Consumer appetite driving growth in India's food packaging industry
India's packaged convenience food industry is positioned for significant double-digit growth in the coming years, according to a study by BDO.
The Indian packaged food industry is experiencing a rapid transformation, propelled by shifting consumer preferences and advancements in manufacturing.
As consumers increasingly seek innovative and high-quality food options, there is a notable surge in demand for items like artisanal biscuits, wholesome snacks, and a diverse array of sauces. There is also heightened interest in ready-to-eat and ready-to-cook meals, on the back of a growing inclination towards convenient culinary products.
As a result of these developments, demand for food packaging is on the rise, both in terms of volume as well as quality requirements.
According to BDO’s report, approximately 40% of consumers said that their expenditure on packaged food had risen by more than 10% in the past year. Convenience, easy availability and better quality are the top three reasons for preferring packaged food over unpackaged food. Extended shelf life is another benefit frequently cited.
Notably, the ready-to-cook segment is expected to see strong demand, with the segment drawing consumers away from both home-cooked meals and traditional food service outlets. This shift is attributed to several changing dynamics, including the inclination of Millennials and Gen Z towards exploring new and gourmet meal options.
The majority of consumers noted a significant rise in the consumption of on-the-go foods, particularly in the munchies category, which includes a diverse range of items like Western snacks, ethnic snacks, and biscuits.
Manufacturers are quick in capitalising the opportunity, said BDO, with many companies in the process of broadening their product offerings by including items that were traditionally not sold in packaged forms.
The largest food packaging players
A benchmark of market share shows that the world's largest food & beverage company, Nestlé, holds the same leading position in the Indian market. The Swiss company is famed for its food products including noodles, sauces, confectionery, and dairy products. Britannia specialises in biscuits, fruit cakes, and rusk, while Parle is renowned for its offerings in the biscuits and snacks categories.
Companies in the sector are strategically expanding their market presence through both organic growth and inorganic routes. Earlier this year, Wipro for instance expanded its consumer products business with the acquisitions of Nirapara and Brahmin’s.
The rise of packaged foods does not come without its risks. Some observers worry that India could face more public health problems with the explosion in popularity of ‘junk food’ that are high in sugar and fats.
