Thanks to their fast paced, hip and hep lifestyles, combined with increasing disposable income, the young middle populace is driving unprecedented growth in high value food products consumption, says Ficci & Yes Bank study prepared for Karnataka.
Vertical growth
The food processing industry is witnessing demand-led vertical growth, as, food and food products constitute largest portion of younger generation’s spending, accounting for over 39 per cent share of their wallet in urban and 52 per cent in rural India. With monthly per capita expenditure on food growing at 7.17 per cent in urban and 6.98 per cent in rural India, size of Indian food market, is projected to grow to US$300 billion by 2015.
Observing that with population of close to 1.2 billion growing by about 1.5 per cent annually, the study says, they are expected to keep country’s food industry on fast growth track for next couple of decades, stating food sector is in exciting stage of growth and development, for evolving Indian consumer has changed the composition of food he demands.
What’s more exciting is that this growth in food market will be accompanied by dramatic changes in food plate composition expected to move more toward high value processed food. The key demand drivers besides population, income levels, urbanisation, changing social structure and lifestyle, being growing exposure to global food cultures, and rapid growth and spread of last mile food services.
With changing social structure and lifestyles among large middle class population, specially growing working women population, focus of food consumption, the study says, is shifting towards convenience like ready-to-cook and ready-to-east food. Similarly, dramatic growth of service sector, specially IT & BPO, has resulted in emergence of global consumer whose buying habits is oriented more towards hygiene, health and style.
Moreover, tremendous growth in two key last mile food service sectors — retail and eat-out segment, has led to emergence of multiple retail formats, with big corporates like Reliance, Bharti, Aditya Birla, foraying into retail, and spread of retail in Tier II cities. Similarly, fast food joints of global brands like McDonald’s, Pizza Hut, KFC becoming household names, domestic outlets like Nirulas, Halidrams and Cafe Coffee Day too are spreading their footprint to meet the vibrant demand of food sector.
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