The Chang­ing Land­scape of Food Re­tail­ing in In­dia

Images Retail - - FRONT PAGE - – By Zainab S Kazi

The food and food­ser­vice mar­ket in In­dia is wit­ness­ing a phe­nom­e­nal change. Alibaba in­vest­ing in Big­bas­ket, Huza­ifa Kho­raki­wala of the Wock­hardt fame set­ting up cafés, Ama­zon In­dia re­ceiv­ing a nod to sell pack­aged and lo­cally sourced food items, in­ter­na­tional brands like Moocow all set to give a taste of their frozen yo­gurts and ice-creams to In­dia and many such in­stances ac­cen­tu­ate the po­ten­tial of Food Re­tail­ing in In­dia. We track the chang­ing dy­nam­ics…

Ajoint re­port by Na­tional Restau­rants As­so­ci­a­tion of In­dia and Technopak Ad­vi­sors state that the food ser­vice mar­ket in In­dia is pro­jected to touch ₹4.98 tril­lion by 2021. These are no small num­bers as in 2016, the mar­ket was at ₹3.09 tril­lion, thus In­dia is ex­pect­ing a growth of 10 per­cent YOY on an aver­age.

The Chang­ing Land­scape

In­dia re­cently had Ama­zon in­vest­ing $500 mil­lion in its food re­tail busi­ness to sell lo­cally made and pack­aged food. With Ama­zon now run­ning suc­cess­fully and Ama­zon Pantry too be­com­ing a hot fa­vorite for daily house­hold items and gro­cery, it is only a mat­ter of time be­fore we have the on­line re­tail­ing giant giv­ing stiff com­pe­ti­tion to play­ers like Big­bas­ket and Gro­fers. But the growth seen by Big­bas­ket can­not be negated, es­pe­cially when Alibaba has re­ceived a nod from the Com­pe­ti­tion Com­mis­sion of In­dia to in­vest in them.

Launched in 2014 as a mo­bile app wherein small mer­chants could list and sell their prod­ucts, Gro­fers has now evolved into an in­ven­tory-led on­line gro­cery de­liv­ery firm with an ex­panded port­fo­lio of home­care prod­ucts, ap­par­els and other mer­chan­dise. The com­pany’s rev­enue made news in Novem­ber 2017 where the chief ex­ec­u­tive of­fi­cer, Al­binder Dhindsa con­firmed that the rev­enue tripled thus putting an end to spec­u­la­tions that they were soon to shut shop /sell the prop­erty cre­ated. In a news ar­ti­cle, he was quoted as say­ing that 2018 is go­ing to be a break­out year for the on­line gro­cery in­dus­try with the con­ve­nience ben­e­fit giv­ing way to value ben­e­fit.

Where Ama­zon is plan­ning an all In­dia roll out from March 2018 on­wards, Flip­kart has al­ready en­tered the genre with a soft launch into the gro­cery busi­ness in Bengaluru. In­no­va­tive Re­tail, which runs Big­bas­ket, crossed the ₹1,000-crore sales mark in FY17, dou­bling its busi­ness with a 107 per­cent jump from ₹527 crore in the last fi­nan­cial year.

Ac­cord­ing to a re­port in Ko­tak, FY 2017 saw Swiggy lead­ing the seg­ment of food de­liv­ery plat­forms, grow­ing its rev­enues by more than 5 times YOY; Fresh­menu, a food kitchen with some de­liv­ery op­er­a­tions posted a

124 per­cent rev­enue in­crease fol­lowed by Food­panda, a food de­liv­ery com­pany at 63 per­cent. Zo­mato’s In­dia busi­ness posted rev­enue growth of 91 per­cent, though this in­cludes con­tri­bu­tion from ad­ver­tis­ing busi­ness also.

The Spir­i­tual Touch

Where multi­na­tional gi­ants have long since got In­di­ans used to their prod­ucts, an un­ex­pected player en­tered the mar­ket and be­gan giv­ing stiff com­pe­ti­tion to the likes of HUL and ITC. Baba Ramdev’s Patan­jali Ayurveda has in­tro­duced a range of prod­ucts – from honey to muesli! The brand is avail­able on­line as well through ma­jor mar­ket place mod­els and its not un­com­mon to see them oc­cu­py­ing prime space with en­tire wall racks be­ing de­voted to them in ma­jor­ity of the su­per/hy­per­mar­kets. The brand also plans to en­ter the di­a­per and san­i­tary nap­kin mar­ket soon.

Sri Sri Tattva as an FMCG and ayurveda brand by

Sri Sri Ravi Shankar is catch­ing mo­men­tum at par with Patan­jali. They have gone ahead to in­tro­duce prod­ucts that comes with the good­ness of ayurveda. Arvind Var­chaswi, Man­ag­ing Di­rec­tor - Sri Sri Tattva shares, “In the past sev­eral years the food busi­ness has evolved im­mensely in In­dia. Con­sumers are more aware and are keen about nat­u­ral and healthy sub­sti­tutes. Pack­aged com­modi­ties are gain­ing pop­u­lar­ity and trust, de­spite of their volatile price point and lesser shelf life, and this seg­ment has shown a sub­stan­tial growth in the food in­dus­try. Sri Sri Tattva pack­aged com­modi­ties aim at pre­sent­ing the in­no­va­tive FMCG prod­ucts to the mar­ket place that de­mands the same. These com­modi­ties are sourced from farms fol­low­ing best agri­cul­tural prac­tices.

Sri Sri Tattva also aims at trans­form­ing the mind­set of In­dian cus­tomers to­wards the pack­aged food prod­ucts by hav­ing achieved, high stan­dards of safety, health and hy­giene through­out the man­u­fac­tur­ing process and also in pack­ag­ing.”

Var­chaswi fur­ther talks about their reach across the coun­try stat­ing, “Sri Sri Tattva ef­fec­tively and ef­fi­ciently fa­cil­i­tates the trade through its Om­nichan­nel struc­ture. We have chan­nelised our prod­ucts through gen­eral re­tail stores, modern trade out­lets and are also avail­able on­line through our web­site www.sris­ri­”

Very soon, we shall also have ex­clu­sive out­lets of the brand. Re­veal­ing in­for­ma­tion on the same, he shares, “With an in­creas­ing de­mand for the brand’s prod­ucts in the health and well­ness space, Sri Sri Tattva will now launch its of­fer­ings through ex­clu­sive out­lets pan In­dia. The fran­chisee stores will pro­vide an ex­clu­sive ex­pe­ri­ence to the shop­per look­ing for high qual­ity, ef­fec­tive and au­then­tic prod­ucts in Ayurveda and FMCG space. Our fran­chise model alone as a ver­ti­cal, will mark ₹400-500 crores in the com­ing year.”

With a roll-out of fran­chise mod­els pan In­dia in early Jan­uary, the brand ex­pects to launch 1,000 stores across dif­fer­ent for­mats. The Sri Sri Tattva Mart will carry its en­tire range of FMCG of­fer­ings in the food, per­sonal care and home care cat­e­gories. It will also carry the herbal OTC range of the brand.

The sec­ond for­mat called Sri Sri Tattva Well­ness Place will be fo­cused on health care and will house an Ayurveda Doc­tor who will pro­vide a de­tailed di­ag­no­sis and pre­scribe life­style as well as ayurveda medicines to pa­tients. Sri Sri Tattva Home and Health, the largest of the three for­mats will carry the en­tire range of daily use prod­ucts as well as medicine and also have an Ayurveda Doc­tor. It is no­table for the brand to have launched more than 350+ prod­ucts rang­ing across per­sonal care, health care, home care and in­cense and fra­grance cat­e­gories and more sur­pris­ing is the fact that the brand is avail­able in 33 coun­tries across the globe.

Var­chaswi adds, “Our front run­ner prod­ucts in­clude Health drink Ojasvita, Cow’s pure 100 per­cent Nat­u­ral Honey, range of high


qual­ity masalas and sta­ples. From the other cat­e­gories we have Su­danta which is a non-flu­o­ride tooth­paste, an anti-acne range of Face wash, im­mu­nity builder Shakti Drops and healthy herbal juices.”

Shankara, a lux­ury brand of the com­pany, of­fers an ar­ray of all-nat­u­ral skin­care prod­ucts and they are cur­rently avail­able on­line at

The Mar­ket Dy­namic for Snacks and Ready to Eat /Cook

To fur­ther delve into the seg­ment of niche food prod­ucts, na­chos have gained quite a bit of fan fol­low­ing in In­dia. Cor­ni­tos is one lead­ing brand of­fer­ing na­chos in var­i­ous fla­vors. Vikram Agar­wal, di­rec­tor of Green­dot Heath Foods Lim­ited, Cor­ni­tos shares, “The jour­ney has been good with our flag­ship brand, Cor­ni­tos with sales in­creas­ing an­nu­ally. Cor­ni­tos not only com­mands a size­able share in the Na­cho Crisps mar­ket but has also kept pace with the evolved taste of healthy In­dia. Ini­tially Na­cho Crisps was launched in Delhi, Chandigarh, Mum­bai, Bengaluru, Chennai and Kolkata. Over the years, it has ex­panded to Tier II & III towns.”

The brand is grow­ing at the rate of 20 per­cent YOY and com­mands more than 70 per­cent mar­ket share in Na­cho Crisps Cat­e­gory in the coun­try. It is in­ter­est­ing to take note of the chal­lenges Agar­wal and his team faced to make in­roads in the taste palate of In­di­ans.

Re­veal­ing the same, he shares, “Ini­tially, we have faced dif­fi­cul­ties in gain­ing wide con­sumer ac­cep­tance for these prod­ucts. Our prod­ucts at times have even been equated with pa­pad.

A strong con­sumer fo­cused ap­proach has helped us cre­ate aware­ness around these prod­ucts. Con­sumer pref­er­ence and choices are chang­ing slowly. This is ev­i­dent from the fact that ear­lier Cor­ni­tos prod­ucts were dis­played along­side in­ter­na­tional gourmet prod­ucts by modern trade chan­nels such as Eazy Day and Spencer’s. Now this has changed, and our prod­ucts are dis­played along­side do­mes­tic chips and other snack prod­ucts.”

Elab­o­rat­ing on the reach the brand has man­aged to have across the coun­try, he shares, “Our com­plete range of prod­ucts are avail­able in re­tail, e-re­tail and modern trade stores. We also have in­sti­tu­tional sales across through air­lines, HORECA, mul­ti­plexes and cafés. Mom and Pop Stores ac­com­mo­date prod­ucts that are in de­mand, smaller in size, pre­mium qual­ity but for bud­get cus­tomers. Cor­ni­tos range pre­ferred by them in­cludes Na­cho Crisps 30g Packs,

Taco Shells, Spe­cialty Sauces, 30g Packs of Roasted Nuts – Cashews, Al­monds and Pump­kin Seeds, 26g Packs of Coated Green Peas and Pick­les - Jalapeno Pep­pers & Gherkins.”

With a pan-in­dia pres­ence, Cor­ni­tos prod­ucts are avail­able across 300 cities with over 30,000 re­tail­ers. Sale con­tri­bu­tion is 40 per­cent from modern trade, 55 per­cent from gen­eral trade and 5 per­cent from ex­port sale. Cor­ni­tos is one of the few brands ex­ported not only to the US but also Aus­tralia, China, Sin­ga­pore, the UAE and South-east Asia.

Be­sides the mar­ket for pack­aged snacks, there is a strong po­ten­tial in the genre of ready to eat/ ready to use cat­e­gory as well. The 2-minute noo­dles phenomena is fad­ing, giv­ing way to pack­aged

po­has, up­mas etc. San­jana De­sai, Head of Busi­ness Devel­op­ment, De­sai Brothers Ltd. – Food Di­vi­sion (Mother’s Recipe) says, “Over the years we ob­served that culi­nary skills are di­min­ish­ing among the youth. The pride of cook­ing res­onates mainly with the older gen­er­a­tion. To­day’s younger con­sumers have grown up see­ing their moth­ers use RTC prod­ucts. They are okay with the even more con­ve­nient ready-to-eat (RTE) prod­ucts. A change in life­style – ris­ing dual-in­come fam­i­lies, di­min­ish­ing culi­nary skills and nu­mer­ous food de­liv­ery apps – has trig­gered a tran­si­tion from the RTC to the RTE seg­ment. This shift in con­sumer be­hav­ior of­fers huge mar­ket po­ten­tial for RTC, RTE and in­stant mix cat­e­gories. Hav­ing said that, the pen­e­tra­tion of this cat­e­gory is lim­ited to ur­ban mar­kets, and even in the ur­ban sce­nario, the con­sump­tion pat­terns are not very con­sis­tent.”

Re­cently, the brand launched ‘mom’s style poha on the go’ pack. Apart from this, in the paste cat­e­gory they have rev­o­lu­tionised the pack­ag­ing by launch­ing con­ve­nient tub jar pack­ag­ing


for our gin­ger gar­lic paste. When we see Mother’s Recipe en­ter­ing the seg­ment of ready to eat and ready to use, it makes us think if they are de­vi­at­ing from their core prod­uct line – that of pick­les. But then that is not the case. De­sai ex­plains, “Mother’s Recipe as a brand was syn­ony­mous with pickle and has al­ways en­joyed a strong brand re­call. With con­sumers be­ing more open about ex­per­i­ment­ing new and dif­fer­ent cross-re­gional fla­vors, we have seen a great trac­tion for re­gion spe­cific pack­aged pick­les. Mother’s Recipe was the first brand to of­fer con­sumers sev­eral vari­ants of re­gion spe­cific pick­les, with recipes sourced lo­cally and made in the most tra­di­tional way with­out any chem­i­cal preser­va­tives.”

She fur­ther adds, “The con­sump­tion of pick­les has changed over time, Pick­les used to be con­sid­ered as an essen­tial el­e­ment of ev­ery­day meals. Con­sump­tion was higher, and a meal used to be in­com­plete with­out pick­les. To­day’s gen­er­a­tion sees pick­les as an oc­ca­sional us­age prod­uct. How­ever, the ex­po­sure to var­i­ous cuisines has en­sured that they are con­sum­ing more va­ri­ety and newer fla­vors and want to ex­per­i­ment with food. Also, with chang­ing times, the tra­di­tional pickle mak­ing as an art is slowly dy­ing. Over the last decade or so, peo­ple do not make pick­les at home any­more. Lack of knowl­edge, paucity of time and avail­abil­ity of proper open space can be at­trib­uted as ma­jor rea­sons for this change. This of­fers huge mar­ket po­ten­tial and has re­sulted in in­creased de­mand for pack­aged pick­les in In­dia.”

Ac­cord­ing to her, pickle as a cat­e­gory in the re­tail­ing space has un­der­gone a huge trans­for­ma­tion both in terms of prod­uct of­fer­ing and pack­ag­ing. From stan­dard range of pickle to re­gion spe­cific vari­ants to now ex­otic pick­les, in line with the ever-evolv­ing con­sumer pref­er­ence. Also, from the pack­ag­ing per­spec­tive the prod­ucts which once use to be re­tailed through glass bot­tles jars has seen in­no­va­tive and con­ve­nient pack­ag­ing like pouches, pet jars and sa­chets. She says, “On­line re­tail­ing has the ad­van­tage that peo­ple can or­der and try pick­les that they are used to, or newer fla­vors that may not be avail­able in their re­spec­tive ar­eas. So yes, the de­mand for ex­otic pick­les has def­i­nitely gone up.”

Shar­ing num­bers on the mar­ket size for var­i­ous cat­e­gories within the ready to eat seg­ment, she says, “Re­search data from Nielsen sug­gests that, the break­fast mixes mar­ket is grow­ing at 17 per­cent and is cur­rently pegged at ₹275 crore. The

RTE meals mar­ket is cur­rently val­ued at ₹23 crore. It grew at a com­pounded an­nual growth rate of 3-5 per­cent in the last five years.”

En­sur­ing that the new age cus­tomer is well tapped, De­sai Brothers have gone ahead to launch their very own por­tal as well. De­sai shares, “Yes, we do have an on­line store from where peo­ple can view and or­der their favourite items – www. shop.moth­er­ All our Pickle Pouches, Pa­pads, RTC’S, Masalas and In­stant Mix ranges are avail­able on our web­sites as well as on other e-com­merce plat­form. Our pres­ence on all rel­e­vant e-gro­cer sites and our own e-com­merce site has helped us in­crease our depth of prod­uct avail­abil­ity.”

Eat­ing Out Cul­ture and Chang­ing Dy­nam­ics

To talk about the ‘eat­ing out’ op­tions, each street to­day has at least one fast food joint or a fine din­ing res­tau­rant or an ice-cream par­lour/café. Lit­tle won­der we see names like the Bur­mans’of Dabur fame and Kho­raki­walas en­ter­ing into this seg­ment.

Huza­ifa Kho­raki­wala is work­ing on a startup which is rolling out chain of cafes. Ac­cord­ing to a news re­port, the ven­ture, Peace Mis­sion, pro­moted by him, has opened its first out­let at Wock­hardt Hos­pi­tal in Mum­bai. These cafés, called as Peace Cafes, will not just serve del­i­ca­cies for the stom­ach but they will also re­tail spe­cially themed gifts like ap­par­els and ac­ces­sories. It is be­lieved that the ven­ture has al­ready bro­ken even with sales of

₹1.4 crore in its first year of op­er­a­tions. Kho­raki­wala shall be opt­ing for the fran­chise model of op­er­a­tion and the cities be­ing tar­geted are Jaipur, Kolkata, Ahmed­abad and Man­galuru.

We re­cently saw the open­ing of in­ter­na­tional cof­fee chain Pap­paroti in Mum­bai. With a pres­ence in over 32 coun­tries, Pap­paroti set its foot in In­dia get­ting in­spired by the pre­vail­ing bun and tea cul­ture and it seems to be bet­ting bit on the re­sponse the chain would re­ceive in the coun­try. Bengaluru and Chennai shall soon have an out­let of Pap­paroti each.

When it comes to cafes, fast food joints, restau­rants and es­pe­cially ice-cream par­lors, ma­jor­ity of the play­ers opt for the fran­chise model


and the above just proves the point. Mum­bai’s Jumbo King that rev­o­lu­tion­ized the sim­ple vada pav mak­ing it look like a desi ver­sion of the burger, spread it­self across the coun­try through the fran­chise route. Sim­i­larly, Nat­u­ral Ice Creams too made in­roads across the length and breadth of the coun­try via the fran­chisee model. In fact, they are so over loaded with fran­chisee queries that the What­sapp sta­tus mes­sage of Srini­vas Ka­math of Nat­u­ral

Ice Creams reads – No Fran­chise Query Please.

To take the case of Kolkata’s Pabrai’s ice-cream, that has been pam­per­ing the taste­buds of ice-cream afi­ciona­dos across the coun­try, young en­trepreneur, Har­sha

Gupta, Mas­ter Fran­chisee for the brand for the city of Ban­ga­lore shares: “It has been a very chal­leng­ing yet re­ward­ing ex­pe­ri­ence to work with a niche brand like Pabrai’s. The chal­lenges of em­brac­ing a new pre­mium brand def­i­nitely of­fered lot of lessons and ex­pe­ri­ences to cher­ish. Over the last three years we have man­aged to cre­ate a fan fol­low­ing across Bengaluru purely based on the qual­ity of prod­uct and ser­vice. Our em­ploy­ees both past and present have been in­stru­men­tal in pro­vid­ing the best ex­pe­ri­ence to our cus­tomers which in-turn has spread the rep­u­ta­tion far and wide. The loyal cus­tomer base we have ac­quired over the last few years is pri­mar­ily through word of mouth rather than ex­trav­a­gant ad­ver­tis­ing spends.

With this we have man­aged to ex­pand to four stores in three years’ time.” On what led him to as­so­ciate with the brand, Gupta says, “Pabrai’s man­u­fac­tures some of the most unique and tasty ice creams one can have. When I was look­ing to start a busi­ness of my own, Pabrai’s of­fered the per­fect com­bi­na­tion of a dif­fer­en­ti­ated of­fer­ing and a po­ten­tial to be­come re­ally big. This was one of the prime rea­sons I got into it.”

Out of the four stores in Bengaluru, he owns and op­er­ates two and the re­main­ing two are op­er­ated by fran­chisees ap­pointed by his com­pany – HA Foods LLP. The po­ten­tial that ice-creams have can be seen from the fact that we saw the South Ko­rean Lotte Con­fec­tionary took over Hav­mor for ₹1,020 crore in an all-cash deal.

Moocow is en­ter­ing

In­dia in part­ner­ship with Fran­global, the over­seas arm of fran­chise so­lu­tions com­pany Fran­chise In­dia Hold­ings Ltd. Fran­global will be in­vest­ing $200,000 to­wards mar­ket­ing and ad­ver­tis­ing and they pan to open 100 stores in key cities across

In­dia in the next five years.

One of the key des­ti­na­tions for ma­jor­ity of the fast food brands ad cafes is the city of Bengaluru. The city is be­com­ing the melt­ing pot of In­dia with a lot of peo­ple from dif­fer­ent cities across the coun­try set­tling in there. This most cer­tainly gives a fil­lip to the food in­dus­try in the city. Yum­lok, Bengaluru’s street food res­tau­rant plans to in­vest ₹50 crore in set­ting close to 50 stores by 2020. Yum­lok serves spe­cialty cuisines from across the coun­try. For eg. Delhi

chaats, Mum­bai’s pav bhaji,

Bi­har’s sattu paratha etc, apart from other In­di­anised Western cui­sine.

Ex­plor­ing the Un­tapped Mar­ket of Meats

With Ama­zon Pantry,

Ama­zon Now, Big­bas­ket, Gro­fers etc., the genre of on­line food has wit­nessed an un­prece­dented growth. We see a lot many young minds en­ter­ing the space with niche of­fer­ings like fresh meat, bak­ery and deserts etc. South Mum­bai’s Garten Fresh serves chicken and mut­ton de­liv­ered to the cus­tomer’s doorstep, packed neatly in trays and cov­ered well with cling film. A cus­tomer needs to just What­sapp their or­der and the same is ful­filled the next morn­ing.

Nis­hanth Chan­dran –

Chief Ex­ec­u­tive Of­fi­cer, Ten­der­cuts shares, “Non-veg con­sump­tion has in­creased as most peo­ple are mov­ing to­wards a healthy pro­tein diet form carbs. The Chennai mar­ket alone has been es­ti­mated at po­ten­tially

₹2500 crore. We be­lieve that the trend of in­creased meat con­sump­tion will get stronger. We will do every­thing we can to en­sure that Ten­der­cuts’ suc­cess con­tin­ues for the com­ing decade as we are get­ting around 4,000 cus­tomers ev­ery month and is grow­ing at 100 per­cent rate for ev­ery quar­ter.”

Chan­dran fur­ther adds, “There is no deny­ing that tech­nol­ogy has changed the way we live and Ten­der­cuts is ‘tech driven’ on­line meat de­liv­ery com­pany and uti­lizes the lat­est tech­nol­ogy for its bet­ter­ment. We have launched - Re­fer a Friend! Where any cus­tomer can in­vite his friend through What­sapp or Face­book and in­stantly both get 100 ru­pees off.” 2018 shall see Ten­der­cuts ex­pand their base in

Chennai along with en­ter­ing Hy­der­abad.

To con­clude, it wouldn’t be an ex­ag­ger­a­tion to say that the dy­nam­ics of food re­tail­ing in In­dia have not just in­tro­duced new brands to the coun­try but the with the chang­ing tides, we have also wit­nessed the lo­cal mom and pop stores and restau­rants pulling up their socks and be­ing at par with the change.

From of­fer­ing home de­liv­ery op­tion on or­ders placed on What­sapp or through a tele­phone call or ty­ing up with ser­vice providers like Scootsy, Gro­fers, Swiggy etc. they have been quick learn­ers.


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