India has some distinguishing factors that make it an appealing food and beverage market. For starters, 65 per cent of its population is under 35 years of age, it has the youngest population in the world, and thanks to the IT revolution, they have money to burn.
As incomes rise, India's middle class, which currently numbers 250 million, continues to grow, and because its youth have embraced social media and mobile apps, and increasingly travel and study abroad, their awareness and receptiveness to cool global brands is on the rise.
India and Australia also share common legal and business frameworks, says Nicola Watkinson, Austrade’s senior trade commissioner for South Asia, which can make for an easier entry for companies embarking on business there.
“It’s a much more Westernised culture due to this heritage,” she says.
The country’s retail scene is also undergoing massive change. Until now, this segment has been fragmented and regionalised, and there has been an absence of global supermarket chains with a presence in every city.
Watkinson says that’s because until very recently, there have been restrictions on multi-brand retailing.
Now that the government has eased these restrictions, she expects a number of major retail groups that have been circling the market to finally decide to land.
“Those big retailers will be looking for a range of suppliers, so Australian companies should start looking at how to build their profile and brand and ride this wave of new investment into supermarkets that we think is going to take place.”
Watkinson warns, however, that India can be a little bureaucratic from a business perspective, though the path is much easier for companies that find a local agent. Austrade can connect companies with reputable groups, she says.
Some of the Australian brands already being bought by Indian consumers include Capilano, Sanitarium, Australia Fresh, Hartz, Paton’s Macadamia, Harvey Fresh, Arnotts, Beerenberg, Golden Circle and SPC.
According to Austrade, popular import categories in India include jams, pasta, sauces, biscuits, confectionery, bar syrups, honey, juices, wines, pulses, ready-to-eat products, breakfast cereals, diet foods, canned seafood, canned fruit and vegetables, pulses, food service ingredients, apples, stone fruit, and bakery ingredients such as bread improvers.
“There are some specific areas where we see opportunities: anything to do with pulses, baked products, savoury and sweet snacks,” Watkinson says.
As their lifestyles change, Indian people are increasingly looking to packaged snack foods and convenience foods, including lunchbox snack foods for kids.
Wine is another rising star in India, despite the large luxury tax on wine that has been a barrier to take-up in the past. India has traditionally been a stronger market for spirits, but as people travel overseas and the middle class grows, this is being seen as a less sophisticated option.
Demand for beer is also growing, and last month, Austrade was involved in the first Australian beer tasting in India for hotels and clubs that want to provide a differentiated offering.
Lamb is also finding a strong market in premium hotels, resorts and top-end restaurants, and Watkinson expects to see growth in the retail space at the top end.
However, the “cool chain” remains a real problem for chilled products in India at present.
“Ten years ago, you wouldn’t have seen
India as a mature enough market to take international products, but
the global outlook, rising wealth, and growing taste for
international products, plus the easing of restrictions on bringing
products and investment into the sector, make it a good time to look
at opportunities in the market,” she says.
Three
companies describe their journey into the Indian food and beverage
market.
Edgell and John West
India’s modern retail market is one of the largest and fastest growing markets in the world.
Indian consumers also have a growing appetite for new product lines and a few years ago, international food manufacturer Simplot decided it was the right time to enter the market.
In 2011, Simplot engaged with Austrade to identify a partner in India to help it distribute two of its Australian brands, Edgell and John West, and the company now sells these products through all major retail outlets in India, both modern and traditional.
According to Austrade, John West has become the major canned seafood brand in India.
Also, Edgell has been able to successfully compete against lower priced canned vegetables from Thailand and Malaysia.
Simplot, together with its local representative in India, is looking to expand into India’s tier two and three cities and the company is also looking at adding to the product lines it sells there.
Treasury Wine Estates
Wine is seen by Indian consumers as a sophisticated and stylish drink compared to spirits, and it is becoming popular with the younger generation.
With this in mind, Treasury Wine Estates (TWE) is working with an importer in India to launch its Penfolds, Rosemount and Lindeman’s wine brands in the Indian market.
To help pave the way, TWE has collaborated with Austrade to educate consumers through a series of wine tasting events. The company is now aiming to consolidate its foothold in the market.
According to Yodi Mootoosamy, TWE’s regional business manager, India is a very important market for the company.
He says though the market is currently very complex, with different taxation in different states and high import duties and annual registration fees, he believes that this will change in the future.
“TWE’s intent is to be a leader in wine education in India. We want to use education as a platform to grow the imported wine category as a whole. We will be investing in the market and working closely with our distributors and partners to achieve this objective,” Mootoosamy said.
Mulwarra Exports
Premium foods from across the globe are finding favour in India thanks to the growing affluence of middle class families and their exposure to international tastes and trends.
After a gap of almost a decade, the Indian government recently opened up the import of Australian lamb into India, and Mulwarra Exports, with assistance from Austrade, signed an exclusive agreement with Fortune Gourmet, a Mumbai-based importer and distributor, and its premium lamb is currently being distributed in five-star hotels across India.
Austrade helped launch Mulwarra’s products with a lamb promotion which included exclusive chef roundtables, media lunches and public relations activities.
