Snacking between meals has long been a part of Indian culture, and the COVID-19 lockdown further heightened this practice, leading to a substantial surge in snacking. This trend is expected to persist in the Indian market. Projections indicate that the Indian savory snacks market will reach INR 1,185 billion by 2025, with organized players securing a significant market share due to increased concerns about hygiene and safety.
The Indian Savory Snacks market, with a valuation of INR 728 billion in 2021, is projected to grow to INR 1,185 billion by 2025, boasting a strong CAGR of 13%. This market can be broadly categorized into two segments: Western snacks and Traditional snacks. Among these, the Traditional snacks market, valued at INR 348 billion, contributes significantly, making up about 48% of the total savory snacks market.
Traditional snacks encompass a variety of namkeens, bhujia, and ethnic snacks like dry samosas, kachoris, and chaklis. On the other hand, the Western snacks market, valued at INR 380 billion in 2021, includes products such as chips, extruders, and a new class of snacks known as “bridges,” which offer a fusion of local flavors with a Western appeal.
Packaged Savory Snacks Market in India
The Indian savory and snacks market, valued at INR 728 billion, is marked by a plethora of unorganized players operating within specific regional niches. Each region has its unique snack offerings, resulting in numerous small businesses serving this market. These players typically maintain a limited product range, often specializing in a single category, and, in many instances, exclusively offering traditional snacks. Their operations are typically confined to a small geographical area, typically a single state or city, and rely heavily on competitive pricing and the preservation of traditional flavors.
However, over time, prominent FMCG (Fast-Moving Consumer Goods) companies recognized the potential of the snacks market and made significant forays into it, capitalizing on their established supply chains. These companies are known for their extensive product portfolios spanning multiple categories, aggressive advertising and promotional activities, robust research and development efforts, and more. The combination of factors such as demonetization, changes in GST regulations, and the COVID-19 pandemic forced many small regional unorganized players to cease their operations, which, in turn, provided an advantage to organized players.
Despite 43.4% of the packaged savory snacks market remaining unorganized, companies like Haldiram, Pepsico-Lays, Balaji, and Bikaji have firmly established themselves across the country and secured significant market share in various regions.
The organized segment has been strengthening its position in the market in recent years, introducing new products and innovations targeted at both urban and rural consumers. In 2015, the organized savory snacks market was valued at INR 196 billion, and by 2021, it reached INR 410 billion. This segment is projected to continue growing at a robust CAGR of 15% until 2025. Advertising and promotions have played a pivotal role in the growth of the organized sector. Well-funded, organized players can afford celebrity endorsements and participation in major events across India, which has greatly contributed to their success.
In the organized market, Western snacks still hold sway with a 58.3% market share in the Indian savory snacks segment. Ethnic namkeens and snacks contribute 26.3% to the organized savory market, followed by ethnic bhujia at 15.4% in the overall savory snacks market for 2021.
Ethnic namkeen and snack items, encompassing products like namkeen, chaklis, and various spiced or fried nuts, are traditionally region-specific even within India. However, with urbanization and the migration of the working population to different regions, the demand for regional snacks is on the rise across the entire nation. This shift has prompted regional players like Bikaji and Chitale to expand their presence nationwide.
Another noteworthy trend in the food market is the packaging and sale of products that were previously not sold in packaged form. Examples include Bhakarwadi, samosas, Bhel Puri by Haldiram’s, Aam Panna by Paperboat, and packaged coconut water, among others. This trend is anticipated to persist as companies develop processes to enhance shelf life while preserving the authentic taste of traditional foods. Haldiram’s, Bikaji, Balaji Wafers Pvt. Ltd., and Bikanerwala are prominent players in the traditional snacks sector, enjoying broader reach, while other players have more regional coverage.
Currently, the ethnic namkeen and snacks market is valued at INR 108 billion. This segment has witnessed substantial growth in recent years, particularly during the pandemic, as moreconsumers opt for branded namkeen over loose products from local stores due to hygiene concerns. Interestingly, the surge in branded or organized namkeen consumption is driven by consumers transitioning from the unbranded segment rather than those shifting from Western snacks to ethnic snacks. Today, ethnic namkeen represents the fastest-growing opportunity in the Indian savory snacks market, offering advantages such as better profit margins and a wide range of products. Consequently, many companies are expanding their namkeen product offerings.
While the overall snacks market is experiencing healthy growth, the ethnic namkeen and snacks segment stands out with the highest growth rate, resulting in increased competition. Companies are vying for market share by introducing new flavors, products, and variations of traditional items, along with attractive packaging and flexible pricing. This competition is fueling the significant growth of the namkeen market, with a projected growth rate of nearly 16% over the next four to five years. The growth is further bolstered by the significant presence of the unorganized sector, catering to unique regional tastes and reaching even the most rural markets. Ultimately, consolidation of the unorganized sector is expected in the long term
Ethnic Bhujia is another specialty within the traditional Indian savory market. It is a crispy snack prepared with besan and moth dal (gram flour/dew beans), and a blend of spices. The origin of Bhujia can be traced back to Bikaner, a city in the northern part of Rajasthan, India. This delectable treat has not only found its way to various parts of India but has also gained international popularity. While many regions in India produce Bikaneri bhujia, the one made in Bikaner remains distinct due to the geographical indication tag it received in 2010. In addition to Bikaneri bhujia, there are variations such as Aloo bhujia, Pudina bhujia, and more. The current organized market size of ethnic bhujia is INR 63 billion, with a growth rate of 15% CAGR.
In the organized Western snacks category, with a market value of INR 239 billion, a growth rate of 14.4% CAGR is expected until 2025. This category comprises chips, extruders, and other products referred to as “bridges,” contributing 52%, 34%, and 14%, respectively, in 2021. Major players in this segment include PepsiCo with Lay’s chips and Kurkure, ITC with Bingo, Pratap Snack’s Yellow Diamond, and DFM Foods’ Crax.
These companies offer a variety of snacks, easy accessibility, and numerous product variations. Several medium-sized companies, like Maiyas, Balaji Wafers, and Laxmi Snacks, are gaining popularity nationwide. The market also features both branded and unbranded chips and extruders, often confined to specific cities or localities. Notably, consumer preferences in India are shifting toward packaged Western snacks, asegmentwhere Bikaji’s market share is currently limited.
Sweets Market in India
Sweets hold a cherished and traditional place in Indian households and culture. These delectable treats are not just an integral part of religious festivities and family functions but also evoke a deep emotional and cultural connection for Indians, both within the country and among NRIs on foreign shores.
The Indian sweet market, valued at INR 589 billion, is predominantly served by unorganized players. Thanks to the enduring sweet tooth of Indians, it is anticipated to surge to INR 843 billion by 2025. Traditional Indian sweets, crafted from fruits, dairy, pulses, cereals, or ingenious combinations of these ingredients, offer an astonishing variety. Moreover, these sweets have been nurtured and cherished across different regions of the country, reflecting unique regional specialties and tastes.
The Indian sweets market is predominantly unorganized, with a market value of INR 533 billion. Approximately 90% of the market is dominated by standalone mithai shops that can be found throughout the geography of India. These shops offer an array of regional and traditional sweets, including popular favorites like gulab-jamun, rasgulla, and a plethora of barfis. Organized players in the sweet market provide products like tinned gulab-jamun, rasgulla, Bengali mithai, and more. The demand for packaged sweets has seen a steady rise due to concerns about hygiene and safety, exacerbated by the COVID-19 pandemic.
The enduring popularity of traditional sweets, combined with heightened consumer awareness regarding cleanliness and hygiene, has led to a growing acceptance of packaged sweets. Moreover, the unorganized market for open sweets faces challenges like fluctuating prices of milk and raw materials, sometimes compelling sellers to resort to adulteration. The preservation of shelf life is only feasible with packaged sweets, and consumers have developed trust in neatly packaged products that list all ingredients. Regulatory bodies like FSSAI are tightening norms related to food labeling and safety.
The INR 56 billion organized sweet market is segmented into milk-based sweets, Soan Papdi, dry fruit sweets, and other varieties such as ladoos. Major players in the organized sweet industry, like Haldiram, Bikaji, and Bikano, offer a wide assortment of packaged sweets. Milk-based sweets are experiencing impressive growth with a CAGR of 14.7% and are expected to reach INR 27.2 billion by 2025. Similarly, Soan Papdi and dry fruit sweet segments are growing at CAGRs of 15.6% and 13.2%, respectively.
Key drivers for the growth of sweet and savory industry
The key drivers for the growth of sweet and savory industry are the following:
- Traditional snacking culture
- Innovation in flavors and new segment
- Increasing per capita income and disposable income
- MNC and domestic companies trying to scale up
- operations and increase their presence
- Growing FDI and collaborations
- Increasing exports
- The restraints for Indian savory snacks and sweets
- industry are the following:
- Increasing prices of the raw material
- Availability constraint for some raw material due to
- seasonal crops
- Lack of infrastructure
- High cost of packaging
- Long and fragmented supply chain
- High cost and low quality of distribution
- Inadaptability of technologies for production and distribution
- Adulteration by unorganized players
- Low shelf life of the products
- Me too products affecting brand credibility
Split of the Sweet and Savory Segment by Region
The demand for savory snacks is most pronounced in North India, closely followed by West India. These regions are the primary consumers of namkeen, with Rajasthan and Gujarat being particularly notable for their strong cultural attachment to this snack.
Consequently, the majority of namkeen varieties originate from these areas. Furthermore, the growing popularity and increased availability of diverse options in the ethnic namkeen and bhujia segments are driving growth in these regions. In East India, savory snack consumption is significant, particularly as a form of street food between meals and during travel.
Recent trends suggest that the consumption of ethnic savories is poised to increase steadily, with companies like Bikaji and Halidram seeking to penetrate the market with their extensive product offerings
When it comes to the sweets market, North India takes the lead with a 35% share, driven by states like Uttar Pradesh, Delhi NCR, Punjab, and Haryana. East India, on the other hand, sees Bengali mithais dominating the market. South India and West India contribute approximately 13% and 24%, respectively, to the sweets industry.
Estimated Market Share Pan-India
Bikaji stands as one of the top three manufacturers of Indian ethnic snacks in the country. Haldiram, a renowned market leader in the Ethnic Namkeen and snacks market, has always been synonymous with packaged traditional snacks and sweets both in India and abroad. Given its rich heritage, it is poised to maintain its market dominance over the next 4-5 years. This commanding position is attributed to a broad product portfolio, products tailored to individual tastes, competitive pricing, a robust supply chain, and appealing profit margins. Bikaji and Bikanerwala Foods are other companies deeply entrenched in the namkeen market, with Bikaji foods holding a strong presence in the North and East Indian markets, offering a wide array of ethnic snacks and namkeens. Notably, Bikaji is the market leader in the Bikaneri bhujia segment. Balaji Wafers, too, has established itself in the namkeen market and is vying for a top position. Additionally, other players like Prataap Snacks, DFM Foods, Pepsi, and ITC have ventured into the ethnic namkeen and snacks market.
In the Western snacks category, PepsiCo, with its “Lay’s” and “Kurkure” brands, leads the market with a share of over 20%. The company’s success can be attributed to its diverse product range, robust distribution network, availability of products with both Indian and international flavors at various price points, and aggressive promotional efforts. ITC, with its “Bingo” brand, closely follows as the second largest player in the Western snacks market, holding around 11% market share. The dominance of these key players has faced challenges in recent years as mid-sized companies such as Balaji Wafers and DFM have chipped away at market share previously held by PepsiCo. These challengers have leveraged aggressive pricing, offering more product value for the same price, and increased accessibility through various retail outlets
Major food companies like PepsiCo and ITC have a nationwide presence in the Western snacks market. Their diverse food portfolios ensure cost optimization and the ability to supply products across the country. They have a strong presence in both rural and urban markets, highlighting the importance of distribution in becoming a leading player in the market. The presence of multiple products in their portfolios that complement snack offerings further contributes to the optimization of distribution costs. In contrast, DFM Foods has a presence across India but is primarily concentrated in urban regions, with limited penetration in rural areas.
Conclusion
The Indian Savory Snacks market is valued at INR 728 billion in 2021 and is projected to reach INR 1,185 billion by 2025, representing a CAGR of 13%. Notably, the demand for savory snacks is highest in North India, closely followed by the West. On the other hand, the Sweets market is primarily driven by North India, which holds a 35% market share, with significant contributions from states like Uttar Pradesh, Delhi NCR, Punjab, and Haryana. East India follows, with Bengali mithais taking the lead in the market. South India and West India contribute around 13% and 24%, respectively, to the sweets industry
In this segment, major players like PepsiCo, known for its Lay’s chips and Kurkure, ITC with Bingo, Pratap Snacks’ Yellow Diamond, and DFM Foods’ Crax, offer a wide variety of snacks with easy accessibility and diverse SKUs. Additionally, there are several medium-sized companies gaining popularity across India, including names like Maiyas, Balaji Wafers, and Laxmi Snacks. The market features both branded and unbranded chips and extruders, which contribute to the overall growth of the industry.
