The Neofoods categories or the New age consumption goods are set to grow as sizeable markets in India. I call these as Neofoods or new age goods as these are primarily consumed by the post –liberalisation generation or they became popular in recent times. Most of these products were introduced to Indian consumers during the last three decades. The product categories are Instant soups, Ketchups, Burgers, Pizzas, Peanut butter, Packed juices, Iced tea, Cold coffee, Noodles, Cornflakes, Nutella(Hazelnut spread), Hot dogs, Oats, Mayonnaise..the list goes on …
Among these, noodles as a category was one of the earliest to enter. It is estimated to have reached 20-25% of India ever since the category was formalized in early 80s. Now the category has interesting brands like Nestlé’sMaggi Noodles, Nissin’s Top Ramen Smoodles, GSK’s Horlicks Foodles, HUL’s Knorr Soupy noodles, ITC’s Yippee noodles etc..
Ketchup is another category with a reach of 20% of households in the country. But, other categories are still trying to get their way into the market. Oats has around 3% of market penetration. Ready to make Soups have penetrated to less than 5%.
As India grows, the per capita consumption of these products is also likely to grow due to changes in family dynamics and lifestyle. So, this has created a lot of interest among FMCG giants both Indian and MNCs to build brands in these categories. Pepsi, Marico, Nestle, GSK, ITC, Britannia, HUL, Kellogg’s and the likes are getting serious. Starbucks has already come into India. HUL has launched a full-fledged range of Knorr noodles to take on Maggi. This comes years after launching soupy noodles, a bridge product.
But at the same time, companies are not losing focus on established categories, considering the potential to grow further. It is interesting to note that the penetration of tea is already close to 90%. But the per capita tea consumption in India is just 0.63 kg. In UAE, it’s 6.2 kg, almost 10 times more. Similarly, Ice-cream penetration in India is just 140 ml. compared to 10 litres in USA and 300 ml. in Pakistan. So, companies like HUL are finding ways to grow more in the existing food categories as they find them more relevant today.
But, still the Neofoods category is clearly providing a stellar opportunity to add new stars in the portfolio of FMCG players. Will it emerge as an important category group within in a decade? We can only wait.
