Scope for Ready to Eat Food (Marketsize,Major Players, Changing Patterns)

Scope for Ready to Eat Food (Market size, Major Players, Changing Patterns)-Great opportunities Ahead

Twitter Handle: @shuchi_nahar

Global Ready To Eat Industry

Globally, the demand for Ready-to-Eat (RTE) food has grown significantly and is expected to reach US $172 billion by the end of 20231. Changing food habits, lack of time and easy accessibility to various food groups have generated a huge demand for these products. Driven by high disposable incomes, ease of use, busy lifestyle, and better nutritive content, consumers globally are relying more on Ready - to - Eat food.

Ready to Eat Industry –Market size & Growth

The global ready meals market size was valued at USD 159.15 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 5.5% from 2020 to 2027. Shifting consumers’ food preferences towards ready-to-eat food products owing to the busy lifestyle of working individuals as well as hectic work schedules of college grads and students are expected to be a key factor for the market growth. Moreover, the growing demand for minimally processed and additive-free food products with an extended shelf life is expected to fuel market growth.

The Indian ready-to-eat food market stood at $261 million in 2017 and is projected to grow at a CAGR of over 16% during 2018-2023 to reach $647 million by 2023.

Anticipated growth in the market can be attributed to rising urbanization, increasing disposable income of the middle-class population and changing taste preferences of Indian consumers. Moreover, the growing demand for quick food and the presence of freshness and high nutritional value in these foods are further aiding the growth of the Indian ready-to-eat food market.

The demand for ready-to-eat food products is recording high growth in metros where a lot of working people don't get enough time to cook proper meals. Additionally, longer shelf life and easy availability of ready-to-eat food products is further pushing their demand across the country.

The most popular ready-to-eat items include preparations of paneer, chana masala, rajma masala, pav bhaji, etc. The rise in the demand for ready-to-eat food products has created interest among many companies to enter this space which is likely to contribute to the growth of the market in the coming years. Furthermore, innovation in product offerings, sustainable packaging, preference for single-serving frozen products, aggressive marketing & promotional strategies would steer growth in the market during the forecast period.

(Source: Grandview Research)

In recent years, employment has been growing across the globe, which has changed the food preferences of the consumers. Customers around the globe are more inclining towards food items that can easily be consumed without any effort. Due to hectic work schedules, people around the globe are buying Ready-to-Eat (RTE) food products and meals, which are easy to cook and less time-consuming. These consumer food preferences are propelling the demand for ready meals.

Precooked or ready meals are highly convenient and they help save time and effort required for meal preparation. This has led to an increased demand for ready meals, especially among the working population and students across the globe. Ready meals are a cost-effective alternative as they are precooked. Moreover, the easy availability of ready meals throughout the year will have a positive impact on their demand. In addition, print and media advertisement has played a key role in creating awareness about ready meals, thereby augmenting the overall market growth.

(Source: GrandviewResearch)

Varieties of Products

Frozen and chilled meals held the largest revenue share of more than 50.0% in 2019 and are expected to maintain their lead over the forecast period owing to a wide range of products with high shelf life. Frozen pizza is the most popular frozen ready meal, thereby significantly contributing to global revenue.

 

Canned meals are anticipated to expand at the fastest CAGR of 6.1% from 2020 to 2027 owing to rising popularity among young consumers across the globe. The dried product segment is likely to witness significant growth in the future. Dried products include foods such as instant pasta and noodles. Countries including the U.S., China, India and the U.K. are the major markets for dried meals owing to substantial demand.

 

Distribution Channel

Supermarket and hypermarket are the largest revenue generators for the RTE market and are expected to maintain their lead over the forecast period. Some of the largest chains of supermarkets and hypermarkets, such as Walmart, Tesco, 7Eleven, Apar, and Aldi, are expanding their stores across the globe. These market giants are increasing their product offerings in order to attract customers.

 

The online retail segment is anticipated to expand at the fastest CAGR of 6.2% from 2020 to 2027 owing to the growing trend of online shopping among consumers. Increasing penetration of smartphones, coupled with the rising use of the internet, is propelling the growth of e-commerce.

Food Service Industry in India

The INR 38,000 million Food Service market in India is mostly dominated by the unorganized sector, contributing to around 62% of the overall market size. Within the organized sector, QSRs (Quick Service Restaurants) and CDRs (Casual Dining Restaurants) constitute about 80% of the market. The organized foodservice segment is expected to grow at a CAGR of 13% between 2019-2024. The growth is largely influenced by an increasing number of international brands, the emergence of food technology disruptors, strengthening of backend infrastructure, acceptance of new cuisines, and changing lifestyles.

 

The RTE sector has been evolving as the country has the highest millennial population (, people aged 18 to 35), whose food habits and tastes are very different from those of previous generations. Millennials today, happen to be tech-savvy, independent, career-driven individuals with global exposure possessing a higher spending capacity and with little time to cook indoors.

Indian Organized Food Service Market (INR In billion)

(Source: Technopak BoK, NRAI India Foodservice Report)

Drivers – Ready to Eat Food Market

Rapid urbanization and high disposable income

With the rapid urbanization, high disposable income, changing consumer lifestyle which leads the urban people to suffer from a time crunch which is increasing the demand for on the go convenience foods, thereby fueling the ready-to-eat food market. Furthermore, with an increased willingness to spend on such food innovative products with functional ingredients, convenience, and organic foods and advancement in areas of packaging technology is anticipated to act as a Ready to Eat Food key driver of the market during the forecast period 2020-2025.

 

Focus on nutritious packaged foods

Many families still compel their younger members to have home-cooked meals, due to the lack of trust in RTE foods. This is causing many RTE companies in India to focus on positioning their products as having high nutritional value. For instance, McCain foods, though relatively new to the Indian market, provides its customers with a range of delicious frozen foods, including French fries, aloo Tikki and cheesy bites.

 

Food processing technology

Food processing technology has developed significantly in recent years and has become a boon with regards to mass production of RTE foods on a commercial scale.

Many Indian companies are also now investing much more in terms of budgets and manpower towards food-related R&D. This is resulting in a variety of products reaching the Indian consumer.

 

Busy Lifestyle

Increasing the female employment rate is expected to propel the ready to eat food market. High technological advancement such as microwaves has increased the demand for the ready to eat food products.

 

Changing Food Habits and Lifestyle

Rapid economic development coupled with rising disposable income is driving the ready to eat food market. Additionally, increasing working population and changing lifestyle has encouraged the significant growth of ready to eat food market during the forecast period.

Ready - to - Eat food market (Region wise Penetration)

(Source: Mordor Intelligence)

Major players, who are currently operating in the Indian ready-to-eat market include Tasty Bites, Tata Consumer, Nestle, Britannia Industries Limited, Hindustan Foods, Dabur India Limited, Godrej Agrovet, ITC, Marico Limited, Heritage Foods Limited, etc.

Disclaimer: The information provided on Shuchi Nahar’s Weekend Blog is for educational purposes only. The articles may contain external links, references, and a compilation of various publicly available articles. Hence all the authors are given due credit for the same. All copyrights and trademarks of images belong to their respective owners and are used for Fair Educational Purpose only.

Twitter Handle: @shuchi_nahar