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Interviews- Expert Speak

“50% of current non-users interested in buying packed staples”

Mintel is the world’s leading market intelligence agency. Its analysis of consumers, markets, product innovation and competitive landscapes provides a unique perspective on global and local economies. Recently, it released a report on pulses, rice and atta market titled – Pulses, rice and atta – Indian consumer – 2022. The report highlighted how branded staples are expected to deliver on quality, purity and hygiene, as consumers have to let go of the assurance they derive from physical touch and feel. Dr Anamika Banerji, research analyst, food and drink, Mintel Reports India.

Tell us about the growth in the packaged food industry. How does it augur well for packaged staples?

India is witnessing growth in the packaged food sector. Rapid urbanisation, the growing number of working women, and the paucity of time in a fast-paced life have made convenience a top driver for the rising inclination towards packaged foods. Moreover, brands are using health as a platform to introduce new variants in almost all packaged food categories, which enables them to command a premium and also accelerate the growth of the overall category.

The pandemic has accelerated the adoption of online grocery shopping and boosted the move from loose to pre-packaged/branded staples. The demand for convenience and quality is likely to compel consumers to continue with packed staples post-pandemic.

You are talking about the growth potential for branded staples. Elaborate.
The Covid-19 pandemic gave a boost to the demand for packaged staples. In the latest Mintel research on Pulses, Rice and Atta (2022), we looked at consumers’ intention for purchasing packed staples in the next 12 months to understand the momentum of this category post-pandemic. Our data shows that 60-70% of current users of pre-packaged staples would like to continue purchasing different packed staples. What is encouraging, is the fact that around 50% of current non-users are also interested in buying packed staples in the next 12 months. Metro dwellers are particularly keen to purchase these products in the future.

India is a price-conscious market. Then how does one strike a balance when offering branded staples?
Grocery items are non-discretionary, but there is a limit to how far consumers would stretch their budget while grocery shopping, especially since the start of the pandemic. Competitive pricing is essential as consumers tend to be swayed towards the lower-priced alternatives. 4 in 10 Indians belonging to socio-economic groups B and C have increased their purchase of private label products and have switched to lower-priced alternatives since the pandemic.

The top three factors most likely to motivate Indians to purchase pre-packaged staples are purity, quality and hygiene, which makes sense in a country where adulteration is not uncommon.

Convenience, quality and cost are the three most important factors which influence the purchase decisions of consumers. Packaged/branded staples will find a place in the shopping cart if they fit into that matrix.

Brands offering unpolished and organic have not done well in the past. But your report is suggesting these. Elaborate.
There is a demand for transparency with respect to the place of origin and the agricultural practices that are followed. According to our research, 4 in 10 consumers would be motivated to buy packaged staples due to organic claims whereas around 3 in 10 consumers would be motivated if the place of origin is known. While there is demand for organic staples, affordability and apprehension about on pack claims could be coming in the way of a larger acceptance. Competitive pricing and display of proof in the form of organic certifications as well as education on benefits could motivate purchase.

Indian consumers purchase after physically inspecting the grains. How is the response when you take away this experience?
Traditionally, consumers make a purchase after physically inspecting grains for quality. Apart from touch and feel, the aroma is another important factor when purchasing rice. 4 in 10 consumers agree that they like to check the aroma of rice before making the purchase. Packaged staples take the touch and feel aspect away from consumers, leaving them unsure and skeptical about the on-pack claims.

45% of consumers who purchase one or more loose staples say that being unable to touch/feel the products before buying restricts the use of pre-packed staples.

More effective communication around quality is required to turn around skeptical non-users. A provision for keeping test samples in retail outlets or sharing mini packs of samples via home delivery could be helpful.

Give us details on the outlook for pre-packaged staples in India.

The pandemic has given a boost to online grocery shopping and the transition from loose to pre-packaged/branded staples. While convenience-seekers such as working women are more likely to use these products, factors such as quality, purity and hygiene are key motivations driving the category.

Effective communication around quality and freshness will be key in showcasing value for money to consumers. Pricing will be crucial as consumers will be on a tight budget even when shopping for non-discretionary groceries due to the growing inflation and the lingering effects of the pandemic.

Premiumisation is possible in the case of fortified staples, as 4 in 10 consumers are ready to pay more for staples with added nutrition.

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