For any investor, enthusiastic to venture into the restaurant business, time is right for launching a casual or a fine dine restaurant, that too gourmet style.
The trend across the restaurant industry is all about conceited and buttoned-up servers, an ultra-formal way of service, boutique-style interiors and gourmet meal courses - on the whole an up market experience. The overall sector is pegged to grow significantly in the time to come. Beny Sachdeva and Yamini S Verma explore through this article.
The Indian F&B market is the best destination for any investor to invest in. With so many international brands foraying India, the industry has grown itself offering feasible business opportunity to entrepreneurs via the franchise route. Also with consumers seeking variety of cuisines falling within their respective expenditure slab has brought in various formats of the eating joints into existence. Casual and fine dine has witnessed maximum consumer base and profit in terms of revenue and preference of choice after QSR and take aways. Go to any nearby high street, mall or hotel, large number of casual and fine dine restaurant chains have opened up not only in metros but in tier- I and II cities too. 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, Bon South- South Indies, Hongkong, Moti Mahal Deluxe, TGIF, Asha's Restaurants Pvt Ltd, and The Great Kabab Factory are operating in organised food service business.
On the occasion of their special food festival, Vikram Vikas Varma, Head Marketing, Barbeque Nation Hospitality Ltd., adds, “Customers today seek the thrill of deriving maximum pleasure for their taste-buds. Our brand just does that as it offers a plethora of tastes to its customers. We look forward to cater to the tastes of our customers and put together a terrific dining experience.”
Barbeque Nation is a pioneer in India to promote 'DIY' (do-it-yourself) cuisine with a concept of live on-the-table grill in India and is today the largest casual dining brand in the country. The restaurant offers a pre-fixed menu with a fixed price. With more than 39 outlets across the nation, its menu is drawn from Mediterranean, American, Oriental, Asian and many more.
Market at glance
According to a report by National Restaurant Association of India (NRAI) and Technopak, the size of the food services market in India was estimated at $48 billion in 2013. This is estimated to grow at a CAGR of 11 per cent over the next five years to reach $78 billion by 2018. The Indian F&B industry which is still largely unorganised seems to have abundant opportunities for the investors to invest in.
For S K Restaurants the market size of fine dine and casual dine model of f&b sector entirely depends upon the location. "Fine dine is only phenomenal in metros while the culture of casual and fast, casual mid-segment format is fast emerging in India. We have opened The Yellow Chilli restaurant in tier II cities including Raipur,Jabalpur, Gorakhpur and Jammu," says Satyaki Mukherjee, Head, Franchising and Liasoning, S K Restaurants.
Franchising at its best
Following the growth in travel overseas for both business and leisure, the exposure to cuisines has grown and people expect some of those experiences in the local market and hence we see the demand growing rapidly.
Ashna Kapur, Vice President Brand Development, Umak Hospitality Pvt. Ltd. elaborates: “The fine dining destinations are no more limited to metro and tier I cities, and have percolated to tier II and III cities as well. Subsequently, many restaurant chains are now vying to tap this market.” Umak Hospitality Pvt. Ltd., iscurrently operating four reputed and successful restaurant brands, namely, The Great Kabab Factory, The Spice Factory, Indyaki and Superstars.
Revamping strategies for revenue growth
The restaurant business is a business of profits. 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.
Regarding strategy revamp, Kapur says: “We constantly re-innovate our menu and service offerings at The Great Kabab Factory. We also introduce various food festivals for our discerning patrons to continue offering them an unmatchable dining experience.”
Great growth for gourmet restaurants
Gourmet food is nicer or more unusual or sophisticated than ordinary food, and is often more expensive. To be more precise, Gourmet food is an expensive, seasonal, non-native food, perceived as superior, that under the best of circumstances is also of high quality, accurately prepared and presented with artistic flair. A restaurant which offers a similar or better than above mentioned kind of experience is what is in demand by the food lover and investor both.
Referring to the same, Gaurav Marya, Chairman, Franchise India, said,”It is no secret that Indians love food. For 2015, I see a lot of potential for restaurant brands in franchising; especially gourmet brands & specialty restaurants. This sector will witness a lot of growth.” India has emerged as one of the significant markets for gourmet food products and gourmet restaurants. With mounting awareness towards organic food, healthy food, swelling income levels, and altering consumer behaviour, India's organic & gourmet food market is swiftly changing into one of the world's fastest growing organic food market. Looking at the potential a few leading gourmet restaurants are looking at scalability. These brands are seeking partners in metros & tier I and II towns pan India.
After successful five years in the country, Chili's (R) Grill & Bar is looking at expanding its footprint in the Indian market. The chain which offers a variety of Southwest American fare, especially Tex-Mex, is looking at ramping up operations, amid greater visibility from the brand. The restaurant chain operated by Texas-based Brinker International will be opening 10 outlets in the Western and Southern regions of India by 2015. Currently, the chain has 10 stores in India, five in the Southern & Western region (one in Mumbai, Pune, Hyderabad and two in Bengaluru) and five in the Northern and Eastern region.
Speaking about the future expansion plans for the brand, Ashish Saxena, CEO, Chili's ® Grill & Bar, South & West India said, “An average investment of US$ one million will be made per store, and the new outlets will be located in Bengaluru, Hyderabad, Mumbai, Goa, Chennai and Kochi. It's interesting to see how the flavour profile of the Indian audience has changed over time, given how they are increasingly experimenting with different cuisines now, giving the brand the opportunity to innovate with the menu more often. And it's definitely a positive sign that the casual dining market in India is growing around 10 to 15 per cent year on year.”
Another leading brand in the capital named Farzi Café is a signature gourmet Indian confectionary brand, which is also a signature “Jiggs Kalra” concept is also seeking franchisees pan-India.
This industry is perpetually catching up pace among the Indian food lovers, Not just restaurants gourmet food retailer industry is also growing manifold owing to wide awakening among Indian consumers towards leading a healthy life. Read in detail about gourmet retail at pg no. 44.
Casual dining establishments provides full table service that is more upscale than fast-casual restaurants, but also more affordable than fine dining restaurants. They appeal to a wide customer base and are usually family-friendly.
Technopak anticipates, that the casual dining restaurants, which are worth $430 million will continue to grown even in 2015. Fine dining restaurants offers a high perceived value for their guests, defined by beautiful décor, pleasant atmosphere, renowned chefs, exceptional service and special, pricy dishes.
F&B sector will multiply quickly with casual dining from $430 million as recorded in 2012 to $755 million by 2017 while fine dining from $190 million in 2012 to $335 million by 2017.
(source: Technopak Advisor).