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Ready-to-eat market size to touch Rs. 2,900 crore by 2015

MUMBAI: The ready-to-eat (RTE) market in India, currently estimated at Rs. 128 crore (2006) is expected to expand to reach Rs. 2,900 crore by 2015, according to an analysis done by Tata Strategic Management Group (TSMG).

Tata Strategic is among the leading management consultancy firms in South Asia

In its analysis, TSMG said that the factors contributing to the growth would be changes like 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.

The report also highlights that the RTE market in India has remained under-penetrated owing to factors such as consumers’ penchant for freshness, low affordability and the Indian housewife’s preference for home-cooked food.

According to data in the reports, packaged foods in India have grown at about seven per cent a year between 2000 and 2005, with RTE foods being the fastest-growing, at a CAGR of 73 per cent.

The Indian RTE foods market, canned/preserved segment is more popular, contributing about 90 per cent of the market and growing at a Compound Annual Growth Rate (CAGR) of 63 per cent between 2001 and 2006 while the chilled and dried ready meal segments are non-existent.

According to Raju Bhinge, CEO, Tata Strategic Management Group, “There is a huge untapped market opportunity arising due to rapid demographic shifts in income, urbanisation, and proportion of urban working women in India. The industry needs to concentrate on broadening the market and increasing penetration amongst Indian consumers.”

The analysis also pointed out 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 Indian consumer. Besides price consideration, the product range offered by industry players will have to be strengthened.

At the moment, the regional cuisine and non-vegetarian cuisine markets are relatively under-serviced with concentration on the vegetarian North Indian meals.

Pankaj Gupta, Practice Head-Consumer & Retail, Tata Strategic, said, “According to our analysis, India provides an attractive opportunity for both Indian and international players with a mix of demand and supply side changes. If consumer demands of affordability, availability and enhancing acceptability are met, the RTE foods market has the potential market size of 2,900 crore by 2015 from its existing Rs. 128 crore.”

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