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Dabur India, known for ayurvedic products such as Chyawanprash, last week introduced Dabur Honey Tasties – honey-infused chocolate and strawberry syrups – for children, marking its entry into the dips, spreads and condiments category, which has attracted other companies, too.
The company is counting on its innovation in the honey category to provide a treat that children will like while widening its share of the market.
“Dabur Honey Tasties can be added to milk, spread on bread, drizzled on pancakes/waffles and used to make desserts. It not only enhances the flavour of milkshakes but can also be used as a topping in beverages like cold chocolate and cold coffee, besides ice-creams,” said Prashant Agarwal, marketing head -health supplements, at Dabur India.
The product, priced at Rs 120 for a 200-gram squeezy pack, will be sold at select retail stores and on leading e-commerce platforms.
Last year, Hindustan Unilever, extended the spreads category by launching peanut butter in south India under its Kissan range of products, which includes jams and ketchup. Epigamia, Jubilant FoodWorks, Del Monte, BigBasket, Veeba and Wingreen Farms have introduced products in this segment to tap growing consumer demand.
What’s cooking?
From a time when ketchup and chilli sauce (or hot sauce) were the only products in the dips, sauces and spreads category on grocery shop shelves, the consumer today is spoiled for choice. Although ketchup, or tomato sauce as it’s known in India, still commands about 60 percent of the market, demand for products such as hummus, cheese spreads and oriental sauces has spiked.
“Customers are now exposed to new cuisines through shows like MasterChef and cookery channels on YouTube and other digital platforms,” said Purnendu Kumar, executive vice president, consumer and retail, at Praxis Global Alliance. “It has increased the popularity of new sub-categories like pasta sauce, hummus and pesto.”
Sample this: The dips and spread market in India is about Rs 3,500 crore and this is expected to almost double by 2026. After ketchup, mayonnaise has a 20 percent share in this market and all other products have a 20 percent share, according to data from Praxis Global Alliance, a management consulting and advisory services firm.
“The retail market has shown a healthy growth of 15-16 percent during the last five years. During COVID-19, cooking at home has increased the demand for products like mayonnaise, pizza and pasta sauce. Categories like mayonnaise have shown growth of approximately 25 percent per annum,” said Kumar.
According to Rohan Mirchandani, cofounder and CEO of Drums Food International, the maker of Epigamia-branded products, digital media has nudged this category.
“These products are very Instagrammable and you can demonstrate several occasions by using them,” he said.
Epigamia has introduced ghee-based spreads and cream cheese to cater to the growing market for such products.
Besides Epigamia, Veeba and Del Monte, with a mainstay in sauces and condiments, have launched several products. Veeba introduced Earthmade Organix, a range of organic hummus, last week. Del Monte brought out a range of oriental sauces last year.
Large FMCG companies, however, still have the biggest chunk of the market, primarily because of their ketchup products. Nestle’s Maggi commands a 30 percent share of this market, HUL’s Kissan 22 percent and Tops 12 percent, according to industry estimates. Mrs. Bectors (Cremica), Smith & Jones, Veeba Food, Dr. Oetker, and Del Monte Foods have the remainder.
Not-so-urban phenomenon
Although a large share of the sales of these new products comes from metros and tier-1 towns due to e-commerce and social media exposure, there is heightened interest from small towns as well.
“While ketchup is available across the country, small towns are showing high growth in other categories like mayonnaise and pizza and pasta sauce,” Kumar said.
According to industry reports, the small-town market is expanding at almost 2-2.5 times the overall national growth rate in these segments.
Experts said improved direct distribution networks and increasing delivery destinations by e-commerce companies are helping widen product availability in smaller towns.
“Most of the sales of our products are coming from metros and tier-1 now. However, like Epigamia’s yogurt, we expect that small towns would also follow soon,” said Mirchandani.
Experts, though, are sceptical about premium products finding enough takers in the small towns given their high prices.