Food Market In India, The Trends & ITS Impact On Talent Fabric
Vinayak Deshpande, Director & Head - Human Resource, South West Asia, Kerry PLC, 0
Once, one of the world's poorest and least brand savvy nations, India is now on its way to becoming a globally important food market. With a population of over 1.2 billion and a rapidly expanding middle class eager to spend India offers untapped potential for several stakeholders across the food chain. This briefing examines India's growing importance for packaged food, looks at the largest and fastest-growing products, and identifies key opportunities for domestic and international manufacturers.
The current trends in India food market are driven as follows:
Young and Brand-Savvy Population
This is the population that is growing fast in India and is indulging in premium products. Thus, this is one of the most attracted generations for all the new QSRs and HORECA channels today in this part of the world.
India has one of the youngest populations globally, with the country's mean standing at just below 29 years in 2014. A growing number of these young Indians have higher disposable incomes than their older counterparts. They also have a lower propensity to save and are less afraid to display what they eat and drink driving sales of premium and value-added products.
"With 68 percent of the population living in villages, getting into rural India is of utmost importance for food manufacturers and retailers if they are too boost sales and increase their margins"
Rising Traditional Grocery Retailers and their Partnership with Big Food Malls and Online Culture
Traditional grocery retailers account for almost 90 percent of overall packaged food value sales and are thus crucial to future growth. Kiranas, the Indian local independent retailers, represent the bulk of packaged food sales. Hence, understanding kiranas is also vital to understand the average Indian consumer.
No doubt that Food Malls have taken away the majority of share of sales from grocery retailers but food malls have a limitation of location and it is impossible for them to reach out to the consumer to their doorsteps. Thus, for daily needs consumers still depend on grocery retailers.
The culture of online buying is at its best today however it is the emotional need of certain class of consumers to do physical shopping. The study says, for some it is also a stress buster. According to Jasmine Rhyas, “Shopping is the activity that helps to release your worries and stress. There are people of different nature some like to shop and purchase something important from their shopping list, some have the habit to shop and others are just addicted, so whenever you shop you get relaxed and buying things that you love, in advance you may get compliments for that new thing from your friends”.
The Future of India Lies in its Village
With 68 percent of the population living in villages, getting into rural India is of utmost importance for food manufacturers and retailers if they are too boost sales and increase their margins. However, rural India has its own needs and challenges which require special attention.
Food Service Should be the Focus
India boasts of one of the fastest growth rates for consumer foodservice. Growth is particularly high in fast food and pizza foodservice categories. Indian Food
service market is forecasted to reach $95.75 billion by 2024 registering a CAGR of 10.3 percent during the forecast period(2019 - 2024).
The Indian food service sector is one of those vibrantly growing markets that has seen exceptional growth during the past decade and continues to expand rapidly during the forecast period.
•A high percentage of the young and working population is driving the India foodservice market. The availability of organized retail space aids the industry to encourage the growth of local and international brands across different formats.
•The Indian foodservice market space is attracting significant interest from domestic as well as international private equity and venture capital funds.
Increase in Eat Out Habits Among Indians
Factors such as rise in frequency of eating out, experimenting with new cuisines, and growing brand onsciousness drive the India foodservice market. This has led to the dominance of full service restaurants in India. As there has been a significant growth in the working population across the country, more and more people are getting engaged in outdoor activities like shopping, outings with friends, families and colleagues, leisure plans and others. Therefore, dine out preference of Indians has significantly contributed to the food service market of the country. Notably, shopping and casual dining were the prime reasons for eating out occasions for Indians in last few years.
Dark Kitchens and Cloud Kitchens
The revenue in the online food delivery market is expected to grow substantially every year. Now think of a restaurant model that exists purely to capture this market. As consumers shift their dining behavior increasingly to delivery, it’s impossible for restaurants to ignore the large appetite for this new model. Even industry trends have started showing up in favor. According to a recent survey conducted, 67 percent of the restaurant owners would want to open a cloud kitchen as their next outlet.
Why does this work? Because you’re cutting costs on front-of-house activities and concentrating on your food. With the availability of third party services and the growing comfort of mobile ordering, this model seems just right to experiment with. There are more benefits involved like Lower Real Estate Costs, Better Expansion Opportunities and Saving on Overhead Costs.
Impacting the Talent Fabric for the Food Organization in India?
The food industry is facing an acute shortage of talent. Apparently, not many Indians are keen on taking up food industry careers. Interestingly, the food and beverage industry remains immune to market fluctuations it continues to grow steadily and surely.
Culture of Startups
The culture of startups in India is growing. This has an impact on the overall talent fabric for India Food Industries. One has to build an entrepreneurial culture in order to attract talent.
Lack of Specialised Experts
In the overall food industry though there is good generalist talent available. We lack specialised experts. The food science is more of an art than science. Thus, the availability of a good chef or flavourist or food technologies is always at dearth. Therefore, as a food industry, you need to have a learning organization that enables the generalist talent to gather the specialized skills required for your industry and plan a retention program so that over the period this talent gets retained and add value to business.
Glamor in the Job is missing
The food industry is not as glamorous as fashion or FMCG organizations. Thus, the talent is reluctant to join the industry. As an industry we need to make it career radiant enough to attract the top talent.
The Indian food service sector is one of those vibrantly growing markets that has seen exceptional growth during the past decade and continues to expand rapidly during the forecast period.
•A high percentage of the young and working population is driving the India foodservice market. The availability of organized retail space aids the industry to encourage the growth of local and international brands across different formats.
•The Indian foodservice market space is attracting significant interest from domestic as well as international private equity and venture capital funds.
Increase in Eat Out Habits Among Indians
Factors such as rise in frequency of eating out, experimenting with new cuisines, and growing brand onsciousness drive the India foodservice market. This has led to the dominance of full service restaurants in India. As there has been a significant growth in the working population across the country, more and more people are getting engaged in outdoor activities like shopping, outings with friends, families and colleagues, leisure plans and others. Therefore, dine out preference of Indians has significantly contributed to the food service market of the country. Notably, shopping and casual dining were the prime reasons for eating out occasions for Indians in last few years.
According to a recent survey conducted, 67 percent of the restaurant owners would want to open a cloud kitchen as their next outlet
Dark Kitchens and Cloud Kitchens
The revenue in the online food delivery market is expected to grow substantially every year. Now think of a restaurant model that exists purely to capture this market. As consumers shift their dining behavior increasingly to delivery, it’s impossible for restaurants to ignore the large appetite for this new model. Even industry trends have started showing up in favor. According to a recent survey conducted, 67 percent of the restaurant owners would want to open a cloud kitchen as their next outlet.
Why does this work? Because you’re cutting costs on front-of-house activities and concentrating on your food. With the availability of third party services and the growing comfort of mobile ordering, this model seems just right to experiment with. There are more benefits involved like Lower Real Estate Costs, Better Expansion Opportunities and Saving on Overhead Costs.
Impacting the Talent Fabric for the Food Organization in India?
The food industry is facing an acute shortage of talent. Apparently, not many Indians are keen on taking up food industry careers. Interestingly, the food and beverage industry remains immune to market fluctuations it continues to grow steadily and surely.
Culture of Startups
The culture of startups in India is growing. This has an impact on the overall talent fabric for India Food Industries. One has to build an entrepreneurial culture in order to attract talent.
Lack of Specialised Experts
In the overall food industry though there is good generalist talent available. We lack specialised experts. The food science is more of an art than science. Thus, the availability of a good chef or flavourist or food technologies is always at dearth. Therefore, as a food industry, you need to have a learning organization that enables the generalist talent to gather the specialized skills required for your industry and plan a retention program so that over the period this talent gets retained and add value to business.
Glamor in the Job is missing
The food industry is not as glamorous as fashion or FMCG organizations. Thus, the talent is reluctant to join the industry. As an industry we need to make it career radiant enough to attract the top talent.