On slow burn

Updated: Nov 17 2005, 05:30am hrs
Heat water. Bring it to boil. Immerse pouch for four-five minutes. Open pouch and serve. Heres presenting the four-step, five-minute recipe to mouth watering dal makhani. Or palak paneer, pav bhaaji or even moong dal halwa! Mouth watering as it sounds, ready-to-eat (RTE) instant food hasnt really found instant success. For all the talk of explosive growth, this segment is still valued at Rs 45-50 crore in India, that too including retail as well as institutional sales. Sales from just the retail segment may be as low as Rs 20-25 crore. As an industry insider quips, The product is ready, but the market is yet to get ready.

The market is growing on a sustained basisthough not at an explosive oneat 20-25% annually. India is a value-conscious and traditional market as far as food consumption is concerned, says Rakesh Roshan Mishra, functional head, foods division, Satnam Overseas. We tend to take time in adapting to new taste and consumption patterns. From our understanding, typical RTE consumers come from SEC A in urban centres. They belong to double-income nuclear family households.

At the same time, there is quite a major segment of affluent Indian joint families buying these products, when they travel. The market is growing more in cosmopolitan centres such as Bangalore, Mumbai, Hyderabad and Delhi.

However, one big reason why this market hasnt taken off is that women still want to be involved in the cooking process. Whet-her employed outside or a homemaker, women pride themselves in coo-king for the family. So RTE is seen as competition. She sees the effort put into preparing instant food as negative lab-oursomething that provides convenience but no satisfaction.

Food For Thought
The ready-to-eat market in India is valued at Rs 50 crore approximately
Belying early projections of explosive growth, it is chugging along at 30% annually
"Traditional values" have stood in the way of ready acceptance by households
Typical RTE consumers come from urban centres, mainly double-income households
Differences in palate across
regions stand in the way of national presence
Players such as MTR, ITC and Satnam Overseas have begun tapping overseas markets
A thought echoed by Damodar Lall, president, Food Bazaar, the foods division of Pantaloon Retail, which developed the concept of live kitchens in India a-year-and-a-half ago. You have to know what kind of help women are looking for, he says. Its the laborious, lower-end of the cooking job that theyd like help with. But they want control at the final stage of cooking; this way the credit for cooking stays with the woman.

Food Bazaar has about 10 such kitchens where part of the cooking is done for the customer. While she shops, she can have vegetables cut, dough kneaded, coffee beans ground, idli or dosa batter prepared and so on.

Taking a page from similar researches, players are now devising ways to allow women to get more involved. For instance, Satnam Overseas, that entered the RTE segment under the Kohinoor brand last year, has added readymade gravies to its portfolio just last week. You purchase the gravy and simply add chicken, mutton or paneer to complete the dish. The company expects the RTE business to contribute about 8-10% of its total turnover in the current year.

Not to be discouraged by all the challenges that plague the segment, one of the oldest dry spices and cooking paste brands in Bengal has decided to enter the field. Krishna Chandra Dutta Spices says it will enter the segment with Cookme RTE products in a year.

We will focus on non-vegetarian foods because there are very few players who have non-vegetarian offerings, says Atanu Dutta, managing director, Krishna Chandra Dutta Spices. Second, in vegetarian foods the flavours differ a great deal from region to region.

The differences in palate may not allow successful regional brands to achieve the status of a national player. Adds Dutta, People who say theyre looking for a national roll-out, indulge in wishful thinking. There are as many tastes, flavours and styles of cooking in India as there are regions. What works in Bengal may broadly work in Bihar, UP and Orissa but not in north India. What works in the north wont work in the south.

No wonder then, marketers are also looking abroad to spread their RTE business. And it is here that Indian RTE products have found immediate acceptance, thanks to the large Indian diaspora. MTR exports its products to the US, the UK, Australia, New Zealand, Malaysia, Singapore, the UAE and Oman. Exports, say media reports, contribute 13 per cent to its turnover.

Even ITC has opened Kitchens of India to the world. The premium offering is exported to the UK, Canada, Switzerland and Australia, besides the US, where it has developed a network of 2,000 retail outlets within just six months.

Keralas Anna Groups recent RTE offering, Saras, is growing on the back of demand from expats. Satnam Overseas exports Kohinoor RTE products to more than 20 countriesnotably the US, the UK, Canada, Australia, New Zealand, Japan, Singapore, Malaysia, Mauritius, Germany and France. Exports contribute around 95% of the business at this point of time, while domestic sales are only 5%.

While it may still take time for the RTE market to take off in India, observers are optimistic. The RTE segment has to grow, says Rajesh Srivastava, president, Perfunova, who has had a long stint in the foods business earlier in his career. The demographics of the country and the changing employment pattern will ensure that it does.