Packaged Foods in India1
Industry Overview
Packaged foods have become a significant part of our modern lifestyle, offering
convenience, variety, and extended shelf life. It is driven by the evolving needs and
demands of consumers, particularly due to their hectic lifestyles and increased travel
frequency. This has created a preference for convenient food options that are easily
accessible and require minimal cooking efforts. Packaged foods have successfully catered
to these preferences by providing ready-to-eat alternatives. With their time-saving
benefit, packaged foods have seamlessly integrated into modern-day living, becoming an
essential choice for individuals seeking practical and hassle-free meal solutions.
Over the past few years, the packaged food industry in India has witnessed a remarkable
surge in demand. In FY 201415, the retail revenue of packaged food reached an impressive
value of Rs.2,434 Billion. Since then, it has witnessed significant growth increasing to
Rs.4,240 Billion in FY2022, achieving a remarkable CAGR of ~8.3% from FY 2014-15 till FY
2021-22.
1 Industry report on savouries, sweets and papad in India, 30th September 2022.
Categorising the Industry
The India Packaged Food Market valued at Rs.4,240 Billion is segmented into dairy
products, snacks and sweets, biscuit and snack bar, baked products, ready to eat meals and
others. Among Indian consumers, the dairy products segment dominates the market with the
largest share of 38.8%, followed by the snacks and sweets segment at 32.3% and the
biscuits segment at 14.5%.
Category wise packaged food retail market, India, FY 2022: K4.24 Trillion
Classifying the Distribution Reach
The packaged food industry relies heavily on a robust distribution network. The mode of
distribution in India is divided into two categories: the offline channel and online
channel. The offline channel is driven by supermarkets, hypermarkets, convenience stores,
brick-and-mortar outlets, and others, while the online channel is particularly led by
e-commerce. Although the offline market holds majority share, the online market has
emerged as a prominent platform for the packaged food industry in the past few years as
more people shift towards digitalisation.
Why Packaged Food MattersRs.
Protection: One of the most significant advantages of food packaging is that it
protects the food from external factors such as air, light, moisture, and contamination,
which can affect its quality, taste, and safety. Packaging also helps to extend the shelf
life of food, reducing waste and ensuring that food stays fresh for longer.
Convenience: Packaging makes it easier for consumers to transport, store, and use food
products. Packaging provides easy-to-use and convenient storage options that can help make
it easier to transport and consume food while on the go.
Differentiation: Packaging can also help differentiate products in the market, making
it easier for consumers to identify different types of food products and brands. This
differentiation can be critical for products that may have similar ingredients, flavours,
or nutritional values.
Safety: Food packaging is critical in maintaining the safety of food, particularly
during transportation and storage. Packaging helps prevent food from being contaminated,
reducing the risk of foodborne illness and ensuring that food is safe for consumption.
Sustainability: Many food packaging materials can be recycled or reused, making the
industry more sustainable by reducing waste and minimising the environmental impact of
packaging production and disposal.
India Packaged Food Market Drivers1
Swift modernisation is anticipated to boost the market growth.
The urban population in India has experienced significant growth over the years. This
trend is expected to continue, with projections indicating that the urban population could
reach 70% by 2030. Urban areas offer better access to packaged foods due to
well-established infrastructure, widespread retail outlets, and e-commerce services.
The governments focus on planned urbanisation further supports this market growth.
Bettering retail and rising disposable incomes are expected to boost market demand
The Indian retail industry is experiencing remarkable growth and is projected to reach
a significant value in the coming years. The presence of key players like Reliance, DMart,
and Amazon contributes to the industrys competitiveness. Additionally, the expanding user
base of internet users provides opportunities for e-commerce companies to expand their
operations. Rising exports contribute to economic prosperity and increased disposable
incomes among consumers. Furthermore, initiatives such as production-linked incentive
schemes drive market growth.
Outlook
The packaged food market in India is projected to reach a size of Rs.5,798 Billion by
2026, exhibiting a CAGR of 8% from FY2022 till FY2026. The growth is primarily fuelled by
factors such as the rise in product and packaging innovation, a growing focus on healthy
food options, and the increasing demand for convenient food products.
Indias Dominance on Snacking2
Industry Overview
Amidst a rich and diverse food culture, India stands out for its deep-rooted fondness
for snack items. Snacks play an integral role in the countrys food culture, offering a
wide array of flavours, textures, and regional specialties. From traditional street snacks
like samosas, pakoras, and vadas to modern twists on snacks like chips, biscuits, and
namkeens, India offers a treasure trove of snacking options.
Indias savoury snacks industry has experienced substantial growth, with its value
increasing from Rs.500 Billion in the FY2015 to approximately Rs.751 Billion today. Within
this market, the organised sector, characterised by well-packaged, labelled, and branded
products, accounts for around Rs.423 Billion. Among the organised sector, western savoury
snacks hold a dominant position, contributing Rs.242 Billion and represents approximately
57% of the total organised savoury snacks market.
Division of Indian Snacks Market The savoury snacks market in India is characterised by
the presence of numerous unorganised players operating across different product segments.
Each snack item has its regional significance, leading to the entry of many small
businesses in the market. These players typically offer a limited product portfolio
focused on traditional snack items within a specific category. Due to their geographical
limitations, these businesses primarily cater to a single city or state. To gain
popularity, they rely on competitive pricing and the appeal of traditional flavours
associated with their products.
Large FMCG companies have capitalised on the snacks market potential, utilising their
robust supply chains. Distinguished by diverse product portfolios, aggressive advertising,
and R&D, these players have gained an upper hand as factors like demonetisation, GST,
and the pandemic led to the closure of small unorganised businesses. The organised segment
has experienced significant growth through innovative launches, targeting urban and rural
consumers, with strategic advertisements and celebrity endorsements amplifying their
success. This trend is projected to persist, further solidifying the positior of organised
players.
Outlook
The outlook for the Indian savoury snacks market is promising, with an estimated value
of Rs.1,227 Billion by FY 2026. This growth will be largely driven by the organised
players in the market, who are capturing a significant market share. As these players
continue to prioritise quality, convenience, and adherence to safety standards, they are
well-positioned to meet the evolving consumer demands and capitalise on the markets
growth potential.
India Savory Snacks Market in India
Segment-wise Organised Indian Snack and Sweet Market3
Ethnic Namkeen and Snacks, Ethnic Bhujia and Western Snacks
The organised market for savoury snacks like ethnic namkeen, bhujia and western snacks
in India is currently valued at Rs.423 Billion. It is further projected to grow at a CAGR
of 15% until FY2026. This growth can largely be attributed to the organised sectors
ability to leverage celebrity endorsements and conduct effective marketing campaigns,
thereby engaging and expanding their audience base.
With such capabilities and significant contribution, today, the Western snack category
continues to dominate the organised market, holding a substantial market share of 57.2% in
the Indian savoury snacks segment. Ethnic namkeen and snacks contribute 26.9% to the
organised savoury market, while ethnic bhujia holds a share of 15.9% in the overall
savoury snacks market.
Organised Indian Savory Snacks Market- Market size by type, FY 2022
Sweet Market
Sweets hold a prominent and cherished place in Indian households, representing a deeply
rooted and popular cultural tradition. The Indian sweet market boasts a substantial
valuation of Rs.593 Billion, yet the organised sector accounts for only a fraction of
this, amounting to Rs.58 Billion.
Within the organised sweet market, major players have segmented their offerings into
various categories. These include milk-based sweets, soan papdi, dry fruit sweets, and
other delectable varieties that cater to diverse consumer preferences and tastes.
Organised Indian Sweet Market size by Type,
FY 2022
Papad Market
Papad, a ready-to-cook product enjoyed as a snack or as an accompaniment to meals,
holds immense popularity in Indian markets. It is widely available, ranging from local
mom-and-pop stores to popular e-commerce platforms.
In certain states of India, a meal is considered incomplete without the addition of
papad to the serving.
The papad market as a whole is valued at Rs.78 Billion, with the unorganised sector
holding the majority share. The organised market, comprising 32.9% of the total market, is
primarily dominated by established players with a rich legacy who have successfully
implemented systematic processes and practices.
Major Split of the industry by Region
The demand for savoury snacks is high in North and West India, where namkeen forms an
integral part of food habits, particularly in Rajasthan and Gujarat. The popularity of
ethnic namkeen and bhujia segments is driving growth in these regions. In East India,
consumption of savoury snacks, along with street food, is considerable. The sweets market
is driven by North India, followed by East, South, and West India. Papad is widely
consumed with meals and as snacks in states like Rajasthan, Gujarat, and Madhya Pradesh.
India Savoury Snacks, Sweets and Papad Market - Split by Region, FY 2022
Company Overview
Bikaji Foods International Limited is a prominent brand in India that specialises in
ethnic snacks and has established a global presence. Our company is one of the
fastest-growing players in Indias organised snacks market and aspires to become a
significant player throughout the country. While we have a strong base in Rajasthan, we
have also made our mark in Bihar and Assam. Our company has gained market leadership in
these areas, and we are continuously expanding across India.
In addition to our domestic success, we are proud to be the top exporters of snacks,
sweets, frozen food, and savouries to over 25 countries worldwide. Our reach extends
across North America, Asia Pacific, the Middle East, the European Union, Africa, and the
United Kingdom.
Our diverse product range comprises over 300 different items, including namkeen,
sweets, western snacks, chips, and cookies, which provide us with a robust presence in the
Indian snacks industry. Bhujia is our best-selling product, followed closely by other
categories such as namkeen, sweets, papad and other snacks.
IPO Listing
In this year, we launched our IPO on November 3, 2022, offering 2,93,73,984 equity
shares with a face value of Rs.1, amounting to a total of f881.22 Crores. The IPO
witnessed a robust investor response, with shares sold in the price range of Rs.285-300
per share. The subscription rate surpassed 26.67 times during the period of November 3-7.
Following a successful listing on November 16, 2022, at a price of Rs.321.15, our
companys share price has experienced growth, reaching T362.60 as of March 31, 2023. The
market capitalisation of the Company has marked its presence under the list of Top 500
Companies. As per the market capitalization list released by NSE and BSE, the ranking of
your Company stood at 345 and 348, respectively, as of March 31, 2023.
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