For ITC, the market seems ripe for readymade meals - The Hindu Business Line
June 03, 2013
Stumble through the front door at 9 pm after a long day at work and the last thing you would want to do is cook for the family. In a perfect world, dinner would always be pre-planned and the resultant chaos around the dining table would cure the day's stress, not cause it.
This is where ITC has got the Indian market to slowly warm up to its idea of pre-made ingredients (curry pastes, masala mixes) and ready-to-eat meals.
"We are a nation of foodies. Not only do the different States have their own regional cuisines, each individual household weaves in its own secret subtleties while preparing traditional dishes," says Chittaranjan Dar, CEO, ITC Foods.
Tradition made easy
Though women have been preparing meals every day from scratch, rapid urbanisation and more working women have heralded a change in food consumption patterns, he adds.
"A significant portion of the white-collar middle class is now searching for culinary convenience. What we have found is that when people have their meal, one of the dishes is a showcase dish. The whole meal may not be Kitchens of India (ITC's brand of ready-to-eat gourmet cuisine), but just a dal bukhara, which involves intricate cooking that is not easy to replicate" Dar told Business Line.
So, whether it is dal bukhara that is cooked overnight in traditional styles and seasoned with tomato, ginger and garlic, or pindi chana or Hyderabadi korma or Bombay kadai, each dish is layered with its textures and spices, rooted in the region where it originates.
In this Rs 30-crore market, ITC has managed to capture an over 30 per cent share in the 10 years since the launch of its Kitchens of India range. With its gourmet Indian cuisines, created by the master chefs of ITC hotels, the FMCG major hopes to recreate fine dining in customers' homes.
And it's not just the domestic market that the conglomerate is catering to. ITC Foods, part of the diversified ITC Group, began exporting its ready-to-eat meals for non-resident Indians and global food aficionados from last year.
Export market
"(The size of) our exports is three times that of the domestic market. Our customised packages are available in the mainstream markets of Canada and the US, where a lot of foreigners have genuinely appreciated Indian cuisine," says Dar, warming up to the theme.
ITC, he says, has "consciously stayed away from Indian stores abroad. As the distribution is only to mainland stores, our volumes are ok." The company is keen to introduce new items for its foreign markets.
"Unfortunately," the CEO adds, "we can only export vegetarian items from India. Both the US and Canada have very strict non-vegetarian (food standards). Large parts of Europe don't import non-vegetarian items either."
Aloo tikki, bhindi masala, chana masala and samosas are a major hit with Canadian and US residents, says the CEO. The product mix also includes curry pastes and condiments such as barbecue sauce. "We export frozen foods too, though the cold chain infrastructure in India is very much in the development stage," he adds.
Small town focus
With the Indian packaged food industry likely to double to $30 billion by 2015 as multinationals arrive in the sector and modern retail trade grows, ready-to-eat foods, one of its several segments, has been growing at a healthy compounded annual growth rate of about 15 per cent.
Though ITC is confining its readymade meals to larger towns domestically right now, Dar says this is not for lack of a distribution network. "Our feedback says the product is not for smaller markets and that ready-to-eat meals are more of a metro phenomenon. We will be extending it to tier-2 and tier-3 markets such as Guwahati, and are even considering extending it to smaller markets. Fundamentally, we want to make our products available in a market where the demand is low, but it should not be difficult to service either," he adds.
Though the current market size limits promotion of these products to smaller towns, Dar insists it is only a matter of time before the rollout takes place. With consumers inclined towards spending more on food and preferring healthier food options, the sector is set to see some heated action in the foreseeable future.
