With consumers demanding greater choice, convenience and health benefits in their morning eating occasion, India’s growing breakfast foods market is spurring innovation in many forms – new formulations, flavours and formats.
The need for greater convenience, changing social mores and an increasingly mobile workforce is changing the definition of breakfast. Increasingly, consumers are blurring snacktime and mealtime, they desire foods that are portable, nutritious and simple to prepare or eat. Some consumers are eating breakfast foods as a snack, while others eat a snack instead of a meal for breakfast. This has influenced categories, especially cereal, to cater to these behaviors. So, apart from the traditional, tried and tested breakfast foods, operators are evolving breakfast menus, incorporating more veggies, ethnic ingredients, healthy items and savory flavors that are characteristic of other dayparts. And that’s right on target with what consumers want today, an increasing number of whom are well-travelled, have sufficient exposure and nurture higher culinary expectations.
So, while traditional Indian breakfast comfort foods continue to hold sway, there is also a burgeoning demand for a more adventurous and contemporary breakfast menu. “Traditional breakfast options continue to be a part of the Indian breakfast table and there is a big segment of people who still prefer home-cooked food for breakfast. However, in light of the growing importance of health and wellness in our lives, consumers are now making an effort to ‘healthify’ traditional meal items by using healthier ingredients,” says Mohit Anand, Managing Director at Kellogg India and South Asia. The sentiment is echoed by Devna Khanna, Director, i2i Consulting and India Trade Representative for the California Walnut Commission. She says: “Usage of nuts, quinoa, dried fruits and seeds like chia, flax, pumpkin and sunflower is on the rise. Nuts, cereals, eggs, fruits and juices are recording maximum growth.”
But for the most part, Indians are inclined to consuming their quintessential hot, cooked breakfast. “This is because a huge percentage of Indian consumers still prefer freshly prepared hot breakfast. If we talk about the population living in other than Tier I and Tier II cities, people prefer home-cooked fresh breakfast rather than having easy, ready-to-cook or cold breakfast,” says Khanna. Parantha remains a popular breakfast item in north, idli and dosa in south, flattened rice flakes (chivda/ poha) with milk in western and central India, whole wheat grits (dalia), and a mélange of regional staples in many other parts of India.
Bread and eggs continue to be a popular breakfast staple in many households. But the choices have grown even in this segment. The range of breads available today include white bread, brown bread, whole wheat bread, multi-grain bread, sandwich bread, multigrain oats and flax, baguette, and croissant. For egg lovers too, there has been an explosion in the choice at the retail level – there are brown eggs, white eggs, quail eggs and free-range eggs (cage free) to choose from. Leading egg producers like Venky’s and Suguna are making innovations related to packaging, nutritional content (the addition of omega-3s), egg color, and production method (cage-free, organic and free-range). As a result of such initiatives, the market share for organic and cage-free eggs, while small, continues to rise as egg companies increase their focus on cage-free egg production.
Apart from bread and eggs, supermarkets across the country are reporting growth in sales across many breakfast categories. Given the rushed urban lifestyles of today, consumers are looking for convenience without compromising on health and taste. The need for convenience and health is also the reason why packaged and ready-to-eat breakfast cereals – both hot and cold – have risen as an important category in the food and beverage industry. While the rise of oats and muesli as a category is a global trend, multinationals and large domestic food companies are all now fighting for a pie of the fast-growing breakfast category, which includes oats, corn flakes, muesli, dalia and mixes of traditional breakfast like idli and upma.
Popular Breakfast Foods
At Foodworld, a chain of supermarket stores, the breakfast cereal range has been performing well with offerings that include muesli, all bran wheat, corn flakes, ragi flakes, almond corn flakes, strawberry corn flakes, granola, Special K (for women), and millet muesli. In the oats category where Quaker, Kellogg’s, Saffola and Bagrry’s are its top performing brands, the chain has been recording good sales for classic oats, masala oats and oats shake. In the millets category, brands such as Manna, 24 Mantra, Organic Tattva, and Arya are the sales pullers at Foodworld, which rakes in about three per cent of its overall sales from the breakfast category.
“Alongside the good sales of breakfast cereals, we also see an impressive show put up by Indian breakfast mixes comprising products like upma mix, rava idli mix, rava dosa mix, vada mix, oats upma mix, ragi dosa mix, vermicelli mix, poha mix, multigrain dosa mix and oats idli,” informs Eby Mathews, Chief Operating Officer, Foodworld Supermarkets Pvt. Ltd. MTR, 24 Mantra, Maiyas, and Pillsbury are its top brands in the Indian breakfast mix segment. In the kid’s breakfast segment, honey loops, choco’s, pan cakes, oat-bites and choco-fills are the popular off- erings with Kellogg’s, Soulfull, Pillsbury and Betty Crocker as the best-selling brands. Other brands – Tropicana, B-Natural, Silk, Sundrop, Fun Foods, Veeba – are also big sales pullers at Foodworld, which allocates 4-5 per cent of its shelf space to the breakfast category, which has been clocking 15-20 per cent growth.
According to Rajeev Krishnan, MD & CEO, SPAR Hypermarkets, “The breakfast category is witnessing strong growth largely fueled by regional players. There is a strong demand seen in the easy to-prepare healthy food options. The traditional healthy breakfast products are witnessing higher sales than western food alternatives like corn flakes, jams, juices, etc. There is a great demand from customers for products that are tasty, healthy and affordable and there is already a strong participation from regional brands that meet these needs and are helping to drive repeat purchases.” He adds: “At SPAR Hypermarkets, which enjoys a strong presence of its own store brands in each of the breakfast sub categories, south Indian RTC mixes, millet flours, oats and breads are the popular breakfast foods in demand. This is one of the fastest growing categories, witnessing strong double digit growth. However, we are excited to see the regional brands witness stronger growth in this segment compared to the national brands, led by product categories like millet flours, brown breads, oats, etc.”
At HyperCITY, another large chain known for its great mix of breakfast food items, instant breakfast mixes, cereals, cereal bars, muesli, oats, granola & energy bars, fresh fruits, fresh juices, coldpressed juices, green juices, etc, are the most popular offerings in the breakfast category. The total sales contribution from breakfast foods at HyperCITY is about 4-8 per cent on average. “While routine product offerings like cereals, oats and muesli are showing ongoing stability in sales, we have observed an aggressive growth of around 30 per cent in the new range of premium breakfast category products comprising quinoa, muesli and oats. We are also seeing an upsurge in the consumption of instant ready-to-eat/ cook breakfast mixes because of the changing economic scenario and the needs of evolved urban consumers,” observes R. Shankar Narayan, VP - Buying and Merchandising, HyperCITY Retail (India) Ltd. The chain allots, on average, about eight per cent space to the breakfast range at its stores across India. While brands such as Kellogg’s, Bagrry’s, Quaker, Saffola, Nibble Box, MTR, Soulfull and Patanjali have been receiving great response from HyperCITY customers, regional brands like Ruchi, Kwality, Mohan’s and Gits are also in demand at its stores.
According to retailers and food manufacturers, a growing base of consumers in the age group between 30 and 40 years are embracing specialty breakfast cereals like Special K, muesli with yogurts, organic food and millets. At the same time, the younger generation is moving away from regular breakfast cereals to breakfast bars and drinks to save on time. Cereal bar is finding a huge fan following with today’s youngsters, teenagers and youth. “Our product range in the cereal category comprises original, dried fruits & dark chocolate; dark chocolate in the bar category and flaxseeds in the nachos category. We are introducing Granola – cereal & bars – and plan to come up with some more exciting snacks soon,” says Rohit Pugalia, Partner, Soch Foods LLP, which operates the Munchilicious brand that provides healthy yet tasty all-day, midmeal, on-the-go and affordable snacking options for all dayparts, including the morning breakfast. The products are geared towards new-age consumers, both male and female in the age group 26–35 years. Soch Foods has expanded considerably within a short span of three years on the strength of its great tasting, nutritious, no-added-oil and glutenfree products, all of which are quality tested at the reputed testing and certification agency TÜV SÜD.
Thanks to the change in our lifestyle, people prefer to have on-the-go breakfast on workdays and leisure breakfast on weekends. So there is a huge demand for products like ready to eat, ready to cook, breakfast bars, protein shake and processed meat that is healthy and replete with proteins needed for a healthy body. “Due to an increase in the demand for on-the go breakfast products, major market shareholders such as Kellogg’s, Quaker Oats, Bagrry’s, Saffola, and others are focusing on products like ready to eat that have enough proteins and calories sufficient for maintaining a healthy body,” opines Mathews of Foodworld.
Market Size and Category Growth
According to India Breakfast Cereal Market Overview, India’s breakfast cereals market was pegged at USD 157 million in 2013 with the promise of double-digit growth over the next five years. It has been growing at over 17 per cent CAGR over the past five years. Another industry estimate puts the market size of breakfast cereals in India to about ten billion Indian rupees in 2015. The estimation for 2020 is approximately 20 billion Indian rupees. According to Euromonitor, the breakfast cereal market in India grew 24 per cent in 2015 to Rs. 1,440 crore and is estimated to touch Rs.2,610 crore by 2020. Being a large market with a growing middle-income group and double-income households, India holds great potential for the breakfast cereal market.
However, the intake of breakfast cereals is still limited in the country. Research from Mintel shows per capita consumption was just 0.043 kg in 2016. That said, the product is taking off– per capita consumption of breakfast cereal in India in 2015 was 0.036 kg – as it offers time-pressed consumers a viable breakfast option that’s considered healthy and suitable in terms of taste. The market is divided into two categories viz., hot cereals and ready-to-eat (RTE) cereals. Hot cereals include products like oats, oat bran, wheat bran and porridge whereas readyto-eat (RTE) cold cereals include corn flakes, wheat flakes, choco flakes, muesli, etc. Indian consumers prefer hot breakfasts; hence the hot cereal category is growing at a much faster pace than ready-to-eat cereals. Data from Mintel reveals volume sales of the hot breakfast cereals segment saw a 27 per cent rise from 2015 to reach 33,000 tonnes in 2016. In comparison, cold breakfast cereals posted a 13 per cent growth from 2015 to reach 24,000 tonnes in 2016.
Consumers in India like their breakfast to have savory and sweet flavors. With regard to breakfast cereal, people prefer oat flavors and traditional flavors such as masala. The popularity of oats has risen among Indian consumers and has now evolved to the level of traditional flavors such as masala and vegetable. Sweet-flavored breakfast cereals, e.g., chocolate, strawberry and honey, are enjoyed by all age groups; however, savory flavors are popular among teenagers and older consumers. Though corn flakes, as a category, dominates the market with highest market share, other cereals like oats and muesli are fast catching up. Oats and muesli, as a category, are growing much faster than corn flakes as people are getting more health conscious and venturing into even healthier foods. That said, the primary consumers for breakfast cereals continue to be urban consumers. This is because urban consumers prefer a fast arrangement for breakfast due to their lifestyles, and breakfast cereals, especially flakes, provide exactly that. Owing to urbanization and increased income of people, western India has the largest market share in breakfast cereals, followed by the north and south.
Kellogg’s India, Bagrry’s and PepsiCo Quaker are the leading breakfast cereals companies with a dominant market share. “We have grown strongly over the years and much of it has been organic, driven by consumer loyalty as well as by the growing strength of our distribution in association with Indo-Nissin foods. As per Mintel, we have over 18 per cent share in the breakfast cereals category,” says
Aditya Bagri, Director Bagrry’s India Ltd. As a growth strategy, players like Bagrry’s are using and highlighting the nutritional benefits of their breakfast cereals. They have been introducing healthy fortified options to suit the needs of different demographics. “We have recently entered the corn flakes segment, which has the largest volume share in the breakfast cereals market. Bagrry’s Corn Flakes Plus is an innovative product that has almost twice as much fibre as compared to ordinary corn flakes. We are confident that our entry into this segment will help us enhance our overall share of the market. As a business, we have grown at over 40 per cent this year so far and expect to grow even faster,” says Bagri.
Bagrry’s wide product range includes muesli, oats, corn flakes plus, oats for India, masala oats, organic superfoods and also healthy snacks such as makhana (foxnuts). “In muesli itself, we have 10 unique variants with different flavors and functional needs. We are constantly developing new products and plan to add many more innovative offerings in the near future. We have also developed a new brand – ‘Lawrence Mills’, which is rapidly growing, with the same international quality ethos but at an affordable price point. We have two products under the Lawrence Mills brand – corn flakes and choco crunch,” adds Bagri. With a strong presence in the Indian subcontinent across over 70,000 retail outlets, Bagrry’s products are widely available in the metros and Tier-1 cities and they also reach out to over 170 smaller towns in India. “We are present across various retail formats, be it traditional, organized retail, e-commerce or the institutional business. We aspire to connect with our consumers in as many relevant touchpoints as possible and our distribution association for our smaller low-value packs is helping us to penetrate deeper in semi-urban and rural markets,” reveals Aditya.
Convenience and Product Innovation
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