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BUSINESS OF FOOD SERVICE IN INDIA  

By  Abhijit  Saha    

BUSINESS  OF  FOOD  SERVICE  IN  INDIA  

 Best    Food  service  business  opportuni1es  to  invest  in  from  

consump1on  outlook    

Star1ng  a  food  Business  via  franchising:  Are  you  cut  out  for  it?    

Building  a  food  brand  –  What  does  it  take?    

Single  unit  vs.  mul1-­‐unit  food  operator  -­‐  what  is  the  difference?    

HOSPITALITY  INDUSTRY  GROWTH  STORY  

IN  FOCUS  Hospitality  industry    in  the  limelight  owing  to  the  spurt  in  the  growth  of  

India's  tourism  industry  and  increased  economic  ac1vi1es  

100%  FDI  The  liberaliza1on  policy  of  the  Government  permits  100%  foreign  direct  

investment  in  the  sector.  

GDP:  TOTAL  CONTRIBUTION  Travel  &  Tourism  -­‐INR5,651.0bn  (6.4%  of  GDP)  in  2011    

Rise  by  7.3%  in  2012  Rise  by  7.8%  pa  to  INR12,891.2bn  in  2022  

World  Travel    &  Tourism  Council  

HOSPITALITY  GROWTH  STORY  

INVESTMENT  By  2020,  travel  and  tourism  investment  in  India  is  es1mated  to  reach  US$  

109.3  billion  or  7.7  per  cent  of  total  investment.  World  Travel    &Tourism  Council  

RISE  OF  INCOME  The  rising  income  levels  and  business  ventures  have  also  added  the  demand  

for  hotel  rooms  across  the  country.    

GLOBAL  PLAYERS  Many  global  players  in  the  industry  have  started  inves1ng  in  India  by  way  of  partnerships,  mergers,  acquisi1ons,  franchising  and  through  management  

contract.    

FOOD  SERVICE  GROWTH  STORY        

MARKET  SIZE  Indian  food  services  industry  is  worth  nearly  Rs  65,000  crore  now  and  is  growing  at  a  healthy  compounded  annual  growth  rate  of  17%.  It  is  likely  to  reach  Rs  90,000  crore  by  

2015.  –  Na4onal  Restaurant  Associa4on  of  India    

SEGMENTATION  70%  of  the  market  is  currently  dominated  by  unorganized  players  and  the  remaining    30%    consists  of  quick  service  restaurants  driven  by  interna1onal  chains,  and  causal  and  fine  

dining  outlets  dominated  by  Indian  and  private  equity  majors.      

FUTURE  GROWTH  In  the  future,  the  organized  segment  is  expected  to  grow  even  faster  —  at  around  20%  to  

25%  per  annum.    

INVESTMENT  Last  year,  these  businesses  received  $  300mn  of  funding.    

GROWTH  ENGINES        

EMERGENCE  OF  CONSUMPTION  CLASS        close  to  70million  by  2220  

 HUGE  WORKING  POPULATION      rise  in  disposable  incomes  

 GROWTH  OF    PROGRESSIVE  MIDDLE  CLASS      

distribu1on  of  consuming  middle  class  beyond  large  ci1es      

EXPOSURE  –  THROUGH  TV,  INTERNET  AND  TRAVEL    increasing  experimenta1on  across  cuisines  

 INCREASED    ACCESS    

 home  delivery,  transit  hubs        

GROWTH  ENGINES        

TIME  CONSTRAINTS  –  HECTIC  LIFESTYLE  ordering  food  in  homes  and  offices  

 CHANGING  TASTE  AND  SENSIBILITIES    

Ea1ng  out  is  becoming  an  important  leisure  and  entertainment  ac1vity    

DEVELOPMENT  OF  TOURISM  INDUSTRY  Increased  travel  and  consump1on.  

 DEVELOPMENT  AND  APPLICATION  INFORMATION  TECHNOLOGY    

improved  dining  experience,    applied  to  control  &  management    func1ons.    

AVAILABILITY  OF  FUNDING  THROUGH  PRIVATE  EQUITY  AND  PUBLIC  LISTING      Everstone  Capital,  SAIF  partners,  TVS  Capital,  Sequoia  Capital,  New  Silk  Route,  India  

Equity  Partners,  Navis  Capital  &  Peepul  Capital.        

 BEST    FOOD  SERVICE  BUSINESS  OPPORTUNITIES  TO  INVEST  IN    THE  QSR  PHENOMENON  

 Quick  Service  Restaurant  (QSR)  segment  with  brands  like  Domino’s,  Pizza  Hut,  KFC,  McDonald’s  are  expanding  rapidly  and  growing  at  a  rate  of  30%  per  annum.  Indian  

brands    are  also  beginning  to  make  their  mark    

SMART  CASUAL  DINING  Informal  dining  –  Café  Bistro  Format  

 FINE  DINING    

Standalone  restaurants  like  Caperberry,  Fava,  Shiro,  Indigo,  Olive,  Hakkasan,  Mainland  China,  Copper  Chimney,  Punjab  Grill,  Punjabi  by  Nature  

 FOOD  COURTS    Malls,  Airports  

 CATERING    

Private,  Corporate,  Events,  industrial            

 THE  QSR  PHENOMENON  IN  INDIA    Jumboking        Nirulas    

Dosa  Plaza    Mast  Kalandar    

Adigas    Kaa1  Zone    Yo!  China    

Smokin’  Joes    Falafel‟s    US  Pizza    

Haldiram‟s    Rajdhani    Barista    

Café  Coffee  Day  Ammi’s  Biryani    

 SMART  CASUAL  DINING  Informal  dining  –  Café  Bistro  Format  

Indigo  Deli  Smoke  Hose  Deli  

Moshe’s  Coffeeday  Square  

Café  Noir    

 FINE  DINING    

THE  FRANCHISING  MODEL    

Scalable  Product/  Brand    Financial  Viability  Development  Team  

SOPs  &  Brand  Standards  Implementa1on  Team  Tools  of  Quality  Control  Tools  of    Cost  Control  Effec1ve  Marke1ng  

FRANCHISOR  &  FRANCHISEE                      

 Franchisee  Owned-­‐  Franchisor  Operated  Franchisee  Owned  –  Franchisee  Operated  

Ini1al  Franchise  Fee  Monthly  Royalty/  Opera1ons  Management  Fee  

BUILDING  A  F  &  B  BRAND  

Knowledge  &  Skill    

Innova1on    

Quality  Product    

Consistency    

Aren1on  to  details      

Correct  Marke1ng  and  Communica1on    

Innovation

Knowledge

Innovation

 Step  1:  Idea]on  Step  2:  Explora]on  Step  3:  Feasibility  Step  4:  Valida]on  Step  5:  Test  marke]ng  Step  6:  Launch  

The Process

Quality Product

Consistency

Attention to Detail

Marketing and Communication

SINGLE  VS  MULTI  UNIT  OPERATOR          

 Owner  Driven  vs  Professionally  Managed  

Personalized  vs  Process  Driven  Quick  Decision  Making    vs  Rela1vely  Slow  

Limited  Poten1al  of  Growth  vs  Huge  Poten1al    

THANK  YOU