A Multipolar World

The availability of foreign food ingredients on the Indian retail shelves is relatively recent, thanks to the rise of the globally-mobile urban Indian and his/ her penchant for the good life. It is clear that there is a growing urban population that is integrating international cuisine as part of their diets more often than before, helping importers, marketers and retailers to cash in on an emerging sub sector of modern food retail.

Elaborating on the status of cooking and consuming foreign foods in Indian households, Mohit Khattar, MD of Godrej Agrovet Ltd’s gourmet food sstore, Nature’s Basket, says, “The trend ofexperimenting with food in general is as old as man himself. It is the drift towards experimenting and cooking international food at home that is relatively new. Eating out or being exposed to any international cuisine is a significant precursor before one actually starts making foreign foods at home. Therefore, cooking foreign cuisines at home has been an evolution in the trend of foreign food consumption in India, which has admittedly only grown in the metro cities as of now. But over a period of time, we do expect it to percolate down to tier II and tier III cities as well.” He further adds, “There is also an upgrade happening here. If one were to count consumers who once prepared only instant noodles in the name of foreign food at home, one would realise that the upper class, among them, has moved on to make more evolved, fine-dining international preparations.”

Echoing this view, Sunil Sanklecha, managing partner, Nuts ‘N’ Spices, the immensely popular Chennai-based supermarket chain, says, “As far as cooking and consuming foreign cuisines are considered, I think the trend has just begun and is the tip of an iceberg right now. Non- Indian cuisines are typically cooked and consumed in the metro cities only. Tier II and tier III cities have just started to ackowledge the swing.”

“Predominantly, growth in foreign food consumption is driven through the 12 mega cities (major metros and other cosmopolitancities), with smaller towns trying to tentatively change course to the best of their capabilities. This trend is growing at a good pace in tier II as well and soon these cities will be familiar with all kinds of foreign cuisines,” states Saumil Thanawala, director – marketing, Amalgam Speciality Foods Limited (ASFL), a subsidiary of Amalgam Enterprises.

“Tier III cities, however, are still slow on trying and adopting new food habits. Consumers in these markets try new cuisines while travelling in metros, but have yet to be enamoured enough to get into the habit of cooking foreign eats at home,” he adds.

Amalgam processes, blends and packs a premium range of uniquely freeze dried multi-cuisine herbs, spices and seasonings, sold under the brand “Keya – Simply Fantastic”. The company also offers a range of other products in its portfolio.

Agreeing with all, Devna Khanna, director, i2i Consulting, which is a country consultant for Southern United States Trade Association (SUSTA), for their value-added food products, comments, “Liberalisation of imports and the spread of modern retail formats has given more access to imported ingredients, which has accelerated the swing. This trend is primarily driven by demand from metro cities, though it is also prevalent in tier II and tier III cities, to some extent.”

Apart from foreign exposure and travel, a number of television channels running cookery shows, hosted by celebrity chefs, have further generated curiosity even among the most uninitiated. First-time consumers of foreign food ingredients, therefore, are accounting for the bulk of impulse shoppers at international food counters in modern retail.

According to Nikhil Asrani, director, Suresh Kumar & Co. (Impex) Pvt Ltd, one of the leading importers of food products in India, the trend of cooking international fare at home is yet prominent enough in the country. “Though slow paced, the availability of ingredients has propelled the trend; demand is also growing faster in India than anywhere else in the world. Foreign foods can now be consumed either by cooking or buying ready-to-eat (RTE) meals. As far as cooking at home is considered, the practice is by and large restricted to metro consumers,” he notes.

Chinese, or more appropriately, ‘Indianised Chinese’, has long enjoyed the monopolistic status of being the most preferred foreign cuisine in India. Initially popularised by Chinese and Tibetan expats, Chinese foods in India are currently as ubiquitous – and cut across class divides – as the samosa.

On the status of popularity of Chinese main dishes, Sanklecha comments, “Today, so deeply entrenched is the Chinese presence in food, that it is virtually an extension of Indian sensibilities.” It is over the past decade that other foreign cuisines such as Thai, Malaysian, Italian, Mexican, Lebanese, Japanese, French, Spanish, Korean, Greek, Moroccan, Indonesian and Peruvian, to name some, have come to subtly challenge the Chinese Dominance.

According to Amit Lohani, CEO, Max Foods, one of the dominant importers and exporters of globally renowned food and beverage brands, the most popular international cuisines among Indians are Chinese, Italian, Thai, Japanese and Lebanese. “These are some of the cuisines for which ingredients are now easily available in modern retail,” he says. Viney Singh, managing director, Max Hypermarket India Pvt Ltd, says, “In order of popularity, Italian, Chinese, Thai, Mexican, Lebanese and Greek are leading all other cuisines.” Agreeing with Singh to some extent, Abeir Phogatte, director, Phoset Foods Pvt Ltd, a major manufacturer and importer of exotic ingredients (herbs, spices and seasonings) says, “Chinese, Italian, Lebanese, Mexican and Thai are the most preferred cuisines by Indians.”

Acknowledging the status of Chinese cuisine as an integral part of Indian menu, B.V.K. Raju, partner, Q-Mart, states, “As far as experimenting at homes is considered, Indian consumers are most curious about Italian, followed by Thai, to some extent. The wide availability of ingredients for these two cuisines, also aids their growing DIY status.”

Thanawala feels that the two most admired cuisines among Indian consumers are Chinese and Italian. “But there is a huge section of urban Indians that looks to – and is in fact, very conversant with – North American, Japanese, Mexican, Thai, and Lebanese signature dishes. Mediterranean cuisines – Greek and Spanish – are also picking up, but the most popular would be Chinese, Italian and North American.”

Puneet Gupta, MD of L-Comps, which is a part of Prabha Group of Companies, opines, “Chinese and Italian are the most accepted global cuisines in India.” “Italian and French foods have been extremely popular for some time now,” notes Mohit Kampani, vice president, merchandising, food and FMCG at Spencer’s Retail. “However, among the other global favourites, Thai has also gained immense popularity, followed by Japanese and Mexican,” he says.

Going by industry experts, it is clear that apart from Chinese,which still tops the pecking order, the flavours of Italian and Thai are gradually but firmly permeating the urban Indian household. Japanese, Lebanese and Mexican igredients, while lagging behind at this point in time, are also expected to make it to kitchen shelves shortly

The broad view of the scenario depicts that there are audiences for foreign cuisines other than the usual suspects — Chinese, Italian, Thai, Japanese and Mexican. But the analysis suggests that when it comes to cooking foreign foods, with the help of easy-to-use ingredients, the ones that do not involve elaborate cooking techniques and time are clearly preferred. “In terms of convenient cooking, Italian pizza and pasta are most preferred, for obvious reasons,” Raju Says.

Gupta seconds the view, saying, “Chinese and Italian are certainly the most easy-to-cook with the help of available ingredients.” Lohani also votes for Italian and Chinese cuisines as leading the list in terms of userfriendliness. While he agrees with this view, Singh does point out that along with Italian and Chinese cuisine, Thai preparations are also fairly easy to cook. Favouring the king of foreign cuisines, Khattar says, “Chinese cuisine is the easiest to cook, primarily because of the easy availability of ingredients and the way it has been adapted to suit the taste sensibilities of the average Indian consumer.”

“Italian preparations are very easy to make at home, as its ingredients are popular and easily available. Other foreign cuisines such as Chinese, Japanese, Lebanese, Mexican etc, however, need more elaborate preprations,” Thanawala opines.

“One must remember that Chinese cuisine has had a head start – ingredients and cooking have been Indianised from the beginning. But as far as creating an authentic cuisine taste with help of imported ingredients is considered, Thai foods are simpler to prepare,’ Kampani points out. “For instance, in order to make a Thai Green Curry, one just needs to buy a pouch of green curry paste for Rs 25 or Rs 30, add the choice of vegetables or meat, add water and boil!”

He further remarks, “While Italian and French dishes are no doubt very aspirational and generate plenty of interest, Thai foods are being cooked more often in homes, followed by Japanese and Mexican dishes.” Among all the different cuisines now available in the country, by large it is Chinese, Italian and Thai cuisines that are being preferred for cooking at home with the help of accessible ingredients. Besides these three, Japanese and Mexican cuisines are also becoming kitchen friendly for women. The sales graph of ingredients can clarify as to which cuisine is being cooked more at homes and generating higher sales for the retailers.

Sharing details on largest selling foreign cuisine ingredients at Nature’s Basket, Khattar says, “Right from Arborio rice, handmade pastas, slow cooked flavoured pasta sauces, herbs for Italian cuisines, Jasmine rice required for Thai cuisines to dips, tacos, beans and fajitas for Mexican cooking to pickled ginger, wasabi mayonnaise and silken tofu required for Japanese cooking; our store stocks a host of foreign cuisine ingredients. Out of all these, around 40-45 percent of sales come from Italian ingredients alone.” “Italian and Chinese ingredients are the largest selling in our portfolio, constituting around 65 percent of our total sales volume, in the ingredients segment,” says Lohani at Max Foods.

“The total sale volume of these two cuisines’ ingredients, for the entire country, would be around 35 percent of the overall ingredients’ sales,” he adds.

“At our stores, Italian cuisine ingredients account for 60 percent of total sales, in the entire foreign ingredients section. The balance is derived from Mexican and Thai ingredients’ ranges, followed by steadily picking up sales of a few Japanese and Lebanese ingredients,” says Sanklecha at Nuts ‘N’ Spices. “Sales of olive oil have also shot up significantly of late,” he notes.

“According to me, anything – apart from ready-to-eat – that goes into the preparation of any cuisine is an ingredient. At Spencer’s outlets, we offer around 70 different varieties of pastas, and a huge range of olive oil, all of which are extremely fast moving. Hence, Italian ingredient sales are the largest and contribute to around 15 percent of sales revenue from the imported foods counters in our stores,” Kampani discloses. Khanna at i2i Consulting also believes that Italian cuisine ingredients are the highest selling ingre- dients. “About 50 percent of ourrevenue comes from Chinese and Italian cuisine ingredients’ sales,” shares Thanawala at Amalgam Speciality Foods.

At Spar’s foreign foods section, there is no single nationality that accounts for the bulk of sales. “The range of ingredients include mayonnaise, dips and spreads, speciality sauces, olive oil, pastas, yoghurts, varieties of cheese, delicatessen meats, pickled salad condiments such as olives, jalapenos, asparagus and baby onions,” shares Singh at Max Hypermarket

India.

“At Q-Mart, Italian ingredients are the largest selling and account for 50 percent sales, followed by 35 percent sales of Chinese ingredients; Thai cuisine ingredients account for 10-15 percent sales,” explains Raju. According to Phogatte, for Phoset Foods, Italian and French ingredients are the largest selling ingredients and account for 30 percent of sales. “Sales of Chinese ingredients are 30 percent higher than the other ingredients in our portfolio,” says Gupta at L-Comps.

Asrani at Suresh Kumar & Co shares, “Around 70 percent of our sales revenue comes from the sales of Oriental and Italian ingredients.” Suppliers and retailers’ sales data suggest that Italian cuisine currently tops the chart and is widely acknowledged as being the largest cookedand consumed-at-home foreign cuisine, along with Chinese.

Clearly, Italian ingredients generate more volume sales for retailers and suppliers. Higher volume sales necessitate increase in supply of product SKUs at the retail end. How do modern retailers manage the growing shelf space needs of fast moving products, given the static retail space? The imported foods category in India is by nature a high margin product category, where some products offer higher gross margins or return per square feet and there are different ways of managing increased volume sales. Elaborating on the technique being used at Q-Mart, Raju says, “Chinese ingredients do not churn as much return, as Italian ingredients do for me. For instance, out of all the Italian ingredients, if oregano gives me more sales return, it is not necessary to give it more visibility and stack more SKUs. Instead it means that sales turnaround (time period in which specific number of product SKUs move out/ sell off the shelf ) of oregano SKUs take place in a comparatively lesser time period than others.”

“Growth in demand for a product can be defined as horizontal growth or vertical growth. If the category is growing faster, that does not necessarily translate to a need for increasing shelf space for that product category. Currently, it is the vertical growth of the category that is being witnessed in the case of foreign cuisine ingredients in our store.”

Citing an example, he adds, “If earlier, I used to sell 10 cases of olive oil in 10 days, now, with a rise in the sales volume of olive oil, those 10 cases sell off in five days. So my suppliers will have to replenish the supply of olive oil every five days. It is the faster movement of product SKUs from the shelf that justifies my investment in the increased number of SKUs of the particular ingredients.”

“In the imported food business, or what we call a gourmet food business, which is generally a shop-inshop (SIS) inside a hypermarket, it is necessary to maintain a specific number of SKUs and keep a wide range of products. For instance, in Italy, pastas are numbered on the basis of their quality and that is how we also arrange them. If the demand for pasta 65 rises over any other number and there are three brands – A, B and C offering pasta 65 – we will replace brand A and boost the display of pasta 65 under brands B and C. It is necessary to maintain a variety of products in the imported foods segment because customers typically look for variety – and not ncessarily brands – in pastas; they will buy brand B or C in case A is not available. The reason behind this phenomenon is that in the domestic FMCG categories, there are generally one or two dominating brands, holding 40 to 50 percent category share; hence keeping those brands is important for any retailer. But in the case of imported foods, by and large consumers are not very particularabout the brand; they are more concerned about the variant or the range of offerings in any category,” explains Kampani with respect to the merchandising strategy at Spencer’s gourmet SIS.

“The idea is not to have all the brands, but the range of ingredients, especially for recipes or speciality foods, as consumers can substitute one brand for the other, but not the ingredients. So we substitute brands and maintain the range and variety of ingredients,” he adds. Kampani and Raju’s explanations also highlight the fact that merchandising and inventory of fast moving products are managed variably by different retailers, depending on the type of growth and retail formats they operate in.

The fact that Italian cuisines are perceived as the easiest to cook at home has also been propelled by a slew of QSR chains such as Pizza Hut, Domino’s etc, which position Italian preparations in the fast food bracket. Also with the easy availability of cheese and pizza bases or pastas it is relatively easier to make Italian food at homes.

Not every shopper who enters a retail store scans through the imported food shelves. Households plan their purchases depending on the frequency of cooking international cuisines. The question that suppliers ask is, who are those consumers and how often do they cook foreign foods at home? “The TG for us is quite old for these ingredients and belong to the age group of 45-54 years. These people belong to a high social strata, they are typically well travelled and settled in life,” says Kampani. He exemplifies and adds, “In our stores, food and grocery account for around 80 percent of our sales; and10 percent of food shoppers buy foreign food ingredients, about two to three times a month. So my analysis suggests that they cook foreign foods at least once a week at home.” According to Gupta, young and middle aged consumers between 20- 40 years old, who are well travelled, willing to experiment, and also well educated, buy ingredients to cook

foreign cuisines.

Agreeing with Gupta, Sanklecha says, “Younger consumers (20-40 years), who are well exposed and informed about foreign cuisine cultures, are purchasing international cuisine ingredients.”

He adds that around 55-60 percent of shoppers at Nuts ‘N’ Spices purchase foreign ingredients and shop around thrice a month. “The number of consumers is also progressing, leading to increase in the overall sales volume. For instance, earlier we used to buy 20-25 cases of pastas; now we buy 50-60 cases,” he explains.

“Around 35-40 percent of shoppers at Spar buy foreign ingredients at least once a month as part of their monthly shopping baskets,” shares Singh. “The consumption of foreign ingredients is driven by educated consumers belonging to the uppermiddle and upper classes. It is specifically a married couple with one or two kids or a small nuclear family, who cook foreign foods at least oncea- week,” observes Asrani.

“My target audience consists of married women, aged between 30-45 years, with one or two kids. They are typically housewives who love cooking and even time-pressed working women who love to cook for the family, whenever possible. They are the women who want to give their families a unique experience of eating international foods at home; they are open to experimenting and want to master a couple of recipes apart from typical Indian fare. Also, when it comes to cooking speciality foods, it is the women who indulge more frequently, ” says Thanawala.

“At any point of time, Indian consumers are price sensitive and cost-effectiveness plays a big role for them,” believes Sanklecha. He elaborates on the affordability factor and says, “Eating a pasta at a decent speciality restaurant costs roughly around Rs 250. Whereas one can easily purchase pasta sauce for about Rs 150 to Rs 160, and a pack of pasta for Rs 115; for Rs 275 one can make and eat pasta at home at least four times. Therefore, eating out once or twice is affordable, but on a regular basis ,eating in is being preferred.” Agreeing with the cost efficiency of cooking foreign foods at home, Raju adds, “Most of the speciality cuisine restaurants – barring Chinese – are extremely over-priced.”

So, is it only cost-effectiveness that has stirred and shaken the athome consumption of exotic foods? “Well, by cooking at home there is a scope to tailor the flavour, aroma and intensity as per taste,” Asrani remarks, referring to the primary drivers of this swing.

Thanawala believes that it is the convenience of eating at home, with the food cooked to suit your palate, without any hassles of driving that makes one try different cuisines at home. “It is also a matter of variety as nobody likes monotonous offers on the table day in and day out. Also, the younger generation andeven children show a leaning toward the untried and untested,” he notes.

“Also, cooking at home offers an option to ‘Indianise’ the dish, as per the preference,” Lohani points out. “Also, in a lot of cases, making foreign foods is a lot easier and less time consuming with the help of ingredients. For instance, a boiled chicken added with a speciality sauce and sprinkled with some seasonings is ready to eat, whereas making a traditional Indian meal consisting of dal (pulses), roti (Indian bread), subzi (cooked vegetables) and rice, would take a lot more time,” Sanklecha says, with regard to the driving Factors.

As in other food categories, innovative promotions and demonstrations at retail channels have played a vital role in propelling the overall swing and creating awareness among consumers. For instance, at most Spencer’s hypermarkets, there are live kitchen sections called ‘Chef Corner’, which feature live cooking and demonstrations of various global cuisines by renowned chefs. Elaborating on this in-store feature, Kampani says, “These live cooking demonstrations of various cuisines are usually organised once a fortnight. We also conduct a clutch of foreign trade promotions at the store; for instance, we periodically organise French fests, Australian fests and American fests, and we conduct these with the help of embassies and consulates.”

Stressing on the importance of instore initiatives, he adds, “More than promotions, which include priceoffs, one plus one free etc, it is demonstration of cooking and sampling which is important. In-store promotions don’t work as effectively as live foreign cuisine demonstrations using the imported ingredients. It is a far more serious and compelling tool to create demand. Some cookery shows on television channels use a host of ingredients that may not be available in the local markets. In our live cooking demonstrations, ingredients that are available in our store are used. So, beyond just creating aspiration, we also allow consumers to literally ‘buy’ the experience. We see a huge sales lift after any such demonstration.”

Another interactive and engaging way of familiarising customers with international cuisines is by having gourmet food experts present in stores such as Nature’s Basket. Explaining the strategy, Khattar says, “In case a customer purchases some ingredients and is not sure of the cooking instructions, or the customer does not like the taste of a specific ingredient, then there are food experts on the floor in Nature’s Basket who can help shoppers with directions, or help them substitute an ingredient with the one that would suit their taste.”

At the promotions’ front, i2i Consultants has been undertaking numerous consumption-building activities to promote Southern United States of America’s (SUSTA) products in India. The approach involves in-store promotions, culinary demonstrations, trade shows and PR activities, among others.

Given the rising popularity of Italian cuisine among urban Indians, in the days to come, one can expect its growth to show up in hard numbers and in a certain ‘bastardisation of cuisine’, if you will. If Italian food will go the Indianised Chinese way, only time will tell. Some of that is already underway, thanks to multinational QSR chains, who have adapted to localisation. Items such as Chicken Tikka Pizza, Paneer Tikka Pizza, Kebab-E-Khas Pizza and pastas in Indian spices are now quite prominent on fast food menus. Some restaurants are going further in making the best of both worlds with Indo-Chinese versions of pizzas – Chilli Paneer Pizza, Chilli Chicken Pizza and so on.

Gupta believes that Chinese, Italian and Mexican will continue to be popular and evolve; also, their consumption will achieve higher penetration across the country. “In the days to come we can expect Japanese cuisine – especially sushi – to gain popularity in the country,” Raju remarks.

Kampani predicts that whole new ranges of fresh ingredients will come into the Indian stores. “Especially more exotic vegetables, fruits, meats and ingredients that have not been not available in India up till now – due to inefficient logistics and supply chain facilities to support the import of such products,” he adds. “Cuisines from South-East Asia such as Korean, Malay and to some extent, Indonesian, will gain more prominence and the trend to cook signature preparations from these cuisines at home will rise. Consumption of South-East Asian cuisine will grow faster than of European cuisine,” he says.

Echoing Kampani, Lohani says that in the next three years Japanese and South-East Asian (Malaysian, Korean, Vietnamese etc) cuisines will gain more popularity. “We expect a huge surge in demand for foreign cuisine ingredients,” he adds.  Raju says that the swing toward foreign food consumption will penetrate and evolve more in tier II and tier III towns.

According to Phogatte, consumption and popularity of cuisines that can be modified to suit the Indian palate and the ones close to the native cuisine’s taste will rise. Going by the overwhelming response from the consumers in the cities where Keya is currently available, Amalgam Speciality Foods has decided to expand its retail distribution.

“The company plans to increase Keya’s retail presence from 1,000 stores in 11 cities to a retail network of 5,000 stores in 22 cities by June 2010, as the use of speciality ingredients is surging in India,” Thanawala confirms.

“We are trying to create awareness about Southern US cuisines and would like to see Pecan Pie, Cajun, Creole and Tex-Mex being introduced into Indian kitchens,” Khanna Says.

Optimistic about the rising trend of cooking foreign foods at homes, Asrani suggests, “With the government’s support in reducing the import duty on ingredients, the prices of ingredients will dip, which will propel its consumption among a larger set of consumers across the country.” “Oriental and Italian cuisines will continue to dominate the Indian palates,” he concludes.