Ready to Eat Food Market Essay

Ready To Eat segment – Document Transcript Chapter – 1IntroductionIndia has made lot of progress in agriculture & food sectors since independence in terms of growth in output, yields and processing. It has gone through a green revolution, a white revolution, a yellow revolution and a blue revolution. Today, India is the largest producer of milk, fruits, cashew nuts, coconuts and tea in the world, the second largest producer of wheat, vegetables, sugar and fish and the third largest producer of tobacco and rice.

Now the time is to provide better food processing & its marketing infrastructure for Indian industries to serve good quality & safest processed food like ready to eat food. It is opening a new window in world scenario as far as taste & acceptance is concerned. Therefore, Indian Government is providing more infrastructure for this sector. Excise duty is now ZERO % on RTE and 100 % tax deduction for the first 10 years for new units. This allows manufactures to bring down their prices & spreads its flavors to the world.

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These foods meet the specific needs of convenience, nutritional adequacy, shelf stability, storage, distribution to the centers and have become very popular after the Year 2002. Some of the mouth-watering dishes in RTE include sooji halwa, upma, chicken curry, mutton curry, fish curry, chicken madras, chicken kurma, rajma masala, palak paneer, dal makhnil, mutter paneer, potato-peas, mutter mushroom, vegetable pulav chicken pulav, and mutton pulav, etc. The market for semi-processed/cooked and ready to eat foods was around Rs 82. billion in 2004-05 and is rising rapidly with a growth rate of 20 per cent. With the changing life styles of the Indian middle class and the busy schedules of both the husband and wife in the family the demand for semi-processed cooked/ready to eat food will go up steadily as hired domestic help is also becoming costlier. HLL has entered the ready to eat segment through Indus Valley rice meals in seven flavours. MTR Foods has also launched a wide range of rice meals and other curries. Satnam Overseas has also entered this growing market with its Kohinoor brands of rice meals and curries.

ITC ‘s more than 50 packaged branded food products under Kitchens of India and Aaashirvaad brands with different varieties of ready to eat, cooked, food is gaining popularity in the market. Pizza Corner has also expanded its outlets rapidly this year. There are currently 37 Pizza Corner outlets of Global Franchise Architects (GFA) across India. The total production of culinary products and snack food was around Rs 1750 crore in 2004-05 and is growing at a moderate rate of 8 per cent. The culinary products including mainly wheat based products comprising of noodles, vermicelli, macaroni and spaghetti is gaining popularity.

HLL (Kissan and Knorr range) and Nestle (Maggi) dominate this segment, as both have large product portfolios. Heinz and Top Ramen are also knocking at the door. Indian snack food market has reached a value of Rs 1530 crore. It is one of the largest snack markets in the world. Potato chips are by far the largest product category within snacks, with 85% of the total market share. Snack nuts and savory snacks also add to the market. At present, popcorn has yet to break into the Indian market.

Frito Lay's India, Pepsico’s Snack Food Division having snack foods plants in Channa (Punjab) and Pune (Maharashtra), and going for another in (Sakrail) West Bengal with investment of Rs 75 Crores as the state of West Bengal has immense opportunities for agro-based industries. The company has carried out backward integration to source potatoes and other crops with farmers across the states. The world’s largest producer of French fries and potato specialties McChain Foods with McChain Smiles and NP Foods have entered in India’s potato snack industry in 2005.

Objectives:To identify the factors affecting the overall demand of ready to eat segment despite being a convenience product. * Consumer perception about RTE segment * Buying patterns of RTE by consumers * Factors affecting repeat purchases of RTE by consumers  * Identify and define profile of a target RTE customer  Analysis will include: * Demographics vs attitudes of people * Percentage of people aware about RTE & have purchased it  * Percent bought an RTE on monthly basis vs emergency basis  * How did the respondents come to know about RTE – So that awareness could be increased through those means? Critical areas where communication is required to draw a change in the perception/attitude of customers towards RTE segment  * Points people gave to prefer RTE as an option when needed  * Checking the repeat purchase levels of the respondents who have purchased RTEs 8. Top of Mind brand recall (Unassisted) for Leading Brands  * Customer Profiling based on:- * Age Group * Marital Status * Nature of family (Nuclear/Joint) * Typical Family Size * Income Group * Communities which accept RTE

CHAPTER-2Review of literatureConsumer Buying Behaviour of Ready-to-eat food According to the report of Euromonitor International, a market research company, the amount of money Indians spend on meals outside the home has more than doubled in the past decade, to about US$ 5 billion a year and is expected to double again in about half that time. The industry is estimated to grow at 9-12 per cent, on the basis of an estimated GDP growth rate of 6-8 per cent, during the tenth five-year plan period. Value addition of food products is expected to increase from the current 8 per cent to 35 per cent by the end of 2025.

Fruit and vegetable processing, which is currently around 2 per cent of total production is estimated to increase to 10 per cent by 2010 and to 25 per cent by 2025. With the growth of 150 per cent in sales, the popularity of food and agro products is not surprising. With such promise in the sector, a number of foreign companies have joined the competition. While US brands such as McDonald's, Pizza Hut and Kentucky Fried Chicken have become household names, more are on their way. The new wave in the food industry is not only about foreign companies arriving here attracted by the prospective size of the market.

It is also about the migration of the made in India tag on food products travelling abroad. Indian food brands and fast moving consumer goods (FMCGs) are now increasingly finding prime shelf-space in the retail chains of the US and Europe. These include Cobra Beer, Bikanervala Foods, MTR Foods' ready-to-eat foodstuff, ITC's Kitchen of India and Satnam Overseas' Basmati rice. Major social, economic and demographic changes over recent years have had great influence on the food we eat, and on where, when and how we do so. As a result the convenience food sector has grown by 70% over the past decade, creating a huge market.

Convenience foods are foods which are designed to save consumers time in the kitchen and reduce costs due to spoilage. These foods require minimum preparation, typically just heating, and are packaged for a long shelf life with little loss of flavor and nutrients over time. These products tend to be criticized because:- * They typically are high in fat and calorie contents * The reduced time cost and nutritional content associated with these foods is specifically blamed for obesity * Sometimes Genetically Modified Foods are used Sometimes an irradiation process is used * If heat processing is used the vitamins are lost * Preservatives are always used These products tend to be used because of: * Cost is not very high * Time costs: Convenience foods reduce the time it takes to prepare dinners significantly. * Variety: Due to packaging techniques such as canning and freezing, foods are available at all times of the year. * Food safety: Packaging and processing techniques, such as canning, freezing, and irradiation, reduce spoilage and the presence of bacteria in the consumed products.

Consumer Foods This segment includes packaged foods, aerated soft drinks, packaged drinking water and alcoholic beverages. Packaged / Convenience FoodsConsumer food industry mainly consists of ready-to-eat and ready-to-cook products, chips, salted snacks, pasta products, cocoa based products, bakery products, biscuits, soft drinks, etc. There are around 60,000 bakeries, 20,000 traditional food units and several pasta food units. The bakery industry is among the few processed food segments whose production has been increasing steadily in the country in the last couple of years.

Bakery products include bread, biscuits, pastries, cakes, buns, rusk etc. This activity is mostly concentrated in the unorganized sector. Bread and biscuits constitute the largest segment of consumer foods with an annual production is around 4. 00 mn tonnes. Bread manufacturing is reserved for the small-scale sector. Out of the total production of bread, 40% is produced in the organized sector and the remaining 60% in the unorganized sector. Similarly, in the production of biscuits, share of unorganized sector is about 80%.

Cocoa Products There are 20 units engaged in the manufacture of cocoa products like chocolates, drinking chocolate, cocoa butter substitutes, cocoa based malted milk foods with an annual production of approximately 34,000 tonnes. CONCEPT Ready to Eat Meals like already cooked or prepared lunch & dinner are relatively new products which came in market only a few years back and are now sold through retail general stores in especially made sealed aluminum laminates. The retorting or sterilization process ensures the stability of the Ready-to-Eat foods in retort pouches, on the shelf and at room temperature.

The application of sterilization technology completely destroys all potentially harmful micro-organisms, thereby making sure that the food product has a very long shelf life of over 12 months and needed no refrigeration. When customer needs to eat, the food item pouch is either put in microwave oven to warm it or keep in heated water for a few minutes and then serve to eat. Such ready to eat meals have been especially given to soldiers in army of many countries who require carrying their rations while on war front or while located far away from their main unit.

The advertisements like, ” Hungry Kyaa” are adding zest to the market by popularizing such food items which are pre-cooked and free from any preservative, and yet have a long shelf life of over 12-months. These food items are normally selling in pouches, well packed in cardboard printed boxes of small book size and carry about 300 grams of cooked food at a price of about Rs. 40 to 200 in foreign market depending upon the type of dish packed. One packet of vegetable dish is normally sufficient for one meal for two persons and therefore falls in economic zone of consumer’s preferences.

WHY READY TO EAT FOOD Globalization of Indian food and its culture are the core factors for popularization of ready to eat foods. Main motivation for these ready to eat foods is fast growing foreign market. Retail outlet culture is now growing rapidly in India. Shelf life of these foods are at least 12-18 months. Quality, Taste and Flavor of these foods remains as good as fresh up to the expiry date. Women wanting to spend more time out of the kitchen. More working bachelors staying away from homes. Cost effective in comparison to the Indian cuisine served by the restaurants in foreign countries.

TYPES OF READY TO EAT FOOD Veg Food Non Veg Food Alloo Matar Chicken Curry Palak paneer Butter Chicken Sarso Ka Saag Karahi Chicken Chana Masala Mughalai Chicken Kadi Pakora Mutton Masala Cheese Tomato Mutton Korma Dal Makhani Karahi Mutton Rajma Masala Mutton Biryani MAJOR PLAYERS IN READY TO EAT FOOD MTR Kohinoor Foods ITC Haldiram Tasty Bites MARKET & ITS GROWTH The popularity of ready to eat packed food now is no longer marks a special occasion. Peoples want value for time, money in terms of quality and variety.

The food processing industry is one of the largest industries in India and it is the ranked fifth in terms of Production, Consumption, Export & Expected growth. Processed food market in India accounts for 32% that is Rs. 1280 billion or 29. 4 billion US $ in a total estimated market of Rs. 3990 billion or 91. 66 US $. Euromonitor International, a market research company says that amount of money Indian spend on ready to eat snacks & food is 5 billion US $ in a year while on abroad Indian or Indian subcontinents spend 30 billion US $ in a year.

Ready to eat packaged food industry is over Rs. 4000 crore or 1 billion US $ and it is growing at the rate of 20 % per annum. Ready to eat food market is developing specifically in UK, USA, Canada, Gulf & South Asian Countries with the growth rate of over 150 % per annum. Tata Strategic Management Group, have released its analysis on the Ready-To-Eat (RTE) foods market in India currently worth Rs. 128Cr. (2006), expecting it to further expand to Rs 2900 Cr. by 2015.

The factors contributing to this growth would be changes like cold chain development, disintermediation, streamlining of taxation, economies of scale on the supply side, coupled with increasing disposable incomes, diminishing culinary skills and the rising need for convenience on the demand side. The Assumptions made: * The random sampling distribution of a statistic is approximately normal. * Values given by the samples are sufficiently close to the population value and can be used in its place for calculating the standard error of the samples.

Objective of the study: * The prime objective of the study was to understand the variation in the importance given by people from different age groups, occupations and number of family members to various factors(quality, price, taste,brand,etc) associated with RTE food products. CHAPTER-3METHODOLOGYThe Ready To Eat industry is a highly competitive one. To be successful, it must be able to project the right image as well as meet the needs of customers. Marketing strategies must be formulated to attract customers. This report looks at some aspects of the RTE market in India.

It examines the buying behaviour of consumers and gauges their perceptions of marketing variables. DATA COLLECTIONPrimary data: – Which is collected by new research called primary data. * Questionnaire * Secondary data: – Already existing data is called secondary data. We collected them by following method –InternetBooksSURVEYTo obtain a better insight of the RTE Market, a questionnaire was designed to answer the following questions:A questionnaire survey was done on a sample of people taken at random. The survey was conducted on 60 people among whom the questionnaires were circulated.

Design of the questionnaireIt is mainly composed by four segments in this investigation:-The first part of the questionnaire consist of : * Name * Age * Marital Status * Occupation * Monthly Income * Number of Family Members * Which is necessary to predict the lifestyle of the respondents and to know their family background, this will help in relating how consumer preferences vary with varying parameters. * The second part of the questionnaire contains of information that * What are the preferences of the consumers regarding brand * Beliefs about RTE food products. When do they buy RTE? * Which brand of RTE have they heard of ? The third part contains of * Price which the customers are willing to pay for the RTE food products. * Role of retailers in promoting a RTE brand. * From where customers get information about new RTE food products and brands from. The fourth part consist of * Importance of free sampling for growth of RTE brands. * Comparison of taste between RTE and home made food. * Importance of Brand ambassador in promoting a RTE product. * Whether customer is satisfied with the range being provided by RTE brands. CHAPTER-4 * ANALYSIS Q1. Do you buy ready to eat food frequently? YES NOOBJECTIVE: This question helps us to analyze the frequency by which the respondent is using RTEANALYSISPi-chart 1It is clear that 44. 44% people use RTE frequently and rest are not use to it. This interpretation will help in comparing later questions. Q2. Do you think ready to eat food keeps its nutrition value intact-? YES NOOBJECTIVE: This question was set up in order to check the customer feedback about the nutrition intact of RTE.

What do respondent think about the RTE quality and is respondent health conscious or not. Pi-chart 2It is clear that people do think about the nutritional content present in their diet and about 71% people think that RTE is not that nutritional than normal food. Q3. When do you buy ready to eat food-? * Flying abroad Get-together at home Avoid cooking AnytimeOBJECTIVE : Through this we are comparing Question No1 and Question No 3 and if the respondent buys frequently then on what occasion is the respondent buying it.

StatisticsWhen do you buy ready to eat foodNValid45Missing0When do you buy ready to eat foodFrequencyPercentValid PercentCumulative PercentValidFlying abroad1737. 837. 837. 8Get together at home511. 111. 148. 9Avoid cooking1942. 242. 291. 1Any time48. 98. 9100. 0Total45100. 0100. 0 Pi-chart 3It is clear from above pi chart that maximum people use RTE while they fly out of the country and when they want to avoid cooking. Q4. Which brands amongst given below you have heard of ??  Amul Haldiram Ethnic kitchen Kitchens of India ITC MTR Tasty bite Ashoka ready to eat PriyafoodsOBJECTIVE: This question was asked to know that market leaders in RTE as per customers and there first preference of choice. StatisticsAmulHaldiramEthnic KitchenKitchens of IndiaITCMTRTastybiteAshoka RTEPriyafoodsNValid454545454545454545Missing000000000AmulFre quencyPercentValid PercentCumulative PercentValidYes3066. 766. 766. 7No1533. 333. 3100. 0Total45100. 0100. 0HaldiramFrequencyPercentValid PercentCumulative PercentValidYes3577. 877. 877. 8No1022. 222. 2100. 0Total45100. 0100. 0Ethnic KitchenFrequencyPercentValid PercentCumulative


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