SubMitted To:- Dr. Amit Jain

SubMitted By:- Dheeraj Malhotra 2014BCMBA002

Assignment Of Business Organisation & System

• Snacks Market:- India• September-2014

• OPPORTUNITIES IN THE INDIAN FOOD SERVICE

MARKET

QSR, CASUAL DINING, FINE DINING, VENDING

SUMMARY

The Indian Food Service Industry is worth $41.3 bn and growing at a CAGR of 11%. It is expected to reach $68 bn by 2018.

The size of Organized Indian QSR market is $0.62 bn, growing at a healthy CAGR of 20% and is expected to reach $1.1 bn by 2017-18.

Delivery segment is a integral part not only of the Indian Food Service segment, but is also common for

Grocery stores, Liquor stores, vegetable vendors etc. Consumers are highly price sensitive.

Age Group Profile of Those Who Eat Out

Snacks

18%

31%

40%

11%

1

18 To 20 Years

21 To 30 Years

31 To 40 Years

41 And Above

25% OF OUR YOUTH PREFER HANGING OUT WITH THEIR

FRIENDS OVER OTHER OUTDOOR ENTERTAINMENT ACTIVITIES

Favourite outdoor entertainment activity 13-18 years 19-24 years Gen Next(all youth)

Projected base 93,18,951 129,923,462 223,142,413

Movies at Cinema hall 13.90% 16.60% 15.50%

Go dancing at discos 0.40% 1.40% 1.00%

Pubbing/drinking with friends/family 1.20% 1.60% 1.50%

Eating Out 9.70% 10.40% 10.10%

Entertainment Parks 4.80% 5.90% 5.40%

Shopping/Window Shopping 4.70% 5.20% 5.00%

Spiritul sessions/satsangs 5.80% 8.90% 7.60%

Watch art & culture performance/events 4.40% 4.10% 4.20%

Generally hangout with friends 27.00% 23.80% 25.10%

Go for long walks 4.60% 6.80% 5.90%

Read in libraries 4.70% 4.20% 4.40%

Go on long drives 0.90% 2.30% 1.70%

Play favourite sports 8.10% 6.20% 7.00%

Going Out/picnic with family 7.20% 8.00% 7.70%

Visit Relatives/neighbours 15.70% 16.60% 16.20%

None 40.40% 37.30% 38.60%

73% OF THE YOUTH CONSIDER PRICE THE MOST IMPORTANT

CONSIDERATION WHILE MAKING PURCHASESBuying Orientation 13-18 years 19-24 years Gen Next(all

youth)

Projected Base 93,218,951 129,923,462 223,142,413

Brand Image 64.00% 61.20% 62.40%

Price 73.00% 72.70% 72.80%

Performance quality 36.50% 37.40% 37.00%

Premium/advance features 13.80% 16.40% 15.30%

Design And Looks 30.10% 23.90% 26.50%

Ease of Usage 25.00% 27.90% 26.70%

Shopping Experience 15.70% 17.00% 16.50%

Reputation of the Company making the product/service

12.00% 11.70% 11.80%

Ease of payment/payment option available 9.60% 9.70% 9.70%

What most people around you are buying/using 7.10% 9.60% 8.50%

Recommendation by shopkeeper/dealer 5.10% 5.60% 5.40%

Recommendation by friends/relatives/colleagues 4.80% 4.30% 4.50%

The celebrity endorsing the brand 2.50% 2.10% 2.30%

Possibility of buying online 0.80% 0.50% 0.60%

'GOING OUT' OF INDIAN YOUTH HABITS

Casual Dining And QSR Dominates the Organized

Indian Food Service Market 70%

Pubs,Bars,Clubs And Lounges 12%

Fine Dining And Frozen Deserts 10%

Cafes 8%

Total Indian Food Service Market

100%

• Indian consumers, at least those who

can afford it, are increasingly dining

out, particularly in urban areas.

Eating out has evolved from anoccasion driven activity to an

occasion in itself. It has become a form of

entertainment for consumers today.

Urbanizing double-income households, changing lifestyles

and food preferences are spurring the organized market

within the dining out sector.

•

•

FOOD HABITS OF INDIAN YOUTH

31% of Indians are vegetarians for religious and cultural reasons while the rest of the population eat fish and meat

Hindus, the dominant element of the population, strictly abstain from eating beef

Consumption of pork is also limited to a relatively small baseDining out is popular amongst many Indian consumers, particularly in urban areas, facilitated by busier lifestyles and higher levels of disposable income. Indeed, value sales at full-service restaurants have increased steadily in recent years, with consumers largely preferring independent rather than chained venues.

It is also becoming more common for some consumers to order food for takeaway to eat at home during the week and then to dine out in restaurants

Since a dip in 2009, demand for home delivery/takeaway meals has been increasing steadily, with value sales reaching nearly Rs2.2 billion in 2013.

Fast food has become highly palatable to the teens and consumers in their early twenties, with international fastfood chains like KFC and McDonalds, Subway, Domino’s Dunkin Donuts particularly popular.

The menus in Indian outlets tend to differ from those in other countries with high consumption of beef. There is also high demand for indigenous meals from independent fast food venues

Many consumers purchase snacks and other food items from the numerous street stalls and kiosks. Street food like pav bhaji, dosas, pani puri etc are very popular in India.

INDIAN FOOD SERVICE MARKET TIMELINE: KEY PLAYERS

Franchisee Model

emerged in mid-

1990s

1970s and

1980s

2000-2010

• Dunkin’ Donuts• Starbucks• Taco Bell• Pizza Express• Sbarro

• Nirula’s• Haldiram

• KFC• McDonald’s• Pizza Hut• Domino’s• Café Coffee Day

• Subway• CPK• Papa John’s• Jumbo King• Goli Vada Pav

• HonestRestaurant• Saravana Bhavan• Wimpy

Pre-1950

1990s

2014 - present

GREAT INDIAN ETHNIC CUISINE MEDLEY

CHALLENGES IN INDIA’S FOOD SERVICE MARKET

Food price inflation A key factor affecting the consumer food services market, it is impacted by delayed monsoons, the economic slowdown, and unfavourable demand-supply conditions. It keeps fluctuating and reached a peak of 18% in 2010.Fragmented Market The QSR market has many small and mid-size unorganized players competing with large chain players. This fragmented market reflects a number of challenges, including unclear format segmentation, varied consumer options for eating out, and the lack of best practices for food services outlets.Real Estate Cost High real estate cost tend to impact store profitability.Labour Acquisition and Cost Manpower is a big challenge in the food services market, with an attrition rate of 25-30% and high cost of labourFragmented Supply Chain and Sourcing The industry’s supply chain is fragmented in nature and marked by the presence of multiple intermediaries. The lack of appropriate infrastructure, inadequate technologies, and the non-integration of the food value chain are factors key to the wastage of nearly 30-40% of prepared food across the supply chain.Red Tapism In India, obtaining the requisite licenses, e.g. health license, food safety license, police license, No Objection Certificate (or NOC, from the fire department and the state pollution control board), etc. is a major obstacle hindering the smooth operation of a restaurant. The process is not centralized as yet and requires filing applications with individual stakeholders, which involves a lot of paperwork and is a time-consuming activity.Multiple Level of Taxes The Indian restaurant industry is burdened with multiple taxes like VAT, excise, and service tax, besides different state taxes

WHAT IS A QSR (Quick Service Restaurant)

A quick service restaurant (QSR) is characterised by fast food cuisine, minimal table service and a fixed menu.The food (or ingredients) is prepared in bulk in advance and is packaged to order

QSRs are usually part of a restaurant chain or a franchise operation, which provisionsstandardised ingredients and/or partially prepared foods and supplies them to each restaurant through controlled channels. It is different from fine dining, as the latter usually targets rich and upper middle class consumersFine dining restaurants also offer a unique ambience and upscale serviceAlthough fine dining restaurants do not compete directly with QSR, a moderate casual dining restaurant could be a competitor. It is pertinent to note that while QSRs typically target customers within the age group of 16-35 years, a casual dining restaurant would target people across age groups

QSRs are able to compete with casual dining restaurants on the basis of factors such as consistency in quality and speed of delivery.

KEY QSRs IN INDAIN

CafesPizzasInternational Fast Food (Non-Pizzas)Ice-Creams

Indian Fast Food (Key players) Confectionaries

Outlets of Key Players (Nos. )

Confectionaries

Indian Fast Foods2

%6%10

% 44%

Ice-Creams

International Fast Foods

(Non-Pizzas)15%

Pizza Chains

Cafes23

%0 50

01,000

1,500

2,000

2,500

3,000

3,500

419

1001

1515

2,939

132

645

PACKAGING OPPORTUNITIES IN INDIAN FOOD SERVICE MARKET

• Indian Packaging Industry is valued at USD 19 Bn in 2014 and it is growing at 12% perannum• The food and beverage occupy the largest share of about 85% in packaging

industry, a figurethat is estimated to rise

• Sustainability and bio degradable packaging missing

• Light Weighing, easily transportable packaging missing

• Only 600-700 packaging machine manufacturers of which 95% are in small and mediumsectors and located all over the country , so there is huge gap in demand and supply of food packaging professionals

LOGISTICS SECTOR OPPORTUNITIES IN INDIAN FOOD SERVICE MARKET

• Warehousing :– Majority of operators are small to mid-sized entrepreneurs with limited capacity

– Main players are government agencies like central and state warehousing corporations

– The existing warehouses are of poor quality and are present in limited numbers without adequatecapacity

• Cold Chain Storage : – About 40% of fruits and vegetables grown in India gets wasted, so the sector Needs to grow at much faster rate to meet the needs.

– With the poor electricity condition in the country the cost of operating such facilities is very high

– So it provides an immense opportunity to organized players who can setup the infrastructure andare able to provide the service through out the nation

SUGGESTIONS

DISCOUNT AND COUPON AGGREGATOR WEBSITES

• Indian customers actively seek out discount offers. Makes discount aggregator websiteslucrative opportunities.

• Currently, there are 150 websites which are actively involved in coupon business. On a conservative estimate, these sites generate a combined 6-7 million page views per month.

• Around 4.6 million Internet users in India aged 15 and older accessed the coupons category which is 10.4 % of the entire online population.

• Estimated to grow in the next 2-3 years because of the growth in e-commerce purchases.