Home Food Service The Booming Foodservice Sector in East India –The Near Future

The Booming Foodservice Sector in East India –The Near Future

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Even though East India’s food market holds immense potential, the region has never been on top of the agenda of organised foodservice chains when they draw up their expansion plans. But the region is seeing growth despite being embroiled in political turmoil, fight for ethnic turfs, slow development, poor infrastructure, untrained human resource, and an inadequate supply chain management, all of which have made potential investors from other states of the country wary of setting up business here. Despite its problems, the resilient East is determined to be part of India’s growth story. It’s just a matter of time

Currently, India’s food and beverage (F&B) business is worth Rs 45,000 crore, of which the QSR segment contributes 7 percent, and is poised to grow at a CAGR of 22 percent between 2012 and 2017.“East is the quintessential melting pot of cuisines from Bengali to Continental and Chinese in many variations. Formats include fine dining to informal cafes. A restaurant opens every other day. A new market has opened up for ‘luxury restaurants’ and is already booming as they are destinations that don’t just serve food and beverages but offer an experience in being entertained. In my opinion, the foodservice industry just cannot fail to do well in the East,” says Muckth Dograa, Food & Beverage Manager, ITC Sonar.

Eating out: A lifestyle

The whole concept of eating out, packing food for eating at home or ordering in after a busy day at work, is becoming a norm as lifestyles undergo changes, disposable incomes rise, and factors such as paucity of time and convenience set in. Pressed for time, families seek the comfort and convenience of eating, but are concerned about eating healthy as well. Observing this trend, many restaurants have introduced healthier and family meals such as thalis. Another incentive for eating out is the desire to indulge. Restaurants are luring customers with a wide range of cuisines that are popular across the world.

Like other regions in India where people are noted for their distinct fondness for food, Easterners too love their meals. Prominent cities such as Kolkata and Bhubneshwar, especially, have witnessed a rapid expansion of the foodservice sector in the last few years.

Changing Dynamics

The “restaurant culture” has accelerated and become an integral part of our lifestyle.  According to Pratichee Kapoor, Associate Director, Retail, and Shruti Garyali, Senior Consultant, Retail, at : “There has been a move towards expanding taste horizons as a result of the overall lifestyle changes. In places such as Kolkata and smaller cities like Guwahati, Shillong, and Bhubaneswar, eating out is already a popular trend. With the blending together of so many cultures and cosmopolitan influences on our basic lifestyles, foodies all over are raring over new and distinctly different lifestyles. However, a similar trend to explore new cuisines and brands is emerging in other cities such as Patna, Ranchi, and Guwahati. This has been a result of evolution of aspirations of younger generation, increased openness to foreign culture, an increase in disposable incomes, rise in presence of branded retail chains, and growth of entertainment as a concept with the emergence of malls and multi-screen multiplexes. All of this in turn has increased consumers’ exposure levels and also influenced the way they eat by encouraging them to venture out and try new cuisines.”

Concepts and Innovations

Several innovative and out-of-the-box restaurant concepts have made their way into the Eastern horizon. Restaurant owners are going the extra mile to pull in more and more foodies not just by dishing out good food but also giving them a fine-dining experience. Eggspress, an egg themed restaurant, and Kaidi Kitchen (a prison themed place to eat) are examples of places that offer new experiences, clearly drawing light to the fact that food aficionados are willing to experiment with new concepts and cuisines.

“Innovative concepts always sell. I remember seeking professional help from food consultants and being discouraged by them saying nothing different can be done with eggs. An egg is just like a potato, it’s a common food item, what more can you do with it. Well, I did a lot with eggs as they are healthy, tasty and as one of the most commonly consumed food items, they are everyone’s favourite, and have wide acceptability amongst consumers of all ages,” says Rajiv Jalan, Owner of Eggspress.

Ravi Ojha, Owner, Kaidi Kitchen, explains, “Our competition is with our own selves; we believe in quality edge where competition ends in itself. We strive to provide the best of food quality and service so that we get repetitive customers. We have explored very well and tried to give our customers which isn’t available anywhere in fine-dining restaurant easily. People here are adventurous with regards to their cuisine preference.”

Says Bibi Sarkar, Owner of Taaja’s and the recently opened Cafe 23, “Opening a restaurant on a theme is the new mantra to success. The idea behind opening a café was to give Kolkatans a taste of a European café which is not a coffee shop but an all day casual dining place, showcasing food from across the globe.”

Tier II and III Influence

Most of the domestic and international chains that have already entered or are planning to enter the Eastern region start with the big cities, but they also have an aim to eventually move to smaller markets. Their key concern is to be able to build enough scale in a few big cities so that they can streamline their logistics and supply chain processes before setting up stores in the smaller ones. In fact, with metros now reaching saturation point, it is the small towns and the suburbs of metros that are showing great promise. For instance, Jamshedpur and Raipur are booming markets.

Emerging trends in the East

There are certain difficulties that one faces while dealing with a customer base in East India. In Kolkata, the number of vegterians is more than the non-vegetarians, while this is not so in other metros. Although the eating out culture is now rising in Kolkata, price factor still remains an important consideration here as compared to Mumbai. In Mumbai particularly, people like to visit specific restaurants that have a celebrity status, while in Kolkata the quality of food and service is the celebrity. Food alone sells here. There cannot be anything bigger than food in Kolkata. Kolkata and other neighbouring cities have seen the advent of several amazing food joints in the last decade or so, setting off a spate of trends in East.

Broadly speaking the food segment in the East can be classified into three brackets:

• Luxury restaurants – To be found in five-star luxury hotels and some exclusive stand-alones.

• Diners and other restaurants – Budget hotels and plenty of stand-alones.

• Club kind – Pocket friendly, limited fare and average ambience restaurants usually in clubs, commercial zones, etc.

Growing Importance of food Courts

Food has always played an extremely important role in all shopping and market areas of India. The need for being peckish while shopping is an Indian phenomenon. This theory has withstood the test of time and the malls have just taken this to another level. Further food has become as important as brands and the quality of the food has direct results on the success of a mall. This includes all F&B options that run through the mall.

“There are many factors leading to the success of a good food court; however, there are a few fundamentals that should not be tempered with. The offerings between brands and non-brands must strike a balance which must span across age groups. Ambience, customer’s comfort levels, hygiene and sanitation are the issues that are absolutely non-negotiable. India specifically caters to a wide variety of taste and it becomes so much more important to address a balance between value and variety,” says , GM Operations, CESC Properties, RP- Group.

Brands have become very important in the food courts. ’s, Pizza Hut, Domino’s, , , etc. have now become synonymous with standardised quality of QSR. Having these brands is quintessential for a food court and subsequently for a mall’s success. Placing them correctly in the mall is all the more important. The importance of having these killer brands in the designated area, which will help drive the customers, is huge. Food is as much a differentiator as it is a driver. A family of four may very well have a dosa, chaat, pizza and a burger, which we call a typical Indian family. A balance of foreign and Indian food has to be there. If something is not working, it should be churned out. Any mall takes about one and a half to two years to settle down and it is important that the same time is given to the F&B operators. A food court or  the F&B area has always been the only part of a mall which from the very beginning has enjoyed a combination of minimum guarantee or a percentage of revenue as a revenue model for the developer, in comparison for a fixed rent or an escalation every year for a new food retailer, which shows the reasons for importance that food as an offering holds in a retail development.

“The food courts have become a very integral, social community house for the DINKS and young couples. It also seems to cater as the local takeaway or dinner options. This has happened because there is no time for cooking. The luxury of time has been reduced by everyone due to hectic schedules and overworked jobs. We shall see food courts taking on a more social and a centre of a hub of activities for families as the evolving workforce transcends from low paid to medium and high paid jobs, as the changing skillsets required to survive in this demanding and competitive work environment. The skillset requirements in the last 10 years have amazingly evolved and changed. There is an economic upheaval in India which will have a dual effect on both the Labour Force and the effect on the families,” says Mehra.

Near Future

Majorly and exponentially year on year, the last few years have seen a few restaurants that could get by with anything. There were few restaurants in each cuisine and fewer choices for the consumers. Today, the scenario has totally changed with far more choices and branded cuisines making a foray and doing well. People will only eat out – it will be convenient, varying in experience and pocket friendly on one hand and on the other hand eating out will be the only form of socialising available and people will want to explore newer trends with convergence of experience such as entertainment, great ambience and good cuisine.

There are certain problems indigenous to certain paces. East India has its share of problems, but food retailers need to look beyond it. East India market should be treated as any other market of the country; a food retailer needs to keep in mind that localising is the key to success in the Eastern market.

According to the leading chef, Chef Clement, Hyatt Regency, “World cuisine is well catching up in the East since local customers here are well travelled and they are creating and looking for the authentic taste. The Eastern part of the country in general has real foodies and the market is shaping up well and prefers authenticity. Customers here actually know what they are looking for. They never hesitate to talk about their feedback, which is always a good factor for the growth”

“At Hyatt, we interact with vegetarian food lovers, who are really health conscious. They also like to experience different vegetarian cuisines of the world. Anticipating the guests’ needs, chefs should customise the food recipe keeping the authenticity in mind. The evolution of the foodservice sector in the East has been tremendous. New hotels/free standing restaurant with new themes and concepts have come up. Yes, the foodservice sector in the East is poised to grow.”