By P. Rajan Mathews
NEW OUTLOOK AND PIVOT FOR THE PACKAGED Food & BEVERAGE INDUSTRY:
The two months plus Covid Pandemic Lockdown period is a Disruptor for many industries including the Indian packaged Food and Beverage Industry. Due to the Covid Lockdown, changes in the Indian Consumers habits and their behaviour will result in the changes in demand and needs of the Indian Consumers are going to change in comparison to the pre Covid Lockdown period. The changes will dictate the new norm and outlook for the post Covid Lockdown Decade for the Indian packaged Food and Beverage Industry in the following ways:
I. New Age Grains / NUTRI-CEREALS will gain momentum : Millets comprising of Sorghum (Jowar), Pearl Millet (Bajra), Finger Millet (Ragi / Mandua), Minor Millets i.e. Foxtail Millet (Kangani / Kakun), Proso Millet (Cheena), Kodo Millet (Kodo), Barnyard Millet (Sawa / Sanwa / Jhangora), Little Millet (Kutki) and two Pseudo Millets (Black-wheat (Kuttu) and Ameranthus (Chaulai) have high nutritive value as “Nutri-Cereals” for production, consumption and trade instead of Coarse Cereals. Quinoa is another new age Grain which has an incredible nutrition base and are considered better sources of fibre, protein, vitamin B, iron, and high levels of protein in comparison to other grains available.
II. Fortified and Biofortified foods will be the new Norm: Food fortification is one of the simplest and most sustainable public health strategies to address the challenge of micronutrient deficiencies. Biofortification is a cost-efffective and sustainable sloutions that uses conventional plant breeding and agronimic practises to increase the density of micronutrients such as Vitamin A, Zinc and Iron in staple foods such as Wheat, Rice, Pearl Millet, Maize Beans and other food crops.
III. The rise of value-added Culinary Ingredients for Home Cooking: The new Home Cooking will also demand the intermediate Gravy mixes such as Red Tomato Gravy mix for Dal / lentils, vegetable, rajma and Chick peas / Chole and paneer curries, White Gravy mixes for Mughlai dishes and paneer dishes and the Non-Veg Gravy mixes for preparing the Non-Veg dishes.
Following are the Culinary Ingredient Products that are bound to grow faster in the
post Covid Lockdown decade….
Cut vegetables, Peeled Garlic and Ginger.
Retail / Supermarket Brands and private labels
Cooking Pastes– Ginger &
Garlic, Green Chilies, Tamarind, Kanda-Lasun etc
Mother’s Recipe, Dabur’s Hommade, Smith & Jones,
White Gravy Mixes, Red Gravy Mixes, Non-Veg Gravy mixes
Maggi Bhuna Masala and Brands present in Food Service such as Knorr, Mother’s Recipe, Cremica.
Spice Mixes for Indian Curries –
Veg & Non-Veg
Mother’s Recipe, Suhanaa, MTR,
Spice Mixes for S.E Asian
Tomato Puree and Paste.
Hommade, Easy Cook, Kissan,
Coconut Milk and Milk powder.
IV. Working from Home and more Home Stays will stir up demand for the Ready to Cook and Ready to Eat Foods: In the future post Covid Pandemic Lockdown most Companies will look at Working from home as the new working norm. Schools and Colleges with the need to maintain social distancing and as precautionary measures will encourage students lesser time in School / Colleges and will have alternate coaching / teaching online.
V. Future of the Indian DAIRY industry post the Covid Lockdown: As Indian Consumers is more dependent on the Milk and Milk products for its nutrition the Covid-19 pandemic has thrown up the real possibility for the dairy industry to benefit as large sections of consumers will strongly shift from meat-based to dairy-based protein. The Covid Pandemic Lockdown has made people more aware of the need to adopt a healthy diet and this will increase the demand on the Dairy products with more solids and fat through.…
Homogenised Standardised Milk will be in more demand: In India the most prevalent milk is the Toned Milk but, in the future,, there will be more demand for Milk with higher fat and milk solids and hence Homogenised Standardised Milk will grow faster and will ultimately overgrow the Toned milk category.
VI. Poultry Meat and Meat Products will have to reorient for the post Lockdown Period: During the initial phase of Novel Corona Viral breakout the demand for poultry meat had dropped to dismal levels as a result the wholesale rates of poultry meat touched as low as Rs.40 per kg when the average production cost of one kg poultry meat is above Rs.77 per kg.
Wet Live Poultry Bird / Fish / Lamb Slaughter houses will move out of Cities : With the hygiene becoming a high priority concern during the Corona Virus Lockdown, the wet markets such as the Live bird / Lamb slaughter shops are bound to be moved out of cities or closed down during the post Lockdown period. This will then require Poultry / Meat Processing plants to be located outside the cities and the processed meat in chilled / frozen formats will be sold in Retail outlets. Many of the Countries have this in place and Poultry / Meat / Fisheries majors will have to initiate Retailing of the processed meat and other value-added products.
The market for Chilled Chicken meat and processed Chicken products are bound to grow as poultry meat is the cheapest form of non-veg protein available and with the Post Covid Lockdown the demand for these products are bound to increase.
VII. Post Covid, Food will become rightly Spiced: Indian Consumers are well aware of the medicinal and health benefits of all the Spices that they consume and hence post Covid Lockdown there will be more utilisation of all Major Spices ( Chillies, Turmeric, Coriander ), many of the Minor Spices ( Black Pepper, Cinnamon, Cardamom, Cloves, Nutmeg etc ) and Ginger & Garlic. There will be a higher surge in the demand for Whole spices than Spice Powders (Blends and Straights) as Dietitians / Doctors have been prescribing the usage of these spices for improving immunity.
The conversion of the unorganised loose spice / masala powders to the Organised Packaged spice / masala powders will be at a faster pace. Within a few years of the post Covid Lockdown period the Organised packaged Spice powders is bound to double in size. Hence Spice Brands that Market themselves with easy reach and availability will gain momentum and among them the true national brands will emerge.
New Quality parameters will emerge in the Packaged Spice / Masala powder market as consumers become more conscious of the quality parameters of freshness with the flavour content. Brands that will manage their Supply chain better and make the latest manufactured products to its consumers will score over others.
VIII. Future of the Food Service / HoReCa / Bakery: In the Post Covid Lockdown future, one of the biggest losers will be the Food Service / business such as Restaurants, Food stands, vendors and Corporate entertainment is likely to recede. Even team celebrations, family outings etc. are likely to remain low key for the next few years till the pall of gloom and fear lifts. Another point for eating-out will be that the 55 plus aged customers will drop very substantially which are, in fact, the better, richer customers. The International QSRs such as Dominos, McDonald’s, Pizza Hut, KFC, Burger King etc and the Indian QSRs will get impacted for at least two years as lesser number of parents will want their younger kids and teenagers to hang out / eat out.
Catering segment of the Food Service will be the most affected business during the post Covid Lockdown period as most of the Corporates will have Work from Home policy and Corporate offices will have a staggered Office hours / working policy. Even Employees will mostly try to get their own packed food from home rather than having food from office canteens or outside due to the hygiene factor. Hence Institutional Caterers along with the Wedding Caterers and Party Caterers will have to look for alternatives as their business will drastically reduce to a minimal and it will take a longer time for their Catering business to recover.
New format of Restaurants with only takeaways / Deliveries and Cloud Kitchen formats will emerge. Street food will close for few years as the middle-class consumers would want to avoid anything that looks suspect or seems unhygienic. Opportunity therefore, for many ‘Home Restaurants / Takeaway or only Delivery Restaurants / pop-up kitchens / Bakeries who will make small quantities fresh in their kitchens and supply anything from dhokla to sandwiches / Burgers / Biryani and curries by Kilo to homes and offices not very far away, in clean, safe, hygienic packaging. Cloud Kitchens which do not have any major Chefs but depend and use only the Ready to Cook or Instant Mixes by not so Culinary skilled persons will emerge.
IX. Shortening the Supply Chain Network: During the Novel Covid Pandemic Lockdown the supply chain was disturbed even for the packaged food companies and especially for the essential goods suppliers such as milk and Dairy products. Many of the FMCG and packaged Food Manufacturers had multi-level / layer of Distribution wherein stocks were locked up at different levels and was unable to reach out to the retail and the end consumers.
Removing unwanted layers of Distribution Channels such as Super Stockist, Wholesale Distributors and few of the App based E-Distribution platforms in FMCG and Packaged Food and Beverage Products ( such as Ebutor and NumberMall ) will become redundant.
The Post Covid Pandemic Lockdown opens a Gigantic Opportunity for creating the world’s biggest direct-to-home channel for everything from staples, packaged Food and Beverages, Clothes, and electronic gadgets. The investment of Facebook into Jio has an opportunity to change the retail face of India with Facebook’s social messaging app WhatsApp having 400 million users in India, and Reliance’s retail network of around 1,000 stores with the six million-odd Kirana / Mom & Pop Stores across the country, riding as Jio’s telecom subscribers.