The Indian food and beverage market is witnessing a strategic shift from traditional, low cost products to premium quality upgrades as consumer tastes change across food segments. Some examples of the upgrade include a move away from carbonated soft drinks to fruit juices, from polypack milk to tetrapak milk, and from palm oil and refined vegetable oils to heart-healthy olive oil.
The premium food and beverage segment in India now occupies more than 10 percent of the total market. While in the past, premium segment branded F&B products sold only in niche markets in India, they are now increasingly acceptable to the burgeoning population of more than a half billion middle income consumers. The key drivers in the F&B business; awareness, acceptability, availability and affordability, are rapidly pushing up the demand for premium products including olive oil.
Indian cities are increasingly dominated by a younger and more health-conscious population, a growing number of educated and working women, and nuclear families with fewer children — all target customers for premium products such as olive oil in India.
Proliferation of Indian media channels and their growing focus on health-oriented and superior quality F&B products has also contributed to this ongoing evolution as an increased awareness about health and wellness is driving up the consumption in premium foods like olive oil. The fact that olive oil is a widely accepted product in the West is another driver of its demand in India.
Recent studies indicated that over the next four years, India will have 5.3 million families with an average income equal to or higher than the average American family. The consumption patterns of this relatively affluent Indian population for healthy foods such as olive oil will resemble those in the United States. In gross consumption terms, this segment of the market is going to constitute 16 percent of the total market over the next four years.