The frozen food market has gained immense popularity over the last few years owing to the changing food preferences among millennials. The active lifestyle of this generation demands easy to cook ready food that saves time while preserving the nutrient factor. This is where the frozen food market has created their customer base with its convenient and nutritious food items. Advance in biotechnology has propelled the discovery of innovative and customized food chains that meet the current expectations of customers. With concerns related to safety in handling and the higher prevalence of ‘no-contact’ deliveries, the demand for Ready to Eat (RTE), Ready to Cook (RTC), and frozen foods is expected to soar.
Indian frozen food market is expected to be growing at 17% annually during 2020–24 according to The International Market Analysis Research and Consulting Group (IMARC Group). Even as many sectors are faced with a slump, the frozen food sector has been seeing an upward spiral, growing by the passing day as customers become busy and health-conscious. The frozen foods market in India was valued at INR 85.27 Bn in 2019 and is expected to reach INR 192.96 Bn by 2024, expanding at a compound annual growth rate (CAGR) of ~17.74% during the 2019–2024 period. Based on the sales channel, the Indian frozen food market is segmented into retailers, food service providers, and export. In 2019, the export segment held ~47.64% of the total market revenue. This segment is anticipated to dominate till the end of 2024, as the demand for food continues to rise globally. The retail segment is expected to be the fast-growing one, expanding at a CAGR of 21.44% during the forecast period and is expected to account for ~22.78% of the frozen food market revenue by 2024.
RTC market in India stands at INR 2100 Cr in 2019 and the market is expected to grow at a CAGR of 18% to reach INR 4800 Cr by 2024. This is further segmented into non-frozen and frozen RTC product with the frozen taking bulk share of the market at present. However, non-frozen RTC is expected to grow at a faster pace compared to frozen RTC food, and the mix of frozen and non-frozen RTC is expected to evolve from 73%:27% in 2019 to 70%:30% by 2024.
The current lockdown due to COVID19 has resulted in an uptick in the demand for these products. To sustain this growth achieved in this lockdown, infrastructural challenges need to be ironed out. Improving the shelf-life and packaging of frozen foods are the two key elements. Consequently, several frozen food providers are investing in various technologies to store frozen vegetables, frozen meat/fish, and partially and fully-cooked food for longer durations. The majority of the consumption of frozen foods is still happening in Tier1 cities. In order to increase their penetration to tier 2 and 3 cities, innovations in supply chain business models, energy-efficient cooling technology has to be implemented. Psychological barriers are also prevalent in rural areas, where the consumption is lower due to poor information on quality, ingredients, nutritional factors, and traceability. However, the present lockdown has resulted in a surge in the use of cellular phones in rural areas, and innovations can come in for higher traceability coupled with an uninterrupted cold chain. Information on the level of sanitization maintained at each level of the supply chain is an important parameter in traceability.
Leveraging the supply chain established by consumer goods giants like ITC, PnG would help in reaching out deep in the rural networks. Modular cold storage solutions, as provided by Tan90 can be useful here particularly where part-truck loading is of primary importance. The use of solar energy or farm-waste as energy inputs to maintain the cold chain at the end-point would be interesting. Through these interventions, corporates can turn more attention to the rural and semi-urban regions.
The above report has been compiled by Raghava Segu, who is an intern at Tan90 and is helping the organization with his insights on customer segments and acquisition. Tan90 is a DPIIT recognized start-up working towards energy-efficient and cost-effective cold chain solutions