'Indian homes to spend a third of food expenses on meat and poultry by 2025'
Premium- Fitch Solutions said on Friday that this shift will be led by a rise in disposable income and inflationary pressure
NEW DELHI : Indian households are likely to spend close to one-third of their food expenses on proteins such as meat and poultry by 2025 due to the rise in disposable income, and inflationary pressure, while their spending on bread, rice, and cereals is set to decrease from the level in 2005, Fitch Solutions said on Friday.
“Growing wages and disposable income have led to this change in proportion over the past 20 years, enabling the average Indian household to afford more than just basic food staples," Fitch Solutions, an affiliate of Fitch Ratings, said in a report on India dietary spending.
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According to the calculations by the analytics firm, the average Indian household will spend 35.3% of the total household budget on food in 2025, increasing by 2.1 percentage points from 33.2% in 2005. Household spend on meat and poultry will account for the largest share at 30.7% of total food spending by 2025, up from 17.5% in 2005. During the same period, spending on bread, rice and cereals will decline to 23.8% from 28.8% while spending on fruits will go up to 16% from 6.4%.
However, Fitch said the rise in meat consumption in India will not be significant and the nominal spending growth is mainly attributable to inflationary pressures. “Between 2005 and 2025, spending on meat will grow by an annual average of 17%, outperforming headline food spending of 12%. However, we note that on a per-capita basis, the average Indian will only consume 4kg of meat, as compared to 3.1kg in 2005, implying a compound annual growth rate of 1.4% over this period. We highlight that prices of meat and fish have increased by 7.9% y-o-y between 2012 and 2021, above headline inflation of 5.8% across the same time period," it said.
By 2025, poultry will be the most consumed meat, with a per-capita consumption of 2.9kg, increasing from 1.1kg in 2005 and representing 71% of total meat consumed. “Beef will be one of the least consumed meat, at 0.5kg in 2025, decreasing from 1.1kg in 2005. We highlight that the low level of meat consumption is mainly attributable to the religious beliefs of Hindus, which represent 79.8% of the population (approximately 900 million people) in India in 2011. Diet in Hinduism varies with its diverse traditions, with some followers advocating a vegetarian diet, while others may opt for non-vegetarian diet that includes meat. However, Hindus who eat meat will generally avoid consuming beef, as it is considered sacred and goes against their religious beliefs," it added.
Rice and cereal products are staple foods in India, as it is relatively inexpensive and serves bulk of the meal, with many dishes revolving around it. Between 2005 and 2025, per-capita rice consumption will increase from 70.4kg to 77.1kg, while spending on rice will grow by an annual average of 10.7%. Spending on other cereal products such as wheat flour will grow by an annual average of 11.9%. “Swiggy, India's largest online food ordering and delivery platform, reported in its annual report that Indians ordered an average of 95 biryanis per minute or 1.6 biryanis per second in 2019, making biryani the most-ordered dish on the platform for the third year in a row," Fitch said.
While Indians lag behind the recommended 400g daily fruit intake, Fitch highlighted that dried fruit and nuts are highly popular in India and have seen tremendous growth in recent years. “In 2021, Happilo, a dried fruit and nuts snack manufacturer, raised ₹1 billion ($13.6 million) from Mumbai-based venture capital A91 Partners in its first external funding round. The self-funded company that sells directly to consumers has a projected revenue of ₹1.8 billion ($24.5 million) and is profitable. In 2020, close competitor Nutty Gritties reported an annual revenue of ₹200 million ($2.7 million), and the company has been consistently profitable for the last five years," it added.
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