March: Biodefense & food supply safetyWestern companies eyeing India's $90 billion processed food market

Published 20 March 2008

The globalization of food supply is a two-way street: More and more Western food companies sell their products in the growing Indian market; rising standard of living and working mothers drive the demand for pre-packaged and pre-prepared food, but local culinary preferences, and government bureaucratic practices, die hard

We read a lot about more and more food and food ingredients being imported into the United States — but the globalization of the food supply is a two-way street. India offers an example: When Kellogg launched breakfast cereal in India fourteen years ago, it underestimated the stranglehold of traditional cooked breakfasts. Cartons of cornflakes sat unsold on shop shelves. Those who ventured to buy cereal ate it with hot milk, another ritual as until recently milk was rarely pasteurised in India, and they were put off by the soggy consistency with none of the crackle and pop promised by the advertisements. Kellogg fought back with a massive educational campaign and introduced products to suit local tastes such as Basmati rice flakes and mango-flavored cereal for sweet-toothed Indians. It also made small packs for 10 rupees ($0.25) to encourage trial.

It would be foolhardy for me to say Kellogg has replaced cooked breakfast … I don’t think we can ever hope for that,” said Anupam Dutta, managing director of Kellogg India. “But we’ve become a part of the consideration set for breakfast in many Indian homes, and that’s a tipping point,” he said.

The Guardian’s Rina Chandran writes that the Kellog’s story shows that getting a foothold in India’s processed foods market, estimated to be worth $90 billion, requires persistence and a willingness to adapt products to suit culinary and cultural preferences, experts say. Rising incomes, more working women, modern stores, and greater culinary adaptation are helping food giants such as Pepsico, Nestle, Unilever, McDonald’s and Yum Brands get a piece of the market.

Every company that wants a share has to invest heavily, localise extensively and be very patient,” said Jayanta Roy, at consultancy Frost & Sullivan, which estimates that only a third of the processed foods market is in the hands of large Indian and multinational firms. The rest is controlled by regional firms. Culinary adaptation appears to be key. Pepsi has had a big hit with ethnic salty snacks and also sells “aam panna,” or green mango nectar, along with its colas. Nestle pushed its Milkmaid condensed milk as being ideal for traditional Indian sweets. It found more success with Maggi noodles, a bold step in a nation divided between eaters of rice and “roti” (flat wheat bread).

Maggi soon became a staple in school lunch boxes, helped by the ethnic “masala” (mixed spices) flavor. Nestle recently launched packaged yogurt,