SUPERMARKET
Food B U S I N E S S
Regional bias
Demand for processed south-Indian foods is a function of national integration.
By Nupur Chakraborty and Nishi Roy
F
or the time-pressed working wom-
an of modern India, it is virtually
impossible to cook an entire meal
from scratch, though the desire to
whip up a traditional meal for the
family has not died.
MTR Foods’ RTE foods are 100% vegetarian and contain no preservatives.
62 • PROGRESSIVE GROCER • FEBRUARY 2009
SMFB_Nishi_February_09.indd 62
The complexities of urban life are also exploiting opportunities in
have greatly encouraged the emer- specialisation – in mass producing
gence of the class of foods called local meal staples in packaged form.
Ready-to-eat (RTE) and Ready-to- According to industry sources,
cook (RTC). From a virtually non- urban Indians are now among the
existent category this segment grew top 10 most-frequent-consumers of
to an approximately Rs 2,500-3,000 fast food across the globe. The same
crore industry by 2007. The growth sources also indicate that around 70
is expected to accelerate; the RTE to 75 percent of urban Indians con-
foods market in India is clearly on sume food from take-away restau-
a growth trajectory going by the 35 rants once a month. About 35 to 40
percent growth registered. percent of the adult population does
Foods that so at least once a week.
fall in the rapidly The rising demands for regional
expanding RTE flavours in the RTC/RTE category
category include can be gauged from the fact that
pre-cooked now there are numerous players that
non-vegetarian specialise in the regional category. In
and vegetarian southern India some of the popular
preparations, brands that offer a variety of tradi-
m i c row a va b l e tional foods in this category include
meals, frozen MTR, ID Special, Britte Foods, Or-
non-vegetarian kay and Guru Ganesh, among oth-
and vegetarian ers. As per a KSA-Technopak study
foods. However, (KSA Technopak Grocery and Foods
while the de- Advantage Study, GROFAST), a pe-
velopment of culiarity of the RTC segment is that
the segment has while a national player may not be
made regional able to reach a feasible level, even
favourites, such a regional niche player may prove
as Chettinad to be viable. Thus, vermicelli, with
Chicken and a national penetration level of less
Rogan Josh than 20 per cent, continues to be a
available to con- very viable proposition in the south,
sumers across where its penetration is much higher.
the country, Southern India, in fact, shows the
some companies highest penetration for packaged
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 RTC products such as idlis/ dosas
and dessert preprarations.
According to the November
2008 report, “Land Of Opportuni-
ties: The Food Industry in India”
jointly produced by Technopak Ad-
visors Pvt. Ltd. and Federation of
Indian Chambers of Commerce and
Industry (FICCI), the size of the In-
dian Food Industry is estimated at
Rs 8,80,000 crore (USD 200 billion)
in 2006-07 and is slated to reach Rs
1,320,000 crore (USD 300 billion)
by 2015, with the increasing share of
processed food (in value terms) from
43 percent to 50 percent. The Food
Processing, being the major sector in
the indian food industry, stands at Rs
3,74,000 crore (USD 85 billion) and
gives direct employment to about 20
lakhs or two million workers. Or-
ganised food retailing and food ser-
vices are the other fastest emerging
opportunities, organised food retail
is expected to grow Rs 2,33,200
crore (USD 53 billion) by 2013.
According to ‘Branded Foods in
India – Forecasts to 2015’, Maggi’s
‘2-minute noodles’ were the first real
success story of packaged instant
meals in India. Introduced by Nestle
in 1983 and supported by high-im-
pact advertising, it caught the imagi-
nation of the targeted population
and soon became a favourite meal of
Indian children.
The major domestic player in the
instant meals section is ITC, which
has more than 50 packaged branded
food products under the Kitchens of
India and Aashirvaad Brands, with
different varieties of packaged RTE/
RTC.
MTR Foods Ltd., which stresses
that its products are 100 percent
vegetarian and contain absolutely
no preservatives, is amongst the top
five processed food manufacturers in
India. In order to ensure that their
products have the “just-cooked”
freshness, the company has adopted
technology from the Defense Food
Research Laboratory, Mysore. MTR
has ISO 22000 and HACCP certi-
fication and their use of technology
from the Defense Food Research
Laboratory for their RTE products
has won them a President’s Award.
MTR’s wide range of products
include RTE curries and rice, RTC
gravies, frozen foods, ice creams, in-
stant snacks and dessert mixes, spices
and a variety of accompaniments
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such as pickles and papads. The RTE
range currently comprises 22 In-
dian curries, gravies and rice. Most
MTR RTE products can be stored
in ambient temperature and require
no refrigeration. Among the south-
Indian preparations that it offers are
Kharabath, Upma, Sambar Rice,
Rasam Rice, Bisibelebath, Kesarib-
ath, Seedai, Khara Bhat, Pongal and
Pineapple SS Curry.
In sync with product innovations,
the company has also expanded retail
presence significantly; contemporary
‘Namma MTR’ (is MTR’s retail
chain that allows customers to expe-
rience the wide MTR range. Nam-
ma MTR is split into three sections.
One section showcases the entire
range of products. The second sec-
tion is a novel concept kitchen where
customers can interact with special-
ist chefs to learn about MTR prod-
ucts and watch live demonstrations.
This concept kitchen also works as
an ideal platform for feedback (al-
lowing the company to understand
and address consumer needs) The
third section offers a variety of fast-
food — one can either eat here or
get a quick take-away from the ex-
press counter) and MTR kiosks now
serve consumers across Bangalore
and Chennai. The company’s South-
Indian RTC combo-meals in the fro-
zen range consist of Masala Dosa +
Aloo Curry, Rava Idli + Potato Sago,
and Vada. Rice Meals is the other
popular offering from MTR to let
the consumers enjoy ‘home’ food
Britte has developed a vegetarian range for export.
AHEAD OF WHAT’S NEXT
South-Indian
varieties of RTE
are a narrow
market compared
to the North Indian
preparations.
anytime and anywhere. The South- Trials from new customers and de-
Indian cuisines in this range include mand from non-south customers are
Bisibele Bhath (a combination of what are driving demand for MTR’s
vegetables, lentils, rice and aromat- south-Indian specialities.”
ics spices), Lemon Rice (a subtly fla- “The South-Indian varieties of
voured mix of lemon and rice), Sam- RTE are a narrow market compared
bar Rice (lentil and vegetable curry to the North Indian preparations.
with rice), Tomato Rice (a combina- And that is why I believe that this
tion of rice, tangy tomato and spices) market will not grow as fast as ex-
and Tamarind Rice (combination of pected by the industry. There are
rice and tamarind). The price range definite roadblocks in generating
of MTR’s South-Indian RTE / RTC volume as there are divergent tastes
products varies from Rs 22 (for 300 in the four South-Indian states.”
gm of Rasam Rice) to Rs 42 (for 200 Contradicting the belief that
gm of Puliogare powder). the proliferation of modern trade
When R. Ramanathan, national facilitates the growth of emergent
sales manager, MTR Foods Ltd., was categories, Ramanathan points out
asked about how the south-Indian that modern retailers are interested
regional RTC/RTE market fares, as only in products that are in demand.
compared to the north and other “There is no special help from them
zones of India, (supermarket chains). Each brand
he said, “MTR has its own shelf space depending on
offers breakfast, the SKU and demand,” he says when
lunch/dinner asked what the company was doing
and snacks and at the retail end in terms of shelf
sweets in the space visibility.
RTE category. M. Vijaya Kumar, sales man-
The products ager of Britto Exports, which man-
are Kharabath, ufactures and markets the Britte
Upma, Sambar ready-to-eat brand, says, “Britte is
Rice, Rasam a 30-year-old company involved in
Rice, Bisibel- seafood exports. Britte just-eat-sea-
ebath, Kesarib- food is processed and packed by Brit-
ath, Seedai and to Exports, Chennai. The company
Onion Nibbles. launched a range of RTE seafood
The response called ‘Just Eat’ in Retort pouches.
has been very The range was developed by the
good, though Central Institute of Fish Technology
orthodox con- in Cochin.”
sumers are still Britte has also developed a range
not very open of RTE vegetarian varieties for ex-
to the idea. port, which are available in Ban-
galore, Chennai and Hyderabad.
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 Future plans of the company include
expanding the availability of their
RTE range to Mumbai, Delhi and
Chandigarh. The South-Indian re-
gional RTE cuisines present under
the Britte brand include Vada, Idi-
yappam, Chappathi, Frozen Porotta
(Malabar Style) and Ceylon Porotta.
All products are currently being re-
tailed in Bangalore and Chennai.
The price band for the South-Indian
RTE products ranges from Rs 36 (for
a 300 gm pack of frozen Idiyappam)
to Rs 48 (for frozen Chapathi).
“Market demand is slowly grow-
ing and we are witnessing a growth
of about five percent every month.
Modern retail has helped us im-
mensely to push our brand among
new and old customers. At the retail
end, we see to it that we have regular
sales promotions and that our supply
chain remains robust,” Kumar says.
According to him, two of the
drawbacks to the acceptance of re-
gional RTC/RTE products are price
and ‘frozen-awareness’ of consum-
ers. “There is definitely scope for
other players to enter this segment,
but compared to other regions in
the country, especially Delhi and
Mumbai, the market is much smaller
here,” he admits.
S. N. Muralidhar owns the pop-
ular regional brand Guru Ganesh,
which was launched in 2002, and
has since become one of the most
popular brands in the idli/dosa
fresh-batter segment in Bangalore.
“Modern retail has helped us with
Orkay and ID Special batter mixes are especially popular.
64 • PROGRESSIVE GROCER • FEBRUARY 2009
SMFB_Nishi_February_09.indd 64
visibility and has driven sales. Adher-
ence to strict quality control norms
has helped us excel in product inno-
vation; I can very confidently state
that the flavours contained in our
idli/dosa batter cannot be had in any
other brand,” he says.
“Our product features the home-
made batter flavour, and in order to
maintain this quality and taste, I am
not going in for mass-production;
currently we supply approximately
2,500 packets per day around Ban-
galore. My wife personally looks into
the production aspect every single
day.”
Guru Ganesh currently offers
only the fresh batter mix, which is
available in polypacks of 1 kg with
an MRP of Rs 25. Having started
small in 2002, the Guru Ganesh
brand is now available in most of su-
permarkets in Bangalore, including
in Thom’s and Spencer’s. With re-
spect to future plans and availability
of Guru Ganesh products in other
southern cities, Muralidhar says, “I
plan to shortly launch ‘chutney pow-
der’ in the RTE segment – chutney
that will serve as an accompaniment
with idlis/ dosas. In the past I have
noticed that the response from neigh-
bouring cities such as Mysore has not
been as encouraging as in Bangalore,
which with its cosmopolitan charac-
ter is a more promising market for
innovative foods. But I am hope-
ful; idlis and dosas are some of the
healthiest snacks, and now with our
product people can whip them up in
a jiffy.”
AHEAD OF WHAT’S NEXT
One challenge is to
remain true to the
unique flavours of
an ethnic cuisine
while simplifying
the preparation
process.
In response to the range of re-
gional south-Indian flavours present
under their brand, the market de-
mand present, Musthafa P C, man-
aging director, Best Food Enterprises,
said, “Best Food Enterprises is a food
processing business based in Banga-
lore promoted and managed by IIM
and NIT graduates. Best Foods deals
with a thousand-plus retail outlets in
Bangalore including Reliance Fresh,
Food Bazaar, More, Spencer’s, Nil-
giri’s, Foodworld, @Fresh, Total and
Spar. We have also made inroads in
Mysore, having started our opera-
tions in 2008. The price range of the
South-Indian RTC/ RTE varies from
Rs 18 (ID Special Kerala Parota,
small pack; three pieces) to Rs 28
(for ID Special Kerala Parota, large
pack; five pieces).
Best Foods’ RTC/RTE range also
includes ID Special Idli/dosa bat-
ter, ID Special dosa special bat-
ter, ID Special kerala parota, ID
Special Unniappam (deep fried
sweet rice balls), ID Special rose
cookies and ID Special diamond
chips. “We currently sell 10,000-
plus kgs of batter and 5,000-plus
parotas daily. Comfort, taste and
freshness are the major factors
driving their demand. We special-
iise in daily supply and daily replen-
iishment of these products at retail
sso that customers get fresh prod-
uucts every day,” Musthafa says.
While the batter market has
mmatured in Chennai, it is growing
aat the rate of 60-70 percent per an-
nnum in Bangalore and Mysore, he
aadds. “Modern retail has helped us
to improve efficiencies to a great
extent. We have dedicated shelf
space with all modern retailers. They
also conduct market surveys and
work closely with us to co-develop
new products. We are working very
closely with CFTRI (Central Food
Technological Research Institute) in
Mysore to enhance product longev-
ity so that we can export our prod-
ucts.”
Regarding consumer awareness
and acceptability of regional RTC
foods, Musthafa says, “While our
products are currently available in
Bangalore and Mysore only, about
70 percent of Bangalore customers
are not aware of availability of such
products in the market! We haven’t
really explored the other zones of
India. Our understanding of the
consumers suggests that older south-
Indians prefer home-made tradi-
tional foods over ready-to-eat/ready-
to-cook products, though we have
noticed many older north Indians
using our products.”
Best Foods is planning to ex-
pand to 20 other cities in the next
few years. “In batter, we have 90 per-
cent market share in Bangalore. I feel
there is scope for other players to en-
ter the market, since the prospects of
growth in this segment are very good.
Even during this retail slowdown our
sales are growing at about 10 percent
every month,” Musthafa says.
Orkay is a brand of Orkay Instant
Foods P Ltd., a privately-held com-
pany promoted by R. A. K. Swamy
and R. A. Madhusudan and regis-
tered in 1985. Orkay Instant Foods
has four state-of-the-art manufac-
turing facilities located at Peenya,
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 Bommasandra and Mysore totalling “These foods were made tra-
to 22,000 square feet of manufactur-
ditionally at homes by housewives Despite urban-
ing space. earlier. The changing lifestyle of the
“We attribute our success to the
urban consumer has led to paucity of rural migration
utilisation of opportunities thrown
open by the changing social scenar-
time for preparing traditional foods.
There has also been a declining in- and globalisation,
io,” says R. A. Madhusudan, direc-
tor, Orkay Instant Foods P Ltd. “In
terest and fall in knowledge among
these consumers, whose focus is pri- Indians’ primary
order to meet the cooking challenges
of the modern woman, Orkay started
marily on achieving a better lifestyle.
However, the desire to consume tra- food habits
manufacturing Orkay Instant Break-
fast Mixes. Over time we have not
ditional foods has not dimmed. This
has led to the high decibel growth haven’t altered
only expanded our range to Instant
Sweet Mixes, but our product range
and increased visibility of conve-
nience foods on the shelves of the dramatically
now also comprises pure spices, con-
market,” he points out.
diment mixes, beverages and instant The availability of technology
mixes of South-Indian regional spe-and the advances in the packaging
cialities as well. Our wide range of
technology have helped in retaining
South-Indian RTC products include the “freshness concept” in the south-
Gulab Jamoon Mix, Rava Idli Mix, Indian packaged RTC segment. This
Instant Idli Mix, Vadai Mix, Dosai has contributed significantly to raise
Mix, Puliyogare Mix, Bisibelebhat awareness and acceptance of pack-
Masala, Rasam Masala, Sambar aged foods. The ease with which the preparing ethnic foods. This is prob- along with clothing and shelter. The
Masala and Kharabhat/Upma Mix. RTC products can be used to prepare ably what is triggering our growth in very fact that the growth rate of the
The products are designed and de- traditional foods without the rigma- this segment. Food habits are very processed foods segment has been
veloped by Orkay’s in-house R&D role and grind of ethnic cooking has personal and have a very high degree very slow compared to the growth
team. Depending on the nature of largely contributed to consumer will of diversity among the consumers. rate of textile industry indicates that
the product, most products have a to explore. Factors such as taste profiles, flavour the processed food segment has not
shelf life range of 9-12 months.” “User friendliness is a great driver; profiles, textural profiles, preferences been able to fulfil the aspirations and
The selection of the type of pack-
for instance, RTC products from Or- for specific cuisines play a very im- requirements of the consumers. This
aging is also specific to the product
kay seldom fail to perform, irrespec- portant role in the acceptance/non- is even more pronounced in the re-
that the package contains. The price
tive of the cooking skills of the user. acceptance of food. And the RTC gional RTC sub-segment.”
range of Orkay South-Indian RTCs Even a student can prepare delicious segment is not isolated from this Market analysts highlight the
range from Rs 3 (for a 8 gm Sambar traditional south-Indian dishes using phenomenon.” fact that consumers come from
Masala packet and Rasam Masala our RTC range by following simple Clearly, despite galloping urban- varying socio-economic and cultur-
Packet ) to Rs 42 (for the 500 gm steps elucidated in the recipe,” Mad- rural migration and globalisation, al backgrounds, and food preferenc-
Rava Idly Mix). Demand for Orkay’s husudan explains. Indians’ primary food habits haven’t es are primarily dependent on this
RTC products spreads from the ur- One challenge for packaged food altered dramatically. “The migrant very fact. Preferences for specific
ban markets, which account for the brands is to remain true to the unique population prefers foods they have flavours and aromas, and prejudices
major share of consumption, to the flavours of an ethnic cuisine while grown up and are familiar with. This present grave challenges to the food
district and rural markets, where the
simplifying the preparation process. has resulted in a growing niche mar- processor in creating a RTC brand
consumption are catching up very The last things consumer want from ket for regional RTC/RTE cuisines. to satisfy every palate. Hence the
fast, according to Madhusudan. a RTC product is that ‘processed’ The ability of food processors to pro- market is highly fragmented, to the
taste that so vide varied tastes has contributed pos- extent of being unviable for large
often accom- itively to the growth of this segment. scale manufacture, and highly re-
panies such With globalisation, the boundaries gional. Apart from this, the regional
innovations. of migration have disappeared. This variations in food habits and differ-
“I agree,” has resulted in a cosmopolitan popu- ences in cuisine also contribute to
says Madhusu- lation, with every regional segment the roadblocks.
dan, “The tra- of the population differing in food “Apart from cultural constraints,
ditional food consumption habits. This provides taxation has been one of the major
cooked out of a tremendous opportunity for food impediments,” Madhusudan adds.
Orkay’s RTC processors to provide solutions in the “The high taxation structures that
range has a con- form of RTC foods. This segment is existed – and continue to exist in
sistent taste and bound to grow considering that the some areas – make processed RTC
flavour, with boundaries of trade are being lowered foods expensive for the consumer.
virtually no progressively,” Madhusudan says. The market for RTC products was
compromise in Regarding challenges for such non-existent during the late 1950s
taste and flavour speciality packaged foods, he states, and early 1960s; the concept of
compared to “There are very serious cultural and packaged foods was a novelty and ac-
the traditional social roadblocks for RTC foods. One ceptability was very low. As a result,
Regional RTE brands focus on delivering home-made method of must remember that food is consid- the packaging industry has also been
feel and flavours. ered as one of the primary essentials slow to evolve.” ■

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