India Pan Masala Market Size and Share Outlook - Forecast Trends and Growth Analysis Report (2024-2032)

India Pan Masala Market Overview

The market is currently being driven by the growing inclination of large-scale consumers to switch from tobacco products to healthier pan-masala alternatives. The increasing disposable incomes of both urban and rural households are driving the demand for pan masala further among consumers across social backgrounds. Pan masalas are increasingly gaining prominence among consumers in the rural as well as urban sectors.

Moreover, the increasing investments by the key market players in product advertising and marketing are driving the growth of the India pan masala market. In the forecast period, the launch of new pan masala flavours is anticipated to support the market growth. For instance, Rajnigandha, a leading manufacturer of pan masala, offers exotic flavours of pan masala including cloves and saffron. In addition, the rising expenditure by the manufacturers to provide quality packaging to facilitate longer shelf life and ensure prolonged retention of flavour and fragrance is expected to prove beneficial for the market growth in the coming years.

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India Pan Masala Market Trends

Social Acceptance of Pan Masala Consumption

Pan masala has been ingrained into Indian culture for a long time as many people use it as a mouth freshener or digestive aid. Chewing betel nut and leaf, from which pan masala originates, has been a traditional practice in Indian ceremonies.

As per the research by LocalCircles, around 21·4% of adults in India use smokeless tobacco, compared to the 10.7% who use smoked tobacco products, boosting the demand of India pan masala market. Around 10% of the people surveyed by LocalCircles also stated that at least one person in their immediate family consumed gutkha or other chewable tobacco products, indicating the widespread usage of pan masala in families.

Rising Investments in Advertisement

The competitive marketing strategies adopted by the leading producers of pan masala are anticipated to positively influence the market in the country. The companies are focused on both online and offline marketing efforts to maintain their reach among existing customers as well as attract new customers.   In 2022, India Today stated that the pan-masala advertisements which feature famous actors have widely contributed to the widespread use of pan-masala among young adults, contributing to the India pan masala demand. 

Moreover, as per the Business Standard in 2023, the total digital ad spending was around 50% of the total advertisement spending in India. This, along with the total number of internet users in India expected to surpass 1 billion by 2025, has created lucrative opportunities for online advertisement of tobacco. As per the data from The Economic Times, television accounted for about 40% of total ad spending in the country, which indicated that the wide number of pan masala providers such as Vimal pan masala still leverage TV advertisement for their primary marketing.

Industry News

June 2024

Aayush Wellness Limited announced the launch of Aayush Tobaccofree Herbal Pan Masala & Gutka, an innovative product which is Tobacco-free, Supari-free, and non-addictive in nature, which serves as a healthy alternative for the traditional pan masalas.

May 2024

GST portal in India has developed a form for the Pan Masala providers and Tobacco taxpayers, through which they can register their machines. There are two forms, GST SRM-I and GST and the other is used for inputs and outputs during a month. 

Opportunities in India Pan Masala Market

There has been an increased shift towards flavoured and nicotine-free pan masala products which may appeal to health-conscious consumers. Manufacturers are introducing flavours such as mint, saffron, and rose, among others, which appeal to consumers who do not prefer the traditional flavour of this product. For instance, Rajnigandha and Manikchand are now offering innovative flavours such as saffron and cardamom to consumers. India Today stated in 2022 that the rising preference for flavoured pan masala is driven by growing interest in more pleasant-tasting products, which further aids the India pan masala market value.

As per the data from the Economic Times, several market players are turning towards gutkha-free" or "nicotine-free" pan masala products to maintain their prominence in the market, amid rising health consciousness. As per the report from The Hindu, strict government regulations regarding tobacco-based products have led market players to invest in nicotine-free products instead.

India Pan Masala Market Restraints

Under the Finance Bill 2024 in February, the GST law of the country now states that pan masala, gutkha and similar tobacco products providers would have to pay a Rs 100,000 fine if they don’t register their packing machinery with GST authorities effective from April 1, 2024. This is expected to pose a challenge for manufacturers who fail to do so due to some difficulties. 

As per the India pan masala market dynamics and trends, the Bombay High Court in Maharashtra refused to stay the decision of the Food and Drug Administration (FDA) which prohibits the production, storage, distribution, and sale of tobacco and areca nuts or pan masala in the state, to uphold public health. This decision severely impacted the sales of pan masala in Central and Western regions of India.

The Delhi High Court has further upheld the Food Safety and Standards Authority of India (FSSAI) regulation, under which the warning on the pan masala packet should be around 50% of the entire front-of-pack of the label so that it is clearly visible to the customers. This can make consumers more aware of the health risks associated with pan masala, hindering the market growth.

Market Dynamics

Pouch packaging has been gaining popularity in the Indian market in recent years due to its ease of usage. Additionally, the availability of resealable pan masala packages that offer the convenience of consumption is expected to further enhance the product's popularity as well as India pan masala market revenue in the coming years.

As per The Times of India, there has been a rising demand for sachet packaging has also made pan masala more accessible to consumers. Packaging experts in an interview with India Today stated that moisture-proof, resealable packs maintain the freshness of the product for a long time, making them popular among tobacco manufacturers as well. As per a report in Business Standard, the tin and can packaging appeals to high-end consumers and allows the brand to position the brand in the luxury or premium segment.

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India Pan Masala Industry Segmentation

“India Pan Masala Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Pan masala is a mouth freshener, which is made using herbs such as cardamom, cloves, catechu, areca, and other flavouring agents. Pan Masala is a generic term for modern areca nut products that fall under the category of smokeless tobacco commodities. It is generally consumed to remove bad odour or to get a refreshing taste in the mouth. Pan masalas come in a wide variety of flavours and are packed in attractive sachets and tin cans.

By type, the India pan masala market is divided into:

• Pan Masala with Tobacco
• Plain Pan Masala
• Flavoured Pan Masala
• Others

On the basis of price range, the market is bifurcated into:

• Premium
• Non-Premium

Based on packaging, the India pan masala market is categorised into:

• Pouch
• Cans
• Others

On the basis of distribution channel, the market is segmented into:

• Offline
• Online

The regional markets for pan masala include North India, East and Central India, West India, and South India.

India Pan Masala Market Share

By Type Insights

Pan masala with tobacco has maintained a majority share in the market over the years owing to its widespread prevalence in semi-urban and rural areas. The addictive nature of nicotine also contributes to the India pan masala industry revenue. In recent years, flavoured and plain pan masala have been gaining widespread growth as they offer healthy and flavoured alternatives for health-conscious consumers.

By Price Range Insights

The market is currently being driven by the growing consumer demand for premium pan masalas, owing to the improved living standards of people. The easy availability of pan masalas in convenience stores and supermarkets is also supporting the market growth. As per the India pan masala industry analysis, the growing investments by the market players in the development of innovative pan masala flavours such as chocolate, gulkand, and silver-coated betel nuts are anticipated to bolster the market growth in the forecast period.

Packaging Insights

Pouch packaging is expected to witness a CAGR of 4.3% in the forecast period as it is lightweight in nature and easy to carry. It is also more cost-effective for manufacturers as well as consumers compared to other packaging types, boosting the growth of the India pan masala industry. This type of packaging is also moisture-proof and air-tight and can preserve the taste and quality of the product.

Distribution Channel Insights

Online channel is expected to witness a CAGR of 4.1% between 2024 to 2032 due to increased penetration of the internet as well as rising availability of smartphones, which have made it easier to access pan masala products online and boosted the India pan masala market opportunities. Rural India had 442 million active internet users in 2023 and the number is only expected to rise, which offers significant marketing opportunities for pan masala providers.

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India Pan Masala Market Regional Insights

North India Pan Masala Market Drivers

North India has emerged as a significant region in the pan masala market share in India as it is expected to have a CAGR of 4.9% in the forecast period. Tobacco consumption is prevalent in states such as Himachal Pradesh, Uttarakhand, Haryana, and Jammu Kashmir, among others, especially among men.

Moreover, pan masala is stated to enhance the alertness and satiation of a person which is also appealing to the consumers in the region. The burgeoning popularity of pouch pan masala in local pan shops also aids the market growth.

Innovative India Pan Masala Market Startups

Several startups are developing tobacco-free and herbal products which cater to health-conscious consumers. These products usually consist of ingredients such as cardamom, cloves, and betel leaves, which allow the consumers to enjoy pan masala without worrying about health risks. Furthermore, several companies are offering innovative flavours such as fruit, mint, and chocolate, among others, which especially appeal to young consumers and boost India pan masala demand growth. Lastly, some startups are deploying their product range on e-commerce platforms to reach a large customer base.

Tansen Pan Masala

Tansen Pan Masala is an up-and-coming startup in India which is known for its premium, tobacco-free pan masala. The brand aims to establish a prominent position in the premium market through its high-end packaging, a wide range of flavours, and ingredients which are targeted towards health-conscious consumers. This company is expected to gain a significant share in the coming years due to the growth of health-conscious consumers.

Pan Bahar Crystal

Pan Bahar Crystal is a startup initiative of the famous brand Pan Bahar in India pan masala market as this startup offers tobacco-free pan masala to the customers. There is an increased focus on celebrity endorsements and premium packaging in its product range to make it stand out amongst its competitors. This new range is specifically targeting young consumers who want to enjoy pan masala which does not cause any health risks.

Competitive Landscape

The report gives a detailed analysis of the following key players in the market, covering their competitive landscape, capacity, and latest developments like mergers, acquisitions, and investments, expansions of capacity, and plant turnarounds. Several major players in India pan masala market are readily diversifying their product portfolio to cater to different types of customers. For instance, some companies are launching flavoured pan masala while others are offering sugar-free pans. Meanwhile, some companies have been relying on celebrity endorsements to improve their market reach.

Key Industry Players

DS Group

Dharampal Satyapal Group was established in 1929 and is famous in India for its pan-masala brand, Rajnigandha which has established a prominent position in the premium pan-masala segment. Its product portfolio includes Catch Spices, Pass Pass mouth fresheners, and pan masala, among others.

Manikchand Group

Founded in 1939, this company is mainly known for its pan masala brand Manikchand. Its product portfolio includes Manikchand Gutka, RMD Pan Masala, and Oxyrich packaged drinking water, among others. The company is known for its mass appeal as it has a significant presence in both urban and rural areas.

JMJ group

JMJ Group is known for its prominent product, Goa Pan Masala, and also offers its services in real estate and hospitality sectors. Its pan masala is known for its mass appeal due to the strong marketing strategies of the company. 

Other major India pan masala market players are Godfrey Phillips India Ltd., Kothari Product Limited, Dharampal Premchand Limited, Shikhar Group, Pan Bahar Products Private Limited, Dinesh Pouches Private Limited, KP Group, and Red Rose Group, among others.

The comprehensive EMR report provides an in-depth assessment of the market based on the Porter's five forces model and SWOT analysis.

Recent Developments

October 2023

Prominent celebrity figures such as Akshay Kumar Shah Rukh Khan and Ajay Devgn were featured in a new Vimal pan masala advertisement. The brand is known for promoting its pan masala product through prominent celebrities which can positively impact India pan masala demand forecast.

June 2023

DS Group, known for its Rajnigandha brand, announced that it has acquired The Good Stuff Pvt Ltd which is known for its LuvIt Chocolate and Confectionary brand. This move aims to improve the company’s product portfolio and enhance its reach in the retail sector.