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Apr, 06 2017

Trends in the F&B Industry

The F&B industry is the most vibrant industry to witness a rapid growth in the past couple of years. Rise in the food consumption, increasing urban working population are contributing to the growth

The Indian food services market currently stands at Rs 3,091.1 billion in 2016 and is expected to reach Rs 4,981.3 billion at a CAGR of 10 per cent by 2021. The industry can be broadly classified into four major segments with full-service restaurants contributing 56.6 per cent sales, Quick Service Restaurants (QSR) contributing 16.3 per cent, then 14.6 per cent by street kiosk and stalls, and 12.5 per cent by cafes and bars. In terms of channel of sales, the revenue is majorly contributed with the offline sales posting almost 98 per cent of the revenue.

Key trends to lookout for:

International Chain Restaurants & Franchise Opportunities

Over the past few years, the industry has witnessed new restaurants in the major cities. Two types of developments have clearly emerged in the past few years. First, the growth of QSR chains like Carl’s Jr, and Second, the birth of home-grown new brands such as Lazeez Affaire, Café Out of The Box, Boombox Café, and Wai Wai City.

Several international chains are making efforts to establish network here, as it is a lucrative and high potential market to venture. Brands like Burger King, Starbucks, Jamie’s Italian, Jamies’s Pizzeria have establishing their presence in India via the franchising route.

Virtual Restaurants

The concept of virtual restaurant is still at a nascent stage here and is evolving slowly but gradually in the right direction. Virtual restaurants work on delivery-only concept, as it exists online only. Brands like Pan of Asia, Pao & Bao, Kadhai House, Box8, and Curry Me Up are the few virtual restaurants. The operations of virtual kitchen are highly technology-driven in order to control costs.

New Retail Concepts

Adapting to an ever evolving and dynamic environment, several new concepts are coming up. The F&B industry is focusing on theme and concept-based restaurants that include ambience, food, music and other offerings. The urge to serve something special to patrons has resulted in the opening of many concept-based eateries in the city like Chor Bizarre, The Jugaad Café & Bar, Jungle Jamboree, Garam Dharam.

The Cart Model

Another concept, which is doing reasonably good in the Indian market, is the cart model, where in the food is sold through the carts/kiosk that are placed in the high-street markets/ mall. Under the concept, the cooked/semi-cooked food is supplied from the base kitchen and sold through the carts. This form of expansion strategy gives an edge over QSR or Casual Dine-in restaurants for a faster penetration and roll out. As an investor, you save the cost of investment in setting up a retail outlet at a bigger space.

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