Frozen foods: The melting point

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I want it easy and I want it quick’. Today, the urban consumer swears by this motto and is constantly on a look-out for options on the same line of thought. A category that seems to be getting all the attention from ‘on-the-move consumer’ is the ready to serve frozen food category. The category, which started to gain momentum in the last few years had to face consumers’ scepticism in terms of its health aspect. However, the growing consumption pattern of frozen foods has a different tale to tell.

Frozen food in the past was restricted to categories such as frozen fruits and vegetables such as peas. However, in the past few years, traditional products which were prepared at home have  become available in frozen form at grocery stores.

Most of the products in the category are snacks and appetisers. These are spontaneous buys and do not require extensive prior planning from the consumer’s side. One can just spot a product and add it to his shopping cart. McCain, the producer of French fries and potato specialty products offers a wide range of frozen food and snack items, which include French fries, Smiles – mashed potatoes, seasoned and formed into smiley shape, Aloo Tikki, wedges, nuggets and even burgers. The potato major diversified its range by introducing three-minute rice idli as well.

“The demand for ‘convenience food’ has supported good growth in frozen foods”, explains KS Narayanan, MD, McCain Foods India. The Indian frozen food market is estimated at Rs 1,500 crore and according to industry experts, is expected to become a category worth Rs 3,750 crore in another five years.

Sushil Sawant, Associate Vice President – India Operations, Godrej Tyson Foods, further explains, “We are trying to look at the frozen food category in a more convenience oriented sense by giving a solution to today’s fast paced life.” The products are positioned as saviours in emergency situations like guests landing uninformed or as an easy option for city dwellers, commuters and office goers who require instant food due to paucity of time.

Products on the shelf
Another characteristic of the consumer that seems to be driving this category is the want for variety. Choices drive today’s consumer and the marketers of the frozen food category are well aware of this fact. “With the expansion of the working class in India and also with consumers’ need to experiment with different cuisines, it’s imperative to be very innovative with products,” says Rajesh Gandhi, Managing Director, Vadilal Industries, which has recently entered the frozen food sector.

The recent entrant Vadilal’s Quick Treat includes vegetarian products like Samosas, Parathas, Naans and curried vegetables. However, Godrej Tyson’s Yummiez range of frozen food products includes non-vegetarian items like Chicken Nuggets and Seekh Kebabs as well. Sawant explains, “Indians are vegetarian, as given a first choice. But statistically, 65 per cent of Indians are non-vegetarians. So it is both ways. So our business of veg and non-veg is equally balanced.”

Venky’s is another player in the category which deals in non-vegetarian products like Chicken Nuggets, Chicken Cutlets, Chicken Patties and the like. But according to reports, many playes shy away from the non-vegetarian category. Pankaj Gupta, Practice head for consumer and retail, TSMG attributes this imbalance in the non-vegetarian and vegetarian products to another important factor. “In terms of the trade acceptance, there are large parts of the trade that are happy carrying a vegetarian product but resistant to carrying a non-vegetarian product due to odour issues and consumer sensitivities.” Companies such as Godrej and Venky’s had to invest and create new infrastructure at retail-selling points because people don’t like the products to be mixed together.

Customising the product
“India as a nation loves to eat, which is evident from the fact that Indians spend almost 30 per cent of their income on food,” shares Gandhi. With such a potential in the Indian market, it becomes imperative for marketers to customise to Indian tastes. The category, in its early days, had limited itself to products which were directly picked up from international markets. However, with consumers taking more interest in the category, the players brought the Indian twist to the food products.

However, players still want to remain more ‘glocal’ against totally going for Indian tastes and recipes. “We would not close on the flavour that’s going around the world, as the Indian consumer does not want to miss out on that. At the same time we will not miss out on the flavour of India,” says Sawant.

Right place, right form    
The experimentation of the Indian audience with frozen foods can also be attributed to the retail evolution in the country. The emergence and evolution of organised grocery retailing in India and cold chain infrastructure is adding momentum to the trend of consuming frozen food.

Marketers are thus targeting food stores in malls to increase sale. Gandhi says, “Frozen foods are perceived as a part of grocery shopping and hence Vadilal places its products with other grocery and food items at convenient shopping outlets.”

In terms of packaging, marketers have tried to combat the hesitation of consumers about buying frozen food by the introduction of trial packs. These cost less and are thus a better buy for a consumer who is unsure about the product and the category. Gupta further suggests, “In the given product-price construct, players need to do carry out sampling activities to increase acceptance of frozen foods.”

Products in the frozen food category aren’t just becoming a preferred choice at homes, but are also finding a place in the menus of various restaurants. For a lot of players in this category, business comes from institutional sales with QSRs (Quick Service Restaurants) and HORECA (Hotels, Restaurants, Caterers/ Canteens).

The rough journey
Growth, however, is not a cake-walk for players in the category. Infrastructure is a big challenge. Storage facilities are hugely inadequate and expensive to maintain. Freezers require a fair amount of monetary investment, which restricts growth.

Another challenge is movement of goods as the products have an expiration date but much time is wasted in transportation only. However, the biggest challenge under infrastructural
shortcomings is electricity. Sawant explains, “If you go into Tier-II and Tier-III cities in India, the main problem is the electricity. Infrastructure as a whole is a major challenge.”

For the existing players in the market, Gupta predicts another challenge in the coming future. “One of the big challenges that brands will face will be from private labels, both of large organised retailers and of the modern kirana stores.” Apart from these, the mind set of consumers towards frozen food is another hindrance in the growth of this category. Narayanan says, “We expect consumers to break the myth that frozen foods are less hygienic and low on nutritional content. We want consumers to start accepting frozen food as a healthy meal option as any homemade food.”


It can be observed that there are very few products that are unique to players in the market. The rest are common to all. In such a scenario, product differentiation surfaces as another difficulty to stand out in the clutter. Gupta elaborates, “If someone is making an Aloo Tikki or a Samosa, why should a consumer pay a premium or prefer brand A over brand B? The entry barrier into the frozen foods category is much lower.”

Not all, but a lot of players are taking the mass media route to help people shun these ‘myths’ about frozen food. McCain recently launched its TVC which portrayed a typical urban Indian family and positioned the product as a ‘fresh’ snacking option. Godrej Tyson’s Yummiez has also indulged in print advertising for its two key products- Aloo Tikki and Seekh Kebab. However, players are not drawing the consumer’s attention on the ‘health’ aspect by highlighting the fact that they can even be baked and not just fried. Products like French Fries, Cutlets and Aloo Tikkis can be baked, as mentioned behind the packets of the respective products. The point is yet to be highlighted by any player in the sector.

Future outlook
The category is expected to grow at a rate of 15-25 per cent CAGR in the coming future. There are bound to be more entrants in the industry. However, the early birds perceive the coming of more players as a boon instead of a challenge. Sawant says, “We would be the happiest persons to have a new entrant in the category, because it gets the consumers’ education level up and helps boost the growth of the entire category.” With double-income households on the rise and consumers looking for more convenience products, frozen processed food is predicted to grow strongly.

Sources tell us that players in the ice-cream industry are running pilot projects to test if the existing ice-cream carts can carry their frozen food variants as well. Players like Vadilal who are already established in the ice-cream industry definitely have an upper hand. Gupta says, “The availability of frozen ready-to-cook foods in retail outlets is far lower than that of ice-creams. All that players have to do is ride piggy-back on the same ice-cream infrastructure and the already established route to market.”

While marketers freeze upon the next move in the category, the consumer can recline back on his couch and bite into a snack, right out of the freezer!

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