The share of wallet for food for an average Indian household is expected to increase to 35.4% by 2025 from 33.2% in 2005. Thanks to the country’s rising population and increasing spending propensities, the average Indian is no longer going to consume the good old rice, wheat and other grains she has been consuming for decades. A recent Deloitte-CII report, 'Future of Food', projects the average Indians' food preference to considerably shift towards consumption of proteins, fruits and vegetables.

The report projects a steep decline in carbohydrate consumption. The average Indian not just wants to eat healthier, she is also seeking convenience food, which is going to lead to an increased focus on healthy ready-to-eat and ready-to-cook segments. The discerning Indian consumer is also conscious about how the food she consumes is manufactured, whether it has been sustainably sourced and produced.

Food consumption has certainly entered a new era, wherein people are better informed about what to use and what not to use. As the consumer gets increasingly conscious, the food manufacturers have no choice but to relook at their strategies. The Deloitte-CII report has laid down six broad trends that would determine the future of food consumption in India – mindful diet, mindful wellness, mindful sourcing, mindful preferences, mindful purchasing and mindful convenience.

According to Anand Ramanathan, Partner, Deloitte India, “India is at the cusp of a new food revolution. Health-conscious, evolved consumers prefer to have something on their plates that will have a lower environmental footprint. In addition, they have also become more conscious than ever for the ecosystem, apart from their own health. A food tradition that focuses on sustainable alternatives is setting the path for the future of food in India.”

In terms of food spending by 2025, meat and poultry are estimated to account for 30.7%, bread, rice, and cereals at 23.8%, and fruits at 16% of the total food spending. Grains that accounted for 63% of daily calorie consumption in 1961, dipped to 55% in 2017. Consumers are increasing their consumption of proteins (from 55.3 gm in 2000-02 to 63 gm in 2015-17), fruits and vegetables and superfoods such as green tea and olive oil.

This trend of eating better and healthier is not just restricted to urban India. According to Sridhar Gundaiah, founder of rural distribution company Storeking, rural India is just as conscious as its urban counterparts. For, gone are the days when the rural consumer preferred to buy staples such as rice, dal or oil loose just because it worked out cheaper. Thanks to the health concerns created by the pandemic, the average rural consumer is also willing to pay a slight premium for packaged products.

“Dry-fruits as a category shot up by 5,000 times. We have seen sugar consumption come down dramatically, people are increasingly eating a lot of millets. The kirana store owner is also looking at changing his inventory because if a customer asks for badam or anjeer, he has to be prepared for it,” explains Gundaiah.

The increased levels of concerns around food safety and how it is produced, packed, processed, and delivered, has led to higher consumption of organic food, which is expected to grow at a CAGR of 21% to reach ₹18,200 crore by 2026 from ₹6,000 crore currently. “Customer preference for food traceability has led to companies introducing such solutions. Clean labels are an emerging trend, although currently it is quite nascent,” says the Deloitte-CII report.

Almost every food major, be it ITC, Adani Wilmar, Marico or Nestle, has heightened its focus on healthy, no preservatives, ready-to-eat and ready to cook foods. When it comes to ready-to-eat or ready-to-cook foods, the consumers have a bias towards regional tastes and flavours and this is where the regional brands have an edge over the national brands. The Deloitte-CII report says that going forward it is going to become crucial for the national brands to have a localised strategy.

“If a national brand launches ready-to-cook khichdi, it has to change the tadka to suit regional tastes. These nuances have to be factored in, as that is where the margin play exists,” explains Ramanathan of Deloitte.

Having a localised strategy could indeed be complex, but it is doable, says Ramanathan. “After all, the ingredient for a ready-to-cook khichdi is rice and pulses, the only difference would be the way it is delivered to the consumer at the last mile. Therefore, sourcing can be integrated, the production and packaging values can be similar.”

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