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Food service industry in India- Current scenario
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Monday, 15 February, 2021, 08 : 00 AM [IST]
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Medha Varanasi
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India has been a country of tradition and culture over decades which include the food as a part, making it a global business. Indian cuisines popularity along with the other non – Indian foods has made the emergence of the food service industries. Globalisation and the change in people’s lifestyle have influenced the food service markets helping to increase the economy through business. The food services include Indian, Non – Indian and Fusion. The revolution in the food service sector began with the start of Domino's, McDonald’s, Pizza hut and Subway etc. with competition leading to innovation and domination in the food market business. This also led to the establishment of food courts in malls as a copy of unorganized sector like street vendors which has more domination than food service industries.
Food Services Industry classification
In market structure food services industry is classified as-
These are based on three parameters:
(i) Accounting transparency,
(ii) Organized operations with quality control and sourcing norms,
(iii) Outlet penetration.
1. Organised - conforms to the above three parameters
i) Chained (More than three outlets across the country) - Domestic and International
Classified into six sub segments based on: price, speed, service quality and product offering:
a) Casual Dining
b) Fine Dining
c) Pub Bar Club and Lounge
d) Cafes and Frozen Desserts
e) Quick Service Restaurants
ii) Standalone formats
2. Unorganised - when above three parameters are not conform
Eg. Hawkers, dhabas, roadside eateries and stalls etc.
Favourable Conditions
1. Increasing Urbanization
2. Increasing Women Power
3. Growing Middle Class
• Young (33 per cent younger than 15 and 50 per cent younger than 24) and working (15- 54 years) population percentage increase (will go upto 20 per cent of world's working population by 2022 i.e., 135 millions) has led to growth of food business.
Key allied industries which support Food Services and benefited from its growth are:
• Agriculture and Food Processing
• Real Estate
• Kitchen Equipment and Commissary
• Supply Chain and Logistics
Importance of food services industry to economy’s growth
In the global economic stage Indian economy has significance. India's GDP is estimated to grow at a CAGR of 7.6 per cent from FY 2016 to FY 2022 and by 2050 India will be in the top three global economies. Foreign direct investments in the country have been attracted by the booming food industry including online food startups like Swiggy and Zomato with highest investment value from Samsung Ventures, Korea and Tencent, China. There is a rapid growth in the market for non-home cooked food with varied food habits in India.
Current Scenario
The largest known pandemics in recent time is Covid-19 which has emerged affecting 216 countries globally. This had a greater impact on the food service industries with a business drop of 30-35 per cent approximately.
To gain profit form the present challenges, food industries have been started to adapt and innovate after lifting of lockdown. Hygiene protocols have been emerged to ensure safety and gain confidence of customer to increase the income of food service sector. The food delivery apps have been exhibiting the hygiene standards of restaurants which have improved the profits by 20 per cent. The new norms in the industries include use of masks, frequent sanitation, temperature control and safe packing. Along with these norms contactless guest engagement is also a priority in food industries through automated conversational interaction between customers and service staff. Even with all these measure with 50 per cent reduced capacity still the customer number remains low in urban and semi- urban areas.
India being a food loving country, people here love street food varieties at reasonable prices. But the pandemic outbreak has shown a very fast decline and sharp losses to the street food market. The major reason for this decline is because the prime importance is been given to cleanliness in the fear of Covid-19. There is a opposite effect on organised street food market which match the taste, flavour and expectations of consumer along with maintenance of hygiene and convenience of delivery i.e., there is a growth.
In 2019 - 2020 there is wide shift of consumers to organic foods which increased demand and this has become a main focus of business for many industry brands to launch health products, immune boosters and farm to table menus. Which, now in Covid-19 period has the trend to change into lifestyle by consumers in fore-coming years? There is a sharp rise in the use of mobile food app usage during the period of lockdown in India.
Due to the coronavirus crisis, not only restaurants, but also horticulture farmers, food processing companies, dairy producers, and also logistics companies, suppliers and even delivery partners will see a hit on incomes.
(The author is M Tech food technology student at Jain University, Bengaluru. She can be contacted at varanasimedha@gmail.com)
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