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By Tanisha Saxena | (cbedit@imaws.org)
The Indian savory snack market is projected to experience a compound annual growth rate (CAGR) of 8.42% from 2023 to 2027, anticipating a substantial expansion of USD 3,162.26 million. Key drivers of this growth include the increasing retail presence in Tier-II and Tier-III cities, changing taste preferences, and a rising inclination toward savory snacks.
Market trends currently influencing the namkeen industry
Aakash Kandoi, Managing director at Jagdish Farshan, in the heart of Vadodara, Gujarat, speaks to us about the trends in the namkeen industry. He says, “There are a lot of experiments happening in the industry, especially with manufacturing companies that are quite young. There is a huge shift in flavors, so we are introducing a lot of Western flavors like perry perry Sev, wasabi-coated peanuts, etc. The target is not just foreigners but Indians too. We are also focusing on these aspects as manufacturers. The Indian namkeen market is massive, and everyone is making similar kinds of products, so as manufacturers, you have to be niche but at the same time stand out.
Another aspect that Mr. Kandoi highlights is the sustainable trend enveloping everyone in the Indian market. He explains, “For products like namkeen, the biggest challenge is oil, and paper bags soak the oil. Paper bags have absorbent properties, making them susceptible to soaking oil from namkeen (savory snacks). This poses a challenge in packaging, as it leads to oil stains or compromises the integrity of the bag. To address this issue, manufacturers often explore alternative packaging materials with better oil resistance or use additional inner layers to prevent oil seepage and maintain product quality. So, when it comes to sustainability, then in namkeen manufacturing, we have to work on more innovative paper packaging.”
When it comes to innovation, there will be experimenting in the namkeen industry. Mr. Kandoi adds, “I can see that we all are just experimenting more with flavors and palettes. Consumers are tired/bored of eating the same aloo bhujia. So, we need to offer them something unique all the while serving aloo bhujia. I will give you an example; we recently came up with espresso rosogolla, which is not common of course. Similarly, in namkeen, we have Pani Puri bingo, and our signature Suko Lilo Chevdo – in every product, we try to keep innovating and experimenting. That’s what I also see in the industry happening. The coming years will see more fusions.
Frozen and plant-based range of Namkeens
Frozen namkeens come in various forms, including samosas, pakoras, and other popular Indian snacks. Manufacturers are experimenting with flavors, ingredients, and cooking techniques to enhance taste and texture. Some are exploring healthier options by using alternative ingredients or modifying traditional recipes to meet dietary preferences. Additionally, advancements in freezing technology help maintain the freshness and quality of these snacks, offering convenience without compromising flavor.
Nishant Balecha, Head of Exports, Bikaji foods, opines; “Manufacturers are excelling in the plant-based namkeen and frozen snacks market by leveraging a variety of plant-based ingredients to replicate traditional flavors. They use legumes, grains, and innovative plant-based substitutes to create alternatives to meat-based ingredients. Additionally, advanced processing techniques help mimic the texture and taste of traditional namkeens. In the case of namkeen bhujia, manufacturers are experimenting with ingredients like chickpea flour, rice flour, and various spices to achieve a crunchy texture and authentic flavor. The focus on plant-based options caters to the growing demand for healthier and sustainable snack choices. This trend aligns with consumers’ preferences for snacks that are not only tasty but also align with dietary and ethical considerations.”
The Emergence of E-Commerce is a Boost
E-commerce has benefited namkeen manufacturers by providing a broader market reach, enabling online sales, and facilitating direct consumer engagement. E-commerce platforms are a gateway to a global customer base, allowing manufacturers to transcend local markets and expand their reach internationally. These platforms serve as effective online sales channels, reducing dependence on traditional retail methods and offering continuous accessibility to consumers. They are also instrumental in building direct-to-consumer relationships, enabling manufacturers to gather valuable feedback and insights, which can be used to tailor products to consumer preferences and respond swiftly to market trends.
Mr. Hariram Aggarwal, chairman of Bhikharam Chandmal, explains the importance of E-commerce in the industry, “E-commerce platforms are equipped with robust data analytics tools. Namkeen manufacturers are able to analyze customer behavior, preferences, and purchasing patterns, empowering them to make informed business decisions, optimize marketing strategies, and refine product offerings. The convenience of online shopping for consumers further enhances the appeal of namkeen products, and manufacturers can leverage this to diversify their product range and experiment with new flavors or variations based on online feedback. E-commerce’s supply chain optimization capabilities also contribute to streamlined inventory management, reducing the risk of overstock or stockouts and ensuring a more efficient production cycle. Overall, e-commerce is a versatile tool that empowers namkeen manufacturers to enhance market visibility, improve operational efficiency, and foster direct connections with consumers, thereby contributing to sustained business growth.”
Major Challenges for the Manufacturers
In contemporary times, there has been a discernible shift towards heightened health consciousness among individuals. This trend is notably reflected in the choices people make, extending to their preferences in snack consumption. When it comes to indulging in namkeen, a traditional savory snack, there is a growing inclination towards healthier alternatives. The modern consumer is increasingly seeking snacks that not only satisfy their taste buds but also align with their commitment to well-being. This shift underscores a broader societal awareness and prioritization of health, as individuals are now more inclined to opt for nutritious options in their quest for a balanced and mindful lifestyle.
Amog M, CEO of BGR Snacks, asserts, “We receive frequent requests for products crafted from sunflower and rice bran oil, particularly from the discerning local markets in Bangalore. Meeting this demand poses a challenge, as there is a need for products with an extended shelf life, and formulating items with these oils is inherently intricate. Presently, manufacturers often resort to palm oil as the most pragmatic option. Sunflower and rice bran oils have gained recognition for their numerous health benefits, solidifying their status as favored choices in the culinary oil landscape.”
Another challenge he remembers in the recent past was in the preceding year, “The escalation of palm oil prices was attributed to the disturbance in sunflower oil provisions from the Black Sea region following Russia’s invasion of Ukraine,” tells Mr. Amog.
Adding another layer of challenges that the manufacturers face, Mr. Amog highlights, “More people are choosing fast food over traditional namkeen snacks, impacting the namkeen industry. The convenience and variety offered by fast food have become more appealing, leading to a decline in the popularity of namkeen. To stay competitive, namkeen manufacturers are adapting by introducing healthier options, unique flavors, and new packaging. This shift in consumer preferences is reshaping the industry, prompting it to evolve and meet the changing demands of a society increasingly drawn to fast food choices.
B&M Formats like Hypermarkets and Supermarkets Backing up the Industry
Manufacturers benefit from the expansion of B&M formats like hypermarkets and supermarkets as these platforms offer a broader reach, increased visibility, and efficient distribution channels. By aligning with these retail giants, manufacturers can tap into a larger consumer base, enhance product exposure, and streamline the supply chain, ultimately fostering growth and market presence.
Jignesh Chedda, Chief Operating Officer at Chheda Specialties, shares some insightful details on the same. He elaborates, “The transition to remote work in India during the pandemic has led to a noticeable trend in dietary choices, where individuals working from home often prefer smaller meals. Namkeens, being convenient and snackable, have become a popular choice among remote workers.”
He goes on to explain, “Simultaneously, the rapid expansion of brick-and-mortar selling formats, such as hypermarkets and supermarkets, in India’s metro cities has played a pivotal role. These large-scale retail spaces offer a diverse range of snacks, including Namkeens, making them easily accessible to consumers. The convenience and variety provided by these formats contribute to the increased consumption of Namkeens, aligning with the evolving lifestyles and preferences shaped by the ongoing changes in work environments. This synergy between remote work practices and the proliferation of modern retail formats has significantly impacted the Namkeen industry’s dynamics in India.”
Automation transforming the namkeen manufacturing industry
Automation has significantly transformed the namkeen manufacturing industry, bringing about improvements in efficiency, consistency, and scalability. The adoption ofautomated processes has notably accelerated production speed and accuracy, reducing manual errors and creating a more streamlined production line. This not only results in higher output levels but also contributes to lower operational costs.
Perish Shishangiya, Managing Director, GujjuBite, Saffron Food Products LLP, states, “The implementation of automation ensures a consistent level of product quality by precisely controlling factors such as ingredients and cooking times. This commitment to quality not only satisfies customers but also enhances brand reputation. Automated systems enable manufacturers to produce larger quantities of namkeens and snacks within shorter time frames, a crucial aspect for meeting the growing demands of the market and expanding business operations. Despite the initial setup costs, the long-term benefits of automation include reduced labor costs, minimized waste, and optimized resource utilization, ultimately leading to overall cost savings for manufacturers. Moreover, automation enhances workplace safety by reducing the need for manual intervention in potentially hazardous tasks, minimizing the risk of accidents and injuries. Additionally, the flexibility provided by automation allows manufacturers to adapt to changing market trends and introduce new products easily. They can reprogram automated systems to accommodate variations in recipes or packaging requirements. In summary, automation has not only optimized production processes but has also contributed to higher product quality, increased output, and overall cost-effectiveness, fostering the growth and competitiveness of the namkeen manufacturing industry.”
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