Is the Ready-to Eat( RTE) category going to be affected by inflation/price rise ? Why is that RTE brands are not targeting the bachelors ?
According to ITC press release on March 2008, Indian RTE market is worth around Rs 80-100 crore. The market is somewhat in a stagnant state and the growth is minimal.
The general price rise that we see today will have an impact on most of the food product segments. The Indian middleclass segment spends heavily on food products. Hence when there is a price rise, there is a chance that the consumers will tighten the purse-strings .
In the case of RTE category, the segment is not price sensitive. As you are aware of , RTE products are highly priced and is often targeting the upper middle and higher segments of the society. Hence a general price rise may not have an impact on this segment.
Unlike the western market, RTE brands have not been able to break into Indian consumers kitchen in a big way. It is more of a cultural issue aggravated by the price factor. Even though many Indian households are ripe for such a category, the brands have not been able to make an impact. Many middleclass have now women working which makes this category relevant. But there is a cultural preference for freshly cooked food.
The price and taste is also a dampener. The value proposition of RTE products are not attractive for an average Indian consumer. In my experience, the packs does not have enough contents to justify the price. This has prevented many repeat purchases. Again , the same taste of the food also inhibits customers to checkout the products often. For non-vegetarian dishes, consumers are doubtful whether the food will remain unspoilt for such a long period. Hence there is a inhibition of buying these foods regularly.
Regarding the bachelor segment, RTE cannot target this segment because of two reasons :
For the bachelor segment, I doubt whether the size is big enough to be considered as a target segment.
Second, this segment mostly prefers fast food joints and restaurants and RTE brands maynot be able to bring in a new habit of cooking oneself among these consumers.
The general price rise that we see today will have an impact on most of the food product segments. The Indian middleclass segment spends heavily on food products. Hence when there is a price rise, there is a chance that the consumers will tighten the purse-strings .
In the case of RTE category, the segment is not price sensitive. As you are aware of , RTE products are highly priced and is often targeting the upper middle and higher segments of the society. Hence a general price rise may not have an impact on this segment.
Unlike the western market, RTE brands have not been able to break into Indian consumers kitchen in a big way. It is more of a cultural issue aggravated by the price factor. Even though many Indian households are ripe for such a category, the brands have not been able to make an impact. Many middleclass have now women working which makes this category relevant. But there is a cultural preference for freshly cooked food.
The price and taste is also a dampener. The value proposition of RTE products are not attractive for an average Indian consumer. In my experience, the packs does not have enough contents to justify the price. This has prevented many repeat purchases. Again , the same taste of the food also inhibits customers to checkout the products often. For non-vegetarian dishes, consumers are doubtful whether the food will remain unspoilt for such a long period. Hence there is a inhibition of buying these foods regularly.
Regarding the bachelor segment, RTE cannot target this segment because of two reasons :
For the bachelor segment, I doubt whether the size is big enough to be considered as a target segment.
Second, this segment mostly prefers fast food joints and restaurants and RTE brands maynot be able to bring in a new habit of cooking oneself among these consumers.
hi sir..
ReplyDeletethnx for the info...
I buy ur justification that this segment wont be affected...
But is it also because none of the major players in this segment have taken a charge n revived the industry like a market leader shud...like say what Good Night did to liquidators where there wasnt a NEED for a product as such...
2.Another question...although not very significant but according to ur previous article http://marketingpractice.blogspot.com/search?q=mtr
the curry paste business is around 5 cr...what do u say about this section?I believe companies like MTR can concentrate more on this segment as it negates the reasons why they dont buy RTE meals (like health issues and pricing to an extent)
Plz comment...sorry to bug u!! :-)