Frozen Foods Business in India is Scaling and this 28-year-old Player is Cashing in The industry has embraced technological changes along with easier imports, lower duties and access to better raw material

Most working professionals or bachelors living away from home turn to the kitchen after a long day's work to prepare a dish that can hardly pass off as dinner even after much of a scramble. Or worse, they resort to ordering food online, not just spending money but also adding unneeded calories to their diet.

Bringing respite to these people is the frozen foods sector. With ready-to-cook packets, it promises to provide a quick dinner that can also be healthy. One of the leaders of the frozen foods segment in India is Innovative Foods Limited which under the brand name Sumeru offers a variety of vegetarian and non-vegetarian ready to cook products.

In an interview with Entrepreneur India, the newly-appointed CEO of IFL, Mithun Appaiah talks about the Indian FMCG space and how he will now lead the 28-year old company and innovate to scale faster.

The Changing FMCG Industry

The Indian FMCG industry has been evolving at a high rate over the last few years. Coupled with the growth of foodtech, the industry has embraced technological changes along with easier imports, lower duties and access to better raw material and packaging. Adding to the same, Appaiah said, "The change isn't limited to multinational companies or the organised sector discovering new rural markets. It is about ambitious new companies mushrooming across the country and offering high quality products."

GST however, has not had a major impact in the industry according to Appaiah. He believes that it will only simplify their operations for the supply chain management is benefitted with faster timelines and thus greater reach to customers.

Expanding Rapidly

With a presence in over 100+ cities in India and over 11 countries, the company believes that they have the best innovations funnel. Appaiah is currently focusing on building citadels around key geographies which have high industry size in their category and will also turn out to be profitable and sustainable in the long run. "We are looking at launching products that are specific to a region and capture the needs of consumers who are presently seeking differentiation in the offering," he said.

Talking about their expansion plans, Appaiah said that they are looking at scaling up their distribution to be 4X of their current size.

In today's digital world, one cannot forget to build a social media presence and that also seems to be on Appaiah's priority list. "We are looking at disruptive marketing using digital media and consumer data from digital," he said.

Functioning like a Start-up

Having been in the FMCG industry for long, Appaiah who also mentors many startups, said that they are changing the way they do business. Appaiah said that they are proud to have the most innovative product development labs. They are even focusing on the healthy food segment but with products that consumers like, for example a healthy paratha range.

"We ourselves would like to function like a start-up as we realize that the potential is a lot larger than what we get to see. Speed to market would be most critical part of this industry and the game needs to change," he said.

Challenges of the Industry

The vast industry which promises a lot of growth also brings with it a set of challenges. Appaiah listed down a set of challenges that the frozen foods industry currently faces:

Evolving talent pool: Recruiting expertise and then retaining them has been a challenge that this sector continues to face. Appaiah believes that the brain drain from this industry happens as other emerging sectors have set a higher bench on remunerations. "Within FMCG, the frozen business needs differential skills and hence it's been difficult to get the right set of people," he said.

Clutter in the retail space: Walk into a mall and the frozen foods segment has a variety of brands all screaming for attention. Agreeing with the same, Appaiah said, "The retail space is too cluttered today with many brands fighting for the same space. Getting yourself noticed and ensuring repeats is a challenge."

Spoilt with choices to order food: Foodtech startups delivering food at the customer's doorstep, has made way for convenience but has also affected the frozen foods segment.

"The options are so many that consumption from alternate sources are more than traditionally cooking food at home," he said.

Poor infrastructure pushing costs of logistics and distribution : Another major problem that the industry faces is that infrastructure development fails to keep up with the consumer demand, thus resulting in a higher pressure on distribution. "Cost to serve and space within stores are always a dichotomy and hence puts pressure on FMCG players on their bottom line.We have built robust systems and processes that ensure these issues are addressed by keeping the consumer at the centre of all decisions," said Appaiah.