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ITC's Sachid Madan on the market for frozen foods...
ITC recently introduced a new range of over 50 frozen food products targeting both retail and food service players. We spoke to Sachid Madan, chief executive - Frozen Snacks, Fruits and Vegetables, ITC Limited about the market and how it has changed over the years.
Name a couple of available frozen foods in the market around you. Vegetarian and non-vegetarian burger patties and French Fries, would be your answer, right? Kolkata headquartered consumer goods company ITC has now introduced not just a few, but 50 new 'desi' frozen food product offerings under its ITC Master Chef brand.
The new range of snacks – both vegetarian and non vegetarian - focuses on preservative free, low fat, healthier options keeping the ethnic flavours and tastes in mind. It includes a range of Kebabs including Hara Bhara, Beetroot, Dahi, Rajma ki Galouti, Falafel in vegetarian and Chicken Galouti Kebab, Chicken Mediterranean Kebab in non-vegetarian, Mumbai Vada Pop inspired by the Mumbai Batata Vada, Lime and Mint Wedges inspired by our love for Pudina and a flavourful Aloo Tikki.
We spoke to Sachid Madan, chief executive - Frozen Snacks, Fruits and Vegetables, ITC Limited, about the frozen food market in India and how it has changed over the years. After having spent 13 years at HUL at the beginning of his career in 1982, Madan moved on to join Mafatlal Denims in 1995 as the chief executive officer. He later worked at Agro Tech Foods (subsidiary of ConAgra Foods) as vice president between 1998 and 2004. Madan joined Technico Agri Sciences (A part of ITC Group) as chief executive in 2004 and held the position until taking up his current role at ITC in 2017.
Edited excerpts from the interview.
Tell us about the frozen food market in India and how it has changed over the past five years.
The expanding international and Indian QSR chains, including local burger joints, bars, pubs and other eateries have significantly increased the B2B demand for frozen food. Frozen food is a natural choice for chains to ensure that the food served at different locations has the same taste and quality. This becomes very difficult with fresh produce, where year-round availability is a problem and the taste can change depending on the season, location or the chef at each store. This is why all large international QSR chains have standardised their products based on frozen or centrally prepared ingredients, making it quick and easy to present the final product to consumers at their outlets. A good example is burger patties. Almost all burger patties are prepared at a high quality plant based on a standardised recipe and then frozen. This ensures that the consumer experiences the same taste whether he eats the burger in Kashmir or Kanyakumari.
But India has the 'ghar ka khana' tradition...
While consumer acceptance for frozen food has continued to go up, the penetration and frequency is far below that in the western world and lower than even our neighbours. For example, in Pakistan and Thailand, frozen food is 17.5 per cent and 34.7 per cent of packaged food respectively, whereas in India it is just 2.5 per cent.
Overall, the market is growing at 12 to 15 per cent with food service leading the pack. A big deterrent is the misconception in consumers' minds that frozen food is not healthy, not as tasty or as fresh and has preservatives etc. This is a pain point for all processed foods, but is actually not true for frozen food. The other challenge is the limited availability/range of frozen food in retail outlets and the fact that till recently, most frozen food was potato or chicken based.
However, led by modern and premium trade as well as e-commerce, availability has improved. We expect that the gap vis a vis our neighbours will narrow over the next few years.
How are you dealing with the 'misconception' and how has consumer behaviour changed in the category?
The Indian consumer continues to seek varieties in taste, but is now increasingly conscious about health. Consumers now want healthier products with the goodness of vegetables, products that are low fat, protein rich, preservatives free, etc. They also look for the ability to cook them without using too much oil. We are also encouraging consumers to go beyond deep frying and most of these snacks can be baked, air fried, tawa grilled or pan fried.
However, taste continues to be paramount. Consumers also demand variety and are increasingly becoming more experimental and open to flirting with different cuisines but will still return to their comfort food for the majority of their eating occasions.
Who is the major target audience?
The traditional target audience has been families with kids which is why the focus of most players has been on French Fries and other kid friendly snacks. While focusing on them, ITC is working to expand the market and cater to the millennials, DINKS (double income no kids) as well as the baby boomers (mid-50s to mid-70s) by expanding the range of products and the occasions, where they can be consumed. Thus, our range has something for kids, youth and seniors and they can be a part of the school tiffin as well as a party to add zing to your snacking or meal. Our frozen snacks repertoire is a complete food solution for both professional chefs and home makers.
Who are you competing with?
On a broader level, all food categories are competition - eating out at any food joint, home delivery, other RTE (ready to eat) products whether retort or dehydrated, or even snacks like chips or other salties. We hope to get share from all of them.
Within the category, there are a few national players and a number of regional players with whom we compete. However, none of them has the kind of range that we do. As mentioned earlier, our aim is to grow the market given its vast potential and the need for hygienic, healthy and 'as good as fresh' frozen snacks. In a market where penetration is barely five per cent, we see little point in focusing on competition.