Gauging the Indian Snacks Market

Potato chips and popcorn, nachos and nuts. What do these food products have in common? Not their origin, flavour, palate or cuisine, but the fact that all of these food products are regularly consumed as snacks.

A snack is smaller than a regular meal, generally eaten between meals. This definition of a snack indicates how broad a category it is. There are no official prescribed snacking meal times and snacks come in vast varieties, in both sweet and savoury options, in terms of both food & beverage; and also as a combination of both food & beverage, and as well as a combination of both savoury and sweet. Snacks come in different forms, to be consumed at home or on the go. 

Today, there are over than 1000 types of snacks that are available in the Indian market. India’s thriving snacking culture of present day has a rich legacy, which can be traced to our culinary traditions, which flowed from the ancient ages. 

Growing Snacking Culture

With the customary meal timings in India being 12 -2 pm for lunch and 8-10 pm for dinner, it resulted in a gap of approximately 7-8 hours between the two main meals of the day. The average human body needs to be nourished after around every 3-4 hours and thus the evolution of the 4pm snack time or ‘tiffin time’ came to be. The way the snacks market has grown in India, significantly differs from its western counterparts.

While no reliable estimate of the snack food market in India exists, the Euromonitor figure of branded packaged snacks market in India is Rs. 22,131 crore. The unorganised snack market in India is much bigger than the organised Indian snack market. An estimated 20 percent of the overall food market in India happens to be led by snack food that is extremely high when compared to other nations. Namkeens, the traditional Indian snack, has highest share even in the branded packaged snack segment of India.

What works in India’s snacks market? One thing for sure is that the consumers in India demand superior taste from the snacks they consume. If the taste factor is compromised, little are the chances of the snack being a success in the Indian market. What we Indians prefer is the burst of flavours in every bite; a certain robustness and aroma in flavours (not necessarily spicy), multitude of textures and contrasting colours.

What are the reasons behind the growth of the snacking culture in India during the recent years? The increasing urbanisation, increase in the number of double income households, and the rising ‘time poverty’ in urban India during the recent years  have resulted in changing consumption patterns in India, especially in the food category. This has in turn fuelled the demand for convenience food products in urban India.

At the same time, the spurt in disposable incomes during the last two decades has resulted in the increased exploration of the various snack options available in the Indian market, whether they be traditional or western. Consumers are seen moving up from unbranded to branded snacks, given the heightened concerns for quality and the greater availability of branded options in the Indian snacks market. Branded snacks are also fast penetrating the semi-urban and rural India. These markets have been traditionally dominated by unbranded or homemade products.

This has resulted in branded snacks becoming an all-time food for the munching needs of a section of consumers in India. Today snacking in India is not just for children or youth. Snacking between meals is a habitual occurrence in the day-to-day lives of huge numbers of Indian consumers. Snacks in India no longer cater to a single consumer segment, but instead have a diverse consumer appeal and are increasingly being consumed across different age groups.

In the backdrop of this scenario, the snacks market in India has witnessed a high growth trajectory and various new players are foraying into the market while the existing ones are expanding to cash in on the market’s growth potential.

The Opportunity Areas

In the Indian snacks market, the biggest opportunity, it seems, lies in  converting the local, regional unbranded snacks of the country into branded, packaged form with infusion of some upgraded  ingredients, which will facilitate their availability pan-India.

While consumers are upgrading to branded snacks products, the unbranded snacks market in India still remains awesomely huge in size. There are still hundreds of traditional snack categories for which branded options do not exist in India, which present a huge market opportunity for entrepreneurs.

This is especially true in the context of another growing trend in the traditional snacks segment in the country. Though our palates may change every

200 km and regional preferences are strong, there has been an increasing democratisation of snacking preferences in India during the recent years, and many hitherto regional snack items have found nationwide acceptance e.g. banana chips.

Adopting the western flavours to Indian taste buds can also give a fillip to India’s snacks market. This concept can be run across various snacking products like chips, extruded snacks, biscuits, namkeens, etc. with likelihood of garnering impressive results.

Using Indian millets like bajra, jowar, ragi, rajgira in snacking can also be a lucrative avenue to explore in the Indian snacks market. We don’t need to go after the expensive Quinoas of the world but have a treasure-trove back home. The usage of Indian millets into our snacking options can enhance the taste, health quotient and sustainability factor in our snacks.

Rising health consciousness, and the increasing incidence of lifestyle diseases in urban India owing to sedentary lifestyles and the legacy of our faulty eating habits have resulted in increased demand for ‘healthy’ snacks in India. This is one of the mega trends sweeping the world and thanks to the proliferation of Internet and international exposure, India is certainly going to leapfrog in this area.

However, healthy food means different things to different individuals. For some it means low sugar, for some others it means sodium in moderation; for some it means low fat and high fibre, for some it is gluten-free. When you get a combination of all the above, it is possibly inedible or is a medicine! So having all the healthy attributes in a snack can often be an unfeasible market proposition.

Essentially what our consumers are looking for is a guilt assuaging snack. For example, it could be a buttery croissant, but when coated with lots of nuts, seeds and multiple grains, it makes one feel healthy.

The trend towards healthy snacking is only expected to increase in the future India and presents lucrative opportunities for both existing as well as new players in the snacking segment. Overall, we can say that marketers in the Indian snacks segment need to brace up for this opportunity. The challenge will however be to achieve the right balance of taste, health, and price in the snacking options.

Nuts and popcorns present another impressive market opportunity in the Indian snacking segment, which needs to be vigorously explored. These two products are sweeping across the supermarket aisles in developed markets as the

fastest growing snack food products. The trend has every likelihood to  spread to the Indian market. Nuts and popcorns made available with a plethora of Indian flavours could potentially unlock a mega opportunity for branded snack food players operating in India to cash in.

Another impressive market opportunity in the hugely diversified Indian snacks segment lies in baked snacks. Biscuits and its baked counterparts have always had a sweet corner in the Indian shopping basket. Double-digit growth over the last decade, innovation in packaging formats with a major plank on affordability and the usage of healthier ingredients has led to mass proliferation of this category in the post-modern Indian market. Now with intelligent combination of flavours, spice blends and ingredients, marketers can garner lucrative returns in this area.

Snack kits form yet another strong emerging area. Who does not have cherished memories of the roadside chaatwala, street snacks, snack dishes served in marriage functions, events, festivals and so on. Now all of these presented in the form of a kit, hygienically packed with a combination of flavours, dressings and sauces, can bring back a flood of warm memories.

The bhel puri kit, the pani puri kit are just the beginning. Many more traditional snack dishes could be presented through user-friendly kits.

Summing Up

Succinctly, over the past few years, the snacks market in the country has witnessed a slew of activities, which include the emergence of new players, the expansion of snacks portfolio through continuous product innovations, aggressive marketing campaigns to establish consumer connect, shift in consumption with increasing demand for convenience, etc.

Going forward, the prospects for the branded snacks market in India remain bright. However, players will need to focus continually on product innovation to combat competition, both from within their category of operations (branded as well as unbranded) as well as from other categories.

The writer is the former MD of McCain India and has worked 25 years in the food & beverage industry in various roles. Contact him at:       

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