foodService India - November - December 2018

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India’s foodservice market was estimated at Rs. 3,40,052 crore
(USD 50.75 bn) last year. The market is growing at a CAGR
of 10 per cent and is expected to be Rs. 4,97,870 crore (USD
74.32 bn) in 2021. The organized share of the market is 34.5
per cent and is growing at 15 per cent. In recent times, the
industry has seen a steady shift – from the unorganized to
organized segment owing to the implementation of GST and
the aspiration on the part of players to upgrade ambience,
infrastructure, services and technology.
The quality of food remains the most critical factor for
determining the growth and success of restaurants, on the
consumer side. This key driver is followed by ‘location’ and
‘pricing’. The quality of food has a lasting impact and it helps
build the recall factor in the mind of customers. On the other
hand, convenience of visit and choice of outlet is largely
determined by a restaurant’s location, while pricing infl uences
the perception of affordability and related consumption
behavior. The expected pricing also represents the level of
desired service by the consumer. Today, as consumers are
showing a serious preference for healthy food, organic food
has emerged as a rising trend, and is seen as more important
than pricing and cuisine preference, especially in urban areas.
When it comes to the preferred strategy for growth on
part of foodservice players, pan-India and/ or regional
expansion are being seen as the primary strategy for growth
by stakeholders. To action retail expansion, players are driven
by the expectation of funding from private equity fi rms or the
availability of internal accruals or promoter fund and/or bank
loans. To increase bill value or to attract new customers, FS
players are also resorting to adding new cuisines or expanding
menus, which once again underscores the importance of food
as a key element to the success and growth of restaurants.