The dynamic market potential of the restaurant industry in India is fuelling the growth strategy of QSRs and fine dining segment. Restaurants are innovating and customising products keeping the Indian preferences in mind By Archana Sharma
According to George Bernard Shaw, an Irish playwright, “There is no sincerer love than the love of food.” And for a country like India, this statement holds true, especially with the recent advent of new international brands focusing on expanding in India, leading to the ever growing food industry. According to Riyaaz Amlani, president, National Restaurant Association of India (NRAI), “Over the last decade, the hospitality industry has undergone a series of rapid changes, mainly due to the changing aspirations, choices and behavioural patterns of the consumers that now form an essential parameter.”
With changing times, the trends have changed and so have the tastes and preferences of the people. Amlani believes that the hospitality service market has become more experiential and concept based. “The Indian audiences have become more receptive and accepting towards the casual-dining culture that began, not so long back, here. There has been an organic augmentation in the casual dining culture in India. The product portfolios of restaurants have widened in order to include a variety of offerings, instead of a single stream,” he said.
The total size of the food service industry in India was estimated at US$ 48 billion in 2013 and projected to grow to US$ 78 billion by 2018, at a CAGR of 11 per cent, according to India Food Services Report 2013, commissioned by Technopak for NRAI. The fine dining segment was growing at a healthy rate of around 15 per cent and the chain fine dine market size was estimated to be US$ 95 million in 2013, forecasted to reach US$ 195 million by 2018.
The market potential is encouraging domestic and existing players to expand their footprint, while new European and US brands are charting India entry plans. The Indian quick service restaurant (QSR) industry is growing at CAGR of about 25 per cent. “The near future will witness multiple expansion plans chalked out by various QSRs in the market. Especially, the tier II cities will see an increasing number of QSRs entering their market and even in metropolitan cities, QSRs will be able to offer a more niche and customised service,” added Amlani.
Dhruv Kaul, chief marketing officer, KFC India stated, “KFC focuses on the evolving Indian taste palate, and therefore has enhanced its menu through constant research. According to Euro Monitor, close to 42 per cent of India’s population is vegetarian and 35 per cent of the weekdays are vegetarian for non-vegetarian consumers, and therefore, we launched the ‘So Veg, So Good’ menu to enhance our existing vegetarian range and by offering this, we were able to broaden the brand’s relevance in a diverse country like India.” Currently, KFC has over 309 stores spread across 81 cities in the country and plans to have over 500 stores by 2015 and over 1000 stores by 2020. They have plans to invest another US$ 100-120 million by the end of 2015.
New trends and change
Research shows that even at times of financial distress people will not stop eating and the F&B industry will continue to grow. Factors like value for money, quality service and experimentation in cuisines have become the core competence for any restaurant in the industry. “We often experiment with taste, flavours and textures. Launching new products with a view to offer unmatched variety to customers is at the very core of our brand DNA,” mentioned Kaul.
Apart from the ever growing fine dining market in India which has around 50 players, with 150 to 200 outlets spread across major cities, the QSR and casual dining space is a major market segment now. “The customer trends are gradually moving from the fine dine to a more casual dining culture. QSRs are witnessing an increasingly upward trend in terms of growth and expansion, across the country. The coming few years will see an effortless seepage of QSRs in tier II cities as well as mini metros. In the metropolitan cities however, the QSRs will begin to create and offer premium quality products, services and interiors to keep the customers enticed and engaged,” informed Amlani.
Menu and product innovation
Menu planning and designing is a very important part of a restaurant. And, more often, it is defined as an important marketing tool to gain customers towards a particular restaurant. No one likes to taste the same food over a long period of time. Today everyone believes in tweaking and playing with different flavours. And thus, restaurant owners and chefs believe in revamping their menu and flavours every four-six months to show their creativity in the cuisine that they serve.
The Indian consumers are evolving in terms of their food preferences, eating out habits and are becoming more reciprocative towards food experimentation. This goes for the fine dining as well as the QSRs. Known fine dining brands in India include Punjab Grill, Mainland China, Smokehouse Grill, Olive Bar & Kitchen, etc., and QSRs include Dominos, Dunkin’ Donuts, McDonald’s, KFC, Pizza Hut and others.
Dominos has more than 820 outlets in over 170 cities, making them the largest QSR brand in India, both in terms of revenue as well as market share. Harneet Singh, senior vice president, marketing, Domino’s Pizza India said, “We continuously launch new products and try to evolve in accordance to the Indian market and its expectations. We come up new products or innovations every two-three months with new variants to keep the customer interested.”
Believing in innovation as the key for growth, Singh highlighted, “We believe in product innovation and in the last five-six years we have introduced around 25-30 products like taco mexicana, choco lava cake, junior joy box. Apart from this we also keep on undertaking crust innovations. We had initially started with the cheesy burst and we have recently introduced the cheesy wonder crust with two layers of cheese in it.” They also change the menu according to the location, like for Gujarat they offer an all vegetarian menu as well as for other religious places. In the last financial year they have added over 150 outlets in over 22 cities. “We have always been an aggressive brand and will keep on adding seven-eight products every year, constantly evolving and introducing exciting products,” he informed.
Kaul mentioned that innovation at KFC is backed by the ability to localise the offerings keeping in mind the Indian taste palate, yet staying true to original taste. Some of the India specific innovations have been: Paneer Zinger, Veg Twister, Veg Rockin Burger and Potato Krisper, all inclusive in the ‘So Veg So Good’ range.
Set’z at DLF Emporio in New Delhi, has seven distinct interactive kitchens – Northern Indian, Thai, Chinese, Southern Coastal Indian, Arabic, European and Japanese. Kaushik Ghosh, general manager, DLF Emporio Restaurants said, “There is an innovative and interactive buffet concept wherein each section is based on the personalised, live food stations, which apart from ready to eat dishes gives a leverage to get the food custom made in accordance to the guest’s requirement. Each section is based on the method of cooking- grills n roasts, steamed n baked, curries n stews, fry’s n stir fry’s, cold , desserts, noodle bar, to name a few.” Set’z also has a new menu, ‘Back To The Basic’. “This is the creative route our good chefs have now chosen to carry forward which complements our current a la carte offerings, where authenticity only takes not a step, but a good leap forward which includes duck rolls, roast leg of lamb, live interactive food stations. i.e. soup, grills, street food, teppan, desserts, etc,” he added.
Believing the younger generation to be a key source, Singh concluded stating that, “With the advent of new brands the younger generation is becoming global and is beginning to acquire new taste and preferences. For this reason alone, we have added at least 10 new pizzas in the last decade only.”