The demand for healthy and functional foods is growing, with the COVID-19 pandemic playing a huge part in this. When the pandemic hit, many migrant workers migrated back to their towns and villages and brought their urban preferences home with them.
The mandate for healthier food choices is being fulfilled by a robust e-commerce network building up in India. And owing to the pandemic, consumers have picked up healthier eating habits.
Dabur India marketing head Mayank Kumar said, “When people migrated from big cities like Bengaluru to smaller towns, they carried the habit of consuming healthy and functional foods. However, what has helped people in these places adapt to such consumption habits is the reach of e-commerce. The penetration of e-commerce beyond the metros found the right consumers who had sampled such products and were now ordering them online. This helped consumers in smaller towns to sustain the habit of consuming functional and healthy foods.
According to Euromonitor International, “Indian cities are the new demand hotspots for packaged food brand owners. The heightened interest in self-care and increased home cooking has brought significant attention to food, while consumers’ reverse migration to tier-2 and tier-3 cities has influenced and urbanized food trends in smaller cities and towns. It has therefore become essential for companies to reassess and reformulate their product and channel strategies to remain competitive.
While tier-1 cities continue to remain strategically important and priority markets, food companies must explore growing opportunities in tier-2 cities as adoption of different packaged food categories increases. The urbanization of food trends in tier-2 and tier-3 cities, and consumers’ willingness to pay more for foods with health claims will create fresh growth pockets for newer brands. Additionally, multinationals will also be able to extend the distribution of their premium and healthier packaged food product portfolios beyond tier-1 cities.