Growth of FMCG Sector in India: Part I Condiment and Processed Food

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The fast-food sector is the fastest-growing segment in the food industry across the globe, especially amidst the pandemic. An increase in the preference of young adults for fast-food items foster’s market growth. A surge in the sales of dips and spreads as a substance taster is a key development in the market. Asia-Pacific is anticipated to hold the largest market share in terms of sales and revenue growth of the dips and spreads market. An increase in the number of fast-food chains in this region and the rise in popularity of healthy and organic food is key factor boosting the growth of the dips and spreads market during the forecast period. 

Various companies in this sector have been receiving funding from across the globe. Condiments and sauce maker Veeba Food Services Pvt. Ltd, incorporated in 2013 raised over $6 million in a Series C round led by its existing investor Verlinvest, the Belgium-based investment holding company of Anheuser-Busch InBev founding families in 2017. Noida-based online gourmet food marketplace, The Gourmet Jar also raised an undisclosed amount from Chandigarh Angels Network in 2016. Gurugram-based Wingreens Farms Private Limited (Wingreens) incorporated in 2011 by Anju Srivastava and Arjun Srivastava, raised over $17 million as a part of its Series B funding round led by Zurich-based private equity fund responsAbility Investments AG in 2019.

China, Japan, India, Taiwan, and Indonesia are the highest consumers in the dips and spreads market in this region. Aiding the process is a myriad of sauces available in the Indian market like Aioli, Arrabiata, Chipotle, Peri Peri, Harissa, Asian Sweet Chilli, Sriracha, Schezwan, Hollandaise just ready to be added to raise the oomph of any dish or cuisine. While ketchup has been the traditional and most popular table sauce in India for years, demonstrating strong value growth year-on-year, other sauces like mayonnaise, salsa, sweet onion, etc have been fast catching up. The recent boom in the fast-food industry, changing lifestyle, and the huge influence of international cuisine on rising economies like India are the factors causing the surge in the demand for sauces in the last five years.

Dipping into the current demand for sauces for home consumption, many big restaurants are finding innovative ways to remain afloat by delivering DIY (Do it yourself) kits at homes for their popular dishes. The kit contains pre-made items such as sauces, gravies, and dips, along with cut vegetables, meats, and instructions. For instance, Fig’s Raw Mango Thecha and secret spicy sauce are versatile and can be used as dips, like sauces in gravy, or replicate the restaurant’s signature bowls. At Rs 200 to Rs 650 these sauces are finding big discerning takers in cities like Mumbai, Delhi, Bengaluru, and Kolkata. The lockdown has also presented an opportunity to restaurant owners to market super seasonal and immunity-boosting food and sauces replete with ginger, basil, curcumin among others to people. . Big eateries like Fig and Maple, Yuatcha, Nara Thai, Mamagoto are a few companies approaching this industry. 

A few concerns faced by the industry are logistics and expansion into tier II and tier III cities. To tackle the former, companies have leveraged their online presence as a preferred method of delivery to adapt to this evolved business environment. Most have signed with food delivery companies like Swiggy, Zomato, Amazon, Flipkart for extensive customer reach.

The Sauces-dipping sector will be seeing a steady spike as people are getting swish with their culinary experiments to bring home the joys of dining out, especially due to the pandemic scenario. According to Research and Market forecast, from 2020 to 2025, the global sauces and dips market is projected to soar at a CAGR of 6.97 per cent from a market size of $138.195 billion in 2019 to a market size of $207.049 billion by the end of 2025.



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