India's packaged food industry faces the challenge of reformulating products to comply with new sugar content regulations, but experts see this as an opportunity. While larger companies can adapt, smaller firms may struggle with the costs. However, strategic planning, phased implementation, and consumer education can mitigate the short-term impacts. The industry is also well-positioned to benefit from market differentiation, regulatory compliance, and premium pricing for healthier products, driving sustainable growth in this rapidly expanding market.
In a move towards empowering Indian consumers, experts are urging the public to scrutinize nutrition labels on packaged foods more closely. This push for greater transparency comes as a positive step in India's journey towards healthier eating habits.
"Consumers should start taking efforts to read and understand the nutrition labelling of packaged food products. This is important for health reasons and to force companies to stop printing misleading claims," say experts.
The recent dietary guidelines released by the Indian Council of Medical Research (ICMR) in May 2024 highlight concerning issues, such as some fruit juices containing less than 10% fruit pulp and sugar-free foods having high fat content. "Some manufacturers use labels to make incorrect and incomplete claims about their food products," the ICMR guidelines state.
A report by the National Institute of Nutrition (NIN) echoes these concerns, noting that "though the Food Safety and Standard Authority of India (FSSAI) has strict norms, the information presented in labels could be misleading."
These revelations have prompted a call to action. "It is time that consumers start carefully reading the information on food packages to make informed and healthy choices," urge experts and activists.
The FSSAI is taking proactive steps, advocating for more transparent food labelling, including proposed regulations mandating front-of-pack labelling (FOPL) to highlight high levels of sugar, salt, and fat. While implementation and enforcement remain a work in progress, this initiative signifies India's commitment to empowering its citizens.
"FSSAI did acknowledge the undesirable effects of artificial non-caloric sweeteners in food products, but has not taken any action to keep up with the global trend of reduction in high intake of sugar in everyday products," says Swarna Jain, Senior Associate at Spice Route Legal. "Cutting down on added sugars and replacing them with other alternatives may be expensive for companies, however, that cannot be a reason to not implement regulations for the well-being of consumers."
The private sector, too, is recognizing the shift in consumer preferences. "If Europe can have a food quality (standard) that has zero sugar in a product, why do we need anything else?" said Anita Parveen, Secretary of the Ministry of Food Processing Industries.
Companies are rising to the challenge, finding innovative ways to balance taste and nutrition. "We develop products that have lower sugar content than other similar products in the market," shares Prashant Parameswaran, MD & CEO of Tata Consumer Soulfull.
This positive change in the Indian food landscape is further reinforced by research. A survey by Nielsen revealed that 67% of Indian consumers desire comprehensive information about their food, and 68% are willing to pay a premium for products labeled as "natural" and "organic."
As India continues to empower its consumers through improved food labelling and a growing emphasis on nutritious choices, the country stands at the forefront of a healthier future. This transformation represents a significant step towards a more informed and health-conscious populace, benefiting both the industry and the nation as a whole.
India's Packaged Food Industry Embraces Transformation
In a move towards a healthier future, India's packaged food and beverage industry is rising to the challenge of adapting to new regulatory guidelines. While some stakeholders initially saw these changes as "impractical," the industry is now poised to embrace the transformation with a positive outlook.
The revised guidelines, which cap the threshold for sugar in food products and beverages, have been met with a mix of concerns and opportunities. As Sanyal, an industry expert, points out, "This type of change is not new to the industry. For example, in response to Covid-19, food companies were able to quickly change packaging and logos. To avoid incurring the cost of relabelling already packaged products, stickers can be allowed."
The labelling costs, which may initially seem daunting, are often diluted over time and are not typically higher than a company's marketing spend, according to Sanyal. Moreover, studies have shown that stringent labelling requirements can lead to a reduction in the purchase of high-calorie products, ultimately driving companies to transition to healthier options.
Jain of Spice Route Legal echoes this sentiment, stating, "Studies have shown that stringent labelling requirements may lead to a reduction in revenues, but it also forces companies to transition to healthier products."
While large multinational corporations and conglomerates possess the necessary capabilities to adapt their formulations, smaller companies may face more significant challenges. "Even larger companies will not find it easy to reduce sugar as this requires additional investments and will have a direct impact — at least initially — on profit margins," says Sinha of Desai & Diwanji.
However, Ramanathan, an industry expert, sees these challenges as temporary. "With strategic planning, phased implementation and effective consumer education, companies can mitigate these impacts. Long-term benefits include achieving market differentiation, ensuring compliance with regulatory standards, and potentially commanding premium pricing for healthier products, positioning companies for sustainable growth in an evolving market," he adds.
India's packaged food and beverage industry, valued at $32 billion in 2022 and expected to reach $86 billion by 2029, is poised to lead the charge towards a healthier future. By embracing the regulatory changes and harnessing the power of innovation, the industry is set to transform, serving the evolving needs of health-conscious consumers while ensuring sustainable growth.
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