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Restaurant Industry - India - Sectoral Analysis
The document provides an analysis of the consumer food service industry in India. It discusses the history and origins of restaurants and cafes. It then analyzes the current market landscape of the industry in India, including popular brands and the performance of key segments like full-service restaurants, street food, and fast food. Finally, it outlines the various licenses and permits required to operate a food business in India.
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Restaurant Industry - India - Sectoral Analysis
- 2. The Consumer FoodService Industry Sector Analysis by Likesh Bhambhwani likeshb@gmail.com Business Design, 2011-2013 Welingkar Institute of Management and Research • Likesh Bhambhwani • likeshb@gmail.com
- 3. • Public eateriesexisted in Ancient Rome and Song Dynasty China • The modern restaurant originated in 18th century France • The first cafe was established in Constantinople in 1550 • The first modern-type cafe was “Cafe Procope” which opened in 1696 www.foodtimeline.org
- 4. • 50% ofchained restaurant networks concentrate on the five most populous cities of India • 98% of all value sales are from independent operators • Chained consumer foodservice value sales grew by over 22% in 2010 • Independent players growth was less than 13% • Consumer foodservice in India is expected to post a constant value CAGR of 4%
- 5. • Owner’s • Chef’s • Waiter’s • Property Owners • AHAR – Association of Hotels and Restaurants • NRAI – National Restaurant Association of India • The Food Ministry of India • Corporates • End User’s
- 6. Market Capitalization ($ Revenue ($ Net Income ($ Sr. No. Name Billion) Million) Million) 1 McDonald's Corporation 95.95 24,074.60 4,946.30 2 Yum! Brands, Inc. 24.89 11,343.00 1,178.00 3 Chipotle Mexican Grill 10.56 1,835.92 178.98 4 Tim Hortons Inc. 7.86 2,501.72 638.25 5 Darden Restaurants, Inc. 6.27 7,500.20 478.7 Arcos Dorados Holding 6 4.74 3,018.12 106.29 Inc 7 Dunkin' Brands Group Inc 3.14 577.14 26.86 8 Wendy's Company 2.15 3,416.41 -4.32 9 Brinker Intl. 1.89 2,761.39 141.06 10 Domino's Pizza, Inc. 1.84 1,570.89 87.92
- 8. CMIE Report Sr. No. Name 2009-10 (Rs. Crore) 2009-10 (Percentage) 1 Indian Hotels Co. 1897.92 16.72 2 ITC 904.92 7.97 3 EIH 774.13 6.82 4 Indian Railway Catering & Tourism Corpn. 557.72 4.91 5 Mahindra Holidays & Resorts India 468.75 4.13 6 Hotlel Leelaventure 430.13 3.79 7 Bharat Hotels 367.08 3.23 8 Asian Hotels (North) 290.18 2.56 9 Hardcastle Restaurants Pvt. 275.65 2.43 10 Piem Hotels 244.59 2.16 11 Apeejay Srrendra Park Hotel 241.44 2.13 12 Taj G V K Hotels & Resorts 228.25 2.01 13 Chalet Hotels 212.95 1.88 14 Taj Stats Air Catering 192.95 1.7 15 Oriental Hotels 192.77 1.7
- 9. CMIE Report Sr. No. Name 2009-10 (Rs. Crore) 2009-10 (Percentage) 16 India Tourism Devp. Corpn. 190.16 1.68 17 Juhu Beach Resorts 176.93 1.56 18 Jaiprakash Associates 151.99 1.34 19 E I H Associated Hotels 147.94 1.3 20 Hotel Excelsior 125.75 1.11 21 Adayar Gate Hotel 111.93 0.99 22 A B Hotels 108.84 0.96 23 Kamat Hotels (India) 98.61 0.87 24 Blue Coast Hotels 87.19 0.77 25 Barbeque-Nation Hospitality 83.22 0.73 26 Bhagwati Banquets & Hotels 82.98 0.73 27 Nehru Place Hotels 82.17 0.72 28 Sayaji Hotels 81.41 0.72 29 Asian Hotels (West) 80.28 0.71 30 Sahara Hospitality 76.8 0.68 Total 8965.63 79.01
- 10. Consumer Food Service PizzaHome Cafeteria’s Self Service Full-Service Street Delivery and Fast Food and Bar’s Caféteria’s Restaurants Stalls/Kiosks Take Away www.euromonitor.com www.euromonitor.com
- 12. Full Service Restaurants Stand Alone Hotel Based Domino’s Indian Hotels Pizza Hut Barbeque ITC Pizza Co. Ltd EIH Nation www.euromonitor.com
- 13. • Top 10brands account for 66% of chained FSR value sales • Growth was lesser as compared to pre- 2009 • Increased variety of menu items led to a healthy sales growth in 2010 • Increased significance of outlet growth for traditional brands like Mainland China and Rajdhani • Increased significance of premium offers like “double cheese burst” for brands like Domino’s www.euromonitor.com www.euromonitor.com
- 15. • Year 2010saw street stalls/kiosks record the highest year-on-year growth of any other year • Due to inflationary pressures, operators increased prices • As a result, spend per transaction went up by 16% thus raising value growth to 27% • Chained players account for less than 1% of overall value sales • No clear leader amongst existing chains www.euromonitor.com
- 16. • Regional brandsin specific parts of the country are responsible for 74% of value sales • The Ministry of Food Processing Industries has announced plans to launch scheme to plan and upgrade the quality of street food • Huge scope for more chained players who can leverage the low investment requirements www.euromonitor.com
- 18. • Major Players – Amalgamated Bean Coffee Trading Company Limited (ABCTCL) – Café Coffee Day and Coffee Day Xpress – Barista – Java Green – Costa Coffee www.euromonitor.com
- 19. VALUE SALES • ABCTCLaccounted for 36% of chained ABCTCL OTHERS Café’s/Bars value sales ABCTCL 36% • 18% increase in OTHERS 64% number of chained outlets • Chained Café’s/Bars account for 96% of overall value sales www.euromonitor.com
- 21. • Major Players: – McDonald’s – KFC – Subway – Baskin Robbins www.euromonitor.com
- 22. Value Sales McDonald's KFC Others 35% 48% 17% www.euromonitor.com
- 23. • Fastest growingof all consumer food service categories at 33% • Baskin Robbins is a leader in terms of number of outlets with 23% of all chained fast food outlets • Growth of FF in India is hugely dependent on the improved network of cold storage and logistics network www.euromonitor.com
- 25. • No evidentbrands within this category in India • Brands like Planet Yumm and Food Union often comprised branded outlets for fast food and full service restaurant chains but do not have outlets belonging to the overall brand • With chained format of street stalls/kiosks, fast food, and full-service restaurants this foodservice type is not expected to see appreciable growth over the forecast period www.euromonitor.com
- 27. • Major Players – Domino’s – Pizza Hut – Pizza Corner – US Pizza – Smokin Joe’s www.euromonitor.com
- 28. • Competitive Landscape Value Sales Distribution Domino's and Pizza Hut Other's 24% 76% www.euromonitor.com
- 29. • Café duBagne established in 1885 by Maxime Lisbonne celebrated the revolutionary Paris Commune of 1871 • The earliest print reference we find for Chinese food delivery is from the Kin- Chu Café, Los Angeles, 1920s. • First pizza delivery was by Casa D'Amore, in the 1950s www.foodtimeline.org
- 30. • While evidencesuggests some mixed dining happened as early as the 18th century, this practice was not fashionable until the late 19th/early 20th century. • Long before it was fashionable for men and women to be seen dining in public together, they dined "out" in private rooms. Fine restaurants and hotels established separate dining rooms for ladies. Tea rooms, ice cream parlors and department store restaurants catered exclusively to female clientele. www.foodtimeline.org
- 31. • The world'sfirst revolving restaurant, La Ronde, opened atop Hawaii's Ala Moana building in 1961 • The visionary architect was John Graham. www.foodtimeline.org
- 32. • Menu’s cameinto existence in the 1770’s • From the early 1770s, at the latest, the use in restaurants of a printed menu, or carte, that allowed each customer to choose his or her own restoratives marked another distinctive innovation in service. Before the emergence of the restaurant, a menu had always been a list of all those foods to be served during a particular meal (as at a banquet today). www.foodtimeline.org
- 33. • In-n-Out Burgerbuilt the first drive-through restaurant in 1948 • Although the concept of the “drive-through” has been around since the 1930’s, In-n-Out was the first to apply this concept to restaurants www.foodtimeline.org
- 34. Ithaa – TheFirst Underwater Restaurant • Ithaa, which means mother of pearl in Dhivehi, is a mostly acrylic undersea restaurant secured five metres below sea level at the Conrad Maldives Rangali Island in Rangalifinolhu, Maldives • It started its business on November 19, 2004
- 35. Price Service Cuisine Authentic Ambience Location Variety Crowd Parking/Valet Quality Quantity Waiting Period Veg / Non Veg Reservations Alcohol Size of Family Happy Hours Timing Taste
- 36. Group of Friends Health Couples Conscious Party’s Individuals End User’s Corporates Family Multiple Travellers Families
- 37. • Theme’s • Menu’s • Hoardings Near Location • PR Company – SMS’s – Social Media Marketing – Launch Party – Pamphlets • Cable TV Ad’s
- 38. • Justdial • Review Sites • Online Booking Sites • College Festivals • Kitty Parties • Newspaper Agencies • Name Hoarding • Festivals • Brand Promotions
- 39. Item Order Frequency Credit Period Suppliers Mayakka Vegetables Manohar Vegetables Vegetables Daily 10 Days LT Jeswal Vegetables A P Mani & Sons Veg & Fruits Pvt Ltd Balaji Central Store Groceries Once a Week 7 Days Agarwal Taders Vijay Enterprises TJ UK Canned Food & Syrups Once a Month 1 Month Shanti Sales Milk and Paneer Daily 3-4 Days Gupta Milk Centre Cheese and Butter Once a Week 0 Days Ganesh Agency Spices Once a Week 7 Days Vishram Spices India Pepsi Co. Soft Beverages Daily 0 Days Coca Cola Co. Alcohol 10-15 Days 30-40 Days Respective Companies
- 40. • Housekeeping Products – 6 Months Stock – On Spot Payment • Takeaway Bags, Containers, Valet Tags, etc. – 3-6 Months Stock – On Spot Payment
- 41. • Hari OmKitchen Equipment (Others) • SK Engineering (Continental) • Galaxy Gas Equipment (South Indian)
- 42. Particulars Amount (Rs.) Percentages Raw Material 8,00,000 32 Human Resources 3,00,000 12 Rent 4,00,000 16 Utilities 1,00,000 4 Franchise Fees (10%) 2,50,000 10 Staff Food 1,00,000 4 Miscellaneous 1,50,000 6 Profit 4,00,000 16 Sales 25,00,000 100
- 43. • Shops &Establishment Certificate • BMC Health License (to serve food) • BMC Health License (to serve Liquor) • Maharashtra Prevention of Food Adulteration Act License under Food and Drug control Act, Govt. of India • Grading Certificate (I,II and III) • Chapra or Board License of BMC under Health Department • Medical/Health Certificate of the Kitchen Staff on yearly basis (specially of food handlers & waiters) AHAR Suppliers Guide
- 44. • Permission fromElectric Supply Companies to operate heavy machine like Air- Conditioners, Cooling Plant, M/C, Grinding M/C etc. • Police Registration Certificate • Water Connection Certificate as per Grade. • Neon-Sign Board Or Glow Sign Board License- provided it carries any advertisement • Maharashtra State’s Weights & Measurement Department Certificate and its approval every year AHAR Suppliers Guide
- 45. • BMC-Rationing Permissionto obtain food grains like Rava, Maida, Atta, Rice, Sugar etc. • ESIC Certificate for the shop employing more than ten staff members under Govt. of India • Provident Fund Registration if number of employees is more than twenty. • Maintenance of Register of working staff on daily basis and temporary basis for the inspection. AHAR Suppliers Guide
- 46. • Professional TaxCertificate of Employees • Professional Tax Certificate for Employer. Certificate of Registration under Sub Sec. 1 of Sec 5 MAH/L Tax on Profession, Trade and Employment Act, 1975 • Drainage Inspection Certificate once in two years • Pollution Clearance Certificate • Grinding Stone Or Heavy Machine operating permission from BMC AHAR Suppliers Guide
- 47. • Permission tooperate more than two cylinder of gas at a time from BMC, Health Department • Permission & Certificate from CFO from fire department to operate more than two gas cylinders in hotel premises • Insurance of entire shop (Hotel) against natural calamities, fire, theft, robbery or any other damages (Not mandatory but advisable) • Maintenance of Payment Register as per Bonus Act A & B 1965 AHAR Suppliers Guide
- 48. • License tokeep place of Public Entertainment-by Bombay Police Act, 1951 • Sales Tax Registration Certificate under Bombay Sales Tax under Sec. 22/22A-1059 • The performing Rights Society Ltd., Govt. of India • PPL (Phonographic Performance License) for sound recorded music, Royalty to the singer etc • Nokarnama of each Employee’s Certificate with photograph AHAR Suppliers Guide
- 49. For Permit Rooms: •Entertainment Tax Certificate and approval from Collector’s Department, Mumbai on Dance / Permit Room conducting dance • State Excise and Prohibition License for Permit Room Renewal every year • Monthly Statement of Excise Log Book-Form FLR-4 • Excise Officer’s Visit Book to be endorsed on monthly basis. • Customer’s Drinking Permit-As per Rule (FLX-C) Rule 70-D AHAR Suppliers Guide
- 53. Segmentation Matrix
- 56. • Insights, NeedGaps and Trends
- 57. • Private roomsand tables in restaurants • Waiting in the lobby is one of the most sighted pain points • Cleanliness is another major issue sighted by people • Availability of medicines in restaurants in menu cards. Huge number of BP and heart patients need to take medicines after or before a meal
- 58. • Childcare andPlaypens • Drivers/Car Services to drop people home • Pick up and drop services • Drunk Bus – Canadian concept (Bar on Wheels) • Car Wash/Car Repair – Dinner while your car is being washed or repaired • 24 hour coffee shop with car wash • Special Offerings for Specific Diseases
- 59. • 24 hourrestaurants • Restaurants which allows pets • Mobile apps to check waiting time, reserving tables, ordering food in advance • Interactive Menus on tablets which also lets you see how your food is being cooked via cameras in the kitchen • Menus should show pictures of every dish • Live Kitchen and Customization (Wok it Up) • Dish Tasters
- 60. • Workshops onfiner cooking skills (Vicky Ratnani at Aurus) • Flexible Portions (Single Person, Couple, Groups, etc.) • Special Dinner Packages – Couples (Ambience, Aroma, Flowers, Champagne), Surpris e Parties • Games to help people pass time while waiting for their orders (Bombay Blues) • Time taken to bring food on the table should be sighted and if not adhered to, free food
- 61. • Don’t give us feedback forms, listen to us! • Fire Wood Pizza • Happy Hours • Regular themes and events • Online table reservations • Restaurant memberships
- 62. • Beyond bricks-and-mortar • Newer Cuisines • Slow it down • Booze Boutique • Alcohol – Food Pairings • Portion Size Offerings • Celebrity Chefs
- 63. • Smartphone appsfor consumers (e.g. ordering, menus) • Tablet computers for menus and wine lists • Social media for marketing/loyalty programs • Mobile-wireless/at-the-table payment options • Smartphone apps for chefs/restaurateurs (e.g. recipes, measurement converters) • QR codes on menus, marketing, etc. • Wireless payements