Healthy snacking market gains momentum spurred by consumer demand, mindful eating

Even as Amitabh Bachchan is shown enthusiastically digging into his pack of Bhikaji namkeen and refusing to share it with anyone, people are increasingly beginning to let go of calorie and fat rich snacks and going for healthier options, thus propelling a burgeoning healthy snacking industry.

While this shift to more mindful eating has been on the rise in the last few years, it gained momentum during the COVID-19 period, which made people rethink their lifestyle choices ad make several conscious changes.

Health is wealth is the new adage

India is projected to have an addressable base of 120 Mn health-conscious individuals by next year, with nearly half of these coming from outside the metros and Tier 1 cities. Moreover, the preventive healthcare segment is predicted to reach $100 billion in value, with healthy consumption accounting for 30% of this opportunity. Therefore, it’s no surprise that D2C startups are flocking to meet this ever-increasing demand.

A report by Avendus Capital underscores the substantial growth expected in the Indian market for health-focused products. The projection of a 2x increase in per capita spending on healthy foods by 2026 reflects the changing mindset of consumers who are now willing to invest more in products that contribute to their overall well-being. The burgeoning health food market in India, expanding at a notable 20 percent CAGR, signifies a growing awareness and consciousness about the role of nutrition in maintaining good health. This momentum has particularly benefited the Healthy Snacking market, with various brands capitalizing on the trend.

Sharing his opinion that ‘Health is wealth’, Yash Kotak, Co-Founder, BOHECO, shared: “In today’s dynamic landscape, the concept of health and wellness brands is unfolding and gaining momentum globally, and particularly within our country. The adage 'healthy is wealth' is no longer just a phrase but a conscious choice individuals are making regarding their dietary and nutritional needs. This transformative journey, although nascent, has seen significant impetus, with the recent pandemic acting as a catalyst. As we observe a dominance of healthy brands in online retail, propelled by the convenience and accessibility offered by e-commerce platforms, it becomes clear that the industry is not only evolving but also aligning with the changing preferences of a tech-savvy consumer base.”

Brands in the ‘Healthy Bandwagon’

Popular brands like Natureland Organics, Oorla, NuttyFox, Tata Soulfull, Pink Harvest, Lil' Goodness, Yoga Bar, BOHECO, and others are offering consumers a diverse range of healthier snack options. These brands are not only catering to the increasing demand for nutritious alternatives but also contributing to the expansion of the overall market.

Prashant Parameswaran, MD & CEO, Tata Consumer Soulfull, puts forth his views about the growing success of the brand, saying: “The pandemic undeniably had a significant impact on Tata Soulfull as a brand and the retail sector as a whole. As a millet-based breakfast and snacking brand, we faced unique challenges as well as long term opportunities. While there was an initial impact on business due to lockdowns and supply chain disruptions, the pandemic also heightened consumer focus on health and nutrition, which aligned well with our product offerings. As a result, household penetration of the Breakfast Cereals category has significantly increased post pandemic. In the broader retail sector, the pandemic accelerated the shift toward e-commerce, with consumers increasingly valuing contactless shopping. Retailers had to invest in safety measures and adjust their strategies to meet the evolving demands of cautious consumers.”

Sharing his views on the trend of healthy snacking, Ajeet Godara, Founder and Director, Natureland Organics, said, “The concept of healthy foods and snacks is indeed relatively new in our country, and it's an exciting development. It is expected that the health food market in India will grow exponentially. This trend signifies a growing awareness and interest among consumers in making healthier dietary choices. I believe this shift is driven by several factors, including an increased focus on personal well-being and a desire to lead healthier lifestyles. People are becoming more conscious of the link between nutrition and health, which is fostering the demand for healthier food options.”

Seconding the views, Saravanan Mohan, Co-founder, Oorla, said: “The concept of healthy foods and snacks is indeed gaining momentum in many parts of the world, including India. While there is a strong tradition of delicious and flavorful traditional snacks and sweets in Tamil Nadu, we believe that there is also a growing demand for healthier options. At Oorla.com, we recognize the importance of offering a diverse range of products that cater to different preferences. We are committed to providing our customers with both the traditional and authentic sweets and snacks they love, while also introducing healthier alternatives. We source and offer a variety of snacks and sweets that are made with high-quality ingredients, emphasizing traditional preparation methods while keeping health considerations in mind. By doing so, we hope to contribute to the growing movement of making healthier choices more accessible to our customers.”

Britannia, one of the most famous bakery and dairy products manufacturer, has expanded its wellness food portfolio with an aim to tap the growing number of health conscious consumers in India. Its food portfolio now includes biscuits, breads, dairy products and breakfast cereals for the health conscious consumers.

High nutrition food trending across the Nation

The COVID-19 pandemic has indeed accelerated certain social transitions, particularly in the realm of consumer behavior and preferences. The heightened awareness of health and nutrition has led to a significant shift in the way people approach their diets, and this trend is observable globally, including in India. Consumers are now more watchful and conscious of what they put on their plates, with a greater emphasis on nutritious and wholesome foods.

This shift has had a notable impact on the packaged food industry in India, prompting leading companies to reassess and revamp their product offerings to align with changing consumer preferences. This may involve reformulating existing products, introducing new lines of healthier options, or providing clearer nutritional information on packaging. Some companies may also engage in marketing strategies that emphasize the health benefits of their products.

The road ahead

“In terms of upcoming trends in the healthy food and snack sector, we can expect several developments” says Ajeet Godara, adding “Personalisation and customisation of products to cater to specific dietary requirements and preferences are likely to become more prominent. Plant-based and vegan options will continue to gain popularity as more people adopt sustainable and ethical dietary choices. We can anticipate the growth of functional foods and beverages with added health benefits, as well as a focus on reducing packaging waste and promoting eco-friendly practices.”

Agreeing with the former, Saravanan Mohan said that plant based and vegan snacks will continue to grow rapidly. He said: “There is a growing interest in authentic regional and ethnic flavors. Snack brands are experimenting with unique and alternative ingredients, such as seaweed, jackfruit Chips, and Millet flour, to offer innovative and nutritious options. Snacks formulated to support mental health and stress relief, such as those containing adaptogens and mood-enhancing ingredients, are expected to gain popularity. Combining flavors and ingredients from different cuisines is a trend known as "culinary fusion." These snacks offer exciting and unique taste experiences.”

Factors driving popularity of healthy snacking

The popularity of healthy food and snack brands in India can be attributed to a combination of factors, as opined by Ajeet Godara. He adds: “One of the key reasons is the growing health awareness. The consumers are more aware, they are switching to a balanced diet that has fuelled the demand for healthier food options. The rise in fitness and wellness culture has encouraged people to prioritise their well-being, leading to the preference for nutritious snacks and foods. Moreover, government initiatives, advertising campaigns, and the efforts of health-conscious individuals and influencers have all contributed to raising awareness about healthier food choices. The growing middle-class population and changing lifestyles also play a role in this trend, as people seek convenient yet healthy food alternatives.”

Yash Kotak opines: “The surge in popularity of health and wellness brands in India can be attributed to a heightened awareness of well-being, spurred by the COVID-19 pandemic, prompting individuals to re-evaluate their lifestyles. Looking ahead, the future of the sector is characterised by innovative trends such as advanced diagnostics, tele-consultations, personalised treatment plans, genomic innovations, and the integration of cutting-edge technologies like smart watches, fitness trackers, AI-infused wellness apps, and block chain security etc. Additionally, the industry is witnessing a rising demand for effective and sustainable healthcare solutions, with cannabis and hemp-based innovations stepping in to meet the evolving needs of today's health-conscious consumers. As technology continues to redefine healthcare, the sector is undergoing a paradigm shift toward holistic well-being, with these transformative trends shaping its progressive trajectory."

Prashant Parameswaran puts forth his views about the success of the brand, saying: “The pandemic undeniably had a significant impact on Tata Soulfull as a brand and the retail sector as a whole. As a millet-based breakfast and snacking brand, we faced unique challenges as well as long term opportunities. While there was an initial impact on business due to lockdowns and supply chain disruptions, the pandemic also heightened consumer focus on health and nutrition, which aligned well with our product offerings. As a result, household penetration of the Breakfast Cereals category has significantly increased post pandemic. In the broader retail sector, the pandemic accelerated the shift toward e-commerce, with consumers increasingly valuing contactless shopping. Retailers had to invest in safety measures and adjust their strategies to meet the evolving demands of cautious consumers.”

Majority of D2C brands take the e-commerce route

The predominance of healthy brands in online retail over brick-and-mortar stores can be attributed to several key factors. On this, Ajeet Godara said: “Firstly, the convenience of online shopping allows consumers to explore a wider range of products and make informed choices without the constraints of physical store locations. E-commerce platforms provide a convenient way for customers to access a variety of healthy brands and compare them in terms of price, quality, and reviews. Another factor that has led to the growing inclination towards online shopping is the COVID-19 pandemic. It accelerated the adoption of online shopping, as people sought to minimize physical interactions and access essential products from the safety of their homes. As a result, online retail has become a significant channel for healthy food brands to reach their target audience.”

According to Saravanan Mohan, the dominance of healthy food and snack brands in the e-commerce space, as opposed to shops, can be attributed to several factors, such as:

Wider Reach: E-commerce allows brands to reach a global audience, as opposed to the limited local reach of physical stores. This wider customer base is particularly important for niche and healthy food brands that may have a smaller target market.

Convenience: Online shopping provides convenience, allowing customers to browse and purchase products from the comfort of their homes. This convenience is especially important for health-conscious consumers who might not find the time to visit physical stores.

Access to Information: E-commerce platforms offer detailed product information, reviews, and comparisons, which are crucial for health-conscious consumers making informed choices. Physical stores may not provide the same level of information.

Digital Marketing: E-commerce platforms provide opportunities for digital marketing and social media engagement, which is highly effective for promoting health and wellness products. Brands can leverage online marketing to reach their target audience more effectively.

COVID-19 Impact: The COVID-19 pandemic accelerated the shift towards online shopping as people sought contactless options for their daily needs. This shift has continued even as the pandemic recedes.

The future of this sector appears promising, driven by evolving consumer demands and a growing commitment to health and sustainability. It is essential for businesses to stay agile and innovative to remain competitive in this dynamic market.