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NEW CONSUMER INSIGHT (NCI) SERIES

Consumer Trends in India:


Opportunities in Health and Wellness
Food & Beverages
Capitalizing on the growing awareness and a need for preventive healthcare
through diet and nutrition
Reference Code: DMCM4726
Publication Date: April 2010

OVERVIEW

Catalyst
Obesity and heart disease are headline issues across the world. Healthcare costs rise ever upwards. It is almost universally
accepted that healthy eating is crucial regardless of advances in healthcare treatments. These trends are fuelling demand
growth in India for health and wellness food and drinks. Rapid increases in awareness and income levels further fuel this
growth meaning that the opportunity is vast. The challenge is creating the right formulation and marketing mix to tap the
potential in a consumer landscape with complex decision drivers and resulting behaviors.

Summary
This report aims to identify the current Indian consumer attitudes towards health and wellness, as well as the drivers behind
their food and beverage product choices. It also outlines key focus areas for food and drink manufacturers in terms of
product development, packaging and positioning, to profit from current and future opportunities in the wake of this health
and wellness revolution. Datamonitor’s analysis in this regard is based on the following core findings:

• Food and beverage products delivering health and wellness benefits have potential for robust growth in India. In
capitalizing on this growth, however, it is important to recognize that differing segments of Indian consumers
exist, each with a differing health and wellness outlook.

• Marketers are developing healthier product formulations to differentiate and to address Indians’ increasing
lifestyle-related health concerns. Indian women more actively buy and consume health-aligned food and
beverages although there are attitudinal similarities among the genders. Younger generation Indians' primary
health concern is their physical appearance although concerns evolve with age.

• Ingredient-linked health claims exert differing degrees of influence on Indians’ food and beverage choices. Indian
consumers perceive freshness claims to be more influential than authentic/natural claims. Indian women more

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Brief Title

thoroughly understand and use nutritional information from reference groups as well as packaging to aid product
choice.

• Healthier food and drinks should be made available in convenient and innovative package formats to keep up
with the changing consumption patterns. While focusing on developing functional or fortified food and
beverages, manufacturers should also explore opportunities in dietary supplements. Product development
should also address the emerging health and wellness needs of a fast-growing, aging demographic in India.

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Table of Contents

TABLE OF CONTENTS
Overview 1

Catalyst 1

Summary 1

THE FUTURE DECODED 8

INTRODUCTION: Food and beverage products delivering health and wellness benefits have potential for
robust growth in India 8

TREND: Differing segments of Indian consumers exist, each with a differing health and wellness outlook 9

TREND: Marketers are developing healthier product formulations to differentiate themselves and to address
Indians’ increasing lifestyle-related health concerns 20

TREND: There has been an increased focus on development of organic food and beverages in India 34

INSIGHT: Indian women more actively buy and consume health-aligned food and beverages although there
are attitudinal similarities among the genders 39

INSIGHT: Younger generation Indians' primary health concern is their physical appearance although
concerns evolve with age 42

INSIGHT: Ingredient-linked health claims exert differing degrees of influence on Indians’ food and beverage
choices 45

INSIGHT: Indian consumers perceive freshness claims to be more influential than authentic/natural claims 49

INSIGHT: Indian women more thoroughly understand and use nutritional information from reference groups
as well as packaging to aid product choice 52

INSIGHT: Taste aspect of healthier variants of food and beverages is often a greater concern to Indian men 56

ACTION POINTS 58

ACTION: Health food and drinks should be made available in convenient and innovative package formats to
keep up with the changing consumption patterns 58

ACTION: While focusing on developing functional or fortified food and beverages, manufacturers should also
explore opportunities in dietary supplements 61

ACTION: Product development should address the emerging health and wellness needs of a fast-growing,
aging demographic in India 64

APPENDIX 67

Methodology 67

Further reading and references 68

Ask the analyst 69

Datamonitor consulting 69

Disclaimer 69

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Table of Contents

TABLE OF FIGURES
Figure 1: Health and wellness food and beverages in India are broadly classified into ‘good for
you’ and ‘better for you’ products 9

Figure 2: Differing segments of Indian consumers exist, each with a differing health and wellness
outlook 10

Figure 3: Information areas to assess Indian consumers’ attitude towards health and wellness,
and their purchase and consumption behavior of food and drinks 11

Figure 4: More Indian men can be classified as Easy Going regarding their attitude towards
health and wellness 12

Figure 5: Companies need to work on innovative product concept and engaging campaigns to
build long-term consumer awareness and demand for health foods 13

Figure 6: Health Seekers in India are marginally skewed towards 25-49 year olds and males 14

Figure 7: Detailed nutritional information and ingredient-linked health benefits on product


packaging helps build consumer awareness among Health Seekers in India, as seen with Sundrop Oil14

Figure 8: There are more female health Skeptics, a segment also disproportionately skewed
towards more mature consumers 15

Figure 9: Targeted communication on product packaging to differing consumer cohorts can help
address specified product claim skepticism that is prevalent among some Indians 16

Figure 10: Indians between the ages of 35-49 constitute the highest percentage of Food Actives 17

Figure 11: Highlighting the presence of ‘real’, ‘natural’ and traditional ingredients is important for
connecting with Indian consumers who are focused on the quality of their dietary intake 18

Figure 12: There are more females in India who fall under the ‘Health buffs’ consumer segment 19

Figure 13: Those Indians with a high level of health pre-occupation will be potentially more
attracted to unique product formulations such as probiotic ice cream 19

Figure 14: Indians are confronted with an increasing number of lifestyle-related health concerns 21

Figure 15: Packaged milk market in India is a fast growing segment, with variants targeted across
age groups and health concerns related to heart and bone & joint health 23

Figure 16: Owing to product formulation changes, cooking oil products in India now tout heart
health benefits 25

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Table of Contents

Figure 17: Healthier variants of bread and breakfast cereals have begun to show increased
adoption and potential for growth among Indian consumers 27

Figure 18: The hot beverages market in India is fast evolving to address age, gender and lifestyle-
specific nutritional needs 28

Figure 19: The fruit-based beverage market in India has created a lot of category awareness
regarding health benefits, and presents opportunities for innovation in flavors and packaging formats30

Figure 20: The energy and sports drinks market in India is still in a nascent stage and offers
opportunities for more brands and variants, at affordable price points 31

Figure 21: Biscuits are emerging as the most affordable source of nutrition in India, with many
products being launched with a cereal-based formulation and addressing digestive concerns 33

Figure 22: The comparatively small organic markets in China, South Korea and India are expected
to grow rapidly over the next five years 36

Figure 23: Organic variants are increasingly available across several categories in the Indian
packaged food market 37

Figure 24: Manufacturers are including details of organic certification on product labeling to
increase consumer awareness and understanding 37

Figure 25: The Indian organic food and beverage market became more regulated with the
introduction of the mandatory logo of certification by the NSOP 38

Figure 26: Across age groups, Indian men and women show similar levels of interests in food and
beverages which help improve general health and wellbeing 40

Figure 27: Compared to men, Indian women are more interested and actively buy functional food
and beverages with added health benefits 40

Figure 28: Indian women across all age groups make a more conscious attempt to eat healthily
compared to the men 41

Figure 29: Desire to eat healthily among Indian consumers shows a multi-stage adoption pattern 42

Figure 30: Younger Indian men look for appearance-linked health benefits from food and
beverages, but with age, benefits related to ‘physical energy and stamina’ gain more importance 44

Figure 31: Younger Indian women look for appearance-linked health benefits from food and
beverages, but with age, benefits related to ‘heart health’ gain more importance 44

Figure 32: Level of influence of several ingredient-linked product claims over Indian consumers
when making food and beverage choices 46

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Figure 33: Indian consumers across all age groups are more influenced by freshness claims
rather than natural/organic or authentic/home-made/original claims 50

Figure 34: An increasing number of Indian men and women are making a conscious effort to buy
organic food and drinks regularly 51

Figure 35: Both Indian men and women show a keen interest in reading or hearing about the
relationship between food and health 53

Figure 36: Indian consumers remain unsure about whether they feel food and health information
is confusing and conflicting 54

Figure 37: More Indian women than men use nutritional information on product packaging to help
make food and drink choices 55

Figure 38: Across all age groups, more Indian men than women believe that healthy food is not
tasty and enjoyable 57

Figure 39: The design, size and labeling of health food and beverage packages need to be planned
with portion control in mind, and packs should promote nutritional benefits that are easy to
understand 59

Figure 40: Create innovative packaging that allows for apportioned intake and re-use, to increase
the ease of consumption of on-the-go health and wellness food and beverages 60

Figure 41: Marketing to educate consumers on the benefits of a healthy diet is being explored by
firms such as Quaker Oats to drive long-term demand in India 61

Figure 42: Focus on creating product packaging and formulation which makes it interesting for
kids to voluntarily include healthy food and beverages as part of their dietary intake 64

Figure 43: Address the latent need for formulating food and beverages keeping in mind the health
concerns and the attributes of the fast-growing, aging demographic in India 66

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TABLE OF TABLES
Table 1: Per capita expenditure on fresh and long-life packaged milk in India is currently $3.4 and
has grown at a CAGR of 9% over the period 2003-2009 22

Table 2: Per capita expenditure on oils in India is currently $1.7 and has grown at a CAGR of 9%
over the period 2003-2009 24

Table 3: Per capita expenditure on bread and breakfast cereals in India is currently just $0.5 and
has grown at a CAGR of 11% over the period 2003-2009 26

Table 4: Per capita expenditure on juices in India is currently $0.4 and has grown at a CAGR of
17% over the period 2003-2009 29

Table 5: Per capita expenditure on biscuits in India is currently $1.3 and has grown at a CAGR of
8% over the period 2003-2009 32

Table 6: Organic food and non-alcoholic beverage spend in five Asia Pacific countries (US$m), by
country and product format, 2004-2014 35

Table 7: Ingredient-linked health claims have a low and similar level of influence on Indian men’s
choice of food and beverages 47

Table 8: Ingredient-linked health claims have a high level of influence on Indian women’s choice of
food and beverages compared to men 48

Table 9: Key nutrient deficiencies among Indian children (2005-06) 63

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The Future Decoded

THE FUTURE DECODED

INTRODUCTION: Food and beverage products delivering health and wellness benefits have
potential for robust growth in India
A key area of focus for Datamonitor’s research in recent years has been to understand the implications of rising health and
wellness awareness among consumers across the world. The trend is significantly shaping product choices across
industries and territories.

• In India, the FMCG industry has shown tremendous resilience even in the wake of a recent economic
downturn, with rising demand for health and beverages touting health and wellness benefits – the total
size of the Indian food and beverages market was approximately $293bn in 2009, of which packaged food and
beverages account for approximately 7.3% or $21.6bn. Of this, health and wellness foods accounted for close to
$725m, growing annually by more than 25%. The most important factors driving the ongoing strong growth of
health and wellness products include the rising health awareness among Indians and the widening availability of
information from various media. Adopting a more proactive attitude towards health is actually now seen by many
Indians as the most important step in securing one’s future. This is creating an aspirational value in the minds of
the majority of urban Indians to ensure that they look good and feel good. Since Indians increasingly strive to
stay healthy by placing more emphasis on their diet, there is scope for companies to respond to the growing
demand by offering food and beverages that can address several existing and latent health concerns (which
may have been suppressed due to more restrictive incomes/wealth). This is reflected in many manufacturers’
outlooks:

“Our opinion is that India has reached that level of affluence where people are in the market for more convenience, more
variety, especially in the health and wellness areas.”

Executive director of the consumer case division at Dabur India, commenting on the opportunities in the Indian
health and wellness food industry in November 2008

“Currently there are primarily three growth drivers within the packaged food segment in India. First, aspirational products
where consumers look for branding and quality assurance. Second, urbanized convenience foods such as ready-to-cook
and ready-to-eat products. Third, health and wellness products, given the hectic lifestyle most consumers lead today.”

Chief executive of ITC Foods on ITC’s increased focus on health- and wellness-oriented products

• Like in more developed markets, a spectrum of healthy offerings is emerging ranging from a ‘good for
you’ and ‘better for you’ positioning – these are modified with the introduction of certain changes in the
formulation of processed food and beverages, and are to a great extent influenced by marketers’ claims. As far
as ‘good for you’ foods are concerned, they now have added functionality leading to claims such as ‘more iron’,

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The Future Decoded

‘more vitamins and minerals’ and so on. In the case of ‘better for you’ foods, claims that certain ingredients have
been reduced such as ‘low sugar’, ‘low trans-fats’ and ‘low calories’ are successful in reducing the guilt often
associated with the consumption of these products by presenting a favorable image to customers. Figure 1
further elucidates this classification, with some relevant examples.

Figure 1: Health and wellness food and beverages in India are broadly classified into ‘good for you’ and
‘better for you’ products

Health and wellness foods in India

Good for you Better for you

Functional or fortified
products Naturally good products e.g., low-fat snacks, low
cholesterol oils, sugar-f ree
e.g., iron fortified breakfast e.g., 100% fruit juices, oat flakes biscuits
cereals, and high fiber biscuits

Source: Datamonitor analysis DATAMONITOR

As Indians’ awareness about product formulation and associated health benefits further increases, manufacturers can
capitalize on the opportunity by introducing added value (functional) food and beverage products with specific health
claims. This also extends to the development of dietary supplements, which are preparations intended to provide nutrients
such as vitamins, minerals, fiber, fatty acids or amino acids that may be missing from a person's diet, or not consumed in a
sufficient quantity. The following report analysis captures the trends and insights from consumer attitudes towards purchase
and consumption of health and wellness foods, and how food and beverage manufacturers can capitalize on the emerging
opportunities. Analysis begins by looking at the different consumer health segments.

TREND: Differing segments of Indian consumers exist, each with a differing health and
wellness outlook
Though there has been a conscious effort to adopt better lifestyles and shift to a healthier dietary intake, Indians show
marked differences in their attitudes towards buying health foods across categories. At one end of the spectrum, there are
consumers who only show a marginal inclination towards consumption of healthy foods, and the other end, there are
consumers who look at eating healthy to be of utmost importance and a route to proactive protection. These consumer
attitudes are shaped by income segments, educational background and nature of occupation, among several others.

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The Future Decoded

Figure 2 (below) shows the broad archetypes of Indian consumer segments, depending on their attitudes towards health
and wellness and the food they consume on a sustained basis owing to perceived health benefits. Figure 2 also lists the
kind of food and drinks that are consumed by each consumer segment. These categories are cumulative in that consumers
move up through the phases of category adoption as their health concerns and understanding become more sophisticated.

Figure 2: Differing segments of Indian consumers exist, each with a differing health and wellness outlook

Cumulative
Characteristics of consume r segment category
adoption
-Early adopting opi nion lea de rs driving the longer- te rm diffusion of a Fortified water,
given health t rend Organic and
Health - Active ly s eek inf orma tion related to hea lth and wel lness P robiotic
Buffs - Adopt a more holistic outlook; mot iv at ed by a des ire f or balance d foods and
diet , e xercise , and nutrition Confec ti onery

Phases of health and wellness category


adoption amo ng Indian consumers
- Lat er adopters than ‘Health Buff s’, but still ahea d of the mass ma rket
- Foc us on their die ta ry inta ke to s tay hea lthy
Te a, Milk,
Food - Belie ve ingredie nts are ke y to flav or & health bene fits
Brea d and
- Atta ch high import anc e to quality
Actives S avory sna cks
- Motiva ted by tas te , t ex ture a nd benefit s of ‘rea l’ food
- Seek long term solution through healthy f oods

- Do not easily believe in ‘em erging' he alth trends/product offerings


Juices,
- Are unsure of their personal healt h and we llness needs and how to
Biscuits and
Skeptics addre ss them
Break fast
- Are occ asionally drive n by a ffordability
c ereals
- Are indiffere nt rega rding most health is sues

-Are just beginning to explore options for a hea lthier dietary intake
Oils,
- Are e asily influe nced by heal th fa ds
Health - Us ually buy products which are aggre ssi vely markete d and
Spreadable
Seekers fats and
positioned for their hea lth be nefit s
Convalesc ence
- View on healt h issues is driven by popular opinions

- Don't s ee the ne ed f or health a nd wellnes s produc ts


- Are ha ppy with imm ediate gratific ation
Easy - Les s li kely to shift to a healthier diet unless m edica lly esse ntial --
Going - Are driven by ta st e, e motion and experience
-Healt h and wellne ss conce rns are purel y ne ed ba sed

Source: Datamonitor analysis DATAMONITOR

These above consumer segments have been modelled using select responses from Datamonitor’s consumer survey
conducted among Indian consumers in 2009 (see Figure 3).

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The Future Decoded

Figure 3: Information areas to assess Indian consumers’ attitude towards health and wellness, and their
purchase and consumption behavior of food and drinks

1 How interested are you in food and beverages in improve your general
health and wellbeing?
2 Generally, to what extent are you trying to do the following?
- Make conscious attempts to eat healthily
- Buy food and beverage products on the basis of value-for-money
- Buy functional food and beverage products with added health benefits
- Use nutritional information on product packaging to help make food and
drink choices
- Use dietary supplements to support your overall dietary intake
- Ensure you consume as much fresh food as possible
- Foll ow a specific diet plan
3 Please indicate to what extent do you agree or disagree with the following
statements
- “Reading or hearing about the relationship between food and health is of
interest to me”
- “I feel that food and health information is confusing and conflicting”
- “I don't worry about food, I just eat what I like”

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

The largest segment of the Indian population can be classified as ‘Easy Going’ with regards to health

A large part of the Indian population can be classified as ‘Easy Going’, since they are not particularly concerned or
convinced about the specific need for health and wellness food and beverages. They do not make an attempt to look for or
purchase product with health claims, and their product choices are sensory/enjoyment led, i.e., driven by taste/flavor. Given
their characteristics, it will take a sustained effort over a period of time to make them aware of the long term ill effects of
having an unhealthy diet and the importance of shifting to products that offer health benefits on a sustained basis. Figure 4
offers a more detailed overview of this consumer segment.

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The Future Decoded

Figure 4: More Indian men can be classified as Easy Going regarding their attitude towards health and
wellness

Easy Going

Lifestyle attributes: Consumers who qualif y as Easy Going usually do not engage in physical exercise
Gender distribution
or make a conscious attempt to eat healthy . They do not consider changing their dietary intake unless and
until it is medically advised to do so. They are largely driven by the tas te and experience of eating.

Shopping behaviour: Usually buy products on the basis of f lavours and look f or variety while shopping
f or f ood and beverages. They also tend to eat f ood from outside the home based on their pref erences, but
not based on the health perception associated with thos e f oods.

Media consumption habits: Do not follow health related information on the television or other media,
unless they have a s pecif ic illness/medical condition which requires to do so. They track information
70% 30% related to f ood more on the basis of what they like rather than its health benefits or perils.

Age distribution Must buy: They do not buy any product specifically for its health positioning.

Composite (Age and Gender) distribution

18-24 25-34 35-49 50+


Male Female Male Female Male Female Male Female
23% <1% 20% 17% 10% 10% 17% 3%

Source: Datamonitor analysis; Datamonitor Consumer Survey 2009 DATAMONITOR

Companies aiming to create sustained ‘health’ equity should therefore aim at building a long-term campaign in order to
create awareness among consumers. Britannia is one company in India realizing the need to invest in a positioning on a
sustained basis in order to change consumer consumption habits and product choices. During the 2010 new-year, they
launched a ‘Health starter kit’ which comprised of the NutriChoice range of biscuits along with a seven-day pre-activated
gym pass, a gym sipper bottle and a healthy diet chart (as shown in Figure 5), for $2. The company’s desire to position
Britannia NutriChoice on a lifestyle and wellness platform was evident from the communication during the launch:

“It is our New Year resolution to make India healthier. Several consumers have shared with us that their resolutions are
sincere but somehow they don't get started because they don't find the right motivator. Fitness is 60% diet and 40%
exercise and that is why the Health Starter Kit was conceived to facilitate the start of both healthy eating and exercise. INR
100 is the actual value of the biscuits while the rest of the kit is a pure health activation bonus from Britannia NutriChoice -
people's health buddy. We wish all our customers a very happy and healthy new year and are confident that the kit will help
them activate their resolution to be healthy.”

Neeraj Chandra, COO, Britannia Industries Ltd, speaking at the launch of Britannia's Nutrichoice Health Starter Kit.

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The Future Decoded

Figure 5: Companies need to work on innovative product concept and engaging campaigns to build long-
term consumer awareness and demand for health foods

Source: Elephant Design website DATAMONITOR

‘Health Seekers’ are the fastest growing segment of Indian consumers

Consumers associated with this segment are beginning to look for healthier alternatives to their current food and beverage
intake, also with an attempt to read and understand information related to health and wellness through several media. On a
sustained basis such consumers tend to consume healthier versions of products such as oils, juices and spreadable fats
(butter/margarine) to start with (which can also be associated with the aggressive marketing efforts by the manufacturers of
these products). Figure 6 offers a more detailed overview of this consumer segment.

This set of consumers presents a significant opportunity for most of the marketers; however, they are prone to losing faith
in marketing claims over a period of time and become indifferent in addressing their health concerns if they do not notice a
significant change in the way they feel or look. Figure 7 shows an example of product packaging of Sundrop’s Nutrilite oil,
which has detailed nutritional information and health claims to cater to consumers who are looking to make an informed
choice.

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The Future Decoded

Figure 6: Health Seekers in India are marginally skewed towards 25-49 year olds and males

Health Seekers
Lifestyle attributes: Consumers of this archetype are those who have started paying attention to their
health and wellness concerns only recently. This is ref lecting in their initiatives to engage in some
Gender distribution phys ical exercise, changes in dietary intake, etc., but sustainability remains a question. They are easily
influenced by secondary opinions and adv ices regarding health.

Shopping behaviour: Usually buy products which are advertised and marketed aggressiv ely f or the
health and wellness claims. Make an attempt to explore new product launches, while spending time on in-
store product promotion literature as well.

Media consumption habits: Spend a lot of time on reading health related inf ormation f rom whichever
sourc e possible. May not have specific media s ources which they track on a regular basis.
58% 42%

Must buy: They usually begin to move to a healthy lif estyle by reducing the f at and oil content in their
Age distribution dietary intake. So they buy products such as healthier oils and spreadable f ats. Apart from this, they buy
conv alescence products such as malt and choc olate based drinks.

Composite (Age and Gender) distribution

18-24 25-34 35-49 50+


Male Female Male Female Male Female Male Female
10% 7% 17% 12% 17% 15% 14% 7%

Source: Datamonitor analysis; Datamonitor Consumer Survey 2009 DATAMONITOR

Figure 7: Detailed nutritional information and ingredient-linked health benefits on product packaging helps
build consumer awareness among Health Seekers in India, as seen with Sundrop Oil

Sundrop NutriLite product packaging has detailed nutritional


information and ingredient linked health claims, which help in
building awareness among health seekers.

Source: Datamonitor analysis DATAMONITOR

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The Future Decoded

Skeptics are aware of the benefits of consumption of health and wellness products

Since Skeptics are unsure of how to address their health concerns, they proactively seek information related to how a
certain product’s health claims would benefit them personally. The key to communicating with these consumers lies in clear
product positioning and communication on product labels to substantiate claims.

Most products in categories such as juices, biscuits and breakfast cereals have overcome this stage of consumer
skepticism related to the brands’ health claims. Unless the category has matured to a level where the formulation and
claims have established credibility and acceptance, Skeptics are unlikely to buy products in that category with health claims
on a sustained basis. Figure 8 offers a more detailed overview of this consumer segment.

Figure 8: There are more female health Skeptics, a segment also disproportionately skewed towards more
mature consumers

Skeptics
Lifestyle attributes: Pref er following a dietary pattern which they hav e been used to. Dietary intake is not
heavily inf luenc ed by health concerns. Since they are unsure about how to address their health concerns
Gender distribution and do not react to passing health f ads. They are also neutral on mos t health issues, and rarely engage in
physical exercise f rom the perspective of proactive health protection.

Shopping behaviour: Consumers of this archety pe do not proactively look for health and wellness
c laims while shopping f or their food and beverages. They look f or af f ordable nutrition and at times are not
immediately inf luenced by point of sale promotions for products.

Media consumption habits: Do not actively read or f ollow health related inf ormation. Since they do not
trust manuf acturers ’ claims strongly, they read articles which explain the truths and myths associated with
47% 53% health, product benefits , etc., to aid their buying process at times.

Age distribution Must buy: They buy products only certain ‘tried and tested’ categories where the products’ health claims
have gained mass ac ceptance, s uch as, juices, biscuits and breakf ast cereals.

Composite (Age and Gender) distribution

18-24 25-34 35-49 50+


Male Female Male Female Male Female Male Female
6% 9% 11% 14% 15% 16% 15% 13%

Source: Datamonitor analysis; Datamonitor Consumer Survey 2009 DATAMONITOR

Variants of products such as Complan Family carry detailed descriptions of how the product benefits different members of
the family by virtue of formulation (see Figure 9 below). Such efforts can help overcome the limitations of broad health
claims made by some brands, which at times do not fall in line with the expectations of consumers, leading them to become
skeptics.

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The Future Decoded

Figure 9: Targeted communication on product packaging to differing consumer cohorts can help address
specified product claim skepticism that is prevalent among some Indians

Front of packaging reads: Back of packaging reads:

Easy to digest, No Nutrition for every member


added sugar, No fat, of the family and has specific
Zero cholesterol, Easy ingredient linked claims to address
to mix. personal health concerns.

Source: Datamonitor Analysis DATAMONITOR

‘Food Actives’ are health aware, but do not readily embrace health fads

Food Actives rely heavily on 'natural' and 'real' ingredients, and are highly quality-conscious. These individuals take time to
make a considered product choice and, therefore, their brand loyalty is typically higher. Though this segment consume
health and wellness food and beverages across many categories on a sustained basis, passing health fads often do not
impact them since they believe in seeking long-term solutions through their diet. Figure 10 offers a more detailed overview
of this consumer segment.

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The Future Decoded

Figure 10: Indians between the ages of 35-49 constitute the highest percentage of Food Actives

Food Actives
Lifestyle attributes: Late adopters of health trends. Consumers of this archetype f ocus on ensuring
v ariety and quality of their diet f or a healthy lif estyle. Believe in eating f resh and natural f ood as f ar as
Gender distribution poss ible. Their objective is to s eek long-term solutions to their health c oncerns through changes in their
diet. Clos ely f ollow and understand dif f erent f acets of health related inf ormation to make an informed
c hoice.

Shopping behaviour: Buy as much f resh f ood as poss ible (inc ludes f ruits and vegetables). Look f or tags
s uch as ‘100% Natural’, ‘No added preservatives or colors’, etc. Assess all products f or their flavor and
long term, proven health benef its. Ensure quality of all possible sources of dietary intake.

Media consumption habits: Read opinion articles on the latest health and wellness f ads, long term
44% 56% benefits of consumption of certain f oods and f ollowing a certain diet regimen. Watch television shows
related to dif f erent cuisines and the use of dif ferent kinds of ingredients.

Age distribution
Must buy: They are beginning to buy products such as herbal tea, low-f at milk, low-fat snacks and multi-
grain bread on a regular basis, apart f rom f ruit juices, breakfast cereals, etc.

Composite (Age and Gender) distribution

18-24 25-34 35-49 50+


Male Female Male Female Male Female Male Female
1% 3% 9% 13% 18% 25% 17% 15%

Source: Datamonitor analysis; Datamonitor Consumer Survey 2009 DATAMONITOR

Manufacturers’ claims which are built through tangible changes in product formulation and have gained acceptance to be
credible, drive purchase decisions of Food Actives. The increase in the presence of 'natural' ingredients in many food and
beverages, with claims such as ‘real fruit pieces’, ‘with 100% real vegetables’ and so on, are positively impacting the uptake
of health foods among Food Actives. Since these consumers also place high importance and trust in the goodness of
traditional Indian ingredients such as turmeric, tulsi, etc., manufacturers are leveraging upon this as well in their product
formulations.

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The Future Decoded

Figure 11: Highlighting the presence of ‘real’, ‘natural’ and traditional ingredients is important for connecting
with Indian consumers who are focused on the quality of their dietary intake

HUL – Knorr Soup Bagrry’s – Fruit & Fibre Naturell – Rite Bite Nutrition bar
Product packaging reads, with Muesli Product labeling has information on
100% real vegetables Product labeling has information traditional ayurvedic ingredients
on “Crunchy oat clusters with which have been used in product
Honey, Almond, Raisins, Apple, formulation – “Shankhppushpi,
Pineapple and Strawberry” Brahmi, Ashvagendha”.

Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

‘Health Buffs’ make up a very small portion of consumers in India: they have a holistic view of health and
wellness, looking to maintain both a healthy diet and physical fitness

This consumer segment proactively seek information on global health and wellness trends and are prepared to accept, as
well as experiment with, products carrying health claims across all food and beverages categories. Figure 12 offers a more
detailed overview of this consumer segment.

Since they are among the first to try new products that are launched in the market, Health Buffs play the role of opinion
leaders, seeking and contributing to information related to ingredients, health concerns and ways to address them through
all possible media. Innovation in product formulation and packaging is important in attracting this segment. Figure 13
highlights a product recently launched in India with an innovative formulation and health claims likely to appeal to Indian
‘Health Buffs’.

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The Future Decoded

Figure 12: There are more females in India who fall under the ‘Health buffs’ consumer segment

Health Buffs Lifestyle attributes: Since they are very partic ular about their diet for the day, they eat in moderation,
ensure that they never skip a meal and have fresh f ruits and vegetables whenever possible. Women of
this archetype are concerned about the health of the family as well, and use low-choles terol oil f or
Gender distribution c ooking, f or instance. They regular engage in s ome physic al exerc ise, such as, walking and/or a workout.
Discus s topics related to health and wellness with their peer group. Keep abreast with new health f ood
launches in the market.

Shopping behaviour: Keenly look f or inf ormation in-store and on produc t packaging to aid product
c hoice. They visit specialty food stores, gourmet/imported health f ood and organic f ood sections while
s hopping.

Media consumption habits: Read magazines like Health and Nutrition, and Stay fit, apart from staying
18% 82% up-to-date with inf ormation in the newspaper on diet-plans, tips on exerc ise and f itness , etc. Avidly f ollow
television shows related to health and wellness, on channels like NDTV Good Times, Dis covery Trav el
and Living, etc.
Age distribution
Must buy: Produc ts such as probiotic dahi, multi-grain bread, low-fat snacks, slim-milk and f ruit juices,
regularly f eature on their shopping lists, apart f rom a host of other health foods

Composite (Age and Gender) distribution

18-24 25-34 35-49 50+


Male Female Male Female Male Female Male Female
<1% 12% <1% 18% 12% 24% 6% 29%

Source: Datamonitor Analysis; Datamonitor Consumer Survey 2009 DATAMONITOR

Figure 13: Those Indians with a high level of health pre-occupation will be potentially more attracted to
unique product formulations such as probiotic ice cream

Amul - Sugar Free Probiotic ice cream


The company claims, the probiotic ice cream is enriched with live
beneficial cultures to help achieve overall well being and health.
More specifically, it is said to improve immunity and digestion
Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

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The Future Decoded

Key takeouts and implications: health driven marketing in India needs to appropriately adapted to the
differing consumer segments that exist

• Though Indian consumers are shifting to a healthier dietary intake on the whole, there exists a difference
among consumer groups in attitudes towards purchase and consumption of food and drink products
with a health and wellness positioning. Depending on the consumers’ attitude towards proactive health
care, educational and lifestyle background and income levels, they can be classified into archetypes
such as Easy Going, Health Seekers, Skeptics, Food Actives and Health Buffs, each having a different
attitude towards ‘eating healthy’.

• The resultant product choices across these archetypes are also different across categories.
Manufacturers need to clearly identify the consumer segments they wish to target, before designing the
formulation, packaging and the marketing communication, in order to sell the right kind of value
proposition.

TREND: Marketers are developing healthier product formulations to differentiate


themselves and to address Indians’ increasing lifestyle-related health concerns
In recent years there has been a change in Indians’ attitudes and behavior around regulating their diets and lifestyles to
stay healthy. The effort required to stay healthy is further compounded as a result of longer work schedules and a constant
need to multi-task to manage both domestic and professional responsibilities efficiently. The outcome of such a stress-
ridden lifestyle is the rise in the incidence of lifestyle-related disorders and health concerns that were not so common even
a decade ago. This is making Indian consumers be more careful about their dietary choices and consumers are taking
recourse in eating healthy as a route to preventive healthcare. Currently, the key areas of medical concern emerging
among urban Indians are as shown in Figure 13.

These concerns can be addressed through a combination of changes in a person’s lifestyle, diet and fitness regimen. There
are an increasing number of Indians who now take up some kind of physical exercise on a regular basis, but still most
Indians resort to changes in the dietary intake in order to address their health concerns. According to a Nielsen survey in
2008, only 20% of Indians exercise on a regular basis, with an equal percentage doing so once or twice on a weekly basis.
And, for most Indians, walking was the usual form of exercise. Unsurprisingly, the survey also found that 69% of Indians
are changing their diet plans to lose weight. Capitalizing on these changing consumer attitudes, manufacturers have
responded by launching food and beverage which have modified formulations, targeted at providing solutions to Indians’
health concerns.

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The Future Decoded

Figure 14: Indians are confronted with an increasing number of lifestyle-related health concerns

H eart diseases

Dige stive
Sleeples sness
disor ders

Lack of energy Obesity


and stamina

Depression Bone
and anxiety and joint pain

Source: Datamonitor Analysis DATAMONITOR

Milk products increasingly target the health concerns of Indian consumers

The consumption of milk and other dairy products such as yoghurt and ghee are a regular part of most Indians’ daily dietary
intake. The intake of each of these is associated with a certain health benefit. For instance, the intake of milk is considered
important since it aids in strengthening bone and joint development, especially in children. Adults in India usually consume
milk with their tea, coffee or other hot drinks, but not because of the nutritive value of the milk itself. This attitude towards
milk consumption has undergone a major change with Indians of all ages now beginning to consume milk which has is low-
fat, helps reduce blood cholesterol, etc. For example, Arokya milk (a product manufactured by Hatsun Agro in India)
launched a low-fat milk variant with the campaign focusing on the claim and the tagline “Nothing Removed. Nothing
Added”. This helped to almost double sales volume.

Most of the distribution of milk in India until recently was in the loose form and through the unorganized market. However,
because of the added benefits manufacturers are now offering, packaged milk is fast catching up and most major organized
retailers have a separate section for packaged milk variants. The fresh and long-life liquid milk market in India is currently
valued at $4.3bn. The per capita expenditure in India on packaged milk (fresh and long-life) is currently $3.4, and has
grown at a CAGR of 9% during the period 2003-2009 (as shown in Table 1).This is the highest among the BRIC economies
and even developed nations such as the UK and US.

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The Future Decoded

Table 1: Per capita expenditure on fresh and long-life packaged milk in India is currently $3.4 and has
grown at a CAGR of 9% over the period 2003-2009

(figures in $)
Country 2003 2006 2009 CAGR (2003-2009)

India 2.0 2.3 3.4 9%


Brazil 31.0 36.5 42.3 5%
China 3.9 4.5 5.2 5%
UK 86.3 85.6 110.8 4%
Russia 10.3 11.2 12.4 3%
US 50.2 52.0 53.5 1%

Source: Datamonitor’s Market Data Analytics (MDA) DATAMONITOR

This increased per capita expenditure on packaged milk can be largely attributed to some recent developments in product
formulation such as those illustrated in Figure 15. The following is a brief description of those products and their positioning.

• Arokya milk, manufactured by Hatsun Agro – claims to be India’s first and only pathogenic bacteria clarified
milk, with 50% more butterfat making it thicker and creamier than normal milk. The product is primarily targeted
at growing children.

• Nesvita Pro-heart, manufactured by Nestle – this is marketed as supporting heart health because it contains
omega-3 fatty acid, which helps manage cholesterol levels in the blood, and is 98% fat-free. This milk is targeted
at people who want to reduce the risks associated with an unhealthy heart.

• Sofit, manufactured by Godrej – this was the first soy milk drink to be launched in India. The product claims to
be cholesterol-free, low in fat and free of preservatives. Since soymilk is also lactose-free, it is suitable for
people who are lactose intolerant. The firm's literature claims that the product is suitable for lactating mothers,
geriatrics and diabetics as well.

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The Future Decoded

Figure 15: Packaged milk market in India is a fast growing segment, with variants targeted across age groups
and health concerns related to heart and bone & joint health

Nestle - Nesvita Pro Heart Godrej - Sofit Hatsun Foods - Arokya


India’s first and only pathogenic
Packaging reads, “Omega 3 - Packaging reads, “Cholesterol
bacteria clarified milk. 4.5% butter
helps manage cholesterol. 98% fat free, low fat. No preservatives.”
fat, which is 50% more than
free.”
regular toned milk.

Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

Oils and fats are being re-formulated and re-positioned to address health concerns

Oils are among the most frequently used ingredient in Indian cooking and are top on the list of ‘things to avoid’ in most
consumers’ minds. However, this outlook towards oil has changed somewhat in recent years. The media coverage on
topics related to heart health and the perils of consuming oily foods on a regular basis has led to Indians attempting to
restrict the consumption of oily foods and reduce the overall use of oil in cooking as well. Also, this shift can be attributed
to the marketers' aggressive positioning of oil brands with claims pertaining to health and wellbeing. In the process, the
consumption of other compound cooking fats (CCF), such as dalda, has drastically reduced. The sustained growth of the
oils market in India owing to the marketers’ effort is clearly reflected in the increasing per capita expenditure in India on oils
(as shown in Table 2). The oils market in India has grown at a CAGR of 9% over the period 2003-2009, and this is the
highest among the BRIC economies and even developed nations such as the UK and US.

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The Future Decoded

Table 2: Per capita expenditure on oils in India is currently $1.7 and has grown at a CAGR of 9% over the
period 2003-2009

(figures in $)

Country 2003 2006 2009 CAGR (2003-2009)

India 1.0 1.3 1.7 9%


UK 6.0 7.5 9.4 8%
China 10.1 12.0 14.4 6%
Russia 11.7 13.6 15.8 5%
US 9.3 10.1 11.5 4%
Brazil 20.6 22.7 25.4 4%

Source: Datamonitor’s Market Data Analytics (MDA) DATAMONITOR

Amidst efforts for healthier formulations and marketing efforts, most of the communications are centered on cardiac
problems. Apart from the traditionally used oils in India such as mustard, gingelly and sunflower oil, the popularity of oil
from sources such as corn, rice bran, soya bean and olives is also growing. Many new varieties of oils have lesser fat and
cholesterol content, but in 2009, a study conducted by the Centre for Science and Environment (CSE) in India, has
revealed that dangerous levels of trans-fats exist even now in most brands of cooking oils in India. Consumers are hence
shifting to some of these ’new-generation’ oils so that they need not reduce their oil consumption, but can start using
variants with lower cholesterol and added health benefits.

Examples of cooking oils launched in India with a health and wellness positioning are given below (and pictured in Figure
16 below).

• Saffola Active, manufactured by Marico – this oil is made from rice bran and soya beans, and provides
omega-3 and oryzanol, two compounds known for promoting heart health. Also containing vitamin E, the product
is targeted at consumers who do not wish to compromise on sensory benefits (i.e. the taste or smell of their oil),
but want a healthy alternative.

• Sundrop Nutrilite, manufactured by Agro Tech Foods – a 100% soybean oil which is fortified with vitamins A
and D. It is rich in omega-3 and omega-6, essential fatty acids that are known to boost the immune system of the
body. Sundrop Nutrilite is marketed as “a family consuming foods cooked with this oil stay active and healthy
throughout the day”.

• Cutis Olive Oil, manufactured by Amrutanjan – this is extracted from the first cold-pressing of olives and its
high percentage of antioxidants help to control blood cholesterol levels. The oil also helps in the assimilation of
vitamins A, D, E and K. This is targeted at consumers looking at reducing the risk of heart disease, a remedy for
ulcer and gastritis and controlling blood pressure.

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The Future Decoded

Figure 16: Owing to product formulation changes, cooking oil products in India now tout heart health benefits

Marico – Saffola Active AgroTech Foods – Sundrop Amrutanjan – Cutis Olive oil
Nutrilite
Made from a combination of This olive oil contains vitamins
rice bran and soya bean oil. 100% soya-bean oil. Provides A, D, E and K. Helps aid
Contains Vitamin E and upto 25% requirement of daily digestion and control blood
Omega 3. vitamins A, D & E. Contains cholesterol levels.
Omega 3 and 6.

Source: Datamonitor Product Launch Analytics DATAMONITOR

Bread and breakfast cereal claims are moving beyond basic nutrition in a trend that mirrors Western
markets

Urban Indians’ consumption of breakfast cereals has increased over the last few years, mainly because lifestyle changes
have created the need for convenient breakfast options. The idea of making breakfast the most wholesome and nutritious
meal of the day is being actively promoted and hence there have been many products launched that are easy to consume
and claim to deliver a myriad of health benefits. Heightened sense of health consciousness has driven the demand for
healthier variants of both breads and breakfast cereals, with product claims often including ‘multi-grain’, ‘high-fiber’, ’rich in
iron’, ‘rich in vitamins, minerals and essential nutrients’ and ‘low fat and cholesterol’, among others. This is indicative of the
shift from a positioning of providing mere basic nutrition.

The per capita expenditure on bread and breakfast cereals in India is currently $0.5, and is relatively low when compared to
developed economies such as the US and the UK but shows promising growth owing to the fact that these categories have
grown at a CAGR of 11% over the period 2003-2009, as shown in Table 3.

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The Future Decoded

Table 3: Per capita expenditure on bread and breakfast cereals in India is currently just $0.5 and has grown
at a CAGR of 11% over the period 2003-2009

(figures in $)
Country 2003 2006 2009 CAGR (2003-2009)

China 0.4 0.6 0.9 13%


India 0.3 0.4 0.5 11%
Russia 29.2 37.7 45.2 8%
Brazil 3.4 3.8 4.4 5%
UK 113.7 118.5 122.9 1%
US 66.4 68.6 70.4 1%

Source: Datamonitor Market Data Analytics DATAMONITOR

This increased per capita expenditure is also a result of increased variety of bread and breakfast cereals available in the
market, many of them with specific health benefits, as shown in Figure 17.

• Oat Bran Hi Fiber cereal, manufactured by Bagrry’s – this breakfast cereal claims to contain zero cholesterol
and trans-fatty acids, but plenty of fiber, protein and iron, and is thus targeted at consumers looking at
addressing both their digestive and heart health concerns.

• Modern Wheatamin, manufactured by HUL – this is wheat-based brown bread fortified with extra vitamins and
boasting a low content of fat and cholesterol. This bread is targeted at people who are watching their weight as a
healthier alternative to white sandwich bread.

• Rite Bite Work-Out Gymnasium Bar, manufactured by Naturell – this is a protein-rich cereal bar that is also
high in fiber, vitamins, mineral, and amino acids and has zero cholesterol and trans-fats. It is marketed at
consumers who are focused on getting all the essential nutrition necessary to compliment their fitness routine, in
a convenient format and packaging.

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The Future Decoded

Figure 17: Healthier variants of bread and breakfast cereals have begun to show increased adoption and
potential for growth among Indian consumers

Bagrry’s - Oat Bran HUL - Modern Wheatamin Rite Bite Workout - Gymnasium Bar
bread Blended with 20 percent protein, 21
Packaging reads, “Zero
vitamins and minerals, is high in fiber,
cholesterol. Zero trans fatty Wheat-based brown bread,
electrolytes and amino acids. Zero
acids. High in dietary fibre. High fortified with extra vitamins.
cholesterol and trans fats.
in protein. High in iron.”

Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

There has been an especially high amount of health-aligned NPD activity in the hot beverages market
(excluding coffee)

Hot beverage mixes have always been considered as a source of nutrition among Indians. The market consisted of a large
number of regional product offerings and home-made solutions which used ingredients perceived to have certain immunity
building and overall health benefits. Given the rising inclination among consumers to embrace products with a health and
wellness positioning, product categories such as tea, and market segments such as malt-based, chocolate-based and other
hot drink mixes have seen increased product activity in the recent past.

Since India is a country in which a large percentage of people drink tea, several companies have found it an attractive
proposition to launch different varieties of tea with health benefits, which include relaxing, digestive, laxative, slimming and
detoxifying and de-stressing properties. Also, herbal and green tea are being actively promoted for their naturally healthy
properties for immunity-building and detoxification, respectively.

Other hot beverage mixes have also started offering more nutritional value, extra iron, calcium and minerals, all in varying
combinations, targeted at specific age groups and requirements. Examples of tea and other hot beverage mixes which
claim to address some health concerns, are given below (and pictured in Figure 18 below).

• DigesTea, manufactured by Himalaya – this is part of a range of herbal teas, each of which is targeted at a
specific health concern. This particular variant is supposed to aid in digestion, and can be taken by those who
suffer from indigestion, flatulence and belching.

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The Future Decoded

• Women’s Horlicks, manufactured by GSK – this is a variant of the popular beverage Horlicks that is
specifically targeted at addressing the nutritional needs of the modern Indian women. While the product aims at
fulfilling nutritional and energy requirements for women, it also helps in improving bone and skin health.

• Bournvita Li’l Champs, manufactured by Cadbury’s – this product contains DHA, marketed as being vital for
brain and vision development in the formative years of childhood. It is also supplemented with whey protein
concentrate, which not only increases overall protein content, but also enhances muscle development and
immunity in children. It is presented as a nutritional supplement specifically for kids between the ages of two and
five.

Figure 18: The hot beverages market in India is fast evolving to address age, gender and lifestyle-specific
nutritional needs

Himalaya - DigesTea GSK - Women’s Horlicks Cadbury’s - Bournvita Li’l champs


No added sugar, rich in No added sugar, rich in milk protein,
Herbal tea which aids in
milk protein, low fat. low fat. Presented as a nutritional
post-meal digestion.
Addresses a plethora of supplement, to aid muscle
health concerns a typical development and immunity building
woman faces. in children.

Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

Fruit-based beverages have renewed health-based credibility following the activity of prominent brands

For a number of years, the positioning of fruit-based beverages in India was that of refreshment and was perceived as
healthy only when compared to carbonates. The category took on a more explicit health and wellness positioning only after
brands such as Real and Tropicana launched in the market. The percentage content of fruit content in fruit-based
beverages has created multiple segments within the category. The fruit-based beverage category has three different kinds
of offerings:

• Fruit drink (less than 20% fruit pulp content) – examples include Frooti, Real Twist, and Tropicana Twister.
Fruit drinks are generally positioned as healthier alternatives to other carbonates and have some extra nutrients
added to the formulation.

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The Future Decoded

• Fruit nectar (20–85% fruit pulp content) – examples include Real Mango and other flavors such as Litchi,
Guava and Tropicana Twirl. Fruit nectars are generally positioned for children and adults, to be included in their
daily intake, and claim to provide a significant proportion of the daily recommended intake of vitamins, minerals
and other essential nutritional components of one’s diet.

• Fruit juice (more than 85% fruit pulp content) – examples include Real Activ, Tropicana Premium and Saint.
Fruit juices are usually positioned as not containing added chemicals and preservatives, have variants such as
‘low-sugar’, and are targeted at adults who are particularly desirous that their fruit-based beverage’s taste and
formulation should be as pure and real as possible.

The reach and availability of these products is becoming more expansive, and there is an increasing tendency among
Indians to include fruit-based beverages as part of their diet on a regular basis. The fact that many of the fruit juices do not
contain added sugar helps appropriate it for diabetics as well. These changes have helped fuel the growth of several juices
categories in India and the current market size of juices stands at $564m. Though the per capita expenditure on juices in
India is still very low, at $0.4, it has grown at a CAGR of 17% over the period 2003-2009, (as shown in Table 4), which is
the highest among the BRIC economies and even developed nations such as the UK and US.

Table 4: Per capita expenditure on juices in India is currently $0.4 and has grown at a CAGR of 17% over the
period 2003-2009

(figures in $)
Country 2003 2006 2009 CAGR (2003-2009)

India 0.2 0.3 0.4 17%


Russia 15.4 23.1 31.6 13%
UK 77.8 102.0 138.8 10%
China 1.5 1.8 2.1 6%
Brazil 2.1 2.4 2.7 5%
US 71.0 70.3 69.7 <0%

Source: Datamonitor’s Market Data Analytics (MDA) DATAMONITOR

The strong growth presented in Table 4 has a correlation with the aggressive marketing efforts of companies to target
consumers of different age groups with fruit-based beverages addressing several need states. Figure 19 highlights few of
these product launches in India, along with health claims and positioning.

• Tropicana Twister, manufactured by PepsiCo – this is a fruit drink available in apple and orange flavors, and is
targeted at young adults that want 'natural' refreshment on the go.

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The Future Decoded

• Real Nature Fresh, manufactured by Dabur – this is a fruit nectar containing 'natural' fruit pulp and the amount of
vitamins that the body requires in a day to remain active. This variant of Real juice is specifically targeted at
schoolchildren to ensure that they get their recommended nutritional intake.

• Saint Juice, manufactured by Parle Agro – this was the first 100% fruit juice to be launched in the Indian market. It
contains no added sugar and preservatives, and is targeted at consumers who are looking for the best quality of
ingredients combined with the taste and flavor of 'natural' juice.

Figure 19: The fruit-based beverage market in India has created a lot of category awareness regarding health
benefits, and presents opportunities for innovation in flavors and packaging formats

PepsiCo - Tropicana Twister Dabur - Real Nature Fresh Parle Agro - Saint juice
Positioned as a fruit drink, the Positioned as a fruit beverage. Packaging reads, “100% juice.
product claims to be a natural Product packaging reads, Nothing else. No added sugar
refreshment on-the-go. “Original goodness.” or preservatives.”

Source: Datamonitor Product Launch Analytics DATAMONITOR

Sports and energy drinks is a relatively new segment in India but shows good growth potential

Sports and energy drinks are targeted at an emerging set of Indians who want beverage supplements to boost their energy
levels during fitness workouts and throughout the day. The awareness regarding the need or the efficacy of these products
is still, and therefore is a significant challenge to tap into the huge potential these categories offer. As far as energy drinks
are concerned, companies such as Red Bull have invested heavily on marketing initiatives and on-ground activations to
build consumer understanding of the category over the years. Lately, there have been a number of Indian companies
launching products as well, with formulations being unique to appeal to the local tastes and preferences. The current
market size of energy drinks in India is $200m but has grown at a CAGR of 78% over the period 2003-2009, which is
essentially owing to the fact that the category was introduced in the Indian market only recently.

It is important to understand how the Indian market has been shaped up over the years, owing to the marketing efforts of
companies like Red Bull. In 2001, Coca Cola launched an energy drink called ‘Shock’ in the Indian market, but the brand
failed to strike a chord with the Indian consumers at that point of time. In 2009, the company launched another energy drink

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The Future Decoded

called ‘Burn’, which was already a successful brand in some other markets. The company learnt from the marketing efforts
of others who had built their presence in this category, and positioned their product clearly for the young and social active
adults, with product distribution only through pubs, clubs, resto-bars and discos.

With an increasing number of Indians focusing on physical fitness activities, sports drinks are also a fast growing category
in India. The promotions for these products are restricted to the retail outlets, and marketers need to work towards more
targeted campaigns in the future, to increase consumer awareness. The current market size of sports drinks in India is $9m
and has grown manifold over the period 2003-2009.

Nonetheless, there have been quite a few product launches in the Indian market across these two categories over the last
few years, and some examples of these are featured in Figure 20.

• Gatorade, manufactured by PepsiCo – an energy drink containing a formulation of electrolytes, carbohydrates


and flavors that is supposed to "Rehydrate, Replenish and Refuel". It is targeted at consumers wanting hydration
with nutritional value, before and after physical activity, so that energy levels are sustained for a longer duration.

• Cloud 9, manufactured by Goldwin Healthcare – Cloud 9 uses 'natural' energy boosters such as Guarana,
Ginseng Taurine and Pomegranate, and B-group vitamins to support its users' health. It originally came only in
the standard pomegranate flavor, but is not available in wild berry and grapes flavors.

• Current, manufactured by Energy Beverages – Current is enriched with vitamins (B2, B3, B5, B6 and B12) for
endurance and sustained energy; Glucose and Guarana that for an instant boost of energy; and several other
essential and nutritional ingredients that help enhance alertness, increase concentration, improve stamina and
replenish energy levels.

Figure 20: The energy and sports drinks market in India is still in a nascent stage and offers opportunities for
more brands and variants, at affordable price points

PepsiCo - Gatorade Goldwin Healthcare - Cloud 9 Energy beverages - Current


Product claims to “Rehydrate. Positioned as India’s first natural Product claims, “Enriched with
Replenish. Refuel.” It is targeted energy drink. Contains multiple vitamins and provides
at people who engage in sports pomegranate juice and several increased alertness,
and physical fitness activities. natural energy boosters. concentration and stamina.”

Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

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The Future Decoded

The biscuit category is one of the largest in the packaged food industry in India and has seen strong
growth over the last few years, both in urban and rural markets

In India, biscuits were traditionally positioned on basis of their flavors and occasion; e.g. as a tea-time accompaniment and
consumer groups apart from children were not specifically targeted by manufacturers with a health positioning. In the recent
past however, biscuits are being positioned as a healthy snack, for between-meal consumption and even specific consumer
groups such as diabetics.

This aggressive shift in positioning has resulted in the biscuit category being been among the most dynamic categories in
terms of product launches and, according to Datamonitor’s Product Launch Analytics (PLA), in 2009 more than 440 new
products were launched in sweet and savory biscuit categories alone.

Also, according to Datamonitor’s estimates, the per capita expenditure on biscuits market in India is currently $1.3, and has
grown at a CAGR of 8% over the period 2003-2009 (as shown in Table 5). This is among the highest compared to other
BRIC countries and developed economies such as the UK and US.

Table 5: Per capita expenditure on biscuits in India is currently $1.3 and has grown at a CAGR of 8% over
the period 2003-2009

(figures in $)
Country 2003 2006 2009 CAGR (2003-2009)

Russia 7.3 9.7 12.4 9%


India 0.8 1.0 1.3 8%
China 1.5 1.7 2.0 5%
Brazil 28.0 30.6 33.1 3%
UK 56.9 59.4 61.3 1%
US 39.8 39.4 39.0 <1%

Source: Datamonitor’s Market Data Analytics (MDA) DATAMONITOR

This growth of the biscuit category is primarily driven by marketing efforts that are promoting these products as healthy,
anytime snacks and an affordable source of nutrition. The price positioning across the category ensures that there are
products targeted at different sections of the society, but even the lowest priced SKUs now claim to have a health
positioning.

Some examples of products launched in the biscuit market with health claims are presented below in Figure 21.

• Vita Marie Gold, manufactured by Britannia – these protein-rich biscuits contain 58% cereal, and are tagged
as "Vitamin rich energy biscuits". These are targeted at consumers looking for a healthy snack food or people
who lead an active lifestyle.

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The Future Decoded

• NutriValue Dibeck Health Biscuits, manufactured by Baker & Wallbrit – the formulation of this product
substitutes the relatively difficult to digest maida with the healthier ragi, which is rich in fiber, iron and calcium,
and can be digested easily as well. This product is marketed as a comprehensive meal for diabetics.

• NutriChoice 5 Grain, manufactured by Britannia – the core value proposition offered by Britannia for these
biscuits is contained in the product literature: “It is the perfect answer to those looking for healthy eating options
without as much making a compromise on taste, or convenience, or health.” They are claimed to contain five
carefully chosen cereals: oats (help reduce bad cholesterol), corn (promotes heart health), ragi (a good source
of both calcium and fiber), rice (low in fat) and wheat (provides wholesome energy).

Figure 21: Biscuits are emerging as the most affordable source of nutrition in India, with many products being
launched with a cereal-based formulation and addressing digestive concerns

Britannia - Vita Marie Gold NutriValue - Diabeck Health biscuits Britannia - NutriChoice
Positioned as ‘Vitamin Positioned as ‘A comprehen sive meal A combination of 5 healthy cereals.
enriched biscuits’. Claims to be for diabetics’. Claims to be rich in iron Positioned as a comprehensive source
protein rich and contains 58% and calcium. of wholesome nutrition - as a quick
cereals. meal or a between-meal snack.

Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

Key takeouts and implications: health and wellness orientated innovation and consumption is increasingly
evident across product categories

• With Indians placing more emphasis on a healthy diet, food and beverages with a health and wellness
positioning are showing higher adoption. This strong demand pull implies long-term growth
opportunities for products and brands with health and wellness claims in the otherwise rapidly
stagnating urban markets in India. The key emerging health concerns among Indians include diseases
of the heart and the digestive system, obesity, bone and joint pain, depression and anxiety, lack of
energy and stamina, and sleeplessness. While some of these are being aggressively addressed by
manufacturers, there are some others that still offer a scope for product development.

• In the milk category, the recent product launches have been largely centered on claims and functional
attributes such as ‘soy’, ‘fat-free’ and ‘rich in vitamins and minerals’. These products have found high

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The Future Decoded

acceptance among most Indian consumers across different age groups. There could be considerable
potential around probiotic and low-cholesterol milk in the near future.

• Manufacturers are exploiting the properties of different varieties of oils and offering combinations of
these to address specific health concerns. Having previously perceived these products to be
components of cooking that should be avoided, Indians are now realizing the benefits of using certain
healthy oils, although in regulated quantities. There marketing push for certain kinds of oils from other
geographies, such as olive oil, but since Indian consumers are used to a certain taste and flavor of oil,
there will be a resistance to any shift towards non-traditional sources of oils on a sustained basis.

• The breakfast cereals category is the most active with respect to NPD, providing nutritional value for
different age groups and specific nutritional requirements. The category has seen the entry of many
foreign players and the resurgence of a cereal-based diet. Common health and wellness claims in this
category include ‘high fiber’, ‘rich in iron, vitamins and minerals’ and promises of comprehensive
nutrition. There have been many cereal bars released lately offering similar ingredients, but in different
packaging and formats. Scope exists to introduce products with flavors suiting the Indian palate, with
specific variants targeting children, people focused on fitness and the aging demographic.

• The beverage industry in India has seen a lot of products with health and wellness claims launched in
recent years, especially in teas, fruit juices, and sports and energy drinks. Most of the efforts have
centered on innovations in product formulation by identifying the need states of specific customer
segments, such as age and lifestyle groups. Another beverage segment that will present significant
opportunities in the future is flavored and fortified water. There is a lot of scope for the introduction of
new flavors and ingredients that deliver health benefits, especially in this category. For the industry as a
whole, there is a need for more convenient, easy-to-carry packaging.

• Biscuits offer potential in India to be positioned as an affordable way of getting the right nutrition. By
virtue of their ingredients and packaging formats, products in the biscuit market are easy to digest, and
have been positioned as an ‘anytime snack’. Apart from ingredients that enhance nutritional value,
manufacturers should explore the possibilities of including immunity-building ingredients as well.

• Going forward, an emerging area of focus could be food and beverages that provide benefits centered
on beauty, detoxification, vitality and relaxation: an area relatively poorly understood and researched in
the Indian market.

TREND: There has been an increased focus on development of organic food and beverages
in India
With rising health concerns and awareness among Indian consumers, there is an increased focus on adopting ethical and
sustainable food production practices. While in a nascent stage, one of the first steps in this direction in India is the
increased industry focus on the development of food and beverages with organic ingredients. The main reason for this
interest in organic foods in the local market is that, having seen and heard the harmful effects of chemical fertilizers and
pesticides, Indian consumers are now looking for more natural nourishment.

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The Future Decoded

In a recently published global survey by Nielsen, 69% of Indians vouch for organic food and agree that it is safer than
conventionally produced food. In contrast, globally 51% consumers agree with this belief. Also, when respondents were
asked why they believe it is good to buy organic products is because, 37% of them stated that they think it is better for them
and their family.

This kind of positive sentiment towards organics is helping to drive the growth of the organics food and beverage market in
the country as shown by the data presented in Table 6 and Figure 22 below. Until recently most of the organic products
made in India were exported to more developed Western economies and Japan. Nevertheless, riding on the increasing
affluence and exposure to western food and beverage consumption trends among Indian consumers, in the recent years, a
steady rise in the demand for organic food and beverages was observed in the domestic Indian market as well.

Table 6: Organic food and non-alcoholic beverage spend in five Asia Pacific countries (US$m), by country
and product format, 2004-2014

2004 2009 2014 CAGR 2004-2009 CAGR 2009-2014

Australia Food 505 698 839 6.7% 3.8%


Beverage 31 37 42 3.6% 2.8%
Total 535 735 881 6.5% 3.7%
China Food 186 617 1,044 27.1% 11.1%
Beverage 34 114 198 27.2% 11.8%
Total 220 731 1,242 27.1% 11.2%
India Food 119 232 350 14.3% 8.6%
Beverage 22 43 66 14.4% 9.3%
Total 141 274 417 14.3% 8.7%
Japan Food 2,744 3,898 4,846 7.3% 4.4%
Beverage 333 486 650 7.9% 6.0%
Total 3,076 4,384 5,496 7.3% 4.6%
South Korea Food 72 146 233 15.3% 9.7%
Beverage 13 27 44 15.4% 10.4%
Total 85 173 277 15.3% 9.8%

Source: Datamonitor analysis DATAMONITOR

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The Future Decoded

Figure 22: The comparatively small organic markets in China, South Korea and India are expected to grow
rapidly over the next five years

Growth forecast for organic food and non-alcoholic beverages in Asia Pacific
(%CAGR), by country, 2009-2014
35%

Average CAGR
30%
China
25%
CAGR 2004-09

20% South
Korea
15% Average CAGR India

10%
Australia
5% Japan

0%
0% 2% 4% 6% 8% 10% 12% 14%
CAGR 2009-14

NB. = US$735 million

Source: Datamonitor analysis DATAMONITOR

Indian manufacturers are quickly responding to the rising domestic demand for organic foods

There are several companies in India that are beginning to offer organically grown pulses, such as lentils, across the major
retail outlets in the country. One such company is Sresta Natural Bio Products, based in Hyderabad. It has launched a
range of organic products under the brand name ‘24 letter mantra’. It has products spanning across 'fresh' fruits and
vegetables, pulses, processed food, bakery, dairy and beverages. It has also recently launched organic ready-to-eat meals
as well. The products are manufactured without the use of pesticide and chemicals, and in organic-certified farms, but the
company claims not to have compromised on the taste and quality of the product (see Figure 23).

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The Future Decoded

Figure 23: Organic variants are increasingly available across several categories in the Indian packaged food
market

24 letter ma ntra - Organic Rice 24 letter mantra - Organic Ready to Eat meal

Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

Similarly, the Darjeeling Tea Association (DTA) has also increased its focus on organic cultivation. Currently 37% of all tea
cultivation in the Himalayas is organic, but under guidelines given by European and Japanese agencies, since most of the
produce is exported. In many cases, the firm uses the product packaging extensively to communicate the benefits of
organic cultivation (see Figure 24).

Figure 24: Manufacturers are including details of organic certification on product labeling to increase
consumer awareness and understanding

Darjeeling Choice Organic Tea


Product packaging carries ‘organic’ labeling
and information on organic certification.

Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

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The Future Decoded

In the recent past, there have been significant efforts by governmental bodies in India to lend structure to
and regulate organic food production and distribution

Although there will be a rise in consumer demand for organic products in several product segments over a period of time,
the main challenge for the growth of the organic food market lies in the prerequisites needed for carrying out sustainable
organic production. This includes organic standards and certification and regulatory mechanisms. Globally there are more
than 50 standards governing organic produce and, as of 2003, there were more than 360 certification bodies across the
world. These certifying authorities were predominantly found in the EU, the US, Japan, Canada and Brazil.

While the awareness levels among consumers about the benefits of consuming such products are relatively low in India,
there has been a lot of effort made by both manufacturers and industry bodies in this regard. The Agriculture and
Processed Food Products Export Development Authority (APEDA), which operates under the central Ministry of Commerce
and Industry, is set to launch a nationwide system of traceability for organic food items in January 2010. All farm produce
that is tagged ‘organic’ will be labeled with the name of the farm, the agricultural techniques used for cultivation and so on.
This initiative is going to involve 400,000 farmers in India, and is aimed at lending more structure and credibility to organic
farming techniques in both the Indian and global markets.

The first step in India towards laying down guidelines for organic food production and certification was in 2000, when the
government released the National Standards for Organic Products (NSOP) under the National Programme for Organic
Production (NPOP). It stipulates that inspection and certification by a nationally accredited certification body is mandatory
for labeling and selling products as “organic.” NSOP also has a logo (as shown in Figure 25) that is granted as a mark of
compliance to exporters, manufacturers and processors whose products are duly certified by the accredited inspection and
certification agencies.

Figure 25: The Indian organic food and beverage market became more regulated with the introduction of the
mandatory logo of certification by the NSOP

Source: Organicindia website DATAMONITOR

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The Future Decoded

Key takeouts and implications: the organic food and beverage market in India will expand significantly in
the coming years

• There is an emerging perception among Indian consumers that health and wellness concerns now
encompass issues such as sustainable food production techniques and environmental protection. This
is as a result of the media coverage regarding the adverse effects of using synthetic and chemical
ingredients to protect crops and improve agricultural production. The issue of food safety will translate
into an increased tendency among consumers to look for products that contain ingredients produced in
accordance with certain guidelines.

• While the organic food market, in terms of both availability and production, is still in a nascent stage in
India, demand is being fueled by the fact that consumers are wary of the harmful effects of some
chemicals used in agricultural production and food processing. Some companies have introduced a
variety of pulses, staples and other food products that have been produced in accordance with the
requirements for organic food, but are positioned at a significant premium over the normal variants. In a
situation where consumers' awareness about the benefits of organic food consumption is not very high,
they are not able to rationalize the overall value proposition. This necessitates clear articulation of the
products' attributes, method of cultivation and health benefits in comparison to the normal variants in
the product category.

• There has been significant lobbying by governmental agencies to promote standardization in terms of
norms and regulations regarding organic production and the labeling of products using such
ingredients. There will be better tracking of organic produce across the country and greater consumer
trust. With such guidelines in place, the organic food market is going to become more streamlined and
create an opportunity for manufacturers to explore a first-mover advantage in sourcing such ingredients
and declaring their products officially ‘organic’ certified.

INSIGHT: Indian women more actively buy and consume health-aligned food and beverages
although there are attitudinal similarities among the genders
Indians have become more aware and discerning regarding their attitude towards a healthier lifestyle, especially in their
choice of food and drinks. The phenomenon has strengthened as a result of the recent economic uncertainty and the rising
costs of healthcare because Indians increasingly looking to invest in preventive, rather than curative health care. Also, most
do so by primarily ensuring the quality of their diet since physical fitness regimes require consistent efforts over a period of
time and are also time consuming. Eating healthily therefore, emerges as a more workable alternative in comparison.

A recent Datamonitor consumer survey among Indians revealed that both men and women show similar interest in food
and beverages targeted at improving their general health and wellbeing, but this interest translates into actively buying such
products more so for women. Across all respondents, more than 80% demonstrated interest in food and beverages offering
health and wellness benefits, with not much variation across the genders. Also, when probed whether this interest
translated into purchase of functional foods which offer added health benefits, close to 60% of the women were doing so,
compared to 38% of the men.

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The Future Decoded

Figure 26: Across age groups, Indian men and women show similar levels of interests in food and beverages
which help improve general health and wellbeing

QUESTION: How interested are you in food and beverages


providing the follow ing benefit? Im prove your general health
and w ellbeing

Male Female
100%
% of interested respondents

80%

60%

40%

20%

0%
18-24 25-34 35-49 50+
Age group

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

Figure 27: Compared to men, Indian women are more interested and actively buy functional food and
beverages with added health benefits

QUESTION: Generally, to what extent are you trying to do the


following? Buy functional food and beverage products with
added hea lth benefits

Male Female
100%
% of respondents who are interested

80%
and actively buying

60%

40%

20%

0%
18-24 25-34 35-49 50+
Age group

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

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The Future Decoded

Although Indian women are more proactively buying functional food and beverages, it is important to note that this will be
influenced by the reality that the regular grocery shopping in India is mostly done by women. Hence, even in product
categories such as, oils, malt/chocolate based beverage mixes, fruit juices, etc., though the primary buyers are the woman,
the consumption could possibly extend to the entire family.

However, to further understand if consumers make an attempt towards eating healthy, Datamonitor probed respondents on
how often they make a conscious attempt to eat healthily. The results revealed that Indian women across all age groups
make a greater conscious attempt to do so, as shown in Figure 28.

Figure 28: Indian women across all age groups make a more conscious attempt to eat healthily compared to
the men

QUESTION: Gen erally, to wh at extent are you tryin g to d o the


following? Make conscious attem pts to eat h ealthily

Male Female

100%
regular attemp t to eat healthily
% of respondents who make a

80%

60%

40%

20%

0%
18-24 25-34 35-49 50+
Age group

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

Attempts to eat healthily often follow a pattern of staggered adoption. For instance, most people tend to reduce the
consumption of products such as oils, spreadable fats, etc., to begin with, in an attempt to eat healthily. With time, this
could give way to more elaborate changes in dietary consumption and purchase patterns, as depicted in Figure 29.

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The Future Decoded

Figure 29: Desire to eat healthily among Indian consumers shows a multi-stage adoption pattern

Buying Using
Re ducing Increasing Eating p ro ducts wi th immunit y-
a ppropria te ly
prod ucts cons umption a dditiona l b uil di ng a nd
that are ric h i n fat of fruit s and sized and
h ealth othe r o ver-th e-
veg etab les well-spaced
and chole sterol b enef its, such counte r (O TC)
mea ls
a s ‘high f iber’ pro du ct s

Desire to eat heal thy

Source: Datamonitor Analysis DATAMONITOR

Key takeouts and implications: more Indians are coming to realize the value of good diet and nutrition as a
form of preventive healthcare

• Societal changes and the increasing pressure to balance personal and professional responsibilities are
making Indians realize the value of preventive healthcare, and shift to a healthier lifestyle. Both Indian
men and women are showing an equal and high level of interest in food and beverages that offer health
benefits. This interest translates into active purchase of functional food and beverages more in the case
of women than men. It is important to note that the primary buyers are women, but the consumption
could extend to the whole family. Therefore, manufacturers must ensure formulation and other
communication cues appeal to their actual target audience, but evaluate marketing and communication
efforts for their effectiveness with the female shoppers.

• Overall, Indian men make a less conscious attempt to eat healthily compared to the women. Hence, they
are more likely to be classified as ‘Easy Going’ and manufacturers need to design their product and
marketing strategy in line with the actionable areas suggested therein, to convert this set of consumers
into ‘Health Seekers’. At the same time, as Indian women are making more conscious attempts to eat
healthily, most of them can be classified as ‘Health Seekers’ or in some cases, ‘Food Actives’. At this
stage of the health and wellness evolution in India, it is vital for manufacturers to ensure product claims
are credible, since there is a high possibility of these women consumers becoming ‘Skeptics’ otherwise.

INSIGHT: Younger generation Indians' primary health concern is their physical appearance
although concerns evolve with age
Societal and professional requirements have shaped the notion in India that it is of utmost importance to be good looking in
order to feel confident. Since the current generation of Indians has had far greater exposure through several media
regarding health, beauty and fashion trends, the awareness translates into a greater desire to enhance physical
appearance compared to previous generations. Though personal care products play a major role in this process, the
advent of several food and beverage products in the market with specific health claims has pushed consumers to seek
longer term solutions through modifications in their diet. This has been actively promoted through several marketing

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The Future Decoded

campaigns in India, where there is an attempt to modify the notion of beauty being ‘skin deep’ to a longer lasting feeling of
wellbeing from within.

This has resulted in consumers becoming discerning in their food and drink choices in order to address their key personal
concerns. Since consumers do not mind experimenting, dietary patterns are not as rigid as before. This is increasing the
effort from manufacturers to position their products to target specific need states through claims such as, ‘healthier heart’,
‘stronger bones’, etc., rather than claims linked to just taste and flavor.

In the Datamonitor survey, consumers were probed regarding their interest levels regarding purchase of food and beverage
products which offered several health benefits such as,

• Improve your general health and wellbeing;

• Improve your heart health;

• Improve your digestive system health;

• Improve your appearance (e.g. skin, hair);

• Improve your immune system/support body defences;

• Improve your appetite control/ satiety by providing you with a feeling of fullness;

• Improve your bone and joint health (e.g. strengthens bones);

• Improve your physical energy or stamina;

• Improve your ability to concentrate;

• Improve your alertness;

• Improve/helps you to relax and feel calmer;

Figure 30 elaborates on the responses from male consumers across different age groups across the five key benefits they
were seeking. Men aged 18-24 were looking for appearance-linked benefits, but with age, ‘physical energy or stamina’
seemingly become a greater cause for concern.

Female respondents unsurprisingly yielded similar results as men in the age group of 18-24, but it was observed that elder
women have more or less similar levels of interest in addressing all the health concerns as they are supposed to look after
the wellbeing aspect of the entire family. However, as the number of coronary patients in India has increased over the last
decade, Indian women have become more conscious in maintaining the heart health of the entire family.

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The Future Decoded

Figure 30: Younger Indian men look for appearance-linked health benefits from food and beverages, but with
age, benefits related to ‘physical energy and stamina’ gain more importance

QUESTION: How interested are you in food and beverages


providing the following benefits? (Male respondents)
Heart health Digestive system health
Appearance Bone and joint health
Physical energy or stamina
100%
% of interested respondents

95%

90%

85%

80%

75%
18-24 25-34 35-49 50+
Age group

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

Figure 31: Younger Indian women look for appearance-linked health benefits from food and beverages, but
with age, benefits related to ‘heart health’ gain more importance

QUESTION: How interested are you in food and beverages


providing the following benefits? (Female respondents)
Heart health Digestive system health
Appearance Bone and joint health
Physical energy or stamina
100%
% of interested respondents

95%

90%

85%

80%

75%
18-24 25-34 35-49 50+
Age group

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

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The Future Decoded

Key takeouts and implications: Indians express interest in a myriad of health issues

• Given the heightened sense of personal and professional competitiveness, there is an inherent tendency
among Indians to proactively seek products and services to address their personal health concerns.
Since there is a notion developing among consumers that ingestible solutions guarantee longer health
benefits and a sense of wellbeing from within, Indians are increasingly buying food and beverages
which address specific health concerns.

• It is observed that Indian men and women in the age group of 18-24, seek appearance-linked benefits the
most. With age, men look for ‘Physical energy and stamina’ linked claims, whereas ‘Heart health’ linked
benefits appeals the most to women.

INSIGHT: Ingredient-linked health claims exert differing degrees of influence on Indians’


food and beverage choices
Most food and beverages in the Indian market are either fortified with ingredients which increase the amount of iron,
calcium, fiber, etc., to position them as healthier alternative to the standard offering or have reduced quantities of salt, fat,
cholesterol, etc. to reduce the guilt factor or risk associated with the consumption of certain products. Ingredient-linked
product positioning has become very common, since it gives manufacturers the possibility of customizing product
formulation in order to appeal to the most pressing health concerns of the consumers. Some brands like Kellogg’s have
used this as a technique to market their products to specific consumer groups. For example, Kellogg’s ‘Iron Shakti’
cornflakes claimed to contain a higher proportion of iron in the formulation, thereby providing benefits such as better
concentration and memory for children. On the other hand, Saffola, a brand from the stable of Marico, markets its ‘Saffola
Gold’ vegetable oil with claims of being free of trans fats.

In the Datamonitor survey, respondents were asked about the level of influence such ingredient-linked health claims had on
their choice of food and beverages (see Figure 32 for details). The claims have been divided into three sections in terms of
the extent to which they impact self-reported buying behavior. Among these claims it was observed that ingredient-linked
claims about heart and digestive health have the greatest influence.

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The Future Decoded

Figure 32: Level of influence of several ingredient-linked product claims over Indian consumers when making
food and beverage choices

Hi gh i nfl uence
No artif icial a ddi tives including colo rs, flavourings and
preservatives, etc.
Added/High in fiber
Whole grain
Low or reduced f at
Low or lowers cholesterol
High pr otein
Added/High vitamins and minerals

Medi um influenc e
High in ant ioxidants
Low sugar or no added sugar
Low or reduced calories
Low carbohydrate
Low or reduced salt
Al lergen-free
Added /High calcium
Low i nfl uence
Cont ains soy
High carbohydrates
Added/High Omega 3
Gluten free
Low Glycemic
Contains probiotics
Contains prebiotics

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

When these responses were further analyzed for gender-based preferences, most Indian men said that such claims did not
have a high influence on their product choices and their responses did not show much variation across several ingredients,
as shown in Table 7. Among the claims though, ‘Added/High in Fiber’ had the highest influence among ‘good for you’
product claims, and ‘No artificial additives including colours, flavourings and preservatives etc.’, among ‘better for you’
products.

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The Future Decoded

Table 7: Ingredient-linked health claims have a low and similar level of influence on Indian men’s choice of
food and beverages

% of respondents who said it % of respondents who said it


had a high influence when Ingredient removed or had a high influence when
Ingredient added
making food and beverage reduced making food and beverage
choices choices

Added/High Calcium 9% Low or reduced salt 14%


Added/High Omega 3 10% Low or reduced fat 19%
Added/High vitamins and Low sugar or no added
13% 16%
minerals sugar
Added/High in fiber 16% Low or reduced calories 14%
High protein 13% Low or lowers cholesterol 22%
No artificial additives
including colours,
Whole grain 15% 24%
flavourings and
preservatives etc.
High carbohydrates 12% Low carbohydrate 12%

(Note: All respondents are male)

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

The female respondents in the survey, however, said that they were more influenced by ingredient-linked claims in their
choice of food and beverages. Also, in the case of ‘Good for you’ product claims, they were most influenced by ‘Whole
grain’ claims, and ‘No artificial additives’ claims in the case of ‘Better for you’ products, as shown in Table 8.

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The Future Decoded

Table 8: Ingredient-linked health claims have a high level of influence on Indian women’s choice of food
and beverages compared to men

% of respondents who said it % of respondents who said it


had a high influence when Ingredient removed or had a high influence when
Ingredient added
making food and beverage reduced making food and beverage
choices choices

Added/High Calcium 12% Low or reduced salt 15%


Added/High Omega 3 14% Low or reduced fat 29%
Added/High vitamins and Low sugar or no added
16% 25%
minerals sugar
Added/High in fiber 22% Low or reduced calories 20%
High protein 19% Low or lowers cholesterol 27%
No artificial additives
including colours,
Whole grain 24% 33%
flavourings and
preservatives etc.
High carbohydrates 14% Low carbohydrate 21%

(Note: All respondents are female)

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

Key takeouts and implications: as health consciousness becomes more granular, the specifics of health
claims will increasingly dictate Indians’ product choices

• There is a rising tendency among Indian shoppers to evaluate products which have a health and
wellness positioning on the basis of ingredient-linked claims. Among these claims, it is found that ‘No
artificial additives’ has the maximum influence across all Indian consumers.

• When analyzed on the basis of gender, it was found that Indian women were more influence by these
ingredient-linked claims, compared to the men. Also, though men did not show any significant
difference in their attitudes towards several ingredient-linked claims, ‘Added/high in fiber’ and ‘No
artificial additives’ had the highest influence among ‘Good for you’ and ‘Better for you’ product claims,
respectively.

• In case of Indian women, they were most influenced by ‘Whole grain’ and ‘No artificial additives’, across
‘Good for you’ and ‘Better for you’ product claims, respectively. These claims would be the most
relevant for manufacturers who wish to target consumer archetypes such as ‘Food Actives’ and ‘Health
Seekers’, as described in the earlier section of the report.

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The Future Decoded

INSIGHT: Indian consumers perceive freshness claims to be more influential than


authentic/natural claims
Indians have always believed in the benefits of consuming freshly prepared food at home, and place a lot of trust in the
nutritional value of such foods. Over the years, since the role of women has undergone several changes in the domestic
and professional fronts, it has become challenging to prepare every meal afresh at home. Therefore, at least while making
product choices among processed food and beverages, Indians still try to look for the product’s freshness before buying it.

In the Datamonitor consumer survey it was found that Indians place a higher trust in the freshness claims of food and
beverages, compared to even natural/organic or authentic/home-made/original. This was observed across respondents of
all age groups, and both genders, as captured in Figure 33.

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The Future Decoded

Figure 33: Indian consumers across all age groups are more influenced by freshness claims rather than
natural/organic or authentic/home-made/original claims

QUESTION: How much influence do the following claims have


when making food and beverage choices?

Natural/organic Food or drink marketed as 'authentic', 'home-made' or 'original' Fresh

100%
% of respondents who are
influenced by the claims

80%

60%

40%

20%

0%
Male Female Male Female Male Female Male Female
18-24 25-34 35-49 50+
Age group and gender

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

This preference for ‘fresh’ food is at a time when there is consumer understanding of the benefits of food products which
are free from artificial additives and ingredients having been cultivated with the use of reduced or no chemicals. Therefore,
the number of products launched with a ‘natural/organic’ tag have increased manifold over the last few years, owing to the
fact that it offers manufacturers a clear differentiation and also helps to build consumer trust.

Though natural products are demanded by consumers across all age groups, Indians are still skeptical about paying the
premium that organic products currently command. When consumers in the Datamonitor survey were probed about how
often they made an effort to buy organic foods, less than 15% across both genders were doing so ‘all the time’ (as shown in
Figure 34). It is also important to note here that the availability and understanding of benefits of consumption of packaged
organic foods is restricted largely to only urban Indians.

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The Future Decoded

Figure 34: An increasing number of Indian men and women are making a conscious effort to buy organic food
and drinks regularly

QUESTION: Generally, to what extent are you trying to do the


following? Buy organic food and drinks

Male respondents Female respondents


All the All the
Never time Never
time
6% 8% 4%
14%
Rarely
Rarely
14%
20%

Most of
the time
32% Most of
the time
29%

Occasion Occasion
ally ally
40% 33%

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

Key takeouts and implications:

• Indians place a lot of trust in the nutritive value and quality of freshly prepared food, but with the
increasing involvement of women in the professional front, cooking afresh during every meal time has
become a challenge. Hence, consumers try to look for freshness related claims (such as, ‘Farm fresh’,
‘Freshly ground’, etc.) at least while making processed food and beverage choices. These claims are
seen to supersede even those such as ‘Natural/organic’, ‘Authentic’, ‘Home made’ and ‘Original’,
according to consumers across all the age groups. This would mean that protecting and projecting
freshness of formulation should be at the forefront of companies’ efforts, through product packaging
and marketing communication, respectively.

• Indian consumers across all age groups are increasingly influenced by ‘Natural/organic’ claims since
there is a rising awareness regarding the perils of consumption of food that has artificial additives, or
uses ingredients which have been cultivated with the use of too many chemicals. Though this points at
a consumer preference for products with natural/organic ingredients, companies have to use these tags
with caution, since there is a possibility of consumer skepticism owing to the unsubstantiated use of
these claims by several manufacturers.

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The Future Decoded

• The understanding of the benefits of organic food products is largely an urban phenomenon in India and
it is observed that both male and female consumers are making an attempt to buy organic foods on a
regular basis. The main hurdle to the further growth of organic foods is the fact that many consumers
are still not willing to pay the premium that these products currently command in the market. So
marketers need to focus on creating the right value proposition for the consumers, to push adoption of
organic food and beverages.

INSIGHT: Indian women more thoroughly understand and use nutritional information from
reference groups as well as packaging to aid product choice
Traditionally, Indians have placed a lot of trust in peer reviews and opinions from secondary sources, and used these to
guide their product choices. Lately, with the advent of seamless influx of information through internet and other media,
there is more emphasis and referencing on eating healthy, tips on weight management, looking young, etc. Most upwardly
mobile Indian consumers regularly keep track of these sources in order to develop an understanding of several health
concerns, product availability and launches in the market and their health claims. These consumers scan through these
information and pieces of advices to make informed product choices. Such information, apart from accreditation through
doctors and other expert groups to certify their products’ health benefits and formulation, helps to build consumer trust and
awareness in the long run.

Since Indians are interested in taking control of their personal health now, there is a renewed interest in reading information
related to health and wellness, through food and drink, physical exercise, lifestyle changes, etc. and when respondents in
the Datamonitor consumer survey were asked about reading or hearing about the relationship between food and health,
64% of the men agreed that it was of interest to them, while more than 70% of the women did so, as is shown in Figure 33.

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The Future Decoded

Figure 35: Both Indian men and women show a keen interest in reading or hearing about the relationship
between food and health

QUESTION: Please indicate to what extent do you agree or


disagree with the following statements - Reading or hearing
about the relationship between food and health is of interest
to me

Male respondents Female respondents


Strongly Tend to Strongly
Tend to disagree
disagree Strongly disagree disagree
2% agree 7% 1%
10% Strongly
22% Neither agree
agree nor 29%
disagree
19%
Neither
agree nor
disagree
24%

Tend to Tend to
agree agree
42%
44%

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

This translates into an opportunity for manufacturers to tap into in terms of marketing their products and services to a set of
more information-seeking consumers in India. However, it is vital to communicate the right kind of value proposition to build
trust against the health benefits being offered. Since most lifestyle related health concerns experienced by Indians are
relatively new, a precautionary attitude needs to be created among consumers to shift to a healthier lifestyle and dietary
intake.

In order to understand the consumer perception towards the existing communication, respondents in the Datamonitor
survey were asked if they found food and health information to be confusing and conflicting. The result shows that one third
of both male and female consumers neither agrees nor disagrees to this hypothesis, and the opinion remains divided even
otherwise, as shown in Figure 34.

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The Future Decoded

Figure 36: Indian consumers remain unsure about whether they feel food and health information is confusing
and conflicting

QUESTION: Please indicate to what extent do you agree or


disagree with the following statements - I feel that food and
health information is confusing and conflicting

Male respondents Female respondents


Strongly Strongly Strongly Strongly
disagree agree dis agree agree
9% 9% 12% 7%

Tend to
Tend to agree
disagree Tend to
agree Tend to 25%
24% disagree
26%
23%

Neither Neither
agree nor agree nor
disagree dis agree
32% 33%

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

It is vital for manufacturers to bridge this gap in consumer understanding of the food and health communication, since
Indian consumers are proactively interested in reading or hearing about information related to health. Also, ever since it
was made mandatory by the Indian government in March 2009 to declare nutritional information on the packaging of all
processed foods and beverages, awareness about product labeling has further increased both among industry players and
Indian consumers. The labeling now carries information on the ingredients, weight, total calories (energy value), and
quantities of protein, carbohydrates, fats, sodium (salt), sugars, dietary fiber, vitamins, minerals and trans-fats.

There are collaborative communities that find representation in the media, with doctors, industry bodies, manufacturers and
users all sharing their views on the efficacy of such product labeling and the veracity of manufacturers’ claims. Although
consumers’ views of health and wellness products are shaped through different media, their product choices at the point of
sale are heavily influenced by the nutritional information that is presented to them on product packaging. In the Datamonitor
survey, it was found that especially women across all age groups were actively reading and using the nutritional information
on the product packaging to make food and drink choices, as shown in Figure 35.

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The Future Decoded

Figure 37: More Indian women than men use nutritional information on product packaging to help make food
and drink choices

QUESTION: Generally, to what extent are you trying to do the


following? Use nutritional information on product packaging
to help make food and drink choices
Male Female
100%
nutr itional inform ation regularly
% of respondents who use the

80%

60%

40%

20%

0%
18-24 25-34 35-49 50+
Age group

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

Key takeouts and implications: Indians are showing an even greater interest in reading or hearing
information about the relationship between food and health

• Indians always have a high tendency to use peer group opinions and secondary reviews to aid their
choice of food and beverage products. In the wake of the rising health consciousness, Indians are
showing an even greater interest in reading or hearing information about the relationship between food
and health, with women showing a greater interest compared to the men. Though the consumers are
interested in gathering such information, it is found that many find such information confusing and
conflicting. This is often a result of opinion articles in the media from different organizations, medical
and research bodies about tests or surveys which are conducted on a regular basis, but amid varying
consumer groups. Also, the rate of innovation and new ingredient/health linked product claims are not
in tandem with the quality of communication which reaches the consumers.

• Every since it was made mandatory for companies to declare detailed nutritional information on product
packaging, Indian consumers are actively using such information to aid their product choices. Since
Indian women showed a greater tendency to do so, and keeping in mind that they are the decision
makers at the point of sale for a number of categories, it is important for manufacturers to deliver clear
nutritional information and leverage their product attributes effectively.

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The Future Decoded

INSIGHT: Taste aspect of healthier variants of food and beverages is often a greater
concern to Indian men
The most common challenge encountered by manufacturers while formulating food and beverages with a health positioning
is the fact that consumers usually perceive healthy foods to be less sensually appealing. The reduction of ingredients such
as butter, oil, sugar, salt, spices, etc., makes the food relatively bland and consumption of such food and beverages on a
sustained basis if often a challenge for many. There are actually several products in categories such as biscuits, breads
and juices where certain products were taken off the shelves few months after their launch, because the consumers did not
like the taste of those products in spite of the formulation being healthy.

Given below are some examples of products in India which either changed their product formulation or launched new
products, to cater to the need for a ‘taste plus health’ positioning -

• Horlicks introduced variants such as Chocolate Horlicks in order to appeal to people who did not like the taste of
the normal Horlicks, and might shift to other chocolate based drinks which also offered health benefits.

• Britannia’s NutriChoice range of biscuits has variants with high-fiber, multiple grains, etc., but the company has
ensured that the product is tasty as well, by adding ingredients such as honey. This helped them to differentiate
themselves from a lot of other biscuits in the market which has a health positioning, but did not appeal to the
consumers’ taste preferences.

In the Datamonitor survey, consumers were probed about whether they found healthy food and beverages as tasty and
enjoyable. Interestingly, it was found that male consumers showed greater dissatisfaction regarding the taste of healthy
foods compared to the women. This was especially high in the age group of 25-34, as shown in.

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The Future Decoded

Figure 38: Across all age groups, more Indian men than women believe that healthy food is not tasty and
enjoyable

QUESTION: Please indicate to what extent do you agree or


disagree with the following statements - Healthy food and
beverages are generally tasty and enjoyable

Male Female

25%
% of respondents who disagree

20%

15%

10%

5%

0%
18-24 25-34 35-49 50+
Age group

Source: Datamonitor Consumer Survey, 2009 DATAMONITOR

Key takeouts and implications: the most common challenge faced by companies is to ensure the taste of
their products which have a health positioning.

• Since these product formulations usually contain low fat, sugar or salt, etc., their taste is considerably
different from the regular variants. It is therefore imperative for manufacturers to strike a balance
between health and taste, failing which, even a product with a very healthy forumulation will not find
acceptance among consumers.

• It is observed that this phenomenon is stronger among Indian men, who often do not find healthy foods
to be tasty and enjoyable. Hence, companies which create health foods specificaly targeted at the male
consumers need to focus on passing their formulations through extensive taste tests before mass
launch in the market.

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Action Points

ACTION POINTS

ACTION: Health food and drinks should be made available in convenient and innovative
package formats to keep up with the changing consumption patterns
In line with their changing lifestyles, Indian consumers are looking for ways to alter their diets so that they can benefit from
extra nourishment and fortification. Marketers have been swift in spotting the demand for food and beverages that can be
consumed relatively quicker and, at the same time, cater to nutritional requirements in line with the changing lifestyles of
Indian consumers.

During the last decade, Datamonitor has observed marketers aggressively promoting products such as breakfast cereals,
fruit juices and flavored milk. As time set aside for breakfast continues to shrink and consumers' nutritional requirements
and awareness of related deficiencies and their eventual perils continue to increase, lately there have been product
launches such as high-fiber biscuits, cereal bars and fruit bars. The key focus across all of the products here is on enabling
time-poor consumers to have a convenient, balanced breakfast without having to forego any of the nutritional requirements
of their active lifestyles.

Consumers are looking for products that offer increased convenience through ease of consumption and ease of portability,
as well as health benefits. In a crowded marketplace where several products have health claims, sustained purchase is
driven by a product's packaging, size and format being aimed at providing the aforementioned convenience to consumers.
To implement this aspect of convenience, it is essential to design the packaging to offer benefits such as portion control, re-
sealability and ease of use for on-the-go consumption. To illustrate this, Datamonitor has provided some product examples
below.

Portion controlled packages would help to drive product uptake among Indian consumers who are watchful
of their calorie intake

One of the most commonly advocated methods of ensuring a healthy dietary intake is through regulating the portions
consumed during each meal, but this is rarely followed on a sustained basis by consumers. A lot of people have named
lack of time as the key factor driving this trend. This is largely because of the difficulty in measuring the quantity as
suggested on the product packaging. This need can be addressed by bringing about portion control through product
variation in the packaging itself and separating the contents into portions of recommended serving size. Manufacturers
should also look at the possibility of including details of the calorific value for each portion size on the product packaging.

To illustrate this concept, let us take the breakfast cereals and biscuit category in India. Breakfast cereals in India are
usually promoted on the basis of pack sizes and number of servings, and not on their calorific value. Biscuits with a health
claim are also more often than not sold on the basis of non-standard weights and measures, and the consumers do not
know the calorific value per biscuit packet. Since many Indians are trying to eat healthily, they make an attempt to track the
calories consumed per meal or serving. Manufacturers could consider smaller pack sizes of cereals, mueslis and biscuits
that are packed in a pre-determined calorie serving size, for instant use. In the Western markets such as the US and the
UK, it is becoming an increasingly mainstream phenomenon to launch SKUs of a product based on its calorie content. This
could make the communication about nutrition per serving or meal easy to understand and more effective.

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Action Points

In India, Britannia’s Cheese Slices and NutriChoice 5 Grain biscuits are examples of portion control and innovation in this
regard. Britannia’s Cheese Slices are individual slices of cheese, packed in easy-to-open plastic sleeves and sold in packs
of 10. The NutriChoice 5 Grain biscuits are available in a carton that contains several small, single-serve pocket-meal
packs, so that there is no issue of not being able to reseal the package.

Figure 39: The design, size and labeling of health food and beverage packages need to be planned with
portion control in mind, and packs should promote nutritional benefits that are easy to understand

Nabisco - Wheat Thin chips minis Britannia - NutriChoice 5 grain


The product is availa ble in portions of 100 The product is available in four portion
ca lo rie packs, which are low-fat and do controlled packets in a carton. Each pack
no t contain any trans-fat or cholesterol. contains three biscuits.

Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

Re-sealability and on-the-go consumption are among most desired packaging attributes

The need for convenience is greatest when products are consumed outside the home, at office or on the move. Very often
the contents in a certain food and beverage may not be consumed in one go. In such cases, of the factors that aid
convenient consumption, the ability to reseal the contents for later use is an important one. For instance, consider energy
drinks and fruit drinks: these are not always convenient for use in a gym or during a jog, where the need would be greatest.
This is because most energy drinks in India are available in a can and fruit drinks tend to come in tetra packs or larger
cartons. If these were also made available in ‘sipper’ packs, they would be more convenient for consumers to use.

Also, many healthy food and beverages in the Indian market are provided in packaging formats that make it necessary to
transfer them to another container once opened, since the original packaging cannot be resealed. This restricts the
likelihood of these products being consumed outside the house. In the Western markets there are various health foods that
are available in zip-lock containers to ensure that they do not lose their nutritional value because of exposure to the outside
environment.

Figure 40 shows examples of products with innovative packaging that allows for usage on-the-go and re-sealability.

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Action Points

• Robinsons Fruit Shoot Juice Drink in India – the plastic bottle that contains this fruit drink is designed in the
form of a sipper with a cap, which makes it easy to drink on-the-go and also store for later use. It is available in
five flavors - Apple, Blackcurrant & Apple, Orange & Peach, Strawberry, and Tropical. It is stated to be a non
carbonated fruit based drink targeted especially at children.

• Orion’s Beatles candy in South Korea – this is a fruit candy containing vitamin C and Xylitol, available in four
different flavors. It is sold in resealable packaging, which makes it convenient for use on-the-go and eliminates
the need to transfer the contents of the package after opening.

Figure 40: Create innovative packaging that allows for apportioned intake and re-use, to increase the ease of
consumption of on-the-go health and wellness food and beverages

Robinson’s Fruit Shoot - Juice Drink Orion - Beatles candy


(India) (South Korea)
The bottle has a sipper with a cap, It has a resealable packaging, which
which makes it easy to drink on-the-go makes it convenient for use on-the-go
and also store for later use and eliminates the need to transfer the
contents of the package after opening

Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

Apart from these design modifications, manufacturers should also use packaging to effectively educate people about the
benefits of their products. A conscious effort to increase consumers' awareness and engage them with the health and
wellness movement is being made by companies such as Quaker Oats in India. The company is making even people who
do not consume oats aware of the importance of a healthy heart and of various ways by which they can reduce the chance
of heart problems and so on, using product packaging and a media campaign with the tagline ‘Mission to make India heart
healthy’ (see Figure 39).

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Action Points

Figure 41: Marketing to educate consumers on the benefits of a healthy diet is being explored by firms such
as Quaker Oats to drive long-term demand in India

Quaker Oats’ media campaign The reverse of Quaker Oats’ product


to increase heart health packaging has detailed nutritional
awareness amongst Indian information, a section called ‘Why
consumers. Quaker Oats is good for you?’ and
highlights the ease of consumption.

Source: Datamonitor Analysis; Afaqs website DATAMONITOR

ACTION: While focusing on developing functional or fortified food and beverages,


manufacturers should also explore opportunities in dietary supplements
Apart from cases where the doctor specifically prescribes vitamin tablets (which are OTC drugs), most consumers in the
India are usually not aware whether they need dietary supplements with vitamins, minerals, iron, calcium or others at all.
Whereas in the US, more marketing efforts around vitamin and mineral supplements are made by medical practitioners and
companies, and awareness of these products among consumers of all ages is high.

Although this is reflective of the current market scenario, it has been observed that the dietary supplements sector, while
challenging, is showing signs that it may have potential for very high growth in the next five years. This trend is largely
being driven by:

• Increased effort from manufacturers in increasing consumer awareness regarding the importance and
convenience of consuming dietary supplements.

• Changes in the regulatory environment regarding the usage of certain ingredients in non-OTC preparations,
which have resulted in the reclassification of some dietary supplements, thus opening up grocery retail channels
for sales rather than just pharmacy chains.

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Action Points

Amway, Dabur and Himalaya are the forerunners in the Indian market with their dietary supplements and traditional
medicinal OTC offerings. The key brands launched by these companies in India include the following.

• The Nutrilite range of vitamins, mineral and dietary supplements, which was launched in India by Amway in
2001. It now contains a wide variety of products in the form of beverage mixes and capsules.

• Chyawanprash, which has anti-oxidant properties and strengthens the body's internal defenses and boosts the
immune system. While this is a traditional Indian preparation, it was launched by Dabur in the Indian market in
1949 and has seen constant innovation in terms of formulation and packaging since then.

• Liv52, which is an herbal liver care product that also helps in cholesterol regulation. It was launched in the year
1955 and has become a globally acclaimed product for liver care.

All of these products have been backed by aggressive marketing and promotional campaigns, and this category will
continue to present tremendous opportunities for growth. There have been changes in the drugs schedule that classifies
products as medicinal preparations or OTC items, and this resulted in some products that could earlier be sold only through
pharmacists now being marketed in grocery stores. Considering this scenario, it is clear that the Indian market shows good
potential for products in this category, and their growth could be further aided by the following factors:

• Targeting the middle of the pyramid – there is a huge middle-class population in India, whose disposable
income is rising along with a parallel increase in their desire for a better quality of life. Pack sizes should be
designed keeping in mind the aim of encouraging such consumers to try out products.

• Professional endorsements – with the increasing tendency of consumers to proactively look for ways to
address their health concerns, they tend to believe in product claims that have an additional professional
endorsement by a body of medical practitioners or any such similar accrediting organization.

The scope for product development of functional and fortified food and beverages, as well as dietary supplements, is
particularly high in the case of children. In the third cycle of the National Family Health Survey (NFHS), which was
conducted in 2005–06, 18 research organizations conducted interviews with more than 230,000 women aged 15–49 and
men aged 15–54 throughout India, including all the major towns. During the NFHS, more than 200,000 adults and young
children were tested for anemia. According to the survey, the levels of iron, vitamin A and zinc deficiency in Indian minors
were found to be alarmingly high (see Table 9).

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Action Points

Table 9: Key nutrient deficiencies among Indian children (2005-06)

Nutritive component of diet % of Indian children with a deficiency


Iron 75
Vitamin A 57
Zinc 42

Source: NFHS (National Family Health Survey), 2005-06 DATAMONITOR

Manufacturers should focus on developing products that are rich in these nutrients and specifically positioned for children.
To illustrate this, Figure 42 provides examples of food and beverage products targeted at children that have been launched
in other countries.

• Play!, manufactured by Kubu, in Poland – this is a carrot and fruit drink aimed at children. It combines the
high vitamin A content of carrots with fruits rich in other essential nutrients for minors. The beverages are
presented in 150ml pyramid-shaped drink boxes with straws.

• Boost Kid Essentials, manufactured by Nestle, in the US – this is promoted as a nutritionally complete drink,
said to be for kids aged one to 13. It has 25 essential vitamins and minerals, 7g of muscle-building protein, a
good source of antioxidants (vitamins C and E, and selenium), plus immunity-supporting probiotics. All this is
available in a recyclable packaging that is spill-resistant, easy to grip, and tagged "drink-anywhere and drink-
anytime".

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Action Points

Figure 42: Focus on creating product packaging and formulation which makes it interesting for kids to
voluntarily include healthy food and beverages as part of their dietary intake

Kubu’s - Play! (Po land) N estle - B oost kid essentials (US )


Carrot fruit drink targeted at kids, Ch oco late probiotic milk with extra nutrients
in a n innovative tetrahedral and fo rtification, aimed at immu nity building
pa ckaging. in ch ildren. In p ortion controlled individua l
bottles inside the carton.

Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

ACTION: Product development should address the emerging health and wellness needs of
a fast-growing, aging demographic in India
One of the most striking trends resulting from an increased focus on health and wellness in India, along with the excellent
healthcare systems emerging the country, is the increased life expectancy, especially of those living in urban areas. This
has resulted in new needs arising for products and services to cater to this aging demographic. In 2000, there were 77
million people in India above the age of 60 and, according to Datamonitor estimates, this age bracket will grow at a CAGR
of 7% over the period 2010–2015.

There are certain attributes emerging among Indians who are around or above 60 years of age and live in urban areas.
These can be summarized as follows.

• Greater economic independence compared to earlier generations.

• Increasing propensity to make a conscious attempt to stay healthy, buy products or services to ensure the same,
and lead an active lifestyle.

• Thanks to the increased time and information resources available, a greater ability to make informed choices
regarding their health and wellness requirements.

The key health concerns that this aging demographic wishes to address include the following.

• Mental alertness and memory – this is one of the first signs of aging that most people face, and eventually they
can develop conditions such as dementia and Alzheimer’s disease, which have become very common among

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Action Points

urban Indians. Although engaging in mentally stimulating activities helps, there is a need for dietary supplements
or foods that help to maintain mental alertness and memory using ingredients such as brahmi (bacopa), which is
an Ayurvedic herb with properties that improve mental functions and assist in the physiological processes
involved in relaxation. It rejuvenates nerve and brain cells, and helps in the treatment of cognitive disorders
associated with aging.

• Bone and joint health – osteoporosis is a key concern for this demographic, since it severely inhibits the
activity levels of the individual. There are several OTC preparations that cater to this disease in terms of offering
a calcium supplement (e.g. Calcium Sandoz), but there is still a lot of scope for ingredients that could be
incorporated directly in the diet or in the form of dietary supplements with calcium levels meant for the elderly.

• Digestive health – as well as maintaining a regulated diet, many elderly Indians look to food and beverages or
dietary supplements to address specific problems related to the digestive system such as gall stones, sluggish
digestion, and irregular and improper bowel movements. People prefer curative solutions to these concerns in
an ingestible format, a product sector that is in a nascent stage itself.

• Heart health – India has the largest number of people suffering from cardiac diseases and by 2010 it is
estimated that 60% of the world’s cardiac patients will be Indian. The main reason cited for this is elevated levels
of low-density lipoprotein (LDL) cholesterol and triglycerides and reduced levels of high-density lipoprotein (HDL)
cholesterol (which aids in clearing blocks in the arteries). Though manufacturers have addressed preventive
heart care through product categories such as oils and milk, there is still room for products containing
ingredients that help purify the blood and improve heart health.

These health concerns present a huge opportunity in categories such as bread, milk, oils, beverage mixes and soups for
manufacturers to cater to, but while products have been conceptualized for this aging demographic, there are certain
limitations in providing good nutrition to elderly people.

• Many older people suffer from an inhibited appetite or thirst.

• Some necessary medications that they are already consuming might interfere with the nutrients' absorption or
reduce the desire for a normal diet.

• Many have difficulty in chewing and digestion.

• Most elderly people cannot manage a high salt intake, but most processed foods have a considerable salt
content owing to the method of manufacture and the need to increase shelf life.

Refer to Figure 43 for some examples of products that have been launched in other countries, and are synchronized with
the needs of the aging demographic. These could be suitably modified and positioned specifically for this population in
India as well.

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Action Points

Figure 43: Address the latent need for formulating food and beverages keeping in mind the health concerns
and the attributes of the fast-growing, aging demographic in India

Mor pheme - Brahm i cap sules (US) Solara - EZ Melt Dietary Suppleme nt (US)
Rejuvenate s ne rve and bra in cells. It is me ant for p eople wh o canno t easily swallow pills,
and want to streng the n their bone health. Ideal for
Red uces sig ns of men tal aging .
elder who want to protect aga inst bo ne de generation.

Parmalat – Ever Fres h Eas y Get milk Na ka Nutri Heart – L iqu id Herba l a nd Vitamin-
(South Africa) Minera l formula (Canada )
T his low fat milk is specially designed to It is d esig ned to benefit the overall card iovascul ar
be e asy to digest. system. He lps lowe r choleste ro l l evel s and clea ning
the arteri es.
Source: Datamonitor’s Product Launch Analytics (PLA) DATAMONITOR

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Appendix

APPENDIX
Varying definitions exist for the terms 'natural', 'organic' and 'fresh'. Complication exists because the terms can be used to
describe finished or shelf-ready products as well as individual ingredients. Definitions also vary by category. However, for
the purpose of this report Datamonitor uses the following definitions.

• 'Natural' – at present there is no legal definition of what constitutes a natural product. For this report
Datamonitor defines natural food and drink as those that do not have artificial additives, sweeteners, colorings,
preservatives or other petro-chemical additives or ingredients. They must also be naturally grown, minimally
processed and free of all non-naturally occurring chemicals. As a result, all organically certified food falls within
this definition of 'natural'.

• 'Organic' – this is a legally defined quality and is signified as such by both private and state-endorsed labels
(India has several certifying bodies now). In the Indian context, Datamonitor considers organic food and drinks to
be those that are grown or produced without the use of synthetic chemicals in a farming system that avoids the
use of artificial pesticides, fertilizers, growth regulators and livestock feed additives. As such organic food and
drink is a sub-set of 'natural' food and drink.

• 'Fresh' – this term is increasingly used by marketers, but again there is no stringent legal product definition. For
this report, Datamonitor defines 'fresh' foods and drinks as being those that have not been frozen, dried, canned
or preserved in vinegar, other liquids or sugar, or vacuum packages (e.g. peanuts). 'Fresh' produce must be
recently prepared and show no visible signs of maturation or non-essential processing, be in a raw state, and
offer a 'natural' taste and smell. As a result of the definition, 'fresh' food and drink will include some organic and
'natural' products. However, while the organic market is a clearly defined sub-set of the 'natural' market, the
differences between 'natural' and 'fresh' foods are not easily disentangled. In this report, Datamonitor treats the
'natural' (including organics) and 'fresh' markets separately, although some products will be included in both.
Taking this approach is beneficial because it reflects the different types of product positioning that are being
used in order to target consumers who are interested in food and drinks that are as close to their original state
as possible.

Methodology
The aim of the New Consumer Insight (NCI) concept is to build up a picture of consumer behavior, and how it will develop.
Different data sources are used for different areas of the analysis; qualitative and quantitative analysis is based on the
combination of both primary and secondary research. The following data sources have been utilized.

• Online consumer surveys – since 2003, Datamonitor has conducted large- and small-scale consumer surveys
across several geographies. More recently, in September 2009, Datamonitor surveyed consumers in 15 countries:
Australia, Brazil, China, France, Germany, India, Italy, Japan, the Netherlands, Russia, South Korea, Spain, Sweden,
the UK and the US. The NCI consumer survey has been used to determine the changing consumer shopping patterns
in India. A total of 553 respondents were surveyed.

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• Secondary research from company, trade and academic sources – for every NCI report, Datamonitor analysts
extensively examine trade and specialist publications, along with business and academic journals. Other sources used
include newspaper and periodical articles and websites.

• Datamonitor’s market data – where relevant, NCI research will utilize information from Datamonitor’s Market Data
Analytics. This is a unique online information tool providing comprehensive data across global food, drinks personal
care household products, pet care, news and magazine and tobacco markets. It provides comparable and accurate
data covering historic market values and volumes, with five-year forecasts, distribution channels, and company and
brand shares.

• Consumption and Usage Demographics – where relevant, NCI research will utilize information from Datamonitor’s
proprietary Consumption and Usage Demographics data. This breaks down the total value of each category covered
within Market Data Analytics into the value of the consumption accounted for by people from different demographic
groups (for example, the proportion of the French savory snacks market value consumed by people living in one-
person households).

• Product launch analytics – Datamonitor’s CPG Product Launch and Tracking database provides the most
comprehensive information covering new product launches in the world. It has global coverage and provides a wealth
of details on product introductions from the following industry sectors: food, alcoholic drinks, nonalcoholic drinks,
personal care and household products.

• Country Statistics – socio-demographic data, in particular population statistics, are taken from Datamonitor’s global
Country Statistics database to support the analysis.

Further reading and references


Datamonitor (2009) Successes and Failures in Consumer Goods Innovation and NPD, December 2009, BFCM0361

Datamonitor (2009) Ingredients Fortification Case Study: How the Addition of Ingredients has Redefined Products Within
Their Own Categories, December 2009, DMCM4618

Datamonitor (2009) The Global Economic Crisis: the Impact on Consumer Attitudes and Behaviors in India, September
2009, DMCM4689

Datamonitor (2009) Global Consumer Trends: Convenience, August 2009, DMCM4695

Datamonitor (2009) Global Consumer Trends: Sensory, July 2009, DMCM4693

Datamonitor (2009) Global Consumer Trends: Health, June 2009, DMCM4691

Datamonitor (2009), Dietary Supplement Market Trends & Opportunities, June 2009, BFCM0332

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Appendix

Ask the analyst


The Consumer Knowledge Center Writing team

askcm@datamonitor.com

Datamonitor consulting
We hope that the data and analysis in this brief will help you make informed and imaginative business decisions. If you
have further requirements, Datamonitor’s consulting team may be able to help you. For more information about
Datamonitor’s consulting capabilities, please contact us directly at consulting@datamonitor.com.

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