A combination of Indian preference for freshly prepared meals, lower percentage of working women in the country and pricing are restricting the growth of the ready-to-eat (RTE) market here, according to a study by Tata Strategic Management Group, a management consulting firm. The RTE market in India is expected to reach the Rs2,900 crore mark by 2015 from the current level of Rs128 crore. But to touch that mark, the industry will have to offer customers varied options, competitive pricing and dispel consumer fears regarding hygiene to ensure its products find favour with Indians. India’s share of the global RTE market, worth $47 billion (about Rs1.8 trillion), is minimal. But according to the study, factors such as a growing number of nuclear families, rising household incomes and a significant rise in the number of working women professionals is expected to accelerate growth.
The study reveals that acceptance of RTE food is low primarily because it competes with home-cooked food, a much cheaper and fresher option. “To increase consumption, RTE players will have to significantly improve their price competitiveness with respect to home-cooked food. A reduction of prices by 25-30% could lead to a demand explosion due to higher affordability,” said Pankaj Gupta, practice head, consumer & retail, at Tata Strategic Management Group.