The fast food industry is witnessing an unprecedented growth, making the
food services market one of the most promising business sectors not only in India but across the world. The QSR business has grown over the last decade and is a key segment in Indian food service industry. This industry is expected to grow two to three-fold from Rs. 10,000 crore currently to Rs. 25,000 crore over the next five years. Globalisation, higher disposal income, lifestyle shifts, higher proportion of youngsters in the population and changes in consumer behaviour are leading to experimentation and adoption of new food habits.
The advent of foreign QSRs and access to world class food and services at an affordable price has changed the market dynamics favourably. The popularity and wider spread of the F&B sector has amplified the opportunities for entrepreneurs. One of the fastest growing concepts in the restaurant industry over the last few years has been the ‘fast casual restaurant’. In this concept, consumers get to taste great tasting food at affordable price
points while on the go. This segment is expected to keep growing in 2016 and beyond due to the busy lifestyle of urban consumers.
In 2016, fast food industry will witness operational efficiency, growth in delivery-focused formats and services, social marketing, increasing importance of sides and desserts within the menu mix. Besides, consumers’ in-store experience will improve further, which will be prompted by e-commerce, home delivery and social media.
In the past five years, technology has taken an advanced role and there has been a lot of advancement in the mobile app players. Right from ordering flight tickets, booking cabs, ordering consumer goods to ordering groceries home, apps are now widely being used by consumers, especially in the Indian metros. This trend in the food sector has led to an era of ‘Urbanisation’ of food. Unlike many other earlier channels – which were inherently aggregators – the new apps actually deliver the food to your table in less than 30 minutes with a lot of unique elements. Customers are now more demanding than ever, and their expectations of the in-store experience are higher than ever before. Using technology in the shops to meet the ever increasing demands of tech-savvy shoppers is a major challenge. It has therefore become necessary for the brand to be present across all customer touch points – whether it is web, mobile, online partner channels, retail, supermarkets, kiosks, airports, tech parks and other retail touch points.
Food service operators are beginning to see penetration not just in the metros but also in the smaller cities and towns. With the availability of proper infrastructure, logistics, increase in disposable income of people, and the growth of the influencers through media and internet, people’s tastes have evolved and demands have increased. Tier I and II cities are emerging as attractive markets and offer immense potential for retailers to expand. However, logistics and distributed proper real estate availability remain a challenge.
Today, consumers have become diverse in choices and dynamic in nature. At the same time, they are more aware and expect higher standards for food safety than before. They expect food to meet their nutritional needs and to be produced ethically respecting the environment, animal health and welfare. Food service operators continue to focus and innovate by exceeding the expectations and demands of their vibrant consumers. To sum up, the fast food industry will continue to grow at faster pace due to globalisation and the lifestyle shift within the urban population. Brands that offer greater food safety, social responsibility, suitable taste & variety, at affordable price points will better connect with these consumers.