Convenience is the new trend and the fact is being reinstated time and again from the growth

figures which refuse to plunge. An interview with Shushmul Maheshwari, CEO, RNCOS (market research and analysis), on India's acceptance to convenience. RNCOS has been established as a prominent market research company. Is there any significant research carried out by your organisation in the convenience food segment? Well, yes we do have reports on the retail food segment wherein our team of analysts have intensively monitored and analysed the convenience food segment of major markets globally. Can you brief us on India's convenience food market? What is the growth rate? In my opinion, Indias convenience food market is an emerging segment that has immense growt h potential. Initially, most of the players in the market started with export-based focus, but now changing consumer preferences have made the domestic market more lucrative. The industry has been witnessing a growth rate of 15-18% in the recent years. How is the instant food segment growing? Globally what is the growth rate? The instant food market is observing a growth rate of around 12-15% globally. A fast-paced urban lifestyle, increasing prevalence of nuclear family structure, rising disposable income, increasingly larger number of globe-trotting consumers with an experimentative palate are all favourable demographic factors spurring the adoption of instant food on a global level. Instant food though have arrived in Indian markets do not assert a strong market presence due to strong preference towards fresh food consumption. What is the future of instant food consumption in India? As per my understanding, various factors such as expansion of consumer base for instant food, advantage of organized retail offers, development of cold chain infrastructure and government initiatives will drive the optimistic performance of the instant food market in India. Among the three categories of instant food market (snacks& savories, instant meals and beverages), which segment do you see a potential in? Snacks & savories has immense potential for future expansion due to its easy affordability by the common man across rural as well as urban areas. For this, many manufacturers/brands are creating the market by frequently introducing new products for packaged food. The new products are customised as per the requirements of Indian consumers and are targeted at satisfying their unmet needs. Which are the probable emerging markets for instant food in India? Which Asian markets are being targeted? Tier-I & II cities will emerge as emerging markets for instant food in India. As the role of women in an urban Indian family has undergone a massive transformation, lifestyle changes have necessitated modifications in most urban Indians diet regime in terms of meal time fragmentation and diet diversification. Apart from India, the instant food segment has been witnessing stupendous growth rates in countries like

China, South Korea, Japan, etc. Do you see a revolution in the packaging industry with the acceptance of convenience food in the country? Of course, itll be. In view of tapping the market, manufacturers will identify potential opportunities in terms of novel product concepts and packaging formats. Flexible packaging will log faster gains based on advantages of greater cost effectiveness, space saving capabilities, lighter weight and overall source reduction capabilities Which Indian companies do you see as emerging leaders in instant food category? Companies like ITC, MTR, Kohinoor Foods and Haldiram will emerge as the market leaders in instant food category. However, entry of large international companies like Tyson Foods, McCain, etc. is expected to play a significant role in the growth of this market. Are Indian safety laws related to food certification attractive to the foreign players in the food market? The Food Safety Standards Act 2006 has brought Indian food laws at par with global norms and has given food imports and exports a boost. It has laid down rules to standardised separate segments of new generation foods. A whole range like detox, pro- and pre-biotoc, anti-oxidants, organic, genetically modified and irradiated, among others have been dealt with. The new act also lays down a case-by-case punitive action plana nice change from the old law which prescribes compulsory prosecution that will help boost food imports, and attract more foreign food companies to the Indian market. Will you buy and also eat an instant pav bhaji which is packed 6 months earlier with ease? Yes indeed. Being an urban consumer, who is typically busier and more affluent and willing to pay for convenience, Ill readily do so

FROZEN FOODS & SNACKS MARKET IN INDIA The changing Indian lifestyle is creating a multitude of opportunities for market players, across industries. The rise in the number of women in the workforce, and the resultant time-paucity, along with the increasing at-home socializing, the preference for nuclear families, or that of young professionals for living alone; the growing acceptance of western food, and the need for on-the-move freshly-cooked food are often cited reasons given by firms while launching frozen/ready-to-eat meals (or microwaveable meals), ranging from mutter paneer to cheese nuggets. The frozen/convenience food industry, which started by offering basic frozen vegetables and fries, today offers a wide range of products, from fruits & vegetables to frozen meats and ready-to-cook, snacking and full meal options. The segment has recorded a healthy growth, at a CAGR of 15-20%, thanks to increasing customer appetite and acceptance, complemented by an increase in selling points, deeper penetration by organized retail players, as well as an increase in available freezer space in the retail domain. However, data released by Indias Ministry of Food Processing indicate that the Indian frozen foods market is much smaller than even Chinas, which is also not considered a well-developed market. In terms of product categories, Frozen Vegetables and Frozen Snacks together make up a more than 65% share of the market and their collective volume share consumption for 2012 exceeded 85%. The market is dominated by organized players, e.g. Mother Dairy stands out with a ~50% market share in the vegetables segment as a result of the widespread popularity of its Safal brand. The other key brands in the market are Venkys (V.H. Group), Al-Kabeer (Al-Kabeer Group), Sumeru (Innovative Foods), Everfresh (Temptations Foods), Meatzza (Darshan Foods), and McCain Foods (McCain Foods India).

The frozen snacking market, which has registered a double-digit growth, is characterized by vegetarian and non-vegetarian spontaneous buys that often do not need prior planning by the consumer. From a B2C perspective, these products are positioned as saviors in a contingency, of either non-planned get-togethers at home or as an easy alternative for city-dwelling commuters and office-goers who prefer quick/instant food due to the paucity of time. In B2B terms, these products are now finding a place in the menus of various restaurants, far from being considered fallbacks they are now considered ready reckoners and standardized offerings by various F&B brands. With the growth of Cafs and Quick Service Restaurants (QSRs) wherein shop floor kitchen skill levels are a major challenge, these frozen foods ensure consistency, speed of service, and assured quality. This creates a vast business opportunity for market players from institutional sales to QSRs and HORECAs (Hotels, Restaurants, Caterers/ Canteens). The consumer preference for frozen non-vegetarian items is rising, in part due to the hygiene issues associated with making available fresh products. At present, the product offerings in the market, from brands such as McCain, Yummiez, Quick Treat, and Venkys, include cold cuts, meatballs, hot dogs and sausages, samosas, kebabs, jalapeno and cheese sticks, spring rolls, nuggets, French fries, fillets, breaded fingers, patties and cutlets, among others, some of which are available in vegetarian, chicken, and mutton variants. The introduction of products more friendly to the Indian palate, such as the Idli Sambar Combo by McCain, is expected to be a boost for further, similar offerings. These usually come in pack sizes starting from 200250 grams. The price, which depends on the product and its variant (i.e. vegetarian or non-vegetarian), can be as low as INR 25- the cost of the McCain Foods trial pack.

The increasing penetration of frozen snacks, from the deep-freeze displays at retail marts into home refrigerators, is also an outcome of the proactive initiatives taken by brands to ensure awareness about, and the usage of, their products. Mother Dairy, which was concentrating solely on frozen vegetables until recently, has also added such snack offerings to its portfolio as frozen corn cobs, cheese cutlets, tikkis, and French Fries. Similarly, McCain Foods has also organized customer awareness programs, while also going for celebrity endorsement. For example, the company has organized McCain Nights, where the brand offers free product sample, in various cities. In Delhi, McCain has also tied up with several residents' welfare associations and, like Mother Dairy, has been conducting in-home kitty parties to reach out to women. A McCain retail kiosk was launched in a Delhi as a pilot to promote the product-tasting experience and to drive the consumers purchase decision at the retail end. Godrej Tyson foods, a JV between Godrej Group and Tyson Foods USA, has also undertaken consumer awareness programs through several consumer touch points in order to educate consumers on how their products can be used directly. The other entrants in this segment are Vadilal Group, Vimal Foods, Maiya Group, ITC, and Kohinoor Foods, among others; these are testmarketing and building capacities at both the front- and back-ends. Source: Euromonitor & Technopak Analysis ( 2012) Despite the various offerings available, and the promising growth in this category, penetration is still at a nascent stage, representing low product usage and a lack of consumer awareness about frozen foods. Also, impacting the market are such logistical hurdles as the relative lack of necessary back-end infrastructure, as a result of which frozen foods manufacturers are not assured of delivering their products to retail points without compromising on food quality. Transportation and utilities-related woes

have further exacerbated this issue. To overcome this, manufacturers have resorted to supplying their own equipment to transporters and retailers. It is imperative for any player to keep in mind the following critical success factors to launch and sustain frozen snacks in India:

decision to launch any product must be assessed in detail to ascertain the extent, and potential, of the market that can be targeted for high revenues

To attract them, manufacturers have to walk a tightrope in matching product size and product price. As a result, smaller pack sizes, which can be retailed at a lower cost, will become popular.

about the quality, value, and usage of the product Despite the challenges faced by the industry, the frozen snacking market is expected to double in the next 5 years largely due to consumer demand and many new market entrants both in terms of the number of players and the variety of products offered to fulfill this demand. Innovation and differentiation will be the key for brands vying for the market share; more glocal (Indian and western) products will be offered in the market and find greater space in refrigerators. The investment in developing distribution and supply chain capabilities, in not just the metros and mini metros but in the Tier towns as well, will convert non-consumers to

consumers, enhancing product usage. Authored By: Tarun Jain (Vice President, Food Services & Agriculture) Vidul Sharma (Principal Consultant, Food Services & Agriculture)

http://www.foodnavigator-asia.com/Markets/McCain-going-local-and-affordable-with-frozen-foods-inIndia

This past Sunday, the world's biggest frozen French fries maker hit television screens in India with its first ad campaign for the country. Hot, crisp, fresh, convenient, easy was McCain Foods India's promise as it showcased its potato wedges, Smiles and fries, with the tagline Fresh Banega, Baat Banegi. But why play on the fresh' angle for a frozen' item? The creative challenge for us was to communicate the fresh' attribute of the product and to break the consumer mindset on frozen foods, explains Samir Gangahar, Executive Director, Leo Burnett, which executed the campaign. For India's nascent frozen foods industry, it's not just the perception of not fresh' that it has to overcome in the customer mind. Although it has been around for more than a decade, a whole set of challenges have so far prevented the industry from growing. Low consumer awareness levels, an underdeveloped frozen foods distribution network, and lack of freezer space at the retail end have posed a problem for frozen foods companies like ours, says K.S. Narayanan, Managing Director, McCain Foods India. But, suddenly, there appears to be a big thaw towards frozen. With food inflation at a high, and eating out becoming expensive, the coming-home-to-a-frozen meal-proposition - so entrenched in Western markets such as the UK - has now started appealing to Indian customers. Convenience has become a big driver for our category now, says Munish Soni, Deputy General Manager (Marketing), Mother Dairy, which is the market leader in frozen peas with its Safal brand. Mother Dairy's frozen foods division contributes nearly Rs 80 crore annually to its F&B division turnover of Rs 600 crore. Kannan Sitaram, Chief Operating Partner of India Equity Partners, which has acquired Kochi-based Innovative Foods, maker of the Sumeru brand of frozen products, points to hygiene as another driver. We find that consumer preference for frozen non-vegetarian items is rising because of the hygiene issue, he says. The big thaw Compared with a market such as the UK, where the frozen food industry is worth a whopping 5 billion, the Indian industry - at Rs 1,000 crore - may look pea-sized. But riding

on a host of factors, including the rise of modern retail, better cold chain infrastructure, and greater consumer acceptance, there's been a sudden spurt of growth in the category. The big players in the segment - from McCain Foods to Mother Dairy to Godrej Tyson Foods and Innovative Foods - say the category is now clipping along at 20-25 per cent per annum. Some claim to be growing faster than the industry average. Our frozen foods division is growing at 70-80 per cent per annum, says Sushil Sawant, Associate Vice-President India Operations, Godrej Tyson Foods Ltd. McCain's Narayanan also attributes the sudden growth in the category to the rise in demand from quick service restaurants. McCain products, he says, are being used by leading fastfood chains, hotels, restaurants and catering companies in India, though he says, home consumer demand is also picking up now. Heating the market with advertising Almost all the players have raised the decibel, and are now trying to make their brands more visible. Mother Dairy, which claims to be the market leader in frozen vegetables, is using the kitty party route to woo housewives. It is also trying to beef up the distribution end by using its ice-cream channels. In Delhi, for instance, it is pressing into service ice-cream vending carts to test if they can be used to retail vegetables. Our biggest advantage is the cold chain we have for ice-creams. We are riding on that for our frozen foods, says Soni. He says the dairy and vegetables major is also helping retailers by placing freezers at their stores. McCain, meanwhile, apart from the TVC, is also organising large-scale sampling and consumer contact programmes in various cities. It hopes the trials will break barriers to the adoption of frozen foods. We have introduced trial packs at Rs 25, which enable the consumer to try out different products, significantly reduce the cost of trial and the risk of failure, says Narayanan. In Delhi, McCain has also tied up with several residents' welfare associations and, like Mother Dairy, has been conducting in-home kitty parties to reach out to women. Godrej, meanwhile, is focusing on consumer education to drive adoption. Indians still lag behind in understanding frozen products that it has to be kept in freezers, and not thawed before cooking. Though we write the instructions, somehow consumers feel it has to be thawed and cooked, says Sawant. The company is imparting this education through multiple-level consumer touchpoints at the shop-level, experiential, digital. We are also partnering with modern retail in promoting the category and product, he says. So far, Godrej has used print and radio to advertise, but might look at TV soon, he says. Cooking up demand

What's also driving excitement in the category is the host of new products that have suddenly been unleashed. Take McCain, which, after a rash of potato-based products, including Super Wedges, Smiles, Rosti Rounds and ethnic specialities such as Aloo Tikki, Crunchy Potato Bites with Chilli & Garlic, has suddenly come up with a 3-minute rice idli offering. In addition, it has also started retailing imported Cheese appetisers such as Cheese and Jalapeno Nuggets, Macaroni n' Cheese Munchies and Mozarella Cheese Sticks. Mother Dairy, which till now was focussing on vegetables, has also jumped into the fray with snack offerings. From frozen corn cobs to cheese cutlets, tikkis and French Fries, it is test marketing a new snack range. It should be launched in the next six months, says Soni. As for Godrej, which unleashed two new Yummiez offerings Dilli Aloo Chaat and Seekh Kabab last month - to add to its existing 13-14 products, it promises more soon from its Bangalore R&D labs. Sawant says the company is innovating on five-six frozen products that should be launched by the year-end.