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RESTAURANTS : CATERING : CONSULTING!
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