The packaged food industry has experienced remarkable growth over the past half-decade. The numbers tell the tale of a relentless upward trajectory – in the fiscal year 2015, retail revenue from packaged foods reached INR 2,434 billion, and since then, it has maintained a formidable CAGR of approximately 8.2% until FY 2020. The future looks even brighter, with projections suggesting an expected CAGR of 9.1% over the next five years, ultimately reaching a colossal value of INR 5,581 billion.
The packaged food industry in India is presently valued at INR 3,615 billion, and it has experienced substantial growth over the past five years, driven by shifting lifestyles, increasing incomes, and urbanization. In the fiscal year 2015, the retail revenue from packaged foods amounted to INR 2,434 billion, with a compounded annual growth rate (CAGR) of approximately 8.2% from FY 2015 to FY 2020. Projections indicate that this sector is expected to maintain a CAGR of 9.1% over the next five years, ultimately reaching a value of INR 5,581 billion.
Market Segmentation in the Packaged Food Industry
In the year 2020, the packaged food industry boasted an approximate valuation of INR 3.61 trillion. Within this sector, dairy products stood out as the leading contributor, accounting for 38%, which equates to INR 1.38 trillion. Following closely behind were the snacks and sweets segment, making up 33.2%, and the biscuits segment at 14.5%. This remarkable industry is poised for continued growth in the coming years due to factors such as increasing product and packaging innovations, a growing emphasis on healthier food options, and the rising demand for convenient meals. As a result, the demand for packaged foods is expected to maintain a robust growth rate of over 31% in the foreseeable future.
Key drivers for the Indian packaged food industry
Some of the key drivers for the Indian packaged food industry include:
Convenience: As families have become more nuclear and the changing lifestyle has led to the working class to look out for more convenient and healthy options of food.
Disposable income: Increasing disposable income will drive the growth for this market. Per Capita income has more than doubled in last 10 years to USD 2,014.
Safety and Hygiene: Packaged food is the ultimate solution for maintaining the hygiene of the food products and given the pandemic, consumers are more concerned about safety and hygiene than before.
Shelf life: Packaged food has ensured better storage by retaining their quality for longer period.
