Giants of the gourmet galaxy
Sales of gourmet and international foods are soaring and the growing consumer interest presents a real opportunity for manufacturers and retailers to differentiate themselves from competitors through their authentic, gourmetinspired offerings.
Despite the thrifty mindset that persists among large sections of Indian consumers, sales of gourmet and international foods – marked by unique and exciting flavor profiles, high-quality formulations and beautiful packaging – are soaring. The trend suggests that apart from food connoisseurs, even value-minded consumers are more often stepping up to the plate to relish small indulgences. The category has been growing at a steady healthy clip of 20% CAGR and is set to gather even greater momentum in the days ahead. The growing consumer interest presents a real opportunity for manufacturers and retailers to differentiate themselves from competitors through their authentic, gourmet-inspired offerings.
For some years now, the eating habits of Indian consumers have been evolving – from traditional foods to global food flavours. More than anytime before, a large base of consumers now has more sophisticated palates, make higher nutritional demands, have the ability to afford premium products, and the desire to enjoy them on a regular basis. Marketers describe this class of consumers as belonging to ‘gourmet’ category. The word ‘gourmet’ itself is French, and comes from the world of wine. It was originally the term for a wine broker, or a taste-vin, one who purchased wines for a wine dealer. In the parlance of food retailing, ‘gourmet’ is used to describe a connoisseur of fine food or someone with a refined palate. Avni Biyani, Concept Head, Foodhall, the premium lifestyle food chain of Future Group, feels that a gourmet is someone who enjoys and understands the finer nuances and aspects of food. “Consumers are evolving and asking for exciting options in a new and interesting manner. As a brand specializing in the gourmet format, we are catering to Indians as well as expats who are well-travelled and well-versed with fine foods and have a refined palate.”
“The Indian customer profile is witnessing a rapid change. With over 400 million Gen-z customers with better education levels, greater exposure to international markets/ travel, along with the penetration of smartphones/ internet and the media, customers today are more aware than ever before and are open to experimentation with food,” says Rajeev Krishnan, MD & CEO, SPAR Hypermarkets. “New-age Indians are travelling more within India and abroad, they are acquiring and developing their taste buds for various kinds of food. Also, cooking channels and reality cooking shows have become increasingly popular. Consumers want to eat and cook new cuisines more. There is also a large expatriate population in cities such as Delhi, Gurgaon, Bangalore, Mumbai and Pune who are already well-versed with gourmet foods,” observes Avni.
Industry observers agree that over the past few decades, the base of gourmet consumers in the country has swelled considerably. They point to the drawing cards responsible for the bulge in the number of gourmet consumers. “Growing aspirations, globalization, changing lifestyles and growth of the organised retail sector along with augmented purchasing power of consumers are providing impetus to the gourmet category and to international food manufacturers in India,” says R. Sankaranarayanan, Vice President Buying & Merchandising, HYPERCITY Retail (India) Ltd.
According to Krishnan, “The efforts of Indian and international food companies in offering price-competitive products are helping to recruit an increasing number of customers into the segment.” Citing an example, he points to the number of Indian brands entering the olive oil and pasta segment at competitive prices and also offering customer education. “Such efforts bring in the first-time customers. We are also witnessing increasing quality and ingredient consciousness, which is spurring customers to demand better and more.”
As a brand specializing in the gourmet format, we are catering to Indians as well as expats who are well-travelled and well-versed with fine foods and have a refined palate. — Avni Biyani Concept Head, Foodhall
— Rajeev Krishnan MD & CEO, SPAR Hypermarkets
By one industry estimate, the Indian gourmet food market was expected to have crossed USD 2,800 million by 2015, and is reckoned to be growing at a CAGR of 20 per cent. Says Vikas D Nahar, MD, Satvikk International, which operates the health food brand Happilo: “The gourmet market in India is approximately worth Rs. 15,000 crore and growing at the rate of 20% per year. If we compare the Indian gourmet industry with that of the US, it is approximately 10% of the US industry. This offers enormous scope for growth considering the population difference between both countries.”
There is no disputing the fact that India is now an attractive market for gourmet and international food products thanks to the constellation of various forces in recent years. Consumers are becoming increasingly aware of international cuisine, and their palates are ready and willing to taste and test a lot more. As both Krishnan and Sankaranarayanan observe, the growth in consumer interest and demand for category has impelled many more foreign manufacturers to enter the gourmet and international food segment and bring their merchandise to India as well.
SPAR is a very well- known international brand and the natural choice of many expatriate communities who shop gourmet products. With a strong assortment, great quality, attractive price and unbeatable service, we also become a preferred choice for brands to drive their offerings.
Evolution of gourmet category
With so much happening and at stake, there have been subtle and significant changes in the market for gourmet and international foods category in India. “With increased appetite of Indians to experiment with various cuisines, gourmet food retailing in India is now moving to the next level,” points out Avni. True to her observations, the retail space for this food category has witnessed rapid expansion as well as transformation in recent years. From the traditional, low-cost products dominating this category until about a decade ago, there is now a profusion of premium upgrades to products such as Washington apples, Australian Kiwifruit, Swiss chocolates, French cheese, Italian pastas and more.
Twenty years ago, buying gourmet foods meant — more often than not — ingredients, either raw materials or processed foods like olive oil, pasta, and so forth. Today, it is as likely to mean a readymade sauce or marinade, or in some cases, a readyto-eat dish made from high-quality, often organic ingredients using traditional recipes from the international lexicon. Products such as chocolates, cookies, juices, pasta, olive oil, honey, sauces and salad dressings and certain fruits and vegetables are prime categories constituting the bulk of the gourmet and international foods market in India today. Apart from these categories, ingredients such as truffles, artichokes, asparagus, Australian lamb and Norwegian salmon have found their way into the Indian food and beverage space.
Consumer receptivity to gourmet products has touched off in a big way also because of the dynamic growth of the natural and health food industry and its cross-fertilization with the gourmet food industry. In fact, this has brought about a greater involvement in gourmet on the part of mainstream food marketers. Growing synergy between the natural and gourmet foods industries coupled with other factors like an expanding retail distribution plus the convenience of products like bottled water, RTD beverages, bagged salads, and refrigerated ‘supermarket sushi’ are all paving the way for urban Indians to adopt tastes from all over the world.
Another significant development favorable to the growth and expansion of the gourmet market has been the emergence of large natural food chains featuring organic produce. In the past two decades, hundreds and thousands of such stores have sprung up across all parts of the country. In their wake, consumers have found themselves facing a plethora of novel choices that did not exist earlier. From fresh baked goods, hormone-free meats, an assortment of cheeses from dairies using organic farming principles to a wide variety of dry grocery products, these products cut at the intersection of the natural and gourmet foods industries. And the stores hawking these products resemble far more the highly visible upscale gourmet independent grocery than the more stark and sterile environment of the more traditional health food store. The variety of offerings, the creative merchandising, the focus on freshly prepared foods and even the product mix serve to draw gourmet and specialty foods consumers.
The merger between the gourmet and natural/ organic products industries — now nicely established — has resulted in a explosion of food styles, options and variety, which has definitely raised the bar of food retailing in India. Just look at the developments in the natural products arena, where manufacturers have been busy making organoleptic improvements to their products. It has led to the development of better flavors, textures, colors, and aromas. Soy-based foods and drinks serve as a prime example of “natural done better” and are now accepted by even the pickiest palates for retail and home shelves.