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people 2013-10-09

Indulgence in new food is a challenge for suppliers and restaurateurs

An interview with S. Viraraghavan, Director-Sales & Marketing, Cargill Foods India.

Indulgence in new food is a challenge for suppliers and restaurateurs

In an exclusive interview with Franchise India Viraraghavan talks about the F&B trends and the reason for the success of foreign chains.

On the F&B trends happening in India

This is a complex time and we see several contradictory trends in the market. On one side we see indulgence and new experiences and therefore there is the consumer who wants to experiment with new food. However, on the other side, many restaurateurs try to bring in localisation of food. Experimentation and indulgence in new food is also a challenge for the suppliers and the restaurateur. To be able to do all that at great prices and at the same time providing a great experience is a contradiction.

The NRAI report suggests that there is boom in the industry and the companies are doing a lot of marketing strategy. However, the real picture is a bit different because the economy is also not booming right now. Do you think the picture is different?

I think the trends are inexorable. The fact that people are eating out, out of home consumption is booming. The problem is the price points that people are willing to pay. You can get food by easily going to a mall but there is a large chunk of people who want food that are affordable along with good ambience. They don’t want to go to a hotel where there is no air condition and they don’t eat food which is not seen as food. I think people will eat outside because of the fact that many people are young between the age of 30-20 and also the fact that the disposable income is higher because both the husband and wife are working. The more the people will earn money they will put in the capital to grow it more and that is something what we have to watch for.

What are the reasons for the growth of foreign outlets in India?

I think the drivers are different. The foreign chains are driven by top line, which is not only the revenue but also the outlet. I think they are investing where there is opportunity. Certain multinationals, even my company, has done that in the past so there is no surprise in it. I think Indian companies look for return far earlier. In fact restaurants focus on profitability and therefore the behaviour that you see is manufacture. This is because there is an assumption that in one phase we want to grow and look at profitability 5-6 years later and another phase is we grow as we grow profitable. 

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