Companies are ramping up distribution through tie-ups with e-commerce firms and food-tech platforms
With restaurants restricting services to takeaways besides the fear of a rising number of Coronavirus cases has led to people cooking at home, thereby leading to an increase in the consumption of ready-to-eat products. In the last two months, several companies in the ready-to-eat category have claimed to see a rise in demand for their products such as curries/ meals, batters, instant mixes, desserts as well as frozen snacks. “Demand for frozen snacks in retail has increased by 25% to 30% when compared to the pre-Covid period. The demand is continuing to grow especially for high quality and trusted Indian brands,” Sachid Madan, chief executive – frozen snacks, fruits and vegetables, ITC Ltd told BrandWagon Online.
According to a report by market research firm RedSeer Consulting, the ready-to-cook market in India which stood at Rs 2,100 crore in 2019, is expected to grow at a CAGR of 18% to reach Rs 4,800 crore by 2024. As per the report, the ready-to-cook market is segmented into the non-frozen and frozen product with the former taking bulk share of the market at present. However, non-frozen RTC is expected to grow at a faster pace compared to frozen RTC food and the mix of frozen and non-frozen RTC is expected to evolve from 73%:27% in 2019 to 70%:30% by 2024. “As conservatism on stepping out takes centre stage, brands will need to innovate their offerings to drive the category post lockdown. Besides, the need to leverage digital medium and television to advertise is immense with the rise in consumption of content on OTT, social media and television,” Saurabh Uboweja, managing partner, BOD Consulting explained.
MTR Foods, which sells a range of packaged foods, claims to have seen an uptake of about 20%, despite facing issues such as supply chain, sourcing, market access, initially. “E-commerce contribution in the last two months has doubled for us. We are almost touching five percent from 2-2.5% earlier,” Sunay Bhasin, chief marketing officer, MTR Foods said. In order to leverage the growth, MTR Foods claims to be investing in its own e-commerce platform which currently serves about 15,000 codes. The firm also plans to increase its advertising spends on digital which currently accounts to almost 10% of the overall spends.
The increase in new distribution channels is also a reason behind the rise in the sale of these products. For instance, Haldiram’s, which earlier sold its ready-to-eat products through Amazon and Flipkart, has now tied up with Swiggy and Zomato to market its products. “We have also tied up with a few corporate houses as conventional catering has taken a backseat among rising concerns around health and safety,” Gaurav Mahajan, head of marketing, Haldiram, noted. ITC too has tied up with Swiggy, Zomato, Dunzo, Scooty to expand its presence while also introducing ITC-On-Wheels, a mobile store which offers a range of the company’s products to consumers at their door-steps. “This has been targeted at residential welfare associations (RWA) who have been partnering with us to bring a range of food products to their residents,” Madan explained. Moreover, the company claims to be expanding its in-store visibility and sampling, along with participating in a number of exhibitions to enhance its reach. The next level of growth, analysts say, will be driven by food-tech platforms like Swiggy which plans to venture into the DIY Meal Kits delivery service. As people stay indoors the reliance on ready-to-eat food items is expected to reach its peak, which means – the competition will intensify.