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Food and Beverages 10 Jul 2017

How Investors Should Look at Brand

In India over 30 or more companies in last 5-6 years on an average has gone 3X in terms of revenue.

By Nusra Sub Editor

Investing in food business sector is part of all industry and domestic consumption. It’s a part of larger theme. And one particular thing to invest in has received the maximum number of attention so far. In fact there have been 50 investments in the space in the last 8-10 years which is almost $5oo million. In India over 30 or more companies in last 5-6 years on an average has gone 3X in terms of revenues which is pretty impressive compared to companies command globally.

Also, as this industry is highly fragmented into segments, the food tech and the food manufacturing the consumer story in this country in next decade which is unfolding is going to be very exciting. Food manufacturing in India is not very exciting to invest; it may come up as major sector of investment in next five years but today food processing is a major investment ground. Casual Dining sector has left QSR and Fine dining sector behind of the investment race. According to experts here are 6 reasons which make this segment more palatable for investors to put their money:

Controllable cost: Casual dining chains know where to invest their money. They work on a cost controlling model making investors grab the segment as their favourite land to put their money in.

Lower Leveraging: Food businesses are over leveraged for making quick money, faster exit. But, casual dining business takes time for break even. It is a long time business if you have a strong model to cash on bigger returns.

Ability to tweak food range: Casual dining gets a wide variety of customers. From young crowds to aspirational millennial and mid level people. Hence, restaurant can tweak their price range according to the market and people preference at a particular location. For eg: a same restaurant serving food at Sangam Courtyard in Delhi could tweak the menu at say locations like CyberHub Gurgaon where there is a mix of crowd.

Ability to reach customers’: Customers are always king. Restaurants should have an ability to reach customers. Casual dining with an ease of comfort attracts much more customers as compared to other segments making it a preferred destination for all.

Scalability: Casual dining segment runs on scalability as there is lot of potential to grow and mould the brand according to the need of the customer.

Cost subsidising: It is always good to do cost subsidising. The item which is not running good can be priced low and which is doing good can be priced high.

Hence, we can say that with casual dining capturing the young and comfy class there is more room and willingness among investors to put their money into the segment. 

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