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Indian Food Industry

Fast-food restaurants seem to be big business in India, and so a many foreign chains have made an entry into the market to joint the early movers like McDonald's or KFC. On of the last entrants is Bembos, and that chain from Peru will not be the last one. Now ITCOT, a Chennai based, banks-promoted consultancy has presented the updated version of a “Feasibility Report on Fast Food Restaurants” which has first been published in 2002. After an overwhelming response, so ITCOT, a revamped version was released in 2008 so to provide the latest statistics and information to entrepreneurs about the fast-food restaurant segment.

The report covers both pure vegetarian and multi-cuisine type fast food restaurants which are classified into different types in the first chapters, including a history of the “hamburger”. The main focus of the report is on explaining franchise models and cost aspects of a fast-food venture, introducing necessary controlling tools, among them “financial ratios”, “projected profitability” or “projected cash flow”. Regarding

locations, for example, the report notes that the top five foreign brands, namely, McDonald’s, Domino’s Pizza, Pizza Hut, Subway, and Pizza Corner would be focused

on New Delhi, Mumbai, Bangalore and Chennai which account for 53% of their total number of outlets.

The principal factors that drive the demand for fast food restaurants would be the increasing disposable incomes among the target groups, increase in working women, urbanization, globalization, the consequent changes in life styles, and the brand pull, ITCOT says, but informs also that there would be no authentic estimates of demand for fastfood products in India. According to Down to Earth (March 2008), Indians would spend close to Rs 4,449 crore a year (approx. €767 million) at fast-food joints. The fast-food market would be growing at 40% per year. If one would assume a modest growth of 30% only, so ITCOT, then the business potential for fast food restaurants in the country may be reckoned at Rs.13,580 crore by 2011-12.

The Indian food and beverage (F&B) industry is growing faster than IT and pharma. According to a study conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI), the F &B industry grew 8.5% during the last financial year, and the trend continues during 2007-08 as well. While the total “output addition” in information technology and pharmaceuticals was Rs 30,000 crore and Rs 15,000 crore respectively, between 1993 and 2000, food manufacturing recorded an output addition of Rs 90,000 crore, the study said.

According to the survey, the food and beverage sector is witnessing large-scale transformation, innovation, and launching of new products and brands, huge awareness campaign about the products and brands, advertisement spending, distribution of free samples to make strong presence in the Indian market. Indian F & B companies are venturing overseas to markets like South and South East Asia, West Asia and the CIS