Sweets play a vital role in Indian culture. Be it celebrations in the family or festivals, Indians are known for indulging in a variety of sweets, as well as gifting them to others. Undoubtedly, India is the biggest consumer of sugar; and the sweets and namkeen market size in the country is worth more than Rs 1,00,000 crore. This industry employs more than one crore people directly, and many indirectly. With the evolution of the packaged foods industry and the increasing consciousness of consumers towards hygiene and safety, the Indian sweets or mithai business has received a further boost.
Over the years, Indian sweets have evolved, with new trends, methods and techniques influencing their make and taste. So many regional varieties of sweets exist in India today, that making a list would be arduous.
Sweets continue to be sold in enormous quantities in India. Sales of mithai and namkeen have never dipped — the industry has grown at healthy double digits every year this century. Despite the initial setback due to the pandemic, the industry is looking at a revenue of Rs 65,000 crore in FY 2022.
Chocolates and Western snacks were the first movers as far as branding of snacking products is concerned, and they have definitely benefitted from it. However, with the passage of time, consumers are realising that traditional sweets and snacks have a very prominent place in the Indian palate, which can’t be replaced. Western chocolates and snacks are widely accepted by people as packaged products with a longer shelf life as compared to the traditional mithai. But that has changed somewhat, with packaged mithai being sold on digital platforms.
The outbreak of the pandemic and implementation of stringent lockdown regulations across several nations resulted in a shift from brick-and-mortar distribution channels to e-commerce platforms for sales. For brands, the challenge was to redefine packaging that attracts consumers through electronic screens. Moreover, brands had the additional task of making their packaging e-commerce-friendly, so as to reduce the use of tertiary packaging.
While the economy has been struggling, primarily due to the pandemic like the rest of the world, e-commerce has seen quite a lot of success in 2020 and 2021. Traditional businesses and shoppers increasingly ‘went digital’, and this has led to a surge in e-commerce and accelerated growth towards digital transformation. With the faster adoption of digital platforms for purchases and payments by consumers in the pandemic times, e-commerce and omnichannel strategies have become critical for the FMCG sector. It is expected that the e-commerce channel, especially in the sweets and namkeen business, will continue to witness growth. Sweets companies are also exploring tie-ups with new-age delivery start-ups, food-tech service players, food aggregators, hyper-local apps, and courier firms to have their products delivered to consumers’ doorsteps.
With the new government regulation regarding investments in FMCG companies and accepting foreign-directed investments, the sector has seen a sudden influx of funds. The governments’ incentives and the FDI funds have helped the FMCG sector strengthen employment, establish a more robust supply chain, and capture high visibility for brands across established retail markets.
While offline purchases were fundamental in the growth of the Indian sweets industry, online channels are expected to see a significant growth rate in the years to come. The pandemic was a gamechanger for the industry, and though change is the only constant, the relevance of keeping the customer at the centre of all business decisions and innovation will never change.
The author is director, Bikano, Bikanervala Foods
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