India Mayonnaise Market Forecast
The relevance of research
Mayonnaise is a traditional food for Indian cuisine. The main reasons for the popularity of mayonnaise in India is the deeply rooted tradition of eating this product. In addition, active marketing activities of manufacturers and sellers, as well as the demand for these products from fast food restaurants, contribute to a stable level of mayonnaise sales.
Purpose of the study
Analysis of the state of the mayonnaise market in India, assessment of the market size, analysis of competitors, as well as identification of factors affecting the mayonnaise market
Content
Chapter 1. Key components of the mayonnaise market
1.1. Market size
1.2. Growth rates of the mayonnaise market
1.3. The ratio of imported and domestic products in the market
1.4. Volume and dynamics of mayonnaise production
1.5. Mayonnaise import. Volume and dynamics
1.6. Mayonnaise export. Volume and dynamics
1.7. Share of exports in production
Chapter 2. Economic characteristics of the market
2.1. Mayonnaise Market Trends
2.2. The main problems of the industry
2.3. Estimation of the number of buyers and their financial capabilities
2.4. Estimated consumption per capita
2.5. Analysis of sectoral indicators of financial and economic activity
2.6. Compact location of industry companies in certain regions
2.7. Mayonnaise market life cycle stage
Chapter 3
3.1. Economic components
3.2. Social Components
3.3. Technological components
3.4. Political Components
3.5. STEP-analysis of the mayonnaise market
Chapter 4. Assessment of the degree of competition
4.1. Scale of competition (local, regional, national, global)
4.2. Number of competitors and relative market shares of the largest competitors
4.3. Competition from substitute products
Chapter 5 Industry Forecasts
5.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
5.2. Analysis of the impact on the state aid industry at the current date
5.3. Assessment of the extent of the impact of the crisis on the analyzed market. Barriers existing in the mayonnaise market
5.4. Prospects and growth drivers for the mayonnaise market
5.5. Forecast of mayonnaise market development in the context of the current economic crisis
Chapter 6 Forecasting Methodology
6.1. Methods for forecasting key industry indicators
6.2. Sources of information for forecasting
6.3. Timing of forecasting
Research excerpt
Chapter 1. Key components of the mayonnaise market
1.1. Market size
Mayonnaise is a traditional food for Indian cuisine.
According to consumer surveys of recent years, almost 100% of families declare regular consumption of mayonnaise. The level of its per capita consumption in India also remains one of the highest in the world.
The main reasons for the popularity of mayonnaise in India is the deeply rooted tradition of eating this product. In addition, active marketing activities of manufacturers and sellers, as well as the demand for these products from fast food restaurants, contribute to a stable level of mayonnaise sales.
Among the many varieties of packaging in the mayonnaise market, plastic bags with a doypack dispenser with a lid (DS) are in the lead due to the most convenient use and storage. In the store, mayonnaise should be stored in a cool place without direct sunlight at a temperature not lower than 0 and not higher than 18 ° C.
Quality industrial mayonnaise should not have a lot of air bubbles or lumps, which could indicate improper storage. And the most serious defect is the delamination of the emulsion, in which oil is released from the mass. This can be seen with sudden changes in storage temperatures, non-compliance with the temperature regime or the multiplication of microorganisms in the product.
Mayonnaise-based sauces are also included in this market study. The domestic market of mayonnaise-based sauces is still an experimental platform where large and small players try their hand at creating and promoting innovative products.
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1.2. Growth rates of the mayonnaise market
In 2015, the volume of the mayonnaise market...
Diagram 1. Mayonnaise market volume dynamics, 2014–2021, thousand tons
1.3. The ratio of imported and domestic products in the market
The Indian mayonnaise market is dominated by domestic products.
Domestic producers fully satisfy the demand for this type of product both in terms of price and quality. Imports do not have a significant impact on the market.
1.4. Volume and dynamics of mayonnaise production
According to Rosstat, the volume of mayonnaise production in 2021 amounted to ...
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The seasonality of mayonnaise production is pronounced. In the last months of the year, the volume increases significantly. As a rule, the December values are almost twice as high as the January ones. The main reason for this is the tradition of Indians to celebrate the New Year at the festive table, which necessarily includes a variety of salads, including Olivier salad. In their preparation, mayonnaise and mayonnaise sauces are most often used as dressings.
Sufficient shelf life allows you to purchase the product a few weeks ahead of the required date. Manufacturers strive to follow the dynamics of demand for these products and increase production volumes for this period.
1.5. Mayonnaise import. Volume and dynamics
Mayonnaise imports to India are on a downward trend.
Diagram 4. Volume and dynamics of imports of mayonnaise, 2014–2021, thousand tons
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1.6. Mayonnaise export. Volume and dynamics
In 2016–2021 the volume of export deliveries of mayonnaise from India shows a positive trend.
1.7. Share of exports in production
The share of exports in the production of mayonnaise is insignificant, but it is growing every year.
Chapter 2. Economic characteristics of the market
2.1. Mayonnaise Market Trends
Among the trends in the mayonnaise market, it should be noted:
- Annual decline in imports;
- Development of online trading;
- Shift in consumer demand towards small-sized packaging;
- Orientation of consumers towards more natural products that are closer to traditional recipes;
- Expanding the range of flavors;
- Re-formulating mayonnaise by reducing fat, sugar and salt, and adding other functional ingredients to mimic traditional recipes;
- Development of own brands by large retail chains;
- Rising prices for mayonnaise due to an increase in the cost of the main raw material;
- Reducing the volume of packaging while maintaining prices. There are more and more products on sale, the size of which is smaller than usual for buyers. A slight decrease in the volume of packaging is less noticeable to the consumer than an increase in the cost of goods.
Conducting a special military operation in Ukraine leads the market to new trends:
- Finding alternatives for products that were unavailable due to a global supply disruption;
- Weakening of loyalty to familiar brands and willingness to replace them with others;
- Shift in consumption towards cheaper brands of mayonnaise;
- Transition by consumers to the mode of reasonable consumption.
2.2. The main problems of the industry
The main issues in the industry include:
- Difficulty entering retail chains;
- High level of competition;
- Violation of logistics links;
- Decrease in the availability of financing for enterprises.
2.3. Estimation of the number of buyers and their financial capabilities
During 2014–2017 India's population has shown a positive trend.
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The consequences of the covid-19 pandemic and quarantine restrictions have been a reduction in the earnings of Indians, the transfer of workers to part-time jobs, sending them on unpaid leave and layoffs. From the assessment of SberData analysts, it follows that every second employee in India had their salary reduced during the pandemic (from March to May 2020).
Chart 10. Dynamics of real incomes of the population of India, 2013–2021, %
According to Rosstat, the real disposable income of Indians increased by ...% in 2021. However, it is rather problematic to predict the further economic situation in 2022, since at the moment geopolitics is the main influence. Due to the growth of the key rate, inflation will also rise. Rising inflation will lead to a fall in real disposable money incomes of the population.
2.4. Estimated consumption per capita
Mayonnaise consumption per capita is calculated by GidMarket based on the total population of India.
Fluctuations in mayonnaise consumption are negligible, indicating that mayonnaise consumption in India has reached its limit.
2.5. Analysis of sectoral indicators of financial and economic activity
When analyzing financial and economic ratios, averaged indicators for leading enterprises were used. Data for 2021 are GidMarket forecasts based on retrospective data.
Table 1. Gross margin of the mayonnaise industry compared to all sectors of the Indian economy, 2016-2021, %
Throughout the study period, the gross profitability of mayonnaise is below the average profitability of all sectors of the economy.
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Profit before tax reflects the share of revenue that remained in the enterprise as profit before tax. The value of this coefficient in the mayonnaise industry is below the average Indian values.
Current liquidity characterizes the extent to which all short-term liabilities of the enterprise are secured by current assets. Shows how many rupees of current assets account for a unit of short-term liabilities.
The estimated indicator of current liquidity of a normally operating solvent legal entity must be at least one, that is, it is necessary that the total value of current assets be greater than the amount of short-term liabilities.
If the current ratio is more than two, this indicates that the company has more current assets than short-term liabilities with double coverage. The company has a high ability in the short term to pay off its obligations (debts). The normative value of current liquidity equal to two was obtained in practice and is most often found in domestic regulations. At the same time, in world practice, a coefficient in the range from 1,5 to 2,5 is considered optimal.
A more stringent liquidity criterion is the absolute liquidity ratio. It shows what part of short-term liabilities can be repaid immediately, if necessary, at the expense of available cash and marketable securities.
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Table 2. Absolute liquidity of the mayonnaise industry compared to all sectors of the Indian economy, 2016-2021, times
In general, the analysis of sectoral financial ratios in the mayonnaise industry shows low profitability values, however, at the same time, liquidity values indicate that enterprises are able to fulfill their current obligations and carry out operating activities in a timely manner.
2.6. Compact location of industry companies in certain regions
The distribution of production capacities is determined, on the one hand, by transport accessibility to provide the resource base of enterprises with the necessary raw materials, and, on the other hand, by the concentration of the population.
It should be noted that in the regions there are local leaders known only in their own territory.
The largest number of mayonnaise enterprises is represented in the Moscow region.
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2.7. Mayonnaise market life cycle stage
The mayonnaise market is at a mature stage of development, certain principles and rules for the operation of the product market have been formed, and a niche for consumers of mayonnaise as a food product has been formed. As is typical for the maturity stage, sales either continue to grow, but at a very slow pace, gradually reaching a maximum value, or remain stable.
There are a small number of consumers on the market who have made a purchase of mayonnaise for the first time, as a rule, the bulk of consumers make a purchase repeatedly or more often multiple times. In addition, buyers have the opportunity to choose between numerous brands offering goods for sale.
At this stage, the role of price competition increases, as the product is offered for sale by many manufacturers. The main emphasis in promotional activities is on attracting a mass conservative consumer who prefers a well-known and tested product at reasonable prices.
The market is quite saturated, and sharp jumps in market volume are not to be expected. Manufacturers will have to adapt to new consumer demands, which are increasingly based on the principles of healthy eating, and the composition of mayonnaise contradicts them.
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Chapter 3
3.1. Economic components
India GDP
GDP is a macroeconomic indicator that reflects the market value of all final goods and services produced in a year in all sectors of the economy on the territory of the state for consumption, export and accumulation. The dynamics of India's GDP is decisive in the vector of development of the entire economy of the country and determines the key trends in consumer effective demand and economic activity.
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Retail turnover
Retail trade turnover is also a reflection of the effective demand of the population and the level of real incomes of the population.
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3.2. Social Components
- HLS
- The fashion for a healthy lifestyle has a negative impact on the mayonnaise market, stimulating adherents of a healthy lifestyle to replace mayonnaise with lower-calorie sauces.
- Decline in the number and income of the population (discussed in paragraph 2.3).
3.3. Technological components
Development of new niches in the market
Taste trends have recently been very busy for technologists of mayonnaise and mayonnaise-based sauces. This is fueled by consumers' continued interest in natural products, clean labels and healthier options, and their desire for new taste experiences. In order to attract the consumer, brands prefer more surprising and unusual flavor blends, as well as more intense taste sensations.
Today, technologists of processing enterprises are increasingly required to show a product that will be able to withstand the rapidly growing competition on the shelves not only in terms of wrapping, but also in taste, aroma and useful qualities.
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Digitalization
In terms of Internet use activity, India is on par with the leading countries and even somewhat ahead of them, taking into account the achieved level of development of telecommunications infrastructure. Indians are online for more than 7 hours and 52 minutes daily.
Mayonnaise producers maintain social networks of their brands and interact with the audience. The use of Internet technologies helps companies increase sales and improve visitor loyalty. Home delivery services are rapidly developing. The positive influence of the factor.
3.4. Political Components
Decrease in availability and increase in the cost of credit resources
This factor affects both in the short term - to ensure current activities, and in the long term - in terms of ensuring investment activities with a long maturity (acquisition of new equipment).
Enterprises, due to additional restrictions in receiving investments from Western banks (sanctions policy), will experience a shortage of funds for renewal and modernization.
Governmental support
The state, as part of the development of the Indian agro-industrial complex, provides various subsidies.
Mayonnaise consists of 60-80% vegetable sunflower oil. The state provides subsidies to stimulate an increase in the production of oilseeds, reimburses part of the direct costs incurred for the creation and (or) modernization of agro-industrial complex, and issues grants to support start-up farmers.
Restrictions on plastic packaging
As mentioned earlier, the most popular packaging for mayonnaise on the mayonnaise market is a doypack.
Doypack is a type of flexible packaging, which is a plastic bag with a bottom, which allows the package to stand upright when filled. The principal feature of the packaging is a multi-seam construction with a flexible bottom.
In June 2021, the Indian Environmental Operator (REO) compiled a list of goods that are planned to be banned from production in India in the future, restrictions also apply to doypack packaging.
Removal of flexible packaging will lead to the need to re-equip enterprises that produce such products, which will have a negative impact on the cost of production and may provoke a significant increase in prices in stores.
3.5. STEP-analysis of the mayonnaise market
Economic and social factors of the macro environment have a negative impact on the market: an unstable economic situation, a projected reduction in real disposable incomes of the population and GDP, instability of exchange rates, population decline, a trend towards a healthy lifestyle, and a decrease in retail trade turnover. The decrease in availability and increase in the cost of credit resources, as well as the discussed restrictions on plastic packaging, also have a negative impact.
Table 4. STEP analysis of factors affecting the mayonnaise market
Technological factors require additional costs from enterprises, but they also open up new opportunities for growth and development, improving business efficiency, and its investment attractiveness. State support for the agro-industrial complex also has a positive impact on the mayonnaise market.
Chapter 4. Assessment of the degree of competition
4.1. Scale of competition (local, regional, national, global)
In the mayonnaise market, regional and national competition is most developed. Each region tries either to meet demand through domestic production, or to import products from nearby regions.
With the development of retail trade networks, mayonnaise of the largest market players competes within the framework of national competition in the entire domestic market, both with local players and with imported producers. However, foreign players in the Indian market are extremely poorly represented. Imported mayonnaise competes with domestic products in the Siberian and Far Eastern federal districts.
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Chart 19. Shipment of mayonnaise abroad by region, 2021, %
4.2. Number of competitors and relative market shares of the largest competitors
The mayonnaise market is moderately concentrated, the Herfindahl-Hirschman index is 1000
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4.3. Competition from substitute products
Mayonnaise is made from yolks, mustard, oil, lemon juice. 100 grams of the product contains about 600 calories, which is not the best way to reflect on the figure. Often, manufacturers add various chemicals and not always high-quality ingredients to it, which, if used regularly, cause significant harm to the body.
The sugar in it stimulates appetite, provokes overeating and leads to excess weight. Due to taste enhancers, taste receptors are dulled in a person, he does not enjoy ordinary food and begins to abuse various dressings.
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Greek yogurt and kefir are also popular alternatives to mayonnaise. In addition to dairy products, mayonnaise can also be replaced with lemon juice.
During the coronavirus restrictions, due to the inability to visit cafes and restaurants, people experimented more at home. In 2021, spices and sauces showed the largest growth among products for preparing complex dishes at home. Four categories of sauces showed the greatest increase in sales: salad dressings and ready-made sauces for second courses, soy sauce, marinades.
In general, consumers are switching to lower calorie foods, but despite the fact that these categories are growing strongly, it is worth noting the effect of a low base. India has yet to develop in this direction. Mayonnaise remains the leader in consumption among sauces. Thus, competition from substitute goods is average.
Chapter 5 Industry Forecasts
5.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
An economic crisis is a profound disruption of normal economic activity, which is accompanied by the destruction of habitual economic ties, a decrease in business activity, the inability to repay debts and the accumulation of debt obligations. This is a phenomenon of a market economy, repeating with a certain frequency, and depending on the scale, it can either concern a particular state or be of global importance. The crisis is accompanied by a sharp decline in production, bankruptcy of enterprises, a fall in the gross national product, a large-scale increase in unemployment, and often a depreciation of the national currency.
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5.2. Analysis of the impact on the state aid industry at the current date
Since the introduction of restrictive measures in India related to the spread of a new coronavirus infection, the state has been providing the necessary support measures to business representatives who have encountered objective difficulties. Some of them are systemic and apply to all organizations and individual entrepreneurs, while others are intended only for companies and businessmen working in certain sectors of the economy.
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5.3. Assessment of the extent of the impact of the crisis on the analyzed market. Barriers existing in the mayonnaise market
The previous import substitution of products resulted in the fact that the cost has increased not only for goods prohibited for import, but also for those produced in India. In 2022, in the context of the introduction of new sanctions and the fall of the rupee, food prices will again begin to rise sharply.
India is one of the world's largest exporters of mayonnaise. In principle, the European Union's rejection of Indian products, if it creates discomfort for manufacturers, is most likely temporary and should not cause serious economic damage.
Separately, it is worth noting the situation with olive oil: raw materials for its production are not growing in India, and the main importing countries are members of the European Union. These are Spain, Italy and Greece.
Oil supplies could potentially be cut off or reconsidered (in the case of the most severe Western response scenario), but there may be nuances and attempts to bypass.
In addition, apart from European producers, olive oil is produced in Tunisia, Turkey, Chile and Syria, so in this case the issue will be resolved by revising suppliers, another problem is that the range will be possibly narrower.
The main barriers hindering the development of the industry include:
- The growing popularity of a healthy lifestyle;
- Sufficient market saturation;
- Changing supply chains;
- Rising prices while reducing incomes of the population;
- Decrease in demand for mayonnaise from the HoReCa segment in the short term;
- The market is becoming less attractive for new participants: the positions of the largest market operators are strengthening.
5.4. Prospects and growth drivers for the mayonnaise market
Perspectives:
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5.5. Forecast of mayonnaise market development in the context of the current economic crisis
Forecasting the dynamics of the volume of the mayonnaise market is based on the forecast indicators of the development of the Indian economy, barriers and growth drivers that exist in the market.
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Chapter 6 Forecasting Methodology
6.1. Methods for forecasting key industry indicators
Modern statistical forecasting methods are used, taking into account the actual dynamics of the industry and the impact of the current and forecast general economic situation.
In addition, when compiling the forecast, changes in real incomes of the population, trends in consumer preferences in a crisis, development forecasts and the degree of impact of other factors affecting the industry are taken into account.
6.2. Sources of information for forecasting
- Industry volume over the past 8–9 years
- Industry dynamics in 2008–2009, in 2014–2021*
- Dynamics of macroeconomic indicators over the past 9–10 years
- Current public assistance plans
- Databases of the State Statistics Committee of India
- Indian Revenue Service databases
- India Customs databases
- Open sources (websites, portals)
- Issuer reporting
- Company websites
- Media Archives
- Regional and federal media
- Insider sources
- Specialized analytical portals
Until October 2022, financial indicators for the main market operators and industry coefficients for 2021 are GidMarket forecast based on the dynamics for 2017-2020, except for cases when the operator discloses data on the results of financial 2021 publicly.
6.3. Timing of forecasting
The forecast belongs to the medium-term category - 5 years (2022-2026)
Diagrams
Diagram 1. Mayonnaise market volume dynamics, 2014–2021, thousand tons
Chart 2. The ratio of imported and domestic products in the mayonnaise market, 2014–2021, %
Diagram 3. Dynamics of mayonnaise production volumes in India, 2014–2021, thousand tons
Diagram 4. Volume and dynamics of imports of mayonnaise, 2014–2021, thousand tons
Diagram 5. Volume and dynamics of imports of mayonnaise, 2014–2021, thousand US dollars
Diagram 6. Mayonnaise export volume and dynamics, 2014–2021, thousand tons
Diagram 7. Mayonnaise export volume and dynamics, 2014–2021, thousand US dollars
Chart 8. Share of exports in production, 2014–2021, %
Diagram 9. Population dynamics in India, as of 01 Jan. 2013–2022, million people
Chart 10. Dynamics of real incomes of the population of India, 2013–2021, %
Chart 11. Consumption in the mayonnaise market per capita, 2014–2021, kg/person
Chart 12. Profitability before tax (profit of the reporting period) in the mayonnaise industry in comparison with all sectors of the Indian economy, 2016-2021, %
Diagram 13. Current liquidity (total coverage) for the mayonnaise industry for 2016–2021, times
Diagram 14. Compactness of location of companies in the industry in certain regions
Diagram 15. Mayonnaise market life cycle stage
Chart 16. Dynamics of India's GDP, 2014–2021, % to the previous year
Chart 17. Monthly dynamics of the US dollar against the rupee, 2017-Mar. 2022, Rs. for 1 US dollar
Diagram 18. Dynamics of retail trade turnover, 2014-Jan. 2022, % of the previous period
Chart 19. Shipment of mayonnaise abroad by region, 2021, %
Diagram 20. Shares of the largest competitors in the mayonnaise market in 2021, %
Diagram 21. Forecast of the mayonnaise market volume in 2022–2026, thousand tons
Tables
Table 1. Gross margin of the mayonnaise industry compared to all sectors of the Indian economy, 2016-2021, %
Table 2. Absolute liquidity of the mayonnaise industry compared to all sectors of the Indian economy, 2016-2021, times
Table 3. Expert forecasts for the decline in real GDP in India in 2022, %
Table 4. STEP analysis of factors affecting the mayonnaise market
Table 5. The main companies participating in the mayonnaise market in 2021
Table 6. Assessment of the impact of recent crises on the industry
Table 7. Analysis of the impact on the industry of the state aid proposed as of April 13.03.2022,
Table 8. Forecast indicators of the development of the Indian economy
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