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The recent shift in trend towards healthy FMCG products

The recent shift in trend towards healthy FMCG products

The Covid-19 pandemic has sparked greater focus on health, convenience, and sustainability among consumers as attention turned to proteins and fresh proteins, a Deloitte India survey has found.

Indians are slowly moving away from parathas and cookies to a wider assortment of cereals, oats and milk food drinks as fortified foods with incremental nutrients gain favor with consumers who are willing to spend more on healthy foods. The overall health and wellness food products segment crossed Rs 10,000 crore sales mark in 2015, less than 10% of the overall food market, according to a latest report by Nielsen. Yet, marketers are upbeat.

“With most urban consumers, especially millennials, opting for such products now, the country will see a hockey stick curve in the overall category growth, especially for healthier variants as young consumers are more concerned about diet and lifestyle than their previous generation.”

The following reasons have escalated the impact:

Mindful diet: Grains accounted for 55% of the daily calorie consumption, down from 63% in 1961. Consumption of proteins has increased to 63 gm in 2015-17 from 55.3 gm in 2000-02, while fruits, vegetables, and superfoods like olive oil and green tea are also growing.

Mindful wellness: Nutri-cereals such as millets have started to replace daily staples such as wheat and rice as focus on a healthy lifestyle and preventive health care increases. Consumers are also keen on food fortification to increase nutrition.

Mindful sourcing: Today’s consumers are also concerned about the safety of their food, leading to an affinity for organic food. The Indian organic food sector is expected to clock a compound annual growth rate of 21% to hit Rs 182 billion by 2026 from the current Rs 60 billion currently.

Mindful preferences: Customer preference for food items that appeal to their local tastes has led to the growth of regional brands. This could force brands to be cognisant when planning their product mix. National brands are trying to focus on offering regional variants as well.

Mindful purchase: Customers now prefer to buy packaged staples rather than unpacked supplies. Covid-19 accelerated this trend. Private-label retail brands are witnessing increased traction due to this preference for affordable packaged food.

food businessMilk food beverages contributed nearly half of the health products category with sales of Rs5,180 crore followed by healthy oils and multigrain atta at Rs1,250 crore and Rs1,205 crore each.

A granular view of the geographies shows that south India is the earliest to adopt the trend accounting for 36% share for such products followed by eastern India. Surprisingly, Indian shoppers mostly turn to traditional trade stores for their provisions, with health and wellness foods being no exception except instant noodles and cereals that buck the trend with healthy sales in modern trade outlets.

“Cultural factors and eating habits make Indians prone to weight issues, and with consumers now judging themselves on international body-image parameters, the general consensus is that a concerted effort on health and wellness is imperative,” said Manoj Kulkarni, director at Nielsen India.

“There is an increasing trend for genuine products that have the backing of health benefits,” said Aditya Bagri, director at Bagrry's that sells muesli and oats. “Making such products palatable is critical so that it is consumed regularly.”

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