MARKET RESEARCH

· Textile Industry

· https://www.ibef.org/industry/textiles.aspx

· https://www.ibef.org/download/Textiles-and-Apparel-February-2018.pdf

· Potential Market Size

· The domestic textile industry in India is projected to reach US$ 250 billion by 2019 from US$ 150 billion in July 2017.

· The textile industry in India is among the oldest industries in the region’s economy. It is still one of the biggest contributors to the exports that the country is making.

· There is a promising future in the industry driven by strong export demand and domestic consumption. The retail sector of this industry is witnessing a rapid growth because of the rising consumerism and disposable income

· it contributes to approximately 13% of the total exports.

· this industry has become one of the largest employers in the region since it is a labor-intensive industry.

· The textile industry has two broad segments.

· First, the unorganized sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods.

· The second is the organized sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale.

· The Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum.

· The decentralized power looms/ hosiery and knitting sector form the largest component of the textiles sector.

· The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries.

· The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world.

· Potential Growth (size and factors)

· Textile plays a major role in the Indian economy

· It contributes 14 per cent to industrial production and 4 per cent to GDP

· With over 45 million people, the industry is one of the largest source of employment generation in the country

· The industry accounts for nearly 15 per cent of total exports

· The size of India’s textile market in 2016 was around US$ 137 billion, which is expected to touch US$ 226 billion market by 2023, growing at a CAGR of 8.7 per cent between 2009-23E

· As of June 2017, the central government is planning to finalize and launch the new textile policy in the next three months. The policy aims to achieve US$ 300 billion worth of textile exports by 2024-25 and create an additional 35 million job

· During the last five years, the textile industry has been having a spurt in investment. The printed and dyed industries together with this industry have attracted the Foreign Direct Investment amounting to 2.68 billion US dollars during the period from April 2000 and September 2017.

· The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route

· Gems and Jewelry Industry

· https://www.ibef.org/industry/gems-jewellery-india.aspx

· https://www.ibef.org/download/Gems-and-Jewellery-February-2018.pdf

· https://www.investindia.gov.in/sector/gems-and-jewellery

· Potential Market Size

· India is one of the largest exporter of gems and jewelry and the industry is considered to play a vital role in the Indian economy as it contributes a major chunk to the total foreign reserves of the country.

· Net exports of gems and jewelry from India rose at a compound annual growth rate (CAGR) of 7.01 per cent between FY05 and FY17.

· The net exports rose from US$ 15.66 billion in FY 2004-05 to US$ 35.59 billion in FY 2016-17.

· The overall net exports stood at US$ 35.59 billion during FY 2016-17 registering a growth of 9.07 per cent over FY 2015-16.

· US, Hong Kong and UAE accounted for 75 per cent of the total gems and jewelry exports from India during FY 2016-17.

· Its contribution to the global jewelry consumption is 29%.

· it is a sector that contributes approximately 7% of India’s GDP

· It also employs over 4.64 million workers. One of the fastest growing sectors, it is extremely export oriented and labor intensive.

· Based on its potential for growth and value addition, the Government of India has declared the Gems and Jewelry sector as a focus area for export promotion.

· The Government has recently undertaken various measures to promote investments and to upgrade technology and skills to promote ‘Brand India’ in the international market.

· Moreover, India exports 75 per cent of the world’s polished diamonds, as per statistics from the Gems and Jewelry Export Promotion Council (GJEPC).

· Potential Growth

· The gems and jewelry market in India is home to more than 300,000 players, with the majority being small players.

· Its market size is about US$ 60 billion as of 2017 and is expected to reach US$ 100-110 billion by 2021-2022. It contributes 29 per cent to the global jewelry consumption.

· India is one of the largest exporters of gems and jewelry and the industry is considered to play a vital role in the Indian economy as it contributes a major chunk to the total foreign reserves of the country.

· The Bureau of Indian Standards (BIS) has revised the standard on gold hallmarking in India from January 2018.

· The gold jewelry hallmark will now carry a BIS mark, purity in carat and fitness as well as the unit’s identification and the jeweler’s identification mark. The move is aimed at ensuring a quality check on gold jewelry.

· Companies such as PC Jewellers, PNG Jewellers, Popley and Sons, are planning to introduce a virtual-reality

· (VR) experience for their customers. The customer will have to wear a VR headset, through which they can

· select any jewellery, see the jewellery from different angles and zoom on it to view intricate designs

· Established brands are guiding the organized market and are opening opportunities to grow. Increasing penetration of organized players provides variety in terms of products and design

· Spices Industry

· https://www.ibef.org/exports/spice-industry-indias.aspx

· Potential Market Size

· India, known as the home of spices, boasts a long history of trading with the ancient civilizations of Rome and China.

· Today, Indian spices are the most sought-after globally, given their exquisite aroma, texture, taste and medicinal value.

· India has the largest domestic market for spices in the world.

· In fact, India is the world’s largest producer of cumin, chilli, ginger, and turmeric.

· Largest producer

· Traditionally, spices in India have been grown in small land holdings, with organic farming gaining prominence in recent times. India is the world's largest producer, consumer and exporter of spices; the country produces about 75 of the 109 varieties listed by the International Organization for Standardization (ISO) and accounts for half of the global trading in spices.

· Studies show that India produces approximately 3 million tonnes of spices on an annual basis, which are worth around Rp 186 billion (US$ 3 billion).

· Potential Growth Size

· Total spices export from India stood at 947,790 tonnes valued at US$ 2.63 billion in the year 2016-17, registering a year-on-year growth of 6 per cent in value terms.

· The revenues from India market are expected to expand to around USD 18 billion in FY’2020, growing with a CAGR of ~% from FY’2016 to FY’2020. (Indian Institute of Spices Research (IISR)). India will have $5 billion share

· The highest contribution to this growth is expected to come from the spice mixes and blended spices

· The population in India is surging and the increasing consumer expenditure on food explains the swelling demand for food in India.

· Accordingly, the demand for spices is expected to grow in the future which will lead to a prominent growth in the revenues from the sales of spices in India.

· Major importers of Indian are US, China, Vietnam, UAE, Indonesia, Malaysia, UK, Sri Lanka, Saudi Arabia, and Germany.

· Top spices produced in the country include pepper, cardamom, chilli, ginger, turmeric, coriander, cumin, celery, fennel, fenugreek, ajwain, dill seed, garlic, tamarind, clove, and nutmeg among others.

· India commands a formidable position in the world spice trade with the spice exports expected to touch US$ 2.63 billion by 2016-17.

· Unorganized segment has been dominating the spices market in India for the last many years. The market share of unorganized segment was ~% in FY’2015.

· Gujarat has been and continues to be the largest spice producing state in India.

· In FY’2015, ~ thousand tonnes of spices were produced in Gujarat.

· A combination of highly fertile soil and recent irrigation projects has given Gujarat the edge over other spice producing states.

· The dominance of inorganic spices segment has showcased that majority of the farmers are adopting the farming practices for inorganic spices and consumers have also shifted their preferences towards inorganic spices owing to huge cost associated with the organic spices.

· A major part of revenues for the manufacturer of spices come from this sector as spices are largely consumed by individuals for cooking purposes at home.

· Segments:

· Chilly is the largest produced spice in India.

· It contributed to the tune of ~% of the world production.

· This spice is used majorly in curried cuisines.

· It is also used in curry power, seasoning and other such spice mixes. MDH was the dominating player in FY’2015, with a market share of ~% in the total revenues generated from the sales of spices in the organized segment.

· The major factor for the dominance of MDH is the gigantic distribution network comprising of 1,000 wholesalers and more than 400,000 retailers in India.

· Pepper second largest.

· According to the Spices Board, the Indian government body that promotes Indian spices, India accounts for about 30% of the world’s pepper production, 35% of the world’s ginger production and 90% of turmeric production.

· Kerala tops the chart when it comes to the production of spices because the state produces close to 96% of pepper, 53% of cardamom, and 25% of ginger in the country.

· Andhra Pradesh leads the country in the production of chilli and turmeric, with 49% and 57% respectively.

· Rajasthan is the largest producer of coriander, cumin and fenugreek, and the figures stand at 63%, 56% and 87% respectively.

· India is not just one of the largest producers of spices in the world but it is a prime exporter of spices too. In fact, India’s share in the world trade of spices stands at 48% in terms of volume and 25% in terms of value

· A rise in the local demand for spices has kept the prices of spices high, especially that of chilli and pepper, and this is advantageous in the Indian context, where producers are able to make money from the Indian market. However, by keeping the prices high, Indian producers are losing out in the international arena.

· In modern times, international trade in spices and condiments have increased dramatically which could be attributed to several factors including rapid advances in transportation, permitting easyaccessibility to world markets, growing demand from industrial foodmanufacturers of wide ranging convenience foods which are eitherready to eat or requiring minimal preparation time in the household, migration of large number of people of different ethnicity with theirtraditional food habits, to meet the changing requirements of industry and commerce and exposure to culinary delicacies of other regions of the world by increasing business and tourism travel. As thedemand for Indian spices is increasing day by day, Indian manufacturers are producing spices of high quality

· Spices Board of India

· Spices Board was constituted on 26th February 1987 under the Spices Board Act 1986 (No. 10 of 1986) with the merger of the erstwhile Cardamom Board (1968) and Spices Export Promotion Council (1960). Spices Board is one of the five Commodity Boards functioning under the Ministry of Commerce & Industry. It is an autonomous body responsible for the export promotion of the 52 scheduled spices and development of Cardamom (Small & Large).

· http://www.indianspices.com/sites/default/files/SB_printed_document_0.pdf

· The Spices Board of India works towards the development and worldwide promotion of Indian spices. It provides quality control and certification, registers exporters, documents trade information and provides inputs to the central government on policy matters. The board participates in major international fairs and food exhibitions to promote Indian spices, apart from organising various domestic events.

· Spice and Spice products for processing and export shall comply with:

· The Board’s regulaion

· FSSA Act& Rules

· Labeling reqirements

· Approval no.

· Date of manufacture

· Consignment no

· Chemical use

· Brand name

· Food and non food chemicals shall be seperately stored with adequate labels as well as instructions for use

· IISR has conserved around 3,000 varieties.

· India is the centre of origin for black pepper and cardamom. Apart from this, the country is the major producer of ginger, turmeric, chillies and tree species of spices.

· Highlighting the role of farmers in conserving and identifying different species of spices crops, he said 22 cardamom varieties are identified by farmers.

· The leading factors which have been propelling the market over the period last six fiscal years include surging demand for packaged spices, emerging market of organic spices, swelling demand for spice mixes and influx of regional as well as global players in the market.

· In India, unorganized segment dominates the spices market with a ~% share in the revenues being generated from the sales of spice products in FY'2013. Unorganized segment includes all the unbranded spices sold in India.

· Competitors - http://infobharti.com/indias-top-10/top-10-spice-brands-of-india.phpdo sp

· MDH

· CATCH

· Mother’s recipe

· Cook me

· Priya

· Pushp

· Ramdev

· Nilon’s

· Nutraceuticals Industry

· http://www.nuffoodsspectrum.in/inner_view_single_details.php?page=1&content_type=&vrtcl_panel_nm=&ele_id=NOR_588b37ba948df4.78777381

· Positioned in between Food & Beverages and Pharamceuticals

· Developing markets like India, Brazil, and China are relatively smaller, yet have a huge growth opportuniry.

· The nutraceuticals industry in India is one of the rapid growing markets in the Asia- Pacific

· Industry is worth about 2.2 billion dolars and is projected to grow at 20% to 6.1 billion dollars by 2019-2020.

· The popularity and growth of this industry can be attributed to consumers’ increased inclination towards health and nutrition.

· Over the past decade, there has been a radical change in lifestyle of Indians.

· Develped an interest in products for boosting energy and improving their physical endurance and mental alertness.

· Dietary supplements hold the largest share in the market

· Indian dietary supplement market is composed of over 500 participants

· Vitamins and minerals supplement market is the most competitive with over 100 participants.

· India is opening up its market to foreign players (healthy competition in the sector)

· To keep up with the growing competition, nutraceutical companies are focusing their energies in develping new product and innovative formulations and using proper advertising techniques to help consumers choose the right products

· Nutraceutical ingredients have typically been positioned as natural and healthy alternatives to allopathic medicines. However one of the primary challenges being faced by these products is the difficulty in formulating these products using the right dosage form. Besides, flavor and fragrance masking, the dosage forms also need to increase the stability of ingredients in the final product. But lately consumers are seeking more variety and benefits from delivery methods beyond those possible through traditional (tablet and capsule) technologies. As a result, the formulator needs to work far harder to cater to increasing consumer demands. As the nutraceutical industries look to carve a niche of their own and create a differentiated product, an important trend is the growth and diversity of new dosage formulations. As a result, traditional tablets and chewables are slowly being replaced by capsules, particularly liquid-filled capsules.

· Different Segments:

· Functional Foods

· Provide health benefits beyond the provision of essential nutrients when consumed at efficacious levels as part of a regular diet

· Omega-3 enriched eggs, Oats, Fatty Fish, Soy, Tomato, Nuts etc.

· Ancient Indian traditional medical system:

· Ayurveda has been practiced for millennia and is still quite accepted

· Chavanprash and mant botanicals such as brahmi, ashwagandha, etc.

· Functional Beverages

· Non-alcoholic beverages containing ingredients that provide specific health benefits beyond those of general hydration

· Fortified with vitamins, minerals, amino acis, and antioxidants

· Sports drinks, ready to drink teas, enhanced water, fruit drinks

https://social.eyeforpharma.com/column/nutraceuticals-india-challenging-opportunity

file:///C:/Users/student/Downloads/Nutraceutical-Products-in-India.pdf

· India and Indian Subcontinent

· India’s market share growth is not expected to come from dietary supplements

· Functionnal beverages are expected to drive growth throughout the subcontinent

· The functional food (24%) and functional beverages (12%) are relatively promising markets in India, primarly due to the existence and reliance on traditional wisdom and Ayurveda by a burgeoning middle class, which accounts for a huge chunk of the puchasing power in India

· Marketing of sports and energy drinks is primarly targeted at niche segments of the urban population

· Growth of the dietary supplements will be spurred forward by the growing demand for dietetic supplements due to an urban, fitness concious, young population

· Functional F&B market is expected to touch $4.11 billion by 2022 at CAGR 22%

· Dietary Supplements

· Intended for ingestion that contains a dietary ingredient intended to add further nutritional value to the diet

· Minerals and vitamins

· Market for dietary supplements is expected to touch $5.90 billion by 2022 at CAGR 19%

· Competitors:

· Functional Food & Beverages:

· GSK Consumer Health Care

· Amway Nestle

· Abbott Nutrition

· Baidyanath Group

· Dietary Supplements:

· ITC

· Dabur

· Himalaya

· Patanjali

· Baidyanath

· Many players have identified niche markets to play on their strenghts

· Overall Major Key players ruling the Indian Nutraceuticals market:

· The Indian nutraceutical market is mainly dominated by pharmaceuticals and Fast moving consumer giants with very few companies that only specialize in nutrceutical products.

· Dietary supplements such as vitamin and mineral supplements have been captured by pharmaceutical companies, functional food and beverages are now bring brought to the market by FMCG companies.

· Increasing health consciouness and improved incomes and standard of living has boosted growth of the Nutraceuticals market in India, making it one of the fastest growing segments.

· India represents merely 2% of the global nutraceuticals market is way behind in terms of per capita spent on nutraceuticals with just US $2.5 compared to global average of US $21

· Highly concentrated in South India followed by East India with leading top three states – Andra Pradesh, Tamil Nadu, and West Bengal

· Rutal india occupy nearly one third of the market

· Market Growth:

· Broadly consists of two major segments- Food supplement and vitamins and minerals supplements, the former over 60% of the market and the rest 40% comes from the latter.

· Among vitamins and minerals supplements have continued to be markeed and distributed like prescription drugs in India, as the general awareness level are still low.

· Food and supplements on the other hand, are marked and distributed more like FMCGs, a reason why they are also clubbed as fast moving healthcare goods by the various players.

· Nutraceuticals market penetration in urban India is at around 22.5 %, while it is comparatively low in rural India at 6.3% per cent.

· Potential:

· Have to focus on product innovation

· Convergence of food manufacturing companies with pharmaceuutical companies to manufacture and market Nutraceutical is another emerging trend that will catch on in the future

· India will maintain a modest trade surplus in Nutraceutical ingredients as most of the contry’s large pharmaceutical companies operate divisions that produce bulk medicinal and nutritional compounds.

· The distribution channels available for Nutraceutical shall play a vital role in the future growth of the business

· Highest growth is likely to be in sub categories such as energy drinks, enhanced shelf stable juices, probiotics and omega fortified foods and beverages. These foods and beverages, personalized to manage certain health conditions are the future of the functional health foods market

· Factors Driving Growth in India:

· Rising awareness of health issues & alternatives

· Better access through newer channels

· High incidence of Diabities, hypertension, cardio-vascular ailments, osteo-arthiritis, osteoporosis, etc

· Low incidence of health insurance in India- large population still uncovered

· Usage of vitamins

· Rising middle class ad health consciousness

· Health care costs

· Indian Market Size & Growth

· Indian nutraceuticals market is exepected to grow to $10 billion in 2022, at a growth rate of 21% annually

· Functional food & beverages account for 35% of the market in India and will experience higher growth

· Consumer Segments?

· Growing children needs functional food and beverage supplement to be able to perform well academically and non

· Younger age groups 15-25 & 25-35 are stronger targets due to active lifestyle or specific needs

· Pregnant and lactating mothers need to supplement their nutrition need

· Ages 60+ group are specifically vulnerable to Diabities, Bone related diseases and other aliments and needs special preventive protection through Nutraceuticals

· Indians have been facing issues with proper food and nutrition. In general, protein intake is less so need to consumer more of higher quality protein and if these are not available from the foods then normally consumed necessary supplements.

· Indians have been using spices and herbs in cooking for centuries so daily diet contains functional foods containig garlic, chillies, tumeric and many other which have health benefits.

· The functional food concept is not new and Indians have already accepted many newer forms of functional foods that contains probiotics, omega 3 etc.

· Indians carry legacy of traditional herbal and ayurvedic medicines. Reliance on these produts may dilute demand for emerging nutraceuticals, particularly as less aware Indian consumers of new ingredients such as omega-3 fatty aicds. – threat of substitute

· Ayuervdic and herbal medicines provide a rich local ingredient base for incorporation into nutraceuticals

· Chavanprash or herbal honey is used as a general health supplement

· Traditional medicines also represent a culture of natural products and self-care that merges with global trends in nutraceuticals.

· Channels?

https://www.researchgate.net/publication/261007048_Ch_19_Nutraceutical_and_Functional_Food_Regulations_in_India

·

· New trends among consumers? In food innovation, consumer eating-pattern changes and lifestyle shifts.

· Paleolithic diet (paleo)

· Or “caveman” diet

· Diet that is basd on avoiding not just modern processed foods, but also foods that humans began eating after the Neolithic Revolution.

· While food variability exists in the way the diet is interpreted, we’re noticing more attempts at marketing food products using this term.

· Baking Alternatives

· Gluten free choices are still a powerhouse on retail shelves

· One reason is celiac disease

· Alternatives include spelt, quinoa, teff, brown rice flour

· Fermented Foods

· The benefits on digestive health seem to be in high demand among specialty foods from the already Popularized Kombucha, to Kerfir, to “gut shots”like this, or even cultured coffee.

· Consumers seem to be very intrugied by the natural varieties of microflora, and continue to demand a much wider variety of beneficial bacteria from foods and supplements alike

· Dosha: rice of turmerc as a trending ingredient recently been observed greatly. This might be the beginning of consumer exploration of Ayurveda and the dosha concept of health.

· Labeling requirements?

· Private label Industry India

· file:///C:/Users/student/Downloads/Private%20Labels-2512.pdf

· https://www.waljatcollege.edu.om/journal/pdf/IJASM-010104.pdf

· https://www.ibef.org/download/Retail-February-2018.pdf

· http://www.icrim.eu/wordpress/wp-content/uploads/2014/12/KPMG-Retail-India.pdf

· According to the 2007 report by McKinsey & Company, India is set to grow into the fifth largest consumer market in the world by 2025

· Creating customer loyalty is now a whole new challenge

· Demographic shifts have also created the need for leader who can keep pace with change and identify with and predict future demand

· Organised retail has grown very rapidly in India with the influence of private labels.

· Fast moving consumer goods (FMCG) sector contributes a lot to the growth of India’s GDP

· Necessary to identify the changes in consumer buying behavior towards FMCG products

· Indian FMCG sector with a market size of $ 13.1 billion is the fourth largest sector in the economy

· A wel established distribution network with an intense competition between the organize and unorganized segments characterizes the sector.

· Expected to grow $74 billion in 2018

· With the emergence of strong retailers, private label brands, also called own brands/store brands also emerged as a major factor in the market place.

· Where the retailer has a particularly strong identity, this “own bran” may be able to compete against even the strongest brand leaders, and may outperform those products that are not otherwise strongly branded.

· Market size?

· CAGR 12-13% which would be worth USD 94.8 billion 2018-2019

· With over 92 percent of the business coming from the fragmented unorganised sector, such as traditional family run mom and pop stores and corner stores, the Indian retail sector offers immense potential for growth and consolidation

· Family owned and operated stores lack scale to grow

· Potential growth?

· Private label is a push market

· Predominately driven by food retailers

· Positively correlated to concentration levels in food retail

· 50% of organized retail by 2025 (global)

· 15% of total retail in india by 2025

· The private label arena in the fast moving consumer goods arena has shown consistency and potential

· Nielsen estimates that India’s private label sector is better poised than its counterparts in other emerging economies. It also highlights shifting attitues and perceptions with respect to brand loyalty.

·

·

· Food dominates India’s private-label market

· Food category alone accounts for 76% of the total sales in private label, and within this, some areas are making bigger waves than others

· Packaged grocery for example has a particularly dominated position- as it pulls in a whopping 53% of total sales

· While segments within the food category like packaged rice, packaged atta, and pure ghee have garnered the highest values sales, a few private label segments are generating sales that are stronger than their modern trade equivalents.

· In the non-food category, household cleaners hold the top position, accounting for nearly half (48%) of the private label sales

· Personal care, fabric care( manufacturing ready-to-wear garments) and general care are other segments which contribute to non-food

· India is still largely an unorganized retail market where maximum retailers operate in less than 500 sq. ft. of space. The total retail industry is estimated at 9 lakh crore of which the organized sector accounts for a mere 9 per cent indicating a huge potential market opportunity that is lying in the waiting for the consumer-savvy organized retailer. Today, the organized players have ventured into each and every retail category.

· Rural markets show high growth potential if tapped with the right set of products and pricing.

· With increasing investments in infrastructure, connectivity to such towns is now becoming easier. This helps the retailer to increase reach in such high potential markets.

·

· What’s driving the change?

· Crucial to understand the characteristics of the modern shopper

· With growing levels of disposable income, shoppers are far more open to experimentation than ever before

· Perception of grocery shopping have changed- rather than viewing shopping as a chore, more indians are finding it to be more pleasurable experience

· Shopping experience from being a necessity to becoming a sensorial experience with less dependence on planning and a fixed list of brans

· Private labels in certain categories because of the assurance they get from knowing what they can interact directly with the retailer during the shopping trip

· Changing purchasing habits of indian consumer:

· Before invention of mass media, buyers relied on sales people and word of mouth to infrm their purchase decisions

· Advertising helped spread saes and marketing messages

· Price conscious -80% of consumers are considered price conscious

· Eight/10 consumers are looking for value for money while they shp

· Staying up to date on sales or using coupons

· 84% respondents in the Valassis Shopper marketing report responded they prefer value for their money over brand and can switch to any product to suffice the purpose

· Indian retail: Time to change?

· Retail companies are increasingly concentrating on strenghtening existing operations and assessing options for growth through consolidation, while continuing to innovate.

· Certain drivers which are likely to have impact across retail categories

· Factors like renegotiating rentals, store rationalization, working capital mangement, regionalization, cost optimization and manpower resizing are some of the key top of mind issues for retailers in the curent context of the downtown.

· Retailers are therefore indulging in creation of new private label brands in order to compete with national and international brands of repute [6] Initially the private label was only available in the commodity or non-branded product range which included spices, grams, wheat flour, masalas, papads and other eatables.

· Now the private label brands have grown up and are available in high technology electronic gadgets like juicer, mixer, mobiles, TVs, water purifier and such.

· Therefore the value addition seems to be the hygiene factor, which is making a game away from local and national retailers. The loyalty with store has a positive association with private label brands.

· With increasing convenience, various retail formats are becoming prominent touch points for millions of Indian retail consumers.

· Taking hint from global retailers, Indian retailers are also looking for newer ways to increase their profit margins by introducing in-house brands and also developing niche strategies for promotion of these private label brands.

· Majority of the Indian retail customers perceive

· private label brand as average quality and low priced substitute of national brands. Food category and the apparels categories were the section where customers prefer private label the most, because of less stakes involved.

· On the other side consumers were least bothered about private brands in Electronics Category as the involvement in terms of price, time and quality impact is high.

· For retailers private brands provide better margin and more sales, because of which, retail outlets offer more discount on price to attract consumers to go for private label brand

· It can be concluded that if retailers can consistently provide value enhancers to customers on factors required by customers, there is high possibility for them to establish their private label brands, as acceptable and satisfactry brand in the minds of customers, wich will further improve customer’s perception about private label and lead to more adoption

· Famous Indian private labels:

· Clean mate

· Tasty Treat

· Care mate

· Jade Blue

· Food Bazaar by pantaloons india Ltd.

· Mochi ka Juta

· Flavor and Fragrence Market in India

· https://www.researchandmarkets.com/research/49ql79/india_perfume

· https://www.slideshare.net/StevenThomas34/organized-deodorant-and-perfume-players-to-dominate-the-fragrance-industry-in-india-by-2022-bonafide-research?qid=5b62b244-1be4-4bee-ac01-a12132f8cb03&v=&b=&from_search=1

· Potential Market Size

· Perfume market is driven by various consumer behaviours and demands from differing consumer segments.

· The Indian market is complex and has developed over the millennia.

· The consumers of perfumes are presented with a vast array of offerings from multinationals, from prestigious brands to independent manufacturers, with some perfumes produced according to traditional formulae laid out in the ancient Hindu Ayurvedic texts.

· Due to the historic abundance of natural aromatic resources present in the Indian geographic region, there is a glut of natural raw materials from which perfumes and scents are extracted.

· All these products are exported from India to the international perfume houses of the world, and are also being used by a broad segment of local unorganized manufacturers.

· At present, the Indian perfume market is set to grow considerably and offer innumerable opportunities for new entrants to establish themselves in this market.

· The perfume market is operated under the organized as well as unorganized players.

· The market is overpowered by unorganized players, as India is a land of attars, Kannauj (Uttar Pradesh) being the capital city for attars. Indians were mesmerized by the fragrance of attars and was a favourite amongst many.

· However, as new players are entering into the organized market with innovations like perfumes, deodorants and colognes, attars are somewhat losing their essence to these branded products. With the introduction of perfumes having synthetic ingredients, products like attars have started getting competition and are facing tough times as synthetic laid perfumes are taking over a major segment of the perfume market.

· The fragrance industry’s rapid growth is attributed primarily to the advent of functional products with several characteristics.

· Segments: perfumes and decorants, the latter doing relatively well for years

· Indian people have used perfumes and perfume oils on their body

· In India has been high, in terms of production, consumption, import as well as export and is in the process of growing exceptionally with more youngesters wearing fragrence

· Market is further differentiated between organized and unorganized markets

· Organized market for fragrence products like deodrants and perfumes is set to grow extraordinarily and reach to a total market size of around INR 65 00 crore by 2019.

· Organized players:

· HUL, ITC, J.K Helene Curtis, McNroe Consumer Products, Marico, Nivea etc. are giving tough competition to unorganized players

· Foreign giants: Avon, Coty, L’Oreal have set their shops locally and are expected to compete rigorously to gain upper hand in market

· More orgnized players have eneterd the market, thus increasing the overall market size and making it even more compelling for the unorganized players to introuce new cost effective products

· Are keepng their product prices in traction so as to capture a larger size of the market since India consumers have a tendency to buy product that is low cost

· Growth tend is expected given increasing scale of local firms and need and demand for standardization of products

· High end sophisticated fragrences are set to have an increase in demand as consumers look to impress their peers, subordinates in office environments

· Potential Market Growth

· According to "India Perfume Market Overview, 2016-2022", the demand for perfume products has been driven by rising personal grooming, brand awareness, increasing disposable income, growing demand from middle class population and affordable range of products.

· Perfumes see a hike in sales in the festive season, as it is considered a perfect gifting option to friends, family and relatives.

· Companies that are already established in other fragrance related segments are now foraying into the perfume market by expanding their product portfolios.

· Women are also emerging as the desirers for different perfumes suiting their personality and making them feel confident about themselves.

· Key players

· Major players contributing to the organized perfume market are mostly international players like Coty, Avon, P&G, etc. Indian manufacturers have also started venturing into the perfume market such as Vini Cosmetics with brand Fogg. Fogg is currently the leading brand in Indian deodorant market and now plans to take on big players in the perfume category.

· Many more big Indian names are setting up their eyes on the perfume market and are planning to launch affordable perfume products for the price sensitive consumers

· Deodorants World market is $12 Billion USD

· India contributes only 2.5 % of deodorants sales

https://www.slideshare.net/NAVEN131/business-plan-perfume-startup-or-business-plan-sample

Link: https://www.chemarc.com/content/flavours--fragrances-industry-in-india/599d6f81f607c744996eed3a

· Small but significant constituents of food and beverages and FMCG products respectively.

· Indian flavor and fragrences market is dominaed by the large global flavors and fragrences houses, which contribute over sixty percent of the Indian production of flavour and fragrence blends.

· These players are strenghtening their manufacturing base in india to cater to the growth in Indian demand.

· All flavours and fragrences blends use a large number of ingredients, which can be either natural or synthetic, depending on the source and manufacturing process.

· Flavors and fragrences can be derived from a variety of sources of raw materials.

· Essential oils are distilled from various herbs and spices like mint, rosemary, and others whereas aroma chemicals are derivatives of organic or inorganic aromatic compounds, which are in turn derived from petrochemicals or from natural sources.

· The ability to secure a consistent raw material supply is a key advantage for Indian players using natural ingredients, the only challenges being seasonality and variation in yields of natural raw material.

· Sourcing would continue to be challenging for Indian players depending on synthetic raw material sources, since such feedstock is relatively scarce in India, is controlled by a few players flavors & fragrences constitutes a small share of downstream applications. Many players diversify sourcing by importing such feedstock.

· Segments

· Essential oils

· Aroma chemicals

· Fragrences

· Large unorganized blending market estimated to be larger than organized market, but difficult to quantify

· The unorganised market largely caters to tobacco, incense, and other such end products with thriving unorganized markets by themselves

· Growth Drivers

· Increasing demand for processed food

· Processed food requires flavouring

· Increasing use of new flavor concepts and flavor blends will drive growth

· Rural Penetration of FMCG

· Marketing by FMCG companies has created demand for categories like deodeants, room freshners, and perfumed sopas in rural markets

· Has opened up new opportunity for the currently underpenetrated fragrence market (penetrated only to an extent of 0.5% of the potential market).

· Premiumisation

· As indian consumers graduate from using basic soaps and detergents to higher end products such as skin creams, lotions, hair gels, and other specialized cosmentics products, the quality and value of the flavors and fragrences used in these products is expected to increase

· Room freshners and car perfumes are seeing increased penetration, bolstering the demand of flavors and fragrences.

· The air care market in India is expected to grow at 40% p.a. In the beverage space, fruit-based drinks (expected to grow at 30% p.a.) are becoming popular and consumers are demanding unique flavours. These require high value flavouring ingredients.

· Indian Market

· The Indian market for flavour and fragrance is consolidated, with the top 4 players (the global Flavours & Fragrances houses - Givaudan, IFF, Firmenich and Symrise) constituting more than two-thirds of the market.

· The rest is shared among more than 1,000 players.

· Major Indian players include S.H. Kelkar and Ultra International.

· The global Flavours & Fragrances houses also use India as a base to service some of the South East Asian markets.

· The global Flavours & Fragrances houses and some of the scaled up Indian players are directly aligned to the major FMCG players, and supply specific fragrance or flavour blends for specific products.

· Few FMCG players also have blending capability for some blends, for which they source ingredients directly from ingredient manufacturers. Indian ingredients manufacturers supplying to the global Flavours & Fragrances houses are very closely aligned with them.

· It is common for Flavours & Fragrances houses to develop new flavours or fragrances jointly with their ingredient suppliers.

·

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· Key Success Factors

· Raw Material Sourcing

· Access to a steady supply of raw material with minimal price fluctuation is one of the most important factors for an ingredient manufacturer. This is especially true in the case of essential oil and spice oleoresin manufacturers due to the seasonal nature of the harvest.

· Companies like Sharp Global, Synthite and Kancor have contract farms which ensure they have a steady supply of raw material for them to process. In the case of aroma chemical manufacturers as well, petrochemical derivatives have limited availability in the country and their prices fluctuate in line with oil prices

· The ability to secure prices by means of alternate sources of feedstock is key success factor

· Customer relationships

· Given the abstract nature of fragrance and flavors and their impact on consumer perception of the end product, it is very tough to build new relationships and start supplying to the top Flavors & Fragrances houses.

· These firms have strong brands and are wary of experimenting with their composition.

· A supplier to the large Flavors & Fragrances houses has to generate consistent aroma or flavor in each batch, with consistent purity levels. It takes a minimum of 3 years and may even take 7-10 years to break into the vendor rosters of the large Flavors & Fragrances houses.

·

· Blenders

· Blenders add value by creating unique scents. These are created by unique combinations of numerous aroma ingredients and additives to produce balanced blends.

· There is usually considerable IP involved in creation of scents. Blenders have to be able to keep innovating, creating unique fragrances and flavours as the market demands.

· The global Flavours & Fragrances houses spend an average of 9% on R&D.

· There is a lot of collaborative development involving end-users as well as ingredient manufacturers.

· Trends Shaping the market

· Synthetic Ingredients continue to dominate Indian market

· Currently the Indian consumption of naturals is very small due to price sensitivity of the Indian consumer. Natural ingredients may cost anywhere between 10-100 times that of their synthetic counterparts.

· Due to consumer demand for healthier products, some natural-like products (refer to the next section for details) are entering the market.

· However, we expect synthetics to continue to dominate the segment in the near future.

· Green processes and “natural-like products” increasing popularity

· Natural-like products are semi-natural, semi-synthetic products, manufactured differently from synthetic products.

· The raw materials for these chemicals are derived from non-petrochemical sources, and the processes followed in manufacturing these do not use acids and other harsh chemicals.

· They use natural solvents such as resins which are less toxic while manufacturing.

· Most of the companies in India manufacturing bulk aroma chemicals compete on price as these are standard chemicals with very little differentiation.

· However, by manufacturing natural-like products and using green processes, players are able to create differentiation.

· Asian customers are price sensitive and are less willing to pay a premium for these products

· Increasing adoption of natural ingredients to benefit Indian Players

· India has a strong position in natural ingredients.

· There is support from Government of India for the development of agro-processing industry. It has been declared as a sunrise sector and receives many incentives in terms of income tax, excise and customs relief.

· Scale to become increasingly important

· Scale is extremely important for flavor and fragrance ingredient manufacturers as well as blenders to be able to secure better bargaining power with their customers – Flavours & Fragrances houses (for ingredient manufacturers) or FMCG players (for blenders).

· In addition, scale helps improve raw material sourcing efficiency and pricing, as well as improves cost structures by means of manufacturing efficiencies.

· Indian players less likely to displace global Flavours & Fragrances houses

· The ability to create unique and creative fragrances, often involving significant research and perfumery skills, is a major differentiation attained by top Flavours & Fragrances houses.

· There are many small players in the Indian market who merely blend a combination of aroma chemicals and other fragrance ingredients to create standard fragrances which cater to the demand of other small / unorganized FMCG players.

· Key players

· However, the top Flavours & Fragrances houses develop their proprietary blends, often using proprietary constituent ingredients.

· Only few Indian players such as S.H. Kelkar have demonstrated the capability to create unique blends.

· Improving fragrance delivery systems using techniques like encapsulation, sustained release

· Developing captive aroma chemical ingredients through R&D

· Long term purchase arrangements with global FMCG players

· Flavors & Fragrances houses strengthening India presence

· India is an attractive destination for global Flavours & Fragrances houses to cater to the large, growing Asia Pacific market. The top 10 global Flavours & Fragrances houses have their presence in the country with others looking to enter. Eight of the top ten have a manufacturing presence in India. T. Hasegawa and Robertet are major global Flavours & Fragrances houses which do not have a significant presence in India yet. These companies are present in other developing markets and are keen to enter India.

· Frutarom recently entered India by means of acquisition of Sonarome. There has been a strong interest amongst most global Flavours & Fragrances houses to acquire or partner in India, especially amongst flavor and fragrance blenders, and this space is likely to see significant partnerships and M&A activity.

· Challenges?

· Moving up the value chain

· Most of the Indian ingredient providers are suppliers of oleoresins or aroma chemicals to the Flavours & Fragrances houses in India or exporters of the same.

· Many of the synthetic aroma chemicals are not differentiated and as a result there is stiff price competition in this space.

· Some natural extracts and oleoresins may command a premium; however, they are seasonal in nature and are beginning to face price competition from the Chinese.

· As a result, manufacturers of bulk aroma chemicals or oleoresins typically experience relatively low margins (15-25% gross margins)

· compared to the global Flavors & Fragrances houses which have much higher profitability.

· Moving up the value chain may not be an urgent imperative for Indian ingredient manufacturers, but may be a key differentiator in the long term.

· Building barriers to entry

· There are no significant technology barriers in the space. However, established players have a critical advantage in terms of client relationships.

· Global Flavours & Fragrances houses derive most of their revenue from mature FMCG players.

· Competition among the larger players is often price based, which is the consequence of limited product differentiation.

· Companies that are able to create product differentiation would be in a position to build better margins and protect themselves.

· Cost and availability of agricultural raw material

· Spices and other plants have cost and availability fluctuations during and across years. There have been times when the players have faced shortages and had to import from neighboring countries.

· This impacts their cost structure quite adversely (raw materials make up 60-70% of the total cost).

· Companies are looking to hedge these risks by engaging with contract farmers, and planting better yield varieties which lower their raw material costs.

· Players who can manage their sourcing effectively can create a sustainable advantage for themselves.

· Competitive Landscape

· The blending segment is dominated by MNCs, with global Flavours & Fragrances houses constituting over 60% of the Indian market and exports contributing to most of their revenue

· Aroma chemical manufacturers face competition from Chinese aroma chemical players

· Companies to watch out for - Privi Organics, Synthite Industries

file:///C:/Users/student/Downloads/KR349.pdf

Ken’s Research Report

The increase in personal disposable income of consumers, busier lifestyles, and higher preference towards personal wellness products has raised the demand for flavor and fragrance products in the country. There have been certain developments in the economy which has further raised the market for flavor and fragrance such as increasing demand of organic flavors, growth of food additives market and much more. This has led the flavor and fragrance market to grow at CAGR of ~% from FY”2010 to FY’2015, registering sales revenues of USD ~ million in FY’ 2015.

There has been a paradigm shift in the industry from the use of botanical ingredients to the synthetic raw materials which is heavily skewed towards urban consumers and almost trivial towards rural consumers. This showcases an ample scope for the flavor and fragrance market to flourish in the forecast period FY” 2016- FY’ 2020, on the grounds of incline in consumption.

Flavor and Fragrance market in India has been dominated by the fragrance with ~% share in the overall revenues of the market as of FY” 2015. It has been observed that the market has majorly been dominated by the organized players. Although there has been strict rules and regulations formulated by the government, small and medium enterprises whether organized or unorganized usually sway through them due to lack of proper controls over the market players.

In the short run, the demand for flavor and fragrance product is likely to enhance with the increase in the demand of package food manufacturing. This is also backed by consumption of convenience products which requires high flavoring and fragrances, coupled with progression of products capacity by leading flavors and fragrance market platers. However, in the long run, the revenues pertaining to flavor and fragrance market are likely to bolster determined by introduction of innovative and versatile products. The growth of this market in the long run will be further infused by rising urban population and growth in preferences towards a better lifestyle, since consumer behavior takes year to change. Hence, in the long run, the market is estimated to achieve sales revenue worth USD ~ millions by FY” 2020.

Changing Trends

The consumers in the country are steadily moving towards packed and canned foods, which have heightened the growth of flavor segment in India. Various factors such as economic growth, rising prosperity, incline in urban class population and busier lifestyles have contributed to an inclining growth for flavors. Moreover, busier lifestyles in the country have triggered increase in consumption of ready to eat foods. For consumers unwilling to compromise on taste, health or convenience, flavor companies that have been bent on innovating new products. The demand for flavors has widely enhanced over the last couple of years.

Moreover, the series of innovations and the launch of newer varieties of flavors in the market have led the market to remain concentrated, with a number of international and domestic players. Enhancement of sales force capabilities and technological improvement are the critical factors for the success of flavor industry.

Flavor market in India has been segmented on the basis of types of applications which comprise beverages, bakery, confectionery, dairy, pharmaceuticals, tobacco and others. The Flavors used in the beverages have grossed the highest revenues for the flavor market

Competition

The market for fragrance products is subjugated by organized players namely SH Kelkar, Givaudan, Firmenich and others. The market includes a number of international as well as domestic players. The unorganized and small players have a way of avoiding the rules and hence can create a greater supply in the market

Despite this fact the major share has been owed to the organized players due to the trust and better linkages they have envisaged in the purchasers. The India fragrance market is diversified across several fragrance families such as floral, woody, citrus, foug`ere, chypre, ambery and several others. The market was ruled by floral fragrances which remain the largest sector of the fragrance market in India, contributed nearly ~% to the overall market

India flavor and fragrance market has witnessed phenomenal growth of ~% over the period FY’2010-FY’2015 backed by rising consumption expenditure, increased demand for convenient and packed food as well as personal and home care products. The growth in this segment has majorly been apparent across metropolitan cities. The growth in number of housing units in both urban and rural areas, surge in new product launches and improvement in distribution networks in metropolitan cities are further expected to drive the market growth. The market so far has been dominated by national players such as S H Kelkar and multinational player such as IFF, Firmenich, Givaudan and many others which accounted for a major share in flavor and fragrance industry in India.

The revenues pertaining to flavor and fragrance market are likely to bolster determined by introduction of innovative and versatile products. The growth of this market in long run will be further infused by rising urban population and growth in preferences towards a better lifestyle, since consumer behavior takes year to change.

The demand would also bolster on the account of rising demand for flavor and fragrance products from the tier 2 and tier 3 cities majorly due to an increased use of personal wellness products. Hence, in the long run the market is estimated to achieve sales revenues worth USD 1,443.8 million by FY’2020

Locally grown smaller players would also be seen consolidating amongst themselves to match up to the international players. However, just like every other industry, flavor and fragrance industry too is expected to face some glitches in the form of variations in the prices of raw materials and complex preferences of highly diversified customer base

http://www.flavoursandfragrancesexpo.com/pdf/flavours&fragnances.pdf

http://fernfortuniversity.com/term-papers/porter5/analysis/239-international-flavors---fragrances-i.php