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A

PROJECT REPORT

ON

READY TO EAT FOOD INDUSTRY

SUBMITTED TO: SUBMITTED BY:

PROF. S. C. REDDY ANAND ASODIYA (06)

Director, SKPIMCS MEHUL KANOJIYA (37)

MANISH PARMAR (77)

DHARA THAKKER (114)

S. K. PATEL INSTITUTE OF MANAGEMENT & COMPUTER STUDIES,

GANDHINGAR-23


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ACKNOWLEDGEMENT

At the very outset of this report with all our due respect and regards we take this

privilege to extend our sincere thanks to all those who helped us during ourproject.

We are highly grateful to our director Prof. S. C. Reddy who gave us the

opportunity to carry our project as a part of MRIS course in READY TO EAT

FOOD industry. Indeed this project has really enhanced our knowledge in the

field of READY TO EAT FOOD Industry.

We are also thankful to Prof. Pratima Prakash and our institute SKPIMCS.

Lastly we want to thank all the people who gave their support directly or indirectly

to make this project successful.


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EXECUTIVE SUMMARY

We Indians are extremely fussy about the food we eat, and hate to compromise

on taste and quality. So, we like our vegetables with the same taste for yearstogether, perhaps just like it was in our childhood, which put in other words

means that, for us, theres no substitute for homemade food. But have we ever

given a thought to how much time we spend in cooking? How many toils go

behind the exotic fares that a woman prepares for her family? Innumerable hours

are spent on every mouth-watering dish. Cutting this, chopping that, roasting,

grinding, frying. Etc.! Cooking is indeed a full time occupation. But todays

woman, with so many demands on her time, simply cannot afford to spend a

whole day in the kitchen. At the same time, in no way is she willing to substitute

her ways, for the fear that quality and taste may be compromised.

Now people have discovered the joys of a simpler, faster and fun way of cooking

traditional Indian food. As nuclear families proliferate in urban India, the ready-

to-eat market is set to grow. Its a food revolution thats been a long time coming.

As double-income nuclear families become the norm in urban India, everyone

who is anyone in the food business has been eyeing the ready-to-eat food sector

with considerable hunger.

Top food companies say the market is currently worth around Rs 50 crore in

India but they confidently predict it will grow to around Rs 200 crore in the next

one or two years. So there is a great future for food companies in India.


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TABLE OF CONTENTS

1. INTRODUCTION....1

2. RESEARCH METHODOLOGY.......2

3. INDIAN FOOD INDUSTRY...4

4. COMPANY PROFILE....7

4.1 MTR...7

4.2 ITC-AASHIRWAD........................10

4.3 SATNAM OVERSEAS........................12

4.4 TESTY BITES...................16

5. THE FIRST INTERNATIONAL CONFERENCE IN INDIA ON READYTO-

EAT FOOD - 2005 ....... ...17

6. PRESS REPORTON RTE FOOD: SEPTEMBER 20, 2003, BUSINESS

STANDARD.............................................................................................19

7. DATA ANALYSIS AND INTERPRETATION...........25

8. SUGGESTIONS..............31

9. CONCLUSION..32


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1. INTRODUCTION

In todays competitive world the practical study forms an important part in each

and every professional course. The MBA is a course in which the theoretical

knowledge is backed by the practical study. That study is in the form of different

projects which are undertaken during the MBA course. Here we have done a

project on a READY TO EAT FOOD INDUSTRY as a part of MARKETING

RESEARCH INFORMATION SYSTEM course. The current situation is made

known to the students when they undertake the project. The project gives better

insides into the application part of the theory. The companies in an industry and

their operations can be better known by the students when they analyse the data,

and prepare the project.

This project is on the study of READY TO EAT FOOD market of India. We have

done analysis based on the primary data (which are collected through survey &

personal interview) and secondary data (which are collected from different

sources like internet, magazines, and reports of different Government agencies).

This project also includes the current news on ready to eat food and alsoincludes the details of the first international conference in India on READY TO

EAT FOOD industry.


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2. RESEARCH METHODOLOGY

OBJECTIVES OF PROJECT:

To study the market of Ready to Eat food.

To determine the factors affecting the purchase decision of Ready to Eat

Food.

To understand the consumption pattern of Ready to Eat Food.

To analyse the competition among different brands.

TIME SCOPE OF PROJECT:As the project is undertaken as a part of MARKETING RESEARCH

INFORMATION SYSTEM subject, the time limit taken to complete the project is

the Two months.

DATA COLLECTION METHOD:

PRIMARY DATA

1. Questionnaire.

2. Personal Interview.

SECONDARY DATA

1. Internet

2. Magazines.

3. Companies Brochure.

SAMPLE SIZE 100

SAMPLING TECHNIQUE Convenience Sampling.

LOCATION FOR SURVEY- Ahmedabad and Gandhinagar

LIMITATIONS IN PROJECT:

As no project is possible without any limitations, our project and survey is

also bounded by some limitations of which few major limitations are as follows:


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The project was the part of MRIS Subject and hence the time

duration to carry out the project.

The project was restricted to some selected study areas of READY

TO EAT FOOD industry.

The respondents have been selected by convenience; hence they

might not be perfect representative of the analysis.

The research depends on the data obtain from secondary sources.

Thus it authenticity of the report depends on the authenticity of the

source of data.. The analysis also depends on the respondents

answer and thus might differ from actual situation.


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3. INDIAN FOOD INDUSTRY

The food industry is on a high as Indians continue to have a feast. Fuelled by

what can be termed as a perfect ingredient for any industry large disposable

incomes the food sector has been witnessing a marked change in consumption

patterns.

Increasing incomes are always accompanied by a change in the food basket,

says an ICRA report, which analyses food expenditure patterns over the last

three decades in India. The report observes that the proportionate expenditure

on cereals, pulses, edible oil, sugar, salt and spices declines as households

climb the expenditure classes in urban India while the opposite happens in the

case of milk and milk products, meat, egg and fish, fruits and beverages.

For instance, the proportionate expenditure on staples (cereals, grams, pulses)

declined from 45 per cent to 44 per cent in rural India while the figure settled at

32 per cent of the total expenditure on food in urban India.

A large part of this shift in consumption is driven by the processed food market,

which accounts for 32 per cent of the total food market. It accounts for Rs 1,280

billion (US$29.4 billion), in a total estimated market of Rs 3,990 billion (US$91.66

billion).

The popularity of READY TO EAT food packs and the bottomlines of eateries

have a story to tell. Eating out no longer marks a special occasion. Not only does

the traditional eat-at-home type prefer to eat out, he is very demanding too. Hewants value for his money in terms of quality and variety. No wonder, multi-

cuisine restaurants are mushrooming even in small towns. Italian, Mexican,

Lebanese, Japanese, Cajun the list is growing.


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Corroborating this trend, Euromonitor International, a market research company,

says the amount of money Indians spend on meals outside the home has more

than doubled in the past decade, to about US$5 billion a year, and is expected to

double again in about half that time.

Another interesting trend noticed in consumer patterns is the growth of branded

products. The branded food market is on a roll. It grew over 5 per cent in 2004,

according to the latest ACNielsen Global Services report on global trends in food

and beverages.

That makes food an attractive proposition for investors. Savvy companies have

pumped in more than Rs 60,000 crore (US$13.78 billion) in new food and farm

businesses in 2004. According to industry estimates, 321 private sector projects

worth Rs 60,360 crore (US$13.86 billion) were announced in 2004 compared to

89 with an investment of Rs 2,130 crore (US$489.3 million) in 2003.

The popularity of food and agro products is not surprising when the sector is now

offering a growth of more than 150 per cent in sales. With such promise in the

sector, a number of foreign companies have joined the fray.

While US brands such as McDonalds, Pizza Hut and Kentucky Fried Chicken

have become household names, more are on their way. The US$7 billion US

soups-to-juices company, Campbell, is planning an entry into India. African fast

food chain Nandos, which specialises in flame-grilled chicken made in peri-peri

(chilli) sauce, is all set to enter India.

Among processed food products, the milk product market needs special mention.

Retail shelves now offer multiple choices in the processed cheese segment with

Le Bon of Dabon International, Laughing Cow, Britannia and Amul. Mother Dairy,

the marketing arm of National Dairy Development Board (NDDB), plans to join

the 6,000-tonne processed cheese market. India is, in fact, one of the largest

milk producers in the world. Its milk output is estimated to have grown by 3.13

per cent to 92.2 million tonnes during 2003-04.


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The new wave in the food industry is not only about foreign companies arriving

here attracted by the prospective size of the market. It is also about the migration

of the Made in India tag on food products travelling abroad. Indian food brands

and fast moving consumer goods (FMCGs) are now increasingly finding prime

shelf-space in the retail chains of the US and Europe. These include Cobra Beer,

Bikanervala Foods, MTR Foods' ready-to-eat food stuff, ITC's Kitchen of India

and Satnam Overseas' Basmati rice.

In a bid to boost the food sector, the government is working on agrizones and the

concept of mega food parks. One indication of the importance that the sector

received is the hiking of the present outlay for the sector from Rs 85 crore

(US$19.5 million) in 2004-05 to Rs 180 crore (US$41.35 million) the next year,more than twice the earlier amount.

The government is also considering investing Rs 100 crore (US$22.97 million) in

at least 10 mega food parks in the country besides working towards offering 100

per cent foreign direct investment and income tax benefits in the sector.


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4 COMPANY PROFILE:

4.1 MTR

MTR Foods Limited is amongst the top five processed food manufacturers in

India. We manufacture, market and export a wide range of packaged foods to

global markets that include USA, UK, Australia, New Zealand, Malaysia,

Singapore, UAE and Oman.

Starting with the legendary MTR restaurant in Bangalore, Indias silicon valley,

we now offer ''complete meal solutions'. Our wide range of products include

ready-to-eat curries and rice, ready-to-cook gravies, frozen foods, ice cream,

instant snack and dessert mixes, spices and a variety of accompaniments like

pickles and papads.

Our deep understanding of culinary expectations and needs has resulted in many

new and innovative products. Our investments in infrastructure and technology

ensure that we can scale rapidly and bring these to market. Today, consumers

across the globe count on us to bring them all-natural, wholesome and delicious

food that is also convenient and no-fuss.

We have also expanded our retail presence significantly: contemporary 'Namma

MTR' and MTR kiosks now serve delighted consumers across Bangalore and

Chennai.

QUALITY POLICY:

We are ISO 9002 and HACCP certified.

At MTR, quality is a way of life. Hazard Analysis and Critical Control Point or

HACCP, developed by the Codex Alimentarius Commission, is a global food

safety standard. We have successfully met the stringent requirements for this

certification.
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Our facilities are equipped with the latest systems. We adhere to international

standards across all operations: from sourcing the finest ingredients to

processing and packing using cutting-edge technology. Each MTR product

carries this assurance of quality and meets the high expectations our consumers

have from us.

FEATURES OF MTRS FOOD PRODUCTS:

What makes MTR a trusted, household name?

Our products are 100% natural have no preservatives and use only the

finest, most authentic ingredients.

Be it an Instant mix or a Ready to Eat dish, pickles or soups, all MTR

products are known for their mouthwatering, "home-cooked" taste.

We adhere to the most stringent quality standards, from sourcing

ingredients to processing and packing. We are ISO 9002 and HACCP

certified.

We use the latest technology to preserve the quality and freshness of our

food. Our use of technology from the Defense Food Research Laboratory

for our Ready to Eat products has won us the President's award.

All MTR products are 100% vegetarian.


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PRODUCT LIST: READY-TO-EAT

CURRIES

1 RAJMA MASALA (RE) (BULK) 1KG

2 DAL MAKANI (RE) (BULK) 1KG

3 RTE PALAK PANEER (RE) (BULK) 1KG

4 RTE MIXED VEG CURRY (RE) (BULK) 1KG

5 RTE CHANA MASALA (RE) (BULK) 1KG

6 RTE DAL FRY (RE) (BULK) 1KG

7 RTE NAVRATHAN KURMA (RE) (BULK) 1KG

8 RTE ALU MUTTER (RE) (BULK) 1KG

9 RTE PANEER MAKHANI (RE) (BULK) 1KG

10 RTE PAV BHAJI (RE) (BULK) 1KG

11 RTE AVIAL (RE) (BULK) 1KG

12 RTE BENDI MASALA (RE) (BULK) 1KG

RICE ITEMS

1 RTE TAMARIND RICE BULK (1KG)

2 RTE LEMON RICE BULK (1KG)

3 RTE SAMBAR RICE BULK (1KG)

4 RTE RASAM RICE BULK (1KG)5 JEERA RICE (RE) (BULK) 1KG

6 DIET DELITE (RE) (BULK) 1KG

7 MASALA RICE (RE) (BULK) 1KG

8 RAJMA CHAWAL (RE) (BULK) 1KG

9 KHARABATH (RE) (BULK) 1KG

10 KESARIBATH (RE) (BULK) 1KG

11 BISIBELE BATH (RE) (BULK) 1KG

12 PONGAL (RE) (BULK) 1KG

13 VEGETABLE PULAV (RE) (BULK) 1KG

SOUPS

1 SIMPLY TOMATO SOUP 1X1KG

2 SPICY TOMATO SOUP (BULK)1X1 KG


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3 MULLIGE TAWNY SOUP (BULK) 1X1 KG

4 SPINACH CARROT SOUP (BULK)1X1 KG

5 MIXED VEGETABLE SOUP (BULK) 1Kg

6 BABY CORN & SPRING ONION SOUP (BULK)1kg

4.2 ITC AASHIRVAAD

AASHIRVAAD READYMEALS

ITC Foods launched a range of Ready-

To-Eat dishes under the 'AashirvaadReadyMeals' label, in Hyderabad, on

25th June 2003. The range now

comprises nine dishes and two Combo

packs. The dishes on offer currently are

Rajma Masala, Nav Ratan Kurma, Dal Makhani, Aloo Mutter, Palak Paneer,

Pindi Chana, Pav Bhaji, Mutter Paneer and Yellow Dal Tadka. Rajma Masala &

Basmati Rice and Yellow Dal Tadka & Basmati Rice are available in Combo

packs.

The Dishes are priced between Rs. 30/- to Rs. 40/- for a 285 gms pouch and the

Combo packs are priced at Rs. 45/- for a 485 gms pack.

The unique packaging form, using a retort process, ensures that the original

freshness and taste of the recipes is protected without the use of preservatives.

THE RETORT PROCESS

The pioneering introduction of retorting technology is what has made the sale of

Ready-to-Eat food products commercially viable.


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The need of frontline military soldiers for light but nutritious food, with an assured

long shelf life was the impulse and the inspiration for the development and fine-

tuning of the retorting process.

Retorting technology was used by the US in its Apollo Space missions. Today it

is the mainstay of US military rations. Retorting is also widely used in packaged

foods in Japan and Europe.

The efficacy and effectiveness of the retorting process depends on the

sterilisation process and the retorting pouch.

STERILISATION PROCESS

The sterilisation process ensures the stability of the Ready-to-Eat foods in retort

pouches, on the shelf and at room temperature. The application of sterilisation

technology completely destroys all potentially harmful micro-organisms, thereby

making sure that the food product has a very long shelf life. However, in the

current commercial context, the shelf life is limited to one year.

RETORT POUCHES

Retort pouches are flexible packages made from multi-layered plastic films, with

or without aluminum foil as one of the layers. Their most important feature is that

they are made of heat-resistant plastics, unlike the usual flexible pouches. This

makes the retort pouches uniquely suitable for the processing of their food

contents at temperatures around 120 degrees Celsius. That is the kind of

ambient temperature prevalent in the thermal sterilisation of foods.

The 3-ply laminate consisting of PET/ Al oil / PP is the most common material

used in retort pouches and is the only one used in India. ITC uses 4-layered

pouches. The use of PET or polyester as the outer layer gives the required

strength to the pouch. The aluminum foil serves as a barrier layer ensuring a


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shelf life of more than one year. The Nylon layer provides strength to the pouch,

reassuring additional shelf life. The innermost layer of Polypropylene provides

the critical seal integrity, flexibility, strength and taste and odour compatibility with

a variety of food products.

Aashirvaad ReadyMeals' is currently available across all major cities like Delhi,

Mumbai, Kolkata, Bangalore, Hyderabad, Chennai, Pune, Ahmedabad, Nagpur,

Patna, Guwahati, and Vishakhapatnam. All grocery stores selling ready-to-eat

products stock Aashirvaad ReadyMeals.

4.3 SATNAM OVERSEAS

YEAR EVENTS 1989 - Satnam Overseas Limted was incorporated on 26th July

as a private Limited company with the Registrar of companies Delhi and

Harayana at New Delhi under the Indian Companies Act, 1956 with the main

object to manufacture and export rice. It was converted into a public limited

company on 9th December, 1992.

- Satnam Overseas Limited has beem promoted by the Arora family fromAmritsar. Sri Jugal Kishore Arora, Sri Satnam Arora and Sri Gurnam Arora are

the main promoters of the Company.

- The Company is an associate of the Satnam Overseas Group, which is known

for its present in Rice Trade since 1979.

1994 - The Company came out with a public issue of 40 lakhs Equity Shares of

Rs.10/- each for cash at a premium of Rs.7/- per share aggregating to Rs.680.00

lakhs in the month of January/February.

1995 - The Company has launched its premium quality branded pulses on the

national level.


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- The company issued 40,00,000 No. of equity shares of Rs.10/- each at a

premium of Rs.7/- per share during the year.

1997 - The company launched a new product - tea bags under the brand name

of `Viceroy`.

1998 - The Company has tied up with few big companies in different countries for

Export of Rice, Pulses and other products.

- The Company has bagged award from WORLD ECONOMIC FORUM in view of

its excellent contribution towards global growth.

- The Company allotted 56,00,000 No. of Equity Shares of Rs. 10/- each fullypaid-up by way of Bonus Shares.

2000 - In a bid to boost basmati exports under its `Kohinoor` brand, Satnam

Overseas Ltd is setting up a wholly-owned marketing subsidiary in the US.

- The company received the prestigious APEDA Award for the Ninth Year in

succession for the outstanding export performance during the year.

- The company has tied up with a multi-national Company in Saudi Arabia to

market rice under our own Brand in Saudi Market, which constitutes over 70% of

the total Basmati rice market of the world.

- The Company has entered into agreement with National Securities Depository

Limited and Central Depository Services (India) Limited to facilitate holding and

Trading of shares in electronic form.

2004

-Satnam Overseas ties up with Amazon.com for rice trade


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VISION & MISSION

Satnam Overseas to emerge as the best premium food company, enabling

people to savour the flavours of India, globally

To achieve global standards of excellence in our operations with focus on

consumer satisfaction /delight, providing consumers the flavour of India;

To set up high standards of leadership, quality and productivity.

To develop a well knit human resources policy and culture which motivates

employees to contribute their best towards achievement of organisational

objectives; and

To function as a responsible corporate citizen and help enrich the quality of life

of the community and work towards sustainable development.

To harvest natures finest products, process them using the best technology and

make them available across the globe.

The mission encompasses the three core virtues that drive the company :

High-quality products

The finest technology

Global availability

NETWORK OF SATNAM

A quality product has little value if it does not reach its consumer. It is with this in

mind Satnam Overseas has developed an extensive distribution network that

covers not only India, but also a significant chunk of the international market.

Over the years, Satnam Overseas has emerged as a key player in the global

market of Indian agro products. The company is recognised as a leading supplier

of premium quality Basmati rice. In the last few years, the company has made

exceptional efforts to encourage sale of basmati rice under its flagship Kohinoor


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in the overseas market. And, we have met with considerable success on this

front.

We have now penetrated global frontiers and established ourselves as a leading

player in the Basmati rice market globally. Today, Kohinoor, is visible in the

retail counters in a number of countries like U.S.A., U.K., Canada, France, Saudi

Arabia, Kuwait, United Arab Emirates, etc.

In India, the company has more than a hundred distributors, 450 stockists and

over 2,00,000 retailers, giving it a reach that is unrivalled in the Indian market.

THE US OPERATION

S.O.L Inc, the companys fully owned subsidiary, is based in New Jersey and

overlooks the needs of the US and Canadian markets.

THE UK OPERATION

Indo European Foods Limited, The company's fully owned subsidiary, is

headquartered in London and looks after the European market. The company is

setting up a rice processing mill at felixtowe, U.K., Which is going to be in

commercial production by first week of July.

THE MIDDLE EAST OPERATION

Another joint venture company, Rich Rise Raisers Factory LLC, operates from

Dubai and caters to the needs of the markets in the Middle East. As a result, no

matter where you are, there is a fair chance that you will be able to enjoy quality

products from Satnam Overseas.


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4.4 TASTY BITES EATABLES LIMITED

Tasty Bite Eatables Ltd (TBEL) was incorporated in 1985. Apart from ready to

serve food, the other business of TBEL includes processing of vegetables, lease

of cold storage facilities and food services business. The company's plant is

located at Khutao and Bhandgao ( Pune). The company currently derives 70 per

cent of its income through exports. TBEL launched ready-to-serve food products

in India in 1990, but was unsuccessful. Efforts to develop an export market or

collaboration with international majors like Pepsi also failed. In 1994,

Connecticut-based Preferred Brands Inc (PBI), an international natural foods

marketing and distribution company, acquired the global marketing rights for the

Tasty Bite brand. The Tasty Bite brand was successfully launched in the US

markets in 1995. TBEL was referred to BIFR during the same period. Preferred

Brands, by then the largest customer for TBEL, decided to takeover management

control of the Indian company. PBI through its 51 per cent subsidiary, Preferred

Brands Foods (India) Ltd, acquired a 67 per cent stake in the company. The

company initially launched its ready-to-serve Indian-vegetarian entrees in cities

like Pune, Mumbai, Chennai, Hyderabad, Bangalore and New Delhi.

Future Plans

The company is banking on the changing consumer buying behaviour for the

success of their products. In three years time the company sees the domestic

market overtaking the exports. A phased launch of ready to serve food over

several other cities is being planned over the next 1-2 years. The company

currently has only vegetarian food in its stable for the Indian market and

proposes to gradually increase this to non- vegetarian food in order to meet the

increased demand.


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5. THE FIRST INTERNATIONAL CONFERENCE IN INDIA ON

READY-TO-EAT FOOD - 2005

Ready-to-Eat packs are fully cooked and ready to eat meal with a long shelf life.Shelf life ranges up to 3 years (and beyond) without refrigeration depending on

storage temperatures. Some items are available which are also known as heat

and eat. The food is normal, not freeze dried, and each item is cooked and

sealed in individual high strength pouches. Once the food is cooked/half cooked

and packaged, it never sees the light of day. Full meal RTE typically includes a

main entree, a side dish, a dessert, crackers and spread, beverage base, a

spoon, and an accessory packet. All the contents are packaged inside an outer

bag making them compact and easy to pack.

Ready to Eat packs were adopted as the US Department of Defense combat

ration in 1975. A large-scale production test began in 1978 with delivery in

1981.It was widely known as Meals Ready to Eat in those times. MRE I (1981)

was the first date of pack. Though it was extensively used by the defense for long

time, it has been well accepted by civilians in recent past in the western world.

With the income level rising, demand for milk, meat or fish, fruits and vegetables

is also increasing in India. With more urbanization, Indian families also consume

more processed foods, more ready-to-eat foods, etc. Asian Americans, now

numbering over 10 million along with the other 13 million persons of India origin

spread all over the world are a huge potential market for the RTE Foods out of

India. This creates a scope for the producers to come out with a long range of

dishes including the usual meals. India had been at the forefront for variety of

dishes both in domestic and global market. Today the ready-to-eat products

produced from India are mostly on Basmati rice Pulao, Biryani, Dal, Channa,

Rajma, Spicy Vegetable Curry, Mushroom, Paneer, Chicken, Broccoli, Sweets

and many more South Indian dishes.


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RTE products exported from India are mostly consumed in UK, Europe, USA,

and Arab countries. With the advanced food preservation technology the

chances of preserving food for longer time is increasing day by day. Still the stuff

inside the ready-to-eat packs remain nutritious and hygiene for a certain period

only. So it is highly essential to enhance the quality to compete in the global

market. Though we produce better quality food products, we fail to compete in

the global market due to improper packaging as per international norms. Quality

is of paramount importance for the growth of the RTE foods business in India.

Poor hygiene in the preparation and sale of street foods is a continuing problem:

Food quality improvement must begin at farm level and must be regarded as an

indispensable element of the global approach to improving the post-harvest

system.

Though the demand for the ready-to-eat products is increasing in the global

market, the supply is still not satisfactory. Just to given an example, there are

more than 500 units in the City of London, which are into ready to eat foods.

Exports as well as the domestic market offer a vast scope for the Indian

producers to excel in this sector. The success of ready-to-eat is dominated by the

fact that the market is decades away from maturity and therefore can look

forward to continued strong growth over a long period of time.


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6. PRESS REPORT ON RTE FOOD: SEPTEMBER 20,2003,

BUSINESS STANDARD

As nuclear families proliferate in urban India, the ready-to-eat market is set togrow, says Soumik Sen

Its a food revolution thats been a long time coming. As double-income nuclear

families become the norm in urban India, everyone who is anyone in the food

business has been eyeing the ready-to-eat food sector with considerable hunger.

The result: new menus that include everything from Punjabi kadhi pakora in a

can to pure vegetarian navratan kormas in hi-tech retort pouches.

But it has been tougher to cook up a storm in the Indian market than anyone

expected. Indians proved remarkably attached to freshly cooked meals.

Nevertheless, times may be changing. Top food companies say the market is

currently worth around Rs 50 crore but they confidently predict it will grow to

around Rs 200 crore in the next one or two years.

Take a look at ITC Foods, which started turning out dishes for the top end of the

market with its pricey Kitchens of India range.

ITC won praise for its offerings and showed they could get the flavours right. But

at Rs 150 for a 450 gm tin of dal bukhara (which feeds about three people) it was

strictly a limited clientele.

Now ITC is taking a shot at the middle market and trying to reach shop shelves

around the country. It has put together a range of five vegetarian flavours

including aloo matar, rajma masala and navratan korma, packed in retort

pouches and with a shelf life of 12 months.


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The 285 gm pouches called the Aashirvaad range sell for between Rs 35

and Rs 40, putting them within reach of middle-class buyers. Says Ravi Naware,

CEO, ITC Foods, "Aashirvaad will now be the ready-to-eat solution for the time-

pressed family."

ITC is hoping to serve itself big helpings with its new business. The Aashirvaad

ready-cooked dishes have already been launched in five cities Mumbai, Pune,

Hyderabad, Chennai and Kolkata.

In the next two months, the products will also be available on shop shelves in

Delhi and Bangalore. Naware believes his two brands have already captured

between 15 per cent and 20 per cent of the ready-to-eat market.

Whats more, ITC isnt stopping here. By the end of this financial year, another

five flavours will be added to the Aashirvaad bouquet.

ITC already has two plants churning out products in Bangalore and Delhi and

Naware is scouting for locations to put up a third one.

But ITC doesnt have the kitchen to itself not by a long shot. MTR foods,

arguably the pioneer in the segment, is in no mood to relinquish the leadership

position to the FMCG behemoth.

S Suresh, COO, MTR points out that it has a huge menu card with 15 curries and

seven south Indian specialities. Its also launching nine rice-based items like

lemon rice and rajma chawal.

MTR believes it is the largest in the field with over 70 per cent market share and

it isnt cowed by ITCs distribution muscle.


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Says Suresh: "We are already present across 60 cities in India, and by 2005

hope to control around 35 per cent of the Rs 200 crore market."

But MTR also has greater ambitions and hopes to make it to dining tables around

the world. It has sales and distributions teams in North America, Australia, West

Asia and South East Asia.

At another end of the country theres Satnam Overseas, one of Indias largest

exporters of basmati rice under the flagship Kohinoor brand which is also hoping

to make a big meal from the ready-to-eat business.

It has introduced heat-and-eat curries and lentils with a distinctly north Indian

flavour, including Peshawari dal, Kashmiri rajma, and Amritsari chole. Also

coming from the kitchen are other northern specialities like sarson ka saag and

aloo palak. Research is underway to develop ready-to-eat paneer curries and

pav bhaji very soon.

"Each of these preparations follows traditional recipes," says general manager,

Rajesh Trikha.

"Customers just need to heat for two-to-three minutes in a microwave or boiling

water and eat." A single pack priced at Rs 46, is meant to serve upto three

persons.

Satnams USP is its regional appeal. "Punjabi cuisine like Punjabi music is a rage

in the rest of the country as well as overseas," says Trikha, "and we want to

serve the flavour of North India, as authentically as possible, from our plant at

Murthal in Haryana."


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How big is the ready-to-eat market and is it poised for a quantum leap? Trikha

believes the market is poised for an explosive jump and that it will triple in the

next one year.

Says Trikha: "According to our internal estimates, the domestic market for ready-

to-eats is Rs 50 crore plus and is expected to grow three times by the end of

2004."

Whats more, Trikha is firmly convinced that around Rs 25 crore worth of ready-

to-eat-curries are already selling. Thats likely to touch around Rs 100 crore by

2004 according to him.

Naware is also counting on giant-sized growth. His expectations arent very

different from Trikhas. He believes the market will touch Rs 200 crore by around

2005 and hes hoping to garner as much as 50 percent marketshare by

spreading himself across 50 cities.

Naware is putting together a big-budget print and television campaign to promote

his dishes which is being handled by Grey Worldwide. The company is also

organising sampling sessions to gauge customer feedback.

There are smaller companies too that are hoping to grab a chunk of the action.

Pune based Tasty Bites Eatables Limited [TBEL] has been exporting for years

and is now making an ambitious thrust into the Indian market.

Tasty Bites started operations back in 1987 but it didnt make much headway and

the products were withdrawn a year later.

"People were sceptical back then and consequently our products were non-

starters," says Ravi Nigam, president, Tasty Bites.


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Tasty Bites was taken over and restructured by US multinational Preferred in

1998. It registered a profit two years later.

The Rs 20 crore export-driven company, (80 per cent of its earnings come from

exports) has successfully tapped markets in Ahmedabad, Baroda, Surat,

Mumbai, Pune, Bangalore, Chennai and Hyderabad.

The company now plans to expand by entering the northern markets

aggressively. Tasty Bites offers nine curries and six south Indian ready-to-eat

dishes like avil and pongal.

Also, it recently launched a range of ready-to-cook (RTC) curry pastes. Tasty

Bites also has another range of ready-to-eat meals that it makes for the Indian

Army which come along with plastic plates.

Inevitably, Indian flavours dominate the ready-to-eat market. But one of the

earliest players was Indo-Nissin foods, a subsidiary of Japans Nissin Foods

which has been selling instant cup noodles since 1991. The 80 gram cup, in

chicken, vegetable and masala flavours, is priced at Rs 20.

Despite the presence of high-profile brands, Indo-Nissins General Manager R V

K James says the company sells around 6.5 lakh cups every year, giving him a

billing of Rs 1.3 crore annually.

"We have been consistently growing at 22 per cent annually," he says. But Im

sure with the market ready to explode, that number will only go north."

Armed with a Rs 5.5 crore budget, cup-o-noodle advertisements are currently

being aired on television channels.


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Indo-Nissin has also actively targeted school children by sponsoring quiz

sessions and conducting sampling sessions at various schools.

The company is also about to launch a sub-brand in the ready-to-eat cup-noodle

segment targeted specifically at kids.

But will the year-on-year 100 per cent growth that all players are so optimistic

about actually happen?" Most analysts believe the food companies arent being

overly optimistic.

Says B Narayanaswamy, executive director, Indica Research: "The increased

penetration of microwave ovens will need software to drive the hardware.

Ready-to-eats will find the perfect match in the upwardly mobile Indian kitchen."

"Convenience is a prime factor, but other factors like increased spending on food

by city couples are also important, says Hemendra Mathur, senior manager, food

and agri-business, Rabo India.

Abroad, the convenience foods industry has grown to gigantic proportions. And

Indians too could be developing a healthy appetite for meals from a can or a

pouch.


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7. DATA ANALYSIS & INTERPRETATION

Here we have used statistical techniques for analysis. We haveanalysed data to

determine the factors affecting the purchase decision of Ready to Eat Food and

to understand the consumption pattern of Ready to Eat Food.

1) In which kind of family do you live?

[ ] Joint family

[ ] Nuclear family

[ ] Live alone

Family Type

20%

55%

25%

Joint

Nuclear

Live Alone

locations for our survey were Ahmedabad and Gandhinagar. Generally most ofthe people in Gujarat live in nuclear family. Very few people, whose native are

not Ahmedabad & Gandhinagar and doing job or business here, live alone.

2) Do you use or consume READY TO EAT food products?

[ ] Yes

[ ] No


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Users

35%

65%

Yes

No

from the above pie chart that around 65% people do not use Ready to eat food

and 35% people do not use or consume it. There are many reasons why very few

people consukme RTE food. They might be less awareness, less reliability,

higher price or no requirement of such products.

FOLLOWING FOUR QUESTIONS ARE FOR USERS OR BUYERS OF READY

TO EAT FOOD

3) Why do you consume ready to eat food products?

[ ] Need.

[ ] Taste.

[ ] Reliability.[ ] Price.

[ ] Freshness.

[ ] Quality.

Reason for Buying

63%12%

10%

0%

5%

10% Need

Taste

Reliability

Price

Freshness

Quality


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We can see from the pie chart that one of the most important reason to

purchase RTE food is the requirement. If a person lives alone and do not get the

enough time to cook food than and than he or she will go for it. And most of the

users come under this category. They need the ready to eat food products. And

some of the people like the taste of it that is why they use it.

4) Which companys READY TO EAT food product do you consume?

[ ] ITC.

[ ] MTR.

[ ] Satnam Overseas.

[ ] Testy Bites.

Preferred Companis

76%

20%

1%

3%

ITC

MTR

Satnam Overseas

Testy Bites

Most of the users of RTE food purchase ITCs AASHIRWAD (RTE food brand).

And second preference is given to MTR. As ITC is a Famous and trustworthy

company people prefer to purchase their products. And as other companies like

MTR, SATNAM OVERSEAS and TASTY BITES have not become aggressive in

Gujarat, people are not aware about them. They are also expanding their market.

c) How many times do you consume READY TO EAT food in a month?

[ ] 1-5 times

[ ] 5-10 times

[ ] 10-15 times

[ ] More than 15 times


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Buying period

80%

15%

5%

0%1-5 times

5-10 times

10-15 times

>15 times

Most of the users consume RTE food for 1-5 times in a month. It means today

also many people like to eat home made food and restaurants food.

d) How do you find the product?

[ ] Very good

[ ] Good

[ ] Average

[ ] Bad

[ ] Very bad

Quality

25%

30%

35%

7% 3% Very Good

Good

Average

Bad

Very Bad

Out of 100 users, 35 users rate the RTE products average. It means if the

companies improve the quality and taste, the market for the RTE can expand or

increase.


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FOLLOWING TWO QUESTIONS ARE FOR NON-USERS OR BUYERS

a) Which factors do affect for not consuming READY TO EAT food?

[ ] No need

[ ] Taste

[ ] Reliability

[ ] Price

[ ] Freshness

[ ] Quality

Problem

54%

8%6%

7%

20%

5% No Need

Taste

Reliability

Price

Freshness

Quality

Generally in India or in Gujarat, most of the people dont need to purchase RTE

food. They dont require it that is why they do not purchase it. And 20% of thepeople believe that they are not fresh so they do not like to eat.

b) Will you consume READY TO EAT FOOD products in the future, if the

problems are solved?

[ ] Yes

[ ] No

[ ] Cant say


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Willing To Buy

52%

30%

18%

YesNo

Can't Say

when we ask respondents that if your particular problems regarding RTE food

like high price, poor quality etc., will you purchase it? And most of them were

agreed to purchase it.

Finally it can be said from above analysis that people who are unmarried, who

live alone and the family in which both husband & wife do the job consume

Ready to Eat food. Still RTE food makers need to do lot promotion to make

people aware about their products and to penetrate the market they also have to

reduce the price of their product.


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8. SUGGESTIONS

As awareness of RTE food is less, food companies should increase their

promotional activities.

Food companies should organize a food festival events in different cities to

attract new customers

Food companies concentrate more on nuclear family but along with they

should also concentrate on people who live alone.

Food companies should try to reduce the cost of RTE food.

Though the demand for the ready-to-eat products is increasing in the global

market, the supply is still not satisfactory. So food companies should

increase their production capacity.

Quality is of paramount importance for the growth of the RTE foods business

in India. So each food company should concentrate on quality improvement

of RTE food.

Packaging is also important for RTE food to keep the food hygienic. Food

companies must follow the international norms for packaging.

Food companies should explore the new avenues for marketing anddistribution of RTE food.


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CONCLUSION

With the income level rising, demand for milk, meat or fish, fruits and vegetables

is also increasing in India. With more urbanization, Indian families also consumemore processed foods, more ready-to-eat foods, etc. Asian Americans, now

numbering over 10 million along with the other 13 million persons of India origin

spread all over the world are a huge potential market for the RTE Foods out of

India. This creates a scope for the producers to come out with a long range of

dishes including the usual meals. India had been at the forefront for variety of

dishes both in domestic and global market. Today the ready-to-eat products

produced from India are mostly on Basmati rice Pulao, Biryani, Dal, Channa,

Rajma, Spicy Vegetable Curry, Mushroom, Paneer, Chicken, Broccoli, Sweets

and many more South Indian dishes.

Food companies should increase the promotion of RTE food to create awareness

among people about the concept of RTE food and convince customers about the

misconception about the added preservatives in RTE food.

There is great opportunity for Indian food companies to capture Indian food

market as well as food market of other countries. Top food companies say the

market is currently worth around Rs 50 crore in India but they confidently predict

it will grow to around Rs 200 crore in the next one or two years. So there is a

great future for food companies of India.


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ANNEXTURES

QUESTIONNAIRE

Respected Sir/Madam,We, the students ofS. K. PATEL INSTITUTE OF MGMT. & COMPUTER

STUDIES, GANDHINAGAR are conducting a research on READY TO EAT FOODmarket. We request you to provide information required in the questionnaire.

___________________________________________________________________

1. In which kind of family do you live?[ ] Joint family[ ] Nuclear family[ ] Live alone

2. Do you use or consume READY TO EAT food products?[ ] Yes[ ] No

3. If yes, [ FOR USERS OF READY TO EAT FOOD]a) Why do you consume ready to eat food products?

[ ] Need.[ ] Taste.[ ] Reliability.[ ] Price.[ ] Freshness.[ ] Quality.

b) Which companys READY TO EAT food product do you consume?

[ ] ITC.[ ] MTR.[ ] Satnam Overseas.[ ] Tasty Bites.

c) How many times do you consume READY TO EAT food in a month?[ ] 1-5 times[ ] 5-10 times[ ] 10-15 times[ ] More than 15 times

d) How do you find the product?

[ ] Very good[ ] Good[ ] Average[ ] Bad[ ] Very bad


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e) Any suggestion for Ready to Eat food products._______________________________________________________

_________________________________________________________

4. If no, [ FOR NON-USERS OF READY TO EAT FOOD]

a) Which factors do affect for not consuming READY TO EAT food?[ ] No need.[ ] Taste.[ ] Reliability.[ ] Price.[ ] Freshness.[ ] Quality.

b) Will you consume READY TO EAT FOOD products in the future, if the

problems are solved?[ ] Yes[ ] No[ ] Cant say

c) Any suggestions for Ready to Eat food______________________________________________________________

__________________________________________________________________________________________________________________________________

PERSONAL DETAILS:

Name: _______________________________________________________

Age: ______________Sex: ___________ Occupation: _________________

Income: _______________________ Marital status: ___________________

Thank You


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BIBLIOGRAPHY

WEBSITES:

www.indiainfoline.com

www.agriwatch.com

www.satnamoverseas.com

www.itcportel.com

MAGAZINES:

ICFAI journal of Marketing Management

PITCH

NEWSPAPERS:

Economics TIMES

Business Standard

final ready to eat

Documents