Hvs restaurant industry in india - trends opportunities


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Hvs restaurant industry in india - trends opportunities

  1. 1. Restaurant Industry in India - Trends and OpportunitiesRestaurant Industry in India - Trends and OpportunitiesHVS International (India), Mr. Navjit Ahluwalia, Associate Director andMr. Dushyant Singh, Consulting & Valuation Analyst Research, Report WritingMr. Shyam Suri, Secretary General, FHRAI Editing, Report FianlisationMr. Pooran Chandra Pandey, Assistant Secretary General (Research), FHRAI Hotel Questionnaire & Co-ordinationMr. Raj Rajeshwar Sharma, Computer Data Assistant Design, Graphics, Pre-press & DTPPrinted by :Published in April 2004 by:Secretary General, Federation of Hotel & Restaurant Associations of IndiaB-82, 8th Floor, Himalaya House, 23 Kasturba Gandhi Marg, New Delhi - 110 001Phones : (011) 23318781, 23318782, 23322634, 23322647, 23323770 Fax : (011) 23322645E-Mail : fhrai@vsnl.com Website : www.fhrai.com© Federation of Hotel & Restaurant Associations of India (FHRAI), 2004Price: One copy free to concerned FHRAI members. (Additional copies at Rs. 400.00 for FHRAI members and Rs.600.00 for Non-Members.) US$50.00 for foreign dispatches 2
  2. 2. Contents Table of Contents1. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72. Background Scenario and Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113. Analysis of Questionnaire Responses 3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 3.2. Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 3.3. Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .214. Food Trends-At home and abroad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .255. International Restaurant Chains & Franchise Opportunities . . . . . . . . . . . . . . . . . . . . . . . .296. What is my Restaurant Business worth? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .357. Conducting a Feasibility Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .418. Restaurant Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 3
  3. 3. Restaurant Industry in India - Trends and Opportunities 4
  4. 4. Foreword ForewordFHRAI has been very active in our research studies, but we have done this first research project onthe restaurant industry in India. This present study on Restaurant Industry in India - Trends &Opportunities has been conducted on our behalf by HVS International (India), which is a reputedglobal consultancy company in the field of hospitality industry.Some facts and figures on the operations of restaurants in India have been given in this study from aquestionnaire response from FHRAI hotel and restaurant members. The statistical analysis in thereport has used 165 such responses, which represents about 15% of the 1100 questionnaires whichwere sent to our restaurant members, both independent and in the hotels. Apart from this analysis,the researchers have also quoted some interesting demographic & economic data about theconsumers in India and their expenses on the food services. We are all aware about the boom in therestaurant sector in India, particularly in the metro cities and other large cities. One anecdotalevidence suggests that about two new restaurants are opening in Delhi and Mumbai every weekwhich makes it as 100 new restaurants in the year in these cities. These are in the organised sector,and a huge growth is simultaneously taking place in the unorganized and informal sector also. TheIndian economy is on a high growth curve and experts believe that the economy can generate anaverage 8% growth in the GDP on a sustainable basis for the next few years. This is bound to resultin high disposable incomes and higher consumer expenditure in the food service sector.The report also gives an insight on how to carry out valuation of restaurants and feasibility studies.It also gives average figures of operations and financial ratios for different types and sizes ofrestaurants. There is also information on global trends in the restaurant industry and names ofmultinational brands which are active in India and elsewhere. These facts and estimates should be ofgreat interest to new entrepreneurs as well as operators of existing restaurants. The report also hasfour case studies, which narrate actual experience of 2 failed and 2 successful restaurants. Analysisof these cases should help new entrepreneurs in a better understanding of the factors, which need tobe examined carefully in a new restaurant project.I express my sincere thanks to Mr. Manav Thadani, Managing Director, Mr. Navjit Ahluwalia,Associate Director & Team Leader and Mr. Dushyant Singh, Consulting and Valuation Analyst, HVSInternational (India) for their work on this study.I do hope that our hotel and restaurant members will read this research study with interest and it willbenefit them and the new investors in the restaurant sector in their operations and projects.Vivek Nair,President, FHRAI 5
  5. 5. Restaurant Industry in India - Trends and Opportunities 6
  6. 6. Executive Summary 1. Executive SummaryPurpose of the Study advised to read the entire report for aThe Federation of Hotel and Restaurant comprehensive view.Industries in India (FHRAI) engaged HVSInternational to research the restaurant Background Scenario and Numbersindustry in India and identify both global and Based on projections extrapolated from thedomestic food trends. 165 questionnaire Third Economic Census conducted in 1990, weresponses from independent and hotel estimate that there are approximately 500,000restaurants in India provided the statistical restaurants in India in the organized sector. Thisbasis for analysis of operations and financials of figure is expected to rapidly increase as a resultthe existing restaurant industry in the country. of the changes in demographic and economicIn addition, a large cross section of factors which are having a significant impact onprofessionals involved in the industry were the restaurant industry in India. Increasingconsulted for their views. The report presents urbanization and rising disposable incomes arethe results of the analysis and includes the characteristics that are common across severalfollowing: emerging economies, particularly in Asia. However, the pace at which this has taken place Background Scenario and numbers which in India in the last few years is likely to continue includes an analysis of the demographic over the next decade and will outpace most changes occurring in India and their other economies in the region. In particular, potential impact on the restaurant industry. Merrill Lynch estimates a growth in urban Analysis of responses collected via the consumption at potentially 20% per annum in questionnaire representing a snapshot of nominal terms (16% in real terms) for at least trends in the Indian restaurant industry. the next 5-7 year period. In addition, higher disposable incomes among consumers A summary of key emerging global food particularly in the top 25 cities and the trend trends as well as international restaurant towards eating out are combining with growth chains that provide franchise opportunities in organized retailing to fuel growth in the for operators in India. foodservice sector. A guide on how restaurants are valued and There are 10 million households in India with guidelines for conducting a feasibility study average household income of Rs 46,000 per before opening a restaurant. month and 2 million households with a Real life restaurant case studies on both household income of Rs 115,000 per month. successful and not so successful Eating out has emerged as a trend, which is restaurants. prevalent within this elite group. Two of out of every five households in this group eat out atConclusions for each of these sections are least once a month. There are 100 million 17-21summarised below and discussed in greater year olds in India, and six out of ten householdsdepth throughout the report. The reader is have a child that was born in the post- 7
  7. 7. Restaurant Industry in India - Trends and Opportunitiesliberalization era and has grown up with no acceptance of new fusion concepts andguilt of consumption. establishing of the chef entrepreneur. In India multinational restaurant chains had to make aSales by Indian food service companies totalled downward price revision and offer moreRs 350 billion in 2002. The organized sector is vegetarian toppings to increase sales volume.responsible for approximately Rs 20 billion This led to a dramatic improvement in theirworth of sales. Indian consumers spend only 2.4 performance. They are also adding more spicypercent of their food expenditure in hotels and items in their menus to satisfy Indian taste buds.restaurants (including on premises and take-outsales). American consumers, by comparison International and domestic multi-unitspend 46 percent of their food expenditure on restaurant groups are expected to drive theaway-from-home meals. These demographic expansion in the restaurant industry in India.numbers represent a young nation which has an Among the leading trends in this regard wouldincreased propensity to spend in restaurant and be the expansion of quick service Asianother food service sectors. restaurants, fusion concepts, restaurants with a focus on entertainment, and ethnic and regionalAnalysis of responses cuisine restaurants.An analysis of 165 responses out of 1100questionnaire sent nationwide revealed some Restaurant Valuations and Feasibilityinteresting statistics: Studies There have been very few restaurant A majority of respondents (53%) were transactions that have taken place in India till restaurants that achieved an average check date, largely because the restaurant business of between Rs 200 and Rs 400. has not yet evolved into a mature business. The total number of employees employed However, we foresee a fair bit of activity in this by 66% of the restaurants is under 40 with area in the future: changes in market trends and only 3% respondents employing more than competition, spurred by a huge expansion in the 100 employees. The sample therefore food service industry in all major metro cities, represented mid-size restaurants, which would cause many restaurants to change hands are a majority in the country. from one operator to the other. Restaurant valuation is a specialised art and appraisers of With regards to questions on tip and restaurant real estate normally consider three sharing of tips, 83% of the respondents do approaches to value: the cost approach, the not levy any service charge on the sales comparison approach, and the income restaurant bill. In comparison, 77% of the approach. Each approach has its own strengths respondents do not charge a service charge and weaknesses, depending on the age and in banquets. A majority of the respondents condition of the improvements and whether the (60%) have tip pools. building is occupied by an operating restaurant or is vacant. The cost approach is used toEmerging Food and Restaurant Trends estimate the cost of purchasing a site suitableSome of the emerging culinary trends for restaurant development and building ainternationally include the popularity of health restaurant on the site, including the cost offoods, use of fresh and authentic ingredients, 8
  8. 8. Executive Summarylandscaping the site. The sales comparison estimate for the restaurant. This investment hasapproach considers recent sales of restaurant to be compared with the returns being indicatedproperties that are comparable to the subject by the income and expense statement torestaurant property in location, size, and brand evaluate whether or not the restaurantaffiliation (if the restaurant was in operation at envisaged is financially feasible.the time of sale). The income approachconsiders the actual or projected rental income Restaurant Case Studiesthat could be generated by a restaurant business Four real life case studies are presented with theoccupying the building. attempt to highlight critical factors that determine the success or failure of a restaurant.A feasibility study is much more than a site- For each case study, we interviewed thelocation study - this approach involves entrepreneur and asked him/her to identify thegathering and analysing a great deal of key lessons learnt in running a restaurant. Weinformation, from demographics to design, describe the experience of each entrepreneur,which helps the operators make a better together with their perceptions of where theyinformed decision about the potential success of were right, or where they went wrong. Two casea specific concept at a certain location. In order studies represent entrepreneurs who believedto establish the feasibility of the proposed they had the right idea as well as the resourcesrestaurant, one must first estimate the to make a success in the restaurant business,development costs of the project. By analysing and they succeeded The other two casesboth development cost figures and current highlight some of the factors that did not allowmarket conditions, and by making adjustments the restaurant to succeed and both of them hadfor the specific characteristics attributed to the to close down. The studies give the factors,proposed restaurant (such as location, size, which led to the success of these enterprises.facilities, class and so forth), one will be able toderive an appropriate construction cost 9
  9. 9. Restaurant Industry in India - Trends and Opportunities 10
  10. 10. Background Scenario and Numbers 2. Background Scenario and NumbersSignificant economic & demographic facts urban consumption at potentially 20% perIndia has arrived on the global roadmap. It is annum in nominal terms (16% in real terms) forthe only country that has experienced at least the next 5-7 year period. What explainsacceleration in growth rates of per capita this phenomenon? The answer lies in theincome over the past decade. Almost all other demographic shift that is taking place in India.economies have shown growth rates lower than To put it simply, India is producing a muchIndias through the decade. Also, Indias per larger number of young people entering the jobcapita income growth over the past five years market compared to other Asian economies. The(1997-2002) has outperformed that of other number of working-age adults in the country isdeveloped and major Asian economies, save rising at a fast pace. While this is true of ChinaChina. as well, the pace of increase is faster in India than in China. Thus, even with Chinas vigorousIndias per capita income grew by about 19% in population policies, its per capita income1997-2002, second only to China, whose per growth is not rising as fast as India.capita income grew by 39% during this period.The only other emerging Asian country that The restaurant industry is an importantcompares with Indias growth rates is Korea, component of our nations economy, andwhich has grown around the same rate as India. employment opportunities in this sector shouldTaiwan comes fourth with a growth rate of 13% continue to grow in the future as a direct resultduring the period. of the demographic changes taking place. Indian consumers spend only 2.4 percent ofDuring 1992-2002, Indias per capita income their food expenditure in hotels and restaurants.grew by 46% - a rise of 980 basis points (9.8%) American and British consumers, byfrom the 36.5% growth rate observed during comparison, spend 46 percent and 29 percent1982-92. On the other hand, China has shown a respectively, of their food expenditure on away-decline in growth rate over the decade by as from-home meals. This indicates that there ismuch as 700 basis points (7%). And countries significant scope for the growth of food servicesuch as Thailand and Hong Kong have seen a sector in India in the years to come.fall in growth rates by as high as 6,200 basispoints (62%) and 5,100 basis points (51%) A number of factors are driving increasedrespectively. foodservice sales in India:Increasing urbanization and rising disposable Growth in personal income- The increase inincomes are characteristics that are common buying power of Indian consumers is driving theacross several emerging economies, particularly growth in the foodservice sector. Apart from thein Asia. However, the pace at which this has growth in per capital income, as per figurestaken place in India in the last few years is likely given above, there are other important factorsto continue over the next decade and will also contributing to this kind of consumption.outpace most other economies in the region. In Just 2.4 percent of Indian households earn 50%particular, Merrill Lynch estimates growth in of Indias GDP The top 3.9 million households . 11
  11. 11. Restaurant Industry in India - Trends and Opportunitieshave an average household income of households in middle, upper and high-incomeapproximately $35,000 per annum. According segments has grown by 12% annually.to the National Council for Applied Economic Approximately 23.6 million households haveResearch (NCAER), as indicated in Table 2-1, been added to the high, upper and middlehigh income households in urban India grew at income segments of Indian consumers fromover 21.5% on a compounded annual growth 1990 to 1998. These households have higherbasis between 1995-96 and 1998-99. disposable income per member and have a greater propensity to spend on food. Table 2-1 growth in per capita income by income classes Urbanisation- Most high income IndianIncome Class* Average Annual Growth in per consumers live in urban India. Approximately capita income (CAGR in %), 50 percent of households in the high, upper and 1995-96 to 1998-99 Urban Rural Total middle income groups reside in urban areas.Lower -10.8 -4.5 -5.5 Over one-third of urban Indian consumersLower-middle 0.9 7.7 5.6Middle 5.3 7.8 6.6 reside in less than one percent of the totalUpper-middle 9.9 8.6 9.3 number of cities in India. The percentage ofHigh 21.5 14.3 18.6* inflation adjusted, comparable over time Indians living in cities has increased from 19.9Source: NCAER percent in 1980 to 30.5 percent in 2000.The consuming classes consist of 40 million Growing number of women in the workforce-income-earners with a per capita income of The number of dual income households where$4,000 (Rs. 1.8 lakhs) and 10 million with a per both husband and wife work is increasing. Overcapita income of $12,000 (Rs. 5.4 lakhs). 16 percent of the population of Indian womenConsumers are also migrating up the income work full-time and spend most of their timechain - from the "have nothing" to the "have away from home; this has been an importantsome" to the "have more" to the "have lots" and, factor influencing the trend towards more mealsfinally, "have all". These numbers for different away from home.income groups are given in Table 2-2. Emergence of the Liberalisation Children- Table 2-2 No of Households by income There are a 100 million, 17-21 year olds in classes India, and six out of ten households have aNo of Category Anuual Monthly "liberalisation child" (Post 1991). This is aHouseholds Income USD Income Rs2 Million Have All 30,000 115,000 generation that was born in the post-10 Million Have Lots 12,000 46,000 liberalisation era and has grown up with no40 Million Have More 4,000 16,000100 Million Have Some 1,500 6,000 guilt about consumption.30 Million Have Nothing 200 700Source: IMA Research The rise of the self employed- The proportion ofConversion rate of 1 USD = Rs 46 was used for this table. self employed in urban India has risen to aboveShrinking household size- The size of the Indian 40%, replacing the employed salary earner ashousehold has declined over the last few years the new "mainstream market". A Hansa(from 5.9 people per household in 1990 to 5.5 Research Group study shows the even in thepeople in 1998). The total number of households creamy layer, comprising the top two socialin India has increased by less than 3 percent per classes in towns having a population of 10 lakhyear from 1990 to 1998; however, the number of plus, in urban India, 40% of chief wage earners 12
  12. 12. Background Scenario and Numbersin households are shopowners, petty traders, households. Only 3.4 percent of the householdsbusinessman and self employed professionals. in those six metros qualified to be included inUnlike the salary earner, the self employed use the Platinum category.products much more to signal success. The average monthly household income (MHI)Menu diversification- High-income Indian of a Platinum household is Rs 23,000. And,consumers are seeking variety in their choice of interestingly enough, every month, 60 percentfood. Urban Indian consumers are aware of of this amount is spent to maintain the life andvarious international cuisines (Continental, style of the household.Chinese, Mexican, Italian, Thai and Japanese)and an increasing number are willing to try new Well-heeled Capital of Indiafoods. As per the study, every second Platinum household is in Delhi. Mumbai comes next, butSuper Rich Defined the probability drops down to one out of five. ItThe Media Research Users Council (MRUC) is true that today, Delhi is, by far, the city of theundertook a study of the incomes and spending super rich of India. The citys Platinumpatterns of households and called it The IRS households have an average income of RsPlatinum. The data collected was then analysed 24,450. Mumbai earns the highest (Rs 31,970)by the Communication Channel Planning (CCP) and Bangalore earns the least (Rs 20,180). Thedivision of Initiative Media. chief wage earner of the family is highly educated. In terms of occupation, he isIRS Platinum defines super rich as any predominantly a businessman in Mumbai,household that has a colour television, Chennai and Ahmedabad. In the other cities herefrigerator, washing machine and a car. The is either an officer or an executive at a seniorstudy was restricted to Mumbai, Delhi, level. Moreover, eighty-eight per cent ofAhmedabad, Bangalore, Chennai, and Pune - Platinum households adult members have athe cities having a high proportion of college-level degree.households that satisfied the above criteria.These towns account for 39 percent of all the In these households the housewife is also highlysuper rich households that reside in urban India educated (68 per cent are at least graduates).today. However, in spite of their high education, only 17 percent are working, either full-time or part-It is interesting to note that metros such as time. The average household size is 4.5, whichCalcutta and Hyderabad are missing from the reflects the nuclear structure of the families. 85list. These cities would have definitely qualified percent of this elite group has its own house andby the normal demographic parameters. They is gradually going in to buy its second TV set.missed out since the penetration of one or more Almost all the households in this group have aof the listed durables was low in these otherwise cable and satellite connection.large metros.A sample of 5,226 households was surveyed by If you have it then spend itORG-MARG on behalf of MRUC to understand The interesting part is the information that IRSthe lifestyles of the affluent, with media and Platinum provides on the monthly familyconsumer habits of such individuals and their expenditures. The patterns are indeed very 13
  13. 13. Restaurant Industry in India - Trends and Opportunitiesrevealing. On an average 61 percent of MHI is surprise package is Internet. It has alreadyspent to maintain the life and style of these elite overtaken Radio (30 percent). Platinumhouseholds. It rises to 69 percent in Ahmedabad households are spending more time on theand drops to 56 percent in Chennai. The Internet than on reading.expenditure is tracked across 20 heads rangingfrom the monthly electricity bill to the amount Number of Restaurants in Indiaspent on last eating out. On an average, each It is difficult to assess the number of restaurantshead accounts for about 5 percent of the total in India. They receive their licenses from theexpenditure. The highest amount goes for local municipal authority, which is mainly amonthly provisions accounting for almost 17 licence from the point of view of health andpercent of the total spend. hygiene. In certain bigger cities, there is also a requirement of a license from the local policeChennai is the surprise package for starting operations. RestaurantAt city level certain interesting patterns establishments in semi-urban and rural areas,emerged. Chennai had the highest average which may also include road-side restaurantsmonthly telephone bill. Its residents spend the and dhabas on inter-city roads and highways,maximum on personal care products as well as may not be possessing any license, from anyon cosmetics. Likewise, they spend the authority. It is, therefore, difficult for anyone tomaximum while eating out, on alcohol and compile statistics of all the restaurants in India.beverages, on buying gifts and also on charity We believe that the best effort in this regard hasand donations. Bangalore pays the highest been made in the government census. We havemonthly rents, and spends the highest among all figures available from The Third Economiccities on maintenance and on travelling and Census which was conducted in all cities/unionconveyance. territories except Jammu and Kashmir duringIn terms of occupation, it is the reflection of the 1990, along with the house listing operations ofIndian economy with 44 percent focussing on the 1991 population census. We have not beenthe manufacturing sector. Within this, able to access the economic census which mayengineering goods alone account for 8 percent have been done in 2000, as part of theof them. This is the largest skew across all the population census of 2001.three sectors put together. Financial services The economic census of 1990 divided hotel andincluding banks (5.5 per cent) and the current restaurant enterprises in two categories, Ownfavorite, IT and software (4.2 per cent) stand out Account Enterprises (OAE) and Establishmentsamongst the rest. (Estt). The figures of the two categories haveIn terms of their media habits, as expected, been separately given for rural and urban areas.almost all the Platinum households can be easily Table 2-3 reflects the break-up of hotel andreached through either the print or the restaurant establishments for rural and urbantelevision. Radio has lost out (25 percent), but of India. Table 2-4 reflects data relating to thethose tuning in, almost 90 percent are tuning state-wise distribution of hotel and restaurantinto FM. However, unlike the West, enterprises in the country.predominantly they tune in at home. But the 14
  14. 14. Background Scenario and Numbers Table 2-3 No of Hotel and Restaurant categories. Although the overall PFCE is Enterprises in India available for 2001-02, the disaggregate data isLocation OAE % Estt % Total %Rural 459,134 42.6 133,240 12.4 592,374 55.0 available up to 2000-01. There were only nineUrban 243,044 22.5 242,888 22.5 485,932 45.0 PFCE segments that have recorded continuousTotal 702,178 65.0 376,128 34.9 1,078,306 100.0Source: The Economic Census of India, 1990 high growth performance and include hotels and restaurants.If we assume that there may have been a growthof 6% annually in hotels and restaurant Another survey that captures eating out habits isestablishments after 1990, the number of the Readership Survey. Table 2-5 and Table 2-6establishments would have doubled in the 12 illustrate the eating out habits of the sample byyears upto 2002. We therefore estimate that city and for the country as a whole. The surveythere are approximately 2.2 million or 22 Lakh helps in identifying certain trends as regards thehotel and restaurant establishments in India in use of restaurants and frequency of their use.the year 2002. We further estimate that of the The results indicated that Bangalore scored thetotal figure, approximately 500,000 restaurants highest in terms of the percentage ofqualify as establishments in the organized sector respondents eating out more than once a weekwith more than 20 seats, an entrance door, a followed by Kolkata and Chennai. On a broadermenu card and waiter service. As the number of level the all India average of respondents rarelylodging or hotel units in these figures would not eating out was 70%, once again indicating thebe more than 20,000 or 30,000, we can presume potential that exists for the food service sector inthat the entire figure of 22 lakhs can apply to the the country in the years to come.restaurant sector. For restaurants, the growthpatterns would be different for different cities, Table 2-4 Geographical Distribution ofwith metro cities achieving about 15-20% Hotel and Restaurant Enterprises Own Accountgrowth and smaller cites about 5%. State/UT Enterprises Establishments All Andhra Pradesh 69,979 26,504 96,483 Arunachal Pradesh 446 1,029 1,475The eating out culture Assam 12,005 14,713 26,718Eating out has evolved into a popular trend Bihar 39,822 21,599 61,421 Delhi 10,917 10,642 21,559among Platinum households. Two out of five Goa 1,740 1,189 2,929such households eat out at least once a month. Gujarat 14,759 12,945 27,704 Haryana 11,971 5,426 17,397This is highest in Bangalore (43 percent) and Himachal Pradesh 7,931 3,214 11,145lowest in Pune (33 percent). It is estimated that Karnataka 60,093 34,429 94,522 Kerala 71,472 27,483 98,955Indians spend Rs 350 billion annually on eating Madhya Pradesh 39,248 24,412 63,660 Maharashtra 47,828 52,237 100,065out. Moroever, of this Rs 350 billion, the Manipur 2,174 794 2,968organised sector accounts for only Rs 20 billion, Meghalaya 2,222 3,100 5,322 Mizoram 1,010 619 1,629suggesting a tremendous potential for growth in Nagaland 589 949 1,538this area. Orissa 34,811 18,007 52,818 Punjab 10,006 6,694 16,700 Rajasthan 29,426 14,820 44,246An analysis of National Accounts Statistics data Sikkim 261 398 659with regards to private final consumption Tamil Nadu 85,563 36,637 122,200 Tripura 4,096 1,254 5,350figures (PFCE) reveals interesting insights as Uttar Pradesh 73,911 28,760 102,671well. The national accounts provide West Bengal 68,179 26,508 94,687 Others 1,719 1,766 3,485disaggregated data for 37 consumption Total 702,178 376,128 1,078,306 15
  15. 15. Table 2-5 Dining out Habits for seven Indian Cities Delhi Greater Mumbai Chennai Kolkata Hyderabad Bangalore Ahmadabad Pune Eating Out In Restaurant (000s) % (000s) % (000s) % (000s) % (000s) % (000s) % (000s) % (000s) % More Often Than Once A Week 113 1.4 162 1.4 135 2.7 260 2.8 96 2.2 175 4.7 23 0.8 34 1.5 Once A Week 240 3.1 319 2.7 139 2.8 183 2 148 3.4 281 7.6 47 1.6 74 3.3 Once A Fortnight 211 2.7 320 2.7 152 3.1 115 1.2 127 2.9 271 7.3 80 2.7 65 2.9 Once A Month 579 7.4 976 8.3 675 13.7 362 3.9 268 6.2 492 13.3 228 7.7 243 10.9 Once In 2-3 Months 470 6 1232 10.5 546 11 448 4.8 229 5.3 318 8.6 277 9.4 277 12.5 Less Often/Only At Festivals 495 6.4 941 8 610 12.3 2143 23 134 3.1 293 7.9 253 8.6 235 10.6 Rarely/Never/Cant Remember 5477 70.3 6792 57.9 2283 46.2 5442 58.4 3150 73.1 1817 49.1 1611 54.7 1143 51.5 Source: Readership Survey Table 2-6 All India Urban Dining out Habit16 All India Urban Eating Out In Restaurants (000s) % More Often Than Once A Week 3068 1.7 Once A Week 4568 2.5 Once A Fortnight 3800 2.1 Once A Month 10046 5.5 Once In 2-3 Months 9858 5.4 Less Often/Only At Festivals 14599 8 Rarely/Never/Cant Remember 127822 69.6 Source:Readership Survey Restaurant Industry in India - Trends and Opportunities
  16. 16. Analysis of Questionnaire Responses 3. Analysis of Questionnaire Responses 3.1 GENERAL independent restaurants operating a single unit and 19% were multi-unit restaurants operatingThis study of Restaurant Industry in India- two or more units. Moreover, 40% of theTrends & Opportunities is based on data and restaurants that participated in the survey werecomments provided by members of the owned by sole proprietorships, 15% wereFederation of Hotel and Restaurants Association through partnerships and 40% were privateof India. In order to reflect a comprehensive limited companies. Large hotel and restaurantview of the restaurant industry, we have companies were conspicuous by their absenceincluded comments and data from both chain and contributed only 1% of the total responses.affiliated and independent restaurants. This can also be explained by the fact that largeAbout 1,100 questionnaires were sent out hotels do not maintain detailed/accuratenationwide to independent restaurants and financial break-up of costs by restaurant, as theyhotels. A total of 165 restaurants responded, of use a number of central services like a commonwhich 90 responses were from the metro cities laundry, housekeeping and security and, in mostof New Delhi (18), Mumbai (43), Kolkata (2), cases, a central kitchen.Chennai (6) and Bangalore (10). The remaining75 responses reflected a homogenous mix from Highlights & Characteristics44 cities in India with the maximum responses Table 3.1-1 on page 18 summarizes thefrom Pune (11), followed by Agra (8) and Jaipur responses to Section I of the questionnaire and(5). However, it is important to note that provides a view to some importantresponses for the financial data were not as characteristics representative of restaurants incomplete when compared to the general India.questions. This factor combined with our The majority of respondents (53%) werestringent criteria to accept only validated restaurants that achieved an average checkfinancial data resulted in fewer responses, between Rs 200 and Rs 400. The second-providing us a total of 72 usable responses. As largest group, comprising 36% of thethe data in the following paragraphs shows, the respondents, had an average check ofrespondents belong to the upper end segment of between Rs 400 and Rs 650. A muchrestaurants in India. They are the ones who are smaller percentage of restaurants, 5% andmore organized to respond to questionnaires. 6%, had an average check of either over RsThis may not be a negative factor for this study, 650 or below Rs 200, respectively.as they are usually trend setters which othersfollow. 60% of the respondents indicated full liquor service and 5% indicated a license for onlyComposition of Participating Restaurants wine and beer. 35% of the respondentsThe survey indicated that 40% of the served no alcoholic beverages.respondents were restaurants located within a Multicuisine restaurants, serving a varietyhotel. A slightly larger proportion (41%) were of cuisine including Indian, Continental 17
  17. 17. Restaurant Industry in India - Trends and Opportunitiesand Chinese, constituted a fairly large restaurant on renovations was Rs 9 lakh.segment (17%) of the respondents to the A majority of restaurants (73%) respondedsurvey. that they did not have a loyalty program. InRecorded music (62%) is the most widely fact, we believe a much larger percentageused entertainment in the restaurants. A of restaurants do not have any loyaltynumber of respondents (17%) use live programs, but some hotel respondents maybands. have confused restaurant loyalty program with the hotel loyalty program.The response with regards to the site andbuilding on which restaurants are located Table 3.1-1 Composition of Participatingdrew an almost equal response between Restaurantsowned and leased. This is also indicative of Type of Ownershipthe fact that a majority of restaurants Sole Proprietorship 19 % Partnership 40responding to the survey (63%) have been Government Owned -in the business for over ten years and only Private Company 40 Public Limited Company. 16% of the respondents have been in Type of Organisationbusiness for under two years. As leasing Independent (operates one unit) 41 %restaurant buildings is a fairly recent trend, Multi-Unit (operates two or more units) 19 Hotel restaurants 39we assume that, had the respondents been Others 1skewed towards more recent entrants, the Primary Type of Businesspercentage of sites leased as opposed to Fine dining (average check over Rs. 650) 5 %owned would have been higher. Fine dining (average check over Rs. 400) 36 Fine dining (average check over Rs. 200) 53 Any Other (Average check below Rs. 200) 6Almost all respondents are open for lunch Limited service (only quick service / fast food) 0and dinner. 44% of the respondents are Liquor Serviceopen for breakfast and 13% responded as Full liqour Service 60 %being open for nearly 24 hours. Most of the Only Wine and Beer 5 No alcholic beverages 35last two categories must be hotelrestaurant. Primary Menu Theme Indian Mughlai 22 % Indian Fast Food 10The survey indicated that the majority of French / Continental 9restaurants (38%) are between 50 and 100 Western Fast Food 4 Regional (eg. South Indian etc) 12seats. Coffee Bar 4 Asian (chinese, Indonesian, Japanese, Korean) 15The total number of employees employed Mexican 2 Italian 4by 66% of the restaurants is under 40 with Multicuisine 17only 3% respondents responsible for Any otheremploying more than 100 employees. Entertainment in Restaurant Live band / Show 17 %Over one-third of the restaurants Television Monitor 18 Recorded Music 62responded to having renovated their All the above mentioned entertainment 2restaurant in the last one year but an equal Any other 1number also had not renovated for over Site on which restaurant is locatedthree years. The average amount spent per Land owned 30 % land leased 11 18
  18. 18. Analysis of Questionnaire ResponsesBuilding ownedBuilding leased 31 27 3.2 TRENDSNumber of Years in Business Section II of the questionnaire was designed tounder 2 years 6 % highlight emerging trends within the restaurant2 to 5 years 145 to 10 years 17 industry in India. The questions covered a wideover 10 years 63 area ranging from employee hiring andRestaurants best estimate of sales if offered in % motivation to locations and menu themes forTake out 5 %Outside Catering new restaurants.Banquet ServicesRestaurant Opened for Highlights & CharacteristicsBreakfast 44 % Below, we highlight some of the importantLunch 96Dinner 100 trends that emerged from the analysis of the24 hours (nearly) 13 responses received.Number of SeatsUnder 50 4 % Referrals were ranked as the first choice as5o to 100 38 an avenue to recruit staff, followed by100 to 150 31150 to 200 14 advertising, placement agencies and200 to 250 7 internet sites. Some respondents indicated250 to 300 3Above 300 3 campus recruitments, walk ins and directTotal Square Footage applications as other avenues used by themUnder 1,000 6 % in this regard.1,000 to 2,000 212,000 to 3,000 14 Higher Salary, followed closely by Growth3,000 to 4,000 184,000 to 5,000 17 Prospects, were the leading motivationAbove 5,000 24 factors indicated by respondents.Total no of employeesUnder 20 25 % Respondents chose business people as their20 to 40 41 most important customer group. This is40 to 60 1360 to 80 12 perhaps in line with the characteristics of80 to 100 6Above 100 3 the majority of restaurants participating in the surveyLast renovation carried outUnder 1years 34 % More than 80% of the respondents felt that1 to 3 years 30Over 3 years 36 the culture of eating out has increased overTotal cost of renovating (Lakhs) 9 the last three years.What services do you outsource/contract ?Cleaning 20 % With regards to what would be theirPayroll and Accounting 9 success formula for a new restaurant inLaundry 52Marketing 9 terms of menu theme, 28% of theRepair and Maintenance 38Food production 7 respondents chose Multicuisine, 17% choseAny other 7 Indian Mughlai, 16% chose Asian and 10%Do you have Loyalty program ? pointed to regional Indian.Yes 27 %No 73 Almost half the respondents preferred their restaurants to be located in a commercial 19
  19. 19. Restaurant Industry in India - Trends and Opportunities market, while 26% preferred to be located Table 3.2-1 Trends as indicated by in a hotel. respondents The survey indicated that the majority of What avenues do you use to recruit staff Rank * Advertisements 2 restaurants (38%) would price a new Internet Sites 4 restaurant they opened between an average Placement Agencies 3 Refferals 1 per cover of Rs 200 and Rs 400. Any Other 5 Over one-third of the restaurants use What do you consider the most important ways to motivate staff Rank imported raw food materials and 44% stock Higher salary 1 imported alcoholic beverages. Flexible working hours 4 Increased training 3 Modern restaurant/ kitchen equipment 5 A majority of restaurants (59%) responded Growth prospects 2 that they did not import or use imported Any other kitchen or restaurant equipment. However Who is your most important customer group? Rank a significant 41% did. Business People 1 Tourists (out of town) 3 Families/housewives 2 With regards to questions on tip and Parties for children 4 sharing of tips, 83% of the respondents do Young people (15 to 30 age group) 5 Any other not levy any service charge on the restaurant bill. Among the 17% who do levy Which success factors are most important to you? Rank a service charge, the median with regards Quality of food 1 Entertainment 5 to the percentage charged is 8%. Quality of service 2 Promotion/ Marketing 4 In comparison, 77% of the respondents do Restaurant seting/décor 3 not levy a service charge in banquets. Do you feel in the last three years the Banquets is mostly a hotel activity and it is culture of eating out has Increased a lot 58 % possible that those who said yes, were hotel Remained the same 6 restaurants. However, the 23% that do, Increased marginally 29 Decreased 6 have a median charge of 10%. A majority of the respondents (60%) have tip pools. If you were to build another restaurant today(what in your view will be a success formula) ? Interestingly, where restaurants levy What would be your Menu theme service charge as part of the bill, the Indian Mughlai 17.4 % Indian fast food 15 median percentage retained by French/ Continental 1 management is 25% as compared to 10% in Western Fast Food 5 Regional (eg. South Indian etc) 10 case of tip pools. Also, the median Coffee Bar 5.16 percentage retained by service staff is much Asian (Chinese/Indonesian/Japanese/Korean) 16.1 Mexican 0 higher in the case of tip pools (97%), as Italian 1 compared to a situation where service is Multi Cuisine 28 charged and the money distributed more Would you prefer to be located in/attached to A hotel 26 % equitably among all staff with the service In a commercial Market 48 staff retaining a lower figure (53%). Residential Area 14 A transportation center(airport, railway station) 13Table 3.2-1, summarizes the responses to What kind of Restaurant would it be?Section II of the questionnaire on the trends. Fine dining (average check over Rs. 650) 11 % 20
  20. 20. Analysis of Questionnaire ResponsesFine dining(average check over Rs. 400)Fine dining(average check over Rs. 200) 33 38 3.3 FINANCIALSLimited Service (all quick service/ fast food) 19 Section III of the questionnaire was designed toDo you use imported materials? capture the financial structure of theFood and non alcoholic beveragesYes 37 % restaurants in India. The questions covered theNo 63 profit and loss account. The section belowAlcoholic spirits highlights some of the important trends thatYes 44 %No 56 emerged from the analysis of the responses.Kitchen or restaurant equipmentYes 41 % Understanding Medians & MeansNo 59 This section utilizes medians for reportingWhat is your policy on tips? results. A median is defined as the middle valueDo you levy service charge in Rest. Bills of all amounts reported for a specific line item.Yes 17 %No 83 For example if we received nine responses for% of bill amount 8 number of employees-8,4,2,6,9,7,5,1,3- theseDo you levy service charge on banquets? numbers would be arranged sequentially (inYes 23 %No 77 order of size) -1,2,3,4,5,6,7,8,9- and the middle% of bill amount 10 value, 5, would be the median. 50% of theDo you have a tip pool? 60 % responses received are below the value and 50%Yes 40 are above.NoHow do you dispose off the service charge? Median ** In conjunction with medians, lower quartilesRetained by Management 25 % and upper quartiles are used to give a furtherManagers 15Service Staff 53 description of the sample results. Medians areKitchen Staff 25 used most often as we believe that the medianOthers (e.g. office cashier, security, etc) 10 gives less biased results compared to averagesHow do you dispose off tips pools? Median which are sum of all figures divided by theRetained by Management 10 %Managers 10 number of figures. Medians keep the resultsService staff 97Kitchen staff 29 from being skewed by a few abnormalOthers (e.g. office, cashier, security) 10 respondents with higher or lower figures. For example if a few responding restaurants* 1 is the hightest and 5 lowest incurred very large operating losses, those** Please see definition of median on page losses would be divided equally among all restaurants (when using mean calculations) and would reduce the average net profit of the entire group which, for the most part, may have reported respectable profits. Quartiles divide the responses into four equal parts, with medians still being the middle value. The "lower quartile" is the value that separates the lowest 25% of the respondents from the sample when arranged sequentially, while the 21
  21. 21. Restaurant Industry in India - Trends and Opportunitiesupper quartile defines the boundary of the important findings. A total of 69 respondentsupper 25% from the lower 75%. Stated another completed the financial section of theway, 50% of all responses fall between the lower questionnaire.quartile and the upper quartile. For example ifwe receive 99 responses for a specific items and Table 3.3-1 Trends as indicating bythe responses were numbered 1 through 99, the respondents In Rs.median (or middle value) would be 50. The Median Average Check 241lower quartile would be 25 (25% of the Median Total Sales per full time equivalent employee 311,974responses would be below 25) and upper Median Total Sales per Square foot 3,494quartile would be 75 (25% of the responses Median Income before income taxes as % of total Sales 4.51%would be above 75). Fifty percent of the Median Total Cost of Sales 40%responses would fall between the lower andupper quartiles. The median average check for the respondents is Rs 241.It will become evident in reading this report thatcolumns do not always total when medians are The respondents reported income beforeinvolved. The reason behind this is that each taxes of approximately 5% of sales.line item is analysed separately. In Table 3.3-1, Median total sales per full time equivalentwhen all amounts are arranged sequentially, the employee is Rs 311.974.median total sale per seat is Rs 81,638. Thisfigure is based on the 69 restaurants that gave The survey indicated that the median forus information for this specific line item. The the percentage of food sale to total sale wasmedian per seat for total food and beverage 76%. Beverage sale accounted for thesales are Rs57,659 and Rs 18,564, respectively. remainder 24%.These two amounts were analysed on a sample The median cost of sales as percentage ofof 61 and 40 restaurants respectively, which total sale was 40%.gave us separate food and beverage sales.Different sample sizes are one reason why Table 3.3-2 presents the income and expensefigures do not add up to the total shown. statement of the 69 respondents who provided financial data. The data is presented both as aThere is another reason that columns in the percentage of total sales and as amount per seat.table do not total. When using medians, it isimportant to remember that the median food The survey indicated that the median forsales, the median beverage sales and the median the percentage of food sale to total sale istotal sales figures reported probably represent 76%. Beverage sale accounts for thethe results of three different restaurants, even remainder 24%.thought the sample size of each may be equal. The median cost of sales as percentage ofThis also holds true for lower and upper total sale is 40%quartiles. The upper quartile of income beforeHighlights & Characteristics income taxes is 11% and the median is 5%.Table 3.3-1 summarizes the responses to SectionIII of the questionnaire and highlights some 22
  22. 22. Analysis of Questionnaire Responses Table 3.3-2 Percentage of Total Sale and Amount per Seat Percentage of Total Sales Amount Per Seat (Rs) Lower Median Upper Lower Median Upper Quartile Quartile Quartile QuartileWhere it Came FromSales Food Sales 78% 76% 75% 42,988 57,659 61,225 Beverage Sales 22% 24% 25% 12,476 18,564 20,268 Total Sales 100% 100% 100% 55,294 81,638 78,040Cost of Sales Food1 44% 43% 40% 18,824 24,646 24,322 Beverage2 37% 32% 38% 4,667 5,903 7,624 Total Cost of Sales 3 47% 40% 40% 25,882 32,515 30,917Operating Expenses Salaries & Wages 12% 12% 15% 6,739 9,619 11,606 Employee Benefits 2% 2% 3% 925 1,354 1,958 Direct operating expense 4% 7% 9% 2,392 5,434 7,099 Music and Entertainment 0% 1% 1% 129 467 1,042 Marketing 1% 1% 1% 425 640 970 Utility Services 2% 2% 3% 1,257 1,607 2,168 Restaurant Occupancy Costs 2% 2% 4% 865 1,731 2,964 Repair and Maintenance 1% 2% 3% 582 1,359 2,217 Depreciation 3% 4% 5% 1,912 3,284 3,625 Other Operating Expenses/ (Income) 1% 2% 4% 291 1,869 3,028Total Restaurant Operating Expenses 37% 30% 35% 20,415 24,506 27,570 General and Administrative Expenses 3% 4% 8% 1,809 3,599 6,408 Corporate overheads 1% 3% 8% 706 2,116 6,235Total Operating expenses 45% 49% 48% 24,994 39,824 37,775Interest Expenses 1% 2% 3% 709 1,453 2,101Other Miscellaneous Expenses 1% 1% 2% 481 780 1,527Income before income tax 2% 5% 11% 1,172 3,679 8,6671 Food Cost as percentage of Food Sale2 Beverage Cost as percentage of Beverage Sale3 Total F&B Cost as Percentage of Total SaleNote: While reviewing Table 3.3-2, it should be borne in mind that for each line item the number ofresponses received varied thereby making it necessary to view data in terms of medians and not asaverages. Also Income before income tax as a percentage can not be derived from simply subtractingtotal expenses from the revenues shown above for exactly the same reason. Each revenue or expenseline item must be viewed in isolation, however the total expenses and income before income tax linesindicate the macro picture as indicated by respondents in the survey. 23
  23. 23. Restaurant Industry in India - Trends and Opportunities 24
  24. 24. Food Trends-At home & abroad 4. Food Trends-At home & abroadIntroduction Indian, Southwest and Asian. Here are someWhen restaurateurs want to spot emerging trends:culinary trends they go to what they consider CHINO - LATINOthe ultimate source - customers. Anecdotal "Cuisine du Soleil" with Chinese cooking stylesevidence from restaurant customers is only one and some exotic flavours.way to spot trends. The print media andtelevision play a big role in establishing culinary Example: Mezza 9 in Singaporeconcepts and preferences, with food columnists INDO-LATINOand TV chefs endorsing one trend over the other. "Cuisine du Soleil" with strong Indian TandoorHowever, the single-biggest factor influencing preparations and typical herbs and marination.culinary trends is population demographics.Some important demographic changes have Example: Frangipani at The Oberoi in Mumbaiemerged in recent times: increased number of NIPPON - SOUTH AMERICANworking women with little time to cook at home; Lukewarm Sushi, Sashimi with noodles anda population that travels more and is exposed to vegetables marinated in Wasabi-Soy dressing.international cuisine; a population which is Japanese type salads and Ceviche.more concerned about its health; an increase inexpatriate population; and an increase in Example: à la Nobu in London or Felix in Hongdisposable incomes. And, beyond all these Kongfactors, is an indefinable spark that makes one PACIFIC RIMculinary item succeed and another fail. Chefs "From down under" Australian flavours and foodare always looking for the next big thing, product mixing; Hawaiian and Japanese food;something that will set them apart and put them cooking fusion with lots of seafood and aon the map. Sometimes it succeeds; sometimes Californian spirit.it doesnt. FRENCH THAIThe following section presents an overview of European ingredients cooked in Thai stylewhat culinary professionals and industryanalysts say are some of todays exciting Example: à la Vong (Jean Georg Vongerichten)international culinary trends. also coming to India soon.East meets West Healthful and FlavorfulWhether it is called fusion or eclecticism, Obesity has become a "four-letter-word" for allblending cuisines is one of todays hottest aspects of the food industry, whether grocery orculinary concepts. Fusion is carefully selecting restaurant-related. Consumers are looking forfoods from parts of the world that are not healthier choices and flocking to flavourfulgeographically close and combining ones that ethnic cuisines such as Asian andgo well together. The combinations are Mediterranean foods. With an emphasis onnumerous-Thai and French, American and ingredients such as vegetables, grains and fish, 25
  25. 25. Restaurant Industry in India - Trends and Opportunitiesthese cuisines appeal to the health- minded Back to Basicsconsumer. Accordingly, food businesses are Although fusion food remains hot in manyresponding and reacting in a variety of ways. kitchens, other chefs and industry expertsBelow are some of the current restaurant herald the resurgence of simple foods andconcepts in USA that are addressing health flavours. The trend in foods is going back toissues. basics. People are tired of fusion food because it became confusion food. It became anythingThe most promising concept, mostly because it goes with blending of everything. People arehas the muscle of Darden Restaurants (Red starting to say, "Weve had enough, just give meLobster, Olive Garden, Bahama Breeze, all in a good steak."the United States) behind it, is Seasons52(www.seasons52.com). The test restaurant for An increase in dining out has also spawned thethis casual dining concept is in Orlando, need for restaurants with casual, simple fareFlorida. Its name refers to the fact that every such as brasseries, bistros and trattorias. That isweek of the year different foods reach their peak not to say fine dining is out.of freshness and taste and the restaurants menu "Comfort food" may have become a cliché - as inchanges and adapts accordingly. Calories "comfort food TV" - but the desire to simplifytypically range from 300 to 375 for entrees, and slow down is very real. In difficult times,entrée salads and sandwiches and from 100 to which were witnessed for restaurants in USA200 for appetizers, soups, and desserts. The post 9/11, we strive for something we can relytrick to a 200-calorie dessert? Each is referred on and hold on to, even if its just a really goodto as a "mini indulgence" and each of the eight sandwich from the local deli, a dish of fresh-small selections fits in a tall shot glass. from-the-oven roast chicken, or a wonderfulFounded by an executive from yogurt maker dark chocolate truffle. Food and dining areStonyfield Farms, ONaturals being called upon to be less and do more. The(www.onaturals.com) is true to its name. The eating experience must still be fast, convenient,four Maine and New Hampshire units pride and if at all possible, healthy. Yet it is just asthemselves on offering all-natural and organic important for it to not only be good value butitems ranging from steak and chicken to vegan also provide us with relief and reassurance.options plus childrens choices. Fussy frou-frous and opulence for its own sake are unnecessary. Many of the old French classicsWith three units in the Chicago area, Wheaton, - like coq au vin - are really very simple food.Illinois-based The Fitness Café(www.fitnesscafe.net) positions itself as a Chefs go casual;healthy alternative to fast food. The owners Chains go chicbelieve in lifestyle change, not dieting. All menu Upscale chefs are opening more casualitems list grams of calories, protein, restaurants in New York, like Danny Meyerscarbohydrates, fats, and fiber and sport names Blue Smoke, Michael Lomaneco at Noche, Tomlike The Firm, The Flex, The Crunch, and The Colicchio with Craftbar and Wichcraft, BradleyIronman. In India too, we have a similar trend Ogdens Parcel 104 in California. "Roadsidewith the opening of the health juice café chain cooking being reworked for the Wine Countrymarketed under the brand Amorettos. crowd" is the way San Francisco Magazine (July 26
  26. 26. Food Trends-At home & abroad2003) characterizes Market, a St. Helena, Larkspur, California it is the first raw restaurantCalifornia-based restaurant recently opened by to cast raw as haute cuisine dining. Anothera former chef from Jardinère and the ex-wine popular raw dining spot is Quintessence indirector from The French Laundry. They are Manhattan which has 3 locations.cooking up mac n cheese and pairing merlot Clearly, this is a style of eating that will notwith meatloaf and were recently named one of spread to the masses. It will have its day in thethe "Best New Restaurants in America" by press and create interest and conversation. WillEsquires (November 2003). it have a lasting impact on cooking and dining?More chains are bringing classically trained Perhaps. Yes it is extreme, but such movementschefs on board and are adding culinary- can have residual-to-lasting impact. Dontbuzzword ingredients to their menu items like dismiss it in total.sun-dried tomatoes, pesto sauce, bruschetta,focaccia, and baguette. McDonalds, the The Ubiquitous Sandwichgranddaddy of them all, has almost single- Sandwiches are CHIC! From simple tohandedly brought chipotle, barbacoa and decadent, hand-held to knife-and-fork, fromcarnitas into mainstream lingo with their calorie-laden to light and healthy, whether aChipotle Mexican Grill chain. Even in India, Mc snack or a full meal, as a comfort food or as anDonalds Wraps, which are Mexican in origin, adventurous new cuisine experience,are selling in huge numbers. sandwiches fit into every aspect of todays lifestyles and are constantly being reinvented.Even the quick takeout-lunch-at-your-desk has Upscale restaurants are adding lots of newbecome gourmet and somewhat highly-priced. twists to this classic sandwich.Takeout lunch five years ago was a Big Mac andfries; now its roast chicken with mozzarella and .. BLT, GOAT CHEESE, AVOCADO & BASIL,basil on warm focaccia, and the cost has risen TOASTED ONION ROLL - Gustavinos, Newaccordingly, with a price tag for sandwich, soup, Yorkand a soda between USD10 and USD15. .. LOBSTER BLT - SWEET PEA REMOULADE ON COUNTRY WHITE BREAD - ChadwickLiving Raw Restaurant, Beverly Hills, CATodays food news is filled with the new .. TEMPURA BATTERED FISH BLT WITHrestaurants and folks devoted to raw food. A BACON, LETTUCE, TOMATO & MAYO ON Agrowing number of people believe that eating SOFT BUN SERVED WITH JERK FRITIES &"living foods" extends youth and staves off BACON AVOCADO RANCH OR ADD BACONdisease. Heat, they maintain, depletes foods OR AVOCADO - Cuba Libre, Philadelphiaprotein and vitamin content and concentratesany pesticides. More important, it destroys …RAWAS WITH RICADO ROJO, A YUCATANfoods natural enzymes which, enthusiasts RED SPICE MIX WITH TOMATO, BELLclaim, facilitate digestion. The premise is that PEPPER, CUMIN AND GARLIC IN PITA-only humans cook their foods and only humans Basilico, Mumbaisuffer widespread sicknesses and ailments. One …GRILLED ZUCHINI, AUBERGINE, BELLof the restaurants getting the most press PEPPERS AND SMOKED SCAMORZA -Olive,coverage over "raw" is Roxannes. Located in New Delhi 27
  27. 27. Restaurant Industry in India - Trends and OpportunitiesIndia is also seeing the spread of sandwiches Fast food is finally here to stay. There havewith the opening of Subway and the Irish chain been some failures but the success of McOBrien. Donalds, Pizza Hut and Dominos Pizza have caused some people to eat theirChef-driven Cuisine words. It is, however, important to noteWith such diversity in culinary trends, there is that the Indian consumer wantssomething for every chef to add to his or her "international desi" and that the Indianmenu. But the real trend may be for chefs to palate is indeed addicted to a certain levelexpand beyond what analysts have defined as of spice. Any new international entrants"whats hot and whats not" and to explore their would ignore this fact at their peril.own culinary creativity. A few who have become There is a tremendous future for regionalinternational legends are Daniel Boulud, Alan Indian cuisine restaurants. There are veryDucasse, Jean Georges Vongerichten, Rick few authentic restaurants offering regionalBayless, Thomas Keller, Nobu Matsuhisa, Indian cuisine and that is an area thatCharlie Trotter, Alan Wong, Douglas Rodriguez, could witness significant growth over theJerry Traunfeld, Floyd Cardoz and Arun next few years.Sampanthavivat. An increasing trend of freestandingBetter Ingredients international cuisine restaurants servingSavvy chefs have come to the conclusion that Italian, Mediterranean, Thai, Spanish,theyre not going to come up with some brilliant Korean, and other exotic cuisines.cooking methods. Instead they are The spread of Indian fast food asconcentrating on using better ingredients. popularised by Haldirams, Nathu Sweets and others continues and remains a veryFood Trends specific to India large market.Although all the above trends being witnessed inUSA are applicable to India, some specifics Pizzas, Burgers, Indian Tandoori, Chinese,attributable to restaurants here are: South Indian & Thai continue to dominate the take away business and is growing at An increasing trend toward vegetarian food double digit annual rates. and an increasing trend of reduction in red meats 28