Pâté Market Forecast in India
The relevance of research
Pate (Italian pastetto) is minced game, meat, liver, eggs, mushrooms, truffles, etc., prepared in a special way. Pates are a high-calorie homogenized product, with a predominant meat content. The subject of this study is the pate market as part of the meat and fish processing market in India. The pate market in this study is understood as a set of enterprises that form the market supply, the number of consumers that form the market demand, as well as the relationship that arises between sellers and consumers.
Purpose of the study
Analysis of the state of the pate market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the pate market
Content
Chapter 1. Key Components of the Pâté Market
1.1. Market size
1.2. Pâté Market Growth Rate
1.3. The ratio of imported and domestic products in the market
1.4. Volume and dynamics of pâté production
1.5. Import pate. Volume and dynamics
1.6. Export pate. Volume and dynamics
1.7. Share of exports in production
Chapter 2. Economic characteristics of the market
2.1. Pâté 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. Pâté 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 pâté 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 degree of impact of the crisis due to covid-19 on the analyzed market. Barriers in the pâté market
5.4. Prospects and growth drivers for the pâté market
5.5. Forecast for the development of the pâté market in the context of the current economic crisis due to covid-19
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 Pâté Market
1.1. Market size
At the end of 2021, the market volume in physical terms amounted to ...
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Pate (Italian pastetto) is minced game, meat, liver, eggs, mushrooms, truffles, etc., prepared in a special way. Pates are a high-calorie homogenized product, with a predominant meat content. A delicate texture is achieved by special methods of processing raw materials and selecting the ingredients of the recipe. Patés packaged in optimally convenient packaging are in great demand among the population and are considered a delicacy product. They produce canned, weight, piece pates, in a shell.
There are liver pates (the most common in India and Ukraine), goose, duck, fish, chicken, pork. In recent years, manufacturers have diversified the range of meat pies, releasing a line of pates with additives, for example, mushrooms, herbs and other components that add piquancy to the taste. Such pastes are in demand among consumers.
The subject of this study is the pate market as part of the meat and fish processing market in India. The pate market in this study is understood as a set of enterprises that form the market supply, the number of consumers that form the market demand, as well as the relationship that arises between sellers and consumers.
For the purposes of this study, we will define market participants that are pâté producers - companies operating in the industry of processing various types of meat and fish, producing, among other things, pates, consumers of pâtés - individuals purchasing pâtés for personal use, and organizations purchasing pâtés for catering purposes for employees or guests. Manufacturers organize the sale of finished products through their own branded stores or through large retail chains or retail outlets.
The popularity of meat pates today is due to the desire of buyers to diversify their diet. That is why this segment of meat processing is growing mainly due to the sale of pates with various additives that have an original and peculiar taste. It is worth noting that the demand for pate continues to grow during periods of crisis. The reason, according to experts, is that the market has not yet reached saturation, canned pates are stored for a long time and are more affordable for the buyer.
If, with the growth of consumers' money incomes, the quality indicator of the product, and not its price, came to the fore, then during the crisis, the opposite phenomenon is observed - the price again begins to have the main influence on the purchase decision. Experts believe that this will lead to an increase in demand for cheaper canned food containing vegetable protein, even though they have a low palatability.
1.2. Pâté Market Growth Rate
Pate market growth rate in 2014-2021 allow us to state that the market is in a stagnation stage with prospects and potential for further growth with ambiguous growth rates, this is indicated by a positive trend in the development of the agricultural industry and an increase in meat production in India, the development of the meat processing industry, as well as a low share of pate imports, which is compensated increase in domestic production.
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1.3. The ratio of imported and domestic products in the market
The share of imports in the pate market in India is low during the study period and amounts to ...%, ...
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According to surveys conducted by manufacturers and the Social Statistics Service, the main consumers of pates are citizens who want to diversify their own diet, in particular, pates are purchased for breakfast, snacks in the office or outdoors. Indian producers sell more than 90% of pâtés on the domestic market, this is evidenced by the low share of exports during the study period, which is due to the high demand for Indian-made pâtés within the country.
1.4. Volume and dynamics of pâté production
Chart 4. Trends in pâté production in India, 2014-2021
According to Rosstat, the production of pâté (including meat pâté and fish pâté, excluding baby food pâté) in India in 2021 amounted to ...t.,
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In general, we can say that the dynamics of production volumes correlates with the dynamics of the volume of the domestic pate market in the study period - the market under such conditions does not strongly depend on import volumes and their fluctuations. Further, a detailed examination of the indicators for imports and exports shows that the share of exports in production is small, respectively, the work of Indian manufacturers is primarily aimed at meeting the country's domestic needs.
1.5. Import pate. Volume and dynamics
The share of imports in the pate market during the study period is small, has multidirectional dynamics and depends on a number of economic and political factors, while a pattern can be traced - with a decrease in pate production in India in the subsequent period, the share of imports slightly increases.
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1.6. Export pate. Volume and dynamics
Chart 6. Volume and dynamics of pâté exports, 2014–2021
The maximum value of the volume of exports in physical terms falls on 2019 and amounts to ...
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1.7. Share of exports in production
The share of exports in the production of pate in India during the study period remains stable and low, on average it is ...% over the study period, while considering the increase in exports with an increase in production, we can talk about the potential for export supplies for Indian producers in perspective.
Chapter 2. Economic characteristics of the market
2.1. Pâté Market Trends
Recently, despite stable demand, manufacturers are trying to diversify the product with ingredients and additives, and also produce products in various weight categories and packages. But, as before, the leading positions are occupied by pates with poultry meat, turkey, goose liver. Less popular are fish pates made from salmon, mackerel, and tuna. Consumers do not change their principles: most of them buy pates in aluminum packaging, and a small percentage of buyers take polymer containers.
According to the estimates of the largest market operators for the Meat Expert magazine, 2021 showed two main trends:
- consumers began to give preference to a healthy and balanced diet and healthy products - it is important for everyone to understand what is in what we eat.
- the modern pace of life does not allow spending a lot of time on cooking, which means that consumers are increasingly paying attention to semi-finished and highly prepared products
It is these two trends that the largest manufacturers will focus on in 2022.
According to experts, today the Indian economy is characterized by a growing demand for food products, however, their consumption is limited by a relatively low income level of the population. Under the influence of this fact, the country's meat processing market has undergone major changes in recent years. One of the most obvious trends was the increase in the segment of the less expensive and more affordable price category in the production of domestic meat products. Producers who objectively assess the market situation offer customers exactly those meat products that they can afford to regularly purchase - these are jelly, brawn, liver sausages, pates, aspic and others.
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In addition to working with the assortment, in 2021 market operators continue to actively develop online sales channels. Online sales of food products in general began to actively increase in the spring of 2020, when a lockdown was introduced in the country, and from then until now, experts and market operators have noted a constant increase in sales of products through online stores and delivery services - often from a month sales are doubling by the month. The popularity of online sales and delivery is not declining, because in today's fast-paced world, it is convenient to choose groceries from home or during a break at work and receive the assembled order at home without wasting time on the road to the store. Experts and market operators believe that this trend will continue in the near future.
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2.2. The main problems of the industry
The main problems of the industry include dependence on the supply of imported equipment and spare parts, dependence on the prices of raw materials - meat and fish, which, in turn, depend on the prices of feed, veterinary drugs and maintenance, as well as dependence on the volume of production of raw meat in country - if outbreaks of disease occur, this affects the production of raw meat, and, accordingly, the production of pate.
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2.3. Estimation of the number of buyers and their financial capabilities
Population.
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Chart 9. Trends in real income in India, 2013-2021, available period 2022
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2.4. Estimated consumption per capita
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The per capita consumption of the pate market in India differs from the market volume dynamics, with the consumption dynamics having a more stable positive development trend in contrast to the market dynamics, helped by the change in prices for meat products in general, which is linear.
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2.5. Analysis of sectoral indicators of financial and economic activity
Let us consider sectoral indicators of the financial and economic activity of the canned food and pate industry in order to determine the sustainability of the industry and the enterprises operating in it.
Table 1. Pate Industry Gross Margin vs. All Industries in India, 2016-2021, %
Gross margin is an economic indicator that characterizes the ratio of gross profit to revenue and allows you to evaluate the efficiency of an industry or enterprise.
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Profitability before tax is an economic indicator that characterizes the ratio of gross profit to revenue, in other words, how much profit is in each ruble from goods sold.
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Chart 12. Current liquidity (total coverage) for the pâté industry in 2016–2021, times
The current (total) liquidity ratio is a financial ratio equal to the ratio of current (current) assets to short-term liabilities (current liabilities). This is the most common and commonly used measure of liquidity. The ratio reflects the company's ability to repay current (short-term) liabilities at the expense of current assets only. The higher the indicator, the better the solvency of the enterprise.
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The absolute liquidity ratio is a financial ratio equal to the ratio of cash and short-term financial investments to short-term liabilities (current liabilities). The source of data is the company's balance sheet in the same way as for current liquidity, but only cash and funds close to them in essence are taken into account as assets. It shows what part of the current liabilities of the companies in the industry are able to repay at their own expense in the shortest possible time and is used to assess the financial situation of the industry.
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2.6. Compact location of industry companies in certain regions
To determine the compactness of the location of companies in the industry, consider the number of enterprises producing meat and fish pies in the states of India according to Rosstat, which will indicate a high concentration of companies in this region.
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2.7. Pâté Market Life Cycle Stage
The pâté market in India has reached a stage of maturity, close to saturation. The maturity stage represents the stage of stability in terms of demand, technology and level of competition.
The maturity stage is characterized by a stable level of sales with a slowdown in growth rates. The product reaches its peak of sales and provides a stable income due to the formed consumer base with the preferences that have developed at that moment. The level of profit at the stage of maturity may decrease slightly. To maintain and increase profits, it is necessary to: increase investment to maintain sales levels, price reduction and deep price reduction promotions for large buyers, regular customers, research and development to stimulate a new stage of growth.
The maturity stage is the longest of all life cycle stages. It is characterized by stable consumption, popularity and wide exposure of the product or service, all of which ensures a stable level of sales over a long period.
The level of competition in the market becomes maximum and stabilizes, which, in the face of slower growth, creates a more aggressive struggle for existing consumers. A high value at the stage of maturity gets the speed of the company's reaction to the actions of competitors.
At this stage, the average price level is formed, and each market participant has an established price positioning. Price competition is decreasing, the role of the product brand is increasing, and sales promotion by lowering the price is short-term.
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Chapter 3
3.1. Economic components
Gross domestic product (GDP) is one of the most important macroeconomic indicators.
It reflects the market value of all final goods and services intended for direct consumption, which were produced for a certain period (quarter, year) in all sectors of the economy on the territory of the state for consumption, export and accumulation, regardless of the nationality of the factors of production used.
GDP is expressed in national currency, or (if necessary) converted into foreign currency at the exchange rate, and can also be presented at purchasing power parity.
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3.2. Social Components
- an increase in the consumption of pates due to the desire to diversify the diet, and also, as mentioned earlier, due to the long shelf life of products, the purchase of pates for future use with the further development of the current crisis;
- change in consumer behavior - the reorientation of customers from hypermarkets to convenience stores and an increase in the frequency of purchases have already led to a decrease in the volume of one-time purchases, as well as an increase in the share of piece products and small volumes. The younger generation, 20-35 years old, prefer to avoid communication with sellers and buy packaged products of small weight, in addition, the pâté is ready to eat, which saves time.
- India's population is slightly declining in 2018-2021. (Diagram 8) - accordingly, the level of consumption of goods and services in the domestic market of India also slightly decreases.
3.3. Technological components
- automation of production - a decrease in the share of manual labor, the introduction of software for accounting and control;
- dependence on foreign suppliers of components for meat processing equipment. Equipment is also produced in India, but some spare parts are imported;
- the development of online trading is a definite plus for the convenience of ordering and paying; after the coronavirus pandemic and the restrictions imposed, operators and market experts note an increase in online sales of meat processing products;
- the possibility of making pate at home - if there is time and desire, consumers purchase liver, butter and other necessary ingredients and can cook pate, not only liver, at home.
3.4. Political Components
- Sanitary control over food production;
- State support of staff to SMEs in the processing industries - various grants, subsidies, concessional lending;
- Support under the federal project ""Export of the Agro-Industrial Complex"" - compensation of part of the costs of transportation, compensation of part of the costs incurred for certification of products in foreign markets for all manufacturers of food and processing industries.
3.5. STEP analysis of the pâté market
Table 3. STEP analysis of factors influencing the pâté market
Based on the results of the analysis of factors affecting the Indian pate market, there is a balance of the influence of positive and negative factors on the market, and, accordingly, on demand.
Significant constraining factors include dependence on retail chains, a decrease in purchasing power and population, the instability of the rupee and a decrease in GDP, an increase in production costs, as well as dependence on foreign suppliers of equipment and components. In the context of declining incomes of the population, it is also worth noting such a deterrent as the possibility of making pate at home.
The following political, technological and some social factors have a stimulating effect on the analyzed market: state regulation of the industry and support for SME staff in meat processing, the development of online tools and production automation in order to reduce manual labor and reduce costs, as well as changing consumer habits and increasing the consumption of pâtés.
Chapter 4. Assessment of the degree of competition
4.1. Scale of competition (local, regional, national, global)
According to experts and participants in the meat processing and pate production market, the market as a whole is mature, competitive and fragmented. The largest processors occupy relatively small market shares, as India has a large regional concentration of production.
The market for the production of pates, as one of the segments of the meat processing market, is less competitive - the products of large market players are more represented on the shelves of federal networks, the products of regional (small and medium-sized enterprises) are presented in local retail chains and convenience stores.
To date, the market is represented mainly by products of domestic manufacturers - there are more than a hundred such enterprises on the market. Regional and local types of competition are strongly expressed due to the fact that in most regional cities preference is given to the products of local enterprises, since quite often their price, even for products of a high price segment, is lower. Moreover, almost every region has its own manufacturers that meet the demand from the population of the region.
Among the main competitors in the pâté market, we can single out companies with a full production cycle - from growing grain and producing feed, to animal husbandry, poultry farming and further processing of products; meat processing enterprises; also, one should not forget about the development in recent years of small firms and individual entrepreneurs with small production volumes, present only in regional markets.
The level of competition in the market as a whole is quite high, and in this case, the end consumer makes a choice according to several parameters: first of all, this is the ratio of price and quality, then availability in promotion and sales channels.
4.2. Number of competitors and relative market shares of the largest competitors
In the Indian pate market, according to various estimates, there are about more than a hundred companies. These include canned food manufacturers and meat processing plants, for which pâté production is a by-product.
The Indian pâté market is represented by companies focused primarily on meat processing and canning, many of these companies are also large vertically integrated holdings where animals and poultry are raised, as well as feed for them. Such companies feel more stable in any market situation. It is also worth noting that large companies are not limited to working in the market in the region of production, organizing sales in other cities and regions through cooperation with federal retail chains.
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The largest pate market in India, according to GidMarket, can be considered 7 companies that have stable revenues with positive dynamics year on year, and also have their own brands, known to consumers and widely represented in federal retail chains.
The largest players in the pate market are located in the Central Federal District, as well as in the North-Western Federal District. The level of competition between Indian companies is moderate, there are opportunities for new players to enter, while the required amount of initial investment directly depends on the size of the enterprise being created.
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Diagram 16. Shares of the largest competitors in the pâté market in 2021, %
The market leader is...
4.3. Competition from substitute products
The competition for canned meat is the actively developing category of meat (meat-containing) semi-finished products. A special place in the Indian canned meat market is occupied by pates, which are especially popular with consumers as a high-calorie ready-to-eat product that can act as an alternative to meat and sausage products.
In addition, pates are actively consumed for breakfast and for a snack, like sausage. Sandwiches for breakfast are chosen not only by schoolchildren and students - entrepreneurs agree that this is a good time saver.
It is worth noting that eating pâté for breakfast is more beneficial than sausage, which is noted by healthy nutrition experts. They claim that 100 gr. liver pate provide the body with 300 kilocalories. The pate contains B vitamins, phosphorus, sodium, potassium, iron, iodine. There are a lot of essential amino acids in the liver, such as lysine, methionine and tryptophan. A well-prepared pate has a good effect on the functions of the skin, eyes, promotes the proper functioning of the stomach, has a beneficial effect on growth and metabolism, increases hemoglobin, and improves immunity. The liver is especially useful (in the form of a pate, including) for people in the postoperative period, since the liver contains glycogen, which acts as a building material for tissues and cells. Chicken sausage is also a useful product in the diet. It has a balanced vitamin and mineral complex. The chemical composition of chicken sausage is worthy of attention, it contains choline, B, D, E and PP vitamins, as well as minerals necessary for the human body: potassium, calcium, magnesium, zinc, selenium, copper and manganese, iron, phosphorus and sodium.
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)
In 2020, many markets felt the impact of the pandemic and the onset of the economic crisis, the pate market in India was no exception, but the crisis in 2020 affected it to a lesser extent than the tourism, entertainment, catering, and transport industries.
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5.2. Analysis of the impact on the state aid industry at the current date
Forecasting the development of the pate market in India is impossible without understanding the economic situation in the country, as well as the measures taken to support business in the context of the tough sanctions policy of a number of countries.
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It is worth noting that in connection with the imposition of sanctions against India by a number of countries in 2022, the Government of India proposed and adopted by the Parliament and the President of India a number of measures to support the economy and business in various sectors, namely:
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5.3. Assessment of the extent of the impact of the crisis on the analyzed market. Barriers in the pâté market
As noted earlier, the main problems of the meat processing industry are dependence on the supply of imported equipment and spare parts, dependence on the prices of raw materials - meat and fish, which, in turn, depend on the prices of feed, veterinary drugs and maintenance, as well as dependence on production volumes of raw meat in the country - if outbreaks of disease occur, this affects the volume of production of raw meat, and, accordingly, the volume of pate production. In the current difficult economic and geopolitical situation, the problems of the industry have become more acute. The usual approaches developed over the years stop working, and there is no time to test new hypotheses: each new week can be characterized by a change in market conditions and another change in the structure of demand.
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5.4. Prospects and growth drivers for the pâté market
Most experts agree that the livestock industry will continue to grow in the future. According to experts, the main driver of market growth is an increase in production volumes to meet domestic needs with the stimulation of occasional consumption (convenience for snacks in the office, picnics, saving time) with a further focus on increasing export supplies.
Quality, safety and transparency come to the fore when making food purchasing decisions – consumers want to know what the food they eat is made of and how it is produced. The consumer culture is growing, so some consumers are ready to buy less, but at a higher price, if it is confirmed.
Experts also note that increased competition in meat processing will lead to a gradual consolidation of the industry, which is noticeable in the more mass segments of meat processing - the production of meat, semi-finished products, boiled sausages.
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According to the updated forecast of the Ministry of Economic Development of India, published on May 18, 2022, in the base case, the medium-term trajectory of the development of the Indian economy is determined by the following factors:
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The base case includes a proactive economic policy. In particular, it is expected:
- effective implementation of the entire range of measures to support the economy, including concessional lending programs;
- active reduction of the key rate by the Bank of India following inflation;
- the level of budget expenditures sufficient to maintain domestic demand.
These measures will make it possible not to supplement the structural crisis with a cyclical one. The economy will be able to adapt to new conditions and move on to recovery growth.
5.5. Forecast for the development of the pate market in the context of the current economic crisis
The market analysis was carried out on the basis of methods based on identifying trends over time, adjusted for expert opinion in the industry. When compiling the forecast, methods of mathematical modeling, mathematical analysis and statistics were used, adjusted for market trends and expert opinions.
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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 projected general economic situation in connection with the spread of the covid-19 virus.
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 2013-2020*
- 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
6.3. Timing of forecasting
The forecast belongs to the medium-term category - 5 years (2021-2025)
Diagrams
Diagram 1. Pate market structure by types
Diagram 2. Dynamics of the pâté market volume, 2013–2020
Chart 3. The ratio of imported and domestic products in the pate market, 2013–2020, %
Chart 4. Trends in pâté production in India, 2013-2020
Chart 5. Volume and dynamics of pâté imports, 2013–2020
Chart 6. Volume and dynamics of pâté exports, 2013–2020
Chart 7. Share of exports in production, 2013–2020, %
Diagram 8. Population dynamics in India, as of 01 Jan. 2012–2021
Chart 9. Dynamics of real income of the population of India, 2012-2020, available period 2021
Chart 10. Consumption in the pâté market per capita, 2013-2020
Chart 11. Profitability before tax (profit of the reporting period) in the pate industry in comparison with all sectors of the Indian economy, 2015–2020, %
Chart 12. Current liquidity (total coverage) for the pâté industry in 2015–2020, times
Diagram 13. Compactness of location of companies in the industry in certain regions
Figure 1. Life cycle stage of the pâté market
Chart 14. India's GDP evolution, 2012-2020, available period 2021
Chart 15. Monthly dynamics of the US dollar against the rupee, 2016-2021 available period, Rs. for 1 US dollar
Diagram 16. Shares of the largest competitors in the pâté market in 2020, %
Chart 17. Forecast of pâté market size in 2021-2025
Tables
Table 1. Pate Industry Gross Margin vs. All Industries in India, 2016-2021, %
Table 2. Absolute liquidity of the pate industry compared to all sectors of the Indian economy, 2016-2021, times
Table 3. STEP analysis of factors influencing the pâté market
Table 4. The main companies participating in the pâté market in 2021
Table 5. Assessment of the impact of recent crises on the industry
Table 6. Analysis of the impact on the industry of the state aid proposed to date
Table 7. Forecast indicators of the development of the Indian economy
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