The move comes on the back of rising demand among urban consumers for full meals
With the advancement of technology in food processing
and changing lifestyles, the consumers’ food choices and spending on food formats have changed quite a bit over the last decade or so. Part of the wider market for ready meals, the ready-to-cook (RTC) segment is now bursting at the seams with the addition of new brands and innovative products. As brands such as ITC, MTR Foods and McCain experiment with unusual recipes, new entrants like Adani Wilmar
are trying to put on your table everyday dishes that take quite a lot of preparation time.
Let us look at the potential of the segment to understand why new brands an products are racing to it. The market for ready meals has grown from Rs 2,039 crore to Rs 2,741 crore between 2017 and 2019. The industry is pegged to grow at close to 12 per cent between 2019 and 2024.
Before we proceed, here’s a look at what the segment really represents. As per Euromonitor International, ‘ready meals’ —that have had recipe “skills” added to them by the manufacturer — are an aggregation of shelf stable, frozen, dried, chilled ready meals, dinner mixes, frozen pizza, chilled pizza and prepared salads. “Ready meals are generally accepted to be complete meals that require few or no extra ingredients, however, in the case of canned/preserved ready meals, the term also encompasses meal ‘centres’; for dinner mixes, the term encompasses part meals. Some ready meals may require cooking; others may simply need reheating, prior to serving,” according to Euromonitor.
Now back to the action in the market. Edible oil company Adani Wilmar
recently threw its hat into the ring with a handful of ready-to-cook khichdi variants. The move comes on the back of rising demand among urban consumers for full meals that require minimal cooking, says Ajay Motwani, head-marketing, Adani Wilmar.
Branded as Fortune Khichdi, the three variants of Gujarati, Bengali and Punjabi can be prepared in just 10 minutes with almost all the ingredients provided in the packet. In the next three years, the company aims to garner a revenue of Rs 25 crore-Rs 50 crore from the newly launched RTC products, with more variants are in the works. “The increase in the number of working women and their busy schedules is one of the main reasons for the growth of ready meals. Though local grocery shops remain the preferred channel for the purchase of ready-to-eat products, the presence of large retail chains and online channels is also contributing to the increase in the demand for such products,” says Adani Wilmar’s Motwani.
Among the early entrants, MTR Foods, with a portfolio comprising breakfast, lunch, dinner mixes and desserts to even beverages, is hoping to touch Rs 1,000 crore in revenue this year, having grown at 14 per cent compounded annual growth rate (CAGR) over the past five years. Sunay Bhasin, CMO of MTR Foods, attributes its steady growth to a range of factors including changing demographics, rising population in emerging cities, as well as changes in consumer lifestyles and food habits.
“Increasing urbanisation, the emergence of nuclear families, the growing number of women in the workforce have all led to people being time-starved. This also means less time for preparing food at home. With double income families on the rise, the per capita spending capacity has also risen. So many consumers are shifting from traditional foods to the idea of packaged food. With convenience a key requirement in food preparation, the growth of the packaged foods industry is understandable,” says Bhasin.
Despite stiff competition from food technology apps like Swiggy and Zomato, Bhasin believes both the RTC industry and food tech companies
have a lot of room to grow. “The RTC category gives instant gratification with a meal being ready in two-three minutes, whereas ordering meals from apps needs planning and time, with the minimum delivery time being 20 minutes that can go up to an hour. We firmly believe that both these have scope to grow,” he adds.
While most players acknowledge that the rise of ready meals is still largely an urban phenomenon, they are innovating and expanding their footprint to tap the latent demand in smaller markets. MTR plans to deepen its focus on Karnataka while expanding its footprint in South. “We plan to deepen our distribution foothold with hyper-local products. This year we will focus on our core categories of masalas, breakfast mixes, desserts and will launch locally relevant products. Geographically we would be deep diving into the southern states, expanding our distribution and investing in hyper-local products in convenient easy-to-use formats,” Bhasin adds.
The medium of communication that MTR plans to leverage reflects its focus on hyper-local markets — it will use traditional media as well as vernacular digital medium besides short content formats like videos to reach out to the consumer.