New Delhi [India], April 2 (ANI): The savoury snacks market in the country is expected to register a growth of around 13 per cent CAGR over the next three years and outperform the broader packaged food industry, according to a report by Ashika Institutional Equities.

The report noted that the Indian savoury snacks market, estimated at around Rs 748 billion in FY24, is projected to grow at approximately 13.0 per cent CAGR over FY24-FY29E, higher than the broader packaged foods industry, which is expected to grow at around 11 per cent.

It stated that the reason of this growth is the 'Improving income levels, better infrastructure and rising media penetration are enhancing awareness and access to branded products in rural India'.

The report highlighted that nearly 43 per cent of the market is still unorganised, indicating significant room for expansion in the organised segment.

While western snacks currently dominate market share, ethnic snacks are expected to grow at a faster pace, with a CAGR higher by around 100-200 basis points. This growth is supported by strong regional preferences and cultural affinity among consumers.

The report also pointed out that the snacks category continues to be driven by low price points of Rs 5-Rs 10, reflecting high dependence on impulse-driven consumption, especially in rural markets.

On the distribution front, modern trade and digital channels are growing significantly faster than traditional general trade formats, driven by rapid digitisation and changing consumer preferences.

Urbanisation is also playing a key role in shaping consumption patterns. The urban population is expected to increase from around 36.8 per cent in CY24 to 40.9 per cent by CY30, leading to higher demand for convenient, ready-to-consume food products.

The shift towards nuclear families and increasing participation of women in the workforce is further boosting demand for such products.

Policy support is also expected to aid growth. A reduction in GST rates from 12 per cent to 5 per cent on packaged snacks could accelerate the shift from the unorganised to the organised sector.

Additionally, initiatives such as the Production-Linked Incentive (PLI) scheme and Mega Food Parks are improving supply chain efficiency and encouraging capacity expansion.

The report added that organised snacks, which currently account for around 57 per cent of the market, are gaining share rapidly, with ethnic snacks expected to outgrow western snacks due to strong consumer connect and regional demand. (ANI)