India Pan Masala Market

Market Overview

India Pan masala market had a revenue share of INR 406,153 crore in 2021, presumed to reach INR 608,801 crore by 2030, expanding at a CAGR of 4.6% during the forecast period (2022-2030)

Pan Masala is commonly thought of as a digestive aid or a breath refresher after eating spicy foods. Fennel seeds are the main component of pan masala and sugar-coated seeds, including sesame, fennel, and coriander. The mixture may consist of flavorings such as catechu, betel nuts, areca nuts, cardamom, powdered lime, mint leaves, and pure menthol. Consuming the ingredients releases flavors, reviving the tongue and digestive system when consumed after a meal. There have been many concerns about pan masala blends containing tobacco products, although not every pan masala contains tobacco. Some areas have outlawed tobacco-containing mixes because, according to medical professionals, their additives may increase cancer risk.

Supari, catechu, cardamom, lime, areca nuts, tobacco, flavorings, and particular naturally occurring fragrant ingredients make up most of the ingredients in pan masala. Therefore, the essential basic components for making pan masala are usually accessible from local vendors and are frequently common. However, the production cost and finished goods prices can be significantly impacted by the highly variable raw material prices in different geographic areas. However, having many raw material providers on the market might be advantageous for businesses since these suppliers will concentrate on providing raw materials of the highest quality at meager prices. The pan masala market is anticipated to be driven by the rising demand for breath fresheners and the active advertising campaigns run by the firms. Still, demand may be hampered by rising consumer awareness of the pan masala's carcinogenic properties.

Market Dynamics

The Growing Demand for Mouth Fresheners

Areca nut catechu, flavorings, cardamom, lime, and a few organic fragrance-producing ingredients make up pan masala. It is mainly used to give off fresh breath by removing foul mouth odor, but it is also frequently used as a chemical to help digestion. The popularity of pan masala among adults in urban areas has been rising. The market demand is fueled by higher consumption of pan masala in India, which is attributed to increasing disposable income, a young population, appealing pan masala packaging, intense advertising activity, and a widespread switch from hard-core tobacco products to pan masala. The rising demographic dividend in India is another factor contributing to the rise in pan masala consumption.  

According to a research study by the National Institute of Health, most tobacco users in India were between the ages of 20 and 35 for men and 35 and 39 for women. Both boys and females between the ages of 15 and 19 frequently consumed non-tobacco items like pan masala. Hence, the market will expand further with the upsurging consumption of pan masala by the younger and adult population. Due to the pervasiveness of sociocultural beliefs about the health benefits of pan masala, whether it contains or does not contain tobacco, habitual chewing is common in rural areas. Daily wage laborer in the countryside frequently eats pan masala with cigarettes. Thus, another element driving the expansion of the pan masala business is the rise in the number of people earning a daily salary.

The Aggressive Advertisement Campaigns

Advertisers promote pan masala as a healthier option than tobacco products with strong nicotine content. Companies are effectively pairing pan masala products with tobacco to serve as surrogate advertisements for brands whose products cannot be explicitly promoted in the media. For instance, the Vimal mouth freshener's catchphrase, "Daane Daane me Kesar ka dum," is being substituted for advertising Vimal's tobacco pan masala, advertised by some Bollywood actors. People are more likely to accept advertisements featuring well-known people, which indirectly increases pan masala sales and increases demand for both aromatic pan masala and pan masala with tobacco.

Pan Masala Market Restraints

The Increasing Awareness of Consumers Regarding Carcinogenic Nature of the Product

Pan masala made with nicotine has an addictive quality and functions as a brain stimulant. The rate of oral cancer is steadily rising in India, where the product is the most common. According to the World Health Organization, chewing tobacco may result in leukoplakia, oral submucous fibrosis, and other severe disorders. According to the National Center for Biotechnology Information at the National Library of Medicine in the United States, India has an oral cancer incidence rate of 20 per 100,000 people, accounting for close to 30% of all cancer cases there.

In India, oral cancer claims the lives of more than five people every hour of every day, along with the same number of victims of oropharyngeal and hypopharyngeal cancer. Oral cancer is influenced by several socio-economic factors, including poor diet, inadequate healthcare, poor living conditions, and risky behaviors. Combining all these elements and strong anti-tobacco government campaigns are expected to impede the pan masala market expansion.

Pan Masala Market Opportunities

Acceptance of Premium Pan Masala Among Adult Population

The finest ingredients, including areca nuts from Karnataka, catechu from Himachal Pradesh, and the best cardamom from Kerala, are used to make premium pan masalas. Premium pan masalas are presented in stylish sachets and high-quality tins, lending a premium touch. Companies are spending a lot on commercials that use domestic and foreign stars to advertise their premium goods, causing a rise in demand for this type of pan masalas. In the upcoming years, the Indian pan masala market is expected to benefit significantly from introducing new, high-quality pan masala products that do not contain tobacco or other dangerous ingredients. New formulas are continuously produced and released onto the market to deliver premium products and lower health concerns. These variables are anticipated for the pan masala market to create growth prospects.

Regional Analysis

The state-wise segmentation of the pan masala market includes Maharashtra, Rajasthan, Uttar Pradesh, Bihar, Delhi, Gujrat, Haryana, Jharkhand, Madhya Pradesh, and the Others States. 

Jharkhand, Madhya Pradesh, and Others will remain predominant in the market

It is projected that the other states section will hold the largest share during the forecast period while expanding at a CAGR of 5.32%.

Jharkhand will expand at a CAGR of 5.11% during the forecast period and hold the second-largest market share. According to information from the Socio-Economic and Caste Census conducted by the Ministry of Rural Development of the Government of India, there are 3.8 million households with a monthly income of less than USD 66 and 0.7 million households with a monthly income between USD 66 and USD 132. These people are the pan masala market's primary target customers. Therefore, the increase in disposable income brought about by the expansion of daily wage jobs under MGNREGA is anticipated to speed up the demand for pan masala.

The sale and use of cigarettes, bidi, pan masala, hookahs, and gutkha, however, are prohibited by the state of Jharkhand, particularly in light of the recent pandemic. Additionally, the State government has mandated a 6-month prison sentence for anyone caught spitting tobacco in a public area. These issues will likely hamper the state's market demand for pan masala.

Madhya Pradesh will advance at a CAGR of 4% during the forecast period. In the state, smokeless tobacco use among adults was 28.1% of all adults, according to the GATS-2 India Report. Most pan masala users are from lower- and middle-income socio-economic categories, mainly daily wage workers. The MGNREGA Act's budgetary allocation to the state has increased, which has resulted in a significant increase in the number of men/women working days. This has improved peoples' disposable money and opened new opportunities for the pan masala market.

Segmental Analysis

The pan masala market is classified based on type, packaging, and state. 

Based on Type

The segments are Pan Masala with Tobacco, Plain Pan Masala, and Flavoured Pan Masala

The plain pan masala segment is projected to advance at a CAGR of 5.1% and hold the largest market share. Plain pan masala doesn't contain any sugars or flavors made artificially. Low-wage groups typically consume this kind of pan masala. Plain pan masala is also consumed by the general public, who strive to stop eating pan masala with tobacco and move to a safer option. The consumption of plain pan masala is projected to decrease due to state government bans on tobacco and pan masala used.

The pan masala with tobacco segment will hold the second-largest market share. The most popular variety of pan masala is the one flavored with tobacco. Most of this pan masala is consumed in rural areas across the nation. The majority of pan masala with tobacco intake is in northern states. The primary causes for consuming this kind of pan masala are increased alertness and satiation of hunger. Increased mouth cancer instances in India and intense anti-tobacco activities by government organizations and non-profit organizations are causing consumers of tobacco pan masala to become more health concerned, which could prompt them to switch to non-tobacco pan masala and impede the segment's growth.

Based on The Packaging

 the segments are Sachets and Tin Boxes

The sachets segment is projected to advance at a CAGR of 4.53% and hold the largest market share. Manufacturers actively invest in the most current manufacturing processes to create eye-catching and innovative sachet packaging that would attract more customers. Manufacturers use the well-known fact that consumers instinctively respond to visual stimuli by making their packaging as appealing as possible. Most pan masalas are offered in sachets and marketed to lower- and middle-class consumers. Most of these sachets are sold in pan shops, which make up about 2.5 million stores in India. The demand for pan masala marketed in sachets would increase as more daily wage employees find employment prospects due to higher MGNREGA funds allocated for unskilled workers.

The tin-boxes segment will hold the second-largest share. Most premium-flavored pan masalas are sold in tins and range in size from 100 to 500 gm. Tin boxes sell best in pan shops and retail Kirana shops because the general public rarely buys them. The upper middle class often consumes this pan masala, and consumption spikes around special occasions or social gatherings.

Recent Developments

• In 2022, DS Group launched a water economic zone in Madhya Pradesh. This integrated watershed development project seeks to improve natural resources, particularly soil and water, to boost productivity.