September 08, 2022: In Indian culture, sweets are very important. Indians are renowned for their love of indulging in a variety of sweets during family gatherings and festivals as well as for sharing love and affection by giving sweets to others. India is without a doubt the world’s largest consumer of sugar, and the nation’s sweet and namkeen business is worth more than 100,000 crores.
ore than one crore people are employed directly and much more indirectly by the sweet and namkeen sector. The Indian sweets or mithai industry has benefited further from the development of the packaged food sector and customers’ growing awareness of hygiene and safety. The sweets business is anticipated to continue showing positive development potential in the future due to shifting customer preferences and the start of the holiday season.
The Thriving Sweet and Namkeen Industry in India
Over the years, Indian sweets witnessed great evolution with new trends, methods, and techniques influencing their make and taste. Thousands of regional varieties exist in India today making an arduous and unfathomable list! No surprise India is heaven for sweet lovers.
Sweets continue to be sold in enormous quantities in India. Sales of mithai and namkeen have never dipped—the industry has grown at healthy double digits every year this century, and the turnover for the organized sweet and namkeen industry crossed INR 1 trillion in 2019-20, according to FSNM (the Federation of Sweets &Namkeen Manufacturers). Despite the initial setback due to the pandemic, the industry is looking at a revenue of INR 65,000 crore in the financial year ending 2021.
The Evolution of the Industry
Chocolates and western snacks were the first movers as far as branding of snacking products is concerned and they have definitely benefitted from that. However, with the passage of time, consumers are realizing that traditional sweets and snacks have a very prominent place in the Indian palette that can’t be replaced. Western chocolates and snacks are widely accepted by everyone as packaged products with a shelf-life.
“The outbreak of the pandemic and the implementation of stringent lockdown regulations across several nations resulted in a shift from brick-and-mortar distribution channels to e-commerce platforms for sales. For brands, the challenge was to redefine packaging that attracts consumers through electronic screens.
Moreover, brands had the additional task of making their packaging e-commerce-friendly, so as to reduce the use of tertiary packaging.” says Manish Aggarwal, Director, Bikano, Bikanervala Foods Pvt Ltd, “While the economy has been struggling primarily due to the pandemic like the rest of the world, e-commerce has seen quite a success in 2020 and 2021.
Traditional businesses and shoppers increasingly ‘went digital’, providing the goods and services online and this has led to a surge in e-commerce and accelerated growth towards digital transformation. With the accelerated adoption of digital platforms for purchases and payments by consumers during the pandemic times, e-commerce and omnichannel strategies have become critical for the FMCG sector. It is expected that the e-commerce channel, especially in the sweet and namkeen business, will continue to witness growth. FMCG companies have incorporated apps in their business processes directly targeting retailers and Kirana stores who offload their products and serve as last-mile sellers/suppliers to end consumers.”
“With the new government regulation regarding investments in FMCG companies and accepting foreign-directed investments, the sector has seen a sudden influx of funds. The governments’ incentives and the FDI funds have helped the FMCG sector strengthen employment, establish a more robust supply chain, and capture high visibility for FMCG brands across established retail markets. While offline purchases were fundamental to the growth of the Indian sweet industry, online channels are expected to see a significant growth rate in the years to come.” adds Manish Aggarwal.
The pandemic was a game-changer for the industry and though change is the only constant, the relevance of keeping the customer at the center of all business decisions and innovation will never change.