Head honchos of Top Food and Grocery Brands discover opportunities that lie ahead for the growth of modern retail and trade
The 7th Food and Grocery Forum India (FGFI), India’s biggest platform for food and grocery businesses, held on 23rd and 24th January, 2014, witnessed a gathering of some of the best international and national brands from the industry at the Bombay Exhibition Centre. FGFI 2014 was all about ideas, innovation in trade by the food captains, growth of modern retail, and discovered new potentials to boost the industry. The Bombay Exhibition Centre, Goregaon, Mumbai also concurrently hosted the India Food Service Forum 2014.
The curtain raiser of FGFI 2014 witnessed a session wherein Saloni Nangia, President, Technopak discussed about ‘Top 10 consumer trends in 2014’. She threw light on e-commerce being the future of food and grocery segment as it facilitates ease and convenience to consumers. She also highlighted the fact of culinary authenticity in food which consumers are now seeking. Bhavdeep Singh, Executive VP, US Operations, Ahold, USA, spoke about ‘Retail Trends of Future: A Global Perspective’. He mentioned that today’s consumer is looking at quality in exchange for value of his money. Hence, the mediocre services will have to become good and the good will have to become better to withstand and combat competition.
At the Inaugural session of FGFI 2014, key leaders of the food and grocery industry with the likes of Ajay Kaul, CEO, Domino’s; Devendra Chawla, CEO, Food Bazaar, Future Group; Mark Ashman, CEO, Hypercity; Viney Singh, MD, Max Hypermarket; Sh JP Meena, Jt. Sec., MOFPI; Sh Gajendra Bhujbal, Economic Advisor, MOFPI; Jamshed Daboo, CEO, Trent; and Mohit Kampani, CEO, Spencers were seen discussing the opportunities in food and grocery retail in India which is estimated to be worth about $490 billion, which constitutes about 69 percent of India’s total retail market. The session was anchored by Shivnath Thukhral, Group President, Corporate Branding & Strategic Initiatives, Essar Group. The CEOs, Policy-maker, experts and consultants shared their insights on the business of food production in the country, trade and consumption.
Sh J P Meena, Jt Sec, MOFPI pointed out the trends, triggers and prospects of the food processing industry. He said the Food Processing sector is growing annually at 7.2 percent as compared to 3.9 percent in Agriculture for the last 5 years ending 2012-13. It is growing at a faster rate than agriculture sector; more and more agriculture produce is getting processed. Investment in Food Processing sector is increasing annually at 21.66 per cent. FDI is also increasing significantly at the rate of average inflow of US $ 117 Million for 11 years ending 2011-12; 2012-13: US $ 401 Million; 2013-14 (Apr-Oct): US $ 2146 Million. Exports are increasing at the rate of 20.4 per cent per annum. India is poised for a big take-off in Food Processing sector with more opportunities to investors. The assistance from the Ministry is grant of 50% of the CAPEX in general areas and 75 percent in difficult areas, the maximum grant being Rs. 150 Million.
Chawla then discussed modern trade growth path by driving consumption and category creation in the food sector. He said that consumers who claim to shop at Modern Trade “occasionally” has grown from 54 percent last year to 68 percent – increasing consumption, comfortable shopping experience, new categories, wide variety of brands under a single roof and attractive prices are the main reasons. A whopping 55 percent of the Modern Trade shoppers actively seek promotional deals, 35 percent of them making bulk purchases of which 30 percent are male customers – many regular while some “initiating trial”. The growth drivers of the sector are improved quality products, convenience for consumers, improving incomes, technology and improved access to stores. In this ever-changing economic scenario, brands (retailers) that help the housewife put back quality time in her family allowing her to pursue her priorities will find takers. He summarised by saying, “One thing is for sure: If the housewife has stepped out of the kitchen to multi-task, live her dreams and aspirations, outsourcing kitchen chores is here to stay or rather increase; brands and retailers just need to start matching her pace.”
Daboo said that the country is moving at a fairly fast pace. Consumers are creating their own opportunities and they are becoming exposed to information and they know what they want. Hence, the challenge lies in serving this change.
Ashman stated that Hypercity started operations in 2006 in India and today there are 15 hypermarkets pan India. As part of our expansion strategy, we are clustering in the key markets and we looked towards the west for inspiration. Absolute space brings the operation cost down and facilitates the right product mix. Another critical observation is that food export has become expensive which challenges the retailers to maintain the food quality. At Hypercity, we are passionate about what we offer and what customers want. We also believe in educating the customer as to how to store a particular product. We constantly seek Government’s help to maintain quality of food and bring in variety of international food to India.
Kaul said that 50 percent of the market is sitting in the strugglers segment and there is a huge opportunity in the migration of traditional to modern trade. With various changes that are happening at the demographic level and with behavioural patterns of the youth in the country, the definitive impact on the food service is huge. After QSR, FCF (Fast Casual Format) will pick up in India as a trend from USA.
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