homevideos Newslifestyle NewsMad About Markets: Food trends in India – is QSR industry hungry for growth?
Mad About Markets: Food trends in India – is QSR industry hungry for growth?
People are eating out more -- the increasing tendency to eat out that was traditionally not a feature of the Indian lifestyle has now changed.
From pizzas to pani-puris, food is always on top of the mind of Indians, and given the insatiable appetite for fast food, it's always a good time to be a quick-service restaurant (QSR) in India.
We are all mad about food and are compulsive nibblers. That's what Indians are. The past year of the COVID-19 pandemic showed a big bounce in food deliveries at home. Not just that, the QSR industry was the quickest to get back on its feet and this revival has made a lot of money for investors.
In just the last year, the first food aggregator listed on the bourses, which had a couple of QSR players like Devyani International and Burger King. Most recently, India has had its first cloud kitchen unicorn. So, it is a big opportunity in the food space, and is there a serious amount of appetite?
How big is this appetite?
The Indian food services industry valued at about Rs 4.2 lakh crore as of FY20. It has gained a serious model momentum in the last decade, thanks to a favourable demographic dividend, more young Indian stack, internet penetration growth in organised retail and preference for brands over unorganised players. All of this has led to changing consumption patterns.
More importantly, people are eating out more -- the increasing tendency to eat out that was traditionally not a feature of the Indian lifestyle has now changed. As a result, it turned into Rs 4.3 lakh crore and it's expected to touch Rs 6.5 crore, a 50 percent jump by 2025. And, that's how big the plate is.
Is the QSR Industry hungry for more?
To understand this and other trends in the food industry, CNBC-TV18 spoke to Smita Jatia, the managing director of Westlife Development, the company that runs the Mcdonald's chain of restaurants in the west and south India through a wholly-owned subsidiary Hardcastle Restaurants Private Limited. CNBC-TV18 also caught up with Kallol Banerjee, co-founder of Rebel Foods, which operates a network of cloud kitchen brands such as Behrouz Biryani, Mandarin Oak, Ovenstory Pizza, and Faasos and is a proud member of the India’s unicorn club.
Many QSR spaces are dominated by MNC players, but at the same time, many of these MNC are also fell by the wayside. So what differentiates QSR success in India from failure?
Jatia said, over the last 25 years she has learned a couple of things that she feels are very relevant to the success of any brand in India, be it local or an MNC.
To start with cultural relevance is very for a brand and especially for an MNC to understand the roots of the country it operates in, she said. So when McDonald's got in, it was very clear that there will be no beef and pork because of the religious sentiment, she said.
The other thing she pointed to is vegetarianism. “India is rich and 50 percent of the population is vegetarian, and it was very important for us to have segregated veg and a non-veg kitchen in order to build credibility and trust of the vegetarian customers to come to us. So that’s about cultural relevance,”
The second factor she highlighted is menu relevance. She explained that when her company started, a burger was a completely alien product and customers had to be about it.
Meanwhile, Banerjee threw light on trends like ‘revenge dining’ and asked what was the biggest trend that emerged during the pandemic.
According to him, delivery of food was already an ongoing trend, which was emerging globally as the fastest-growing distribution channel for food.
“The pandemic I think just served as a shot in the arm for that trend and out of necessity as well. Those who were on the sidelines, still thinking whether to download a food delivery app or not, finally ended up doing so,” he said.
He explained that in India, there has been migration from high rental cities like Bengaluru and Mumbai to people’s hometowns due to the work-for-home trend. People carried this online ordering trend back home, he said.
“Some of these brands, for example, are well known in Bengaluru. When we opened, let's say in Ranchi recently, we saw that from day one it has been taking off almost immediately as soon as we opened. So I think this has been a fallout that the brand messaging has spread further into the B and C towns in India,” Banerjee said.
For the entire conversation, click on the video
(Edited by : Kanishka Sarkar)
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Lok Sabha elections 2024: 28% of candidates contesting in fourth phase are 'crorepatis'
May 9, 2024 4:29 PM
Free poha-jalebi to movie ticket discounts: How cities struggling with 'urban apathy' are luring voters to polling booths
May 9, 2024 3:17 PM