Reasons Why Ready To Eat Food Hasn't Boomed In India

Since Independence, India has made a lot of progress in the field of agriculture and food sector. India’s agriculture sector has gone through a series of revolution like green revolution, white revolution, yellow revolution and blue revolution. This has led to India being one of the largest producers of wheat, vegetables, sugar, milk, fruits, fish etc.

The food processing sector like Ready to Cook & Ready to Eat has emerged as one of the fastest growing sectors in the Indian economy due to several economic reasons like urbanization et al and also the availability of Retort Technology which was developed by the Defense Food Research Laboratory.

Brands like Nestle Maggi have been using this technology over the years and have been a leader in this market segment. Consumers tend to be irrational in their choice and don’t necessarily make choices based on practical attributes. The power of hedonic features can be seen in strong brands like Maggi which claims that it can be prepared in 2 minutes whereas it’s a known fact that it takes around 5-10 minutes to cook. Consumers have accepted it over the years because Maggi has positioned itself as a food that can immediately cure hunger. Its marketing strategy has helped it to connect with children and mothers. For mothers, food is significantly important and therefore quick preparation becomes important. The above is a classic example which shows the potential scope for influencing consumer behavior.

With changes in societal trends, there has been a major impact on the food behavior of Indian consumers. Growth in urbanization, changes in lifestyle, socio-economic profiles of Indians, the concept of nuclear family are some of the reasons for the growth in RTE foods in the country. The new generation of emerging Indian women does not possess the necessary time to prepare authentic, traditional meals on a day to day basis. This has led to Indians being much more experimental with their food choices. These changes act as important inputs to influence consumer behavior. Different factors such as cultural factors, psychological factors and personal factors play a vital role in shaping consumer behavior. For instance, a young professional working in a metropolitan city will show more inclination towards products that show deliverable results in much lesser time as compared to a person living in a rural area. According to a research based reports published by leading global consulting firm, the India’s RTE food market is projected to grow at a CAGR of 22% between the year 2014 and 2019. Some of the major players in the Indian RTE industry are MTR, Kohinoor foods, ITC, Haldirams, Unilever, ConAgra. Having said this, RTE has still not taken off as it was expected. Although in the west, the market for RTE food, especially Indian cuisine is flourishing. In the west, Indians don’t have much time and resources to prepare authentic Indian cuisines. We must also note that for a majority of Indians living abroad, home cooked Indian meals aren’t easily available. Therefore the dependence on RTE food increases. Also, westerners who relish spicy Indian cuisines ranging from north India to south India find RTE foods very convenient.

Coming back to India, let us now take a look as to why RTE food really hasn’t boomed in India as per the expectation even though it has tremendous growth potential.

Competition

RTE food directly competes with home cooked meals which is a more preferred option. Indian consumers relate home cooked meals with their mother or wife. Due to this emotional connect, RTE face a stiff challenge. Food delivery options: Indian consumers prefer to order in or take-out food over RTE food. Ordering food over a phone call has been in existence for a long time and consumers also have much better customer engagement and a homely connect with their local restaurants. Also brands such as Dominos, Fasoos, Pizza Hut, McDonald’s etc. provide customers with excellent customer service, e.g. 30 minutes or free due to which they’re able to create value for the customer. Also with the rise in internet, customers are just a click away from ordering online and that too across various channels. Over the internet, customers nowadays have the luxury to customize ad place their orders via Zomato.com, Foodpanda.com, Dominos.com etc. These companies not only provide excellent service, but also loyalty programs and heavy discounts which take customer engagement and customer satisfaction to all new different level. Companies also engage customers via reviews and feedback on their websites. Dominos has been extremely successful with its campaign of “Khushiyon ki Home Delivery” because it transforms a regular meal into an experience which a consumer can enjoy with his family or friends. This sort of customer engagement, service and experience isn’t available in RTE food.

Lack of Modern Retail Outlets

There are still less number of modern retail outlets like Big Bazaar or More outlets across India due to which RTE food hasn’t been able to penetrate much into Tier II and Tier III cities and towns.

Skepticism with regards to freshness

Indian consumer’s attitude and belief towards food has been the consumption of freshly prepared food. Unfortunately, RTE food products still haven’t been able to change the mind set of Indian consumers who believe that packed food doesn’t last for long and is just like any other perishable item whereas RTE food of premium brand have an average shelf life of 6-12 months. This lack of awareness among Indian consumers have made them skeptic about RTE foods. Failure in pricing: The price at which RTE food is sold across India is generally high when compared to a regular home cooked meal. The serving portion quantity is also insufficient at such a high price. Indian consumers therefore find it irrational to pay such high prices for low quantity.

Increase in health awareness among Indian consumers

Indian consumers are now much more aware of their health and avoid products that use preservatives as it can be detrimental on their health over the long run. Due to this RTE food products have found it difficult to transform customers into loyal customers. Incorrect positioning: RTE food product have been generally positioned as either “Authentic” or “Original” or “Home-made” or even “No Artificial Additives” but Indian consumers who are now driven by health awareness would like to have products that are “Fresh” or “Natural”.

Lack of Communication

Indian consumers find the health information provided on the packages conflicting and confusing.

Packaging and Positioning

The color green relates with nature and freshness. It should be incorporated in packaging in such a way that when the consumer sees the package, he/she tends to believe that the product is made from the freshest and natural ingredients. Instead of using terms such as “Authentic” or “Original” or “Home-made” or even “No Artificial Additives”, brand should position as RTE products as “Fresh” or “Natural” or “Made using Organic products”. These claims would gain precedence over claims of authenticity and original claims. ELM and Fishbein Models can be used to achieve this objective. Also the packaging format should have an option where they content can be directly eaten from the container in order to make it more convenient for the customer Improve customer engagement: In order to improve customer engagement and give consumers a sense of ownership of what they eat, RTE foods should provide consumers with different tips of garnishing and pictures of food presentation. Also, having an online forum where different consumers can discuss and share tips and pictures would heighten consumer engagement and this would also transform having a RTE packaged food into an enjoyable experience. Use of brand ambassador and creative teaser ads: Recently Ching’s Secret, an Indian FMCG brand which also sells RTC noodles under the name of “Ching’s Secret Noodles” came up with a creative advertisement campaign that was targeted at the youth. They roped in popular Bollywood star Ranveer Singh for their campaign. They released a teaser of the advertisement which created suspense and curiosity among consumers. After some time they released the complete advertisement which was in the form of a catchy dance song “My name is Ranveer Ching” which became quite popular and it helped in increasing customer involvement. By adding an element of fun, the brand was able to create brand awareness and recall.

Based on their product offerings, RTE food firms can take a leaf out of Ching’s Secret’s book and come up with a similar campaign if necessary.

Influence consumers with low fat and cholesterol

RTE foods can be reformulated to contain low fat and low cholesterol. Additives and preservatives should be used bare minimum and many Indian consumers today are enamored by “Organic” vegetables which can be used in the ingredients. RTE salads can also be introduced for health conscious consumers. In order to gain consumer trust, nutritional information should be provided in a detailed and descriptive way. A large segment of Indian consumers across all ages are highly influenced by claims related to “better-for-you” when they make choices pertaining to food and beverages. Variety in offerings: Brands should offer greater variety in their offerings other than the traditional North and South Indian delicacies. Brands can conduct a marketing research to study the likes and dislikes of consumers and can they narrow down to cuisines from different parts of the world like Mexican, Italian, and Chinese etc.