. Chips, Snacks,Papad,

Dalgrams, Sauces

Dream Exporters, No 15/5, Pirattiyur ,

TIRICHY. Banana chips, Sauces, cookies

Sources: www.exportersindia.com

http://www.bizzduniya.com/Company/Food-And-Beverage/Snacks-And-Wafers/ALL/4

http://dir.indiamart.com/impcat/snack-foods.html

In southern India some of the popular brands that offer a variety of traditional foods

in this Category include MTR, Britannia, ITC, and Guru Ganesh among others. As per

KSA- Technopak study, a secularity of the RTC Segment is that while a national player may

not be able to reach a feasible level, even a regional niche player may prove to be viable.


http://www.exportersindia.com/

http://www.bizzduniya.com/Company/Food-And-Beverage/Snacks-And-Wafers/ALL/4

http://dir.indiamart.com/impcat/snack-foods.html

-- 79 --

Moreover Southern India, in fact, shows the highest penetration of ready-to-cook products

such as idlis/ dosas, Noodles and Readymade chappathies and parotta. According t o the

November 2008 report, “Land Of opportunities: The Food Industry in India jointly

produced by Technopak Advisors Pvt. Ltd. and Federation of Indian Chambers of

commerce, the size of the Indian Food Industry is estimated at Rs.8,80,000 Core (USD 200

billion) in 2006-07 and is stated to reach Rs13,20,000 core (USD 300 billion) by 2015 with

the increasing share of processed food from 43 percent to 50 percent. Organized food retails

is expected to grow Rs.2,33,000 core(USD 53 billion by 2013, including rural market”.

According to “Branded Foods in India – Forecasts to 2015”, Maggi’s 2 minutes

noodles were the first real success story of packaged instant meals in India. Introduced by

Nestle in 1983 and supported by high impact advertising, it captured the perception of rural

population and soon became favorite meal of Indian children. The major domestic players in

RTE foods such as ITC, Ashirvad, Kitchens of India has more than fifty branded foods.

Another one of major player in RTE foods in Rural Tamil Nadu segment impede that

its products are one hundred percent vegetarian and contain absolutely no preservatives, is

almost the top of five processed food manufacturers in India. In order to ensure that their

products have freshness of just cooked the company has adopted technology from the

Defense Food Research Laboratory, Mysore. MTR has ISO 22000 and HACCP certification

and their use of technology from the Defense Research Laboratory for their RTE products

has won them a president Award. MTR’s wide range of products include Ready-to-eat and

Ready-to-cook foods such as masalas suit to Tamil Nadu rural recipes like Rasam, Sambar,

Gravies and presently they comprises more than 22 varieties in it.

As per the manufacturing companies perception that the South Indian varieties of RTE

foods are narrow market as compared to North Indian preparations. And that is the reason

why South Indian market of RTE foods is not grown fast as expected by the Industries.

Further there are definite roadblocks as there are divergent tastes in the four South-Indian

states. The marketers mainly concentrating on Metro’s and urban market. The perception

about their product by the rural consumers in Tamil Nadu, a part of South India, is well aware

by the mass media.


-- 80 --

The Ministry of Rural Development has released grant in aid worth Rs.79,49,50,000/-

as part payment of Ist installment of Phase-VII, for construction of rural roads in Tamil Nadu

under Pradhan Mantri Gram Sadak Yojana (PMGSY).The sum is from the special window

created in NABARD (National Bank for Agriculture & Rural Development) under RIDF as

grants in aid to the Tamil Nadu Rural Housing & Infrastructure Development Corporation

(TNRHIDC)102

. TNRHIDC is the agencies executing the works taken up under Pradhan

Mantri Gram Sadak Yojana (PMGSY) in the state.Pradhan Mantri Gram Sadak Yojana is a

100 % centrally sponsored scheme to provide road connectivity in the rural areas of the

country. PMGSY envisages connectivity to all habitations with a population of 500 persons

and above in the rural areas and about 250 persons and above in respect of the hilly states,

tribal areas and desert areas through good and all weather roads.

Rural shops are recognized as valuable for it is for local people to enable them to

purchase supplies without having to travel outside the village, particularly those who rely on

local facilities for their everyday supplies. The shop and post office are also important social

hubs in a village – a place to share information and meet with friends and neighbours. There

are few highlights on Tamil Nadu rural shop. More over roads connecting to the Tamil Nadu

rural area is no doubt a comforting zone for their logistics are concerned with. Roads

connecting Rural shop. Most of the rural shops are owned by individual villagers are engaged

in the shop are local personals. Resting places in the rural stores are not provided in such a

way that consumers are satisfied to buy their needs immediately.

Market analysts highlight the fact that consumers come from varying socio

economic and cultural backgrounds and RTE food preferences are primarily focused on this

aspect. Preferences such as specific flavours, appealing of packing, net weight displayed in

the packing, present grave challenges to the food processors in creating their brand image

to consumers in rural area . Hence the rural consumers of Tamil Nadu market are highly

fragmented, to the extent of being unviable for large scale manufacturer and highly regional

oriented. Apart from this, the regional variations in food habits and differences in cuisine

also contribute the manufacturers to look into their perceptions.

102 www.cpjoshi.com,C P Joshi, Union Cabinet Minister, Road Tansport and Highways, (Release ID :65891)


-- 81 --

PICTURE 3.5

ROAD CONNECTING RURAL SHOPS

Source: Snap shot at Trunelveli rural area on 8th May 2012

PICTURE 3.6

SHOP CONNECTED BY THE ROAD (Fig 3.5)

Source: Snap shot at Trunelveli rural area on 8th May 2012

Shop connected by road, Trunelveli Region

Roads to rural shop, Trunelveli Region


-- 82 --

3.12 EMERGING CONSUMERS’ MARKET OF RTE FOODS

Most multinationals have resisted targeting the local consumers. They have argued

that the mass market in a single emerging economy is not large enough to justify localisation.

Further, multinational managers rationalize; emerging-market consumers are becoming more

like their developed counterparts. Thus, the RTE foods manufacturers are better off offering

their products with innovative positioning and waiting for consumers to evolve towards these.

Local managers of global companies now realize that the 3 to 5 per cent of consumers

in emerging markets who have global preferences and purchasing power no longer suffice as

the target market103

. Instead, they must develop deeper into the local consumer base to deliver

on the promise of tapping into billion consumer markets. These are powerful arguments.

However, that consumers of emerging markets for RTE foods are considered small is a self

fulfilling prophecy. Products transplanted from affluent markets only appeal to an elite,

which is no more than 5 per cent of the market. Delving into the population base to establish

mass market positions creates the economies of scale necessary to justify localization.

3.13 RURAL CONSUMERS’ SEGMENTATION

Low wages mean that time has a low opportunity cost. Thus labour saving benefits,

which are fundamental to RTE foods, new formats for culinary pastes, Ready to eat

chappathies and parotta combinations and masala powders, are unlikely to sell well in

undeveloped markets. While the opportunity cost of time is low for most consumers, it is

high for a small but significant segment. For this small segment, products that save labour

might be attractive. However, segmenting the market by cost of time is not useful because

time can be bought. In other words, richer consumers substitute others' time for their own,

and the market for time savings is served through inexpensive services rather than products.

Some local and branded MNC’s have demonstrated that well targeted, indigenously

developed and locally produced products can yield profits in mass markets. One thing

important to note is that practices in developed markets, such as rapid product development,

continuous product innovation and accelerated obsolescence, do not work well in rural

consumer’s market segment.

17 Times of India,By Niraj Dawar and Amitava Chaftopadhyay - Nov 09 2000.


-- 83 --

Since consumers can substitute their time for the benefit at a lower opportunity cost,

engaging consumers' energy as a substitute for including benefits can allow companies to

market a product at a price affordable to the rural consumers market.

3.14 RURAL CONSUMERS’ PURCHASING POWER

Prices need to be set in the context of consumer’s purchasing power, rather than in

relation to international standards. Consumers purchasing power exchange rates estimate the

value of a currency in terms of the basket of goods that it buys (compared with the cost of a

similar basket in a reference country and currency) rather than in terms of the existing market

exchange rates.

Multinationals, stuck with international pricing strategies, often resort to price

promotions to capture volumes. Such promotions can yield dramatic, if temporary, sales

increases. These large volume increases reveal a potentially large market that remains

untapped, just below the actual price points. To generate sustainable volume sales, a

permanent product entry at the affordable price for consumer is required. Failure to capture

volume segments leaves an opportunity for local companies, as Unilever discovered in the

Indian detergent market. Nirma, an initially ignored local brand, went on to topple Unilever's

Surf from its dominant position.

3.15 RURAL CONSUMERS’ RETAIL MARKET

In contrast to concentrated retailers and distribution in developed markets, the trade in

rural consumers emerging markets is fragmented. Multinationals sometimes rely on these

chains as their primary channel, but it is unlikely that chains will provide access to mass

markets. High population density, small homes with little space for storage, lack of

refrigeration and low car ownership mean consumers buy daily and locally. As a result, retail

outlet density is very high. Therefore foreign retailers cannot be the pillar of mass-market

distribution. At the same time, using small, independent stores poses a challenge to

international companies because they lack the expertise to deal with a fragmented trade

beyond the first tier of retail outlets, many companies use multiple levels of wholesalers and

distributors to capture shelf space one store at a time. This many layered distribution channel

puts a large distance between mass markets (especially rural markets) and manufacturers,

impeding learning and marketing adaptation.


-- 84 --

Despite being fragmented, shops have considerable power. The consumers deals

directly contact with the shopkeeper (often the owner), whose advice carries weight. The

owner's relationship with consumers is based on an understanding of their buying habits and

is often cemented when the retailer extends credit. These relationships give trade outlets

tremendous clout in recommending brand, making trade marketing an essential element of

any manufacturer's programme. Building relationships with a fragmented trade requires an

understanding of their interests. For example, it is counterproductive to push inventory on

them because most have little working capital. Rather, successful manufacturers develop new

revenue activities for the face-to-face contact has always more impact in rural market.

Indian homemakers are turning out to be a marketer's dream. A study conducted by

market research firm Indian Market Research Bureau shows an increasing number

homemakers are splurging on packaged and convenience foods and do not mind giving fast-

food to their kids. Marketers say this section of homemakers is symbolic of urban India with

an increasing disposable income. With more women taking up jobs as against the traditional

'homemakers' they are experiencing a new lifestyle either through self-indulgence or

indulging their kids. The study, shared exclusively with Times Of India, classifies these

women as 'indulgent homemakers' who are typically in the age group of 35-44 years, urban

and from Socio Economic Class . These indulgent homemakers say that as many as 68% of

their children prefer fast-food over home cooked food, while 61% of these homemakers

themselves opt for branded packaged food as it is convenient. This category of homemakers

spends an average of Rs 9,000 per month on grocery, according to the IMRB study.

In foods, the change is taking place from home-made to ready-to-eat. The evidence

lies in how quickly the market for packaged breakfast has doubled in three years to Rs 400

crore growing at 30% annually. Seeing huge opportunities in the changing preferences of

these women, marketers are all out to woo this growing segment. On top of the list for the

indulgent homemaker are branded ready-to-eat food, frozen food products. Other

convenience foods like packet pasta, instant noodles and snack mixes are also finding huge

traction among this group. "As a marketer this is emerging as a very important segment of

consumers despite its small size, because they are the trendsetters and decision makers for

their families. It is important to note that these consumers are also open to trying innovations


-- 85 --

whether it is yoghurts, health bars, ready-to-eat meals or bhuna masala. Also, their sensitivity

to price is low versus the average Indian," says Swati Jain, head, marketing, Danone India.

Indian cooking and lifestyle have undergone tremendous changes for the last 15 years.

There are many major factors impacts this change are include, liberalization policy, dual

income, separate living of couples, Innovative kitchen applications, Media proliferation etc.

The cooking style and eating habits in India varies drastically from southern part of India to

northern part of India. Due to lifestyle pressure nowadays people prefer easy short way of

cooking food rather spending too much time on spending in cooking. Non-availability of raw

materials to prepare masala and tedious process involved in doing so, has influenced people

to choose such products. There is no specific category and market potential for these

products. The product portfolio varies from noodles, pasta, chips, dairy products, fish & meat

products, ready cooking dosa, parota items, masala dishes, pre cooked dishes etc.

Due to Change in lifestyle and Foreign Institutional Investors investment there is a

drastic change in Indian culture and food habits. Most of the family members don’t have time

to cook the food in traditional way and most of the families are living in separate

environment. Despite modern cooking devices, consumers still need ready-to-cook and

Ready-to-eat food because it consumes very less time. The change in lifestyle and dual

income consumers prefer these types of products. The products may vary from noodles,

pasta, masala packages, stuffed paratha, etc., and many more. Other than national player like

nestle, pepsico, ITC, haldirams, cavinkare, there are many regional players who is making

foray into ready-to-eat segment. The market for semi-processed/cooked and ready to eat

foods was around Rs 82.9 billion in 2004-05 and is rising rapidly with a growth rate of 20 per

cent. With the changing life styles of the Indian middle class and the busy schedules of both

the husband and wife in the family the demand for semi-processed cooked/ready to eat food

will go up steadily as hired domestic help is also becoming costlier.

HLL has entered the ready-to-eat segment through Indus Valley rice meals in seven

flavours. MTR Foods has also launched a wide range of rice meals and other curries. Satnam

Overseas has also entered this growing market with its Kohinoor brands of rice meals and

curries. ITC ‘s more than 50 packaged branded food products under Kitchens of India and

Aaashirvaad brands with different varieties of ready-to-eat, Ready-yo-cook, food is gaining

popularity in the market. The culinary products including mainly wheat based products

comprising of noodles, vermicelli, macaroni and spaghetti is gaining popularity. HLL (Kissan


-- 86 --

and Knor range) and Nestle (Maggi) dominate this segment, as both have large product

portfolios. Heinz and Top Ramen are also knocking at the door. Indian snack food market

has reached a value of Rs 1530 crore. It is one of the largest snack markets in the world.

Potato chips are by far the largest product category within snacks, with 85% of the total

market share. Snack nuts and savory snacks also add to the market. At present, popcorn has

yet to break into the Indian market. The world’s largest producer of French fries and potato

specialties McCain Foods with McCain Smiles and NP Foods have entered in India’s potato

snack industry in 2005.

Major social, economic and demographic changes over recent years have had great

influence on the food we eat, and on where, when and how we do so. RTE foods are usually

criticized owing to its following perceptions by the consumers. They are such as:

RTE foods are typically are high in fat and calorie contents.

RTE foods reduced time cost and nutritional content associated with these foods is

specifically blamed for obesity.

Occasionally Genetically Modified Foods are used in RTE foods.

If heat processing is used the vitamins are lost.

Preservatives are always used.

In rural market RTE foods consumers get used to it due to:

RTE foods reduce the time it takes to prepare dinners significantly.

Due to packaging techniques such as canning and freezing, foods are available at all

times of the year.

Packaging and processing techniques, such as canning, freezing, and irradiation,

reduce spoilage and the presence of bacteria in the consumed products.

According to the report of Euromonitor International, a market research company, the

amount of money Indians spend on meals outside the home has more than doubled in the past

decade, to about US$ 5 billion a year and is expected to double again in about half that time.

The industry is estimated to grow at 9-12 per cent, on the basis of an estimated GDP growth

rate of 6-8 per cent, during the tenth five-year plan period. Value addition of food products is

expected to increase from the current 8 per cent to 35 per cent by the end of 2025. Fruit and

vegetable processing, which is currently around 2 per cent of total production is estimated to

increase to 10 per cent by 2010 and to 25 per cent by 2025.


-- 87 --

TABLE 3.4

THE FAST FOOD ITEM CATEGORIZED UNDER

QUANTITY AND THEIR VALUE

products 2001-02 2004-05 CAGR

Quantity# Value# Quantity# Value# Quantity# Value#

Groundnuts 112813 2509 177115 5030 16.2 26.1

Guar Gum 117883 4031 129648 6643 3.2 18.1

Jaggery & Confectionery 365893 4365 35549 770 -54 -43.9

Cocoa Products 1293 129 2274 273 20.7 28.5

Cereal Preparation 38087 2247 49487 2778 9.1 7.3

Alcoholic & Non-

Alcoholic Beverages 49672 1183 30045 1138 -15.4 -1.3

Miscellaneous

Preparations 23189 1373 52514 2244 31.3 17.8

Milled Products 322347 1964 140123 1449 -24.2 -9.6

# Quantity in MT, Value in INR Million

Source: Ministry of Food Processing Industries, Annual Report 2005-06.

Now the time is to provide better food processing & its marketing infrastructure for

Indian industries to serve good quality & safest processed food like ready to eat food. It is

opening a new window in world scenario as far as taste & acceptance is concerned.

Therefore, Indian Government is providing more infrastructures for this sector. The retort

processed foods do not require rehydration or cooking and can be consumed straight from the

pouch with or without pre-warming, depending upon the requirement of the users and the

weather conditions. These foods meet the specific needs of convenience, nutritional

adequacy, shelf stability, storage, distribution to the centers and have become very popular

after the Year 2002. Some of the mouth-watering dishes in retort pouches include chicken

curry, mutton curry, fish curry, chicken madras, chicken kurma, rajma masala, palak paneer,

RTE Meals like already cooked or prepared lunch &dinner are relatively new products which

came in market only a few years back and are now sold through retail general stores in

especially made sealed aluminum laminates. The retorting or sterilization process ensures the

stability of the RTE foods in retort pouches, on the shelf and at room temperature. The

application of sterilization technology completely destroys all potentially harmful micro-

organisms, thereby making sure that the food product has a very long shelf life of over 12

months and needed no refrigeration. Globalization of Indian food and its culture are the core

factors for popularization of ready-to-eat foods.


-- 88 --

Main motivation for these RTE foods is fast growing foreign market. Retail outlet

culture is now growing rapidly in India. Shelf life of these foods is at least 12-18 months.

Quality, Taste and Flavor of these foods remains as good as fresh up to the expiry date104

.

according to an analysis done by Tata Strategic Management Group (TSMG) that the factors

contributing to the growth would be changes like cold chain development, disintermediation,

streamlining of taxation, economies of scale on the supply side, coupled with increasing

disposable incomes, diminishing culinary skills and the need for convenience on the demand

side105

. Kissan, which HUL acquired from the United Breweries Group in the nineties, has

had a chequered past. The brand also epitomizes the journey of HUL’s foods business in

India. The well-known brand of jams, ketchup and squashes has seen many short-lived

product innovations that were quickly withdrawn when they failed to take off. As a result, the

older categories dictated the growth rate of the brand (at around 26 per cent per annum),

which has now come to denote ready-to-eat processed food for the FMCG multinational106

3.16 GLOBAL MARKET OF INDIAN RTE FOODS

India is one of the world’s major food producers but accounts for less than 1.5 per

cent of international food trade. This indicates vast scope for both investors and exporters.

Food exports in 1998 stood at US $5.8 billion whereas the world total was US $438 billion.

The Indian food industries sales turnover is Rs 140,000 crore (1 crore = 10 million) annually

as at the start of year 2000. The industry has the highest number of plants approved by the US

Food and Drug Administration (FDA) outside the USA. India's food processing sector covers

fruit and vegetables; meat and poultry; milk and milk products, alcoholic beverages, fisheries,

plantation, grain processing and other consumer product groups like confectionery,

chocolates and cocoa products, Soya-based products, mineral water, high protein foods etc.

We cover an exhaustive database of an array of suppliers, manufacturers, exporters and

importers widely dealing in sectors like the -Food Industry, Dairy processing, Indian

beverage industry etc. We also cover sectors like dairy plants, canning, bottling plants,

packaging industries, process machinery etc. The most promising sub-sectors includes -

Soft-drink bottling, Confectionery manufacture, Fishing, aquaculture, Grain-milling and

104

www.qtefoodcobnsultants.com 105

Business India, The Hindu Wednesday , Oct 24, 2007 106

Sayantani kar,Mumbai, Food for thought, June 13, 2011


-- 89 --

grain-based products, Meat and poultry processing, Alcoholic beverages, Milk processing,

Tomato paste, Fast-food, Ready-to-eat breakfast cereals, Food additives, flavors etc.

FIGURE 3.7

RTE FOOD MARKET A GLOBAL SCANARIO

EUROPE

NORTH & LATIN AMERICA

Dairy Drinks

(14%)

Fish & Sea Food

(12%)

Frozen Meal

Starter (95%)

RTE Salads (19%)

Sweet Pastries

(12%)

Drinkable

Yoghurt (14%)

Fruit Beers (21%)

Frozen Meat

Substitute (19%)

ASIA PACIFIC

EMERGING MARKET

Frozen Meal

Starter (48%) Frozen Fruit

Juice Drink

(49%)

Noodles & Pasta

(27%)

Vegetables

(19%)

Drinkable

Yoghurt (14%)

Cheese (27%)

Meat Product

(37%) Source: FICCI, KPMG report

3.17 INDIAN RTE MARKET in 2025

The expected size of India’s food market in the year 2025 is $155 billion

The market size in 2025

4.1 % will the expected compounded annual growth rate

85% will be the share of potato chips and potato-based products in the salty snack

market

$ 3 billion will be the total estimated worth of the country’s snacks market alone

$ 1.56 billion will be estimated worth of the country’s unorganized snacks market

7-8% will be rate at which India’s unorganized snacks market is growing107

107 www.indianexpress.com/news/indian-food-market-set-to.../341608/


Documents

CHAPTER III - a reservoir of Indian theses @ INFLIBNETshodhganga.inflibnet.ac.in/bitstream/10603/51492/7/07_chapter3.pdfCHAPTER III READY TO EAT FOOD ... South Indian style of consuming