PROJECT REPORT ON

Eating out / Home Delivery restaurants in India

IN

(Paprika Media Private Limited and Paprika Idea Labs Private Limited)

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT OF

MASTER OF MANAGEMENT STUDIES
BY
Vasundhara Jalan
ROLL NO 2014198
MMS-II (SEM III)
YEAR 2014-2016

LALA LAJPATRAI INSTITUTE OF MANAGEMENT

MAHALAXMI, MUMBAI - 400034
 (This is the title page)
SUMMER INTERNSHIP PROJECT

Can put the logo of the company and can be colourful

SUBMITTED BY
Vasundhara Jalan
ROLL NO – 2014198
MMS – II (SEM III)
YEAR 2014 - 2016
 Certificate

This is to certify that the project work titled “Eating out / Home Delivery
restaurants in India” is a summer internship work carried out by Ms.
Vasundhara Jalan

The project was completed for “Paprika Idea Labs Private Limited and Paprika
Media Private Limited”, under the guidance of (Karishma Manglani)

I further certify that the said work has not been submitted in the part or in full, to
any other University.

Date: 31st August, 2015

_____________________ __________________________

Dr. M. Gowri Shankar Dr V.B. Angadi

Project Guide Director
 DECLARATION

I, Ms. Vasundhara Jalan, student of Lala Lajpatrai Institute of Management of

MMS II (Semester III) hereby declare that I have completed the summer
internship project on Eating out / Home Delivery restaurants in India with
Paprika Idea Labs Private Limited and Paprika Media Private Limited in the
Academic year 2014 - 2016. The information submitted is true & original to the
best of my knowledge.

Vasundhara Jalan
 ACKNOWLEDGEMENT

At the outset of this project, I would like to express my profound thanks to a few people without
whose help, completion of this project would not have been possible.

First and foremost, I would like to express sincere thanks to Paprika Idea Labs Private
Limited and Paprika Media Private Limited for giving me this opportunity to work with
them.

The list is endless but to name a few special people, I would like to thank Karishma Manglani,
Marketing Department for being extremely supportive and guiding me throughout my
internship and giving me constant motivation and expert advice.

I would also like to thank the entire Marketing and HR department, Ashwin and Akshata for
providing me their precious time and making this internship a successful learning experience.

I am very grateful to Dr. Angadi, Director of Lala Lajpat Rai Institute of Management, for
giving me the opportunity to do this project in Paprika Idea Labs Private Limited and
Paprika Media Private Limited.

I would also like to thank Dr. M. Gowri Shankar for being an excellent mentor and helping me
whenever I approached him/her.

Last but not the least; I take pride in thanking my parents Mr. Dilip Jalan & Mrs. Sonu Jalan,
siblings and friends for their much valued support.
 EXECUTIVE SUMMARY
(Brief write-up about your project)
 INDEX

Chapter. CONTENT PAGE NO.

NO.
1 INTRODUCTION AND RESEARCH 8-16
METHEDOLOGY
2 INDIA’S RESTAURANT REVOLUTION 17- 23

3 THE FOOD AND BEVERAGE AND EATING 24 - 36

OUT INDUSTRY IN INDIA
4 QSR’s IN INDIA 37 – 39
5 EATING OUT / HOME DELIVERY IN TIER 43 - 52
1 AND TIER 2 CITIES IN INDIA
6 COMPETITOR ANALYSIS / DATA 53 - 66
ANALYSIS
7 FINDINGS 67
8 CONCLUSION 68

9 RECOMMENDATIONS 69 - 73
10 BIBLIOGRAPHY 74 - 75
Chapter I: Introduction and Research methodology

1.1 COMPANY PROFILE :

Paprika Idea Labs Private Limited and Paprika Media Private Limited:

A content and experiential marketing firm. We love what we do, and we want to make the world
more interesting with you.

PIL is India Licensee of Time Out brand which is one of the largest global magazines & online
publisher across 40+ international cities. After successfully running magazines in Mumbai, Delhi
and Bangalore for 10 years Time Out has gone pure online now.

Paprika Idea Lab (PIL), is a part of ESSAR GROUP of companies.

PIL started as a publication house that published TimeOut Magazine in India. Time Out India is
a lifestyle and culture magazine with its roots in London. Since it was first published in 1968, the
magazine with its distinctive logo soon became a London icon, as well as an indispensable guide
to what to see and do in Europe's largest city. TimeOut is a ready reckoner for all the enthusiasts
who love the city as much as we do and we inspire people to go out and experience life.
TimeOut turned digital thereby making the content available faster as well as to a larger
audience.

Paprika Idea Labs forayed into events, activation and alliance in 2011 and runs the largest
dining program in the country for banks and other financial institutions such as Citi Bank,
ICICI Bank, Axis Bank, Kotak Mahindra, American Express, Master Card etc. We have the
expertise to tie up with various retail set ups, restaurants, bars and cafes, entertainment and
wellness centres.

We also design conceptualize and execute events for various clients across different sectors
like the FIFA World Cup 2014 Activation for Sony Liv Sports in 200 cafes across 6 cities.
PIL also has event IPRs of its own. These include titles such as The Mumbai Barathon, Time
Out food awards, an international property of Time Out London.

We at Paprika Idea Labs spend our days wondering why a Brand still works the same way it
did 40 years ago. We’re here to help those creative (read bold) enough to want to create
memorable experiences for their customers. Brands who would want their customers to feel
the brand and leave a lasting impression.
Some people call what we do as “Events, Activation, BTL or On-ground” In our opinion, those
sound a bit silly. We simply think of ourselves as inventors who take the amazingness of the
‘Brand’ and bring it into never-been-done-before real world experiences. We help our clients
stand out from the competition by developing disruptive innovative ideas. Our
strategic campaign approach (Surprise, Intrigue, Entertain = Activate) to make sure that
consumers will stop, listen and consider using the brand that you have invested in.

Recently, PIL created an IP called Barathon. Barathon with its tag line “Your favorite kind of
marathon” is a quirky event in which people explore several new places in one night and have a
drink at each one. It’s different from the concept of a crawl as in involves a marathon for the
participants in which there is a winner and top 20. The first one happened in South
Mumbai on the 3rd of April and the second just happened on the 26th of June.

We love to think and we love to produce. That’s how we view creativity. We strive for a
delicate balance between art and execution. We love business that connects people and we
love art that challenges the uniqueness of things and brings unexpected solutions. And that
is Paprika Idea Labs for you.

The areas Paprika Idea Labs specializes in include:

 Cool & quirky city events designed by PIL and powered by Time Out.

 Events such as Bar-a-thon, Dessert crawl, 5 a Side, Pop-up restaurants etc.

 BTL Solutions for Brands in specific areas such as – Restaurants, Pubs, Bars, Nightclubs,
Gyms, Spas, entertainment places.

 Large scale tie-ups and sampling across the country.

 Comedy, Story telling, Magicians, Mentalists at different settings like corporates,

auditoriums, restaurant/Bar and for different purpose

 Theatre, Art, Dance.

 Create specialized events or connect brands with the popular events.

 Content creation.

 Brands can tap into our resources of content creators for various mediums like video,
digital, written form. We can cater to the content need ranging from comedy, serious
writing, entertainment and city events for different target groups.

 Experiences – Provide unique city & travel experiences for customers and employees of
various brands.

 Customized experiences depending on the marketing/HR objective.

  Loyalty Programs.

 We develop and run sustained loyalty programs for best of financial, auto and start-up
brands. The program covers categories such as dining, wellness, retail and entertainment.

 Providing a platform to reach out to Time Out audiences & loyalists through Time Out
Events such as :

1. Timeout Food Award – Reaching out to Foodies & Restaurant

2. Timeout comedy nights, Timeout Theatre

3. Sunday Music Jam, Book Launches etc.

4. Running the dining alliances for the banks across India.

5. Citi Bank, ICICI Bank, Axis Bank, Kotak Mahindra, American Express, Master Card etc.
are a few of them.

6. 90% of the banks are covered by Paprika in running these dining alliances for them.

1.2 INDUSTRY BACKGROUND :

1.2.1 Introduction -

“What should I have for lunch?” is the perfect startup problem to solve: it affects everyone, it’s
something people are still willing to pay for, and it happens every day. And unlike other app
categories like messaging or social networks, there’s room for multiple big winners, because
everyone has different priorities when it comes to their lunch.

Do you want the best food in town? Or will you take any old wrap? Do you want it now, or are
you willing to wait a little longer for a better price?

The total size of the food service industry in India as per the current estimates is Rs 247,680 cr
(USD 48 billion) and projected to grow to Rs 408,040 cr (USD 78 billion) by 2018 at a CAGR of
11%. Currently, the unorganized market holds 70% share, and remaining 30% by organised
players. However, the organized industry is projected to grow at a CAGR of 16% to reach Rs
145,770cr (USD 28 billion) compared to the current Rs 67,995 cr over the next five years.

The Indian food industry is poised for huge growth, increasing its contribution in world food
trade every year. In India, the food sector has emerged as a high-profit sector on the back of the
scope it offers for value addition, particularly with the food processing industry getting
recognized as a high-priority area.

Accounting for about 32 per cent of the country’s total food market, the food processing industry
is one of the largest industries in India and is ranked fifth in terms of production, consumption,
export and expected growth. The total food production in India is likely to double in the next 10
years with the country’s domestic food market estimated to reach US$ 258 billion by 2015.
The role of the Indian government has been instrumental in the growth and development of the
industry. The government through the Ministry of Food Processing Industries (MoFPI) is making
all efforts to encourage investments in the sector. It has approved proposals for joint ventures
(JV), foreign collaboration, industrial licenses and 100 per cent export oriented units.

1.2.2 Market Size –

The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per
cent of the sales. It is projected to grow at the rate of 104 per cent, touching US$ 482 billion by
2020.

The Indian food processing industry accounts for 32 per cent of the country’s total food market,
14 per cent of manufacturing GDP, 13 per cent of India’s exports and six per cent of total
industrial investment.

Indian food service industry is expected to reach US$ 78 billion by 2018.

The Indian gourmet food market is currently valued at US$ 1.3 billion and is growing at a CAGR
of 20 per cent. It is expected to cross US$ 2.8 billion by 2015.
Indian food brands are increasingly finding prime shelf space in retail chains abroad. These
include Bikanervala Foods, MTR ready to eat foodstuff and ITC’s Kitchens of India.

The online food ordering business in India is in its nascent stage. Share of online food ordering
would be in single digits of the overall food ordering business which in 2014 was estimated to be
around Rs 5,000-6,000 crore (US$ 800.19-960.12 million). We are growing at 20-30 per cent
month-on-month.

The poultry sector of India is expected to register double-digit growth in 2015 on the back of
stable feed prices and encouraging rural demand.
1.2.3 Market Share :

Source : Technopak Analysis

1.2.4 Investments –
According to the data provided by the Department of Industrial Policies and Promotion (DIPP),
the food processing sector in India has received around US$ 6,215.46 million worth of foreign
investments during the period April 2000—Janaury 2015.

Some of the major investments in this sector in the recent past are:

 Foodpanda.in has acquired food ordering portal Just Eat India in an all-stock deal as it
plans to strengthen its presence in India.
 Gujarat Cooperative Milk Marketing Federation (GCMMF), popularly known as 'Amul',
plans to invest Rs 5,000 crore (US$ 800.18 million) to set up ten new processing plants as
well as expand the current capacity to touch 32 million litres per day (MLPD) capacity by
2020.
 Restaurant search service Zomato is in discussions to raise about US$ 100 million in a
fresh round of funding. Zomato is now present in 22 countries and over 500 cities around
the globe.
 Online restaurant search service Zomato has acquired Urbanspoon, for an undisclosed
amount, in an all-cash deal marking its entry into the US. This is Zomato’s sixth
acquisition in six months.
 ITC Ltd plans to invest Rs 1,000 crore (US$ 160.03 million) for its ambitious foray into
dairy and juice businesses which it plans to roll out in the January-March quarter of 2015.
 Papa John’s India Inc. plans to merge with the Pizza Corner brand to become the third-
largest pizza chain in India.

1.2.5 Government Initiatives –

In order to promote food processing industries, increase level of processing and exploit the
potential of domestic and international market for processed food products, Vision Document-
2015 was prepared by the Ministry, which envisaged trebling the size of investment in the
processed food sector by increasing the level of processing of perishables from 6 per cent to 20
per cent, value addition from 20 per cent to 35 per cent and share in global food trade from 1.5
per cent to 3 per cent by 2015. To achieve these targets, an investment of Rs 100,000 crore (US$
16 billion) is required by the year 2015.

Some of the major initiatives taken by the Government of India to improve the food processing
sector in India are as follows:

 Ms Harsimrat Kaur Badal, Union Minister for Food Processing Industries, Government
of India has inaugurated the first of its kind Rs 136 crore (US$ 21.76 million) mega
international food park at Dabwala Kalan, Punjab.
 Ministry of Food Processing Industries has a scheme for human resource development
(HRD) in the food processing sector. The HRD scheme is being implemented through
 State Governments under the National Mission on Food Processing. The scheme has the
following four components:
o Creation of infrastructure facilities for degree/diploma courses in food processing
sector
o Entrepreneurship Development Programme (EDP)
o Food Processing Training Centres (FPTC)
o Training at recognised institutions at State/National level
 The Food Safety and Standards Authority of India (FSSAI) under the Ministry of Health
and Family Welfare has issued the Food Safety and Standards (Food Product Standards
and Food Additives) Regulations, 2011 and the Food Safety and Standards
(Contaminants, Toxins and Residues) Regulations, 2011 which prescribe the quality and
safety standards, respectively for food products.
 The Ministry of Food Processing Industries has taken some new initiatives to develop the
food processing sector which will also help to enhance the incomes of farmers and export
of agro and processed foods among others. The government has also approved the setting
up of five numbers of Mega Food Parks in the states of Bihar, Maharashtra, Himachal
Pradesh and Chattisgarh.
 The Indian Institute of Packaging (IIP) has planned to offer a packaging solution to the
famed Tirupati ‘Laddu’ to enhance its shelf life. They have also planned to install
automatic vacuum packaging system for the packaging of ‘Laddu’ with higher shelf life.

1.2.6 Road Ahead –

Further,the adoption of food safety and quality assurance mechanisms such as Total Quality
Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control
Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP) by
food processing industry enable adherence to stringent quality and hygiene norms and thereby
protect consumer health, prepare the industry to face global competition, enhance product
acceptance by overseas buyers and keep the industry technologically abreast of international best
practices.

The allocation of Rs 2,000 crore (US$ 319.98 million) as a separate National Bank for
Agriculture and Rural Development (NABARD) fund for food processing industries during the
Union Budget 2014–15 is all set to give a big boost to this sector in India.

Exchange rate used: INR 1 = US$ 0.0159 as on March 20, 2015

1.3 Objectives of study –

1.3.1 To find out how many restaurants in India in Tier 1 and Tier 2 cities.

1.3.2 To develop a Competitive Analysis of New businesses built around eating

out/home delivery across India.

a) New apps/websites – detailed study of these apps/sites with their business

models.

b) Unique features in the apps/websites – features which are good for consumer
experience.

c) Top List of apps/sites on the basis of its usefulness and user experience.

d) Investment to these new businesses - how much for each of these new
businesses

1.3.3 To give Inputs on the current apps and things to keep in mind before starting a
Food App Start-up.

1.3.4 MAIN OBJECTIVE – To suggest ideas to Paprika for its new App around
Restaurants and suggesting new app ideas in the food/beverage industry.

1.4 Scope of the Study –

1.4.1 The geographic scope of the study covers all the Tier 1 and Tier 2 cities in India.

1.4.2 The analytical scope causes the fulfilment of the objectives set out for the study.

1.4.3 The functional scope is confined to offering certain meaningful recommendations to

Paprika Idea Labs Pvt Ltd.
1.5 Research Methodology -

1.5.1 Formation of problem :

Eating out in India has evolved from an occasion-driven activity to an everyday activity.
With the rising number of nuclear families, exposure to global trends, the increasing number
of employed women and an increase in the number of dual-income households, eating out
and home delivery has been strongly supported.

The idea is to start one such Mobile App for the same around the Food and Beverage
Industry for Dine-in and Take out.

1.5.2 Collection of data:

 The study is depended on only Secondary data.

 The period of study is only limited to the accounting year 2014-15

to 2015-16.

 I have collected secondary data from various sources as given

bellow :

1- Ministry of food processing industries.

2- Journals, periodicals, and news papers.
3- Research papers published in conference and
seminars.
4- Internet.
 1.5.3 Limitations of the Study:

1- The study is limited only for Restaurant Industry in organized sector

in India

2- The study is only limited for the research period 2014 and 2015.

Chapter II : INDIA’S RESTAURANT REVOLUTION –

2.1 RESTAURANT REVOLUTION:

Did you know that in some parts of Singapore and Thailand apartments do not even include a
basic cooking facility? So ubiquitous are affordable eating outlets that consumers use the space
meant for kitchenette for other purposes.

While such a situation may be still be a far cry in India, when it comes eating out, Indians too
seem to be marching ahead with gusto.

Take a moment and think about what tickles your palate. Chinese, Lebanese, Italian,
Mediterranean, South Indian or African?

Research reports seem to indicate that Indian consumers seem to be patronising Italian cuisine
the most, gulping down pizzas and pastas. Chinese comes next. This, reports say, is largely
fuelled by young consumers aged 14-45 years.

It’s not surprising that the higher frequency of eating out has also evolved the market for the
food services sector. The Indian food service market has come a long way from the early
Nineties when it was dominated by unorganised players and few brands.

The revolution began in 1996 with McDonald’s, Pizza Hut, Domino’s Pizza, Subway and
Yo!China, among others, setting up shop in the country. Since then, the food services market has
been continuously growing.

Let’s look at the size of the Indian food industry. A report by National Restaurant Association of
India (NRAI) and Technopak reveals that the size of the food services market in India is
estimated at $48 billion in 2013. This is projected to grow at a CAGR of 11 per cent over the
next five years to reach $78 billion by 2018.This market is largely unorganised. Chains account
for as much as five per cent of the total market.
“The good news is that the food services industry is set to grow for many years to come, given
the rising disposable incomes, a greater population of younger people, the growth of consumers
in smaller towns and the widening exposure to new cultures and cuisines besides an increased
propensity of eating outside the home,” says Atul Singh, President, CEO, Coca-Cola (Indian and
South West) and President, NRAI.

Interestingly, the QSR (quick service restaurant) and casual dining formats together account for
74 per cent of the chain market while cafes make up 12 per cent. Cafes make for an impulsive
option to hang out while fine dining places are reserved for families.

2.2 DESTINATION MENUS:

Quick service restaurants are a mainstay of the Indian food service market, and are growing fast.
Fine dining is gaining prominence too. Both multi-cuisine and single-cuisine establishments have
shown tremendous growth.

Organised market players such as McDonald’s, Sagar Ratna and Café Coffee Day are looking to
increase their market share in the QSR category by capitalising on untapped locations such as
highways and airports or by creating new destinations with customised menu offerings.

McDonald’s recently introduced a breakfast menu to capture the growing market for outdoor
eating.

Vikram Bakshi, Managing Director, Northern and Eastern Region, McDonald’s India, said,
“When it comes to breakfast, it is still a blue ocean out there. Globally, it is a popular concept but
in India it is still to catch on.”

“Consumers are eating out nearly six to seven times a month as per our research, as lifestyles are
changing. There is a huge opportunity for us as we are targeting people on the move,” Bakshi
added. McDonald’s has about 300 stores across India in formats including drive-throughs, full
menu restaurants and kiosks.

According to the NRAI report, the chain restaurant space is marked by the presence of almost
100 brands with more than 3,000 outlets spread across various cities.

Dine-in contributes the highest, 67 per cent, to the total QSR sales and is followed by takeaway
orders which account for 19 per cent of the sale. Home delivery is also picking up with most
chains offering this service to consumers within a defined catchment. On-the-go meals too seem
to have picked up with about 34 per cent of the total consumers flocking to them during office
hours.
Around 80 per cent of the consumers order in food at least twice a month, reflecting the need for
this convenience especially in larger cities where distance is a prime issue.

Ajay Kaul, CEO, Jubilant FoodWorks Ltd, which is a master franchisee of brands such as
Domino’s Pizza and Dunkin Donuts, says, “You have to create a lot of stimuli for consumers,
whether through online and SMS. We have been enticing consumers and will continue to put
money in branding campaigns.”

2.3 HINDRANCES TO GROWTH:

The key issues that continue to pose a challenge include high real estate costs, rising food costs,
shortage of quality manpower, fragmented supply chain and over-licensing.

McDonald’s Bakshi said the lack of infrastructure and high commodity prices were hitting
margins. “We undertook a price hike last year. We may look at a price hike later this year. Also,
infrastructure bottlenecks such as electricity supply and water are issues we face.”

Saloni Nangia, President, Technopak, notes that this is the phase of consolidation for the food
sector. The need of the hour is to establish an end-to-end supply chain, making use of modern
structures such as logistics parks, integrated cold chain and last mile connectivity. She says the
entry of brands such as Starbucks Coffee and Dunkin Donuts is pushing the demand for retail
space.

The NRAI report reveals that despite the food services market accounting for only 19 per cent of
the total organised market in India, it holds an estimated 30 million sq. ft. of real estate space.
The rise in the space allocated to food services outlets in food courts and standalone spaces in
malls reflect the growing confidence of real estate developers.

2.4 Food Trends : EATING OUT IN 2015

FOOD TAKE OUT – DEFINITION :

A food take-out and delivery business is defined as a business where food is intended to
be eaten off the premises. Food can either be taken “to go” by the consumer or
delivered to the consumer’s home or place of choice. For the purpose of this report the
franchises selected all provide take-out and delivery services. Some of the
franchised restaurants offer take out, delivery and catering services alongside the main
“sit down” area of the restaurant whereas other franchises offer only take-out and
delivery services. Whether a franchisee employs drivers or uses a restaurant delivery
service, take-out and delivery offers the opportunity to boost sales by appealing to time
constrained consumers.

Much has been written on and discussed about the increasing culture of eating out in India, and
the paradigm shift in the dining culture here. While in the past few years, India has seen the
advent of numerous international brands and cuisines, we have seen (and can’t ignore) an equal,
if not higher, number of indigenous restaurant ventures which have come into being, serving
varied regional and sub-regional cuisine from India. Over the years, the restaurant space, or as
many would like to call it, the eating out culture in India has witnessed a kind of revolution,
which in my opinion is set to become bigger and better in 2014.
Here are some trends in the restaurant space which I foresee in the not-so-distant future:

2.4.1. Going Glocal

Times are no longer changing; they have changed. People are now more aware because of
extensive travelling and getting international exposure. Boundaries between nations are fast
vanishing, thus leading to culinary exchanges. Glocal is the new wave. The times to come will
witness the use of many international ingredients in Indian dishes and many Indian
spices/ingredients in international favourites, not just within the culinary boundary of India, but
overseas as well. This trend is a result of diners becoming more adventurous; while there is a
segment which still prefers traditional cuisine, the newer generation is ready to experiment in
order to find newer and finer flavours. However, don’t mistake this for fusion, because it’s not.
Chefs and restaurateurs are combining various ingredients and techniques to evolve their
respective cuisines, thereby offering an iconic dish in a renewed avatar.
2.4.2 Luxurious Dining

Many assume that luxurious dining is restricted to and largely the domain of the finest five star
hotels in the world, where it’s hugely expensive. While in the Indian context, that thought may
have been true till about five years ago, the scenario has drastically changed. Now luxury is more
affordable; affordability is a result of disposable income; income has multiplied and luxurious
dining has become more accessible and real. Gone are the days when a diner chose a special
occasion to dine at a top end restaurant and splurge on food; dining out has a new meaning,
mostly because premium fine dining restaurants are now also outside the confines of five star
hotels; and I feel this is one trend which is only set to become bigger in times to come.

2.4.3. Prior Reservations

This concept was, and to some extent still is, a new concept in India. While Mumbai believes in
making prior reservations, Delhi, Kolkata, Bengaluru and Chennai, among other cities, don’t
believe in the concept. Having said that, diners have now begun making reservations to
guarantee availability of a table. Interestingly, with our brand Masala Library by Jiggs Kalra we
have witnessed something that is unheard of in India, prior reservations with a waiting period of
a fortnight, especially for weekends. I see this becoming a norm in times to come.

2.4.4. Culinary Tourism

In the recent past we have seen many chefs of Indian origin being invited overseas to showcase
Indian cuisine and international chefs being invited to India to showcase their cuisine in
specially-curated events. This form of interchange, popularised by people like my father, Jiggs
Kalra, the late Tarla Dalal and Camilia Punjabi in the 70s, 80s and 90s, is seeing a surge in the
form of culinary tourism. This trend is set to become bigger and an effective way of showcasing
authentic cuisines from various countries to the Indian audience.

2.4.5. Traditional Vs Modern Indian Cuisine

Today’s diner, globally, has become quite adventurous. And his desire to try new cuisines has
led to the emergence of fusion variations. The downside, in the Indian context, is that “traditional
Indian” cuisine is getting lost. Yet I feel there is enough demand for authentic as well as
contemporary Indian cuisine in their respective spaces. I don’t see the demand for traditional
Indian fare going down anytime soon, while modern Indian cuisine is only set to take centre
stage in times to come.
2.4.6. Regional Goes International

India is, in my opinion, the only country in the world to have so many regional cuisines. While
the regional food scene has been dominated by Punjabi cuisine in the global arena for over five
decades, I see the coming years focusing on other regional Indian fare.

2.4.7. Use of Fresh Produce

With advancements in food technology, kitchens across the world are sourcing organic and fresh
produce. Locally-sourced vegetables and fruits have become a norm and many chefs have
already begun their own small farms as an extension of the restaurant. The reasons for this trend
are multi-dimensional; while on one hand it’s more cost- and time- effective for restaurants to
develop their own produce, on the other plucking and using fresh produce in the dishes gives
guests a whole new dining experience which is more engaging.

2.4.8. International Cuisines

If someone had opened a standalone Japanese restaurant in India seven-eight years ago, people
would’ve have applauded the restaurateur’s adventurous streak. However, we’ve clearly
established that we have an appetite for sushi and sake now. Along with this, we have seen the
Teppanyaki-style of cooking gain popularity largely owing to the fact that it’s very similar to our
own tawa-style of preparing dishes. Similarly, we will see introduction of and prominence of
other international cuisines like Vietnamese, Cambodian, Mexican and Lebanese in India in the
coming years.

2.4.9. Flowers vs Spice

Traditionally, Indian cuisine is considered spicy - mostly because of the use of various spices,
rather than chillies. After all, the Biryani was cooked with 35-plus ingredients and spices.
However, with guests becoming more health-conscious and preferring lighter dishes, there has
been a change in preparation techniques. Now we’re seeing edible flowers replacing some
traditional spices to lend that added flavour and aroma to the dish.

2.4.10. Developing Future Culinary Talents

While there are quite a few culinary schools in India, there is a dearth of talent in the hospitality
space. While some private institutions operated by large hotel corporations develop the talent
required to showcase Indian hospitality to the world, the demand for this talent supersedes the
supply. Most institutions are still following an old school curriculum, while the Indian hospitality
space has moved far ahead. The need of the hour is to get our hospitality curriculum up to date
and develop the right kind of talent which is at par with international standards, to enable Indian
hotels and restaurants to offer a much higher experience to guests.

CHAPTER III : THE FOOD & BREVERAGE AND EATING OUT

INDUSTRY IN INDIA

INDIA is one of the world’s largest producers as well as consumers of food. Changing food
consumption patterns of India’s population is expected to not only increase consumption volume
in absolute terms to US$230 billion by 2013 but also shift people’s diet qualitatively towards
richer, processed foods, which will force increased commodity requirements.

Thanks to a population of more than one billion people and food constituting a major share of
the Indian consumer’s budget, the industry has continued to perform well despite the poor
economic performance across the board during the global recession of 2008-09.

3.1 The F&B industry comprises three distinct categories:

(1) Agricultural and horticultural produce,

(2) Processed foods and beverages, and

(3) Food and beverage retail.

Agricultural and horticultural produce: Fruits, vegetables, herbs, nuts, grains, pulses, seeds,
other food crops, milk, meats, eggs, poultry, fish, seafood.

Processed food and beverages: Packaged staples, processed fruits and vegetables, ready-to-eat
foods, canned products, dairy products, baked goods, snacks, alcoholic beverages, non-alcoholic
beverages (juices, cola, health drinks), tea, coffee, confectionery

Food and beverage retail: Food retailing (grocery stores and supermarkets) and food service
establishments (organised sector--quick service restaurants, full-service casual and fine dining
restaurants, hotels, bars and lounges, cafes; unorganised sector--dhabas, street stalls, halwais
(sweet shops), roadside vendors, food carts)

(1) India’s agricultural sector is large and diverse, accounting for about 16% of GDP and 10% of
export earnings. Its arable land area of 159.7 million hectares (394.6 million acres) is the second
largest in the world (after the United States), and its gross irrigated crop area of 82.6 million
hectares (215.6 million acres) is the largest in the world. India is among the top three global
producers of a broad range of crops, including wheat, rice, pulses, peanuts, fruits, and vegetables.
Worldwide, India has the largest herds of buffalo and cattle, is the largest producer of milk, and
has one of the largest and fastest growing poultry industries.

(2) The Indian food processing sector has an abundant agricultural base to rely on and is a fast
growing sector in the economy. Standing at $135 billion, the sector is poised to grow at a
compound annual rate of 10% to reach over $200 billion by 2015.3 Dairy products, in particular
packaged milk, biscuits, snacks, packaged staples (flour, cooking oils) are among the leading
growth segments in this sector. Industry experts point to ready-to-eat foods, indulgence foods
(ice cream, salty and sweet snacks), and health foods as holding significant potential. Changing
demographics and lifestyles with consumers seeking more convenience and choice, rising
disposable incomes, and government initiatives are infusing this sector with huge opportunities
for new and existing players. These changes will spur improvements in much-needed food
processing infrastructure and bring about further growth in new and existing segments.

(3) The F&B retail industry, which sells the fresh agricultural produce and the processed and
prepared foods to people, has grown considerably in the last few years, with organised retailing
becoming more prominent in urban India. On one side of the F&B retail coin are the unorganized
sellers (kirana stores and neighbourhood fruit/vegetable vendors) and the organized grocery
stores and supermarkets such as Food World, Nilgiri’s, and Spencers, which are doing well in
cities across the country. These primarily sell packaged, processed foods, staples, and fresh
produce. On the other side of the F&B retail coin are casual/fine dining restaurants, quick
service/fast food restaurants, food courts, cafes, and the numerous “away from home” eateries in
the unorganized space. The market is still concentrated with unorganised retailers but the
organised sector is fast gaining ground.

3.2 F&B Food Service Structure And Size :

The F&B foodservice industry provides both direct and indirect employment to millions of
Indians. Latest industry estimates place direct employment at 5 million workers. In addition,
there are 10 million street vendors in India. The industry also makes a significant contribution in
terms of tax revenue to the government. It currently contributes $220 million to government
coffers, which has the potential to reach $770 million, according to industry analysts. According
to the National Restaurant Association of India (NRAI), the F&B foodservice industry is
growing at a rate of 5-6% per annum with revenues amounting to $8.6 billion.

The F&B foodservice sector in India comprises two distinct market segments: organised and
unorganised. The organised segment accounts for 16% of the industry and is worth about $2
billion. It is growing at a compound annual rate of 25%. The organised sector is characterised by
an organised supply chain with quality control and sourcing norms, multiple outlets with
standardised design, and accounting transparency. The unorganised segment accounts for the
bulk of the industry (84%) and lacks technical and accounting standardisation and a structured
supply system or business practices.

The Indian market has been piquing the interest of global players and several have already
entered or are working on entering the fast-growing Indian foodservice market. Domestic players
are also beefing up their position to grab their bite of the growing market. In the next 3 to 5
years, the organised segment is projected to grow at 20-25% and reach almost 45% of the Indian
F&B foodservice sector, at the expense of the unorganised sector, which will shrink to 55%.

A number of factors identified in this report will drive this growth in the organised sector. The
attractive growth potential of the organised segment has generated a lot of interest among private
equity investors who made investments worth $100 million in the first half of 2011 itself.

3.3 Breakup of Food & Beverage Food Service, 2011 :

The organised segment is dominated by restaurants, both full service and quick service (40%),
followed by cafes, pubs, clubs, and bars (31%), takeouts/home delivery formats (17%), and
hotels (9%). The unorganised segment consists of individuals or families selling ready-to-eat
food through roadside vending, dhabas, food carts, and street stalls.
Slices of the Organised F&B Food Service Pie :

3.4 Drivers Of F&B Food Service In India :

3.4.1 DEMAND SIDE DRIVERS -

 Favourable Demographics: India, with its population of 1.2 billion, is one of the largest
consumer markets in the world. It is also demographically one of the youngest with more
than 50% of its population below the age of 25 and more than 65% below the age of 35.7
The majority of Indian consumption of fast food is driven by people between the ages of
18 and 40. The appetite of the young Indian population has been a key driver in QSR
industry growth. QSR’s are also increasingly becoming social hangouts, where the young
population gathers to meet friends and spend their leisure time. More and more young
Indians are gainfully employed in sectors such as information technology and services,
which has increased their standard of living and wallet size. This change in the social
landscape in urban India has also spurred growth in fast food restaurants.

 Increase in Income and Consumption Levels: India’s annual growth of 8% is boosting

incomes rapidly. According to the World Bank and International Monetary Fund, per
capita income surged to $1,265 in 2010 from $857 in 2006—an almost 50% increase.
Growing affluence and higher spending capacity provides a huge opportunity for the
foodservice sector. With higher disposable incomes, consumers do not hesitate to spend
more on eating out. By 2025, India will have 583 million people living on incomes of
above US$4,380 (around US$23,530 after accounting for the purchasing power parity).
With 65% of the population are under the age of 35, an increasing number of Indians are
capable of earning and have rising disposable incomes, which is driving up demand for
specialty and value-added food products.8 Indians spent an estimated $1.3 billion on
chain restaurants in 2009. According to Euromonitor, about $400 million of that was at
fast food restaurants.

According to a McKinsey Global Institute’s (MGI) study titled Bird of Gold: The Rise of
India's Consumer Market:

• Total annual household consumption in India is likely to triple (from INR 82,000 in
2005 to INR 248,000 in 2025), making India the fifth largest consumer market by 2025.

• Urban India will account for nearly 68% of consumption growth while rural
consumption will account for the remaining 32% by 2025.

• India’s Middle Class population is expected to increase from the present level of ~150
million to ~550 million by 2025.
 Indian Household Consumption Patterns (percent) –

The projected drop in the relative share of food and beverages in Indian consumption is
due to the rise in share of rest of the categories, not an actual fall in food consumption.
When incomes rise, it is natural for households to begin to spend more on categories
other than food. In fact even though the relative share of food falls, food demand and
consumption will accelerate significantly in the next decade.

 Lifestyle Changes: The shift to nuclear families and with both parents working and
bringing in dual income in most urban households, lifestyles and routines of people have
changed, including food habits. There is increased demand for affordable “food on the
go” and prepared ingredients to make cooking faster. According to an ASSOCHAM
survey, 86% of households prefer to have instant food thanks to a rise in dual income
level and standard of living, convenience, and influence of western countries. The same
survey reveals that 85% of parents with children under the age of 5 are serving easy-to-
cook meals at least 7 to 10 times per month due to increased pressures at work and
reduced time for household activities.9 In addition, 92% of nuclear families feel that they
have less time than before they had kids and are spending less time in the kitchen and
 turning to takeout, delivered food, and semi-prepared meals. Of the bachelors surveyed,
72% prefer ready-to-eat food because it is low-cost and saves time and energy in their
busy lives.

 Rising Number of Working Women: Along with an increase in India’s working

population, there has also been a stark increase in the number of working women. With
more women spending a substantial number of hours at work, there is little to no time to
prepare elaborate meals at home, as generations before them did. More working women
are spending their disposable incomes on eating out or serving ready-to-eat or prepared
foods picked up on the way home from work. Urban Indian women who earned an
equivalent of $90 per month in 2001 were, on average, taking home as much as $189 in
2010. The rise in urban women’s income is directly reflected in the average monthly
household income of urban India going up from $165 in 2001 to $330 in 2010.
Participation of women in the workforce increased from 14-17% between 2000 and
2005.11 Nearly 2.1 million people have joined the list of double-income homes between
July 2010 and June 2011. This is a major driver that will contribute to the growth of the
food service industry, in particular the QSR sector. According to Technopak, women
constitute 51% among those who eat out at least once a month.

Indian Food Consumption Accelerating over next Decade ( INR Billions

):
  Health and Hygiene Consciousness: Indian consumers are becoming ever-more
conscious of the quality of the food and drinks they consume. Rising awareness and
incomes among upwardly mobile urban consumers are making them care more about
health and fitness. The mushrooming of juice bars and kiosks selling salads and wraps are
cases in point. Consumers are opting for healthy options at the supermarket as well.
Many now cook with healthier oils as opposed to ghee and butter, the traditional cooking
medium in India. The fortified/energy drinks segment is also picking up pace. These
include fortified milk and buttermilk, vitamin water, enhanced iced teas, and other
restorative drinks. According to Euromonitor International, urban Indian consumers are
looking for easy-to-consume fortified beverages because they are concerned they are not
consuming enough nutrients due to their erratic eating habits and schedules. Euromonitor
estimates India's functional drink market at INR 546 crore in 2011, 19% more than in
2010.

 Urbanisation: At present the QSR/fast food phenomenon is largely an urban story.

Urbanisation in India is growing by the day, which will further contribute to increasing
demand among urban Indians to eat out. The proportion of Indian population living in
urban areas is expected to grow substantially through 2030.As urban concentration rises,
so will income levels of the people dwelling in the urban areas. A McKinsey study on
urban India estimates that by 2030, the population of Indian cities will reach around 590
million—40% of India’s total population. With economic growth reaching beyond urban
areas, Indian consumers in tier II and III cities are also experiencing a rise in incomes and
purchasing power. QSRs are rightly eyeing these markets as they hold enormous
opportunities to expand and grow.

3.4.2 SUPPLY SIDE DRIVERS:

 Multiple Cuisines: The foray of Indian restaurants into a variety of global cuisines is
having a positive impact on the F&B sector. Indo-Chinese food has risen in popularity to
almost become a staple cuisine across the country, and new favorites such as Mexican,
Italian, Thai, and Japanese food are tickling the palates of Indian consumers. They are
more willing to experiment with different cuisines because it is now easily accessible in
the cities they live in, and this trend could also increase Indian consumers’ frequency of
eating out.

 Improved Retail Formats: The development of malls and multiplexes has provided the
F&B industry with ideal spaces for operation. Malls have allowed new formats such as
 food courts to enter the market and offer consumers access to multiple cuisines. A portion
of the malls’ traffic is also converted into customers for the food courts (the inverse also
being true) and leads to an increase in revenue for both.

 Emergence of Logistics Providers and Contract Cultivation: Contract farming—

companies signing contracts with farmers to grow a specific crop and guaranteeing to buy
the produce at an agreed price—has emerged as a preferred way for big global and
domestic F&B brands to source agricultural produce. Take the case of potatoes. McCain
Foods, which supplies McDonald’s, has 400 farmers cultivating 2,000 acres of potato
fields in Gujarat under contract. Pepsi Foods has over 2,000 farmers on contract, covering
7,000 acres across Haryana, Punjab, and Uttar Pradesh for crops ranging from potato to
chilli and groundnuts. Nestle India, Rallis, and ITC are also contracting farmers.12 Third
party logistics providers, which transport the produce and food products from source to
destination, have also emerged as growth in the F&B sector picks up. As mentioned
earlier, Radhakrishna Foodland, a back end distribution and logistics company, offers its
services to McDonald’s, Pizza Hut, and Subway.

3.5 GOVERNMENT REGULATIONS :

3.5.1 Foreign Direct Investment in India :

In January 2012, the Government of India announced it is permitting 100% FDI in single brand
retail under the government approval route—i.e., global single brands such as Starbucks, Louis
Vuitton, Ikea, and Gucci can have full ownership of their Indian businesses. Under the old rules,
the government required single brand companies to own 51% of their Indian business and
therefore they had to find a local investment partner who would own 49% of the business. QSRs
like McDonald’s, Pizza Hut, and KFC entered India under the old rules. For new entrants, this
new policy could be good news, but there is a catch: Global single brand companies choosing to
own their Indian operations 100% (i.e., beyond 51%), are subject to the condition that they will
have to procure at least 30% of the value of products from Indian small industries/village and
cottage industries, artisans and craftsmen. “Small industries” are defined as industries with a
total investment in plant and machinery not exceeding US$1 million. For QSRs well established
in the Indian market, this does not seem attractive and is a major reason why the likes of
McDonald’s and Yum Brands (Taco Bell, KFC) do not want to break away from their Indian
partners.

Companies interested in setting up shop in India make an application to the Secretariat for
Industrial Assistance (SIA) in the Department of Industrial Policy and Promotion. The
application should specifically indicate the product/product categories that are proposed to be
sold under a single brand. Any addition to the product/product categories to be sold under a
single brand requires fresh approval of the government. The Department of Industrial Policy and
Promotion processes the applications to determine whether the products proposed to be sold
satisfy the notified guidelines, before they are considered by the Foreign Investment Promotion
Board (FIPB) for government approval. FDI in single brand product retail trading are subject to
the following conditions:

(a) Products to be sold should be of a single brand only.

(b) Products should be sold under the same brand internationally—i.e., products should be sold
under the same brand in one or more countries other than India.

(c) Single brand product retail trading would cover only products that are branded during
manufacturing.

(d) The foreign investor should be the owner of the brand.

(e) As noted earlier, proposals involving FDI beyond 51% are subject to mandatory sourcing of
at least 30% of the value of products sold from Indian small industries/ village and cottage
industries, artisans, and craftsmen.

3.5.2 Licensing :

The Indian F&B Industry is highly regulated with numerous requirements that need to be
fulfilled. When opening a new outlet, the following licenses should be obtained:
3.6 Challenges Facing F&B Food Service :

 Manpower Issues: The F&B industry requires employees with specific skill sets such as
fluency in English and basic knowledge of the workings of the sector. The current system
of training in hotel management is not producing enough graduates and getting English
speaking staff with basic service skills is proving to be a challenge. The industry also
faces high levels of attrition of 40-50%.

 High Real Estate Prices: There is a shortage of quality real estate in India and due to the
high demand outlets often find themselves paying global rentals at Indian prices. Real
 estate rentals have increased 3 to 4 times in the past 4 years, contributing a significant
percentage to the total costs incurred during operations.

 Poor Infrastructure: Irregular supply of electricity is a major challenge faced by the

F&B sector in India. As a result outlets have to contend with high costs of backup power,
primarily through diesel-based generators. Access to purified water is also an issue and
significant costs need to be incurred for securing the same. In terms of transportation
logistics, India lags significantly behind other global markets: It takes three times as long
to transport goods in India as it does in the USA. Cold storage facilities are also less
developed, as are refrigerated transportation services.

 Over Licensing: The number of licenses required to set up shop in India is a big
challenge faced by many firms that are looking to set up operations in the country. There
are, at the very least, 10 to 12 different basic licenses required; the number can go up to
50 depending on the state one is dealing with. As noted earlier, typically, a restaurant is
required to obtain a health/trade license, eating house license, liquor license,
environmental clearance, clearance from fire department, lift license, playing of music in
restaurants license, signage license and nomination under the Prevention of Food
Adulteration Act, to name a few. In addition, license fees are variable and are a
significant burden on any new establishment.

3.7 F&B Food Service Trends :

 More International Players Entering Indian market: Given its large and untapped
potential, and despite the challenges, a large number of international players are keen to
enter the Indian F&B foodservice market. Many of them are in talks with local partners.
Most large players plan to first foray into the Indian metros and then expand to tier II and
III cities. Some multinationals are also expanding into India via the inorganic route by
acquiring local brands.
 Franchising: Food and beverage franchising is a very appealing business concept for an
aspiring entrepreneur in India. The franchising sector in general is growing at a swift
pace of 35-38% per annum and the market size is expected to reach $ 20 billion by 2013.

 Kiosks and Food Courts Are Increasing in Popularity: Given high property prices,
rentals, and shortage of space, there exists a large opportunity in setting up shop in kiosks
and food courts. The proliferation of malls and better retail infrastructure has presented
an opportunity for players to share costs associated with operations. The number of food
courts has increased from 39 in 2007 to 270 in 2010, representing a compound annual
growth rate of 27.36%. This number is expected to go up to 1,200 in 2015, showing a
compound annual growth rate of 34.76%.

 Expansion into Smaller Cities and Towns: While new entrants tend to start their
operations in metropolitan cities, the existing players in the market are looking at smaller
tier II cities such as Kanpur, Vadodara, Cochin, Lucknow, and Pune as drivers of growth.
Chains such as Nirula’s have gone one step further and expanded into tier III cities such
as Meerut and Pathankot and plan to open more across the country.

 Localisation of cuisine: When in India, do as Indians do. The Indian market is typically
split into vegetarian (31%) and non-vegetarian (69%) restaurants. An important trend,
especially amongst the international players, is the “Indianisation” of cuisine. Over the
last decade, though, many of these players have improved their performance through a
better understanding of the Indian market: Indianising menus, introducing breakfast
menus, sit-down formats, and positioning outlets as destinations for family outings. A
prime example is McDonald’s. The brand has reaped rewards due to its customer-friendly
pricing (the INR 30 Chicken McGrill burger, which is less than 60 US cents) and an
Indianised menu that includes the McAlooTikki Burger. McDonald’s today operates
across 30 Indian cities and more than 70% of the items served in India are not available
in other stores worldwide. This strategy is especially relevant in tier II and III cities,
where the taste preference is still highly local and chains that have adapted their cuisines
have done well in these markets.
Chapter IV : QSRs In India: How Fast Food Chains Are Changing
Eating Habits of Indians!

“The way to a man’s heart is through his stomach”, whoever came up with this phrase was
certainly right. With the decade seeing more women working and more disposable income, guess
the proverb is skewed to, “The way to a child’s heart is through his/her stomach”. And no
wonder fast food chains got the message loud and clear so much so that KFC / Mc Donald’s /
Domino’s / Pizza Hut would rather fight their cases and pay the attorneys hefty amounts to stay
in India because the cost of litigation is way lesser than shutting down!
Fast Food chains also known as QSR (Quick Service Restaurants) are estimated to grow at 30%
CAGR by 2015 as compared to 10% growth estimated for food service sector in India.

According to the National Restaurant Association of India, 50% of the Indian population
is eating out at least once in every three months and eight times in every month in bustling
metros as compared to US (14 times), Brazil (11 times), Thailand (10 times) and China (9 times).
(courtesy: ASSOCHAM)

Mc Donald’s and Subway are increasing their veg menus every year incorporating many
traditional flavours. Mc Donald’s Masala grill, Maharaja Mac burgers, Paneer wraps, Mc spicy
burgers are some of their India-only offerings. Even Mayonnaise in Indian Mc Donald outlets is
free from eggs!

And we certainly don’t need the statistics to know that the numbers of Mc Donald’s, Domino’s
and KFC outlets have increased considerably when they start to appear every 5 km away.
Foreign QSRs are slowly entering India to cash on the huge adolescent population, for example
Krispy Kreme, Burger King, Starbucks and Dunkin’ Donuts debuted the QSR landscape
recently.

Now however, the new destination for the fast food chains is Tier II and III cities. In a report on
eating habits, ASSOCHAM’s study revealed that each middle class household spend on eating
out in Tier II and III cities has increased to Rs. 5,200! In metro’s this number is much higher.
Also the QSR sector was the most immune to economic slowdown and made $50 billion in spite
of the inflation.

“A younger population, higher rate of urbanization, larger disposable incomes, higher protein
consumption, increased participation of women in the workforce, and exposure to Western
lifestyles are leading to the experimentation with, and adoption of, new dietary habits and more
occasions to eat out for all levels of Indian society”, said Asitava Sen, head of F&A for
Rabobank.

Eating out is no more occasions driven, it’s more of a habit for all those below 30 years. Indian
traditional fast snacks like Samosas, Vada Pav, Gol Gappas, Dabelis, Chaats, Paav bhaji whose
taste is unquestionably delicious don’t have glorified outlets like Mc Donald’s due to which
eating at small joints makes youngsters conscious.

QSR food price ranging from Rs.100 to Rs.500 are light on pocket and QSR’s large sized outlets,
music and western food seem to lure youngsters. But what goes into the food and the nutritional
value have been thrown outside the window!

It’s just not only the food, but also the colors that trigger hunger, psychologists say. Have you
noticed how KFC is all red, Mc Donald’s is red and yellow, Coke is red too, so is Pizza Hut and
Domino’s. Red is a color that triggers appetite and pushes you to go for it.

As on 2014, here are the statistics of the QSR food joints and their outlets in India.
“A moment on your lips, forever on your hips” still can’t get people to curb frequenting
these fast food chains. The expansion of these chains shows us the change in lifestyle and
attitudes among youth in dining. Alas!, it’s all for the love of eating.
Chapter V : EATING OUT/ HOME DELIVERY IN TIER 1 AND
TIER 2 CITIES IN INDIA

5.1 VARIETY OF TAKE OUT AND HOME DELIVERY RESTAURANTS:

 Take-out and delivery only:

Certain establishments do not offer any sit-in facilities but cater entirely to consumers
who want a food delivery or collection service. Delivery has long been a staple for many
restaurants, especially pizzerias, which dominate the delivered- food category. For more
information on the pizza franchise industry please click here.

An advantage to this type of franchise is the lower start up costs which have a low initial
investment cost of $155,600 to an average high initial investment cost of $453,600. For
example, the start up costs for a Dominos Pizza franchise is very competitive and the fees
associated with franchising the brand are modest.
The estimated initial investment required per
franchise location ranges from approximately
$185,050 to $519,000 for a
standard Dominos carry-out location.

 Full Service Restaurants :

According to the National Restaurant Association, 37% of Indian adults have used
“curbside takeout” – calling in their order to a full service restaurant for pickup . These
franchises and businesses offer a full service dining area, a full menu and also a take
away or delivery service such as Mainland China franchise. All of Mainland China’s to-
go dishes are packaged in special containers designed to stay hot, hold their flavor, and
travel well. More relaxed fast food restaurant franchises such as Woody’s Hot Dog also
provide a take away or delivery service.

 Catering:

Many established restaurant franchises and businesses do not offer individual orders for
delivery or take-out. Instead these establishments offer catering for parties generally over
8 people.
  Delicatessen:

Most delicatessens in India have a sandwich/Dosa menu, most of which are made to
order behind the counter at the time of sale, to be consumed off the premises. They also
sell cold cuts by weight and prepare party trays to be consumed off the premises.

 Drive-thrus:

Customers are hungry for choice in where, when and how their food is cooked and
served. Drive-thrus have experienced increased popularity due to the convenience and
cost effectiveness that they offer the consumer. When consumers decide on which drive-
thru to visit, the key factors that they take into consideration are speed, menu, price and
location.

5.2 DEMAND DETERMINANTS:

Eating in is the new eating out-

Consumers want the “eat out” experience of quality food but are saving money by eating
food delivered to their home. According to the market research firm NPD Group’s 2009
study A Look into the Future of Eating, the number of restaurant meals eaten at home
is expected to grow by 20% in the next 10 years. The increase of at home leisure
activities has been a key growth driver in the take-out and delivery franchise sector. This
market is largely being catered for via pizza home delivery franchises such as Domino’s
Pizza. However there is an increasing consumer demand for take-out prepared meals.

Technology and Innovation-

The internet offers restaurant franchises and businesses a new market in which to reach
potential customers. Increased trust in online purchasing and the introduction of new e-
commerce platforms offers the benefit of convenience to consumers. An increasing
number of online users in the US will order food online. It is predicted that the internet,
interactive TV and text-messaging will eventually overtake telephone ordering of
collection and home delivered foods. It is therefore important for a business to promote
themselves online and through new media. Pizza Hut, which ranked no. 5 in Franchise
 Direct’s Top 100 Global Franchises, has used a new smart-phone application in order to
boost sales.

5.3 MARKET SHARE -

Despite big budgets, bigwigs and blockbuster hits, the Indian film industry is just about two
billion dollars. The hot and sizzling food services business, on the other hand, with its high
turnover and fragmented players, is surprisingly larger than the Indian telecom sector. The rise of
'eating out' economy has propelled the restaurant industry to $48 billion, according to a report by
the National Restaurant Association of India.

Urbanizing double-income households, changing lifestyles and food preferences are spurring the
organized market within the sector, which is now estimated to be $13 billion but expected to
reach $28 billion in five years. Casual dining and quick service restaurants (QSRs) account for
70% of the organized segment, while pubs, bars, clubs and lounges (PBCL) form 12%, cafes
take 8% share leaving the rest with fine-dining and frozen dessert outlets.

"Eating out has evolved from an occasion-driven activity to an occasion in itself," said Riyaaz
Amlani of Impresario Entertainment & Hospitality, which runs a host of eating joints like Cafe
Mocha, Salt Water Grill and delItalia, adding, "It has become a form of entertainment for
consumers today."

The market potential is encouraging home-grown and existing players to expand their foot print,
while new European and US brands are charting India entry plans. London's dim sum eatery
Ping Pong will make its debut next month in Mumbai, while other global brands
like Nobu,Carluccios and Zuma are preparing strategies for the second largest food services
market in Asia-Pacific. China is far ahead, leading the pack with a $510-billion industry.

High real estate costs in metros and tier 1 cities are driving several restaurant chains to smaller
towns. With tier 2 and non-metro cities offering restaurants better returns on their real estate
investments, and since the customer base and market potential are almost the same as in metro
cities, quick service restaurant (QSR) chains and casual dining restaurants are looking closely at
smaller towns for expansion. However, they also continue to expand in metros to maintain the
growth they have achieved.

A restaurant chain would invest about Rs 3 lakh for a store in a metro against Rs 50,000 for a
store of a similar size in a smaller city. With more people travelling within the country and
abroad, they have exposure to different cuisines, which assures restaurants a good market in
small towns, say restaurant owners.
Annual spends on eating out at QSR chains in non-metros are expected to surge 150% to Rs
3,750 per household over the next three years, according to estimates by Nielsen report in Times
of India. Interestingly, on an average, a tier-I middle class household today spends about Rs
3,700 per annum for eating at QSRs.

In comparison to non-metros, annual spends in tier-I cities are expected to increase 60% to about
Rs 6,000 per household by 2015-16, according to a report by Crisil Research. To cash in on this
demand, global QSR biggies such as Yum! Brands, McDonald's and Domino's Pizza and
domestic rivals have lined up aggressive expansion plans for markets beyond the metros.

Of the total store additions over the next three years, 40-45% will take place in tier-II and III
cities, said the Crisil report, signalling how the consumption story across smaller markets
remains intact despite a sluggish economy.
5.4 STATS OF NUMBER OF RESTAURANTS IN INDIA ACCORDING TO
COST FOR TWO -

TIER 1 CITIES -

12000

10000

8000

6000 Below 1000

Between 1000-1500
4000
Over 1500
2000

TIER 2 CITIES –

4500
4000
3500
3000
2500
Below 1000
2000
Between 1000-1500
1500
1000 Above 1500
500
0
5.5 : Dining habits of Indian Customers –
A research report by National Restaurant Association of India (NRAI) and Technopak Research
reports reveals the following about the dining out habits of Indian consumers:

 In the organized food service industry Indians seem to be patronizing Italian cuisine the
most. Chinese comes next. This is largely fuelled by young consumers aged 14-45 years.

 The QSR (quick service restaurant) and casual dining formats together account for 74 %
of the chain market while cafes make up 12 %.

 Dine-in contributes the highest, 67 %, to the total QSR sales and is followed by
takeaway orders which account for 19 %of the sale. Home delivery is also picking up
with most chains offering this service to consumers within a defined catchment.

 On-the-go meals too seem to have picked up with about 34 % of the total consumers
flocking to them during office hours.

 Around 80 % of the consumers order in food at least twice a month, reflecting the need
for this convenience especially in larger cities where distance is a prime issue.

 The key issues that continue to pose a challenge include high real estate costs, rising
food costs, shortage of quality manpower, fragmented supply chain and over-licensing.
Also, infrastructure bottlenecks such as electricity supply and water are issues.

 The size of the food services market in India is estimated at $48 billion in 2013. This is
projected to grow at a CAGR of 11 % over the next five years to reach $78 billion by
2018.This market is largely unorganized. Chains account for as much as 5% of the total
market.
5.6 EATING OUT ALL OVER INDIA

If you are a foodie, your quest for variety in cuisines will be short-lived as places to eat in
India abound! The call of "Chai-garam" proclaims the availability of hot tea on obscure
railway platforms, and if you are tempted you’ll singe your tongue to one of the truest
Indian experiences with food and drink. From the foil packed dinner trays that is railway
dining to the gourmet meals on dull silver that is fine dining, it’s all available in India.

In the cities the most popular international cuisines are Chinese, Italian,
‘Continental’/European and Thai. Lasagna, pasta, chop suey and red curries abound on
menus. The most widely available Indian foods are definitely Mughlai and south Indian.
Harking back to the days of the Mughals, Mughlai cuisine relies on aromatic spices, and
succulent meats either curried or roasted in a tandoor and it can be very heavy. South
Indian food is predominantly vegetarian, light and tangy.

When it comes to eating out in India, one will be spoilt for choice! Frothy coffee that
sizzles out of a bright machine, chicken burger served up in a jiffy and with a smile; fast
food has come into its own in India. Many worldwide chains have set up shop in India’s
cities and from Pune to Delhi, the American get-and-go eating experience is yours for the
asking.

Originally the truckers’ meal deal, ‘dhabas’ have proliferated along the highways and
cater to all wayfarers. These shack establishments serve some great food at hard to beat
prices, but since plates are not cleaned in the clearest of waters this dining experience
may not be too safe.
5.7 Dine-In, Take out or Home Delivery? Depends on which Generation you
ask.

Consumers make food-related decisions several times a day. But if the decision involves a
restaurant, they must also decide whether to dine in or eat elsewhere—a decision that can prompt
different answers depending on the person’s age.

Base: 1,500 consumers aged 20–66

Total percentages do not equal 100% due to rounding
Source: Technomic Generational Consumer Trend Report

 Dine-in Service

Nearly half (48 percent) of all of the food consumers order at restaurants is eaten on site.
But consumers’ preferences for dine-in, takeout and delivery orders differ by generation.
Data shows that as consumers age, a larger percentage of the meals they source from
restaurants is ordered for onsite dining.
 These restaurant visits account for the largest proportion of orders placed by Baby
Boomers more than half (52 percent) of Boomers’ restaurant occasions include dine-in
service. In comparison, fewer than half of all restaurant orders placed by Millennials (44
percent) and Gen Xers (46 percent) are for dine-in.

 Takeout and Delivery

Consumers are twice as likely to order food for takeout (38 percent) as for delivery (15
percent). This is partly because takeout service is more readily available than delivery.
But generational preferences are also apparent in these service options. Takeout orders
are most common among Gen Xers, with these consumers saying that two-fifths (41
percent) of their dining-occasions are for takeout.

On the other hand, delivery orders are most popular among Millennials. One-fifth of
Millennial (20 percent) restaurant orders are for delivery, compared to 13 percent of
Generation X’s and just 12 percent of Baby Boomers’ foodservice visits.

 Different Motivations

The need for convenience is likely driving takeout and delivery orders by Gen X and
Millennial consumers. More than a fifth of all consumers cite a lack of time to cook (23
percent) and overwhelming daily responsibilities (22 percent) for their reliance on
foodservice.
Base: 708 (would like) and 720 (daily responsibility) consumers aged 20–66
Consumers indicated their opinion on a scale of 1–6 where 6 = agree completely and 1 =
disagree completely
Source: Technomic Generational Consumer Trend Report

From a diner’s perspective, takeout and delivery orders take less time than dine-in occasions and
allow consumers to focus on other tasks while their food is being prepared. Compared to Baby
Boomers, significantly more Millennials and Gen Xers either agree or agree completely that they
rely on foodservice due to a lack of time and overwhelming daily responsibilities.

That said, while both Millennials and Generation Xers seek convenient to-go options, their
preferences vary due to different need states. Millennials, especially younger Millennials aged
20–27, are the least likely of the three generations to be married with kids and have familial
obligations. These consumers are often on the go and may prefer to have food delivered to them
once they reach their destination.

On the other hand, Gen Xers (consumers aged 36–46) are more likely to be married and have
children, and may prefer takeout for family meal occasions. Gen Xers, especially working Gen X
parents, may consider takeout to be a convenient family- meal solution since they can pick up
food for dinner on their way home from work.
 Chapter VI: Competitor Analysis/ Data Analysis

New businesses built around eating out/home delivery across India

The massive influx of young professionals into big towns and cities in India has ensured that the
restaurants and food delivery segment also grows at a fair clip. Coupled with the sharp rise in
smart phones and app downloads, it was only inevitable for the food delivery apps to hit the
mainstream.

Below you’ll find a list of the most popular and impressive apps that you can use to quickly and
securely get your favourite food delivered to your doorstep with the help of your Smartphone -

6.1 FOOD PANDA –

 Available on: iOS, Android, Windows Phone

 Online food delivery is among the hottest spaces in the e-commerce segment with
the likes Zomato and Just Eat making huge investments. One of the fastest
growing name in this segment is Food Panda. The company, already presence in
27 countries such as China, Russia and Brazil, is now looking strengthen its brand
in India.
  Foodpanda operates an online food ordering marketplace. Its platform enables
users to order food online, as well as through mobile applications. The company
was founded in 2012 and is headquartered in Berlin, Germany. It has operations
in India, Thailand, Indonesia, Pakistan, Singapore, Malaysia, Brunei, Vietnam,
Taiwan, Bangladesh, Kazakhstan, Azerbaijan, Hong Kong, the Philippines, the
Russian Federation, Ukraine, Hungary, Romania, Bulgaria, Georgia, and Serbia.

 Food panda is by far one of the most popular online food delivery service in India.
The reason for its popularity is its large database of restaurants from most big
Indian cities and the discounts and offers available.

 The Food panda mobile app lets you create your profile so that you can save your
favorite restaurants and orders for quick access the next time around. Creating a
profile will also let you save multiple addresses under different labels (work,
home etc.). The app also gives you access to features available on the website
including the ability to use coupons and avail discounts and opting for different
payment methods including credit or debit cards and cash on delivery.

 The app currently offers restaurant listings for 34 Indian locations including big
cities like Delhi and Mumbai and smaller ones like Amritsar, Howrah and Vapi.

a) FoodPanda.in is a new concept for the Indian users. How is it different from
online/on phone food delivery services and their USP -

 Food Panda saves orders of users, so it's easy to re-order. There's user ratings for
the restaurants. And they've tied up with over 2500 restaurants.

 They have various deals in collaboration with top brands. Most discounts and
deals such as combos or free appetizer are exclusive with Food Panda.

 They compete with food delivery on phone concept. They concentrate strongly on
service and follow up with the customer and take their feedback.

b) BUSINESS MODEL of Food Panda and How does it monetize its services -

 They're a marketplace for food ordering. They charge a commission from the
restaurants for the successful orders they bring in. Their service is completely free to
the end customers.
  Food panda works on a simple "success-fees" model. They do not charge their
customers anything but get a commission from the partner restaurants for all the
successful orders they generate for them.

 Focus is on Performance marketing.

c) How much traction (from different platforms such as web and mobile) is Food
Panda gaining -

 They have a dedicated app on Android and iphone with over 2 lakh downloads.

 They plan to improve the app interface and functionality in a bid to further tap the
segment.

 They have over 50,000 visitors daily with 18-20% come from Mobile.

d) India's demographic, users base and Market Share And anticipated growth in near
future -

 Food Panda has seen a consistent growth in metro cities, specially Delhi NCR,
Mumbai & Bangalore which contribute to 65% of our total traffic.

 Since online food ordering is a new concept, the growth in tier 2 cities is slightly
slow as compared to metro cities but with increased internet and Smartphone
penetration they see these cities as the key to their growth.

 Market has a huge potential, with 200 million users in India. And aim to have
10% of total 5000cr food delivery market share by 2017.

e) How Food Panda oversees/controls the restaurants on their portal -

 They check out the outlets and their quality before listing them.

 They regularly examine their performance.

 They also remove restaurants from their list if they continue to get poor ratings
from users.

f) Food Panda's policies for customer support and How simplified is it for users -
 They've a full time customer support team working from 11AM to 11PM, 7 days a week.
Moreover, They also have a full-time live chat-support. The customer can simply login &
chat with our executive or call on Food Panda's helpline number

g) Future Plans -

They're planning to further expand to tier 2 cities & increase the restaurant coverage to
5000 restaurants across 20 cities by the end of next quarter.

6.2 JUST EAT –

 Available on: iOS, Android, Windows Phone, Windows.

 Just Eat may not offer the same number of restaurants (or as some may argue- the
same quality of service) as Foodpanda, but it is undoubtedly very popular
especially in Indian metros. The Just Eat app offers relatively the same features
and services as Foodpanda including access to a large number of menus and
restaurants and the ability to pay using cards or cash on delivery. The Just Eat
app caters to nine Indian cities including Delhi, Mumbai, Hyderabad and Chennai
among others.
a) Business Model of Just Eat –

Consumers are attracted to the JUST EAT platform due to the brand, choice of
restaurants, ordering convenience and the ratings and reviews available. Consumer
orders on the platform create benefits for other users by increasing the number of
restaurant ratings and reviews. More consumers attracts more restaurants to sign-up,
which in turn increases choice and drives more consumers to order takeaway through
JUST EAT, completing the virtuous circle.

b) Success-based revenue model –

 They have a simple success-based revenue model which is highly scalable.

Order-driven (“B2C”) revenues account for 89% of total Group revenues,
comprising commission paid by the restaurant on successfully fulfilled orders
and payment card or admin fees. Commission revenue is driven by the
number of orders placed, the average order value (“AOV”) and commission
rates. Thus, an increase in any one of these three variables will have a positive
impact on the B2C revenue. The AOV is principally driven by the
demographic of the consumer ordering, such as families or students and
increases with food/service inflation. The commission rates are agreed in the
contractual terms with the restaurants and vary by country. In January, we
successfully raised commission rates in the UK from 11% to 12% with only a
handful of restaurants leaving the network as a result.

 Five per cent of the Group’s revenue consists of connection fees, which is a
one-off charge of up to £850 (depending on geography) paid by a restaurant to
join the JUST EAT network. It is important to JUST EAT that restaurants are
making a conscious decision to join the JUST EAT platform and that they
have an interest in treating the orders sent to them from our platforms with the
same care and attention as all their other orders.

 A restaurant may also pay for additional services such as promotional top-
placement on the JUST EAT platform and branded commodity products,
which together constitute 6% of the Group’s revenue. Top-placement fees are
charged to restaurants who want to be listed in one of four clearly-labeled
sponsored slots at the top of search results in a particular postcode. By paying
this fee, the restaurant secures a top placement slot for a particular postcode
 for a period of up to 12 weeks. Our “organic” listings below these top-
placement slots are not affected by restaurant payments and are ordered by
restaurant ratings and distance from the consumer.

c) Beneficial cash flow cycle -

When a consumer pays online, JUST EAT collects the full order value on behalf of
the restaurant. Payment to restaurants of the funds collected, less our fees, is typically
made twice per month. As over 60% of orders are paid for by card, JUST EAT
operates with a very favourable working capital cycle.

d) Brand Association with Restaurants -

 Takeaway restaurants may not have the knowledge or readily available capital
to invest in creating their own platform. Additionally, many do not have the
time or investment to spend on marketing, particularly dealing with the
complexities of online search and promotion or building a broader brand.
Brand association helps restaurants to drive scale in orders.

 JUST EAT provides an easy solution to these problems, enabling efficient

entry to the online market. In addition, takeaway restaurants often see an
increase in average order values for online orders as consumers shop the
whole menu at their own pace. The JUST EAT platform improves restaurant
efficiency; accepting an online order is significantly quicker and more
efficient than processing a telephone order.

 The receipt of clear print-outs, rather than hand written notes of consumer
orders also reduces communication errors. This improvement in speed and
efficiency is particularly beneficial during peak ordering times, reducing or
eliminating orders lost through an engaged phone line.

 They help takeaway restaurants to develop their businesses through feedback

for consumer preferences and reviews left on the JUST EAT platform,
ultimately helping to drive standards in the takeaway food industry. We also
 utilise our buying power to offer restaurants JUST EAT branded commodity
products at a lower price than is available to them individually.

e) Peak orders per minute –

Demand is highly concentrated at weekends and evenings. Our core platform has
maintained high availability whilst managing peak volumes, such as the 1,000
orders a minute processed for the hungry romantics ordering on St. Valentine’s
Day 2014. The growth in the peak volumes is shown below.

f) Monetization of Just Eat and what the competition is like –

 Monetization strategy is the key to business. All of us want more customers,

more sales. But at the end of the day, a business will become successful only
if you have a very strong monetization model. And, it’s got to be e-commerce,
and not just plain advertising, it just doesn’t work anymore.

 In case of JustEat, their revenues come out of commission. They charge the
restaurants registered with us, based on the amount of orders that we generate
for them in a month. Talking about competition, It is always great to start a
company, be pioneers in your field. But it is even greater if there are people
competing with you because then you will not just be building a company,
you will be building an industry.
  So, to build an industry, you’ve got to have a healthy competition with your
competitors. We started out in 2006, when we were the only ones to start an
online food ordering portal in India. But since then, they have seen a lot of
companies in this field, across India. So, whichever city they ventured into,
there are a few players already existing there. We actually even look at tying
up with them. They don’t look at competition as someone who will take away
our revenue! They look at competitors as those who will build their
confidence, as it tell them that a service like theirs works. So, competition has
always helped them.

6.3 ZOMATO –

 Available for: iOS, Android, Windows Phone.

 Zomato is the most popular, and some would argue, the best, restaurant
recommendation service in India. The service covers most Indian towns and cities
and has a massive database of restaurants, outlets and even ‘thelas’ on offer.

 The Zomato app is understandably excellent to use and receives updates

consistently to keep the UI in tiptop shape and to iron out bugs.

 Apart from offering you restaurant recommendations, Zomato also works as a sort
of social network for foodies. You can follow different people to read their
 restaurant reviews and also create your own profile. The Zomato team also
regularly creates curated lists, called ‘collections’, in which they list out the best
or the most impressive restaurants and joints under different categories.

 If you relate to terms like ‘eat out’, ‘dine in’ or ‘take out’, Zomato should be
installed on your smartphone.

a) Zomato’s Revenue Model –

Zomato has three major sources of revenue -

 Advertising: The ads which are placed on their website generate the
majority of the revenue for the company.

 Ticket Sales: Zomato also sells tickets for various events and earns a
commission through these sales.

 Consulting: Owing to the huge database of restaurants, users and their

preferences, Zomato also provides business consulting and data
analytics services to their clients.

b) Innovation – New App called “Zomato Order” -

 Zomato launched a new service across India, letting customers order

directly from its platform, started from March 16, 2015. It came up
with a new App called “Zomato Order” for quick and easy home
delivery.

 Unlike regular food delivery websites, Zomato's service will require

each restaurant to confirm an order from a user manualy, before it is
processed. There will be a tablet set up in each of the partnered
restaurants, to act as a Zomato order hotline.
 6.4 FAASO’S –

 Available for:iOS, Android, Windows Phone.

 Faaso’s is a very popular fast food joint in Mumbai, Bangalore, Ahmedabad and Pune
that’s known for its large selection of wraps. Unlike Domino’s, Faaso’s has done a great
job with its app and treads a fine line between making the app stick to the restaurant’s
aesthetics while still being easy and simple to use.

 The app gives you the options to customize your orders in multiple ways. Once you’ve
finalized your order you can either opt for cash on delivery or use the app to make an
online payment or pay using your credit/debit card. You can also use the app to track
your orders.

a) INNOVATION –

 First app to take orders on Twitter.

 All you have to do is 'tweet to order' a wrap and they will home (or
office) deliver it to you, wherever you are.

 Their new store at Mumbai domestic airport allows you to just

tweet them with your order and a delivery time, and they'll get
your wraps at the arrival/departure gate. 'Wraps on the run-way!'

b) INITIAL INVESTMENT AND MARKET SHARE–

  Founded in 2004 by 3 individulas with initial investment of 8 lakhs
for 1 air conditioned restaurant.

 Faaso’s (Acronym for “Fanatic Activism Against Substandard

Occidental Shit”) had raised $20 million in series B funding led by
LightBox Ventures with participation from Innoven Capital, and
Sequoia Capital, which also led its $8 million funding round in
2011.

 At present, it generates 10,000 orders a day. In December 2014, it

got 20,000 orders through its mobile app and by March this year,
the number touched 80,000.

 In March last year, Faaso’s had launched a mobile app, and the
company claims that over 70 percent of its orders come through
the app and it processes about 50,000 orders on it in a month. The
app is available for Android, iOS and Windows Phone users. The
startup expects to cross Rs 100 crore in revenue by March 2016
and Rs 450 crore in march 2018.

6.5 TIMES CITY –

 Available for:iOS, Android, Windows Phone.

 The Times of India’s app is a multi-purpose one for anyone who lives in an Indian
city and likes to be informed on stuff that’s happening around him/her. The Times
City app lets you know everything that may be going on around you with respect
to the theatre, movies and other events but it’s also a great restaurant
recommendation service on its own.

 Like the Zomato app, the Times City app has a comprehensive listing of
restaurants from 10 Indian cities. The app is well designed and follows the design
cues of iOS 7 and Android Material Design by being good looking and
minimalistic. Once you find a restaurant that you like, you can get the info so that
you can either visit them or call them for home delivery. Similar to Zomato, you
can also read other users’ reviews of restaurants or write your own review.

 Business Model –

 DineOut follows a conversion based model and is paid a commission for

each referral by the restaurants.

 The owner refuses to disclose if the commissions are a percentage of the

final bill or a fixed fee.

 It also provides software that restaurants can use for managing these
reservations.
 6.6 BURPP –

 Available for:iOS, Android, Windows Phone, Windows 8.1

 Burrp! is India's leading Local Discovery, Share, Review and Recommendation platform.
It is the pioneer of User Generated Content in the Food & Drink segment and is built on
reviews and recommendations posted by its trusted users; it is the core strength and the
 main objective behind all its initiatives. burrp! was founded in 2006 and is headquartered
in Mumbai, India.

 Burrp! and Zomato have been around for a while and are considered to be competitors.
As with Zomato, Burrp! also covers a large number of restaurants from a large number of
Indian cities and includes menus and information of most of them. What sets Burrp! apart
from Zomato is that it also does what Times City does, in that it helps you keep track of
what all is happening in and around your city.

 Key Performance Indicators (KPI’s) to measure ROI –

 The most important parameter for them is the user engagement with the brand.

 On Facebook they also look at what kind of posts got higher number of Likes or
Shares.

On Twitter they look at more than just retweets and mentions. It’s about how many users speak
to us one-on one; if they retweeted a user’s question, how many of other users replied; or if run a
hashtag with no incentive how many participants did they get or did the hashtag trend; or if they
run a contest then how many participants did they engage
 CHAPTER VII - FINDINGS:

In terms of market segments, the Quick Service Restaurants and casual dine-in formats account
for nearly three-fourths of the total chain and cafes make up 12 per cent, with fine dining outlets,
pubs, bars, clubs and lounges comprising the rest.

The company FoodPanda is a middle person where they connect eateries that do not have
delivery services to consumers that wants them delivered. It could generate profit via delivery
fees that it charges. Of course that isn't a lot at the moment as cost exceed their charges but as
they grow, it might lower the cost for them such as:-

1. Bulk purchase discounts from eateries. - Since they are buying a lot then why not a discount?
But it requires this from demand end.

2. Extensive network to reduce time. - If they are small then they need to be all places, all the
time. That reduces efficiency and profits. Economies of scale is a winner here.

3. Take customer's cash beforehand. - Discount delivery services coupons could be sold upfront
for Food panda to get cheap financing alternative compared to high interest loans from financial
institutions.

4. Ads. - Yes they could advertise for eateries that aren't so famous or even special edition home
made food that doesn't come everyday.

5. Not just food. "I need some flu medication from the pharmacy delivered... Yes I can't even
walk properly". With a good network they could basically deliver anything.

If they could fulfill all these 5, I guess they would have grown about 5 times their current size.
Chapter VIII: Conclusion

Eating out in India has evolved from an occasion-driven activity to an everyday activity.
With the rising number of nuclear families, exposure to global trends, the increasing number
of employed women and an increase in the number of dual-income households, eating out
was strongly supported. Coupled with these factors, international chains entering India
offered a wide variety of options to individuals. Multinationals launching value for money
offerings also helped fuel growth. Companies are enhancing their reach to medium- and
small-sized cities to drive sales.

Key growth drivers and emerging trends include increased share of delivery and take-away
formats focussing on convenience, experimentation, Indian brands going global, larger focus
on value meals, tech-savvy consumers using online, social media, food websites and mobile
applications, and growing interest from private equity and venture capital investors in the
food industry.

Take-out and delivery is a thriving segment of the restaurant market. For traditional “dine in”
restaurants expansion into take-out and delivery creates the opportunity to increase sales.
For franchises that only offer take-out or delivery, such as Domino’s, the long term and
growing consumer demand for convenience and value creates a favorable business climate.
As eating at home becomes more popular and advancements in technology make ordering
food more accessible through different media, the take-out and delivery industry is forecast
to continue to grow through 2016.
 Chapter IX: Recommendations

My main objective of my Market Research at Paprika Idea Labs Pvt Ltd was to recommend new
Apps around food and beverage Industry and second objective was, my suggestion to the
company before starting a new Start up. So the recommendations are divided into two parts –

9.1 Things to consider before starting a Food App based Start up -

1. Know the numbers

“Food in India is a big deal”. The food delivery market in India is worth $1.6 billion, growing at
30 per cent a year. But less than two per cent of the orders are placed online. 430 million citizens
out of India’s 1.2 billion population are between ages 10 and 29, a ripe market for e-commerce
growth. The average order size is Rs. 400, and the top six cities of India account for 40% of the
market.

2. Know the consumers

A good way to segment the food delivery consumer is workaholic, DINK (double income no
kids) and family. Many consumers are too busy or too lazy to cook. Home delivery is therefore
growing fast, and faster even than going out for fine dining.
Consumers prefer ‘clean and well-packaged’ food for office orders, but don’t mind ‘messy food
in plastic bags’ for home delivery. Unfortunately, most orders are placed in narrow time bands
during lunch and dinner, making it difficult for the food kitchens as well as delivery players.

3. Know the methods

Getting consumer insights is key for success. Today, online ordering and food apps open up new
methods for realtime consumer research.

4. Know the market timing

“We were ahead of the game even a few years ago”. In 2006, investors would ask: “Who will
order food on the phone?” Things have moved fast today, thanks to Internet and smartphone
penetration and the youth demographic; entrepreneurs should keep an eye on emerging
technologies to properly time new moves.
5. Know the food vendor
“Getting the restaurant technology right was harder than cracking IIT JEE”. What works best
now is a GPRS box in the restaurant for printing orders. Rosy visions of ERP systems for
restaurants to track supplies and cash flow do not make sense when many prefer to operate only
in cash.

6. Know the industry

The food ordering industry is also subject to wild price fluctuations due to volatility in fuel and
agri markets. “The average menu in India has 300 items – and the prices change every 15 days”.
Foodpanda actively does menu updates itself, and does not leave it to the establishment to update
and display prices.
Many establishments also have disregard for the delivery customers, and ‘customer delight’ may
not even exist in their vocabulary. Orders are often canceled at the last minute, or items are
declared as unavailable after they have been ordered and paid for.

7. Know the business models

Charging for delivery of prepared food is one kind of business model. Another model is to send
trained cooks along with groceries to prepare meals in homes – which is what CookAss.in will
be launching this month in Bangalore, says founder Sameep. “We charge Rs. 30 per mouth as
cooking service charge,” he explained, differentiating his offering from high-end chefs.

8. Know the opportunity

Despite these challenges, an attitude of thoroughness, quality and creativity will help foodtech
startups succeed. There are new opportunities not just in food, but in food for thought –
analytics. “foodpanda has data on 30,000 restaurants – imagine what we can do with that data to
target rice suppliers.”
There are also opportunities in kitchen capacity design, packaging and industry organisation for
Indian food players.
9.2 New App Suggestions to Paprika Idea Labs Private Limited
around Food and Beverage Industry -

1) Lowest Price Drink Finder.

 The app will pick up your location and then find all the liquor stores around you
and find the lowest price for the liquor that you want and also give you the
information about the same and competitors prices.

 Also shows the ambiance of each of the bar or longue it shows.

 Shows the Review of the Bar and the particular drink.

 Helps you make a reservation for the same.

2) Reservation system like bookmyshow.

 This app will allow you to make reservation in a restaurant or bar and the sitting
layout will be displayed where in you can select a place of your choice

 Tie up with wallets like Paytm or mibikwik. The app will have a wallet system for
making a reservation and a minimal amount of reservation will be charged say Rs.
100 which will be redeemable on visit and adjusted with the bill.

 This will be very helpful on weekends when people end up not getting a place in a
bar or restaurant. So early reservations can be made.
3) It’s a DATE !!

 Want to have a perfect dinner/lunch date ? This app will help you book a place
according to the privacy you want and will make arrangements based on your
budget.

 It will show you the visual arrangements that can be made and how much will
each arrangement cost.

 You can select the flowers, lightings, location and food and beverage from the
menu.

 You can also select the sequence in which you want things served.

 You can select the kind of music you want and also call for a live musician if you
want.

4) Bar Line

 Ever had a disappointing night out? We all have. Was it your fault or did you just
not know where to go? Is there anything worse than planning for fun and it
doesn’t happen? Some people spend up to 2 hours getting ready. The problem is
there are a lot of uncertainties in the bar scene.

 The BarLine app will describe the length and or time of waiting in line at bars at
peak entrance hours.

 College campuses and large cities often struggle with obtaining information about
bar lines, thus an app giving them this information can let them know and decide
which bar is worth going or waiting for.
  An app/website that shows the inns & outs of the bar scene, how buzzing it is, the
types of people that go, amount of men or women on a given night, types of drink
specials, et cetera. The idea is to help people find exactly where they want to go
on any giving night quickly and easily. Also I believe this will help promote
smaller bars that have incentives that larger more popular bars don’t have.

5) MUST TRY !!

 We already have apps that help us look up restaurants according to location and
cuisine like Zomato but these apps give us a review about the restaurant as a
whole not a particular dish or item on the menu.

 This app will tell users what are the best dishes and are a MUST TRY and will
reach out as appealing to the users because these suggestions will be made by
other users itself.

 For people who love trying new restaurants and bars, they can look up the
restaurant in the app and will be able to see what other users have to say about
their favorite dish.

 Users can also search new restaurants based on their favorite dish and read what
other people have to say about it along with a picture of how it looks like.

 As the app starts kicking off, whenever someone tastes something they loved,
they will enter the details to the app which will help other users and will be a win-
win situation.
 Chapter X: Bibliography

Introduction References: Ministry of Food Processing Industries (MoFPI), Agricultural

and Processed Food Products Export Development Authority (APEDA), Media reports
and Press Releases, Department of Industrial Policy and Promotion (DIPP), Press
Information Bureau (PIB), Confederation of Indian Industries (CII)

Ministry of food processing industries annual report. Web site- www.mofpi.nic.in and
www.ibef.org

http://www.digit.in/internet/foodpanda-to- focus-on-tier-2-cities- increase-coverage-to-

5000-restaurants-interview-19305.html

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march-2060651

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http://www.socialsamosa.com/2012/09/understanding-burrp-social-media-strategy-
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http://biz.burrp.com/

http://www.twenty19.com/burrp-

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http://www.hospitalitybizindia.com/detailNews.aspx?aid=17030&sid=20

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http://trak.in/tags/business/2015/01/22/qsr- india- fast-food-chains-eating-habits/

http://luxpresso.com/opinion-lifestyle/food-trends-eating-out- in-2014/29322

http://www.athenainfonomics.in/assets/F&B%20Food%20Service%20in%20India.pdf

http://www.franchisedirect.com/foodfranchises/takeoutanddeliveryfranchiseindustrystudy
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