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According to the Grant Thornton and FICCI report, Quick Service Restaurant (QSR) segment has the largest market share in the F&B industry, which is 45% and will grow by about 16 per cent year.
Let us have a taste of the fastest growing segment of Food & Beverage (F&B) industry, reaping faster profits.
The Indian QSR segment has been growing rapidly which is evident from the number of international QSR brands that have forayed into the country and home grown brands also expanding their footprint across cities. An October 2015 study by industry body ASSOCHAM reported that the Indian QSR segment at Rs 8,500 crore is growing at a CAGR of 25%. It is expected to touch Rs 25,000 crore by 2020 as per the study. Thus the market is ripe for the investors.
Indian population is well educated and globally exposed. The rising disposable income and increase in number of Indians opting to eat out are some of the factors that have catalysed growth. Online ordering, mobile applications and food aggregators have made it more convenient for people to have access to QSR options. Customisation of products as well as services has further attracted customers.
All this is fueling healthy competition for franchisors to expand their base and bolstering growth at the same time. They are keen on expanding their base via franchising as franchise mode is the most suited for faster, wider and deeper penetration. “We can leverage the deep local knowledge and the entrepreneurial spirit of franchisees to reach the right sections of the target customers with success,” says Sanjeev Pant, Senior Vice President, CP Foods that runs over 330 Five Star Chicken outlets in India.
What's tempting the investors?
The trends, in terms of growth, in any industry including the QSR sector are largely governed by a country's economy and the consumer. In India too, rapidly evolving consumer dynamics, strong growth projections for Indian economy which is expected to grow at a rate of around 7.8 per cent in FY 2016-17 according to World Bank Report January 2016, foretells a bright outlook for the QSR segment.
“Expansion of QSR segment has led to the development of alternative businesses like the now popular food aggregators Zomato, FoodPanda, Swiggy etc. This has only enhanced the lustre of the Indian QSR industry ultimately catching interest of Private Equity funds and investors who are making huge investments in the sector and in food related setups,” puts forth Ranjit Talwar, Country Head, Subway Systems India Pvt Ltd.