cmr food service industry report 2016

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FOOD SERVICE INDUSTRY

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India: Emerging Trends

Authen'c Indian regional cuisine on the rise.

Brand loyalty is passé. Today’s consumers shi; their palate depending on whom they are ea'ng with.

The Indian Middle Class is driving consump'on, and causing new innova'ons to rise in the food service industry.

T h e Empowe r e d C o n s ume r

With wellness is on the mind, consumers are seeking out organic, and locally sourced food.



Food vans on the rise catering to the growing expat community.

Shi; towards home style meals to subs'tute home cooking

Technology is disrup'ng tradi'onal food service chain models.

T h e C h a n g i n g F o o d I n d u s t r y

QSRs and Café leading the growth in the food service industry.



Swiggy, FoodPanda, Zomato – the new age digital dabawallahs

Digital is also contribu'ng to a new breed of consumers with an increasing demand for gourmet and specialized food.

Food is becoming more “Social”. Facebook and Pinterest are mo'va'ng consumers to seek out new food experiences.

Payment is increasingly Digital. Online payments, and Mobile wallets are on the rise. Near Field Communica'on (NFC) will be a gamechanger.

D i g i f o o d : D i g i t a l r e d e fi n e s f o o d


India: Market Size

[Source: CMR Analysis and Industry Es'mates]

Indian Food Service Industry

US $ 50B


India: Food Service Industry Forecast


2016 2017 2019

[In US $/Billion]

57

2018 2020

64

72

82

92

Note: The size of the Indian food service industry was US$50 billion (CY2015) and will grow at a CAGR of 13% to US$ 92 billion by 2020.

t.


Organized Food Service Market

30%

India: Organized FS Market

Note: 70% of the Food Service market in India is unorganized. The organized food service market accounts for US$ 15 billion of the total food service market.



Cafe

India: Organized FS Segmentation

Quick Service

Frozen Desserts

Casual Dining Pub and Bar

Fine Dining

18%

18%

14% 13%

13%

10% [Source: CMR Analysis and Industry Es'mates]

Indian Organized Food Service Industry

US $ 15 Bn


India: Organized FS Market Forecast


2016 2018 2020

[In US $/Billion]

2017 2019

18 21

24 28

33


Demand Side View

464M youth by 2021

Increasing disposable incomes

More women in the workforce than ever before

Growth of consumers in smaller towns

Rapid UrbanisaYon

Higher frequency of eaYng out

>200M nuclear families by 2020

Broadening exposure to new cuisines


Supply Side View

DisrupYon caused by new age F&B entrants

Efficiencies and quality standards in food supply chain

Arrival and growth of third-‐party logisYcs providers

Digital is redefining the food experience


EM E RG I N G B U S I N E S S MO D E L S

Advent of DigiFood

Restaurant LisYng

Online Food Ordering

1m Daily Orders over phone.

>2% Market is on apps.

~$16b Market Opportunity


Food from Cloud

Online ordering today ~ $500m


The Food Truck Frenzy The food truck, with its low startup cost, flexibility and ease of opera'ons, is a good avenue for all aspiring foodpreneurs to grab a part of the growing food industry pie. India is seeing a boom in food truck business.

N EW D E L H I -‐ N C R

MUMBA I

B E N G A LU R U

• The Lalit Food Truck Company • Flavour Hub • Oh Buoy • What The Truck • Dosa Inc. • Sushi House Mafia • Big Bite Burrito

• Mumbai Rolling Kitchen • Eat N’ Run • Paninaro

• The Spilire Barbecue Truck • The SWAT Truck • The Great Indian Bhukkad • Fuel Up • Square Ruth


63%

37%

Foreign QSR Indian QSR

Quick Service Restaurants (QSR)

• One key and fastest growing segment of the Indian Food Service Industry has been Quick Service Restaurants.

• The QSR segment in India will have >90 brands, with over 3000 outlets.

• Though foreign QSRs dominate the India market, the market growth is driven by domes'c QSR brands as they expand rapidly into Tier-‐II and Tier-‐III ci'es with adaptable medium and small formats.



India: QSR Market Forecast


2016 2017 2019

[In US $/Billion]

CAGR 18%

Note: The size of the QSR industry was US$1.81 billion (CY2015) and will grow at a CAGR of 16% to US$ 4.88 billion by 2021.

2.13

4.88

2018 2020 2021

2.51

2.97

3.50

4.13


Established QSRs

OPERATING STORES: 55 PLANNED STORES: 10-‐12 per year

OPERATING STORES: 21 PLANNED STORES: 150 by 2020


OPERATING STORES: 432 PLANNED STORES: 100 by end-‐2016

OPERATING STORES: 372 PLANNED STORES: To reach 500 by 2016

F O R E I GN Q SR s

DOMEST I C Q SR s


OPERATING STORES: >500 PLANNED STORES: 2000 by 2020


Upcoming QSRs







N EW FORE I GN Q SR s

N EW DOMEST I C Q SR s




Advantage Desi QSR

Emergence of Organized DomesYc Players

Roadside Vendors rule the roost

Many diverse players – both foreign and domesYc, vying for same pie

Foreign QSRs enter India without grasping the huge cultural diversity of India. Even Indian franchisees partnering with Foreign QSRs enter India specula'ng on customer preferences. Domes'c QSRs are able to tailor and segment their menu to suit the cultural and taste preferences of a cross-‐sec'on of customers pan-‐India at affordable prices star'ng Rs 25.

LocalizaYon of Flavors and Pricepoints

There are many different companies compe'ng with each other in every segment.

Many VC-‐backed domes'c companies are entering the India market. Some of the recent domes'c entrants include Goli Vada Pav, Burger Singh, Ammi’s Biryani have all entered recently.

In addi'on to the domes'c QSRs, roadside vendors are cooking up a diverse range of menu that is targeted at the right consumer segment.


India: Future Outlook

Social will gain trac'on, con'nue to influence and drama'cally alter the way food is consumed in India, and this will impact the food business.

Technology will influence all aspects of the food business-‐ from sourcing to advance reserva'ons, from check-‐in to on-‐demand delivery.

QSRs focused on authen'c and unique regional cuisine will find more flavor and acceptance from the demanding Indian consumer.


India: Future Outlook

While food trucks are now in fashion, this segment will see a churn soon as FSSAI 'ghtens the bolts.

Online Food start-‐ups will con'nue to grow organically. However, the pie will remain very niche.

The market for QSR will increase as new non-‐tradi'onal market avenues open up due to Government investments in road infrastructure and air connec'vity.


CMR Cognitive 360™

DEMOGRAPH I C S

Before embarking on a food business on gut feel, its vital to understand the consumer, and their tastes and preferences.

R e s e a r c h c a n b e a g r e a t b u s i n e s s e n a b l e r.

DE L I V E RY

Food Delivery business is ripe for disrup'on. In the hyperlocal era, if food service outlets can cut delivery 'mes to <30 minutes, it will be a huge gamechanger!

D I S COV E RY

The Google Now model can be emulated by startups in food discovery, with no stand alone app, and the func'onality residing within social networks, such as Facebook.

Note: CMR Cogni've 360 provides a clear view and guidance on what’s next for businesses focused on the target market.


About CMR

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