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Expert Speak: Gazing into the future of foodservice in India

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The extremely competitive food industry of India has shown us time and again the significance of innovation. From a filter coffee to espresso and latte or from cutting chai to detox and flavoured teas, from a simple vadapav to a range of vadapav variants, we have been spoilt for choices.

Expert Speak: Gazing into the future of foodservice in India
According to a report by Traxcn, there are close to 200 food ordering and delivery startups in India and the way forward in 2017 is only going to get more competitive

The year 2015 belonged to food tech startups in many ways. Players like Zomato, Food Panda, Swiggy, Runnr raised massive funding at attractive valuations but the party didn’t last long and soon the sector began to crumble in the second half of 2015 impacting the investment climate throughout 2016.

Some startups were scaled down, some other shut down, while a few were absorbed by larger players backed by deep pocket investors. However, green shoots started appearing in the second half of 2016 with food tech startups like Mr Hot, Idea Chakki, Monkey Box and YumLane raising funds from marquee investors like Ratan Tata, Binny Bansal, Blume Ventures and crowd funding platform IvyCamp.

The QSR market in India is expected to touch $4.1 billion by 2020, according to a report by . The report also points out that QSR is the fastest growing segment in the Indian food service industry.

According to a report by , there are close to 200 food ordering and delivery startups in India. Hence, the way forward in 2017 is only going to get more competitive. Here are some trends that will shape the food service industry in India in the coming years.

Real Food: One trend that has been building up over the years is the need for hygienic eating, or food made with ingredients that are free of additives, antibiotics, and other artificial components. But the ‘real food’ concept goes beyond – it includes adding the authenticity of local ingredients. The formats selling authentic Indian food with a twist are likely to acquire customers faster than the ones doling out discounts on every order and burning cash to maintain market share.

New Definition of Healthy: What is really interesting to note is that the traditional definition of ‘healthy’ food is changing with time. While once ‘being healthy’ was all about cutting calories and adding salads to the menu, it now revolves around transparency of the production chain which is of utmost importance. In the ever-evolving digital era, food chains and food brands are on their toes round the clock to take action before they are called out for. The QSRs also have to maintain a standardised taste and unit economics if they have the ambition to become a pan India player.

Ethnic Modern Blends: The QSR sector has always managed to woo the customers by adding ‘n’ number of variations to simple food. This trend will get more exciting with introduction of more ethnic flavours with modern food plating. For instance, the popular chicken nuggets gets a vegetarian twist with achari nuggets.

Tech Savvy Ordering: The newest entrant in QSR industry in 2016 was the concept of Online Ordering – this trend will continue to offer a big opportunity for restaurants, both in terms of customer service and behind the scenes. Ordering via mobile app gives restaurants an insight on customer data, to keep a track on most loving recipe on your menu real time, and delivers orders directly to the kitchen, cutting out the middle man. As mobile and online ordering increase, in-store tablets may become more seamlessly integrated and accepted as part of the fast-food experience.

Bowl-ing!: Choose your choice of veggies and sauces and make your own salad bowl. In 2017 this trend looks promising for customised meal options. For instance, choosing a customised meal to make your own Yoghurt bowl topped with your choice of sprinklers and toppings. It’s a lot easier and faster to assemble a bowl than plated upscale entrees. Indian consumers are becoming more open to DIY concepts. Restaurants and QSRs should add more DIY items on their menu to drive sales.

While these trends are likely to rock 2017, companies in QSR segment – be it a food tech or any other form of food service – will still have to work around the challenges like maintaining unit economics, not losing money on every order, undertake sensible expansion strategy and of course start making some real money.