Savoury Snacks Surge: India's Taste for Growth

The Indian savoury snacks market is poised for significant growth, with projections indicating a 13% compound annual growth rate (CAGR) over the next five years, according to a recent report by Ashika Institutional Equities. This growth is expected to outpace the broader packaged food industry which is set to grow at around 11%.

The report identifies improving income levels, enhanced infrastructure, and increased media penetration as key factors driving the demand for branded products, particularly in rural India. Currently, approximately 43% of the snack market remains unorganised, presenting substantial opportunities for expansion in the organised sector.

Ethnic snacks are anticipated to grow faster than western counterparts, with up to 200 basis points higher CAGR. This is attributed to cultural preferences and strong regional consumer demand. The report also emphasizes the role of low price points and impulse-driven purchases, especially in rural markets.

Modern trade and digital distribution channels are rapidly expanding, fueled by digitisation and evolving consumer preferences. Urbanisation is markedly influencing consumption, with urban dwellers expected to rise from 36.8% in CY24 to 40.9% by CY30, boosting the demand for convenient, ready-to-eat foods.

The transition towards nuclear families and greater female workforce participation is further spurring demand. Additionally, policy interventions, such as the reduction in GST rates from 12% to 5% on packaged snacks, are likely to accelerate the shift from unorganised to organised sectors.

Government initiatives, including the Production-Linked Incentive scheme and Mega Food Parks, are enhancing supply chain efficiency. Presently, organised snacks hold approximately 57% of the market share, with ethnic snacks expected to outstrip western varieties due to strong consumer connections and regional appeal.