ITC Ltd has grown its frozen snack business three times since the pandemic driven by consumers seeking variety in meals at home, with the conglomerate adding 10 new products during this period.
The company’s business head for frozen and fresh food Ashu Phakey said the frozen food market got a huge boost due to the pandemic, growing by 40-50% on the back of higher number of trials. The market was earlier growing at 10-15%. He said in e-commerce while the category doubled, it grew by five times for ITC.
“The pandemic in more ways than one has done for the frozen food category what marketers were trying to do for the category. Consumers staying home and bored of home cooked food were seeking variety, hygienic and wholesome alternates and frozen food came into being the centre of that opportunity. Earlier we had to budget a lot of money just to create awareness,” said Phakey.
The frozen food category had low penetration levels and there have been challenges in the supply chain. ITC is trying to reach small retailers and has also launched carts in Delhi as a pilot which will sell the products right at the doorstep.
“These carts are like ice cream carts selling ITC frozen food. Depending on the success of the pilot, we will expand this initiative. Overall, only one in ten outlets stock frozen food and hence it is important for retailers to augment frozen capacities,” said Phakey.
The size of the frozen food category in India is about Rs 2,400 crore with around half of the market is retail and balance is B2B such as food services and restaurants. During the lockdown, ITC went direct to home with frozen trucks to 1,000-plus societies reaching out to 20,000 households. The company’s reach of frozen foods grew from 12 towns to 132 towns between May to July last year.
ITC will continue to launch differentiated and unique products that are at the side and centre of the plate, said Phakey. “Frozen is the new fresh. New products are also under development including industry firsts. The penetration of the category has doubled,” he said.