COVER STORY

Food Courts:
Long
Way to
Go!
By Bhavya Misra

Food courts are a relatively new phenomenon in India
which owes its existence largely to the growth of the mall
culture in the country and the rising purchasing power
of the people. Despite their rising popularity, they need
to evolve further, expand into newer areas and overcome
many challenges if they are to become a permanent part
of the culinary landscape of India.
F
ood courts, which started off in the
1980s in the West, have today become
an inseparable part of malls, shopping
centers, airports, educational institutions
and cultural centers abroad. In India,
however, they are still at a nascent stage,
though increasingly gaining in popularity. Indeed,
many Indians go to a mall not only to shop but
also to round up their shopping experience with
a bite from the food outlets located there, usually
on the top floor. Some malls have casual dining
restaurants and quick-service outlets clustered
together, which become dining destinations in
their own right for people looking to enjoy lunch or
dinner in a sophisticated, air-conditioned and lively
environment.
Food courts typically exist indoors and involve a
common dining area lined up with stalls of multiple
F&B vendors. These cater to a wide swathe of
customers: shoppers at a mall, visitors at a cultural
center, employees of a large corporate park and even
passengers passing through a metro station or airport.
Says Amit Burman, co-founder of Lite Bite Foods
which runs a number of QSRs, casual-dining
restaurants and food court brands in India: “A food
court is a place where consumers in large numbers
can dine and enjoy different cuisines at a value-for-
money price, all under one roof.” Sandeep Kanotra,

28 SEPTEMBER-OCTOBER 2011 FOODSERVICE INDIA EDITION

 CHALLENGES OF
RETAILING FROM MALLS

• Availability at prime
locations
• Quality of development
• Lack of organized mall
management
• Predominance of sale
model
• High occupancy costs
• Delay in project delivery

Key Takeaway: Apparels,

footwear as well as food
& beverages are some of
the preferred categories
for malls.

source:
Cushman & Wakefield Research

General Manager of QSR and franchise operations

at Old World Hospitality – which operates food
courts under the Eatopia brand name – defines
food courts as a common dining space offering a
choice of multiple food vendors which is generally
fast paced and self serviced.
The dynamics of food courts are simple:
high volumes, small ticket price, a choice of
cuisines, self-service and a fast-paced, animated
atmosphere. The food-court phenomenon in India
is being driven primarily by a rapid rise in the
number of malls all over the country. Malls and food
courts have a symbiotic relationship: good food
courts help mall managements increase footfalls
and revenue, while food courts rely on a steady
stream of customers generated by the shopping
opportunities at the malls. airports, there were no food courts. When there
Kishore Bhatija, CEO of Inorbit Malls, says: “A were no modern highways, obviously there were no
food court is a very important element of a mall. F&B brands lining our inter-city roads. The concept
Any mall developer needs a proposition which of food courts is typically driven by infrastructure.”
keeps consumers coming back to the property. And Food and footfalls are the two essential elements
food is something that undoubtedly plays a very of food courts. These courts make sense at any
important role in achieving that target.” location where a large number of people congregate
Travel Food Services is a sister concern of Blue and who may want to enjoy a meal. “Typically a
Foods Company that operates food courts at food court would do well in shopping areas, mass
the Delhi and Mumbai airports. Its CEO Rajeev transit points, schools and colleges, corporate
Panjwani explains: “When there were no malls, hubs, venues for fairs and exhibitions, tourist sites
there were no food courts. When there were no and cultural centers,” says Kanotra.

FOODSERVICE INDIA EDITION SEPTEMBER-OCTOBER 2011 29

COVER STORY

PREFERRED LOCATIONS “Food courts are typically built around quick

service and fast turnaround of customer’s order.
Parameters Malls Main Streets Local Markets From an operator’s point of view, foods which can
Food & Grocery * ** *** be assembled and served within a maximum of two
Apparel & *** ** * minutes are best suited for food courts,” Kanotra
Footwear informs.
“The food court consumer is not very
Consumer ** *** * adventurous and sticks to either a branded product
Durables or the national or regional cuisine. This trend is
(CDIT)/Mobile fast changing in metros, but in the tier II cities, the
Stores youth – which forms the majority of the food court
Jewellery & ** *** * users – are attracted to the brands due to their
Timewear aspiration values,” he adds.
Food courts have become popular with
Pharma Retail * ** ***
customers because of the numerous choices they
Food & *** * ** offer in terms of food. All members of a family are
What is Beverages sure to find a food offering of their choice. This is
the compelling proposition that a multi-brand food
going to Source: Cushman & Wakefield Research
court offers to consumers.
happen over a Note: *** most preferred option

period of time
is that only
those food
courts which
have the
right brands
and the right
category mix
would be able
to survive in
India.
– Rajeev Panjwani,
CEO, Travle Food
Services

Location Equation
The massive private and public infrastructure
push in recent years in terms of airports, metro
trains, highways and expressways along with the
rapid creation of new malls and office complexes
is creating modern new spaces with high footfalls
where food courts become an attractive proposition.
In the near future, malls and airports are the two
sectors which are expected to contribute the most
to the growth of food courts in India.
According to a report by CAPA (the Centre
for Asia Pacific Association), Indian airports are
expected to handle 450 million passengers per
annum by 2020, with $30 bn to be spent on
their modernization over the next 15 years. The
report notes: “For any business involved in travel
retail, this is a market that cannot be ignored. An
economy growing at 9 percent per annum, a multi-
billion-dollar airport modernization program driven

30 SEPTEMBER-OCTOBER 2011 FOODSERVICE INDIA EDITION

 2010 AIRPORT TRAFFIC SUMMARY
ACI Stats Total Aircraft % Change Total % Change Total Cargo % Change N° of
Regions Movements Passengers Airports
AFR 2 590 933 4.4 155 979 778 9.5 1 715 838 1.9 154
ASP 11 635 928 5.7 1 294 834 11.3 31 856 866 18.5 172
546
India’s
EUR 19 263 177 (0.5) 1 466 758
533
4.3 17 920 309 15.5 454
airports are
LAC 7 602 460 7.0 403 676 303 13.2 4 665 694 14.3 263
expected
MEA 1 974 916 7.7 206 622 059 12.0 5 881 214 13.7 53
to handle
NAM 31 387 228 (1.4) 1 509 836 2.5 28 709 087 13.2 222
450 million
075 passengers
ACI 74 454 642 1.1 5 037 707 6.6 90 749 008 15.3 1318 per annum by
294 2020, with
Footnote: In Asia-Pacific, India’s traffic grew nearly 15 per cent and China’s nearly 14 per cent, as the region once again $30 bn to be
increased its global market share.
spent on their
Passengers: total passengers enplaned and deplaned, passengers in transit counted once.
Cargo: loaded and unloaded freight and mail. modernization
Aircraft Movements: landing and take-off of an aircraft. over the next
Source: Airports Council International 15 years.
by private sector investment, combined with rapid
traffic growth and an increasingly sophisticated
Indian traveler, make this one of the most exciting
opportunities in global retail.”
A report by real-estate consultancy CB Richard
Ellis estimates that 6.1 million sq. ft of mall retail
space got added in India in the first six months
of 2011, with the NCR around Delhi, Mumbai,
Bangaluru, Pune and Chennai witnessing most of
the retail expansion activity.
Commercial property consultancy Cushman &
Wakefield (C&W) says in a report: “Based on the
growth of organized retail and entry of new players
by 2013-14, there will be a likely requirement of
45 million sq. ft of quality real estate in the top four
cities of NCR, Mumbai, Kolkata and Chennai.”
Food and beverages are set to emerge as one of
the top takeaway categories for malls apart from
apparel and footwear, the company says.
Apart from malls and airports, the rapid
development of highways under India’s National
Highway Development Program is also expected to
contribute to the growth of food courts.

Commercial Viability
Food courts occupy large spaces ranging
from 15,000-30,000 sq. ft. With retail rentals
skyrocketing, how does their operational dynamics
work out? From a commercial viability perspective,
three factors are a very important part of the food-
court equation: rental costs, labor costs (hiring
and sustaining employees) and the throughput of
volume. Says Panjwani: “While volumes at airports
or malls may be promising, the rentals and labor
costs eat into a lot of business generated by a food
court.”
A unique characteristic of Indian food courts is
that the operators rely too much on the international
F&B brands, café concepts and established QSR
chains. This approach has its limitations. Adds
Panjwani: “There is a critical need for Indian food
courts to host a good number of home-grown
brands too. It is these domestic brands which,
when placed with anchor brands, fetch incremental
business. This incremental business is very
important in generating enough revenue for the
food court and keeping all the brands out of the
red.”
The home-grown food brands are the heart of
any food court in India because they help create
appeal in the eyes of consumers. “The absence
of domestic brands is a challenge that has not
been adequately addressed in India yet. This, I
think, is because these are early days yet and F&B
conceptualization in the industry is still nascent,”
says Panjwani

FOODSERVICE INDIA EDITION SEPTEMBER-OCTOBER 2011 31

COVER STORY

A lot of evolution still has to happen, but one

thing is clear – given the all-pervasive mall culture
in urban India, the food courts are here to stay.
Combine this with the upcoming modernization of
34 airports across the country and it would seem
that F&B operators have merely scratched the
surface of the Indian food court pie. However, it is
not necessary for the food courts model to succeed
despite these growth factors.
Says Panjwani: “What is going to happen over a
period of time is that only those food courts which
have the right brands and the right category mix
would be able to survive in India. And that will
depend on how closely the food court operators
An F&B work with the mall owners as well as authorities
at the transit locations.” He argues that the
operator commercial viability of a food court, especially that
may find it paying high rentals or revenue share, would depend
easier to run on how proactive were the mall developer and the
food-court operator at the conceptualization stage.
a food court Malls are not the only option for a food court in
in alternative terms of location. Considering the high rentals,
locations many operators are attracted to other alternatives
such as educational institutes and corporate parks.
because of Says Amit Burman, Chairman, Lite Bite Foods:
low rentals, “It’s a matter of choice completely and it is about
choosing your captive audience.”
but the daily Ultimately, everything revolves around turnover
revenue may and return on investment. An F&B operator
not be very may find it easier to run a food court in non-mall
locations because of low rentals but the daily
high either. revenue may not be very high, leading to a longer
gestation period before costs can be recovered.
– Amit Burman, “If an operator invests `35-`50 lakhs to open an
Co-Founder, outlet at a food court in an educational institution,
Lite Bite Foods he might not have to pay rentals as these locations
treat F&B as a service. But if the same operator

opens an outlet in a mall with a similar investment

and then goes on to do a business of `50,000-
`70,000 a day, his ROI would come in much more
quickly,” says Burman.
For F&B operators, there is no certainty that the
business volume of food courts at corporate parks
and educational institutions will ever increase as
much as desired. However, with a mall location,
the operator can be certain there would be a
predictable number of footfalls every day, with
incremental footfalls being an added bonus.

Paying Up
Malls are currently the most lucrative and popular
location for setting up food courts, but a lot of
discontent exists among F&B operators about the
way these are managed by the mall owners and the
terms offered to operators.

32 SEPTEMBER-OCTOBER 2011 FOODSERVICE INDIA EDITION

 Says Kanotra: “Good food in a mall is as essential
as good decor, air-conditioning and music.
Unfortunately, mall owners are often over-ambitious
on the revenues generated by F&B operators.
I think sharing a percentage of revenue is the
most logical and fair option because the business
generated by a food kiosk is almost always directly
proportional to the mall owner’s efficiency in
generating footfalls for the mall.”
When the mall phenomenon initially started out in
India, there was a large inflow of traffic. But as the
number of malls proliferated, the traffic and footfalls
became more diffused and variable. This is directly
impacting the quality stroke and profitability of food
courts in many malls. “The business isn’t the same
as it used to be for malls with variable or less traffic.
Malls that are doing well are in the right space,
have the right amount of traffic and are profitable
too. Malls which are not doing well have food courts
which are not doing well either,” says Panjwani.
He argues that the quality of the mall has a direct
bearing on the quality of the food court. “How a
food court unit fares really depends upon how well
the shopping center has been conceptualized.
Unfortunately, there is no right answer to getting
the whole concept right,” Panjwani adds. “What
is crucial is the expertise of the property owner in
identifying the target market and assessing the
through-put of volume and other significant factors.
This would help decide the type of F&B outlets to
set up in terms of cuisine and concepts.”
All F&B brands must be located at one particular
area of the mall, not necessarily to make the food
court work but to turn the mall successful too – this
is the view of Burman of Lite Bite Foods. “If the
multiplex and restaurants and food courts yield
maximum sales for a mall, why not locate them all
together at the ground floor or any other floor?” he
questions.
Not everyone agrees with this, however. Says
Bhatija of Inorbit Malls: “I would disagree on
clustering all food brands on the same floor in a
mall. I believe we do need some amount of food
option for shoppers at each floor of the shopping
center. A consumer who feels tired might like
to pick up a snack or sip a cup of coffee on the
ground floor, or any other floor. We do not want to
create fatigue among mall visitors by driving them
to one fixed floor or area each time they are in an
urgency to feed themselves.” The
According to him, food courts contribute 5-6 phenomenon
percent of the total sales of a mall on an average.
“Food drives volumes at a shopping center,” he adds.
globally is that
“The percentage contribution to total sales by food footfalls of five
courts appears small because the value of the ticket weekdays equal
is low. If we compare the sales contribution of food the traffic of
courts with high-ticket categories such as fashion or weekends. At
accessories where the minimum average ticket price Inorbit, we have
is `1,000, it would be an unfair comparison.”
The costs that the malls impose on F&B
gradually been
operators vary from vendor to vendor. While many able to move
malls have moved to a minimum guarantee plus away from this
revenue share model with most of the other outlets, phenomenon
with food courts the mall managements are still and are
selective. Some F&B brands have a fixed rental
agreement while others follow a system of revenue
increasingly
share with a minimum guarantee. seeing almost
“This is purely because not all F&B brands in equal traffic on
a food court have a sound background in terms weekdays.
of transparency of operations, standardization
of procedures, etc. While renowned brands can
– Kishore Bhatija,
be trusted for their transparency and revenue
CEO,
generation competencies, it might not be the same
Inorbit Malls
with local brands,” Bhatija says.
FOODSERVICE INDIA EDITION SEPTEMBER-OCTOBER 2011 33
 COVER STORY

A food-court
consumer
is not very
adventurous
and sticks to
either branded
products or
the national
or regional
cuisine. In
tier II cities,
however, the
youth are
attracted by Brand Monotony
The absence of an adequate number of home-
expertise lies in developing and franchising F&B
brands. True, there exist a handful of Indian and
brands due to grown F&B brands in India makes it harder for food International food-court operators in India, such
their aspiration courts to distinguish themselves from each other as the Blue Foods company – which owns food
values. and carve out a unique identity for themselves courts such as the Spoon and Food Talk – SSP
in the minds of the consumer. Most malls in the Travel Associates, Travel Food Services and Buddy
country are concentrated in less than a dozen cities Hospitality, it is early yet to expect them to scale up
– Sandeep Kanotra, and metros. The result: almost all of them host the to cater to a significant chunk of demand arising
GM, QSR & same international brands and offer almost the from the rapidly proliferating shopping centers.
Franchise same fare. The question that faces malls is whether to run
Operations, Old Another issue facing food courts in the country the food court operations on its own or to outsource
World Hospitality is the acute dearth of independent food court to specialists. Says Panjwani: “If a shopping center
management companies, unlike in the West, whose has a very strong proposition as a mall, it may
have the leverage to bring in 10 different brands
on its own to the food court. However, if there’s an
independent food court operator managing its food
court, he may or may not be able to bring in all the
different brands. So there is a pro and con to both
the situations – to outsource food court operations
or to run it on one’s own. There is no straight
answer to this.”
Kanotra on the other hand suggests that
outsourcing food court operations to an
independent foodservice management company
is the best option for a mall. However, the mall
owners have to make sure they are a partner in the
management team.
“Food business is best left to professionals
who understand the concept, the market and the
unique needs of the customers. Food vendors sell
a highly perishable product. They require special
support from the authorities who manage the mall
premises. A developer generally will not be able to
empathize with them,” he says.
Bhatija has a different opinion. He believes
food court management should be done by the

34 SEPTEMBER-OCTOBER 2011 FOODSERVICE INDIA EDITION

mall owners themselves and not necessarily
be outsourced. “At the end of the day, it is the
mall owner’s expertise and experience which is
being applied in the shopping center. When we
started out, we also did not have much expertise
of running mall food business effectively. We
recognized this and went on to hire specialists into
the management with experience of managing food
courts,” says Bhatija.
He adds that his marketing and operations team
has been playing a significant role in ensuring that
the food court traffic on weekdays is at par with
that on weekends. The company also organizes

SNAPSHOT:
OLD WORLD HOSPITALITY
FOOD COURTS

Footfall on weekdays:
2000+
Footfall on weekends:
3000+
Average tickets price on
weekdays:
`120+
Average ticket price on
weekends:
`150+
Number of brands
operated:
5 within Eatopia +
Tikka Town (2 numbers)

promotions with retailers on weekdays. One such
event at its malls, called Tuesday Special, is
conducted in partnership with 20 retailers to offer
special discounts to shoppers on that day.
Says Bhatija: “Typically, the phenomenon globally
is that footfalls of five weekdays at a mall are equal
to the traffic of the weekends. However, we at
Inorbit have gradually been able to move away from
this and are increasingly seeing almost equal traffic
on weekdays at our food courts.”
Slowly, the importance of a well-managed
food court has begun to dawn on mall owners.
Says Kanotra: “The trends of the past five years
have shown that the mall owners are absolutely
convinced that a well-managed food court with a
balanced offering is a footfall-driver in itself. New
properties are now wooing top food brands for their
food court much more aggressively.”
Number of covers:
110 at Eatopia
Average size of the food
court:
6,000 sq. ft inside /
9000 sq ft inclusive of
Some of the most efficient food courts in India outdoor space
today include names such as Inorbit and Forum Mall
(Bangaluru), Ambience Mall and the DLF Promenade Expansion plans:
(Delhi) as well as Express Avenue and Infiniti mall Intends opening some
(Mumbai). more outlets by the end
It cannot be denied that the Indian F&B business of 2012
has a lot of evolution ahead of it, despite the strides
made in the last ten years. It is important for the
home-grown and international F&B brands to evolve
in sync with the Indian market which is growing in
terms of shopping centers, airports and highways
that are being built all over the country, as well as the
rising purchasing power of customers.
The food court sector in on the cusp of formidable
growth. Only those food courts will survive which
are able to distinguish themselves in the market,
customise their offerings and present a unique
proposition to the Indian customer. ••

FOODSERVICE INDIA EDITION SEPTEMBER-OCTOBER 2011 35