Consumer behavior towards the homemade food market

Jyothika Mary Cyriac

Department of Management Studies, St. Xavier’s College - Autonomous, Mumbai

CMS0304: Consumer behavior

Prof. Soni George

Abstract

This paper examines the idea of homemade food, its interface with markets’ competing food
offerings, and the consumer’s perspective on homemade food products. Through the structured
survey of millennials and an empirical study of two homemade food producers, this study aims
to understand the key factors that influence the consumer behaviour towards this business and
to comprehend the impact of socio demographics on the purchase of homemade food.

Key words – Homemade food, Consumer behavior, Hygiene, Authentic

Introduction

In the food industry, the term homemade is mainly used to describe artisanal food produced at
a small scale, usually unbranded or not using well-known brands, of domestic manufacture,
using traditional methods, usually without the use of additives and involving a high degree of
manual work (1). These characteristics differentiate homemade food in the food market. In
addition, the heterogeneity in the end product is able to capture the attention of those consumers
who consider uniformity in products as unattractive (2).

The size of the unorganised food delivery segment in India is valued at $80 billion. The GMV
of the organised food delivery sector is around $1.5 billion. It is also interesting to note that 34
percent of this market prefers to have home-made food (3)

Production costs tend to increase as production scale decreases, so homemade food is expected
to have a higher price compared with conventional alternatives. It is made in limited quantities,
and pre booking is a requisite for most home-made food ventures. The accessibility of the
internet is lowering the barriers to entry for hopeful food businesses. Digital platforms have
extensively helped home cooks promote, connect and deliver their products. Social media is
used for sharing information about the product and promotion, they reach a wide range of
people through their organic and paid advertisements. It makes it convenient for
communication and maintaining a good relationship. Digital payment platforms help in
facilitating easy payments and delivery start-up platforms are adopted to provide convenience
and accessibility for the consumers.

The home cooks either start their own ventures at home, with minimal investment or become
employed under businesses which deliver homemade food. There are also various aggregators
which connect housewives to consumers who wish to eat healthy homecooked meals instead
of relying on restaurants. With around 100 registered chefs now, Masala Box is completely
home-chef driven start-up for homemade food. (4). These marketplaces have come up to bring
the traditionally disorganized home chef industry onto unified platforms and provide them with
delivery services.

The channel of distribution is mostly direct sales at home, fairs or food festivals. They allow
for higher economic returns and direct social interactions between consumers and producers.
This interaction is extremely important as it creates an experience for the consumer, and the
feedback sharing process is helpful for the producer. Businesses that try to distance its
customers from other humans are missing a critical tactic — refocusing their products on
services around the power of human interaction provides an opportunity to create enormous
social and economic value (5). Human-to-human interaction is central to this conception of
homemade food businesses and eventually there is a good relationship between the buyer and
seller and more confidence in the product due to it.

Secondary study

Although studies on homemade food are scarce, the available literature suggests that consumers
seem to be motivated by a variety of aspects when they purchase and use homemade food. It
is likely that the wide range of attributes and meanings of homemade food makes it highly
appealing to several consumer segments looking for novelty in food consumption. The
following was found to be the major attributes –

Tradition and authenticity - Some studies have found a positive association between traditional
food and authenticity. It evokes a sense of nostalgia and connects the consumers to their roots.
As we progress into a more globalised world, people look for more authentic regional food.
Several small producers use traditional processing methods with the aim of preserving
tradition, knowledge and customs (i.e. transmission from one generation to another)
transferring this symbolism to the final product. (6)
Sensory experience - The homemade food market is driven by the need to feel the taste of
home. It is a sensory experience, which is a key aspect consumer identify when they assess
homemade food categories. Studies carried out in various European countries have detected a
strong and positive association between traditional food products and sensory quality (7)

Impact to the society - From a social point of view, homemade food products represent an
alternative source of income for under- and unemployed people in rural and urban areas. It
could be taken up as a passion project by housewives to be economically independent by
pursuing a skill. Under certain circumstances such as high labour competition, economic crises
and situations like the death of a spouse, individuals are forced to turn to self-employment,
where homemade food preparation and sale is a way of overcoming household economic
constraints (8). It is a feasible economic opportunity that is growing with the oncoming of the
internet.

Limitation for the homemade food market - In most emerging economies homemade food
products are mostly part of the informal food markets. Which can increase consumer risk
perception and consequently increase consumer distrust. As a result, this can negatively affect
consumer purchasing habits. But in India, small scale homemade food producers can acquire
an FSSAI (Food Safety and Standards Authority of India) license for a nominal fee of 100/-
per year, under the application category of home-based canteens, which is a basic licence. The
documents to be submitted is an NOC by municipality and the identity proof and photo of the
producer. Within 7 days of form submission, Registering Authority (RA) shall issue the
registration certificate or reject the application, depending on their verification and observation.
It is only compulsory for Food Business Operators with an annual turnover of more than Rs.
12 lakhs. Which means that there could still be various homemade food producers who do not
abide by the terms of use of Food Licensing & Registration System (FLRS).

Research methodology

Research design and sample - A survey-based study was designed to carry out this research.
The target population in this study were millennials, aged 24 – 40. The survey focused on the
people who were born between 1981 and 1996 because the millennial generation represents a
key consumer segment. They fall in the working population age and take the decisions related
to the household’s food purchasing decisions.

A total of 110 respondents were surveyed. Data was gathered using a structured questionnaire,
which was entirely circulated online as google forms. The survey was conducted on millennials
of Indian origin living in India and abroad. The survey focused on tier 1 and tier 2 cities. The
majority of the respondents were from tier 2 cities. Residents of Cochin, Kerala had 47
respondents followed by Bangalore at 18 respondents.

An empirical study based on direct observation and in-depth interviews was also conducted
among two home cooks. They were studied gain insight of their customer base. A key
characteristic of homemade food businesses is that the producers have a good feedback
mechanism which makes them an appropriate group to understand the direct consumer
behavioural trends that they have come across.

Analysis of primary data

1.

VARIABLE CATEGORY % of total

respondents

Age 24 – 29 45.9%
30 – 35 23.4%
36- 40 29.7%

Gender Male 36%

Female 60.4%
Prefer not to say 3.6%

Income <5,00,000 44.15%

5,00,000 –8,00,000 19.8%
8,00,000-
12,00,000 9%
>12,00,000 27%
Table 1 based on authors data

The socio-demographic characteristics of the sample is displayed

2.
Income >4 on a <2 on a 3 on a % of % of % of Total
scale of scale of scale of people people people
1-5 1-5 1-5 most least neutral
(Most (Least (Neutral) likely to likely to about
likely to likely to purchase purchase purchasing
purchase) purchase)
5,00,000 30 8 10 62% 16.6% 20.8% 48
5,00,000 – 17 3 2 77.2% 13.6% 9.09% 22
8,00,000
8,00,000- 6 1 3 60% 10% 30% 10
12,00,000
>12,00,000 22 1 7 78.5% 3.5% 25% 28
Table 2 based on author’s data

Bivariate table showing the Income (Rows) and likeliness to purchase homemade food
(Columns)

The calculation of Karl Pearson’s coefficient correlation based on author’s data gives us R =
0.15786, which shows us that there is a low positive correlation implying a weak relationship
between the variables.

3.

Purchased homemade food Have not purchased

Living away from home 39 3
not living away from home 57 11

Table 3 based on author’s data

Bivariate table showing the influence of living away from home on the purchase of homemade
food. 92.8% of the people living away from home have purchased homemade food, while only
83.8% of people who live at home, have purchased homemade food

Chart Title
100
0
Living away from home Not living away from home

Have not purchased homemade food

Have purchased homemade food
 4.
Purchased Have not purchased % of % of Total
homemade food homemade food Yes No
24-29 46 5 90.1 9.9 51
30-35 21 5 80.7 19.3 26
36-40 29 4 87.8 12.2 33
Table 4 based on author’s data

This table shows us the relationship between the number of people who purchased homemade
food and their ages. There is a higher degree of consumption amongst the early millennials.
There could be a bias in the higher sampling size of the 24-29 group as well.

60

40

20

0
Have not purchased homemade food Have purchased homemade food
24-29 30-35 36-40

Fig 4.1 based on authors primary data

5.

Factors influencing Most important Very important Moderately Least important

purchase of homemade important
food products
Better Hygiene 40 53 13 4
Health perception 31 47 24 8
Tastier food 35 61 11 3
Reliability 27 64 14 5
Experience of the 13 27 41 29
consumer
Premium 14 44 44 12
ingredients used
Missing homely food/ 20 39 33 18
Tired of eating out
Table 6 based on author’s data

This shows us the ranking of importance of 7 main characteristic that is important to the
consumption of homemade food.

7.

Factors influencing purchase of homemade food Least likely Less likely Moderately likely Very likely Most likely Total
Average of More hygienic cooking conditions 2.85 2.83 3.2 3.25 3.16 3.17
Average of Health perception 2.42 2.6 2.7 3.09 2.96 2.91
Average of Tastier food 2.57 2.83 3.31 3.25 3.12 3.16
Average of Reliability 2.42 2.83 3 3.09 3.12 3.02
Average of Experience 2.14 1.5 2.09 2.3 2.29 2.21
Average of Missing homely food, tired of eating out 2 1.83 2.5 2.7 2.5 2.55
Average of More premium ingredients used 2 2.3 2.68 2.5 2.51 2.5

Table 7.1 based on Author’s data. This pivot table represents the average of factors that
influence the likeliness of consumption. The consumers rated how likely they were to purchase
from home cooks and home bakers and this data was analysed with the average of factors that
were rated according to their importance in consumption behaviour.

Factors Correlation
Hygiene 0.097179837
Health perception 0.176556516
Tastier food 0.138470799
Reliability 0.205885065
Experience 0.129471815
Premium ingredients 0.320125621
Missing homely food/tired of eating out 0.180715792

Table 7.2 is calculation of Karl Pearson’s coefficient correlation based on author’s data. It
represents the correlation between the importance assigned to factors that influencing purchase
of homemade food and the likeliness of purchase compared to restaurants. There is a positive
correlation all the factors but with a lower degree. Premium ingredients used and the reliability
of food has a comparatively higher correlation with the likeliness of purchase.
8.

Fig 8.1 based on authors data. This shows us the ranking of negative factors that affect
consumer’s purchasing decision of homemade food.

Empirical study analysis

The author has been directly observing the consumer behavioural trends through a home cook
based in Kochi, Kerala. She provides homecooked meals focusing on “Traditional Syrian
catholic Kottayam style cooking” which resonates to the consumer as a unique product
differentiated by region and religion and give the idea that the product is made with a very
authentic style of cooking using recipes that is used by people in that community. She is a
housewife, who started this venture ‘MomMade’ as a passion project to keep busy. Her
monthly revenue is 40,000 – 45,000 with a profit margin of 60%. It was seen that the food is
preferred by the consumers, who are mostly millennials, because of its authenticity, hygiene
and most importantly because it is made by a mother. The promotion of the products has also
focused on highlighting these factors. The consumers are willing to pay a premium price and
the highest selling product is a dish was the ‘tapioca and fish’ which is made with a recipe that
is popular in the region she is from. This shows us the relevance of differentiated products and
specialised skill which plays a role in consumption pattern.

The second home cook is a baker, providing frosted cupcakes, cookies and brownies. She is a
19-year-old pursuing her college degree along with this. She focuses on a limited menu which
is extending to customised birthday cakes as the demand for it has increased. She notes that
customer’s do not mind splurging on these products, especially the customised cakes which
can cost up to 5000 for a 2kg cake. Aesthetics is important to customer depending on the
product. 2 out of 5 loyal customers who consistently purchase the products were made aware
through her social media page and are not friends or family which shows us the impact of
organic promotion and that the customer base is not limited to people they know. Her revenue
for three months is 70,000, with a 40% profit margin. On an average there is 5-10 orders a
week. She had taken a 3-week break during her exams but reported close to no change in
consumer attitude which shows us the flexibility of these businesses.

Both home cooks got the opportunity to improve their business during the pandemic time. They
give prime importance to safety, they try to interact with limited people and avoid going out,
they also wash utensils with hot water and take necessary measure such as use of hair caps
while cooking. These steps were taken considering customers apprehensions. Both do not
compromise on quality or quantity. They have received feedback stating that they provide
customers value for money spent. They also give individual attention to the products as it is
not mass produced which makes a difference in quality, which is appreciated by customers.
The customers constantly keep in contact through social media by responding to their posts
and giving them feedback on the food purchased which is very motivating and helpful for the
producer. They use the best quality ingredients like home ground spices in the curries, premium
chocolate for the cakes, which increases their cost of production but the consumers have
commented on the difference in taste when compared to restaurants. Both producers have an
FSSAI license which is also highlighted on their products.

MAJOR FINDINGS

• This study showed us that 87.2% of the millennial respondents have already purchased
homemade food. And only 11.8% of the total respondents voted less likely to choose
homemade food over food from restaurants, which gives us a positive consumer
reaction towards homemade food products.
• On analysing the income influence on rating of likeliness, the impact of income was
noticed, a higher percentage of consumers who voted least likely to consume
homemade food products (16.6%) were consumers with lower income (Below
5,00,000). Likewise, the consumers with the highest income slab (above 12,00,00)
had only a small proportion of people voting least likely to consume homemade food.
(3.5%). The percentage of people from each income group who were likely to purchase
homemade food was consistently decreasing from the lowest to highest income
brackets.
• On further analysis of the income of the consumer and the likeliness to purchase, it
was found that there is a weak positive correlation of r = 0.157, implying that income
influences buying but to a lesser degree, even though these products are more
expensive compared to restaurant food. This can be attributed to the importance
consumers give to eating healthy and good food that suits their taste preferences so
consumers do purchase this food but might reduce the frequency.
• The impact of living away from home was clearly seen on the consumption behaviour
of the people. 92.8% of the people living away from home have purchased homemade
food, while only 83.8% of people who live at home, have purchased homemade food.
On further analysis, 68.2% of the total respondents who were living away from home
gave higher importance to ‘missing homely food, tired of eating out.’ Which shows us
the consumer’s attitude towards food changes with a change in living conditions. This
makes it important to target these consumers with the ads that promote the goodness
and authenticity of homemade food.
• It was also found that a higher percentage of younger millennials (age – 24 to 29) have
purchased homemade food before. This could be attributed to them living away from
home (51% of the total) and the higher exposure to social media, which is mainly
popularizing the homemade food businesses.
• There is a high impact of word of mouth on the consumption of homemade food. 62.7%
of the consumers would be influenced by positive reviews from people they know. Out
of the people who have already purchased homemade food, 68.1% were recommended
through friends and family which shows us the importance of the network that a home
cook builds. Another important aspect is that only 13.6% ordered homemade food
because of ads.
• The study showed us that, for most factors, there was an increase in the average rating
of important factors as the consumers likeliness increased. There is a positive
correlation between the factors and the likeliness to purchase.
• Homemade food is made at home, in kitchens where there is a higher probability of
hygienic conditions compared to commercial kitchens and consumers gave high
importance for it. But certain responses pointed out the limitation of these kitchens
i.e. The lack of a certification in most cases.
• The study found that many consumers associate an idea of healthier food to homemade
food. The is due to limited adulterants, preservatives and better ingredients used. The
 impact of having a personalised communication with the cook also helps in the
preparation of healthier food as the consumers have the liberty to request for healthier
substitutes or reduction in oil, sugar etc.
• Most consumers rate reliability as very important. This higher degree of importance
was probably given due to the time of study. In the post pandemic time, consumers
want to be assured that they are consuming safe products. Being made in a home and
directly picked up by the consumer the chances of being safer is higher. This positive
image of reliability will help homemade food businesses.
• Experience was rated as moderately important. In case of the home cook who makes
specialised Kerala style food, her age, background, experience in cooking etc has
played a role in creating a positive attitude in the consumers experience and enhances
the consumer experience.
• Premium ingredients used –Home cooks use better quality ingredients as most
consume the same food in their homes. The taste is enhanced with the specialised
knowledge of the cook and the quality as it is not mass produced.
• Interestingly the factor of missing homely food is scattered amongst the different scales.
This shows us that the consumers see homemade food as not just a homely food supplier
but could indicate them as being suppliers of different cuisines and customised food
which they don’t necessarily associated to the food from their homes.
• As homemade food is made in limited quantities, most producers have not scaled
enough to take up orders like restaurants and the food is mostly made with no
preservatives which makes it difficult to have food made on order which is a drawback
for millennial consumers who are used to 30-minute deliveries. They have the option
of ordering in from a nearby restaurant which will be provided instantly. Many
consumers don’t pre plan their meals and opt out of ordering homemade food for this
reason.
• The food is also priced higher as it does not get the benefit of economies of scale. There
is more labour and time involved as the food is more customised for consumer’s needs.
The premium ingredients used also increase the cost of production for these producers.
This makes homemade food less affordable on a daily basis and most consumers prefer
to purchase it less frequently.
Limitations

This study was conducted with a small sample size of 110 respondents. Furthermore, the age
group was restricted to millennials. There were unequal distributions in the socio demographics
of the sample. The survey was also done entirely through google forms so the author could not
give clarifications if the respondents needed.

With more resources, a more comprehensive study could be conducted with a much greater
sample and more factors. The means of developing this new market can be analysed with a
more extensive study.

Recommendations

This study has proven that people will purchase the food irrespective of income levels, but
higher price makes the consumption less frequent. Having more accessible deliveries through
integration into major food delivery apps would help in overcoming the hassle of pick up. The
producers need to overcome barriers in promotion, giving more importance to the advantage
of personalised communication and network creation, they also have to bring about consistency
and standardisation by abiding by food safety guidelines which could improve the consumer
attitude towards these products. Hence, it is important to influence consumer behaviours by
influencing their cognitive and affective responses, information about the better quality, the
traditional methods of cooking, the perceived health and hygiene benefits of unadulterated food
along with use of better raw materials should be provided to the consumers. The home cooks
must focus more in trying to get their existing customers to promote within their circles as this
is more effective that advertisements. The better communication with the customers will also
improve the affective response as an emotional connection with the chef makes the food more
reliable making the consumption a special experience for consumers.

Conclusion

This study showed us that every kitchen is a money-making machine and there is a positive
consumer reaction to homemade food. The pandemic has also played a role in changing the
attitude of the consumers. It has and is changing the outlook towards the concept of 'eating out'
or 'ordering in'. Consumers find ordering from a place like home to be a much safer, reliable
and hygienic option. Helping small businesses thrive has also became an important factor
during this time. So, the oncoming of the homemade food market is seen as a welcome change
to a lot of consumers
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