The Indian foodservice industry offers a fantastic growth opportunity unmatched anywhere else in the world. Foodservice, with a value of USD 48 billion at current prices, is emerging as a key driver of growth for the Indian economy, which was estimated to be worth USD 2.3 trillion in 2016. Already, the foodservice industry is larger than the pharmaceuticals and FMCG sector in India and its potential growth will be powered by the changing consumer dynamics and increasing market proliferation by brands in the space.
The one way to take the industry forward is to encourage more Indians to eat out more often. Consumer spending on eating out can get a boost if restaurants can attract more people to have breakfast. This is one day-part that is largely untapped by the industry, mainly because most Indians are culturally habituated to have the day’s first meal at home. But if foodservice players can unlock the key to selling breakfasts in India, it will prove to be a goldmine for them. In the West, a substantial chunk of sales in restaurants occur before 11 am, while in India they are just about stirring to life at that hour.
The other avenue for growth available to the industry is geographical expansion. The major portion of the foodservice industry of India is still largely concentrated in the northern and western parts of the country. Players need to renew their focus on the south as well as make inroads into the largely untapped eastern India. Also, the QSR format – growing at an annual rate of 16% – is proving to be popular with Indian diners. New and local players need to tap this segment and come up with unique and innovative formats. Going ahead, it is expected that we will get to see more interesting formats and concepts. Along with the incumbents, the newer players can lead the charge to the lesser penetrated markets and geographies and drive the industry toward a more elevated growth path.