An overview of the Indian frozen food industry
Good food is something that everyone likes and with the growing trend of attempting a hand at fancy dishes right in the comfort of your house, growing culture of food influencers sharing their tips and tricks to try when trying out your favourite recipes, a lot of people have discovered their hidden culinary skills. But leading a busy household and professional life, the passion for cooking has become difficult to indulge in nowadays and that’s where frozen foods come to the rescue.
The Indian frozen foods market was valued at around Rs 74 billion in 2018 and is further projected to reach a value Rs 188 billion by 2024, expanding at a CAGR of around 17% from 2019 to 2024. They are gradually becoming more and more popular among consumers in India due to the increasing self-awareness among consumers of its easy availability and high quality.
Research states that frozen snacks dominate Indian frozen food market due to their high demand especially frozen potatoes-based products in metro, tier I and tier II cities. Even though statistics indicate otherwise, the category is still in its nascent stage in India as consumer penetration in the category is approximately only 1% which makes it more interesting since it presents a great opportunity to exploit in the Indian market.
The frozen food’s standard product offerings were limited to options like green peas, smileys, nuggets, French fries and sausages. But, the unique Indian palettes require a different taste and therefore companies have come up with new and more Indian variants within frozen foods with items like samosas, cutlets, kebabs, and parathas among others. This provides a great opportunity for companies to capture the Indian market while offering standard staples that comprise fruits like strawberries, vegetables like peas and corn, bakery and dairy products along with ready-to-cook meals, diet snacks, healthy frozen alternatives, drinks and so on.
Ready-to-eat frozen foods are also majorly used in dessert application like ice cream and frozen yogurt which are further increasing the growth. But initially, the industry only offered frozen vegetables and fries. Today, it delivers wide variety ranging from fruits, vegetables to frozen meat, read-to-cook snacks, full meals, desserts and so on.
Among these, frozen snacks and vegetables are the largest categories in terms of sales volume summing up to 65% among the Indian customers. Urban areas account for 80 per cent of the demand which include bakery, dairy, canned, frozen, ready-to-eat meals, diet snacks, health products and drinks among others.
With the whole country on lockdown and most people working from home, frozen-food products have been flying off the shelves over the past few weeks. Corona virus having affected the restaurant business, has left the public in fear of ordering in thus, adding to the picking momentum of frozen foods. The latest trend that can be seen is that since there is no school, children’s demand for Maggi and pasta along with parathas has increased multifold.
Further, many bachelors and students are stranded in PGs and do not have access to a kitchen to prepare meals. Since frozen food is simple to prepare, it has become one of the best meal alternatives. For example, if a young woman is staying as a paying guest in a city, not only does she have to manage a demanding job which takes up most of her time but also manage household work, buying groceries and preparing meals that leave her exhausted. To add to that, deciding what meal to prepare apart from the very low ingredient availability due to Covid-19, frozen foods have proven to be a saving grace in their routines.
Thus, the scenario for Indian frozen food industry is projected to grow by 17 per cent annually during 2020-24 as the Corona virus pandemic has made people conscious about healthy choices while buying daily essentials. It can therefore be assumed that consumers will change their brand preference and move towards those brands which display guaranteed safe, regulated plants and processing properties for manufacturing, clean and pure ingredients and safe handling of products. Post-Covid-19, frozen food brands shall get more acceptance from consumers and the consumer penetration into the category is going to thus rapidly increase in India. The same trend is now visible not only in the Indian market but also in all the Asian markets.
However, Covid-19 is not the only factor that has contributed to growth of the frozen food category in India. From the influence of Western culture having changed food habits and lifestyles, to the booming e-commerce sector which offers online platforms that have a high product visibility compared to traditional platforms, have all facilitated greater penetration of frozen food products in India.
Moreover, rising urbanisation has given rise to organised retail sector which are equipped with cold chain facilities making a variety of frozen foods available. Thus changing psychologies and shifting shopping patterns, shortage of time and hectic lifestyles and rising disposable incomes of the middle class are greatly benefiting demand of frozen foods.
While frozen food is generally considered as convenient it is often perceived to be unhealthy, a consumer misconception the sector has grappled with for a while now. Often consumers assume what is available as fresh is better, but it is not necessarily true since fresh foods also take time from getting harvested, packed, shipped to being bought by the customer and finally eaten later.
Freezing is known to increase the shelf life of the food without compromising with the nutritious components. Thus the act of freezing does not make food any less healthy. The health aspect of food depends entirely on its nutritional content and how it’s preserved while being frozen. Therefore, without compromising with any of the content, frozen food undoubtedly becomes a healthy companion of ours.
Frozen food offers a practical alternative to busy households but preserving the original quality of the ingredients remains a challenge and primary concern of food producers and consumers. Therefore, businesses have invested in new technologies like IQF, quick freezing and high quality of inputs to protect the freshness and nutritional properties of fresh.
In response to Covid-19 pandemic, the Food Safety & Standards Authority of India i.e. the FSSAI, has taken several steps to facilitate the industry during lockdown. Some of the guidelines included expediting work related to licensing on the online portal, creating robust complaint handling mechanism and only essential inspections among others.
Realising the need for training food handlers, FSSAI has started training food handlers under its flagship Food Safety Training & Certification programme. Besides training the FSSAI has also undertaken to counter myths and misinformation related to the food category including frozen foods. FSSAI has communicated them to be false along with instructing states/UTs to follow a non-discriminatory approach while dealing with food businesses in the lockdown and even post-lockdown. It has also issued detailed guidelines on food safety and hygiene for food businesses during the Covid-19 pandemic which are being followed by companies because the industry understands the requirements of its customers and their need for eating healthy.
With the world having changed around us forever, the demand for frozen foods is only going to increase. Awareness around how frozen foods are not only easy, convenient, quick snacking and full meal options but also that their freshness and food composition remains intact will create a new thought process that will lead to more frozen foods consumption and higher consumer preference. As more consumers open up to include frozen foods into their lives, it is going to get easier to manage their busy lives along with doing justice to their taste buds.