What's cooking?

Why food companies are looking at healthier options?

Last month ITC Foods launched Sachin's Fit Kit, a new brand of energy bars, cookies and health biscuits, for which cricketer Sachin Tendulkar will extend his brand ambassador's role to developing a range of healthy foods.

A few days later, the Ahmedabad-based Cadila Healthcare brought back butter-substitute Nutralite, which has just one-fourth the fat content of real butter.

Godrej Foods and Beverages plans to relaunch its soya drinks brand Sofit and PepsiCo India is quietly promoting its Quaker Oats.

The change has been slow, but it has laid deep roots. Over the past few years, the nation that snacked on deep-fried, fat-dripping khakras, vadas and chiwda has been quietly switching to energy bars, butter substitutes and soya milk. For a significant portion of urban Indian consumers, "healthy" has become as important as, if not more important than, "tasty".

At present, the Rs 2,000-crore health and wellness category accounts for a minuscule part of the overall food market, but this sector is expected to grow faster, at 20 per cent a year compared to 10 to 15 per cent growth for the overall market (industry estimates). How and why did the menu change?

Super-sized reasons
Call it globalisation, a shrinking world or whatever, but there's no getting away from the fact that lifestyle trends in the developed world are quickly aped by urban Indians. So if Atkins and South Beach are transforming lives "" and eating habits "" in the US, it stands to reason that diets in India will change somewhat, too. But it's not just a fad.

Prosperity has brought with it expanding waistlines and elevated blood pressures. The World Health Organisation estimates that India will account for 60 per cent of the world's heart patients by 2010. Already, 35 per cent of all urban Indians are obese (not just overweight), as is one in every 10 children.

For many, those numbers are a wake-up call that cannot be ignored. So, off to the gym or the spa "" and change the menu as well.

"With changing lifestyles, people are becoming highly health-conscious. That is reflected in their daily eating habits as well," explains Sarang Panchal, executive director, South Asia, of market information firm ACNielsen.

The shift really began last year, when a number of food companies began offering healthier alternatives to their regular product lines, or at least switched to the wellness platform for brand promotion.

Consider that staple of school tiffinboxes: Maggi. For the past 20-odd years, the instant noodles has been the "good to eat" brand. In 2005, Maggi began being promoted as healthy and packed with vitamins. The tagline changed to "taste bhi, health bhi".

To underline its new stance, parent company Nestle also introduced a variant, Maggi atta noodle, in green packaging that drove home the "healthy" aspect.

"In India, traditional foods like brown rice and unrefined flour were the norm until they were discarded in favour of taste and flavour. Now, as awareness of health foods is on the rise, many packaged foods are making the most of the opportunity to revisit these foods," says Naimish Dave, director, OC&C Strategy Consultant India.

Maggi wasn't the brand to realise the benefit of whole wheat flour. "Made from durum hi-protein wheat" formed the cornerstone of ITC Foods' promotion for its instant pasta range Pasta Treat when it was launched last year.

"People are eating more low-fat foods, using less oil and following an entirely new nutritious regime," says Ravi Naware, divisional chief executive, foods division ITC.

"This offers tremendous scope for healthy foods across all categories "" breakfast choices, in-between and teatime snacks, and even the regular main courses."

Money for jam
He's right. Although the bulk of the Rs 2,000-crore health foods segment comprises health drinks (Rs 1,200 crore), breakfast cereals, slim milk, soya products and roasted snacks are also squeezing in.

Granted, those are mainly snack and breakfast foods, but there's a growing market for leaner options even in staples like atta and cooking oil.

Consumer goods company Marico has been quick to seize that opportunity. It has a "healthy" alternative for both segments, under the Saffola brand "" a flour additive that claims to help regulate cholesterol levels, and an oil that allows for less absorption while cooking.

"The market can be as big as we make it, since most healthy eating happens at home," says Ameya Naniwadekar, category head, Marico.

It's not just the potential size of the market that makes this segment so attractive to food companies. Health foods can also contribute to a healthy bottomline. Not only is the segment growing faster, margins here are higher, too.

Consider Saffola, for instance: 2 lt Saffola Gold oil has an MRP of Rs 184, compared to Sundrop Heart's Rs 152 and market leader Goldwinner's Rs 144.

Sports drinks Gatorade and Stamina retail at Rs 25 and Rs 12, respectively, while a 200-ml pack of Sofit costs Rs 15, higher than most carbonated drinks and packaged fruit juices.

"The growth margin in this segment in nearly 40 per cent," agrees A Mahendran, director, Godrej Beverages and Foods.

Spread the word
Most companies agree that communication on two levels is required to ensure the success of health foods brands.

The first step is general education/ awareness on the evils of sedentary lifestyles and the need for exercise and healthy eating habits. Product benefits should come only later, after the consumer has been convinced of the need for a lifestyle change "" and the need for the products that go with the change.

"Health foods is a niche segment and not likely to lend itself to high volumes. Producers will benefit only if they relate the price to high value and health benefits," says Dave.

That's what FritoLay has been doing. In 2005, the PepsiCo subsidiary introduced low-fat versions of its snacks, Cheetos and Lehar. It followed that up with the launch of Quaker Oats.

The instant oatmeal is being promoted through product sampling and school contact programmes. FritoLay also co-sponsored a book of recipes based on "" what else "" oats.

"Over the past few years, urban Indians have become more aware of the benefits of an ideal diet as well as an active lifestyle. Our task is to educate consumers on the multiple advantages of the right intake of calories, proteins, carbohydrates and so on," says Sucheta Govil, marketing director, FritoLay India.

For Gatorade, on the other hand, the emphasis has been on one-to-one communication with consumers. PepsiCo tied up with several gymnasiums in Delhi and Mumbai and set up stalls to speak with potential consumers on the benefits of the sports drink.

"We wanted to be available at various touch points and educate consumers on how sports drink help during high-intensity workouts," explains Geetu Verma, vice president, new business marketing unit, PepsiCo India.

It's not only about targeted communication, of course. Since these are low volume, high margin products, health foods brands need to be placed near the regular product so that consumers are aware of the choice available to them.

That's where in-store promotions also come in. "It is critical to communicate the health benefits of these products and ensure their availability," agrees ITC's Naware. Sachin's Fit Kit, which will hit the market in February 2007, will have a presence in both modern trade formats and local kirana stores.

Similarly, Nutralite will double its reach from the present 250,000 stores in the coming year. Urban Indians' newfound taste for healthy foods has found eager takers in food companies that are rejigging their product lines and launching new products for this segment. If the fad becomes habit, everyone will win.