Ife Main 02 12 08

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Information about Ife Main 02 12 08

Published on December 7, 2008

Author: sanjaysethi

Source: slideshare.net

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This presentation was used by me while speaking at the Inaugration ceremony of IFE India 2008 at New Delhi on 2nd December, 2008. IFE India is a premier Food Drink and Hospitatlity Event in India

Sanjay Sethi, VP - Food and Agriculture, Technopak 2 nd Dec, 2008 Food Retailing in India

The Indian Market The total population is 1.138 billion of which the urban: rural divide is in the ratio 3:7 The total food and grocery imports was valued at US$ 5.9 billion and exports at US$ 9.2 billion in ’07 The aggregate urban household consumption is projected to grow at 9.4% by 2025 Over the past few years, the concept of shopping has changed in terms of the format of retail business and the Indian consumer's buying behavior Modern retail formats have mushroomed in the metros and mini-metros, and over the last few years have also begun to establish a presence in the next rung of cities, exposing shoppers to new shopping, entertainment and food options, all under one roof

The total population is 1.138 billion of which the urban: rural divide is in the ratio 3:7

The total food and grocery imports was valued at US$ 5.9 billion and exports at US$ 9.2 billion in ’07

The aggregate urban household consumption is projected to grow at 9.4% by 2025

Over the past few years, the concept of shopping has changed in terms of the format of retail business and the Indian consumer's buying behavior

Modern retail formats have mushroomed in the metros and mini-metros, and over the last few years have also begun to establish a presence in the next rung of cities, exposing shoppers to new shopping, entertainment and food options, all under one roof

Today’s Consumer….. Changing demographics Young earning population 60% below 24 years 81% population below 45 years Brand conscious More acceptance of new concepts Changing aspirations More nuclear families with dual income 75 million households, called ‘consuming classes’ with annual income between £650 to £ 60,000 Convenience overriding price consideration Higher disposable income and easier financing options 1 Million Households in creamy layer with income at par with International Lifestyle values Global lifestyle: media exposure and overseas travel Look at me (LAM) the most important criteria

Changing demographics

Young earning population

60% below 24 years

81% population below 45 years

Brand conscious

More acceptance of new concepts

Changing aspirations

More nuclear families with dual income

75 million households, called ‘consuming classes’ with annual income

between £650 to £ 60,000

Convenience overriding price consideration

Higher disposable income and easier financing options

1 Million Households in creamy layer with income at par with International

Lifestyle values

Global lifestyle: media exposure and overseas travel

Look at me (LAM) the most important criteria

… is Spending on Many More Categories 1990s Source: Technopak Consumer Outlook& Technopak’s India Luxury Trends 2006 2007 2000 onwards Food and Grocery Clothing Footwear Consumer durables / appliances Home linen Movies and theatre Eating out Food and Grocery Clothing Footwear Consumer durables / appliances Expenditure on DVDs and VCDs Home linen Home accessories Accessories/ Gadgets Eating out Take away/ Pre cooked / RTE meals Movies and theatre Entertainment parks Household help Travel packages Club membership … ..is indulging in luxuries like Gourmet food Fine dining Upscale Vacations High-end homes Segment D automobiles Chic clothing and accessories Cutting-edge technology gadgets and gizmos

Food and Grocery

Clothing

Footwear

Consumer durables / appliances

Home linen

Movies and theatre

Eating out

Food and Grocery

Clothing

Footwear

Consumer durables / appliances

Expenditure on DVDs and VCDs

Home linen

Home accessories

Accessories/ Gadgets

Eating out

Take away/ Pre cooked / RTE meals

Movies and theatre

Entertainment parks

Household help

Travel packages

Club membership

… ..is indulging in luxuries like

Gourmet food

Fine dining

Upscale Vacations

High-end homes

Segment D automobiles

Chic clothing and accessories

Cutting-edge technology gadgets and gizmos

Indian Retail Landscape India moving at a fast pace towards consumer driven economy Demand for competitive goods & services by Indian consumers like global counterparts Organized retail, attracting large FDI and FII investments Retail Power

India moving at a fast pace towards consumer driven economy

Demand for competitive goods & services by Indian consumers like global counterparts

Organized retail, attracting large FDI and FII investments

Strong Growth In Retail Market Size Strong growth in private consumption Retail opportunity slated to rise almost by US$ 200 Billion in 5 years, and another US$ 250 Billion in the following 5 years by 2018

Strong growth in private consumption

Retail opportunity slated to rise almost by US$ 200 Billion in 5 years, and another US$ 250 Billion in the following 5 years by 2018

Indian Food Retail Industry Segmentation Value % Share 2007 Food Services as a kiosks & restaurants contribute a share of 29% Indian unorganized food retail accounts for ~ 96% of the overall food retail but contributes only a share of 65% Super markets occupy 1.4%of the total share Hypermarkets account for 0.7% of the overall share of Indian Food Retail industry

Food Services as a kiosks & restaurants contribute a share of 29%

Indian unorganized food retail accounts for ~ 96% of the overall food retail but contributes only a share of 65%

Super markets occupy 1.4%of the total share

Hypermarkets account for 0.7% of the overall share of Indian Food Retail industry

Food Retail – Major Players in India RPG Spencer’s Reliance Future Group Big Bazaar SPAR Max Hypermarkets Aditya Birla Retail Namdhari Fresh Metro Heritage Foods Wadhawan Group Subhiksha REI Agro Bharti Retail

RPG Spencer’s

Reliance

Future Group Big Bazaar

SPAR Max Hypermarkets

Aditya Birla Retail

Namdhari Fresh

Metro

Heritage Foods

Wadhawan Group

Subhiksha

REI Agro

Bharti Retail

Rural Retail Formats ITC Choupal Sagar Godrej Aadhaar Retailing DSCL – Hariyali Kissan Bazaar Triveni Khushali Bazar

ITC Choupal Sagar

Godrej Aadhaar Retailing

DSCL – Hariyali Kissan Bazaar

Triveni Khushali Bazar

Imported specialty foods have been growing by 36% in last few years. Prime categories of imported food include, pasta, cheese, chocolates, olive oil, salad dressings, juices and certain canned fruits and vegetables. Demand for such products restricted to higher-income consumers - import duties (ranging from 25% to 75%) keep prices high The products which are gaining demand among the Indian consumer are- Breakfast Cereals Confectionary Products Frozen Meat And Poultry Products Gourmet Cheeses Wines Non Alcoholic Beverages Chocolates Pasta Dairy Creams Source: UN Comtrade India: A Huge Market for Imported Foods

Imported specialty foods have been growing by 36% in last few years.

Prime categories of imported food include, pasta, cheese, chocolates, olive oil, salad dressings, juices and certain canned fruits and vegetables.

Demand for such products restricted to higher-income consumers - import duties (ranging from 25% to 75%) keep prices high

The products which are gaining demand among the Indian consumer are-

Breakfast Cereals

Confectionary Products

Frozen Meat And Poultry Products

Gourmet Cheeses

Wines

Non Alcoholic Beverages

Chocolates

Pasta

Dairy Creams

Trends in the Imported Food Segment Pasta : There is an immense trend in Pasta, India currently brings in 1,25,000 wine cases a year accounting for a mere 4.5 milliliters of per capita consumption of the billion-plus population Sauces and dressings: occupy considerable shelf space among imported food product line. The category covers Mayonnaise, Dressings, Sauces, Jams and spreads Honey : Market for imported honey growing at 150 % per annum. The honey market needs a change from domestic brands Olive oils: The total size of the olive oil market in India is around US $ 6 million in terms of value and 2,000 tons in terms of volume. Spanish companies command a share of about 60% Wine: India currently brings in 1,25,000 wine cases a year.

Pasta : There is an immense trend in Pasta, India currently brings in 1,25,000 wine cases a year accounting for a mere 4.5 milliliters of per capita consumption of the billion-plus population

Sauces and dressings: occupy considerable shelf space among imported food product line. The category covers Mayonnaise, Dressings, Sauces, Jams and spreads

Honey : Market for imported honey growing at 150 % per annum. The honey market needs a change from domestic brands

Olive oils: The total size of the olive oil market in India is around US $ 6 million in terms of value and 2,000 tons in terms of volume. Spanish companies command a share of about 60%

Wine: India currently brings in 1,25,000 wine cases a year.

Food Service Channel Total market size estimated at US $7107.45 million in ‘07 Expected to grow at a compounded rate of 8% from 2008 to 2011 The average monthly household expenditure on eating out is estimated at US $ 35.28 mn. About 500,000 new eating outlets will be added over the next few years, taking the total number of outlets to close to 2 billion, second only to China New entrants and domestic players chart aggressive expansion plans for restaurants and hospitality chains By 2010, key Indian cities would witness a 45% increase in room base in the five star category

Total market size estimated at US $7107.45 million in ‘07

Expected to grow at a compounded rate of 8% from 2008 to 2011

The average monthly household expenditure on eating out is estimated at US $ 35.28 mn.

About 500,000 new eating outlets will be added over the next few years, taking the total number of outlets to close to 2 billion, second only to China

New entrants and domestic players chart aggressive expansion plans for restaurants and hospitality chains

By 2010, key Indian cities would witness a 45% increase in room base in the five star category

Catering Services Channel Institutional food service covers catering for large-scale organizations such as military forces, healthcare and educational institutions, business offices and manufacturing plants, and travel facilities . Market for contract food services is highly fragmented and price-sensitive Predominantly vegetarian providing wholesome traditional Indian meals With increase of working woman in urban India, buying lunch outside is becoming the norm at schools and workplace Name Catering Services Indian Hotels Co Ltd In-flight, Institutional & Outdoor EIH Ltd In-Flight & Airports Radhakrishna Hospitality Services Ltd Corporate, Institutional, Educational, Hospitals, Railways,etc LSG Sky Chef In-flight Mayfair Banquets Individual, Corporate & Institutional Ambassador’s Sky Chef In-flight Mars Restaurants & Banquets Individuals, Corporate & In-flight Sodexho International Alliance Corporate & Healthcare

Institutional food service covers catering for large-scale organizations such as military forces, healthcare and educational institutions, business offices and manufacturing plants, and travel facilities .

Market for contract food services is highly fragmented and price-sensitive

Predominantly vegetarian providing wholesome traditional Indian meals

With increase of working woman in urban India, buying lunch outside is becoming the norm at schools and workplace

The Retails Truths Subhiksha retails stores have been facing a challenge in cash flows for some time now Reliance has more aggressive focus on non food sectors now. Metro has obtained sure footing in two cities, by not expanding in haste. Similarly Bharti Walmart doesn’t want to expand in a haste. Godrej Nature’s Basket ( for Gourmet Retail) has opened 6 stores in Mumbai so far

Subhiksha retails stores have been facing a challenge in cash flows for some time now

Reliance has more aggressive focus on non food sectors now.

Metro has obtained sure footing in two cities, by not expanding in haste. Similarly Bharti Walmart doesn’t want to expand in a haste.

Godrej Nature’s Basket ( for Gourmet Retail) has opened 6 stores in Mumbai so far

Thank You! [email_address] +91-9810308309

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