This document discusses the growing gourmet food market in India. It notes that the market has grown rapidly in recent years, driven by rising incomes, urbanization, and exposure to global cuisines. Key categories in the gourmet market include chocolates, cheeses, olive oils, pastas, and sauces. However, newer products like berries, Greek yogurt, and quinoa are also being adopted. The market is expected to be worth $2.8 billion by 2015. The document also profiles several companies operating in the gourmet space in India, including an imported sausage maker, a Greek olive oil brand, and a Danish cookie brand. It outlines their product offerings and growth strategies to tap into

1. 78 • PROGRESSIVE GROCER • September 2013 AHEAD OF WHAT’S NEXT www.imagesfood.com
Apart from the high volume-driven categories
in the gourmet space, there are newer products
and categories that are being rapidly adopted
by the Indian consumer
By Reteesh Shukla & Vidul Sharma
O
ver the years the kind of
food consumed by Indians
has undergone an incredible
transformation.The gourmet
retail space has witnessed rapid
expansion in the past five years, and seen
a strategic shift from traditional, low-cost
products to premium offerings like Washington
apples, Australian Kiwi fruit, Swiss chocolates,
French cheese, and Italian pastas. Chocolates,
cookies, juices, pasta, olive oil, honey, sauces
and salad dressings, and certain fruits are
the major categories constituting the bulk
of the gourmet market in India. Apart from
these categories, ingredients such as truffles,
artichokes, asparagus, Australian lamb, and
Norwegian salmon have also found their way
into the Indian food and beverage space.
The growth of organised small-to-large
format/specialty retailing, a surging economy,
rising disposable incomes, ever-widening
urbanisation, exposure to global cuisines and
food habits, newer travel destinations, growth
in the specialty food and beverage (F&B)
space, and relaxation in regulatory restrictions
are the catalysts for the growing gourmet
F&B market in India. Estimated to be worth
USD 1300 million, the Indian gourmet food
market is growing at a CAGR of 20 percent and
expected to cross USD 2800 million by 2015.
Indian consumers now have both the
willingness and the ability to try new products.
Urban residents are, by and large, becoming
regular purveyors of gourmet food in India.
As the urban populace has higher earnings
compared to the rural equivalent, and
spend over 40 percent of their income on
food alone, this is enhancing the quality of
products consumed. Young urban Indians
are increasingly experimenting with exotic
global products in their kitchens, a trend set
by expatriates, returning NRIs, and jet-setting
corporate executives. The core target remains
the population between 16-40 years which has
exposure to varied tastes, uses such products,
and is willing to pay a premium for better
culinary tastes.
Hotels and restaurants are the other major
consumers of gourmet food products in India
offering seasoned international variants such
as Peking duck with Ossetra caviar, Kanzuri
Shrimp, JamóIbérico Pata Negra (a gourmet
ham sourced from acorn-fed pigs), and
contemporary sushi in an increasing number
of fine-dining, specialty restaurants such as
Hakkasan, Le Cirque, Megu, B Bar, etc, with
more set to enter the market.
To fulfill this increasing demand, there are
enough third-party importers already bringing
International
Food
Gourmet
in the Kitchen
LeMarche,Gurgaon

2. www.imagesfood.com AHEAD OF WHAT’S NEXT September 2013 • PROGRESSIVE GROCER • 79
expected to grow at 45-50 percent annually
over the next five years. While the increase in
imports is around 49 percent, the per capita
consumption in India is still well below the
international average. Health attributes, such
as the absence of cholesterol, have driven its
consumption by affluent Indian households.
Consumption of Extra Virgin Olive Oil has
increased by 35 percent, while that of Pomace
Olive Oil has increased by 14 percent, in the
past one year. Given the rising aspiration for
the finer things in life, urban Indians are also
scouting for ways to get a taste of the world in
their own kitchens.
The growing popularity of gourmet cheese
in India is largely due to the increasing
exposure to world cuisines. These, along with
olive oil, have truly arrived in the Indian market
and are well accepted by the affluent and
middle classes. The imported cheese market
in India is growing at a rate of 30 percent, and
cheeses varieties like Haloumi, Fiore Sardo
or Flower of Sardinia, Parmigiano Reggiano,
Stilton, Provolone, Mozzarella, Roquefort,
Gruyère, Camembert, Feta, etc, can be spotted
in retail outlets across the metros.
Pasta is one of the most popular items in
the gourmet foods category alongside olive oil
and cheese. The universal popularity of Italian
cuisine and the emergence of organised retail
have boosted consumption of imported pasta
in India. Its market size is expected to grow
by 25-30 percent annually. Barilla, De Cecco,
in these products and thereby facilitating ease
of availability. These importers have paved
the way for a number of brick and mortar,
gourmet-retailing concepts across India. As
a result, sales are no longer restricted to
only select retail stores across the country.
Today, almost all stores ranging from small
departmental stores to big retail chains sell
imported food products. Wholesale player
Metro Cash & Carry has also introduced an
international foods section which offers more
than 2,000 gourmet food items at its outlets
in Yeshwanthpur in Bangalore and Zirakpur
in Punjab. Gourmet-focused retail chains are
also expanding in a market which includes
names such as Nature’s Basket, Nuts &
Spices, Foodhall, Le Marche, etc. The rise of
the online gourmet retail space is another
indicator of consumers adapting to newer
tastes and lifestyles, and includes names like
thegourmetbox.in, yzury.com, deliciousnow.
com, among others.
In terms of product demand, consumer
preference is slowing shifting and replacing
the usual products on the kitchen shelf.
Similarly, an increasingly health-conscious
consumer segment has propelled the olive
oil market in India. Brands like Leonardo,
Cola Vita, Bertolli, Fragata, etc, which were
only known to five-star hotels a couple of
years ago are today easily available through
retail outlets. The olive oil market is worth
around USD 80 million in value now, and is
and San Remo are the most popular brands of
imported pastas in the USD 14 to 15 million-
worth Indian market.
With rapid urbanisation and changes in
eating habits, sauces and condiments have
begun to occupy substantial shelf space in
Indian gourmet outlets. While mayonnaise,
ketchup, and olives are the most popular,
others such as chili, soya, gherkins, etc, have
also gained wide acceptance. The growing
demand for sauces and condiments comes
from both individual customers as well as
institutions such as hotels, restaurants, and
clubs. Heinz, Tabasco, Remia, Barilla, and
Prego are some of the famous imported
brands.
Apart from these high volume-driven
categories in the gourmet space, there are
newer products/ categories that are being
rapidly adopted by the Indian consumer. These
include fresh/frozen berries, Greek yogurts,
preserved lemons, yuzu fruit (an east Asian
fruit which is a hybrid mix of mandarin, orange,
and lemon), tagines (vessels to cook Moroccan
dishes), salad leaves (radicchio, kale, Chinese
lettuce, arugula, watercress, etc), grains
(Quinoa and Couscous), egg replacements
(200 gm pack is equivalent to 66 eggs),
gluten-free foods, and processed butter.
The gourmet market is poised to grow
thanks to both demand and supply-related
forces but is challenged by drawbacks such
as limited product/segment awareness,
poor management of shrinkage, wastage,
and vendor management for proper product
replenishment, limited product shelf life,
and restrictions on imports and FDI. These
challenges have kept many players at bay for
a long time; but it is expected that with the
opening up of FDI norms, we will now witness
the growth of such players. n
Reteesh Shukla is Associate Director andVidul
Sharma is Sr. Consultant, Food Services & Agriculture
Estimated to be worth
USD 1300 million, the
Indian gourmet food
market is growing at a
CAGR of 20 percent and
expected to cross USD
2800 million by 2015
Foodhall, New Delhi

3. 80 • PROGRESSIVE GROCER • September 2013 AHEAD OF WHAT’S NEXT www.imagesfood.com
International Food
About the company: The company specialises in food processing based
on modern European technology.
In the beginning: The company was started in September 2011. Initially,
we were working from our living room table at home. Four months later,
we launched our first product.
Production facilities: We have a very modern plant in Attibele village
in Bangalore. The machines are imported from Germany. We have a
water recycling plant and we run partly on solar system. The plant is
ISO 22000:2005 certified; it includes HACCP and ISO 9000 which is
critical for management operations, and ascertains that our production
is hygienic. We chose Bangalore because of its temperate climate as
our products require cold storage. A city like Delhi would require more
energy to run a cold storage unit.
Brand’s USP: High tech machinery, imported German ingredients,
and a German master butcher with 14 years of experience - all of this
make our product authentically German.
We have a smoking chamber as we do
not use smoking liquids, preservatives
or artificial; colourants. So ours is a
natural product that costs half that of an
imported equivalent. We have noticed
that people are wary of buying sausages
because they think that they might
contain chemicals, preservatives, etc.
Our focus is on the highest quality and
reliability. Our products are produced
under the supervision of our German
Master Butcher, who has over 35 years in
the business.
Investment and ROI: Our investment was mainly on FDI basis and a
couple of German investors. We broke even after 18 months. We do
have to pay 40 percent import tax for meat, and we sell at half the price
compared to other imported products. This has attracted the hotel
industry as well to our brand. The hotel industry in Bangalore is set to
boom; Marriot is planning 6 more properties in the next one year. This
will give a boost to our business.
Growth rate: From the initial 3 tonnes, we now produce 14 tonnes,
which indicates around 25 percent growth rate. We want to keep our
growth linear since we have just entered the retail market and we need
to build up our Bon Appetitbrand. We are happy to realise how curious
India has become towards foreign cusines and tastes.
Market view: Products are coming from Sri Lanka and from local
players, but they are of a very different quality. We target a niche
clientele because our products are very superior. The retail industry is
growing and we would like our products to become more visible across
stores. Apart from HoReCa, we are also targetting deli counters and
gourmet shops. Our brand is present in all the metros and big cities from
Kolkata to Trivandrum and in Goa, Pondicherry and Coimbatore.
There are three kinds of trends that are happening in India:
consumers want to eat only the best food, and they are studying
Robin Decher, Business Development Manager, Arthur’s Food Company
labels for the ingredients. The second trend
is demand for ready-to-eat products. Our
products can be prepared on the pan in
less than five minutes. The third trend is
barbecuing, especially by men, who enjoy
sausages with their beer while watching
sports on TV, or during small get togethers.
Our products are easy and quick to grill on
charcoal.
Products: We have cooked or smoked pork and chicken products. Our
best seller is chicken sausage with chives and pork bratwurst. From only
5 products, we have increased to 22 product offerings, out of which 8
are new to the Indian market. Our frankfurters, bacon, smoked ham and
cocktail sausages, pork cheese sausage, pork zrakauer sausage, as well
as the famous pork bockwurst,.are like no other.
At our smoking chamber, we use wooden chips to create smoke that
gives bacon, ham and sausages the flavour and authentic taste. Many
of our competitors use artificial smoking
liquid that turns the sausage brown in
colour. Chicken products contribute 73
percent to our sales and pork 27 percent.
Retail: We have 11 skus. Prices range
between Rs 99 per 150 gm of chicken
sausages with chives to Rs 164 per 150 gm
for smoked pork cheese sausage. 350 to
400 gm of smoked pepperoni salami costs
Rs 490. We have 150 and 250 gm packs
for retail, and 1kg packs for institutional
sales. We have installed our own freezers at
two supermarkets, and our merchandisers
go to the stores everyday to check our
product display, etc. Currently, we are present in 35 retail outlets; our best
performing cities are Bangalore followed by Delhi, Chennai and Mumbai.
Marketing: We do live grilling and sampling at supermarkets. We have
an active Facebook blog apart from our website, www.bonappetite.
com that also offers recipes. We also send out flyers and inserts in
newspapers. We have participated in trade shows such as Ahaar,
Annapurna, and Food Expo.
Challenges: Frequent power cuts affect cold storage or freezers at
retailers. There is limited supply of pork due to few producers, despite
the high demand for pork-based products. Also, handling of meat is a
very sensitive factor as the temperature has to be controlled, but our
distributors are doing a good job of the logistics. Products are packed in
thermocol boxes and sent to the distributors’ freezing units by air freight
or by train from our production unit in Bangalore. We have installed our
own containers with chefs or purchase managers at hotels. Lastly, we
have had to acquire around 18 licenses!
Future plans: We plan to introduce more products such as pepperoni
salami and mini pepperoni salami. We want to enter Rajasthan, and
also Gujarat, though the city is mainly vegetarian. We are also looking at
entering Bhutan,Thailand and Dubai.

4. www.imagesfood.com AHEAD OF WHAT’S NEXT September 2013 • PROGRESSIVE GROCER • 81
Approximately 80 percent of sales comes
from retail and 20 percent from HoReCa.
Challenges: Custom duty and FSSAI
clearances which lead to delays of up to 14
days. Lack of specialised cargo handlers for
transportation of stocks made
of glass bottles and tin cans.
Promotions: We promote our brand at the retail level
with branding and visibility elements at the stores; below
the line (BTL) advertising, offers like buy one get one free
on selected skus, and through print ads.
Market view
Future plans: We are currently focussed on
developing the west and north zones. We will tie up
with modern retail chains and appoint distributors
who will cater to them. We plan to launch a
host of products like olive spreads, cereal bars,
things that have a health benefit from the Greek/
Mediterranean region
About H&H Hellenic Heritage: A Greek brand founded in 2011 by
VTV Europe (importer and exporter of Greek food worldwide). It was
launched in India in 2012 by Kolkata-based Indian importer, Deli Foods.
The brand has charted a business strategy to grow and expand in
increasingly competitive imported foods category in India.
Brand positioning: H&H Hellenic Heritage captures the essence
of Mediterranean cuisine and its globally acknowledged health
benefits.
It has introduced international style packaging for
the first time in this category in India. H&H is also
the only Greek olive oil in the Indian market, where
the olive oil market size is approx Rs 400 cr.
Retail: We are present in Big Bazaar, Spencer’s
Retail, Dorabjee, etc. We are currently
concentrated in the east Indian market, with a
sporadic presence in other zones at select retail
chains. We are currently developing distributor
tie-ups in Mumbai and Delhi and increasing
our retail presence everyday. We are currently
supplying to select HoReCa in the east zone.
About Kelsen: Founded in the year 1933, as a small family bakery in the
Jutland, Denmark, Kelsen has today grown to export its cookies to more
than 110 countries around the world. Kelsen launched Royal Dansk
cookies in India in 2011. Despite stiff competition in the space, the
product has performed very well, and sales are growing rapidly by more
than 100 percent over last year.
Brand positioning: Since the brand has been introduced very recently,
we are creating the platform to build up volume, understand market
behaviour, consumer preference, buying pattern, trade gimmicks, etc.
Retail: We are present in D’Mart, Big Bazaar, Spencer, Nuts & Spices,
Easy day, Le Marche, Metro Cash & Carry etc. Our best performing
retail zone is north India which gives us 45 percent of the sales, 30
percent comes from the west, 20 percent from the south,
and 5 percent from east India. The product has been
positioned at attractive price points, and has a high
shelf life of 18 months.
Challenges: Cookies are still an unknown
category in India as premium biscuits cannot
be called cookies. Size in value for imported
cookies in 2013 would be around Rs 500 cr. In
my view, there was no company or brand with
a significant presence till we appeared on the
scene. Today, we are the market leader and have
no direct competitor. But yes, indirectly, there are
around 15 small competitors from Asian countries
such as Indonesia and Malaysia.
Manav Agarwala, Managing Director (H&H Hellenic Heritage) Deli Foods
Srikant Panda, Country Manager (India), Kelsen
As regards operational challenges for
importers, cookies are a very upmarket
product and new as a category in India.
People do not understand what a cookie is.
If called a special biscuit, then it loses its
credibility because consumers will compare
them with other premium biscuits made
in India. High custom duty and a weak
rupee makes the MRP very challenging and the product unaffordable.
Logistics too is a concern.
Future plans: The company is not looking at setting up a manufacturing
unit or subsidiary in India, because they cannot be called Danish Cookies
then. To call them Danish Cookies, they must to be made in Denmark,
even if the same ingredients are used in India. It’s always better to
import directly than through an importer as it ensures better
control. It is important to be focused. Importers bring in
multiple brands and have to deal with issues on finance
and operations. We associated with the best importers
in the country for transparency, and a strategy for
helping us to grow together! We are continuously
focusing on our primary and secondary growth and
increasing our presence to Tier II cities as well.
Currently, we are monitoring the price point, consumer
demand, and market competition. We are the largest
cookies maker worldwide. Once our retail presence
becomes strong, we will enter the food service space.
Worldwide, all QSRs are buying cookies from us. Many of them
are present in India, so, it’ll be easy to tap them in the future.

5. 84 • PROGRESSIVE GROCER • September 2013 AHEAD OF WHAT’S NEXT www.imagesfood.com
International Food
Overall, our refill rates vary on a case by
case basis from once in 7 days to once a
month. It also depends on the assortment
size/movement from a given store – so
this varies from store to store. As we have
a selective retail footprint, all retailers are
serviced very well, through our appointed
distributors and supported by our sales team.
In the east, we do not operate through a distributor, but deliver directly.
Promotions: There is no better way to promote a brand such as ours
than to get consumers to ‘experience’ us. We lay a lot of emphasis on
sampling – both dry and wet. A team of trained promoters are stationed
at our major retail stores to engage with prospective consumers. We
use selective print for advertising and brand building, and are exploring
avenues like digital/social media and trade events to further build our
brand amongst the niche audience.
Challenges: The market is hyper-competitive. In the premium space,
the key issues, besides distribution and marketing support, is
maintaining the inherent quality of the product
and the systems and processes to keep the
quality consistently high throughout the year.
This is critical for an agri-based product like
tea, where the quality of the tea crop varies
widely month on month from the same sourcing
base. Buying the right teas and adherence to
foolproof quality standards in production and
packaging holds the key. Our back-end systems
are best-in-class for delivering a product that
matches and surpasses the very best anywhere
in the world. The other challenge – particularly
in the flavoured, herbal tea segment – is to
continually develop variants/flavours that
appeal to consumers. At Newby, this is an ongoing
process as a result of which our portfolio today is
amongst the widest across all major premium tea marketers.
Future plans: We have a robust plan in place with respect to new
product launches and entering new markets. Our recently launched
Masala Chai and Green Lemon are doing very well. We have plans
to launch our pyramid tea bags across 10 variants in select outlets,
besides products in the herbal/infusions space. While we are primarily a
metro-centric brand, we are closely looking at lucrative smaller markets
– particularly in the north and west – which we will be entering shortly.
We do not plan to enter the volume business in India at all. Our brand
philosophy is captured in our product promise ‘The finest of Fine Teas’.
We wish to remain wedded to producing teas of the highest quality. This
is our operating principle worldwide, and the same will apply in India.
So,we will not compromise on our product quality to chase volumes.
Packaging: Our primary packaging facilty (across 2 plants) is in Bishnupur
in South 24 Parganas in the outskirts of Kolkata. It is a state-of-the-art
facility with systems and QC processes, built over 70,000 sqft, and has an
annual capacity of packing over 800 tons of tea. It services a significant
part of our international market, besides our domestic market.
About Newby: UK-based Newby has its headquarters in India in Kolkata,
which is their centre of production for both their India and international
markets.Newby India, its subsidiary, commenced operations in 2010,
and is engaged in the distribution, sales and marketing of Newby’s vast
range of teas in the Indian market.
Brand positioning: We operate in the top-end of the premium segment,
which is very small as on date, but poised to grow exponentially in the
short/medium term. We have a wide tea range (black, green, flavoured
and infusions) in various skus – teabags, cartons and caddies - with a
price range between Rs 215 and Rs1,500 per unit. We are achieving
healthy double-digit topline growth year-on-year.
Obviously, for a mass consumed beverage like tea, the premium
segment is still relatively small in volume terms – but growing at a
very fast pace – as newer consumers with a willingness to experiment
with different tastes/formats within tea enter the market. The other
big driver is health and wellness – where tea clearly has an edge
over other beverage categories. This explains the interest shown by
virtually all traditional tea marketers, including plantation companies, to
premiumise their product offerings with green teas, organic teas, etc.
Locational advantages: As a premium tea
company, we pride ourselves in our ability
to provide the consumer the freshest cup
of tea – which, amongst other things,
entails cutting transportation lead time
between the tea garden (sourcing base)
and the end-consumer (consumption base).
To this extent, Kolkata’s strategic location
at the heart of India’s tea growing region
offers huge advantages. The city is very
close to Assam and north Bengal - the top
two tea producing regions in India (they
produce the finest black teas), besides
its relative proximity to China – home of the
world’s finest green teas.
This locational advantage has made Kolkata the hub of tea
production since the British days. Since we at Newby deal with teas
from the best sources of origin in the world, it made sense to have
our manufacturing facility in Kolkata, from where we service a large
proportion of our domestic and international markets.
Retail: We are in the early stages of our presence in India, having
entered organised retail less than two years ago. We are doing well
across all markets. North contributes a higher percentage vis a vis
other zones primarily because our market presence (distribution) in this
region is the most. However, based on the trails and feedback we have
received from across the country, we are bullish on all zones. The east
zone (Kolkata especially) has a captive base of fine tea lovers.
This is an early/growth stage of our retail presence. Some of our
prominent retail customers are Food Hall, Spencer’s, Brown Tree,
Amma Naana, Naturally Aurovilly, Godrej Nature’s Basket, Ratnadeep,
and Modern Bazaar, to name a few. As a premium brand, we are very
picky about the retailers whom we partner. We offer an attractive sales
margin to all our retail partners, and those with better offtake obviously
stand to gain more.
Debraj Banerjee, Head of Marketing, Newby India

6. 86 • PROGRESSIVE GROCER • September 2013 AHEAD OF WHAT’S NEXT www.imagesfood.com
International Food
About Royce: Launched in Japan in 1983, Royce’ offers high-quality,
innovative products. The selection of ingredients, experimentation in
recipes, combination of flavours, and unique textures. It has a discerning
following in Malaysia, China, Singapore, Russia and very recently New
York, where its store is located at the upmarket Madison Square. In
India it is present through a JV with Burgundy Hospitality.
Brand positioning: We believe that the Indian market is ready for luxury
chocolate. There is a clear and burgeoning interest in high quality and
exotic foods from across the world. This insight led us to a partnership
with Royce’. In fact, some of the most discerning customers at the
Royce’ stores in Singapore and Hong Kong are vacationing Indians.
By investing in what truly matters, that is, the highest quality, original
ingredients, and a very responsive local supply chain, the Royce’
operating model makes for a compelling business case in this context.
Retail: Royce has a standalone store at the Palladium mall, Lower Parel,
Mumbai; the second will come up in Delhi soon. Royce’ products are for
everyone, from potato chips dipped in chocolate to almonds dipped in
bitter chocolate. we will start with 19 varieties ranging from Rs 484 to
Rs1665, and with time, introduce limited editions and seasonal varieties
as well.
Marketing and promotions: The brand believes in subtelty and
discretion. Our focus will be non-traditional marketing initiatives and a
lot of in-store activations.
Market view: India is the world’s fastest growing market for chocolates.
Registering 15 percent annual growth between 2008 and 2012, the
Indian chocolate industry is projected to grow at an even higher rate
in the coming years. Even in times of recession, chocolates remain
‘recession proof’ as Indian consumers are willing to spend on affordable
luxury for festive occasions and personal consumption.
According to India
Chocolate Market
Forecast & Opportunities,
2018, India’s chocolate
industry will be growing
at a CAGR of 23 percent
by volume between
2013 and 2018. Dark
chocolates are expected
to account for the larger
market share when
compared to milk and white chocolates.The Indian gifting market
continues to provide captive demand for high quality confectionary, and
is certainly considered in our go-to-market strategy.
Avani Raheja and Samir Gadhok, Founders, Burgundy Hospitality
Challenges: The luxury chocolate market is a completely new product
category in India. The country has a rich heritage of producing,
purveying and consuming some of the finest and most original sweet
foods. Over the last two decades this “sweet enthused” culture
has transgressed into a demand for newer and more unique sweet
“sensations”, including international chocolates and confectionary.
However, the supply side has not kept up with this demand. Indians
remain chronically underserved when it comes to consistently fresh and
well-crafted chocolate. Given the country’s diverse climatic conditions
and challenging supply chain systems, most chocolates available
are exposed to temperature abuse and degenerative environmental
conditions.
Future plans: Burgundy Hospitality aims to tap Royce loyalists and
connoisseurs of luxury fine chocolates with 20 stores in the next 3 years
and 50 stores over the next 5 years across India. No two Royce’ spaces
will be identical in India; each will have its own unique and expressive
characteristics. However, all our stores will evoke a sense of space,
luxury and a touch of Japanese quirkiness.