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What 2022 holds for restaurant industry in India

Over 45 million Indians satiated their food cravings by dining out at their favourite restaurants in 2021. And given growing aspirations, higher disposable incomes and increased tech-savviness of consumers, the restaurant industry could touch new heights in terms of eating out in 2022.

What 2022 holds for restaurant industry in India
Over 45 million Indians satiated their food cravings by dining out in 2021. Image: Bloomberg

By Smita Jatia

The beginning of the year is the best time to determine one’s goals for the future. To me, 2022 has begun with a bang. The fittest in the restaurant industry have survived and revived. And dining out trends of the previous year suggest that the eating out market in India is ripe for its next phase of growth.

Consider this: Over 45 million Indians satiated their food cravings by dining out at their favourite restaurants in 2021, according to tech platform Dineout. In a year marred by the second wave of the pandemic, this number is significant. And given growing aspirations, higher disposable incomes and increased tech-savviness of consumers, the restaurant industry could touch new heights in terms of eating out in 2022.

Why do I say this? Because the restaurant industry has seen some of its most notable changes caused by the Covid-19 pandemic. To me, the pandemic has given an impetus to the market to innovate even as consumer dining preferences have evolved rapidly. A recent Covid impact assessment report by the National Restaurant Association of India says that the share of the organized market within food services is expected to increase to 54 per cent by FY2025, up from 27 per cent in FY2021. While heartening, this calls for players to work even harder, as digital transformation continues to upend both businesses and consumer lives.

For example, take our McDonald’s convenience channels such as delivery, drive-thru, take-out and On the Go. In the September quarter, the rate of growth of these channels was 77 per cent over the year-ago period. That is a significant jump! And the pace of growth continues to be high even as dine-in operations recover almost completely across our markets.

What this suggests to me is that consumers are seeking newer ways to both eat in and eat out and restaurant majors, especially in the organized market, are responding to these trends fast. Who could have imagined, for instance, that a burger could be delivered in a car? But as the need for safety and convenience grew during the pandemic, people are responding with varied options for consumers. 

So where do I see the market headed in 2022? Which are the trends to watch out for this year? I have a few thoughts to share on the subject.

Omnichannel and convenience

India’s internet user base is expected to touch 900 million by 2025, up from 622 million now, a study by Kantar and the Internet and Mobile Association of India said recently. While a growing user base holds significant promise for the e-retail market, consumers will also seek time offline. This applies to the eating out market too, where the consumer will interact with the brand online on some occasions and offline on the other. This omnichannel consumer expects a uniform, seamless and personalized experience across brand touch points. At the same time, this consumer is also seeking convenient solutions in keeping with his or her needs, choices, and occasions.

Be it contactless ordering using QR codes or digital menu cards or UPI payments or digitally enabled take-outs, providing multiple ways for consumers to order, pay for, and get their meals on time while ensuring a uniform and seamless experience across platforms is a way of life now. 2022 could see this trend gather pace as technology moves to the next level. For instance, self-ordering kiosks leveraging augmented reality or virtual reality could provide an immersive experience, allowing customers to order food themselves thereby skipping long queues at the front counter. Some players are experimenting with AI and robotics to elevate the consumer experience at their restaurants.

Safety and hygiene

The importance of maintaining hygiene standards in restaurants cannot be stated enough. In Covid times, safety and hygiene standards are of utmost importance, as consumers consciously seek out places that are safe to eat. 

Personalisation

In the restaurant business, nurturing customers across brand touchpoints is the best way to drive repeat business. In the age of personalization, this is a key ingredient to dish up a comprehensive and seamless consumer experience, capturing valuable data and insights across the customer journey. This could be via drive-thru, mobile apps, kiosks, or tablets. To give customers fantastic, personalized experiences, brands need to know them across channels and be able to use data to give them offers that are relevant, organize menu items based on purchase history and ensure delivery at the right time and location. This is where customer relationship management (CRM) helps. 

Nutritious menu options

Eating at a restaurant doesn’t have to sabotage a healthy diet. In fact, restaurant chains such as ours have been reinforcing our commitment to nutritious and wholesome food for a while now. Consumers too are choosing brands that provide nutritious menu options. I see this trend gaining ground in 2022 as health is no longer a second priority for people in general. It is top on their priority list.

(Smita Jatia is Director at Westlife Development Ltd, which owns and operates McDonald’s restaurants in the West and South of India)

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