With house help unable to visit residential societies, operating restrictions on restaurants, couples juggling between work-from-home and managing their kids, there is accelerated growth in Instant Meals. The past 24 months have significantly increased the spotlight on convenience leaning food categories such as Ready-to-Eat (RTE), Ready-to-Cook (RTC) and Ready to Serve (RTS).
The instant meal industry in India is currently estimated at INR 40 billion and is estimated to grow at a CAGR of 18% over the next 5 years. The breakfast cereal category currently holds the largest share of this market but there is an increasing demand for instant all day meals given the widening consumer base. The past few years have also seen several Quick Service Restaurants (QSR) chains and larger FMCG brands like Jubilant Foodworks, Wow! Momos, Veeba, Adani Wilmar etc. foray into RTE and RTC food segments.
Rapid urbanisation, busier lifestyles and growing nuclear families are some of the factors that have traditionally led to growth of convenience foods. However, this category has been slow in scaling up compared to the exponential growth in other segments like food delivery, cloud kitchens and F&B SaaS over the past decade. One of the key reasons for this is the growing realisation among consumers that Instant Meals are often loaded with preservatives to provide longer shelf life and artificial ingredients to enhance flavours. Increasing health awareness, especially among the younger demographic of consumers has hindered the growth of this market.
Taste, convenience and cost have traditionally been key influencers in driving purchase of Convenience Foods. While taste remains the key driver of consumer preference for foods, there is an increasing inclination towards parameters around health, nutrition, and ingredient transparency. Simply put, consumers are demanding real ingredients from nature as opposed to “lab created” artificial or natural flavours. Covid-19 has also accelerated consumer interest in dietary intake and health with considerable uptick in people who expect their food to deliver nutrition while building immunity.
Over the past few years, India has seen a host of startups emerge in the RTE space but most of these have struggled to grow given minimal differentiation in quality compared to that of larger players like Nestle, Tata Consumer, ITC, MTR, Haldiram, Marico etc. While the Covid-19 lockdown has devastated many businesses in the travel, food and hospitality space, it has created wide ranging opportunities in the Convenience Food category.
Supply chain disruptions triggered by Covid-19 has led to the emergence of a new sub-vertical in the online grocery segment — Quick Commerce (q-commerce) that promises delivery of convenience items in as quickly as 10 minutes. Platforms like Swiggy Instamart, Zepto, Flipkart Supermart, Ola Foods, Blinkit (earlier known as Grofers) are betting heavily on this model that promises to provide a major fillip to RTE and RTC brands.
Rapidly evolving consumer preferences have created the need for Ready-to-Eat options for everyday consumption that can be enjoyed guilt-free without any harmful effects in the long run. The advent of advanced food science technologies, innovative packing and processing techniques has made it possible to create high quality food products that can be prepared in minutes without compromising on the taste, freshness, or nutrition. Smaller, entrepreneurial food brands now have the unique opportunity to disrupt the Convenience Foods category by re-imagining the way foods are prepared, preserved, and ultimately delivered to consumers.
This challenge has been taken up by a new brigade of food-tech startups like Yu Foodlabs, Being Chef, ID Fresh Food etc. across the RTE, RTC and RTS food categories. These startups have crafted their products after years of R&D that includes ingredient analysis, recipe formulation and product development. This is an exciting new phase for the convenience food category, and it will be interesting to see whether this wave of innovative ventures can live up to quality expectations of consumers and gather a larger share of the food industry.