Indian metro consumers set to fuel demand hike in processed food - report

05-Jan-2011 - Last updated on 05-Jan-2011 at 12:37 GMT

Related tags Food processing Food preservation

Demand for convenience and ready-to-eat food in India will explode over the next five years as a major shift in food-purchasing habits by the growing numbers of middle-class city dwellers takes hold, according to new research.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) estimated that these food processing segments will see annual growth of around between 40-60 per cent between now and the end of 2015.

The trade body made its prediction after its survey of 3,000 representative households in metropolitan areas found an average of 86 per cent of respondents expressed a preference for convenience, pre-prepared and fast food. The poll, called Ready to Eat Food in Metropolitan cities, targeted households with or without children, so-called ‘nuclear families’ and single people in major cities throughout India.

Per capita income rising

A steep rise in dual income levels and standard of living and the resulting increase in time pressures, as well as the influence of western countries were all cited as trends driving the trend towards convenience food. Changing trade rules were also highlighted, it said.

“According to survey, metropolitans are the largest consumers of processed food and are going to be the biggest consumers of processed food because of their ever increasing per capita income and lifestyle which is also changing very rapidly,” said Assocham secretary general D S Rawat.

The forecast comes in the wake of great efforts by the India Government to court investment from abroad – including the lifting restrictions of foreign direct investment in the country’s food processing sector.

The research, carried out in cities including Mumbai, Cochin, Chennai, Hyderabad, Indore, Patna, Pune, Delhi, Chandigarh and Dehradun, also found that a “majority” working class consumers questioned were being attracted to processed foods thanks to their convenience.

“Various foods helped to prevent the age-old traditional method of long preparation of grinding, cooking or fermenting for hours and hence making the work faster,” said the industry group.

Findings

Rawat said that the consumer spending rate on processed food had risen at an average rate of 7.6 per cent annually over the last two years. This was expected to increase to 8.6 per cent by 2012.

The survey said that 85 per cent of parents with children under five are serving these ready meals at least 7-10 times per month. Some 92 per cent of the nuclear families said they were more commonly buying pre-prepared and take-ways foods, while the figure for single people was 72 per cent and 67 per cent for working women, added the industry survey.

Food manufacturers, noting the increased demand for processed products, have improved the quality of their outputs, in turn helping to boost demand further, said the survey.

Juice based drinking concentrates, bottled water, organic food, herbal tea, fortified drinks and low fat dairy products have registered major increases in demand – along with canned, fast and frozen foods. Ready-to-eat snacks and breakfast foods, protein supplementary foods are also among those to see climbing demand, it added.