frozen food industry in india: a market...

Frozen Food Industry in India: A Market Study 59

Global Journal of Business Management

FROZEN FOOD INDUSTRY IN INDIA:A MARKET STUDY

Rashmi Khatri*

ABSTRACT

Frozen Food is increasingly becoming popular among consumers in India. This paperattempts to identify the key markets and trends for the consumption of frozen food in theIndian context. The paper rise to develop insights on the pricing, consumption preferences,challenges and future scope of frozen foods. The research makes use of conducting focusgroup for obtaining qualitative responses. A survey is then build upon these qualitativeobservations. The data thus collected is subject to statistical analysis, including regressionand cluster analysis, in order to validate hypotheses. The paper also looks for similarity ordifferences in the results obtained with respect to gender. The paper throws light on certaincommon themes, and some unexpected observations based on the primary research, whichare then statistically scrutinized.

Key Words: Frozen processed Food, growth potential, market segmentation, marketingstrategies, urban consumers, supermarkets, hypermarkets, brands, consumer trends,multinationals, fragmented structure, transformation.

INTRODUCTION

Frozen Food is increasingly becoming popular among consumers in India. By using variousfreezing techniques the food is preserved from the time it is prepared up to the time it isconsumed. Frozen food industry in India has been growing at a rapid pace over the past fewyears. Considered an already premium packaged food category by consumers, frozen processedfood saw minor increases in the average unit price over 2011. Over a period of 2006-2011Frozen processed vegetables have been the largest category by value sales followed by frozenprocessed poultry and then frozen processed seafood. The major sales of the frozen food

* Graduate in Information Technology from the Delhi College of Engineering and a Post Graduate Program(MBA) Degree holder from the Indian Institute of Management, Kozhikode (IIMK) Kerala. Presently she is aSenior Management Executive in HCL Technologies at Bangalore. E-mail: [email protected].

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products have been through Supermarkets and hypermarkets. A research study finding in frozenfood industry conducted by Frozen Food magazine and the American Frozen Food Institute(AFFI) explains the behavior of consumers in US that they recognize frozen food products aseffective home meal solutions and appreciate the ease and quickness of preparation, and observethat there has been an increase in sales of frozen food correlated with the increase in women inworkforce.

With the Indian government relaxing custom and excise duties on machinery and transportequipment that is associated with frozen processed food, the cost of supply chain operationswould come down and this will in turn invite more national and international brands to entervarious product categories. This high growth potential in this market promises scope for entry ofnew players.

Literature Review

This article mainly talks about the present scenario of frozen food industry in India, itsgrowth and the future outlook and various trends. The article provides with relevant facts andfigures about consumption of frozen food (Frozen Processed Food in India, Euromonitor,December 2011)

‘Unique Consumer Attitude Study Spotlights Present, Future Success of Frozen FoodCategory’ is published in ProQuest, news paper on 04 August 1998 that summarises a researchstudy findings in frozen food industry conducted by Frozen Food Age magazine and the AmericanFrozen Food Institute (AFFI). The report is titled ‘freeze frame: the frozen food consumer’.Findings are that consumers recognize frozen food products as effective home meal solutionsand particularly appreciate the ease and quickness of their preparation. There are several otherfindings like who is most likely to buy etc.

The report of Data Monitor (29th April 2011) talks about the frozen food industry in India,the growth in industry in the past few years, the future market value and volume of the industry,profile of the main leading companies and their market share and most importantly about thedistribution channels. The report provides key figures which have been gathered from bothprimary and secondary resources.

The article ‘the 2009-2014 Outlook for Chilled Food in India’ of EBSCOHOST (CountryOutlook Reports, Jan 2010) lists out with the help of several charts the latent demand outlook forthe period 2009-2014 for chilled food across the states, union territories and cities of India. Itprovides data city wise so as to identify the trends in different cities.

The article “The Path of Frozen Food Success: New Research provides guidance” of AlanRobinson (ProQuest, November, 2008) throws light on the consumer research conductedexclusively for Frozen Food Age by Leo I. Shapiro & Associates, Chicago, citing some findingsregarding customer’s perception of the frozen food section, frequency of buying, brand choice,price, importance of quality, etc. Some of the findings reveal that for most customers, the frozenfood section has an image problem, and hence, more importance to be given to such sections,following the insight that frozen food purchasing is the ease of shopping.

mailto:[email protected]



The article “the Economies and Conveniences of Modern-Day Living: Frozen Foods andMass Marketing” of Shane Hamilton (The Business History Review (JSTOR) Spring Issue, 2003)is part of the Business History Review and it describes the evolution of frozen food from a luxuryproduct in the 1940s to a mass product in the current age. In the journey, it narrates howsegmentation of frozen foods was done based on key findings conducted by research of oldertimes. Technical advancements, competition, and shifting conception of ideal customer led to thedesign of a variety of new products for different groups according to their race, age, and class.

The report on “the Food and Bevarages Industry” (BusinessWorld Marketing Whitebook2011-2012) gives an Indian Perspective on the Retailing Concerns and opportunities for thefrozen food segment within the food and beverages industry. The article can be useful for ourproject in that it throws light on the scope of exploiting the upcoming(expected) Organised RetailSectorin distribution. Being Frozen Food, our product shall be requiring cold-storage transfersbetween Production Centres, Wholesale Storages and Retailers. This shall require specifictechnology, which is expected to be efficiently provide-able by Organised Chains. Also, the articleprovides an overview of Indian eating habits

Urban consumers, pressed for time and seeking convenience, have driven the retail salesof frozen foods by 18% to 240 crore in 2010, as per market research firm EuromonitorInternational. The article “Ready-to-cook idlis, vegetarian sausages lead India’s frozen foodrevolution” of Sarah Jacob (ProQuest, Sep 2011) highlights the trends in the Indian Frozen Foodmarket.

The Report on Frozen Food Market in India (Datamonitor, April 2011) provides Market size,share and segmentation data. This report is a comprehensive resource for market, category andsegment level data including value, volume, distribution share and company & brand share. Thisreport also provides expenditure and consumption data for the historic and forecast periods

The report on Food Processing in India (CCI (Competition Commission of India)) highlightsthe competitive landscape and gives an industry overview of the Food Processing Industry inIndia. It also evaluates them in the light of the policies and regulation pertinent to the industry inthe Indian scenario.

Rationale for Choosing Frozen food Industry for the Present Study

• High growth potential of the market.

• Huge scope for entry of new players.

• Marketing faces a challenging role - As more and more players compete in the market,they will have to formulate strategies on the basis of better quality or lower costs tosurvive the competition. Hence a companies will have to take up challenging tasks ofinnovation and different strategies.

• With the increase in women workforce, the demand of frozen food is increasingrapidly.

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Research Question

Design effective marketing strategies for frozen food Industry by identifying the key marketcategories and segments

Hypothesis

• Non-Vegetarian Food is preferred over Vegetarian food.

• People prefer full cooked frozen food more over semi-cooked food.

• The main reason for people to buy frozen food is that it is easy to cook and can beprepared quickly.

• People find frozen foods of good quality.

• People do not prefer frozen foods because of presence of preservatives.

• People prefer branded frozen food over non-branded ones.

Scenario of Indian Frozen Food Industry

Frozen food industry in India has been growing at a rapid pace over the past few years. Asper a recent report the volumes have been increasing constantly and by 2015 are expected todouble over the current volumes. In 2011 the value of frozen processed food sales grew by 13%.A lot of government initiatives have led to a drastic improvement in the supply chain network andcold chain facilities in India. There have been excise duty waivers on preparation of meat, fishand poultry. Excise duty on refrigerated motor vehicles was significantly reduced, while customsduty on the same was waived. As the modern retailers re-ignited their expansion plans the salesgrowth of frozen food items improved in the current year.

Considered an already premium packaged food category by consumers, frozen processedfood saw minor increases in the average unit price over 2011. The average unit price for frozenprocessed food is around one and half times that of canned/preserved food in 2011, thushighlighting the trade-up required on the part of consumers. Overall, unit price growth was justover 3% during the calendar year, with frozen processed vegetables leading growth rates.

Over a period of 2006-2011 Frozen processed vegetables have been the largest category byvalue sales followed by frozen processed poultry and then frozen processed seafood. Though interms of volumes frozen ready meals are more popular than frozen seafood. In 2011 frozenprocessed poultry was the largest non-vegetarian category by value sales and there were a widerange of products catering to consumer demand for snacks from foreign as well as localcuisines.

The growth in frozen processed fish/seafood has been through a dedicated urban demand in2011. Some of the most popular product types were fish fingers, breaded fish fillets and nuggets.Since Indian consumers place high emphasis on freshness of fish/seafood, and thus the frozenform is much more popular than the canned/preserved offerings. Frozen processed vegetableswhich form the largest category both in terms of value and volume include primarily garden peas,which accounted for 72% of value sales in 2011. Similar were our findings in the FGD session.



The Indian frozen food market is fragmented with the top 4 forming accounting forapproximately 50% of the market and the rest of the market share being accounted by varioussmall firms. The top 4 brands are– Safal, AL Kabeer, Venky’s and Sumeru. Looking at theinternationally based manufacturer of significant influence in the industry then AL Kabeer and McCain are the only 2 brands. The major sales of the frozen food products have been throughSupermarkets and hypermarkets which account for almost 75% of the value sales. Now thesebuyers have strong negotiation power since they are the major purchasers but strong brandloyalty from the end customers have exerted some pressure on them and restrained them fromswitching brands.

Pricing

Frozen food is already considered to be premium packaged food by the consumers and thusin 2011 it saw only a minor increase in the unit price. There was just over 3% growth in theoverall unit price during the calendar year, with frozen processed vegetables leading growth rates.None of the brands have targeted the premium or economical segments specifically. Prices weredetermined by product categories in 2011 with frozen processed vegetables being the mostaffordable product category, and frozen processed fish/seafood being the most expensive.

Consumer Trends in United States

A research study finding in frozen food industry conducted by Frozen Food magazine andthe American Frozen Food Institute (AFFI) explain the behavior of consumers in US

• Consumers recognize frozen food products as effective home meal solutions

• Appreciate the ease and quickness of preparation

• Increase of women in workforce has led to increase in sales of frozen food

• Special promotions impact sales in the frozen food department more dramatically thanin other supermarket departments

• Concerns over whether the frozen foods are stored at correct temperature

• Most Popular category in frozen food category is Vegetables

• One problem with frozen food departments is that there is a lot of window shopping

• Ratings of the store also determine how extensively purchaser shop

• Upscale shoppers prefer more of frozen deserts

Future

With the government relaxing custom and excise duties on machinery and transport equipmentthat is associated with frozen processed food, the cost of supply chain operations would comedown and this will in turn invite more national and international brands to enter various productcategories. Since the industry is still in its nascent stages, frozen ready meals is expected to leadthe growth in constant value sales over the forecast period. However the popular food categorieslike frozen processed vegetables and poultry which are consumed in daily use would compete onthe basis of quality and variety.

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16000

14000

12000

10000

8000

6000

4000

2000

0

2006 2007 2008 2009 2010

Indian Frozen Food MarketValue Rs. Million

Indian Frozen Food MarketValue Rs. Million

120

100

80

60

40

20

0

2006 2007 2008 2009 2010

Million Kg

% Growth

Figure 1:



In America frozen foods were originally considered a luxury product and the mass marketdid not develop for the industry till late 1940s. Later on, when the sales were obtained on a massscale, the producers of frozen food tried to segment the market in order to increase profits. Thischange was not only brought about by internal factors such as developments and improvementsin technology but also because of inter-firm competition. This new marketing strategy alsohinged on industry executives’ shifting conception of the ideal consumer. The marketers of frozenfoods of the early 1950s portrayed themselves as the means trough which low cost food couldbe provided to average income people and good life. When a trend of declining profits came forthe industry, the marketers designed a variety of new products for different demographic groups.

In the context of Indian scenario, there is a surging demand for frozen foods in vegetarianalternatives that resemble the flavor, texture and appearance of meat products such as sausagesand chicken-style strips in India. Lots of multinationals are keen to enter the frozen food marketin India.

The change in status of frozen foods – from a taboo to marked acceptance - in Indianhouseholds as working women population, young professionals living alone and greater exposureto western food patterns is increasing. It is expected that frozen food market will double to reach$750 million in the next four years.

Due to paucity of time and increased convenience, urban customers have increased the salesfrozen foods by 18% to 240 crores in 2010. Some companies are diversifying into this industrye.g. Amara Raja Group while existing players are meanwhile looking to expand their reach andofferings. They intend to achieve this goal through offerings of value-added products to differentiatefrom new players.

The Confederation of Indian Industry has estimated that the foods processing sectors hasthe potential of attracting US$ 33 billion of investment in 10 years and generate employment of 9million person-days.

Food processing is a large sector that covers activities such as agriculture, horticulture,plantation, animal husbandry and fisheries. These are the following segments of the industry:

• Dairy, fruits and vegetable processing

• Grain processing

• Meat and poultry processing

• Fisheries

• Consumer foods including packaged foods, beverages and packaged drinking waters

The value addition of food products is expected to increase from the current 8% to 35% bythe end of 2025. The primary food processing is a major industry which has highly scattered andfragmented structure. This structure is undergoing transformation which offers opportunities ofgrowth and more presence for organized players.

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Major Challenges Faced by the Indian Industry

• The penetration in the Indian market of frozen food has been limited due to infrastructure,especially in semi-urban and rural areas.

• The customer perception regarding Frozen Food has not been very favourable.

RESEARCH METHODOLOGY

The concept of latent demand is rather subtle. The term latent typically refers to somethingthat is dormant, not observable, or not yet realized. Latent demand, therefore, is commonlydefined by economists as the industry earnings of a market when that market becomes accessibleand attractive to serve by competing firms. In order to estimate the latent demand for frozenfood across the states or union territories and cites of India, we conducted focus group interviewof people in the age group of 20-25 years. The FGDs consisted of 9 people who were interviewedfor approximately one hour. The qualitative responses obtained from FGD interviews weretransformed to quantitative questions and they were circulated for survey. Survey response ofmore than 120 people were recorded and analyzed. The respondents also belonged to the youthpopulation in the range of 20-25 years of age. The data collected was analyzed on SPSS wherewe performed regression and cluster analysis. The steps of research methodology were as follows:

Figure 2:

FGD Analysis

Objective:The objective of conducting the FGD was to gain customer insight on thehypothesis that we are testing. For this, we selected 9 participants. The basis for sampling wasmostly convenience sampling. However, we made sure that everyone we picked had made use offrozen foods at least once. Other than that, the demographics of the participants are as follows:



• No. of participants: 9

• Males: 5, Females: 4

• Age Group: 21-26 years

• Environment: Library, Comfortable, Circular seating, Video was recorded.

• Basic Information sheet was filled at the start with questions on no. of members in thehousehold, annual family income, etc.

• Out of the chosen participants, 2 were frequent frozen food users, 2 used it on specialoccasions, 3 about once a week and 2 very rarely.

• Duration: 60 minutes

Observations

1. On being asked the reason why they used frozen foods, most people cited storage tobe the prime reason. The fact that frozen food can be kept in storage for a much longertime than fresh food was said to be the main reason behind its usage. A close secondreason was convenience. Several other reasons were the accessibility to exotic dishesfrom other nations, the consistent taste of frozen food, standard quality, and ease ofmaking for people who do not know how to cook. However, only few people subscribedto these.

2. According to the participants, the major disadvantages of frozen foods were that it is:

• Unhealthy due to the presence of preservatives

• Expensive

• Once opened, the entire quantity of food has to be consumed

• Unavailability of a variety of frozen foods in smaller towns

Though almost everybody agreed that frozen foods are unhealthy, a few said that itdepends on the frequency of consumption and thus, the health factor does not preventthem from consuming frozen foods.

3. When asked about how much premium would they be willing to pay for all theadvantages of frozen foods, i.e.-the price that they would be ready to pay, the mark-upthe participants suggested from the fresh equivalent of the same dish varied considerably.While some said that they would be willing to pay a mark up of 25% above the price ofthe food item’s fresh equivalent, others were even ready to pay up to 200%. However,it was seen that if the example of a food item with a low cost(of fresh equivalent) of,say Rs. 40 was taken, people readily agreed to pay a 25% mark up(Selling Price of Rs.50 of the frozen food item). However, when a food item with a comparatively highcost (of fresh equivalent), say Rs. 600 was taken; a 25% mark up also seemedsignificantly expensive.

4. When questioned about whether the participants made the “what to buy” decision onthe basis of the brand or the kind of food item, there was a consensus that the brandshould be well-known, beyond that they were not concerned with the brand. Some

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brands that they associated with quality are Al-Kabeer, McCain, Safal and Venky. Fewparticipants were vehement about the fact that they would not buy anything that is notfrom these four brands. Few others felt that if a well-known company entered intofrozen food business, they would be willing to try it out. Thus, a well-known name isessential. Very few said that their buying decision did not have much to do with thebrand, and instead depended on the variety of food items on offer.

5. Participants who were from metro cities said that “using frozen foods has become apart and parcel of life” and there is no status symbol attached with stocking frozenfood brands at home. However, few of them felt strongly about serving their guestsfrozen meals. According to them, frozen foods could be served as side meals but not asthe main course. Others felt that in our age group, people would not mind eating fullfrozen food meals.

6. Almost everyone preferred raw frozen foods over semi-cooked and full-cooked meals.However, there were few who preferred semi-cooked. Fully-cooked meals found notakers.

7. When asked about whether the aroma of frozen food was important, i.e.- how importantit is for the frozen food item to smell like its fresh equivalent when cooked, mostpeople did not rate it as very important, they were content with a neutral smell. A feweven said that they would not like the frozen food item to smell too much like its freshequivalent since that would indicate the presence of artificial scents.

8. Among the non-vegetarians, there was a definite view that non-vegetarian frozen mealstaste better than vegetarian ones. However, there were very few non-vegetarians in oursample of participants so we need to be careful while extrapolating this view to a largerpopulation. A substantial number of participants felt that there was more variety availablein the non-vegetarian section as compared to the vegetarian one.

9. On the question of whether they would prefer eating at a restaurant or making the samedish using frozen foods at home, most people preferred making it at home and eating.According to them, frozen food can be had on a regular basis, while eating out everyday is more of a taboo, frozen food in this respect saves time, money and effort.However, there were very few of those who said that they would prefer eating outbecause the food is served to them hot, they don’t have to put in the effort of cookingit, they don’t have to cook more than they want to eat and they get all complimentaryfood items like soft drinks, etc.

10. There was a consensus among the participants on the preference between frozen fastfood and frozen Indian food. Everyone preferred fast food, saying that Indian frozenfood does not taste very good when compared to the fresh equivalent while frozen fastfood tastes like the original and mostly better than what they can make at home usingfresh ingredients.

11. For the participants to purchase a new frozen food brand:

• It should have a lot of shelf space and have good visibility



• It should offer some variety in food item which is not offered by the popularbrands

• Free samples could be offered and if they like it, they would purchase it

In combination with each of the above, the new brand should also be available at a costmuch lower than that of the established brands. More than half of the participants suggested thatthey would like to try out local delicacies of different regions, and this would make them samplea brand, while the others only wanted the standard products to be offered.

Common themes

1. Health concerns over usage of frozen food

2. Brand should be well-known

3. Preference of raw frozen food items over semi-cooked and fully-cooked ones

4. Everyone was content with frozen foods having a neutral smell

5. There is more variety available in non-vegetarian items

6. Fast food is preferred over Indian food

Surprises

1. Frozen food need not smell like its fresh equivalent and can have a neutral smell

2. There is no status symbol attached with the usage of frozen food items

3. People were ready to pay a premium of 25% to 200% for frozen food items over theprice of the same food item made with fresh ingredients

Questionnaire Sesign

A top down funnel approach was used to design the questionnaire in which first, we startedoff by asking about food preferences, the attributes they liked or disliked about frozen foods, thevalue of branded frozen food in the eyes of customer and finally their usage patterns. Thequestionnaire has been split into 5 sections.

• Section-1: Aims at collecting information regarding the vegetarian/non vegetarianalignment and their preferences in choosing to buy between different veg/non vegoptions. We have used a constant sum scale which gives dual benefit. One, the weightsassigned to each option gives a relative importance between stimuli. Second, in theprocess it also provides the ranking between the stimuli. Also, it does not force thequestionnaire taker to forcefully rank the options.

• Section-2: Focuses on gauging the different degree to which they like the variousattributes of frozen food while making a decision to buy frozen foods and if not, thentill what degree they do not like it. A 5-point likert scale fits the purpose in judging thesame. The results from the same will help us in improving the product depending oncustomer views and projecting the same to our customers.

• Section 3: The objective of this section is to gauge the importance of Brand in theminds of customers while going for frozen foods purchase. What exactly incites them

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for going for a brand, if it does and will they be willing to pay a premium for a brandedproduct or not. This will help us in determining how to project the product andwhether to charge a premium.

• Section-4: This section tries to find out on what occasions customers would prefer tobuy frozen food items, which shall help us in gauging the frequency of use and hencehelp in getting an idea about the demand of the product.

• Section-5: The last section is dedicated to collecting the demographic features of therespondents. This shall help us in assessing the relationship between age, income andworking hours of individuals and their buying preferences of frozen foods.

Different multivariate techniques, factor analysis, cluster analysis and conjoint analysis wereused to analyse and interpret the findings. The detailed results and outputs for all the techniquesdiscussed have been attached in the appendix.

Sample Details

The questionnaire was administered electronically using Google forms as well as in hardcopyformat which was later fed into electronic format. The data was gathered from 124 respondentswhich was basically a convenience sample. Social networking sites like Face book and GoogleTalk was used along with email to invite participants to respond to the survey. The respondentswere mostly young working professionals (both services and manufacturing sector) and a fewmiddle-aged persons who consisted of both housewives and working professionals. The averageage of the respondents was 23.3 years. There were around 35 respondents who dropped outfrom the online survey, which indicates that there was some respondent fatigue.

Analysis

Before using the statistical tools of regression and factor analysis we will look at the profileof those who responded to the survey and to their top preferences. Of the 123 respondents 63were non vegetarians whereas 60 were vegetarians. 66 respondents were male and 57 female. Sowe see that sex and eating habits of the sample are quite evenly distributed. Also the mode for noof members in the household is 4 so we can get the idea about how to market the product fromthe responses of these people.

Frequencies

Table 1: Statistics

Number of membersliving in your household

Eating Occupation (curent residence) Sex

N Valid 123 123 123 123

Missing 0 0 0 0

Mode 1 0 4 0

[DataSet1] C:\Users\Laksh\Desktop\HR Data Sets\mr1.sav



Frequencies Table

Table 2: Eating preferences

Frequency Percent Valid Percent CumulativePercent

Valid Vegetarian 60 48.8 48.8 48.8

Non-Vegetarian 63 51.2 51.2 100.0

Total 123 100.0 100.0

Table 3: Sex


Valid Male 66 53.7 53.7 53.7

Female 57 46.3 46.3 100.0

Total 123 100.0 100.0

Most of the people chose their first preference for frozen food as vegetables and fruits.Frozen potato, frozen fast food and frozen bakery and dessert are other favorites.

Table 4: Statistics

Based on the Based on the Based on the Based on thefollowing, following, following, following,choose the choose the choose the choose the

frozen frozen frozen frozenprocessed processed processed processed

food items in food items in food items in food items insequence of sequence of sequence of sequence ofpurchased purchased purchased purchased

most frequently. most frequently. most frequently. most frequently.

N Valid 123 123 123 123

Missing 0 0 0 0

Mode 1 6 2a 1

a. Multiple modes exist. The smallest value is shown

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Frequencies Table

Table 5: Based on the following, choose the frozen processed food items insequence of purchased most frequently.


Valid Vegetables and Fruits 54 43.9 43.9 43.9

Frozen Fast Foods 14 11.4 11.4 55.3

Frozen ready meals 15 12.2 12.2 67.5

Frozen fish/sea Food 1 .8 .8 88.3

Frozen Potato Products 5 4.1 4.1 72.4

Frozen Bakery and Deserts 15 12.2 12.2 84.6

Frozen Meat 19 15.4 15.4 100.0

Total 123 100.0 100.0






Frozen fish/sea Food 5 4.1 4.1 58.5

Frozen Potato Products 13 10.6 10.6 69.1

Frozen Bakery and Deserts 32 26.0 26.0 95.1

Frozen Meat 6 4.9 4.9 100.0

Total 123 100.0 100.0






Frozen fish 4 3.3 3.3 57.7

Frozen Potato 30 24.4 24.4 82.1

Frozen Bakery 15 12.2 12.2 94.3

Frozen Meat 7 5.7 5.7 100.0

Total 123 100.0 100.0



Factor Analysis

Component Matrixa

a. 4 components extracted

Table 8: Rotated Component Matrixa

Component

1 2 3 4

Alternative to expensive diners .780

Eating at home than going out .692 .301

Convenience in cooking .616 .371

Saves Time .546 .455

Consistent/Better Taste .730

Preservatives fine .671

Better Quality .647 -.479

Easilyaccessible .811

Vaieties Available .722

Frozen food chaper .795

Extraction Method: Principal Component AnalysisRotation Method: Varimax Kaiser Normalizationa. Rotation Converged in 7 iteratios

Table 9: Total Variance Explained

Rotation Sums of Squared Loadings

Comonent Total % of Varionce Cumulative %

1 1.844 18.437 18.437

2 1.693 16.932 35.370

3 1.350 13.504 48.874

4 1.140 11.395 60.269

Extraction Method: Principal Component Analysis.

Factor Analysis

Table 10: Descriptive Statistics

Mean Std. Deviation Analysis N

Saves Time 2.24 .950 123

Consistent/Better Taste 3.28 .901 123

Convenience in cooking 2.00 .810 123

table 8 contd...

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table 8 contd...

Better Quality 3.50 .891 123

Eating at home than going out 2.33 .996 123

Alternative to expensive diners 2.58 1.056 123

Frozen food cheaper 3.5854 .81910 123

Preservatives fine 3.5610 .96790 123

Vaieties Available 3.3415 .89470 123

Easilyaccessible 2.9593 1.06662 123


The following are the results of the factor analysis:

For the factor analysis the variables chosen were

• People consider frozen food as alternative to expensive diners

• People prefer eating frozen food at home than dining out

• Frozen food is convenient to cook

• Frozen Food saves time

• Frozen food has consistent and better taste

• People do not have problem with preservatives in frozen food

• People find frozen food cheap

• Frozen food has better quality

• Frozen food has varieties available

The output was in the form of 4 factors. Where the fourth factor just had one variable andtherefore can be ignored and the variable can be taken as such to provide for better results. Thefirst factor takes into consideration convenience and time saving, the second is about quality andtaste and third one is about access and varieties. Also their Eigen values are given in total varianceexplained along with the percentage of variance explained.

Regression Analysis

The following is the output when regression was run:

Regression


Mean Std. Deviation N

Frozen food for daily use 3.59 1.055 123

Saves Time 2.24 .950 123

Consistent/Better Taste 3.28 .901 123

Convenience in cooking 2.00 .810 123

table 15 contd...



table 15 contd...


Eating at home than going out 2.33 .996 123



Table 12: Variables Entered/Removedb

Mode Variables Entered Variables Removed Method

1 Alternative to expensivediners, Consistent/BetterTaste, Saves Time, EnterEating at home than goingout, Better Quality,Convenience in cookinga

a. All requested variables entered.

b. Dependent Variable: Frozen food for daily use

Table 13: Model Summary

Mode R R Square Adjusted R Std. Error ofSquare the Estimate

1 .324a .105 .058 1.024

a. Predictors: (Constant), Alternative to expensive diners, Consistent/Better Tast, Saves Time, Eating athome than going out, Better Quality, convenience in cooking

Table 14: ANOVAb

Sum ofMode Squares df Mean Square F Sig.

1 Regression 14.220 6 2.370 2.260 .042a

Residual 121.634 116 1.049

Total 135.854 122

a. Predictors: (Constant), Alternative to expensive diners, Consistent/Better Tast, Saves Time, Eating athome than going out, Better Quality, convenience in cooking

b. Dependent Variable: Frozen food for daily use

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Vol. 7, No. 1, June 2013

Tabl

e 15

: Cor

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Fro

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food

Save

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0.69

Save

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0.98

1.00

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94.4

47.2

85.2

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Table 16: Coefficientsa

StandardizedUnstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 2.251 .483 4.666 .000

Saves Time .025 .118 .022 .211 .833

Consistent/Better Taste .025 .117 .021 .210 .834

convenience in cooking -.054 .135 -.042 -.043 .688

Better Quality .362 .120 .305 3.012 .003

Eating at home than going out -.021 .105 -.020 -.202 .840

Alternative to expensive diners .034 .100 .034 .345 .731

a. Dependent Variable: Frozen food for daily use

The first regression that we ran was to understand the reason why people buy the frozenfood for daily use when they do. So the dependent variable was frozen food for daily usewhereas the independent variable were saves time, consistent/better taste, convenience in cooking,better quality, eating at home than going out and alternative to expensive diners. From the modelsummary we see that the model is significant at 5% level of significance. The constant andcoefficients are given in the coefficient table. Here we see that only one variable is significant at5% level of significance which is better quality. So from the results of the survey done peoplewho buy frozen food mainly buy it because they believe it to be of better quality.

Similar regression was run after splitting the file on the basis of gender and the sameobservation was made. People buy the frozen food because of the better quality.

Second Regression



Small get togethers 2.71 1.054 123

Vaieties Avaailable 3.3415 .89470 123


convenience in cooking 2.00 .810 123


Table 18: Correlations

Small get Vaieties Better Convenience Alternativetogethers Avaailable Quality in cooking to expensive

diners

Pearson Correlation Small get togethers 1.000 .194 .298 .231 .404

Vaieties Avaailable .194 1.000 .173 .124 .180

table 18 contd...

78 Rashmi Khatri

Vol. 7, No. 1, June 2013

table 18 contd...

Better Quality .298 .173 1.000 .034 .159

convenience in cooking .231 .124 .034 1.000 .316

Alternative to expensive diners .404 .180 .159 .316 1.000

Sig. (1. tailed) Small get togethers . 0.16 .000 .005 .000

Vaieties Avaailable .016 . .028 .085 .023

Better Quality .000 .028 . .354 .040

convenience in cooking .005 .085 .354 . .000

Alternative to expensive diners .000 .023 .040 .000 .

N Small get togethers 123 123 123 123 123

Vaieties Avaailable 123 123 123 123 123

Better Quality 123 123 123 123 123

convenience in cooking 123 123 123 123 123

Alternative to expensive diners 123 123 123 123 123


Unstandardized Standardized CollinearityCoefficients Coefficients Statistics

Model B Std. Error Beta t Sig. Tolerance VIF

1 (Constant) .321 .469 .685 .494

Vaieties Available .098 .098 .083 1.003 .318 .941 1.063

Better Quality .272 .097 .230 2.791 .006 .952 1.050

convenience in cooking .146 .111 .112 1.321 .189 .894 1.118

Alternative to expensive diners .316 .086 .317 3.663 .000 .864 1.157

a. Dependent Variable: Small get togethers

Table 20: Collinearity Diagnosticsa

Variance Proportions

Model Dimension Eigenvalue Condition (Constant) Vaieties Better convenience Alternative toIndex Available Quality in cooking expensive

diners

1 1 4.711 1.000 .00 .00 .00 .01 .01

2 .117 6.341 .02 .07 .09 .48 .17

3 .096 6.994 .00 .01 .00 .44 .82

4 .052 9.494 .00 .67 .47 .01

5 .024 14.098 .97 .25 .43 06 .00





1 Alternative to expensivediners, Consistent/BetterTaste, Saves Time, EnterEating at home than goingout, Better Quality,Convenience in cookinga

a. All requested variables entered.b. Dependent Variable: Small get togethers



1 .488a .238 .212 .935a. Predictors: (Constant), Alternative to expensive diners, Better Quality, Vaieties Available, conveniencein cooking

Table 23: ANOVAb


1 Regression 32.280 4 8.070 9.229 .000a

Residual 103.184 118 .874Total 135.463 122

a. Predictors: (Constant), Alternative to expensive diners, Better Quality, Vaieties Available, conveniencein cooking

b. Dependent Variable: Small get togethers

The Second regression was run to see why the people who use frozen food for small gettogether buy it. The model was highly significant and the VIF value for all the variables was lessthan 5 suggesting no co linearity problem. From the coefficient table we can observe that thepeople who buy it for small occasions buy it not just because of the better quality but alsobecause they consider it as an alternative to expensive dinners. So the marketing strategy couldbe made to adopt these features.

Third Regression



Prefer Purchasing Brand over non 1.83 .636 123branded productsBrands are expensive 3.67 .911 123Brands give assurance of better qualitu 2.15 .807 123Alternative to expensive diners 2.58 1.056 123

80 Rashmi Khatri

Vol. 7, No. 1, June 2013

Table 25: Correlations

PreferPurchasingBrand over Brands give Alternative to

non branded Brands are assurance of expensiveproducts expensive better qualitu diners

Pearson Correlation Prefer Purchasing Brand over nonbranded products 1.000 -.057 .560 .172

Brands are expensive -.057 1.000 -.145 -.173

Brands give assurance of better qualitu .560 -.145 1.000 .237

Alternative to expensive diners .172 -.173 .273 1.000

Sig. (1. tailed) Prefer Purchasing Brand over nonbranded products . .267 .000 .028

Brands are expensive .267 . .055 .028

Brands give assurance of better qualitu .000 .055 . .004

Alternative to expensive diners .028 .028 .004 .

N Prefer Purchasing Brand over non 123 123 123 123branded products 123 123 123 123

Brands are expensive 123 123 123 123

Brands give assurance of better qualitu 123 123 123 123

Alternative to expensive diners 123 123 123 123


Unstandardized Standardized CollinearityCoefficients Coefficients Statistics

Model B Std. Error Beta t Sig. Tolerance VIF

1 (Constant) .738 .283 2.610 .010

Brands are expensive .022 .054 .032 .411 .682 .959 1.043

Brands give assurance ofbetter qualitu .437 .062 .554 7.054 .000 .933 1.072

Alternative to expensive diners .028 .048 .047 .591 .555 .924 1.082

a. Dependent Variable: Prefer Purchasing Brand over non branded products

Table 27: Collinearity Diagnosticsa

Variance Proportions

Model Dimension Eigenvalue Condition (Constant) Brands are convenience Alternative toIndex expensive in cooking expensive

diners

1 1 3.756 1.000 .00 .00 .01 .01

2 .125 5.471 .01 .18 .04 .50

3 .098 6.181 .00 .03 .79 .34

4 .020 13.787 .98 .78 .16 .15

a. Dependent Variable: Prefer Purchasing Brand over non branded products





1 Alternative to expensivediners, Brands are expensive, EnterBrands give assurance ofbetter qualitua

a. All requested variables entered.

b. Dependent Variable: Prefer Purchasing Brand over non branded products



1 .562a .316 .299 .533

a. Predictors: (Constant), Alternative to expensive diners, Brands are expensive, Brands give assuranceof better qualitu

Table 30: ANOVAb


1 Regression 15.629 3 5.210 18.350 .000a

Residual 33.785 119 .284

Total 49.415 122

a. Predictors: (Constant), Alternative to expensive diners, Brands are expensive, Brands give assuranceof better qualitu

b. Dependent Variable: Prefer Purchasing Brand over non branded products

The third regression was run to see why people prefer branded over non branded products.The independent variables here were that brands are expensive, brands give assurance of betterquality and that they are a good alternative to expensive diners. The model was found to be highlysignificant and that at less than 10% level of significance all three factors were found to besignificant and affecting the purchase of brand over non-branded products. The VIF value wasless than 5 signifying that there isn’t a co linearity problem. However at 5% level of significancethe assurance of better quality variable had an insignificant value. Through this we can see thereasons why people buy branded over non-branded.

Major findings can be summarized as:

• People like frozen vegetables and fruits more than any other frozen food available.

• Better quality is the primary reason if people decide to go for frozen food consumptiondaily.

• For small get together people buy frozen food as it is of better quality and is viewed asan alternative to expensive diners.

82 Rashmi Khatri

Vol. 7, No. 1, June 2013

• For the above two findings the results are same across both the genders.

• People buy branded over non-branded as it is more expensive (probably people associateprice with quality and taste), gives assurance of better quality and is a good alternativeto expensive restaurants.

• All the underlying variables can be grouped into 4 factors which present more than60% of the variation in the buying behaviour of people as far as frozen food isconcerned.

Limitation of Study

The study has some limitations. The sample size was a convenient sample, with most of therespondents being young professionals and a few middle-aged housewives and professionals.This can bias the results as a diverse opinion has not been collected. Also, it was found that asubstantial percentage of the respondents were not aware or not frequent users of frozen fooditems which might be mis-leading. Also, sample size is very small for this analysis.

REFERENCES

The Economies and Conveniences of Modern-Day Living: Frozen Foods and Mass Marketing, ShaneHamilton

Ready-to-cook idlis, vegetarian sausages lead India’s frozen food revolution, Sarah Jacob, ET Bureau Sep12, 2011

Food Processing in India, report by CCIThe 2009-2014 Outlook for Chilled Food in India-/.,

frozen food industry in india: a market...

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