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Urban consumers allocate nearly 50 per cent of their food budgets to packaged and prepared foods, giving a significant boost to the FMCG sector, said a recent Deloitte-FICCI report.
The report further adds that the rural Fast-Moving Consumer Goods (FMCG) volumes experienced a 6 per cent growth in the third quarter of the financial year 2024 (Q3 FY24). "Urban elites increasingly spend 50 per cent of their food budget on packaged foods, dining out and deliveries, while rural consumption is shifting from cereals to beverages and processed foods," the report added. The agriculture and food processing sector, representing nearly 30 per cent of the national food market, is gaining momentum due to rising rural demand, digital advancements and strong policy support. The report adds that with a valuation of about USD 160 billion, the agriculture and food processing sector reflects India's economic rise, marked by the country's rank as the fifth-largest economy and a doubling of per capita income to Rs 1.97 lakh over the past nine years. With consumption trends aligning across urban and rural India, Tier-2 and Tier-3 cities are fast becoming engines of economic growth, the report said. Observing the trends, Anand Ramanathan, Partner & Consumer Industry Leader, Deloitte South Asia, said, "India's agri and food processing sector is on the brink of a transformative leap, where tradition meets cutting-edge technology to build a future-ready food ecosystem. Consumer demand is shifting towards clean-label, protein-rich and gut-friendly foods, driving a structural evolution in how India consumes food." He added that India is poised to lead the global narrative on health-driven, tech-enabled and inclusive food systems, fuelled by advancements in AI, IoT and blockchain. "The way forward lies in purposeful collaboration among policymakers, industry players and innovators to build resilient supply chains, empower farmers and entrepreneurs, and cater to a conscious, global consumer," Ramanathan added. The report says that the premiumisation of products is also an emerging trend, with higher-income consumers driving growth through demand for quality, convenience and indulgence. There is also a rising curiosity around global cuisines and regional flavours, marking a convergence of heritage and innovation in consumer preferences. The Deloitte-FICCI report observed that global research and development (R&D) hubs and startups are reformulating products for Indian tastes, focusing on health-conscious features such as clean labels, protein enrichment and gut health. (ANI)
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