Nims Fruit Crisp PEST Analysis

Executive summary

Nims fruit crisp is a UK based company which in recent years gain popularity in UK region receiving award for most innovative business idea in year 2017. The company is now 5 years old and is now well established in UK. So now when company will export chips to India there are few things it needs to take care about like Indias macro environment as in Indias political issues, economy of the country, culture, environmental issues etc. Nims crisps is segmented as packaged food>> healthy snacks>> Fruits and vegetable chips. The target market is classified on basis of demographic, geographic, psychographic and behavioral aspects of the customers.

Basically, it can be seen that India is a safe and stable growth option for the startup like Nims crisps and has a first mover advantage as there is no company providing fruits and vegetables chips is present in India.

Company description

In 2012, Nimisha raja with the idea of air-dried fruit chips. The chips were first launched in the UK market in the name of Nims fruit crisps. Being a mom and also being an entrepreneur caf owner, the concern was the lack of healthy yet tasty snack which would be loved by both aults and children.

It is a Private limited company Located in 3/1 trinity trading estate, tribune drive, sittingbourne, United Kingdom. Nims are official partners with change4life.

Nimisha developed her products first sourcing exceptional quality fruit and then perfecting the process of air-drying them for crispness and sweetness of flavor. Passionate about British manufacturing, last year Nimisha took a step to improve the quality and consistency of her already award-winning products by setting up her own UK-based factory.

Her mission is to make snacks which are healthy and tasty and liked by both children and adults.

Products: Five fruit ranges: apple; pear; pineapple; melon & orange; and pineapple &kiwi. Three vegetable range beetroot&parsnip; cucumber&tomatoes; and peppers&courgette.

Industry analysis

Asia Pacific is the fastest growing region for organic chips market owing to developing economy and improved disposable income in the emerging markets of India and China.

Nims fruit crisp is at its initial stage and so the expansion should be taken into consideration thinking of various majors which will be in favour of the company to have speedy and safe growth.

Here is the PESTEL analysis which will help us with things we need to keep in mind before entering the Indian market place.

4.1. Political factors

Political stability:

India has made major strides towards development in a short span of time because of political stability and the country has ignited a new hope in the world. Also, after the current government the country has faced lots of changes making it easier for new business to enter.

Recent campaign by government Hum fit toh India fit is to motivate people to live a healthier lifestyle.

Trading policies:

In the new regulation, which was notified earlier this month, the FSSAI said: No article of food shall be cleared from the customs unless it has a valid shelf life of not less than 60 per cent at the time of import.(The Economic Times, 2018)

Taxation policies:

In recent times a new common tax has been implied for the country in common known as goods and services tax, making it easier for companies to work across different states.

While, there are few taxes which are implied on imported goods such as custom tariffs and basic custom duty.

4.2. Economical factor

National income

Though there was a time of demonetisation where the economy of India became weak, but it recovered really soon with the consistently growing GDP. The imports of food industry in india is favourable and huge and growing at the rate of 20% due toincrease in disposable income in middle class society because of which purchasing power of people is increasing.

Economic growth:

According to the IMF 2017 economic forecast, Indias GDP is worth $2.4 trillion making it the 7^thlargest economy in the world by nominal GDP. The GDP will grow by 7.0% in FY18 which is expected to increase to 7.4% by FY20. (The World Bank Group, 2018)

4.3. Social Factors

Changes in life-style:

India is one of the most attractive markets in the world in many sectors. Standard of living is gradually improving, and country has a growing middle class with good disposable income.

Education levels:

As the result of increasing educated class of society and the increasing spending capacity of the people in india the youth now in diverting towards the healthier lifestyle. Also, now they are educating parents to develop a healthier lifestyle.

4.4. Technological Factors

With technology advancing, it helps food corporations reach consumers in new and easier methods. In India no. of people using internet is growing at rapid speed its the third largest user on internet in the world, which can help company to develop an online market later in the stage.

4.5. Environmental factors

Indias climate is regularly fluctuating which makes it difficult to keep food in open air for longer time. So, heavy handling and be left in open air longer than anticipated are areas to be concerned about and must be according to Indias climate.

Also importing in India gets easier and cheaper through the means of water transport, which covers major stated like Maharashtra and Tamil Nadu.

4.6. Legal factors

Industry-specific regulations (labeling):

Labelingis an important element for products being exported to India. English is the favorable language for labeling.

As per a Notification issued by the Ministry of Commerce on November 24, 2000, all pre-packaged commodities (intended for direct retail sale only) imported into India must carry the following declarations on the label:

Importing regulations

Consumer laws

Consumer laws of India:-

4.7. Potential Competitors

As per the current scenario there is no such competitor of Nims crisps in Indian market but in future years companies like ITC, Kelloggs, Pepsico etc who are planning to add variant in their products which are healthy but still havent come up with that yet. There is competitive advantage as there is no brand with organic chips in the market but also there is a disadvantage as company will have to create a buzz about this product in Indian market. Also, it will have to do localization in flavors. As off now competitors can be Kelloggs (Pringles), Pepsico (Lays) etc.

Market analysis

5.1. Packaged food

India is 5^thhighest consumer of packaged food in world and 2^ndin Asia with average sales of about 34 million tons of food and about 40 billion dollars. The sale is expected to grow with the rate of 7% per year making it 3^rdlargest consumer till year 2020.

The market is expected to grow rapidly due to rising income and changing lifestyle of middle-class families. Though the urban region accounts for 80% of the packaged food consumption there is huge potential in semi-urban and rural areas.

Ethical labels, branding and nutritional information are the reason for the growth of packaged food in India. Consumers are now more concentrating on the nutritional benefits, ingredients and value for money before purchasing packaged food.

The main items for packaged foods include frozen food, canned food, meal replacements product. While some of the emerging products are ready-to-eat,healthy snacks, probiotic drinks etc. Also, 60 percent of our food consumption is in the form of snacks or mini-meals today.

5.2. Healthy snacks

Recent reports have also indicated that healthy organic packaged food industry will grow by 25% in next 3-4 years. The urban consumers have adapted the healthier options in packaged snacks and now also have a growing demand for organic packaged food.

Healthy snacking is on the rise because of the increase in disposable income, a tradition of having snack meals in middle of meals and an easy go to healthy food in fast-paced lifestyles.

Because of the increasing demand of the healthy food due to changing lifestyle companies like ITC and Britannia are also adding healthy variant to their list of products. This shows the lot about evolving future of the people towards healthy snacks.

In year 2017 it was reported thatfruits snacksaccounted for highest share of retail value sales in NH packaged food followed by few others with all these made up of natural ingredients with less processed than other food products.

5.3. Fruits and vegetable chips

On the basis of the source, it is segmented into vegetable, fruits, cereals, grains, and others. Among all, organic chips one which is sourced from vegetables is dominating the market owing to easy availability and high production volume of the commodity on a global platform.

Though there is no big and specific segmentation based on fruits and vegetable chips in Indian market but many companies like ITC and Kelloogs are planning to add a variant of healthy chips in their products. So Nims have an advantage of entering the market first.

Target market

Snacking has always been an option as a go to food in middle of heavy meals for Indian culture and will continue till decades, but there has been surely one change that is the changing lifestyle of people and growing health awareness because of which healthy munchies has become popular snack.

6.1. Demographic

Age:Our target market can be anyone from teenagers to adults and aged people who loves mid snacks and loves to eat healthy food with pride and happiness.

Occupation:People belonging from any occupation from earing parents to students who have busy lifestyle and needs something healthy to fill their stomach.

Income:The income level can be middle class earning disposable income to the rich class of the society.

Education:The main consumers will be the educated class of India who are aware about health disadvantages caused by savory snacks and instead want some healthy snacks.

As per the graph, our most important customers while targeting the market will be students and the youth of the nation belonging to the age group of 16-25.

(Nielsen, 2018)

(Nielsen, 2018)

6.2. Geographic

As we know India is a very vast country in terms area and population both, so it makes it little harder for a startup to reach to every corner of the country. So, our main focus in terms of location will be places where we can reach mass and the educated class of the society resides.

In recent reports it is seen that supermarkets channel has dominated the organic chips market. Above mentioned cities will help us gain popularity and help reach mass. Later we can reach out to the tier 2 and tier 3 cities to gain market share.

Online market:Also, with the development in technology people now like to purchase online whether its clothes or grocery items, so there can be scope for an online market later in the stage to expand distribution.

6.3. Psychographic

Activities:The main target market based on their activities, are the people who are dieting or are conscious about the health and gym freaks. So, these people are the ones we can target based on their activities and interest.

Priority:Also, people with various heart disease or high cholesterol have a routine to follow.

(Nielsen, 2018)

6.4. Behavioral

People now can be classified into 3 behavioral patterns in snacking industry: pleasure eating (people who want to experience organic snacks with the taste as addition to it are our customer), regular treating and Non-Indulgence.

(Nielsen, 2018)

(Nielsen, 2018)

Overall, Fruit snacks industry will take growth with the increasing health awareness amongst the people and will further increase due to easy storage as compared to other ready to eat and fresh foods and with increasing product variants.

6.5. Buyer behavior

As we know buyer behavior is mostly based on time, money and effort people put before purchasing an item. Here, in case of Nims fruit crisps it is low involvement as the product price is really low, so the amount of time people here will spend to buy the product is also low. Also, it is found that consumer loyalty towards a product largely depends on the availability of product at convenient supermarket during their once to twice visit in a week.

6.6. Culture consideration

As Indian market mostly consists of buyers who are vegetarian there is upper hand for the company. In addition to that, product is less processed and organic and with the changing time people are become vegan, which is plus point for the product.

Conclusion

As seen in the report there is huge potential in Indian market for the product in all terms. Either its macro environment or the market study of the place. We can see how organic food and less processed food is in demand for the market because of the growing health concern and increasing disposable income of middle class. Also, company has first mover advantage and only potential competitors for now. Company should gain trust of the consumers before already existing companies comes up with the same product. Also, one thing that should be taken care about is the flavor should be according to Indian taste. Also, India has a biggest growing market of packaged healthy snack food which give company an advantage to enter the market easily with the product in demand. The only disadvantage which could possibly harm the companys profit margin is, if the acceptability of the product in Indian market due to lack of brand recognition in less. So, one thing which company needs to keep in mind is availability of the product at supermarkets at all time because that the driving factor to increase brand recognition and brand loyalty. Overall, company has a great opportunity in Indian market just few things should be taken care of before and after entering the market and selection of target market should be specific.

References:

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• Beta.companieshouse.gov.uk. (2018).NIM`S FRUIT LIMITED Overview (free company information from Companies House). [online] Available at: https://beta.companieshouse.gov.uk/company/06961718 [Accessed 12 Nov. 2018].
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