Packaged Food Industry Boom in Indian Market

Packaged Food Industry Boom in Indian Market

Packaging

In recent years, packaged food or ready to eat food has become favourite among Indians especially in the urban cities. According to ‘’India Ready-to-eat Food Market Forecast & Opportunities, 2019’’, the Indian RTE food market have grown at a CAGR of 21.99% from 2014-19. Indian Food packaging industry is expected to become 3rd- biggest market by 2020.

There has been a noteworthy change in the eating habit in Metropolitan Cities. Due to the fast-paced life in urban cities, about 79% of the urban people prefer to have ready-to-eat food in their regular meal. The reasons behind the increase in the use of packaged food in urban cities are the steep rise in income, the standard of living and convenience. Mostly, in a small family where both husband and wife are working, they prefer having ready-to-eat food for their children. It has become the most favorite and convenient part of their meal. The main packaged food includes a bakery and dairy products, canned and frozen processed food, ready-to-eat meals, diet snacks, processed meat, health products and drinks. This increasing trend of packaged food has attracted a lot more companies to launch new products and variants of packaged food.

The Indian middle class is growing and so is their buying capacity and demands. They love to try on new products that come in the market. They prefer premium products, especially in the confectionery segments like chocolates, chips and a lot more. They also love to explore packaged foods in the ready-to-make and easy-to-eat category. Rural India provides a great opportunity for the packaged food and beverages industry. As almost 65% of the total Indian population lives in the rural region. They are attracted to food products of urban cities. They are more inclined towards packaged chocolates, biscuits, chips, cakes etc. The buying capacity of rural households has also increased in recent years due to benefits from investment in infrastructure and rising wages. Food processing companies are realizing the potential of packaged food and beverage in rural India. They are understanding buying behavior of rural area and they are launching the products in smaller pack sizes and low prices to attract rural customers. They also making their packaging very attractive like using vibrant colors, celebrity endorsement etc. to attract and capture Rural minds.

The government has made many applaudable efforts to promote investment in this industry by providing them with various schemes as subsidies and grants. These schemes include mega food parks, modern terminal markets and bulk storage facilities. As India is the second largest producer of food and beverages after China, the Indian market has a huge potential for FDI (Foreign Direct Investment) from other countries so that India could overcome the concerns of food processing technology and food packaging machines.

Challenges Faced by the Food and Beverage Industry in India

The challenges faced by the food and beverage industry include lack of consumer awareness towards packaged food and uncertainty about green packaging materials.

The Indian Climate is also another major issue against packaged foods. Packaged foods require cold and less humid climate so that foods remain fresh for the longest time. The country’s heat and high humidity are the two problems that can reduce the shelf life span of packaged foods.

Lack of proper supply chain and refrigeration in retail outlets and homes is also a major obstacle in the path of the packaged food industry. Packaged food requires proper sealing and maintaining the integrity of the product. Indian retail market lags behind in this segment also.

Lack of highly automated and advanced packaging machines is also the main reason. At the same time, packaging of foods requires high investment which is still at the unaffordable category in the Indian market.

The most crucial issue includes environmental factors. Plastics are a major component of air pollution. Packaged foods require the use of the huge number of plastics which is harmful to the environment.

Lack of consumer awareness, high cost, less technology, delivery and performance standards are the main challenges faced by the food and beverage industry in the ready-to-eat product market.

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