India

Relatively new heat-and-eat segment to nearly treble by 2019

By RJ Whitehead

- Last updated on GMT

Relatively new heat-and-eat segment to nearly treble by 2019
Although still young and relatively small, India’s heat-and-eat food industry is in the midst of tremendous growth that will see its size nearly treble by 2019, according to new research.

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. 

Breakaway movement

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​.”

Dominant players

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.

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