In the recent past, the Indian food service industry has seen unprecedented growth due to the changing demographics, increase in disposable incomes of the Indian Middle Class, women in workforce, increasing urbanization and families eating out more often. The US$50-billion food service industry is currently dominated by the unorganized sector and while this is not likely to change in the near future, there will be a steady decline in the share of unorganized food sector over the next 4-5 years. At the same time, the market for organized food service industry stands at US$15 billion of the total market and is expected to grow at a CAGR of 17% to reach US$33 billion by 2020, capturing 36% of the total market. Within the organized food service industry, one segment that is growing the fastest is the Quick Service Restaurants (QSRs), which is a price sensitive segment, and caters to majorly the youth. Increasing disposable incomes, the shift in consumer preferences to increasingly eat out, and greater hygiene consciousness are some of the factors contributing to the rise of QSRs. In India, QSRs have a significant opportunity to grow, despite the fact that the chains of both Indian and MNC brands are still confined to certain growth centers only. The QSR segment in India is slated to grow at a CAGR of 18% to reach US$4.13 Billion by 2020 from US$2.13 Billion in 2016. The QSR segment has seen the entry of foreign players such as Wendys, Carls Jr, Johnny Rockets and some domestic companies like Goli Vada Pav and the VC-backed Burger Singh also form part of it. The CMR Initial Market Guidance report on the food sector, with its key focus on QSR, provides the big picture on all aspects of the food service industry, and captures current demand and supply drivers; opportunities and challenges. Digital is impacting all aspects of the food service industry, as seen with the emergence of new business models: restaurant aggregators, online food delivery, and cloud-based kitchens that back amateur home cooks. Technology will influence all aspects of the food business--from sourcing to advance reservations, from check-in to on-demand delivery. Digital is contributing to a new breed of consumers with an increasing demand for gourmet and specialized food. Food order delivery duration in India stands at approx. 45 minutes/order. We are seeing early signs of disruption here, with startups promising delivery in <30 minutes/order. For any new QSR entrant to the India market, the real challenge is always getting the homework right on consumer tastes and preferences. It is prudent to not go by mere gut feel, but having the company strategy right backed by actionable research insights.

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Integrity | Insights | Independence | Excellence
Cyber Media Research Ltd.
An ISO 9001: 2008 Company
FOOD
SERVICE
INDUSTRY

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India:
Emerging
Trends
Authen'c
Indian
regional
cuisine
on
the
rise.
Brand
loyalty
is
passé.
Today’s
consumers
shi;
their
palate
depending
on
whom
they
are
ea'ng
with.
The
Indian
Middle
Class
is
driving
consump'on,
and
causing
new
innova'ons
to
rise
in
the
food
service
industry.
T h e
E m p o w e r e d
C o n s u m e r
With
wellness
is
on
the
mind,
consumers
are
seeking
out
organic,
and
locally
sourced
food.

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India:
Emerging
Trends
Food
vans
on
the
rise
catering
to
the
growing
expat
community.
Shi;
towards
home
style
meals
to
subs'tute
home
cooking
Technology
is
disrup'ng
tradi'onal
food
service
chain
models.
T h e
C h a n g i n g
F o o d
I n d u s t r y
QSRs
and
Café
leading
the
growth
in
the
food
service
industry.

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India:
Emerging
Trends
Swiggy,
FoodPanda,
Zomato
–
the
new
age
digital
dabawallahs
Digital
is
also
contribu'ng
to
a
new
breed
of
consumers
with
an
increasing
demand
for
gourmet
and
specialized
food.
Food
is
becoming
more
“Social”.
Facebook
and
Pinterest
are
mo'va'ng
consumers
to
seek
out
new
food
experiences.
Payment
is
increasingly
Digital.
Online
payments,
and
Mobile
wallets
are
on
the
rise.
Near
Field
Communica'on
(NFC)
will
be
a
gamechanger.
D i g i f o o d :
D i g i t a l
r e d e fi n e s
f o o d

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India:
Market
Size
[Source:
CMR
Analysis
and
Industry
Es'mates]
Indian
Food
Service
Industry
US
$
50B

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India:
Food
Service
Industry
Forecast
[Source:
CMR
Analysis
and
Industry
Es'mates]
2016
2017
2019
[In
US
$/Billion]
57
2018
2020
64
72
82
92
Note:
The
size
of
the
Indian
food
service
industry
was
US$50
billion
(CY2015)
and
will
grow
at
a
CAGR
of
13%
to
US$
92
billion
by
2020.
t.

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Organized
Food
Service
Market
30%
India:
Organized
FS
Market
Note:
70%
of
the
Food
Service
market
in
India
is
unorganized.
The
organized
food
service
market
accounts
for
US$
15
billion
of
the
total
food
service
market.
[Source:
CMR
Analysis
and
Industry
Es'mates]

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Cafe
India:
Organized
FS
Segmentation
Quick
Service
Frozen
Desserts
Casual
Dining
Pub
and
Bar
Fine
Dining
18%
18%
14%
13%
13%
10%
[Source:
CMR
Analysis
and
Industry
Es'mates]
Indian
Organized
Food
Service
Industry
US
$
15
Bn

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India:
Organized
FS
Market
Forecast
[Source:
CMR
Analysis
and
Industry
Es'mates]
2016
2018
2020
[In
US
$/Billion]
2017
2019
18
21
24
28
33

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Demand
Side
View
464M
youth
by
2021
Increasing
disposable
incomes
More
women
in
the
workforce
than
ever
before
Growth
of
consumers
in
smaller
towns
Rapid
UrbanisaYon
Higher
frequency
of
eaYng
out
>200M
nuclear
families
by
2020
Broadening
exposure
to
new
cuisines

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Supply
Side
View
DisrupYon
caused
by
new
age
F&B
entrants
Efficiencies
and
quality
standards
in
food
supply
chain
Arrival
and
growth
of
third-­‐party
logisYcs
providers
Digital
is
redefining
the
food
experience

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E M E R G I N G
B U S I N E S S
M O D E L S
Advent
of
DigiFood
Restaurant
LisYng
Online
Food
Ordering
1m
Daily
Orders
over
phone.
>2%
Market
is
on
apps.
~$16b
Market
Opportunity
[Source:
CMR
Analysis
and
Industry
Es'mates]
Food
from
Cloud
Online
ordering
today
~
$500m

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The
Food
Truck
Frenzy
The
food
truck,
with
its
low
startup
cost,
flexibility
and
ease
of
opera'ons,
is
a
good
avenue
for
all
aspiring
foodpreneurs
to
grab
a
part
of
the
growing
food
industry
pie.
India
is
seeing
a
boom
in
food
truck
business.
N E W
D E L H I
-­‐
N C R
M U M B A I
B E N G A L U R U
• The
Lalit
Food
Truck
Company
• Flavour
Hub
• Oh
Buoy
• What
The
Truck
• Dosa
Inc.
• Sushi
House
Mafia
• Big
Bite
Burrito
• Mumbai
Rolling
Kitchen
• Eat
N’
Run
• Paninaro
• The
Spilire
Barbecue
Truck
•
The
SWAT
Truck
•
The
Great
Indian
Bhukkad
•
Fuel
Up
•
Square
Ruth

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63%
37%
Foreign
QSR
Indian
QSR
Quick
Service
Restaurants
(QSR)
• One
key
and
fastest
growing
segment
of
the
Indian
Food
Service
Industry
has
been
Quick
Service
Restaurants.
• The
QSR
segment
in
India
will
have
>90
brands,
with
over
3000
outlets.
• Though
foreign
QSRs
dominate
the
India
market,
the
market
growth
is
driven
by
domes'c
QSR
brands
as
they
expand
rapidly
into
Tier-­‐II
and
Tier-­‐III
ci'es
with
adaptable
medium
and
small
formats.
[Source:
CMR
Analysis
and
Industry
Es'mates]

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India:
QSR
Market
Forecast
[Source:
CMR
Analysis
and
Industry
Es'mates]
2016
2017
2019
[In
US
$/Billion]
CAGR
18%
Note:
The
size
of
the
QSR
industry
was
US$1.81
billion
(CY2015)
and
will
grow
at
a
CAGR
of
16%
to
US$
4.88
billion
by
2021.
2.13
4.88
2018
2020
2021
2.51
2.97
3.50
4.13

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Established
QSRs
OPERATING
STORES:
55
PLANNED
STORES:
10-­‐12
per
year
OPERATING
STORES:
21
PLANNED
STORES:
150
by
2020
OPERATING
STORES:
370
PLANNED
STORES:
250
by
2020
OPERATING
STORES:
432
PLANNED
STORES:
100
by
end-­‐2016
OPERATING
STORES:
372
PLANNED
STORES:
To
reach
500
by
2016
F O R E I G N
Q S R s
D O M EST I C
Q S R s
OPERATING
STORES:
1000
PLANNED
STORES:
450
by
2019
OPERATING
STORES:
>500
PLANNED
STORES:
2000
by
2020

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Upcoming
QSRs
OPERATING
STORES:
275
PLANNED
STORES:
5000
by
2020
OPERATING
STORES:
4
PLANNED
STORES:
77
by
2020
OPERATING
STORES:
4
PLANNED
STORES:
20
by
2018
OPERATING
STORES:
2
PLANNED
STORES:
8
by
2016
OPERATING
STORES:
4
PLANNED
STORES:
20
by
2018
OPERATING
STORES:
8
PLANNED
STORES:
6
by
2017
N E W
F O R E I G N
Q S R s
N E W
D O M EST I C
Q S R s
OPERATING
STORES:
2
PLANNED
STORES:
40
by
2019
OPERATING
STORES:
1
PLANNED
STORES:
10
by
2017

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Advantage
Desi
QSR
Emergence
of
Organized
DomesYc
Players
Roadside
Vendors
rule
the
roost
Many
diverse
players
–
both
foreign
and
domesYc,
vying
for
same
pie
Foreign
QSRs
enter
India
without
grasping
the
huge
cultural
diversity
of
India.
Even
Indian
franchisees
partnering
with
Foreign
QSRs
enter
India
specula'ng
on
customer
preferences.
Domes'c
QSRs
are
able
to
tailor
and
segment
their
menu
to
suit
the
cultural
and
taste
preferences
of
a
cross-­‐sec'on
of
customers
pan-­‐India
at
affordable
prices
star'ng
Rs
25.
LocalizaYon
of
Flavors
and
Pricepoints
There
are
many
different
companies
compe'ng
with
each
other
in
every
segment.
Many
VC-­‐backed
domes'c
companies
are
entering
the
India
market.
Some
of
the
recent
domes'c
entrants
include
Goli
Vada
Pav,
Burger
Singh,
Ammi’s
Biryani
have
all
entered
recently.
In
addi'on
to
the
domes'c
QSRs,
roadside
vendors
are
cooking
up
a
diverse
range
of
menu
that
is
targeted
at
the
right
consumer
segment.

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India:
Future
Outlook
Social
will
gain
trac'on,
con'nue
to
influence
and
drama'cally
alter
the
way
food
is
consumed
in
India,
and
this
will
impact
the
food
business.
Technology
will
influence
all
aspects
of
the
food
business-­‐
from
sourcing
to
advance
reserva'ons,
from
check-­‐in
to
on-­‐demand
delivery.
QSRs
focused
on
authen'c
and
unique
regional
cuisine
will
find
more
flavor
and
acceptance
from
the
demanding
Indian
consumer.

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India:
Future
Outlook
While
food
trucks
are
now
in
fashion,
this
segment
will
see
a
churn
soon
as
FSSAI
'ghtens
the
bolts.
Online
Food
start-­‐ups
will
con'nue
to
grow
organically.
However,
the
pie
will
remain
very
niche.
The
market
for
QSR
will
increase
as
new
non-­‐tradi'onal
market
avenues
open
up
due
to
Government
investments
in
road
infrastructure
and
air
connec'vity.

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CMR
Cognitive
360™
D E M O G R A P H I C S
Before
embarking
on
a
food
business
on
gut
feel,
its
vital
to
understand
the
consumer,
and
their
tastes
and
preferences.
Re s e a r c h
c a n
b e
a
g r e a t
b u s i n e s s
e n a b l e r.
D E L I V E RY
Food
Delivery
business
is
ripe
for
disrup'on.
In
the
hyperlocal
era,
if
food
service
outlets
can
cut
delivery
'mes
to
<30
minutes,
it
will
be
a
huge
gamechanger!
D I S C OV E RY
The
Google
Now
model
can
be
emulated
by
startups
in
food
discovery,
with
no
stand
alone
app,
and
the
func'onality
residing
within
social
networks,
such
as
Facebook.
Note:
CMR
Cogni've
360
provides
a
clear
view
and
guidance
on
what’s
next
for
businesses
focused
on
the
target
market.

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About
CMR
CMR
is
a
young
bou'que
firm
that
enables
its
clients
to
find
answers
to
its
most
pressing
business
concerns
and
challenges,
through
market
research,
market
intelligence
and
go-­‐to-­‐market
services.
This
is
us,
at
a
glance:
Business
Channel
Partner
Ecosystem
Research
User
and
Demand-­‐side
Research
Industry
VerYcals
/
Business
Domain
Research
Informa'on
Technology
*
Telecommunica'ons
*
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&
Electronics
*
*
Life
sciences
*
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Industry
ConsulYng
and
Advisory
Services
Go-­‐To-­‐Market
Services

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Prabhu
Ram
E:
pram@cmrindia.com
M:
+91-­‐9899440380
CMR
INDUSTRY
CONSULTING
PRACTICE
Contact
Apalak
Ghosh
E:
aghosh@cmrindia.com
M:
+91-­‐9971548392
P:
+91
124
482
2222
Extn:
162