Major food companies, including ITC, Adani Wilmar, Tata Consumer, BigBasket, and Emami Agrotech, are increasingly prioritizing functional foods designed for health-conscious consumers. These products, which include items like low-cholesterol ghee and low-glycaemic index (GI) foods, are being sold at significant premiums due to limited supply and high technology costs.
With the focus shifting from organic products and millets, FMCG companies are adopting a new strategy to premiumize their portfolios by introducing functional foods. These are marketed as solutions to specific health concerns and are priced considerably higher than regular and even organic alternatives.
Last month, ITC launched its new food brand, Right Shift, featuring a range of meals, drinks, and snacks targeted at consumers in their 40s and above. The brand offers products with dense nutrition, including ghee with low cholesterol, priced at a 26% premium over regular offerings.
Similarly, Adani Wilmar has introduced a new edible oil aimed at the sugar-conscious and those seeking immunity boosters. The company also plans to launch low-GI rice and atta for diabetic consumers, with the new oils priced 22-46% higher than standard sunflower oil, according to Chief Financial Officer Shrikant Kanhere.
The market for premium food products in India is expanding, with an estimated 30 million affluent consumers willing to pay a premium for value-added offerings that combine nutrition, wellness, taste, quality, and sustainability, said Hemant Malik, Executive Director at ITC.
Tata-owned online grocery platform BigBasket is also part of this trend, offering low-GI potatoes at a 21% premium over regular potatoes and low-GI sugar at a 120% premium over standard sugar. Khapali wheat, or Emmer wheat, known for its higher fibre content, is sold by various brands at ₹150–250 per kg, which is three to five times the price of regular packaged atta.
According to Seshu Kumar, Chief Merchandising and Buying Officer at BigBasket, the premium on GI potatoes is expected to persist until supplies increase, as only a limited number of growers currently cultivate them. The technology costs involved in creating and differentiating these products also contribute to their higher prices.
However, concerns about misselling in the segment have surfaced. Last week, the Food Safety and Standards Authority of India (FSSAI) directed companies to remove claims of “A2 milk” from premium-priced milk products. For example, while Amul sells ghee at ₹650 per kg, other brands have been selling ghee labelled as A2 at over ₹2,500 per kg.
As the functional food market continues to grow, FMCG companies are leveraging technology to create a differentiated premium portfolio, further distinguishing themselves in the competitive market.