When it comes to frozen food business, one encounters endless options such as selling frozen fruits, vegetables, meat, chicken, fish, sea foods, turkeys and candy etc. It is looked upon as the next most successful business in cities, which are moving far from the villages, where fresh fruits and vegetables are grown.
India’s frozen food market is projected to grow at a CAGR of around 15%, during 2016-2021, on account of increasing number of modern retail chains, rising number of refrigeration facilities in small retail shops and rural households, rapid development of fast food chains, aggressive marketing strategies by major frozen food manufacturers, and longer shelf life and easy availability of frozen food products.
Frozen snacks dominated demand for frozen food in the country and the segment is anticipated to continue dominating the market through 2021, due to wide variety of products available in the segment. India cold chain industry is anticipated to grow at a CAGR of more than 24% in coming years.
Looking at the market, one can clearly see the amount of scopes; this business is throwing lights upon.
Before establishing any business, one needs to do a thorough market research. It provides clarity about the locality, customer demands, and makes one aware of the competitors. The frozen food industry was founded on the principle of safely preserving healthy food. Today’s frozen food companies seek to remain true to that proud heritage.
Mithun Appaiah, CEO, Innovative Food Ltd said,” Indians have a fixed mindset towards frozen food but we are trying to change it with new communication, marketing and are restructuring our frozen food portfolio.”
Indians are increasingly concerned about both the financial and health implications of their food choices. Rising food costs and shrinking budgets make it more challenging to place healthy meals on the table. But some of the sharpest minds are hard at work exploring new ways to help us eat better and spend smarter.
All Inclusive Menu
Today, the frozen food category embraces every classification of food, including appetizers and snacks, vegetables, fruits, beverages, breakfast items, baked goods, main courses and desserts. In the future, advances in food science and research will provide consumers with an increasing range of healthy, affordable and delicious frozen foods.
The vast industry which promises a lot of growth also brings with it a set of challenges. Appaiah listed down a set of challenges that the frozen foods industry currently faces:
Recruiting expertise and then retaining them has been a challenge that this sector continues to face. Appaiah believes that the brain drain from this industry happens as other emerging sectors have set a higher bench on remunerations. “Within FMCG, the frozen business needs differential skills and hence it’s been difficult to get the right set of people,” he said.
Walk into a mall and the frozen foods segment has a variety of brands all screaming for attention. Agreeing with the same, Appaiah said, “The retail space is too cluttered today with many brands fighting for the same space. Getting yourself noticed and ensuring repeats is a challenge.”
“The options are so many that consumption from alternate sources are more than traditionally cooking food at home,” he said.
“Cost to serve and space within stores are always a dichotomy and hence puts pressure on FMCG players on their bottom line”, Appaiah remarks.
Still in the Race
Despite limitations of cold chain access, penetration, and reliability, the frozen food market is expected to grow due to consumer demand and new players entering the industry. These new players will bring newer products and variants to fuel demand. Frozen foods have grown with the evolution and growth in modern retail. Today, modern trade retail is a more favoured shopping destination as urban consumers find greater variety, quality and convenient pack sizes. Modern trade provides space for better brand visibility and communication.
Despite some concerns associated with frozen foods, familiarity and convenience will promote consumption. Children and youth drive consumption of frozen foods resulting in greater readiness and openness to consume frozen food. The consumer is ready for product offerings that assure taste, variety, quality and healthy choices options in frozen non-veg food in particular and seasonal fresh foods that are available all year round at affordable prices. Well-penetrated, reliable cold chains will grow the frozen foods demand in the coming years.