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Ife Main 02 12 08


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This presentation was used by me while speaking at the Inaugration ceremony of IFE India 2008 at New Delhi on 2nd December, 2008. IFE India is a premier Food Drink and Hospitatlity Event in India

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Ife Main 02 12 08

  1. 1. Sanjay Sethi, VP - Food and Agriculture, Technopak 2 nd Dec, 2008 Food Retailing in India
  2. 2. The Indian Market <ul><li>The total population is 1.138 billion of which the urban: rural divide is in the ratio 3:7 </li></ul><ul><li>The total food and grocery imports was valued at US$ 5.9 billion and exports at US$ 9.2 billion in ’07 </li></ul><ul><li>The aggregate urban household consumption is projected to grow at 9.4% by 2025 </li></ul><ul><li>Over the past few years, the concept of shopping has changed in terms of the format of retail business and the Indian consumer's buying behavior </li></ul><ul><li>Modern retail formats have mushroomed in the metros and mini-metros, and over the last few years have also begun to establish a presence in the next rung of cities, exposing shoppers to new shopping, entertainment and food options, all under one roof </li></ul>
  3. 3. Today’s Consumer….. <ul><li>Changing demographics </li></ul><ul><li>Young earning population </li></ul><ul><li>60% below 24 years </li></ul><ul><li>81% population below 45 years </li></ul><ul><li>Brand conscious </li></ul><ul><li>More acceptance of new concepts </li></ul><ul><li>Changing aspirations </li></ul><ul><li>More nuclear families with dual income </li></ul><ul><li>75 million households, called ‘consuming classes’ with annual income </li></ul><ul><li>between £650 to £ 60,000 </li></ul><ul><li>Convenience overriding price consideration </li></ul><ul><li>Higher disposable income and easier financing options </li></ul><ul><li>1 Million Households in creamy layer with income at par with International </li></ul><ul><li>Lifestyle values </li></ul><ul><li>Global lifestyle: media exposure and overseas travel </li></ul><ul><li>Look at me (LAM) the most important criteria </li></ul>
  4. 4. … is Spending on Many More Categories 1990s Source: Technopak Consumer Outlook& Technopak’s India Luxury Trends 2006 2007 2000 onwards <ul><li>Food and Grocery </li></ul><ul><li>Clothing </li></ul><ul><li>Footwear </li></ul><ul><li>Consumer durables / appliances </li></ul><ul><li>Home linen </li></ul><ul><li>Movies and theatre </li></ul><ul><li>Eating out </li></ul><ul><li>Food and Grocery </li></ul><ul><li>Clothing </li></ul><ul><li>Footwear </li></ul><ul><li>Consumer durables / appliances </li></ul><ul><li>Expenditure on DVDs and VCDs </li></ul><ul><li>Home linen </li></ul><ul><li>Home accessories </li></ul><ul><li>Accessories/ Gadgets </li></ul><ul><li>Eating out </li></ul><ul><li>Take away/ Pre cooked / RTE meals </li></ul><ul><li>Movies and theatre </li></ul><ul><li>Entertainment parks </li></ul><ul><li>Household help </li></ul><ul><li>Travel packages </li></ul><ul><li>Club membership </li></ul><ul><li>… indulging in luxuries like </li></ul><ul><ul><li>Gourmet food </li></ul></ul><ul><ul><li>Fine dining </li></ul></ul><ul><ul><li>Upscale Vacations </li></ul></ul><ul><ul><li>High-end homes </li></ul></ul><ul><ul><li>Segment D automobiles </li></ul></ul><ul><ul><li>Chic clothing and accessories </li></ul></ul><ul><ul><li>Cutting-edge technology gadgets and gizmos </li></ul></ul>
  5. 5. Indian Retail Landscape <ul><li>India moving at a fast pace towards consumer driven economy </li></ul><ul><li>Demand for competitive goods & services by Indian consumers like global counterparts </li></ul><ul><li>Organized retail, attracting large FDI and FII investments </li></ul>Retail Power
  6. 6. Strong Growth In Retail Market Size <ul><li>Strong growth in private consumption </li></ul><ul><li>Retail opportunity slated to rise almost by US$ 200 Billion in 5 years, and another US$ 250 Billion in the following 5 years by 2018 </li></ul>
  7. 7. Indian Food Retail Industry Segmentation Value % Share 2007 <ul><li>Food Services as a kiosks & restaurants contribute a share of 29% </li></ul><ul><li>Indian unorganized food retail accounts for ~ 96% of the overall food retail but contributes only a share of 65% </li></ul><ul><li>Super markets occupy 1.4%of the total share </li></ul><ul><li>Hypermarkets account for 0.7% of the overall share of Indian Food Retail industry </li></ul>
  8. 8. Food Retail – Major Players in India <ul><li>RPG Spencer’s </li></ul><ul><li>Reliance </li></ul><ul><li>Future Group Big Bazaar </li></ul><ul><li>SPAR Max Hypermarkets </li></ul><ul><li>Aditya Birla Retail </li></ul><ul><li>Namdhari Fresh </li></ul><ul><li>Metro </li></ul><ul><li>Heritage Foods </li></ul><ul><li>Wadhawan Group </li></ul><ul><li>Subhiksha </li></ul><ul><li>REI Agro </li></ul><ul><li>Bharti Retail </li></ul>
  9. 9. Rural Retail Formats <ul><li>ITC Choupal Sagar </li></ul><ul><li>Godrej Aadhaar Retailing </li></ul><ul><li>DSCL – Hariyali Kissan Bazaar </li></ul><ul><li>Triveni Khushali Bazar </li></ul>
  10. 10. <ul><li>Imported specialty foods have been growing by 36% in last few years. </li></ul><ul><li>Prime categories of imported food include, pasta, cheese, chocolates, olive oil, salad dressings, juices and certain canned fruits and vegetables. </li></ul><ul><li>Demand for such products restricted to higher-income consumers - import duties (ranging from 25% to 75%) keep prices high </li></ul><ul><li>The products which are gaining demand among the Indian consumer are- </li></ul><ul><ul><li>Breakfast Cereals </li></ul></ul><ul><ul><li>Confectionary Products </li></ul></ul><ul><ul><li>Frozen Meat And Poultry Products </li></ul></ul><ul><ul><li>Gourmet Cheeses </li></ul></ul><ul><ul><li>Wines </li></ul></ul><ul><ul><li>Non Alcoholic Beverages </li></ul></ul><ul><ul><li>Chocolates </li></ul></ul><ul><ul><li>Pasta </li></ul></ul><ul><ul><li>Dairy Creams </li></ul></ul>Source: UN Comtrade India: A Huge Market for Imported Foods
  11. 11. Trends in the Imported Food Segment <ul><li>Pasta : There is an immense trend in Pasta, India currently brings in 1,25,000 wine cases a year accounting for a mere 4.5 milliliters of per capita consumption of the billion-plus population </li></ul><ul><li>Sauces and dressings: occupy considerable shelf space among imported food product line. The category covers Mayonnaise, Dressings, Sauces, Jams and spreads </li></ul><ul><li>Honey : Market for imported honey growing at 150 % per annum. The honey market needs a change from domestic brands </li></ul><ul><li>Olive oils: The total size of the olive oil market in India is around US $ 6 million in terms of value and 2,000 tons in terms of volume. Spanish companies command a share of about 60% </li></ul><ul><li>Wine: India currently brings in 1,25,000 wine cases a year. </li></ul>
  12. 12. Food Service Channel <ul><li>Total market size estimated at US $7107.45 million in ‘07 </li></ul><ul><li>Expected to grow at a compounded rate of 8% from 2008 to 2011 </li></ul><ul><li>The average monthly household expenditure on eating out is estimated at US $ 35.28 mn. </li></ul><ul><li>About 500,000 new eating outlets will be added over the next few years, taking the total number of outlets to close to 2 billion, second only to China </li></ul><ul><li>New entrants and domestic players chart aggressive expansion plans for restaurants and hospitality chains </li></ul><ul><li>By 2010, key Indian cities would witness a 45% increase in room base in the five star category </li></ul>
  13. 13. Catering Services Channel <ul><li>Institutional food service covers catering for large-scale organizations such as military forces, healthcare and educational institutions, business offices and manufacturing plants, and travel facilities . </li></ul><ul><li>Market for contract food services is highly fragmented and price-sensitive </li></ul><ul><li>Predominantly vegetarian providing wholesome traditional Indian meals </li></ul><ul><li>With increase of working woman in urban India, buying lunch outside is becoming the norm at schools and workplace </li></ul>Name Catering Services Indian Hotels Co Ltd In-flight, Institutional & Outdoor EIH Ltd In-Flight & Airports Radhakrishna Hospitality Services Ltd Corporate, Institutional, Educational, Hospitals, Railways,etc LSG Sky Chef In-flight Mayfair Banquets Individual, Corporate & Institutional Ambassador’s Sky Chef In-flight Mars Restaurants & Banquets Individuals, Corporate & In-flight Sodexho International Alliance Corporate & Healthcare
  14. 14. The Retails Truths <ul><li>Subhiksha retails stores have been facing a challenge in cash flows for some time now </li></ul><ul><li>Reliance has more aggressive focus on non food sectors now. </li></ul><ul><li>Metro has obtained sure footing in two cities, by not expanding in haste. Similarly Bharti Walmart doesn’t want to expand in a haste. </li></ul><ul><li>Godrej Nature’s Basket ( for Gourmet Retail) has opened 6 stores in Mumbai so far </li></ul>
  15. 15. Thank You! [email_address] +91-9810308309