Ever evolving snacks industry in India: Opportunities & challenges | FNB News - fnbnews.com

Over the years, India has become one of the fastest growing economies in the world. With rising urbanisation, changing consumption patterns and a huge domestic market to cater to, opportunities for various products and their respective markets have been on the rise.

Consequently, the younger lot that makes up for almost two thirds of India’s population, have created a market for snack products.

The Indian snacks and confectionary products cover flavourful sweet and salty food items sold over the counter. They include snack items such as Namkeen, potato chips, tortilla chips, crackers, as well as bakery items such as preserved biscuits, pastries, cakes.

Opportunities and Challenges pertaining to the Indian snacks industry.

• ?    Since the 1990s, the snacks market has come a long way. The industry was majorly dominated by snack giants and a handful of regional brands. Innovations have always been key in the Indian snack industry. The snack players are always surprising and delighting their customers with amazing and unique taste offerings. The new flavours are inspired by the diversified food culture of our country.
• There have been major improvements in the manufacturing, processing, distribution and marketing processes of snack products. This has made packaged snack products quite popular amongst the Indian consumers.
• Since 2019, the savory snacks market in India has shown an increasing trend. In 2020, the snacks market value in India was about $5.57 billion and is expected to reach almost $13 billion by 2026.
• Traditionally, Indian families like to prepare snacks at home to eat between meals or during travelling. However, with increasing per capita income, higher disposable incomes and need for convenience on account of the fast-paced lifestyles, the demand for ready to eat, on-the-go snacks has increased.
• Hectic schedules are making it tough for people to maintain the right work-life balance. As people switched to Work From Home during the Covid-19 lockdowns, they have developed the habit of munching while working.
• Also, due to an increase in lifestyle diseases such as diabetes and heart ailments, many have started opting for healthy snacking. Now customers want to purchase products that are not only tasty and convenient to procure, but nutritious as well. The changing patterns and trends have led to a rise in the demand for responsible and ethical food processing.
• The Indian snacking and confectionary industry is going through a remarkable growth cycle as many domestic as well as multinational companies are looking to establish their presence within the market.
• Growing FDI and collaborations in the industry are only going to speed up the process. The numbers indicate that the segment has a huge growth potential and will add immensely to the development of the Indian economy.

However, with opportunities, come challenges. The snack and confectionery industry is also facing some issues in terms of lack of storage infrastructure, low availability of raw materials for certain seasonal crops and poor connectivity of certain rural areas with food processing units situated far. This results in a lot of wastage.

There is an urgent need to incorporate the latest technologies in order to keep up the quality of produce and enable farmers to compete in the global market. When it comes to branded and traditional snack products, regional preferences also play a role.

The competition in the snack market is about to become fierce as we can expect a whole range of activities pertaining to innovations in products and tastes, consumer convenience, as well as the entry of new players along the years.

The trick will lie in maintaining the good taste of the product regardless of the technological innovations though. People don’t want healthy food at the expense of good taste.

Also, the trend of snacking came from the West, however, the Indian touch is a must and constant in the available varieties. The manufacturers will have to find the right balance and cater as per the rising demands.

Lastly, for snacks, the quality standards laid by the Food Safety and Standards Authority of India (FSSAI), must be followed by the industry players. Different government policies that have been put together for the food processing sector such as tax benefits, FDI, and export promotions are applicable on the snack industry as well.

Brands and start-ups breathing in the Industry
Given the global outreach and the potential of the industry, a lot of brands in their early days made a name for themselves in the market. The brands have not only achieved local but global footprint as well.  

The entire market is growing at 10-12%, with the branded segment covering about 30% of this market, growing at 25% per annum. With the use of better shelf life and automation, the segment is set to expand even further.

The major players in the Indian snack segment are Haldiram’s, Bikanerwala, Pepsico India, Balaji Wafers, DFM Foods and Prataap Snacks (Yellow Diamond), among others.

The major players in the Indian confectionery segment are Parle Agro, Nestle SA, ITC, Ferrero, Amul, Naturell India, Mars, Lotte.

The entire namkeen segment is broadly categorised into 3 segments. The first one is traditional, covering about 60-65% of the market and comprises traditional Indian wafers. The second type is a little more western.

There’s also an emerging hybrid type called ‘bridge snacks', which has a local taste but a western look.

There are other variations as well called the healthy-snacks category with brands like ‘The Green snack co' looking to make a name for themselves.

Taking into account the opportunities and challenges, we can safely assume that the snacks and confectionery market will attract diverse players, tastes, and products, for years to come.

(The author is CEO at Equinox Labs)

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Ever evolving snacks industry in India: Opportunities & challenges | FNB News - fnbnews.com
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