Forecast for Packaged Food Industry Sector in India

Proper food packaging is extremely essential for any brand food product. It needs protection from chemicals and physical tampering. Packaging must also be environment-friendly and 100% recyclable. This ensures maximum security and preservation of the product during transport. Before consuming the food product, one must check the label on the product to see the nutrition information as well as a date of packaging. It is necessary to check the packaging properly and ensure that it is not puffed and the seal is intact. A big chunk of employment is required for the packaging activity. 

In India, the food industry has a huge growth and every year there is an increase in the contribution to world food trade. The food sector experiences substantial profit and has an extremely high potential value.

The main packaged food products consumed in India are given as follows:

• Bakery Food Products
• Namkeens
• Snacks
• Frozen Foods
• Milk Dairy Food Products

The packaging industry is experiencing a meteoric rise because of the growing importance of packaged foods and demand for environment-friendly packing materials. Due to the increasing awareness in communities, more and more people nowadays are changing their habits and opting for packed foods. 

As per FICCI, dairy products, vegetables, bread, bakery, confectionery and packaged foods are the main products driving the growth of food industry segments. There is tremendous potential for investment and revenue possibilities.

Huge Growth Rate for Packaged Food

Most of the consumers do not compromise on the taste of packaged foods products. The rising incomes and ongoing urbanization have driven the Indian population to the packaged food product market. The food industry is mostly unstructured with 75% of physical process units belonging to the unorganized category. The organized category is small and growing speedily in the booming e-commerce retail sector. There is huge potential growth in future for the retailing food packing sector. The Indian food packaged industry is the fifth largest sector and one of the biggest packaged food product markets in the world with a total worth of US$39.7 billion, which is estimated to reach US$65.41 billion by 2020.

Food packaging mainly deals with food quality control. To achieve success in the food packaging industry, the best packaging materials should be used without compromising on price or quality. Industries ensure the standard of food safety with computer assisted graphic designs and thermal process resolving for low acid foods.

About Company:

DFM Foods Ltd. is in the business of manufacturing, selling and marketing of packaged snack foods and has been a leader in the space for over 25 years. We provides for a wide range of snack and namkeen products. Corn Rings and Wheat Puffs are marketed under the CRAX and NATKHAT brand names respectively. Both these have become extremely popular snacks, especially among children

Marketing Strategy key for emerging Packaged Snack Manufacturers

The snack market has recently seen a boom in the number of snack and namkeen manufacturers who produce packaged products. These new players in the packaged snack industry are well aware of the fact that to establish themselves in the market and sustain a profitable business, it is very essential to develop a sound strategy and have an in-depth knowledge of their target consumers. Thorough market research and a marketing campaign or strategy based on that research is vital for any new business or brand to create a niche for themselves in this sector which has rampant competition. In India, a giant share of the packaged namkeens/snacks market is enjoyed by Haldirams, which caters to all the states of the country. To compete with big established players like these, emerging packaged snack businesses must ensure to develop a strong plan based on their resources and strengths and work on effectively implementing it.

Reduce Input Costs; Improve Market Share

Snack manufacturers should develop unique strategies for their businesses, which are significantly different from others in the market, focusing solely on their own products and their reach potential. For an emerging packaged snack manufacturer, who possesses a limited range of products, a good strategy would be to launch the products at different locations to increase its visibility and get people to know and talk about the brand. A new snack manufacturer with a wide range of packaged products, should create a strategy that focuses on smaller locations and allows three brand to grow gradually. In both these instances, the snack producers need to possess in-depth knowledge of the eating habits of their target customers, which can be gained by doing a thorough research of the market and the way it functions.

Controlling the input costs in the snack business is another big obstacle for new players who are just starting out. The staple crops required by any snack manufacturing company in India are potato, wheat and corn. Sometimes due to the sporadic nature of the Indian monsoons, these crops are adversely affected, which decreases their availability and increases input costs. Moreover, the rupee fluctuates regularly and this directly impacts the cost of ingredients that are imported.

Clear-cut Strategy Key to Success

To decrease input costs, emerging packaged snack manufacturers should first develop a proper transparent pricing strategy that would be commercially effective and could counter rising/fluctuating costs. They should also try to create alternatives that cost less or some new innovations. A clear-cut and solid marketing campaign is essential for the sustained growth of the products and higher revenue. The implementation of such campaigns depends on the region as well as the target consumers. The packaged snack manufacturers should also consider the lifestyles and income levels of potential customers while forming the market plan. People are now very conscious of their health and the snack companies should aim to create snack products that are made from healthy and low-fat ingredients. This not only builds the reputation of the brand but also increases its customer base.

Rise in Namkeen Manufacturers and Distributors in India

ASSOCHAM states that the Namkeen food industry in India has been blooming at a compound annual growth-rate of about 20%. Soon the market is expected to double with respect to revenue. The Indian namkeen sector currently possesses one of the strongest growth fundamentals among other industries and this can be attributed to the expanding population as well as a rise in the average incomes of consumers. The growth fundamentals, in the packaged snacks and namkeens industry, are mainly driven by two things: Convenience and Eating habits. Thus it can be concluded that the incredible growth in this snack food sector is a result of numerous factors coming together like urbanization, hectic pace of modern living, increase in average salaries etc., all of which have pushed consumers in the direction of easily-available and easy-to-eat packaged foods.

Growth Sustenance

The Indian namkeen market has some big players in it as well as new emerging manufacturers and distributors. Haldirams is the biggest name in this sector, which currently enjoy more than 40 percent of the market share. A major reason for this is that it caters to all the states of India. Other big players include Lehar, Parle, DFM Foods etc. It goes without saying that these companies compete fiercely in the snack market. These brands know that to stay relevant in the business and create sustained growth, they need to continuously innovate. Whether it is products, branding, designs or pricing, innovation is extremely critical for continued dominance. It is quite common these days that snack manufacturers launch many diverse products and variants regularly in order to compete effectively with their rival manufacturers.

Emerging Players in the Market

Because of the sudden boom in the economy of the snack market in recent years, new emerging snack manufacturing companies have joined the big players. These new businesses are cropping up quite frequently since the industry promises high growth rate and the capital needed to establish production is not very high. Although the namkeen industry in India is enormous and diverse enough to accommodate both existing players and new emerging manufacturers, the new businesses must keep in mind the various challenges for long-term growth sustenance and accordingly create their respective brand strategies to compete strongly and effectively.

DFM Foods

DFM Foods is one of the bigger players in the namkeen manufacturing market. Known for manufacturing and selling healthy packaged snacks since the last 25 years, the company is one of the leading businesses in their space. The company’s chief product CRAX (Corn-rings) has forever been a huge hit among children and still remains one. The snacks are easily available and reasonably priced, which has ensured that DFM Foods ranks high in popularity in the industry.