A chat with executives from ITC, Mother’s Recipe, iD Fresh Foods, Jubilant FoodWorks, Nilon’s about the ready to cook segment, at CMO Week – 2nd edition.
At the recently concluded CMO Week (2nd edition), we interviewed marketers from different product groups. The first session was about the ‘packaged instant food’ market, or, more formally, the 'ready-to-cook’ (RTC) segment, that comprises products that afford ease and convenience to time-challenged, somewhat burnt out consumers, in the kitchen.
Ashu Phakey, Vice President and Business Head - Frozen and Fresh Foods at ITC
Shailesh Dev Khurana, Chief Operating Officer at Mother's Recipe - Desai Foods
Vikran Sabherwal, Senior Vice President – New Business, and Business Head – FMCG at Jubilant FoodWorks
Rahul Gandhi, Chief Marketing Officer, iD Fresh Food
Kiran Giradkar, CMO, Nilon's
Watch the full session (below) or read on for highlights.
On the demand curve over the last 6-12 months…
ITC’s Phakey: The frozen foods category has seen phenomenal growth in the last 12 months; we have grown 3X over the previous year, and the trend continues. The freezer, today, is the new pantry. The category has moved from being a ‘one product’ category – say, fried potato snacks – to one that has a variety of products on offer. Consumers are seeking versatile products in this category. (ITC’s ‘Master Chef’ range of frozen snacks comprises different types of kebabs/tikkies/patties – corn, beetroot, rajma, chicken, etc).
'Frozen' has had its challenges in the past – distribution, access, capacity related issues. A lot of that is falling in place. Consumer resistance, which was an issue earlier – example, myths around preservatives – has softened to a large extent.
Jubilant’s Sabherwal: We’re just about six months old (ready-to-cook range ChefBoss – cooking sauces, gravies, pastes); when we were looking at entering this category, we found two ways to do so: One – by making 'everyday cooking' simpler/faster. Two – by getting consumers to try new types of food at home. We chose the second. When we were deciding to enter this category, there was no covid, but it has accelerated things 10 fold.
One big trend is the need to make the kind of food at home that makes consumers feel like global citizens (example - thai, chinese, italian); challenges people face include not knowing the recipes, not having the time to learn them, having to source exotic ingredients that aren’t easily available and then potentially wasting them because they’re used for just one meal, etc.
Khurana of Mother’s Recipe: Over the last 12 months we’ve built a portfolio of Indian chutneys (including samosa, bhel puri, pani puri and schezwan chutneys; portfolio also includes instant mixes, cooking pastes and ready to cook gravies).
Growth for the branded, packaged food business has been huge, across channels – modern retail, general trade, e-commerce, and government channels like CSD (canteen stores department). Our biggest spike was in general trade, followed by e-commerce.
iD Fresh Food’s Gandhi: Before I moved to iD Fresh, I was handling snacks (as head of marketing at ITC Foods for the snacks, noodles, pasta businesses); it is convenience that has driven growth for the snacks industry – a lot of that convenience was 'out of home'. When people stopped stepping out, the need for convenience moved 'in home'; that’s what has driven growth across all the portfolios we are talking about here.
Another factor is – the number of family members at home has gone up; professionals are working from home, parents/in-laws have come over and are nestled with their children. That has increased the work load on the person doing the cooking. There’s ‘kitchen fatigue’.
Our ready to eat parotas saw a huge spike in demand of late (portfolio also includes batters for idli/dosa/vada, instant filter coffee decoction, grated coconut, curd, paneer, etc).
Giradkar of Nilon's: Social media is playing a big role in the growth of this category; look at the number of ‘chefs’, ‘cooks’ and ‘photographers’ we have among us. Everyone wants to share recipes and photos – and marketers are also feeding into it.
Also, some markets that are not ‘natural selection’ for some of the western blended spices – example: pasta, something we associate with metro markets – are showing huge growth. We sold about two million packs of pasta masala in hinterland markets like Bihar, Jharkhand, in a six-month span, for example. Thanks to social media integration, we’ve seen people making pasta, pizza, chinese at home; we’ve seen a surge of 4X in the last 12 months.
Previously, consumption packs were bigger. Now, we’re moving towards smaller packs. That’s because there are about two or three (dishes) being made in a single day, at a single time, even for a family of four. Also, people don’t want to store and re-use packs of chutneys/spices, etc. as they become soggy.
On the competitive landscape…
Sabherwal: The ready to cook category sits at the intersection of multiple categories. The biggest issue is masalas – how do you prove the value of biryani RTC over biryani masala, for example? This has been a challenge and a struggle for the RTC category for many years. Another competitor is ‘outside food’, the whole Swiggy-Zomato option that people have, over making the same dish themselves at home, using RTC products.
What works for this category is – the consumer who’s fond of cooking and wants to create. RTC is like a secret between you and the packet. Of course, as proficiency in culinary skills goes up, one may want to make more things from scratch.
Phakey: To me, ‘frozen’ is a format. This category played on the side, not the centre, of the plate; it was a snack. But today, it’s about getting to the centre of the plate, as a meal; yes, I’m competing with the Swiggies and Zomatos… the battle for us is to get into the kitchen.
Gandhi: The first level of competition, for us, is branded category competition – paneer will compete with paneer, curd with compete with curd, etc. Secondly, competition comes from homemade raw materials or ingredients – example batter, parotas. There’s also competition between us and the online fresh foods market like say, a GourmetGarden, etc. Then for filter coffee and Malabar parota we compete with restaurants. Then there’s occasion based competition - different rivals for say, the breakfast segment, different ones for the lunch segment, evening snack.
(The panel went on to discuss distribution and home delivery models, and the need for chiller/freezer space at the retail level).
This session was part of CMO Week, an afaqs! event. Partners for CMO Week 2.0 (April 19-22, 2021) include ABP news (presenting partner) and Shutterstock (session sponsor).
Image Credit: Marvin Ozz from Pexels.