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Gourmet Foods: Indian Brands Are Flourishing In Import-Dominated Market

A growing demand for global foods has prompted brands to foray into this segment, and they’re only getting started.

By Anjali Palod
New Update

A decade ago, satisfying your craving for Korean ramen meant either making it from scratch or finding a Korean restaurant that served the dish. Finding a good Korean restaurant or the ingredients for the ramen would have been a challenge. 

Fast forward to the present, and the scenario has changed remarkably. The prospect of wanting to eat ramen isn’t as complicated. You could easily order instant authentic Korean ramen with the click of a button and it would arrive at your doorstep within minutes or a couple of hours, depending on where in India you are located. You could easily pair the ramen with freshly bottled kimchi — a traditional Korean fermented side dish — to go with. 

Just walk into any supermarket, especially in metro cities, and you'll find a section called 'World Foods' or 'Gourmet.' It's got ingredients, condiments, and packaged food from around the world. Even regular online grocery stores now stock these items, not just the high-end ones like Foodhall or Nature’s Basket, which were known for stocking such ingredients. 

Kanika Kalra, partner at McKinsey told The Core, "People in India are understanding and appreciating different palettes. This has translated to the ingredients market for these different cuisines also growing quite rapidly."

The international grocery market has been dominated by imported brands for most part of the decade. A growing demand for groceries from different parts of the globe has prompted Indian brands to foray into this market. And they are flourishing. 

Chirag Kenia, the founder of online gourmet product store Urban Platter, told The Core, “The overall global foods market is still highly import-dependent. About 80%, I’d say. But, we will see this number going down and down.” 

Homegrown Indian brands are entering the global gourmet grocery market in three ways: making products like cheese and chocolates in India, getting raw materials from abroad (like chilis and truffles) and turning them into different products, or getting finished products (like kimchi and almonds) from other countries, then packaging and branding them in India.

These brands are largely focusing on their promise of freshness and availability across channels to capture the market. “Instances of old and expired imported products being sold in India have made consumers wary of them and there has also been a grey channel that has made authenticity questionable,” Kanika Kalra, Partner at McKinsey told The Core. 

Indians Want Their Gourmet Groceries

Global gourmet groceries have made their way into the grocery baskets of well-travelled, experimental and well-informed consumers. Cuisines like Italian, Japanese and Korean are becoming increasingly popular with restaurants popping up across cities and there’s also a fair influence of pop culture and web shows. Even for good old Chinese, consumers are looking for more authentic ingredients and tastes. 

This has translated into a demand for products such as kimchi, ramen noodles, rice cakes, miso, chilli and truffle oils. 

Between 2020 and 2021 alone, India’s South Korean ramen imports almost tripled from Rs 10.44 crore to Rs 30.63 crore, according to The Economic Times

Akshay Kumar, who founded the Bombay Gourmet Grocery Market which has 15 stores in Mumbai, told The Core that demand for global gourmet groceries like truffles, Korean food ingredients, plant-based dairy products is rising by as much as 75% year-on-year. 

Popular Indian companies that have now forayed into this segment include Masterchow, The Urban Platter Store, Bombucha, The Spotted Cow, Sorrentina, Terosso Truffles and so on.

Kenia said that they only began manufacturing some products in India in 2015 when they observed a sustained growth in demand for imported food products. Urban Platter, which also imports and repackages some products under their own brand name, is growing 30-35% year-on-year said Kenia. In FY22 the company did Rs 45 Cr in revenue.

Mumbai-based Terosso Truffles, a one-stop truffle products shop that started in 2020, has been growing at 45-50% y-o-y and works with a 15-20% profit margin, founder Forum Kapadia told The Core.

The Import-Homegrown Ratio

Barring a few like KS Foods and Ching’s Secret, imported brands still dominate the market. 

Kumar said that in his grocery stores, 70% of the products are imported while 30% are from Indian brands. However, Indian brands were recording higher growth at 50-60% as compared to the imported products that recorded 30-35% growth. 

“Imported products are difficult to procure for a couple of reasons. There are region and ingredient restrictions sometimes and this is on top of import duties which make them more expensive to stock in India. So we like to keep a mix of imported and Indian products,” Kumar said.

Originally, Urban Platter started by stocking mostly imported brands. Now, 95% of its stocks are its own products. The remaining 5% features selected products such as chocolates from local brands. Among their products, 60% are imported and then packaged in India. The other 40% are locally produced. Spices, seasonings, sauces and condiments are some categories produced locally. The company plans to make dairy alternatives like almond milk and oat milk in India as well.  

Importing products, packaging and branding under their own name improves profit margins by 20% as opposed to just selling imported brands, Kedia said. 

Freshness Is The USP 

Indians have traditionally veered towards fresh ingredients over bottled ones. That is a factor that often attracts Indian consumers towards homegrown options. 

"When presented with an imported and homegrown option that are at par in terms of quality, Indians are much more likely to pick the homegrown option with the perception that it is fresher," Kalra said. 

Kapadia from Terosso Truffles seconds this. She adds that her brands’ products are priced at par with market leader for truffle products, Urbani. She said, “We rely on our small batch production and we also do not have too many overhead costs. This helps us moderate the prices and still turn a profit.”

Consumers care less about where their product is coming from and more about how easily it is available. Having local production and supply chains allows companies like Urban Platter to quickly replenish all points of sale and ensure availability across physical and online stores. 

With global gourmet groceries, there is enough curiosity but a lack of knowledge. Imported brands are not able to directly converse with the consumers and help them understand how to use their products. Indian brands, on the other hand, are able to speak to their customers and in a language that they understand too.

“We routinely help customers get familiarised with the products by holding workshops, where they can use these products first-hand before commiting with a purchase and there’s a lot of content being created on social media too,” Kenia said.

Kenia has also made certain adjustments to their products to better suit changing consumer needs and the Indian palette. There was a growing demand for products with less sugar, less salt, which the brand’s local production and relationships with international manufacturers allowed them to make. 

Consumer Perception

But, do consumers perceive Indian global gourmet grocery brands to be at par with imported products?

Kanika said, “If Indians can trust iPhones made in India, food is a lower bar to cross. When it comes to certain food items that need a source of credibility, however, where it comes from does matter. For example, macadamia nuts and California nuts must come from those regions.”

A McKinsey survey, Kalra said, had revealed that the urban nuclear families, with both partners typically working were the ones most experimental with their food. These are the consumers that global gourmet grocery manufacturers are targeting. In addition to this, affluent and well-travelled consumers across tier-2 cities are also a part of their addressable market. 

Pranoti Gargate, analyst at Future Market Insights, adds that to lure these consumers and for sustained growth Indian brands must greatly focus on consistent quality in terms of taste, texture, and aroma while scaling production. She said, “Navigating stringent regulatory compliance, obtaining necessary certifications, and adhering to labeling laws, especially concerning imported ingredients or novel food products are some additional challenges that Indian brands in this segment may face.”


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