How changing consumer lifestyle and behavior is impacting the Food Processing & Manufacturing Industry in India

Mr. Raghav Gupta, MD - Kanchan Metals

India takes pride in possessing one of the largest food processing sectors. It occupies a prominent share of 32% in the global market. Grains, sugar, edible oils, beverages, dairy products, packaged, preserved as well as ready-to-eat food items comprise the sector.

While the segment has been growing exponentially over the years; the pandemic rendered a significant impact on the market.However, it was resilient in its approach and made concerted efforts to revive. Ever since then, the sector has been ever-evolving and is expected to grow in the times to come. This was highlighted by Invest India,the national investment promotion and facilitation agency in its recent report which states that the sector is projected to grow significantly and be valued at $535 billion by the end of 2026.

COVID-19’s impact on the Indian food processing segment
Invest India points out that the growth of the market will primarily be driven by tech advancements induced by the pandemic. As a result, the Indian food processing market that was always known for being labor-intensive is gradually treading the path of digital transformation. Amongst the new-age technologies marking their presence in the segment; automation receives a special mention as the industry has been keen to embrace this as a solution!

What is also noteworthy is that the coronavirus brought about a shift in the consumers’ preferences. In the pre-pandemic era, they opted for purchasing loose and unpackaged food items from their trusted kirana stores and shopkeepers. However, COVID-19 upturned the scenario altogether! Apart from accelerating digital adoption of the sector; it also was responsible for the change in the consumers’ preferences.  As a result, in the post-COVID times, modern consumers now prefer packaged items that offer the reassurance of health quotient and quick delivery!

The impact of consumers’ changing lifestyle and preferences on the food processing segment
India boasts of the largest working population segment at the global level. With the rise in disposable incomes, consumers are now shifting towards the consumption of processed foods. Amidst their fast-paced lives and urban working culture, they are left with limited time to shop for groceries or even prepare their meals. In such a scenario, processed and packaged foods such as ready-to-eat products and snacks have gained popularity specifically in the urban areas. 

The pandemic-induced work from home concept also had a major role to play in the consumers rising preference forsnacks, packaged goods, and instant foods. Hence, they now choose to shop from modern retail stores including hypermarkets and supermarkets on a weekly or monthly basis instead of shopping traditionally at grocers and kirana stores. They not only increasingly demand products but also need diversity in options as well as quick availability. This shift is further pushing the sector to expand its product range, invest in innovations, offer in-store food service, and other services to enhance the consumer’s shopping experiences. 

As per Invest India, by 2030, the Indian annual household consumption is expected to stifle thereby making our country a progressive market for the consumption of processed foods. Hence, it can be rightly said that this shift in the consumption pattern due to the changing lifestyle and food habits of the consumers are contributing to the growth of the market. In order to cater to this rising and diversifying demand, the sector is inculcating automation as a viable solution!

The automation of the Indian food processing segment
The industry players now rely on automation to meet the needs and demands of the consumers. Various segments such as snacks (namkeen, bhujia, mixture) and frozen foods (naan, samosa, bhajia’s) have adopted automation in the form of complete lines for fried snacks, extruded snacks fryer, aloo bhujia/namkeen extrusion line, automatic moong dal processing lines, as well as specifically designed equipment including conveyors. Along with them, complete lines and conveyors for baked snacks and automation solutions for Indian sweets including soan papdi, kaju katli, gulab jamun, etc. are other automation forms that are also witnessing a surge. The Indian food processing segment is harnessing the power of automation for processes such as pumping and extrusion, washing and soaking, weighing, and blending processes, with the sole aim to optimize the workflow and ensure smooth operations.

According to Meticulous Research’s recent reports, the global food automation market is anticipated to grow at a CAGR of 9.5% from 2020 to 2027 and will be valued at $29.4 billion by 2027. The research further points out that the APAC region especially India is a growing market. Businesses are increasingly adopting automation and this trend will continue to pick up pace in the times ahead as well. Thus, it would be appropriate to say that automation is playing a vital role in upscaling the market. 

Summing up!
The pandemic inflicted a considerable impact on the sector. It also paved the way for the shift in the consumers’ preferences. However, the Indian food processing sector has been prompt enough to recover and eventually grow.The new-age consumers demand options, quick delivery, foods that are easily available and come with a promise of hygiene and quality. This change is further impacting the sector as the market is treading on the path of digitization to meet the consumers’ preferences and expectations!