At the 12th edition of India Food Forum last month, CEOs of major grocery chains and leading retailers deliberated on the ways to prepare and face challenges such as the rapid rise in e-commerce and digital ecosystem management and come up with the right strategies for adapting to the needs of evolving customers.
Food and grocery is the highest contributor to the Indian retail market. The segment has been clocking double digit CAGR over the years and is estimated to continue growing 14-15% in the years ahead. To grab this immense opportunity and potential, grocers should have the right business strategy, plan, tools, techniques and the capability to execute. However, the segment is also in the throes of major revolutionary changes. The landscape of modern trade has been constantly evolving over the years even as customer demands and preferences have been witnessing significant shifts. Amidst all the churn taking place, it has become quite a task for retailers to stay relevant. So, while there are many challenges on the way, retailers need to transform those challenges into winning opportunities.
Damodar Mall, CEO, Grocery Retail, Reliance Retail, brought into focus the issue of customer’s evolving preferences and the diverse needs of the new-age generation. He observed: “2020 is not that far off and tomorrow’s consumers are shopping and consuming our brands and evolving. We will see newer brands being launched and some of them will open new areas of consumption and pave the way for more potential business in the years ahead.”
According to Oliver Mirza, MD, Dr. Oetker India, “We see lots of signals and signs of the evolutionary changes in consumers. One of them is the shifting preference towards all things natural and organic. We see higher quality and more premium brands coming up. But the significance of value for money and value for quality is still there and I don’t believe that it is going to change anytime soon.”
The challenges of 2020
There is a growing consumer demand for organic and natural in the food segment as well. This development has also led to the building of newer categories and sub-categories within existing categories over the years. At the same time, there is greater global exposure and foreign food choices in the Indian market. “At present, there is still demand for staple cereals and pulses and traditional food. But certain categories like salad pasta, vegan and gluten-free have also seen a dramatic rise among customers. This has become a challenge for retailers to understand the needs and demands for an all-in-one package deals. All the more so, because today a family of four asks for four different kinds of breakfasts on the same table – from salads to cereals to fruits and egg and bread. It is a platter and we need to understand it and provide to the customers,” noted Ramesh Menon, CEO, Small Formats, Future Group.
According to Aseem Soni, CEO, Modern Foods, “People today are demanding niche products and things that they did not have before. The success of certain startups over a time period of 6-7 years validates the changing preferences of people and their evolution over a period of time.”
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