The head of a leading Indian imports firm has urged UK food exporters to help satisfy India’s growing appetite for speciality foods, including gourmet, health and organic, in a country where consumers are increasingly “food-loving and food-curious”.
Harshita Gandhi, the owner of Mumbai-based Tree of Life, said India’s fast-growing middle class of predominantly young, financially-independent and aspirational consumers is “ready to spend to experience the world food category”.
Gandhi’s firm represents 23 international companies in India including Batchelors owner Premier Foods plc and Sweden’s Paulig, the company behind the Santa Maria brand. She told a conference held by the UK’s national Food & Drink Exporters Association consumers in India are “more attracted to quality and value rather than convenience”.
India’s urban consumers spend a total of 42% of their income on grocery, Ghandi said. Food and grocery is also “expected to be the major driver of the retail industry” in the country – an industry she said is expected to treble its revenues by 2020 from the current level of US$342bn. “Food and grocery revenues are expected to multiply five times, taking the organised share of this market from 17% to 30%.”
Gandhi told UK food exporters there was never a better time to target India with a range of goods. Some 50% of the population is comprised of adults who are under 25-years-old, while 70% of the population is under 35, she said.
The market for healthy and organic food is following that trend. “Food labels such as organic and sugar free now attract consumers a lot too. Gluten free is also growing – even in what is a wheat economy,” Gandhi said.
However, other trends show competition will be fierce. In terms of gourmet products, consumers are “going crazy at the moment” for foods from the Middle East, Gandhi noted.
Online retail represents another potential opportunity for investors, following Amazon’s entry into the domestic market in 2013, Gandhi said. There are now four major national grocery retailers online and “hyperlocal” delivery models are boosting the sector further.
However, Gandhi said potential exporters needed to understand the challenges posed by the Indian market, including high import duties, “a complex and high taxation system and a regulatory system that is undergoing an overhaul causing a lot of pain and uncertainty in the process”.
“The target audience for premium products is scattered over a large land mass of cities and towns. Finding these consumers and converting them is not cheap,” Gandhi said. “Entering the market requires patience and understanding. Nothing happens overnight, it does happen eventually, but there are no shortcuts.”