Wednesday, June 19, 2024
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Future Forward Brands: Creating Their Own Food Playbook In The Market

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Future-forward food brands are revolutionizing the industry by setting their own playbook, embracing sustainability, leveraging data, and staying attuned to evolving consumer preferences. These brands are more than just food producers; they are trailblazers shaping the way we eat, interact with food, and think about the future of food.

In the dynamic landscape of the Indian food industry, established and emerging brands are rewriting the rules and shaping the future of consumer preferences. They are doing so by adopting innovative strategies that challenge conventional norms. These brands have proved themselves worthy to be called “future-forward” by being are at the forefront of food innovation and by redefining how food is produced, distributed, and consumed.

Future-forward food brands can be recognized by their adeptness in combining innovation, sustainability, transparency, and social responsibility while staying adaptable to changing consumer preferences and market dynamics. Such brands can be counted upon to not only anticipate future trends but also actively engage in shaping and contributing to a more sustainable and equitable food ecosystem.

Changing consumer attitudes, increasing product awareness and preference for new products have ensured a demand for more diversity, innovation, better taste, freshness, and healthier options. This has implications for the retailers and brands and they need to strategize better for product development, building new categories, and to win consumer confidence.

Why innovation is important for brands?

  • Innovation is key driver in helping companies achieve sustainable growth and profitability. Product innovation is one of the key ingredients necessary for achieving the strategic goals of a company, and more so for the food sector.
  • Consumer tastes and preferences are constantly evolving. Product innovation allows food companies to keep pace with changing consumer demands, such as the growing interest in healthier, more convenient, and ethically produced food options.

Product development focused on promoting natural ingredients and formulations; innovation to localize the products’ taste profiles with the aim of winning over urban Indian consumers by embracing Ayurvedic ingredients; innovating on traditional juices to tap into the expanding consumers’ preferences for more of juice drinks over fizzy drinks are some of the innovations that manufacturers are already experimenting with.

In a crowded market, innovation sets a brand apart. Unique and innovative food products can capture consumer attention and help companies gain a competitive edge over rivals.

With changing lifestyle patterns of the modern-day customer, FMCG brands must step up their game to ensure consistent growth. From evolving cuisines to pro-health choices, brands coming up with innovative solutions to the gradually changing scene of consumer behavior are thus the ones most likely to stay on top.

Today, new lifestyles, higher incomes and consumer awareness are creating consumer demand for a year round supply of high-quality, diverse and innovative food products. Companies that align innovation initiatives with changing consumer preferences and demands and deliver effectively on innovation initiatives – be it high-quality ingredients, innovative packaging, flavor, etc. – will get the right products to the market with speed, be able to tap new markets, increase sales and establish a significant competitive differentiation.

One example of food innovation is to take a traditional product and add a layer of modern branding to it – be it packaging, communication, branding, etc., is admirable. The Indian consumer loves it when a tradition is draped with modern elements without sacrificing its distinct character and provenance,” says Damodar Mall, Chief Executive Officer, Grocery Retail, at Reliance Retail Ltd, and an IIT-Bombay and IIM-Bangalore alumnus.

Smart innovation and customizing products for younger consumers can cater to the evolving taste buds and changing consumer preferences. It’s important that the food industry innovate on the foods that were there in the olden days and make them palatable for the consumers of today using technology.

In fact, there is a need for new breed of Indian entrepreneurs that are willing to push the boundaries to innovate on Indian food so as to make a huge impact on our palates or in order to launch products abroad.

“For long we have been taking samples from abroad and making it in India. That has to stop. I believe there are a lot of Indian products that we can take abroad and sell it as mass products. The challenge is to innovate in the lab with that product to create a balance between taste and health and for that we need to attract the best brains and bright youngsters into the business to fi nd answers to the challenging question of ‘how to innovate’, says Piruz Khambatta, Group Chairman, Rasna International.

A wide market spectrum to tap

As the Indian consumer is starting to earn more and has much more exposure to products in India and internationally, needs and aspirations are evolving as incomes grow. But while certain groups would only be looking at basic nutrition, there are many groups with a household income above Rs. 21 lakh, where lifestyle and aspirational products, be it health-focused, gourmet foods, anti-aging products, etc., start playing a role. And there is an entire spectrum from a basic nutrition needs with less than Rs. 5 lakh household income to a much evolved range of consumers.

It is therefore crucial for entrepreneurs to understand the markets and territories when venturing into a business. These spaces are categorized as Grey and White space. Grey spaces are the areas that are yet to be explored but hold some potential for the business. However, white spaces hold a greater amount of risk and are virtually a no-profit zone and remain unexplored. It requires a lot of understanding and background check when starting a business in these areas.

There are categories and there are consumers that fit into both grey and white space zones. White spaces have to be penetrated for some time so that they can be converted. There is a market in the white spaces and rural areas if one has the right approach for the business. It is easier to enter these spaces because resources are limited and opportunities are unlimited. Value-based products will avail profits even in the grey areas.

Even if the products are a bit expensive, there is still enough space to occupy in far-off places that are categorized as grey spaces. Competition is a necessary fact and entrepreneurs need to face it. Entering newer geographies and with newer brands are categorized as white spaces. White spaces are really difficult to win because the habit is not built and customers are not ready for such brands. Grey spaces are categorized as ones that have 5-10% of space that fall under the established market geographies but are under-penetrated.

There are several towns that have plenty of categories in grey space areas. Ice-cream, as a category, has great penetration in the top seven cities but when it comes to the next 100 cities it becomes a grey space with 5-10% penetration. There are many other categories and there are consumers that fit in both grey and white space zones.

Put trust in technology

With the democratization of technology, success is no more about a few market leaders but is spread out and widely dispersed among local, regional and national players. Technology has allowed businesses of all sizes to access and implement advanced digital tools and platforms.

This has leveled the playing field and enabled smaller, local, and regional players to compete effectively with larger, national and global counterparts. Technology has enabled local and regional businesses to innovate and develop new products or services more easily and cost-effectively. Access to cloud computing, open-source software, and collaborative tools has spurred innovation at all levels.

Advances in technology have:

  • Allowed local and regional players to optimize their supply chains
  • Reduce operational costs
  • Improved efficiency

This has made brands more competitive in terms of pricing and delivery. Smaller businesses now have access to powerful data analytics tools, enabling them to gather and analyze customer data, market trends, and operational metrics. This data-driven decision making levels the competitive landscape.

The democratization of technology has significantly empowered local, regional, and national players across various industries. This empowerment has led to increased competition, innovation, and opportunities for success, dispersing success more widely and challenging the dominance of a few market leaders.

However, it is important to note that while the opportunities have expanded, the challenges have also evolved, requiring businesses to adapt and stay competitive in the ever-changing technological landscape.

Play to your strengths

While established leaders can be trusted play to their competitive advantages such as

  • Economies of scale
  • Strong brand recognition
  • A history of delivering quality products,
  • Customer trust and loyalty

Several small, local, and regional brands with strong ties to their communities are successfully leveraging the authenticity and heritage associated with their products. They are becoming known for offering unique and niche products that are not readily available from larger, more established brands and their unique offerings are attracting a dedicated customer base.

With new players coming up who don’t necessarily have to put large infrastructure to create innovative products, it is no more a game of scale but rather a game of skill. Increasingly, new entrants are placing their bets on a core unique set of products that they are creating.

While in the past these products would not have had an outlet to reach out to the consumers, the growth of modern retail has changed that.

Here are a few examples of small, local, or regional brands that proved themselves as agile and innovative in responding to market trends and introduced new products or improvements based on customer preferences.

FEW BRANDS:

  1. Bangalore-based Lal Sweets launched itself in 2010 with the vision of selling Indian traditional sweets in the form of a packaged product in the FMCG food category. Today, Lal Sweets has become a renowned name in packaged mithai and namkeen, with a very strong presence across general trade, modern trade, online marketplace, exclusive airport outlets, and the export market. The company felt that when curd & namkeen can be sold in the packed format then why not Indian mithai? With annual turnover of Rs. 120 crore currently, the brand has set its sights on becoming a Rs. 1,000 crore brand over the next few years.
  • Chukde Spices, which started as a trader of whole spices from a small shop in Delhi’s Khari Baoli, has successfully transformed itself into a widely-recognized and popular brand with a pan India reach. The company embraced technology to make its spices safer and keep the flavors authentic. Today, it operates a 90,000 sq.ft. processing facility with an installed capacity of 10,000 metric tonnes of spices, and is counted among the leading suppliers of premium quality Indian spices, domestically and abroad. The brand generated over Rs. 100 crore in revenue last fiscal and has twice been awarded the National Award for Manufacturing and Export Excellence.
  • Taali Foods India, which operates snack brand Taali, was launched just two years ago, in 2021. But in a very short span of time, Taali has already touched the hearts of millions of customers in India and globally with its better ingredients’ produced protein puffs, roasted makhana, roasted peanuts, and cheese balls. The brand is creating products with a keen focus on the new generation of Indian snackers who are looking for healthier options and better quality products for their consumption. Apart from India, Taali also sells its products overseas in markets like the Middle East and USA.

The success of local and regional brands has made major FMCG companies to recognize the value of local and regional players and they are actively engaging with them.

These players have an in-depth understanding of local markets, consumer preferences, and cultural nuances. FMCG companies can tap into this valuable knowledge to tailor their products and marketing strategies for specific regions.

These players often have well-established distribution networks within their specific regions. Partnering with them allows FMCG companies to access these networks and expand their reach into previously underserved areas.

Many FMCG products rely on local ingredients or flavors to resonate with regional tastes. Regional players can provide insights into sourcing these ingredients and adapting products to local preferences.

FMCG companies recognize the value of regional players because they bring the following benefits to the table:

  • Regional expertise
  • Market access
  • Consumer trust
  • Adaptability

Collaborating with regional brands allows FMCG companies to tap into local markets more effectively, cater to diverse consumer preferences, and strengthen their overall market presence.

Conclusion

Future-forward food brands are revolutionizing the industry by setting their own playbook, embracing sustainability, leveraging data, and staying attuned to evolving consumer preferences. They are more than just food producers; they are trailblazers shaping the way we eat, interact with food, and think about our culinary future. As consumers increasingly seek innovative, responsible, and health-conscious options, these brands will continue to play a pivotal role in shaping the food market of tomorrow.

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