Agro & Food Processing February 2018 by Advance Info Media & Events

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Knack of

Indian Snacks Industry Indian Ethnic Palate Shining Globally

Why PepsiCo Lost the Spicy Race ?

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CONTENTS 10

The Taste of India The Indian Snack Industry

3,991

3,617

Haldiram topples PepsiCo What’s next?

4,225

OVERALL MARKET GROWTH DURING PERIOD

17%

3,262

PEPSICO (LAY’S +KURKURE+ UNCLE CHIPS)

HALDIRAM’S HALDIRAM’S

2016

2017

GROWTH DURING PERIOD

30%

Sustaining global standards Halal Market to touch new heights

Maneuvering the Magic of Mithai

Indian Sweet Industry

Indian Ethnic Palate Is Gradually Gaining Global Attention

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nion Budget 2018 was out on the 1st of February, and after introspection and anticipation whether the Modi Government would this time be pro agro-industry or not, the result is out. The result is not bad, actually the Union Finance Minister, Arun Jaitley has given agriculture and rural livelihood prime-time billing in Budget 2018, which is intended at tackling simmering discontent over falling crop prices. The Budget gave farm sector a push by increasing the credit targets, an Operation Green for increasing crop production, and a Minimum Support Price (MSP) for crops that will be 1.5 times the cost incurred by farmers. The government set a higher institutional credit target for agriculture for financial year 2018-19 at Rs 11 lakh crore, up from Rs 10 lakh crore. The Finance Minister in his budget had pointed out that India’s agri-exports potential is as high as $100 billion against current exports of $30 billion. So to capitalise on the surplus produce of agri-commodities every year, the government also has promised liberalization of export regime in the category. The government also doubled its allocation for the food processing sector to Rs 1,400 crore from Rs. 715 crore announced during the last Budget. In another big boost for this sector, the Centre also proposed setting up state-of-the art facilities in 42 mega food parks. Jaitley pronounced that the Food processing sector is growing at an average 8% per annum. Further, the government also plans to set up an agricultural market fund in order to support rural growth, with a total corpus of Rs2, 000cr. Apart from agriculture, allied sectors such as animal husbandry and fisheries have also benefited from a largely populist budget. The government has decided to set up to two funds dedicated to these two categories with a total corpus of Rs 10,000 crore. I actually was not expecting such budget, agreed not all are going to like it, but being a part of the food industry; it is a major booster for us to finally perceive that the government and its budget has recognized food processing as major tool for rural upliftment and to enhance farmers income. The Budget has given priority to ‘’Make in India concept’, a concept that needs to be developed so that regional Indian companies can rise up and compete with the MNC’s. In fact, many regional and local Indian companies have started giving multinational a run for their money. One prominent instance is the Indian snack industry, as regional/local Indian companies have ousted the international biggies making the consumers recover their taste for traditional snacks such as farsan, bhujia and namkeen. Local snacking companies such as Haldiram, Balaji Wafers, Prataap Snacks, Bikanervala, Bikaji Foods and DFM Foods have recorded sales growth of 8-35 per cent and these five firms have combined sales of nearly Rs 3,700 crore, that is higher than Nestle's Maggi, and a few of these firms are larger than Kellogg's in India. The snack industry has grown by 26 per cent highest within packaged food and packaged namkeen had replaced western snacks such as potato chips and finger sticks as the largest segment within branded salty snacks market. In fact, domestic manufacturers are increasing their distribution and penetration into rural India and have launched smaller packs at lower price points. Next on my line of discussion is the 23rd Edition of Gulfood 2018 and this event has an important significance for Indian food companies as India retains strong ties to the Gulf region. The GCC nations and India are strengthening historic ties across cultural, trade, economic, defence and political areas. Relations between the two regions are maturing beyond trade, as they realise the potential of strategic cooperation and growth. Though bilateral trade continues to dominate the multi-billion dollar relationship, investment flows are rising rapidly, as the regions recognise that the GCC-India corridor presents immense opportunities for investors especially the food processing industry. FSSAI is accountable for approving that the food we buy and eat is safe for us, but by going along the news that is circulating around the food industry about its catastrophe regarding food safety, has put the regulator under scanner. According to the CAG’s observations, FSSAI is guilty of various lapses in enforcing food safety across the country. It claimed that food articles that were declared unsafe but it remained up for sale in markets due to lack of adequate monitoring. Moreover, most of the laboratories across states did not have proper accreditation. So, the quality of their testing cannot be ensured. The CAG found that 65 out of the 75 State Food Labs did not have the National Accreditation Board for Testing and Calibration Laboratories accreditation according to the report. The FSSAI and State authorities had been sending samples to these labs despite this major glitch in documents. According to the auditor FSSAI has failed to ensure that the customs authorities are following up with the ‘Non-Conformance Reports’ which are issued regulators. Further the regulator had failed to make sure that unsafe food was not entering India. Budget 2018 was definitely a pro agriculture and food processing budget, hopefully the instigation of growth given by the centre is utilised in the right way making food industry prosperous and safe by developing its food safety standards.

Agro & Food Processing February 2018

SNACKING INDIA

The Taste of India

The Indian

n a cking known as ‘eating between the meals’ is considered as the routine habit in India. In fact, it remains a tradition to prepare homemade snacks specifically during the summer and festival seasons. The Indian snack market is highly diverse with regional specific varieties, flavors, and mixes. Primarily, the snacks market consists of bakery foods, biscuits, chocolates, confectioneries, and traditional savory snacks. Among all these, savory and salty snacks increased its weightage in recent years due to increased penetration of packaged snacks. The savory snacks are salty snacks made from natural as well as added colors and flavored ingredients; broadly consists of ready to eat mixes, various kinds of chips, namkeens and related light processed foods packaged or loose, branded or unbranded. There are approx. 300 varieties of savory snacks out of thousands of

snacking options available in India. The Indian packaged snacks market and especially savory snack has undergone significant change over the past two decades with the entry of numbers of national and regional players with their distinctive brands and flavors. Global researcher company estimated India’s snack market to be valued at more than $2 billion (Rs17, 000 crore), and expects it to surpass sales of nearly $5 billion (Rs 35,801 crore) by 2020. Based on this report, one can deduce that regional branded snack companies have recorded sales growth of less than 40 per cent while, market leader Lay’s lost share from 51.1 to 49.5 per cent with Pepsi-Co’s food division having grown a miserly 4 per cent.

Comprehensive analysis on how the regional/local snack companies overpowered Indian snack market thereby toppling the multinational snack companies who ruled this industry for years Agro & Food Processing February 2018

As per research firm, these regional packaged food firms could grow twice as fast as their multinational corporations’ rivals such as PepsiCo by 2020 in this segment. There was a time when the international snack and companies were ruling the snack market but as of now the table seem to have turned with the Indian consumers seems to have recovered their taste for traditional snacks such as farsan, bhujia and namkeen going by the impressive growth rate of local firms such as Balaji Wafers and Bikanervala at a time when

SNACKING INDIA

Snack Industry

their multinational rivals are struggling.

are larger than Kellogg’s in India.

Local snacking companies such as Haldiram, Balaji Wafers, Prataap Snacks, Bikanervala, Bikaji Foods and DFM Foods have recorded tremendous sales growth of 8-35 per cent, even as international food majors such as GSK Consumer, PepsiCo’s food division and Mondelez struggled to grow their business amid slowing rural demand and discretionary spends.

GSK Consumer posted negative sales growth in 2015-16 while Pepsi-Co’s food division and Mondelez both grew 4 per cent. Experts and company insiders attributed local players’ growth to lower price points, increased distribution and conversion from unorganised market.

It’s not that the local players ‘impressive numbers came from a very small base. These five firms have combined sales of nearly Rs 3,700 crore, that is higher than Nestle’s Maggi, and a few of these firms

Balaji Wafers kept its overhead costs low to keep its products affordable and posted a 14 per cent sales growth last fiscal at Rs 1,440 crore. Also what kept the company up was introduction of healthier variants and expansion in Rajasthan and Madhya Pradesh.

Agro & Food Processing February 2018

“ O n an average, regional snack brands offer 30 per cent higher volume than multinational rivals at similar price points, especially in highest selling price points of Rs 5 and Rs 10. According to market research, sweet and savoury snacks have grown by 26 per cent, highest within packaged food segment between 2010 and 2016. About four years ago, packaged namkeen had replaced western snacks such as potato chips and finger sticks as the largest segment within branded salty snacks market. “Domestic manufacturers are increasing their distribution and penetration into rural India and have launched smaller packs at lower price points” Also funding from private equity funds helped domestic snacking firms to expand their reach and market their products more aggressively, like Prataap

SNACKING INDIA

12 Snacks, maker of Yellow Diamond chips, was backed by Sequoia and has filed papers for an initial public offering (IPO) to raise Rs 400 crore. Moreover, there has been an impetus on brand building and geographical expansion by these regional firms. Their variant launches have been faster compared to large food companies. The company which clocked 35 per cent growth in sales last year at 758 crore, recently roped in actor Salman Khan to promote its brand. Yellow Diamond has now received clearance from the Securities and Exchange Board of India (SEBI) for a revised proposal to float an IPO (initial public offering) of Rs 240 crores. So far, its presence has largely been regional, limited to markets like Madhya Pradesh, Delhi, Haryana, Uttar Pradesh, Maharashtra and Rajasthan. However targeting a national footprint, Prataap Snacks is setting up a plant in South India, Chennai. Also more than two years ago, private equity fund Lighthouse Funds had invested less than Rs 90 crore in Bikaji Foods while WestBridge Capital Partners picked up a 25 per cent stake in DFM Foods that sells snack foods under the brand Crax. It may be difficult for these domestic players to maintain their growth momentum though as larger rivals are entering their turf with similar pricing and products. Parle Products, ITC and PepsiCo have all launched similar range as smaller regional players in the past few years.

dia kicked off an internal project to transform Lay’s with an aim to grow in the hyper-competitive savoury snacks market in India that has an estimated 3,200 contenders. Under this, PepsiCo extended the brand, included a premium variant, increased grammage (weight of chips in a packet), cut costs in supply chain and manufacturing by increasing capacity utilization, among others. Lay’s was not alone. The market share of PepsiCo’s corn puff brand Kurkure dropped to 3.1 per cent (retail value) in 2017 from 4.4 per cent in 2013, despite its efforts to boost sales through extensions. In May 2016, PepsiCo that had been selling Kurkure corn puffs since 1999—extended the brand to other salted snacks including navratan mix, chilli chatka, khatta meetha mix and aloo bhujia, hoping to counter home-grown Haldiram Foods International Pvt. Ltd, its biggest competitor in the snacks segment, that has been selling these products since 2003. PepsiCo’s other snacks brands Lehar, Uncle Chipps and Cheetos never had sizeable share in India’s savoury snacks market, also slipped as per the data. Indian flavors topples PepsiCo share One of the causes for this drop in PepsiCo’s share is that Indian consumers

It is anticipated that the salty snacks segment to surpass biscuits with sales of nearly Rs 35,801 crore by 2020, up from Rs 19,151 crore in 2015. Falling market share of PepsiCo PepsiCo was the ruler of Indian snack market with its Lay’s chips and variants in Indian snack, but since 2013, almost every PepsiCo product has lost market share in India. According to market research agency, PepsiCo’s flagship snack brand Lay’s lost share from 8.1 per cent (retail value) of India’s savoury snacks market in calendar year 2013 to 4.4 per cent in 2017. The company disagrees, adding that Lay’s has been growing double digits quarter on quarter. Interestingly, nearly 15 months ago, PepsiCo In-

Agro & Food Processing February 2018

have had a tepid response to international flavors such as French Salt & Cracked Pepper, Chile Lemon, Caribbean Hot & Sweet Chilli and Spanish Tomato, which Lay’s had launched in order to differentiate itself in the crowded market. Homegrown companies like Haldirams, known for their “Aloo Bhujia” and “Bhujia Sev,” have become household names catering to the Indian palate. These savories were earlier bought from traditional sweet shops and were consumed at tea time in many parts of the country. Haldirams and other local businesses now provide them in a packaged form. These regional brands have focused on local flavors that suit Indians’ palates. Regional brands have created a space for themselves by targeting smaller momand-pop stores and Kirana stores that were not the forte of larger companies like PepsiCo. Domestic manufacturers are increasing their distribution and penetration into rural India and have launched smaller packs at lower price points. Increasing the amount of snacks in each pack, introducing smaller quantity packs and greater than before advertising spends to win marketplace share, on an average, one can deduce that regional snack brands are offering more than 25 per cent higher quantity of snacks in their packs than multinational rivals at similar price points, especially in snack packets costing less than Rs 10. The salted snacks market in India has been growing 25 per cent a year, and as a result they are attracting the attention of private equity players of the country. Funding from private equity funds has empowered regional companies to expand their set of operations across different parts of India and market their snacks more assertively. Taking notice of this astral performance of regional players, world’s largest food brand Lay’s has rolled out Lay’s Crispz and Twitz, two subbrands with less than $1 (Rs 5) entry level packs. By beginning of 2017, the $63 billion company doubled the number of flavors and variants in its Kurkure’s portfolio to 30. In a

SNACKING INDIA

14 single year, it has flavors and varihas developed decade-and-

added many ants as it in over a a-half.

The new variants will include more flavors and even “namkeen” (the traditional Indian savory mixtures) like the “South Tangy Twist,” “Punjabi Chatka,” and “Navratan Mix,” with a mindful focus on expanding Kurkure’s palette from typically north Indian flavors. A couple of years back, PepsiCo had tried to buy out strong competitors such as Gujarat-based Balaji Wafers, but the talks did not materialize. Earlier in 2011, PepsiCo even consolidated its mass-priced snacks under a new entity, Lehar Foods, a low-cost entity selling traditional snacks to take on this local competition. Over a period of time with Lehar failing to capture market share, in 2016 PepsiCo decided to streamline its snacks portfolio to create two master brands with Lay’s and Kurkure that replaces Lehar in the market.

posted sales of Rs 4,224.8 crore in the year ended September, compared with PepsiCo’s Rs 3,990.7 crore from brands such as Lay’s, Kurkure and Uncle Chipps. A year earlier, PepsiCo’s sales stood a t Rs 3,617 crore compared with Haldiram’s Rs 3,262 crore. While

t h e

overall market grew 17 per cent in the year, Haldiram’s pace was faster at nearly 30 per cent, in contrast with 10-12 per cent during 2012-16. It added nearly Rs 1,000 crore of incremental sales in the year to September. Haldiram is split into three geographic entities — Haldiram Manufacturing (north), Haldiram Foods (west and south) and Haldiram Bhujiawala (east).

In 2017, as PepsiCo has decided to introduce competitive products at lower rates, similar pricing to regional snacks, this is likely to add to the intense competition in salted snacks segment.

In the past few years, branded namkeen varieties such as dal, chivra, bhujia and nuts have been increasing their contribution within the overall snacks market worth Rs 21,600 crore. Traditional snacks now account for more than half the market with both multinationals and homegrown companies pushing namkeen into the hinterland with attractive packaging and pricing.

However as regional players have enough time to develop their brands, diversify and consolidate themselves in their niche markets, PepsiCo’s move to fight smaller, well entrenched domestic brands is going to prove to be a long, arduous task at hand.

The overall snacks market is divided into four sub-segments — traditional snacks such as namkeen, bhujia and nuts; western ones such as potato chips; riblon and gathia, which has brands such as Kurkure; and extruded, which includes cheese balls among other snacks.

Haldiram becomes India’s top and largest snack company Haldiram has recuperated the top spot as the country’s largest snack company after more than two decades, beating PepsiCo in sales thanks to increasing consumer preference for packaged namkeen over western snacks such as potato chips. According to the latest data, Haldiram

“Marketers say consumers have increased purchases of branded namkeen rather than unbranded products from local bakeries due to the hygiene factor, helping regional players gain share from Pepsi”. For instance, Gujarat-based Balaji that clocked sales of Rs 2,121 crore in the year to September is the second-largest in

Agro & Food Processing February 2018

terms of individual brands after Haldiram followed by PepsiCo Lay’s and Kurkure. TRENDS Consumers moved slowly towards healthier alternatives drawn from traditional Indian and Western snacks. The rising incidence of cardiovascular diseases, obesity and high blood sugar levels pushed consumers to look for snacks that do not have an adverse effect on their health. Long-working hours and busy lifestyles saw many consumers prefer snacks like Haldiram’s Roasted Almonds and Trail Mixes, which are perceived as healthy and tasty and can be consumed on the go. Haldiram Foods International was the leading manufacturer of savoury snacks in 2017 with a 12 per cent share of retail value sales in 2017. The company offered the largest portfolio of traditional Indian snacks across all retail channels. Thus, strong distribution and a wide choice of popular products helped to maintain its leadership at the end of review period. A 9 per cent retail value CAGR at constant, prices is expected over the forecast period to reach INR446.9 billion in 2022. The introduction of new Western snacks, enduring popularity of savoury tastes and population growth are set to drive sales growth in the forecast period. The Indian snacks market is characterized by a large number of unorganised players across all product segments. This stems from each type of snack being very specific to each region, and hence many small companies cater to that market. These players have a slim portfolio of products, usually of a single category and in many cases only provide traditional snacks items. They also operate in a small geographic range confined to a single state or city. Apart from this, there is a large presence of players that supply fresh products in chips and traditional Indian snacks categories. The organised snacks market has been witnessing high growth over the last few years. This is because of the overall growth in processed foods segment, followed by the moving trend towards consolidation of markets. Some of the traditional Indian snacks have fared better than Western snacks.

SPICY TALE

Haldiram topples PepsiCo What’s next? 3,617 3,262

PEPSICO (LAY’S +KURKURE+ UNCLE CHIPS)

2016

Ghufran Naqvi

Haldiram’s, known for their ‘Aloo Bhujia’ and ‘Bhujia Sev,’ has become a household name catering to the Indian palate. These savouries were earlier bought from traditional sweet shops and were consumed at tea time in many parts of the country.

fter a hiatus of more than two decades, Haldiram became India’s largest snack company after overtaking international food and beverages major PepsiCo in sales. Haldiram finished the year ended with sales of around Rs 4,225 crore, compared to PepsiCo’s Rs 3,991 crore. Last year, it posted sales of Rs 3,262 crore, while PepsiCo posted Rs 3,617 crore in sales. The spike in sales that Haldiram witnessed this year was because of a growing trend of people preferring packaged namkeen over western packaged snacks like

potato chips and nachos. Also, despite being largest in the industry by sales, Haldiram’s grew at a rate of nearly 30 per cent, beating the industry’s pace of 17 per cent by a fair distance. Kamal Agarwal, fourth-generation member of the founding family said, “We have increased our reach and developed products in-house that ensure quality control. We also understand Indian palate well that comes handy while launching new products.” The packaged products business that now contributes over 80 per cent of revenues for the company, initially started

Agro & Food Processing February 2018

off with restaurants and casual dining. The company operates in three different regions. One is Haldiram Snacks and Ethnic Foods caters to the northern region. Two, Nagpur-based Haldiram Foods International serves the western and southern regions and a much smaller Haldiram Bhujiawala catering to the eastern markets. Decline in PepsiCo market PepsiCo was the ruler of Indian snack market with its Lay’s chips and variants in Indian snack, but since 2013, almost every PepsiCo product has lost market

SPICY TALE

3,991

4,225

OVERALL MARKET GROWTH DURING PERIOD

17%

HALDIRAM’S HALDIRAM’S

2017 share in India. According to reports, PepsiCo’s flagship snack brand Lay’s lost share from 8.1 per cent (retail value) of India’s savoury snacks market in calendar year 2013 to 4.4 per cent in 2017. The company disagrees, adding that Lay’s has been growing double digits quarter on quarter. Interestingly, nearly 15 months ago, PepsiCo India kicked off an internal project to transform Lay’s with an aim to grow in the hyper-competitive savoury snacks market in India that has an estimated 3,200 contenders. Under this, PepsiCo extended the brand, included a premium variant, increased grammage (weight of chips in a packet), cut costs in supply chain and manufacturing by increasing capacity utilization, among others. Lay’s was not alone. The market share of PepsiCo’s corn puff brand Kurkure dropped to 3.1 per cent (retail value) in 2017 from 4.4 per cent in 2013, despite its

efforts to boost sales through extensions. In May 2016, PepsiCo that had been selling Kurkure corn puffs since 1999 extended the brand to other salted snacks including navratan mix, chilli chatka, khatta meetha mix and aloo bhujia, hoping to counter home-grown Haldiram Foods International Pvt. Ltd, its biggest competitor in the snacks segment, that has been selling these products since 2003. PepsiCo’s other snacks brands Lehar, Uncle Chips and Cheetos, which never had sizeable share in India’s savoury snacks market, also slipped, according to market data. Reason for this decline One of the causes for this drop in PepsiCo’s share is that Indian consumers have had a tepid response to international flavours such as French Salt & Cracked Pepper, Chile Lemon, Caribbean Hot & Sweet Chilli and Spanish Tomato, which Lay’s had launched to differentiate itself

Agro & Food Processing February 2018

GROWTH DURING PERIOD

in the crowded market. % Home-grown company like Haldiram’s, known for their ‘Aloo Bhujia’ and ‘Bhujia Sev’ has become household name catering to the Indian palate. These savouries were earlier bought from traditional sweet shops and were consumed at tea time in many parts of the country. Haldiram’s and other local businesses now provide them in a packaged form. These regional brands have focused on local flavours that suit Indians’ palates.

Regional brands have created a space for themselves by targeting smaller mom-andpop stores and Kirana stores that were not the forte of larger companies like PepsiCo. Domestic manufacturers are increasing their distribution and penetration into rural India and launched smaller packs at lower price points. Increasing the number of snacks in each pack, introducing smaller quantity packs and greater than before advertising spends to win marketplace share, on an average, one can deduce that

SPICY TALE

18 regional snack brands are offering more than 25 per cent higher quantity of snacks in their packs than multinational rivals at similar price points, especially in snack packets costing less than Rs 10.

Haldiram’s pace was faster at nearly 30 per cent in contrast with 10-12 per cent during 2012-16. It added nearly Rs 1,000 crore of incremental sales in the year to September.

Taking notice of this astral performance of regional players, the world’s largest food brand Lay’s has rolled out Lay’s Crisps and Twist, two sub-brands with less than $1 (Rs 5) entry level packs. By beginning of 2017, the $63 billion company has doubled the number of flavours and variants in its Kurkure’s portfolio to 30. In a single year, it has added many flavours and variants as it has developed in over a decade-and-a-half. The new variants will include more flavours and even “namkeen” (the traditional Indian savoury mixtures) like the “South Tangy Twist,” “Punjabi Chatka,” and “Navratan Mix,” with mindful focus on expanding Kurkure’s palette from typically north Indian flavours.

“There was a sharp increase in raw material prices for several snacking products, especially nuts. However, we maintained our price tag and absorbed losses, which helped us gain share not just from existing players but also the unorganised segment since the price differential narrowed down,” said Kamal Agarwal. “Consumers are also correlating healthy food with Indian snacks and namkeen but chips are perceived to be unhealthy.”

Earlier in 2011, PepsiCo even consolidated its mass-priced snacks under a new entity, Lehar Foods, a low-cost entity selling traditional snacks to take on this local competition. Over a period of time with Lehar failing to capture market share, in 2016 PepsiCo decided to streamline its snacks portfolio to create two master brands with Lay’s and Kurkure that replaces Lehar in the market. In 2017, Pepsi Co decided to introduce competitive products at lower rates, similar pricing to regional snacks, this is likely to add to the intense competition in the salted snacks segment. However as regional players have enough time to develop their brands, diversify and consolidate themselves in their niche markets, PepsiCo’s move to fight smaller, well entrenched domestic brands is going to prove to be a long, arduous task at hand. Haldiram’s Pace of Growth Faster at Nearly 30 per cent While overall market grew 17 per cent in the year,

PepsiCo said it would not comment on “country-specific market share or analyst reports” but maintains its ranking. Comparisons would not be apt owing to the difference in product categories. “In the salty snacks segment, we continue to be the leaders, which is also the fastest-growing category in overall snacks,” a spokesperson said. “In the western salty category, with strong double-digit growth, Lay’s has been our fastest growing food brand in the last year on account of premiumisation and innovation with Lay’s Maxx and Shapes. In nachos category, we scaled our presence with the ‘Made in India’ Doritos, and the product is seeing strong preference and traction amongst consumers. We have further expanded our salty snacks portfolio last year with Kurkure Triangles, which is also growing in double digits.” In the past few years, branded namkeen varieties such as dal, chivra, bhujia and nuts have been increasing their contribution within the overall snacks market worth Rs 21,600 crore.

Agro & Food Processing February 2018

Traditional snacks now account for more than half the market with both multinationals and homegrown companies pushing namkeen into the hinterland with attractive packaging and pricing. The overall snacks market is divided into four sub-segments — traditional snacks such as namkeen, bhujia and nuts; western ones such as potato chips; riblon and gathia, which has brands such as Kurkure; and extruded, which includes cheese balls among other snacks. Marketers said consumers have increased purchases of branded namkeen rather than unbranded products from local bakeries due to the hygiene factor, helping regional players gain share from Pepsi. For instance, Gujarat-based Balaji that clocked sales of Rs 2,121 crore in the year to September, is the second-largest in terms of individual brands after Haldiram followed by PepsiCo Lay’s and Kurkure. “A large part of the unorganised market has shifted towards namkeen as companies have increased availability and affordability,” said B Krishna Rao, Category Head at Parle Products. “Also, increased

SPICY TALE

reach and new product launches especially by local players have been driving most of the growth. Haldiram’s business in FY 16 Haldiram’s revenues grew 13 per cent to cross Rs 4,000 crore in FY16 shrugging increased scrutiny from food regulator amid the Maggi crisis. The Indian snack major is now twice the size of Hindustan Unilever’s packaged food division or Nestle Maggi and larger than the India turnover of the two American fast food rivals Domino’s and McDonald’s put together. The company has three distinct areas of operations with Haldiram Snacks and Ethnic Foods with that clocked Rs 2,136 crore from the northern region, Nagpur-based Haldiram Foods International that caters to western and southern markets with annual sales of Rs 1,613 crore and a much smaller company, Haldiram Bhujiawala, for the eastern market with revenues of Rs 298 crore in FY16, according to data. These figures, when combined with other regional snacking firms, conclusively 19 x 15 cm demonstrates one thing in

fast food or munchies, despite the profusion of MNC brands with high cool quotient, good Indian palate prefers local savouries. “We have increased our reach and developed products in-house that ensure quality control. We also understand Indian palate well and that comes handy while launching new products,” said Kamal Agarwal. Reasons Of Becoming Favourite Analysing consumer behaviour Haldiram’s group is a true rag to riches story, which has expanded from being a small shop in Bikaner in 1937 to being one of the largest smart food chains in India and the world today. At present, they are a Rs. 10 billion company with multiple outlets across rural and urban India as well as a tremendous presence outside the country. Brand Haldiram’s is renowned for its superior product quality and supreme manufacturing processes which have been developed through tremendous research over the years.

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Trends Consumers moved slowly towards healthier alternatives drawn from traditional Indian and Western snacks. The rising incidence of cardiovascular diseases, obesity and high blood sugar levels pushed consumers to look out for snacks that do not have an adverse effect on their health. Long working hours and busy lifestyles seen many consumers prefer snacks like Haldiram’s Roasted Almonds and Trail Mixes, which are perceived as healthy and tasty and can be consumed on the go. Haldiram Foods International was the leading manufacturer of savoury snacks in 2017 with a 12 per cent share of retail value sales in 2017. The company offered the largest portfolio of traditional Indian snacks across all retail channels. Giving local taste Haldiram’s has a huge product portfolio and sought to customize its products to suit the tastes and preferences of consumers from different parts of India. It has launched products, which cater to the tastes of people belonging to specific regions of the country. However, they main-

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SPICY TALE

20 tained concentration on their core products such as ‘namkeens’, which contributed to almost 60 per cent of their revenue mix and was also the first company in India to brand ‘namkeens’. Understanding Indian palate, the brand provides local taste like in Gujarat people consume sweet & salty namkeen while in Uttar Pradesh, people go for chatpata one. We can find different Haldiram products in different regions of the country. While analysing PepsiCo, we find that this famous western snack giant does not make any research on local taste. People will taste the same whether in Delhi or in Chennai. Marketing and Packaging At every stage of their business, Haldiram’s developed new innovative ways of pricing and marketing their products. They pioneered new ways of packaging which increased the shelf life of their products from less than a week to more than six months, thereby catering to needs of hygiene conscious non-resident Indians and other foreign customers. At the same time, they were aware of price consciousness of the typical Indian consumer who constituted bulk of the market. Thus, they managed to exploit the best out of the diverse consumer base by offering ‘something for everyone’ like they provide bhuna chana and murmure mix for rural consumers while PepsiCo and other national and international snack players are mostly playing with in chips and bhujia variants. Quality Check As the company continued to grow, they faced tough competition from local sweet and snack food vendors in unorganized market and western snack players. Their Unique Selling Proposition (USP) against the unorganised sector was the level of hygiene and product quality they maintained without any compromise in taste. This resulted in a shift of the utility curve towards the right, whereby consumers got a higher level of satisfaction, by consuming products from a bigger brand which believed in far better hygienic procedures. Price Per Gram At Various Quantities Of Demand Haldiram’s effectively lowered the price per gram in 200-800 gms segment, which is where the bulk of their consumers were, thereby ensuring higher satisfaction for this market segment. The company also customized specific products with attractive packaging and distribution concepts specifically for the festive season. The

company offered value-added services like online retailing and sales of Haldiram’s products in train and bus stations for consumers in transit. The company diversified its business by opening restaurants in various metros thereby en-cashing on its huge brand image and offering traditional Indian snack food items. Recently, Haldiram topple PepsiCo and became the largest selling snacks brand in India. To counter this and retain their market share, Haldiram’s is on an aggressive promotion and marketing spree. Take lesser time in new product launch Over a period spanning six and a half decades, Haldiram emerged as a household name for ready-to-eat snacks food in India. The brand understands Indian palate very well and with this quality they launch their product in lesser time than PepsiCo and other snacks providers. In PepsiCo, the product travels a long journey before their launch as the company spends a lot on testing experts. Whereas in Haldiram, Agrawal tastes the new innovation and gives his final say about it for the market. Background Note The Haldiram’s brand can be traced back to 1937. It started as a sweet and savoury shop in the city of Bikaner in Rajasthan, India. It was setup as Haldiram’s Foods International Ltd., in 1970 by Shivkisan Agarwal with a manufacturing facility in Nagpur. Subsequently a chain of retail outlets and showrooms were established. In 1992, a sophisticated manufacturing centre cum showroom was established in Main Mathura Road, New Delhi. The Delhi operations of Haldiram’s operate under four categories namely ‘Haldiram’s Manufacturing Company Limited’ for Namkeens, ‘Haldiram’s Marketing Ltd.,’ for Sweets, ‘Haldiram’s Snacks (P) Ltd. for papads and ‘Haldiram’s India Private Ltd.’ for Syrups and Sherbets. The Haldiram’s Group operates out of three locations Bikaner, New Delhi and Nagpur. The unit at New Delhi caters to the neighbouring states such as Punjab, Haryana, Uttar Pradesh, Bihar etc.

Agro & Food Processing February 2018

Apart from that it has three showrooms in Delhi located at Lajpat Nagar, Chandni Chowk and Main Mathura Road. Haldiram’s products are also exported worldwide to countries like Japan, Thailand, Australia, Canada, United Kingdom, United States, New Zealand, United Arab Emirates, Thailand, and Australia. The company was ranked at 55 among the India’s most trusted brands according Brand Trust Report in 2014.It is also a recipient of International Food Award and a leading global player in the snack food industry. Physical Distribution Haldiram’s has an established distribution network for its products. From the manufacturing facility, the products reach the Carrying and Forwarding (C&F) Agents who in turn delivers the products to distributors. The retail outlets get the products from distributors. The Delhi and Nagpur units of Haldiram’s have 25 C&F agents each. While the Delhi unit has a network of 700 distributors in India Nagpur unit has 375 distributors. With the help of this strong system Haldiram’s is able to reach 6 million retail outlets in India. In addition to the above, the company operates through 35 sole distributors in international market. Haldiram’s products are widely available in supermarkets, sweet shops, provision stores, bakeries, ice cream parlours etc. It is also sold in railway stations and bus stations. Promotion Promotion of Haldiram’s products has gained momentum in recent past. The company has given a serious thought about it with entry of MNCs in the Snack Food segment. It has engaged an Advertising Agency named ‘Profile Advertising’ for increasing the visibility of the Haldiram’s Brand. A number of slogans and taglines were developed, and advertisements appeared in print media both in newspapers and magazines. Hoardings

SPICY TALE

22 and posters have also been placed in crucial points in various cities as part of the campaign. Brochures containing information about the products are also made available to customers. Mailers are sent to corporate clients. An important step taken by Haldiram’s through its Ad Agency Profile Advertising is the launch of ‘Recipe Remix Campaign’. Through this campaign, the company has tried to change the way people conceive it. The campaign aims at repositioning the brand from a traditional one catering to the 30+ segment to a dynamic brand catering to the younger generation. With tagline of ‘Taste Mein Naya Twist’ campaign tries to send across the message that the Haldiram’s products can be eaten in different ways by recreating from a single pack instead of eating it simply out of the pack. Haldiram’s has set up Recipe Remix counters in its four outlets in Delhi and Gurugram to test market the concept.

Major Blow Haldiram, the biggest brand in snacks and namkeen sector faced an unsolicited crisis when its largest factory located at Sec 68 Noida was ruined by fire. This incident occurred on 6th September last year just before the preparation for Diwali. Diwali is an auspicious occasion when most of the big manufacturers start stocking up as the requirement and demands go up. Also post Diwali, the marriage season starts alongside winters and this is time when consumption of snacks and namkeens picks up and sale zooms up. This is the time when the companies keep maximum stocks, raw materials, packaging materials stocked in factories. Because of this fire outbreak, Haldiram’s not only suffered a loss of Rs 350 cr in the factory which included materials and machinery but also market share due to no supply from this unit. However, group CMD Manoharlal Agrawal’s command and expertise in the market, magnificent relations with business acquaintance and understanding of trade and industry helped him in to getting his factory back to work in a phenomenal time.

Agro & Food Processing February 2018

Challenges The Indian snacks market is characterized by many unorganised players across all product segments. This stems from each type of snack being very specific to each region, and hence, many small companies cater to that market. These players have a slim portfolio of products, usually of a single category and in many cases only provide traditional snacks items. They also operate in a small geographic range confined to a single state or city. Apart from this, there is a large presence of players that supply fresh products in chips and traditional Indian snacks categories. The organised snacks market has been witnessing high growth over the last few years. This is because of the overall growth in the processed foods segment, followed by the moving trend towards consolidation of markets. Some of the traditional Indian snacks have fared better than Western snacks. Though Haldiram topple western snacks giant but these local players gang in their respective areas are giving tough fight and to retain its position in FY 18 company have to give new taste.

he global halal food market is expected to reach USD 2.55 trillion by 2024. Even, market is projected to be worth $1.6 trillion by 2018. The growing demand for consumption by other communities is a leading factor which is anticipated to fuel market growth over the forecast period. Thus, making it one of the fastest growing consumer segments in the world. The global halal market of 1.8 billion Muslims is no longer confined to food and food related products. The halal industry has now expanded beyond the food sector to include pharmaceuticals, cosmetics, health products, toiletries, and medical devices as well as service sector components such as logistics, marketing, print and electronic media, packaging, branding, and financing. In recent years, with the increase in number of affluent Muslims, halal industry has expanded further into lifestyle offerings including halal travel and hospitality services as well as fashion. This development has been triggered by the change in mindset of Muslim consumers as well as ethical consumer trends worldwide. Because of high Muslim population in the region, Southeast Asia is also a general hub for Islamic products. Japan is beginning to get in on the halal action with food producers applying for halal certification from religious bodies, and China is on this path, too. Japan is hoping to tap into external markets including Singapore, which has a Muslim population of around 15 per cent. The halal market is non-exclusive to Muslims and has gained increasing acceptance among non-Muslim consumers who associate halal with ethical consumerism. As such, the values promoted by halal - social responsibility, stewardship of the earth, economic and social justice, animal welfare and ethical investment have gathered interest beyond its religious compliance. The popularity of, and demand for, halal certified products among non-Muslim consumers have been on the rise as more consumers are looking for high quality, safe and ethical products. In lieu of the change in basic assumptions on global issues such as sustainability, environmental protection, and animal welfare, potential growth of the halal industry has made it a lucrative

WAVE OF GROWTH

market to be tapped into and presenting a major global opportunity. Players from every sector of the industry, from huge multinationals down to small enterprises, are looking to capture their share of this growing market. In the last decade, halal industry has undergone further evolution as a market force when governments have started to look at halal in terms of policy formation for developing their own economies. Halal Certification The products that are permissible under Islamic law get recognition through Halal certification and are thus edible, fit to drink, or usable for Muslims. Halal Certification obtained from Halal Trust, an oldest established Islamic organization helps to build Halal consumerâ&#x20AC;&#x2122;s confidence without suspicion or doubt over the consumption of the food products in restaurants, hotels or in the form of medicines. It is an authoritative and reliable testimony to support food manufacturersâ&#x20AC;&#x2122; claim that their products have met strict Halal requirement by the Shariah Law. Certified Halal food products not only meant for domestic use but can also be marketed to worldwide Halal consumers. This provides an opportunity for export markets especially in those countries that do not permit sale of non-Halal food products. Muslim as well as non-Muslim consumers make use of these products, as Halal certificate represents high level of hygiene, cleanliness, safety, nutrition and is produced strictly under the requirements of the Islamic Dietary Law. Global Halal Standard Although halal certification is considered a key enabler for successful development of global halal industry, the issue of differing certification standards still plagues the industry. The lack of a single, unified global halal standard is a pressing issue within the halal industry. Currently, different halal standards between countries and within countries due to the presence of various halal authorities, and in some cases abuse in halal auditing and certification are inhibiting the further development of the industry. Additionally, differences in interpretations on major issues such as slaughtering methods, packaging, logistics, gelatine, food flavourings and animal enzymes has impeded further development of the glob-

Agro & Food Processing February 2018

al halal industry. Having an all-encompassing halal standard and a harmonised halal certification system that is adopted worldwide has it merits. A global halal standard and certification system would expedite product development, provide greater assurance to consumers, reduce the number of multiple certifications, and ultimately would compress the supply chain cycle time. Geographical locations and ethnicity differences has also resulted in variations in halal concepts adopted by Muslims worldwide. Complicating this issue is the lack of mutual recognition among 300 halal certification bodies across the world. In the UK, some certification bodies allow the use of electrical stunning as part o f the

slaughtering method while the Halal Monitoring Committee and Muslim Council of Britain firmly reject this practice 32 Establishment of halal certification bodies also differs between countries. In Malaysia, Indonesia, Brunei and Singapore, government or quasi-government agencies issue halal certificates. Several initiatives at the global level have been directed towards establishing a global halal standard. The establishment of the World Halal Council in 1999 was the first step in this direction. The works of the Council in coming up with an International Certification Standard is not without its difficulties, especially with oppositions from various quarters including halal certification bodies. Recently, there has been the establishment of the International Halal Integrity Alliance or IHI Alliance to spearhead the harmonisation of halal standards.

WAVE OF GROWTH

Growing market force One of the key factors for high demand of halal products market is the growing Muslim population. Since halal products market is not just confined to food and beverages, it has also expanded into personal care, and pharmaceutical industries as well. Muslims represent an estimated 23 per cent of the global population or about 1.8 billion consumers with an average growth rate of 3% per annum. If this growth trend continues, Muslims are expected to make up about 26 per cent of the world’s total projected population of 2.2 billion in 2030. The two strongest markets for halal products are Asia Pacific and Middle East. More than half of the global Muslim population lives in the South Asia and Asia Pacific and the number of Muslims from these regions are expected to reach 1.3 billion by 2030. Four of the ten countries in the world that can boast to have the largest Muslim population in the world are in South Asian and Pacific regions: Indonesia, Pakistan, India, and Bangladesh. The growing Islamic consumerism among urban middleclass Muslims in countries with a large population of Muslims - such as Indonesia, Pakistan and Turkey have set a new trend in the halal market. This is reflected in the mushrooming of an increasing number of religious themed products and services including banking, tourism and fashion. Hence, the modern Muslim consumes view halal products as not only acceptable from a religious viewpoint, but also they imbue a sense of pride and confidence. Another key factor that has boosted the global halal food market is raising awareness about halal food among consumers of all religions across the globe. Moreover, increasing awareness about halal food products globally through social media and other backgrounds, as well as rising demand for cleaner and more hygienic food derivatives across Islamic population of the world are some other major factors accelerating the growth of global halal food market over the forecast period. Furthermore, halal food market is expanding in future years and its demand for new varieties is in turn anticipated to increase over the coming years. Moreover, rising awareness regarding halal food products and new & better ways of slaughtering animal is anticipated to pose a positive impact on the global halal food market.

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Regional Insights Asia Pacific was the largest regional market in 2016 with revenue estimates of over USD 530 billion. This is mainly because it accounts for largest Muslim population in the world. Around 63 per cent of the global Muslim population resides in this region. Indonesia, Pakistan, India, Bangladesh, Myanmar, Morocco are some of the Asia Pacific countries with the largest Muslim population in the world. Hence, feeding this vast community in Asia Pacific has led to substantial size of the halal food market which in fact is the largest in the world. With increase in the number of Muslims, demand for these types of food has also increased tremendously, and this trend is projected to continue over the forecast period, hence driving the Asia Pacific market. Middle East and Africa, home to over 327 million Muslims and is another growing halal food consumer region and providing potential opportunities for importers. The increasing population and rising consumer cognizance towards Islamic lifestyle and food specially in the Middle East is a major factor driving the industry growth. The UAE recently launched “Halal National Mark” as there was an absence of single or proper certification in the region, and henceforth the manufacturers in the region have been adhering to these standards. Over 20 per cent of the global Muslim population were based in the Middle East as of December 2014 and Iran has the highest population among all Arab countries. Egypt and Nigeria are the two African countries with highest Muslim population. Moreover, the growing popularity

of halal food among non-Muslims in other regions owing to rising awareness for food security, freshness, healthiness, and nutrition has another vital role to play in driving the industry growth. Halal products on the rise

FOOD

The halal marketplace is emerging as one of the most profitable and influential market arenas in the world food business today. The halal food market has grown strongly over the past decade and is now worth an estimated USD667 million. Halal food represents close to 20 per cent of the entire global food industry. With expected increases in both population and income of halal consumers and coupled with the expected increase in demand for food by more than 70 per cent by 2050, the future demand for halal food is strong. Halal food products are not confined to meat and poultry, including other food items such as confectionary, canned and frozen food, dairy produce, bakery products, organic food, beverages and herbal products. Many food economists posit that the halal food industry will become a major market force soon based on four prevalent trends. Firstly, Islam is now the fastest growing religion in the world thus fuelling a global demand for halal products. The annual growth in consumption of halal food is estimated at 16 per cent. Secondly, the increasing trend of consuming halal food products for ethical and safety reasons by non-Muslim consumers. In the UK, for example, there are over 2 million Muslims, yet there are 6 million consumers of halal meat. In the Netherlands, non-Muslim Dutch consumers have shown interest in halal food where total demand is esti-

The Arabic word for “lawful” or “permitted” is Halal. It is a broad term covering what is allowed in the context of Islamic law but is very often used in conjunction with the issue of how meat is dealt with. Muslims should make sure that all foods (particularly processed foods), as well as non-food items are halal. If there is no halal food available and a Muslim is forced by necessity, then a Muslim can eat non-halal food to prevent death due to starvation.

WAVE OF GROWTH

mated to reach about USD3 billion on an annual basis. The halal market has witnessed a universal shift in the demand and supply chains of halal food products. They are increasingly made available in Western-style grocery stores including supermarkets and hypermarket chains. It is not surprising that the biggest halal food manufacturers and exporters reside in non-Muslims countries like the US, Brazil, Argentina, Australia and China. Because of the traditional nature of the market, it is estimated that multinationals from these countries control 90 per cent of the global halal market.

Pharmaceutical and health products Pharmaceutical and health products are also large growth areas in the global halal industry. Demand for halal pharmaceutical, generic medial, wellness and healthcare products are estimated to be about USD555 billion in Muslim-majority countries. The main concern among Muslims is use of non-compliant substances such as animal derivatives and animal-based gelatines in these products. The global market growth for pharmaceuticals increased by 4 per cent in 2009 to a value that exceeded USD820 billion, offering vast potential opportunities for the halal pharmaceutical industry to tap into. The rising healthcare costs also provide the halal market with a key differentiation factor in the supply of generic pharmaceuticals. However, the halal pharmaceutical market is plagued with lack of global halal standards on pharmaceutical ingredients and product integrity analytical methodology. In a move to strengthen the integrity within manufacturing and

servicing of medicines and health supplements, Malaysia introduced a new standard for halal pharmaceuticals. Cosmetics Growth in the halal cosmetics market is mirrored by a growth in consumer knowledge about the ingredients used and product awareness, fuelled by social networks. The global halal cosmetic industry is estimated at USD13 billion with an annual growth rate of 12 per cent. At present, the halal cosmetic market constitutes 11 per cent of the total global halal industry. Analysts see the emerging halal cosmetic and personal care market as next in line for growth after the lucrative halal food sector. The market for halal cosmetics is booming in the Middle East and Asia. Across the Middle East, halal cosmetics are registering a 12 per cent annual growth reaching USD12 billion in total value of cosmetic related sales. Markets in Asia, particularly Malaysia and Indonesia as well as Europe, have seen a surge in interest in halal cosmetics. In Malaysia, halal cosmetics contribute 10 – 20 per cent of the local cosmetics market.

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WAVE OF GROWTH

28 Growing concerns about animal-derived ingredients such as gelatine and collagen in cosmetic products are fuelling demand from both Muslim and non-Muslims consumers. The halal label on cosmetics and beauty products appeal to consumers seeking integrity and authenticity in their cosmetic and personal care products. Halal market in India Muslims contain a considerable share in Indian population. India is the third largest destination in the world and first country in Non OIC (Organization of Islamic Cooperation) nations in terms of Muslim population size. They compromise 14 per cent of Indiaâ&#x20AC;&#x2122;s total population and the total global Muslim community stands at 11 per cent. The food market is still unorganised in certain places in India. Many people prefer to purchase the food products from the neighbouring retail outlets due to uncertainty in quality of packaged and processed foods. Packaged food demand is mainly concentrated in metropolitan and urban areas. Muslim have dual reasons for selecting

industry has now evolved from merely halal food products to a holistic halal concept that encompasses the entire value of commercial activities. It has extended beyond food into the realm of business and trade and is fast-becoming a global symbol of quality assurance as well as a lifestyle choice for both Muslims and non-Muslims.

the neighbouring outlet, first is quality and second is Halal authenticity. FSSAI has made it obligatory to disclose the vegetarian and non-vegetarian ingredients in packaged foods by a clear visible logo but such official declaration is not required for halal or non-Halal classification. Therefore, an exclusive and most loyal customerâ&#x20AC;&#x2122;s demand of halal products approximately 10 per cent of total consumption exists in Indian market. Conclusion Halal no longer applies to solely food production and consumption. The halal

Agro & Food Processing February 2018

Halal products are gaining wider recognition not only due to meeting Shariâ&#x20AC;&#x2122;a requirements, but also hygiene, sanitation and safety aspects. Increasing demand for halal products is being seen in several Muslim countries, with strong economic growth fuelling demand. Rising income levels in these key markets have led to higher consumption rates and more opportunities for halal food producers. The largest of these markets are located in Southeast Asia and West Asia. However, the lack of a recognised global halal compliance standard and certification process has caused a lack of confidence for consumers, and uncertainty for the business.

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Is Gradually Gaining Global Attention The growth in this sector has been rising gradually since 2004; it was $2.2 billion in 2009 and increased to $11.7 billion in 2016. Globally, the Indian ethnic food products are known for their ingredients and flavors which cannot be replicated.

fter major international food giants like Dominos, KFC, Subway, Dunkin Donuts, Burger King, etc, that have become popular names in India, there is reversal on the cards now. Several entrepreneurs have opened Indian restaurants mainly because Indian food is gaining popularity in the world. The food industry is consumer-centric in nature as food manufacturers make products that relate to cultural elements and traditions. This means that the food industry of a given country like India cannot be separated from its agricultural and cultural characteristics and the nature of its geography, climate, and crops. Ethnic foods that come from diverse regional backgrounds have play a pivotal role in growth of the food industry. The focus is to provide safe, hygienic food to consumers who are key elements in entire pyramid of the food industry. Even aspects of production-centric technology, such

as productivity, nutrient intake, and standardization are important factors for the booming Indian food industry. Today people have variety of foods prepared using diverse, cultural methods to choose from. In traditional markets, agricultural produce and some ethnic foods became exchangeable goods, gradually developing into the production and exchange-based markets we see in todayâ&#x20AC;&#x2122;s industrialized society. Indian ethnic food products are exported to several countries in the world because a good number of Indians have settled abroad and unique taste-feel of these products. Ethnic food market scenario The ethnic food market scenario has dramatically changed in recent years as the number of Indians increases with every passing year. The growth in this sector has been rising gradually since 2004; it was $2.2 billion in 2009 and increased to $8.7 billion in 2012. Globally, the Indian ethnic food products are known for their ingredients and flavors which cannot be replicated. Indian and Asian foods are highly in demand in foreign locales as over 1,000 new products were launched

Agro & Food Processing February 2018

in U.S. between January 2006 and December 2010. The trend continues as Indian ethnic food items are tremendously doing well with many companies exporting their products to different countries in the world. Canada, Europe, Australia and Middle East regions are the places where Indian ethnic products are capturing a significant market share. As per recent survey, Indian food has tremendous potential. Now with a global food culture, people are keener to experiment. The international market is just getting ready for a good Indian chain to get into it. Industry experts believe that there is a great thrust for Indian food abroad. The Indian population is also growing in the world and cultures of various countries are coming closer everyday of which food is a major part. So, the main motive is to globalize the Indian food. The developments in food products have also led to developments in food culture as well. The advancement of food culture in each country depends on how long the nation spent as an agricultural society, as well as whether it underwent a rapid transition to an industrialized society. In

countries that industrialized quickly, food culture developed within the framework of an efficient economy, while in countries where industrialization was slower and there was an extended agricultural period, food culture developed in the context of agricultural culture. A country like India that boasts of diverse culture and regions has several ethnic products on offer like pickles, spices, cookies/biscuits, South Indian dishes, and other regional popular items. The entire world becomes their marketplace and eventually these Indian companies gain good profit margins. Manufacturers in India can tap this huge market and make use of this opportunity by providing quality eatables.

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The reasons for growth of Indian ethnic food As mentioned earlier, ethnic food items from India are popularly enjoyed by consumers internationally. Indian food is the sought-after meal by Indian foodies staying in different parts of the world. Hence when Indian ethnic food & other ready-to-eat/cook items are available in super-markets & retail stores, who would refuse to purchase them. This is one of the major reasons for the growth of this market. It is not just Indians who prefer these items, even the citizens of those countries tend to gain a liking towards these products. There is wholly distinctive taste appeal of our products in comparison to their local cuisine they consume. A distinctive style always stands out from the rest and that is what makes Indian cuisine

so popular abroad. Indian cuisine consumption pattern is on the rise in overseas market for the different flavours it carries. It is keenly sought by food-lovers, be it rapidly increasing set of foreigners or NRIs who crave for Indian food. At times, the ethnic foods from particular country are localized to adapt with the culture, taste, and habits of people in other countries. This is known as ‘glocalization’ that brings about changes in production and consumption patterns. Even when localization strategies are pursued, they often fail when they damage the originality or traditional knowledge embodied in the food in particular. This means that in order for localization to succeed, a clear distinction needs to be made between values that need to be preserved and things that need to be changed, based on thorough preparation and analysis of traditions and the target region. Ethnic food has become serious business for Indian manufacturers’ and entered the global metropolitan culture all over the

Typical street favorites of India like chaat, samosa, kachori, and dosa are greatly in demand abroad. Indian sweets and desserts require no introduction in international markets as well. Bengal’s rasagollas, gulab jamuns and mishti dhoi have already travelled across different countries. So, whether it is Punjabi or South Indian food, they have found loyal patrons in the international market. Countries wherein there is huge demand for Indian ethnic food are USA, Australia, Canada, Dubai, Singapore, Hong Kong, and Britain. The demand for Indian food is on the rise in these countries because of large presence of NRIs there. Studies revealed that in places like Britain or Canada, many families eat an Indian meal at least three times a week. Indian food is a hot favourite in Britain and Canada. It is reported that London has more than 8,000 Indian restaurants.

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36 world. Ethnic food has a public concern now occupies the same place that health food did three decades ago. Because everyone is looking for newer, stranger and rarer kinds of eth- n i c cuisine available in the global metropolitan culture has proliferated enormously in the last twenty years. Indian food is popular around the world. Indians will not eat a burger everyday but they love to eat dal chawal, idli-sambhar daily and there is a certain pull in that direction. Many Indian companies look to Indianise the product with authentic innovation and introduce it to their targeted audience. Even the product packaging plays a key role to attract attention of customers. Indians residing abroad always seek for those items that give the feel and emotional connect of their homeland. Here the emotional aspect is significant as being away from the birth country & family, individuals crave to eat such ethnic food. Popular celebrity Chef of India Sanjay Kapoor said “Traditional Indian food is amongst the best in the world but still has not received its full due. There is so much to learn and savour from our cuisine and we need to promote it, irrespective of any physical boundaries. Traditional Indian food is so good, everybody needs to experience it.” Today as advancements takes place in information technology and transport, it has given the term ‘globalization’ its true meaning allowing us to easily meet people of any ethnicity or travel to any country. In this globalized era, other industries are focused on unification, speed, standardization, and uniformity, but as the nature of food industry requires diversity due to taste, culture. The reason being is that people tend to get bored of eating the same thing. As food products vary based on the ethnic groups, history, and geographical features of each country, global citizens today want to try a variety of foods from around the world while also learning about that country’s culture, history, and geography. Accordingly in the globalized era, the concept of food industry is being

redefined.

For

example, most people make choices about food products three times a day. As people are naturally meant to get bored of a food if they keep eating it regularly, they will seek out something new, which means that efficiency cannot be the sole goal of production. It is important to remember that food involves biological, visual, medicinal, and cultural elements.

Therefore, as globalization becomes more ubiquitous, rather than seeing food products converge toward a uniform industry standard of high calories and strong flavors, people turn to the diversity, history, and geographical values embodied in traditional ethnic foods that hail from different regions and ethnic groups, leading to the development of technology to store, distribute, consume, and cook these foods. One important category of food products that is borne out of traditional knowledge is fermented foods. There are numerous ethnic foods around the world, including ‘slow food’ movements, which prominently feature fermented foods. Milk-based fermented foods produced by wanderers group led to the development of new fermented foods using the grains and vegetables of

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38 settled agricultural societies. These ethnic foods are human centric, and came from human culture and human biological phenomena which culminates that they have a significant cultural value. General Manager of Vitagreen Products Pvt. Ltd. Bhavesh Hingrajia attributed the reasons for growth of Indian ethnic food products in global market is due to awareness it has created, ease transportation, better communication means. Several households prefer ready-to-eat food because of the convenience factor hence an increased sale of packaged Indian ethnic food has been witnessed in global markets. Owing to rise in disposable income and young demography of households in metropolitans, the consumption rate will surge across categories of packaged food such as packaged beverages, dairy products, snacks, frozen foods, ready to cook/ready-to-eat and baked foods, with urban households accounting for 80 per cent of these purchases. India’s regional and cultural diversity also provides variety of different kinds of food: crunchy, soft, spicy, steamed, bland, finger food, bakes, fries, preserves, pickles, roasts, meats, vegetarian savouries and wide range of sweet dishes right from kheer to chunky barfis and pedas and nebulous halwa. Ready-to-cook foods are gaining popularity as everyone looks for quality and convenience. Few popular Indian brands catering to global market Haldirams Haldiram made humble beginnings in Bikaner, Rajasthan with a savory store in the year 1937. Today, it is one of the biggest brands of sweets and savories not only within India, but its products are sold in several countries all over the world. Every Haldiram packet contains product information in numerous languages, catering to its international fans. The company is majorly known for its snacks and namkeen variety in the country. Haldiram’s has over 100 products that include frozen foods such as frozen meals, ice cream and kulfi, sweets, cookies, crackers, papad, savories, chips and other snacks. Haldiram’s also produces fruit-flavored beverages and dairy products. Since 2010, the company began production of ready-to-eat food items. It provides all type of traditional Indian food and sweets. Haldiram’s products are exported to several countries worldwide like United Kingdom, United States, Canada, United Arab Emirates, Australia,

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New Zealand, Japan, Sri Lanka, Thailand and in over 50 countries. Paperboat Bangalore-based Hector Beverages gave Indian consumers the taste of aam panna and jal jeera in tetra packs & pouches. The product Paperboat established itself with the launch of ethnic drinks like aamras and jaljeera. This Indian startup has given people a product that has retained the taste of the fruit/ingredient. The ready-to-drink beverages in Indian flavours like sherbet, kala khatta, jamun packaged in attractive containers, and supported by nostalgia inducing branding campaigns has captured the taste buds of several. The consumption ratio of carbonated drinks is dropping gradually. There is a shift from carbonated to non-carbonated drinks consumers move towards nonfizzy beverages which seem to be an exciting alternative to fizzy drinks. Hector has been a pioneer in this space and created an ‘Indian ethnic alternative’ for every consumer. This is the biggest source of excitement. These beverages are produced using local spices, fruit, flowers and pulses, and some fruits grow wild, such as jamun and kokum. Paperboat has been innovative in terms of product, packaging and marketing to create the consumer wow factor. The company is popular in India as it has significant presence in metro cities such as Delhi, Mumbai, Bengaluru, Hyderabad, Pune, and Chennai. The product is sold in international markets like Dubai, Malaysia, UK and the US. LT Foods LT Foods flagship b r a n d ‘Dawaat’ was launched in 1980s and is

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now recognized as the leading brand in the industry. The company has a strong nationwide distribution network in domestic market that sells products such as branded rice, wheat and pulses, healthy snacks, spices and other value-added products like brown flex seeds and cashew nuts. Rice is considered as staple dish in India, but even for millions of Indians abroad. This brand comes to mind as they scout for perfect basmati rice to cook at home. Started in 1993, ‘Daawat basmati rice’ is not just one of premium rice brands in India, but today it is sold around the world. Bollywood superstar Amitabh Bacchhan is the brand ambassador of ‘Daawat’ where the packs are stacked at supermarket shelves in over 50 countries gives a nostalgic pride to Indian-origin shoppers. Bikanervala Bikanervala is an Indian sweets and snacks manufacturer based in Delhi, India. The company was founded in 1950, as a retail sweets (Traditional Indian sweets) and namkeen shop in Bikaner, Rajasthan. Bikanervala has its outlets and range of restaurants in North India including Delhi. Bikanervala products are exported to several countries worldwide. The company has recently set up

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40 manufacturing unit in Dubai. There are Bikanervala retail outlets different places in Dubai, London, Australia, Singapore and New Zealand. The company aspires to become a brand leader of Indian ethnic foods in the world. Bikanervala puts in the best efforts to serve quality food to the customers all over the world. The Indian fast food pioneer is focused to promote Indian heritage, culture and cuisine worldwide. In addition, the company has now customised Indian food for the global market. Vadilal Major ice cream player Vadilal Industries Ltd is also one of the largest processed food players in India with significant exports of frozen vegetables and readyto-eat snacks, curries and breads. Vadilal entered the processed foods segment to optimise utilisation of its extensive cold chain network in 1990s. This business is perched for strong growth in next few years due to urbanisation within India and rising demand for Indian food amongst developed regions like the USA, Western Europe and other parts of the world. Vadilal believes in providing best quality of products & services to its customers. They create tasty ice-creams and processed foods with wide range of flavors and provide products. Vadilal offers variety of exciting products for all age groups and aims to come up with various innovative products to satisfy our customers.

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of Indian cuisine globally and tweak their distribution model and focus on the large retailers instead of just specialty Indian or Asian stores. Frozen vegetarian snacks are growing at 21-22 per cent CAGR and this segment is anticipated to grow in next few years. MTR Foods Headquartered in Bangalore, MTR Foods is a food products company that manufactures wide range of packaged foods like breakfast mixes, masalas, spices, readyto-eat meals, dessert mixes, snacks, beverages, pickles, etc. All range of products is authentic and 100 per cent natural. MTR Foods offers pickles which are made with traditional recipes passed down through generations. The company produces both fruits and vegetable pickles like garlic, tender mango, tomato, Avakai mango, lime, mango thokku pounch, mango etc. MTR Foods authentic Indian food marks its global presence for its wide range of packaged products and recipes. The brand is now home to almost Indian kitchen in

Mother Recipe Pune-based packaged foods brand Mother’s Recipe has a portfolio of pickles, ready-to-cook mix and cooking pastes, among others. They plan to venture into the frozen food category and set up a dedicated unit in Gujarat. Aiming to achieve a turnover of Rs 500 crore by 2018-19 as they recorded revenue of over Rs 200 crore in 2014-15 and turnover in the following year was Rs 250 crore. The brand commands 25 per cent market share in the Rs 450 crore organised pickle industry in India and wants to spread their wings in years to come. Mother’s Recipe sells 47 varieties of pickles in the domestic market and exports 60 varieties to over 40 countries. The products exported contribute to 40 per cent of company’s turnover. With an increasing popularity

Agro & Food Processing February 2018

the USA, Canada, UK, Germany, Australia, New Zealand, Middle East, Japan and South East Asian countries. The culinary expertise blends years of rigorous quality, tradition and taste in wide range of ready to eat-curries, rice, soups, breakfast mixes, dessert mixes, snack mixes, spices & masala. The company believes in providing the best products that will keep customers satisfied after consumption. AMUL Amul is an Indian dairy cooperative in the state of Gujarat established in the year of 1946. Today, the brand is managed by the Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF) jointly owned by about 3,000,000 milk producers in the state. Amul model has helped India to emerge as the largest milk producer in the world. The milk is processed in 184 district co-operative unions and marketed by 22 state marketing federations, ensuring a better life for million. The country uses several Amul products like milk, bread spreads, cheese, UHT

42 milk, ice cream, paneer, dahi, ghee, milk powders, mithai range, chocolates, fresh cream, Amul cattle feed, beverage range and happy treats.From milk products like paneer and cheese, the brand has over time progressed to serve the health segment with its sugar-free and probiotic milk products. It is the largest exporter of dairy products in the country. Amul is available in more than 40 countries of the world as they export a wide variety of products. The major markets are the US, West Indies, Gulf region, Singapore, Philippines, Thailand, Japan and China. Nilon’s The head office located in Pune, Maharashtra, Nilon’s Private Limited has grown into is India’s largest producer of pickles, tooty-fruity and roasted vermicelli today. It is one of the country’s fastest growing processed food suppliers with an extensive range of quality products. It is a leading manufacturing company in India for quality food products pickles, spices/masalas, cooking pastes, Chinese products, roasted vermicelli, etc. A wide variety of pickles are produced like mango, lime, green chilli, sweet mango, tomato, stuffed red chilli pickle, cut mango pickle. Nilon products are exported to

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focus markets like Dubai, New Zealand, Malaysia, South Africa, Singapore, Australia, France and Japan. Conclusion India is one of the world’s largest producer as well as consumer of food products. It can be rightly said that this sector plays an important role in contributing to India’s economic development. Indian appetite has undergone several changes in recent times. Since the last decade, due to globalisation, many Indians have travelled to different parts of the world and vice versa with massive entry of people of different nationalities in India. This has further resulted in Indianisation of various international cuisines. Food culture in India will go a long way to fulfill the urgent need to archive recipes that drive our vast culinary heritage. Food is a unique form of art because of accessibility it offers along with basic human need to eat. It has the ability to touch lives as it facilitates connectivity that comes while eating drinking with the people we love. Food

Agro & Food Processing February 2018

also breaks down the cultural, religious and social barriers and connects on vital platform all members of the society. Indian cuisine is widely available in Canada, especially in the cities of Toronto and Vancouver. It is also very popular in Southeast Asia, because of the strong Hindu and Buddhist cultural influence in the region. Indian food has considerable influence on Malaysian cooking styles and enjoys fame in Singapore. This place is also known for fusion cuisine combining traditional Singaporean cuisine with Indian influences. Different recipes, ingredients and processes that Indian ethnic products contain are unique is because of their diversity and regional specialty. Innovation of traditional recipes for Indian consumers abroad is gaining popularity at a global stage. Popularity of Indian food abroad is visible from the fact that after Chinese and French cuisines, Indian cuisine is the third-most popular cuisine in the world.

SWEET SURVEY

Maneuvering the Magic of Mithai

Indian Sweet Industry

he story of mithai Sweets and Mithai form an integral part of the Indian culture, compared to other European and American countries. Sugar, which forms the basic ingredient for most of the sweets, has been cultivated for thousands of years in India. Even the word sugar and candy have their roots in Sanskrit, the ancient Indian language. The foremost reason for this is that there is no other country in which sweets are so varied, so numerous, or so invested with meaning as the Indian subcontinent. India not only has a rich cultural history, its association with sweets is also millennia old. Indians were the first to refine sugar, at around 500 BC.

The sugar revolution was such that by 300 BC, five different kinds of sugar were being processed in India. The west might have given India machines and technology, but it is India which is indirectly responsible for the desserts they enjoy! Some of the common ingredients used in Indian sweets are different flours, milk, milk solids, fermented foods, root vegetables, raw and roasted seeds, seasonal fruits, fruit pastes and dry fruits. The method of preparation are also quite diverse using techniques like freezing for kulfi, frying for jalebi and Imarti, roasting for Mysore pak, baking for nan khatai and simple cooking for gajarkahalwa among others.

In complementing with the sweet toothed Indianâ&#x20AC;&#x2122;s taste buds, sweet marts and mithai shops are offering a numerous delectable mithais that instantly release an opus of delicious flavours as they melt in the mouth. Expediently, Mithai business is flourishing like never before.

Agro & Food Processing February 2018

Agro and food processing magazine decided to explore the Indian Mithai (sweet) industry and how it has transformed in recent years and what is its potential in both domestic and the international market. Other popular sweets in the Indian subcontinent are Barfanitoda, Cham-cham, ChhenaMurki, ChhenaPoda, Gajrela, Gulab jamun, Khaja, Kheer or payas, Laddu, Malpoa, NarkelNaru, Parwal Ki Mithai, Pathishapta, Rasgulla, Ras Malai, Sandesh, Sel Roti and Shrikhand. A popular saying in India goes like thisâ&#x20AC;? shubh kam se pehle kuch mitha kha lena chahiyeâ&#x20AC;? (have something sweet before beginning some auspicious work). Sweets find their way into almost every sphere of Indian society in the form of greeting, celebration, religious offering, gift-giving, parties or hospitality in India, sweets are ever present.

SWEET SURVEY

Especially on Indian festivals – such as Holi, Diwali, Eid, or Raksha Bhandan, the sweet shops expand to more than twice their size to keep up with the sharp increase in demand. Mithai Shops The Indian Mithai shops can be broadly divided into two categories, and these trends will play out differently in each of these categories. The first category is a ‘destination shop’. These shops have had a long history. Every major city or town usually does have one such shop. These shops have built a strong reputation and an unprecedented staying power. Such shops survive and even thrive. Some such shops take a branded route. Das of Kolkata and Pulla Reddy sweets in Hyderabad are two such examples. Others will augment their shelf space or introduce quick-service restaurants. Haldiram’s and Bikanerwala and Nathu’s have done this. Nathu Sweets, the popular sweetmeat shop in central Delhi’s busy Bengali Market, which is the flagship of 13-shop chain, has made a space for itself in the sweet industry. Over the years, politicians, celebrities and commoners alike have developed a fondness for its array of sweets and snacks such as sohan Halwa, ghevar, rabri, Kalakand and etc.. The shop, which is choc-a-bloc with customers through the day, started as a tea stall set up by Gupta’s grandfather Nathu Ram Gupta in the mid-1930s. Just across the Nathu’s flagship outlet, Bengali Sweets does brisk business. Its owner, Jagdish Aggarwal, is not perturbed by Nathu’s popularity. The popularity of Bengali sweets is a story of its own. Each sweet manufacturer maintains that they have a loyal clientele and their way of making Mithai is the best and innovative. Manohar Lal, Chairman, Haldiram’s, has a different take altogether; Haldiram though started on the same line but now has gone ahead and has become a very large conglomerate and does not consider Nathu’s, Aggarwal sweets or Bengali sweets as competition.The sweet and snack giant has now made a mark in the packaged food industry and is now a pioneer of packaged sweet in India. The second category is the ‘neighbourhood shop’. These shops sell mithais

and local dairy products but offer limited product differentiators. Consumers patronize them for accessibility. These shops will undergo a complete makeover in the next decade. Signs of this trend are already beginning to emerge. A visit to any such shop will reveal that a significant proportion of shelf space is assigned to non-mithai categories. But consumers are also confused about the positioning of these shops. They still think it is a mithai shop. But when they visit these shops, they end up buying packaged savouries, beverages or chocolates as an afterthought. This is an interesting situation laden with challenges and opportunities. On one hand, Mithai shops are searching for a unique position in the market. On the other, they offer unique lastmile delivery advantages. This is an exciting opportunity for packaged food, processed food, and health food, beverages and kids food. The ongoing transforma-

Agro & Food Processing February 2018

tion of mithai shops will unearth hidden opportunities for many categories to grow and overcome infrastructure challenges. These categories can aspire to associate with existing mithai shops and open up vast areas of readymade retail shelf space. Technology advancement important for Indian sweet industry The Indian Sweet Industry has been facing unending challenges especially when it comes to the rapid technological changes. Since the emergence of information technology, company communication with its customers took a turn to an un-

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them. Lately a keen interest has once again arisen in the traditional sweets in India, and to cater to the demands of the new generation, old sweet shops like Agrawal, Nathu’s sweet, Suleman Mithaiwala, Ghantewala Halwa established way back in 1970 have started selling their wares online through websites like FoodFeasta. com,Flavorsofmycity.com, sweetsinbox, placeoforigin.in etc. Many Mithaiwala are selling online through websites that promises prompt and fresh delivery facilities.

known destination. In the past, as a company you set the times that were open for business, and customers had to put up with it or stay without that particular product. Technology has totally changed that, with the introduction of e-commerce and mobile phones, customers can access products at any time. They have raised expectations on what is acceptable customer service and what is not. As a business, you have to keep up with the changed consumer behavior or be out of business. For example, if a customer wants to purchase something online at night and has a query, they expect to get instant answers. If they do not they, choose another supplier from the myriad available online who can meet their immediate need. The Indian sweet industry just needs that advancement in technology and to reach out the customers. This is how they can overwhelm the invasion of chocolates in their space. Those who are well proficient in tech matters and understand the concept well can make maximum use of it. Through social media, they can promote the benefits of their products so that people are aware of the advantages of it. Social media becomes the best platform to convey plus points that sweets has. There is wrong belief in people’s mind regarding sweets as bad for health and high in calorie etc. Pradeep Jain, Managing Director, Jain sweets, delegates that scientific facts, blogs; write-ups should be posted on various social networking channels as today there are numerous users who check these regularly. A comparison drawn between

With the revolution in society and technology, people are gradually switching to packaged sweets which carry a guarantee of quality as well as hygiene. The idea works well, not only for food lovers who get to satiate their taste buds, but also for sellers who say their business has increased as a result of this ‘online’ dimension to sales. The startups, which act as a link, say timely delivery and the freshness and authenticity of products is their focus.

western sweets (chocolate, cake, etc.) and traditional sweets will allow consumers to make right choices when it comes to health. “Hence, technolPradeep Jain ogy can be greatly Packaged Mithai add to the sweetness used in the best possible manner by mithai Hygienic packaging is trending in India. companies and awareness created will Daily prepared, unpackaged traditional benefit the industry and will eventually Indian sweets used to be most prominent help the sector grow”, he added Hummingbird Foods & Beverages Pvt. Ltd. (An ISO 9001: 2008 Certied Company)

Despite stiff competition from attractively packed imported chocolates, fancy cookies, cakes, and muffins, branded traditional Indian sweets have not only managed to hold on to their own but have witnessed a steady rise in sales due to an expanding market, rising incomes and, most importantly, the emotional value associated with

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SWEET SURVEY

50 in the sweets category and are widely used as gifts; but there has been an evident shift of preference to packaged sweets over the years. To avoid gifting contaminated sweets, an increasing number of Indian consumers are starting to consider alternatives such as packaged sweet snacks and chocolate snacks as gifting options. Notably, standards laid by the Food Safety and Standards Authority of India (FSSAI) to ensure packaged food safety have also urged more manufacturers to offer hygienically packaged sweet. Also innovative and unique packaging trends have now captured the industry, different sweet items are gaining attention everywhere. Some are even exported. Virendra Jain, Director - Kadimi Sweets, (Also President of FSNM) stated that it was the innovations in packaging that add value for the producer and for the end-consumer who always seek for new and special items. In the similar manner, the sweets segment can adopt innovative packaging style to attract maximum consumers’ attention.

such as Haldiram, ITC, CavinKare using flavour and packaging strategies similar to those of foreign chocolate brands. The Indian ‘mithai’ has already made a strong impression in the gifting market While Haldiram and CavinKare have complemented their existing range of ‘mithais’ and desserts with chocolate, pineapple and sugar-free variants, conglomerate ITC and Delhi-based dairy products maker Mother Dairy have launched traditional sweets in gift packs. Indian sweets were always the favourite for gifting, but were losing favour to chocolates due to lack of innovation and hygiene, which is where companies have upped their ante. ITC has also launched three ready-to-eat ‘halwas’ under its Kitchens of India brand, while CavinKare has rolled out ‘soan papdi’ in chocolate, orange, elaichi and pineapple flavours under its Garden brand. Mother Dairy, too, has launched ‘gulabjamuns’ and ‘milk cake’.Amul already has Indian sweets like shrikhand and basundi in its portfolio, but the Indian sweets segment con-

While, Govind (Sanjay) Chitale, Director, Chitale Bandhu Mithaiwale stated that they had taken a major leap with packaging all its products immediately after manufacture with the idea to sell it over the counter so that the customer can see and buy the fresh sweetmeats. He added that packaging of the product has a very important role to play because the company conveys a lot through the design of their package. Mithai makers are introducing new flavours to pique the taste buds of customers thought to have been lost to foreign confectionery brands alongside with attractive and innovative packaging. In fact, some retailers are saying that the Indian ‘mithai’ has already made a strong impression in the gifting market, with makers of snacks and ready-to-eat food items

Agro & Food Processing February 2018

tributes a meager sum of Rs 1,500 crore(Rs 15-billion) odd to its Rs 23,000-crore (Rs 230-billion) turnover. However, the company is keen to grow the numbers here and says that the segment is clocking a steady 15-20 per cent compounded average growth rate. The traditional Indian desserts market is around Rs 40,000-45,000 crore (Rs 400450 billion), but packaged sweets account for a small percentage of this market, that is around Rs 3,500 crore (Rs 35 billion). While a definite shift from unorganised to organised is being witnessed, not all products have high shelf life or can be industrially produced and hence, scaling up could be difficult.However, the potential is huge, and in the long run conversion towards organised players is imminent, One of the leading players in the segment, Bikanervala validates that e branded segment is growing at a fast pace, not necessarily because the market is firing up, but because there is a steady conversion among consumers from unorganised to organised segments.

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SWEET SURVEY

52 Bikanervala has 60 stores in India and abroad.It plans to double the number of overseas stores over a short period of time, and enter new territories in India, A sign perhaps of the growing demand from customers in these regions.

outrunning PepsiCo. Data showed that Haldiramâ&#x20AC;&#x2122;s sales came in at Rs 4,224.80 crore as on September 2017 and according to data Haldiram added nearly Rs 1,000 crore of incremental sales up to September 2017.

The Indian sweets segment, however, faces tough competition from chocolates and confectioneries. With Mondelez India actively advertising during festivals, chocolates have emerged as a serious competitor for festival gifting and gifting is a key driver for demand for the branded Indian sweets industry. Moreover, it is also a question of availability. Chocolates are available at the corner store, but for sweets one has to visit a sweet shop.

Haldiram operates through its retail chain and its products are easily available in every food store, confectionary store, bakeries, convenient store, local markets, discount stores, superstores and hypermarkets. Its first manufacturing facility was in Kolkata and later plants were estab-

The traditional sweets player is trying to up its game by going in for trendy packaging solutions and adding innovative options in its product portfolio. Another player that has invested heavily in the segment is Haldirams; its stores at the airports are doing brisk business.Haldiram today is the largest sweet and Snack Company,

lished

Agro & Food Processing February 2018

at Nagpur, Bikaner and New Delhi. Many retail chains in metros have also increased their shelf space for homegrown mithai brands. As of today, consumers prefer packaged sweets for gifting on festivals and other occasions. In fact, almost, 50-70 per cent of sales of packaged sweets happen during festive season. There is a clear preference for Indian sweets and dry fruits. Giftready packs, which are high on hygiene and innovation in flavours appealing to the Indian palette, have successfully engaged the consumers. The basic observation was that consumers were turning away from traditional sweets because of adulteration but with safety standard raised and hygienic packaging and given shelf life, the consumers are turning back. According to P r a d e e p Jain,one main issue that all manufacturers want to solve is increase the shelf life. Innovative packaging must be introduced so that the product does not get spoilt and there is increased

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SWEET SURVEY

54 shelf life. Eventually, the mithai market will also witness rise in growth rate because these are used for gifting and desserts. Indian consumers are increasingly inclined to quality, well-packaged sweets as these are commonly associated with greater credibility, longer shelf life and better product quality. Moreover, with the rapid growth of the packaged sweet market in India, the popularity of ethnic sweet snacks from various regions in the country has extended to non-native consumers as well. Several snack companies have began to sell their products across the whole of India, or are exporting them to countries abroad. Keep up with Innovation Evidently, processing and packaging is a critical aspect in the marketing and sales strategy of foods such as snacks and sweets in India. While hygienic and upgraded food machinery is vital for the sweet industry, different packaging forms and designs can influence purchase decisions and help snacks manufacturers gain a significant share in this fast-growing industry. Nonetheless, traditional sweet packaging is no simple feat. The manufacturers have to take into account the inherent fragility and odd shapes of snack foods while ensuring minimised costs and a highly efficient packaging process. According to Virendra Jain, Director, Kadimi Sweets, evaluated that packaging is an important part of today’s food industry and many food companies including snacks, sweets, or beverage and others are making use of processing and packaging equipment for manufacture of their products. He added, “Machines give flexibility and are more responsive in the production process thereby allowing manufacturers make any changes as & when required”. Use of Machines in sweet gives flexibility and are more responsive in the production process thereby allowing manufacturers make any changes as & when required. According to Sunil Dutt Kathuria, Managing Director, Om Sweets, earlier bhatis (use of wood and coal)was used but now boiler and other equipment have ensured hygienic production of sweets and namkeen. “Now to make small Rasagullas, a particular Rasagullas-making machine is available and used for producing uniform size of sweets. Similarly for all other sweets, there are different machines today

for production. We are making use of latest technologies for manufacture of sweets”, he asserted. Technology has taken over lives Sunil Dutt Kathuria and made a huge difference in day-to-day functioning and same goes in the mithai factory. Srinivasa Raja, CMD Adyar Ananda Bhavan, pointed out an important fact on use of automation in the sweet industry; he gauged that though technology has proved to make our lives simpler, it has also made it more complicated at the same time. “Sometimes, people do not understand technical know-how and are reluctant to adopt technological ways”, he said, and further clarified that gradually, even his company began to make use of equipment that improved production capacity to a great extent. But Govind (Sanjay) Chitale,had another story to tell; He said, “My company was the first to bring packaged pouch milk to India way back in 1970. In the same vein, bakarwadi and motichoor ladoos are entirely manufactured on an automated machine. Putting all efforts to make the product acceptable in international market was something that was always a priority. We do not want to limit ourselves just to Indian market and constantly strive to make our products available in various countries of the world”, said Chitale. Also Chitale asserted that his company has worked on network expansion. In India, low tolerance and highly efficient packaging lines are still imported and this stands as a major hindrance for development. These packaging lines are so expensive that an average manufacturer cannot afford them. Therefore, they have to opt for low efficiency machines that result in higher cost of products. It is important to start manufacturing fast, low tolerance packaging lines in India which will greatly benefit the industry.

Agro & Food Processing February 2018

Packaging industry needs to focus on innovations that will enable affordability to masses and automatically the product demand will boost manifold. Products like Barfi and other sweets if packaged in such a way that the shelf life can be extended up to six months, can attract massive demand. “Innovative packaging for Indian sweets must ensure that the product shelf life is increased” said Srinivasa Raja. “One example for such unique innovation is single-serve sweet packs - these portion sized desserts in fitting microwaveable cups with disposable spoon in the pack and whenever a consumer wants to make any moment special, these packs deem to be perfect for the situation”, he stated . The Chocolate invasion One may wonder why Mithai shops are conspicuous by their absence in malls, and if they are being dwarfed by chocolate stores that are entering the market in a grand way? Well, the answer lies in special marketing devises to take over sweet market in festivals with unique advertisements, marketing and packaging strategies, applied by FMCG companies resulting in a major chunk of the sweet eaters switching over to chocolates; other reason being short shelf life of the sweets. Though sweets of India hold their own charm, there are chocolates that are trying to create their own niche and also happen to be the latest trend. Big Chocolate companies like Mondelez, Nestle, Ferrero and etc., all are competing to replace each other and the Indian sweets. Undoubtedly the chocolate ndustry in India has been able to target the young generation who not also prefer it over the traditional sweet, they even take it be healthier and also a stress buster. However upper generation remains an ardent fan of Indian sweet. But can chocolates replace the Indian weakness for traditional sweets? In India, sweetmeats prepared with milk, sugar and ghee are seen as filled with goodness. Also, there is a certain drama that goes into preparing and serving sweets, which is an inherent part of our culture. Cadbury tries to capture that sense of drama. They are not just serving a bar of chocolate but small pieces of it served in a plate. Typically a box of Indian sweets is usually shared by the family; thus by dividing the chocolate into pieces

SWEET SURVEY

holds where families are increasingly becoming nuclear and do not find time to prepare traditional sweets at home. However, beyond strategic communication, the brand needs to consider other ways to increase consumption.

the brand is building on those codes that we are familiar with and introducing it into chocolate. While the older generation may not readily switch to chocolate consumption, the acceptance among young adults the future generation of chocolate consumers will happen. It is clearly a strategy for the long haul. The new communication primarily targets homemakers, who look forward to spending time with the family. Maybe the target will appeal to middle-class house-

Affordability is still a concern. You can get a box of mithai (Indian sweet) at a comparable price and the whole family can share it. How many people can share a bar of chocolate?” Product innovation is another challenge, believe experts. In the past, Cadbury launched Dairy Milk Desserts in unusual flavours like Tiramisu and Kalakand which did not hit the consumers’ sweet spot. Perhaps, going ahead, the brand could launch chocolate bars meant for diabetics or weight watchers. The chocolate sector is also planning to go ahead and make chocolates in the

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shape of traditional Indian sweet to woo the ardent Indian sweet followers. So, with a keen eye set on market growth, Cadbury, Munch, Perk, Galaxy, Kitkat, Ferrero Rocher, Snicker, Bounty, Mars, Twix, etc. can be expected to find new ways of introducing something meetha in our lives. The Mithai hamper Milk items like Rasagullas, Gulab Jamun are a rage everywhere and even white Caucasians in Europe have succumbed to the irresistible Bengali sweets. Thanks to the innovative packaging, now they are walking the export route. Petha is another item of export. Ruling the roost in domestic market are also Khoya items like Barfi, made with Almond, Pistachio and Cashew, the last one called Kaju Katli. The city of joy, Kolkata, is incidentally also the originator of famous Bengali sweets which are famous worldwide. Their hot selling items are Misti Doi and Sandesh apart from all-time favourite fresh Rasagullas. Furthermore, the demand for sweets is consistent all throughout the year and increases in festivals like Dashmi, Diwali

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                   

           

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   

                      

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SWEET SURVEY

58 and Vishwakarmapuja where corporate purchase is at its peak.

Zealand, Australia, UAE, Canada, United Kingdom and Sri Lanka.

further come together to tap the full potential for future growth.

In keeping with the health theory, sugar free sweets are being offered by all major shops. People have misconception that sugar free mithais are tasteless and this awareness has to reach the diabetics and health conscious people so that they could fully explore the market.

Nathu Sweets still introvert to tread on the export route and its reason is quite irrational; that is they want to first meet up the local demand and then think of exports, which is still a thought too thin in their minds.

End In the next few years, taste of Indian sweets will spread far and wide across the world as it slowly gains global attention. Sweets consumption in India is witnessing a rise during the festive season, and during the off-season, the sales fare at a good rate.

But Srinivasa Raja disagrees saying thatpeople only go forsugar-free and health sweets because of the misconception that sweets lead to diabetics and other diseases. “Manufacturers must work in this regard and should introduce innovative products that will satisfy consumers” he advocated. Export potential India is a land of religious people and the turn of festivals gives impetus to sales. Besides, there is a lot of potential in this sector as demand is increasing in India and European countries. But except for a few, most don’t export directly. Haldiram’s started its operations from a small shop in Bikaner and from there has spread its presence in both domestic markets in India and also in international markets. Export orders are carried to several global countries like Thailand, Japan, New

Bengali Sweets are gaining momentum in America and Europe, and in keeping with the demand, they do export but not directly. They export only if there are large orders and do not indulge in direct export. 20 per cent of Bikanervala, local production of branded sweets is now being exported and is growing at the rate of 5-6 per cent every year. The company’s competitors are Bikaji and Haldiram. Adulteration The market is expanding and there is space for everyone. Moreover, the branded sweets market has increased by around 30 per cent. But it is still a long way before the consumers may be convinced to not buy unbranded sweets as India’s traditional sweets market remains largely unorganized and constantly faces threats from rising prices of key raw materials like milk, butter, sugar and dry fruits. Unorganised sector resort to making sweets from contaminated and adulterated ingredients and even use chemicals The problem of adulteration has to be tackled. Section 104, 57 and 58 of the Agricultural Produce Marketing Board Act empowers the Committee to seize or/and slap penalty of around Rs 5,000 on those selling khoya or mawa in the open market other than the mandi. For authenticity of Khoya, a lab test would be more apt rather than the manual test most are doing. Increased spending on R&D for better quality monitoring, use of state-of-the-art preservation and aseptic as well as data of potential markets have to

Agro & Food Processing February 2018

The market for traditional Indian milkbased sweets alone is estimated at $500m. A major push in this direction of turning out bigger volumes of strictly quality controlled traditional sweets for commercial sales both domestically and abroad is needed. Entrepreneurs in Europe, North America and Australia are looking into the prospects of manufacturing traditional Indian sweets. Hopefully, the coming years will witness taste of Indian sweets spreading far and wide. In order to survive and grow in competitive market the Indian mithai industry has to be innovative with complete focus on food safety standards and make the consumer believe of the quality that is being served to them is the best. In fact consumers have to be ensured that the sweets are made in hygienic conditions. Also adulteration in traditional sweets is eroding consumers’ confidence that is fuelling chocolate demand. In counterview this is also a major deal-breaker that is forcing consumers to opt for other alternatives. The need of the hour is that there should be upgradation of Indian sweet industry in the same league as the chocolate industry in terms of processing, use of machinery, packaging and marketing. We as Indian have not lost the love for our traditional sweet, we still are the Desi’s who have now become aware and want the best from our delicacies, the best of hygiene, best of packaging and best of taste. The industry is bucking up and connecting with its consumer via technology and growing on innovation, it is not far away when the Indian sweets with it development will back bench chocolates and other westerns sweet treats.

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