IBEF: January 15, 2021
India's ready-to-cook sector saled leaped with higher sales with very month during the pandemic induced lockdown as people ordered in a variety of foods—from iD Fresh Food’s malabar parotas to ITC’s rajmah galouti kebab and Mumbai vada pops—to bring the dining-out experience home.
In fact, the ready-to-cook segment (RTC) is one of the rare categories which saw surging sales during the peak of lockdown when sales of most other segments declined. About half a dozen packaged food companies such as Tata Consumer Products, ITC Ltd, iD Fresh and Gits Food Products are now planning a record number of launches in the space, hoping surging home consumption will hook consumers at a time when dining-out culture has been stressed. For instance, Tata Consumer Products had introduced mixes under Tata Sampann brand to make idli and dosa, and more recently, poha.
“We will be accelerating the portfolio in the coming months,” said Ms. Richa Arora, president - packaged foods India, Tata Consumer Products. ITC, which also sells instant noodles, too, expanded its range to include frozen snacks such as rajmah galouti and beetroot kebab. “Consumers' perception about the frozen food segment has undergone a significant change with such food choices being considered more hygienic and safer with multiple cooking options, including air fry, microwave and baking,” said an ITC spokesperson.
Packaged snack and biscuit makers who saw sales surge in the June and September quarters due to higher at-home consumption, have now seen demand flagging a bit in favour of out-of-home consumption and ready-to-cook products. RTC segment has outpaced pre-Covid growth level by 100 to 800 basis points in 2020, even as ready-to-eat products, including snacks and biscuits, have tapered off after market re-opening, according to Bizom, a sales automation firm that transacts with 7.5 million retail stores.
“We also saw a slight increase in market share in the first quarter for RTC from 25% to 29% as supply disruptions and movement restrictions affected the ready-to-eat segment severely. However, post easing of restrictions, we see that this share of sales for RTC has settled to 25.7% of the overall category," said Mr. Akshay D'Souza, chief marketing officer at Mobisy Technologies, which owns Bizom. Azim Premji-backed iD Fresh said revenues trebled last year driven by online sales. "Parotas is overtaking our flagship idli batter revenue this fiscal for the first time. With increasing popularity of online grocery shopping, accessibility is no longer an issue,” said Mr. Musthafa PC, cofounder of iD Fresh, which will enter five new sub-segments this year. Gits Food, which did not have a single launch in 2019, and just one last year, said it will launch as many as 10 new products this year.
Mr. Sahil Gilani, director of Gits Food, said it noted a shift in consumer perception towards RTC from being quick fixes for time-pressed working population to assuming the new role of convenient restaurant-style food at home during the pandemic.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.