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Catering Mania


The catering industry in India has been consistently growing in recent years and many players have realised the segment’s growth potential. Although there are no official figures out on the size of the industry, it cannot be denied that this industry is here to stay.

The catering segment in India is mainly dominated by unorganised players, many of who run their business from the comfort of their homes and small establishments. But in recent years, the scenario has changed. A lot of organised operators comprising international catering companies and big restaurant chains have also started taking catering seriously. Catering is no more limited to weddings and birthday parties in the country. Moreover, the imposition of various kinds of taxes by the government is also resulting in the growth of the catering business.

According to , Vice President – Marketing and Communications, Sodexo India On-Site Services, which operates its catering business in 102 Indian cities, “Our market is classified into two sections – the total food services market in India, which is about INR 620 bn, and the target food services market in India, which is about INR 91 bn. As per our estimates, close to 25 percent of our target market is controlled by organised players.”

According to Neha Manekia, Director, Silver Spoon Gourmet – a Mumbai – based catering company that specialises in gourmet European cuisine — there aren’t any recent figures, but the industry in India has been consistently growing at the annual growth rate of 15-20 percent. In 2009, the industry was worth INR 15,000 crore. Deepti Dadlani, Brand Marketing and Communications Head, deGustibus Hospitality, which runs Moveable Feast — the catering division of the company — agrees. “It will be very difficult to comment on the overall market size of the organised catering segment of the country because I don’t think there is any real figure that is out yet,” she adds.

Growth Factors

In the next five years, Sodexo India On-Site Services expects the organised food retailing segment to broaden its target market in food services with an approximate 15 percent growth rate. On the consumer front, increased mobility, exposure, aspirations and availability of a substantially wider range and products would also contribute to this market shift. In addition, increased regulation and stress on quality and safety would lead to a preference for organised players.

With the changing needs and lifestyles of consumers, global as well as Indian food consumption patterns are rapidly evolving. According to Tikekar, a huge production base, increasing organised food retailing and growing export opportunities for favourable regulatory environment are all leading to the growth of the sector. Organisations and consumers have become more conscious about what they serve and eat. She adds, “The importance of quality and safety has become the most vital factor when it comes to catering at corporates. Also, the food offered to employees is widely considered one of the important aspects for retaining employees. Moreover, the government has strengthened the food safety norms due to which organisations prefer companies that have very strong health and safety norms, and this to a large extent is driving the growth,” states Tikekar.

Manekia reasons, “People celebrate a lot of occasions at home now, since due to increased taxes, dining and drinking outside has become all the more expensive, which is also fuelling the growth of catering.”


The corporate catering market is highly fragmented in India, which includes a handful of international and organised players. “Sodexo is the leader in the segment with more than 10 percent of the ,” informs Tikekar. Recently, the market has also seen many consolidations with international companies collaborating with local organisations. This surge has led to a healthy increase in the competition from international players with many of them making strategic investments in the country.

“The competition in this particular segment is also high. With more and more companies these days entering the hospitality sector, the competition has become quite intense. It is tough, but it is good because increased competition also leads to the development and expansion of the market as a whole,” believes Tikekar.

Dadlani, on the other hand, believes that competition is not a matter of concern. “What works to our advantage is that we have a monopoly in catering, especially in weddings and banquets — something that most players don’t have. Moreover, we cater at least two functions daily, every single day throughout the year. Nevertheless, the competition is cut throat in this industry, and so are the challenges.”

“There are very few catering chains in India and most have developed after having an established restaurant,” adds Manekia. “Business is always tough, you have to be at the top of your game every single day to waive off the competition and survive another day.”

According to Dadlani, nobody makes a 100 percent payment in advance in the catering business. “So if you do not deliver the promise and the expectation, you are going to lose money. Secondly, no one is going to use your services again. Forget that you would even be recommended,” she states. Big catering companies today also hire a group of quality checkers for their catering division to conduct a check of each and every part of the function — be it decor, curtlery or food — to ensure that they do not run to the difficult waters.


Moveable Feast has recently started to organise a number of functions outside Mumbai. “We cater to clients who are are looking for high-quality food and are ready to pay a slight premium on it,” reveals Dadlani. “We were the catering company for the Filmfare Awards and the IPL. We do catering for a lot of gymkhanas, high net worth individuals and a lot of middle class functions too. We do corporate events on a daily basis,” she adds.

“Being a niche gourmet company, our food is enjoyed by a wide variety of clients. The biggest companies in Mumbai from to Ceat, to Rolls Royce are part of our esteemed client pool,” says Manekia of Silver Spoon Gourmet. The company also caters to home-based parties but specialises in gourmet European food only.

Sodexo, whose services extend nationwide, sees potential growth in the healthcare and education sectors, although these are at quite a nascent stage. As per their estimates, they expect substantial rise in the services provided to high-end hospitals, educational institutes, etc.

Food Inflation

According to the global rating agency Moody’s, India’s high food inflation is credit negative for the country as it hurts government finances and curtails the ability of the RBI to deal with monetary issues. The country has been facing the problem of food inflation for quite a long time now, which has greatly affected the food service industry.

Claiming that the company has a very clear-cut policy of profit, Dadlani says: “Our whole process is standardised. As far as possible, we try to absorb the cost of inflation within our company. We have been doing it for a long time now. Many a times, customers are not aware of the economics of the food industry, and they are not ready to listen. But yes, sometimes when you cannot absorb more, you have to increase the prices.”

Sodexo India follows a much evolved and globally successful template for food cost management called ‘Five Star’. This has produced results in all major Sodexo countries over the last eight years, says Tikekar, and involves many steps such as optimisation of specifications, item rationalisation, vendor rationalisation, efficient distribution, logistics cost optimisation, and source buying to deliver better inflation control.

Success Mantra

For every business to be successful, there are some golden rules to follow and there are some major dont’s that need to be kept in mind. Manekia suggests not to underestimate the time taken and the costs associated with setting up the food business. “It will always take double the money and time you ideally expect it to take,” she says.

Dadlani, on the other hand, feels that catering companies should always be transparent and never cheat. “Deliver your promise because once you lose the trust of your end user, you are never going to get it back. Don’t take your position in the market for granted and always be updated on new trends. And, last but not the least, offer value for money to your customer,” she suggests

Tikekar informs: “Every day, Sodexo India On-site Services touches the lives of 8,00,000 consumers, all of whom rely on our safety systems. Maintaining a healthy and safe environment has always been a priority for Sodexo. We place high emphasis on achieving a world class health and safety culture at our client sites and were delighted to receive the prestigious ‘International Safety Award 2013’ with Merit from the British Safety Council, this year as a recognition of our efforts. Our other prime focus is on promoting healthier lifestyle choices, and we do this by offering varied and balanced food options with a reduced intake of sugar, salt and fats at our client sites with the help of an in-house dietitian, menu development chefs, etc.”

Emergence of MNCs

The emersion of MNCs is leading to an increased focus on health and safety. These companies stress on stringent safety norms in their own day-to-day businesses and expect the same from their outsourced food partners as well. This is leading to a preference for global companies who have a high focus on standards. “As far as direct competition is concerned, MNCs don’t pose a risk but will help in increased clientele definitely. It will be good for us,” concludes Manekia.

It is quite clear that the catering scenario in India is only getting competitive, riding on various factors that is propelling its growth. And this spells good news for the end consumer who is going to get good quality hygienic food at a very well structured price. But it is yet to be seen, how this industry shapes itself in the coming future .