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Emerging foodservice trends in India

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The Indian restaurant industry has evolved greatly over the last two decades, across the value chain. New formats have evolved, there is a higher service level and supply chain practices have greatly improved.
The fortunes of the restaurant industry – which are linked with the changes – have grown and in turn, influenced the consumption pattern and ushered in lifestyle changes in as far as consumers are concerned. Consumption has also been affected increasing income and exposure to new avenues.

Growth of the Indian Restaurant Industry

In the year 2014, the Indian restaurant industry has grown at a CAGR of 21.1 per cent from 2010 to reach $151.6 billion. This double digit growth has been continuing for the last two years. It is expected that by 2019, the Indian restaurant industry – which accounts for 11.8 per cent of the Asia-Pacific restaurant industry – will see an increase of 61.9 per cent from 2014 and its value will reach up to $245.4 billion.
In 2014, the industry employed 3.5 million people, registering a CAGR of 2.4 per cent between 2010 and 2014. It is expected that this number would touch 3.8 million by 2019.
There are 1.5 million food outlets in India out of which 3,000 are from the organised sector. The unorganised restaurant market includes roadside vendors, dhabas, vans, carts, street stalls and trolleys. The organised restaurant market includes Quick Service Restaurants (QSR), full service restaurants, PBCL (Pubs, Bars, Clubs and Lounges), food courts and kiosks.
The restaurant and cafe segments contribute the highest in terms of sales for the entire industry. It accounted for total sales of $115.1 billion in 2014, which was 75.9 per cent of the total industry value. It was followed by the fast food industry, which contributed $30.3 billion in sales, which is equal to 20 per cent of the industry value.
People in metro cities consider eating out culture as a daily part of social life. The trend is also becoming popular in tier-I and tier-II cities in the country. Restaurants have recognised this behaviour and have customised their offerings accordingly. They are now offering value for money products in addition to what they are already offering in their international menus. Even their menus are reflecting food that these young customers want.
Apart from this, there are a few other trends that are ruling the industry:

Transformation of Menus

Emerging food service trends in India
Multinationals are focusing towards local tastes and changing their offerings with Indian flavours. Similarly, Indian players are globalising their menu. From free ketchups to Masala Grill Burger, they are offering plenty of choices to please Indian consumers. Close to 70 per cent of the McDonald’s menu is customised according to the Indian taste. KFC has also started offering Paneer Zinger and Veg Twisters in its menu. Starbucks have also included Tandoori Paneer Sandwich, Chatpata Paratha Wrap and Murg Kathi Wrap in their menu along with their global offerings.

Value Meals

Emerging food service trends in IndiaConsumers in India seek value-based offers. QSR chains have bundled their multiple offerings into one and are providing value meals. This has helped them move to tier-II cities where price sensitivity is higher and consumer looks to keep their costs on the lower side. This has also been accepted by the younger population and has resulted in an increased trend of consuming food outside the home.

Buffet Service

Emerging food service trends in IndiaEmerging food service trends in IndiaThe buffet concept is getting acceptance by a large number of Indian consumers. Fixed menu with buffet, which was earlier found in hotels, has now moved to restaurants. Both casual dining and fine dining restaurants are getting along with buffet very well. Although the buffet concept has a fixed menu to offer, restaurants like Barbeque Nation and Great Kabab Factory are overcoming this barrier by having a variety of food items followed by salad, desserts, soups and appetisers.
Consumer experience in such places is unique as they offer unlimited food at fixed prices, which increases the value for money for consumers. Also, there is no additional charge laid upon consumers once they enter the restaurant. The format is also liked when going out in groups with friends and families, corporate and casual  etc., which is one of the reasons why buffet is becoming popular in India. The groups may get enough variety of dishes in unlimited quantity with prices fixed. It also reduces the ordering time for consumers in the restaurant.

Renovation of Indian Cuisine

Emerging food service trends in India
India has a rich culinary culture. Every state has its own dishes and recipes. Traditionally north and south Indian food were popular in most parts of country when eating out. These regional dishes have been adapted to different regions within the country. Migration has helped in mixing up of the menus. A Gujarat Thali may consist of a south Indian item or even a pizza. Many restaurants have also combined international food with local food. Pizaa Hut launched Brizza by combining Indian biryani with pizza at a starting price of Rs.99. Jumbo King also launched Jambosa, an extension of the traditional Indian samosa. Customers are also seeking variety and tend to visit region-specific or country specific eateries.

Takeaways and Home Delivery

Emerging food service trends in India
Home delivery/ takeaway format has registered a growth of 13 per cent in terms of value and reached Rs 2 billion in market size in 2013. According to a Euromonitor analysis, the increasing number of working population and migration of people from home towns are the drivers for growth of these formats. Convenience has also come up as another major reason, especially where traffic jams during weekends is a problem.
The growth of delivery and takeaways is also beneficial as it requires less space. They need not invest in decor. Improvement in delivery time, packaging and ordering through the web has supported this.
The ease of ordering for delivery has also pushed up this format. Consumers, nowadays are very comfortable with computers and mobiles, which has helped adoption of the food from phone concept at large. Domino’s is a leading brand on this front in the QSR segment as 50 per cent of its revenues come from deliveries and this is set to double in the coming years. Consumers find it more convenient to order online or from the apps of food chains.
The growth of apps and web-based orders will continue with their upward curve as more and more consumers come online. Consumers are able to compare multiple restaurants through their gadgets in one go.
With platforms like Zomato and FoodPanda, consumers are able to order and rate the services of restaurants based on their experience. They can also check and compare prices, go through the experiences of others through online comments – better known as e-word of mouth – to take their decisions while staying at their own places.

Street Food

Emerging food service trends in India
Street food is widely accepted across India due to its lower price and convenience. According to Euromonitor, the segment grew at the rate of 14 per cent in year 2013. Reasons for the popularity of street foods in India are many. Vendors are able to customise their offerings according to local tastes and preferences. They need fewer infrastructures to operate due to lower rentals, low operating cost and less manpower as compared to the other formats. This category has always been dominated by Indian food, such as chaat, samosa, and panipuri. But now, even International foods like pizza, burger and Chinese are common.
Hygiene is one of the factors that makes consumers skeptical about the food offered by street kiosks, although the convenience and prices make them attractive.
Although this segment of food service in India is dominated by the unorganised and small players, brands like BurgerMan are creating a chain with their kiosks. BurgerMan has a 13 per cent share in the organised segment. Coffee shops like Café Coffee Day have also began to place  their kiosks in markets, shopping centres, Metros, airports, offices and college campuses.

Stand-Alone Stores

Emerging food service trends in India
Stand-alones will remain the largest category but will lose their share to travel locations and leisure. They have shown strong growth in the past and are expected to continue in the future as well. However, the growth rate of stand-alones has slowed down since 2013.
At the same time, leisure and retail locations have shown a promising growth. The change is the reflection of shifting consumer behaviour when eating out. The young population is now willing to try on new concepts, which are supported by a rising income.

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