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Appetite for speciality imported foods grows as incomes rise.


Date: 14-05-2012
Subject: Appetite for speciality imported foods grows as incomes rise
The sales of olive oil have overtaken those of Saffola, a premium cooking medium made from sunflower seeds, in Big Bazaar and Food Bazaar, the food and grocery retail chains of India’s largest listed retail company Pantaloon Retail (India) Ltd.

That olive oil costs two-and-a-half times the price of regular sunflower oil and is at least 25% more expensive than Saffola hasn’t deterred buyers.

At GodrejNature’s Basket, a retail chain of fine food and gourmet stores, the sales of Häagen-Dazs, a super premium ice cream, beat the sales of London Dairy, a premium ice cream, by two to one.

Recently, the chain introduced Balik salmon, considered to be the best smoked salmon in the world, which has started outselling Norwegian salmon, a superior grade arctic salmon, says Nature’s Basket’s chief executive Mohit Khattar.

A trial batch of Mexican tortilla chips and salsa sauce dips introduced at HyperCity stores was sold out within two days. “Our imported foods business is less than 1% of our revenue right now, but it’s growing 100% year-on-year,” said Mark Ashman, chief executive officer at HyperCity Retail (India) Ltd, a unit of Shoppers Stop Ltd.

The sales reflect increasing demand for specialty imported foods in India fuelled by a growing middle class and rising disposable incomes.

For retailers, the growing popularity of international packaged and processed foods mirrors the take-off of fine dining and specialty restaurants in large cities.

First came Chinese noodles, followed by Italian and Thai cuisine, and as they caught on with consumers, demand rose for making those dishes at home.

Mexican, Japanese and Mediterranean foods are also sought after in some niche pockets, said Khattar of Nature’s Basket, who carries an assortment of 4,000-5,000 products, which include sambhar masalas to flavoured sea salt from France.

Over two years ago, Spencer’s, another retail chain, noticed a surge in the sales of international cuisine and decided to take 220 popular recipes, listed the ingredients that went into them and made those available in its stores. Last year, the retailer also started chopping vegetables and making chutneys and pastes for customers as it looked at getting chores out of the kitchen into its stores.

“These categories are seeing good response from consumers,” said Mohit Kampani, vice-president (merchandising, food and fast-moving consumer goods) at the RPG group-owned Spencer’s Retail Ltd.

Santosh Desai, managing director and chief executive officer of Future Brand Ltd, explains that the experimentation can manifest itself in different forms—whether eating dhokla, a gujarati snack, with salsa sauce, a Mexican dip made from tomatoes and onion, or making Italian pasta with Indian tadka, or seasoning.

“Earlier what we ate was a function of where we came from and who we were. Now the relationship has reversed. Our food choices construct our identity,” said Desai.

The advent of modern retail in large cities and the change in preference from unbranded to packaged products partly accounts for the evolution in food habits. The increasing popularity of olive oil is part of the evolution. For instance, there was a time when consumers’ preferred cooking medium was generic hydrogenated vegetable oil or vanaspati. In the 1960s and 1970s India’s largest consumer packaged products company Hindustan Unilever Ltd, then known as Hindustan Lever Ltd, made a big push for consumers switching over from vanaspati to Dalda, a branded vanaspati. Since then consumers moved on to using refined oils, and the health-conscious are now taking to olive oil.

Olive oil imports grew 76% from 2,945 tonnes in 2009-2010 to 5,181 tonnes in 2010-2011, according to Amit Lohani, convenor of the Forum of Indian Food Importers.

“Currently, the international category is growing anywhere between 20% and 25%. In the next two years, we see a growth of almost 30-35%,” he said. “Also, the number of countries (India is importing from) has gone up to 50 from a mere 20 developed nations three years ago.”

International travel has helped instil the habit of consuming ready-to-eat and processed foods among Indians, Lohani says. And, of course, rising incomes and buying power have helped.

“The modern trade shopper has always been characterized as a shopper who has stronger purchasing power and a willingness to buy a wider repertoire of categories and brands. This mix of affluence and experimentation is an invaluable asset for manufacturers seeking to introduce, grow, and create categories,” market research firm Nielsen said in a study titled Shopper-tunity: Riding the Shopping Cart to marketing Success in 2012.

“In the first phase of the modern retail’s existence, consumers were testing us on value and on hygiene parameters. Now the value question has been put to rest and expectations have been set. They have let their guard down and are now ready to experiment—buy more expensive and new products,” said Damodar Mall, director (food strategy) at Future Group, the parent of Pantaloon’s Retail India Ltd.

Take the case of Kumkum Dandekar, a 49-year-old homemaker in the Mumbai suburb of Borivali East who makes a fortnightly visit to a hypermarket for buying food and groceries.

Her average bill value has increased from `4,500 to `8,000 over the past couple of years partly because she now buys items that make cooking easier such as ginger-garlic paste besides imported meats and herbs.

“Earlier all these varieties were not available and we had to make everything at home,” said Dandekar.

Some families are driven to experiment by children who don’t want to eat regular food. Archana Patil, 39, hadn’t heard of tabasco, a hot sauce, or oregano, a herb used as pizza and pasta topping, while growing up in Ichalkaranji, a city in Kolhapur district of Maharashtra. But her 12-year-old, Mumbai-born daughter studying in Bombay Scottish School, Mahim, has.

“I am constantly trying new recipes and cuisines as my daughter and husband enjoy eating new items,” says Patil, who regularly watches cooking shows such as MasterChef, attends food appreciation sessions at her neighbourhood Godrej Nature’s Basket store and even downloads recipes from the Internet.

“There is an increasing demand for new varieties. Right from American to European foods to even newer cuisines like Japanese and wasabi paste, wasabi peas and the traditional soba noodles, all are finding great acceptance among Indians,” said Punit Gupta, chief executive officer, L-Comps and Impex Pvt. Ltd, one of the largest importers of pasta, cheese and sauces and pastes in India.

L-Comps and Impex supplies to 1,000-1,500 modern retail stores and 7,000 traditional retail stores across India.

It’s importing close to 700 items now compared with some 200 five years ago.

HyperCity Retail’s Ashman has tied up with Waitrose, a supermarket chain in the UK, for specialty foods.

Spencer’s imports directly a food container exclusively for its retail chain and Godrej Natures Basket has a sourcing team that tracks food trends around the world to make sure the latest hot products are available at its outlets.

Source : livemint.com

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