An opportunity knocking on the door
As foods category is growing in India, several food companies are capturing salty snacks market. Around 1,000 snack items are sold in India spanning various tastes, forms, textures, aromas, bases, sizes, shapes and fillings. Some 300 types of savories are sold in this country and overall snack product market (inclusive of sweetmeats) is estimated at Rs.25, 000 crore. The branded segment is increasing at the rate of 25 per cent/annum whereas the entire market is growing at the rate of 7 per cent. Namkeen is a product which is essentially known for three important things a) Taste b) Quality c) Variation.
Average annual per capita consumption of commercial snacks is 500g. Consumers from Western India are the leading snack consumers, followed by the North. An aspect that leads to quick movement of ethnic snacks is the consumption convenience or consume anywhere-anytime factor. Snacks/Namkeen can be eaten with cocktails, during teatime, as props with regular meals like breakfast or as starters with dinner.
Due to advancements in technology related to cutting, slicing and grinding in food processing equipment, many food manufacturers have replaced their older machines with newer ones that are more efficient and boost their bottom line through higher throughput. Equipment categories include chillers, dryers, feeders, fryers, grinders, homogenisers, mixers, roasters, separators, slicers and ovens. These machines require cleanliness, gentle handling and precise control of temperatures, pressures, treatment times and other process parameters.
Agro and Food Processing magazine got in touch with some industry players who cater to the snacks and namkeen segment. They provided their views on trends and challenges that surround this market.
Market scenario and Product offerings of snacks industry
The Indian Food Industry is one of the fastest growing segments in Indian economy. Within the food sector itself, the RTE including Namkeen & Mithia holds the biggest share. This segment has the maximum value addition, not just in monetary terms but also at adding shelf life to the product or ensuring that there is reach from Farm to Fork.
Raghav Gupta, Director of Kanchan Metals Pvt. Ltd believes that their customers add capacity to produce more namkeen & mithais. He said “there seem to be many new entrants in this field as well which indicates that this segment is prospering. Our offering includes complete turnkey process lines for popular namkeen like: sev / bhujia, mixtures, peanuts, moongdal as well as automatic forming and portioning machines for mithais like: peda, barfis, soanpapdi, rasgulla etc.
CEO & MD of FABCON Group, Nishant Bansal said with growing disposable income levels & change in cultural habbits, not just the DINK, but almost across all stratas of society (right from urban niche to rural) is a consumer for RTE. This is further fuelled by the growing exposure of the market due to infotainment, travel & the marketing buzz created by manufacturers by introducing new products on a very rapid scale. Whether it is western snacks like Tortilla (also falling under the category of Namkeen) or items like Baklawa (Gulf Mithia), Indian food giants like Haldirams, Bikano, Bikaji, Balaji, ITC are leaving no stone unturned to let the consumer get taste of newer products.
“At Fabcon, we are at forefront of this development as we are leaving no stone unturned to offer the latest technology to the Indian food manufacturers. Our state-of-art manufacturing setup in Delhi NCR (Noida) is equipped with latest technology to offer solutions at par to Europe / USA in terms of quality, reliability & advancement. We also have tie-ups and Joint Venture with who’s who of Global Food Equipment Manufacturers to offer solutions for manufacturing latest food trends for our food manufacturing friends in India.”
Director of Dynamech Engineers, Ravi Mirchandani sees tremendous growth in sweet & snacks industry, right from 3-years old child to senior citizens in India, everybody is target audience of this industry, so entire India becomes the target audience and hence this a huge market . “We offer solution for small, medium and big players of this industry, from a small namkeen retailer to big groups. With 32 years of experience in this industry, we have various verticals from Snacks extruders, Dough kneaders, Centrifuges, Potato peeling equipment ,Batch fryers, Continuous fryers(for namkeens, Lentils,Dals,Potato Chips, Samosa, Boondi, Pani poori), Potato slicers, Mixing & seasoning equipment.”
Managing Director of Saurabh Flexipack Systems Pvt. Ltd, Pradeep. R. Katariya views the growth of Indian mithai and namkeen is great and specially namkeen. “I believe it is the fastest growing industry. We provide hi-speed packaging machines for this industry. We provide machines for packaging namkeens in standup bag with zipper.”
Frequent changes in food preference among individuals have led to increased demand for food products. This changing trend leads to investment more on equipment that will provide efficient output. Shekhar Odak, Director at ODTIN Food Solutions Pvt. Ltd said “this sector is increasingly getting organized due to awareness among the people for hygiene, value for money, government schemes and support. We at ODTIN, offer turnkey solutions for Namkeen and snacks industry right from project engineering, management and machines supply including packaging solutions. Snacks industry includes potato chips, Indian ethnic snacks, frozen food, extruded food like pellets and pasta, RTE.”
New trends observed in the industry
There is a demand for hygienic and nutritious food products. Hence manufacturers need to give the best results so that there is continuous inflow of business. Namkeen consumption is high in Western and Northern states of India and even Southern states have picked up on consumption rate. Also the trend has shifted to using modern technologies from traditional methods.
Gupta adds that Kanchan Metals have been fortunate to partner many leading namkeen producers in their quest to automate traditional production processes. “We have been successful especially in terms of automation of bhujia extrusion, moong-dal frying and portioning of Indian sweets. Salty snacks as a category is growing all over India. Many companies are now going pan-India with their brand which clearly indicates a good volume. Namkeens are also popular all over the country with taste’s varying as per region.” ‘Value for money’ products implemented for sound business practices have enabled their presence across many cities in India. Therefore, the customer faith in genuine-brands grows and creates a brand name in the market.
There is a growing demand in this segment to cater for increasing volumes but also for variety & quality of products. Further, to meet the stringent food standards laid down by FSSAI & also needed for export to other countries, the need for shift from traditional to modern technologies could not be stressed more. Bansal added that Fabcon has contributed to every segment of Namkeen & Sweets. “We have contributed immensely in modernisation of manufacturing techniques across the board. This could not have been possible without the immense support from leaders of the industry like Haldirams! The encouragement from them & the push to find / develop solutions that contribute to higher efficiencies is one of the prime reasons that we come up with newer technologies & a big reason behind the growth of the Indian food industry!”
Traditionally, Delhi (North) & Mumbai (West) have been the 2 big hubs (national and financial). However, since the economy opened up in 1990’s, whole of India has witnessed growth. Areas like Indore, Kolkota, Orissa, Patna in Bihar, Eastern UP, North East & South have also come as big hubs of consumption & hence manufacturing.
Bansal believes that India is and will always remain a region dominated market where there will be local players catering to local demands, culture, flavour. But these will also grow from small quantities & number of players to scale. This is also leading to consolidation where the giants are acquiring the growing companies & brands to establish themselves in these regional upcoming markets & no longer be dependent on the North or East! “Manufacturing hubs in form of food parks are coming up in every state & every few hundred kilometers. Companies will either have to put their own units or acquire or opt for Co-packers that is already happening! At Fabcon, we are focusing on scaling up production at our own base & developing on team of reliable engineers to cater across India & global markets for Sales & after Sales Services.”
Dynamech maintains close relationship with clients to provide them with relevant solutions, and also participate in major Indian and international exbhitions and conferences to expand and build new business opportunities. Mirchandani said “namkeen is a nationwide product with differing taste and varieties, the taste changes with ingredients. In some areas, it’s spicier whereas elsewhere it’s on sweeter side, in some areas rice is predominant ingredient in some gram flour. We would differ on that we believe namkeen is a nationwide phenomenon.”
Saurabh Flexipack takes efforts to make more sophisticated and more hi-speed packaging machines. They have machines upto 180packs/min and their European partner provide machines upto 300packs/min.
Also the company has introduced new technologies in packaging machines like Industrial PC control system that will help to analyse the product data of number of machines in brief and detailed. Also this technology will help to connect and get the centralised data of productions. Katariya agrees that western and northern regions consumption is high but seeing this success the trend has picked up in other regions. “It is glad to see that now all over India manufacturing plants are coming up and consumption is increasing. The north east and undeveloped regions are now developing very fast and so is also the reason to increase the consumption of namkeens being ready to eat.”
It is a very evident fact that as business grows; Indian manufacturers tend to go for further expansion. During initial phase, manufacturer experiences several challenges and opportunities of business expansion and hence tries to address all the issues while expanding the business. So here the solution is only technology and operation practices enhancement. Manufacturer need to attend this hence require good quality machines in terms of technology and standard operating procedures for manufacturing of food product. Nitin. M. Aras, another Director at ODTIN Food Solutions stated that ODTIN plays a major role in creating awareness among them regarding new product trend, also help in SWOT analysis for their upcoming business. “ODTIN also use the various platforms for awareness program through different channels organized by government bodies, CII, various chambers of commerce. Also we are going to introduce KMS (Knowledge Management System) on our company website very soon that will have an exceptionally prepared FAQ to satisfy their instant queries.
Now Namkeen is well known to each and every part of our geography. South and North East part of India has good demand of Namkeen because of mix culture. Due to employment and business opportunities, north and west side people spread over the whole country, settled along with food habits and culture. We are getting more inquiries from south side for namkeen, earlier it was limited to their traditional food and banana chips. Now people are more inclined towards Namkeen and potato chips. Even North East region is also having different requirement of Indian snacks, namkeens and pasta.”
The low per capita consumption of food in certain pockets offers tremendous opportunities for food companies. Many companies, including the global ones have recognized this potential and are increasingly investing in India. The Indian snacks market is characterised by a large number of unorganised players across all product segments. This stems from each type of snack being very specific to each region, and hence, many small companies cater to that market. These players have a slim portfolio of products, usually of a single category and in many cases only provide traditional snacks items. They also operate in a small geographic range confined to a single state or city. The organised snacks market has been witnessing high growth over the last few years. This is because of the overall growth in the processed foods segment, followed by the moving trend towards consolidation of markets. Some of the traditional Indian snacks have fared better than Western snacks.
Quality packaging plays an important role
The manner in which a product is packed has an impact in the market. Manufacturers should consider ideas that could improve the packaging of their product, thereby raising the products’ sales potential. Due to excellent preservation and modern packaging one can have authentic Bengali Mithai in Mumbai similarly consumers can have Dhokla in Chennai and Ratlami Sev in Delhi. Gradually, the segment will see a rise because of the rising acceptance of these products in the country. This opens the door of opportunities for several food manufacturers in India.
Dynamech’s Director believes that this has high scope primarily because people are shifting from local shop products like (samosa, kachori, handmade namkeen) to hygienic products as those are made in a controlled environment and packed hygienically, rather than having samosa at railway station, people prefer to open a namkeen packet. Also Gupta agreed on the same note that this category holds great potential for the manufacturers and industry can take advantage of this opportunity.
With modernization & easy option to relocate for jobs, people are moving pan India. They do crave for their home / regional food. This is a growth story & with rampant increase in E-commerce, this need is being easily addressed across country & globally. Bansal explained that the role of advancements in manufacturing and packing technologies with advancement in M.A.P has made it possible to offer shelf life which was never thought about earlier. “Quick perishable items also last for years. The demand for non seasonal & products which are not local is increasing & will keep on doing so.”
By addition of preservatives, shelf life of any food is enhanced. Odak commented that, “This sector is growing with better transportation conditions. But my opinion is different. Honestly telling, we should have the food of its natural shelf life, without any preservative. For example, if we have a processed food of 3 months shelf life and by adding preservative we can prolong it for 6 or 8 month. Then better to have a food of 3 months shelf life and to maintain this we should have cluster formation of industries. Why should we transport the food for more than 300 or 500 kms? Yes for export, we can use the preservative.”
Challenges dealt by this sector
The snacks food industry in India is highly competitive and evolving. Consumers are always tempted to shift their choices and preferences whenever new products are launched or various marketing plans of different brands are introduced. The market needs new and better products in line with those available in western countries. There are some challenges that both manufacturers and allied industry of snacks and namkeen faces. India is a vast country with several small, medium and big manufacturers working for the successful growth of this industry. They have been through difficult days but have survived the storm by giving efficient output in the end.
Kanchan Metals’ Director said it is very important to have solutions for all scales of production. There are many companies who are still looking for lower capacity lines and thus it is important to have flexible products which can be used for multiple types of namkeens.
Indian food industry for namkeen & mithai has been a regional segment always. There are certain geographies which have their distinct style of taste, form & cater to that particular segment. Companies like Haldiram Family, Bikaji, Balaji, Bikano, Prataap (Yellow Diamond), Aakash, A2B, MTR, Maiyas, etc recognized their strength & have been able to grow by leaps & bounds in the last 2 decades. Of course, the credit to convert this supposedly cottage industry into full fledged industry goes to few like Haldiram Group, Balaji, Bikaji. Everyone starts small, but they only grow big when they can read consumer mind & develop around that. This stands true for food & equipment manufacturers. Consider Bhujia & Moongdaal (Namkeen) & Soanpapri & Rasgulla (Mithai) that have their origins in Rajasthan mainly. But today, they are on everyone’s basket & consumer plate.
As per Bansal, major challenge is to identify the need to offer not just the local flavour, but also take it on national & then global levels. Every 300-500 kms, you see a different food habit. This is Indian Culture. They have their own recipes, traditions & manufacturing techniques. The way forward is to develop systems that suit masses. The smaller players face issues related to capital & mindset of WHAT IF??
What if the new technology changes their product? What if the manpower does not understand? What if they lose control over their age old fashion of doing things themselves? More What if’s…. Further, with onset of GST, the whole industry is at a level playing field & should be now ready to go big, grow big, and think big. We at FABCON are ready to address their needs.
Mirchandani said Dynamech had humble beginnings when it began in 1985 with very small clients. “That time there was no major player in the market, so all the big players today like Haldirams began with Dynamech Machines when they were also small, as they grew Dynamech grew in product portfolio & market. We are a flexible company and can adjust to demands of various levels of namkeen & mithai manufacturers.”
There are some major challenges like few raw materials are grown in certain regions only and transportation becomes the issue along with cost. “In packaging machines business the challenge is providing after sales service. Providing services in areas is too difficult and required good team of trained engineers and technicians. Over a period of last 20 years, we built this team and overcome with this challenge but manufacturers in various regions are facing such difficulties,” said Katariya.
Regarding challenges, Odak is of the view that India is a big geography and based on local environment different challenges need to be addressed like say size of industry and budget. “Similarly India has mainly three market segments; rural, urban and premium. Accordingly we should have the technology which can help in survival of business size. Customization is the only key for the allied industries. ODTIN has that kind of flexibility in technology where it can attend any kind of business environment. ODTIN’s major strength is customization. Our technical team meticulously work on the requirement as per budget, without affecting the quality and performance of final outcome i.e. food product.”
Client needs and latest innovations for this industry
Customer satisfaction is a big factor in the progressive scale of any business. Whether you are into manufacture, packing or allied segment of snacks/namkeen industry, clients’ requirements should be fulfilled. It is very essential to understand the clients’ needs and provide them what they require. Regular customer basically means when they keep coming back to you. It just indicates that they are impressed with the products/services provided.
In addition, Gupta said it’s crucial to understand from the manufacturers about their stressful areas because only then can tailor-made solutions be developed. Kanchan Metals have been successful in automation of some processes of namkeen manufacturing.
Any relationship will last long if there is a connection. Bansal said that if we are not in touch with food manufacturers, we will not only lose an insight into their focus needs, but also we will lose track of what is their vision in the coming times? What are their key concern / bottleneck areas? Companies should discuss and help in developing solutions & systems that address their need in best possible & economical manner.
Fabcon have always had pride in addressing key concern areas of their customers. In the last 40 years, the group has done many such innovations. The key ones in last few years are: 1) Localisation of key Equipment was 100 per cent dependency on foreign suppliers. We have formed JV with companies from US (like Maddox for Extruders & Tortilla lines) & also companies from Europe (like KMG, Planet Dryers etc) for this. 2) CONTIMIX Fully Automatic Recipe Based Weighing & Mixing System for Mixing Namkeen. The system is PLC based & very intelligent that does away with issues of inconsistency, hygiene, batch processing, man power issues & volume pains. 3) Multi Purpose Frying Systems. 4) Automatic Handling, Storage, Mixing & Packing Systems for Conventional BIKANERI BHUJIA 5) KAJU BARFI CUTTING by using Ultrasonic Cutter as developed in Germany with our partners, M/S Doinghaus 6) Fruit Pulp Based bar & ball moulding system for healthy sweets. 7) Many other proprietary systems which we have developed under NDA for our customers
‘Need is the mother of invention’ exclaimed Mirchandani. “All the innovations like Sev Machine, Dough Kneader, Namkeen continuous fryer, Nylon sev extruder, Boondi extruder, Tilting centrifuge & tilting dough kneader have been developed by Dynamech by listening to the problems faced by namkeen manufacturers at regular intervals since its inception. ‘We hear you’ is our innovation strategy for customers,” said he.
It is important to maintain the relationship with manufacturers as equipment provider. The demands are changing very rapidly from manufacturers in terms of technology and output. Saurabh Flexipack, MD stated that, “We are bound to meet those demands and the sales team is always in discussion with key customers to understand the demand and fulfill the same. We have invented our KAWACH- twin-150 bag maker that can produce 180packs/min for small packs of snacks. Recently, we supplied number of machines to one customer for packing 40gms of bhujia. Another customer asked for double output machine in same space, same electricity and air consumption. After working over it, Kawach twin-150 was installed and now we are providing this solution to other snacks manufacturers.”
Constant relationship and communication helps in building win – win situation. Nothing is innovated foolproof right from the beginning. Every time, technology needs some input for the betterment of its objective. It may be pertaining to performance, practice, quality and any others. Aras stated that “this information we can get through only continuous communication and relationship with our customer. We have done lot of changes in our previous technology based on the input from our treasured customer. For example; need of user friendliness and repeatability had been addressed by addition of SCADA and PLC electronic system with our process lines. For small, new entrains, farmers we have developed a roster for grains, cereals, nuts, beans etc as a CSR activities from our side. We are in collaboration with some education institutes and universities for equipment development for specific purpose. ODTIN is committed to invest 3 – 5 per cent of turnover in developing such equipment for the society and small entrepreneurs.”
The Indian snack market is highly diverse with region specific varieties, flavors, and mixes. Primarily, the snacks market consists of bakery foods, biscuits, chocolates, confectioneries, and traditional savory snacks. Among all these, savory snacks increased its weightage in recent years due to increased penetration of packaged snacks. The savory snacks are the salty snacks made from natural as well as added colors and flavored ingredients; broadly consists of ready to eat mixes, various kinds of chips, namkeens and related light processed foods packaged or loose, branded or unbranded. The Indian packaged snacks market and especially savory snack has undergone significant change in the past decade with the entry of numbers of national and regional players with their distinctive brands and flavors.