With the savoury snacks market alone expected to grow at a CAGR of 13% to reach a total of Rs 1.23 trillion ($16.36 billion approx.) by 2026, India has been witnessing compounding growth in the snacking industry.
As per a report by Godrej Yummiez analysing snack consumption across 9 cities, reasons such as prioritisation of taste, indulgence and increased convenience in a busy lifestyle are the top reasons for this underlying growth in consumption.
The Shift Towards Healthy Snacking
India has been witnessing a paradigm shift in consumer tastes with a pivot towards healthy snacking options. A large chunk of this shift is attributed to the pandemic with consumers now opting for low sodium and high fibre alternatives.
Based on recent consensus by Indian Express, more than 85% of Indian consumers now wish to consume healthier snacks and maintain a balance between nutritional value and taste. Additionally, according to Avendus Capital, there will be a 2x increase in per capita spending on healthy foods and snacks by Indian households by 2026. This will further position the industry to reach a market size of $30 billion in the next 5 years.
Apart from Covid, this shift has been a result of changing priorities of the Indian millennial and GenZ consumers from eating unhealthy to preferring healthier snacks like health bars, yogurt, makhana etc, across the country.
Based on this bullish outlook, major snack companies and startups have responded by including a greater number of staples such as rice, oats and ragi for product formulations and snacks including multigrain chips, yoga bars, nut-based snacks etc.
Another significant reason behind this accelerated demand is the lifestyle change that is gaining prominence in tier 1 and 2 cities with a huge chunk of the working population substituting 3 regular meals with healthy snacks and smaller portions at regular intervals. This, in turn, has contributed to a 14% YoY increase in Indian afternoon snackers for 2022 as compared to 2021.
This broad trend is also reflected in the rise of options for ready-made healthy Indian snacks such as poha, upma etc, by companies and conglomerates today so that consumers can keep pace with a fast lifestyle driven by convenience.
Lifestyle changes and rising obesity rates are driving demand for healthy snacks in India. Obesity is correlated with diabetes and heart diseases, prompting people to eat healthier.
The high usage of preservatives, especially in snacks such as potato chips with more than 2% increase in preservatives used over the years, has prompted a shift towards healthy snacking. Alternatives to traditionally fried potato chips and snacks have gained popularity in India in recent years.
The industry received its first major boost with the launch of Too Yumm by RPG back in 2017. Since then, healthier alternatives to potato chips in the form of baked/popped chips have been gaining prominence. Tagz and BRB are examples of two such successful brands specialising in the popped and baked chips category that have been able to carve a niche for themselves in this industry.
More and more people are opting for healthy diet snack options such as dried fruits to satisfy their cravings. There has also been a 10% YoY increase in makhana consumption across metro cities in India. This can also be seen as a rapidly emerging sub-trend.
Among the top 1% of premium consumers across India, nutritious snack alternatives in the form of healthy rice cakes (brown rice cakes), health bars with dark chocolate and almonds exclusively and premium dates have also been gaining prominence.
With the healthy snacking segment forming just 10% of India’s current snacking segment, the industry presents itself as the next big thing in the F&B industry and has the potential to host a large number of startups in the space. With conglomerates like Nestle committing to a 5-10% decrease in the salt and sugar content across their snacks, it has become evident that the trend of healthy snacking in India is expected to grow by leaps and bounds.
Nutritious Snacking in India: A Trend That's Here to Stay
With more than 500 Internet-first, healthy snacking startups across India currently; the nutritious snacking space in Tier 3/4 cities with relatively limited awareness presents untapped potential in the space.
The Indian healthy snacking industry is at the cusp of a major transformation. With the growing awareness of the benefits of healthy snacking backed by an increasing availability of innovative and delicious options, the industry is poised for exponential growth in the coming years.
This presents a significant opportunity for startups to tap into this rapidly growing market.