Retailers and manufacturers see huge scope to grow the breakfast category
India’s vast market holds a huge potential for the growing base of breakfast foods, which includes cereals like oats, corn flakes, muesli, dalia and mixes of traditional breakfast like idli, dosa and upma, among other choices. Rising urban population, increase in disposable income, and higher consumer health awareness are key sales drivers for the category, which has witnessed healthy yearon-year growth in the past couple of years and retains bright prospects for business in the future. With sales in the category concentrated largely in first- and -secondtier cities characterized by fast-paced, modern lifestyles in which convenience and, increasingly, health are prized, players in the breakfast market are focusing on product offerings with enhanced variety and innovation, and on efforts to boost consumer trials and penetration.
Breakfast in India is considered to be one of the most important meals of the day just like anywhere else in the world. Here, by and large, tradition dictates that breakfast is a family meal where the woman of the house ensures that her family is served a wholesome breakfast at the start the day. Our home-cooked breakfast tradition is quite unlike the norm in America or Europe where grabbing a quick breakfast on one’s way to work is very popular and convenient.
According to research done by a leading foodservice operator, as high as 98 per cent of the Indian population prefers to have breakfast at home. The research reveals that there are many reasons why the culture of eating out has not grown in the breakfast segment in India. The out-of-home breakfast market in India is very limited and concentrated mostly in either 5-star hotels or on the street. The mid-segment has been missing, unlike in the West, where a wide choice of options exist at every corner, eliminating the hassles of cooking or cleaning. Cost is another factor here, especially when there is easy access to fresh, home-cooked meals.
The easy availability of a cook or domestic help ensures that it is convenient to eat at home. Also, in deference to tradition, a lot of people choose to eat specific or regional Indian dishes like parantha, aloo-puri, dhokla, idli-dosa, etc. These dishes are often perfected to taste in every house and served in a basic home-style manner. So, there is little need to venture out.
Be that as it may, the trend of eating breakfast at home has been changing in recent years. People’s lifestyles have been evolving in response to various social and culture stimuli. Consumer insights tell us that India has been witnessing a marked increase in higher
disposable incomes, the number of young adults in the no-kids category is steadily expanding, nuclear families are on the rise, and working hours and commute time too are increasing. All of these factors leave people with very less or almost no time for indulging the traditional, elaborate homecooked breakfast except, perhaps, on weekends or holidays. Paucity of time and an increased focus on convenience are pushing people to eat out nearly seven to eight times a month compared to three to four times until just a few years ago. At the same time, Indian consumers, in increasing numbers, are gaining exposure to international environments and cultures, which is creating a demand for world-class products at affordable prices. Today, the profile of the Indian consumer has evolved to being hygieneconscious, taste-conscious, brand-conscious, experimental and seeking not only international standards but also value. All of these factors are responsible for the shift that we see today in a large number of Indians preferring breakfast on the go rather than sitting down to a home-cooked meal.
While global food habits and practices are gradually shaping the way people engage with food in India, a majority of Indians still prefer breakfast at home to eating out. “Traditional breakfast options continue to be a part of the Indian breakfast table and there is a big segment of people who still prefer home-cooked food for breakfast. However, given the growing importance of health and wellness in our lives, consumers are now making an effort to ‘healthify’ traditional meal items by using healthier ingredients,” says Mohit Anand, Managing Director at Kellogg India and South Asia. For the most part, Indians are inclined to consuming their quintessential hot, cooked breakfast. Parantha remains a popular breakfast item in north, idli and dosa in south, flattened rice flakes (chivda/ poha) with milk in western and central India, whole wheat grits (dalia), and a mélange of regional staples in many other parts of India.
Popular Breakfast Foods and Brands
Bread and eggs continue to be a popular breakfast staple for many households. But the choices have increased even in this segment. The range of breads available today include white bread, brown bread, whole wheat bread, multi-grain bread, sandwich bread, multigrain oats and flax, baguette, and croissant. For egg lovers too, there has been an explosion in choice at the retail level – there are brown eggs, white eggs, quail eggs and free-range eggs (cage free) to choose from. Leading egg producers like Venky’s and Suguna are making innovations related to packaging, nutritional content (the addition of omega-3s), egg color, and production method (cage-free, organic and free-range). As a result of such initiatives, the market share for organic and cage-free eggs, while small, continues to rise as egg companies increase their focus on cagefree egg production.
Apart from bread and eggs, supermarkets across the country are reporting growth in sales across many breakfast categories. At Foodworld, a chain of supermarket stores, which is owned by Hong Kong based Dairy Farm International Holdings Ltd, the breakfast cereal range has been performing well with offerings that include muesli, all bran wheat, corn flakes, ragi flakes, almond corn flakes, strawberry corn flakes, granola, Special K (for women), and millet muesli. In the oats category where Quaker, Kellogg’s, Saffola and Bagrry’s are its top performing brands, the chain has been recording good sales for classic oats, masala oats and oats shake. In the millets category, brands such as Manna, 24 Mantra, Organic Tattva, and Arya are the sales pullers at Foodworld, which rakes in about 3% of its overall sales from breakfast category.
Alongside good sales of breakfast cereals, the chain has also seen an impressive show put up by Indian breakfast mixes comprising products like upma mix, rava idli mix, rava dosa mix, vada mix,
At Bagrry’s, we have been innovating our oats category and have created oats for atta, suji and poha. The idea behind these innovations is to make oats a staple for Indian consumers. — Aditya Bagri Director, Bagrry’s India
oats upma mix, ragi dosa mix, vermicelli mix, poha mix, multigrain dosa mix and oats idli. MTR, 24 Mantra, Maiyas, and Pillsbury are its top brands in the Indian breakfast mix segment. In the kid’s breakfast segment, honey loops, choco’s, pan cakes, oat-bites and choco-fills are the popular offerings with Kellogg’s, Soulfull, Pillsbury and Betty Crocker as the best-selling brands. Other brands – Tropicana, B-natural, Silk, Sundrop, Fun Foods, Veeba – are also big sales pullers at Foodworld, which allocates 4-5% of its shelf space to the breakfast category that has been clocking 15%-20% growth.
At SPAR Hypermarkets, which enjoy a strong presence of its own store brands in each of the breakfast sub categories, south Indian RTC mixes, millet flours, oats and breads are the popular breakfast foods in demand. “This is one of the fastestgrowing categories, witnessing strong double digit growth. However, we are excited to see the regional brands witness stronger growth in this segment compared to the national brands, led by product categories like millet flours, brown breads, oats, etc,” says Rajeev Krishnan, MD & CEO.
At HYPERCITY, another large chain known for its great mix of breakfast food items, instant breakfast mixes, cereals, cereal bars, muesli, oats, granola & energy bars, fresh fruits, fresh juices, cold-pressed juices, green juices, etc, are the most popular offerings in the breakfast category. The total sales contribution from breakfast foods at HYPERCITY is about 4%-8% on average. “While routine product offerings like cereals, oats and muesli are showing ongoing stability in sales, we have observed an aggressive growth of around 30% in the new range of premium breakfast category products comprising quinoa, muesli and oats. We are also seeing an upsurge in the consumption of instant ready-to-eat/ cook breakfast mixes because of the changing economic scenario and the needs of evolved urban consumers,” observes R. Sankaranarayanan, Vice President - Buying & Merchandising, HYPERCITY Retail (India) Ltd. The chain allots, on average, about 8% space to the breakfast range at its stores across India. While brands such as Kellogg’s, Bagrry’s, Quaker, Saffola, Nibble Box, MTR, Soulfull and Patanjali have been receiving great response from HYPERCITY customers, regional brands like Ruchi, Kwality, Mohan’s and Gits are also in demand at its stores.
Rise of Cereals and Other Breakfast Foods
For some time now, a quiet revolution has been simmering on the breakfast table. The home-made idli is being replaced by a packaged branded readyto-cook batter. A bowl of cereal is elbowing out the hot-from-the pan aloo-parantha. Even the regular quick-fi x kanda-poha is being shoved aside by multi-grain oats flaunting health benefits. So even as regional and ethnic breakfast eats have their followers, the need for convenience and health consciousness is driving many to replace traditional staples like atta, suji and poha with oats, millets and muesli.
Given the rushed urban lifestyles of today, consumers are looking for convenience without compromising on health and taste. So food makers are picking up popular breakfast recipes like idli, dosa and upma and making them healthier. The need for convenience and health is also the reason why
Every Soulfull product bears out our company’s USPS: honesty, goodness of ingredients, ancient grains, Indianess, convenience and taste. — Prashant Parameswaran MD, Kottaram Agro Foods
packaged and ready-to-eat breakfast cereals – both hot and cold – have risen as an important category in the food and beverage industry. While the rise of oats and muesli as a category is a global trend, multinationals and large domestic food companies are all now fighting for a pie of the fast-growing breakfast category, which includes oats, cornflakes, muesli, dalia and mixes of traditional breakfast like idli and upma.
In the urban areas especially, owing to factors like a faster pace of life, time poverty, increasing spending power, need for convenience, and health consciousness, people are opting for ready-to-eat, packaged hot and cold breakfast cereals. The breakfast cereal market is divided into hot cereals viz. mostly oats, but also oat bran and wheat bran, and ready-to-eat cold cereals such as corn flakes, wheat flakes, and muesli. According to a report titled India Breakfast Cereal Market Outlook, 2021, “Indians prefer hot breakfasts, so hot cereals are growing at a faster pace than ready-to-eat cold cereals.” Owing to urbanization and increased income of people, western India has the largest market share in breakfast cereals, followed by north and south. Nowadays, manufacturers have also introduced a range of brands appealing separately to kids, adults and the entire family. RTE cereals, for instance, fortified with vitamins and minerals and positioned at children, are proving increasingly successful.
“Ready-to-eat cereals are super-fast, nutritious and taste great. The cereal’s role in a nutritious breakfast goes beyond the nutrients in the cereal itself. Cereals serve as an excellent centre piece for a balanced breakfast, which includes milk and fruit. Ready-to-eat cereals offer the goodness of grains (which are an excellent source of complex carbohydrates), are naturally low in fat, are a source of fibre (with many being high in fibre) and, in our case, are enriched with key vitamins and minerals. Over the past two decades, Kellogg has introduced consumer-relevant products in the market and continues to innovate and invest in both ready-to-eat cereal and hot cereal category to introduce distinct and relevant products in the market. Kellogg has been involved in creating and developing the ready-to-eat cereal category in India and has established itself as a leader in the breakfast cereal category,” states Kellogg’s Mohit Anand.
With health and wellness emerging as one of the fastest growing segments in India, the breakfast cereal category has been on a growth trajectory and the segment is growing both in urban and semiurban markets. The increasing trend of healthy eating with emphasis on well-balanced meals is reflected in our breakfast consumption habit today with the rise in the frequency of purchase and penetration of offerings such as oats and muesli. The emphasis now is on having a healthy, nutritious breakfast that helps the consumer get a head start on his/ her day. Also, with more women joining active careers, more families are looking for convenient ready-to-eat yet healthy options in all meals. Ready-to-eat breakfast cereals fit the bill as they are tasty and are fortified to meet Indian nutrition needs.
Breakfast Consumption Trends
1 Focus on health and convenience Indian breakfast habits and food choices have seen some very interesting shifts over the last decade. “There is increased snackification of food in general and breakfast in particular. This shift is riding on the big trend driven by the rise of ‘health & wellness’ and ‘convenience’, the two big pegs constituting this trend. On-the-go solutions have also started to gain traction, again due to convenience,” says Kellogg’s Mohit Anand. For a company that is widely credited with creating and developing the breakfast cereal category in India, Kellogg has been instrumental in growing the category by 1.5X over the past five years and it continues to hold a leadership position in the category by a significantly large margin. Speaking of Kellogg’s portfolio of products, Anand says that they not only cater to the health and wellness market but also meet specific needs that have become relevant for our times. “Our Special K breakfast cereal acts as an ally to people on their weight management journey. Our muesli is full of nourishment and so are our other products. As long as consumers have health and wellness and convenience on their minds, we will be part of their breakfast choice.”
Health and convenience are the two driving factors for many new companies entering the breakfast category. Bangalore-based Pagariya Food Products Private Limited, which is a leading manufacturer, importer, exporter and supplier of a wide variety of breakfast cereals, masala, spice powders, instant powders and soup powders, entered the breakfast cereals category by adopting health and convenience as its two major planks. The company’s products, marketed under the brand name Kwality, covers one of the biggest range of breakfast cereals across India and includes corn flakes, chocho flakes, Fruitoooos (fruit flavored rings), choco delight and berry delight (cream filled snacks), oats, ragi flakes, a range of muesli, flavored corn flakes, and wheat flakes. Kwality products are marketed in India and also exported to over 12 countries now. “We have been growing in this category for over 50% plus year on year for last 3-4 years and we will continue to grow at the same pace or even higher in the years to come. The bulk of consumption of breakfast cereals happens in Tier-1 and Tier-2 cities because of the long working hours and the growing share of working women, which is pushing them to look for faster arrangements for breakfast. Affluent consumers who shop at modern trade outlets and A-class outlets are our target customers and the key market for our products,” says Naresh Pagariya, MD & Founder, Pagariya Food Products Pvt. Ltd.
We have observed an aggressive growth of around 30% in the new range of premium breakfast category products comprising quinoa, muesli and oats. — R. Sankaranarayanan Vice President - Buying & Merchandising, HYPERCITY Retail (India) Ltd.
We are excited to see regional brands witness stronger growth in the breakfast segment compared with the national brands, led by product categories like millet flours, brown breads, oats, etc. — Rajeev Krishnan MD & CEO, SPAR Hypermarkets
Realizing the huge potential of India’s growing health and wellness industry, Gaia was founded in 2009 in the belief that nature, through earth’s diversity of flora and fauna, offers the best solutions for all our health needs. “We are a one-of-its-kind healthy food producer for the high-end fitnessconscious consumer. Our products range from nutritional supplements to a complete set of health foods. In the breakfast category, we have seven exciting variants in muesli and two variants in oats,” says Dolly Kumar, Founder & Director at Gaia, adding that the company is focused on implementing a variety of initiatives to enhance its brand identity and make its products more visible in the market. Founded at a time when the health food industry was at a budding stage, Gaia’s fruit & nut muesli and real fruit muesli are recording a maximum growth among all the products in its breakfast portfolio. “Consumers today seek out for a breakfast option that is not only healthy but also convenient. Since these two mueslis contain real fruit extracts and crushes, they are healthier than the other choices and are recording maximum growth. With the growing incidence of lifestyle related diseases like diabetes and obesity, consumers worldwide are showing great interest in a preventive lifestyle rather than a curative approach, which is leading to the evolution of the health food industry in India and elsewhere,” explains Kumar.
Another company with its sight firmly focused on healthy living is Mapleleaf Distribution Pvt. Ltd, which has over 15 years of experience in retail and wholesale trade alongside supply and distribution
arrangement with the Horeca sector. The company is looking to beef up its breakfast range by tying up with more international brands and distributing/ marketing their products in India. “We have grown and established ourselves as one of the largest importers of Asian and Mexican cuisine in India. We import appropriate products from our international clients and then distribute them across the country through our network of wholesale, institutional and retail stockists,” says Niraj Murarka, Managing Director, Mapleleaf Distribution Pvt. Ltd, which distributes a range of Oriental, Mexican and Japanese cuisine products from international food companies operating in the ready to eat, confectionery and breakfast categories.
The latest addition to Mapleleaf’s growing roster of global food brands is Sante, which has been a major food operator in the Polish market since 1992. The Polish food major specializes in the production of healthy food and over the years it has successfully diversified from selling para-pharmaceuticals, herbs, cereal products, sunflower seeds, lentil seeds and soy beans to becoming a producer of a whole range of health foods spawning breakfast products like muesli and oat cookies to natural and healthy plants’ products like wheat bran, oat bran, wheat germs, soy products, kasha and grains besides much else. “As of today, we distribute and market a complete super market range of food products covering 380 SKUS across various categories, including breakfast range, superfoods and 100% natural coconut water,” reveals Murarka.
The bulk of consumption of breakfast cereals happens in Tier-1 and Tier-2 cities because of the long working hours and the growing share of working women. — Naresh Pagariya MD & Founder, Pagariya Food Products Pvt. Ltd.
2 Adoption of alternate grains As consumers search for cereals that are natural, organic, gluten-free, high in protein and lower in sugar, these need are generating increased interest in ancient grains, superfoods, superseeds, lowglycemic sweeteners, increased fiber and protein, as well as organic and non-gmo products. With lifestyles changing and our lives becoming busier, consumers are holding back to values and traditions that are giving rise to an emerging trend for foods with natural goodness. Brands like Soulfull by Kottaram Agro Foods Pvt. Ltd. focus on ancient grains like millets and it has developed innovative product formats for delivering the natural goodness of age-old Indian grains to consumers. “Soulfull’s core specialty is to bring out the goodness of India’s rich culinary heritage and we do it by creating products that are truly innovative and customized for the modern and discerning Indian consumer. Every Soulfull product bears out our company’s USPS: honesty, goodness of ingredients, ancient grains, Indianess, convenience and taste,” says Prashant Parameswaran, Managing Director, Kottaram Agro Foods, whose ragi flakes and millet muesli are a great hit with health conscious urban consumers
Our strategy is to provide good quality products at the right price and offer good value for money. Also, we have a range of value packs priced Rs.10 and below to target Tier 2 cities and smaller towns. — Dheeraj Jain Director, Pagariya Food Products Pvt. Ltd.
across the country and especially in the markets of Bangalore, Mumbai and NCR.
With millet meal substituting conventional breakfasts in thousands of homes across the country seeking healthy and hot breakfasts, Soulfull Ragi Bites are a particular favorite of mothers across the country. Ragi Bites scores big as healthy cereal for kids since it ticks off on all the nutrition requirements for growing children. “Kids love the flavor and it makes breakfast fun. Similarly, our Loopies are preferred by kids and teenagers who enjoy the mild sweetness coupled with the chocolate flavor. Our latest launch of desi muesli is a perfect fit for healthconscious consumers who also love to enjoy the flavors in each meal. The flavors and the goodness of our products come from India’s own culinary history,” informs Parameswaran, adding that Ragi Bites has the biggest market share in its product portfolio and witnessing faster growth. “Our millet muesli and Loopies are relatively newer to the market but have seen the largest percentage growth over the past two quarters. We believe that our desi muesli will be a game changer and expect it to clock unprecedented growth in the industry, which will also help retailers to grow the muesli category significantly.”
Today, increasing numbers of people in India are taking to alternate grains for making popularly consumed dishes. Aditree Naturals, whose focus market is Bangalore, is one such company leveraging this trend with its range of ready-to-cook products, which are made of healthier grains to give maximum nutrition. “We believe that a lack of time should not translate to a lack of nutrition, so our range is ready to cook and includes upma and khichidi mixes for our breakfast line. We have substituted commonly used suji rava in upma with a variety of grains like wheat daliya, foxtail millet and even quinoa. Similarly, with khichidi, we have substituted white rice with brown rice and millet. Our focus is on the fact that comfort food need not be unhealthy. So our segment consists of people with fast-paced lifestyles who are also health-conscious and want to maintain a healthy lifestyle but not at the cost of time, says Likitha Bhanu, CEO & Co-founder, Aditree Naturals.
The company, whose fastest moving product is its millet line, is focusing on alternate grains in comfort food to stand out in the market. “Millets have gained lot of popularity in the Bangalore market over the past couple of years. Since organic food is an integral part of healthy eating, we use organic ingredients to make our products and we are not in the more commonly found ready-to-cook segments,” informs
Padmaja Bhanu, Co-founder, Aditree Naturals,
which has recently launched chikki in three variants and will bring out its line of jowar noodles and soya noodles shortly.
3 Yogurts, bars, beverages as breakfast foods
While the popularity of breakfast cereals continues to grow, fast food joints and chains are beginning to make their presence felt in this segment. Already, an increasing number of fast food restaurants such as Mcdonald’s, Wendy’s, Subway and Taco Bell offer breakfast items. It is expected that going forward, India will see the emergence of specialized breakfast providers that cater to office-goers who increasingly have little time to make and have a sit-down breakfast at home. This space is likely to grow as consumers start to demand greater choice and convenience for breakfast. Breakfast cereals also face stiff competition from alternate breakfast choices such as Greek yogurt, probiotic drinks and even milkshakes. Once considered a novelty, products like yogurt and probiotic drinks are now fast-growing categories in the healthy food universe and finding a growing and ready acceptance with consumers seeking healthy, lean, protein-rich foods. Also, health-conscious people are now ever more concerned and aware about their gut health. “About 70% of the body’s immune cells are present in the intestine, which plays vital role in maintaining our overall health. Through our product Yakult, we are focusing on intestinal health because including Yakult as a part of daily diet helps improve digestion and build your immunity,” says Amitabh Chaturvedi, Head Marketing, Yakult Danone India Pvt. Ltd., a 50:50
We are a one-ofits-kind healthy food producer for the high-end fitness-conscious consumer. Our products range from nutritional supplements to a complete set of health foods. — Dolly Kumar Founder & Director, Gaia
JV between Yakult Honsha of Japan and Groupe Danone of France, both of which are global probiotic leaders. The JV was formed in 2005 to manufacture and sell probiotic fermented milk products in the Indian market. Yakult, a probiotic drink, was launched in India in 2007, and is presently available in Delhi/ NCR, Nasik, Chandigarh, Punjab, Jaipur, Mumbai, Pune, Ahmedabad, Hyderabad, Chennai, Bangalore, Kolkata, Lucknow and Goa. As a functional food, Yakult can be consumed any time of the day; however it can be an essential part of breakfast as a daily diet mix. “Consumers are becoming more aware of the importance of intestinal health and are including Yakult in their daily diet, which is helping the brand to grow at a rate of about 15%-20% currently,” reveals Chaturvedi.
Apart from health and product purity, taste continues to be an important driver in the breakfast category. Consumers want foods that are produced with higher-quality and better ingredients but also healthful and tasty grab-n-go items and specialty breakfast products like cheeses, spreads and mayonnaise. Additionally, for many players in the breakfast segment, selling strategies revolve around the product’s versatility as an anytime snack or meal, or even as a recipe ingredient. Retailers confirm that they receive lots of interest from consumers about unique recipes that mix cereals and other healthy foods to make great-tasting and nutritious snacks. “Our products in the breakfast category, which include mayonnaise, sandwich spreads, peanut butter and milkshake mixes, help consumers create exciting recipes at home and assure culinary success to mothers who want to serve their kids with exciting food every day. We have the largest range in vegetarian mayonnaise and an exciting range in milkshake mixes (MSMS), which the kids love. The USP of our sandwich spreads range is that you can apply them directly on bread and eat. No additional veggies are required to make a great tasting sandwich,” points out Oliver Mirza, Managing Director & CEO, Dr. Oetker India, which operates the Fun Foods brand, a leading purveyor of western cuisine in India. Mayonnaise is the star product in Dr. Oetker’s breakfast range and has grown at nearly a 100% rate last year, and contributing significantly to the company’s market leadership in the category. “Mayonnaise is a magic ingredient, which helps a mother to cook restaurant style recipes at home - from juicy sandwiches, wraps, burgers to even a creamy white sauce for macaroni. What makes this one product unique is its versatility, as it can be used as a spread, binding agent, dip or sauce. This one category of product simply empowers people to experiment with food at home and create multiple recipes,” affirms Mirza.
According to retailers and food manufacturers, a growing base of consumers in the age group between 30 and 40 years are embracing specialty breakfast cereals like Special K, muesli with yogurts, organic food and millets. At the same time, the younger generation is moving away from regular breakfast cereals to breakfast bars and drinks to save on time. Due to the change in our lifestyles, people prefer to have on-the-go breakfast on workdays and leisure breakfast on weekends. So there is a huge demand for products like ready to eat, ready to cook, breakfast bars, protein shake and processed meat that is healthy and replete with proteins needed for a healthy body. “Due to an increase in the demand for on-the go breakfast products, major market shareholders such as Kellogg’s, Quaker Oats, Bagrry’s, Saffola, and others should focus on products like ready to eat that have enough proteins and calories sufficient for maintaining a health
Major market shareholders should focus on products like ready to eat that have enough proteins and calories sufficient for maintaining a healthy body. — Eby Mathews COO, Foodworld Supermarkets Pvt Ltd.
Consumers are becoming more aware of the importance of intestinal health and are including Yakult in their daily diet, which is helping the brand to grow at a rate of about 15%-20% currently. — Amitabh Chaturvedi Head Marketing, Yakult Danone India Pvt. Ltd.
body,” opines Eby Mathews, Chief Operating Officer, Foodworld Supermarkets Pvt Ltd.
A natural and often necessary accompaniment to a healthy morning breakfast is the ubiquitous cup of tea. Tea is an integral part of our daily consumption, from the time we wake up and till the end of day. Indian consumers prefer a strong flavorsome cup with breakfast to kick-start the day. Given the growing demand for convenience, the younger generation and, typically millennials, prefer teabag over loose tea. People in the age group 25-38 years, young working professionals, frequent travelers and those looking for convenience and a premium lifestyle are key consumers of premium brews in teabags. “Each of Typhoo’s large variety of teas and infusions are specially created to accompany all our food moments. A few of our varieties are a perfect companion to all types of breakfast. Typhoo serves three types of black teas and seven varieties of green teas, especially created for the breakfast occasion. Typhoo English Breakfast, a unique blend of Assam orthodox and CTC with a rich taste, bright liquor, strength and aroma to match, is perfect to go with an English/ Continental breakfast. For all types of traditional Indian breakfast, the Typhoo classic Assam teabag, or its loose version with milk, is an ideal accompaniment. Typhoo natural green tea and the six varieties of flavored Typhoo green tea combine perfectly well with a rather heavy breakfast. Similarly, Typhoo flavored masala tea is an all-time favorite to go with other breakfast products. Typhoo’s blend of natural Indian spices with premium Assam tea acts as the best complement to the Indian breakfast,” avers Subrata Mukherji, Business Head, Typhoo India, which enjoys an over 100 years of brand legacy in bringing the finest tea drinking experience to consumers.
Product Innovations and New Offerings
Breakfast food makers need to introduce constant innovation in order to ensure that the category stays on the growth track and consumers remain engaged in the product. This calls for new product development, product innovation, and renovation to keep the category relevant. “Our R&D is constantly working toward developing new products, keeping the health and nutritional perspective in focus. We were one of the first food makers in India to come out with products like ragi flakes and Fruitooos and we have plans to come with three to four newer products in the cereal range this year, which will be quiet innovative and different than what the competition is offering,” says Naresh Pagariya of the Kwality brand. In fact, the key to successful innovation that will actually grow the category is to offer the right product at the right price for the right consumer. “Our strategy is to provide good quality products at the right price, and at a good value for money. Also, we have a range of value packs, which are priced Rs.10 and below to target Tier 2 cities and smaller towns,” informs Dheeraj Jain, Director, Pagariya Foods.
Manufacturers will need to continue to invest in taste and health improvements across their portfolio so as to keep increasing the consumer appeal for their products. Keeping in mind the palate of Indian consumers and realizing that unlike Westerners, Indians will not be attracted to plain boring grain just because of the health pitch, global cereal makers like Kellogg’s and Quaker have incorporated flavors in their offerings. For instance, Quaker was one of the first players to offer a range of flavored oats with real fruits such as strawberry with apple, kesar with kishmish as well as tomato. It is therefore essential that breakfast brands curate innovative products according to the needs of the market. Such products will surely ensure subsequent growth in the category. “We have a team of dedicated researchers who work very closely with India’s ancient grains like ragi and other millets. We also work with established research centers to innovate on millets to make them more adaptable as breakfast food. Our food researchers constantly innovate to increase the health and taste quotient of our products. For example, we have added dhals to our ragi bites to increase the crunchiness and nutrition value of the end product. At the same time, we are driving growth for our products through constant innovation, extending market reach through sampling, by educating consumers on the goodness of the age-old millets, and by dint of strong production and retail support. But our retailers understand that our aim is to grow the category by bringing in new consumers and not just gaining share within the category,” says Soulfull’s Parameswaran.
Savvy manufacturers are rising to the challenge by formulating innovative products for the breakfast food aisle, many with the kind of convenient, healthy nutritional profiles that more and more consumers seek. Manufacturers know that consumers are searching for cereals that are natural, organic, gluten-free, high in protein and low in sugar, and so they are
Given the growing importance of health and wellness in our lives, consumers are now making an effort to ‘healthify’ traditional meal items by using healthier ingredients. — Mohit Anand MD, Kellogg India and South Asia
We distribute and market a complete super market range of food products covering 380 SKUS across various categories including breakfast range, superfoods and 100% natural coconut water. — Niraj Murarka MD, Mapleleaf Distribution Pvt. Ltd.
bringing in varieties that fit these needs. “The health food category in the breakfast segment is huge and constantly growing. We don’t want to just stop at health foods and nutritional supplements. That’s why we launched two specialized lines, i.e., Gaia Sport and Gaia Lite. These specialized lines cater to the needs of weight watchers, diabetics, go-getters or anyone looking for healthier choices. Furthermore, we are also venturing into organic foods this year,” informs Dolly Kumar. Going ahead, the industry will see more breakfast products come on the market that have better taste and offer excellent nutritional benefits. Going ahead, the breakfast market will continue to evolve, which will create more room and scope to overcome the challenges of spreading product awareness, creating brand loyalty, understanding consumer buying behavior, and developing products that tantalize the taste buds besides offering health benefits.
With demand for healthy breakfast foods expected to shoot up appreciably in the future, there is also a need for manufacturers to provide healthy, convenient, and tasteful options. “Consumers today expect very high quality food products. Their preference was earlier price driven but now it is quality driven. At Bagrry’s, we have been innovating our oats category and have created oats for atta, suji and poha. The idea behind these innovations is to make oats a staple for Indian consumers,” says Aditya Bagri, Director, Bagrry’s India Ltd, pointing out that the majority share of the breakfast category in India is taken up by cornflakes and choco flakes (around 60%). “But oats and muesli are the fastest growing categories. In the US and UK, cornflakes as a category is already de-growing as people now know they are not as healthy and have no fibre. But we have created a range of all natural and delicious tasting corn flakes with 2X fibre than regular corn flakes. We also make high fibre additives of wheat bran & oat bran, which are extremely nutritious and are recommended by leading dieticians for weight loss, informs Bagri who, like his competitors, is looking to tap Indian flavors.
The company has contributed significantly in making popular breakfast cereals healthy through its innovative research and development and has also helped create some key categories of breakfast cereals and health foods that exist today. The Bagrry’s range of products today includes a variety of wholesome products such as muesli (11 variants), oats, corn flakes, bran and makhana (foxnuts). “We have pioneered oats as a category in India. Our quick cooking white oats are extremely popular. We also have a range of all natural masala oats, and steel cut oats. We have created a special range of oats – Oats for India – which is a unique innovation in bringing the goodness of this grain to Indian dishes. We have created oats for atta, oats for suji/ rawa, oats for poha and oats for daliya with the objective of making everyday dishes healthier by using oats,” says Bagri, adding that his company has made recent forays into many new products. “We have recently launched organic superfoods such as quinoa and chia packed with protein and fibre besides making our foray in healthy snacking with nutrient dense foxnuts (makhanas) in three exciting flavours. Also, we have developed another brand Lawrence Mills, which brings the promise of international quality and great taste at affordable prices. We have two products under Lawrence Mills – corn flakes and choco crunch.”
Speaking of cereal offerings and innovative product introductions, Pepsico India recently launched ready-to-cook idli, dosa, upma and khichdi, all of which are tailored to local tastes and can be cooked in 3-5 minutes. To be sold under the label Quaker Nutri Foods, the products have been
We believe that a lack of time should not translate to a lack of nutrition, so our range is ready to cook and includes upma and khichidi mixes for our breakfast line. — Likitha Bhanu CEO & Co-founder, Aditree Naturals
Since organic food is an integral part of healthy eating, we use organic ingredients to make our products and we are not in the more commonly found ready-to-cook segments. — Padmaja Bhanu Co-founder, Aditree Naturals
developed in collaboration with celebrity chef Vikas Khanna and seek to tap into local nutrition needs and offer local products that suit the palates of the Indian consumers. The company also plans to launch, in the months ahead, a few more products under Quaker Nutri Foods brand based on different regional palates.
Pepsico’s strategy seems to be a sound one going by the success that Kellogg has courted in the Indian market by adopting a similar tack. Realizing that India is a country of diverse cultures, many languages and distinct tastes in food, clothing and rituals, the one way for a food company to build familiarity for its products is by adapting to the unique palates of India, which change every 300 kilometers. Accepting the fact that the preference for natural local food is ingrained in our food culture, Kellogg looked at synthesizing modernity with Indian traditions as borne out by some of its recent launches.
Kellogg’s innovation through ragi chocos is a perfect example of bringing traditional Indian grains to the centre, while retaining the credentials of taste and convenience. Its portfolio of flavoured oats is another example that attempts to balance tradition and modernity, while retaining the core of what Kellogg’s stands for. “We understand the need to innovate and be more locally relatable. Hence we launched ragi chocos by using a local grain. Mothers in India introduce ragi to their child as the first cereal. We are proud that through ragi chocos, we are able to provide this nutritious option to mothers across India. Further, we have included locally loved flavours in our breakfast cereals. India specific flavors such as Kellogg’s corn flakes with honey and almond and mango flavor are some examples. In order to cater to the ‘hot breakfast loving consumers’, we have developed savory variants within our oats portfolio like Mast Masala, Simply Pongal and Shahi Kheer. This, again, is a first in the global Kellogg’s world. While Ragi is popular in the south, Shahi Kheer is a trending north India food phenomenon. We look at such regional pockets and opportunities to create brands like ragi chocos or shahi kheer oats to cater to the different palates. We are also looking at more opportunities for snackification and I strongly believe in its potential. We expanded our portfolio in India last year by launching the Pringles brand, which is off to a great start,” says Mohit Anand.
Challenges and Opportunities
While there is no doubt about the potential of the breakfast market in India, challenges abound. The biggest challenge is competition, as there are more than 50 regional players in the segment apart from major players like Kellogg’s, Pepsico’s Quaker Oats, Bagrry’s, and others. The ambitions of players like Marico and Heinz will intensify the competition further in the breakfast category. Patanjali has already launched its product range in categories such as flour, rice, and noodles, which is pushing companies like Quaker, MTR and ITC to focus on the regional food category. Competition is also expected from other FMCG chains, which are not currently focusing on packaged breakfast as their core product offering.
Regional players have a competitive edge over bigger brands with their strong and robust local distribution network. Regional manufacturers are targeting not only kirana stores but also using multilevel and consumer-to-consumer marketing approaches to deepen their market penetration. These players are not spending aggressively in branding; however, they offer relatively better margins to kirana owners to push their products. Again, their products are relatively economical, compared to the bigger brands, and suit the pockets of the middle and lower economic classes. Bigger brands will need to develop a wholly new business model that can extend their reach amid such cutting edge competition. “In-store sampling has worked very well for us as well as the wide availability of our products. We have ensured increased brand awareness of consumers for our products through traditional media and brand comprehension by reaching out to opinion leaders as well as by ensuring social media presence in new markets (both demographically as well as geographically). The strategy has worked well for us in the past, and continues to be our thrust. Our online partners help us reach out to markets where our presence is limited,” says Soulfull’s Parameswaran.
Inflation in raw materials’ prices is another big hurdle not only because of increasing product prices, but also via limiting profit margins. This is increasing the cost passed on to the final consumer, who might be tempted to switch over to relatively economical breakfast options. Another challenge is that Indian consumers have entrenched behaviors in their food consumption patterns, which can be hard to change. It’s a challenge that exists for the entire packaged food industry across the globe but is somehow
Typhoo serves three types of black teas and seven varieties of green teas, especially created for the breakfast occasion. — Subrata Mukherji Business Head, Typhoo India
Our products in the breakfast category, which include mayonnaise, sandwich spreads, peanut butter and milkshake mixes, help consumers create exciting recipes at home. — Oliver Mirza MD & CEO, Dr. Oetker India
more pertinent in the case of India where consumer behavior shows a marked preference for home-cooked food made by a home maker. The packaged food industry is under penetrated because of this habit. Cereals form an important part of the breakfast platter but, to a large extent, people are still inclined towards consuming a quintessential hot, cooked, savoury naashta. Given our traditional breakfast eating culture, it will take time for the category to gain mass appeal, not to mention focused efforts from the industry. People will continue to eat breakfast at home for a few more years and until then, it is difficult to craft a business model based purely on breakfast, even though some players seem to have cracked the code successfully.
As breakfast products still account for low single digit percentage share of store sales, there exists a substantial room to grow the category. Intake of breakfast cereal is still limited in India and research by Mintel shows that per capita consumption was just 0.032kg in 2015. “Breakfast cereals in India are still in infancy but the current size of the market is expected to grow exponentially once the segment attains a critical mass. If we look at per capita consumption of this category in organized markets such as the UK, it is 8 kg of cereals per person every year! That said, the segment is taking off as it offers time-pressed consumers a viable breakfast option, which is healthy and suitable in terms of taste,” opines Soulfull’s Parameswaran. And while
there is significant potential for breakfast cereals to grow, there is also a similar scope for prepared or semi-prepared traditional Indian breakfasts to take flight as well. This growth potential will be driven primarily by the convenience that the products offer as well as the variety available.
To expand and grow the category, meal solution based merchandising can be a useful tool that retailers can tap. Creative merchandising that satisfies the shopper’s need for solutions and hit on key consumer drivers, including health-and-wellness benefits and a desire for home-made meals and convenience can work impressively for retailers while also providing them the opportunity to differentiate from the competition. To be successful in cereal, smart retailers will need to optimize their shelf sets to ‘fix the mix’ for their consumers and their neighborhoods, and provide the right products at competitive and everyday promotional prices.
For retailers in India, breakfast food can be a huge category as it is in the West where it is a significant business driver. In the US, cereal is the second-largest breakfast category behind fruit and one of the most economical breakfast options available to consumers. Additionally, research shows that when ready-to-eat cereals are in the grocery cart, the average cost of all groceries is 25%-40% higher than when cereal is not in the cart. Health-savvy supermarket operators can replicate the success of their American peers by exploring and offering an expanded selection of products and increasing promotional activity to deliver not only the products that shoppers are looking for, but also offering them at a value. Retailers can collaborate with brands to promote the trend of cereal being consumed at various times outside of breakfast – as a snack as well as a different dessert option, and accordingly create some marketing that focuses on this aspect. “Even in our portfolio, we see a significant evidence of consumption beyond breakfast for our cereals. Chocos is a great example of food that is seeing strong traction as a snack food. Our on-the-go consumption with smaller packs at convenient price points of Rs.5 and Rs.10 is helping us drive the snacking codes,” reveals Kellogg’s Mohit Anand.
Organized retail can help pioneer the breakfast category to a new level by introducing more variety and through increased assortment, which can help to significantly increases the consumer’s interaction with the category. “Another important thing is to encourage trials and sampling to develop the consumer habit for breakfast cereals. Awareness through category focused in-store marketing will also help it see a steady increase in adoption,” feels Bagri. According to Typhoo’s Mukherji, brands will need to better understand the shopper behavior, which is key to category management. “Brands will need to keep evolving various tools for staying relevant and innovative to the retail so that the latter accords more prominence and attention to the category. The focus should be on brand engagement and activations with retail store owners who can ensure consumer engagement at the store.” On his part, Bagri believes that modern trade with its advantage of a steep learning curve in growing the breakfast category can offer valuable insights for brands, which can help the latter add value to products.
Going forward, greater demand for healthier and more wholesome products will be the key growth driver for the breakfast category. As awareness rises, consumers will look for options that give them functional benefits in their endeavor to stay fit. Another trend playing out and expected to gather further momentum in the days ahead will be the merging of ethnic tastes with convenient lifestyle habits and a need for nutrition. These will present retailers and producers plenty of opportunities for creating contemporary breakfast offerings that are convenient, healthy and tasty.
Retailers can collaborate with brands to promote the trend of cereal being consumed at various times outside of breakfast – as a snack as well as a different dessert option, and accordingly create some marketing that focuses on this aspect.