How to do effective Marketing for Ready to eat products

Aswathi Cherkkil
11 min readNov 12, 2020

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The introduction and rise of ready to eat foods:

In a time where time is money, more and more people are looking for opportunities to save it conveniently, without having to sacrifice a lot. The Ready to eat/ microwaveable food categories are based on this rising consumer need. It can be traced to as early as the 19th century with tin cans for soldiers. There has been attempts to meet the growing and changing consumer demands across time in different ways. Many have succeeded while quite a lot have failed.

The primary reasons linked to the increasing demand for Ready to eat products include the rise of the working class and women entering the workforce. This meant families found it difficult to spare time for cooking and making meals, leading to the rise of production of microwaveable meals and ready to eat products.

According to the US Food code (FDA, 2009), Ready to eat foods should be in edible form without an additional preparation step. In their addressing of the consumer demand the market has created several variations including ready to eat, ready to cook, frozen foods, microwaveable/ reheated food products, instant mixes and so on. The ready to eat category will include. To attract consumers they bought in new flavours and packaging. With development of technology and packaging more and more items are being available as ready to eat options.

Rise in the global markets:

As mentioned earlier, the changing consumer lifestyle and taste preferences, increasing disposable income and the fast paced urbanization were prime reasons for the rise of ready to eat products. Currently ready to eat products are claimed to be the biggest segment in the food industry. The following image shows the market size, globally of ready to eat products (2018 report), [1]. North America is the largest market for RTE products globally [2]

The recent years have witnessed a high penetration and availability of ready to eat products across different channels. There is a large customer base for brands online through e-commerce platforms for grocery. The distribution channels include Retail stores and specialty stores. It has a highly competitive landscape.

Indian RTE Market:

Indian mothers and home makers have a high regard for home cooked food. Into such a culture ready to eat products were introduced in the 1980’s. The changing economic conditions, increasing income levels along with the rise of the working middle class with both parents going to work made the requirement very prominent. Other than working mothers, there are other segments too like bachelors and students who lack time and knowledge to cook. The expansion of retail chains, hypermarkets, convenience stores, supermarkets and outlets in tier 1 and tier 2 cities have helps in product penetration and increasing awareness among people. Indian cooking styles have been witnessing a shift towards more healthier and convenient options which means more people prefer hygienically packed food rather than loosely sold items. A survey by the associated chamber of commerce and industry for India found that around 79% Indian households prefer instant food because of time restrictions [3]. However there is an increasing preference for ‘Indianised’ options like ready to eat Upma, Bhel, Poha etc launched by brands like MTR and ITC.

The major players in the Indian RTE market are: McCain Foods, MTR , Gits Food Products, Haldiram, ITC, Bikanervala , Godrej Tyson Foods , Darshan Foods etc [4]

Reasons for changing consumer preferences

As mentioned earlier, there are a few primary and strong reasons changing the consumer preferences and tastes in the Indian household which are economic, income wise, improving lifestyles, changing priorities, increasing workforce and urbanization. Along with these, more and more consumers are becoming health conscious which means there is a shifting preference within the ready to eat segments towards healthier snacks and packaged items.

a) Attribute satiation model-

Consumers are getting tired of the attributes of existing RTE products which are branded and sold across outlets. Earlier one of the major reasons for the increasing demand for RTE was the convenience and time and secondly the taste. Consumers are bored of the options available in packaged RTE foods. Most consumers are concerned about the health hazards associated with preservatives. However ready to cook meals do have an advantage in that they leverage the human effort or the human touch in the food. It looks more promising than the ready to eat packaged food. This is a cue to manufacturers to focus more on R&D and develop new flavours, packaging and healthier options.

b) Cognitive dissonance-

As more and more consumers are becoming health conscious they care about the food they put into their mouths. They feel guilty for gluttony and eating processed food. To reduce their dissonance, they look for healthier options in packaged and ready to eat foods. If we look at cities, we find more people preferring supermarket packed salads and fruit bowls. It saves time and is a healthier option. For many supermarkets and retail chains, there is a slow but increasing demand and consumption of packaged fresh foods which are ready to eat. The is information overload today due to the explosion of data and the internet, because of which more and more consumers are becoming aware of the health hazards of continuous consumption of packaged food and the preservatives used in them.

The earlier buzz around packaged food has turned around and people have started to appreciate food that is not packaged and recently it would be correct to say that there is a changing preference as people are now unsatisfied or reluctant to the taste of packaged food. This is a point of critical concern for ready to eat food manufacturers in India. Unless they act up on this issue and innovate, they will lose out on the customer’s mindshare.

Hedonic purchase behaviour- impulse buying and variety seeking behaviour

Most players market the products on hedonic attributes, as this can become the differentiating factor among competing brands. Analysing the hedonic purchase behaviour we can observe that impulse buying and variety seeking behaviour are two factors that affect the demand ans sales of ready to eat products.

Impulse buying is good for the segment as product placement in retail stores can conveniently push a fast shopper towards purchasing the item. Impulse buying however cannot outlast customer cognition for a longer time and is a risky bet under the changing customer attitude towards packaged foods.

Variety seeking behavior- For many packaged snacks and RTE products a major driver for change and innovating with flavors were the variety seeking behavior of customers. For packaged food items this meant innovating with product attributes like new packaging, using colors, shapes and new exotic flavors. Compared to the Impulse buying behavior, variety seeking behavior is something more stable that the marketers and manufacturers can rely and bet on. This would mean more opportunities for existing and new players to enter different product subcategories and experiment with new features.

Marketing strategies:

Some viable marketing strategies that the manufacturers can use is to focus on product differentiation and the variety seeking behavior of customers. To roll out new flavors and packaging and product sizes.

· Disentangle the frame of reference.

This can be used as an effective strategy. Right now the reference frame for customers for RTE products are home cooked meals. For Ready to cook products this is a point for leverage. They can continue to focus on the factor of effort justification and the human factor. But for ready to eat products that do not require any further cooking the reference point should be disentangled from the home cooked meals. This would tarnish the image to the Indian consumer. Instead for healthier ready to eat food products, it would be a better comparison to set the reference frame as the fast food options which are unhealthier options. So we could use the fear appeal to create product affinity.

· Affective advertising and celebrity appeal.

Two appeals promoting the impulse buyer would be humor appeal or the scarcity appeal. For RTE products like packaged snacks, using humor appeal can be beneficial. Creating product variants like limited edition packaging and exotic new flavors can help in market research to see customers interest in the new variant as well as help create a buzz for the product. We have seen this work successfully for potato chip brands like Lays.

For ready to cook meals, creating affective advertising with celebrities as mothers would be a great option to strike a chord with Indian working mothers. Brands like Maggi, Nestle are

· Diversification- brand/ category extensions.

To satisfy the variety seeking behavior of customers in the RTE category manufacturers often play with packaging, flavors. It would also be feasible for them to enter into healthier food options like protein bars, snack bars, cold pressed juices etc. For ready to cook brands like MTR, Nestle, Haldirams, Knorr, ID Fresh foods, this has worked successfully.

· Focusing on hedonic attributes.

It is quite obvious that for conventional not-so-healthy RTE products, the focus is better to be on hedonic attributes. This would help push sales and bring customers under the sway of positive affect. It would also help to increase margins by charging premium.

· Customer co-creation, taking frequent customer insights.

Taking frequent customer insights and taking not of changing customer preferences and tastes is important for companies in the food industry. Customer co-creation is where the company take design inputs for the products from the customers. In RTE segment this could mean taking ideas for new flavors or on packaging. Customer involvement is increased by taking customer inputs on packaging as has been successfully demonstrated by brands like Nestle Maggi and Kissan, Coca-Cola, Snickers etc. For RTE products and even RTC products including customers’ recipes, stories in packaging has been a successful strategy to involve customers. It is quite frequently observed in ice-cream shops in US that they let customers design custom ice-cream flavors which they test and then launch to the market.

· Elaboration likelihood model.

Changing customer attitude towards RTE products are essential to ensure the continuity of the product. Since most RTE/ RTC products focus on the hedonic attributes of the product while advertising, they take the peripheral route. However it is essential to increase customer involvement in the product and its consumption through affective appeal, celebrity and distinctive appeals; and by sponsoring and participating in cooking events, Television programs, social media challenges and content. Thereby creating and attracting consumers with high involvement, high motivation and cognition. This will increase the brands mindshare and subsequently help to gain market share.

Factors affecting diffusion

1) Relative advantage: Ready to eat products have a relative advantage when it comes to cooking. They are convenient and quick options for people who lack time.

2) Compatibility: In the Indian market, home cooked meals are revered. But the closest you could come to it is when you induce Indian flavors and dishes into the RTE category as has been successfully demonstrated by MTR, Haldirams etc. Not just the taste, most Indian households do not have microwaves and as mentioned in the article ‘Ready-to-eat brands, not yet a palatable concept’, brands like Pillsbury and act-II popcorn have been successful in helping Indian wives and mothers use pressure cookers to create cakes and popcorns.

3) Complexity: Ready to eat and ready to cook products win the game when it comes to complexity as these require little or no preparation time and effort.

4) Observability: For ready to eat products observability is a key factor and this is so even for some categories of ready to cook products which require only adding hot water or reheating, could be made available in office pantries. This would increase customer awareness.

5) Trialability: Manufacturers can facilitate diffusion by introducing smaller packets to increase ‘trialability’. Also make products available online for the multi-channel shopper.

Technology disruptions in the food system and their affect in RTE market

Technology has made RTE products viable to be manufactured and marketed. However there are challenges to the sector coming from technology disruptions in other areas like restaurants. As more and more restaurants are making food available for delivery through online platforms, it is easier for customer segments of RTE like working bachelors to order a hot food of plate online on platforms like Swiggy and Zomato rather than bring in a ready to eat or ready to cook product. Since the restaurant food is often made by hand by in house chefs, it gives a much pleasing sense of fulfilment for the hungry Indian consumers who have grown up with hot food served by their mothers or grandmothers. The explosion of online delivery platforms and the increasing number of restaurants that are registering on these platforms for delivery prove to become a threat to the RTE market. However one of the main downfalls of restaurant food could be the price, hence RTE segment can focus on competing on price with these technology disruptors. The following figure shows the reduction in spending on food by consumers and the online food delivery revenue [6]

The Future

There is potential for RTE and RTC products in the market, but the consumer’s requirements and tastes are changing. It would depend a lot on compatibility, hedonic attributes, customer attitude etc. The present COVID crisis has increased demand for RTE products for a smaller segment which are bachelors and single individuals who are living away from home and were earlier dependent on maids for home cooked food. The social distancing has isolated this category and they are increasingly depending on RTC and RTE products. But for Indian mothers who are now working from home, RTC product demands would be lower as they spend a lot of time at home and can find pockets of intervals to get to cook in their kitchens. As mentioned, unless RTE/ RTC products disentangle the frame of reference to home cooked meals, they will find it hard to market and sell the products, alternative uses and use cases for the products should be promoted and technology must be leveraged to help increase customer involvement in the consumption of the product, which would also give scope for customization to their tastes. Introducing the business model of 7/11’s seen in China and other South-East Asian countries can be tried out in India as well. 7/11’s are grocery stores where customers can buy quick RTC/RTE products and they have enough facilities like hot water supplies and so on, so that customers can sit down and

References

[1] https://www.mordorintelligence.com/industry-reports/ready-to-eat-food-market

[2] https://www.blueweaveconsulting.com/global-ready-to-eat-food-market-1980

[3] https://www.indiaretailing.com/2020/01/22/food/food-grocery/ready-to-eat-food-millennials-new-favourite/

[4] https://www.globenewswire.com/news-release/2020/01/09/1968244/0/en/india-ready-to-eat-food-rte-market-study-2013-2023-analysis-by-segment-distribution-channel-and-state-featuring-profiles-of-leading-players.html#:~:text=Some%20of%20the%20major%20players,Foods%20Limited%2C%20Darshan%20Foods%20Pvt.

[5] Case reading material- Ready-to-eat brands, not yet a palatable concept.

[6] https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/ deloitte-au-economics-future-food-uber-eats-100719.pdf

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