By Mr. Manish Aggarwal, Director, Bikano
With packaged food industry as a whole evolving and maturing in the country in recent years, packaged sweets have come to register as an integral part of that process. In fact, the traditional popularity of sweets coupled with an increased consumer consciousness of hygiene and cleanliness has made sure that packaged sweets have acquired extraordinary traction. The popularity of sweets offered in a hygienic package itself in a way is giving a fillip to the packaged food industry in the country. In other words, packaged sweets is revolutionizing the packaged food industry. With authorities increasingly clamping down and tightening norms around food labeling and general safety and hygiene, this is further serving the cause of packaged food industry.
The emerging packaged food landscape
Even before Covid-19 had ‘bared its fangs,’ the Indian packaged food sector had been on a positive trajectory. For instance, last year it was reported how packaged food industry had recorded an impressive over 14% growth for April to August period. However, what is particularly notable is that this growth had occurred despite the wider consumption slowdown. In more recent times, while western snacks have been a high growth category, RTE as emerged as a high potential category. In terms of sales, tier 1 and metro markets have been the best performers with rural and rest of urban areas contributing almost similarly. Therefore, with a permanently large middle class with increasingly hectic schedules and busy lifestyles, the room for ready-to-serve packaged food can never be enough for the Indian market and there will always be room for growth.
The sheer range of sweets available is a hugely motivating factor
Representing both traditional and the modern, the Indian sweet market is characterized by an extraordinary array of offerings. From traditional milk-based sweets and open mithais offered by unorganised and traditional sweet shops to sweets and confectionery products prepared by organised bakeries, to specialized milk-based products by dairy establishments to luxury mithai brands promoted by a new-age confectioners to organic sweets by modern food brands, the range of sweets products available in the country is simply mindboggling. Growing at a CAGR of over 12% for almost a decade, the confectionery market alone is estimated at $1.5 billion. Another research estimates that confectionery and snack market is to grow by over 10% between 2020 and 2025. This huge array of items would definitely give a massive stimulus to the packaged food as well as the packaging industry in the country.
The growing packaging industry itself
At the same time, with increasing investment in food processing industries, rapid expansion of organized retail and rising exports market, the packaging industry itself has seen considerable gain. The need for improvement in shelf life, maintenance of the pace of production while upholding quality necessarily requires high standardized and quality packaging. With improvement in packaging methods and technologies such as the emergence of eco-friendly packaging such as biodegradable technologies, nanofabrication technologies and the shift from rigid to flexible packaging, the packaging industry is undergoing considerable upgrading and change. It has been forecast that the Indian food and beverage packaging market is set to cross USD 122 billion by 2025 from about USD 26 billion in 2019 at a CAGR of nearly 30%.
Government tightening norms
With food regulatory authorities increasingly raising the bar for quality and hygiene for sweet products and even snack category, the packaged food industry would receive further boost. Only in February this year it was reported how local sweet shops had to mandatorily display ‘best before date’ and the date of manufacturing on non-packaged and loose sweets kept in a container or tray, a more stringent norm than the then existing labeling rules which required these details for pre-packaged/pre-packed sweets only. Such measures could only add to the push for packaged food industry. Significantly, prompted by sustainable environmental concerns, the government is also adopting polices to promote recyclable technologies for packaging.
Therefore, as Covid-19 has precipitated an all-out migration to packaged food away from open, loose and perceivably unhygienic food and snack culture, packaged sweets and confectionery category would impart the strongest push to the packaged food industry. Despite the recent societal and consumerist drive for healthy and nutritional snacking, the sweets and mithais would continue to form an indispensable part of the country’s food culture which in turn would give a sustained thrust to the packaged food industry. Given that small packs of Rs 5/10 contribute to 70-80% of the sales in snacks category, this is encouraging. After all, guilty pleasures can be derived from small packs, since once can never really wish them away.
