The fifth edition of the two-day Food & Grocery Forum India 2012 witnessed a great start on day one with a packed auditorium at Bombay Exhibition Centre, Mumbai. Participating in the pre-inaugural session titled “Numbers and Analysis of Food & Grocery and Food Service Markets,” doyens of the food and grocery business analysed the key trends and implications that will contribute to the growth of the industry in India.
The guest panel comprised Abhishek Malhotra, Partner and Head of Consumer and Retail Practice, Booz & Company India; Abheek Singhi, Partner and Director, Boston Consulting Group (BCG); and Karishma Bhalla, Principal, BCG. Speaking on the Rs 7,000 crore organised foodservice market in India, Malhotra stressed that it is growing at 28 percent in comparison to the total growth of the sector at 13 percent. “Improved penetration of food services has resulted in the growth of this sector. QSR, kiosks, and cafes have contributed immensely to this strong performance in India. The growth has been primarily restricted to seven cities namely New Delhi, Mumbai, Kolkata, and Chennai, to name a few. Over 70 percent of the growth in the organised foodservice retail is coming from these few cities alone. This leaves a huge opportunity in the rest of the country,” he said. Malhotra also pointed out that 70 percent of the eating out population is below 35 years of age and has the money and willingness to spend.
Despite the opportunities and efficiencies, the sector faces challenges too. Unavailability of manpower, high attrition rates, and unfavourable labour laws continue to be the major obstacles for the growth of the sector. In order to maintain good business and good percentage of growth, Malhotra advised the foodservice retail companies to invest in brand building and a strong supply chain management and later scale out to different locations.
Talking on the prospects of the food and grocery retail business in India, Bhalla and Singhi estimated the food market in India and China to generate revenue of around $10 trillion by 2020. “With 80 percent of the growth coming from the unprocessed market, there is significant opportunity for the market to grow. We need to tap the market and work more towards brand manufacturing and retail,” said Singhi.
Bhalla pointed out that according to a new study conducted by the BCG, the new consumer – the Gen I – is willing to spend for the right choices. What they are looking for is convenience and pampering. Food continues to be a major chunk of the spending for this generation with health food being a major attraction.
Indians have a tendency to shop in groups or as families and so the product offerings have to be targeted at families, stressed Bhalla. Creating magic price points, attractive point of sales, focus on category creation, and a strong grip on the supply chain are elements that determine the success of food and grocery sector in India, affirmed the panelists.
Organised by Images Group, Food & Grocery Forum India is a unique forum which brings together the leading modern retailers; organised hotels, restaurants, and catering companies and their suppliers; and progressive grocers from across the country to forge together growth in the sector by sharing best practices, showcasing widest range of products and concepts, and new thoughts.