Year 12 | 23 January 2020 | firstname.lastname@example.org
Although the ready to eat (RTE) food category was first introduced in India in 1987, it was not well received by Indian consumers due to the dependence on traditional cooking. In the early 2000s, with the advent of new technology that improved the shelf life of products and the growth of storage and distribution centres, RTE products began to gain popularity. Several segments were introduced in the industry resulting in an increase in product differentiation. One of these segments was developed by using retort technology, and came to be known as the heat and eat food industry.
The heat and eat food industry in India, valued at INR 2,370 million (~USD 39.5 million) in FY 2014, has been growing at a CAGR 18% for the last three years. The industry is expected to grow at a CAGR of 22% in the next five years till FY 2019 due to rapid urbanisation, increasing disposable income, and an expected improvement in retail infrastructure. ValueNotes estimates that the industry will be worth approximately INR 6,405 million (~USD 106.7 million) by FY 2019.
India’s heat and eat food industry is currently dominated by the top five players, viz. ITC, MTR Foods, Kohinoor Foods, Gits and Tasty Bite Eatables. ITC and MTR together contribute to about 49% of the market share, while the other three players make up 35% of the total production of heat and eat food. Other players in the category include ADF Foods, Priya Foods and Heinz who are relatively new entrants in the market with limited product lines and have a regional presence.
According to Vaishnavi Raichur, a research analyst at ValueNotes, "The heat and eat food category has a tremendous growth opportunity in the near future due to a growing youth population and working woman segment." She adds, "Increasing work and study commitments, declining culinary skills, the rising need for convenience, and surging disposable incomes, along with clever marketing will all lead to a higher demand for heat and eat products.”
The heat and eat category of food products is largely export-driven as it is yet to establish a firm footing in the Indian retail market. However, the domestic markets constitute 40% of the total revenues of heat and eat products. Maximum sales of these products occur in urban areas, especially in tier I cities where retail infrastructure is significantly developed.
The ValueNotes report, titled Heat and Eat Foods Industry in India: 2014-2019, takes a look at the industry including the current market size and growth, the drivers and challenges for growth, the competitive landscape, an analysis of the industry for investor attractiveness, and Porter’s Five Forces. Key market trends discussed indicate the opportunities and challenges for industry players.
by S. C.
07 august 2014, World News > Asia