Most of us have apprehensions about buying frozen food. It is a choice only when we do not have enough time to whip up something fresh. Canada-based McCain Foods, which has been a leading marketer of frozen potato-based products in India, is going the whole hog now to change people’s perception and, in the process, the dynamics of the frozen processed food market.
It recently launched its first television commercial in India to promote its range among the retail consumer. The brand plays on emotion using a family setting to drive home the convenience factor.
So far the company had single-mindedly focused on out-of-home consumption with the bulk of its business (more than 60 per cent of its turnover) coming from quick-service restaurants, hotels, restaurants and cafes. But the company now realises that there is a huge in-home consumption market waiting to be tapped as more and more Indians shed their inhibitions about packaged foods. For the records, McCain Foods, which entered the country in 1998, is yet to break even.
Frozen processed foods, mind you, is a tough market to operate in. First the segment itself is small. Industry estimates peg the segment at $8 billion (Rs 360 crore) which includes both vegetarian and non-vegetarian foods. While there is no national player that is a clear leader, there are a throng of players, ranging from Godrej Tyson Foods, Venky’s, Sumeru and many others waiting for the market to open up. While McCain’s product portfolio is focused solely on potato products, Venky’s is strong in the chicken segment, while Sumeru and Mother Dairy operate in a range of categories from frozen vegetables to French fries.
To break into the retail segment, McCain Foods has undertaken a slew of initiatives. For one, it is investing significantly in packaging through which it is addressing the misconceptions surrounding frozen food consumption. McCain has been pretty aggressive in adapting to local preferences. It has extended its French fries portfolio to products like aloo tikki, chilli garlic potato pops, vegetable burgers and tandoori vegetable nuggets. The most recent launch was a non-potato product, the 3-minute idlis, piloted last year. McCain is planning to introduce some of these products in small pack sizes, priced at Rs 25, to drive trials.
Then competition is not sitting idle. Godrej Tyson Foods, which operates in both the vegetarian and non-vegetarian space, has a presence across 2,000 outlets. “We are fast rolling out localised products like Dilli alu chaat and seekh kebab which are gaining traction,” says Sushil Sawant, vice-president, Godrej Tysons. The company is also eyeing the street food space with keen interest.
The other challenge would be to establish a well-oiled cold chain and supply chain facility. “This is an industry issue and all players are still learning the ropes of the logistics game,” says KS Narayanan, managing director, McCain Foods. There is also the issue of locating integrated suppliers who can provide both freezer space and transportation. But as modern retail grows and small grocers start investing in small freezers, the segment will gather pace, notes an Euromonitor 2010 report on frozen processed foods.
