Maharashtra Tourism Minister releases
NRAI India Food Services Report 2016 in Mumbai

~Report’s Mumbai pull-out highlights the city as the second largest food services market in India~
~Also states employment generated by food services in the city is around 5,00,000 people in both organized and unorganized segments~

Mumbai, September 19, 2016: After the roaring launch in New Delhi by Shri Amitabh Kant, CEO, NITI Aayog in July 2016, the NRAI India Food Services Report 2016 (NRAI IFSR 2016), industry’s most influential and respected trade-report, was released by Shri Jaykumar Jitendrasinh Rawal, Hon’ble Minister of Tourism, Government of Maharashtra, in the city today along with a special pull-out carrying information on Mumbai’s food services industry. Commissioned by the NRAI and compiled by Technopak, NRAI IFSR 2016 is the only and most comprehensive trade report on the Indian food services sector. It states that Mumbai, which ranks among the world’s top ten centres of commerce, also boasts the highest GDP in India making it a lucrative market for all food businesses. Shri Madan Madhukarrao Yerawar, Hon’ble State Tourism Minister also graced the occasion as the ‘Guest of Honour’.

Discussing the report with the restaurant fraternity in Mumbai and the chief guest, Mr. Riyaaz Amlani, President, NRAI, remarked, “The organized food services market in Mumbai is estimated to contribute INR 3,500-4,000 crore as taxes. Out of 5,00,000 people employed by the food services industry in Mumbai, organized segment itself employs around 2,70,000 (53%) people of the total workforce. As per the NSDC, restaurants contribute the maximum manpower requirement within the hospitality sector. This is by no means a small achievement.”

While addressing industry concerns to the hon’ble chief guest, he pointed out, “Out of the top 10 restaurants in the city in 2012, only two survived in 2016. As no ministry covers restaurants, we have to go to several departments for our paperwork and to get the plethora of licenses and NOCs issued, like- the shops and establishments department in the BMC for our licenses and health permits, the legal metrology department for our weights and measures, and the fire department for fire licenses. We report to multiple departments and no one in particular. Regulation of our business is hyper-local, and the need is to deregulate the business and incentivise people to open restaurants.”

He further added, “While we appreciate the recent initiatives of the Maharashtra Government to improve the business environment for the industry, complex maze of approvals and licenses and high tax brackets are not favorable for government’s agenda of ‘Ease of Doing Business’. We wish to continue working with the state authorities to overcome challenges including single-window licensing, permission for 24/7operations, reduction in the drinking age, and usage of terrace area for serving food, among others, so that the city’s food services sector, citizens and the government can all be beneficiaries.”

Noting that this is an exciting time for investors to be in the F&B Sector, Rahul Singh, Honorary Secretary, NRAI, mentioned, “Tapping into the immense potential this sector holds, many multinational brands have entered the country and prospered. The industry has also seen tremendous support and investment coming in from VC & PE firms. The potential for growth is also cemented by the fact that previously international companies that preferred entering through a master- franchise route only, are now launching through company-owned outlets or joint ventures with Indian affiliates.”

While presenting details from the report, he also highlighted the following key points with respect to Mumbai’s food services industry:

• The organized market (chain and organized standalone) is valued at INR 14,665 crore (~USD 2.3 billion), which is significant at 14% of the total organized food services market in India
• The chain market in Mumbai is estimated to INR 4,715 crore (~USD 725 million) and is ~ 23% of the overallchain market in the country
• The unorganized market holds a 55% share in the pie and is valued at 17,665 crore (~USD 5 billion)
• Organized standalone market in Mumbai is dominated by Casual Dining formats
• Mumbai has the highest eating-out and ordering-in frequency in the country

Addressing the restaurateurs and Mr Amlani’s concerns, Shri Jaykumar Jitendrasinh Rawal, Hon’ble Minister of Tourism, Government of Maharashtra said, “The Department of Tourism, Government of Maharashtra, is in the process of creating a single window clearance mechanism for the hospitality industry and restaurants backed by an empowered committee. Some of the expected outcomes for the industry from this mechanism are – faster clearance and release, single source of information on licenses, processes, documents and requirements, increased transparency through application tracking and status checks, enabling online services for submission of all applications, etc. As the State Government is committed to strengthening this sector in Maharashtra, our move to introduce shopping, entertainment and city hubs at 22 points along the up-coming Mumbai-Nagpur corridor is an initiative that members of NRAI can also look forward to. I believe this corridor shall offer tremendous investment potential for restaurateurs and QSR chains.”

Mr Samir Kuckreja, Past President and Trustee, NRAI added, “Over the years, the Indian consumers’ profile, behaviour and spending patterns have evolved with the changing economic, social and demographic landscape. I hope NRAI IFSR 2016 will be a guide for restaurant owners and operators to understand key levers which drive business and help grow their revenues profitably over the next few years.”

Given Mumbai’s stature as a financial capital with a high propensity of dining-out, the report seeks to highlight the major trends and figures of the sector in this hub.

Commenting on the recent developments in the restaurant industry, Mr. Amit Jatia, Chapter Head, NRAI Mumbai stressed thatMumbai’s restaurateurs need to up their game. He remarked, “In this rapidly changing food retail and service landscape, brick and mortar restaurants will be competing with an increasingly wider set of peers for the same customer wallet. Moreover, to be relevant in the future, players need to reinvent their ways of doing business. Hence, need for fundamental transformation andpolicy changes like model and shop establishments, GST and the seventh pay commission implementation would play a pivotal role in the growth of the sector.”

The launch was a high-profile event that witnessed the coming together of CEOs of all the popular restaurants such as Mr Amit Jatia of McDonalds, Mr Anurag Katriar of Indigo, Mr Chetan Arora of Subway, Mr Sameer Seth of The Bombay Canteen, Mr Sanjay Coutinho of Baskin Robbins, Mr AD Singh of Olive Bar & Kitchen, Mr Dheeraj Gupta of Jumbo King, Mr Sumer Vaswani of Blue Frog, Mr Gaurav Goenka of Rajdhani, Mr Rahul Leekha Di Bella, Mr Rajeev Matta of The Yellow Chilli, Mr Vijay Kamat of Vithal Kamat, Ms Gauri Devidayal of The Table including many more. The event also saw presence of popular star chefs like Chef Vicky Ratnani, Chef Rahul Akerkar and Chef Saransh Goila.

NRAI IFSR 2016 includes results from in-depth interaction with a variety of companies, meetings with over 50 CEO’s, consumer research that covered 2000 people across 20 cities of India and trade research at restaurants. The report addresses international market perspective for nine countries including USA, China, South Africa, Turkey and UAE and reveals that the food services market in India has triggered growth across a wide range of ancillary industries, thus providing a boost to the entire ecosystem.

WatConsult and Lodha Capital Markets have also contributed chapters on ‘Digital Marketing Practices’ and ‘Prospects of Private Equity/ Venture Capital Investing in India’ respectively to this report.

The NRAI IFSR 2016 will be subsequently launched in Bengaluru with a special pull-out on the garden city.

A copy of the NRAI IFSR 2016 can be bought at INR 45,000 on Buy Now.