Food FMCG is a part of retail industry. FMCG covers product that move fast from retailers to consumers as they are bought on a frequent basis. They tend to be high volume and low cost items. FMCG is the 4th major sector of Indian economy.
The sector consists of 3 main segments- household and personal care product having the highest share, followed by healthcare products and then food & beverage segment. Food FMCG includes packaged foods, snacks, confectionery, beverages, and other edible items.
The global Food and grocery retail market stood at 11.3 trillion USD as of 2021 expected to grow at a CAGR of 3%. The Indian market stood at 269 billion USD in 2022, expecting a growth of 11% CAGR aims to reach 505 billion USD by 2027.
In India, breakfast cereal and snack carries the highest share among rest of the categories. Region wise, North India carries the highest share in consumption followed by East, West and then Southern India carrying the least.
Data sources: alliedmarketresearch.com and maximizemarketresearch.com)
Global trends and outlook
Organic way in
Organic foods include fresh produce, meats, and dairy products as well as processed foods such as crackers, drinks, and frozen meals without the use of synthetic chemicals or genetically modified components. Rising awareness of negative health effects of mass produced food, organic food category is projected to show accelerated growth.
Organic food have a shorter life span, and thus its adoption also shifts focus towards localised and niche producers.
Disruptions through platforms like Instagram which is used for generating local outreach are successfully building a customer base who is aware, conscious of health and well being.
This is also posing a challenging question to the current mass producers to re think and rewamp their product portfolio to cater to health demands of consumers. Lately, as a result of this trend, many companies have started offering alternative products that are healthier than their main product. E.g. coke zero, Veg atta Maggie, Sunfeast Oats cookies to name a few.
Veganism
‘Vegan food near me’ witnessed a 5000% increase in Google search in 2021 as per a vegan dedicate site. According to some statistics, about 88 million people in the world are vegan. The trend is only rising and resulting in demand shifts to products like almond milk, oats milk, plant based meat, and concentration on fresh fruit, vegetables, nuts and grains.
Buying behaviors
With every product fighting for a preference on store shelves, things are becoming complex with too many alternatives and resulting in consumer attention being divided among multiple marketing channels and brands.
Social media is disrupting older methods of marketing and sales in retail. AI is subconsciously influencing buying behaviors and proving to be better a advertiser than any other. Advertisers are using Emotional engagement strategies like personalized packaging, vintage packaging to give a feel of warmth and nostalgia and other strategies to expand consumer breadth.
Indian outlook
India has one of the largest raw material base being an agricultural intensive country. India is the largest producer of milk, bananas, mangoes, guavas, papaya, ginger, okra, second largest producer of wheat, rice, fruits, vegetables, tea, sugarcane and cashew nut and the third largest producer of cereals, coconut, lettuce, chicory, nutmeg, mace, cardamom and pepper globally.
Ecommerce in India is one of the fastest growing in the world. In Food FMCG segment however, it will grow at a moderate speed owing to issues like lack of trust, operational and infrastructural challenges and older generation’s slower adaptability towards technology.
The ready to eat category is slated to rise most in coming years, due to increase in working population in India. The products are also expected to have multiple flavor and choices due to the younger population dynamics.
Our Experience
In the world of FMCG everything is agile. Production to packaging happens swiftly to maintain freshness of the products. The distribution channel and sales happen quickly too. Our team is experienced in planning operations- packaging, branding, distribution system set up for ‘farm to table’ products like tea.
We have undertaken product planning, packaging, positioning planning and launch planning of Dairy and Grocery FMCG retail business for both online and offline channels. Our team helped the business scale up through execution of right strategies backed by a sturdy financial plan.
Our experience also covers packaged snacks and chips category. Our team delivered successful results to the business by involving in planning and positioning of new product and market launch. We were able to deliver this through our experience in streamlining sales and operations with a customer first focus.
