The movement is similar to that of lifestyle products in the consumer durables segment, where demand for mass-priced merchandise is under pressure due to inflation and growth is largely driven by the premium range.
“The context started during Covid and India having a tough pandemic – the appreciation of packaged food improved a lot and it has now catapulted,” said Kalpesh R Parmar, country general manager, Mars Wrigley India. “So, when one wants small moments of happiness, the consumer opts for a packaged snack, either biscuit or chocolate and chips.”
Parmar added, “Because of the consumer mindset changing, they are going for packaged products and not local products, which are handmade. It was never a big worry but now people are being cautious.”
During the 12 months ended October, the beverages sector grew 24%, convenience food – including noodles, pasta and cereals – grew 13%, while snacking segments such as chips, cookies and chocolates expanded 12% by volume, data from global consumer research firm Kantar Worldpanel (formerly IMRB) show. Volume indicates the unit number of products bought or consumed.
Last year, the beverages segment had just started to recover from the lows of the pandemic’s first summer in 2020. A harsh summer and pent-up demand helped the segment grow 54%. Several ready-to-eat and ready-to-cook products grew during the pandemic and offered easy stocking and snacking options.Consumption of packaged consumer goods in the country fell for the fifth straight quarter in July-September, when the FMCG market shrank 0.5% on-year by volume, led by food products amid rising prices.”FMCG fell marginally by 0.5% even during the year ended October, but the decline could have been steeper if not for these sectors that outperformed all expectations,” said K Ramakrishnan, South Asia managing director of consulting firm Kantar. “Shoppers are starting to increasingly get habituated to convenience foods and alternate formats.”
Alternate categories or premium sub-segments, including liquid soaps, detergents and dishwash, grew 30%. “If you look at premium categories, the consumer is different, and the way they buy is also different,” said Sameer Satpathy, chief executive of personal care, ITC Ltd.