Steady domestic demand at 10% per annum but exports growing at over over 30%
It’s a highly competitive market with more than 1,000 local players across the country. This market is at least INR 1,000 crore and has been growing at 10% per annum with exports rising by more than 30% annually. In future, the market is projected to reach INR 1,500 crore at least, in the next decade.
Harshal Chheda, Proprietor and Director, Ganesh Papad, speaks to Progressive Grocer about the growth of papad market in India, the product’s impressive potential for exports and the ways in which manufacturers are bringing higher value to the category. Can you offer a broad overview of the papad market in India? How would you describe the market size and growth of the category in recent years and what are the market projections for future growth?
When it comes to papad, it’s a regional market where every region consumes different types of papad like Appalam in the south or Bikaneri in Rajasthan and in east India. It’s a highly competitive market with more than 1,000 local players across the country. This market is at least INR 1,000 crore and has been growing at 10% per annum with exports rising by more than 30% annually. In future, the market is projected to reach INR 1,500 crore at least, in the next decade.
How is the category shaping up and performing in terms of demand and supply? Which are the factors driving the growth?
The market demand for papad is steadily growing. The main trigger for growth is coming from the hotel and institutional segment as more people are eating out these days. Variety, taste and quality are the factors that are driving growth. Especially, in India, where rice is consumed a lot, papad is a must with every meal in every state.
Which factors are playing an important role in the category’s performance?
When it comes to this particular product category, quality and price play a crucial role. If you want to survive in this market in the long run, the mantra is to keep offering value. People these days are willing to spend an extra rupee to get a good quality product. That’s the strategy we follow at Ganesh Papad. If the expected quality is not met even after a premium pricing is charged, the brand loses credibility and, most importantly, ‘repeat purchase’ doesn’t happen. So, maintaining superior quality can justify the pricing.
What are the new trends and developments in the category that you would like to highlight?
People in foreign countries are taking a liking to papad as they have greater exposure to Indian restaurants in their countries. This is a positive sign as it’s opening more opportunities for the export business.
Which are the frontline national and regional brands in the papad category?
Other than Ganesh Papad, Lijjat is one of the oldest papad brands in the national market. There are about a hundred regional players, who are engaged in small-scale business.
What is the scope for greater value-addition in this product range (by way of intrinsic value addition to the product, packaging, etc.) and is there any such innovations being done by players operating in this category?
With competition intensifying, market players have to pull up their socks if they want to survive the market. Here, ‘value addition’ plays a crucial role. When it comes to the papad industry, value addition can be done with ready to eat papads or with packaging like zip pouches to ensure freshness, which many players are doing. Also, new variants like soya-based papads are coming into the market.
How large is there an opportunity for players like yourself to grow and expand the market for your products?
I believe sky is the limit. Ganesh Papad has already marked its presence nationwide as well as internationally. We keep introducing newer product categories, which keeps adding varieties to customers. We have a digital presence as well, which makes us more accessible to customers. Adapting newer market spaces is a must when it comes to FMCG products.
Any suggestion for better category management/ merchandising by retailers that could help the category grow more impressively?
Retailers need to give more display as papad is an impulse category product and retailers need to highlight the offers. Higher brand recall converts into positive sales.
Give us an account of your brand’s strength in this space vis-a-vis the competition. Which are the strong markets for your products and what are your plans for strengthening your retail presence?
We are the leading brand in India. Currently, our main markets are west and central India and in the next five years, we will be available across India. Also, we have a complete presence in a modern trade where we have a strong distribution set-up.