Upswing to foodies' delight

Retail-o-metre  | QSR

Food services market has shown tremendous growth from the last decade. Currently, the size of the market is estimated at

Rs 60,000 crore, and with a growth rate between 20-25 per cent, the market has witnessed noticeable shift. With more organised players have entered the market, QSR formats (Quick Service Restaurant) catching up as the new concept in India. 


Sales speak

The market worth of fast food industry is estimated approximately at Rs 2500 crore which constitutes street vendors, mom-n-pop stores, restaurants, etc.  Without disclosing the actual figures of the turnover, Unnat Verma, Director- Marketing, Indian Sub-continent, KFC says, “The potential of food and services sector in India is overwhelming due to the changing trends among the consumers. We are expanding at a large scale and from the last fiscal year we have grown around 70 per cent in our turnover.”


As opined by Vikram Bakshi, Managing Director, McDonald’s India (North & East) “We have been experiencing robust sales performance so far in this year, and are very hopeful of ending the year with 18-20 per cent growth over last year. The new stores have been performing exceedingly well, and the comparable stores continue to report strong results.”


Driving on the similar note, Ashish Kapur, MD, Yo! China comments, “We have almost doubled our sales performance from last fiscal year.”

Main drivers of the market New cuisines and tastes are finding greater acceptability now with the Indian audience. Besides taste, convenience and accessibility are other critical drivers of this market.


The main drivers of increase in the size of the market can be contributed to the following main reasons:

  • Growing disposable income
  • Favorable demographics
  • Changing lifestyles and preferences
  • Increasing number of working women
  • Growing need for convenience
  • Higher aspirations among youth
  • Impact of western lifestyle
  • Increased use of credit and debit cards

The working urbanites are depending more on fast and ready-to-serve food, since they take less pain than traditional method of cooking.  As explained by Verma of KFC, “There are emotional and functional drives which are responsible for increase in the spending on food services. On emotional side, our youth population has taste for experimenting new cuisines of different regions and countries. Also, their spending habits and capacity is much higher than the generations behind, especially in metros. Functional factors include change in lifestyle, economic migration of workforce without family and crunch of time are also the reasons for the flourish of food services sectors.”


Supporting the statement, Kapur of Yo! China says, “There is big opportunity for growth in small towns and cities, which are mostly untapped. Therefore, the future of Indian fast food industry lies in masses that live in tier-II and tier-III cities.”


Peak time & occasions

The main occasions include - Celebrations, Marriages, Holidays, Get together, Shopping, Festive Seasons like Diwali, Navratras, Durga Puja and others.


Weekend days constitute around 80 per cent of the sales. In addition, the combo deals add to the sales surge to these days. Tinku Singh, Group President, SRS Group, concurs with this: “In our outlets, the peak days for the sale are Tuesday, Friday, Saturday and Sunday. On Tuesday we have a good sales record in Moradabad and Gorakhpur and weekend is everywhere.”


Says Bakshi of McDonald’s, “Lunch and dinner hours are the busiest across our system in all days, and weekends are the busiest days across our system.”


Most of the food services witness orders after 6 pm which are known as the ‘Rush Hours’ of the day. Children play an important role in driving the sales of food and services sector.


Rising popularity of new cuisines

A decade back, Indian restaurants with Indian food habits were the flavour of the market. But in the last seven-eight years, ‘Organised Quick Service Restaurant’ industry is evolving at a rate approximately 40 per cent per annum. However, food chains have realised the basic requirement of the average Indian consumers and keep on Indianising the menu to fit Indian tastes into their own formats.


The market has been forayed by large numbers of foreign players adding flavour to the Indian cuisine. More specialty restaurants have emerged giving the experience of sumptuous range of international cuisine --Greek, Thai, Lebanese, Italian and Japanese food. Emphasising on the health factor, Akshay Bector, MD, Mrs Bector’s Food Specialties Ltd says “Today’s consumer is more health conscious hence they are switching to healthier product options, this is the reason there is increase in sale of veg mayonnaise in the market, which is a better and healthier option than butter.”


In consonance to the previous statement, Kiran Nadkarni, CEO, Kaati Zone comments, “Consumers today are more willing to try different cuisines - be it Continental, Chinese, Japanese, Thai, Lebanese, etc. Or they prefer pizzas, burgers, wraps and rolls and so on. So, as we continue with our traditional eating habits, there has also been a growing acceptance for other cuisines.”


In fact, food courts, especially in malls-with perfect ambience, mouth-watering platters, with authentic food options under one roof, give enough scope to the customers to experience their choices.


Among masses, Chinese and South Indian foods are two prime categories that have done exceedingly well in this segment in India. Today, globally, the fastest growing theme foods are Mexican and Chinese, followed by Thai and Vietnamese.


Marketing strategies

In fact most of the food retailers have turned down the strategy of giving discounts on the products and believing in offering menus which have ‘value for money’.  Samar Qureshi, Director, Fast Trax Foods Pvt Ltd, which catered to India’s biggest sporting event, Common Wealth 2010, clarifies, “The truly heartening thing is, we have never really marketed aggressively yet enjoy a steady rise in our customer base across all 22 of our outlets. I strongly believe that if your product is good and you maintain the quality, people will come back. The marketing tool so far has been a positive ‘word of mouth’.”


Some Value added services

  • Free Home Delivery
  • Delivery in 30 minutes
  • Discounts with combo deals
  • Online Services
  • Tie-ups with banks
  • Affordable product mix to serve each category of customer—low, middle and high
  • Introducing more menus to the table

Festivals are the occasion when food service sector plays the most active role to induce thrill and excitement, creating enjoyable experience for the customers. This enables them to bolster sales figures and market their brand. “We normally participate in all kind of food festivals and try to make some different options for the customers to provide them services on all occasions, in fact we do provide fasting food during Navratras as well to make our customers regular and available with options, other than this we have all kind of food on festivals and sweets for the consumers at the same place,” says Singh of SRS Group.


“We do not believe in offering schemes on a sustained basis to increase our sales. We strongly believe in word of mouth publicity, which we ensure by offering best of the products and services at a real value for money prices,” says Virendra Ghole, Marketing Head, Monginis Foods Pvt Ltd (India).  He lays emphasis on two major drivers of sale—footfalls and the spending size. To this he adds, “For ‘footfalls’ we run tactical schemes in order to attract more customers and make them experience our brand. Whereas for increasing ticket size or spending size, we have introduced products ancillary to our wide range of cakes in addition to training our sales teams in ‘upselling’ techniques. We also celebrate “Shop Anniversaries” in a big way and run tactical schemes to generate excitement in the catchment areas of a shop since Monginis is all about celebrations.”


Kapur comments, “We love to interact and stay connected to our target audience. That’s why we are active on social media. Apart from this, we actively participate in youth oriented festivals. For example, we recently participated as food partners in the IIT Delhi annual fest. Not only did we had great sales, but also increased our fan base.”


In short, it is the speed in services, quality of products, health and hygiene which are boosting the industry.


Company’s Name                  YoY Sales Growth

                                           (approximately) 2010

KFC                                        70-75%

McDonald’s                              18-20%

Monginis                                 25%

Fast Trax                                56%

Kaati Zone                              50-60%

Yo! China                               90%













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