QSRs rule the food service industry

Indian food services market is likely to reach Rs 408 Cr mark by 2018, growing at a rate of 11 per cent.
Food Services Industry

The Indian food services industry is expected to grow very quickly over the next few years and that is largely due to  increased frequency of eating out by consumers, especially at quick service restaurants and allied options. And, according to a recent report by the National Restaurant Association of India (NRAI),  the industry is expected to grow from Rs 247,680 crore currently to Rs 408,040 crore by 2018, a compounded growth of 11 per cent.

Also, one of the components of the food service industry, the chain and licensed standalone industry will broadly double over the next five years to Rs 25, 000 crore. This report also gave a broader insight of the industry and consumer demographics. For instance, quick service restaurants  and casual dine-in formats account for 74 per cent of the total market, cafés account for 12 per cent and the remainder came from fine dining and pubs.

Samir Kuckreja, President, NRAI, said, “As the industry has been a significant contributor to the nation’s economy via taxes and employment generation, we hope that we can work together with the government to help us grow. We are proud to announce that the industry currently employs 4.6 million people directly and it is projected to grow to 8 million by 2018”.

Moreover, the industry also made  a strong pitch for ‘unshackling’ it from the license and tax regimes. The NRAI is optimistic of support from various stakeholders in this regard.

Key growth drivers and emerging trends :

  • Increasing share of delivery and take-away formats, with a focus on convenience
  • Experimentation with new formats, themes and menus
  • Indian brands going international
  • Popularity of value meals
  • Growing importance of online/ social media, food websites and mobile applications
  • Increasing interest from private equity and venture capital investors 

 

Issues and challenges facing the industry :

  • High food inflation
  • High real estate and operational costs
  • Burden of high taxes

 

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