Food marketers have struggled to sell products tagged as ‘healthy’.
Health and wellness foods are not going down well with Indian consumers, despite marketers making a play for them. Mayank Shah of Parle Products insists taste scores over calories and it is a fallacy that increased consumer awareness and growing health concerns will ensure health foods grow at a healthy rate.
“The health and wellness (H&W) category of foods is primarily consumed by choice, not compulsion. The primary reason is taste. If it is not tasty, it will not be sold,” says Shah. Consumers may cut down on the frequency of consumption, but will not give up on taste, he declares.
Mayank Shah is the group product manager at Parle Products, which owns biscuit brands such as Parle G, Monaco, Hide n Seek and Krackjack. He insists health-conscious consumers are not necessarily looking for products with additional benefits and nutrients, and are turning down the market's many offerings.
Though earlier estimates had suggested that demand for H&W food would rise due to the growing incidence of lifestyle diseases, wider availability and communication and marketing initiatives, the story has not gone according to plan in India.
“Yes, child nutrition is a major issue here, but we don't really understand the issue in all its magnitude. Many people in Orissa, the central part of the country and the East don't have two square meals a day. Given this scenario, how can we talk about lifestyle diseases?” asks Shah.
The H&W category, as a trend, has had an over-arching influence on the development of the food and beverage (F&B) industry in India. According to a research report by the Tata Strategic Management Group, the H&W F&B sector in India was estimated at Rs 16,000 crore in fiscal year 2011 and is expected to grow at nearly 22 per cent reaching Rs 36,000 crore by fiscal 2015.
The report classified H&W products into three dominant sections. The better-for-you segment comprises low-cholesterol, edible oils, 0 per cent transfat snacks and biscuits, slim milk, curd, ice creams and diet colas; functional or fortified category, which comprises iodine-fortified salt, iron-fortified biscuits, health food drinks and breakfast cereals fortified with micro-nutrients; and the natural category, which is 100 per cent natural fruit juices and pickles without preservatives.
Concerned about lifestyle diseases, urban consumers are showing increasing preference for low-fat, low-sugar, low-carbohydrate and low-cholesterol products, it says.
Several corporates too have jumped onto the bandwagon. In the biscuits category, Britannia launched its fortified tiger biscuits with vitamins and iron and a ‘Health Kit’ called Nutrichoice Health Starter Kit. The company is attempting to convert all its products to trans-fat- free and position them as both enjoyable and healthy.
ITC placed its Sunfeast Marie Light Oats variety in this category, as the earlier orange and Original versions have reportedly done well. United Biscuit came up with its popular brand of Mcvitie’s Digestive, in the whole grain fibre category. Parle too launched Digestive Marie.
Similarly, the probiotics market saw some action. Nestle launched probiotic dahi in 2007 under the Nesvita brand, to counter the stiff competition from local players, such as Gujarat Co-operative Milk Marketing Federation, which offered a range of probiotic lassis and ice creams under its Amul brand.
The same year, the National Dairy Development Board launched a probiotic curd, b-Activ, under the Mother Dairy brand. When the Danone-Yakult joint venture entered India in 2009, Yakult’s products started appearing on shelves.
Three years on, some of these ‘healthy’ products are unavailable in the market. A report by Euromonitor International has also alluded to the slim sales in the category.
“Between 2002 and 2007, India maintained a commendable Compound Annual Growth Rate (CAGR) of 12 per cent, but the H&W market remained underdeveloped. Though India is the second most populous country in Asia Pacific, it accounts for only 4 per cent of the region’s total H&W food and beverage value sales,” the report adds.
Parle Products too attempted its own H&W offerings, but learnt the hard way. It had to withdraw Monaco Smart Chips, a baked product. The company had tried to fuse together the ‘do good’ (with Marie and glucose biscuits) and ‘feel good’ (indulgent snacks) categories for Monaco Smart Chips, which super star Aamir Khan endorsed. However, barely a year into launch, the product was off the shelves.
Market research agencies had forecast that the H&W market was set to grow at 25 per cent and expected to reach $7.5-$10 billion by 2015. The market was expected to grow in urban centres with its established modern retail channels.
But Shah insists that “it is too early to invest in the segment.”
In a country that faces the dual challenges of nutritional deficiency and obesity, a number of food players have been introducing healthier variants of their existing products or launching a completely new range of products on the H&W platform. Shah insists most have got the story all wrong.
“Take a look at what happened to Pepsi. In the last five years, it has lost out to Coca-Cola. With its excessive focus on health, Pepsi is far behind. There is nothing wrong with that (health), but one needs to understand the category they are in. If you completely ignore the category code and forget about the taste, the consumer is not going to accept your ideas about looking after his health,” he adds.
Pepsi Max, PepsiCo's no-sugar cola, had to be discontinued less than a year after launch.
Citing another example, Shah says, “Look at what happened to Saffola Zest (a baked snack). It was the launch of a health offering and unlike many other snacking options. The health benefits were promised. They made it fortified, but the taste was horrible. It bombed. The company had to withdraw the brand.”
Stating that the Saffola Zest case turned out to be “a good learning for Parle never to compromise on taste,” Shah adds, “We cannot afford to say ‘thoda kum taste chalega’ (a little less tastier is fine). The consumer does not buy your theory.”
The Indian market has not yet “evolved to a stage where we have the consumer spoilt for choice,” Shah adds. “That time might come, in 25-30 years. We need to understand that these are a few pockets we are talking about, not all India. Incomes have to grow here. In the US, food contributes very little to the total spend. We still have to evolve to that level here.”
Ssedentary lifestyles are only a feature of the metros and are not the real India, Shah claims.
“The balance 90 per cent of India has yet to experience these luxuries and the varieties and choices on offer,” he says.
Though biscuit majors such as ITC and Britannia have been developing healthier products with several options, Shah argues that healthier biscuits can be successful if manufacturers focus on taste.
Insisting that in the case of Parle, there is absolutely no compromise on taste, Shah adds, “Though we have several big brands, and ParleG is the world's largest selling brand in terms of volume, our only limitation is in terms of assortment. There has been a clear focus on growing each category rather than introducing new variants.”