Factors considered while purchasing HORECA product

India has a rich, dynamic, diverse and extremely fast paced Food, Drink and Hospitality
industry. A population of over 1 billion, a rising middle class, GDP growth rate of over 8%,
increased spending power in the consumer age groups, has meant India today is an economic
powerhouse.

The Indian hotel industry registered the healthy revenue growth of 20% in 2010-11. A strong
revival in domestic and foreign tourist arrivals, adequate rate increases of 5-7%, revenues from
incremental supply, and stable food and beverages (F&B) revenues are the factors responsible
for this growth. (According to ICRA report)

HORECA is an acronym that refers to a foodservice industry sector that sells food and/or
beverages. The word HORECA itself combines the first two letters of the words: HOtel,
REstaurant, CAfé, or HOtel, REstaurants, CAtering (depending on who you ask).

The HORECA industry is a very dynamic and extremely important area of the economy of
European Union countries. The area of activity included in the sector is very wide, both from
the point of view of the type of services performed as well as the type of entities that provide
these services. The effectiveness and efficiency of entities operating in the industry depends
on the quality of qualifications and competences of employees in the sector. The proposed list
of tasks and learning outcomes will ensure the constant development of the HORECA industry,
in addition, it will provide enormous support for its main pillars, ie hotel, restaurant and
catering.

Now a day’s customer has a wide variety of choice while selecting HORECA, producer has to
innovate additional values to the product that the product continues its presence in the market.
Different factor governing the customer based on different product category like Cheese, Milk
Products, Fries & Butter etc.
 OBJECTIVE OF THE STUDY
PRIMARY OBJECTIVE:
 To study the factors determining the pre purchase
decision.

RESEARCH METHODOLOGY
Type of research
Descriptive
Type of data
Primary data
Data collection method
Data is collected through structured
questionnaire.
Sampling
Convenient sampling
Sample size
100
Data analysis technique
Quantitative
Data analysis tool
Bar charts, pie charts.
 HORECA (Hotel, Restaurants & Catering)
Horeca (also HoReCa, HORECA) is an abbreviation for the food service industry. The term is a
syllabic abbreviation of the words Hotel/Restaurant/Café. The term is mostly used in Dutch. In
English, this term is often known as (Hotel and) Catering Industry.

The Dutch Uniforme Voorwaarden Horeca (UVH) is translated into English as Uniform
Conditions for the Hotel and Catering Industry. This code covers hotels, bars, restaurants and
related businesses in the Netherlands. Koninklijke Horeca Nederland is the Dutch trade
association for the hotel and catering industry.

This sector is one of the fastest growing in Europe. In 2004, more than 7.8 million people were
employed and the sector generated more than $338 billion turnover.[4] Jobs tend to be
temporary, with irregular hours, low pay, and few career prospects. There is a high proportion
of young people working in the sector. Some distribution companies use this term to define the
food & beverage service trade channel or the hospitality trade channel.

Some tobacco companies use this term to define the food & beverage service trade channel or
the hospitality trade channel.
Horeca is the sector of the food service industry that consists of establishments which prepare
and serve food and beverages. The term is a syllabic abbreviation of the words
Hotel/Restaurant/Catering. The Dutch Uniforme Voorwaarden Horeca is translated into English
as Uniform Conditions for the Hotel and Catering Industry. This code covers hotels, bars,
restaurants and related businesses in the Netherlands. Koninklijk Horeca Nederland is the
Dutch trade association for the hotel and catering industry. This sector is one of the fastest
growing in Europe. In 2004 more than 7.8 million people were employed and the sector
generated more than 338 billion turnover. Jobs tend to be temporary, with irregular hours, low
pay and few career prospects. There is a high proportion of young people working in the
sector.

Why Focus on HoReCa?

However, there are few companies equipped with a robust GTM strategy for HoReCa. In fact,
the leadership team at Metro Cash and Carry believes that most companies lack a proper
market strategy for HoReCa and brands ride on their natural edge in this segment to tap them.
Possibly that explains the reason why there’s a mere 0.2% success rate with HORECA product
launches. Nielson, in a recent report mentions that only 31 out of 15000 product launches
succeed every year. The reason why the rest of the brands fail is a lack of an all-pervasive
distribution strategy. It is interesting to know that the best HORECA companies manage to
penetrate only 30-40% Kirana stores with their top brands stagnating at a penetration level of
not more than 50%. However, HoReCa as an alternate model and independent segment has
gathered immense focus owing to its contribution that is higher than retail. In addition to
traditional Kirana stores, Modern Trade and General Trade, HORECAs are building a strong
focus on the HoReCa channel as well.

Growth in HoReCa Segment

In a recent Economic Times article, online retail player Big Basket shared plans to generate
500 crore revenues from their newly launched HoReCa segment in 2018. Such is the
attractiveness of the new segment that the company is setting up dedicated distribution
centres across 8 cities so that scaling up is not a deterrent to catapult growth. The last decade
has witnessed the emergence of large number of organized food processors with a strong
focus on HoReCa. Frozen food manufacturers and marketers have a strong foothold in this
industry since their major business comes from this channel.

The growth in the Food and Services Industry therefore, finds the organized food services
segment demand for quality raw materials with higher standards. This leads to better practices
and technology transfers.

Growing at a faster pace, this segment also takes up 75% sales against retail. In addition to
fuelling growth, it is also helping define lifestyle changes of the modern consumer. What could
be the reasons that sets the pace for this new industry across the commercial ecosystem?
Well, the propensity to travel by nuclear families has become a way of life. This implies having
favourite meals in the comfort of a third home. Owing to higher spending capacities of a
metrosexual Indian, the likelihood of having meals outside home has gained frequency. This
also explains the discovery of food apps that has suddenly gathered momentum. Thus,
delivering premium quality raw material is a pre-requisite for brands to thrive in the HoReCa
segment since the returns here are significantly attractive than retail. In fact, a leading food
brand explains that QSRs (Quick Service Restaurants) and HoReCa channels have registered
a higher use of convenience products as compared to the fine dining restaurants. In a nutshell,
they present a huge market that is still nascent and untapped in India.

The Indian retail industry has developed significantly, rising as a standout amongst the most
venturesome and dynamic parts of the economy. Today, the retail segment represents over 10
per cent of the nation’s (GDP) and a stunning eight per cent of the nation’s employment as
indicated by the India Brand Equity Foundation (IBEF). With India positioning as the world’s
fifth-biggest destination worldwide in the retail space, the part is probably going to observe
more development because of strong household request, in the years to come. Digital
technology will play a great role in expansion of this industry.
Fuelling this growth, both HORECA and online retail players are looking beyond traditional
trade channels to boost revenues whilst gaining an express entry into the HoReCa (Hotels,
Restaurants, and Catering) segment in India. Over the past couple of years, the food service
business otherwise called the HoReCa business has turned out to be one of the fastest
developing ventures on the planet. Business-to-business (B2B) discount mammoths are
progressively assuming control; accounting for nearly 1.3 cr organisations compared to 1.2 cr
Kirana stores, the segment is one of the fastest growing in India and provides immense
opportunities to cash and carry players. The time is ripe for organised retailers to foray into this
market. However, the biggest challenges faced by this segment include transparency in
transactions, consistent supplies and value solution in terms of products and services. Also,
there is a dire need to rework the retailers’ approach and provide end to end automation,
disintermediation of supply chain, transparency and predictability for customers leading to
consumer satisfaction. Whilst, the overall
industry faces certain challenges, but it will remain a major engine of growth for the country’s
economy contributing significantly to the GDP and generating employment for millions of
people. The road ahead for the Indian HoReCa Industry looks promising and it is imperative for
the government to facilitate faster growth of this sector.
Leveraging the current opportunities in the sector, following factors will prove to be
instrumental in organising the HoReCa industry and will further enable the players to grow their
business substantially.
Supply chain management acts as a sturdy backbone

Catering to the rising need for an efficient supply chain management system, investment into
India’s supply chain infrastructure is experiencing noteworthy progress. The introduction of the
Goods and Services Tax (GST), expanding foreign direct investment (FDI) and higher
government spending has helped to spur much-needed growth. The supply chain industry has
a trickle-down effect on almost all aspects of retail and trade. As India starts to open its
economy even further, financing the improvement of this intermediary sector is key to growth in
the HoReCa industry.
Whilst a supply chain management approach is ideal when facilitating an effortless transition
from farmer to consumer, the concept of supply chain collaboration with logistics service
providers has few takers within the HoReCa segment. Nonetheless, a strong supply chain is
pivotal for the HoReCa segment. The reason why many brands are largely unsuccessful is the
absence of an all-inclusive distribution strategy. Retailers need to intensify their supply chain
by making greater investment for ‘last mile delivery’ to win over customer satisfaction, gain
loyalty, increased purchase value and frequency, mitigating profitability risk through automation
and optimisation of fulfilment locations.
Access to relevant information from each step of the food supply chain magnifies food safety,
fortifies the integrity of a brand, and ensures customer loyalty. The lack of transparency and
traceability can create an upheaval in the supply chain and expose a brand to unnecessary
risk. This drawback in a food supply chain is typically due to companies availing outdated
systems or manual tracking and inspections. Being a food quality conscious segment, it calls
upon the retailers to maintain high quality standards. At the same time, quality can be difficult
to define and isolate but when Customers judge the quality of fresh-food products, they
consider much more than taste and appearance. Therefore, maintaining food security has
become unconditional and highlights the need to achieve full supervision of food safety in the
modern world, because the journey leading from food production to the consumer is very time
and space consuming.

Products & Categories: -

 Imported Cheese
 Indian Cheese
 Milk Products
 Excellent Quality Indian Whole Spices
 Dry Fruits
 Canning Foods
 Ketchup and Sauces
 Rice, Pulses and grains
 Pasta, Paste and Colours
 Instant mix flour
 Achar and Papad
 Oil and Ghee
 A widest variety of Indian spice powder
  French Fries, Potato Wages etc…
 Rich Creams etc…

TOP HORECA Companies

 Flanders
 Gowardhan
 Merry Foods
 Kroon
 Elle & Vire
 Perla
 Milkana
 Delaktis
 Arla
 Dodoni
 Kraft
 McCan
 President
 Rich Gravvis
 Good Juicery

The factors which customer focuses while purchasing HORECA products are
 Price
 Availability
 Brand name
 Quantity
 Quality
 Packing
 Advertisement
 Reference
 Credit Facility
 Fast Delivery
 Analysis and Interpretation of the Data:
The collected data were not easily understandable, so I like to analyze the
collected data in a systematic manner and interpreted with simple method. The
analysis and interpretation of the data involves the analyzing of the collected data
and interpretation it with pictorial representation such as bar charts, pie charts
and others.

Types of Restaurants

Identification of types of restaurants consumes HORECA products in daily basis. Restaurants

classified in different types i.e. Multicuisine, Punjabi, Veg, Italian, Chinese, continental. The
following data reveals how no. of restaurants from the sample using HORECA products,

Continental 19

Ital i an 28

Mul ticui s i ne 45

Punjabi 5

Veg 3

Chi nes e0

0 5 10 15 20 25 30 35 40 45 50

Types of restaurant Number

Chinese 0

Veg 3

Punjabi 5

Multicuisine 45

Italian 28

Continental 19

Purchasing Factor
Identification of various factors plays a vital role in consumer behavior study. The various
factors such as quality, price easy available etc. is influencing lot and influences positively. The
following data reveals how various factors are influencing to buying of HORECA products .
Factors No of respondents Percentage
Quality 38 38
Brand 28 28
Price 20 20
Easy availability 14 14
Others 0 0
Total 100 100

No of respondents
Percentage

Interpretation:
38% of respondents buying HORECA products for its Good Quality, 28% of respondents
use for its Band Name,20% of its Price Consideration, 14% of its easy availability of
respondents buying HORECA products.

Quality:
Company has two responsibilities in a quality centered. First, they must participate in
formulating strategies and policies designed to help the company win through total quality
excellence. Second they must deliver marketing quality alongside production quality. This
helps to company to attract more number of customers to their products. Hence I try to collect
information related to quality of HORECA products.

Opinions No of respondents percentage

Durability 35 35
Freshness 45 45
Taste 20 20
Others 00 00
Total 100 100

No of respondents
Durability
Freshness
Taste Durability; 35; 17.50%
Others
Total Total; 100; 50.00%
Freshness; 45; 22.50%

Taste; 20; 10.00%

Interpretation:
As per the data, 35% of the respondents buy the milk due to Thickness, 45% of the
respondents for Freshness, and 20% of respondents for Taste. Quality takes vital role in every
organization. From the above table we can conclude that majority of the respondents
expressed that HORECA product

Opinion towards Products:

 The behavior of users after his commitment to a product has been collected with
respect product and terms of satisfaction with rating scale. The following are the data obtained
related to HORECA products. Analysis of Rating towards HORECA products

Ratings No of respondents Percentage

Excellent 25 25
Good 48 48
Average 22 22
Poor 05 05
Total 100 100

No of respondents
percentage

Interpretation:

25% of the respondents rated that HORECA products are excellent. 48% of the respondents
rated as good, 22% of the respondents rated as Average Quality. 05% of the respondents
rated that HORECA products are Poor.
From the above table we can conclude that majority of the respondents rated HORECA are of
Good Quality

Purchasing Place:
Purchase place is also important to know where users choose their Purchase point. This helps
to marketer to design various promotion and distribution programmers’. The data is collected to
know the various purchase place and availability.

Easy available No of respondents percentage

Yes 95 95
No 05 05
Total 100 100

No of respondents

Interpretation:

95% of the respondents said that they are getting HORECA products easily. Only 05% of the
respondents disagree with the easy available of HORECA products. From the above table we
can conclude that majority of the respondents getting the HORECA products easily from the
dealers or retailers

Value for the Money:

Customers always think while paying price to the products such as how much we are paying
towards products and how much we are getting. This data is gathered to know what value they
are receiving from the HORECA Products.

Response No of respondents percentage

Yes 96 96
No 04 04
Total 100 100
 No of respondents

Interpretation:
96% of the respondents feel that they get the value for money they paid. Only 04% of the
respondents feel that they are not getting the value for money what they paid. From the above
table we can conclude that majority of the respondents are agreed that they are getting the
value for money they paid.

Credit facility

Credit Facilities are the frequent asked by restaurants while Purchasing the products. This
data is gathered to know what value they are giving to the while Purchasing the HORECA
Products.
Interpretation

78% of the respondents said that they prefer credit facility. Only 05% of the respondents wants
to purchase by cash only. From the above table we can conclude that majority of the
respondents getting the HORECA products from the credit facility.

Fast Delivery

Customers gives more priority for the fast delivery of their products. This data is gathered to
know how much the customers prefer fast delivery while purchasing the HORECA products.

No of respondents

Response No of respondents percentage

Yes 96 96
No 04 04
Total 100 100

Interpretation:
96% of the respondents prefers fast delivery of product while purchasing. Only 04% of the
respondents feel that they are not prefer fast delivery. From the above table we can conclude
that majority of the respondents are agreed that they prefer fast delivery while purchasing the
HORECA products.

Influence to Others to Buy Products:

Post experience & benefits will help organization in obtaining the additional sale. In this
connection feedback its act as an influence to others to adopt the product the user survey has
conducted to identify what an extent user recommends to others. The data has been extracted
& it is as follows.

Recommend No of respondents percentage

Yes 95 95
 No 05 05
Total 100 100

No; 5; 5.00%

Yes
No

Yes; 95; 95.00%

Interpretation:

95% of the respondents recommended HORECA products, 05% of the respondents not
recommended HORECA products to others. From the above table we can conclude that
majority of the respondent’s recommended HORECA products.