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India Food Services Report, commissioned by NRAI, launched in Mumbai


Our Bureau, Mumbai
The National Restaurant Association of India (NRAI) India Food Services Report 2016 (NRAI IFSR 2016) was released in Mumbai by Jaykumar Jitendrasinh Rawal, minister of tourism, Government of Maharashtra.

Compiled by Technopak, it had a special pull-out carrying information on Mumbai’s food services industry, including the fact that western metropolis was the second largest food services market in India.

It stated that Mumbai, which ranks among the world’s top ten centres of commerce, also boasts the highest gross domestic product (GDP) in India, making it a lucrative market for all food businesses.

Riyaaz Amlani, president, NRAI, remarked, “The organised food services market in Mumbai is estimated to contribute Rs 3,500-4,000 crore as taxes. Out of 5,00,000 people employed by the food services industry in the city, the organised segment employs about 2,70,000 (53 per cent) people of the total workforce.”

“As per the National Skill Development Corporation (NSDC), restaurants contribute the maximum manpower requirement within the hospitality sector. This is by no means a small achievement,” he added.

“Out of the top ten 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 no-objection certificates (NOC) issued,” Amlani stated.

“These include the shops and establishments department in the Brihanmumbai Municipal Corporation (BMC) for our licenses and health permits, the legal metrology department for our weights and measures, and the fire department for fire licenses,” he added.

“We report to multiple departments and no one in particular. The regulation of our business is hyper-local. The need is to deregulate the business and incentivise people to open restaurants,” Amlani said.

He added, “While we appreciate the recent initiatives of the Maharashtra government to improve the business environment for the industry, the complex maze of approvals and licenses and high tax brackets is not favourable for the 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 24/7 operations, reduction in the drinking age, and the usage of the terrace area for serving food, among others, so that the city’s food services sector, citizens and the government can all be beneficiaries,” Amlani stated.

Noting that this was an exciting time for investors to be in the food and beverage 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 venture capital (VC) and private equity (PE) firms. The potential for growth is also cemented by the fact that previously international companies, that preferred entering through the master-franchise route only, are now launching through company-owned outlets or joint ventures with Indian affiliates,” he added.

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

• The organised market (chain and organised standalone) is valued at Rs 14,665 crore (approximately $2.3 billion), which is significant at 14 per cent of the total organised food services market in India

• The chain market in Mumbai is estimated to Rs 4,715 crore (approximately $725 million) and is about 23 per cent of the overall chain market in the country

• The unorganised market holds a 55 per cent share in the pie and is valued at Rs 17,665 crore ( approximately $5 billion)

• The organised standalone market in Mumbai is dominated by casual dining formats

• Mumbai has the highest eating-out and ordering-in frequency in the country

Rawal 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.,” he added.

“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 upcoming 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 quick service restaurant (QSR) chains,” Rawal stated.

Samir Kuckreja, past president and trustee, NRAI, said, “Over the years, the Indian consumer 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,” he added.

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

Commenting on the recent developments in the restaurant industry, Amit Jatia, chapter head, NRAI Mumbai, and chief executive officer, McDonalds, stressed that the city’s restaurateurs needed to up their game.

He added, “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, the need for fundamental transformation and policy changes like model and shop establishments, goods and service tax (GST) and the seventh pay commission implementation would play a pivotal role in the growth of the sector,” Jatia stated.

The launch witnessed the coming together of the chief executive officers of popular restaurant chains, including Anurag Katriar (Indigo), Chetan Arora (Subway), Sameer Seth (The Bombay Canteen), Sanjay Coutinho (Baskin Robbins), A D Singh (Olive Bar & Kitchen), Dheeraj Gupta (Jumbo King), Sumer Vaswani (Blue Frog), Gaurav Goenka (Rajdhani), Rahul Leekha (Di Bella), Rajeev Matta (The Yellow Chilli), Vijay Kamat (Vithal Kamat) and Gauri Devidayal (The Table).

Madan Madhukarrao Yerawar, minister of state for tourism, was the guest of honour at the event, which also saw the presence of celebrity chefs such as Vicky Ratnani, Rahul Akerkar and Saransh Goila.

NRAI IFSR 2016 included results from in-depth interaction with a variety of companies, meetings with over 50 chief executive officers, consumer research that covered 2,000 people across 20 cities of India and trade research at restaurants.

It addressed international market perspective for nine countries including the United States, China, South Africa, Turkey and the United Arab Emirates and revealed that the food services market in India had triggered growth across a wide range of ancillary industries, thus providing a boost to the entire ecosystem.

WatConsult and Lodha Capital Markets contributed chapters on digital marketing practices and prospects of private equity/venture capital investing in India respectively to the report.

Source : FNB News

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