THESIS final

An Exploratory Study on Indian Food Processing Industry and
Consumer Demands: Current Trends and Future Business
Opportunities In India
A dissertation presented to the Department of Food Business and Development,
University College Cork, Ireland. in partial fulfilment of the requirements for the
degree of MSc Food Business
By
Siddharth Padmakar Jagtap
September 2015
Supervisor: Ronan O’Farrell
Course director: Dr. Joe Bogue

TABLE OF CONTENTS
Contents Page
List of figures
List of charts
Abstract 1
Acknowledgement 2
Chapter 1: Introduction 3
1.1 Introduction 3
1.2 Background to the Research 3
1.3 Justification, Scope and Purpose of Study 4
1.4 Research Question and Sub-questions 5
1.5 Research Objectives 5
1.6 Methodology 5
1.7 Summary 6
Chapter 2: Global Food Processing Industry 7
2.1 Introduction 7
2.2 Global food processing sector 7
2.3 Benefits of food processing 8
2.3 Factors Affecting Change in World Food Demand 9
2.4 Summary 10
Chapter 3: Indian Food Processing Industry 11
3.1 Introduction 11
3.2 Indian Food Processing Sector 11
3.3 Background/Overview of Indian Food Processing industry 12
3.4 Value Chain in Food Processing Industry in India 18
3.5 Skilled Workforce Availability 18
3.6 Government Initiative 19
3.7 Food Exports 20
3.8 Changing Food System in India 20

3.9 Summary 24
Chapter 4: Factors Influencing Change in Consumer Demand 25
4.1 Introduction 25
4.2 Consumer Demand 25
4.3 Westernisation/Globalisation 26
4.4 Rise in Income 27
4.5 Reducing Poverty and Rise in Middle-class 28
4.6 Rapid Urbanisation 29
4.7 Changing Lifestyle 29
4.8 Increasing Health Consciousness 30
4.9 Key Challenges 31
4.10 Strength and Opportunities that India enjoys 35
4.11 Summary 36
Chapter 5: Methodology 37
5.1 Introduction 37
5.2 Research Design 37
5.3 Mixed Method Research 38
5.4 Exploratory Method 39
5.5 Exploratory Design Procedure 39
5.6 Phase I: Qualitative 41
5.6.1 Introduction 41
5.6.2 Data Collection 41
5.6.3 Validation and ethics 42
5.6.4 Sample Unit 43
5.6.5 Method 43
5.6.6 Data Analysis 44
5.7 Phase II: Quantitative 45
5.7.1 Introduction 45
5.7.2 Data Collection 45

5.7.3 Reliability and Validity 45
5.7.4 Sample Unit 46
5.7.5 Method 46
5.7.6 Data Analysis 46
5.8 Summary 47
Chapter 6: Result and Analysis 48
6.1 Introduction 48
6.2 Qualitative Results 48
6.2.1 Participant Profile 48
6.2.2 Consumer Everyday Cooking Pattern 48
6.2.3 Consumer Preference when they are Not Cooking at Home 49
6.2.4 Problems/Issues Faced by Consumers in Cooking Everyday Meal 51
6.2.5 Consumer Everyday Eating Pattern 53
6.2.6 Consumer Perception on Eating Out 56
6.2.7 Consumer Frequency of Eating Out 59
6.2.8 Consumer Perception on ‘RTE’ and ‘RTC Food Products 60
6.2.9 Consumer Preference of Location form where they Purchase their
Food and Grocery Products 62
6.2.10 Important Attributes Consumer Consider while Purchasing Food 64
6.2.11 Common Food Products Purchased by Consumer 65
6.2.12 Effect of Inflation on Consumer Purchasing Pattern 66
6.3 Quantitative Results 68
6.3.1 Demographics 68
6.3.2 Consumer Cooking Pattern at Home 69
6.3.3 Time Required for Consumer to Cook Meal 69
6.3.4 Consumer Opinion on Cooking Meal as Time Consuming Process 70
6.3.5 Consumer Preference When Not Cooking at Home 70
6.3.6 Challenges Faced by Consumers While Cooking Everyday Meal 71
6.3.7 Consumer Meal Eating Location 72
6.3.8 Consumer Frequency of eating out 72

6.3.9 Consumer Perception on their Eating Habit as Healthy 72
6.3.10 Consumer Expenditure on Grocery 72
6.3.11 Consumer Expenditure on Eating Out 73
6.3.12 Consumer Preferred Destination for Grocery Shoppling 73
6.3.13 Important Attributes Considered by Consumer 74
6.3.14 Effect of Inflation of Consumer Purchasing Pattern 75
6.4 Summary 75
Chapter 7: Research Conclusion and Recommendations 76
7.1 Introduction 76
7.2 Research Summary 76
7.3 Factors Influencing the Change in Consumer Demands 76
7.4 Consumer Cooking Pattern 77
7.5 Consumer Eating Pattern 78
7.6 Consumer Purchasing Pattern 78
7.7 Growth Opportunities for Food Businesses in India 79
7.8 Concluding remarks 80
Appendices 82
References 125

List of figures and tables
Fig 1. Sequential exploratory mixed method design
Fig 2. Quantitative questionnaire page 1
Table 1. Demographics of respondents (qualitative survey)
List of Charts
Chart 1. Gender of respondents
Chart 2. Age of respondents
Chart 3. Education level
Chart 4. Annual income of respondents
Chart 5. Challenges faced by consumers
Chart. 6. Factors considered while purchasing food
Chart 7. consumer cooking pattern at home
Chart 8. Time taken for consumers to cook meal
Chart 9. Consumer preference when not cooking a home
Chart 10. Consumer perception on cooking meal as time consuming process
Chart 11. Friedmen’s test for challenges faced by consumers while cooking everyday
meal
Chart 12. Destination where consumers ate their food
Chart 13. Consumer Frequency of eating out
Chart 14. Consumer perception on their eating habit as healthy
Chart 15. Consumer expenditure on grocery
Chart 16. Consumer expenditure on outside food
Chart 17. Friedmen’s test for important attributes considered by consumers while
purchasing food products
Chart 18. Consumer grocery purchasing destination
Chart 19. Consumer perception on effect of inflation on food purchasing pattern
Chart 20. Occupation of respondents

ABSTRACT
Background
Food processing industry in India is seen as a “sunrise industry” having huge
potential for creation of large scale processed food manufacturing and food
chain facilities, uplifting the agricultural economy, and increasing export
earnings. Food processing industry in India is poised for huge growth.
Accounting for around 32 per cent of the country’s total food market, the
food processing industry is one of the largest industries in India and is ranked
fifth in terms of production, consumption, export and expected growth.
Country’s domestic food market is estimated to reach USD 258 billion by
2015.
Objective
The objective of the research were: to conduct a literature review on factors
influencing the change in consumer demand for food; to understand the
current consumer demand with respect to their cooking pattern, eating pattern
and food purchasing pattern; and to discover the future business opportunity
in Indian food processing industry
Methodology
The methodology used in this research was the sequential exploratory mixed
method. Qualitative questionnaire was made using open end questions and
were distributed to specific samples. Analysing the qualitative data, common
themes were discovered, which were used in forming the quantitative
questionnaire. Quantitative data was analysed using SPSS.
Findings and conclusion
Analysis of data showed that consumers in urban India tend to be time poor
cash rich, so the demand for convenience food is on the rise. Variation and
availability of good quality ready to use vegetables are the major problem
faced by consumers while cooking everyday meal. It also showed that the
consumers are becoming more and more health conscious and demanding
health and wellness food products. Most of the consumers tend to eat at home
and sometimes prefer eating outside. Local kirana store and supermarket
were the preferred destination for the consumers for shopping food products.
The main conclusion for this research is that there lies a huge opportunity for
food processing businesses in India on the back of massive macro-economic
growth and changing consumer demands.
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ACKNOWLEDGEMENTS
First, and most of all, I would like to thank my supervisor Ronan O’Farrell, for his
expertise, assistance and guidance throughout the process of writing this thesis. I
would like to thank my course director Dr. Joe Bogue for his support, teaching,
suggestions and encouragement. You have been a source of guidance, support and
inspiration for an international student like in a foreign country. I would like to thank
UCC and all of its staff for their support and help.
I would like to thank my parents, my brother and sister in law for their support and
love, without which I would not have come so far away from home. You gave me
wings to fly. I would also like to thank my friends both in Ireland and India who
supported me every time and helped me in completion of this thesis.
I am grateful to all the beautiful and friendly people of Ireland for being so kind and
very helpful to me. Because of your kindness and friendliness, I was able to do this
study and complete my education.
Thank you all.
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Chapter 1: INTRODUCTION TO THE STUDY
1.1 Introduction
The aim of this research is to gain better understanding of consumer demands related
to food products in Indian urban areas. Changes in demographics of consumers have
brought a change in their purchasing and eating pattern. Rapid urbanisation, rising
income, globalisation, rising number of working women, etc., are the main factors
affecting the change in consumer demand. It is very important to understand the
consumer needs in order to setup or expand any business in a country. Similarly for
any food business for setting up or expanding in India, it is very important to
understand the consumer needs in India and their fast changing eating habits.
Food processing industry in India is currently at a nascent stage. But as the
macroeconomics of the country is changing rapidly, food processing industry is seen
as one of the most important industry for achieving growth and creating employment
opportunities. Only 2-3 percent of the total fruits and vegetables produced in India is
processed, which leads to about 30 to 40 percent of the total produce being wasted
before consumption. These losses are huge and can be minimised by doing more
research in this sector, increasing the level of processing and improvement in
infrastructure. This gives an opportunity for food business entrepreneurs to provide
new products and services to the consumers. Understanding consumer demand is
vital for research in food processing sector, in order to provide efficient and
productive food products and services which can be beneficial for both consumers as
well as the industry.
1.2 Background to the Research
There has been very limited research being done on the changing consumer demands
for food products in India. While researching for scientific or academic information
regarding the Indian food industry and the consumer demands for food, the
researcher found that there were limited sources of study being done on the demands
of Indian consumer for food. So the researcher felt the necessity to study in detail
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and bring together and relate the food processing industry and the changing
consumer demands in Indian urban areas.
As Indian consumers’ mindset is rapidly changing from traditional habits to more
globalised habits, food industry in India faces a greater challenges in understating the
changes. Increasing middle class consumers are demanding higher level food
products, they are demanding more variety of food products. Rising income has
increased the purchasing power of consumers, more and more consumers are going
for branded and premium food products. Increasing literacy rate and rising literacy in
women has increased the demand for healthy and nutritious food products. All these
factors are having a major effect on the consumer demands in urban as well as rural
India.
Through this research, the researcher wants to highlight the important factors that are
affecting the change in demand; consumers’ day to day eating, cooking and food
purchasing pattern which can determine the demand for new food products and
services.
1.3 Justification, Scope and Purpose of the Study
Consumer demand is the consumers desire to buy product or services according to
their requirement. Understanding consumer demand is necessary for the growth of
food processing sector, to bring down the failure rate of new products which might
have an economical impact on the industry and to minimise the wastage of food by
implementing effective and efficient food supply chain system.
There are three research contributions envisaged form this study. First, the cooking
pattern of consumers; everyday cooking habit of consumers, what problems they
face in everyday cooking. Second, consumer eating pattern; consumer eating habits
at home or out of home, how much preference they give to outside food products,
and their view on RTC and RTE food products available in the market. Third,
consumer purchasing pattern, this study explains the consumer grocery purchasing
habits, from where do they buy food items, what types of food product they buy
every time they so to grocery stores, how much they spend on purchasing food, etc.
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1.4 Research Question and Sub-questions
The aim of this research is to understand the current situation of Indian food industry
and to understand the consumer demands for food products in Indian metro cities.
The main research questions are:
1. What are the factors affecting the change in consumer demand?
2. What are the current consumer demands?
Above question consist of these three sub-questions:
i. What is current consumer cooking pattern
ii. What is current consumer eating pattern
iii. What is current consumer food purchasing pattern
3. What are the opportunities for food processing businesses in India?
1.5 Research Objectives
The main objectives in carrying out this research are — to conduct a literature
review on factors affecting consumer demands; to examine the consumer demand for
food in India; to examine the consumer cooking habits; to find out consumers
purchasing patterns; to understand the consumer eating habits; and to explore
opportunities for businesses in Indian food processing sector.
1.6 Methodology
The research methodology used in this study is mixed method sequential exploratory
method which consists of two parts: open end type qualitative questionnaire survey
for specific sample and close end type quantitative questionnaire survey for general
population. The qualitative survey was conducted by sending a questionnaire by
email to specific samples. The specifications for the selected samples were: they
should be married, between age of 23 to 40 years, must cook at home everyday, at
least 2nd level of education. 13 such samples were identifies for qualitative survey.
From the qualitative survey results, themes and codes were formed by analysing the
responses of the respondents using NVIvo software. Quantitative questionnaire
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survey was constructed using the themes which the researcher got by analysing the
qualitative survey. These quantitative questionnaires were then distributed among the
general population, the specifications for the population were: must cook everyday at
home, age between 25 to 50 years. The survey questionnaire were distributed online
on popular social networking website like Facebook, Whatsapp and via emails. 32
valid responses were considered for the analysis of the quantitative data. SPSS
software was used for analysing the quantitative data.
1.7 Summary
This chapter laid the foundations for the research in this study. It outlined the main
objectives of the research, and presented the questions and sub questions of the
research. The methodology and limitations of the research were also briefly
described. In chapter 2 the literature review is introduced and focuses on the food
processing industry in world and in India.
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Chapter 2: GLOBAL FOOD PROCESSING INDUSTRY
2.1 Introduction
Previous chapter introduced the study in short. In this chapter, significance of the
food processing industry will be reviewed. The aim of this chapter is to introduce the
food processing industry in the world and preview the benefits of food processing
sector in world. The current scenario of the global food processing sector will be
discussed as well as the factors that are affecting the change in world food demand
with respect to high economic growth and population change in Asia and the effect
of globalisation will be discussed in this chapter.
2.2 Global food processing sector
Food processing can be understood as post harvest activities adding value to the
agricultural produce prior to marketing. In addition to the primary processing of food
raw materials, it includes final food production and the preparation and packaging of
fresh products (McCullough et al., 2008). Food processing can be said as the
transformation of raw materials into food, or food into other form. Food processing
generally takes harvested, clean crops or butchered animal products and use them to
produce attractive, marketable and often long shelf life products.
The food processing industry can be divided into following broad segments:
Primary processed food – this category includes products such as fruits and
vegetable, edible oil, packaged milk, milled rice, flour, tea, coffee, pulses, spices and
salt which can be sold in packed or non-packed forms.
Value-added processed food – this category includes products like processed fruits
and vegetables, jams, juices, pickles, processed dairy products such as ghee, paneer,
cheese, butter, etc., processed poultry and marine products, confectionery, chocolate,
alcoholic beverages, etc.
Food processing industries provide throughput between industry and farm.
Accelerating agricultural development through the creation of backward linkages-
inputs, supply of credits and other production enhancement services and forward
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linkages-processing and marketing (Shah, 1998). Food processing also adds value to
the farmer’s produce and creates employment opportunities, hence increasing the
economic condition of the farmer (Kumar and Basu, 2008).
The food situation in the world is currently being rapidly redefined by the new
driving forces. Globalisation, income growth, urbanisation, climate change, high
energy prices, and transforming food consumption, production and markets. The
influence of the private sector in global food system, especially the leverage of food
retailers, is also rapidly increasing. Changes in food availability, (Braun, 2007)
2.3 Benefits of food processing
Benefits of food processing includes preservation, toxin removal, easing marketing
and distribution tasks and increasing food consistency. Food processing increases
yearly availability of many foods, enables transportation of delicate perishable foods
across long distances and makes various types of foods safe to eat by de-activating
spoilage and pathogenic micro-organisms. Modern supermarkets would not exist
without modern food processing techniques, and long distance transportation would
not be possible. Processed foods are usually less susceptible to early spoilage than
fresh foods and are better suited for long distance transportation from the source to
the consumer. Processing of food can also reduce the incidence of food borne
diseases. The extremely varied modern diet is only truly possible on a wide scale
because of food processing. Transportation of more exotic foods, as well as the
elimination of much hard labour gives the modern eaters easy access to a wide
variety of food products which were not possible to their ancestors. A large profit
potential exists for the manufactures and suppliers of processed food products.
Modern food processing also improves the quality of life for people with allergies,
diabetics, and other people who cannot consume some common food elements.
Food processing can also add extra nutrients such as vitamins, etc.
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2.3 Factors affecting change in world food demand
Demand driven by high economic growth and population change
Many countries in the developing world have experience high economic growth in
recent decade. Developing countries in Asia, especially India and China, has shown
strong and sustained growth. Real GDP in the region increased by 9 percent per
annum between 2004 and 2006. Countries in sub Saharan Africa experienced rapid
economic growth of about 6 percent in the same period. Beyond 2008, global growth
is expected to remain in the 4 percent range and the developing countries growth is
expected to be at average 6 percent (Braun, 2007). This growth can be the central
force of change on the demand for food in the world. High income growth in low-
income countries readily translates into increased consumption of food.
Another major force altering the food equations sifting rural-urban population and
the resulting on consumer preferences and spending on food. The global urban
population has grown more than the rural population. In next three decades, 61
percent of the world’s population is expected to live in urban areas (Cohen, 2006).
However, around 75 percent of the poor live in rural areas and rural poverty will
continue to be prevalent than urban poverty during next several decades (Braun,
2007).
Agricultural diversification towards high value food production is a demand driven
process in which the private sector plays an important role (Joshi et al., 2007).
Urbanisation, higher income, changing preference are the factors responsible for
increasing consumer demand for high value food products in developing countries.
The spending of food budget is shifting from the consumption of grains and other
staple crops to vegetables, fruits, meat, dairy and fish. The demand or ready to cook
and ready to eat foods is on the rise, particularly in urban areas. Due to globalisation,
consumers in Asian cities are being exposed to non-traditional foods. The
consumption of wheat and wheat based products, temperate zone vegetables and
dairy products in Asia has increased (Pingali, 2007).
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With an income growth of 5.5 percent in South Asia, annual per capita consumption
of rice in the region is expected to decrease from its 2000 level by 4 percent by 2025.
At the same time, consumption of milk and vegetables is projected to increase by 70
percent and consumption of eggs, meat and fish is projected to increase by 100
percent (Joshi et al., 2007).
Globalisation and Trade
A more open trade regime in agriculture is expected to benefit the developing
countries. According to the International Food Policy Research Institute (IFPRI), the
benefits of opening up and facilitating market access between member countries of
Organisation for Economic Co-operation and Development (OECD) and developing
countries, as well as developing countries would bring significant economic gains to
the counties involved (Bouët et al., 2007).
2.4 Summary
In this chapter, the global food processing sector was reviewed. Its significance and
benefits were explained. The factors that are affecting in change in global food
demand were also previewed in this chapter. In the next chapter, Indian food
processing sector is discussed in detail.
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Chapter 3: INDIAN FOOD PROCESSING INDUSTRY
3.1 Introduction
The global food processing sector and its significance was discussed in the previous
chapter. In this chapter, the food processing in India is explained. The aim of this
chapter is to study the food processing industry in India in detail. The overview,
value chain system, government initiatives, food exports and the changes that are
taking place in food system in India will be discussed in this chapter.
3.2 Indian food processing sector
In India, food processing industry is considered to be a sunrise industry because of
its large potential for growth and its socio economic impact. Food processing sector
not only leads to income generation but also helps in value addition, reducing waste,
and foreign exchange earnings. In current global market, food safety and food
quality have become competitive edge for the enterprises producing foods and
providing services.
“With proper investment in food processing, technical innovation and infrastructure
in agriculture sector, India could become the food basket of the world.”(Meeta,
2007). According to Government of India, ministry of food processing industries
annual report, 2007, the existing level of processing and value addition in Indian
food processing sector is very low as compared to other developed as well as
developing countries. The food processing industry in India is ranked fifth in terms
of production, consumption, export and expected growth. Merchant, 2008 stated that,
a strong and dynamic food processing sector plays an important role in improving
value addition, diversification of agricultural activities and creating surplus for
export of agro-food products. In Indian economy, food processing accounts for about
14 % of manufacturing GDP i.e. Rs. 2,80,000 crore, and employs about 13 million
people directly and 35 million people indirectly.
The food processing industry in India is highly fragmented and is dominated by
unorganised sector. A number of players are small scale industry. About 42% of total
output comes from unorganised sector, about 25% from organised sector and rest
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from the small players. Although the unorganised sector varies across different
categories, approximately 75% of the market falls under this sector. The organised
sector is bigger in secondary processing compared to primary processing. Increasing
urbanisation, health and nutrition consciousness and changing lifestyle are changing
the consumption habits in India. The number of working women, single students/
professionals and increasing nuclear families are creating demand for processed
ready to eat food products. Growth in organised retail stores, which makes the
processed food readily available, is driving the growth of food processing.
India is in a phase of rapid economic and demographic transition. Per capita income
has been rising steadily, life expectancy is increasing and birth rates are falling.
Poverty levels continue to decline as does the incidence of malnutrition and
stunning. A key feature of this growth has been the change in the nature of the diet.
According to Pingali (2007), because of the integration and fast communication in
the world economy, diet transition in India was inevitable. In the recent decade
globalisation has played an important role in the transformation of food consumption
patterns of Indian households. This is particularly evident in urban areas. The change
in consumer tastes and demand has critical implications for the whole food supply
system in India.
The process of diet transformation has far-reaching consequences for public health.
The adoption of a more varied and nutritionally balanced diet, typical of income-
induced diet diversification, generally leads to a substantial improvement in public
health indicators. The health implications
3.3 Background/Overview of Indian food processing industry:
After the independence in 1947, India witnessed rapid growth in food processing
sector especially during 1980s. It followed the first phase of the green revolution in
which had resulted in increased agricultural production and the need of its post-
harvest management. The importance of the sector was realised by the business
community which lead to diversification from mere grain trading to grain
processing. (Kachru, 2010). Initially, the processing started with rice and followed
by wheat milling, paper, pulp industry, milk processing sector, sugarcane processing
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and oil extraction through solvent plants. In some areas like the solvent extraction
industry, the installed processing capacity was much higher than the supply of raw
materials, however, in other areas like fruits and vegetable processing the growth
was not encouraging due to poor demand for processed products by the consumers.
The low level of processing was driven primarily by the food habits of the
population. Fresh fruits and vegetables were preferred compared to processed fruits
and vegetables.
Even though India has a strong agricultural production base, food processing
industry is still under developed. The highest share of the processed food is in dairy
sector, where 35% of total produce is processed, of which 15% is processed by
organised sector. In fruits and vegetable, the processing level is around 2.2% of
which 48% is processed by organised sector, 21% in meat and poultry products.
Food and food products are the biggest consumption category in India, with
spending on food accounting for nearly 21% of countries GDP.
According to a study by McKinsey, the food processing sector in India has an
economic multiplier of 2-2.5. That is for every one rupee of revenue from food, the
economy gets Rs. 2 to 2.50. This phenomena was highlighted in a study done in
Uttar Pradesh for knowing the contribution of agriculture based industries in
generation of income and generation of employment for farmers. The presence of
food processing industry increases the hired workforce in farms. It is over 75% for
farms associated with industry in comparison to average of 72% of total hired
workforce in agriculture. Even after all these benefits in India, farmers and private
sector are yet to exploit the full potential of food processing sector.
India is the world’s second largest producer of food next to China, and it has the
potential of being the biggest in the food and agricultural sector. The total food
production in India is likely to double in the next ten years and there is an
opportunity for large investments in food and food processing technologies, skills
and equipment. India has the second largest arable land and largest area under
irrigation in the world, with 20 agri-climatic regions, all 15 major climates in the
world exists in India. The country also possesses 46 out of 60 soil types in the world.
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According to annual report of MOFPI, 2008-2009, India is the largest producer of
milk, pulses, buffalo meat, tea, cashew and mangoes; and the second largest
producer of fruits & vegetables, wheat, rice and sugarcane. Globally India has the
largest livestock population of 470 million, which includes 205 million cattle and 90
million buffaloes. The Indian government expects USD 21.9 billion of investment in
food processing infrastructure by 2015, and has also launched Infrastructure
Development scheme to increase investments in food processing infrastructure.
Investments including foreign direct investments (FDI) will rise with strengthening
demand and supply fundamentals. The food processing industry in India accounts for
32% of the country’s total food market. It is estimated to be worth USD 121 billion.
Food processing industry is one of the largest industries in India, it accounts for 14%
of manufacturing GDP, nearly 13% of India’s exports and 6% of total industrial
investments. Currently the food processing industry is growing at more than 10% per
annum, it is expected to touch USD 194 billion by 2015.
The major segments in Indian food processing sector comprise of fruits and
vegetable, diary, meat and poultry, edible oil, alcoholic and non-alcoholic beverages,
grain based products, marine products, sugar and sugar based products, pulses,
aerated beverages, malted beverages, spices and salt. Out of these segment grain
based products (34%), bakery based products (20%), dairy and dairy based products
(16%) and fish and meat products (14%) contribute to a major portion of industry
revenue (Rias et al., 2013).
Fruits and vegetable: fruits and vegetables processing is dominated by unorganised
players, which is around 70% of the total market size. The fruit and vegetable
processing industry has witnessed rapid growth of ready to eat food products, frozen
vegetables, processed mushrooms etc. The major challenge for this sector is
unavailability of infrastructure facility to store produce (Rias et al., 2013).
Dairy: According to Dairy India 2007, the current size of Indian dairy sector is Rs.
3,133.50 billion and has been growing at a rate of 5% a year. Substantial increment
in milk production was obtained with the launch of a nationwide dairy development
programme (operation flood) known as the white revolution in the year 1970. After
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three decades of successful efforts to increase the production of milk and milk
products, India has become the world’s largest milk producer. Further, India is also
self-sufficient in milk. In 2012 its production reached 127.9 million tonnes, and per
capita consumption reached 290 Gms/day (NBBD, 2013). Besides the large
production and consumption of milk, India also produces and consumes butter, and
skim milk powder (SMP), and is a marginal exporter of SMP, butter and whole milk
powder (WMP). In 2011, the value of milk output from livestock was around Rs.
2,40,000 crore and the value of dairy products market was around Rs. 4,00,000
crores. This has been largely achieved through a combination of favourable policies
and an institutional network that has supported millions of rural households in
pursuing their livelihoods through small scale dairy farming. About 20% of the milk
produced is collected and processed by organised sector. Co-operatives link more
than 12 million small scale dairy producers to urban market and provide them with
moderate amount of income. India is witnessing a rising demand for milk and milk
products because of improved milk availability, globalisation, a change over to
market economy and because of the entry of private sector in dairy industry.
Meat and poultry: Meat production in India is estimated at 6.5 MT during 2007-08,
which is around 2% of world meat production. The share of bovine, ovine, pig and
poultry is 43%, 12%, 8% and 37% respectively. There are organised players like
Godrej, Venky’s, Suguna poultry, etc. In meat, processing and packaging has
accelerated growth of this industry segment (Rias et al., 2013).
Fish and marine products: Marine and fisheries including capture, culture and
processing is and important sector in Indian food processing industry. With a
coastline of over 8,000 km, an Exclusive Economic Zone (EEZ) of over 2 million
sq.km. and with extensive fresh water resources, fish processing plays a vital role.
India ranks 2nd in world fish production contributing about 5.4 percent of global fish
production. Total fish production during 2013-14 is estimated at 9.45 MT, from
which 6.10 MT came from the inland sector and 3.35 MT from marine sector. This
sector contributes about 1 percent to overall GDP and represents 4.6 percent of
agriculture GDP (MOFPI). Indian seafood processing units are being encouraged to
go for value addition and export through setting up new units, expanding their
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capacity and diversifying their current activities, etc., for value addition. The export
of marine products has steadily grown over the years from Rs, 3.92 crore in 1961-62
to Rs. 8607.94 crore in 2008-09. Marine products account for approximately 1.1% of
the total exports from India (GOI National Productivity council, 2009).
Snacks: The snacks market in India is estimated to be worth around USD 2 billion
from which organised segment accounts for half of the market share and is growing
at a rate of 15-20%. The unorganised share is around USD 1 billion and is currently
growing at the rate of 7-8%. Potato chips and potato based products occupy almost
85% share of snack market in India.(GOI National Productivity council, 2009).
Beverages: The market for carbonated beverages in India is worth USD 1.5 billion,
while the juice and juice based drinks market accounts about for USD 0.25 billion.
This sector is growing at a rate of 25%. The fruit drinks category is one of the fastest
growing segments in the beverages sector in India. With the rising health
consciousness among Indian consumers, focus is increasingly shifting towards
healthier eating and drinking habits. Asia Pacific (APAC) is the largest global market
for non-alcoholic beverages, while India stands among the largest consumers of non-
alcoholic beverages in Asia. With the economic development and increase in
urbanisation across the country, growth projections are very high in this segment.
Non-alcoholic beverage sector in India includes a wide variety of drinks like
packaged drinking water, carbonated soft drinks, energy drinks, sports drink, etc.
There are around 23,000 licensed liquor shops in India, and around about 10,000
outlets such as bars and restaurants. The distribution of alcohol varies according to
the states in India, sates like Tamil Nadu, Kerala and Andhra Pradesh the distribution
is controlled by the state government. On the other hand, in the states like
Maharashtra the distribution is relatively open, and new entrants can compete
effectively. The spirit market is highly regulated in India. The government controls
all the 33,000 outlets throughout the country through which the liquor is sold and
regulates the manufacturer, transportation and advertisement of alcoholic products.
There is high taxation in the liquor sector, so the companies have to set up their
manufacturing facilities in every state where they want to sell the products. Sarin and
Barrows (2005) suggests that despite being placed 39th in the world ranking for beer
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sector, the beer market in India is one of the largest emerging markets with 5.6
million bottles and is set for rapid growth in the coming decade. With estimated
around 85 million potential beer consumers set to be added in the next ten years, the
beer market will see penetration levels from 11 to 20 per cent per year. Dr. Krishna,
deputy general manager-strategic planning, Shaw Wallace Breweries Limited,
suggests that factors like rising incomes, changing lifestyle and removal of market
distortions will fuel the growth of the beer market. He further suggests that strong
beer segment is the fastest and largest growing segment currently enjoying 61 per
cent market share while the mild beer has 39 per cent share. A host of international
brands of beer have entered the Indian market over the past ten years in the mild beer
segment like Fosters, Corona, Becks, San Miguel, and Castle Lager, etc. Among
these Fosters made a great impact on the market and among the Indian brands in the
mild beer segment Kingfisher of United Breweries is the most popular one. Whiskey
is the largest segment of the spirits industry in India. According to the IWSR study
currently India is the largest whiskey consumer in the world, overtaking USA in
2001. The Indian made foreign liquor (IMFL) and the scotch segment is pegged at
79.5 million cases in India. The increasing elite class in the metropolitan cities has
given a big demand to premium whiskey and facilitating the entry of many foreign
companies like Seagrams. There are as well many representative offices of many of
the well-known foreign brands and there are some joint ventures also (Sarin and
Barrows, 2005).
The food processing industry in India has strong linkages with rural economy, as all
the raw materials are produced by farmers in rural areas. Hence any changes in food
processing industry, positive or negative will have a direct impact on economy of
rural India. The share of agro based industry in village level and rural industry in
terms of total employment, number of enterprises and gross value added is 78, 83
and 72% respectively. The food processing industry in rural areas is mainly
unorganised. According to NSSO classification, there are two types of setups, one is
establishment and other is own-account enterprise. The establishment is the one
which employs one or more hired workers on regular basis and own-account
enterprise is an enterprise which is run without any hired worker.
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3.4 Value chain in Food processing industry in India
The value chain in food processing industry in India begins from farm inputs and
ends at food retail stores and food services. The first phase of value chain includes
delivery of agro-inputs, i.e. agro-chemicals, seeds, fertilisers, etc. This phase also
includes production of crops and insurance of crops against natural disasters.
Procurement is also involved in this phase. The second phase includes the storage
and trading of produce. The absence of proper cold storage facility in India leads to
wastage of produce, which amounts as high as 35%. This cold storage problem is
marked as the most important challenge in food processing industry by the
entrepreneurs in a survey conducted by FICCI. This phase also includes
transportation for export, trading of sourced agro-produce and shifting of produce
from one place to another. The next phase consist of primary processing which
includes grading, sorting, waxing in case of fruit and vegetable segment, milling,
grading in case of grains. Then the next phase includes value addition of wheat into
noodles, wheat into bakery items, processed fruit and vegetables, extruded snacks
etc. In the next phase there is wholesale trading of value added products, branding of
products and export of produce. The final phase includes the food retailing and food
services, which implies retailing of value added foods by means of hotels,
restaurants, eat-outs, and retail stores. There is increase in value addition in every
segment of food processing sector with increase in demand for processed and
packaged foods.
3.5 Skilled workforce availability
According to Rias, there is a wide gap between skills needed and skills available.
There is a huge gap between demand and supply for skills in India. According to the
survey done by NSDC, there is a huge demand for skilled workers in all the stages in
food processing industry, especially for person with short-term vocational course
training. The demand for skilled human resource is continuously increasing in Indian
food processing sector. As organised sector is small compared to unorganised sector,
there is greater demand for skilled workers in unorganised sector rather than
organised sector. Many positive developments in the food processing sector have
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resulted in apprehension about the emerging skills deficits due to difference between
demand for specific skills and availability.
3.6 Government initiative
The government of India has recognised the importance of food industry for
economic progress. So the Government of India have set up some schemes and
policies to support the food processing industry in the country. Some of them are;
The Ministry of Food Processing Industries (MoFPI) has created a vision 2015
Action Plan. The Plan includes trebling the size of the food processing industries,
raising the level of processing of perishables from 6% to 20%, increasing value
addition from 20% to 35%, and enhancing India’s share in global food trade from
1.5% to 3%. According to the MoFPI, the Government of India is actively promoting
the concept of Mega food parks, and has planned to set up 30 mega food parks
across India. These mega food parks are estimated to attract FDI. The government
has released total budget of USD 23 million for the implementation of the scheme.
The government of India has also planned a subsidy of USD 22 billion for mega
food parks. The Indian government has established 60 fully equipped agri-export
zones (AEZs) across the country, in order to boost the agricultural and food
processing exports. The concept of Agri Export Zone are attempts to take a
comprehensive look at a particular products/produce located in a neighbouring area
for the purpose of developing and process is centred on a cluster approach of
identifying the potential products/produce, the geographical area in which these
produce are grown and adopting an end to end approach of integrating the entire
process, from the stage of production till it reaches the market. The government of
India helps in sourcing the raw materials, setting up the processing facilities; it also
provides finance at low interest rates and even matching with international buyers.
The export zones mentioned by the Agricultural and Processed Food Products Export
Development Authority (APEDA) is to increase international trade in agri-
commodities are an attempt to take comprehensive approach to encouraging trade in
specific commodities located in a specific area. For example in the state of Tail
Nadu, the AEZs focuses on grapes, mangoes and sapodilla, in state of Kerala-
vegetables, in state of Punjab- Kino, wheat and rice, in the state of Karnataka-
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vegetables and flowers, in the state of Maharashtra- mangoes, grapes and flowers.3.7
Food exports
According to Agricultural & Processed Food Products Exports Development
Authority (APEDA), India’s exports of processed food was around USD 7 billion in
2012-13, which include the share of products like mango pulp (USD 121.7 mm),
dried and preserved vegetables (USD 127 mm), other fruits and vegetables (USD
346.6 mm), groundnuts (USD 813 mm), Guar-gum (USD 425 mm), jaggery &
confectionery (USD 183.4 mm), cereal preparations (USD 448 mm), beverages
(USD 381 mm) and miscellaneous preparations (USD 342.4 mm). The food
processing industry in India is primarily export oriented. The geographical situation
of India gives it the unique advantage for connectivity to Europe, the Middle East,
Japan, Singapore, Thailand, Malaysia and Korea. One example indicating the India’s
location advantage is the value of trade in agricultural and processed food between
India and Gulf region. Retail industry is one of the largest sectors in the global
economy (USD 7 trillion), and the retail industry in India is going through a
transition phase. One of the prime factors for the non-competitiveness of the food
processing industry is because of the cost and quality of the marketing channels,
globally more than 72% of food is sold through super stores. India presents a huge
opportunity and is set for a big retail revolution. Indian retail market is the least
saturated of the global markets with a small organised retail and also the least
competitive of all global markets.
3.8 Changing food system in India:
Large business organisations are keen to expand into vegetable processing because
of the increasing consumption of vegetables among urban population in India. In
1970s, cereals accounted for more than half of all food expenditure in India. By
1990s, this proportion dropped to just over one-third. According to National Sample
Survey (NSS) data, cereal consumption in rural India declined by 23% between
1959-60 and 1993-94, while real GPD per capita doubled over the same period.
Consumption of fruits and vegetables, meat, dairy products has increased in the diets
of urban population. Economists in past few decades have closely followed the trend
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in cereals consumption and indicated that the per capita consumption and demand
has levelled off (Kumar, 1998). Reforms in domestic market started during the 1990s
and diversification in food supply has offered a wide choice in food to consumers,
leading to change in dietary patterns from cereals to high-value grains (wheat and
rice), livestock products (meat, milk, etc.), poultry, fisheries and horticulture (fruits
and vegetables). It is believed that household food security continues to be
vulnerable even though food security has been achieved at the national level.
The per capita consumption of different food commodities had changed across
different income groups over the past two decades (1983-2004). The changes can be
shows two types of effect: (i) changes in consumption pattern of food products of an
income group over time. Which is called as “structural shift” on account of
‘consumption diversification effect’ which is because of easier access to supply,
transformation in preferences and tastes and varying relative prices, and (ii) Changes
in consumption pattern as the consumer moves from lower income to higher income
group in the same year, this is called as ‘pure income effect’. These changes are the
result of increase in income level of the consumer. The per capita consumption of
cereals has reduced substantially over the years. The per capita consumption of high
value cereals like wheat and rice has increased on account of increase in income as
well as due to changes in preference and tastes, and also because of easy availability
of these grains due to good public distribution system and higher productivity.
However total cereals consumption has declined by 11 per cent to 21 per cent due to
diversification in dietary pattern towards horticulture and livestock products and also
because of rise in prices in real term of cereals. The annual per capita consumption
of pulses has declined by 13 per cent for lower income group and by 36 per cent for
higher income group, owing to their higher relative prices during two decades from
1983 to 2004. The per capita consumption of fruits, vegetable, edible oils, meat,
milk, fish, eggs and sugar has increased substantially in all the income groups. This
shift is substantial in the lower income group. The dietary shift form low-value food
to high-value food products has been prominent and pervasive for all the income
group.
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Cereals dominated in budgetary allocation across different food commodities in the
total food expenditure of all income groups. In 1983, the budgetary allocation for
cereals were 58 per cent for very poor households, 55 per cent in moderately poor
household 45 per cent for non-poor lower households and 33 per cent for non-poor
higher level households. In 2004, a consistent decline in the budgetary allocation for
cereals was observed across all income groups. A decline of 28.7 per cent was
observed in very poor group, followed by 26.8 per cent in moderately poor
household, 25 per cent in non-poor lower households and 23.7 per cent in non-poor
higher household groups.
For pulses, there has not been a significant change in budgetary allocation across all
income groups. It has been around 4-6 per cent of total expenditure on food. There
has been a rise in the budgetary allocation of 13.3 per cent for very poor group and
7.5 per cent for moderately poor group. On the other hand both non-poor lower and
non-poor higher group has a decrease in their budgetary allocation for pulses.
The budgetary allocation for fruits and vegetables in total food expenditure has
shown maximum change across all income groups. The rise in expenditure on fruits
and vegetables was maximum across very poor household and it decreases as income
level rises.
For edible oils, the budgetary allocation had shown second maximum rise after fruits
and vegetables, particularly across both very poor and moderately poor groups. The
change was 51 per cent for very poor and 35 per cent for moderately poor
households. This shows the rising trend in consumption of edible oil by poor strata
of the society. On the other hand, the non-poor higher household group has shown
the rise of only 1.6 per cent over the period from 1983 to 2004, indicating not much
change in their consumption for edible oils.
The share of milk has shown a considerable rise in the total share of food
expenditure. The change has been maximum for very poor group at 42.4 per cent and
21.9 per cent for moderately poor group, this shows a higher increase in
consumption of milk by the poor household group. On the other hand for the non-
Page 22

poor lower and non-poor higher the rise in budgetary allocation for milk has been
nominal around 2.5 per cent.
The budgetary allocation for sugar in total food expenditure has shown an interesting
trend. There has been maximum rise for very poor category at 17.96 per cent and 21
per cent reduction in the non-poor higher household group. The sugar consumption
level did not vary much across different income groups in 2004. It varied from 3.7
kg to 4.1 kg only across different income groups.
For fish, meat and eggs, the budgetary allocation in total food expenditure has shown
a consistent rise across all the income groups during the year 1983 to 2004. This rise
in budgetary allocation for fish, meat and eggs has been significant varying form 39
percent for the very poor household group to 25 per cent for non-poor higher
household group. This explains the rising diversification in consumption towards
livestock products across all the income group.
The share of total expenditure on other food commodities has shown an increasing
trend during the period 1983-2004. The rise has been consistent across all the
income groups throughout the period, but the change was maximum for very poor
households by 32.9 per cent and decreased with increase in income category to 24.0
per cent for non-poor higher household group.
From the data provided, it is clear that the reduction of 24-28 per cent in the
budgetary allocation for cereals has been diverted to higher allocation to high-value
food commodities such as fruits and vegetables, milk, fish, meat and eggs across all
income categories. This change in food allocation indicates an increasing
consciousness for nutrition as well as the urge to shift the consumption form the low-
value cereal based food to high-value, nutritious and tasty food products as income
increases. This trend was visible more in lower income groups than higher income
groups.
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3.9 Summary
This chapter highlighted the food processing sector in India. The background of
Indian food processing sector, the value chain in food industry, the availability of
skilled workforce and the changing food system in India was also discussed in this
chapter. In the next chapter, factors which are influencing the change in consumer
demand for food are determined.
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Chapter 4: FACTORS INFLUENCING CHANGE IN CONSUMER DEMAND
4.1 Introduction
In the previous two chapters, global food processing sector and factors causing
change in global food demand, and Indian food processing industry were discussed.
In this chapter, the factors which are influencing the change in consumer demand for
food in India is explained. The aim of this chapter is to examine and understand the
factors such as globalisation, rising income, rising middle-class, rapid urbanisation,
changing lifestyle, increasing health consciousness, etc., which are responsible for
drastic change in consumer food demand. The key challenges for food processing
sector and the strength that India enjoys is also discussed in this chapter.
4.2 Consumer demand
Food purchasing behaviour of the consumers in India has significantly changed due
to an increase in the per capita disposable income, global interaction, information
and communication technologies, rising education levels, health awareness and rapid
urbanisation, Movement of households towards higher income groups, changes in
family structure and lifestyle. The purchasing behaviour of the consumers for food
and grocery products has always been influenced by a number of economic,
psychological, cultural and lifestyle factors. In the recent decades, sustained
economic growth and increasing urbanisation in India are fuelling a rapid growth in
the demand for high value foods like fruits, vegetables, milk, meat, eggs and fish. On
an average, an urban household in Uttar Pradesh (India) spends about 47 percent of
its consumption expenditure on food items, out of which, 30 per cent is spent on
grocery items and about 16 per cent is spent on fruits and vegetables. Increase in
income, particularly in the lower and middle income families, is having a significant
impact on the demand of food products, because these groups tend to spend a
relatively higher share of their income in food consumption. Middle income and
urban families also spend a greater part of their income on upgrading and
diversifying their diet towards higher value products, eating out more often and
consuming more processed and convenience food products. In addition, a growing
consumer preference for shopping convenience is promoting the growth of modern
Page 25

retailing in India. The growth in modern retailing in tern demands greater efficiency,
quality and safety standards in food supply chain. Consumers in India have become
more discriminating in their food products choices and have started emphasising
more on quality of the product, freshness and convenience. With the emergence of
the supermarkets and hypermarkets culture in urban India, consumer preference for
packaged food products has increased significantly in recent years. The preference
for convenience food and an increase in the number of working women are some of
the important factors driving a strong growth of packaged food products (Goyal and
Singh, 2007). Besides, consumers in India have started preferring quality food intake
and are becoming more conscious in terms of health, nutrition and food safety issues.
With the evolution of the food retail modernisation and rapid changes in the
purchasing behaviour of consumers, the retail market for food and grocery is
growing at a high rate. To seize the opportunity of a growing organised retail market
in India, big corporate organisations are foraying into this segment. These
organisations are in the process of investing huge amount of money in order to create
retail chains throughout the country.
4.3 Westernisation & globalisation:
July 1991 marked the beginning of globalisation in India. In 1991, India opened its
market to the world. Form then many multi-national companies tried to come in
India and take advantage of huge consumer base in India. Some of them were
successful in setting up food industries in India like McDonalds, Domino’s, Pizza
hut etc. These companies gave rise to the western trend of fast foods. Indian people
were quick to adopt this western culture of fast food, as it was new to the market.
Globalisation in Indian food industry had both positive and negative effect. Positive
effect was that it created business opportunities, brought investments in Indian food
industry and generated employment. But the negative effect was that it led to the
adoption of western culture of fast food and abandoning the traditional food. More
and more people are consuming fast foods, causing the rise in obesity cases in the
country. One of the expected impacts of globalisation on dietary patterns of Indian
people relates to higher incomes. The consumption pattern has shifted from cereals
to more expensive protective foods. The second expected impact is that people have
Page 26

shifted towards more processed foods. Third impact is the market influence of
popular fast foods promoted through advertising like McDonalds, KFC etc. Due to
westernisation Indian people have started to move towards the fast food and
convenience foods. This is the major change taking place in the consumers in the
urban areas.
4.4 Rise in income:
India is one of the fastest growing economies in the world. In the past decade
(2000-2010), India’s gross domestic product (GDP) has grown at an average rate of
7.27 percent. According to the Planning Commission estimates, the economy is
projected to grow at the rate of 9-9.5 percent during the 12th Five Year Plan period
(2012-2017). GDP growth has been accompanied by a rise in per capita income.
The real household disposable income has more than doubled since 1985. With the
rise in income, consumption patterns have changed and a new middle class has
emerged, which is growing at a fast pace. It is believed that in the next decade
middle class would be the dominant section of the Indian population.
Gross domestic product (GDP) of India has grown at a steady rate. While a
slowdown is expected over next few years, India will continue to be amongst the
fastest growing economies in the world. India’s rise in income has turned it into one
of the largest consumer markets in the world. The average per capita income (PPP)
has increased from USD 1,500 in 2000 to USD 3,700 in 2013. And the per capita
(PPP) is estimated to reach US$ 12,800 in the year 2020. Food is the biggest
consumption category in India which accounts for 31% of the average consumer’s
budget. A higher income is expected to drive shifts in dietary patterns from basic
subsistence food to more value added food categories like health and wellness
products. People with higher income prefer to shop at supermarkets because of
convenience, higher standards of hygiene and an attractive environment for
purchasing food. As wages are increasing, people are willing to pay for convenience,
which frees up their time for income and they can involve more in income earning
activities. They are demanding more processed foods with shorter preparation times.
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With higher incomes and increasing health consciousness, consumers in India have
started adopting preventive lifestyle over a curative approach.
4.5 Reducing poverty and Rise in middle-class:
Globally there is no definition of the middle class. However, the definition varies
across the developing and developed countries. There have been a few studies that
have tried to define the middle class. For instance, Birdsall et al. (2000) defined the
middle class as those with incomes between 75 percent and 125 percent of the
median in each country. Banerjee and Duflo (2008) identified the middle class in
developing countries as those earning between $2 and $10 a day. The World Bank
classifies economies into different income groups that include categories such as low
income — $1,005 or less, lower middle income — $1,006 to $3,975, upper middle
income — $3,976 to $12,275 and high income — $12,276 or more. In India there is
no official definition of the middle class. Survey-based studies such as those
conducted by the National Sample Survey Organisation (NSSO) classify Indian
households into different income groups but does not specifically define the middle
class. The National Council for Applied Economic Research (NCAER) define the
Indian middle class as those whose annual household income falls in the income
group of Rs. 2,00,000 - Rs.10,00,000 ($4,000-$21,000). The majority of other
studies such as the McKinsey & Company (2007) and Saxena (2010) have used the
NCAER data and definitions of the Indian middle class.
With rapid economic growth over the last decade, the income of the average
household in urban India has grown three times between years 1994 to 2010. In this
period, economic growth has not only lifted millions of households out of poverty,
but it also gave rise to an emerging middle class in India. These emerging middle
class has new consumption patterns and potentially a strong interest in health and
nutrition foods. The poverty in India has reduced from 407 million (34.2% of total
population) in 2004-05 to 269 million (22% of total population) in 2011-12. The
poverty in India is reducing at a rate of 2% per annum. If this rate continues, this
could lift 580 million people above empowerment line, leaving 100 million (7% of
total population) below empowerment line and only 17 million (1% of total
Page 28

population) below poverty line by 2022. This will virtually eliminate extreme
poverty in India in a decade from now. And this is all possible because of strong
government policies and rapid growth in economy. About one in twenty Indian
people are in middle class by American standards, which if translated into total
population comes to 60 million individuals. According to the McKinsey Global
Institute forecast, by 2025, the Indian middle class will grow to 41% of total
population, making a population of 583 million individuals. The report also says that
the share of total consumption by the middle class people will grow from 18% in
2005 to 59% in 2025. More middle class people mean more expenditure on quality
food and convenience food.
4.6 Rapid urbanisation:
Currently near about 28% of Indian population resides in urban areas and is expected
to reach 32% by 2020. According to United Nations, India has the highest rate of
change of the urban population among the BRICS nations, which will remain above
2% annually for next three decades. At this rate, an estimated 854 million people
(58% of total population) will live in Indian cities by 2050. Urbanisation and
growing incomes will have a huge impact on lifestyles and exposure to value added
and packaged foods. The process of urbanisation and global integration has brought
new dietary needs and general lifestyle changes. It has led to major shifts in demand
across different types of food, i.e. the urban people are shifting from inferior foods
towards more variety and higher value foods. The rising need for convenience
foods, along with the rise of lifestyle will trigger huge demand for value added
packaged products. Urban areas experienced a growth of 14.4% in the packaged
food market in 2008/09.
4.7 Changing Lifestyle:
In India, women are participating more in the labour force, especially in the service
sector. Service sector tends to be more urban in nature, which is why, there is an
increased demand in urban areas for certain foods that reduce the preparation time of
food in general and also is associated with lifestyle and income improvements. The
increase in opportunity cost of women’s time has increased the demand for non-
Page 29

traditional ‘fast-food’ in India. And also due to the small family size of the working
couples, it enables families to eat outside the home on a more regular basis and
demand more convenience processed food. An emerging generation of Indian
women now exists that have neither the necessary knowledge nor the time to prepare
traditional Indian meals on a regular basis (Lau, 2010).
4.8 Increasing Health Consciousness:
There has been a growing focus amongst Indian people on health and wellness in
recent years. This is mainly influenced by the education and media, with increased
television and radio attention on nutrition and health. This is resulting in a strong
enthusiasm among consumers to shift to a healthier diet. In a survey by KPMG, it
says that Indians place a high priority on food safety, with 65% of people
interviewed agreed that food grown in country is safer than imported food. Both men
and women are equally interested in knowing the relationship between food and
health, but more women tend to use the nutritional information on the label. Since
Indian consumers are taking more interest in taking control of their personal health
than ever before, more and more consumers are taking seriously the contents of the
product and the nutritive value. Detailed and descriptive nutritional information on
the product packaging is necessary in gaining the trust of the consumer. Food and
beverages marketed with ‘freshness’ claims have more influence on consumers,
compared to ‘authentic/home-made/original and no artificial additives’ in India.
Traditionally, Indian consumers have long believed in the benefits of consuming
freshly prepared food at home. The ongoing preference for ‘fresh’ food is influenced
by increasing understanding of the benefits of food products which are free from
artificial additives or are made from ‘natural’ ingredients. Freshness linked claims
gain precedence over authenticity and home-made claims in consumers’ choice of
food products. In India the key consumer preferences are in areas of cardiovascular
health, digestive health, low sugar and natural products. The increasing education
regarding health foods is reflected in the increasing usage of supplements like
probiotics, omega-3/omega-6 fatty acids etc (Umali-Deininger and Sur, 2007).
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4.9 Key Challenges
The future of the Indian farmer depends on the success of the food industry as India's
prosperity is predominantly linked to the growth of incomes in the agrarian sector of
the economy. Increasing liberalisation of the economy has tried to lift the protection
that the food and agriculture sector once enjoyed in the country. This has exposed the
sector both to the opportunities and challenges of the global food economy. The
market forces are compelling the Indian agriculture producers to increase the quality
of their farm produce while continuing to maintain their cost competitiveness in
order to be able to compete effectively in the global food market. Even in the
domestic market, rising per capita incomes and changing demographic profile of the
population has ensured the growing demand for processed and convenience foods.
Increasing consumer awareness about health and hygiene has shifted the focus of the
market to "safe" foods. The Indian food-processing sector is undergoing a veritable
revolution, all the way from the plate to the plough. Indian food processing industry
has seen significant growth and changes over the past few years, driven by changing
trends in markets, consumer segments and regulations. These trends, such as
changing demographics, growing population and rapid urbanisation are expected to
continue in the future and, therefore, will shape the demand for value added products
and thus for food processing industry in India. The Government of India’s focus
towards food processing industry as a priority sector is expected to ensure policies to
support investment in this sector and attract more FDI. India, having access to vast
pool of natural resources and growing technical knowledge base, has strong
comparative advantages over other nations in this industry. The food processing
sector in India is clearly an attractive sector for investment and offers significant
growth potential to investors.
The most crucial challenge today that the Indian food processing industry is facing is
the lack of suitable infrastructure in the shape of cold chain, packaging centres, value
added centre, modernised abattoirs etc. Improvement in general infrastructure is also
a must requirement for the industry to progress. Some other important initiatives that
are needed are • Promotion of appropriate crossbreeds while conserving indigenous
breeds of livestock • Establishment of livestock marketing system • Promotion of
Page 31

rural backyard poultry in a cooperative marketing setup • Development of
cooperative dairy firms • Enhancing livestock extension services • Encouraging
private veterinary clinic • Institutionalising a framework for utilising synergy
between restoration and creation of water bodies for water harvesting and fishery •
Provision of an insurance package to avoid distress (FICCI, 2010).
Lack of Infrastructure-(organised & unorganised retail)
The inadequate support infrastructure is the biggest bottleneck in expanding the food
processing sector in terms of both exports and investments which includes
inadequate cold storage and warehousing facility, fragmented supply chain,
inadequate road, rail and port infrastructure. In India there inadequate modern
logistics infrastructure such as logistics parks, last mile connectivity, integrated cold
chain solutions, dependence on road than rail, lack of customised transportation,
technology adoption and government support are some of the problems that exists in
supply chain and logistics sector in India. Key concerns in this area are:
Long and fragmented supply chain: Companies in the food processing sector in
India face problems on the incoming supply chain in terms of inconsistency of inputs
quality, high level of wastage till the product reaches the manufacturing facility. This
is due to the long and fragmented supply chain which results in wastage of food
products and as a result of price escalations. Due to this companies are required to
invest in creating backward linkages through contract farming by which the
company would be able to control the inputs at an assured quality level with minimal
wastage (FICCI, 2010).
Inadequate cold storage and warehousing facility: Cold storage facilities in India
can accommodate 21.7m tons of produce with compared with a requirement for
more than 31m tons which indicates a shortfall of 10m tons of cold storage facilities
for agriculture produce (KPMG report, 2009). Moreover cold storage facilities in
India are available mostly for single commodity like potato, apple, orange,
pomegranate and flowers etc. which results in poor capacity utilisation. Food
processing industry which is mostly based on perishable products cannot grow and
survive without a strong and dependable cold storage supply chain. Warehousing
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which is a key requirement for overall supply chain in food processing sector is
mostly dominated by unorganised players. Currently in India about 20% of
warehousing is organised in which 70% of the organised market is controlled by
government. Involvement of more private players will help in the better development
of warehousing facility (FICCI, 2010).
Challenges related to road, rail and port infrastructure: National highways in
India account for only 2% of the total road network, but carry out 40% of all cargo
transport by road. This puts a lot of pressure on national highways due to high traffic
volumes and as a result delays in transit. The balance of road networks (not
including highways) is not well developed which results in increased transit time and
the extent of damage to cargo. On an average trucks/trailers in Indian covers a
distance of 250-300 km/day whereas the international norm is 600-800 km/day. Most
roads in India are designed to carry a maximum gross weight of 16.2 tons whereas in
US its 36 tons. Rail haulage networks in India suffers from several key issues which
limits the possibility of rail being used for transportation of food products. Important
issues are the lack of last mile connectivity form rail transporters; insufficient
services due to the current monopoly in rail haulage leading to delays etc.; road
transport is preferred over rail due to flexibility provided by road transport operators.
Port infrastructure is a key concern for external trade. Even though port capacity is
increasing over the past few years, lack of connectivity to these ports leads to
escalation in costs and delay in the good transfers. Also, high dependence on manual
labour and low technology usage have a severe effect on turnaround times at ports
which have a direct impact on overall supply chain lead time. This can cause adverse
effect especially for food and food products which has a limited shelf life. In India,
the cost of an import container costs around 500-520 USD per container as compared
to around 300-350 USD in ports in developed countries (FICCI, 2010).
Obesity
Due to industrialisation and urbanisation in developing country like India, the
standard of living continue to rise, Obesity and weight gain are beginning to pose a
severe threat to the health of citizens in India. According to World Health
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Organisation’s global database, pre-school obesity in India is about 1%. Use of
commonly used indicator of pre-school childhood malnutrition (weight for height)
shows the problem of obesity among stunned children. The factors like repeated
episodes of malnutrition and nutritional rehabilitation are known to alter body
composition and increase the risk of obesity. Childhood obesity increases the risk of
obesity in adulthood and parental obesity interacts strongly to alter this risk and
increased prevalence of obesity in childhood are encouraged by several interactive
factors. Developing countries like India, which are rapidly urbanising, demonstrate
dramatic increase in fat intake, increase in energy intake along with increased level
of sedentariness. Lifestyle changes resulting in decreased physical inactivity and
increased sedentary behaviour are important in contributing to obesity in children.
This is explained by children spending more time in physically passive behaviours
like watching TV playing games on computer, talking on telephone, etc. (Pradeepa
and Mohan, 2002)
There is less reliable and representable data on obesity among adults in India.
However, there are several reports from various parts of India, mostly urban, which
provides some insight into the problem. A study in Mumbai showed that the
prevalence of obesity among young adult males varied from 10.7% to 53.1%, while
another report form Delhi which was done on sample of 13,414 adults aged between
25 to 64 years old. This report showed an overall prevalence of 27.8% of obesity.
The study also indicated that obesity was higher in females (33.4% vs. 21.3% among
males) and that the obesity was associated with hyperlipidaemia,
hypercholesterolemia and lower level of physical activity. A report from the
Nutrition Foundation of India suggests that the prevalence of obesity varies with
socio-economic status in urban India. The people in upper strata having higher
prevalence rates of 32.2% among males and 50% among females, than the people in
middle class with 16.2% males and 30.3% females with obesity, followed by people
in lower socio-economic groups with 7.0% males and 27.8% in females (Shetty,
2002).
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Inconsistent government policies
Most of the policies developed for food processing sector by the central government
are generic. Respective states have to develop their own policies which are
coordinated with the socio-economic and agri-livestock resource base in order to
benefit from central government policies. The policy from the centre and state
government have encouraged Public Private Partnership (PPP) model. This model is
designed to overcome various constraints like non-availability of adequate
infrastructure facilities, cold chain, lack of adequate quality control and testing
facility, packaging and grading centres etc. The food processing sector in India is
governed by multiple policies rather than a single comprehensive policy in food
processing. Food laws which governs food processing industry includes nine
ministries, comprising 13 central orders alone, in addition state government have
their own control policies. According to National Bank for Agriculture and Rural
Development (NABARD), village level agro-industry does not come under any
single ministry. Because of this only a fraction of village level agro-industries are
registered. In context with food regulation laws, the Indian food regulations includes
various food policies that have been implemented at different point of time, and are
under the control of various ministries of Government of India. Historically, they
were introduced to supplement each other while achieving food sufficiency, safety
and quality. This incremental approach by the government has led to incoherence
and inconsistency in the food processing regulatory scenario. The multiplicity of
different ministries and administering authorities at both central and state levels has
resulted in a complex regulatory system which is not a good while adding an
additional burden on the food processing industry.
4.10 Strengths and opportunities that India enjoys
India is the seventh largest country, with extensive administrative structure and
independent judiciary, a sound financial & infrastructural network and above all a
stable and thriving democracy. Due to its diverse agro-climatic conditions, it has a
wide-ranging and large raw material base suitable for food processing industries.
Presently a very small percentage of these are processed into value added products.
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It is one of the biggest emerging markets, with over 1 billion population and a 250
million strong middle class. Rapid urbanisation, increased literacy and rising per
capita income, have all caused rapid growth and changes in demand patterns, leading
to tremendous new opportunities for exploiting the large latent market. An average
Indian spends about 50 per cent of household expenditure on food items. Demand
for processed/convenience food is constantly on the rise. India’s comparatively
cheaper workforce can be effectively utilised to setup large low cost production
bases for domestic and export markets. Liberalised overall policy regime, with
specific incentives for high priority food processing sector, provide a very conducive
environment for investments and exports in the sector. Very good investment
opportunities exist in many areas of food processing industries, the important ones
being : fruit & vegetable processing, meat, fish & poultry processing, packaged,
convenience food and drinks, milk products, etc.
4.11 Summary
In this chapter, the factors which are having a major influence on changing consumer
demand for food such as rising income, rising middle class, rapid urbanisation,
changing lifestyle, effect of westernisation were discussed. In the next chapter, the
methodology used for this study is explained.
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Chapter 5: RESEARCH METHODOLOGY
5.1 Introduction
In the previous chapter the researcher explained the literature about the changes
occurring in consumer behaviour regarding food consumption in India for past few
decades. There has been a significant change in consumption pattern form low level
foods to higher level foods from 1950 to 2011. The research question for this study is
restated here:
What are the consumer trends and demands for food products in India?
5.2 Research Design
In this study, the researcher used a mixed method design. Mixed method design is a
design which involves collecting, analysing and mixing both qualitative and
quantitative data in a single study. Its central premise is that the use of both
qualitative and quantitative approaches in combination provides a better
understanding of research problems than either approach alone (Creswell, Plano
Clark, et al., 2007). The rationale for mixing both qualitative and quantitative
approaches was that neither of them are sufficient by themselves to capture the
trends and demands of the Indian consumers regarding food products. Qualitative
and quantitative methods when used in combination, complement each other and
allow for more complete analysis (Green, Caracelli, & Graham, 1989, Tashakkori &
Teddlie, 1998).
Qualitative research is an inquiry process of exploring and understanding of the
topic, where the researcher developed a complex, holistic picture, analyse words,
reports detailed views of informants, and conducts the study in natural setting
(Creswell, 1998). In this approach, the researcher made an attempt to explore and
understand the consumer behaviour related to food. In qualitative research,
collection of data is done form those immersed in everyday life of the setting in
which the study is framed. Data analysis is based on the values that the participants
observe from their day to day life. Ultimately, “it provides an understanding of the
problem based on multiple contextual factors” (Miller, 2000).
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In quantitative research, the researcher relied on the numerical data. Statistical
significance can be used to anticipate with great extent of confidence that a similar
result would be achieved again in future research. Statistical analysis can have two
strategies: descriptive and deductive results. Descriptive analysis is a useful tool to
other analysis in order to give a picture of characteristics of the sample. Deductive
analysis anticipates what will happen in future, by showing where relationship
pattern exist which can be used to guess future events. Quantitative data, “Helps in
making judgements when there is insufficient information to be certain of what will
happen” (Bryars, 1983). To avoid attributing cause to statistically significant results
care must be taken, although a relationship may exist, the direction of influence
between the variables should not be assumed but must be tested.
While designing a mixed methods study, three issues were considered: Priority,
implementation and integration. Priority referred to which method either quantitative
or qualitative is given more emphasis in the study. Implementation referred to
whether the qualitative and quantitative data collection and analysis in sequence or
in chronological stages, one following another, or in parallel or concurrently manner.
Integration referred to the stage in the research process where the connecting or
mixing of qualitative and quantitative data occurs.
5.3 Mixed Methods research
Mixed Methods research is a research design with philosophical assumptions as well
as methods is inquiry. As a methodology, it involves philosophical assumption that
guide the direction of the collection and analysis of data and the measure of
qualitative and quantitative approaches in many phases in the research process. As a
model, it focuses on collecting, analysing, and mixing both qualitative and
quantitative data in a single study or series of studies. Its central premise is that the
use of qualitative and quantitative approaches in combination provides a better
understanding of research problems than either approach alone.
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5.4 Exploratory Method
The intent of the two phased Exploratory Design is that the results of the first
method (qualitative) can help develop or inform the second method (quantitative)
(Greene et al., 1989). This design is based on the basis that an exploration is needed
for the topic for one or several reasons. This design begins with qualitative study
because it is best suited for exploring a phenomenon (Creswell, Plano Clark, et al.,
2003). This design is useful when a researcher needs to develop and test an
instrument as none is available (Creswell et al., 2004) or to identify important
variables to study by quantitative method when the variables are not known. This
design is also useful when a researcher wants to generalise results to different groups
(Morse, 1991), to test aspects of an emergent theory or classification, or to explore a
phenomenon in depth and then measure its prevalence (Creswell, Plano Clark, et al.,
2007).
5.5 Exploratory Design Procedures
This design starts with qualitative data, to explore a phenomenon, and then builds to
a second, quantitative phase. (fig.). In this design, the researcher builds on the results
of the qualitative phase by developing an instrument, identifying variables, or stating
propositions for testing based on a framework or an emergent theory. These
development connects the initial qualitative phase to the subsequent quantitative
component of the study (Creswell, Plano Clark, et al., 2007).
Variants of the exploratory design: This design has two common variants: the
instrument development model and the taxonomy development model. Both of these
models begin with an initial qualitative phase and ends with a quantitative phase.
They differ in the way the researcher gives relative emphasis and connects both
phases. In this research, the instrument development model was used.
Instrument development model is when the researcher needs to develop and
implement a quantitative instrument based on qualitative findings. In this design, the
researcher first explores the research topic with a few participants by using
qualitative method. The qualitative findings then guide the development of
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information and scales for the qualitative survey instrument. In the second phase of
data collection, the instrument is implemented and validated by quantitative method.
In this design, the qualitative and quantitative methods are connected by the
development of instrument items. Researchers using this variant often emphasise the
qualitative aspect of the study (Morse, 1991).
According to Creswell et.el., the strengths of sequential exploratory mixed methods
are: straightforward to design, implement and report, and the inclusion of
quantitative elements makes qualitative inclusion more acceptable to quantitative
biased audiences. Creswell suggests that such a design is ideal when the variables
are unknown and to be investigated and where elaboration of findings is required.
Weaknesses of sequential exploratory design is that it requires reasonable time frame
to implement, and analysis of the qualitative data must conclude which can be useful
for the subsequent stage.
This study used one of the popular mixed methods design in market research i.e.
instrument development model in sequential exploratory mixed method design,
consisting of two distinct stages (Creswell, 2007). In the first phase, the qualitative
data were collected first, using an open end type questionnaire. The goal of the
qualitative data was to explore and identify the current trends and demands for food
in Indian consumers and to build an instrument. Second phase consisted of the
administration and testing of the instrument in general population sample. The
rationale for this approach is that the qualitative data and results provide a general
picture of the research question, i.e. what are the current trends and demands for
food products in India, while the quantitative data and its analysis will test the
themes and codes on a general population statistically. The process of this study is
graphically represented in figure 1 (Creswell, 2007).
!
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Fig 1. Sequential exploratory mixed method design

The priority in this design is given to the quantitative method, because the
quantitative research represents the major aspect of data collection and analysis in
the study. A smaller qualitative component goes first in the sequence and is used to
explore the trends and themes for food demand in India. The results of the two
phases will be integrated during the discussion of the outcomes of the whole study.
An advantage of using mixed methods approach in this study is the flexibility
afforded to the researcher to carry out numerous data collection and analysis which
best suits the research question or problem. This is characteristic of the pragmatism
paradigm which contains singular or multiple phenomenon, is extremely practical in
the choice of data collection techniques, which allows the researcher to move
between unbiased and acknowledged bias and uses both qualitative and qualitative
data (Creswell, 2007).
5.6 Phase I: Qualitative
5.6.1 Introduction
In the phase I of the research, qualitative open ended questionnaire was used. The
rationale of using open end questionnaire was to explore the topic and to gain
maximum information from the consumers by asking open end questions. From this
open end data, the researcher found out the common themes which were then used in
phase II of the study.
5.6.2 Data collection
The first, qualitative phase of study was focused on identifying and exploring the
factors that affect everyday food consumption pattern of consumers. An open end
questionnaire survey was used for data collection. The primary technique for
collecting the qualitative data was a self-developed questionnaire, containing
demographics questions and open end questions, which are organised into four
sections.
The survey questionnaire will be web-based and accessed through URL, which will
be sent to all the specifically selected samples. One of the advantages of web-based
surveys is that participants’ responses will automatically be stored in the database in
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text format and can be easily transferred to qualitative analysis software like NVIvo
etc. The URL will be sent through email to the samples to their last known working
email addresses. A cover letter page will be available on the first and second page of
the questionnaire which will include the study title, purpose of the study, the
assurance of confidentiality, contact details of the researcher in case the samples
have any doubt or questions and the instructions for the survey.
The survey questionnaire was pilot tested on 3-5 specifically selected samples. The
goal of the pilot study was to validate the questionnaire and to test its reliability. 3-5
samples who qualifies all the criteria were randomly selected for pilot study. These
participants were excluded from the following phase II qualitative study. The results
of the pilot test helped stability and internal consistency reliability and content
validity of the questionnaire. Based on the results of the pilot test, the survey items
were revised to improve the quality of the questionnaire.
A week before the survey was sent to the participant via email, they received a
notification from the researcher describing the purpose of the study, their role in the
study and the importance of their input for the study. This helped to escape a low
response rate, which is typical for web-based surveys. To decrease the response rate
error and seek relatively high rate of response of the survey, a two phase follow up
reminder was used in case the participants forgets to fill up the survey. To those
participants who did not respond by the set date (1) seven days after sending the
URL, an email reminder was sent; (2) two weeks later if the participant didn’t fill up
the survey, second email reminder was sent stating the importance of the
participant’s input for the study.
5.6.3 Validation and ethics
To determine the validity of the findings and credibility of the information and
whether it matches reality, four primary forms were used in the first, qualitative
phase of the study. (1) triangulation- converged different sources of information
(surveys and documents); (2) member checking- once the themes were identified, it
was taken back to the participant to cross check whether they meant the same; (3)
provided rich description to convey the findings; and (4) external audit- asked a
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person outside the project who has good knowledge of research methods, to conduct
a throughout review of the study and report back (Creswell, 2003).
Following the qualitative research design and piloting of the questionnaire which
was used in the surveys, ethics approval were sought for the process of collecting
data from the participants. The survey instructions conveyed that information given
by the participants would remain confidential, and that the primary purpose of the
survey questionnaire was to gather subjective data regarding the food consumption
pattern. A plain language statement was also attached to the questionnaire
conforming their participation.
5.6.4 Sample unit
A very specific samples were selected for the qualitative survey. Sample for the
study consist of middle aged individuals (indicated as consumer in this study), in the
age group of 25 to 40 years, they were married, doing a professional job and the
education level is graduate or higher, and those who cooked at home every day. The
samples were drawn from Pune city. This segment of population were selected
because they were the new modern population with higher level education and a
professional job and have an access to latest technologies, amenities and good
exposure to globalisation. This sample was a good example of rising middle class in
India.
5.6.5 Method
The data was collected using a structured questionnaire. The survey questionnaire
were sent to the target consumer by email and were requested to fill when they had
free time, so that they can freely express their opinion. Due care was taken before
sending the survey questionnaire by asking few questions about their cooking habit,
education, profession and marital status to make sure that the target consumer fulfil
the sampling requirement.
The questionnaire had the following four sections:
Demographics of the consumer such as age, education level, marital status, income,
occupation;
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Consumer’s everyday cooking pattern, and the challenges they face while cooking
everyday meal;
Consumer’s everyday eating pattern, their opinion about eating out and where and
what do they prefer to eat when they are not cooking at home;
Consumer’s grocery and food products shopping pattern, from where they purchase
their food and the important attributes they take into consideration while making the
purchase.
Sample size: Phase I of the study included qualitative study, so author used open end
type questionnaire, the survey were given to few selected consumers to get in-depth
information about their behaviour. Questionnaire were sent to 20 consumers by
email, from those 20, 13 consumers responded. So 13 questionnaires were selected
for analysis.
5.6.6 Data Analysis
In the qualitative analysis, data collection and analysis proceed simultaneously
(Merriam, 1998). The researcher started analysing the data for themes while still
collecting the data and continued to search for themes throughout the study. After
receiving all the responses, the texts responses obtained from the open ended type
questionnaire were coded and analysed for themes with the help of the Qualitative
Software and Research (QSR) NVivo 10 software for qualitative data analysis.
The steps in qualitative analysis includes: (1) preliminary exploration of the data by
reading through the transcripts and writing memos; (2) coding the data by labelling
the text; (3) using codes to develop themes by combining similar codes; (4)
connecting and interrelating themes; (5) constructing a narrative (Creswell, 2002).
To strengthen the further discussing, the visual data display were created to show the
evolving conceptual framework of the themes and relationships in the data.
Data analysis involved developing a detailed description of each phase of cooking
pattern, eating pattern and purchasing pattern. During the data analysis the researcher
situated the case within its context so that the phase description and themes were
related to the specific activities and situations involved in the phase (Creswell et.el.,
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2002). Based on the analysis, the researcher provides a detailed narration of the case,
using elaborate perspective about some factors or some major themes
5.7 Phase II: Quantitative
5.7.1 Introduction
This research is driven by the question “what are the current trends and demands for
food products in India?” A two phase sequential methodology was used and found to
be appropriate for this research process. Phase I qualitative data has been collected
and analysed. Results highlighted the most important factors for the consumers were
time consumption, quality and variation, while price, shelf life etc. where among
others.
This section introduces phase II of the research which is a quantitative method. The
chapter then reviews the methods adopted for phase II data collection, data analysis
etc.
5.7.2 Data collection
The second, quantitative phase in the study focused on explaining the results
obtained in the first qualitative phase. Structured close ended questionnaire were be
used for collecting and analysing the qualitative data. The common themes found
form the first phase qualitative research were used for preparing the questionnaire
via google forms. Common answers by the respondents were used as options in the
questionnaire. The question type used in the questionnaire were of multiple option
type.
The survey questionnaire was web based and accessed through URL, which was
circulated to random sample as well as on social media and also via email. The
responses from the survey were stored in an EXCEL file and then were transferred to
SPSS software for further analysis.
5.7.3 Reliability and validity
Reliability and validity of the instrument in quantitative research are very important
for decreasing errors that might arise from measurement problems in the research
Page 45

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