2022 influencing food product innovations

31 December 2021 | Opinion

The COVID-19 pandemic and the pandemic related restrictions have led to significant shifts in consumer behaviour in terms of their eating habits, preferences for certain diet and nutritional products and their decision to buy, including switch over to e-commerce platforms. These shifts/ trends are influencing the way industry approaches product innovations in the short and long term and launching products with greater consumer acceptability.

Year 2022 could be exciting with significant consumer as well as industry interest in product innovations focusing on health & nutrition as well as safety & hygiene, and sustainability.

 

Health and functional foods 

One of the pandemic related trends that is likely to persist is the consumer focus on health and nutrition, leading to increased demand for functional foods/ preventive health products. During the pandemic, many players had launched products or re-formulated their existing products by adding a familiar ingredient Eg. Turmeric milk. India is a strong base of traditional knowledge on the application value of herbs, and many players are expected to ride the wave of functional foods fortified with traditional ingredients. With an explosion of health-related claims post covid, it is important for industry to sustain the consumer faith/ interest for health foods in future. There is greater opportunity for industry players to launch products containing science-based ingredients with validated health claims for immunity and other health benefits. The use of branded ingredients with clinical data to support the health benefits/ claims can provide opportunities for premiumisation of products. Traditional foods as a platform for nutrition also provides an attractive avenue as occasions for consumption are constant and familiarity still plays an important role in acceptability by the consumers. 

 

Meal kits/ DIY foods 

With pandemic related restrictions and safety concerns, Indian consumers had started exploring meal kits/ Do-It-Yourself (DIY) foods to have restaurant experience at home. Time saving, convenience, availability of gourmet food and the increasing reach of e-commerce led to the popularity of this category during COVID time. The trend is expected to stay as consumers are eager to experiment and seek variety, creating a great opportunity for traditional dishes as well as multicuisine, new flavours, complex recipes or difficult to cook items including desserts, bakery and beverages. There is also great scope in this market segment for products focusing on health & nutrition, clean labels (no additives, no preservatives), organic as well as the concept of back to basics with use of millets, regional dishes etc. 

 

Plant Protein-based foods

The pandemic led to overall growth seen in ready meals category and e-commerce space, coupled with consumer awareness about food safety issues from animal meat has resulted in growth of plant-based meat substitute category in the Indian market recently. Relative ease of product launches with existing regulations being conducive for the plant protein-based product category and the possibility of a wide array of applications like meat substitute products, fortification etc. will drive the market for plant proteins-based foods in India. The communication on protein nutrition and protein quality seems to be on the lower side in the current Indian market, with emphasis more on animal welfare and sustainability and there is a need and opportunity to address it. The potential opportunity for plant proteins lies in addressing the wide gap in protein consumption in the country and meeting the national protein demand based on Recommended Dietary Allowance (RDA). Plant-based proteins/ meat substitutes can complement other protein sources in Indian diets in meeting this gap/ demand. There is a big opportunity for players to enter the plant protein ingredients segment as well by developing protein isolates from local legumes and other crops. 

 

Plastic Waste Management and Sustainable Packaging

With growing consumer awareness and regulatory pressure, plastic waste management and sustainable packaging will continue to gain the attention of the food industry. With greater consumer focus on safety and hygiene as well as increased food deliveries through e-commerce and food delivery players, the use of plastic as packaging and carrying material has greatly increased in post- COVID world. Few industry players have already adopted measures like eco-friendly packaging, wooden/ edible cutlery, bio compostable packaging etc., but there is a need for industry at large to adopt measures to reduce/ recycle this plastic/ packaging waste. As per Environment Ministry’s recent draft Extended Producer Responsibility (EPR) notification under Plastic Waste Management Rules 2016, plastic packaging producers, importers and brand owners in India will be required to recycle a minimum of 35 per cent of their plastic waste in the first year of notification, followed by an increase to 70 and 100 per cent in subsequent two years. This draft notification sets direction and brings the opportunity for the industry to start working on plastic waste management by looking at recycling of waste as well as adopting sustainable packaging material. The draft also proposes incentives for stakeholders in the form of EPR certificates which can help them in improving their brand image as well as the opportunity to trade in EPR certificates. 

The packaging challenges provide the food industry great opportunities to innovate by redesigning packaging material, use of recycled material, reducing secondary packaging, biodegradable packaging, active and smart packaging to extend shelf life and prevent food loss. Industry also has scope for business model innovations, adoption of circular economy models/ closed-loop production systems.

 

Resilient Supply Chains

Pandemic led disruptions in supply chains have forced the industry to adopt measures for ensuring efficiency and resilience in their supply chains. Several industry players are reducing their reliance on one or few suppliers and/or countries for raw material sourcing. Diversification of sourcing and expansion of raw material storage/ warehouse capacities by industry, to reduce the supply chain vulnerabilities, is likely to increase in the coming years. The trend of using more local/ regional ingredients will continue in the coming years and industry players may develop and redesign the products accordingly. The Atma Nirbhar or Vocal for Local campaign by some Indian players is also in that direction. Technology interventions and digitisation in the logistics sector for improving supply chain efficiencies and real time monitoring is expected to increase.

 

Automation in industry

The extent of automation in the Indian food industry is limited compared to developed markets but is gradually moving in that direction. Automation in Indian industry was mainly happening in packaging, supply chain and logistics due to competition/ international benchmarks, meeting quality and food safety compliance, traceability etc. The consumer focus on food safety and hygiene in the COVID world is now making industry to think of ways to reduce human intervention to the extent possible and adopting automation. Pandemic led labour availability issues and anticipated vulnerabilities may also trigger decisions in favour of automation in critical operations. 

 

Traceability and transparency

Consumers are also increasingly becoming aware of food safety risks, food frauds, climate change and sustainability. Globally, major food players have started implementing end to end traceability for their products and are sharing information across the supply chain to meet food safety regulations of destination market, buyer requirements & specifications or to share true source of origin/ product or process information to consumers in a transparent manner via QR Codes/ labels on the product etc. It is anticipated that Indian industry will also adopt transparency and traceability measures across their supply chains in the coming years. 

 

Dr K V Satyanarayana, Food Processing practice lead, Sathguru Management Consultants, Hyderabad

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