Mar 7, 2020
Sachid Madan, Chief Executive – Frozen Snacks, Fruits and Vegetables, ITC Limited. He is also responsible for ITC’s Technituber subsidiary.
ITC first started diversifying from its core tobacco business in the early 1970s, with the diversification drive picking up steam in 2003 when the Indian behemoth conglomerate started with its slew of launches in the FMCG category. With its stated interest in the ‘areas of tomorrow’, the company’s focus is now on the frozen food industry.
Sachid Madan, Chief Executive – Frozen Snacks, Fruits and Vegetables, ITC Limited says, “Entering the frozen food category is another step of ITC’s commitment to be a part of every food moment. Given that globally frozen snacks and meals are growing we believe there is a lot of headroom for this category in India.”
“We also believe it has a much larger purpose as the enlargement of ITC’s food business enhances incomes for the Indian farmers and also provides a much-needed fillip to the country’s processed food industry”, he added.
The motivation for the frozen food industry in India was by the entry of Global QSR chains like McDonald, KFC, Subway, etc. With the international QSR popularity, the increase in B2B demand for frozen food has been increased Indian QSR chains as local burger junctures, parlours and pubs and other eatery platforms.
This is because frozen food is the natural choice for food chains to deliver a standardized product at all locations. At the same time busy lifestyle having time constraints make consumers look for convenience food, and this was the best opportunity that was seized by the frozen food companies to provide food and gain momentum.
Madan says that while the industry size for frozen foods is still small, ITC sees this as a big opportunity.
Sachid Madan, narrates, “We believe that the consumer is now putting greater value to his/her time and is looking for personalized offering. He is willing to spend a little more, but still seeks value. In the western markets, the frozen section continues to grow as the range of offering is expanding and we feel that the same will happen in India provided we create products that meet the consumer expectations”.
Madan adds that the ITC brand propose to be the answer to the questions like : ‘aaj kya khaoge? [PP: What will you eat today?] and Kuch naya ho jaye? [PP: Got something new?] ‘. ITC’s proposition is to have a wide range of products that allows consumers to have a pick and choice with different variant every day or with every meal.
Keeping the requirement of a consumer in mind, the pricing has been kept affordable. So for instance, a vegetable kebab platter of eight pieces costs Rs. 64 while the non-vegetarian kebab platter is priced at Rs. 86.
When it comes to HORECA (Hotel/Restaurant/Café), this sector has been under cost pressure, space and time pressure. Catering to this segment, ITC has created products that enhances the chef’s capabilities, reduces complexity while still providing space for customization.
There are products priced at Re. 1 each, while a wide range of products are priced between Rs. 3 to 5 each and differentiated products like the mutton grill patty are more expensive.
General Perception:
Generally, among the varied consumers there stands a big challenge for frozen foods companies with the thought that frozen food is not healthy and does not tastes good and is often deep-fried.
Madan counters this perception by explaining, “There is a misconception among the general population that frozen food is unhealthy and the popular way of cooking, which is deep frying only added to this perception. It is a different matter that frozen food can be even healthier than fresh provided it is freshly frozen, which is soon after the harvest or preparation and this in fact locks in freshness, taste and nutrition.”
“ITC has crafted its range to help change this perception by providing a number of nutritious, preservative-free and delicious choices, using advanced individual quick frozen technology, which can be cooked in multiple ways, including baking, pan fry, tawa fry, shallow fry, air fry and of course even deep fry as the consumer may like it. Most of the retail snacks do not have any artificial preservatives, except for the preservative which may be in the cheese-based products. All of this has been done without compromising on taste which as we all know is of paramount importance to the consumer.”
Expanding The Consumer Base
Frozen food companies basically targeted families along kids with the products like French fries, burgers and other kid friendly snacks. But ITC is planning to expand its expansive range of products where various cooking methods that can be applied and multiple occasions where the products can be consumed to expand the consumer database.
Sachid Madan stressed, “We have some things for everyone. Our products can be a part of the school tiffin, a house party, a light meal or something to add zing to your dinner or lunch. Expanding the target, audience and thus the market is one of the key roles ITC intends to play.”
Promoting Approach
Promoting frozen food products which have been introduced under the ITC Master Chef brand, is to be a one-stop solution for innovative, tasty snacks for different occasions. The products are positioned as healthier, which can be prepared in a jiffy.
Sachid Madan says, “The core marketing philosophy of the brand is to help the consumer re-imagine the frozen foods category. The consumer is continuously changing and looking for high quality, tasty and nutritious food at home but without too much effort. Our product offering and marketing is targeted to provide the solution by removing the misconceptions in the consumer’s mind.”
“We are empowering the consumer to use these products as is or create their own unique dishes, as an option to the time consuming making from scratch food or an expensive cold or soggy home delivery. As families get smaller and the consumer wants to have two pieces of hara bhara or chicken galauti kebab what better way does he have to get it quickly and economically?.”
Madan replied that the initial feedback from consumers has been encouraging and the chief objective for the company is to get the consumer to taste the products. Currently, the focus is on interacting with consumers at retail stores, exhibitions, events and offices. In addition, the brand is using Digital, Print, influencers and food bloggers to spread the word across.
Presently, the consumer packs are available in 11 major cities, while the food service packs are available in nearly 60 cities. With strategic planning in coming years, ITC’s expansion plans includes spreading in Tier II and III towns.
Facing the challenges
Inspite of high demand for frozen foods, access and easy availability of the product remains a challenge among consumer and market on the whole.
Madan expressed, “The biggest challenge for ITC’s frozen foods is limited points of availability for the consumer as only a fraction of the outlets carry frozen snacks and even those that do, carry a limited range.”
Being a part of food industry means that competition is not just in the frozen food segment and includes snacks, every edible product and even eating moments, be it eating out or at home and as the market size is currently small, Madan added that competition is not a major concern as the opportunity to expand is so large.
He believes that the industry needs to work towards unlocking the potential of the category by providing healthier, tastier and wider range of products that are more easily accessible and can be cooked in different ways which helps free the valuable time of consumers.
Considering the future of frozen foods industry, Madan forecasts, ““The market is expected to more than double over the next five years led by changing consumer habits and perceptions and the availability of better products. Initially, food service will grow faster, but retail will soon follow as the consumer experiences the quality and range available in the market. Over the next three years, we are targeting a 15% to 20% share in the product segments we operate in.”