The various auxiliary businesses have had a large impact on real estate, commercial kitchen equipment, and the employment market.
Real Estate: The real estate sector is growing at a rate of about 20% per annum with many domestic and international players eyeing potential real estate locations, for manufacturing, retailing, corporate offices, etc. This surge of new entrants has increased the demand for real estate. Forays by international brands, like Starbucks Coffee and Dunkin’ Donuts, into the Indian market is also pushing the demand of retail spaces.
Key malls in India – Presence of food services outlets
|Mall||City||Total GLA (sqft.)||No. of outlets||No. of F& B outlets||% of F&B outlets to total|
|R City Mall||Mumbai||6,57,000||140||49||35%|
|Ambience Mall||Delhi NCR||8,73,000||165||47||28%|
|The Great India Place||Delhi NCR||8,50,000||190||50||26%|
|Mantri Square Mall||Bangalore||9,19,516||202||46||23%|
|Select Citywalk||Delhi NCR||5,12,000||159||35||22%|
|High Street Phoenix||Mumbai||6,50,000||165||35||21%|
|South City Mall||Kolkata||6,10,000||150||21||14%|
The demand for real estate, in tandem with the expansion by major food services brands, will boost the real estate sector in India. Additionally, the relaxation of FDI norms will further fuel real estate demand, with the entry of players like IKEA and Walmart ramping up competition for prominent locations.
Commercial Kitchen Equipment Industry: The rising number of restaurants, a consequence of the changing culinary preferences in India, is a harbinger of business for the manufacturers of commercial kitchen equipments – commercial fryers, charbroilers, ovens, cooking ranges, microwaves, toasters and food warming equipment, etc. The average equipment cost involved in setting up food services business range from INR 1 lac (USD 1925) to a few crore depending on the format type, product range, brand, etc. With over 10,000 chain outlets across various formats, the estimated demand for equipment is worth INR 4,475 crore (USUD 860 million). This is likely to surge, at an anticipated CAGR of 21%. Some of the brands with a prominent market presence are as mentioned:
|Alto-Shaam||Convection ovens, rotisseries|
|Bake off Italian||Bakery products|
|Beech||Stone earth ovens|
|Caplain Machines||Bakery, Confectionery and pizzeria equipment|
|Cleverland||Steam cooking equipment|
|Cooper-Atkins||Food safety, temperature measurement and environmental solutions|
|Dean||Commercial deep fryers|
|DIHR||Ware washing specialists|
|La Cimbali||Coffee machine|
Alcoholic Beverage Industry: The growth in the food industry has also brought a radical shift to beverage-based concepts as retail opportunities. The recent emergence of cafes, juice bars, and tea lounges has accelerated the Indian beverage industry’s growth. The innovations that the beverage industry has undergone is not limited to alcoholic beverages, they have also propagated a shift in preference, at the product level.
Food processing Industry: The major players in the market, viz. Mc Donald’s, KFC, Domino’s Pizza and Pizza Hut, have made a threefold impact on the market, along economic, ethnic and cultural lines. They have changed the way of doing business in India by adopting the outsourcing model of production, and supply chain management, while maintaining focus on branding and marketing of products.
Mc Donald’s Case Study
Mc Donald’s has successfully built its food processing capacities by partnering with food processors, like Vista Foods, Mc Cain, Venky’s, and Mrs. Bector’s. On the contrary, these outsourcing partners have gained financially, by generating economies of scale, and also socially, by enlarging their business operations. They have also invested in their supply chain and logistic that ensured the at-the-doorstep supply of raw materials to various Mc Donald’s outlets.
The kind of tie-up was mutually rewarding as on one hand it helped Mc Donald’s generate quality products in quantity and also maintain an efficient supply chain throughout the year without any pressure of production. On the other hand, it helped partners improve on their plant, technology and production capacities by adding new lines of operations and also ensured annual demand.
(SOURCE: INDIAN FOOD SERVICES REPORT 2013, NRAI)