The ready-to-eat category was first introduced to the country in 1987, but suffered a slow beginning with consumers preferring traditional cooking.
By the turn of the millennium, and the advent of new technologies to improve the shelf life of ready-to-eat products, alongside a growth in storage and distribution centres, the segment gained momentum.
With the development of retort technology, and increased differentiation among ready-to-eat players, the heat-and-eat segment broke away to become a market in its own right.
The heat-and-eat market currently valued at Rs2.4bn (US$39.4m) and has been growing at a rate of 18% over the last three years, according to a study by ValueNotes.
Over the next five years, though, ValueNotes suggests its rise will reach 22% per annum as a result of rapid urbanisation, increasing disposable income and expected improvement in retail infrastructure, touching over Rs6.4bn (US$107m) by 2019.
According to Vaishnavi Raichur, a research analyst at ValueNotes: "The heat-and-eat food category has a tremendous growth opportunity in the near future due to a growing youth population and working woman segment.
"Increasing work and study commitments, declining culinary skills, the rising need for convenience, and surging disposable incomes, along with clever marketing will all lead to a higher demand for heat-and-eat products.”
Heat-and-eat foods are currently dominated by the segment’s top five players: ITC, MTR Foods, Kohinoor Foods, Gits and Tasty Bite Eatables.
ITC and MTR together contribute to just under half of the market share, while the other three players make up 35% of the total production of heat-and-eat food.
Other players in the category include ADF Foods, Priya Foods and Heinz who are relatively new entrants in the market with limited product lines and have a regional presence.
The category is largely export-driven as it is yet to establish a firm footing in the Indian retail market. However, domestic markets constitute 40% of the total revenues of heat-and-eat products.
Sales mostly occur in urban areas, especially in Tier I cities, where retail infrastructure is significantly developed, ValueNotes noted.