Bengaluru’s foodservice industry valued at Rs 11,740: NRAI Report

Bengaluru’s foodservice industry valued at Rs 11,740: NRAI Report

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Bengaluru, which is also referred to as the Silicon Valley of India is the second fastest growing major metropolis in the country, and the fourth fastest growing Foodservice market in the country according to a report by the National Restaurants Association of India ().

Bengaluru's foodservice industry valued at Rs 11,740: NRAI Report
The employment generated by foodservices in the city is around 2,15,000 people in both organized and unorganized segments

Discussing the report, NRAI President, restaurateur, remarked, “Bengaluru is the fourth largest Foodservice market after Delhi, Mumbai and Kolkata. The employment generated by Foodservice in the city is around 2,15,000 people in both the organized and unorganized segments. The Organized segment employs around 1,60,000 (74 per cent) people of the total workforce.”

Challenges Faced

“Bengaluru is the perfect blend of new versus the old when it comes to the foodservice sector; which is also the reason why the sector has seen an exponential growth over the last few years. Though there are still several issues dampening the spirit of the sector. Until recently, the closing hour for pubs/ bars and restaurants followed an archaic time of 11:30 pm. However, the NRAI Bengaluru Chapter was able to champion a change and as of July 2016, the excise officer extended the deadline to 01:00 am giving the sector a welcome reprieve,” Amlani added.

He said that the city’s Foodservice sector is still grappling with its fair share of challenges – like the recent ban on plastic, and ambiguity in rules and regulations of the local Municipal Corporation for the restaurant industry.

“This coupled with the existing Cigarettes and Other Tobacco Products Act and Noise Pollution Act tends to indirectly affect the industry. We are striving to work along with the state Government to ensure ease of doing business along with a simpler license renewal process,” Amlani said.

Opportunities Galore

Noting that this is an exciting time for investors to be in the Food & beverages sector, Trustee and former president of NRAI, , said, “Bengaluru is one of the most prosperous modern business centres in India with a young and demographically diverse population that comprises of students, single working professionals and nuclear families. It has one of the highest eating-out and ordering-in frequencies in the country and averages around seven to eight occasions with an average monthly spend of Rs 5,500-5,750 per household per month. The strong cosmopolitan culture of Bengaluru is also represented by the cuisine mix of the city. I believe this is a great time for new start-up ventures to cash in on the trend.”

In respect to Bengaluru’s foodservices industry, the report highlights that the city’s organized foodservice market (chain and organised standalone) is Rs 7,870 crore, 8 per cent of the total Indian organized market, while the unorganized market holds around 33 per cent share and is valued at Rs 3,870 crore.

According to the report, “The chain market in Bengaluru is estimated to Rs 2,855 crore and is 14 per cent of the overall chain market in the country and is dominated by Casual Dining Restaurants (CDRs), contributing to Rs 1,205 crore (43 per cent) of the city’s chain market followed by Quick Service Restaurants (QSRs) at Rs 1,070 crore (38 per cent).”

Organized standalone market in Bengaluru is again dominated by CDRs. The market size of CDRs in the standalone market is estimated to be Rs 2,770 crore (55 per cent) followed by Pubs, Bar Cafes and Lounges (PBCL) segment with 19 per cent market share.

Organized food services market in Bengaluru is estimated to contribute Rs 800 crore – Rs 900 crore as taxes. An additional tax contribution of Rs 250 crore – Rs 300 crore can be added to the same by conversion of around 30-35 per cent of the unorganized segment to the organized.

Bengaluru – India’s Melting Cauldron

Sharing his thoughts on the recent developments in the restaurant industry in Bengaluru, Chapter Head, NRAI Bengaluru, said, “In the last couple of years, Bengaluru has witnessed a number of trends including farm-to-fork, food walks, pub crawls and molecular gastronomy and regional cuisines. Beer remains the city’s choice beverage and microbreweries have sprung-up giving lovers of lager much choice in artisanal beer. Gastronomically speaking, Bengaluru is India’s melting cauldron!”

“The food industry does robust business catering to tourists and locals alike and despite the challenges, Bengaluru Foodservice sector has come up trumps,” he concluded.