The findings, from a joint study by Mintel and the Economist Intelligence Unit (EIU), were revealed in a paper titled Convergence with Divergence, which analysed how household spending in China and India, along with Mexico, Turkey and South Africa, are likely to change in comparison to the United States and the United Kingdom over the next three years.
Changing society
“In India, we expect to see growth in household products, with fierce brand loyalty to those companies that have invested in the widescale distribution systems needed to reach India’s smaller towns,” said Peter Aylton, a global consumer analyst at Mintel.
The report expects to India to witness total FMCG expenditure to increase by around 12%. Much of this spurt should come from the replacement of traditional and regional dishes with packaged national products.
The report painted a rosy future for India’s packaged tea and whisky markets, which are the world’s biggest by volume. Although they are mature, there still remains a great deal of spending growth potential for both sub-sectors.
And showing the growing impact of Western tastes within a changing India, consumers will continue to shift gradually away from home-cooked food. The demand for breakfast cereals, for example, will increase as lifestyles become busier
“Breakfast products provide a good example. Chapattis or dosas now have to compete with cornflakes, with the latter having the added benefit of a longer shelf life suited for the bottlenecks in the Indian distribution system,” he added.
Joint project
The reason behind the research being a joint project between Mintel and EIU was so that analysts could look at both the micro- and macro-economic trends, providing a more accurate prediction for businesses looking to explore new and emerging markets for their products.
“Understanding the trends and opportunities in the market is essential for any businesses looking to invest in India in the next three years,” said Jon Copestake of the Economist Business Unit.