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com
Experts in the food and grocery industry identify and analyse upcoming
trends that will drive consumption in 2013 and beyond
Compiled by Juhi Sharma
Cover Story
A
s the modern food and grocery (F&G) retail market moves up the
growth graph in India, speculation by professionals and
experts is shifting from whether food and grocery retail
would grow to how fast can it grow and what more
will it bring to consumers table.
According to Images Groups India Retail Report 2013, the
F&G retail market has been growing at a CAGR of 14 percent and
is estimated to grow at 17 percent per annum by 2015. The modern
retail market, which is 1.4 percent of the total market, grew by 23
percent and is projected to grow at a CAGR of 30 percent to achieve a
share of contribution of around 11 percent of total modern
retail by 2015.
The modern F&G retail currently touches up to
Rs 17,12,000 crore and is expected to expand to touch
Rs 27,41,961 in 2015.
Comments Vaibhav Singhal, Founder, Savemax stores,
Retail shall become more organised at a faster pace in North India
specifcally because West and South of the country have seen their
share of trade getting organised. East India is still slightly low on
potential.
According to Tata Strategic Management Groups report, globally,
retailers have realised that size drives proftability, not just through
economies of scale in operations but also through higher bargaining power
leading to better margins. While many players are entering the retail space in
India currently, the growth stage will be characterised by rapid expansion and
consolidation among these players.
As the organised food retail market matures in India, there would be an increased
need for retailers, suppliers and marketers to differentiate through innovation in areas
where customers are expected to indulge more. For instance, going by the psychographic
trends, analysts predict that demand for convenience food is certain to rise.
Demand for ready-to-eat (RTE) products will see surge as time for cooking reduces at the
households due to emergence of more nuclear families and working couples. QSR (quick
service restaurants) will also rule the roost, suggests Rajkiran Kanagala, Vice President
and Group Head-Business Development at Transport Corporation of India (TCI).
While looking for convenience, what is also increasingly on the agenda of Indian
customers is the health and wellness quotient of their food choices. Experts predict that,
going ahead, it will gain more traction. Organic foods and wellness products will be seen as
emerging opportunities.
Another noticeable trend that will gain more ground is experimenting with foreign foods
from European, including Mediterranean, to the more exotic Japanese and gourmet foods
from across the world. Food importers and marketers are optimistic that the Indian consumer
is ready for such products. So the market can expect to see more and more imported food
categories and global brands on retail shelves this year. Agrees, Pragya Singh, Associate Director,
Retail, Technopak, Consumers over the recent years have been exposed to a variety of international
TRENDS 2013
Pix: shutterstock.com
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How is Indias supply chain sector shaping up?
Will we see better infrastructure in 2013 following
FDI ruling?
There is a great deal of interest and activity in
the feld of supply chain. We see some sectors
like FMCG maintaining high rates of growth and
margin pressure. These sectors will be looking to
ensure market share by creating more responsive
supply chains and will simultaneously be looking
for ways to lower costs. Consumer durables
which have had slower growth will be even more
aggressive in the same areas.
The impact of the FDI ruling will have a
big impact on logistics and warehousing
infrastructure, but it will be diffcult to predict
the timing of these improvements. The issue
is not only of money, but also capability.
Building capability takes time. It has to be done factory by factory,
warehouse by warehouse and driver by driver. Entrants into this feld
must be ready for the long haul. At the same time, it will create a
great deal of entrepreneurial opportunity in the sector as new and
more sophisticated techniques get deployed. We should expect a
revolution as signifcant as the telecom revolution in this country as
we modernise or creaking logistics systems. Superior distribution
performance can help lower inventories all along the chain. Costs will
come down. Customers will fnd what they want, when they want, and
they will enjoy lower prices, since, in the end, the
customer pays for all the ineffciency that is presently
there.
Whats missing and what needs to be done
immediately to curb wastage?
We have not allowed this sector to truly develop
because transportation and warehousing have
been seen as costs that need to be controlled.
We need to take a view that a sound logistics
capability can deliver competitive advantage - better
responsiveness and lower total cost. This will allow
leaner supply chains and less spoilage and damage
in distribution. We have focussed a lot on the
downstream supply chain but very little focus has
been given to incoming materials. Since companies
negotiate a landed rate, opportunities to optimise
incoming freight and warehousing costs are left untouched.
To address these areas, it is necessary to build capability at
all levels - from senior managers to the operators who handle the
goods. It will range from new models and designs, to such basic
activities as sound loading and unloading practices, automation to
improve turnaround times and reduce damage, to safer and more
comfortable workplaces that increase productivity. Awareness of the
possibilities will help re-orient thought and drive improvements in a
feld that still has a long way to go.
What is your reaction to the Union Budget 2013-14?
Finance Minister P Chidambarams Union Budget for 2013-14
is largely uneventful and not expected to do much to boost
sentiments. Given the fact that this years Budget comes
against the backdrop of the slowest economic growth in a
decade, the Finance Minister has missed the opportunity
to give that much-needed booster dose for growth. In fact,
the absence of any big-bang negative proposal in this years
Budget can be seen as a big positive.
There have some been some feel-good moves in the form of special schemes for three
key sections of the society, that is Women, Youth and the Poor, in addition to greater thrust
on Infrastructure and higher spends on Food Security. It is also heartening to see that the
government is fnally moving ahead with the introduction of Goods & Services Tax (GST) and
the proposal for balance CST compensation to the States is a move in the right direction.
While steps like Rs 2,000 relief to taxpayers in the Rs 2-5 lakh bracket and Rs 1 lakh
additional relief on home loans of up to Rs 25 lakh would certainly put more disposable
income - howsoever little - in the pockets of the common man, but these were much below
expectations. Given the continued Infation, there is very little real relief and cheer for the
common man.
I am quite happy with the governments continued focus on rural India. The decision to
extend interest subvention scheme for short-term crop loans, higher allocation for National
Rural Employment Guarantee Scheme are big positives which would surely go a long way in
putting more money in rural pockets and improving their standards of living. This would, in
turn, ensure continued rural demand.
cuisines and food habits. Many international
brands would fnd India an attractive
opportunity.
As the retail industry expands and
modernises, it is inevitable that retailers will
upgrade their stores by deploying better store
designs, shopftouts and more technological
tools that would not only streamline their daily
operations, but also enhance their customers
shopping experience. In fact, many progressive
grocers are gradually looking beyond the
mandatory POS and CCTV camera to smart
phones, electronic shelf display systems, and
e-commerce.
A recent study by the Retailers Association
of India (RAI) has estimated that modern
retailers would invest about Rs 13,668 crore
by 2017 towards technology solutions for
cost control, opportunity assessment and risk
minimisation.
Pending reforms like GST will go through
a fresh round of debates. There is a genuine
expectation that a clear roadmap for the
revamped version of GST will be unfolded.
Even if the GST at the start is not the most
ideal version, it is believed to be a major game
changer. There is also a need for greater clarity
by the policy makers with respect to FDI. n
SUNIL DUGGAL | CEO, DABUR INDIA
ALAGU BALARAMAN | PARTNER & MD - INDIAN OPERATIONS, CGN & ASSOCIATES
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COVER STORY
How will grocers take their stores to the next level of
upgradation?
India today consists of several upwardly mobile
customers and consumers with access to far more
media and shopping platforms, hence, they have a
desire to shop primarily in a clean and structured
environment, which connotes hygiene, transparency,
non- adulteration, value for money, etc. Since, by
nature, Indian customer gets carried away with
bargains and discounts, grocers need to be
careful about the fundamentals for upgradation.
How will modern retail evolve?
Regions with lesser proximity to wholesale markets
such as Gurgaon in the North, or with lesser strength
of wholesale like in South India will see modern
retail expansion. Neighbourhood stores (NMT) with
large array of daily need products including top two
to three brands in each category; and large format
stores catering to single point monthly and festival
shopping will show better performance.
How will consumer behaviour
impact food sales?
Primarily, we are pre-disposed
to eating hot-from-the-stove
food. One of the reasons is that
labour being cheap in India,
most households have domestic
helps to serve them hot food.
So, completely RTE foods will
grow slowly, but semi-cooked
foods, which are healthy may
grow over time. Health and
wellness aspects will infuence
consumers choice, but there
is large scale distrust and lack
of awareness on organic foods,
which needs to be addressed.
What are your views on GST and FDI?
GST and FSSAI appear to be welcome initiatives,
and debates around the two, if any are mere
rhetoric. As regards FDI, there is certainly
cynicism, especially with our large population
and employment issues. There will be a big
differentiation between national players who would
offer competitive and optimum nodal solutions,
especially with the advent of GST. The unorganised
sector, which mostly operates on local/consignment
basis might get hit. Other issues such as APMC,
labour unions and octroi are still pending for
debates.
Will we see more international brands entering Indian markets?
The market for imported food products continues to grow. Indias agricultural imports
jumped from $7.2 billion in 2007 to $17.3 billion in 2011, and imports of consumer-
ready foods, led by nuts and fresh and dried fruits, have doubled since 2008 to $2
billion. Food exporters face high tariffs, effective bans on some products, and strong
competition from domestic producers, but opportunities are emerging for certain
categories and more international brands from various parts of globe are getting
space in Indian market. The consumer market is gaining international attention
not just because of its promise of volumes but also because of tectonic shifts
happening in the nature of demand: increasing urbanisation, rising incomes, growing
aspirations, exposure to foreign cuisine, willingness to adopt convenience foods, and
double-income households are giving a new defnition to the Indian market.
Which food products will emerge as hot favourites?
Like its culture, food in India has been infuenced by many
civilizations. Tradition, religion, caste, geographic location, and
individual preferences defne food preferences. Dry fruits and nuts,
especially almonds; fresh fruits, fruit juices; alcoholic beverages;
and confections are few of the product categories we expect to
emerge as hot favourites.
Which food categories are likely to perform better?
Over the past few years, small but growing numbers of Indians
have started to eat out more, to try new cuisines and ingredients,
to buy more convenience and processed foods, to focus more
on health and nutrition, and to shop at supermarkets and other
modern food retail platforms. I strongly sense that health food
categories like nuts, and fresh and dried fruits, will lead the
market. The statistics reveal that India imported consumer food
products worth $3.12 billion in calendar year 2011, led by nuts
and fresh and dried fruits.
What consumption growth do you anticipate for American foods?
Of the total consumer food imports into India, the US market share is limited to 14
percent. In the US fscal year 2012, India imported $502 million of consumer food
products from the US a growth of 6 percent over 2011. In general, Indians have
a strong preference for fresh products, traditional spices and ingredients, which
has generally slowed the penetration of foreign foods. However, the acceptance of
packaged, convenience and ready-to-eat food products is increasing, especially among
younger consumers and the urban middle class. Many Indians are quite willing to try
new foods while eating out, but often return to traditional fare at home. Italian, Thai
and Mexican foods are reportedly the fastest growing new cuisines in India.
What are your expectations from the Indian marketplace vis-a-vis other Asian
markets?
Food exporters face comparatively high tariffs, effective bans on some products and
strong competition from domestic producers. Opportunities for value-added imported
foods are generally thought to be limited to higher-income consumers. Import tariffs
on consumer food products range from 0 to 150 percent, but most products face
tariffs in the 30-40 percent range. India has emerged as a very interesting market vis-
-vis other Asian markets and it continues to play a vital role in the global economy,
but it will continue to lag behind other Asian markets due to the high level of market
protection.
MANOJ SATIA | MD,
MANOJ MULTIFOODS AND MMF
DIRECT2U RETAIL
ALLAN MUSTARD | MINISTER-COUNSELOR FOR
AGRICULTURAL AFFAIRS AT THE US EMBASSY
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COVER STORY
What is the current market size of Indias FMCG sector?
The FMCG sector in India is at present, the fourth largest
sector with a total market size in excess of USD 13 billion as of
2012. In the last decade the sector has grown at an average
of 11% a year. In the last fve years, annual growth has
accelerated to 17%. Rural India contributes one third of FMCG
sales in India. Because of innovation, brands such as Lux,
Dettol and Lifebuoy have retained their brand equity. In fact,
innovation is the keyword to the future survival and growth of
FMCG companies.
Cost of raw materials that go into making soaps, detergents
and other personal care products has come down. A study
of the aggregate fnancial performance of the leading 10
FMCG companies over the past eight quarters shows that the
industry has grown at an average 16-21% in the past two years
with average operating margins being 22%. Globally, India is
currently ranked at worlds 12th largest consuming country
and estimated to reach 5th position by 2025.
What will be the challenges in this sector?
Challenges: will pertain to increasing rate of infation, which
is likely to lead to higher cost of raw materials. The standardisation of packaging norms is
expected to increase the cost of beverages, cereals, edible oil, detergent, four, salt, aerated
drinks and mineral water.
Steadily rising fuel costs will lead to increased distribution costs. The present slow-down
in the economy may lower demand of FMCG products, particularly in the premium sector,
leading to reduced volumes. The declining value of rupee against other currencies may
reduce margins of many companies such as Marico, Godrej Consumer Products, Colgate,
Dabur, etc, who import raw materials.
The legal Metrology (Packaged Commodities) Rules 2011 will make it mandatory for FMCG
companies to package and sell specifc products in standard pack sizes only. This law is
applicable for 19 product categories in the FMCG sector including biscuits, soaps, detergents,
edible oils, coffee, tea and milk powder. As per the rule, the smallest permissible pack size of
tea and coffee is 25 gms , while it would be in multiples of 100 gms in the case of baby food
packs. Standard pack size of biscuits would be in multiples of 25 gms up to 100 gms.
Most of the FMCG companies have priced their low price product offerings (in the range
of Rs 2 to Rs 5) in pack size as varied as 33 gm to 74 gm. Movement to the nearest standard
pack size would impact sales volume of these low-priced packs, apart from additional costs
involved in replacing the existing inventory with new pack sizes
What will be the opportunities?
Increasing rate of urbanisation is expected to see major growth in the coming years. Rise in
disposable incomes will result in premium brands having faster growth and deeper penetration.
Innovative and stronger channels of distribution to the rural segment leading to deeper
penetration into this segment, along with increase in rural non-agricultural income and benefts
from government welfare programmes (Increase of PCI), and investment in stock markets of
FMCG companies, which are expected to grow constantly.
What are the long-term projections for the Indian FMCG market?
The FMCG sector is expected to grow to a US$ 33 billion industry by 2015 and US$ 100
billion by 2025 as per several research estimates done around the world. FMCG players are
increasing their product portfolio to maintain their market share (a huge array of products on
its wide shelf space). The food processing Industry, packaged food Industry and opening of
FDI in multi brand retail will give a boost to the FMCG sector.
How will the Indian market for premium/
luxury chocolates perform in 2013?
Chocolate is an industry in itself in India.
The chocolate industry has been growing
at a rate of approx 12 to 14%. The per-
capita consumption of chocolates has
also increased from 50 gm in 2005 to
300 gm now and there is a lot of scope to
grow even further. The industry caters to
a variety of consumers with over 65% of
consumption taking place in urban Indian
markets.
According to an industry body study, at
present, the Indian chocolate market is
about Rs 4,500 crore and is expected to
cross the Rs 7,500 crore mark by 2015,
thanks to the rising consumption in urban
and semi-urban areas. Ahead of the
festival season, the demand of chocolates
this year increased by 35% compared to
last year, mainly in urban areas due to
shift in preference from traditional mithai
to chocolates.
Earlier, people used to gift traditional
Indian sweets, but now they want to
gift different varieties of chocolates.
Chocolates are the best gift for any
occasions and are liked by all generations.
An Indian consumer is always ready to
try new products, and has a wide range
of high-quality products to choose from.
All Leonidas chocolates in India are
vegetarian. Localisation to meet the
consumer needs is always important
for a business to be successful. We do
tremendous research to cater to the
tastes of the consumers here.
VRINDA RAMBHIA |
DIRECTOR - BUSINESS
DEVELOPMENT, LEONIDAS
GAURAV SHARMA | ASSOCIATE VICE-PRESIDENT,
TECNOVA INDIA
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How will wine consumption grow in India?
Traditional wines will remain in demand
but wines in new favours such as lychee,
mango and herbal wines, which have been
appreciated the world over, will become
highly popular in India. In todays changing
world, people want to experiment with wines
made in new styles and, these wines have a
strong Indian connect, therefore, we assume
that they will be immensely liked.
Another visible trend will be in wine
retailing. Modern retail is the new good
thing which has happened in the Indian
wine industry. Change in demographics and
consumer behaviour including preferences,
all put together have resulted in opening
up of modern retail stores which sell wines
alongside other categories. Since these stores
are trendy, spacious and more convenient than
traditional liquor shops, it goes without saying
that modern format will be preferred choice
over traditional stores. Few modern retail
outlets have already out-classed traditional
liquor shops in terms of sales/volumes.
Will we see more international brands?
New international wine brands will certainly hit
Indian shores as we have already witnessed
the entry of so many wine labels in the recent
past. But the fact remains that only a good
wine will sustain this tough market. We have
to understand what goes into making a good
wine; it is nothing but a composition of good
quality, attractive packaging and right pricing.
Also, to cope with the excess demand and
demand fuctuation, foreign markets are now
eyeing India as an emerging market.
How is consumer perception of wine changing?
With aggressive initiative by wine companies
especially by Luca in educating customers about
the enormous health benefts of wines, people
have started believing that wine essentially is
good for health. This will make people switch
their liquor categories to wines. The biggest
consumer of wines in India is going to be the
youth, since India is a country with a huge young
population, and if we communicate effectively
with them, then the chances are strong that
What packaging trends will be witnessed or gain
popularity across various categories?
There have been some landmark developments
in the packaging industry recently. The beverage
segment has seen huge growth with leading
aerated beverage brands having depicted a
growth of over 25 percent recently. This signifes
that the beverage packaging segment has a lot of
unexplored potential.
We are witnessing a shift in packaging from
glass to plastic, especially in case of consumables
and popular items such as ketchups, jams,
syrups and so on. Accompaniments such as
ketchups and sauces have traditionally been
packed in glass bottles, but in the last two years,
manufacturers have opted for multilayer squeezy
barrier plastic bottles, which not only provide the same shelf life and
barrier properties as glass, but also make handling by consumers
very convenient. Brands like Heinz and Kissan have switched to such
packaging formats. This trend will continue in the coming years. There
is also an increasing move towards PET, specifcally for alcohol and
spirits. Even at the retail space, consumers prefer carrying small plastic
packs of liquor. Further, plastic miniature liquor bottles of 60 ml offer
on the go consumption option, which is suitable for serving customers
in aircrafts, for people who are travelling on holidays, etc.
Please share your plans for the year.
Most recently, we have entered the liquor, personal
care, dairy and edible oil segments. Some of the clients
Manjushree has started working with include names such
as Diageo, Bacardi, United Spirit and Radico Khaitan. From
the personal care segment, we have tied up with Himalaya
Drugs Company for our packaging solutions. We have also
started exports to Africa, Thailand, Middle East and some
European countries. We are working very closely with a few
dairy companies to develop suitable packaging solutions
for favoured milk, sweets and other processed foods.
Manjushree Technopack registered a turnover of
Rs 310 crore for the FY 2011 12 and growth of more
than 30% in proft after tax (PAT) for ffth year in a row.
We are currently the largest manufacturer of PET bottles
and preforms in the country, with an existing capacity
of 50,000 MTPA. This will further increase to 80,000 MTPA by the
end of this fnancial year, with the commissioning of new Greenfeld
manufacturing plant in Bidadi, Bangalore. This plant will be completely
automated and will be one of the largest facilities of its kind in south-
east Asia, and it will also be LEED Platinum certifed.
With our expansion plans underway, we have partnered with Nissei
ASB, Japan for our blown containers and bottles; Husky, Canada for
our preform manufacturing systems and other technology from Europe
and America.
this customer segment will prefer wine over
any other alcoholic beverage.
What are your plans for 2013?
We are all set to introduce unique wines
which will surprise the entire wine world. For
instance, we will launch a wine based on a
5,000-year-old recipe. We have a nationwide
coverage in 11 states and over 2,000 outlets.
We are going to gain entry in Maharashtra,
Tamil Nadu and Kerala soon. We are also
highly aggressive in the export market. Our
brands are available in Japan, UK, Dubai,
Nigeria, Malaysia, Italy, New Mexico, Canada,
and a few European countries.
For 2013, we have laid down very
ambitious plans for market development
and penetration, and for uplifting the
overall spirit and image of the brand. Our
focus areas will be promoting the concept
of wine tourism and imparting training on
wines as these two are highly important
marketing tools. Every year, we will launch
a new category of wines.
VIMAL KEDIA | MANAGING DIRECTOR, MANJUSHREE TECHNOPACK
M K RUSTAGI | JOINT MANAGING DIRECTOR, LUCA WINES
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COVER STORY
What does the future portend for modern retail in
India?
Modern retail will evolve in regional areas and this will
be led by traditional retailers converting into modern
trade format.
Dairy, frozen, instant food and fruit juices will
become hot favourites among consumers. We will see health and wellness products like
ricebran oil, whole wheat products, etc, infuencing customer choice, but I am skeptical about
organic food products. Going ahead, instant food and skin care categories will depict the
fastest growth.
With more members working in the families, there will be a change in the consumers
behaviour pattern. They will become more independent and exploratory. This will lead to a rise
in sales of instant foods, for example, sales of packaged curd, ready-to-cook masalas have
grown manifolds in the past few years.
Issues like GST and FDI will draw attention towards different sides of the story, India
is a vast country with many cottage and small household industrial/manufacturing units.
Livelihood of many households depend on such initiatives. Policy makers need to analyse
what alternatives are available to them.
How will modern retail evolve
and across which regions?
The retail business model
has not yet been perfected.
The economic slowdown
in 2008-09 made retailers
adopt a cautious approach,
work on fne-tuning their
business models, building
a supply chain backed by technology,
closing unviable stores and formats and
starting new ones. This fne tuning process
and innovation in formats and technology
will continue. Formats which maximize
space productivity while adapting to their
catchments will display better performance.
Retailers are continuously rationalising
space and reshuffing store layouts in an
attempt to offer more convenience and cost
benefts to consumers
Will the GST/FDI/FSSAI and other issues
draw fresh debates?
GST is likely to stay in the news as
consensus is required between the States
and the Union Government. Although the
Union Government has allowed 51% FDI in
multibrand retail, it has left the fnal decision
to individual State Governments. Along
with the riders and conditions this comes
with, and the looming general elections in
2014, uncertainty amongst foreign
multibrand retailers looking to enter
India with remain.
Will we see more international
brands entering Indian markets?
Consumers over the recent years
have been exposed to a variety
of international cuisines and
food habits and with increasing disposable
incomes and aspirations, many international
brands would fnd India an attractive
opportunity and look to enter the country.
Will we see better infrastructure for supply
chain/logistics/warehousing?
Food & Grocery sector depends heavily
on supply chain effciencies . Currently we
have an ineffcient storage leading to high
wastage. Fruits and vegetables wastage
is as high as 30-40%. There is inadequate
cold storage capacity - 65% of Indias cold
storage facilities are only used to store
potatoes. Warehousing effciencies are half
the world average. There is a lot which needs
to be done and while some efforts are on in
this direction, this will take signifcant time,
investment and effort from both the private
players and the government and we may
not see any instant drastic changes in the
current scenario.
The cookie market is expected
to grow by at least 25-30%
this year. This is due to several
factors such as the price of
packaged biscuits is going up
and closing the gap between
packaged and fresh baked.
People understand that with a
minor price differential they can
purchase a premium product.
Also, the market has seen the
emergence of new categories,
such as cream-flled, health
cookies, etc. Cookieman has a presence
in all these categories and expects to
grow at 25-30% this year.
India is a market which understands
Scotland, and has a
consumer base with a
diet that naturally fts
with the quality products
from Scotland. From
our preliminary market
research, we realised
that Indian consumers
have a liking for biscuits,
sweet products, oatmeal,
whisky, and seafood. India
also has its own Indian
species of salmon (albeit
different from our Scottish
salmon), so we have a lot in
common.
With a fast growing
retail and premium
foodservice sector in India, and a stated
strong demand by Indian buyers for
new international products, Scotland is
well placed to respond to this market
opportunity.
For 2013, Scottish Development
International will educate Scottish
companies on the Indian market place.
They will also bring a delegation of
Scottish companies to the market to
see and learn for themselves. We will be
working closely with Indian businesses to
grow our trading relationship with India.
PRAGYA SINGH | ASSOCIATE DIRECTOR, RETAIL, TECHNOPAK
MARK DOLAN | DIRECTOR
- SCOTTISH DEVELOPMENT
INTERNATIONAL (SDI) INDIA
ANUPAM SALUJA | CEO,
AUSTRALIAN FOODS (I)
CHETAN SANGOI | MD,
SARVODAYA SUPERMARKET,
MUMBAI, AND RETAIL CONSULTANT
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COVER STORY
How will modern retail evolve and across
which regions?
Progressive grocers will take their stores to
the next level of up gradation by building on
scalable model, which comprises of factors
such as an economically effcient supply
chain model, an excellent understanding
of various elements of Indian retail with
the competence to marry it with the
requirements of modernised version of retail,
and skilled manpower. The entire model is
backed by the right use of technology. We at
Savemax are attempting a new retail model
which encompasses all the above.
Most of the retail chains in India have
tried to ape the Western formats. This has
seriously impacted the supply chain and how
one manages different categories within a
store. All this has negatively affected not
just bottom lines, but cash fows as well, and
has left the consumer more confused rather
than better informed.
Going ahead, we will see retail becoming
more organised, and at a much faster rate,
especially in north India because the west
and south have already seen their share of
trade getting organised. But east India is still
slightly low on potential.
The food and grocery industry has always been an extremely dynamic
space. The availability of new and advanced technologies, shifts
in buying power, and scarcity of natural resources are expected to
reshape the industrys supply chain at an unprecedented pace.
These trends will compel manufacturers and retailers to redefne how
they collaborate with each other and with other trading partners by
streamlining supply chain operations.
Technologies which enhance supply chain effciencies and provide
increased visibility, safety and security of supplies in transit, will
be increasingly adopted within the food and grocery retail sector.
In addition, technologies and IT applications which enable deeper
consumer insights would also be increasingly used.
Consumers desire for easy access to more information to
make informed choices and their increasing ability to access it
via technology like smart phones will open a window of opportunity to improve consumer
confdence in digital product information while also further addressing the growing focus
among consumers and regulators on health and wellness as well as the need for convenient
shopping by consumers.
This will increase the adoption of global standards for the implementation of Business-to-
Consumer (B2C) applications connecting consumers to trusted product information through
the use of mobile devices.
Which categories will show better growth than
others?
Trends suggest that categories based on
health and wellness will defnitely infuence
consumer choice more and more. They will
look for products that offer signifcant health
benefts. In fact, demand for health and
wellness products has increased manifold,
and will keep on increasing in the near future.
According to a report jointly released by FICCI
and PwC, the Indian health and wellness
segment, which is estimated at Rs 59,000
crore and growing at a CAGR of 18-20 percent,
is set to double by 2015.
Even the organic food market is expected to
grow signifcantly due to increasing awareness
of natural, chemical-free food. At present the
organic food market is growing at a rate of 20-
22 percent per annum.
How will consumer buying pattern impact
sales?
With the onset of wholesale club models,
consumers would be willing to pay for a larger
pack size if they see value in the deal. Thus,
a retailer must not confuse the consumer
by offering too many shadow brands. This is
one aspect which will certainly see a change
in the buying pattern. The consumer is
getting more cautious about the quality of
goods, thus, as a retailer, we must focus on
ensuring quality.
Please comment on the long-pending GST
implementation issue and FDI.
It is high time these concepts are put
into action rather than simply debating on
them! GST shall certainly prove to be a game
changer. A strong tax law is required to
provide a level playing feld for all trades. FDI
will help increase trade and infrastructure,
but would have a serious impact on the
policy making of the country. India needs to
invest in technology. We have a good supply
chain management (SCM) in the country.
Only it is rusting; it needs a fresh lease of life
by restructuring the entire model.
India is a large and dynamic market in
which the opportunities for premium
brands such as Loch Duart are
increasing. We have been impressed
by the knowledge of Indian buyers
throughout the food chain and especially
in the level of interest in provenance and
our sustainable production methods.
India is a sophisticated market in which
quality products are understood and
appreciated and in which value is also
well understood. We aim to deliver on
both counts. We welcome visitors to our
pristine environment in the Highlands
and Islands of Scotland, where we live,
work and rear our salmon, and hope to
see many more visitors from India in the
future.
VAIBHAV SINGHAL | FOUNDER, SAVEMAX
RAVI MATHUR | CEO, GS1 INDIA
ALAN INGIS | MD, LOCK
DUART (A LEADING SALMON
FARM IN SCOTLAND)
www.imagesfood.com AHEAD OF WHATS NEXT MARCH 2013 PROGRESSIVE GROCER 49
What is your outlook on food products in
2013?
Looking into the past few years trend, we
foresee fast growth in the convenience
food segment along with the traditional out-
of-home food category such as ice creams
and frozen desserts. Shelf stable goods are
growing consistently in our markets, and a
desire for modern, healthy food is seen as
evolving from developing to more developed
market. The continuing need for value as a
trend is also growing.
What are your plans for the current year?
Apart from launching new favours such as
Badabite, Flingo, Gourmet and Ice Trooper,
we plan to launch several products in the
Artisan range. Some products are being
launched for the frst time in the Indian
market, and we are hopeful of a tremendous
response from consumers.
We have recently expanded into favoured
milk with the launch of Power Sip in kesar,
elaichi and rose favours. Going ahead, we
plan to add chocolate and coffee favours.
We also have a huge portfolio of
processed food available under the name
Vadilal QuickTreat. We have added many
products in the ready-to-eat (RTE) and ready-
to-serve ( RTS) segments.
Since distribution plays a key role in the
success of our business, we are planning
to increase our reach by consolidating our
presence in cash and carry format as well
in modern trade. For ice creams, which is a
cold chain-dependent product, logistics are
complex and we are continuously expanding
DEVANSHU GANDHI | MD, VADILAL
our cold chain distribution network through
refrigerated vehicles and deep freezers.
In terms of marketing, we ensure maximum
reach through an optimum mix of above-the-
line (ATL) and below-the-line (BTL) activities.
For this year also, we have a 360-degree
marketing plan. However, the advertising
budgets are more skewed towards television
as we have a nation-wide reach now.
We are constantly engaging our trade
patrons through various schemes and also do
consumer promotional activities from time-to-
time. Our iconic 1+1 scheme for party packs
has become an all-around-the-year trend for
the entire industry.
What is your expectation from FDI?
As the Indian economy transits towards
a matured and developed structure, it
is impossible to operate in isolation. As
physical boundaries dissolve and businesses
become global, increase in FDI will facilitate
the growth. Global economic policies would
attract more FDI and subsequently higher
export growth. All this in turn would prove to
be benefcial to us as well.
RAJKIRAN KANAGALA | VP & GROUP HEAD - BUSINESS
DEVELOPMENT, TRANSPORT CORPORATION OF INDIA (TCI)
What trends do you foresee in F&G industry?
The global food and grocery industry is forecasting to generate revenue of almost USD 7
trillion by 2016. Supermarket, hypermarket and discounter sales combined
represented the most proftable segment in the world food retail market,
generating almost USD 2.75 trillion in revenue for 2012, which was over
45% of the overall market value.
What trends do you foresee in F&G retailing?
Modern retail stores have slready captured the market in tier I cities. Now
they are concentrating more on tier II cities. Other trends currently evident
in the global food retailing industry include use of digital technology and
Internet marketing. Food retailers in India will have to be very reactive to
constant changes in consumer behaviour to attract customers and offer
them appropriate packaged goods at prices they are willing to pay.
What are the main challenges?
The recent agricultural awakening is changing the way many food
companies source products. Apart from marketing appeal, food quality and safety concerns,
transportation costs, and local economic development efforts are compelling restaurants,
grocers, and wholesalers to engage smaller producers and localise their supply chains. At
the infrastructure and supply chain front, we will see better infrastructure for supply chain,
logistics and warehousing. The main reason is that the market has been responsible for the
rapid growth of organised retail industry, commodity market, and growth in manufacturing
and development.
Which food categories will emerge stronger?
The RTE market will see a surge in demand as time for cooking reduces with nuclear working
couples wanting instant food more and more. Quick-service-restaurants (QSRs) will also rule the
roost. Also, demand for frozen foods and RTE in India is rapidly increasing, which leads to better
infrastructure for supply chain industry. Indian logistics market is expected to grow annually at
the rate of 15 to 20%, reaching revenues of approximately USD 385 billion by 2015.
What are TCIs plans for the current year?
We are setting up new warehouses near Nagpur at MIHAN and also in the North at Kundli-
Manesar highway, besides in other major metros. These warehouses will vary in size from 1.5
lakh to 2.5 lakh, and will be multi-user, racked; completely managed by WMS for the beneft
of TCIs clients as we approach GST. TCI already has one of the widest networks of 1,000+
branches to serve its customers. This is besides its international presence.