This is a category that hasn’t really lived up to its potential.
First, consumers remain wary as per serving cost for any ready-to-eat (RTE) offering is far higher for the consumer than what she incurs when she prepares a meal at home or even orders in. Second, the most common packaging used in the segment, that is retort packaging, does help in increasing the shelf life of the product but it tends to compromise the taste if the product sits on the shop shelf for a stretch of time.
More importantly, the country has a diverse culinary heritage with distinct regional cuisines boasting of a wide array of flavours and cooking techniques. This can seriously challenge any brand harbouring pan-India ambition.
So why is Cremica, one of the largest suppliers of condiments to the HoReCa (hotel, restaurants & catering) sector, so eager to set foot in the risky RTE market?
Will it not put its hard-earned equity at stake by venturing into a new — though not entirely unknown — territory?
Look at the opportunity and it will be easy to understand
Cremica’s plan. With a turnover of over $1.02 billion in 2024 and a compounded annual growth
rate of 15.9% since the Covid years, the RTE segment can be rewarding if a brand gets the price-value equation right, say experts. In any case, improvements in cold chain infrastructure and product accessibility via online shops and supermarkets have laid the groundwork already.
So as the company eyes its IPO in 2025, chairman and MD Akshay Bector says Cremica needs to expand its product portfolio to tap into future growth opportunities. “While its current operation doesn’t need too much capital and is self-sustaining, the IPO will allow us to get into new categories next year,” he adds.
So what are the things Cremica needs to keep in mind before making that foray into RTE?
First, it needs to widen the definition of competition — it’s not just other RTE players but the playing field now includes cloud kitchens and delivery-only players as well. Pramod Damodaran, CEO, Wagh Bakri Tea Lounge and someone who has spent decades in the food business, says with food delivery players such as Zomato and Swiggy dropping off ready meals at your doorstep in a jiffy, RTE products need to stand out in terms of affordability. “Cost will be a key factor,” he says. Then they must innovate both in terms of offering consistent quality and enabling easy distribution. It is also important to ensure that consumer perception of ready-to-eat products remains positive, as they often worry about things such as foods being laden with preservatives or being low on their nutritional value.
Then, Cremica has to amp up production — it currently has two manufacturing facilities in Punjab and Himachal Pradesh. The company plans to expand its existing plant capacities by almost 40%.
Also, when working out its new products it has to find the perfect balance between tradition and modernity, as other players have found. Indian consumers appreciate RTE products that offer traditional flavours with modern convenience. “You’ll find sabudana khichdi selling big in Mumbai but not in the South. Thus, catering to regional preferences becomes critical,” says Nisha Sampath, managing partner, Bright Angles Consulting.
What will most definitely work in its favour is the fact that Cremica is a big brand in the HoReCa segment. That brand recognition will give it a headstart. Having said that, B2B and B2C are very different ball games and success in B2B might not ensure success in B2C even when the product is the same. “Starting from basic things like advertising the product quality and benefits, opting for the right packaging material and communicating the overall brand story, everything has to be well thought through as it would be up against brands that have been at it for decades,” reminds Sampath.
She has a point. The segment has well-entrenched players like MTR and ITC, which have both an understanding of the consumer and deep pockets. In other words, the next phase of growth for Cremica is not going to be a cakewalk.
