New Delhi, Oct 28 (UNI) Rising disposable incomes, lack of time and increasing number of working couples is driving the growth of ready-to-eat market in country expected to grow to Rs 2,900 crore by 2015 from Rs 128 crore in 2006.
Packaged foods sector in the country has grown at about seven per cent every year between 2000 and 2005, with ready-to-eat (RTE) foods registering the fastest growth, at a CAGR of 73 per cent, a study conducted by Tata Strategic Management Group (TSMG) said.
RTE foods comprise those which are ready-to-eat, or are ready-to-cook (could be a cake mix, a pasta mix where the ingredients are provided and one has to heat, boil or microwave), and then there are other packaged foods like dairy products, snacking, bakery/biscuits products and many more.
RTE further comes in four different types-- frozen, chilled, preserved/canned and dried. However, globally RTE is available in two types--frozen and chilled.
The Indian RTE foods market, canned/preserved segment is more popular, contributing about 90 per cent of the market and growing at a CAGR of 63 per cent between 2001 and 2006, while the chilled and dried ready meal segments are non-existent.
Players in India, actively looking at the segment, are ITC with its Kitchens of India, MTR Foods, Nestle, Vadilal (processed foods), Hindustan Unilever Ltd (Knorr and Annapurna) and many more.
The cold chain development, disintermediation, streamlining of taxation, economies of scale on the supply side, coupled with increasing disposable incomes, diminishing culinary skills and the need for convenience on the demand side are the factors contributing to this growth story the study futher says.
The Indian RTE market has remained under-penetrated owing to factors such as consumers' penchant for freshness, low affordability and the housewife's preference for home-cooked food, the report says.
The ready-to-eat story, however, would be restricted to urban areas. Singles and households with double incomes are big sub-segments for the ready-to-eat market. The current consumption base estimated by TSMG is less than three per cent of the total base.
The study also suggests that industry players would have to significantly improve their price competitiveness with respect to other options such as domestic help, eating out and ordering in, available to the consumer. Besides price consideration, the product range offered by industry players should also be improved.
The positive outlook for the industry comes from the drivers. It is expected that households with an annual income of 60,000 dollars and more will increase from 1.1 million in 2005-06 to 3.9 million in 2014-15.
Similarly, the urban population is set to rise from 286 million in 2001 to 288 million in 2011.