JOINTLY TO SHARE THE PIE

The Indian food sector is growing in a skewed manner, with the mushrooming of restaurants as well as the food manufacturing companies. This growth is further fuelled by the way the Indian consumers are now going and eating out. According to the Food Franchising Report 2011 by Franchise India Holdings Ltd, in collaboration with CFTI FICCI, 48 per cent of the consumer wallet share is dedicated to food (54 per cent in rural areas and 41 per cent in urban areas). According to the report, the size of India’s food service sector is `43,000 crore, of which organised players enjoy 16-20 per cent. 

Along with growing institutional selling, the Indian food manufacturers are also seeing that there is an opportunity to reach their consumers by marketing their products at restaurants or food chains and also promoting better business for these eat out joints. With this the Indian food industry is finding a right way to mingle institutional selling and consumer selling. 

 

TOGETHER FOR LARGER GOOD

These tie ups are a win win situation for both the players respectively and both are leaving no stone unturned to serve their consumers. R S Sodhi, Managing Director at GCMMF Ltd (Amul) says, “It is a symbiotic relationship with obvious advantages to both the parties. While the restaurants need consistency in the quality as well as supply of the ingredients, the F&B companies are looking to acquire loyal customers through such tie ups. We enjoy tremendous brand loyalty for our Amul milk, butter, cheese, condensed milk and fresh cream by a large number of restaurants, hotels and catering institutions. In turn, we also lend a special focus to the HoReCa Segment (Hotel, Restaurants & Catering Institutions) as an important strategic thrust area to attain our marketing goals.” Puesh Kumar, Director, DS Group, comments, “F&B companies tie-up with restaurants/hotel chains because they are volume buyers, therefore, they can be one point source of generation of large volume of sales, and from an economic perspective such institutional buyers help in adding both top line and bottom line since cost of sales is lesser as compared to the overheads involved in generating retail sales.” 

 

In this context, Vikas Mittal, Managing Director, McCain Foods India Pvt Ltd adds, “The concept of eating out has come a long way in India and the way the consumption patterns are changing, we are looking at these kind of tie-ups very closely. It’s like carving the growth path together wherein we both are sharing resources to get more footfalls. I think what brings the two industries together is that the more the customers will come in, the better business will come for restaurants and for us, and we will get recognition across the consumers further creating potential buyers.”

 

MARKETING  COLLABORATION

This marketing strategy actually helps food suppliers to brush up the quality of the products. Brands including McCain, Amul and Catch are the ones who work behind the scene and provide ingredients for the preparations. For them, there’s a need to create a brand image among restaurant eaters which will not only increase their consumer sales but will also synonym their name to quality. As revealed in Kumar’s words, “The strategy behind such tie ups with restaurants/hotels is that it provides a platform for brand exposure to the specialist in the food industry in terms of well known chefs and merchandisers. This helps in giving the product premium brand imagery and it also has a rub off effect on other products under the same brand umbrella. As these institutional buyers are conscious about offering quality products to their consumers, therefore, such an association with them creates a perception of high quality for the products supplied by the companies. Hence, such tie-ups are not meant only for increasing product sales but for various other reasons as mentioned.”

 

Sub-One Hospitality Services Pvt Ltd, the master franchisee of Quiznos in India, has been working with such suppliers. “We work with various vendors and also do some joint promotions for them. This is generally done through hoardings, flyers and in-house promotions. For us, this calls for better footfalls and also cost sharing in terms of marketing,” comments Pradeep Sehgal, CEO, Sub One Hospitality Services Pvt Ltd.

 

“Coming together with F&G companies enables the restaurant industry to benefit from the larger geographic footprint, as we do marketing tie-ups and event associations with them. It also helps us get benefits in terms of the marketing know how that these large F&B companies have,” opines K S Narayanan, CEO, Pan India Food Solutions Pvt Ltd.

 

“We have already started piloting some of the projects in this front. We recently tied-up with a pub in Bangalore wherein we conducted a ‘McCain Night’, and served snacks from McCain. We have also done some experiments with few PVR multiplexes. Moreover, we also plan to have small table tents on the restaurant tables as when, for instance, they are eating a burger, they know it’s a McCain tikki inside. There is a need to create awareness and credibility among consumers about our offerings,” informs Mittal.

 

The brands can create their visibility by using hoardings, giving away special combos or offers, conducting dedicated hours or evenings in collaboration with restaurants or hotels. “We have a large number of restaurants and institutions which promote their products using a USP of Amul ingredients inside. Even large number of street food vendors selling as diverse products as pav bhaji, dosa, vadapav, pizzas, burgers, sweet corn, omelettes and maska bun try to differentiate their offerings with a message ‘Amul ingredients inside’,” adds Sodhi.