Young working population are eating out
Indian Food Services market in India is projected to grow at a CAGR of 10% over the next 5 years to reach Rs.5,52,000 crore by 2022, said a report on the industry.
Combining both the organized and unorganized, the sector is estimated at Rs.3,37,500 crore for this year, according to the report by Food Safety and Standards Authority of India at a conclave by the Federation of Indian Chambers of Commerce and Industry on 14 Nov 2017.
Two mega metros, Mumbai and Delhi NCR (National Capital Region) contribute 22% of the overall Food Services market (11% each) followed by six mini metros (Pune, Ahmedabad, Bengaluru, Chennai, Hyderabad and Kolkata) comprising of 20% share in the Food Services market.
High percentage of young and working population which is well travelled have double incomes and is experimental along with being tech savvy, is eating out more than their predecessors, driving the growth of the Food Services market.
Availability of organized retail space is helping in consistent growth of Indian and International brands across different formats, according to the report “Indian Food Services Industry: Engine for Economic Growth & Employment – A Roadmap for Unlocking Growth”.
The impact of the market as a whole on the entire ecosystem – right from real estate to agriculture, kitchen equipment to supply chain and employment is significant.
However, certain challenges such as availability of quality manpower, high attrition rate, high real estate cost, fragmented supply chain, over-licensing etc. act as headwind for growth of the industry, cautioned the report.
Some key trends are gaining traction in the Food Services space like Virtual Kitchens and Ready to Cook players.
Ordering-in has become an integral part of the eating experience and several logistics players are providing last mile delivery for restaurants.
Thus, Food Services is emerging as a key contributor for the Indian economy, including employment generation, skill development, growth in the allied industries, entrepreneurship, and tourism and creating experiences for the Indian consumer.
Underlining the importance of the Food Services sector Dr. Sanjaya Baru, Secretary General, FICCI said, “India’s overall retail opportunity is substantial, and coupled with a demographic dividend (young population, rising standards of living and upwardly mobile middle class) and rising internet penetration; strong growth in retail & e-Commerce is expected.
The Indian government’s initiatives Make in India, Digital India, and Start up India project is indeed giving a great stimulus to the Food Services retail sector”.
It is imperative for the Government and regulators to recognize the contribution and role of Food Services Industry and take measures to create positive policy framework for industry’s growth. Fii-news.com
