Fueled by growing health concerns and new-found awareness of lactose intolerance among the consumers, India’s non-dairy toppings segment is growing in strength.
Bakers and confectioners say taste, stability and smoothness are behind growing consumer preference for non-dairy alternatives. Moreover, in the increasingly important context of food presentation, non-dairy toppings can be more easily sculpted due to their ability to stay upright and lack of bubbles.
According to Pankaj Chaturvedi, chief executive of Rich Graviss India, the segment that his company helped pioneer is now worth close to Rs250cr (US$39m) with 25 to 30 brands present in the market, of which Rich Graviss alone holds more than a 50% share.
Rich Graviss is a joint venture between US-based Rich Products Corporation and India’s Graviss Foods. The partnership sold its first whipped topping in 1996, and since then has launched a range of products from its international portfolio, as well as through local R&D.
The segment has only recently grown in prominence with consumers beginning to recognise lactose intolerance over the last couple of years.
“One of the major problems people suffer from is a negative reaction to the milk sugar contained in most dairy products, or lactose intolerance,” explains Chaturvedi.
“Infants are less likely to be lactose intolerant but many people eventually become lactose intolerant in adulthood. It tends to increase with age, affecting the fastest growing segment of our society.”
He isn’t undermining the significance of dairy, of course. “While dairy is great and will continue to have its market, there is no reason for us to believe that the Indian consumer is resistant to new concepts, especially if we are careful enough to satisfy the parameters which he or she uses to determine choice,” he says.
Health to the fore
For the end consumer, the concern is health, while the bakers and confectioners who buy Rich Graviss products identify cost and product differentiation as key factors. According to Chaturvedi, his non-dairy allows bakers to innovate.
Various food scares might also act as catalyst to growth in the segment, even though the two are not directly related.
“We are keeping a close watch on issues, and the [Fonterra] incident has helped us highlight to consumers in general that dairy products are a sensitive category, and even the best technology can be rendered ineffective due to minor changes in process, procurement and handling.”
Indeed, the non-dairy segment’s biggest advantage over its dairy counterpart is that it is an engineered product and so does not rely on sourcing or other uncontrollable variables and so is not exposed to inadvertent risks, like dairy products are.
This, he says, allows Rich Graviss and its counterparts to guarantee consistently high quality and safe products to buyers.
Good old Indian supply chain
But that’s not to say that challenges don’t exist in the segment, but non-dairy players are tackling these by developing their own systems for quality control, and in some cases going the extra mile.
First is the challenge of hygiene and quality assurance. “We tackle challenges in processing is incorporating robust systems in terms of process flow and quality assurance,” Chaturvedi says.
The company’s manufacturing facilities in Pune (Maharashtra) and in Kala Amb (Himachal Pradesh) are not only registered with the US Food and Drug Administration and certified to Food Safety System 22000:2010, but are also registered with the Halal Committee in India.
Then there’s India’s cold chain, which leaves a lot to be desired and could degrade even the most carefully processed and packaged products by the time they reach the buyer’s doorstep.
According to one Assocham report, the problems arise because the location of cold storage is highly concentrated in a few states.
“Sixty-five per cent of the cold storage capacity is confined to Uttar Pradesh and West Bengal. On the other hand, the vast majority of Indian states lack investment from government as well as private players when it comes to cold storage,” Chaturvedi says.
So how do food processing companies dealing in temperature-sensitive products cope with this? They go into DIY mode, he adds.
“We have made sure that our refrigerated and frozen transporters, cold chain hubs and distributors are some of the best in the business.”
Like with everything involving a supply chain in India, it is once again up to the company itself to sort this crumbling mechanism out.