Meat & seafood organised retail spot find right opportunities in Covid-19
Covid-19 has disrupted the global supply chain network. The pandemic pushed for an urgent change in consumer behaviour whereby consumers became more wary of sourcing and distribution of food products in their plate especially meat and seafood. Given the significance of fresh food in India, it is the right moment to look at new opportunities starting from farming, processing, storage, and distribution – the whole scope of supply chain.
In recent years, wet markets have lost ground to fresh meat and seafood startups, omni-channel companies, but the traditional butchers remain the major source of meat and seafood in our country. With the Covid-19 outbreak, wet markets and butcher shops were shutdown and people feared to visit these places due to the spread of the infection and the severity of the pandemic. Sales of organised meat and seafood companies saw a spike with last-mile delivery, contactless retail paving way for the change in consumer preferences as they stayed in their homes.
Daily new customers of these companies have witnessed an uptick and even transaction volumes were bolstered by both offline and online meat and seafood sales. Covid-19 has cultivated long-term preferences for online shopping and will stay on for a long time as meat and seafood retailers continue to improve their warehousing and distribution capabilities. Localisation of supply chain will assist the growth of online fresh food consumption and will push investments in building a robust cold chain transportation and storage network.
In India, animal breeding, slaughtering and processing segments highly rely on manual labour but the worker shortage amid the Covid-19 outbreak exposed the shortcomings of this low-automation production model. It eventually led to large gaps in demand and supply. Many farms were left struggling and government continues to work on improving the necessary infrastructure ailing the industry for long. Modernisation of product lines is the need of the hour to boost the food supply chain thereby aggressively expanding market capacities of the meat and seafood industry.
With increased scrutiny enforcement of stricter food safety regulations will also lay the groundwork to improve the hygiene at fish and meat markets. With meat becoming an affordable source of diet in the past few years, stricter regulations are required to ensure better health and safety of the consumers.
According to an analysis of the national health data by IndiaSpend and FactChecker, 70% of Indian women and 80% men consume non-vegetarian food. On a weekly basis, 48.9% men and 42.8% women consume non-vegetarian food. This has translated into a boost in sales for meat and seafood companies. Hygiene has become the mainstay for such companies and has created a unique opportunity for the companies to make further inroads. Online buying has become a new trend and will continue to be part of the Indian buyers.
At least 95 per cent of the non-vegetarian market in the country is unorganised and Covid-19 has created a better opportunity for the companies operating in the sector. Covid-19 has created a positive movement for the companies, where many customers who would have taken several years to switch to hygienic meat/seafood brand is happening faster now. This is an opportunity at the time of crisis. The Covid-19 spread is very sensitive; hence companies are taking utmost precaution by implementing many new SOPs (standard operating procedures) to keep it safe.
There have been multiple challenges encountered along the way by the industry. Educating customers was a major issue as most of them were accustomed to purchase from the local markets. Awareness about the disadvantages of consuming warm meat has allowed the shift towards meat-fish retail. Training the butchers in the market and improve their life is another issue that hampers the industry.
Companies are working on providing training to the butchers and specialise them in the art of modern meat and seafood retail model. They have been quick to understand that traceability, farm-to-fork, better inventory management thereby reducing wastage based on auto forecasting, are the key to build a successful omni-channel model. Technology to manage and automate large parts from procurement to last-mile delivery will play an important role to change the existing image of the industry.
According to a report, the Indian meat industry is estimated at US$31billion and is growing at a CAGR of 20% and is expected to reach US$65 billion by the year 2022.The industry right now has the right mix to step out of metropolitan cities, and look at expanding into Tier-2, 3 cities. Though, there are obstacles to address the scale of expansion but consumption in rural areas as well as semi-urban cities is being strongly driven by combining online as well as the retail experience. With the growing Internet and smartphone usage coupled with increased customer awareness, companies need to address the scepticism and take the organised retail experience of meat and poultry to tap into the minds of the customers where factors like timely deliveries and familiarity with the neighbourhood butcher shops are still a comfort zone.
Millennials, rising disposable income and time-pressed urban consumers looking for convenient food options without compromising on health aspects are driving the market for the category. A large population is exposed to digital mediums, retail stores which is allowing the demand for food hygiene to flourish at a rapid rate. The success for modern retailers come from having an end-to-end cold chain network, a large display of products, skilled and conversant manpower to handle the demands of the customers. Convenience of shopping in a hygienic and comfortable environment, availability of a more SKUs (stock keeping units ) under one roof and at your fingertips, right product information, assurance of correct weight and quality, right pricing, cutting and cleaning under a controlled environment are the key differentiators which encourage customers to buy meat and seafood from organised retailers. Understanding a customer demographic also plays a vital role as certain varieties suit a certain demographic.
Meat and seafood retail are having a golden run and people continue to accept the category. As the industry grows bigger, constant improvement and innovation will become synonymous for the organised as well as the unorganised retailers. Covid-19 has let unorganised players turn to the organised category as they look to survive the pandemic on both personal and professional levels. Coupled with regular health awareness initiatives, focus on nutritional values, expanding into new categories like ready-to-cook and ready-to-eat is the way forward for the industry to grow and expand in the future. Meat and seafood retailers have a bigger role to play post-Covid-19 pandemic to evolve themselves and emphasise on right markets, right opportunities and the right moments to set sights on grabbing a larger pie of Indian meat and seafood market.
Source : fnbnews