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India
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Indian foodservice continues to expand beyond largest cities

1 Dec 2010

While the very largest cities continue to drive demand, foodservice operators in India have grown ever more

aggressive in targeting smaller cities and towns, where incomes continue to grow and competition remains

muted.

The major cities, which include New Delhi, Mumbai, Bangalore, Hyderabad, Kolkata and Chennai, are estimated

to account for more than one half of consumer foodservice value sales in India. However, as the number of

foodservice outlets is expanding rapidly, albeit from a very small base in smaller cities and towns, the outlet

and value growth rates have been significantly higher in cities such as Pune, Jaipur and Chandigarh over the

later years of the review period. With more than thirty cities boasting a population of one million people or

more, the scope for expansion across India is expected to only grow over the next five years, particularly as

the Indian government steps up its investments in second-tier cities, looking to spread the benefits of growing

prosperity to every corner of the country.

Evolution in big cities, expansion elsewhere

Chained foodservice outlets on the whole remain far more concentrated in the major cities. However, well-

established brands including Baskin-Robbins, Domino's Pizza, Café Coffee Day, McDonald's and Indian Hotels

Co Restaurants are present across a wide range of cities and towns. Indian Hotels Co Restaurants, for instance,

is present in around 61 locations in India, comprising a mix of large cities, commercial hubs, and tourist areas,

such as travel resorts and historical and pilgrimage centres. That said, while Domino's Pizza outlets were

present in 55 Indian cities by early 2010, about 50% of its outlets are known to be in metro cities in India.

Several domestic brands, especially emerging ones, have a regional focus, with their outlets being

concentrated in the leading cities within their home region. For example Jumbo King, Devil's Workshop, Uncle

Sam's Pizza (by Sankalp Recreation Pvt Ltd), Natural and Havmor (by Havmor Group) are mainly present in

Vododara, Ahmedabad and Mumbai in West India. By contrast, nascent international brands such as Papa

John's and Mövenpick tend to set-up one or two outlets in each major city before expanding their business.

This allows the international brand to gauge the Indian consumers' responses to the brand and then tailor their

expansion strategies based on regional differences in terms of taste preferences and operational constraints.

particularly as migration from the countryside continues. to be enjoyed in-store. improving at a much higher pace than in the major cities. for instance. above all. continued expansion in second-tier cities has emerged as a real priority for India's federal government--in 2007. the government has allocated more than US$280 million to a number of urban development projects. it pledged to spend US$29. success in India is a long-term. as a group. any more than foodservice demand has passed by cities like New York or London. While foodservice has become an increasingly basic part of life for more-affluent Indians in cities like Mumbai and Bangalore. including renovating the local airport and constructing an eco-friendly mass-transit system to absorb an expected surge in road traffic. On the other hand. consumers in smaller cities see an entertainment value and novelty in dining-in and the proportion of sales coming from home delivery is very low in such cities. the rewards are significant—ten years from now. second-tier cities across India will gain greater importance both as engines of economic growth and as expanding consumer markets. with both chains investing tens of millions in infrastructure prior to becoming consistently profitable. for many middle-class consumers a purchase from Domino's or similar chains is an occasion. McDonald's and Baskin-Robbins. including Nagpur. traffic congestion and long working hours posing a problem in all the major cities. With parking.” Strong expansion forecast This growing focus on second-tier cities will only accelerate going forward. allowing for the full “restaurant experience. However. Yet it seems clear that the truly meteoric growth in demand to be found in India over the next five years will increasingly centre on second-tier cities.With the rapid pace of shopping mall development as well as continual upgrading of popular high street areas. for example. While obviously not a process without risk. the time to start investing in outlet presence and.5 million population). has shown no qualms about moving away from a delivery focus where conditions demand—for many Indian families still. Rather than gathering around the television with a delivery pizza. Mysore and Jaipur. distribution infrastructure is now—as the example of operators like McDonald's and Domino's Pizza has shown. What's more. have focused their outlet expansion plans on developing a footprint in smaller cities. For global foodservice operators. Thanks to government investment and incentive policies. the major cities in India continue to offer plenty of potential for outlet expansion. None of this is to say that megacities like Delhi and Mumbai will fall by the wayside. with many growing into powerful regional hubs in their own right. particularly as real estate values in cities like Mumbai and Delhi continue their dizzying ascent. 10 to 20-year project. a “pizza night” is by no means a regular occurrence. and chains which understand this will likely do well— Domino's Pizza. the list of the top ten largest global chains in India will include those .In the city of Nagpur (2. elsewhere it remains very much a luxury. several leading brands. with the infrastructure and purchasing power in smaller cities and towns. There are marked differences between consumer preferences in the major cities and smaller cities and towns. home delivery is highly popular in these areas.0 billion over the seven years to 2014 in order to modernise second-tier cities and turn them into economic hubs besides existing metropolises. including Domino's Pizza.

India EXECUTIVE SUMMARY Growth slows temporarily due to the economic downturn Terrorist attacks in Mumbai in late 2008 and concerns about the economic slowdown resulted in a drop in consumer confidence as well as uncertainty in the property market in the first half of 2009. Shopping malls become unpopular as foodservice locations Foodservice outlets in shopping malls in the major cities in India are generally perceived as upmarket and expensive. Consumer Foodservice Analyst: Michael. This adversely affected consumer foodservice in 2009 and footfalls dropped as consumers tried to rein in their expenditure. with an eye on serving the vast cohort of consumers found in mid-sized cities across the subcontinent. fast food outlets and casual dining full-service restaurants expanded their dessert and beverage offerings in a bid to compete for the same consumer group. Oriental Cuisines Pvt Ltd and Lite Bite Foods Pvt Ltd have emerged as some of the fastest growing multibrand operators in India. Multibrand operators expand their presence 2008-2009 saw the emergence of operators managing the outlets of several domestic and multinational brands across India. While cafés increasingly expanded their food menus. With concerns about the economy easing in the second half of the year and most of the major brands undertaking remedial action. Yum! Restaurants International Inc. acquired franchising rights for multinational brands and spun-off their existing brands in new formats. This resulted in the launch of several new brands and formats including Chili’s Grill & Bar’s first outlet in India and Mocha’s new format .Mocha Art House. the industry was on its way to recovery by the end of 2009. such as launching new menu items and attractive discounts.com Consumer Foodservice . such as hygienic and affordable food and a safe and ‘cool’ place to relax with friends. Speciality Restaurants Pvt Ltd. Rapid outlet and value expansion over the review period has emboldened existing domestic foodservice operators and they increasingly launched new foodservice concepts. please contact Michael Schaefer. In 2009 growth was significantly slower than other years of the review period. footfalls in shopping malls fell . With consumers seeking to rein in expenditure in early 2009. For further insight. cafés and fast food outlets increasingly competed head-to-head towards the end of the review period.Schaefer@Euromonitorintl. Competition intensifies between cafés and fast food outlets With a large number of foodservice brands competing for share of pocket among college youths and young professionals and most brands offering similar benefits. although current value growth remained in double digits.operators who began the process of investment and expansion today.

Kolkata and Chennai. especially emerging ones. While Domino’s Pizza outlets were present in 55 Indian cities by early 2010. are estimated to account for more than one half of consumer foodservice value sales in India. Indian Hotels Co Restaurants are present in around 61 locations in India. which include Delhi-NCR. Some operators such as Nando’s Indage Restaurants Pvt Ltd relocated their low-performing mall outlets elsewhere by late 2009. Café Coffee Day. Meanwhile. Several domestic brands. Hyderabad. which made their first appearance in India in 2009. have fuelled the upgrade of the premises and menus of a large number of foodservice outlets. well-established brands including Baskin-Robbins. Uncle . have a regional focus. comprising a mix of large cities. which will be held in Delhi in October 2010. high rentals and outlet closures in some major cities further reduced footfalls and made shopping malls unattractive locations for foodservice outlets. The Delhi government is working with the Confederation of Indian Industry (CII) to provide hygienic and authentic meal options to visitors during the games. and tourist areas. Jaipur and Chandigarh over the later years of the review period. The high levels of vacancy due to a combination of overcapacity. With vast potential for expansion. including Domino’s Pizza and Café Coffee Day are expected to drive the growth in smaller cities and towns. Mumbai. about 50% of its outlets are known to be in metro cities in India. McDonald’s and Indian Hotels Co Restaurants are present across a wide range of cities and towns. with their outlets being concentrated in the leading cities within their home region. The preparations for the Commonwealth Games. commercial hubs. For example Jumbo King. the outlet and value growth rates have been significantly higher in cities such as Pune. leading brands. such as travel resorts and historical and pilgrimage centres. Devil’s Workshop. international and domestic chained brands have focused on firmly establishing their presence in these cities before considering expansion into smaller cities and towns across India. Chained foodservice outlets are more concentrated in the major cities. as the number of foodservice outlets is expanding from a very small base in smaller cities and towns. consumer foodservice in India is expected to see a recovery with strong growth rates in 2010. and Bembos are expected to develop a presence in the major cities in India in the short term.drastically in the first half of the year. Strong recovery expected as concerns about the Indian economy ease With most brands emerging from the economic slowdown with slight slowdowns in growth by the end of 2009. Due to the presence of a large number of affluent and well travelled Indian and expatriate consumers. Bangalore. particularly for affordably priced quick service brands. Consumer Foodservice . double-digit current value growth is forecasted for chained brands. Domino’s Pizza. as directed by the Delhi government. However.India KEY TRENDS AND DEVELOPMENTS City Level Trends The major cities. However. Fledgling multinational chains such as Au Bon Pain and Häagen-Dazs.

Nascent international brands such as Papa John’s and Mövenpick tend to set-up one or two outlets in each major city before expanding their business. McDonald’s and Baskin-Robbins. However. consumers in smaller cities see an entertainment value and novelty in dining-in and the proportion of sales coming from home delivery is very low in such cities. With parking. several leading brands. traffic congestion and long working hours posing a problem in all the major cities. with the infrastructure and purchasing power in smaller cities and towns. Au Bon Pain and Chili’s Grill & Bar opened their first outlets in India in Bangalore in 2009. Natural and Havmor (by Havmor Group) are mainly present in Vododara. Growth of chained brands slows The economic uncertainty of early 2009 resulted in a slowdown in value sales growth in the consumer foodservice industry in India. Consumers in the major cities tend to be more open to trying unfamiliar cuisines due to their greater exposure to international media and brands. Most operators of multinational brands have set-up their base in either Delhi-NCR or Mumbai with a focus on expanding in either North India or West and South India respectively. Mysore and Jaipur. The global economic recession caused a loss of consumer confidence in India in . brands such as Little Italy and Barbeque Nation. There are marked differences between consumer preferences in the major cities and smaller cities and towns. Increasingly. improving at a much higher pace than in the major cities. With the rapid pace of shopping mall development as well as continual upgrading of popular high street areas. The upgrade of airports in major cities such as Hyderabad and the development of metro rail transport systems in Delhi and Mumbai have provided a new avenue for the expansion of outlets in travel locations in 2008 and 2009.Sam’s Pizza (by Sankalp Recreation Pvt Ltd). On the other hand. the major cities in India continue to offer plenty of potential for outlet expansion. including Domino’s Pizza. have focused their outlet expansion plans on developing a footprint in smaller cities. home delivery is highly popular in these areas. Bangalore is also attracting multinational brands due to the concentration of the IT industry in the city which attracts a large number of expatriates and well travelled Indian consumers. On the other hand. which have a higher spend per transaction compared to quick service brands such as Pizza Hut and McDonald’s. This allows the international brand to gauge the Indian consumers’ responses to the brand and then tailor their expansion strategies based on regional differences in terms of taste preferences and operational constraints. tend to develop menus with lower prices for their outlets in smaller cities and towns. including Nagpur. Ahmedabad and Mumbai in West India. most of the rapidly expanding independent players (such as the Middle Eastern fast food brand Falafels in Mumbai) and domestic fledgling chains (such as Berco's Chinese full-service restaurant (FSR) in Delhi-NCR) usually seek to establish their presence with a large number of outlets concentrated in one major city before trying to expand into other major cities. With food and overhead prices and purchasing power generally being higher in the major cities.

as well as domestic brands such as Nirula’s and Jumbo King. alongside tighter credit requirements and uncertainty in property prices. Mainland China and Baskin-Robbins stepped-up their outlet expansion rate in 2009. With transaction value and volume growth slowing or dropping for several brands. However. have decided to wait-out the uncertainty in property prices. Outlook Chained consumer foodservice is expected to bounce back to record largely robust double-digit growth transaction volume and value and outlet terms in 2010. With the exception of a handful of brands such as KFC. witnessed a large number of outlet closures. Growth in chained brands is expected to continue to outpace that of independent brands as the former are growing from a very small base in India. The effect of the slowdown was more pronounced among chained brands as several chained players underwent a period of rationalisation in terms of outlet expansion and witnessed outlet closures or renovations. However. Costa Coffee closed several high-rental outlets in 2009 as they were hurting the company’s bottom line. KFC. While a large proportion of brands. The entry of multinational brands such as Starbucks. McDonald’s. and US Pizza. For example. . independent outlets are expected to continue to dominate the consumer foodservice landscape over the forecast period. the growth in outlets slowed in 2009. operators tried to rationalise costs by shutting down low-performing and cost-ineffective outlets. others such as US Pizza took the opportunity to reconfigure their expansion plans and experiment with menu innovation and brand renovation instead of focusing on outlet expansion. is also expected to inject buoyancy into the industry over the forecast period. especially in smaller cities and towns. including Coffee Day Xpress. which were not present in India over the review period.the first half of the year. including McDonald’s. several domestic and multinational brands. Future Impact As the effect of the economic slowdown was short lived in India. most of the other fast growing brands in2009 were relatively new. in 2009 growth levels slowed sharply. Nonetheless. Domino’s Pizza continued on its pre- 2009 outlet expansion trajectory in preparation for an IPO (Initial Public Offer) in early 2010. move ahead with outlet expansion plans. foodservice operators are expected get back on the outlet expansion track from 2010 onwards. Current Impact The growth in outlets. as the effects of the economic uncertainty were wearing off in early 2010. transactions and value sales in chained consumer foodservice reached robust double- digit levels during the review period. increasing their market penetration at a time when most other brands were lying low. which require low investments for outlet expansion. Several emerging independent brands recorded strong performance towards the end of the review period. Value sales growth is expected to be driven by brands’ efforts to expand the average bill size through menu expansion. particularly in street stall/kiosks. While most brands continued to add new outlets. Chained consumer foodservice growth is expected to be robust from 2010 onwards as multinational brands such as McDonald’s and KFC. and they are expected to emerge as high growth chained brands over the forecast period. Mainland China and Baskin-Robbins.

Menu innovation increases profitability in tough economic conditions With the economic slowdown in early 2009 resulting in consumers cutting back on their expenditure in terms of eating-out. widely promoting them through mass- media advertisements. However. US Pizza launched several new items to cater specifically to health conscious and religious consumers. These strategies allowed several chained brands to record positive growth in transaction volume and value terms despite the economic slowdown in 2009. Current Impact Several operators added new menu items to generate interest in their brands in 2009. manufacturers focused on strategies to attract more consumers to their outlets. desserts and beverages. Growth is also expected to be driven by the expansion of small city-based chains. with the pressure of the economic slowdown easing in late 2009 and with several brands having undertaken large changes to their menus in 2009. drawing consumers to their brands to try out the new items. Other brands. particularly for chained brands which slowed down their outlet expansion in 2009. McDonald’s and Domino’s Pizza also widely promoted their low-priced menu items as a key strategy to drive-up transaction volumes. are expected to enjoy rapid expansion in the forecast period. sides. into neighbouring cities. such as Mast Kalandar and Casa Piccola from Bangalore. Future Impact Overall. particularly for multinational brands which need to continuously adapt their menus to the tastes of Indian consumers. which were still fledgling chains in 2009. Outlook Menu innovation is expected to remain a key strategy for growth in the forecast period. KFC and Domino’s Pizza added several new and indulgent desserts. including US Pizza. and vice versa. Chili’s Grill & Bar and Bembos. However.Brands such Au Bon Pain.a more expensive and larger serving size which consumers perceived as offering more value for money than the single scoop. McDonald’s by bringing down the prices of their meals to reduce the price gap between meals and single snack items and Baskin-Robbins by launching a ‘Value scoop’ . for the attention of young consumers. beverages. New menu items generated interest and drove-up bill sizes for several brands in 2009. rolled-out completely revised menus in several of their outlets: Pizza Hut extended its menu to include a large variety of new pastas. menu innovation is expected to continue at a steady pace over the forecast period as brands launch new items to maintain the interest of consumers. companies are expected to focus more on expanding their outlet count in the early part of the forecast period rather than on radical menu innovation. Some of the new menu items launched in 2009 also allowed café brands to compete more successfully against fast food brands. and Mocha introduced a sophisticated menu. Menu innovation was a common strategy. main and side dishes to their menus in 2009. Pizza Hut and Mocha. McDonald’s and Baskin-Robbins encouraged consumers to trade-up to more expensive items. most companies are expected to focus on . which includes raw food items and alcoholic drinks.

Towards the end of the review period. acquired franchising rights for multinational brands and spun- off their existing brands in new formats. Mocha Mojo and Mocha Art House by early 2010. chicken fast food and Asian fast food become increasingly crowded with a large number of chained brands. Some operators sought to segment their existing concepts into various formats by launching subbrands that cater to consumer groups with different purchasing power and tastes. added Chili’s Grill & Bar to its portfolio in 2009. Meanwhile. Menu extensions and limited edition launches are expected to become a key differentiator for brands in the forecast period. The learning curve for franchising and brand building has been very steep for Indian foodservice operators as the industry has witnessed very rapid chained outlet expansion since the beginning of the review period. Domino’s Pizza and Pizza Hut are expected to focus on popularising their new pasta menus while regularly launching new pizza crust and pasta styles to pique consumer interest. of US Pizza fame. United Restaurants Ltd. with the increased availability of experienced foodservice brand managers and raw material suppliers across India. domestic foodservice operators increasingly launched new foodservice concepts. The Mocha brand was present in the major cities under various subbrands including Mocha coffees & conversations. Current Impact Multibrand operators continued to gain prominence in 2009 through capacity expansion and new concept launches and by bringing more multinational brands to India. Foodservice operators’ increasing confidence in managing several brands simultaneously resulted in the entry of several new brands in 2009. In 2008 and 2009 café players Impresario Entertainment & Hospitality Pvt Ltd and Barista Coffee Co Ltd launched lounge-styled outlets under the Mocha Mojo and Barista Crème subbrands respectively. Multibrand foodservice operators on the rise 2008-2009 saw the emergence of several operators managing outlets of several domestic and multinational brands across India. Some of their existing cafés were converted into these new formats. which cater to a more mature clientele and they served alcoholic drinks as well as a main course with a health & wellness slant. This fuelled new concept launches. brand revamps and chained outlet expansion in 2009. Players such as McDonald’s are expected to focus on persuading consumers to choose meal instead of low- priced snack options. Mocha Bar. particularly as categories such as specialist coffee shops. . McDonald’s is also expected to roll-out the breakfast menu that it developed and tested in 2008 to more outlets to increase its dayparts and expand transaction volume and value sales. While JIP Fashion & Restaurant Pvt Ltd. leveraged its expertise in affordable and hygienic pizzas by launching a pizza street stalls concept called Nuva in January 2010. the master franchisee for Papa John’s. Lite Bite Foods Pvt Ltd added another multinational brand to its existing portfolio of more than 10 domestic and multinational brands by launching Guatemalan chicken fast food brand Pollo Campero in January 2010.popularising the new menu items that were launched during 2009 in the short term instead of undertaking extensive menu innovation.

In 2009. also tried to build a presence in consumer foodservice. India Hospitality Corp. respectively. including the personal care player CavinKare Pvt Ltd and textiles conglomerate Vardhman Group. as long as prices are affordable. Outlook The expansion of multibrand foodservice operators is expected to continue in the forecast period. so that these two brands account for 40% and 10% of its outlets. International companies looking to build a presence for their brands in India are also expected to prefer well-established companies for joint venture or brand licensing deals due to the their proven track record and industry know-how. further expanded its presence in consumer foodservice by acquiring the franchise for Pizza Hut’s outlets in Central India in November 2009. Some foodservice operators are expected to expand their footprint by taking over such brands and either rebranding them or injecting funds to facilitate their expansion into other regions. The company plans to dilute its equity by up to 30% to raise money for its expansion plans and it is also expected to launch an IPO over the forecast period. With an injection of funds from its IPO in early 2010. Jollibee Foods Corp is expected to actively try to establish a footprint in India over the forecast period and it is known to be on the lookout for acquisitions in the country. companies from other industries. while Pizza Hut accounts for the remaining 50%. as it determined a growth strategy in consumer foodservice. While Global Franchise Architects (India) is expected to expand its presence outside of South India by issuing regional franchising licenses. Vardhman Group initiated plans to launch a chain of Asian fast food outlets in the forecast period. While CavinKare experimented with two new Asian FSR concepts in 2009. Future Impact The rise of multibrand foodservice operators is expected to boost chained outlet expansion and drive concept innovation over the forecast period. in India by 2015. Yum! Restaurants International is targeting outlet expansion for KFC and Taco Bell. operators are expected to be emboldened by their success with existing brands and launch more innovative brands and formats over the forecast period. . With Indian consumers showing a high affinity to eating-out and trying new cuisines. Jubilant Foodworks Ltd (formerly Domino’s Pizza India Ltd) is expected to seek another international brand to build-up from scratch in India and it is expected to enter into talks for a tie-up with Starbucks in the early part of the forecast period. which had taken over the multibrand foodservice operator Mars Restaurants Pvt Ltd in mid-2007. The several small regional domestic chains (less than 30 outlets) which have been mushrooming across India towards the end of the review period are also expected to be ripe acquisition targets. Speciality Restaurants Pvt Ltd of Mainland China fame is expected to acquire a South Indian FSR chain in the first half of the review period. Global Franchise Architects (India) laid the groundwork for raising funds for future expansion through private equity investment. While Yum! Restaurants International launched Taco Bell’s first outlet in India in March 2010.Existing multibrand operators also stepped up their activities in 2009. This company also engaged a master franchisee in order to expand the footprint of its Pizza Corner and Coffee World brands in East India in 2009. Several leading single foodservice brand operators are expected to expand their portfolios with the launch of new brands or spin-offs.

Cafés such as Mocha and Café Coffee Day continued to expand their food menus to attract consumers looking for a substantial meal and who tend to choose bakery products fast food or other fast food types over cafés. Pizza Hut revamped its communications strategy to portray its outlets as the ideal location to celebrate any big or small occasion in late 2009. In 2009. Barista Coffee Co Ltd introduced Barista Lavazza Ice Creams in some of its outlets while Café Coffee Day introduced its ‘Layers’ menu comprising thick milk shakes. eating-out is expected to lose its novelty for affluent consumers in the major cities. McDonald’s launched Chicken McNuggets in large portions (20pcs with three dips for Rs225. Thus. beverages which clearly compete with the iced coffee and chocolate drinks served by cafés. Hence. Cafés also faced increasing competition from ice cream and bakery products fast food as outlets such as Häagen-Dazs. Hot Breads. They also offer a similar youthful and inviting in-store ambience. and Mövenpick. fast food outlets and casual dining FSR. cafés. However. Meanwhile. The effect of this trend was more pronounced in the major cities due to the high penetration of chained players and the presence of a large number of foodservice outlets in close proximity to popular locations such as high streets and areas close to colleges and IT campuses. many consumers viewed them as a novelty and experiencing a new or different concept was very much part of their appeal. Moreover. While a large proportion of chained brands in India were new brands or recent entrants in India as of 2009. While KFC launched Krushers. Current Impact Due to the economic slowdown in 2009. over the forecast period many more fast food and café brands are expected become relatively mature brands which young consumers would have grown up with. Outlook Cross-category competition is expected to intensify over the forecast period.Cross-category competition intensifies A large number of foodservice brands are competing for the share of pocket of college youths and young professionals and most brands offer similar benefits such as hygienic and affordable food and a safe and ‘cool’ place to relax with friends. café.00) to attract groups of friends who might otherwise spend time over coffee and cakes in cafés. casual dining FSR and food courts increasingly competed head-to-head towards the end of the review period. many young consumers cut down on their visits to cafés. Hence. Both kiosk and café brands increasingly positioned themselves as alternatives to fast food outlets towards the end of the review period. Both KFC and McDonald’s sought to expand their share of the ‘café crowd’ by expanding their menus in 2009. The number of brands providing hygienic and affordable quick meals is also . fast food outlets. Some cafés also expanded their emphasis on healthier and more sophisticated menu items to attract more mature and affluent consumers. fast food and casual dining FSR menus saw an increasing emphasis on indulgent beverages and desserts. foodservice operators undertook menu and outlet innovations to differentiate themselves from other brands and cast a wider net for consumers in 2009. which serve hot and cold coffee and chocolate beverages in addition to cakes and ice cream.

Current Impact Several fast growing new brands emerged in street stalls/kiosks towards the end of the review period. Several new chained fast food and full-service restaurants extended their brands by adding street stalls and kiosks in 2009. Towards the end of the review period. developing new concepts and deriving high transaction volumes. As the competition for the share of pocket of this consumer group intensifies. are expected to focus on targeting older consumers with deeper pockets. food court stalls and kiosk brands are expected to focus on hygiene. With more hygienic street stalls/kiosks cropping up in the major cities. Unlike fast food or full-service restaurants. at approximately the same cost in terms of meal prices. BurgerMan. fast food outlets.expected to increase. In addition to the superior in-store ambience of cafés. casual dining FSR and cafés in the forecast period. such as Barista and Mocha. including the South Indian kiosk brand. While café brands such as Café Coffee Day and Mocha matured over the review period and had to undergo format and menu innovation to compete effectively. Street stalls/kiosks becomes a highly attractive format Street stalls/kiosks have always been highly popular among Indian consumers due to their low prices. brands are expected to pursue consumer segmentation based on the age. ‘cool’ and safe environment. However. home delivery and servicing high-volume locations to differentiate themselves from casual dining FSR and cafés. café brands which have introduced more upscale subbrands. which went from five outlets in 2007 to 50 outlets in 2009. especially in the smaller cities. On the other hand. wealthier foodservice operators increasingly recognised that the format represents an untapped opportunity for spreading awareness of their existing brands. Future Impact From the consumers’ point of view casual dining FSR. Fast food outlets are expected to focus more on quick service and cheap meals and snacks. was avoided by health conscious and affluent consumers. convenient locations and emphasis on local snacks and finger foods. Both kiosk and café brands are expected to position themselves as alternatives to fast food outlets. high volume locations (eg near colleges or . café and casual dining FSR outlets to increasingly compete head-to-head with each other. street food and localised menu offerings to attract youngsters. this format. which is mainly comprised of unhygienic independent roadside outlets. the investment required for setting-up stalls/kiosks is very low. These emerging street stall/kiosk brands focused on convenient. 100% takeaway outlets. sophistication and purchasing power of consumers to specifically target other consumers groups as well as undertake menu and outlet innovation to increase their appeal to young people. their emphasis on healthy food will allow them to be more successful than fast food outlets in attracting a more mature and wealthier clientele. cafés and food court stalls all provide young people such as school and college students the opportunity to spend time together in a casual. the format also became more attractive to affluent consumers towards the end of the review period. This will force fast food. convenience. it is fast food outlets that are expected to face more competition from street stalls/kiosks.

sandwiches and snow cones prepared in a hygienic manner were their mainstay. Outlook Street stalls/kiosks is expected to remain an attractive format for both consumers and foodservice operators over the forecast period. as of December 2009. Devil’s Workshop benefited from its strategy of targeting cinemas as locations for new kiosks as it was able to leverage the large network of chained multiplexes across Ahmedabad. Similarly. which are not associated with any brand and operate on informal terms without cash counters or established standards of hygiene. The expansion in the number of shopping malls across urban areas will provide a strong opportunity for both independent and chained foodservice operators to launch stalls in upmarket locations. the popularity of old-fashioned street stalls/kiosks. In 2009. Food court stalls in shopping malls were key locations for the launch of new brands such as Paranthe Wali Gali 0 Km. As food court stalls and street kiosks will continue to have lower operational costs compared to fast food and full-service restaurants. Manufacturers were able to benefit from the consumers’ willingness to pay more for street food items in upmarket locations by opening such outlets in shopping malls in 2009. The rapid addition of modern outlets with higher standards of branding and hygiene and higher quality food is expected to counter the effect of the closures of old-fashioned outlets in the forecast period. outlet registration and hygiene standards in more affluent areas of the major cities. Paranthe Wali Gali 0 Km was a new stall which served Paranthe (stuffed Indian flatbreads) . Kaati Zone is a brand focused on Indian wraps and rolls in South India.railway stations) and popular snacks such as burgers. a mobile street stall focused on healthy and affordable pizzas. Brands such as Paranthe Wali Gali 0 Km and Street Foods of India (eight outlets in 2009) leveraged Indian consumers’ demand for hygienic street food. they will remain a good way of strengthening brand awareness and deriving volume sales with low capital investment. had 40 street stalls/kiosks in addition to 40 standalone specialist bakery retail outlets across West India in 2009. pizzas. Future Impact . three 100% home delivery/takeaway outlets and five Kaati Zone Asian fast food outlets.Nuva.a popular food item served by roadside stalls and economy full-service restaurants in Delhi. Devil’s Workshop. is expected to decline in the forecast period. through kiosks located on the premises of IT companies. Gujarat. As consumer purchasing power and health consciousness rise. Such outlets are also expected to see increasing closures and/or refurbishments due to more stringent enforcement of zoning. United Pizza Restaurants Pvt Ltd tried to benefit from the rising popularity of relatively upmarket street stalls by launching a new concept . Brands such as Barista and Coffee Day Xpress also witnessed rapid expansion in captive locations towards the end of the review period. emerging fast food brands such as Kaati Zone launched kiosk-styled outlets to increase their footprint at low investment costs. rolls. hospitals and colleges. With the credit crunch and uncertain property market dampening expansion plans for emerging players in 2009. a brand launched by Rasna International in 2008 focused on doughnuts and other baked snacks. East West Ethnic Foods Pvt Ltd operated seven kiosks.

0 Coffee Day Xpress Various franchisees 279. such as salads. Small formats such as 100% home delivery/takeaway and street stalls/kiosks are expected to help players to expand into new towns and cities.0 Ltd Baskin-Robbins Various franchisees 380. Chained street stall/kiosk brands such as Gogola which serve items that are made-to-order on the premises are expected to see rapid outlet expansion and move into new cities in the early part of the forecast period. While street stalls/kiosks mainly served local or traditional food items in the review period.0 Domino's Pizza Jubilant Foodworks Ltd 296. However. Leading Chained Consumer Foodservice Brands by Number of Units 2009 Global Brand Owner outlets Amalgamated Bean Coffee Trading Co Café Coffee Day 816. due to the ability of such locations to attract high footfalls from affluent consumers.Street stalls/kiosks is expected to receive a facelift over the forecast period as new stalls will be trendy and modern while many existing stalls will be forced to close. Shopping mall. foodservice players are expected to make more international food items. soups and noodles. airport and cinema locations are expected to be highly attractive for foodservice operators looking to set-up kiosks with upmarket offerings. or refurbish and/or relocate in order to avoid closure.0 Barista Coffee Co Barista Coffee Co Ltd 175. brands such as Devil’s Workshop which rely on massive central kitchens for their food supply are expected to face considerable teething problems when trying to expand outside their home cities.0 McDonald's Various franchisees 179. Spend per transaction is expected to be much higher in these locations compared to standalone locations where chained brands will have to compete with the extremely low prices of independent outlets. available through this format in the forecast period.0 .

0 US Pizza Various franchisees 51.0 Others Others 3.0 Trading Co Ltd KFC Various franchisees 73.0 Costa Coffee Devyani Food Industries Pvt Ltd 43.0 Restaurants Subway Various franchisees 155.0 Qwiky's Various franchisees 27.0 Java Green Java Green Pvt Ltd 70.0 Sagar Ratna Various franchisees 29.0 Total Total 7.473.0 Swirl's Various franchisees 70.0 Sarvana Bhavan Hotel Saravana Bhavan 29.0 Amalgamated Bean Coffee Coffee Day Xpress 150.325.0 71.0 Nirula's Nirulas Corner House Ltd 65.0 Indian Hotels Co Indian Hotels Co Ltd 157.746.0 2.0 Mainland China Speciality Restaurants Pvt Ltd 25.0 Natural Various franchisees 54.0 Marrybrown Various franchisees 28.421. Table 3 Consumer Foodservice by Independent Vs Chained Outlets: Units/Outlets 2009 outlets Independent Chained Total Cafés/Bars 69.0 BurgerMan Various franchisees 50.152.0 Smokin' Joe's Various franchisees 70. Leading Chained Consumer Foodservice Brands by Number of Units 2009 Global Brand Owner outlets Pizza Hut Various franchisees 159.0 Kamat Rangappa Kamat Group of Hotels Ltd 37.0 Pizza Corner Various franchisees 62.0 Devil's Workshop Various franchisees 40.0 Jumbo King Various franchisees 43.0 .0 Little Italy Various franchisees 28.0 Dosa Plaza Various franchisees 39.

748.851.0 Fast Food 64.048.497.0 7.0 1.005.0 130.0 1.006.660.0 1.0 Pizza Consumer Foodservice .710.0 66. - Street Stalls/Kiosks 1.0 603. Table 3 Consumer Foodservice by Independent Vs Chained Outlets: Units/Outlets 2009 outlets Independent Chained Total Full-Service Restaurants 601.740.0 742.708.0 1.0 .0 255.0 1.087.003.0 Consumer Foodservice 1.207. .444.0 100% Home Delivery/Takeaway 125. 742.643.152.0 Self-Service Cafeterias .