Restaurant and Catering Services in India

Rajat K. Baisya

restaurant and catering servicesIndian catering services sector is estimated to be worth INR 570 billion which includes restaurant business. About INR 40 billion or 6.9 percent of it is accounted for organized sector. The vast unorganized segment is mainly comprising of street side stalls and kiosks, on-premise service constituting the majority of consumer food service units and is characterized by intense fragmentation and a virtual absence of standardization of operations. The retail segment was INR 350 billion in 2004, which grew by about 18 percent to INR 414 billion in 2005 and in 2006 the segment recorded a growth of nearly19 percent over previous year and stood at INR 492 billion at 2003-04 prices.

Food and beverage retail constitutes about 4.7 percent of the USD 270 billion Indian Retail Market (Source: India Retail Report 2007: An Images F&R Research).

Home grown as well as international restaurant chain present in both high street location as well in malls represent orgainsed F& B sector. Most of the leading multinational food service chain like Pizza Hut, McDonald, Dominos, Kentucky Fried Chicken (KFC) followed the franchising model whereas local chains like Nerulas are setting mostly company owned units. There was a 70 percent increase in the total number of outlets in the year 2006 which is significantly higher than 29 percent of the previous year. This is indicative of the fact that Indian consumers are seeking variations and are willing to experiment with new cuisines. KSA Technopak studies show that as against in USA where seven basic types of meals which covers all types of dinner menu, in India 15 different types of meals cover only 60 percent of dinner menu. The home delivery segment is also fast growing during last couple of years.

Vegetarian section of the society needs vegetarian menu which perhaps forced KFC to introduce the vegetarian menu. At the same time Indians have accepted Chinese, Italian, Mexican and Thai menu and these restaurants are also proliferating now. The catering service industry in India is in the growth phase and offers opportunities across a variety of cuisines in various formats like fast food restaurants, multi cuisines food courts, living space and home delivery.

Major Players

Cafe Cpffee Dau

The Bangalore based Amalmagated Bean Coffee Trading Co. Ltd is the parent company The company today has 500 outlets spread across 80 cities as compared to 300 outlets equivalent to 500000 sqft of retail space in 64 cities in 2005-06. Each outlets attract about 400-800 customers every day.

Barista

Barista Coffee Company started the coffee revolution in Indian market way back in 2000 first in northern India and then extended to other regions. Today Barista have 225 outlets in over 35 cities whereas in 2005-06 they had 129 outlets in 25 cities. It also has franchisee stores for setting Expresso Bars and Coffee Kiosks in smaller towns. Average outlet size is 1000 sqft and by year 2007 they plan to have 300 outlets and projecting 1000 outlets by 2010

Baskin Robbins

It is world’s largest chain of ice cream specialty shops with presence in 40 countries and more than 5600 outlets. Currently they have about 200 outlets in 30 cities in India offering many options of ice cream flavours registering an increase from 120 outlets in 2004-05 to 160 outlets in 2005-06 in 25 cities.

McDonald's

McDonald opened its first outlet in October 1996. Indian operation is a joint venture between (50:50) McDonald’s corporation of USA and two Indian businessmen. Hardcastle Restaurants Pvt. Ltd owns and operates its western India operation and Connaught Plaza Restaurant Pvt. Ltd operates the northern operations. There are 100 outlets in 22 cities with a total retail space of 275000 sqft. McDonald also developed specific vegetarian menu to suit Indian food habits. McDonald do not offer any beef or pork items in India. It plans to have 200 outlets in 45 cities by year 2010 that will make total retail space of 700000 sqft.

Dominos

Dominos Pizza India Ltd was incorporated in March 1995 as the master franchisee of Dominos International Inc USA for India, Srilanka and Nepal. The first outlet was opened in 1996 in New Delhi. Now they have 140 outlets in 32 cities and 154000 sqft of retail space and is a leader in its segment. It plans to add 45-50 more outlets by 2007-08

Pizza Corner

It was first started operation in India in 1996 by Global Franchise Architects India Pvt. Ltd (GFAI:PL). Currently it has a chain of 92 outlets in 24 cities with total retail space of 79543 sqft. The emphasis of the operation is in northern and western regions GFAIPL is a Geneva based company which plans to invest USD 1.1 million this year towards expansion plan to add 30 more outlets of Pizza Corner and 10 outlets of Coffee World.

Pizza Hut

Pizza Hut the flagship brand of the Yum Brands Inc launched ‘Great Indian Treat’ its first Indian menu offered in International format. Pizza Hut also entered India in 1996 and presently has 163 outlets in 25 cities. Expansion plan is through mainly franchising route.

Pulse Foods

Belongs To Podder Heritage group serving Indian food through its chain. Currently it has 60 outlets across India. This chain follows quick service format. This chain now has opened its international outlet in London

Jumbo King Vada Pav

Jumbo King opened its first outlet in 2001 in Mumbai. Presently has 50 outlets covering 3 cities in western India covering retail space of 11000 sqft. In 2004-05 it had only 9 outlets in one city. They now plans to have 500 outlets in 39 cities by year 2010 covering 200000 sqft.

COMESUM

It focuses on railway catering . The concept came up when Indian Railways Catering and Tourism Corporation signed up the company for opening restaurants at various railway station across India. The chain has three retail models: Comesum Food Plaza. Comesum Restaurants and Comesum Takeaway. Currently it has 10 outlets across 7 cities. Two more outlets are coming up in Gaziabad and Gurgaon in north.

In the regional sector there are number of new players emerging. For Example , Arambag Hatcheries has recently opened Arambag Adda Bites, 700 sqft coffee shop in Kolkata. Three more outlets are being added in the same city.

Kamat is another chain operating in Western and Southern India. Sukh Sagar and New Shanti Sagar dominate the market in southern cities in India.
In north India we have Sagar Ratna of Delhi which also is a major player in the catering retailing area.

-- This article was first published in "Processed Food Industry" monthly magazine.

 

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