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Jul, 11 2013


Who would not love to splurge on world tours for relishing a variety of cuisines? Just like foreign nations, India too is offering bona fide cuisines that are set to tickle consumers' taste buds.

INDIA’S food service industry is regarded as the best business to invest in. India is a well-diversified market and serving different cuisines on a platter can turn out to be a feasible business opportunity. As consumers' consumption  preferences are growing with the rising income capacity of average Indians, the market is yet again up for profits as eating out culture in India is catching up at a fast rate.

What really drives the industry's growth are  changing of people's eating out patterns, influx of brands in casual dine or fine dine restaurant segment,  consumers seeking variety in menu, starting from a mere Indian and Chinese to Thai, Japanese, Italian, Lebanese, Mexican and a variety of regional cuisines. In addition to the double income households, the changing food preference in terms of experimenting with new cuisines is further spurring the demand in the organised food service sector.

Go to any nearby high street, mall or hotel, you will find a cluster of casual dines and fine dine restaurant chains. Currently in India, a mix of casual and fine dine chains like Nando's, The Yellow Chilli, The Spaghetti Kitchen, Mainland China, Sagar Ratna, Punjab Grill, The Pasta Bar Veneto, South Indies, Nom Nom, Moti Mahal, TGIF, Asha's Restaurants Pvt Ltd, and The Great Kabab Factory are operating in organised food service business. Market experts feel that the casual and fine dine restaurants are expected to touch Rs 10,000 crore by 2015.

Franchising rules

India's franchising industry is expected to quadruple in volume in the next five years, accounting for almost 4 per cent of India's GDP in 2017, according to a report released by KPMG India Pvt. Ltd.

The restaurant business is a business of packs. Be it a fine dine or a casual dine restaurant brand, tweaking the strategy as per the location and local taste and price points have to be customised so as to generate maximum footfall. Talking about the market size of casual dine and fine dine restaurant industry, Vinodh N Sharma, Executive Director, Fifth Avenue Group & Managing Director, Fifth Avenue Hotels & Resorts Pvt Ltd, operates Italian café restaurant chain-The Pasta Bar Veneto  says:  “The sector will grow with a CAGR of close to 12 per cent in the next five years, which means it will be almost $ 80 billion by 2018-19. But less than 20 per cent of this is organised. Casual dining restaurants are expected to be at $450 million in 2013 and approx $ 800 million by 2018. Fine dining restaurants are expected to account for $190 million this year.” According to a Technopak report, the size of the gourmet food market in India is Rs 6,500 crore, growing at a CAGR of 20 per cent. The market is expected to cross Rs 13,700 crore by 2015. The Indian gourmet food market includes fine dining restaurants, café market as well as food retail.

Commenting on the share of the industry they are planning to tap, Vinodh N Sharma says: “We are clear that we want to be the leader among Italian restaurants in the country. Over the next five years, we want to ensure that we grow in a manner that is steady and we do not want to overreach ourselves. I am afraid I do not want to talk of market share at this point at all. We have a great model and we are confident that we will grow exponentially over the next few years.”

Fighting hurdles

Casual dine and fine dine restaurants face hurdles pertaining to searching the right location, right manpower, skyrocketing real estate prices, sourcing supplies and most of all, following the customer- centric  approach, erratic power and water

supply, setting up own logistics and developing a dedicated vendor base and maintaining quality standards. Commenting on overcoming challenges, Vijay Abhimanyu, CEO, Billion Smiles, which operates three restaurants brands under its portfolio, says: “There is a need to be sensitive to the size of the format. This will enable viability when it comes to rentals. Once a brand is well- established, the location/street becomes less important in a casual diner! The catchment becomes the driver.”

To stay ahead of competition, Billion Smiles has a very unique positioning with restaurant chains concentrating on only one cuisine i.e. South Indian cuisine. Talking about giving the toughest edge to competitors, Vijay Abhimanyu says: “We constantly innovate with the cuisine and bring dishes with special touch for the food connoisseurs. We believe in our customers and that shows in our hospitality service.” In terms of business opportunity, South Indies is exploring the FOCO model of operation.  Currently, two brands of Billion Smiles  South Indies and Bon South- are offering franchise business opportunity.

Spreading foothold

Hitesh Keshwani, Owner of Silver beach hospitality Pvt Ltd that operates Nom Nom, which serves South East Asian and Japanese cuisine, says: “We plan to open eight outlets within this year. Whereas Italian restaurant, The Pasta Bar Veneto, confirms the opening of 12 outlets this year.” On the other side, South Indies is planning to open 10 outlets by this fiscal year-end.

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