As Indians acquire healthier tastes, food companies pack it in

Kolkata: Indians are shifting toward consumption of low-salt, low-sugar and nutrition-fortified packaged food with sales of such products having risen in the last five years, according to the latest data from companies, market researchers and the government. This reflects an uptick in healthy eating trends as well as packaged food companies working on improving taste, the reason why sales of such items had failed to gain traction initially.

Data show urban India is leading the shift toward healthier food, even though it has also picked up pace in rural areas, where household expenditure on staples such as salt, sugar and edible oil has come down. High levels of sugar, salt and fat in processed goods are seen as a concern amid rising diabetes, obesity and cardiac issues in India and elsewhere.

PepsiCo's bottling and distribution company Varun Beverages told analysts last month that 46% of its consolidated sales volumes comes from low-sugar or no-sugar products, which aligns with consumer trends.





High-volume Growth: NielsenIQ
In 2018, the low-calorie portfolio comprising Tropicana, low-sugar variant Pepsi Black and Sting was about 2% of its mix and the company had told analysts at the time that the market was still keen on products with existing levels of sugar content.

As per FMCG market researcher NielsenIQ, the shift toward healthier eating habits among Indian consumers is pervasive, with high-volume growth.

The classic case is the breakfast cereal category: it's seen 13.3% year-on-year value growth in the 12 months ended March with 9.9% volume growth.

Roosevelt Dsouza, head of customer success at NielsenIQ, said oats and muesli have emerged as favoured healthy options, with their saliency in urban India rising to 32% and 19%, respectively, over the past two years.

Reliance Retail chief executive for the grocery business Damodar Mall posted on X on May 25 that India's largest retailer sells more muesli than cornflakes, while oats and masala oats are also growing rapidly.

The shift to healthier food was an undercurrent that gained pace during the COVID-19 pandemic when healthier living became a way of life, company chiefs said, adding that packaged food companies are driving this change by reducing sodium, sugar and palm oil and adding healthier alternatives such as millets, atta and micronutrients without compromising on taste.

Britannia, for instance, reduced sodium content in its portfolio by 7.8% per serving in FY23 compared with what it was in FY19. In the same period, it has reduced sugar content in biscuits and milk shakes--by 9% in Britannia Nutrichoice Digestive, 13% in Milk Bikis and 16.7% in Winkin Cow Chocolate Shake. All Nutrichoice products are now made of 100% atta.

Nearly half of Britannia's portfolio is enriched with relevant essential micro-nutrients, said Sudhir Nema, head of research and development at the company.

"We have been actively working towards reducing the sugar content across our portfolio without any compromise on the product experience," he said.

ITC has decided to add millets or roll out 100% millet products across categories such as snacks, confectionery, cereals, ready-to-eat range, biscuits and instant noodles with the company adopting a "nutrition-first" strategy.

The company is working on enhancing the nutrient value of products to address consumer concerns arising out of anaemia, digestive health, diabetes, immunity, lactose and gluten intolerance, a spokesperson said.

PepsiCo has started trials to replace palm oil and palmolein with better alternatives for its chips brand Lays, while Varun Beverage president Raj Gandhi told analysts last month that most of new beverage products launched are zero-sugar and low-sugar such as Sting and Gatorade.

Shift to healthier options
This shift toward healthier food is also seen in staples. As per the government's household consumption expenditure data, the share of sugar and salt in monthly per-capita expenditure has halved in the past decade.

In urban households it has dipped from 1.15% in FY12 to 0.6% in the August 2022-July 2023 period, while in rural households it has dipped to 0.93% from 1.83% in the same time.

Even edible oil has declined from 2.66% to 2.37% in urban households in the aforementioned period, while in rural areas it has dropped from 3.74% to 3.59%.