As Indian consumers become more health-conscious, the salty snacks market is shifting away from palm oil, with the palm oil-free trend gaining momentum. Rice bran oil, groundnut oil, as well as mustard, sunflower, and coconut oils are among the healthier options as perceived by consumers.
Driven by consumer awareness and influencer advocacy, this movement is pushing healthier oil alternatives into the spotlight and aligning with the growing demand for transparency and sustainability.
Indian salty snacks, including chips, namkeen, and spiced mixtures, are popular for their bold flavors and crispy textures. This segment holds a prominent place within the broader food industry, meeting consumer demand for convenient, ready-to-eat options that double as indulgent treats or quick, portable snacks. The market is growing rapidly due to factors including increasing urbanization, higher disposable incomes, and changing lifestyles. Additionally, the growing young population and the adoption of Western eating habits are driving demand for convenient, ready-to-eat snacks across different demographics.
According to the ‘India Snacks Market Report (2024-2032)’ by IMARC Group, the Indian snacks market, valued at US$ 5.14 billion (Rs 42,694.9 Crore) in 2023, is expected to reach US$ 11.51 billion (Rs 95,521.8 Crore) by 2032, growing at a CAGR of 9.08%.
However, as Indian consumers become more health-conscious, the salty snacks market is experiencing a notable shift. There is growing concern over the use of palm oil as a key ingredient, especially among metro residents, who are driving the demand for palm oil-free alternatives. The concerns related to Palm oil; its saturated fat content results in heart diseases, and the environmental impact leading to deforestation and destroying critical habitat for many endangered species. Also, a study on the preparation of palm oil for processed foods found that the oil could produce a potentially cancer-causing contaminant, but only when heated to temperatures as high as 200 degrees Celsius (392 degrees Fahrenheit).
Shifting away from the palm oil
There is growing consumer preference towards palm oil-free snacks. Major brands like PepsiCo are testing sunflower oil and palmolein as alternatives to palm oil in their popular Lay’s chips. This shift responds to health concerns and aligns with the increasing consumer demand for transparency in ingredient labeling.
An effective communication of these changes is crucial, as a recent research shows that 50% of urban consumers view snacks made with palm oil as unhealthy, and 39% of those seeking palm oil-free options are willing to pay a premium. These trends suggest that the palm oil-free claim is likely to gain significant momentum in the coming years.
As per the Global New Products Database (GNPD), there has been a notable rise in palm oil-free snack launches, increasing from only 0.1% of total launches five years ago to 2.4% in the past year. Interestingly, the smaller brands are driving this trend, using the palm oil-free claim to position themselves as leaders in offering healthier snack options.
In addition, the social media influencers, like Revant Himatsingka (Food Pharmer), are also encouraging consumers to scrutinize product labels and reduce unhealthy fats, particularly palm oil, in packaged foods. They highlight the health and environmental benefits of cutting down on palm oil usage.
Moving towards healthier alternatives
The palm oil-free claim is expected to become more common in the Indian snacks market as consumers increasingly prioritize healthier eating habits, driven by growing awareness of preventive healthcare and the rise in non-communicable diseases.
Some brands are addressing the consumer concerns/preferences by clearly stating the type of oil used on the front of their packaging. This not only strengthens their palm oil-free claims but also educates consumers about healthier alternatives. (e.g. WellBe Murukku is marketed as a “healthy snacking alternative” made with red rice flour and cold-pressed sunflower oil, showcasing the benefits of using healthier oils and cold-pressing techniques to boost product appeal)
A recent research reveals that 57% of Indian consumers are willing to pay more for food products containing healthy fats, suggesting that brands may reconsider palm oil as an ingredient. Offering palm oil-free snacks can help brands cater to consumer preferences for healthier options while differentiating themselves in the market.
Rice bran and groundnut oils have emerged as the leading alternatives to palm oil in Indian snacks, with data from GNPD (February 2022–January 2024) showing that rice bran oil accounted for 41% of launches and groundnut oil for 37%. Additionally, ghee is gaining popularity as a ‘healthy fat,’ with 42% of Indian consumers expressing interest in snacks made with desi ghee. Additionally, oils like mustard, sunflower, and coconut oil are also seen as healthier options by consumers.
However, regional differences in oil familiarity may impact the choice of palm oil alternatives. While a majority of North Indian consumers looking for palm oil-free traditional snacks prefer mustard oil, only a small portion of South Indian consumers opt for refined oil, suggesting a lower awareness of healthier alternatives. This underscores the need for consumer education on oil choices, as refining is a process that applies to all oils, including palm oil.
