Almost 98 per cent of the unorganised catering industry in India is abstained of the inclusive growth, despite the fact that Rs one lakh cr wedding industry is growing by 25-30 per cent every year. Alongside, significant number of growth is happening in commercial and corporate events.
Considered as an important factor for the success of any event, the catering sector is in grave need of government intervention with rules and regulations for safe and hygienic practice . The large sect of unorganised caterers operating in their own geographies and peripheries are indeed in need of 3600 training, education and information about the rules and regulations.
“There is a need of training, education, information about the government policies, FSSAI rules, implementation of GST rules, new trends and corporate culture”, said Narendra Somani, President, Federation of All India Caterers (FAIC) on the sidelines of pre-event press conference of FAIC Exhibition and Convention 2016 happening between 27th -29th September, 2016 in Mumbai.
This is a transition period for the industry, which till now was in its protected cocoon and comfortable in its own world. In the recent past, the sector has adopted fast pace growth, while serving as engine for inclusive growth. The atomisation is happening quite fast, with even small caterers too focusing on deploying machines at event venues. Earlier the caterers use to cook on wooden stoves before moving on to LPG gas and now they have started using induction to keep the food warm.
The caterers were not upgrading their standards until they started facing the brunch of technology, labour rules and rules of conduct of service. Also, steadily they have started understanding the importance of centralised kitchen, while focusing on hygiene.
Licence Concerns
The government has set standard rules for food industry, whether it’s processing, restaurant or catering that has to be taken care of. . Therefore, the industry has to fight with the government on policy front for food safety rules as it is very difficult for caterers to adhere to it.
If we study the food safety rules, many of them are not possible to adhere by the caterers. There are 35 rules formed by FSSAI, which cannot be possible at the outdoor venue for caterers to follow. In many cases venues are not decided before two days, like in Roka ceremony to adhere to the laws.
Unlike average 18 licences needed to be obtained to run a restaurant, the outdoor caters are forced to have around 25-30 licences for just 12 hour function. There is a compulsion of a licence, right from using LPG cylinders to using generators, electric works and fire and food safety by FSSAI. This makes it difficult for the caterers to function in the complex regulatory scenario.
“FSSAI is now changing. I am representing the organisation ‘Mission Safe Food India’ in which we are forcing FSSAI to make separate laws for catering industry to make it easy and educate the caterers. Government has set up separate committee to make separate laws and encouraging education process, but implementation is going to take some more time”, said G S Bindra, MD of Pune based Bindra Hospitality Services Pvt Ltd.
Tax Burden
The higher taxation is proving to be the bone of contention for the industry. In addition to 12-15 per cent VAT in different states, caterers have to apply 15- 25 per cent service tax as well before securing good earnings.
“Catering is a social work and government shouldn’t put burden of tax on such sectors, so that people are not wary of spending on events like wedding”, said Kirit Budhdev, Secretary, Federation of All India Caterers & All Gujarat Catering Association.
The industry is also concerned with the upcoming GST rule, which is said to propose the tax cap between 18-22 per cent on goods and services.
“GST will be a big problem for us. It is considered that government is keeping 22 per cent of cap in GST. Government should have nominal below 10 per cent tax for the industry to make it organised and to encourage people to spend white money on events like wedding. It’s all because nobody wants to pay 25-30 per cent extra”, added Narendra Somani.
Employment opportunities
While employment is a big issue in India, the sector provides a lot of employment opportunities to even uneducated class across metros to tier II and IV cities. An individual can earns Rs 500- Rs 700 to Rs 3000- Rs 4000 a day in catering. There are more than 75 per cent of vacancies in the industry for employment.
Thus, many hotel management and catering institutes have been mushrooming across many cities in the country. Students are also taking keen interests in joining the professional courses to make a career in the sector.
Food
Indians have always had intrinsic fervor for good food. Today,with more Indians travelling than ever before, they have access to the best global dishes. Hence, their expectations from catering services have also risen. To meet the ever-increasing demand for new cuisines, caterers adapt to changing trends by preparing wide range of culinary delights and presenting it with panache.
“Indian food is richest in the world. You won’t be able to taste even 10 per cent of the recipes anywhere in the world, what you can taste in India. In international weddings, average gathering is of 100-150 people and in Indian wedding the average gathering will be of 1000-5000 people. So, the challenge here is completely different from international level. Whatever innovations are being introduced, they are starting from catering and then transferred into restaurants”, said Lalit Jain
The sector has witnessed paradigm shift over the years with state of the art technological offerings, innovative concepts, growth in Indian regional food, multi cuisine across regions specialities with global cuisine trends. The Italian, Chinese and Japanese cuisines are also gaining preferences among food frenzy youths.
With thriving growth in industries and IT/ ITES sector, corporate catering with classic courses of delectable menu is gaining huge popularity. There has been significant increase in online search for catering services that is emerging as an important local service category.
Size of the industry
India is a country of festivals and ceremonies being conducted in the form of important events on social occasions every year. So, the scope of catering in the country is worth taking a note. It is the fastest growing sector, which has seen surge in the demand across the country.
The estimated cost of wedding in India is no less than between Rs 5lakh - Rs 5cr in India. A person spends 1/5th of the lifetime accumulated wealth on wedding of his son or daughter. Half of the Indian population is between the age bracket of 28-29, so, the wedding market is estimated to boom like never before in the coming 5-10 years. Hence, with this, the catering industry is set to grow rapidly.
“Catering in India has now become an integral part for the success of various events and social occasions. It is one of the fastest growing sectors that has seen surge in demand across the country. The sector, though largely unorganised, is estimated to be dominated by over two-million caterers primarily in metros, tier 1 and tier 2 cities. Caterers have adapted innovative flair, while doing their business on grand scale for weddings, social gatherings, formal events, conferences and parties” said Yogesh Chandarana, Vice President, Federation of All India Caterers.
Estimated size of the catering industry in India is Rs 15,000-20,000cr and having annual growth of 25-30 per cent.
