Meal Vouchers: A disruptive force waiting to erupt

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The meal voucher segment in India has a tremendous potential for growth. India has a market of about 8-10 million users for meal vouchers, though only a million people actually use it. However, now, everyone uses smartphones and companies like Zeta and Sodexo, which are into the meal ticket business, can leverage the ubiquity of smartphones to great effect and grow the market for meal vouchers in India.
Companies and organisations are always looking for innovative ways to reward their employees and meal vouchers is one of the ways to do so. In recent years, HR departments have taken to meal vouchers in a big way as it helps to pay for an employee’s meals at the office or outside. A meal voucher is a meal ticket in paper or digital form given to employees as an employee benefit, allowing them to eat at outside restaurants and purchase food and nonalcoholic beverages.
Meal vouchers work to the advantage of both the employers and employees. The employers would like their employees to have adequate meal support so as to boost productivity and for them to work efficiently. At the same time, employees want to get the right work environment and support for themselves to perform their work duties better. The net result is a win-win for all concerned.
There have been studies conducted that show a direct relationship between employee engagement, workplace productivity and adequate meal support for the employees.
The meal voucher segment in India has a tremendous potential for growth. The Indian economy is growing at a rapid clip and its Food Retail sector is witnessing an unprecedented boom.
Industry estimates reckon that India has a market of about 8-10 million users for meal vouchers, though only a million people actually use it. However, now, everyone uses smartphones and companies like Zeta and Sodexo, which are into the meal ticket business, can leverage the ubiquity of smartphones to great effect.
Although the concept is an invention of the West, it is catching up fast in the service industry. The employees aren’t complaining either, since meal vouchers save them taxes.
These vouchers work as a motivational tool and create an allegiance among workers who value the consideration for their welfare, building a better employer-employee rapport. However, receiving or granting approvals for expenses is a nightmarish process not just for organisations but for all the parties involved, including the HR, management and employees.
Now, with meal vouchers going digital – meal vouchers by Zeta is one such example – employees can either use or transfer the vouchers to merchants over mobile while HR teams have the ease of one-click distribution via a desktop app. And all of this in a matter of few seconds.
zeta-mealvoucher“Ours is a first-of-its-kind solution to make meal vouchers an employee benefit, accessible to not only large enterprises, but also the medium and small companies. Employees can also benefit from thewidest acceptance of food merchants across the country,” says CEO and Cofounder of Zeta, Bhavin Turakhia, whose meal vouchers solution is designed to make management and distribution
of vouchers extremely smooth for corporates.
For employees, too, the solution promises ease of access and use, along with tax savings. Zeta Meal Vouchers can be used through various ways like the Zeta app and a physical MasterCard powered Zeta Super Card.
Sodexo, a global player in the meal benefit industry, offers secured pre-paid instruments with security features that are accepted at a proprietary network of merchant establishments spread across over 1,400 cities worldwide. Sodexo Meal Pass Card is a rupee-denominated reloadable magnetic stripe PIN based prepaid meal card offered by Sodexo. It is a proprietary card that is issued to corporates as part of their employee benefit programs and accepted at Sodexo merchant outlets for food and non-alcoholic beverages.
“Sodexo is the only company in India that provides an Integrated Meal Benefit Program for corporates comprising Meal Card, Resto Card, Cafeteria Card and Meal Voucher. It is the only company in India that has a Proprietary Meal Card Network. This enables the company to offer a complete bouquet of services for employee benefit programs while operating at the highest levels of compliance,” says MD, Benefits & Rewards Services, Sodexo SVC, Rajiv Warrier.
Market for Meal Vouchers
The organisations involved in the business of meal vouchers consider it a right time to tap the unexploited sector in the country. Zeta, a leading player in the meal voucher industry, is gunning for the local meal voucher market reckoned at worth Rs 4,000 crore.
“We have over 110 corporates that have signed up with Zeta and are happy customers using our first product – Zeta Meal Vouchers – which was launched in January this year. Our product has seen a warm welcome in the market, which lays down a steady path for the future already,” says Turakhia.
sodexoSodexo also believes that the meal benefit industry in India (including meal vouchers/cards and free or subsidised meals provided by companies) offers tremendous opportunities for growth and is looking to be a leader in this market, which it values to be now worth approximately Rs 7,500 crore annually.
“The meal benefits industry in India still has a lot of headroom for growth.The migration to cards and digital payments is likely to help maintain the growth trajectory for many years,” says Warrier.
Features & Offerings
Zeta has witnessed an exponential growth in the sector with one of its primary products – Zeta Meal Voucher – becoming a runaway success since its launch in January this year. According to Turakhia, the company has been successfully adding a new client each working day. Zeta offers a range of services to its customers.
Zeta Meal Voucher is a fully customised product and provides a 360-degree flexibility to firms. This can be tailored to revolve around the parameters and policies set by an organisation. In addition, the meal voucher is fully in compliance with the RBI norms and IT guidelines. It also offers a single digital platform for employee benefits and tax reimbursement.
The voucher also provides comprehensive payment channels. Zeta’s app operates even without the accessibility of the internet, and for non-smart phone users Zeta has developed a Zeta Super Card.
The company has developed the Zeta app and this assists the users to accomplish a transaction in less than five seconds, using a smartphone. Priority has been given to the interest of retailers and Zeta delivers a complete package that integrates perfectly with the existing POS/EDC terminals of merchants.
Sodexo, which is amongst the top two companies worldwide in the service vouchers and card segment industry, is no less gung-ho about its prospects in the Indian market. The organisation has a substantial grasp of the Indian market as over 6,000 firms across both the private and public sector have opted for the Sodexo meal benefit plan.
Sodexo provides meal vouchers and pre-paid cards, which can be loaded with the value of meal benefit. These can be used at over 25,000 outlets across India for buying food and non-alcoholic beverages. It offers a range of services in the form of employee benefit solutions to clients and their employees. The company also gives value-added deals and promotions that the Sodexo card offers from time to time.
Operating Mechanism
Sodexo’s clients agree on the eligibility per employee and place request to load cards with an amount every month or provide an equivalent value of meal vouchers. Sodexo, on most occasions, first issues pre-paid cards and then loads them monthly with the specified amount.
Employees can use these cards for purchasing food and non-alcoholic beverages at any affiliated outlet of Sodexo across India. The merchants are reimbursed by Sodexo for the purchases made at their outlets as per the contract. Sodexo earns a commission on these transactions from the merchants and a commission of issuance from the clients.
In a similar fashion, Zeta charges a fee from companies in lieu of the meal voucher service. The firm levies a small fee from the merchants for a tie-up with Zeta.
A Win-Win
Meal benefit programmes have a far-reaching positive impact on various segments of society. Consumers across the world receive a meal benefit that can be redeemed at the restaurants of their choice, which in turn helps them improve their quality of life. This benefit contributes significantly to the business of small merchants, who in turn are able to use that money and put it to better use.
For HR professionals, the meal benefit program is a great way to ensure that their employees eat healthy meals during work, which in turn help them to stay fit, increase productivity and remain motivated.
The role of vouchers/cards can be extended beyond its traditional usage. Government can use it for playing a larger role in the public distribution system nationwide. They can also be used for other purposeful interventions such as fulfilling mass social obligations like the alleviation of hunger amongst under- privileged sections of society,
The growth of the meal voucher business in India was until now rather stunted owing to several issues that come with distribution, management and usage of vouchers. Corporates found it extremely expensive to manage and distribute vouchers. Employees found it difficult to locate stores that accept vouchers. This often resulted in companies not offering meal vouchers as a tax benefit and employees lost out about 12,000 every year in taxes.
However, the market has developed and has immense potential to grow, with approximately only one million employees using meal vouchers in some form or the other. The possible market size is estimated at over 10 million users and companies like Zeta and Sodexo want to be the first ones to tap this goldmine with their unique offerings.

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